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Civil Appeal No. 854 of 1971.
Appeal by Special leave from the judgment and order dated the 6th November, 1970 of the Andhra Pradesh High Court in S.A. Nos. 719 and 826 of ]967 T. section Krishnamoorti Iyer Mrs. J. Ramachandran and K. Ram Kumar for the Appellant.
P. Govindan Nair and G. Narasimhulu for Respondent No. 1.
A. V. Rangam for Respondents 2(c) & (e).
B. Parthasarthi for Respondent No. 3.
The Judgment of the Court was delivered by 240 BALAKRISHNA ERADI, J.
This appeal by special leave is directed against a judgment of the High Court of Andhra Pradesh in two connected Second Appeals Second Appeal Nos. 719 and 826 of 1967.
Those Second Appeals arose out of a suit filed by the appellant herein for setting aside the summary order passed in E.A. No. 90 of 1958 in E.P. 7 of 1956 in O.S. No. 26 of 1952 on the file of the Sub Court, Anantapur, and for recovery of possession of plaint 'C ' Schedule property or, in the alternative, for partition and recovery of one half of the property described in the plaint 'B ' Schedule.
The plaint 'C ' Schedule plot is a southern portion of the property described in the 'B ' Schedule.
The plaint 'B ' Schedule property consisting of 1 acre and 90 cents of land together with two houses situated therein belonged to one Allabaksh.
He was adjudged an insolvent and the official Receiver sold a half right in the said property to one Moola Narayanaswamy under Exh.
A 3 dated December 6, 1939.
The remaining half interest in the property belonging to Allabakash was also subsequently brought to sale by the official Receiver and one J. Narasimhulu became the purchaser.
A 27 dated January 5, 1945 is the sale certificate issued in his favour.
The resultant position was that the 'B ' Schedule property came to be owned in undivided half shares by Moola Narayanaswamy and J. Narasimhulu.
Subsequently, Narasimhulu transferred his interest in the property in favour of the plaintiff for a consideration of Rs. 4,000 under Exh.
A l dated May 10, 1948.
The plaintiff is the daughter of Moola Narayanaswamy.
One Nagappa (first defendant) obtained a simple money decree against Moola Narayanaswamy in O.S .
26152 on the file of the Subordinate Judge 's Court, Anantapur, and in execution thereof, he attached and brought to sale in court auction the two houses described in the plaint 'B Schedule property.
In the said court auction, the first defendant purchased the plaint 'B ' Schedule property for Rs. 2,050 and in enforcement of the sale certificate, he obtained delivery of possession of the two houses.
Since the judgment debtor, Narayanaswamy, was entitled to only a half interest in the property, the plaintiff filed E.A. No. 90/58 in the Executing Court under order 21, Rule 100 C.P.C, asserting her independent rights to the southern half of the property and praying for redelivery of the said portion in her favour.
That petition was dismissed by the Sub Court, Anantapur, by order dated March 11, 1960, and hence.
the plaintiff brought the suit out of which this appeal has 241 arisen for setting aside the said summary order and for recovery of possession of the southern portion of the property which is described in the plaint 'C ' Schedule.
During the pendency of the suit, the first defendant sold the northern half of the property in favour of the 7th defendant as per Exh.
B 14 dated March 21, 1961.
Later, the first defendant transferred the southern half of the property to the 8th defendant under the sale deed (Exh. B 15) dated June 19, 1961.
Reference has been made to the fact that the two sales effected by the official Receiver in favour of Narayanaswamy and Narasimhulu were in respect of unspecified half shares in the plaint 'B ' Schedule property.
The basis on which the plaintiff rested her claim for recovery of possession of the southern half of the property was that a partition had been effected between herself and the heirs of Narayanaswamy in 1952 and the 'C ' Schedule property had been allotted to her share at the said partition.
Defendants 2 to 6, who are the legal heirs of deceased Narayanaswamy, did not contest the o suit.
However, the first defendant, who was the main contesting defendant in the trial court, denied that any such partition had taken place.
put forward the case that in effecting the purchase of the balance undivided half interest in the property, when it was brought to sale by the official Receiver on November 28, 1944, Narasimhulu was acting as a benamidar for Moola Narayanaswamy and that the ownership in respect of the said half interest also became vested in Narayanaswamy himself.
It was further contended that the transfer by Narasimhulu in favour of the plaintiff was also a benami transaction for the benefit of Narayanaswamy and hence, the entire property I ad been validly purchased by him at the court sale held in execution of the money decree obtained by him against 1 Narayanaswamy in O.S. 26 of 1952 of the Subordinate Court, Anantapur.
The two main issues that arose for determination by the trial court (court of the Munsif Magistrate, Tadpatri) were (a) whether the transactions of purchase of the half share in the plaint 'B ' Schedule property by Narasimhulu at the court auction sale and the subsequent transfer of the same by Narasimhulu to the plaintiff were benami for the benefit of Narayanaswamy and (b) whether there was a subsequent partition of the property at which the plaintiff was allotted the southern half (plaint 'C ' Schedule property).
On on a consideration of the evidence adduced in the case, the trial court found that there was no, foundation whatever for the plea of 242 benami put forward by the first defendant, that the plaintiff was the owner of a half share in the plaint 'B ' Schedule property and that her interest could in no way be effected by the court sale held in execution of the money decree obtained by the first defendant against Narayanaswamy.
The learned Munsif further held that the plaintiff had not succeeded in establishing her case that there had been a partition of the property by metes and bounds, at which the southern half of the property, namely, the plaint 'C ' Schedule plot had been allotted to her share.
In view of the aforesaid findings, the trial court set aside the summary order passed in E.A. 90/58 in E.P. 7/56 in O.S. 26/52 of the Subordinate Court, Anantapur, and passed a preliminary decree for partition of the plaint 'B ' Schedule property by metes and bounds into two equal shares and for allotment and delivery of one such share to the plaintiff.
The first defendant carried the matter in appeal before the District Court, Anantapur (A.S. 173/56) reiterating his contention that the purchase of the half interest in the plaint 'B ' Schedule property by Narasimhulu and the subsequent sale by him to the plaintiff were benami transactions.
The plaintiff filed a memorandum of cross.
Objections questioning the correctness of the finding entered against by the Munsif that the plea of partition put forward by her had not been proved and praying that in place of decree for partition granted to her by the Munsif, she may be allowed to recover possession of the plaint 'C ' Schedule property after upholding her prayer regarding the partition.
After a detailed consideration of the oral and documentary evidence adduced in the case, the learned Additional District Judge, who heard the appeal, upheld the finding of the trial court that the first defendant had totally failed to establish the case put forward by him that the auction purchase effected by Narasimhulu and the subsequent transfer of the property by Narasimhulu to the plaintiff were both benami transactions intended for the benefit of Moola Narayanaswamy.
It was further held by the learned Additional District Judge that subsequent to the purchase of the half interest in the 'B ' Schedule property by the plaintiff, there had been a partition between her and the other heirs of Narayanaswamy in 1952, as pleaded by the plaintiff, and the plaint 'C ' Schedule property had been allotted to the plaintiff 's share at that partition.
In the light of the aforesaid findings, the appeal filed by the first defendant was dismissed by the learned Additional District Judge, the cross objections filed by the plaintiff were allowed and in modi 243 fication of the decree of the trial court, the plaintiff was granted a decree for recovery of possession of the plaint 'C ' Schedule property.
Against the aforesaid judgment of the Additional District Judge, Anantapur, the first defendant and the 8th defendant filed two separate Second Appeals before the High Court of Andhra Pradesh.
The two questions raised in those appeals were (a) whether the purchase of the property by the plaintiff was benami for Narayanaswamy and (b) whether a partition of the plaint 'B Schedule property had taken place as between the plaintiff and the heirs of Narayanaswamy, at which the plaintiff got the southern half thereof.
A learned Single Judge of the High Court disposed of the two Second Appeals by a common judgment, wherein he has discussed at great length the oral and documentary evidence and entered findings of his own on the two questions aforementioned.
The learned Judge found that there was no force in the contention put forward by the first defendant that the half interest in plaint 'B ' Schedule property was purchased at the court auction sale by Narasimhulu benami for Narayanaswamy.
He also rejected the further plea put forward by the first defendant that the subsequent transfer of the property by Narasimhulu to the plaintiff was also a benami transaction.
In consequence, the Second Appeal filed by the first defendant was dismissed, On the second question aforesaid, the learned Judge differed from the finding of the Additional District Judge and held that the plaintiff had failed to establish that a partition of the property had been effected as between herself and the legal heirs of Narayanaswamy at which the 'C ' Schedule property had been allotted to her share.
The learned Judge then proceeded to hold that the fact that the first defendant sold to the 7th defendant a specified portion in the north did not necessarily create any right in the 7th defendant to the particular properly and hence this was a case where a partition of the property should be effected between the plaintiff on the one hand and the defendants 7th and 8th on the C ' other.
In view of the said findings, the Second Appeal filed by the 8th defendant was allowed by the learned Judge and the suit was remanded to the trial court for effecting a partition of the plaint 'B ' Schedule property between the plaintiff, the 7th defendant and the 8th defendant.
It is against the said decision of the High Court that the 7th defendant has filed this appeal after obtaining special leave from this Court.
244 Two main contentions were advanced by the learned counsel on behalf of the appellant.
Firstly, it was urged that the High Court has acted illegally and in clear violation of the limitations imposed by Section 100 C.P.C. in interfering with the finding entered by the Additional District Judge on the question as to whether or not there had been a partition between certain parties which is a pure question of fact.
The second contention advanced on behalf of the appellant is that the High Court has committed a grievous error in omitting to notice that the 7th defendant had not been even impleaded as a party in the Second Appeal (S.A. 826/67) filed by the 8th defendant, and that while showing the plaintiff as the sole respondent in that Second Appeal a categorical statement had been made in the memorandum of the Second Appeal that "the other parties in the courts below are not necessary parties to this appeal".
It was, therefore, contended by the appellant that the High Court has acted wholly illegally in recording a finding adverse to the 7th defendant and directing a partition of the entire 'B ' Schedule.
property in spite of the fact that the northern plot had been sold to the 7th defendant by deceased Narayanaswamy.
After hearing counsel appearing on both sides, we have unhesitatingly come to the conclusion that both the aforesaid contentions advanced on behalf of the appellant have to be upheld.
The finding entered by the Additional District Judge that a partition had taken place between the plaintiff and the other legal heirs of Narayanaswamy in 1952, and as a result thereof the southern portion of the 'B ' Schedule property (plaint 'C ' Schedule property) had been allotted to the plaintiff 's share was based on a detailed consideration of the legal evidence available on the record.
It was not open to the High Court to reappreciate the said evidence and substitute its own conclusions in place of those entered by the lower courts while exercising the jurisdiction conferred by Section 100 C.P.C.
The learned counsel appearing on both sides have taken us through the relevant portions of the evidence having a bearing on the plea of partition, and we are satisfied that the finding entered by the Additional District Judge cannot be said to be unreasonable or perverse.
No question of law whatever was agitated before the High Court.
In the circumstances, there was no justification at all for the High Court to interfere with the finding of fact entered by the Additional District Judge that there had been a partition between the plaintiff and the legal heirs of Narayanaswamy in 1952 at which the plaint 'C ' Schedule property had been allotted to the share of the plaintiff.
245 In this view, it is unnecessary for us to go into the merits of the second contention advanced on behalf of the appellant.
In the light of the foregoing discussion, we allow this appeal, set aside the decision of the High Court and restore the judgment and decree of the Additional District Judge, permitting the plaintiff to recover possession of the plaint 'C ' Schedule property.
We make it clear that we are expressing no opinion on the question relating to the rights inter se as between the defendants 7th and 8th in respect of the remaining portion of plaint 'B ' Schedule property, and the said matter is left to open.
The parties will bear the respective costs in this appeal.
S.R. Appeal allowed.
| The petitioner is a driver constable in the Delhi Police Force under the Delhi Administration.
The scale of pay in the Delhi Police Force is for non matriculate drivers Rs. 210 270 and for matriculate drivers 225 308.
The scale of pay of a driver in the Railway Protection Force is Rs. 260 400.
The scale of pay of driver in the non secretariat offices in Delhi is Rs. 260 6 326 EB 8 350, while that of Secretariat offices in Delhi is Rs. 260 6 290 EB 6 326 8 366 EB 8 8 8 390 10 400.
The scale of pay of drivers in the office of the Language Commission is Rs. 260 300 while the drivers of heavy vehicles in the Fire Brigade and the Department of Light House is Rs. 330 480.
The petitioner and other driver constables made a representation to the authorities that their case was omitted to be considered separately by the Third Pay Commission and that their pay scales should be the same as the drivers of heavy vehicles in other departments.
As their claims for better scales of pay did not meet with success, the present application has been filed by the petitioner for the issue of a writ under Article 32 of the Constitution.
Allowing the petition, the Court ^ HELD: 1:1.
The petitioner was appointed as a driver in the Delhi Police Force.
After his discharge from the army question of his employment as a driver in Delhi Police Force was considered, he was asked to appear for a test of proficiency in driving, directed to produce a Civil Heavy Transport Driving Licence, selected thereafter as a driver in Delhi Police Force under the category "Employment of Ex serviceman in Delhi Police as N.T. Driver (Constable).
" He was designated as Constable, because for the purposes of the discipline of the Force and appointment as driver in the Delhi Police Force he had to be made a member of the Delhi Police Force and had to be assigned a rank in the Force.
The investiture of the petitioner with the "powers, functions and privileges of a police Officer" was a consequence of his becoming a member of the Force.
[302 H, 303 A C] 1:2.
The petitioner and other drivers in the Delhi Police Force perform the same functions and duties as other drivers in the service of the Delhi Administration and the Central Government.
If anything, by reason of their investiture with the "power, functions and privileges of a police Officer", their duties and responsibilities are more arduous.
The clarification that the drivers of the 299 Delhi Police Force and the other drivers belong to different departments and that the equal pay for equal work is not a principle which the courts may recognise and act upon is irrational.
[306 A, B, C, D] 2:1.
No doubt, equation of posts and equation of pay are matters primarily for the Executive Government and expert bodies and not for the courts, but where all things are equal that is, where all relevant considerations are the same, persons holding identical posts may not be treated differentially in the matter of their pay merely because they belong to different departments.
Of course, if officers of the same rank perform dissimilar functions and the powers, duties and responsibilities of the posts held by them vary, such officers may not be heard to complain of dissimilar pay merely because the posts are of the same rank and the nomenclature is the same.
[303 G H, 304 A] 3:1.
The principle "equal pay for equal work" is not an abstract doctrine but one of substance.
There can be and there are different grades in a service, with varying qualifications for entry into a particular grade, the higher grade often being a promotional avenue for officers of the lower grade.
The higher qualifications or experience based on length of service, reasonably sustain the classification of the officers into two grades with different scales of pay.
The principle of equal pay for equal work would be an abstract doctrine not attracting Article 14 if sought to be applied to them.
[304 C E] 3:2.
It is true that the principle of "equal pay for equal work" is not expressly declared by our Constitution to be a fundamental right.
But it certainly is a Constitutional goal.
Article 39 (d) of the Constitution proclaims "equal pay for equal work for both men aud women" as a Directive Principle of State Policy.
"Equal pay for equal work for both men and women" means equal pay for equal work for every one and as between the sexes.
Directive Principles have to be read into the fundamental rights as a matter of interpretation.
Article 14 of the Constitution enjoins the State not to deny any person equality before the law or the equal protection of the laws and Article 16 declares that there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
These equality clauses of the Constitution must mean something to everyone.
To the vast majority of the people the equality clauses of the Constitution would mean nothing if they are unconcerned with the work they do and the pay they get.
To them the equality clauses will have some substance if equal work means equal pay.
Questions concerning wages and the like, mundane they may be, are yet matters of vital concern to them and it is there, if at all that the equality clauses of the Constitution have any significance to them.
The preamble to the Constitution declares the solemn resolution of the people of India to constitute India into a Sovereign Socialist Democratic Republic.
Again the word 'Socialist ' must mean something.
Even if it does not mean 'to each according to his need ', it must at least mean 'equal pay for equal work '.
[304 E H, 305 A D] 3:3.
From a construction of Articles 14 and 16 in the light of the Preamble and Article 39(d), it is clear that the principle "equal pay for equal work" is deducible from those Articles and may be properly applied to cases of unequal 300 scales of pay based on no classification or irrational classification though those drawing the different scales of pay do identical work under the same employer.
[305 G H, 306 A] Kishori Lal Mohan Lal Bakshi vs Union of India, A.I.R. , distinguished.
|
Civil Appeal No. 246 of 1959.
Appeal from the judgment and decree dated December 4.
1956, of the Patna High Court in First Appeal No. 429 of 1951.
A. V. Viswanatha Sastri and Mohan Behari Lal, for the appellant.
B. K. P. Sinha and A.G. Ratnaparkhi, for respondent No. 1.
M. K. Ramamurthy R. K. Garg, D. P. Singh and section C. Agarwal, for respondent No. 6. 1961, December 13.
This appeal arises out of a suit brought by the respondent Kumar Jagat Kishore 121 Prasad Narayan Singh, hereafter called the respondent, against the appellant, the Raja of Kanika, for redemption of certain mortgages.
The suit was decreed by a learned Subordinate Judge of Gaya and the High Court at Patna confirmed that decree on appeal.
The appellant has now appealed to this Court against the judgment of the High Court.
In the High Court many points were argued but in this Court Mr. Sastri for the appellant pressed only one point.
We have therefore to state only such of the facts as concern the point raised by Mr. Sastri.
The respondent claimed to be entitled to redeem the mortgages as the executor of the estate of Chandreshwar Prasad, the mortgagor, and as the receiver appointed in certain execution proceedings hereafter mentioned.
It has since been finally held, as will appear later, that the will appointing the respondent executor was not genuine.
It may also be stated that the respondent is no longer holding the office of receiver.
It would, therefore, appear that the respondent has now no locus standi to contest the appeal.
He was however, the only person opposing the appeal in this Court.
As learned counsel for the appellant did not object to the respondent appearing in this appeal, it is unnecessary to discuss the respondent 's position further.
It appears that on February 17, 1924, Chandreshwar Prasad executed a mortgage in favour of the then Raja of Kanika to secure a sum of Rs. 4,00,000/ .
The mortgaged properties consisted of certain Mokarrari tenures.
The mortgage debt not having been paid, the Raja of Kanika filed a suit on the mortgage and obtained preliminary and final decrees thereon.
Thereafter he put the decree into execution sometime in 1938 and we are informed that the execution case was never finally disposed of.
It was in these execution proceedings 122 that the respondent had been appointed the receiver of the mortgaged properties.
The Mokarrari tenures were held under the Tikari Raj.
The Tikari Raj had mortgaged its proprietary interests in these and other tenures to the Darbhanga Raj by way of a usufructuary mortgage.
Chandreshwar Prasad appears to have failed to pay the rent of the mortgaged and other tenures which he held under the Tikari Raj.
Thereupon, the Darbhanga Raj as the usufructuary mortgagee of the proprietary interests in these tenures started certificate proceedings for the realisation of the rent and in or about 1940 obtained a certificate for Rs. 83,267/ in respect of arrears of rent.
The certificate put the mortgage security of the Raja of Kanika in jeopardy and the latter thereupon on September 28, 1940, paid the amount of the certificate.
In view of this payment, under section 171 of the Bihar Tenancy Act the Raja of Kanika became the mortgagee of the tenures in respect of the rent of which the certificate had been issued and also entitled to possession of the tenure villages till the amount paid by him in respect of the certificate was repaid with interest at the rate prescribed.
On November 23, 1940, the Raja of Kanika took possession of all the tenures in respect the arrears of rent of which the certificate had been issued.
As a result, the receiver appointed in the execution case was dispossessed.
The mortgagor Chandreshwar Prasad died on September 28, 1941.
The respondent as the executor under a will alleged to have been left by Chandreshwar Prasad obtained probate of it from the High Court on December 10, 1945.
He was appointed receiver in the execution case on February 17, 1949.
On September 20, 1949, the respondent as the receiver and executor as aforesaid filed the suit for the redemption of the aforesaid mortgages.
By 123 this date, the Raja of Kanika in whose favour the mortgage had been executed in 1924 had died and the suit was brought against the appellant as his successor and as the person then entitled to the mortgage 's interest.
The respondent contended that the Raja of Kanika had realised sufficient amounts from the tenures of which he came into possession under section 171 of the Bihar Tenancy Act, to pay off both the mortgages and had in fact realised more which he was liable to repay.
On March, 19, 1951, the respondent was removed from his office as receiver and thereafter on August 22, 1951, the High Court in a Letters Patent Appeal set aside the grant of the probate, holding the will to be a forgery.
On the last mentioned date, a decree for redemption was passed in the suit by the Subordinate Judge, directing the accounts to be taken and giving other usual directions.
The appellant appealed from the judgment of the learned Subordinate Judge to the High Court at Patna some time in September 1951.
While this appeal was pending in the High Court, four daughters of Chandreshwar Prasad were brought on the record as representing the mortgagor 's interest.
In the meantime, on September 25, 1950, the Bihar Land Reforms Act, 1950 had come into force.
This Act provided that the State Government might by notification declare that the estates or tenures mentioned in it had passed to and become vested in the State.
Sometime in 1952, a notification was issued by the Bihar Government under this Act vesting in the State of Bihar the tenures which had come into the possession of the Raja of Kanika under section 171 of the Bihar Tenancy Act.
As a result of this notification the right, title and interest of the mortgagor Chandreshwar Prasad and of the superior owner in tenures vested absolutely in the state free from all encumbrances and 124 the proprietor and tenure holder ceased to have any interest in them.
In August 1952, the State of Bihar took possession of these tenures from the appellant who had till then been in possession.
Thereafter, the State of Bihar was made a party to the appeal pending in the High Court.
As required by section 14 of the Bihar Land Reforms Act, the appellant filed claims in respect of his dues under his aforesaid mortgage decree and the mortgage under section 171 of the Bihar Tenancy Act before the officer appointed under the first mentioned Act.
The daughters of Chandreshwar Prasad were made parties to the claim proceedings but they did not appear to contest the claim.
On January 15, 1955, the Claims Officer decided that a sum of Rs. 5,33,077/ was due to the appellant in respect of the mortgage of 1924 a sum of Rs. 25,034/4/ in respect of the mortgage created by the operation of section 171 of the Bihar Tenancy Act.
No appeals had been taken against these decisions of the Claims officer as provided in the Land Reforms Act and they therefore became final under section 18(3) of that Act.
The appellant 's appeal to the High Court which had been pending all this time, thereafter came up for hearing and it was dismissed on December 4, 1956.
It had been contended on behalf of the appellant that in view of section 35 of the Land Reforms Act a civil court must be deemed to have no jurisdiction to decide any question of mortgage claims over tenures vested in the Government under the Act.
The High Court was unable to accept this contention as in its view what was barred by the Act was a suit by the mortgagee only and observed that the Act did not contain any provision barring a suit by the mortgagor.
In that view of the matter the High Court confirmed the decree of the learned Subordinate Judge.
This appeal against this decisions of the High Court.
We think that this appeal must be allow.
It is clear that a redemption decree can no more be 125 given effect to after the notification issued under the Land Reforms Act, since thereafter the mortgaged tenures became vested in the State of Bihar free from all encumbrances.
The tenures having vested in the State of Bihar, the mortgagee had no longer any interest in the tenures nor was he in possession of them.
He could not carry out the decree by reconveying the tenures to the mortgagor or put him into possession.
The mortgage as a security had ceased to exist, for the mortgaged properties vested in the State of Bihar under the Act free from all encumbrances.
The mortgagor in his turn also ceased to be entitled to the mortgaged properties.
He had hence no right to redeem them.
Therefore, in our view, the decree for redemption which had been previously passed, became infructuous.
But it was said that if the mortgagee had realised more out of the income of the mortgaged properties than was due to him, the mortgagor was entitled to repayment of the excess realisation and that, therefore, the redemption decree in so far as it directed the taking of accounts had not become infructuous.
We are unable to accept this contention in view of the provisions of the Land Reforms Act to some of which we shall now refer.
Under section 4, upon the notification, all the interests of proprietors and tenure holders in estates and tenures mentioned in it came to an end and vested in the State free from all encumbrances.
Clause (d) of this section provides that no suit will lie in a civil court for the recovery of moneys due from the proprietor or tenure holder on a mortgage of the estate or tenure and all such suits and proceedings pending on the date of vesting will be dropped.
Section 14 provides that every creditor whose debt is secured by a mortgage of an estate or tenure vested in the State may within the time there prescribed notify his claim in writing to a Claims 126 Officer for the purpose of determining the amount of the debt payable to him.
It would be clear from this section and section 4(d) earlier referred to, that a mortgagee could not recover the amount due to him from the mortgaged tenures which had vested in the Government except by following the procedure laid down in section 14.
Section 14 also provides that the Claim 's Officer shall be a Subordinate Judge or a Munsif depending on the amount of the claim.
Section 16 states the principles how the claim of the creditors is to be ascertained.
It is not necessary to refer in detail to the provisions of this section but it may be stated that it gives power to scale down the interest.
Section 17 provides for appeals against the decisions of the Claims Officer to a Board one of whose members shall be a Judge of the High court or a District Judge, again depending on the amount of the claim.
Sub section (3) of section 18 provides that "The decision of the Board and where no appeal has been filed to the Board, the decision of the Claims Officer shall be final.
" Sections 14 to 18 are contained in Chapter 4 of the Act.
Chapter 5 of the Act deals with the assessment of compensation payable to the divested proprietors or tenure holders.
Section 24, which is contained in this chapter, deals with the determination of the amount of compensation payable in respect of the transference of the properties to the State.
Sub section (5) of this section provides that in a case where the interest of a proprietor or tenure holder is subject to a mortgage, the compensation shall first be payable to the creditor and then to the proprietor or tenure holder, the amount of compensation payable to the creditor being the amount determined under Ch.
All compensation payable to the proprietor, tenure holder or encumbrancer is required to be set out in the compensation Assessment roll.
Section 35 of the Act states, "No suit shall be brought in any Civil Court in respect of any entry in or omission from a Compensation Assessment roll 127 or in respect of any order passed under Chapters II to VI or concerning any matter which is or has already been the subject of any application made or proceedings taken under the said Chapters.
" This section would make it impossible for the decision of the Claims Officer or the Board to be challenged in an ordinary civil proceeding.
Section 32, which is contained in Chapter 6 of the Act, provides that when the Compensation Assessment roll was become final as prescribed in the Act, the Compensation Officer appointed under the Act shall proceed to make payment in the manner specified in it.
We may also refer to section 38 of the Act which states that the Claims Officer and the Compensation Officer shall have the powers of a Civil Court.
What is the effect of these provisions on the redemption decree in so far as it directed the mortgage accounts to be taken ? It seems to us that they rendered that part of the decree also infructuous.
In our view, the mortgage accounts cannot be taken under the decree for they have already been taken under the Act and the decision of the Claims Officer on the State of the accounts is final under section 18(3).
In view of section 35, no suit can be brought concerning the decision of the Claims Officer.
It is true that the suit in the present case had been brought before the Act and would not itself be affected by section 35.
But we should suppose that the Act will now prevent the account being taken under the decree so as to challenge the decision of the Claims Officer.
If this were not so, the Officer taking the accounts under the decree has to accept the Claims Officer 's decision for that is final and the parties cannot challenge it.
That being so, the result would be that the officer taking the accounts would have to make a report finding that the same amount which the Claims Officer found to be due, was due to the mortgagee.
On this report a decree would follow and the appellant would become entitled to the amount found due 128 to him under the decree.
Now, he was already entitled to that amount under section 32(1) of the Act.
He would then have a right to be paid the same sum twice over in respect of the same mortgage right.
We cannot conceive that such an anomalous position could have been intended by the Act.
We, therefore think that since the Act, the redemption decree cannot be given effect to.
The High Court seems to have thought that the Officer taking the accounts under the redemption decree would not be bound by the decision of the Claims Officer.
This view was based on the reason that only such of the Claims Officer 's decisions would be binding as had been given in matters over which he had jurisdiction and that he had no jurisdiction to investigate into a claim by the mortgagor in respect of realisation by the mortgagee from the mortgaged properties in excess of his dues.
We think that in this the High Court was in error.
In taking the accounts the Claim 's Officer has to decide under section 16 (2)(b) how much had been paid to the mortgagee or realised by him.
It is therefore, wrong to say that the Act did not give the Claims Officer jurisdiction to go into the question of the realisation by the mortgagee.
It is true, as the High Court pointed out, that the Act does not expressly bar a suit by a mortgagor for redemption but that seems to be the practical and inevitable effect of it.
This does not affect the rights of a mortgagor.
He can establish before the Claims Officer that the mortgagee had realised out of the income of the mortgaged properties of which he was in possession more than what was legitimately due to him.
If he succeeds in doing that the Claims Officer will hold that nothing in payable to the mortgagee out of the compensation.
He may even indicate that the mortgagee has been overpaid to a certain extent.
Whether in such a case the mortgagor can file a suit to recover from the mortgagee the amount paid in excess is not a question that arises in this appeal.
129 Even if he could, that would not lead to the conclusion that in the present case the mortgage accounts can be taken under the redemption decree.
We therefore, express no opinion on that question.
We think it right to point out that the Act has taken sufficient care to see that neither the mortgagor nor the mortgagee is in any way prejudiced in the proceedings concerning the investigation of the mortgagee 's claim.
It has provided that the investigation would be by experienced judicial officers of high status and that the proceedings would be taken as if they were taken in a Civil Court.
In the result, in our view, on the mortgage security having vested in the State of Bihar free from encumbrances under the Land reforms Act the redemption decree passed by the learned Subordinate Judge became infructuous.
The decree could not stand any more; the accounts directed to be taken by it could no more be taken, nor the other directions contained in it carried out.
In our view, the High Court was in error in confirming the decree.
The decree could no longer be acted upon.
The claim proceedings under the Act finally determined the state of the mortgage accounts.
We, therefore, allow this appeal, set aside the decree of the High Court and direct that the respondent 's suit for redemption be dismissed.
There will be no order for costs.
| Certain disputes between the appellant and its workmen were referred to the industrial tribunal for adjudication by the State Government under the provisions of the .
The award made by the tribunal provided, inter alia, (1) that if a workman had to work on a weekly off or on a holiday he should be paid 1 1/2 times his wages and dearness allowance over and above a substituted holiday, and (2) that all the workmen shall be granted 15 days privilege leave in a year which could be allowed to be accumulated up to 45 days.
The appellant applied to the Government under section 36A of the Act stating that the directions given by the tribunal had to be clarified on the grounds, inter alia, (1) that the reason for directing the additional payment for working on a weekly off or on a holiday was that the workman was deprived of an opportunity to spend his time in the company of his colleagues and refresh himself, but that there was no basis for this since the whole factory worked on weekly off or on a holiday, and (2) that the accumulation of privilege leave of 45 days to all workmen was not justified.
The tribunal made a clarification as regards privilege leave confining it to only those workmen who had put in 240 days or more of actual working during the previous calendar year so as to be in conformity with the provisions of the , but as regards others matters it held that the directions given were quite clear and that under the guise of clarification the appellant could not seek a modification of the award under section 36A. ^ Held, that 36A of the , was intended to empower a tribunal to clarify the provisions of the award passed by it where a difficulty or doubt arose about their interpretation, and not to review or modify its own order.
Any question about the propriety, correctness or validity of any provision of the award would be outside the purview of the enquiry contemplated by that section.
|
ases Nos. 20 and 21 of 1950.
Appeals under article 132(1)of the Constitution of India from the judgment and order dated the 19th May, 1950, of the High Court of Judicature at Bombay (Dixit and Shah, JJ.) in Confirmation Case No. 4 of 1950 and Criminal Appeals Nos. 190 and 199 of 1950, arising out of judgment dated the 13th March, 1950, of the Court of the Special Judge at Ahmedabad in Special Cases Nos. 2 and 3 of 1949.
N.C. Chatterjee and Ram Lal Anand (Hardyal Hardy and S.L. Chibber, with them) for the appellants.
712 M.C. Setalvad, Attorney General for India (G. N. Joshi, with him) for the respondent.
A.A. Peerbhoy and J.B. Dadachanji lot the Intervener.
May 20.
The judgment of Mehr Chand Mahajan, Mukherjea, Das and Chandrasekhara Aiyar, JJ.
was deliv ered by Das J. Patanjali Sastri delivered a separate dissenting judgment.
PATANJALI SASTRI C.J.
I regret I am unable to a gree with the reasoning and conclusion of my learned brother Das J. whose judgment I have had the advantage of reading.
The appellants were convicted and sentenced to death and varying terms of imprisonment by the Special Judge, Ahmeda bad, on charges of murder and other offences under the Indian Penal Code, the Arms Act and the Bombay Police Act.
The Special Judge was appointed by a notification issued under the Bombay Security Measures Act, 1947, (hereinafter referred to as the impugned Act) and on August 6, 1949, the State Government, in exercise of the powers conferred by section 12 of the impugned Act, directed the Special Judge to try the case of the appellants who were implicated in what was known as the Central Bank Robbery Case.
Charges were framed on January 13, 1950, without any preliminary enquiry and committal by a Magistrate which had been dis pensed with by the impugned Act, and seventeen witnesses for the prosecution were examined before January 26, 1950, when the Constitution came into force.
The proceedings continued, and after the examination of sixty witnesses in all, ended in the conviction of the appellants on March 13, 1950.
Separate appeals were preferred by the present appel lants to the High Court which, however, confirmed the con viction and sentence in each case.
An objection that the trial was illegal as the impugned Act was void under article 13 (1) of the Constitution, read with article 14, was over ruled on the ground that 713 those provisions had no retrospective operation and did not affect proceedings already started in the Court of the Special Judge.
the learned Judges followed the decision of a Special Bench of their own Court in In re Keshav Madbar Menon(1) which has since been affirmed by this Court in ; It is urged on behalf of the appellants that the deci sion relied on by the High Court is distinguishable and that the present case is governed by the decision of this Court in The State of West Bengal vs Anwar Ali Sarkar(2) to the effect that section 5 of the Bengal Act (which is in identi cal terms with section 12 of the impugned Act) is discrimi natory and void in so far, a any rate, as it empowers the State Government to direc "cases" to be tried by a Special Court under a special procedure.
Accordingly, it was claimed that the Special Judge had no jurisdiction to try the appellant applying the special procedure prescribed by the impugned Act.
Granting, however, that section 12 of the impUgned Act must, in view of the decision in Anwar Ali Sarkar ' case (2), be held to be discriminatory and void in so far as it empow ers the State Government to refer individual cases to a Special Judge for trial, it does no seem to me to follow that the trial of the appellants which had validly started before the Special Judge who had been duly empowered to try the case, is vitiated by reason of the Constitution subse quently coming into force.
It is to be noted that the West Bengal case(2) was argued on the basis that article 12 of the Constitution was applicable to the proceeding from their inception, although the notification directing the trial of some of the persons accused in that case was issued on the day before the commencement of the Constitution.
The posi tion here is different The appellant 's case was sent to the Special Judge for trial by notification dated 6th August, 1949, and the Judge took cognisance of it, framed the charges and proceeded with the trial to a considerable extend before the commencement of the Constitution on 26th (1) (1950) 52 Born.
L.R. 540.
(2) [5952] S.C.R. 284.
714 January, 1950.
There could be no question, therefore, of the appellants ' fundamental right under article 14 being in fringed up to that point, as it has been held by this Court in Keshavan Madhava Menon 's case(1) that the provisions of the Constitution relating to fundamental rights have no retrospective operation and do not affect a criminal prose cution commenced before the Constitution came into force.
On and after 26th January, 1950, the appellants, no doubt, had the right to the equal protection of the law; but, as has been repeatedly pointed out, that right only meant that the State, including the executive and the legis lature, should apply the same law, substantive and procedur al, to all persons alike in the same situation without discrimination.
It is said that after the commencement of the Constitution persons who commit the same offences with which the appellants stood charged would, according to Anwar All Sarkar 's case (2) not be liable to be tried by the Special Judge under the special procedure and, if so, the trial of the appellants, too, could not be continued by the Special Judge under such procedure after 26th January, 1950, because such of the departures from the normal procedure of trial under the Criminal Procedure Code as were applied to the appellants during the rest of their trial, being disad vantageous to them in some respects, involved discrimination against them.
It is, therefore, claimed that the continued application of such discriminatory procedure after the Constitution came into force rendered the trial and the resulting conviction illegal.
I am unable to agree.
In the first place, as already pointed out: equal protection of the laws postulates persons in the same situation and in the same circumstances claiming that the same law should be applied to them.
Can it be said that the appellants, whose trial by the Special Judge had been lawfully com menced and was pending at the commencement of the Constitu tion, were in the same situation with persons who committed the same offences after the Constitution came into (1) (2) ; 715 force ? It seems to me that the situation and circumstances are different in the two cases and no complaint of dis criminatory treatment by reason only of the trial having been continued under the special procedure can be sustained, even assuming that the ordinary procedure under the Crimi nal Procedure Code became applicable to the appellants on and after 26th January, 1950.
Such assumption, however, seems to be open to ques tion.
Section 1, sub section (2), of the Criminal Procedure Code enacts that "Nothing herein contained shall affect . . any special jurisdiction or power con ferred or any special form of procedure prescribed, by any other law for the time being in force . .
The juris diction conferred on the Special Judge by the impugned Act, which, as pointed out already, was perfectly valid and fully operative down to the 26th ,January, 1950, thus remained unaffected and application to the appellants of the ordinary procedure prescribed by the Code was excluded.
It cannot, therefore, be said that on the 26th January, 1950.
the appellants were in a position to claim that they were enti tled to be tried under the ordinary procedure like those who committed the same offences after that date or who, having committed them before such date, had not been direct ed to be tried 'by the Special Judge.
It was said that sec tion 1 (2) of the Criminal Procedure ' Code pre supposes a valid law conferring a special juris diction or prescribing a special form of procedure and, inasmuch as such parts of the special procedure as could still be applied to trials continued after the commencement of the Constitution are void under article 13(1) read with article 14, section 1(2) of the Code could not stand in the way of the appellants being tried under the ordinary procedure.
This argument seems to me to beg the question.
It assumes that the special procedure is discriminatory and void to the extent to which it could have been applied to the trial of the appellants after 26th January, 1950.
But the assumption would not be valid unless the appellants could be tried 716 under the normal procedure after 26th January, 1950, in which case alone they could say "Why not try us under the Code; why discriminate?" But, having regard to section 1 (2) of the Code, the normal procedure would become applica ble only if the special procedure is excluded as being discriminatory and void.
The argument thus proceeds in a circle.
Again, it is difficult to see on what principle the jurisdiction of the Special Judge, validly created and exercised over the appellants ' case, could cease to continue on and after 26th January, 1950.
According to the appel lants ' contention.
the special procedure prescribed by the impugned Act became discriminatory and void after 26th Janu ary, 1950, and, therefore, inapplicable to what remained of their trial.
But, could this circumstance affect the compe tence of the Special Judge to try their case of which he had validly taken cognisance ? In Keshoram Poddar vs Nundo Lal Mullick(1) the Judicial Committee of the Privy Council held that the cessation of the jurisdiction of a Rent Control Tribunal after 31st March, 1924, over properties beyond a certain rental value did not affect its power to deal with a case after such cessation if the case was within its juris diction when it was filed and related to a period prior to such cessation.
Their Lordships observed: "The application of the Act is when the parties begin to move under it.
This was done in the present case before March 1924.
The rest is merely the working out of the application".
The position here seems to me to be closely analogous.
The Special Judge was competent to try the appellants ' case when the trial commenced before 26th January, 1950, and the impugned Act was validly applied to the case.
The rest was merely working out the application of the impugned Act.
I find it diffi cult to see why the competency of the Special Judge to try the case should cease after 26th January, 1950, any more than that of the Rent Control Tribunal to deal with a pend ing matter after 31st March, 1924, when its jurisdiction was restricted.
(1) (1927) 54.
I.A.152.
717 If, then, the jurisdiction of the Special Judge to continue the trial of the appellants remained unaffected by the advent of the Constitution, it would be impracticable for the Judge to switch the pending trials to a different procedure from 26th January, 1950, so as to give effect to the equal protection claims of under trial prisoners.
The impugned Act, for instance, enacts that "Notwithstanding anything contained in the Code the trial of offences before a Special Judge shall not be by jury or with the aid of assessors" (section 20).
The trials having been held so far without a jury or assessors as the case may be.
it would obviously be impossible in such cases to continue them after 26th January, 1950, with a jury or with the aid of asses sors, where such trials are required to be so conducted under the ordinary procedure.
Again, the impugned Act provides that no case shall be transferred from any Special Judge, a necessary consequence of the exclusive jurisdiction of the Special Judge and the special mode of proceeding prescribed for him.
If a right of transfer under section 526 of the Code were to be recognised as accruing after 26th January, 1950, to persons undergoing trial before the Spe cial Judge, the scheme of trial by Special Courts may well break down.
The alternative courses open to the Court would, therefore, seem to be either to hold that article 13(1), read with article 14, does not affect pending trials even in respect of procedural matters, as it has been held not to affect such trials in respect of substantive rights and liabilities accrued before the date of the Constitution in Keshavan Madhava Menon 's case(1), or to go back on that decision and give those provisions of the Constitution retrospective, effect.
I am clearly of opinion that the principle of the above said decision must rule the present case.
That principle has been stated thus: "Article 13(1) cannot be read as obliterating the entire operation of the inconsistent laws, or to wipe them out altogether from the statute book, for, to do so will be to give them retrospec tive effect which, we have said, they do not possess.
Such laws exist for all past transactions and ,.for enforcing all (1) ; 718 rights and liabilities accrued before the date of the Con stitution", (Italics mine).
Indeed, the last few words are apt to cover the present case, though, as a party to that decision, I am sensible that we did not have in mind a case precisely like the one now before us.
But, it is well to remember that over fine distinctions sometimes lead to unsuspected traps.
In the foregoing discussion I have assumed that such departures from the normal procedure as were still applica ble to what remained of the appellants ' trial after the 26th January, 1950, were so materially prejudicial to them as to amount to a denial of the equal protection of the laws within the meaning of article 14 of the Constitution.
I am, however, by no means satisfied that that is the position.
One of these deviations relates to the recording of evi dence. '1 he SpeCial Judge is empowered to record only a memorandum of the substance of the evidence of each witness examined, whereas the Criminal Procedure Code requires the evidence to be recorded in full.
Another relates to the summoning of witnesses for the defence, the Special Judge being given a discretion to refuse to summon a witness ' 'if satisfied after examination of the accused that the evidence of such witness will not be material" (section 13), while under section 257(1)of the Code the Magistrate has the discretion to refuse to summon witnesses if he considers that the application for the issue of process for compelling the attendance of any witness is made "for the purpose of vexa tion or delay or for defeating the ends of justice".
And lastly, the impugned Act provides that no court shall have jurisdiction to transfer any case from any Special Judge (section 18 (3)), whereas transfers under section 526 of the Code are allowed on certain specified grounds.
The more important departures from the procedure under the Code such as dispensation of preliminary enquiry and committal and the elimination of jury and assessors had already been applied, and validly applied, to the trial of the appellants before the Constitution came into force.
and there can be no ques tion of such departures vitiating the trial.
I am unable to regard the 719 procedural variations in the recording of evidence and the summoning of witnesses as so serious as to amount to a denial of the equal protection of the laws within the mean ing of article 14.
Even if the appellants were to be tried under the normal procedure of the Code after 26th January, 1950, the omission to record the evidence in full and the refusal to summon a witness in the circumstances mentioned in section 13 may well be regarded as mere irregularities curable under section 537 of the Criminal Procedure Code.
As regards transfer, it does not, as already pointed out, fit in with the scheme of trial before a Special Judge, and, unless any system of trials by Special Courts is to be condemned as violative of article 14 the decision of this Court in Kathi Raning Rawat vs The State of Saurashtra(1) shows that it can be validly instituted in appropriate circumstances a prohibition of transfer cannot be regarded as falling within the inhibition of article 14.
I have emphasised elsewhere, and I do so again, that in applying the dangerously wide and vague language of the equality clause to the concrete facts of life, a doctrinaire approach should be avoided.
In all the circumstances of this case, I do not feel impelled to set aside the trial and conviction of the appel lants and I accordingly dismiss the appeals.
DAs J.
These two appeals are from the judgment of a Division Bench of the Bombay High Court (Dixit and Shah JJ.) dated May 19, 1950, dismissing the appeals preferred by the appellants against the order made by Shri M.S. Patti on March 13, 1950, as the Special Judge appointed under the Bombay Public Security Measures Act, 1947, whereby he con victed and sentenced them to death and to different terms of imprisonment under the different charges.
The prosecution case is shortly as follows: On the morning of May 26, 1949, between the hours of 10 30 a.m. and 11 a.m. in the city of Ahmedabad the two appellants with another companion, after injuring, by gunshot, the driver and a peon of the Central (1) ; 720 Bank of India Ltd, forcibly removed motor van No.
BY 4388 belonging to the bank in which a large sum of money was being carried from its head office at Gandhi Road to its branch office at Maskati.
After abandoning the motor van at a distance of threefourths of a mile, the three gunmen forcibly took possession of the bicycles of some persons who were riding the same and continued their escape.
In course of their flight, they fired and injured several people.
Eventually, however, the two appellants were arrested by the police but their companion made good his escape.
The driver and the peon of the bank who had been injured succumbed to their injuries, one dying on the spot and the other in the hospital on the next day.
After investigation, the Ahmedabad Police, on July 19, 1949, submitted to the City Magistrate, Ahmedabad, two charge sheets Nos. 183 and 188 A against the two appellants and the then unknown absconder in respect of several of fences committed in course of the transaction that took place on May 26, 1949.
The charge sheet No. 183 was in respect of offences under sections 394, 397, 302, 307 read with section 84 of the Indian Penal Code, section 19 (e) of the Arms Act, and section 68 (1) of the Bombay District Police Act.
The charge sheet No. 183 A was in respect of offences punishable under sections 307, 392 read with sec tion 84 of the Indian Penal Code, section 19 (e) of the Arms Act and section 68 (1) of the Bombay District Police Act.
In each of these charge sheets there was appended a note to the effect that the District Superintendent of Police, Ahmedabad City, had requested the District Magistrate.
Ahmedabad, to move the Government of Bombay/or the constitu tion of a Special Court to hear the cases and that the said charge sheets might be transferred to the Special Court as and when one was so constituted.
In view of this note the City Magistrate did not hold any enquiry but only re manded the appellants.
By a Notification dated August 6, 1949, the Government of Bombay exercising its powers under section 10 ofthe Bombay Public Security Measures Act, 1947, 721 constituted a Special Court of criminal Jurisdiction for the Ahmedabad District and under section 11 of that Act appoint ed Shri M.S. Patil, District and Sessions Judge, Ahmedabad, as a Special Judge to preside over the Special Court.
By another Notification made on the same date, the Government of Bombay in exercise of powers conferred by section 12 the Act directed the Special Judge to try two particular cases, namely, the Postal Van dacoity case in which there were 9 accused and the Central Bank robbery with murder case in which the two appellants before us were the accused under the two charge sheets.
In view of the above Notification the City Magistrate, Ahmedabad, transferred the two cases against the appellants to the Court of the Special Judge and they came to be numbered as cases Nos. 2 and 3 respectively of 1949.
On December 31, 1949, the Government of Bombay directed that the trial of the appellants should be held by the Special Judge in the Ahmedabad Central Prison.
There was no order of committal by any Committing Magistrate nor was there any preliminary enquiry by the Special Judge.
On January 13, 1950, the Special Judge consolidated the two cases against the appellants with a view to holding a joint trial.
On the same day he framed five several charges, namely, four under different sections of the Indian Penal Code and one under section 19 (e) of the Indian Arms Act and section 68 (1)of the Bombay District Police Act.
On January 19, 1950, the 'first prosecution witness was examined and up to January 25, 1950, seventeen prosecution witnesses were examined.
The Constitution came into operation on January 26, 1930.
The hearing proceeded thereafter and the deposi tion of the last witness was recorded on February 9, 1950.
Altogether sixty two witnesses were examined.
The two appellants were examined under section 342 of the Code of Criminal Procedure on February 10, 1950.
One handwriting expert was examined as a Court witness on February 13, 1950, and arguments for the prosecution commenced on the following day.
After the conclusion of the 722 arguments for the defence on February 23, 1950, the Special Judge delivered his judgment on March 13, 1950.
According to his findings both the appellants had committed eleven different offences punishable under several penal provisions of law as specified by him and he convicted both the appel lants of the said eleven offences and sentenced both of them to death under section 302/34, Indian Penal Code, and to transportation for life under section 307/34, Indian Penal Code, and to various terms of imprisonment under various other sections of the Indian Penal Code, Arms Act and Bombay District Police Act.
The capital sentences were, of course, subject to the confirmation by the High Court.
Both the appellants appealed to the Bombay High Court.
The appeals along with the reference for the confirma tion of the sentences of death were heard together by Dixit and Shah JJ.
who by their judgments dated May 19, 1950, dismissed the appeals and confirmed the sentences of death.
The appellants applied to the High Court for certificates under articles 132 (1) and 134 (1) (c) of the Constitution to enable them to appeal to this Court.
The High Court (Bhagwati and Dixit JJ.), however, granted the appellants a certificate only under article 132 (1) but declined to issue any under article 134 (1) (c).
The appellants thereupon filed the present appeals pursuant to the certificate under article 132 (1).
A petition was filed before us under arti cle 132 (3) for leave to urge, as an additional ground, that the trial was vitiated by reason of misjoinder of charges.
No such ground was actually advanced before the High Court and as this Court did not think fit to permit the appellants to raise a new point at this stage it disallowed that peti tion.
Accordingly these appeals must be limited to attack ing the judgment of the High Court on the ground that a substantial question of law as to the interpretation of the Constitution has been wrongly decided.
The only substantial question of law as to the interpre tation of the Constitution urged before us is that 723 the Bombay Public Safety Measures Act, 1947, or, at any rate, that part of section 12 of that Act which authorises the State government to direct specific "cases" to be tried by a Special Judge appointed under that Act, offends against the equal protection of law guaranteed by article 14 of the Constitution and is as such void under article 13 on the principle laid down by this Court in the cases of The State of West Bengal vs Anwar Ali Sarkar(1) and Kathi Raning Rawat vs The State of Saurashtra(2).
In order to appreciate the point in issue, it is necessary to consider in some detail the provisions of the impugned Act.
The Act came into force on March 23, 1947.
It was then instituted as "An Act to consolidate and amend the law relating to public safety, maintenance of public order and the preservation of peace and tranquillity in the Province of Bombay".
The preamble recited the expediency of consoli dating and amending the law relating to those several mat ters.
By section 9 (3) the Act was to remain in force for a period of three years.
The Act was amended by Bombay Act I of 1950 and, amongst other things, the words "security of the State, maintenance of public order and maintenance of supplies and services essential to the community in the State of Bombay" were substituted for the words "public safety, maintenance of public order and the preservation of peace and tranquillity in the Province of Bombay" occurring in the long title and preamble of the Act.
The word "six" was substituted for the word "three" in section 2(3).
The remaining sections of the Act are grouped under several heads.
Thus sections 3 (A1) to 5B are grouped under the heading "Restrictions of movements etc.
" A contravention of an order made under some of these sections is made an offence punishable as mentioned therein.
The subject of "collective fines" is dealt with under that heading in section 6. "Control of. camps etc.
and uniforms" are covered by sections 7 and 8, each of which makes a contra vention (1) ; (2) ; 94 724 of any order made under it an offence.
Section 9 prescribes whipping as a punishment for certain offences under certain Acts in addition to any other punishment to which the of fender may be liable under those Acts.
Section 9A is set down under the heading "Control of Publications etc." and section 9B under the heading "Control of Commodities etc.
" Each of those sections makes a contravention of any order made thereunder an offence punishable as provided therein.
Sections 10 to 20 which are collected under the heading "Special Courts" are material for the purposes of the point in issue before us and will have to be carefully noted.
The rest of the sections are set out under the headings "Miscel laneous" and "Amendments to Acts".
Turning to the group of sections under the heading "Special Courts", it will be noticed that section 10, like section 3 of the West Bengal (Special Courts) Act.
1950, and section 9 of the Saurashtra State Public Safety Measures Ordinance, 1948, authorises the government by notification in the Official Gazette to constitute Special.
Courts of criminal jurisdiction for such ' area as may be specified in the notification.
Section 11 which corresponds to section 4 of the West Bengal Act and section 10 of the Saurashtra Ordinance empowers the government to appoint as a Special Judge to preside over a Special Court any person possessing the requisite qualifications mentioned therein.
Section 12 is expressed in precisely the same terms in which section 5(1)of the West Bengal Act and section 11 of the Saurashtra Ordinance are ' expressed, namely: "A Special Judge shall try such offences or class of offences or such cases or class of cases as the Provincial Government may, by general or special order in writing direct.
" It will be noticed that the offences mentioned in the above section are not limited to offences created by this Act only but also cover offences under any other law, e.g, the Indian Penal Code, Section 13 runs thus 725 "13.
(1) A Special Judge may take cognizance of of fences without the accused being committed to his Court for trial.
(2) A Special Judge shall ordinarily record a memoran dum only of the substance of the evidence of each witness examined, may refuse to summon any witness if satisfied after examination of the accused that the evidence of such witness will not be material and shall not be bound to adjourn any trial for any purpose unless such adjournment is, in his opinion, necessary in the interests of justice.
(3) In matters not coming within the scope of sub sections (1) and (2), the provisions of the Code, in so far as they are not inconsistent with the provisions of sections 10 to 20, shall apply to the proceedings of a Special Judge; and for the purposes of the said provisions, the Court of the Special Judge shall be deemed to be a Court of Session." Under section 14 the Special Judge may in his discretion direct the evidence of a person who is not in a position to attend the Court to be recorded on commission.
Enhanced punishments are provided for certain offences by section 15 as follows: "Notwithstanding anything contained in the Indian Penal Code, whoever commits an offence of attempt to murder may, in lieu of any punishment to which he is liable under the said Indian Penal Code, be punishable with death, and whoever commits an offence of voluntarily causing hurt by stabbing may.
in lieu of any punishment to which he is liable under the said Indian Penal Code, be punishable with death or transportation for life.
" Section 16 authorises the Special Judge to pass any sentence authorised by law and section 17 prescribes a special rule of procedure for recovery of fines.
Section 18 gives a right of appeal to a person convicted on a trial held by a Special Judge within a period of fifteen days from 'the date of sentence and also empowers the High Court to call for the records of the proceedings of any 726 case tried by a Special Judge and in respect of such case exercise any of the powers conferred on a Court of appeal by sections 423, 426 and 428 of the Code.
Sub section (3) of section 18 runs thus: "No Court shall have jurisdiction to transfer any case from any Special Judge or to make any order under section 491 of the Code in respect of any person triable by a Spe cial Judge or, save as herein otherwise provided, have jurisdiction of any kind in respect of proceedings of any Special Judge." Thus the right to apply for transfer of the case and the right to apply for revision are denied to an accused who is tried by a Special Judge.
Ordinary law is, by section 19 made applicable in so far as it is not inconsistent with the provisions of sections 10 to 20.
Section 20 provides as follows : "Notwithstanding anything contained in the Code, the trial of offences before a Special Judge shall not be by jury or with the aid of assessors.
" Thus, besides providing for enhanced punishment and whipping the Act eliminates the committal proceedings [section 13 (1)], permits the Special Judge to record only a memorandum of the evidence, confers on him a larger power to refuse to summon a defence witness, than what is conferred on a Court by section 257(1) of the Code of Criminal Proce dure and also deprives the accused of his right to apply for a transfer or for revision.
That these departures from the ordinary law cause prejudice to persons subjected to the procedure prescribed by the Act cannot for a moment be denied.
This Court has, by its decisions in the State of West Bengal vs Artwar Ali Sarkar (supra) and in Kathi Raning Rawat v The State of Saurashtra (supra).
recognised that article 14 condemns discrimination not only by a sub stantive law but also by a law of procedure and that the procedure prescribed by the corresponding provisions in the West Bengal Special Courts Act and the Saurashtra Ordinance which introduced similar departures from the ordinary law of procedure constituted a discrimination 727 against persons tried by the Special Judge according to procedure prescribed by those pieces of legislation and finally that, in any event, section 5 (1) of the West Bengal Act and section 11 of the Saurashtra Ordinance, both of which corresponded to section 12 of the Bombay Public Secu rity Measures Act, in so far as they authorised the govern ment to direct specific and particular "cases" to be tried by the Special Judge, was unconstitutional and void.
In view of the departures from the ordinary law brought about by the Bombay Public Safety Measures Act, 1947, which are noted above, it cannot but be held, on a parity of reason ing, that at any rate section 12 of the Act, in so far as it authorises the Government to direct particular "cases" to be tried by a Special Judge, is also unconstitutional.
Learned Attorney General appearing for the State of Bombay does not controvert the legal position as discussed above but he points out that the offences were committed in May, 1949, that the Special Court was constituted and the Special Judge was appointed in August, 1949, and these "cases" were directed to be tried by the Special Judge in August, 1949, that the Special Judge actually framed charges against the appellants on January 13, 1950, and that the depositions of seventeen witnesses had been taken before the Constitution came into force and when the Bombay Public Safety Measures Act, 1947, was valid in its entirety.
He contends, on the authority of the decision of this Court in Keshavan Madhava Menon vs The State of Bombay(1).
that the Constitution has no retroactive operation and that it does not affect the rights acquired or the liabilities incurred under laws which, before the advent of the Constitution, were valid, and, quoting from the jud ment of the majority of the Bench in that case, that "such laws exist for all past transactions and for enforcing all rights and liabili ties accrued before the date of the Constitution", he urges that the legal proceedings commenced before the Constitution came into (1) ; 728 operation are in no way affected by it and may well be proceeded with.
In Keshavan Madhava Menon 's case, the appellant was the Secretary of People 's Publishing House, Ltd., of Bombay.
In September, 1949, he was alleged to have published a pamphlet which, according to the Bombay Government authorities was a "news sheet" within the meaning of section 2 (6) of the Indian Press (Emergency Powers) Act, 1931.
On December 9, 1949, he was arrested and a prosecution was started against him in the Court of the Chief Presidency Magistrate at Bombay for having published the pamphlet without the author ity required by section 15(1) of the Act and for having thereby committed an offence punishable under section 18 of that Act.
During the pendency of the proceedings the Con stitution of India came into force on January 26, 1950.
On March 3, 1950, the petitioner filed a written statement submitting, inter alia, that the definition of "news sheet" as given in section 2(6) of that Act, and sections 15 and 18 thereof were inconsistent with article 19(1)(a) and, as such, void under article 13 of the Constitution.
This was followed up by a petition filed in the High Court on March 7, 1950, under article 228 of the Constitution.
The Bombay High Court considered it unnecessary to deal with the ques tion whether sections 15 and 18 were inconsistent with article 19(1)(a) but held that, Assuming that they were inconsistent, the proceedings commenced under section 18 before the commencement of the Constitution could neverthe less be proceeded with.
The High Court took the view that the word "void" was used in article 13(1) in the sense of repealed" and that consequently it attracted section 6 of the General Clauses Act which by article 367 was made ap plicable for the interpretation of the Constitution.
The High Court having dismissed the applicant the appellant came up on appeal before this Court after having obtained a certificate granted by the High Court under ' article 132 (1) of the Constitution.
the majority of this Court held that the Constitution and no retrospective effect but was wholly prospective 729 in its operation and as the existing laws, in so far as they were inconsistent with the fundamental rights, were rendered void only to the extent of their inconsistency, they were not void for all purposes but were void only to the extent they came into conflict with the fundamental rights.
In other words, the majority of this Court held that while on and after the commencement of the Constitution no existing law could, by reason of article 13 (1), be permitted to stand in the way of the exercise of any of the fundamental rights, that article could not be read as wiping out the inconsistent law altogether from the statute book and as obliterating its entire operation on past transactions, for to do so would be to give it retrospective effect which it did not possess.
Such law, it was held, existed for all past transactions and for enforcement of rights and liabilities accrued before the date of the Constitution.
To the same effect were the observations of Mahajan J. who delivered a separate but concurrent judgment, namely, that a provision that with effect from a particular date an existing law would be void to the extent of the repugnancy had no retro spective operation and could not affect pending prosecutions or actions taken under such law, and there was in such a situation no necessity for introducing a saving clause and that it did not need the aid of a legislative provision of the nature contained in the Interpretation Act or the Gener al Clauses Act.
According to him, not being retrospective in its operation, the Constitution could not, therefore, in any way affect prosecutions started for punishing offences that were complete under the law in force at the time they were committed.
It will be noticed that in that case the prose cution was started according to the ordinary law of proce dure.
The only question there was whether a criminal pro ceeding instituted for a contravention of the provisions of the Indian Press (Emergency Powers) Act which amounted to a completed offence before the date of the Constitution could be continued after the Constitution came into force where no change in procedure was involved.
The result of that deci sion iS that although 730 the acts which before the Constitution constituted an of fence under that Act would not, if done after the date of the Constitution, amount to an offence, nevertheless as the Constitution had no retrospective operation it did not obliterate the offence completed before the date of the Constitution and the offender could, therefore, be proceeded against after the Constitution came into force.
It was in this sense that it was stated in Keshavan Madhava Menon 's case that the law existed for the past transactions and for enforcing all rights acquired or liabilities incurred before the date of the Constitution.
If the law did not exist, the offence created by it would ipso facto disappear and no question of punishing the non existing offence could arise.
The observations made in that case related to the substan tive rights acquired or liabilities incurred under the Act before the Constitution came into force.
Under what proce dure the rights and liabilities would be enforced did not come up for consideration in that case, as the procedure adopted throughout was the same.
namely, the procedure prescribed by the Code of Criminal Procedure.
The law of procedure regulates legal proceedings gener ally from its inception up to its termination and usually connotes a continuous process. ]he Bombay Public Safety Measures Act, 1947, by sections 10 to 70 under the heading "Special Courts" prescribes a special procedure for the trial by the Special Judge of "such offences or class of offences or cases or class of cases as the government may by general or special order in writing direct".
The offences or cases so directed to be tried by the Special Judge need not be, or relate to, the special offences created by the Act itself but may be or relate to, any offence under any law, e.g., Indian Penal Code.
Arms Act and the Bombay District Police Act.
It has been seen that the special procedure prescribed by the impugned Act constitutes a departure from the ordinary law of procedure and is, in some important respects, detrimental to the interest of the persons subjected to it and as such is discriminatory.
The 731 discrimination does not end with the taking of cognizance of the case by the Special Judge without the case being commit ted to him but continues even in subsequent stages of the proceedings in that the person subjected to it cannot, even at those subsequent stages, have the benefit of having the evidence for or against him recorded in extenso, may not get summons for all witnesses he wishes to examine in defence only on the ground that the Special Judge does not consider that such evidence will be material and cannot exercise his right to apply to a superior Court for transfer.
of the case even though the Special Judge has exhibited gross bias against him or to apply for revision of any order made by the Special Judge.
As the Act 'was valid in its entirety before the date of the Constitution, that part of the pro ceeding before the Special Judge, which, up to that date, had been regulated by this special procedure cannot be questioned, however discriminatory it may have been, but if the discriminatory procedure is continued after the date of the Constitution, surely the accused person may legitimately ask: "Why am I to day being treated differently from other persons accused of 'similar offences in respect of proce dure? It is stated in Maxwell 's Interpretation of Statutes, 9th Edn., p. 232 "No person has a vested right in any course of proce dure.
He has only the right of prosecution or defence in the manner prescribed for the time being by or for the Court in which he sues, and, if an Act of Parliament alters that mode of procedure, he has no other right than to proceed according to the altered mode.
" If in the absence of any special provision to the con trary, no person has a vested right in procedure it must follow as a corollary that nobody has a vested liability in matters of procedure in the absence of any special provision to the contrary.
If this is the position when the law of procedure is altered by statute, why should the position be different when the Act prescribing the discriminatory proce dure becomes 732 void by reason of its repugnancy to the equal protection clause of the Constitution? Although the substantive rights and liabilities acquired or accrued before the date of the Constitution remain enforceable, as held in Keshavan Madhava Menon 's case, nobody can claim, after that date, that those rights or liabilities must be enforced under that particular procedure although it has, since that date, come into con flict with the fundamental right of equal protection of laws guaranteed by article 14.
It is said, in reply, that in this case there is, in law, no discrimination which can be said to be within the mischief sought to be prevented by article 14.
The appel lants are persons whose "cases" had been properly sent for trial to the Special Court before the Constitution came into force and, therefore, they cannot complain if the procedure prescribed by the Act is continued to be applied to their "cases" although such procedure cannot be applied to "cases" which had not been referred to the Special Court up to that date, for the appellants cannot claim to be similarly situ ated with persons whose "cases" had not been directed to be tried by the Special Court before the date of the Constitu tion or who committed similar offences after that date.
In the circumstances.
the continued application of the proce dure laid down in the impugned Act to the "cases" of the appellants cannot.
it is contended, amount to discrimination in the eye of the law and is, therefore, not within the inhibition of the equal protection clause of the Constitu tion.
Article 14 being thus out of the way, the procedure laid down in the impugned Act continues to be valid in law as regards the persons whose ' 'cases" had been subjected to it before the advent of the Constitution I and so far as those persons are concerned there has been no change in the procedure and, therefore, their "cases" must continue to be regulated by that procedure.
We are unable to accept this argument as sound.
It is now well established that while article 14 forbids class legislation it does not forbid reasonable Classification for the purposes of legis lation.
In 733 order, however, to pass the test of permissible classifica tion, two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible dif ferentia which distinguishes persons or things that are grouped together from others who are left out of the group and (ii) that differentia must have a rational relation to the object sought to be achieved by the Act.
What is necessary is that there must be a nexus between the basis of classification and the object of the Act.
To take an exam ple: Under section 11 of the Contract Act persons who have not attained majority cannot enter into a contract.
The two categories are adults and minors.
The basis of classifica tion is the age.
That basis obviously has a relation to the capacity to enter into a contract.
Therefore, the section satisfies both the requirements of a permissible classifica tion.
In the present case, although the first part of section 12of the Bombay, Act, like section 5 (1)of the West Bengal Actor section 11 of the Saurashtra Ordinance, may indicate and imply a process of classification, the section, in so far as it authorises the government to direct particu lar "cases" to be tried by the Special Court, does not purport to proceed upon the basis of any classification at all.
Further, the supposed basis of the alleged classifica tion, namely the fact of reference to the Special Court before the Constitution came into effect, has no reasonable relation to the objects sought to be achieved by the Act.
The avowed objects of the Act recited in the preamble are the expediency of consolidating and amending the law relat ing to the security of the State, maintenance of public order and maintenance of supplies and services essential to the community in the State of Bombay.
If the consideration of the security of the State or the maintenance of public order requires the application of the special procedure there is no obvious reason why it should be applied to "cases" already referred and not to cases not yet referred at the date of the Constitution.
The same consideration applies equally to both categories of cases.
It is, there fore, clear that there is no nexus 734 which connects the basis on which the supposed classifica tion is founded with the objects of the Act, for the object of the Act is wide enough to cover both categories of "cases ".
Therefore, it is not a permissible classification.
Indeed, it is an instance of fanciful classification which has no rational basis at all.
We see no particular reason why the special procedure should be applied to the appel lants ' "cases" any more than it should be applied to "cases" not referred to the Special Court up to the 26th January, 1950.
No special or peculiar circumstances have been shown to exist which may make the appellants ' "cases" specially suited to this special procedure.
In the absence of a rational basis of classification, as explained above, there can be no justification, after the advent of the Constitu tion, for depriving the appellants of the right to move the Court for transfer or for revision or to obtain process for the attendance of defence witnesses or of having the evi dence of the witnesses recorded as in an ordinary trial which is available to other persons accused of similar offences and prosecuted according to the ordinary procedure laid down in the Code of Criminal Procedure.
It is, there fore, clear that in this case the discrimination continued after the Constitution came into force and such continuation of the application of the discriminatory procedure to their cases after the date of the Constitution constituted a breach of their fundamental right guaranteed by article 14 and being inconsistent 'with the provisions of that article the special procedure became void under article 13 and as there is no vested right or liability in matters of proce dure the appellants are entitled to be tried according to the ordinary procedure after the date of the Constitution.
Their complaint is not for something that had happened before 26th January, 1950, but is for unconstitutional discrimination shown against them since that date.
Their grievance, their cause of action as it were, is post consti tution and, therefore, must be scrutinised and examined in the light of their constitutional rights.
So viewed, there can be no doubt or 735 question that they have been discriminated against after the date of the Constitution in the matter of procedure.
It has already been held in the West Bengal and the Saurashtra cases that discrimination can lie in procedure just as much as in a substantive law.
Therefore, the continuation of the trial after that date according to the discriminatory proce dure resulting in their conviction and sentence cannot be supported.
Indeed in a sense the Special Judge 's jurisdic tion came to an end, for he was enjoined to proceed only according to the special procedure and that procedure having become void as stated above, he could not proceed at all as a Judge of a Special Court constituted under the impugned Act.
The learned Attorney General relied on the decision of the Privy Council in Keshoram Poddar vs Nundo Lal Mallick(1).
The Calcutta Rent Act, 1920, enabled the land lord or tenant of premises in Calcutta to obtain from the Controller of Rents a certification of the standard rent of the premises and also gave a right to apply to the President of the Calcutta Improvement Tribunal for revision of the order of the Controller.
The Act was originally to be in force for a period of three years which was subsequently extended until the end of March, 1924, and finally the figure 1927 was substituted for 1924 with a proviso "that after 31st March, 1924, this Act shall cease to apply to any premises the rent of which exceeded Rs. 250 a month".
The appellant was let into possession on 1st June, 1920, but the rent payable was not then fixed.
He remained in possession until March, 1923, and the question raised by the case was what rent ought to be paid for that period of occupation.
Disputes having arisen, the appellant applied to the Con troller and on 23rd October, 1922, the Controller fixed the rent at Rs. 4,500 per month.
On 25th November, 1922, the appellant appealed to the President of the Improvement Tribunal to revise that decision.
The revision application could not be taken up by the President until long after 31st March, 1924, and when it was eventually (1) I.L.R. ; 54 I.A. 152.
736 posted before him on 3rd August, 1924, he held that had no jurisdiction to determine the matter, for the Act had ceased to apply to the premises.
It will be observed that the application to the President was made long before 31st March, 1924, and that the period for which the rent had to be determined was between June, 1920, and March, 1923.
The Privy Council held that the application of the Act was when the parties began to move under it and that was done before March, 1924, and that the President accordingly had jurisdiction to decide it.
That decision appears to us to have no application to the facts of the present case, for the problem before us does not relate to a period anterior to the Constitution when the Act was good and the Special Judge had authority to apply the special procedure.
The point for decision now is whether the continuation of the procedure prescribed by the Act after the Constitution came into force operates to the prejudice of the appellants and, as such, offends against their newly acquired fundamental right of equal protection of law guaranteed by article 14.
The Constitution has no retrospective operation to invali date that part of the proceedings that has already been gone through but the Constitution does not permit the special procedure to stand in the way of the exercise or enjoyment of post constitutional rights and must, therefore, strike down the discriminatory procedure if it is sought to be adopted after the Constitution came into operation.
To that situation, the decision of the Privy Council referred to above can have no application.
For reasons Stated above, the conviction of the appel lants on trial held by the Special Judge after the date of the Constitution according to the special procedure pre scribed by the impugned Act and the sentences passed on them cannot be supported and these appeals must, therefore, be allowed and the convictions and sentences must be set aside.
The appellants are entitled, after the Constitution, not to be discriminated against in matters of procedure and are entitled to be tried according to law.
We, therefore, 737 direct that they be tried for the offences alleged to have been committed by them according to law and in the meantime they be retained in custody as undertrial prisoners.
Appeals allowed.
Agent for the intervener: Rajinder Narain.
| Held, per MAHAJAN, MUKHERJEA, DAs and CHANDRASEKHARA AIYAR, JJ.
(PATANJALI SASTRI C.J. dissenting).
Section 12 of the Bombay Public Safety Measures Act, 1947, in so far, at any rate, as it authorises the Government to direct particular "cases" to be tried by a Special Judge appointed under the Act does not purport to proceed on any classifica tion and therefore contravenes article 14 of the Constitution and is void under article 13 on the principles laid down in the cases of State of West Bengal vs Anwar Ali Sarkar ([1952] S.C.R. 284) and Kathi Raning Rawat vs Tht State of Saurash tra ([1952] S.C.R. 435).
The appellants who were accused of having committed murder and other serious offences were directed by the Government of Bombay by an order made on the 6th August, 1949, to be tried under the Bombay Public Safety Measures Act by a Special Judge appointed under the Act, charges were framed against them on the 13th January, 1950, and they were convicted in March, 1950.
On appeal it was contended before the High Court that the trial and conviction were illegal as the Bombay Public Safety Measures Act was void under article 13 read with article 14of the Constitution which came into force on the 26th January, 1950, but the High Court held that as the proceedings against the accused had commenced before the Constitution, the provisions of articles 13 and 14 did not apply and the conviction was not illegal.
Held,by a majority, that although substantive rights and liabilities acquired or accrued before the date of the Constitution remain enforceable, it cannot be held that after that date, those rights or liabilities must be en forced under the particular procedure that was in force before that date, although it has since that date been repealed or come into conflict with the fundamental right to equal protection of the laws guaranteed by the 711 Constitution, as there is no vested right in procedure.
The fact of reference of "cases" to the Special Judge before the Constitution came into force has no reasonable relation to the objects sought to be achieved by the Act, the discrimi nation therefore continued after the Constitution came into force and such continuation of the application of the dis criminatory procedure to the cases of the appellants after the date of the Constitution constituted a breach of the fundamental right guaranteed by article 14, and the appellants were therefore entitled to be tried under the ordinary procedure after the date of the Constitution.
PATANJALI SASTRI C.J. (contra).
Granting that section 12 of the Bombay Act must, in view of the decision in Anwar Ali Sarkar 's case, be held to be discriminatory and void in so far as it empowers the State Government to refer individual cases to a Special Judge for trial, the trial of the appel lants which had validly started before the Special Judge who had been empowered to try the case cannot be vitiated by the Constitution subsequently coming into force.
The provisions of the Constitution relating to fundamental rights have no retrospective operation and do not affect a criminal prose cution commenced before the Constitution came into force.
The jurisdiction of the Special Judges validly created and exercised before the Constitution and their competence to try the cases referred to them cannot be affected by the special procedure becoming discriminatory.
The correct view is that article 14 does not affect pending trials even in matters of procedure.
Moreover the appellants against whom proceedings had been commenced before the Special Judge, were not in the same situation as others and there was nothing discriminatory in a law which permits them to be tried under the special procedure which was applicable to them when the proceedings were started against them.
|
Civil Appeals Nos.
781 783 of 1962.
Appeals by special leave from the judgment and order January 6, 1961, of the Andhra Pradesh High Court in Civil Miscellaneous Petition Nos. 4672 to 4674 of 1960.
A. V. Viswanatha Sastri, M.S.K. Sastri and M.S. Narasimhan, for the appellant (in all the appeals).
Ranganadham Chetty and R.N. Sachthey, for the respondent (in all the appeals).
October 22, 1963.
The Judgment of the Court was delivered by AYYANGAR J.
The points raised in these three appeals which come before us by virtue of special leave under article 136 of the Constitution are somewhat 176 out of the ordinary and raise for consideration whether the common order passed by the High Court of Andhra Pradesh rejecting applications to review an earlier order by that court, is correct on the facts which we shall state presently.
The appellant M/s Thungabhadra Industries Ltd. are ' manufacturers of groundnut oil, part of which they convert for sale into hydrogenated oil while the rest is sold as ordinary oil.
Under the Madras General Sales Tax Act, hereinafter referred to as the Act, which has application to the State of Andhra Pradesh, while in regard to groundnuts the tax is levied at the point of purchase, groundnut oil is taxed at the point of sale.
The result of this feature naturally is that when a person purchases groundnut and converts the same into oil and sells the oil extracted he has to pay tax at both the points.
Rules have been framed in order to alleviate what might be considered a hardship by reason of this double levy.
Rule 5(k) of the Turnover & Assessment Rules provides: "5.
(k) in the case of a registered manufacturer of groundnut oil and cake, the amount which he is entitled to deduct from his gross turnover under rule 18 subject to the conditions specified in that rule".
and Rule 18 referred to reads: "18.
(1) Any dealer who manufactures groundnut oil and cake from groundnut and/or kernel purchased by him may, on application to the assessing authority having jurisdiction over the area in which he carries on his business, be registered as a manufacturer of ground nut oil and cake.
(2) Every such registered manufacturer of groundnut oil will be entitled to a deduction under clause (k) of sub rule (1) of rule 5 equal to the value of the groundnut and/or kernel, purchased by him and converted into 'oil and cake if he has paid the tax to the State on such purchases: 177 Provided that the amount for which the oil is sold is included in his net turnover: Provided further that the amount of the turn over in respect of which deduction is allowed shall not exceed the amount of the turnover attributable to the groundnut and/or kernel used in the manufacture of oil and included in the net turnover.
" The appellant is admittedly a manufacturer who is registered for the purposes of that rule.
In respect of the year 1949 50 the appellant while submitting his return disclosing his turnover of the sale of oil, included therein the value of the hydrogenated oil that he sold and claimed a deduction under the rule in respect of the value of the groundnuts which had been utilised for conversion into hydrogenated oil on which he had paid tax at the point of their purchase.
This claim was negatived by the Sales Tax authorities on the ground that "hydrogenated groundnut oil" was not "groundnut oil" within r. 18(2).
Having failed before the departmental authorities in getting its claim to deduction allowed, the appellant approached the High Court with a Tax Revision Case numbered 120 of 1953 on its file but the High Court, by its judgment dated February 11, 1955, upheld the view of the department.
An application was thereafter made to the High Court to grant a certificate of fitness under article 133(1) on the ground that substantial questions of law as to the interpretation of the General Sales Tax Act.
and the Rules made thereunder, as well as of certain other enactments which were relied upon in support of their claim by the appellants, arose for decision in the case.
The learned Judges by their order dated February 21, 1956 granted the certificate.
In view of the points arising in this appeal we consider it would be convenient to set out the text of this order: "This petition raises a question of general importance namely whether hydrogenated groundnut oil popularly known as Vanaspathi is ground 1 SCI/64 12 178 nut oil so as to enable the assessee to claim exemption under Rules 18(2) and 5(1) (g) of the Turnover and Assessment Rules framed by the Government in exercise of the powers conferred by Section 3 and sub rules 4 and 5 of the Madras General Sales Tax Act, 1939.
The answer to the question arising in this matter turns upon whether the chief characteristics of groundnut oil remain the same in spite of the chemical processes it undergoes, It also involves the interpretation of the notifications issued by the Government of India under the Essential Supplies (Temporary Powers) Act and certain provisions of the Vegetable Oils Products Control Order.
In these circumstances we think it a fit case for appeal to the Supreme Court.
Leave is therefore granted.
" Thereafter the appeal was entertained in this Court and numbered as Civil Appeal 498 of 1958, was finally disposed of on October 18, 1960 and is now reported as M/s Thungabhadra Industries Ltd. vs The Commercial lax Officer, Kumool(1).
Meanwhile in regard to the assessment of the three succeeding years 1950 51, 1951 52 and 1952 53, the same question as to whether "hydrogenated groundnut oil" was "groundnut oil" entitled to the deduction of the purchase turnover under r. 18(2) of the Turnover and Assessment Rules was raised and was decided against the appellant by the Sates Tax Officer.
This order was taken up in appeal to the Deputy Commissioner of Commercial Taxes by the appellant and as apparently the identical question was pending in the High Court in regard to the year 1949 50, the appellate authority awaited the decision of the High Court and when T.R.C. 120 of 1953 was decided against the appellant on February 11, 1955, disposed of the appeal against the appellant by its order dated April 5, 1955.
Thereafter the appellant approached the Sales Tax Appellate Tribunal but this was obviously a formality (1) ; 179 because the Tribunal were bound by the judgment of the High Court and the appeals were dismissed by order dated October 20, 1955.
Against the orders of the Sales Tax Appellate Tribunal the appellant preferred three Tax Revision Cases T.R.C. 75,76 and 77 of 1956 in regard to the three assessment years.
The learned Judges of the High Court dismissed the three Revision Cases on October 7, 1958 following their earlier decision in T.R.C. 120 of 1953 in regard to the assessment for the year 1949 50.
At this date, it would be noticed, the correctness of the decision of the High Court in T.R.C. 120 of 1953 was pending adjudication in this Court by virtue of the Certificate of fitness granted by the High Court under article 133(1).
Desiring to file an appeal to this Court against the judgment of the High Court in these three Tax Revision Cases as well, the appellant filed, on February 16, 1959, three miscellaneous petitions under article 133(1) of the Constitution praying for a certificate of fitness that the case involved substantial questions of law as to the interpretation of the Sales Tax Act and the Rules made thereunder etc.
The learned Judges, however, by their order dated September 4.
1959 dismissed the petition stating: "The judgment sought to be appealed against is one of affirmance.
We do not think that it involves any substantial question of law as to the interpretation of the Constitution; nor do we regard this as a fit case for appeal to the Supreme Court.
" The question that arises for consideration in these appeals is primarily whether this order dated September 4, 1959, is vitiated by error apparent on the face of the record.
How that matter becomes relevant is because the appellant filed three applications for review of this order under O. XLVII r. 1 of the Civil Procedure Code specifying this as the ground for relief.
These applications for review were filed on November 23, 1959, and apparently notice was issued to the respondent State Government and the petition for review came on for hearing on January 6, 1961.
180 On that date the learned Judges dismissed the said applications and assigned the following as the reasons for their order: "The only ground argued in support of these review petitions is that leave to appeal to the Supreme Court was granted in similar circumstances in regard to previous year and there was no reason why leave should have been refused in these cases.
We do not think that would furnish a sufficient ground for reviewing the order dismissing the petitions for leave to file an appeal t 0 the Supreme Court.
That apart, the Supreme Court was moved under Article 136 of the Constitution for special leave and that was dismissed may be on the ground that it was not flied in time.
In the circumstances, we think that our order dated 4.9.1959 dismissing S.C.C.M.Ps No. 4823, 4825 and 4827 of 1959 cannot be reviewed.
" The appellants thereupon made applications for special leave from this Court to challenge the correctness of this last order and the leave having been granted after notice to the respondent, the appeals are now before us.
Before dealing with the arguments addressed to us on behalf of the appellant it is necessary to advert to an objection raised by learned Counsel for the respondent urging that the special leave granted to the appellant should be revoked.
We declined to permit the respondent to urge any such argument in this case primarily for two reasons.
In the first place, the special leave was granted after notice to the respondent and therefore after hearing the respondent as to any objection to the maintainability of the appeal or to the granting of special leave.
In the circumstances, any ground in relation to these matters should have been urged at that stage and except possibly in some extraordinary cases where the ground urged happens to arise subsequent to the grant of the special leave or where it could not be ascertained by the respondent at that date notwithstanding, the exercise of due care; except in such 181 circumstances this Court will not permit the respondent to urge any argument regarding the correctness of the order of the Court granting special leave.
Indeed, the very object of issuing notice to the respondent before the grant of leave is to ensure that the latter is afforded an opportunity to bring to the notice of the Court any grounds upon which leave should be refused and the purpose of the rule would be frustrated if the respondent were permitted to urge at a later stage at the stage of the hearing of the appeal and long after the appellant has incurred all the costs that the leave granted after notice to him should be revoked on a ground which was available to him when the application for special leave was heard.
This apart, even the statement of the case filed on behalf of the respondent does not disclose any ground upon which the leave granted should be revoked: nor, of course, does it make any prayer seeking such relief.
One of the objects which the statement of the case is designed to achieve is manifestly that no party shall be taken by surprise at the hearing and this is ensured by the provision in O. XIX r. 4 of the Supreme Court Rules reading: "No party shall, without the leave of the Court, rely at the hearing on any grounds not specified in the Statement of the Case filed by him.
" Nor, of course, was there any contention that the ground that he proposed to submit came into existence after the filing of the statement of case.
It was in these circumstances that we declined to permit the respondent to develop an argument to persuade us to hold that the leave granted by this Court should be revoked, though we might add that the matter mentioned by learned Counsel for the respondent in this respect would not, even if urged at the hearing of the special leave petition, have materially assisted him in resisting the grant of special leave.
The point he desired to urge was that in the petition for special leave the appellant had averred that the decision of this Court reversing the judgment of the High Court in T.R.C. 120 of 1953 had been 182 brought to the notice of the High Court, but that this statement must be erroneous or untrue for two reasons: (1) This is not referred to in the order now under appeal, and (2) the decision of this Court was not reported in any of the law reports official or unofficial till long after January 1961 when the petition for review was heard.
It is manifest that neither of the two circumstances would by itself prove the untruth of the averment in the special leave petition.
The learned Judges might well have thought that the decision had no material bearing on the only point that arose for consideration before them, viz., whether their order of September 1959 was or was not vitiated by error of the sort which brought it within O. XLVII.
r. 1 of Civil Procedure Code.
It is obvious that so viewed, it would not have any relevance.
As regards the other point, the appellant did not have need to wait for a report of the case in the law reports but might very well have produced a copy of the judgment of this Court and being a party to the proceeding here it is improbable that it had not a copy, so, that its statement that it drew the attention of the Court to the decision is not proved to be false by the decision not being reported till long after January, 1961.
The oral application for revoking the leave granted is therefore rejected as entirely devoid of substance.
We shall next proceed to deal with the merits of the appeals.
Before doing so however, it is necessary to advert to a circumstance which the learned Judges considered a proper reason for rejecting the petition for review.
This arises out of the second of the grounds assigned by the learned Judges in their order dated January 6, 1961, refusing to grant the review.
This may be quoted in their own words: "That apart, the Supreme Court was moved under article 136 of the Constitution for special leave and that was dismissed, may be on the ground that it was not filed in time.
" 183 The facts in relation to this matter might now be stated.
As already seen, the applications for reviewing the order dated September 4, 1959, refusing the certificates were filed on November 23, 1959.
During the pendency of those review applications the appellant filed, on November 30, 1959, petitions seeking special leave of this Court under article 136 of the Constitution but those petitions were filed beyond the period of limitation prescribed by the Rules.
An application was therefore filed along with the special leave petitions seeking condonation of delay in the filing of the petitions.
The petitions and the applications for condonation of delay came on together for hearing and this Court refused to condone the delay, so that the petitions for special leave never legally came on the file of this Court.
O. XLVII r. 1(1) of the Civil Procedure Code permits an application for review being filed "from a decree or order from which an appeal is allowed but from which no appeal has been preferred.
" In the present case, it would be seen, on the date when the application for review was filed the appellant had not filed an appeal to this Court and therefore the terms of O. XLVII r. 1(1) did not stand in the way of the petition for review being entertained.
Learned Counsel for the respondent did not contest this position.
Nor could we read the judgment of the High Court as rejecting the petition for review on that ground.
The crucial date for determining whether or not the 'terms of O. XLVII.
r.1 (1) are satisfied is the date when the application for review is filed.
If on that date no appeal has been filed it is competent for the Court hearing the petition for review to dispose of the application on the merits notwithstanding the pendency of the appeal, subject only to this, that if before the application for review is finally decided the appeal itself has been disposed of, the jurisdiction of the Court hearing the review petition would come to an end.
The next question is as regards the effect of the refusal of this court to condone the delay in filing the petition for special leave.
Here again, it 184 was not contended that the refusal of this Court to entertain the petition for special leave on the grounds just now stated was a bar to the jurisdiction or powers of the Court hearing the review petition.
This position was not contested by the learned Advocate for the respondent either.
In these circumstances, we are unable to agree with the learned Judges of the High Court that the refusal by this Court to condone the delay in filing the petition for special leave was a circumstance which could either bar the jurisdiction of the High Court to decide the petition for review or even could be a relevant matter to be taken into account in deciding it.
If therefore their original order dated September 4, 1959, was vitiated by an error apparent on the face of the record, the failure of the special leave petition to be entertained in this Court in the circumstances in which it occurred, could not be any ground either of itself or taken along with others to reject the application for review.
We consider it would be convenient to consider the first part of the order of the High Court now under appeal after examining the principal question whether the order of September, 1959, rejecting the appellant 's petition for a certificate is vitiated by error apparent on the record.
If one analysed that order only one reason was given for the rejection of the certificate of fitness.
No doubt, in the first sentence of their order they stated that the judgment was one of affirmance, but that was merely preliminary to what followed where they recorded that the certificate was refused for the reason that the case did not involve any substantial question of law regarding the interpretation of the Constitution.
The preliminary statement that their judgment was one of affirmance would, however, seem to show that what the learned Judges had in mind were the terms of article 133 of the Constitution where alone as distinct from article 132 there is reference to a judgment of affirmance, though per incuriam they reproduced the terms of article 132(1).
As it was the case of no 185 party that any question of interpretation of the Constitution was involved, the reference to "the substantial question of law relating to the interpretation of the Constitution" must obviously have been a mistake for a substantial question of law arising in the appeal.
Though learned Counsel for the appellant stressed this ground in the order of September, 1959 as itself disclosing an error apparent on the face of the record or was at least, ,indicative that the learned Judges did not apply their minds to the consideration of the question arising in the application for a certificate of fitness, we shall proceed on the basis that this was merely a clerical error in their order and that the learned Judges had really in mind the terms of article 133(1) which had been invoked by the appellants in their application for the certificate.
On the basis that the words in the order of September, 1959 referring to a substantial question of law as to the interpretation of the Constitution were really meant to say that no substantial question of law was involved in the appeal sought to be filed in this Court how does the matter stand ? There was practically no question of fact that fell to be decided in T.R.Cs. 75 to 77 of 1956 and the sole question related to the claim to deduct the value of the groundnut on which purchase tax had been paid and which had been converted into hydrogenated oil which had been sold and which had been included in the appellant 's turnover.
In fact, these T.R.Cs. were decided by the High Court not independently on a consideration of any particular facts which arose in them, but by following the decision of the High Court in T.R.C. 120 of 1953 which had accepted the construction which the departmental authorities had placed on r. 18(2) of the Turnover & Assessment Rules.
The substantial points of law which were claimed to arise in the appeal had been set out in extension the petition seeking the certificate and, in fact, they were practically a reproduction of the contents of the earlier petition seeking a certificate against the decision in T.R.C. 120 of 1953.
The learned Judges and the learned C.J. was a party 186 to the earlier decision and to the grant of the certificate of fitness on that occasion considered these points and had stated as their opinion that substantial questions of law of general importance were involved in the case and they had given expression to these views in a judgment which we have reproduced earlier.
What, however, we are now concerned with is whether the statement in the order of September 1959 that the case did not involve any substantial question of law is an "error apparent on the face of the record".
The fact that on the earlier occasion the court held on an 'identical state of facts that a substantial question of law arose would not per se be conclusive, for the earlier order itself might be erroneous.
Similarly, even if the statement was wrong, it would not follow that it was an "error apparent on the face of the record", for there is a distinction which is real, though it might not always be capable of exposition, between a mere erroneous decision and a decision which could be characterised as vitiated by "error apparent".
A review is by no means an appeal in disguise whereby an erroneous decision is reheard and corrected.
but lies only for patent error.
We do not consider that this furnishes a suitable occasion for dealing with this difference exhaustively or in any great detail, but it would suffice for us to say that where without any elaborate argument one could point to the error and say here is a substantial point of law which stares one in the face, and there could reasonably be no two opinions entertained about it, a clear case of error apparent on the face of the record would be made out.
No questions of fact were involved in the decision of the High Court in T.R.Cs. 75 to 77 of 1956.
The entire controversy turned on the proper interpretation of r. 18(1) of the turnover & Assessment Rules and the other pieces of legislation which are referred to by the High Court in its order of February 1956 nor could it be doubted or disputed that these were substantial questions of law.
In the circumstances therefore, the submission of the appellant that the 187 order of September 1959 was vitiated by "error apparent ' ' of the kind envisaged by O. XLVII r. 1, Civil Procedure Code when it stated that "no substantial question of law arose" appears to us to be clearly well founded.
Indeed, learned Counsel for the respondent did not seek to argue that the earlier order of September 1959 was not vitiated by such error.
He, however, submitted that this Court should have regard not to whether the earlier order was so vitiated or not but to the grounds which were urged by the appellant at the hearing of the application for review and that if at that stage the point in the form in which we have just now expressed was not urged, this Court would not interfere with the order rejecting the application for review.
He pointed out that at the stage of the arguments on the application for review the only ground which was urged before the Court, as shown by the judgment of the Court, was that the order of September, 1959 was erroneous for the reason that a certificate had been granted on a previous occasion.
We have extracted the text of this order of January, 1961 in which this argument is noticed and it is stated that it was the only point urged before the Court.
The question then arises as to what is meant by "in similar circumstances in regard to a previous year".
Learned Counsel for the respondent submits that we should understand these words to mean that the appellant relied on the order dated February 21, 1956, granting the certificate of fitness in regard to the decision of the High Court in T.R.C. 120 of 1953 solely as some sort of precedent and no more.
On that basis learned Counsel strenuously contended that the mere fact that in regard to an earlier year a certificate was granted would not by itself render an order refusing a certificate in a later year erroneous on the ground of patent error.
We have already dealt with this aspect of the matter.
We do not, however, agree that this is the proper construction of the argument that they rejected.
The order dated February 21, 1956, in relation to the previous year 188 was placed before the court and was relied on not as a binding precedent to be followed but as setting out the particular substantial questions of law that arose for decision in the appeals, and the attention of the Court was drawn to the terms of the previous order with a view to point out the failure to appreciate the existence of these questions and to make out that the statement in the order of September, 1959 that no substantial question of law was involved in the appeals was erroneous on the face of it.
This is made perfectly clear by the contents of the petition for review where the aspect we have just now set out is enunciated.
The earlier order being of the same Court and of a Bench composed in part of the same Judges, the earlier order was referred to as a convenient summary of the various points of law that arose for the purpose of bringing to the notice of the Court the error which it committed in stating that no substantial question of law arose in the appeals.
If by the first sentence the learned Judges meant that the contention which they were called upon to consider was directed to claim the previous order of 1956 as a binding precedent, they failed to appreciate the substance of the appellant 's argument.
If, however, they meant that the matters set out by them in their order granting a certificate in relation to their decision in T.R.C. 120 of 1953 were not also involved in their judgment in T.R.Cs. 75 to 77 they were in error, for it is the case of no one that the questions of law involved were not identical.
If, besides, they meant to say that these were not substantial questions of law within article 133(1), they were again guilty of error.
The reasoning, therefore, of the learned Judges in the order now under appeal, is no ground for rejecting the applications to review their orders of September, 1959.
We therefore consider that the learned Judges were in error in rejecting the application for review and we hold that the petitions for review should have been allowed.
We only desire to add that in so holding we have not in any manner taken into account or been influenced by the view expressed by this Court in Tungabhadra 189 Industries Ltd. vs The Commercial Tax Officer, Kurnool(1) regarding the construction of Rule 18(2) of the Turnover & Assessment Rules, since that decision is wholly irrelevant for considering the correctness of the order rejecting the applications for review which is the only question for decision in these appeals.
Before concluding we desire to make an observation arising out of an appeal made to us by learned Counsel for the respondent that even if the appeal were allowed we should make no direction as regards costs against his client.
The right of the appellant to the benefit of the exemption which he claimed and which was disallowed to him by the judgment of the High Court in T.R.Cs 75, 76 and 77 really depended on the correct construction of r. 18(2) of the Turnover & Assessment Rules and in particular on the meaning of the expression "groundnut oil" occurring there whether it included "hydrogenated oil".
This Court in its judgment in M/s Tungabhadra Industries Ltd. vs The Commercial Tax Officer, Kurnool(1) pronounced on the proper construction of the word 'groundnut oil ' occurring in r. 1 8 of the Turnover & Assessment Rules as they then stood.
The assessment proceedings for 1950 51, 1951 52 and 1952 53 had not attained finality against the assessee by the termination of all proceedings, because there were still applications for review pending before the High Court.
In the circumstances, it would have been reasonable to expect that the Sales Tax authorities should have afforded the appellant the benefit of the decision of this Court in regard to these later years also unless there was some insuperable difficulty or other circumstance in the way of their doing so, and learned Counsel for the respondent has brought none to our notice.
That is so far as regards the merits of the controversy in the tax revision cases in which certificates were sought.
Of course, if on any technical or similar points the State is entitled to succeed indisputably they would not be prevented from doing so and they would be entitled (1) ; 190 to collect the tax as assessed and as decided in its favour by the High Court.
But when the respondent fails in the objections raised to prevent the matter coming to this Court, we do not see any justification for the plea that costs should not follow the event but that the appellant should be deprived of it bright to costs.
In the result the appeal is allowed and the common judgment of the High Court in the three appeals is reversed and the petitions for review C.M.Ps 4672, 4673 and 4674 of 1959 on the file of the High Court are allowed with costs here and in the High Court one set of hearing fees.
Appeal allowed.
| The Appellant was the tenant of the respondent occupying of the latter premises at a monthly rental of Rs. 70.
The appellant appealed to the Civil Judge for fixing standard rent under section 11(1) and for specifying interim rent under section 11(3) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and deposited a certain amount to the credit of the respondent.
Subsequently the respondent filed a suit before the Civil Judge for evicting the appellant on the ground of non payment of rent.
The Civil 158 Judge ordered the appellant to deposit the arrears of rent at the rate of Rs. 51 per month within 15 days.
He substantially complied with his order.
The two proceedings were amalgamated.
The Civil Judge fixed the standard rent at the rate of Rs. 50 per month and dismissed the suit for eviction on the ground that the appellant was willing to pay the standard rent within the meaning of section 12 of the Act.
In appeal the District Court fixed the standard rent Rs. 70 per mensem and found that since the appellant had complied with the order to deposit arrears and since he was ready and willing and ready to pay standard rent he confirmed order of the lower court order of dismissing of the suit.
The respondent took the matter in revision before the High Court under section 115 Code of Civil Procedure, 1908.
The High Court reversed the order of the District Court and directed eviction on the grounds that appellant was not ready and willing to pay the standard rent, that he had not deposited the standard rent at the rate enhanced by the District Court and that he had not paid the interim rent at the rate fixed by the trial Court.
Held: (i) Section 12 (1) of the Act applies to a tenant who continues to remain in occupation even after the determination of the contractual tenancy.
Such a tenant is entitled to claim protection from eviction against eviction so long as he is willing and ready to pay the standard rent and permitted increases and observe other conditions under the Act.
This protection is subject to the provisions of section 13 and to the limitations contained in section 12(2) and section 12(3) (a).
The expression "may" in section 12(3) (a) has a mandatory content: if the conditions of this clause are fulfilled the court is bound to pass a decree in ejectment against the tenant.
Bhaiya Punyalal Bhagwandin vs Bhagwat prasad; , (ii) The power to fix standard rent is exercisable under section 11(1) alone.
To bring his claim within section 12(3) (b) the tenant must pay or tender the standard rent fixed by the court and permitted increases on or before the first day of hearing or on before such other date fixed by the court.
The amount of costs has to be paid or deposited only if the court so directs.
If in appeal the standard rent is enhanced the appeal court may fix a date for payment of the difference and if the tenant pays the difference on or before the day so fixed he will be entitled to get the protection of section 12(3) (h).
(iii) Explanation to section 12 erects a rule of evidence.
If the tenant pays or tenders regularly the interim rent specified by the court till the disposal of the suit the court is bound to presume that the tenant is at the date of the decree ready and willing to pay the standard rent and permitted increase.
The expression "standard rent" in section 12(3) (b) shall not however to be equated with "interim rent" in section 11 (3).
There is nothing in section 12 to support the contention that the dispute concerning standard rent contemplated by cl.
(b) of sub section
(3) is one which must be raised before service of notice under section 12(3).
159 (iv) The District Court ought to have before disposing of the appeal fixed a date for payment of the difference between the standard rent due and the amount actually deposited in court.
The error committed by the District Court was however only technical.
Held, further the High Court in exercise of its power under section 115 Code of Civil Procedure had no authority to set aside the order of the District Court merely because it was of opinion that the judgment of the District Court was assailable on the ground of error of fact or even of law.
The High Court may exercise its power under that section only if the subordinate court has acted without jurisdiction or has failed to exercise its jurisdiction or has acted with material illegality or irregularity.
Balakrishna Udayar vs Vasudeva Aiyar, L.R. 44 I.A. 261, Rajah Amir Hassan Khan vs Sheo Baksh Singh, L.R. 11 I.A. 237, Joy Chand Lal Babu vs Laksha Chaudhury, L.R. 76 I.A. 131, distinguished.
Manindra Land and Building Corporation vs Bhutnath Bannerjee, ;
|
ivil Appeal Nos. 129 and 512 of 1 97.
Appeals by Special Leave from the Judgment and order dated 19 6 1975 of the Bombay High Court in Gift Tax Application Nos. 1 and 2 of 1975.
AND CIVIL APPEAL Nos 755 756 OF 1976 Appeals by Special Leave from the Judgment and order dated 8 12 1975 of the Bombay High Court in W.T.A. No. 15/75.
AND 359 CIVlL APPEAL No. 1787 OF 1977 Appeal by Special Leave from the Judgment and order dated 18 12 1976 of the Bombay High Court in W.T.A. No. 24/76.
AND CIVIL APPEALS NOS.
1639 1645 OF 1977 Appeals by Special Leave from the Judgment and order dated 3 1976 of the Bombay High Court in Writ Petition Nos. 16, 1 and 21/76 and Judgment and order dated 4 11 1976 in W.T.A. Nos. 20 and 23/76.
S.T. Desai, section P. Nayar and Miss A. Subhashini for the Appellants.
N. A. Palkhiwala, section P. Mehta, H. P. Raina, Ravinder Narain, Mrs. A. K. Verma, Talat Ansari and A. N. Haksar for the Respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
These appeals by special leave raise a short question as to whether a reference should have been called for by the High Court in each of these cases.
Some of these cases are under the Gift Tax Act while others under the Wealth Tax Act.
They all relate to the valuation of the ordinary shares of a private limited company called Mafatlal Gagalbhai Pvt. Ltd. which is admittedly an investment company.
The assessee in these cases claimed in the course of assessment to gift tax or wealth tax, as the case may be, that the value of the shares should be taken to be the figure arrived at by M/s. C. C. Chokay & Co., Chartered Accountants, by applying the profit earning method of valuation of shares without making any adjustment in the profits of the company.
It is not necessary for the purpose of these appeals to set out the different figures of valuation given in the report of M/s. C. C. Chokay & Co. and claimed by the assessees as representing the correct value of the shares on the material dates, because the question with which we are concerned is one of principle and the actual figures of valuation are not relevant.
The Gift Tax and the Wealth Tax officers did not accept the figures of valuation given by the assessees on the basis of the profit earning method and valued the shares at much higher figures by applying the break up method.
This naturally involved the assessees in higher tax liability and hence they preferred appeals to the Appellate Assistant Commissioner.
The Appellate Assistant Commissioner applied what has been described in 360 the record as 'rule of three and reduced the valuation of the shares but the figure determined by the Appellate Assistant Commissioner were still higher than those claimed by the assessees.
Since the valuation of the shares made by the Gift Tax and the Wealth Tax officers was reduced by the Appellate Assistant Commissioner, the Revenue was dissatisfied and it, therefore, preferred appeals against the orders of the Appellate Assistant Commissioner, to the Tribunal.
The assessees were also unhappy with the valuation made by the Appellate Assistant Commissioner since he did not accept the valuation put forward on their behalf and hence they too preferred cross objections in the appeals filed by the Revenue.
The appeals and the cross objections in the cases forming the subject matter of Civil Appeal No. 129/76 ere heard together by the Tribunal.
The only controversy before the Tribunal was as to which method should be followed for valuing the shares of the company.
The Revenue contended that in the case of an investment company like Mafatlal Gagalbhai Pvt Ltd., the proper method of valuation would be to take the mean of two values, one arrived at by applying the profit earning method and the other by applying the break up method, while the assessees pleaded for adopting only the profit earning method, since in their submission that was the only method which could be applied for valuation of shares of a going concern The Tribunal by a common judgment accepted the contention of the assessees and adopted the valuation of the shares made by M/s. C. C. Chokay and Co. by applying the profit earning method and in the result rejected the appeals of the Revenue and allowed the cross objections of the assessees.
We shall discuss in some detail the reasons which weighed with the Tribunal in coming to this decision when we deal with the arguments of the parties, but suffice it to state for the present that in taking this view, the Tribunal followed the recent decision of this Court in Commissioner of Wealth Tax vs Mahadeo Jalan & Ors.
Similar orders were passed by the Tribunal in the appeals and cross objections relating to the other assessees.
The Revenue was obviously aggrieved by the orders of the Tribunal and, therefore, it made applications to the Tribunal for referring to the High Court the following question of law, namely, "Whether the Tribunal is right in holding, that the shares of an investment company has to be valued only on the basis of the yield without taking into account the assets owned and reflected in the balance sheet 361 could be said to arise out of the orders of the Tribunal.
The applications for reference were rejected by the 'Tribunal on the ground that no referable question of law arose out of the orders of the Tribunal.
the Revenue thereupon made applications to the High Court for calling for a reference but those applications also met With the same fate.
Hence the Revenue preferred petitions for special leave to appeal in the case of all the assessees and special leave having been granted in some of the petitions, the present appeals have come up for hearing before us.
The sole question that arises for determination in these appeals is whether any question of law arises out of the orders of the Tribunal which needs to be referred to the High Court.
It is true that there must be a question of law arising out of the order of the Tribunal before a reference can be made, but it is not every question of law that is required to be referred by the Tribunal to the High Court.
Where the answer to the question of law is self evident or is concluded by a decision of this Court, it would be futile to make a reference and in such a case the Tribunal would be justified in refusing to refer the question to the High Court vide C.I.T. vs Chander Bhan; Mathura Prasad vs C.I.T. and C.I.T. vs Indian Mica Supply Co. Ltd. Now there can be no doubt that in the present case the question as to which method should bf ed for valuation of the shares of Mafatlal Gagalbhai Private Ltd., a private limited company which was an investment company and at all material times a going concern whether it should be the profit earning method or a combination of the break up method and the profit earning method is clearly a question of law.
But the argument of the assessees was that the determination of this question was completely covered by a recent decision of this Court in Commissioner of Wealth Tax vs Mahadeo Jalan & others in favour or the assessees and no useful purpose would be served by calling for a reference.
The Revenue conceded that the decision in Mahadeo Jalan 's case did lay down certain principles for valuation of shares in a limited company, but its contention was that these principles were no more than broad guidelines and they did not eliminate the necessity of finding out the appropriate method of valuation in each case which came before the taxing authority and hence it was necessary to ' make a reference so that the proper method for valuation of the shares of Mafatlal Gagalbhai Pvt. Co. Ltd. could be determined 362 by the High Court.
The controversy between the parties thus centered round the question is to what was decided by this Court in Mahadeo jalan 's case and whether it laid down what method should be applied for valuation of shares of a private limited company which is an t investment company carrying on business as a going concern.
If the method to be applied in such case could be found to have been judicially laid down by this Court in Mahadeo jalan 's case, all that would be necessary to be done for arriving at the valuation of the shares in Mafatlal Gagalbhai Company Private Limited would be to apply that method and it would be wholly unnecessary to call for a reference.
Let us, therefore, examine the decision in Madhadeo jalan 's case and see whether any principle of valuation of shares is laid down in it which would be applicable in case of a company like Mafatlal Gagalbhli Private Limited.
The decision in Mahadeo jalan 's case was rendered under.
the Wealth tax Act and the question was as to what was the appropriate method for valuation of shares of a private limited company for the purpose of wealth tax.
The Tribunal adopted the break up method and arrived at the valuation of the shares on that basis? but on a reference, the High Court took the view that in case of a company which is a going concern the only proper method of valuation of shares is the yield value method and n(lt the break up method.
The Revenue carried the matter in appeal to this Court and in a judgment delivered by Jaganmohan Reddy, J. this Court examined the question of valuation of shares in depth and after referring to various decisions of the English, Irish and Australian Courts, laid clown the following principles for valuation of shares in a limited company: "(1) Where the shares in a public limited company quoted on the stock exchange and there are dealings in them, the price prevailing on the valuation date is the value of the shares.
(2) Where the shares arc of a public limited company which are not quoted on a stock exchange or of a private limited company the value is determined by reference to the dividends if any, reflecting the profit earning capacity on a reasonable commercial basis.
But, where they do not, then the amount of yield on that basis will determine the value of the shares.
Tn other words, the profits which the company has 11 been making and should be making will ordinarily determine the value.
The dividend and earning method or yield method are not mutually exclusive; 363 both should help in ascertaining the profit earning capacity as indicated above.
If the results of the two methods differ, an intermediate figure may have to be computed by adjustment of unreasonable expenses and adopting a reasonable proportion of profits.
(3) In the case of a private limited company also where the expenses are incurred out of all proportion to the commercial venture, they will be added back to the profits of the company in computing the yield In such companies the restriction on share transfers will also be taken into consideration as earlier indicated in arriving at a valuation.
(4) Where the dividend yield and earning method break down by reason of the company 's inability to earn profits and declare dividends, if the set back is temporary then it is perhaps possible to take the estimate of the value of the shares before set back and discount it by a percentage corresponding to the proportionate fall in the price of quoted shares of companies which have suffered similar reverses.
(5) Where the company is ripe for winding up then the break up value method determines what would be realised by that process.
(6) As in Attorney General of Ceylon vs Mackie a valuation by reference to the assets would be justified where as in that case the fluctuations of profits and uncertainty of the conditions at the date of the valuation prevented any reasonable estimation of prospective profits and dividends." Since the company involved in this case was a private limited company which was a going concern, the Court following the above principles, negatived the applicability of the break up method for valuation of the shares and upheld the view taken by the High Court that the yield method was the proper method for arriving at the valuation of the shares.
It is clear from this decision that where the shares in a public limited company are quoted on the stock exchange and there are dealings in them, the price prevailing on the valuation date would represent the value of the shares.
But where the shares in a public 364 limited company are not quoted on the stock exchange or the shares are in a private limited company the proper method of valuation to be adopted would be the profit earning method.
This method may be applied by taking the dividends as reflecting the profit earning capacity of the company on reasonable commercial basis but if it is found that the dividends do not correctly reflect the profit earning capacity because only a small proportion of the profits is distributed by way of dividends and a large amount of profits is systematically accumulated in the form of reserves, the dividend method of valuation may be rejected and the valuation may be made by reference to the profits.
The profit earning method takes into account the profits which the company has been making and should be capable of making and the valuation, according to this method is based on the average maintainable profits.
Of course, for the purpose of such valuation, the taxing authority is not bound by the figure of profits shown in the profit and loss account because it is possible that the amount of profits may have suffered diminution on account of unreasonable expenditure or the directors having chosen to take away a part of the profits in the form of remuneration rather than dividends.
The figure of profits in such a case would have to be adjusted in order to arrive at the real profit earning capacity of the company.
It would, thus, be seen that in the case of a company which is a going concern and whose shares are not quoted on the stock exchange, the profits which the company has been making and should be capable of making or in other words, the profit earning capacity of the company would ordinarily determine the value of the shares.
That is why in Mahadeo Jalan 's case the Court quoted with approval the following observations of Williams, J. in McCathie vs Federal Commissioner of Taxation. ". the real value of shares which a deceased person holds in a company on the date of his death will depend more on the profits which the company has been making and should be capable of making,.
having regard to the nature of its business, than upon the amounts which the shares would be likely to realise upon a liquidation," and stated.
in no uncertain terms that "The general principle of valuation in a going concern is the yield on the basis of average maintainable profits subject t adjustment etc.
which the circumstances of any particular case may fall for".
The break up method would not be appropriate for valuation of shares of a company is a going concern, because as pointed out by the Court in Mahadeo Jalan 's case, "among the factors which govern the consideration of the buyer and the seller where the one desires to purchase and the other 365 wishes to sell, the factor or break up value of a share as on liquidation hardly enters into consideration where the shares are of a going concern".
It is only where a company is ripe for winding up or the situation is such that the fluctuations of profits and uncertainty of conditions at the date of valuation prevent any reasonable estimation of the profit earning capacity of the company, that the valuation by the break up method would be justified.
The Revenue leaned heavily on the observation in Mahadeo Jalan 's case that the factors likely to determine the valuation of a share include "in special cases such as investment companies, the asset backing" and urged on the strength of this observation that in the case of an investment company, the asset backing was a relevant consideration and the break up method could not, therefore, be considered as totally irrelevant.
This contention, we are afraid, is based on a wrong reading of the observation of the Court.
When the Court said that in case of an investment company, the asset backing is a relevant factor in determination of the value of he shares, what the Court meant was in order to determine the capacity of the company to maintain its profits the asset backing would be a relevant consideration.
The profit earning capacity of the company which would determine the valuation of the shares would naturally have to take.
into account not only the profits which the company is actually making but also the profits which the company should be capable of making and in order to arrive at a proper estimation of the latter, the asset backing would be a relevant factor in case of an investment company.
It would not be right to read the observation of the Court as suggesting that valuation of the assets would be a relevant factor in determining the valuation of shares.
The Revenue, of course, did not plead for exclusive adoption of the break up method and wanted the mean of the values arrived at by applying the break up method and the profit earning method to be taken as representing the valuation of the shares, but we do not see on what principle can a combination of the two methods be justified.
There is no authority either in any judicial decision or in any standard text book on valuation of shares which recognises the validity of a combination of the two methods, though it may sound acceptable as a compromise formula.
In fact, Adamson has criticised this combination of the two methods as unscientific in his book on "The Valuation of Company Shares and Businesses", (Fourth Edition) at page 55, where he has said: "The mere averaging of two results obtained by quite different basis of approach can hardly be said to represent any logical approach, whatever its merit as a compromise.
366 Despite its evident popularity in many quarters, it has not been given judicial recognition in decisions involving the fixation of a value by the Court.
" The combination of the two methods advocated on behalf of the Revenue has, thus, no sanction of any judicial or other authority and cannot be accepted as a valid principle of valuation of shares.
The Revenue than pointed out that the principles of valuation set out by the Court in Mahadeo Jalan 's case were merely broad guidelines and they did not obviate the necessity of considering each case on its own facts and circumstances and in support of this contention the Revenue relied on the observation made by the Court that in setting out these principles, the Court had not "tried to L., down any hard and fast rule because ultimately the facts and circumstances of each case, the nature of the business, the prospects of profitability and such other considerations will have to be taken into account as will be applicable to the facts of each case.
" Now it is true, as observed by the Court, that there cannot be any hard and fast rule in the matter of valuation of shares in a limited company and ultimately the valuation must depend upon the facts and circumstances of each case, but that does not mean that there are no well settled principles of valuation applicable in specific fact situations and whenever a question of valuation of shares arises, the taxing authority is in an uncharted sea and it has to innovate new methods of valuation according to the facts and circumstances of each case.
The principles of valuation as formulated by the Court are clear and well defined and it is only in deciding which particular principle must be applied in a given situation that the facts and circumstances of the case become material.
It is significant to note that immediately after making the above observation the Court hastened to make it clear, as if in answer to a possible argument which might be advanced on behalf of the Revenue on the basis of that observation that the yield method is the generally applicable cable method while the break up method is the one resorted to in exceptional circumstances or where the company is ripe for liquidation.
Here in the present case Mafatlal Gagalbhai & Co. Pvt. Ltd. was a private limited company which was a going concern and it was neither ripe for liquidation nor were there any exceptional circumstances which should attract the applicability of the break up method.
The profit earning method was, therefore, the only method which 367 could properly be applied for arriving at the valuation of the shares ill the company and the tribunal was right in accepting the figures of valuation in the Report of M/s. C. C. Choksy Co., based on the application of the profit earning method.
The answer to the question of law relating to the method to be adopted for valuation of shares in the company was clearly concluded by the decision in Mahadeo Jalan 's case and the High Court was, therefore, justified in refusing to call for a reference on this question.
It is true that in the present appeals, the question of valuation arises not only under the Wealth Tax Act but also under the Gift Tax Act, but since the provision for determining the value of an asset is the same in section 6 sub section (1) of the Gift Tax Act as it is in section 7 sub section (1) of the Wealth Tax Act, the principles of valuation laid down ill Mahadeo Jalan 's case must apply equally i relation to valuation of shares to be made for the purpose of the Gift Tax Act.
It was, however, contended on behalf OF the Revenue that there is a vital difference between section sub section (t) of the Gift Tax Act and section 7 sub section (1) of the Wealth Tax Act in aS much aS section S sub section ( 1 ) of the Gift Tax Act is subject inter alia to the provision of sub section (3) of that section and this latter sub section provides that where the value of any property cannot be estimated under sub section ( 1 ) because it is not saleable in the open market, the value shall be determined in the prescribe manner and Rule 10 sub rule (2) of the Gift Tax Rules prescribes the manner of valuation of shares in a private limited company where the Articles of Association contain restrictive provision as to the alienation of shares, by providing that in such a case, the value of the shares "if not ascertainable by reference to the value of the total assets of the company, shall be estimated to be what they would fetch if on the date of gift they could be sold in the open market on the terms of the purchaser being entitled to be registered as holder subject to the articles, but the fact that a special buyer would for his own special reasons give a higher price that the price in the open market shall be disregarded".
The argument of the Revenue was that Mafatlal Gagalbhai Pvt Ltd, was a private limited company and its Articles of Association admittedly contained restrictive provision as to the alienation of shares and, therefore, Rule 10 sub rule (2) was applicable and according to that sub rule, the value of the shares was required to be 1 ascertained by reference to the value of the total assets of the company and it was only if the value was not so ascertainable that 368 it could be determined in any other manner.
The break UP method was thus, according to this sub rule, the primary method to be applied for arriving at the valuation of the shares and in the circumstances the Tribunal was wrong ill determining the value of the shares by applying the profit earning method, atleast so far as the valuation under the Gift Ta Act was concerned.
Now it is difficult to see how the question whether the valuation of the shares should have been made on the basis of the break up method by reason of Rule 10 sub rule (2) of the Gift Tax Rules can be required to be referred by the Tribunal to the High Court.
It is well settled that no question can be referred to the High Court unless it arises out of the order of the Tribunal and, as pointed out by this Court in Commissioner of Income tax vs Scindia Steam Navigation Co. Ltd. a question of law can be said to arise out of the order of the Tribunal only if it is dealt with by the Tribunal or is raised before though not decided by the Tribunal and a question of law not raised before the tribunal and not dealt with by it in its order cannot be said to arise out of its order, even if on the facts of the case stated in the order the question fairly arises.
It is obvious that this question sought to be raised on behalf of the Revenue was neither raised before the Tribunal nor decided by it and the only argument advanced before the Tribunal was that the mean of the values arrived at on an application of the profit earning method and the break up method should be taken to be the value of the shares.
There was no argument addressed to the Tribunal that the breakup method should be adopted because that was the primary method prescribed by Rule 10 sub rule (2) and the Tribunal had, therefore, no occasion to deal with such argument.
This question obviously, therefore, does not arise out of the orders of the Tribunal and it cannot be required to be referred to the High Court.
These were the only contentions urged on behalf of the Revenue and since there is no substance in them, the appeals fail and are dismissed with costs, N.K.A. Appeals dismissed.
| The Chartered Accountants of the assessee company, which was an investment company.
VL ed its shares by applying the profit earning method of valuation of shares without making any adjustment in the profits of the company.
The Gift Tax and Wealth Tax officers did not accept this method and valued The shares by applying the break up method.
The Appellate Assistant Commissioner applied a different method called "the rule of three" and reduced the valuation of the shares; but the figures determined by him were still higher than those claimed by the assessee.
The Revenue preferred an appeal against the order of the Appellate Assistant Commissioner because the valuation of the shares made by the Gift Tax and Wealth Tax officers was reduced by him: the assessee preferred an appeal against the order of the Appellate Assistant Commissioner because he did not accept the valuation put forward d by the assessee.
The Tribunal accepted the valuation made by the Chartered Accountants and rejected the Revenue s appeal.
The Department 's request for making reference to the High Court was rejected on the ground that no referable question of law arose out of the order of the Tribunal.
The High Court refused to call for a reference.
It was contended on behalf of the assessee before this Court that the determination of this question was completely covered by the decision of this Court in Commissioner of Wealth Tax vs Mahadeo Jalan and no useful purpose would be served by calling for reference.
On the other hand the Revenue contended that (1) the decision in Mahadeo Jalan 's case laid down no more than broad guidelines which did rot eliminate the necessity of finding out the appropriate method of valuation in each case and therefore it was necessary to make a reference so that the proper method of valuation of shares could be determined by the High Court.
(2) The break up method according to rule 10(2) of the Gift Tax Rules is the primary method to be applied for arriving at the valuation of the shares and since in this case the articles of association contained a restrictive provision as to the alienation of the shares, the Tribunal was wrong in determining the value of I i the shares by applying the profit earning method so far as the valuation under the Gift Tax Act was concerned.
358 Dismissing the appeals, ^ HELD: 1.
It is not every question of law that is require to referred by the Tribunal to he High Court.
Where the answer to the question of law is self evident or is concluded by a decision of this Court no reference would be justified [361 C D] The answer to the question of law relating to the method adopted for valuation of shares in the company was clearly concluded by the decision in Mahadeo Jalan 's case and the High Court was justified in refusing to call for a reference on this question.
[367A B] In the instant case the assessee was a private limited company which was a going concern.
lt was neither ripe for liquidation nor were there any exceptional circumstances which should attract the applicability or the break J up method.
The profit earning method was, therefore, the only method which could properly be applied for arriving at the valuation of the shares in the company and the Tribunal was right in accepting the figures of valuation in the report of the Chartered Accountants based on the application of the profit earning method.
[366G H, 367A] 2.
It is well settled that no question can be referred to the High Court unless it arises out of the order of the Tribunal.
A question of law can be said to arise out of the order of the Tribunal only if it is dealt with by the Tribunal or is raised before it, though not decided by the Tribunal.
A question of law not raise before the Tribunal and not dealt with by it in is order cannot be said to arise out of its order, even if on the facts of the case stated in the order, the question fairly arises.
[368C D] In the instant case the question sought to be raised by the Revenue was l ' neither raised before the Tribunal nor decided by it and the only argument t advanced before the Tribunal was that the mean of the values arrived at on an application of the profit earning method and the break up method should be taken to be the value of the shares.
No argument was addressed to the Tribunal that the break up method should be adopted because that was the primary method prescribed by rule 10(2) and the Tribunal had no occasion to deal with such argument.
The question did not arise out of the order of the Tribunal and it could not be required to be referred to the High Court.
3(i F]
|
vil Appeal No. 113 of 1953.
Appeal from the Judgment and Decree, dated the 25th day of March, 1952, of the High Court of Judicature at Bombay (Bavdekar and Dixit JJ.) in Appeal No. 554 of 1951, from Original Decree arising out of the Judgment and Decree, dated the 30th day of June, 1951, of the Court of the Joint Civil Judge, Senior Division of Thana, in Special Suit No. 12 of 1949.
K. section Krishnaswamy lyengar, (J. B. Dadachanji, V.B. Rege and Ganpat Rai, with him) for the appellants.
section B. Jathar, R. B. Kotwal and Naunit Lal for respondent No. 1. 1954.
April 12.
The Judgment of the Court was delivered by GHULAM HASAN J.
This appeal is brought by leave of the High Court of Bombay against the judgment and decree of a Division Bench of that Court (Bavdekar and Dixit JJ.) dated March 25, 1952, modifying the judgment and decree of the Civil Judge, Senior Division of Thana, dated June 30, 1951.
The appeal arises out of a partition between 6 brothers of a joint Hindu family.
The joint family carried on joint family business of a grocery shop, liquor shops, a ration shop, a motor bus service and also moneylending under the name of "Sontakke Brothers".
The family also Possessed immovable and movable property.
Balkrishna Sitaram Sontakke is the eldest of the brothers and is the plaintiff respondent in the present appeal.
He will be referred to hereafter as the plain tiff.
It is common ground that up to 1944 the brothers were living and messing together and the income from 101 the family business used to be kept with the plaintiff.
From April 14, 1945, the situation changed and the parties began to appropriate the proceeds of the various businesses carried on by them separately to themselves.
The plaintiff was running the liquor shops, defendants Nos.
I and 2 who are the appellants, were carrying on the motor bus service business while defendant No. 4 was running the grocery shop.
The parties tried to have partition effected between them through arbitrators but the attempt failed.
On June 29, 1945, all the five brothers filed a suit for partition against the plaintiff of all joint family properties including the accounts of all the businesses.
The suit was numbered 39 of 1945.
It was compromised on March 7, 1946.
By this compromise it was declared that prior to 1942 all the accounts of the various businesses had been correctly maintained and shown, that the parties had agreed to have arbitrators appointed through Court for examining the accounts from 1942 up to March 31, 1946, and for determining the amount due up to that date.
Each of the brothers was to get one sixth share in the cash balance as found on March 31, 1946, upon examination of accounts by the arbitrators.
All the movable property of the joint family including the stock in trade of all the family businesses was to be divided equally among all the brothers.
The compromise further declared that the plaintiff was to have one sixth share in the motor garage and that defendants 1 and 2 were to pay the price of one sixth share to him.
These are the material provisions of the compromise.
One of the brothers was a minor and the Court finding the compromise to be for the benefit of the minor accepted it and passed a pre liminary decree in terms of the compromise on July 25, 1947.
If nothing else had happened to disturb the natural course of events, the proceedings would have ended in a final decree for partition.
The plaintiff, however, commenced a fresh suit on February 23, 1949, confining his relief to his share of the profits and assets Of the motor business carried on by defendants Nos. 1 and 2 after March 31,1946.
His case was that the compromise was made in a hurry, that the parties omitted to provide in the compromise about the future conduct 102 of the motor business from April 1, 1946, that the motor business was still a joint family business and that he had a right to ask for accounts of that business subsequent to March 31, 1946.
In defence it was pleaded that the compromise was made after due deliberation, that accounts of the motor 'business and grocery shop should actually have been taken up to April 14, 1945, the date of disruption of the joint family status, but the parties agreed by way of compromise that account of all family businesses should be taken up to March 31, 1946.
It was also pleaded that the claim was barred by res judicata.
Upon the issues framed in the case the Civil Judge found that the suit was not.
barred by reason of the decision in the previous suit No. 39 of 1945, that the decision in that suit was not obtained by fraud and misrepresentation and that the compromise in the previous suit was not due to a mistake or misunderstanding.
Despite these findings the Civil Judge held that although the motor business carried on after the partition had ceased to be a joint family business yet as it was carried on by some members of a family their position was analogous to that of a partner carrying on partnership after dissolution and applying the principle underlying section 37 of the Partnership Act he held that the two brothers carrying on the motor business were liable to account.
Accordingly he passed a preliminary decree directing the accounts of the motor business to be taken from March 31, 1946, up to the date on which a final decree for payment of the amount found to be due would be made.
A Commissioner was appointed to take the accounts to ascertain the profits earned by the use of the capital belonging to the shares of brothers other than those who carried on the motor business.
In appeal Bavdekar 'J. with whom Dixit J. agreed modified the decree of the trial Court by directing that the accounts were to be taken up to the date when the businesses discontinued and not up to the date of the final decree.
The learned Judges held that the cause of action for the present suit was different from the cause.
of action in the previous suit and that the suit was not barred 103 by res judicata or by Order II, rule 2, of the Code of Civil Procedure.
After delivering themselves of some conflicting observations to which reference will in detail be made hereafter they held that the consent decree did not expressly negative the right for accounts of the motor transport business.
Finally the learned Judges recorded the conclusion that regardless of the pleadings in the case the defendants Nos.
I and 2 had made use of the joint family property and that they stood in, the position of co owners and as contemplated in section 90 of the Indian Trusts Act were liable to render accounts for the profits which were attributable to the employment of the assets owned by the parties jointly.
Learned counsel for the appellants has contested the view of the High Court upon all the points decided, ,against them.
He has contended that the cause of action in a suit for partition is the desire and intention of the family to separate, that the cause of action in the two suits is identically the same and not separate and distinct and.
that the suit was, therefore, barred both by the principle of res judicata and by Order II, rule 2, of the Civil Procedure Code.
Learned counsel also challenged the view of the High Court about the applicability of section 90 of the Indian Trusts Act It seems to us that upon a fair reading of the compromise arrived at between the parties in the circumstances then existing, the only legitimate conclusion possible is that the parties had agreed to confine the taking of all accounts upto March 31,1946, and had closed the door to reopening them beyond that date.
If the compromise was arrived at after full consideration by the parties and was not vitiated by fraud, misrepresentation, mistake or misunderstanding as held by the trial Court a finding which was not interfered with by the High Court it follows that a matter once concluded between the parties who were dealing with each other at arms length cannot now be reopened.
What led the parties to confine the period of account to March 31, 1946, and stop further accounting which would have normally extended to the passing of the final decree will appear from the following circumstances.
The plaintiff knew that the licence for the liquor shops 104 carried on by him was expiring on the 1st April, 1946, and he was anxious to run the liquor business exclusively and not jointly or in partnership with his brothers after the expiry of the licence.
He gave a notice to his brothers through pleader on December 12, 1945, stating inter alia the following : "The period of (licence for) the liquor shops at the said places expires by end of March, 1946.
Hence after the expiry of the said period, my client having no desire to conduct liquor shop business jointly or in partnership with any of you again, he intends to run and will run as from the date 1st April, 1946, one or more liquor shops as he pleases belonging to him alone independently.
The moneys that will be required for (purchase in) auction of the shops will be paid by my client by borrowing the same from third parties on his own responsibility and my client will not allow the said moneys to have the least connection with the businesses, properties and cash which are at present in dispute in Court and with the profits and income from the said businesses or properties.
My client expressly informs you by this notice of the fact, viz., that the liquor shops thus purchased by him will solely belong to him and will be run by him independently of any of you.
None of you will have any legal right to meddle with or interfere in the liquor shops which will be thus purchased by my client in the Government auction for the new year beginning from 1st April, 1946, and if any of you make an attempt with malicious intention to cause even the slightest interference in the said business of my client, then my client will hold you fully responsible for any harm suffered by him and for other damages and expenses incurred by him and will take a severe legal action against you therefor.
" This notice furnishes a true guide as to the intention of the plaintiff which was none other than that he should run the liquor shops exclusively for himself and appropriate the profits thereof without making himself accountable to his brothers.
Although the plaintiff says that he intended to pay for the auction of liquor shops by borrowing he was really in a position of vantage for he admittedly had Rs. 13,000 cash in hand as 105 against the Rs. 3,000 his brothers had.
The notice explains the significance of the provision in the compromise that accounts are to be taken only up to March 31, 1946.
Since the plaintiff did not want his brothers to interfere with his exclusive running of the liquor business after March 31, 1946, he perforce had to agree that he should sever his connection with other businesses run by his brothers.
This arrangement was apparently acceptable to all the brothers as being fair and reasonable and as not giving undue advantage to any party over the other.
This being our construction of the compromise, it follows that the plaintiff 's conduct in going back upon that arrangement by filing a fresh suit in regard to the motor business only is anything but honest.
The plaint filed in the previous suit leaves no manner of doubt that the plaintiffs in that suit ,sought a complete division of all the family property both movable and immovable and a final determination of all the accounts in respect of the family businesses.
It is also significant that after the compromise the plaintiff (Balkrishna) filed an application before the Civil Judge in which he alleged that when he agreed in the compromise that the accounts of the various businesses should be up to the 31st March, 1946, he was under a misapprehension regarding his legal right inasmuch as he thought that when the accounts were to be taken up to a certain date, 'the joint family property after that date would not be allowed to be utilized by some members only of the family for making profits for themselves to the exclusion of the plaintiff.
He goes on to say that he laboured under the impression that the joint family business would be either altogether stopped after the 31st March, 1946, or would be run either by the arbitrators or the Commissioners and the profits accruing therefrom would be deposited in Court for distribution among the parties according to their shares.
The application was made on November 22, 1947.
His pleader, however, stated on April 6, 1948: " The application is abandoned by the applicant as he wishes to pursue his remedy by way of an independent suit for the grievance in the application," and the Court passed the order, "The application is disposed of as 14 106 it is not pressed." The learned Judges of the High Court in referring to this application observe thus: " It is obvious therefrom that really speaking the idea of the profits of several businesses after the 1st of April, 1946, was present to the minds of the parties; but the parties did not care to ask that accounts of the other businesses will be taken up after the 1st of April, 1946.
One of the businesses was a liquor business, which admittedly was to come to an end on the 31st of March, 1946; but there was also another business; that Was a kirana shop, which was not a very big business.
But all the same it was there, and there is force, therefore, in the contention which has been advanced on behalf of the appellants that it was not as if there has been an oversight on the part of the parties, but the parties knew that the businesses might go on afterwards; but if they were carried on, they did not particularly care for providing by the compromise decree for accounts of those businesses being taken after the 1st of April, 1946.
" Having said all this they record the conclusion that the compromise did not expressly negative the right of the plaintiff to an account of motor business.
We are unable to accept this conclusion.
The observations quoted above negative the plaintiff 's case about mistake or misunderstanding in regard to the true effect of the compromise and show that the plaintiff abandoned the right to Account after the crucial date and the status of the parties thereafter changed into one of tenants in common.
If the plaintiff really intended that accounts of the motor business or indeed of all other businesses were to be taken up to the date of the 'final decree, there was no point in mentioning the 31st March, 1946.
The normal course, after the preliminary decree was passed by the Court, was to divide all the property by metes and bounds and to award monies as found on examination of the accounts right up to the date of the final decree.
But for the compromise which limited the period of the account the plaintiff would have obtained the relief he is now seeking, in the partition suit as accounts would have been taken of all the businesses up to the date of the final decree.
The plaintiff has himself to thank for preventing the natural 107 course of events and for forbidding the accounts to be taken after the 31st March, 1946.
The plaintiff on the other hand has no real grievance in the matter, for although the defendants Nos. 1 and 2, who continued to run the motor business, may have made some money with the help of the two old motor buses, the plaintiff whose keenness to run the liquor business is apparent from the notice referred to above was not precluded from reaping the fruits of that business.
It is hard to conceive that the plaintiff would have agreed to share his burden of the loss if the motor business had sustained any.
We hold, therefore, that the compromise closed once for all the controversy about taking any account of the joint family businesses including the motor business after the 31st March ', 1946, and the plaintiff is bound by the terms of the compromise and the consent decree following upon it.
The obvious effect of this finding is that the plaintiff is barred by the principle of res judicata from reaitating the question in the present suit.
It is well settled that a consent decree is as binding upon the parties thereto as a decree passed by invitum.
The compromise having been found not to be vitiated by fraud, misrepresentation, misunderstanding or mistake, the decree passed thereon has the binding force of res judicata.
We are also of opinion that the plaintiff 's claim is barred by the provisions of Order II, rule 2(3), of the Code of Civil Procedure.
The plaintiff by confining his claim to account up to March 3, 1946, only, implicitly of not explicitly, relinquished his claim to the account for the subsequent period.
Sub rule 3 clearly lays down that if a person Omits, except with the leave of the Court, to sue for all reliefs to which he is entitled, he shall not afterwards sue for any relief so omitted.
We do not agree with the High Court that the cause of action in the subsequent suit was different from the cause of action in the first suit.
The cause of action in the first suit was the desire of the plaintiff to separate from his brothers and to divide the joint family property.
That suit embraced the entire property without any reservation and was compromised, the plaintiff having abandoned his claim to account in respect of 108 the motor business subsequent to March 31, 1946.
His subsequent suit to enforce a part of the claim is founded on the same cause of action which he deliberately relinquished.
We are clear, therefore, that the cause of action in the two suits being the same, the suit is barred under Order II, rule 2(3), of the Civil Procedure Code.
As the.
suit is barred both by res judicata and Order II, rule 2(3), of the Civil Procedure Code, no further question as to the applicability of section 90 of the Indian Trusts Act can possibly arise under the circumstances.
The result is that we allow the appeal and dismiss the suit with costs throughout.
Appeal allowed.
| Inams were granted by Hindu kings for performance of certain servicer, (e.g. watchmen, music players etc.) in the ancient temple, of Thirumoolanathaswami.
The inams were confirmed by the British Government.
For over 80 years the inams were enjoyed by alienees from the inamdars.
By an order passed on April 10, 1947 under section 44 B of the Madras Hindu Religious Endowments Act, 1926, the Revenue Divisional Officer resumed the inam lands and regranted them to the temple.
His order was confirmed on appeal by the District Collector.
Both these authorities held that the inams comprised both melwaram and kudiwaram rights.
The alienees instituted a suit in the Court of the Subordinate Judge under the proviso to section 44 B (2) (d) (ii) asking for a decree declaring that the inam grants consisted of the melwaram only.
They filed another suit asking for a declaration that the aforesaid order passed by the Collector was a nullity.
In appeals against the order of the trial judge the High Court decided against the plaintiffs except as regards Dasi inams.
Against the High court 's order the plaintiff appellants came to this Court.
It was contended on their behalf that : (i) the inam grants did not comprise the Kudiwaram; (ii) the inams were personal inams burdened with services and were not resumable under s.(iii) Section 44 B(2) was not retrospective in operation and did not authorise resumption of the inams on the ground of any alienation thereof made before 1934 when it came (iv)there was no alienation of the inams as contemplated by section 44 B (2) (a) (i); and (v) the tight of resumption of the inam lands was extinguished by adverse possession of the lands by the alienees for 60 years.
HELD: (i) The documents in evidence showed that the lands were being enjoyed by the inamdars and were granted as inams.
The amount of the assesment or melwaram was very low and could not be an adequate remuneration for the services to be rendered.
The plaintiffs claimed title to the lands under a grant from the inamdars on the footing that the inamdars were entitled to the kudiwaram and the melwaram.
The conclusion is irresistible that the inam comprised both the warams.[547 F G] (ii) There is a well recognised distinction between the grant of the land burdened with a condition of service and the grant of land as remuneration for an office.
Section 44 B does not apply to a personal inam burdened with a condition of service.
It applies to an inam granted to an office holder as remuneration for his services connected with a math or temple as also to an inam granted to the institution directly.
The inams in the present cases were not personal inams.
They were inams granted 543 to office holders as remuneration for services to be rendered by them and were within the purview of section 44 B. [548 B C].
(iii) The words 'has made ' in section 44 B(2)(a)(i) take in all alienations past and future and not only future alienations or alienation made after the section came into force.
Section 44 B(2) is in its direct operation prospective as it authorises only future resumption after it came into force.
It is not properly called retrospective "because a part of the requisites for its action is drawn, from , a time antecedent to its passing.
" The inams in the present case were resumable under section 44B(2)(a)(i) though the alienations were made before 1934.
[548 G 549B].
Maxwell on interpretation on Statutes 11th Ed., p. 211, relied on.
(iv) The appellants admitted that they held the land from the inamdars under a cowle lease and at no earlier stage did the appellants contend that the lease was not within the purview of section 44 B(2)(a)(i).
The plea that the lease was from year to year and hence outside the purview of the section could not be allowed to be raised for the first time in this Court.
[849 E H].
(v) The appellants being lessees their possession was not adverse to the inamdars.
A fortiori, their possession was not adverse to the Government under whom the inamdars held the inam lands.
They did not acquire any prescriptive title to the kudiwaram rights either against the inamdars or against the Government.
The Government could therefore resume the inam lands under section 44 B(2) and dispossess the inamdars and the plaintiffs claiming as lessees under then.
[550 B C].
[The question whether an alienee from the inamdar can acquire a prescriptive title to the kudiwaram rights in the inam lands and thereby defeat the latter 's right to resume the inam did not on the above view arise for decision and the court therefore expressed no opinion on it.] Roman Catholic Mission vs State of Madras, [1966] 3 S.C.R. 283, referred to.
Forbes vs Noor Mahomed Tuquee, [1870] 13 M.I.A. 438, 464 and P V. Dheenuena Rao vs Sirigiri Pedda Yella Reddi, ; , relied on.
|
ition No. 8193 of 1981.
(Under article 32 of the Constitution of India.) R. K. Garg and C.S. Vaidyanathan for the Petitioner.
Miss A. Subhashini for Respondent No. 1.
N. C. Talukdar, K.S. Gurumoorly and R. N. Poddar for Respondents Nos. 2 to 4.
P. N. Lekhi and K. C. Dua for the Applicants.
P. K. Bahardwaj in person for Times of India.
B. M. Srivastava for U.N.I. V. section Karnic for P.T.I. The order of the Court was delivered by CHANDRACHUD, C.J. This is a petition under article 32 of the Constitution by the Chief Reporter of the Hindustan Times, Smt.
Prabha Dutt, asking for a writ of mandamus or any other appropriate writ or direction directing the respondents, particularly the Delhi Administration and the Superintendent of Jail, Tihar, to allow her to interview two convicts Billa and Ranga who are under a sentence of death.
We may mention that the aforesaid two prisoners have been sentenced to death for an offence under section 302 Indian Penal Code and the petitions filed by them to the President of India for commutation of the sentence are reported to have been rejected by the President recently.
Before considering the merits of the application, we would like to observe that the constitutional right to freedom of speech and expression conferred by article 19(1)(a) of the Constitution, which includes the freedom of the Press, is not an absolute right, nor indeed does it confer any right on the Press, to have an unrestricted access to means of information.
The Press is entitled to exercise its freedom of speech and expression by publishing a matter which does not invade the rights of other citizens and which does not violate the sovereignty and integrity of India, the security of the State, public order, decency and morality.
But in the instant case, the right claimed by the petitioner is not the right to express any particular view or opinion but the right to means of information through the medium of an interview of the two prisoners who are sentenced to death.
No such right can be claimed by the Press unless in the first instance, the person sought to be interviewed is 1186 willing to be interviewed.
The existence of a free Press does not imply or spell out any legal obligation on the citizens to supply information to the Press, such for example, as there is under section 161(2) of the Criminal Procedure Code.
No data has been made available to us on the basis of which it would be possible for us to say that the two prisoners are ready and willing to be interviewed.
We have, however, no data either that they are not willing to be interviewed and, indeed, if it were to appear that the prisoners themselves do not desire to be interviewed, it would have been impossible for us to pass an order directing that the petitioner should be allowed to interview them.
While we are on this aspect of the matter, we cannot overlook that the petitioner has been asking for permission to interview the prisoners right since the President of India rejected the petitions filed by the prisoners for commutation of their sentence to imprisonment for life.
We are proceeding on the basis that the prisoners are willing to be interviewed.
Rule 549(4) of the Manual for the Superintendence and Management of Jails, which is applicable to Delhi, provides that every prisoner under a sentence of death shall be allowed such interviews and other communications with his relatives, friends and legal advisers as the Superintendent thinks reasonable.
Journalists or newspapermen are not expressly referred to in clause (4) but that does not mean that they can always and without good reasons be denied the opportunity to interview a condemned prisoner.
If in any given case, there are weighty reasons for doing so, which we expect will always be recorded in writing, the interview may appropriately be refused.
But no such consideration has been pressed upon us and therefore we do not see any reason why newspapermen who can broadly, and we suppose without great fear of contradiction, be termed as friends of the society be denied the right of an interview under clause (4) of rule 549.
Rule 559A also provides that all reasonable indulgence should be allowed to a condemned prisoner in the matter of interviews with relatives, friends, legal advisers and approved religious ministers.
Surprisingly, but we do not propose to dwell on that issue, this rule provides that no newspapers should be allowed.
But it does not provide that no newspapermen will be allowed.
Mr. Talukdar who appears on behalf of the Delhi Administration contends that if we are disposed to allow the petitioner to interview the prisoners, the interviews can be permitted only subject to the rules and regulations contained in the Jail Manual.
There 1187 can be no doubt about this position because, for example, rule 552A provides for a search of the person who wants to interview a prisoner.
If it is thought necessary that such a search should be taken, a person who desires to interview a prisoner may have to subject himself or herself to the search in accordance with the rules and regulations governing the interviews.
There is a provision in the rules that if a person who desires to interview a prisoner is a female, she can be searched only by a matron or a female warden.
Taking an overall view of the matter, we do not see any reason why the petitioner should not be allowed to interview the two convicts Billa and Ranga.
During the course of the hearing of this petition, representatives of the Times of India, India Today, PTI and UNI also presented their applications asking for a similar permission.
What we have said must hold good in their cases also and they, in our opinion, should be given the same facility of interviewing the prisoners as we are disposed to give to the petitioner in the main writ petition.
We therefore direct that the Superintendent of the Tihar Jail shall allow the aforesaid persons, namely the representatives of the Hindustan Times, the Times of India, India Today, the Press Trust of India and the United News of India to interview the aforesaid two prisoners, namely, Billa and Ranga, today.
The interviews may be allowed at 4 O 'Clock in the evening.
The representatives agree before us that all of them will interview the prisoners jointly and for not more than one hour on the whole.
There will be no order as to costs.
Mr. Lekhi who appears on behalf of the magazine India Today as also Mr. Jain who appears on behalf of the Hindustan Times has requested us to direct the Superintendent of Jail to allow the aforesaid representatives to be present at the time of the execution of the death sentence.
That is not a matter for us to decide.
If such an application is made to the Superintendent of Jail, he will be free to consider the same on merits and in accordance with the jail regulations.
| The Central Health Service was constituted by the Central Government and the Central Health Service Rules 1963 came into force with effect from 15 5 1963.
These Rules were amended by the Central Health Service (Amendment) Rules 1966.
Before the Punjab Reorganisation Act came into force the State of Punjab had its own Health Service known as the PCMS with two grades, Grade I and Grade II.
After the Punjab Reorganisation Act came into force, and the Central Health Service was formed, some persons belonging to the PCMS and some persons working as Medical officers in hospitals run by Local Bodies were inducted into that Service after they had exercised their option to be inducted therein.
The petitioners and contesting employees respondents in writ petition nos 2 of 1980 and 288 of 1979 filed in the High Court had been inducted into the Central Health Service after they had exercised their option.
When the Himachal Pradesh Union Territory was in existence, its Health Department was manned by officers of the Central Health Service, but after Himachal Pradesh became a full fledged State, the Himachal Health Service was constituted on 24.1.1974 1044 under the Himachal Pradesh Health Service Rules which came into force on 19.1.74.
The members of the Central Health Service serving in the erstwhile Himachal Pradesh Union Territory were asked to exercise their option to continue in the new Himachal Pradesh Health Service.
The writ petitioners and the contesting employees respondents exercised their option to continue in the Himachal Pradesh Health Service.
The Appellant in C.A. No. 2384 of 1980 who was one of the petitioners in writ petition No. 288 of 1979 contended before the High Court that his reversion from the post of Deputy Director of Health Services to which post he was appointed on a regular basis was void.
The petitioner in writ petition No. 2 of 1980 claimed that the seniority list of Specialists prepared by the State Government was contrary to the rules and that the appointment of the appellant in C.A. No. 2104 of 1980 and of respondents 2 and 4 in writ petition 288 of 1979 as Deputy Directors of Health Services was contrary to the provisions of the 1974 Rules.
It was contended that the appointments were also vitiated because the Departmental Promotion Committee constituted for making appointment was not properly constituted because one of the members of the committee the Principal Secretary to the Chief Minister was unauthorised by inducted into the Committee in place of the Secretary to the Government Health and Family Welfare Department and (ii) that their confidential reports were written by an officer junior to them and who was an aspirant for promotion to the higher post.
The appointments of the Director of Health Services and the two Deputy Directors having been made in haste immediately after the seniority list was issued rendered the appointments void.
The petitioner in writ petition 2 of 1980 claimed that the inter se seniority between himself and the respondents could not be disturbed at the time of absorption in the Himachal Pradesh Health Services having regard to the Punjab Reorganisation Act and the protection given to the members of the Punjab Service.
These two petitions were contested.
It was contended by the State of Himachal Pradesh that the petitioners in W.P. No. 288 of 1979 were appointed as Deputy Directors of Health Services only on ad hoc basis that the post is a selection post which cannot be claimed as of right by persons appointed on ad hoc basis by way of stop gap arrangement.
The incumbent to the post of Secretary Health and Family Welfare being on leave at the relevant period the Principal Secretary to the Chief Minister was appointed to function in his place as Secretary to Government in the Departmental Promotion Committee the constitution of the Departmental Promotion Committee was perfectly valid.
The annual confidential reports which were written by the junior officer who was working on ad hoc basis were not the only reports taken into account by the Departmental Promotion Committee.
The post of Director of Health Services was manned on an ad hoc basis.
Ad hoc appointments were necessitated by the absence of the final seniority list which was prepared only on 2.11.1979 and since that impediment was over the Departmental Promotion Committee met on 3.11.1979 and orders of appointment to those selected by that Committee were issued on the same day.
Specialists were officers possessing post graduate qualifications while General Duty officers were as a rule only graduates.
The Rule making autho 1045 rity divided the higher posts equally amongst the officers of the two categories taking all factors into consideration.
Therefore the claim for being considered to the post of Director of Health Services is wholly untenable having regard to Rule 9(3) of the Rules which provides that only Deputy Directors should be considered for promotion to the post of Director of Health Services.
On behalf of the Central Government it was contended that the Central Health Service was constituted with effect from 9 9.1966 and the seniority of the Medical Officers appointed to the service with effect from that date had been determined to be that officers appointed to a grade under rule 7A of the Central Health Services Rules 1963 as amended by the Central Health Service (Amendment) Rules 1966 will rank en bloc senior in that grade to those who may be appointed to that grade under rule 8A.
The officers of the Punjab Government were appointed to the Central Health Service with effect from 1.11.1966 under rule 8A. As These officers have come into the Central Health Service only after the initial constitution of that service was over it was not possible to assign them seniority over the officers appointed at the initial constitution of the service.
The Government of Himachal Pradesh having proposed to formulate their own Health Service and the Medical officers who are to opt from the Central Health Service are to be included in that service those officers were asked to exercise their option.
Those officers who opted to join the proposed Himachal Pradesh Health Service were given the benefit of past continuous service while fixing their seniority in the Himachal Pradesh Health Service.
The High Court allowed the writ petitions and held (1) that the petitioners therein being appointed as Deputy Directors on ad hoc basis cannot claim a right to the post of Deputy Directors of Health Services or to seniority on the basis of ad hoc appointment though then can add the period of such appointment in the matter of experience for promotion and confirmation.
(2) The Principal Secretary E to the Chief Minister was appointed to function additionally as Secretary to Government Health and Family Welfare Department as per office order dated 2.11.1979 and therefore the Departmental Promotion Committee had been properly constituted.
(3) Seniority has to be determined on the basis of the date of induction into the Central Health Service and not on the basis of the earlier service.
Allowing the appeal to this Court ^ HELD: 1.
The High Court erred in holding that the inter se seniority has to be determined only on the basis of the date of induction into the Central Health Service and not with reference to Rule 10 (a)(iii) of the Rules.
Inter se seniority has to be determined only in accordance with Rule 10 (a)(iii) of the Rules and Dr. S.P. Kapoor would be senior to Dr. R.M. Bali who in turn would rank senior to Dr. Jiwan Lal.
[1072 1073 B] In the instant case the Central Government was under an obligation to see that in fairness and equity the seniority of officers drafted into the newly formed State from the integrating States is properly fixed and that obligation has been properly discharged by the Central Government.
Dr. section P. Kapoor had been appointed to the PCMS (Grade I) post on 29.1.1965 and he was inducted into the Specialist Grade in the Central Health Service with effect from 1.11.1966 while 1046 Dr. R.M. Bali and Dr. Jiwan Lal who were in the Central Health Service on the date of its constitution on 9.9.1966 had been taken in the Specialists Grade and G.D.O. Grade I respectively under the Central Health Service with effect only from 9.9.1968.
[1072 1068 C] Roshan Lal Tandon vs Union of India ; held inapplicable.
N. Subba Rao etc.
vs Union of India and Ors.
, ; and C.P. Damodaran Nayar and P.S. Menon vs State of Kerala and others ; referred to. 2.
The annual confidential reports were initiated by an officer not only junior but also an aspirant for promotion to the higher post and therefore such Confidential reports should not have been taken into consideration for further promotion.
[1073 C] In the instant case it would not have been fair for the Departmental Promotion Committee to take into account the annual confidential reports made by Dr. Grover though they might have been revised by the higher authorities.[1073F] 3.
The post haste manner in which the Departmental Promotion Committee Meeting was held on 3.11.1979 suggests that some higher up was interested in pushing through the matter hastily when the regular Secretary Health and Family Welfare was on leave.
The matter is therefore required to be considered afresh.
[1075 B] In the instant case the Director of Health Services and Deputy Director of Health Services were holding the posts on ad hoc basis from the year 1973.
The final seniority list was prepared only on 2.11.1979 and the Departmental Promotion Committee was constituted on 3.11.1979.
The Joint Secretary Personnel Department had written the letter dated 3.11.1979 requesting the Principal Secretary to the Chief Minister who was appointed additionally as Secretary of Health and Family Welfare to attend the Departmental Promotion Committee Meeting at 3.00 p.m.
On that day.
There is room for suspecting the reason why the whole thing was completed in haste on 3.11.1979 after the preparation of the final seniority list on 2.11.1979.
The matter was not such as could not have been put off by a few days.
Such rush is not usual is in any State Government.
[1074 GD.
1075 A] 4.
The High Court was right in finding that the Specialists had an advantage for their category starting the roster by the senior most of The Specialists having put in more number of years of qualifying service than the HPHS (Grade I) officers and that the Government was right in getting the roster started With Specialists instead of HPHS (Grade I) officers.
[1076 B C] In the instant case as Rule 9(4) did not provide the category with which the roster may be started whether with HPHS (Grade I) officers or Specialists difficulty arose.
The Government therefore stepped in and supplemented the Rule by directing that the roster may be started with the category of Specialists keeping in view the length of qualifying service in each of the two grades namely Specialists and HPHS (Grade I) officers.
This they were entitled to by Rule 21 [1075 H. 1076 A]
|
Civil Appeals Nos. 1270, 1315 1316 of 1975.
Appeals by Special Leave from the Judgment and Order dated the 26 8 75 of the Joint Judge at Thana in Election Petitions Nos. 3 and 4 of 1974.
R. P. Bhat (In CAs.
1315 1316/75, K. R. Chaudhury, K. Rajendra Chaudhury and Mrs. Veena Khanna for the Appellants in CAs.
1315 1316/75 and in C.A. 1270/75.
D.V. Patel (In CAs.
1315 16/75, V. N. Ganpule for respondent No. 1 in all the appeals.
D. V. Patel, P. H. Parekh and (Miss) Manju Jetley for respondent No. 2 in CAs.
1315 1316/75.
M. N. Shroff for respondents 4 and 5 in CAs.
1315 1316/75.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The first two civil appeals based on admitted, abbreviated facts, revolving round the election of the President of the Basscin Council (and the third raises virtually the same point but refers to the bhibendi Municipal Council) under the Maharashtra Municipalities Act, 1965 (the Municipal Act, for short) has led to long and intricate argument, thanks partly to the haziness and incongruity of the statutory provisions, and the hard job of harmonizing and harmonizing and illumining which, by interpretative effort, has drained us of our faith in the blessings of simplicity, certainty and consistency in Indian codified law.
We may pardonably, but hopefully, permit ourselves by way of constructive criticism of perfunctory codification a proliferating source of litigation that it was once thought, "With a Code, all our troubles and cares would magically vanish.
The law, codified, would become stable, predictable and certain.
The rules of law, purified, would be accessible to, and understood by, not only the legal establishment of bench and bar but the people as well.
" 835 Professor Grent E. Gilmore comments: "The law, codified, has proved to be quite as unstable, unpredictable, and uncertain quite as mulishly unruly as the common law, uncodified, had ever been.
The rules of law, purified, have remained the exclusive preserve of the lawyers; the people are still very much in our toils and clutches as they ever were if not more so." (Quoted by H. R. Hahlo in Codifying the Common Law: Protracted Gestation Mod. Law.
Rev. January 1975, p. 23, 29 30).
Election law has necessarily to be Statutory, but a code can be clear in its scheme and must be such that litigation proof elections should become the rule.
Legislative nemesis, in the shape of ambiguity induced litigation is a serious political misfortune in the area of elections where lay men go to the polls and people 's verdicts get bogged down in court disputes, attended with desperate delays.
Some intelligent care at the drafting stage, some vision of the whole scheme in the framers, will reduce resort to legal quarrels and appellate spirals so that the time consumed in this Court in resolving conflicts of construction in comparatively less important legislations can be spared for more substantial issues of general public importance.
Civil Appeals Nos.
1315 and 1316 of 1975 One Shri Rajani, a candidate for Presidentship of the Bassein Municipal Council and Shri Samant, a voter in that municipal area, made common cause and filed two election petitions challenging the declaration in favour of the appellant, Dr. Parulekar, who was the successful candidate, winning by a large plurality of votes.
The resume of relevant facts sufficient to appreciate the contentions may straightway be set out.
We are confining, as suggested by counsel, to the twin appeals relating to Bassein since the fate of Bhibandi must follow suit.
Three candidates, including the two already mentioned, had filed nomination papers on October 21, 1974 for the presidential election of the Municipal Council.
At the time of the scrutiny which took place two days later, no objection was raised to the nomination of Dr. Parulekar by anyone and, on the withdrawal of the third candidate within time, there was a straight fight between the appellant and the first respondent.
The poll battle which took place on 17 11 74 found the appellant victor and he was so declared.
The frustrated first respondent and his supporter, 2nd respondent, challenged the return of the appellant by separate election petitions under section 21 of the Municipal Act.
The sole ground on which the petitioners were founded was that Dr. Parulekar, the returned candidate, was disqualified under section 16(1) (g) of the Municipal Act, the lethal vice alleged against him being that on the date of nomination he was holding an office of profit under the Government, as he was then, admittedly, working as a panel doctor appointed under the Employees ' State Insurance Scheme (acronomically, the ESI scheme), a beneficial project contemplated by 836 the ESI Act, 1948.
Of course, the appellant doctor submitted his resignation on November 5, 1974 and this was accepted on November 11, 1974.
Thus, before the actual polling took place, but after the nomination, he had ceased to be on the ESI panel.
Another circumstance which may have some significance in the overall assessment of the justice of the case, although of marginal consequence on the law bearing upon the issues debated at the bar, is that the appellant has been a councillor of the aforesaid municipality since 1962 and he has also been a doctor on the ESI panel throughout the same span of years and no one has chosen to raise the question of disqualification on this score up till the 1st respondent fell to his rival and had no other tenable ground of attack.
Necessity is the mother of invention and the respondents, aided by the cute legal ingenuity, may be, dug up the disqualification of 'office of profit ' and, indeed, wholly succeeded before the Election Tribunal, the Joint Judge of Thana.
The Trial Judge not merely voided the appellant 's election but declared the 1st respondent President since he was the sole surviving candidate.
This order of the Joint Judge has been assailed before us in the two appeals, after securing leave under article 136.
Three main contentions have been urged before us by Shri Bhatt, counsel for the appellant, which we will formulate and deal with one by one, although on the merits the most formidable issue is as to whether figuring in the medical list under the ESI scheme amounts to holding an office of profit under Government.
With a view to get a hang of the major plea, it is necessary to study the scheme of the ESI Act, even as to get a satisfactory solution of the other two points we have to gather the ensemble of provisions dealing with disqualification of candidates and the triple remedies provided in that behalf by the Municipal Act.
The discussion, to be put in proper focus, requires formulation of the submissions of counsel, the foremost in importance and intricacy being whether a doctor on the Medical List made by the Surgeon General of the State holds an 'office of profit ' within the meaning of section 16(1) (g) of the Municipal Act.
Next in the order of priority is the question whether a petition for setting aside an election of President on the ground of disqualification for being a councillor is permissible under section 21 of the Municipal Act in view of the special provision in section 44 of the said Act and the rules regarding objections to nominations and appeal therefrom framed under that Act.
The last question which, in a sense, is interlinked with the earlier one is as to whether, assuming the appellant to be disqualified, the first respondent can be declared the returned candidate or President, by passing the necessity for a fresh poll getting elected, as it were, through the judicial constituency of discretionary power.
It is plain democratic sense that the electoral process should ordinarily receive no judicial jolt except where pollution of purity or contravention of legal mandates invite the court 's jurisdiction to review the result and restore legality, legitimacy and respect for norms.
The frequency of forensic overturing of poll verdicts injects instability into the electoral system, kindles hopes in worsted candidates and induces postmortem discoveries of 'disqualifications ' as a desperate gamble in 837 the system of fluctuating litigative fortunes.
This is a caveat against overuse of the court as an antidote for a poll defeat.
Of course, where a clear breach is made out, the guns of law shall go into action, and not retreat from the Rule of Law.
We will proceed to take a close up of the three lines of attack outlined above, and if interference with the election must follow, it will; otherwise not.
The appellant is a doctor in Maharashtra where the municipalities are organised, based on popular franchise, in terms of the Municipal Act.
It is a heartening omen that this local body, Bessein, has electorally attracted professional men, not mere politicians, into its administrative circle; for the appellant is a 'medic ' while respondent 1 is an 'advocate '.
By a margin of over a thousand votes the former won but the lawyer rival has invoked the law to undo the election on the ground of disqualification based on section 16(1)(g) of the Municipal Act.
The ban is on one who holds an office of profit under government and the public policy behind the provision is obvious and wholesome.
We may read the relevant part of the section: "16(1)(g): No person shall be qualified to become a Councillor whether by election, co option or nomination, who is a subordinate officer or servant of Government or any local authority or holds an office of profit under Government or any local authority;" The short question then is whether the appellant is qualified to be a Councillor (which expression is rightly deemed to include President, vide section 2(7).
The disqualifying stain is stated to be that he held an office of profit under the State Government.
He did resign before the date of poll but after the date of filing nomination.
The nomination was vitiated and subsequent resignation did not confer moksha and the election thus became void.
Assuming that if a candidature is stigmatised by a fatal blot at the time of nomination the election also suffers invalidity, despite intervening removal of the disqualification, did the doctor incur the penalty by being on the medical panel of the ESI scheme ? The critical question, apparently simple and limpid, has, when saturated with precedential erudition and lexicographic inundation, become so learnedly obscure and conflictively turbid that were we governed by a radically streamlined methodology of legislation and liberality of interpretation, as obtains in other systems of jurisprudence, much of the forensic work could have been obviated.
This is a problem of disturbing social import outside the orbit of these appeals with which alone we are currently engaged.
The magnificent concept of judicial review is at its best when kept within the beautiful trellis of broad principles of public policy and tested by the intentionability of the statute.
With this predisposition calculated to make judge power functionally meaningful, we proceed to fix the contextual semantics of 'office of profit ' as a disqualificationary factor for running for municipal president.
To begin with the 838 very beginning; what is an office ? too simplistic to answer with case that it is derived from 'officium ' and bears the same sense.
Indeed, in Latin and English, this word has protean connotations and judicial choice reaches the high point of frustration when the highest courts here and abroad have differed, dependent on varying situations, or statutory schemes, the mischief sought to be suppressed and the surrounding social realities.
Then we come to the second question: what is an 'office of profit '? And, thirdly, to the question: when is an 'office of profit ' under Government ? The context purpose signification of expressions of varying imports leaves room for judicial selection.
Illustratively, we may refer to two decisions which throw some light but turn on the statutory setting of those cases.
For instance, in Ramachandran (AIR 1961 Madras 450, 458) it has been observed: ".
We find, in Bacon 's Abridgment at Vol.
6, p. 2, the article headed 'of the nature of an officer, and the several kinds of officers ', commencing thus: 'It is said that the word 'officium ' principally implies a duty, and, in the next place, the charge of such duty; and that it is a rule that where one man hath to do with another 's affairs against his will, and without his leave, that this is an office, and he who is in it is an officer '.
And the next paragraph goes on to say: 'There is a difference between an office and an employment, every office being an employment; but there are employments which do not come under the denomination of offices; such as an agreement to make hay, herd a flock, etc; which differ widely from that of steward of a manor, etc.
The first of these paragraphs implies that an officer is one to whom is delegated, by the supreme authority, some portion of its regulating and coercive powers, or who is appointed to represent the State in its relations to individual subjects.
This is the central idea; and applying it to the clause which we have to construe, we think that the word 'officer ' there means some person employed to exercise, to some extent, and in certain circumstances, a delegated function of Government.
He is either himself armed with some authority or representative character, or his duties are immediately auxiliary to those of someone who is so armed." In Statesman vs Deb it is said: "An office means no more than a position to which certain duties are attached.
According to Earl Jowitt 's Dictionary a public office is one which entitles a man to act in the affairs of others without their appointment or permission.
" Both these decisions may perhaps be generally relevant but not precisely to the point.
We were taken through the panorama of case law and statute law relating to corporations, companies, autonomous bodies and other creatures of statute, to bring out the content of 'office of profit under 839 government ' as distinguished from offices under the control of government.
Indeed, even the Constitution of India disqualifies a person for being chosen as Member, if he holds any office of profit under the Government.
The question may well arise whether the ESI Corporation is under the control of government and can be equated with State so that holding any office thereunder may attract the proscription of section 16(1)(g).
We are relieved from this industrious adventure by the stand taken by counsel for the respondents, Shri Patel, that he stakes this part of his case on the sole ground that the appellant doctor is holding an office of profit under the Maharashtra government, as such.
He has no case therefore that the doctor is under the control of the ESI Corporation, an institution controlled by the Union government and hence is disqualified.
The short issue, therefore, is whether, under the scheme of the ESI Act and the rules framed thereunder, the appellant squarely falls within the description of holder of office of profit under the State Government.
This branch of enquiry takes us to an analysis of the provisions bearing on the scheme of the medical project under the ESI Act and the role of the State government therein.
We have some assistance from rulings of this Court in resolving the dispute and we may mention even in advance that a seeming disharmony between two decisions of this Court also has to be dissolved.
Apparent judicial dissonance may give place to real consonance, if a dissection of the facts and discernment of the reasoning, in the light of which the decisions of this Court are rendered, is undertaken.
The ESI Act provides medical facilities for the working class, the primary responsibility for executing the project being shouldered by a statutory corporation created by section 3 of the Act and the infra struture for implementation is organised by the other provisions of Chapter II.
A Standing Committee administers the affairs of the Corporation.
A Medical Benefit Council is constituted by the Central Government to help in the discharge of the duties of the Corporation which involve expertise.
The financial resources come from contributions and other moneys specified in the Act itself and an Employees ' State Insurance Fund has been brought into existence in this behalf.
The Corporation, although has a separate legal personality, is under the control of the Central Government.
But that is not the pertinent issue before us.
The fatal sin is not that the appellant is a doctor under the ESI Corporation but that he is holding an 'office of profit ' under the State Government.
We may ignore provisions relating to the powers of the Corporation and turn to the role of Government vis a vis private medical practitioners like the appellant.
He is not a full time employee of Government.
On the other hand, he runs his own clinic.
Even so, it is argued with force that section 58 and a fasciculus of rules framed by the State Government under section 96, viewed as a mini scheme, creates offices of profit which are filled by private doctors like the appellant.
The legal spring board is section 58 of the ESI Act and it is best to start off with reading that section: "58.
Provision of medical treatment by State Government. (1) The State Government shall provide for in sured persons and (where such benefit is extended to their 840 families) their families in the State, reasonable medical, surgical and obstetric treatment: Provided that the State Government may, with the approval of the Corporation, arrange for medical treatment at clinics of medical practitioners on such scale and subject to such terms and conditions as may be agreed upon.
(2) Where the incidence. " Two things are self evident.
An obligation to provide medical treatment for insured persons has been saddled on the State Government.
Secondly, that Government may discharge this responsibility through arrangement with medical practitioners who run clinics.
The bare bones of section 58 have to be clothed with flesh before a viable project comes to life.
This is achieved by rules framed unders.
96 especially section 96(1) (d) & (e).
We may make it clear that the Corporation 's entry into the field is not inhibited by section 58 as section 59A underscores.
But what is posed before us is the appellant 's status as a holder of an office of profit under the Government since he is admittedly a medical insurance officer within the mechanism set up by the rules.
Here we seek light from the several rules governing medical insurance officers, their empanelment, control, removal and allied matters.
Some empathy with the plan of benefit by the State Government is a pre requisite to an insight into the true nature of a medical insur ance officer in the context of an office of profit.
A broad idea can be gained from the key rules and so we sketch the outlines by reference to them, skipping the rest.
The Chief officer entrusted with the working of the scheme is the Director Rule 2(3A) defines 'Director ' as the Director, ESI scheme, Government of Maharashtra.
This officer, the kingpin of the whole programme, is an appointee of the State Government.
The content of medical benefits is covered by r. 4 which extends the medical services to insured persons and runs thus: "4.
Provision of general medical services to insured persons by Insurance Medical Practitioners. (1) The State Government shall arrange to provide general medical services to insured persons at clinics of Insurance Medical Practitioners, who have undertaken to provide general medical services under these rules and in accordance with their terms of service.
(2) An Insurance Medical Practitioner shall be deemed to be appointed as an Insurance Medical officer for the purposes of the Regulations.
" The agency for rendering medical treatment is called Insurance Medical Practitioner.
Rule 2(6) defines the Insurance Medical Practitioner as one appointed as such to provide medical benefits under the Act and to perform such other functions as may be assigned to him.
Rule 2(2) authorizes the appointment of one or more officers by the State Government to control the administration of medical benefits and they are called 'administrative medical 841 officers '.
These officers shall, under r. 5, prepare a list of the practitioners whose applications have been approved by the Allocation Committee (defined in r. 2(13).
This list is called the Medical List of Insurance Medical Practitioners.
Before a doctor can be included in the medical list, he has to apply to the administrative medical officer in the form specified by the State Government for the purpose.
The Insurance Medical Practitioners have to be responsible for rendering medical treatment and must conform to the conditions specified.
A Medical Service Committee shall be set up for such areas as may be considered appropriate by the State Government.
This Committee investigates into questions between an Insurance Medical Practitioner and a person who is entitled to obtain treatment from that practitioner, etc.
On the report of the Medical Services Committee relating to the conduct of an Insurance Medical Practitioner, the Director may take action in one or more of the ways specified in r. 22(2).
He may even remove the Insurance Medical Practitioner 's name from the medical list.
There is an appeal by the aggrieved doctor to the State Government.
Rule 24 relates to investigation into cases of disputed prescriptions, record keeping and certification relating to Insurance Medical Practitioners.
The total impact of a detailed study of the various rules framed by the State Government bearing on Insurance Medical Practitioners is that a doctor applies for getting into the Medical List, agrees to abide by the duties and conditions prescribed, is under the control of the Medical Services Committee and may even be removed or resign from the panel.
It is clear that he cannot extricate himself from government control by the plea that he is a private doctor because his entry into the Medical List is preceded by an application for inclusion where he undertakes certain responsibilities.
Such application is considered by an Application Committee which recommends his name to the Director, Employees State Insurance Scheme.
The Surgeon General ultimately grants the prayer for inclusion in the Medical List on the recommendations of the Allocation Committee.
It is true that an insurance medical practitioner has the right to resign and also to have the name of any insured person removed from his list.
He has duties which are prescribed by the rules vis a vis the patients.
He is required to furnish various pieces of clinical information and to do other medical duties as are set out in r. 10.
The State Government has the power to remove the name of any individual Insurance Medical Practitioner from the Medical List even as the latter is entitled to give notice to the Director, ESI Scheme that he desires to cease to be an Insurance Medical Practitioner and that his name may be removed from the Medical List.
It follows that although he is a private doctor, running a private clinic, he is also an Insurance Medical Practitioner subject to the discipline, directions, obligations and control of the relevant officers appointed by the State Government in implementing the medical benefit scheme.
An insurance medical practitioner the appellant is one being a medical practitioner 'appointed as such to provide medical benefit under the Act and to perform such other functions as may be assigned to him, ' the question arises whether this is tantamount to holding an office.
842 The legal provisions under the Act and the rules certainly make of an insurance medical practitioner a category different from one who runs a private clinic and enters into contractual terms for treatment of patients sent by Government, nor is he a full fledged government servant.
He is a tertium quid, as it were, but the finer question is whether this category falls squarely within the description of 'office of profit under government '.
This very question fell for decision before the Bombay and Calcutta High Courts but the learned Judges, on a study of the identical provisions, arrived at antipodean conclusions.
After all, minds differ as rivers differ and, assisted by the flow of logic in these and other rulings cited before us, we will hopefully reach the shore of correct interpretation.
The process of mentation, the office of words like office of profit ' which convey many meanings and the inputs into the complex matrix of statutory construction make what looks simple to the lay, sophisticated for the legal, as the case on hand amply illustrates.
Back to the issue of 'office of profit '.
If the position of an Insurance Medical Officer is an 'office ', it actually yields profit or at least probably may.
In this very case the appellant was making sizeable income by way of capitation fee from the medical senice, rendered to insured employees.
The crucial question then is whether this species of medical officers are holding 'office ' and that 'under Government '.
There is a haphazard heap of case law about these expressions but they strike different notes and our job is to orchestrate them in the setting of the statute.
After all, all law is a means to an end.
What is the legislative end here in disqualifying holders of 'offices of profit under government '? Obviously, to avoid a confict between duty and interest, to cut out, the misuse of official position to advance private benefit and to avert the likelihood of influencing government to promote personal advantage.
So this is the mischief to be suppressed.
At the same time we have to bear in mind that our Constitution mandates the State to undertake multiform public welfare and socio economic activities involving technical persons, welfare workers, and lay people on a massive scale so that participatory government may prove a progressive reality.
In such an expanding situation, can we keep out from elective posts at various levels many doctors, lawyers, engineers and scientists, not to speak of an army of other non officials who are wanted in various fields, not as fulltime government senants but as part time participants in people 's projects sponsored by government? For instance, if a National Legal Services Authority funded largely by the State comes into being, a large segment of the legal profession may be employed part time in the ennobling occupation of legal aid to the poor.
Doctors, lawyers, engineers, scientists and other experts may have to be invited into local bodies, legislatures and like political and administrative organs based on election if these vital limbs of representative government are not to be the monopoly of populist politicians or lay members but sprinkled with technicians in an age which belongs to technology.
So, an interpretation of 'office of profit ' to cast the net so wide that 843 all our citizens with specialities and know how are inhibited from entering elected organs of public administration and offering semivoluntary services in para official, statutory or like projects run or directed by Government or Corporation controlled by the State may be detrimental to democracy itself.
Even athletes may hesitate to come into Sports Councils if some fee for services is paid and that proves their funeral if elected to a panchayat ! A balanced view, even if it involves 'judicious irreverence ' to vintage precedents, is the wiser desideratum.
The general interpretative approach hallowed by Heydon 's case is expressed by the Bench in the Bombay ruling AIR 1958 Bom 314 Deorao vs Keshav thus: "The object of this provision is to secure independence of the members of the Legislature and to ensure that the Legislature does not contain persons, who have received favours or benefits from the executive and who, conse quently, being under an obligation to the executive, might be amenable to its influence.
Putting it differently, the provision appears to have been made in order to eliminate or reduce the risk of conflict between duty and self interest amongst the members of the Legislature.
This object must always be borne in mind in interpreting article 191.
" While we agree that this consideration is important for purity of elective offices, the need for caution against exaggerating its importance to scare away men of skill in various fields coming into socially beneficial projects on part time posting or small fee cannot be ignored.
Informed by these dual warnings, we proceed to assess the worth of the rival contentions.
Section 58 charges the State Government with the duty to provide medical facilities to insured employees.
This obligation may be discharged by arrangements with private clinics.
An Insurance Medical Officer is not a government servant, but he is more than a mere private doctor with a contractual obligation, for he undertakes certain functions which are regulated by law viz., rules framed under section 96.
The question is not what he is but whether he is 'holding an office of profit '.
We have already referred to the principal sections and rules, the broad scheme and infra structure and the rights, duties and degree of control over Insurance Medical Practitioners exercised by the State directly or through its officers.
A further elaboration is possible, but is supererogatory.
A full study of the Bench decisions of Bombay and Calcutta led to diametrically opposite conclusions thus proving the wide judicial choice available depending on the perspective, the import and the objections one accepts from the two enactments viz. the Municipal Act and the Insurance Act.
It is a context purpose quandary.
844 Chainani J., speaking for the Court set out the true approach thus: P. 318, para 12.
"In our opinion, the principal tests for deciding whether an office is under the Government, are (1) what authority has the power to make an appointment to the office concerned, (2) what authority can take disciplinary action and remove or dismiss the holder of the office and (3) by whom and from what source is his remuneration paid ? Of these, the first two are, in our opinion, more important than the third one.
" Shri A. N. Ray, J. (as he then was) stated his touchstone to be fourfold: "The four tests which have been applied to these cases were stated by Lord Thankerton in the case of Short vs J. and W. Henderson, Limited, reported in These four tests are : (a) the master 's power of selection of his servant, (b) the payment of wages or other remuneration, (c) the master 's right to control the method of doing the work, and (d) the master 's right of suspension or dismissal.
Lord Thankerton referred to the observation of Lord Justice Clerk in the judgment under appeal in that case that a contract of service may still exist if some of these elements are absent altogether, or present only in an unusual form, and that the principal requirement of contract of service is the right of the master in some reasonable sense to control the method of doing the work, and that this factor of superintendence and control has frequently been treated as critical and decisive of the legal quality of the relationship.
"(1) A few searching questions and implied answers may help a solution.
Is the appellant (or those of his ilk under the Scheme) an employee of government? Not more than any other expert consulted by Government for fee paid? But he has obligations of a statutory savour He is 'appointed ' on his application which is processed by the appropriate body, removed if found wanting, obliged to discharge duties, make some reports and subject himself to certain discipline while on the panel.
In the words of the Bombay decision : Para 30, p. 323. "In the form of application, a medical practitioner, who desires his name to be included in the medical list, has also to state that he agrees to abide by the terms of service.
In other words, he agrees to join a service, see also Rule 22(d), which uses the words 'prejudicial to the efficiency of the Service '.
He is also subject to disciplinary action and control.
He cannot also resign or give up his post except by giving three months ' notice under Service Rule 845 14.
He is also required to maintain records and to submit returns.
His employment has, therefore, all the attributes of a service.
He must, therefore, be held to be a holder of an office.
The fact that he is allowed private practice will not alter the character of his appointment.
" The other features pointing in a different direction are not to be overlooked either.
Ray J. (as he then was) drew the lines, boldly, when he observed: Para 29, p. 7.
"These medical practitioners apply themselves for inclusion in the medical list.
Their payment is not out of the government revenue but out of a special fund consisting of contribution made by the employers.
Therefore such a fund over which the government has no legal title and which is vested in the corporation under the combined effect of sections 3 and 26 of the Act to which I have already referred indicates beyond any doubt that the remuneration of medical practitioners is paid not out of the public exchequer.
The contention of Mr. Advocate General is correct that medical practitioner in the present case gave nothing more than a voluntary undertaking to offer services in lieu of fees for professional service rendered and the inclusion of names in the list and the preparation of the list did not have the effect of making the medical practitioner an employee of the State.
" x x x x Para 23, p. 6. "Mr. Advocate General, in my opinion, rightly contended that the medical practitioners were really undertaking and offering services and if the undertaking was treated as a contract between the medical practitioner and the persons in charge of preparation of medical list, namely, the State or the Corporation it was a mere contract for services and not a contract of services.
This proposition was extracted from the decision in Gould vs Minister of National Insurance, reported in and also in (1951) I All.
E.R. 368.
That case was on the construction of the provisions of the National Insurance Act, 1946 and the question was whether the appellant in that case who was a music hall artist and who had entered into a written contract with the second respondent acting on behalf of several companies, under which he undertook to appear in a variety 'act ' at a theatre for one week from September 6, 1948 was an employed person within the meaning of the Act.
The first respondent, the Minister of National Insurance, had decided that during that week the appellant was not an 'employed person ' within the meaning of the Act.
It was held that the question would turn on the particular facts of each case and the authority of cases based on different statutes would not always be of assistance.
It was said 846 that it would be easy in some cases to say that the contract was a contract of service and in others that it was a contract for services, but between these two extremes there was a large number of cases where the line was much more difficult to draw.
" Does the destiny of this case depend on murky semantics as to what is an 'office ' filling columns of Law Lexicons and English Dictionaries or the nub of the dispute turn on contract of service versus contract for services? Alas ! Could not the law be made plainer in this area of mass participatory process called elections ? Dickens is still valid about our modern Legislations unresponsive to the common man 's need of comprehensible law and unmindful of the court 's consequential wrestling with etherie differences ! 'The law is a ass a idiot ' (Mr. Bumble in Oliver Twist).
The commensense way, rather than the lexicographic street, is the better route to the destination.
And that means we have to crystallise our notion of 'office of profit ' and then test the fate of Insurance Medical Practitioners.
Profit he does derive, but does he hold an office under Government ? Mere incumbancy in office is no disqualification even if some sitting fee or piffling honorarium is paid (vide: If a lawyer (or doctor in a system of National Health Insurance) is on a panel of Government for looking after cases or other legal work and paid for services rendered but, otherwise, a freelance, does he hold an office under Government ? Shivamurthy Swami(1) clears the ground for the discussion by going to the basics which determine what is an office of profit under Government.
These tests are: "(1) Whether the Government makes the appointment; (2) Whether the Government has the right to remove or dismiss the holder; (3) Whether the Government pays the remuneration; (4) What are the functions of the holder ? Does he perform them for the Government; and (5) Does the Government exercise any control over the performance of those functions ?" We are not faced with the plea of office under the Corporation and thus under the Central Government but only with the disqualification of holding an office directly under the State Government via section 58 read with the rules framed under section 96 of the Insurance Act.
In this connection, a closer link with the present situation is established by Kanta(2) where an Advocate, acting for Government under the directions of the Government pleader could be said to hold an office of profit.
Sikri J., (as he then was) adopted the classic definition 847 of 'office ' given by Justice Rowlatt in Great Eastern Rly Co.(1) as appropriate even in an electoral context and proceeded to apply the ratio to the facts of the case.
Observed the learned Judge: "We cannot visualise an office coming into existence, every time a pleader is asked by the Government to appear in a case on its behalf.
The notification of his name under rule 8B, does not amount to the creation of an 'office '.
Some reliance was also placed on rule 4 of Order 27 C.P.C. which provides that: "The Government pleader in any Court shall be the agent of the Government for the purpose of receiving processes against the Government issued by such Court.
" This rule would not apply to the facts of this case because the appellant was appointed only to assist the Government Advocate in a particular case.
Assuming it applies, it only means that the processes could be served on the appellant, but processes can be served on an Advocate under Rule 2 of Order XLV of the Supreme Court Rules, 1966.
This does not mean that an Advocate on Record would hold an office under the client.
The learned Counsel for the respondent, Mr. Chagla, urges that we should keep in view the fact that the object underlying article 191 of the Constitution is to preserve purity of public life and to prevent conflict of duty with interest and give an interpretation which will carry out this object.
It is not necessary to give a wide meaning to the word 'office ' because if Parliament thinks that a legal practitioner who is being paid fees in a case by the Government should not be qualified to stand for an election as a Member of Legislative Assembly, it can make that provision under article 191(1)(e) of the Constitution.
The case of Sakhawat Ali.
vs The State of Orissa(2) provides an instance where the Legislature provided that a paid legal practitioner should not stand in the municipal elections.
" This takes us to Sakhawat Ali(2) and to Mahadeo(3) which too afford some luciferous parallels.
In Sakhawat Ali (supra) the question arose about a legal practitioner employed on behalf of a Municipality standing as candidate for election to the Municipal Council.
Stress was laid on the purity of public life, an object which would be thwarted if there arose a situation of conflict between interest and duty.
A lawyer paid by the municipality becoming a councillor is a situation fraught with perils to purity in public life.
This factor was emphasized by an express provision in the Municipal Act in that case disqualifying such paid legal practitioners from becoming candidates.
Had such a step been taken in our case, the law would have been at least clear, whether it was wise or No. 848 In Mahadeo 's Case(1) a fine distinction from Kanta (supra) arose.
There also the disqualification of a lawyer on account of holding an office of profit under the government arose.
After quoting Lord Wright in Mcmillan vs Guest(2), trying to define 'office ', the Court proceeded to consider whether a lawyer who accepted a position on the panel of Railway pleaders for conducting suits filed against the Union of India on the terms and conditions therein mentioned, was holding an office of profit.
Holding that such an appointment on the panel of lawyers for the Union of India was an office of profit, the Court observed: "If by 'office ' is meant the right and duty to exercise an employment or a position to which certain duties are attached as obsered by this Court, it is difficult to see why the engagement of the appellant in this case under the letter of February 6, 1962 would not amount to the appellant 's holding an office.
By the said letter he accepted certain obligations and was required to discharge certain duties.
He was not free to take a brief against the Railway Administration.
Whether or not the Railway Administration thought it proper to entrust any particular case or litigation pending in the court to him, it was his duty to watch all cases coming up for hearing against the Railway Administration and to give timely intimation of the same to the office of the Chief Commercial Superintendent.
Even if no instructions regarding any particular case were given to him, he was expected to appear in court and obtain an adjournment.
In effect this cast a duty on him to appear in court and obtain an adjournment so as to protect the interests of the Railway.
The duty or obligation was a continuing one so long as the railway did not think it proper to remove his name from the panel of Railway lawyers or so long as he did not intimate to the Railway Administration that he desired to be free from his obligation to render service to the Railway.
In the absence of the above he was bound by the terms of the engagement to watch the interests of the Railway Administration, give them timely intimation of cases in which they were involved and on his own initiative apply for an adjournment in proceedings in which the Railway had made no arrangement for representation.
It is true that he would get a sum of money only if he appeared but the possibility that the Railway might not engage him is a matter of no moment.
An office of profit really means an office in respect of which a profit may accrue.
It is not necessary that it should be possible to predicate of a holder of an office of profit that he was bound to get a certain amount of profit irrespective of the duties discharged by him." The next case of considerable importance is Gurugobinda(3) which related to a chartered accountant, a partner of a firm of auditors of two companies which were owned by the Union Government 849 and the State Government.
Disqualification for holding an office of profit, again, in this circumstance, was pressed before the Court and section K. Das, Acg.
C. J., speaking for the Court observed: "We think that this contention is correct.
We agree with the High Court that for holding an office of profit under the Government, one need not be in the service of Government and there need be no relationship of master and servant between them." (P. 319) "In Maulana Abdul Shakur vs Rikhab Chand and another (1958 SCR 387) the appellant was the manager of a school run by a committee of management formed under the provisions of the Durgah Khwaja Saheb Act, 1955.
He was appointed by the administrator of the Durgah and was paid Rs. 100 per month.
The question arose whether he was disqualified to be chosen as a member of Parliament in view of article 102(1) (a) of the Constitution.
It was contended for the respondent in that case that under sections 5 and 9 of the Durgah Khwaja Saheb Act, 1955 the Government of India had the power of appointment and removal of members of the committee of management as also the power to appoint the administrator in consultation with the committee; therefore the appellant was under the control and supervision of the Government and that therefore he was holding an office of profit under the Government of India.
This contention was repelled and this court pointed out the distinction between the holder of an office of profit under some other authority subject to the control of Government." (p. 319 320) "It has to be noted that in Maulana Abdul Shakur 's case the appointment of the appellant in that case was not made by the Government nor was he liable to be dismissed by the Government.
The appointment was made by the administrator of a committee and he was liable to be dismissed by the same body." (p. 320) "It is clear from the aforesaid observations that in Maulana Abdul Shakur 's case the factors which were held to be decisive were (a) the power of the Government to appoint a person to an office of profit or to continue him in that office or revoke his appointment at their discretion, and (b) payment from out of Government revenues, though it was pointed out that payment from a source other than Government revenues was not always decisive factor.
In the case before us the appointment of the appellant as also his continuance in office rests solely with the Government of India in respect of the two companies.
His remuneration is also fixed by Government.
We assume for the purpose of this appeal that they are Government companies within the meaning of 850 the Indian and 100% of the shares are held by the Government.
We must also remember that in the performance of his functions the appellant is controlled by the Comptroller and Auditor General who is himself undoubtedly holder of an office of profit under the Government, though there are safeguards in the Constitution as to his tenure of office and removability therefrom." (p. 321) "Therefore if we look at the matter from the point of view of substance rather than of form, it appears to us that the appellant as the holder of an office of profit in the two Government Companies, the Durgapur Projects Ltd., and the Hindustan Steel Ltd., is really under the Government of India; he is appointed by the Government of India, he is removable from office by the Government of India, he perfoms functions for two Government companies under the control of the Comptroller and Auditor General who himself is appointed by the President and whose administrative powers may be controlled by rules made by the President." (p. 322) "In Ramappa vs Sangappa the question arose as to whether the holder of a village office who has a hereditary right to it is disqualified under article 191 of the Constitution, which is the counterpart of article 102, in the matter of membership of the State Legislature.
It was observed therein.
"The Government makes the appointment to the office though it may be that it has under the statute no option but to appoint the heir to the office if he has fulfilled the statutory requirements.
The office is, therefore, held by reason of the appointment by the Government and not simply because of a hereditary right to it.
The fact that the Government cannot refuse to make the appointment does not alter the situation.
" There again, the decisive test was held to be the test of appointment.
In view of these decisions we cannot accede to the submission of Mr. Chaudhury that the several factors which enter into the determination of this question the appointing authority, the authority vested with power to terminate the appointment, the authority which determines the remuneration, the source from which the remuneration is paid, and the authority vested with power to control the manner in which the duties of the office are discharged and to give directions in that behalf must all co exist and each must show subordination to Government and that it must necessarily follow that if one of the elements is absent, the test of a person holding an office under the Government.
Centre or State, is not satisfied.
The cases we have referred to specifically point out that the circumstance that the source 851 from which the remuneration is paid is not from public revenue is a neutral factor not decisive of the question.
As we have said earlier whether the stress will be laid on one factor or the other will depend on the facts of each case.
However, we have no hesitation in saying that where the several elements, the power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the duties of the office are to be performed, and the power to determine the question of remuneration are all present in a given case, then the officer in question holds the office under the authority so empowered." (p. 322 323) The core question that comes to the fore from the survey of the panorama of case law is as to when we can designate a person gainfully engaged in some work having a nexus with Government as the holder of an 'office of profit ' under Government in the setting of disqualification for candidature for municipal or like elections.
The holding of an office denotes an office and connotes its holder and this duality implies the existence of the office as an independent continuity and an incumbent thereof for the nonce.
Certain aspects appear to be elementary.
For holding an office of profit under Government one need not be in the service of Government and there need be no relationship of master and servant (Gurugobinda supra).
Similarly, we have to look at the substance, not the form.
Thirdly, all the several factors stressed by this Court, as determinative of the holding of an 'office ' under Government, need not be conjointly present.
The critical circumstances, not the total factors, prove decisive.
A practical view not pedantic basket of tests, should guide in arriving at a sensible conclusion.
In the present case, can we say that the post (forgetting the finer issue of office, as distinguished from post) is under the State Government ? The capitation fee is the remuneration the doctor is paid and this comes not from Government direct but from a complex of sources.
But Gurugobinda and Gurushantappa(1) took the view that payment of remuneration not from public revenue is a neutral factor.
Is the degree of control by Government decisive ? The power to appoint, direct and remove, to regulate and discipline, may be good indicia but not decisive, as pointed out in Gurushantappa.
In our case, Government does have, partly direct and partly indirect, control but the conclusion is not inevitable because the doctor is put in the List not by Government directly but through a prescribed process where the Surgeon General has a presiding place.
How proximate or remote is the subjection of the doctor to the control of Government to bring him under Government is the true issue.
Gurushantappa has highlighted this facet of the question.
Indirect control, though real, is insufficient, flows from the ratio of Abdul Shakur(2).
The appellant, as elaborated by Ray J (as he then was) in the Calcutta case, was not a servant of government but a private practitioner, was not appointed directly by Government, but by an officer of government on the recommendation of a Committee, was paid not necessarily 852 out of Government revenue and the control over him in the scheme was vested not in Government but in an Administrative Medical Officer and Director whose position is not qua Government servant but creatures of statutory rules.
The ultimate power to remove him did lie in Government even as he enjoyed the power to withdraw from the panel.
The mode of medical treatment was beyond Government 's control and the clinic was a private one.
In sum, it is fair to hold that the Insurance Medical Practitioner is not a free lancer but subject to duties, obligations, control and rates of remuneration under the overall supervision and powers of Government.
While the verdict on being under the Government is a perilous exercise in Judicial brinkmanship, especially where the pros and cons are evenly balanced, the ruling in Kanta Kathuria which binds us and the recondite possibility of conflict of duty and interest for a Municipal President who is an Insurance Medical Practitioner under an arrangement with Government induce us to hold that though the line is fine, the appellant is not functioning under the Government in the plenary sense implied in electoral disqualification.
After all, the means, i.e., the ban on candidature, must have a substantial link with the end viz., the possible misuse of position as Insurance Medical Practitioner in doing his duties as Municipal President.
This question is interlaced, in the present context, with the concept of 'office of profit '.
And the twin problems baffle easy solution since an apparent not real conflict of reasoning exists between Mahadeo (decided by a Bench of two Judges) and Kanta (by a Bench of five Judges).
Of course Sikri, J. (as he then was) thought that Mahadeo 'in no way militates against the view ' which appealed to the majority in Kanta.
Judicial technology sometimes distinguishes, sometimes demolishes earlier decisions; the art is fine and its use skilful.
Both the cases dealt with advocates and we have referred to them in the earlier resume of precedents.
Even so, a closer look will disclose why we follow the larger Bench (as we are bound to, even if there is a plain conflict between the two cases).
Justice Rowlatt 's locus classicus in Great Western Ry.
Co. (followed by this Court in many cases) helps us steer clear of logomachy about 'officio ' especially since the New English Dictionary fills four columns ! Rowlatt J. riveted attention on 'a subsisting, permanent, substantive position, which had an existence independent from the person who filled it ' which went on and was filled in succession by successive holders '.
So, the first step is to enquire whether 'a permanent, substantive position, which had an existence independent from the person who filled it ' can be postulated in the case of an Insurance Medical Practitioner.
By contrast is the post an ephemeral, ad hoc, provisional incumbency created, not independently but as a List or Panel clastic and expiring or expanding, distinguished from a thing that survives even when no person had been appointed for the time being. 'Thin partitions do their bounds divide ' we agree, but the distinction, though delicate, is real.
An office of Insurance Medical Practitioner can be conjured up if it exists even where no doctor sits in the saddle and has duties attached to it qua office.
We cannot equate it with the post of a peon or security gunmen who too has duties 853 to perform or a workshop where Government vehicles are repaired, or a milk vendor from an approved list who supplies milk to government hospitals.
A panel of lawyers for Legal Aid to the Poor or a body of doctors enlisted for emergency service in an epidemic outbreak charged with responsibilities and paid by Government cannot be a pile of offices of profit.
If this perspective be correct, Kanta and Mahadeo fit into a legal scheme.
In the former, an ad hoc Assistant Government Pleader with duties and remuneration was held to fall outside 'office of profit '.
It was a casual engagement, not exalted to a permanent position, occupied pro tempore by A or B.
In Mahadeo, a permanent panel of lawyers 'maintained by the Railway Administration ' with special duties of a lasting nature constituted the offices of profit more like standing counsel.
If, in our case, had there been a fixed panel of doctors with special duties and discipline, regardless of doctors being there to fill the positions or no, a different complexion could be discerned as in the case of specified number of Government pleaders, public prosecutors and the like, the offices surviving even if they remain unfilled.
On the other hand, no rigid number of Insurance Medical Practitioners is required by the rules or otherwise.
If an Insurance Medical Practitioner withdraws, there is no office sticking out even thereafter called office of Insurance Medical Practitioner.
The critical test of independent existence of the position irrespective of the occupant is just not satisfied.
Likewise, it is not possible to conclude that these doctors, though subject to responsibilities, eligible to remuneration and liable to removal all with a governmental savour cannot squarely fall under the expression 'Holding under Government '.
Enveloped, though the Insurance Medical Officer is, by governmental influence, and working, though he is, within an official orbit, we are unable to hold that there is an 'office of profit ' held by him and that he is 'under government '.
This conclusion avoids the evil of public duty conflicting with private interest and accommodation of more technical persons in semi voluntary social projects in an era of expanding cosmos of State activity.
We hold, not without hesitation, that the appellant suffered no disqualification on the score of holding office of profit under government.
Is it not a sad reflection on legislative heedlessness that, notwithstanding forensic controversy for a long period not a little legislative finger had been moved to clarify the law and preempt litigation.
Judicial pessimism persuades us not to be hopeful even after this judgment.
The Court and the Legislature have no medium of inter communication under our system.
Its desirability was emphasised by Justice Cardozo, way back in 1921 (when he addressed the Association of the Bar of the City of New York and proposed an agency to mediate between the courts and the legislature).
In characteristically beautiful prose he said: "The Courts are not helped as they could and ought to be in the adaptation of law to justice.
The reason they are not helped in because there is no one whose business it is to give warning that help is needed.
We must have a courier who will carry the tidings of distress.
Today 854 courts and legislature work in separation and aloofness.
The penalty is paid both in the wasted effort of production and in the lowered quality of the product.
On the one side, the judges, left to fight against anachronism and injustice by the methods of judge made law, are distracted by the conflicting promptings of justice and logic, of consistency and mercy, and the output of their labors bears the tokens of the strain.
On the other side, the legislature, informed only casually and intermittently of the needs and problems of the courts, without expert or responsible or disinterested or systematic advice as to the working of one rule or another, patches the fabric here and there, and mars often when it would mend.
Legislature and courts move on in proud and silent isolation.
Some agency must be found to mediate between them." In the light of the conclusion we have reached, the other two grounds raised may not strictly arise for consideration.
However, since arguments have been addressed, we had better briefly express our view.
It was argued by Shri Bhatt that when the ground for invalidation of the election is a disqualification for membership, the proper procedure is to invoke section 44 and not to resort to an election petition under section 21.
On a close study of the two provisions in the light of the ruling of this Court in , we are satisfied that an election petition under section 21 is all inclusive and not under inclusive.
What we mean is that even if the invalidation of the election is on the score of the disqualification under section 16 it is appropriate to raise that point under section 21 which is comprehensive.
All grounds on the strength of which an election can be demolished can be raised in a proceeding under section 21.
The language of the provision is wide enough.
Maybe that supervening disqualifications after a person is elected may attract section 44, but we are unable to agree that the latter provision cuts back on the width of the specific section devoted to calling in question an election of a councillor (including the President).
We agree in this regard with the Full Bench decision in Dattatraya(1).
Likewise is the fate of the feeble argument that because there is a provision for challenging the nomination of a candidate and for appealing against the decision of the returning officer regarding that objection, it is not permissible to urge a ground then available later before the Election Tribunal.
In the present case there was no decision by the Returning Officer about the nomination paper, and so we are not confronted by the appellate adjudication by the District Judge about the validity or otherwise of the nomination and its resuscitation before the Election Tribunal.
In this view we do not accede to the contention of the appellant based on section 44 or rule 15.
The third plea, not aimed at salvaging the poll success of the appellant but in unseating the respondent who has been declared elected by the Tribunal also has no merit from a legal angle although it is unfortunate that in a situation where there are only two candidates 855 and the election of one is set aside by the Tribunal, the other automatically gets returned, without resort to polls.
Anyway, in the present case, if the appellant 's election were invalid, there is only a single survivor left in the field, i.e., the first respondent.
Naturally, in any constituency where there is only one valid nomination, that nominee gets elected for want of contest.
To conclude, since the appellant is not disqualified, the appeals are bound to be allowed and we do so, but in the circumstances, without costs.
In the connected appeal C.A. No. 1270 of 1975 the consequence is to conform to what we have held above.
Therefore, that appeal is also allowed.
The parties will bear their respective costs through out.
P.B.R. Appeals allowed.
| Previous enmity between the appellant Ramaswami Ayyangar and the deceased Kaliaperumal resulted in an occurrence, in which Kaliaperumal got seriously injured and died in the hospital.
Various charges were framed against the six accused, including those of murder and rioting.
The Trial Judge acquitted three of the accused persons, convicted two under section 302 I.P.C. and one under section 324.
Cross appeals were preferred in the High Court; one by the three accused against their convictions, and another by the State, against the acquittals.
The High Court convicted all the six accused of the offence of rioting.
A 2 to A 6 under section 302 read with section 34, A 1 under Ss. 302/149 and 302/109, and A 2 under section 324.
It was contended before this Court that on the facts of the case, the High Court was not justified in interfering with the acquittal of A 1.
A 5 and A 6, and that A 2 who did not physically participate in the fatal beating of the deceased, could not be held vicariously liable for the acts of others, and that section 34 was not applicable to him.
Partly allowing the appeals, the Court ^ HELD: (1) In the case of an offence involving physical violence, it is essential for the application of section 34 that the person who instigates or aids the commission of the crime must be physically present at the actual commission of the crime for the purpose of facilitating or promoting the offence, the commission of which is the aim of the joint criminal venture.
[881 C D] (2) The "act" spoken of in section 34 includes a series of acts as a single act.
It follows that the words "when a criminal act is done by several persons" in section 34, may be construed to mean "when criminal acts are done by several persons".
The acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise.
Such presence of those who in one way or the other facilitate the execution of the common design, is itself tantamount to actual participation in the 'criminal act '.
[881 A B & D] (3) The essence of section 34 is simultaneous consensus of the minds of persons participating in the 'criminal action ' to bring about a particular result.
Such consensus can be developed at the spot and thereby intended by all of them.
[881 D E]
|
Appeal No. 442 of 1965.
Appeal from the judgment and decree dated August 10, 1961 of the Bombay High Court in Appeal No. 23 of 1960.
H.R. Gokhate, P. N. Duda, and J. B. Dadachanji, for the appellant.
H. M. Seervai, Advocate General for the State of Maharashtra, R. Gopalakrishnan and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought, by certificate, from judgment of the Bombay High Court dated August 10, 1961 by which the appeal of the respondent against the judgment of section M. Shah, J. of that High Court was allowed and the suit of the appellant was dismissed.
The appellant was a member of the Bombay Medical Service, Class 11 and as such was an employee of the State of Maharashtra.
In 1943, the appellant was posted at the Civil Hospital, Ahmedabad and on February 18, 1950 he was in charge of the Medico Legal Section of that hospital.
On January 19, 1950, one Nabimahomed complained to Mr. Rathod, Sub Inspector of Police ' Anti Corruption Branch, Ahmedabad, 580 implicated by the Anti Corruption Branch of the Police and asking him to consider the representation before giving his sanction for prosecution of the appellant and before making an order of suspension.
The Surgeon General forwarded the report of Sub Inspector, Mr. Rathod as well as the representation of the appellant to the State Government by his letter dated February 1, 1950.
He requested the Government that in the circumstances mentioned in the Sub Inspector 's report orders may be issued for placing the appellant under suspension.
His recommendation was approved by the Minister for Health and by the Chief Minister.
By a letter dated February 13, 1950, the Deputy Secretary to the Government informed the Surgeon General that the appellant should be suspended with immediate effect pending further orders.
The Surgeon General thereafter issued an order to the Civil Surgeon, Ahmedabad dated February 16, 1950 that the appellant should be placed under suspension pending further orders from the date of the receipt of the memorandum.
In pursuance of the directions received by him from the Surgeon General, the Civil Surgeon, Ahmedabad, issued the following office order and sent it; to the appellant : "Under orders from the Surgeon General, with the Government of Bombay, conveyed in his Memorandum No. section 97/189/A dated 16th February, 1950, you are informed that you are suspended pending further orders with effect from the afternoon of 18th instant.
You should hand over your charge to Mr. section section Doctor, B.M.S. Class 11 at this hospital.
" On August 21, 1950 the Government directed that the appellant should be allowed subsistence allowance at Rs. 153 5 0 per mensem from the date of his suspension February 19, 1950 to March 31, 1950, at Rs. 158 13 0 per mensem from April 1, 1950 to February 18, 1951 and at Rs. 119 2 0 per mensem from February 19, 1951 onwards.
The Government also directed that the appellant should be paid in addition Rs. 35/ per mensem as dearness allowance and Rs. 14/ as house rent allowance during the entire period of suspension.
On May 6, 1950 sanction was given for the prosecution of the appellant under section 161, Indian Penal Code.
On February 26, 1951 the appellant was convicted by the First Class City Magistrate at Ahmedabad and sentenced to one day 's imprisonment and a fine of Rs. 1000/ .
The appellant filed an appeal to the Sessions Court, but his appeal was dismissed.
Thereafter, the appellant took the matter in revision to the Bombay High Court.
The revision application was allowed and the conviction and sentence passed against the appellant were set aside.
On March 14, 1952, the appellant made a representation to the Government praying that he should be reinstated in service.
581 The Government, however, applied to the High Court for leave to appeal to this Court against the decision if the High Court and on the said application being rejected, the Government applied to this Court for special leave to appeal.
This Court rejected the application on October 13, 1952.
On November 27, 1952 the Government issued another order in regard to the payment of subsistence allowance to the appellant.
On February 20, 1953 the Government directed that a departmental enquiry should be held against the appellant.
The Civil Surgeon, Ahmedabad was appointed Inquiry Officer and he was asked to complete the inquiry within three months and submit his report to the Government through the Surgeon General.
For reasons which are not apparent the departmental inquiry was delayed and ultimately an order of dismissal was made against the appellant on February 11, 1960.
Before the conclusion of the departmental inquiry and while that inquiry was going on the appellant gave a notice to the respondent under section 80 of the Civil Procedure Code.
On April 11, 1953 the appellant brought the present suit against the respondent praying for a declaration that the order of suspension was illegal and inoperative in law and the appellant continued in service as though no order for suspension had been passed.
The appellant claimed remuneration and allowances with usual increments from the date of his suspension till the date of his reinstatement.
The respondent controverted the allegations made in the plaint and asserted that the suspension of the appellant was not illegal.
Shah, J. of the Bombay High Court before whom the suit was tried held that the appellant was entitled to salary and allowances upto the date when he was dismissed i.e., February 11, 1960.
He granted to the appellant a declaration that the order of suspension was illegal and inoperative in law and the appellant continued to be on duty till February 11, 1960 as though no order of suspension had been made.
He also granted a decree directing the respondent to pay to the appellant Rs. 51,135.28 with interest on Rs. 43,223/ at the rate of 4 per cent p.a. and the cost of the suit.
The respondent appealed against the judgment of the trial Judge.
The appeal was heard by a Bench consisting of the Chief Justice and Mody, J.
The Appellate Bench held that the respondent had inherent power to suspend the appellant and to withhold full remuneration for the period of suspension under Rule 151 of the Bombay Civil Services Rules.
The Appellate Bench therefore held that the order of suspension made by the respondent was legally valid as it was in exercise of the inherent power as regards prohibition of work, and in exercise of its powers conferred by the rules so far as the withholding of pay during enquiry against his conduct was concerned.
The Appellate Bench also held that the suit was barred under Article 14 of the Schedule to the Indian Limitation Act.
For these reasons the Appellate Bench allowed the appeal, set aside the decree passed by the trial 582 Judge and dismissed the suit and ordered the appellant to pay four fifths of the costs of the respondent through out.
The first question to be considered in this appeal is whether Government had the power to suspend the appellant by its order dated February 13, 1950 pending enquiry into his alleged misconduct.
It was contended on behalf of the appellant that the power to suspend is not an implied term in an ordinary contract between master and servant and that such a power can only be the creature either of a statute governing the contract, or of an express term in the contract itself.
It was urged that there was no express provision in the Bombay Civil Services Rules granting a power to the Government to suspend a Government servant pending enquiry into the allegations made against him.
The argument was put forward that in the absence of any express provision either in the contract of employment or in any statute or statutory rules governing such employment, there was no power to suspend a public servant pending inquiry into the allegations of his misconduct.
We are unable to accept the argument put forward on behalf of the appellant as correct.
The general law on the subject of suspension has been laid down by this Court in three cases, viz., The Management of Hotel Imperial, New Delhi vs Hotel Workers ' Union,(1) T. Cajee vs U. Jormanik Siem,(2) and R. P. Kapur vs Union of India(3).
It is now well settled that the power to suspend, in the sense of a right to forbid a servant to work, is not an implied term in an ordinary contract between master and servant, and that such a power can only be the creature either of a statute governing the contract, or of an express, term in the contract itself.
Ordinarily, therefore, the absence of such power either as an express term in the contract or in the rules framed under some statute would mean that the master would have no power to suspend a workman and even if he does so in the sense that he forbids the employee to work, he will have to pay wages during the period of suspension.
Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder, the order of suspension has the effect of temporarily suspending the relationship of master and servant with the consequence that the servant is not bound to render service and the master is not bound to pay.
This principle of law of master and servant is well established: (See Hanley vs Pease & Partners, Ltd., (4) Wallwork vs Fielding, (5) and the judgment of Cotton, L. J. in Boston Deep Sea Fishing and Ice Co. vs Ansell) (6).
It is equally well settled that an order of interim suspension can be passed against the employee while an inquiry is pending into his conduct even though there is no such term in the contract of appointment or in the rules, but in such a case the employee would (1) ; (3) ; (5) (2) ; (4) (6) 583 be entitled to his remuneration for the period of suspension if there is no statute or rule under which it could be withheld.
In this connection it is important to notice the distinction between suspending the contract of service of an officer and suspending an officer from performing the duties of his office on the basis that the contract is subsisting.
The suspension in the latter sense is always an implied term in every contract of service.
When an officer is suspended in this sense it means that the Government merely issues a direction to the officer that so long as the contract is subsisting and till the time the officer is legally dismissed he must not do anything in the discharge of the duties of his office.
In other words, the employer is regarded as issuing an order to the employee which, because the contract is subsisting, the employee must obey.
The general principle therefore is that an employer can sus pend an employee pending an inquiry into his misconduct and the only question that can arise in such suspension will relate to payment during the period of such suspension.
If there is no express term relating to payment during such suspension or if there is no statutory provision in any enactment or rule the employee is entitled to his full remuneration for the period of his interim suspension.
On the other hand, if there is a term in this respect in the contract of employment or if there is a provision in the statute or the rules framed thereunder providing for the scale of payment during suspension, the payment will be made in accordance therewith.
This principle applies with equal force in a case where the Government is an employer and a public servant is an employee with this qualification that in view of the peculiar structural hierarchy of Government administration, the employer in the case of employment by Government must be held to be the authority which has the power to appoint the public servant concerned.
It follows therefore that the authority entitled to appoint the public servant is entitled to suspend him pending a departmental enquiry into his conduct or pending a criminal proceeding, which may eventually result in a departmental enquiry against him.
But what amount should be paid to the public servant during such suspension will depend upon the provisions of the statute or statutory rule in that connection.
If there is such a provision the payment during suspension will be in accordance therewith.
But if there is no such provision, the public servant will be entitled to his full emoluments during the period of suspension.
On general principles therefore the government like any other employer, would have a right to suspend a public servant in one of two ways.
It may suspend any public servant pending departmental enquiry or pending criminal proceedings; this may be called interim suspension.
The Government may also proceed to hold a departmental enquiry and after his being found guilty order suspension as a 584 punishment if the rules so permit.
This will be suspension as a penalty.
As we have already pointed out, the question as to what amount should be paid to the public servant during the period of interim suspension or suspension as a punishment will depend upon the provisions Of the statute or statutory rules made in that connection.
On behalf of the respondent Advocate General of Maharashtra relied upon Rules 151 and 152 of Ch.
VIII of the Bombay Civil Service Rules.
These rules provide as follows: "151.
A Government servant under suspension is entitled to the following payments : (a) In the case of a military officer who is liable to revert to military duty, to the pay and allowances to which he would have been entitled had he been suspended while in military employment.
(b) In any other case, to a subsistence grant at such rates as the suspending authority may direct, but not exceeding one fourth of the pay of the suspended Government servant.
Provided that the suspending authority may direct that the Government servant under suspension shall be granted in addition such compensatory allowances as the Government may sanction by general or special order for issue under this proviso.
Note 1.
The grant of subsistence allowance cannot altogether be withheld." "152.
When the suspension of a Government servant is held to have been unjustifiable or not wholly justifiable; or when a Government servant who has been dismissed, removed or suspended is reinstated, the revising or appellate authority may grant to him for the period of his absence from duty (a) if he is honourably acquitted, the full pay to which he would have been entitled if he had not been dismissed, removed or suspended and, by an order to be separately recorded any allowance of which he was in receipt prior to his dismissal, removal or suspension; and (b) if otherwise, such proportion of such pay and allowances as the revising or appellate authority may prescribe.
585 In a case falling under clause (a), the period of absence from duty will be treated as a period spent on duty.
In a case falling under clause (b) it will not be treat ed as a period spent on duty unless the revising or appellate authority so direct. .
Note 2 Under this rule the revising or appellate authority can convert a period spent under suspension into one of leave admissible under the rules.
The period of suspension cannot, however, be converted into leave without pay except in accordance with the conditions in Rule 752.
Subsistence allowance paid under this rule should be adjusted or recovered from the Government servant when the period of suspension is converted into leave with or without pay.
" On behalf of the appellant Mr. Gokhale contended that Rule 151 applies only to a case where a Government servant is suspended by way of penalty and not to a case of interim suspension.
We see no warrant for accepting this argument.
Suspension is used in Rule 151 in a general sense and Rule 151 applies to all kinds of suspension, whether it is imposed by way of penalty or as an interim measure pending departmental inquiry or a criminal proceeding.
We see no reason, either in the context or the language of Rule 151, to place a restricted interpretation upon the meaning of the word "suspension" in that rule.
On the contrary, the language of Rules 153 and 156 suggests that the suspension contemplated by these rules includes not only suspension by way of penalty but also interim suspension pending a departmental inquiry or a criminal proceeding.
Rules 153 and 156 state as follows "153.
Leave may not be granted to a Government servant under suspension." "156.
A Government servant committed to a prison either for debt or on a criminal charge should be conssidered as under suspension from the date of his arrest and therefore entitled only to the payments specified in Rule 151 until the termination of the proceedings against him when, if he is not removed or dismissed from service, an adjustment of his pay and allowances should be made according to the conditions, and terms prescribed in rule 152 the full amount being given only in the event of the Government servant being considered to be acquitted of blame, or, if the imprisonment was for debt, of its being proved that the Government servant 's liability arose from circumstances beyond his control.
" If the word "suspension" in Rules 153 and 156 contemplates suspension pending an inquiry we see no reason why it should be 586 given a different interpretation in Rules 151 and 152.
We are accordingly of the opinion that Rule 151 empowers the State Government to withhold pay for the period of interim suspension but the Government servant is entitled under that rule to a subsistence allowance at such rate as the suspending authority may direct but not exceeding one fourth of his pay.
It follows therefore that the order of the State Government dated February 13, 1950 suspending the appellant pending enquiry into his conduct was legally valid and the argument of the appellant on this aspect of the case must be rejected.
The view that we have expressed is supported by the ratio of the principle of the decision of this Court in R. P. Kapur vs Union of India(1).
The question in that case arose with regard to the interpretation of Fundamental Rule 53 which provided for payment to a Government servant under suspension and which states as follows "53(1).
A Government servant under suspension shall be entitled to the following payments, namely : (i) in the case of a Commissioned Officer of the Indian Medical Department or a Warrant Officer in Civil Employ who is liable to revert to Military duty, the pay and allowances to which he would have been entitled had he been suspended while in military employment; (ii)in the case of any other Government servant (a) a subsistence allowance at an amount equal to the leave salary which the Government servant would have drawn if he had been on leave on half average pay or on half pay and in addition, dearness allowance, if admissible on the basis of such leave salary: Provided that where the period of suspension exceeds twelve months, the authority which made or is deemed to have made the order of suspension shall be competent to vary the amount of subsistence allowance for any period subsequent to the period of the first twelve months as follows Fundamental Rule 54 is to the following effect: "54(1) When a Government servant who has been dismissed, removed, compulsorily retired or suspended is re instated or would have been re instated but for his retirement on superannuation while under suspension.
the authority competent to order the reinstatement shall consider and make a specific order (1) ; 587 (a) regarding the pay and allowances to be paid to the Government servant for the period of his absence from duty or for the period of suspension ending with the date of his retirement on superannuation as the case may be; and (b) whether or not the said period shall be treated as a period spent on duty.
(2) Where the authority mentioned in sub rule (1) is of opinion that the Government servant has been fully exonerated or, in the case of suspension, that it was wholly unjustified, the Government servant shall be given the full pay and allowances to which he would have been entitled, had he not been dismissed, removed, compulsorily retired or suspended, as the case may be.
It was held by the majority decision of this Court that Fundamental Rule 5 3 contemplates all kinds of suspension, whether it is a penalty or as an interim measure pending departmental inquiry or criminal proceeding.
It is manifest that Rules 151 and 152 of the Bombay Civil Service Rules are couched in a similar language to that of Fundamental Rules 53 and 54 and it must be held for this reason also that Rules 151 and 152 of the Bombay Civil Service Rules comprise in their scope both kinds of suspension, whether it is a penalty or as an interim measure pending an inquiry into the conduct of the Government servant concerned or criminal proceeding against him.
We proceed to consider the next question arising in this case i.e., whether the order of suspension came to an end on February 15, 1952 when the appellant was acquitted by the High Court in revision and whether in consequence the appellant is entitled to full pay for the period from February 15, 1952 to February 11, 1960 when he was ultimately dismissed.
It was contended on behalf of the appellant that he was suspended pending an inquiry into the charge for the criminal offence alleged to have been com mitted by him and as the proceedings in connection with that charge ended with the acquittal of the appellant by the High Court on February 15, 1952, the order of suspension must be deemed to have automatically come to an end on that date.
We see no justification for accepting this argument.
The order of suspension dated February 13, 1950 recites that the appellant should be suspended with immediate effect "pending further orders".
It is clear therefore that the order of suspension could not be automatically terminated but it could have only been terminated by another order of the Government.
Until therefore a further order of the State Government was made terminating the suspension 588 ,the appellant had no right to be reinstated to service.
On behalf ,of the appellant reliance was placed on the decision of the Orissa High Court in Narayan Prasad Rewany vs State of Orissa(1).
But the facts of that case are clearly to be distinguished.
The order of suspension in that case did not contain the phrase "pending further ' orders".
Furthermore, the order of suspension was passed under R. 93A of the Orissa Service Code, Vol. 1, under which the Government servant could be suspended during the periods when he was not actually detained in custody or imprisoned.
Having, regard to the terms of that rule it was held by the Orissa High Court that the order ceased to be operative as soon as criminal proceedings had terminated.
In the present case, however, the appellant was not suspended under any rule similar to rule 93A of the Orissa Service Code, Vol. 1 and the decision of the Orissa High Court has therefore no rele vance.
We are therefore of the opinion that the order of suspension of the appellant made by the State Government on February 13, 1950 did not come to an end on the date of the order of acquittal made by the High Court and Counsel for the appellant is unable to make good his submission on this aspect of the case.
It is not necessary for us to express any opinion as to whether the suit is barred under Article 14 of the Schedule to the Indian Limitation Act as we have held that the claim of the appellant is devoid of merit.
For the reasons already expressed, we hold that the judgment of the Bombay High Court dated August 10, 1961 is correct and this appeal must be dismissed.
In view of the circumstances of the case we do not propose to make any order as to costs ,of this Court.
R.K.P.S. Appeal dismissed.
(1) A.I.R. 4957 Orissa 51.
| The appellant was convicted by the Sessions Judge under section 302 of the Indian Penal Code and the conviction was upheld by the High Court.
According to the prosecution evidence the appellant was trying to assault one D when the latter 's brother K intervened.
The appellant took out a knife and caused an injury on K 's thigh which cut an artery and resulted in his death.
In appeal, by special leave, before this Court it was urged that in the circumstances of the case the intention and knowledge requisite for an offence under section 302 I.P.C., had not been established.
HELD: (i) The appellant had not used the knife while he was engaged in the fight with D.
It was only when he felt that the deceased also came up against him that . he whipped out the ' knife.
The deceased was at that time in a crouching position.
In these circumstances it could not be said that the appellant intended to cause the injury in the thigh knowing that it would cut the artery.
It was, therefore, not possible to apply cl. 3 of section 300 to the act of the accused, and he was not guilty of murder.
[250 G H] Virsa Singh vs State of Punjab. ; , applied.
(ii) However, when the appellant struck the deceased with the knife, he must have known that the deceased then being in a bent position, the blow would land in the abdomen or near it a vulnerable ' part of the human body and that such a blow was likely to result in his death.
In these circumstances it would be quite legitimate to hold that he struck the deceased with the knife with the intention to cause an injury likely to cause death.
The offence, therefore.
clearly fell under section 304 Part 1.
[251 B C]
|
vil Appeals Nos.
4885 91 of 1989.
From the Judgment and Order dated 21.9.
1989 & 6.10.1989 of the Punjab & Haryana High Court in C.W.P. No. 11218/89 and 12519, 12520, 12521, 12593, 12868 & 12463 of 1989.
P.H. Parekh, Manoj Swarup and J.P. Pathak for the Appellant.
Krishan Kumar and Mehta Dave & Co. for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
These appeals are directed against two Orders of the Punjab & Haryana High Court by which the High Court has directed the appellant Institute to admit respondent students 1 to 8B to its B .E. course irrespective of their merits.
The relevant admitted facts are that on May 24 and 25, 1989, respondent No. 9 Punjab University held a Com bined Entrance Test (C.E.T.) for admission to B.E. course (Session 1989 90) conducted by 4 different institutes in cluding the appellant Institute.
On June 26, 1989, the University declared the merit list of students who appeared in C.E.T. June 30, 1989 was the last date fixed for submit ting applications by students to individual institutes.
The students were given choice of the institutions and they were required to state their choice in order of preference.
The representatives from the 4 institutes met together at Chand igarh from 24th to 27th July 1989 to finalise the admissions tO the 4 institutes.
The meeting of the representatives of the 4 institutes was necessary to ensure that the students were given the institutes of their choice in the order of merit, subject, of course, to the students applying to the particular institutes and that the student did not get admission at more than one institute at a time.
The Commit tee of representatives interviewed the students and awarded them the institutes of their choice in the order of their respective merits.
Accordingly, the appellant Institute drew up its merit list of candidates.
Interviews were held in the respective institutes including the appellant Institute for filling up the reserved seats other than those 397 reserved for Scheduled Castes and Scheduled Tribes and also for filling up seats in general category which fell vacant subsequentIy as a result of the students leaving the appel lant Institute.
On August 14, 1989, a second round of inter views was held in all the institutes including the appel lant Institute for filling seats which fell vacant as a result of the students leaving the appellant Institute subsequently.
Incidentally, this was also the last date of admission to B.E. course as was notified in the prospectus of the appellant Institute.
However, the last date was extended to 25th August, 1989 by an advertisement in the newspaper, namely, Tribune published on August 19, 1989 wherein it was clearly mentioned that the admission to the course will be closed on August 25, 1989.
The advertisement was repeated in another newspaper, namely, the Times of India on August 20, 1989.
The appellantInstitute closed the admissions at 5.00 p.m. on August 25, 1989.
On this day, the position of the appellant Institute was that the last stu dent who was admitted to the B .E.
Course was at serial number 1127 in the merit list prepared by the University as per the results of the C.E.T 3.
On August 30, 1989, respondents 1 to 4 filed a Writ Petition No. 112 18/89 before the Punjab & Haryana High Court for a direction to the appellant Institute to extend its last date of admission and to admit them to the B.E. course in the appellant Institute alleging that six seats were lying vacant in the Institute.
In the meanwhile, as usual, the first test of the B.E. course was held by the appellant Institute after six weeks of the commencement of the course.
On September 19, 1989, the appellant Institute filed its written statement to the writ petition objecting to the maintainability of the petition against the appellant Institute as it was not a State within the meaning of Article 12 of the Constitution of India.
It was also pointed out in the written statement that since the past experience showed that some students left the Institute as soon as they got admission in the other institutes, the appellant Institute had admitted 10 additional students to the B.E. course.
The total seats available in the B.E. course in the appellant Institute were 180 and students at numbers 181 190 were admitted to meet this contingency.
It was also pointed out in the written statement that the last date of admission to the course was fixed by the appellant Institute taking into account the said past experience as well as to put a seal of finality on the process of admission which would otherwise continue indefinitely.
On September 20, 1989, the appellant Institute also filed a short affidavit in the writ petition stating therein that the admissions to the B.E. course had closed on 25th August, 1989 and no student had been 398 admitted thereafter.
It was also pointed out that regular classes had begun, and the first terminal examination had been held from 4th September, 1989 to 9th September, 1989 which carried weightage of about 30% marks.
Hence, the students admitted at the belated stage would not be able to cover up lecture attendance and no seat in excess of the total seats could be filled up.
On September 21, 1989, the High Court allowed the writ petition by proceeding on the assumption that more than half a dozen seats were lying vacant with the appellant Institute.
The High Court held that belated admissions were something that the students seeking such admissions would worry about rather than the appellant Institute.
The appel lant Institute was also directed to grant admissions to respondents 1 to 4 in the B.E. course forthwith.
As pointed out by the appellant Institute, on that day the factual position with regard to seats in the course was that out of 190 students who were granted admission, 12 students had left leaving a total strength of 178 students.
Since the last date for admission was August 25, 1989, 178 students had continued in the course with regular instructions and tests one of which was already held as stated earlier be tween 4th and 9th September, 1989, six weeks after the commencement of the course.
A further batch of Writ Petitions, namely, Writ Petitions Nos.
125 19, 12520, 1252 1, 12593, 12868, 12463 all of 1989 filed by respondents 5 to 8B respectively were allowed by the High Court on October 6, 1989 directing the appellant Institute to admit the respective respondents to the said course.
It also further appears that three other similar writ petitions filed by other students seeking admission to the course in the appellant Institute are pending before the High Court for preliminary hearing.
The appellant Institute further points out that the second test of the said course was scheduled to be held from 23rd to 28th October, 1989.
It is not disputed before us that whereas the last student admitted on merit in the appellant Institute was at serial number 1127 in the merit list prepared by the Univer sity as per the Combined Entrance Test, the respondent students were at the serial numbers in the said merit list, as follows: respondent No. 1 (1145), No. 2 (1147), No. 3 (116 1), No. 4 (1277), No. 5 (1259), No. 6 (1112), No. 7 (1266), No. 8 (1218), No. 8A (1189) and No. 8B (1245).
Thus it will be seen that except for respondent No. 6 who had not earlier applied for being admitted to the appellant Insti tute and had opted for some other Institute, all the re spondents had secured lower numbers in the merit list.
399 What is further, the students who were at a higher serial number of merit list were still waiting for admission to the appellant Institute, when the High Court directed the appel lant Institute to admit the respondent students.
What is more, even in their writ petitions before the High Court the respondent students had claimed no further relief than that they should be directed to be admitted to the appellantIn stitute according to their merit.
The relief claimed in Writ Petition No. 112 18/89 may be reproduced here by way of illustration: "this Hon 'ble Court may please to issue a Writ of Mandamus directing the respondents to extend the date of admission and to admit the petitioners in the B.E. course as per their merits;".
(emphasis supplied) The High Court further not only ignored the fact which was specifically pointed out in the appellant Institute 's affi davit in reply before it, that there were no seats available in the appellant Institute whose capacity was only 180 seats but also the fact that there were more meritorious students than the respondents as per the C.E.T. who could not secure admission and who were waiting to be admitted to the appel lant Institute.
The respondent students could get admission to the appellant Institute only if their comparative merits ordained it and not otherwise.
They could claim no merit over other meritorious students merely because they had approached the Court for securing admission.
There was further nothing wrong in the appellant Institute admitting 10 more students in the circumstances pointed out above.
The Institute has a capacity of only 180 students.
To meet the contingency of the students leaving it soon after admission they had admitted, as they do every year, 10 more students.
As it turned out, 12 of the students left leaving 178 students on the roll, with only 2 vacan cies.
The High Court could have directed only two students to be admitted and that too on merit.
Admittedly, there were more meritorious students than the respondents, waiting in queue.
The High Court thus travelled beyond its jurisdiction and not only directed more students than the Institute could absorb but also students who were less meritorious, to be admitted.
No reasons whatsoever have been given by the High Court for exercising its extraordinary writ jurisdiction so peremptorily which has resulted in injustice both to the appellantInstitute as well as to the students who stood higher in merit than almost all the respondent students except respondent No. 6.
We refrain from making any further comments on the impugned order.
400 8.
Since the respondent students stand already admitted, and the more meritorious students cannot now avail of the seats given to the respondents due to lapse of time, we do not propose to interfere with their pursuit of the course.
It is for this reason that we are dismissing the appeals.
In the circumstances, the appeals stand dismissed, but with no order as to costs.
G.N. Appeals dismissed.
| The State of Bihar published an advertisement inviting applications for appointments to the junior teaching posts in medical colleges in the State of Bihar.
For the post of Assistant Professor.
only such officers who had worked as Resident or Registrar in Medical Hospitals recognised for imparting M.B.B.S. studies by the Medical Council of India and having three years experience of such post were consid ered eligible.
The last date for receipt of applications was fixed as 31st January 1988.
Pursuant to the said advertise ment.
applications from eligible candidates were received and a select list or panel was prepared for appointments to the respective posts.
The respondents and some other inter venors who were working then in the Medical colleges as junior teachers challenged the State action in fixing the 3 1st of January 1988 as the cut off date for receipt of applications for the advertised posts.
as they had by then not completed three years which was prescribed as the requi site experience.
It was contended by them that the cut off date was arbitrarily fixed and was therefore violative of Article 14 of the Constitution.
The High Court took the view that the State Government in fixing the 31st January 1988 as the cut off date.
had deviated from its usual practice of fixing the cut off date as 30th of June of the relevant year.
Hence this appeal by the State of Bihar by special leave.
It is contended by the State that the decision of the High Court was based on an erroneous premise that the cut off date for eligibility purposes was 'always ' fixed as 30th of June of the relevant year in the past.
Allowing the appeal, this Court.
HELD: The past practice was to fix the last date for receipt of applications a month or one and a half months after the date of actual publication of the advertisement.
Following the past practice the State 469 Government fixed the last date for receipt of applications as 31st January 1988.
These who had completed the required experience of three years by that date were.
therefore.
eligible to apply for the posts in question.
[474G H] The choice of date cannot be dubbed as arbitrary even if no particular reason is forth coming for the same unless it is shown to be capricious or whimsical or wide off the reasonable mark.
The choice of 'the date for advertising the post had to depend on several factors, e.g. the number of vacancies in different disciplines.
the need to fill up the posts.
the availability of candidates etc., [475C D] Merely because the respondents and some others would qualify for appointment if the last date for receipt of applications is shifted from 31st January 1988 to 30th June 1988.
is no reason for dubbing the earlier date as arbitrary or irrational.
[475D] The High Court was clearly in error in striking down the Government 's action of fixing the last date for receipt of application as 31st January 1988 as arbitrary.
[475E] Municipal Board, Pratabgarh & Anr.
vs Mahendra Singh Chawla & Ors., ; Union of India & Anr.
vs M/s. Parameswaran Match Works & Ors., ; and Uttar Pradesh Mahavidyalaya Tadarth Shikshak Niyamitika ran Abhiyan Samiti, Varanasi vs State of Uttar Pradesh & Ors., , referred to.
|
Civil Appeal No. 1108 of 1976.
Appeal by special leave from the judgment and order dated the 17th April 1976 of the Madhya Pradesh High Court in Second Appeal No. 113 of 1969.
S.K. Mehta, P.N. Puri and E.M.S. Anam for the Appellants.
P.P. Juneja for the Respondent.
The following Judgments were delivered DESAI, J. A tenant under a decree of eviction is the appellant in this appeal by special leave.
609 Respondent landlord filed a suit for recovery of possession of premises being a small shop admeasuring 7 'X 22 ' forming part of a big non residential building situated in Sadar Bazar, Bilaspur town in Madhya Pradesh on two grounds, to wit: (i) that he (landlord) intended to open a medicine shop and he had no other reasonably suitable accommodation for the same in the town; and (ii) that he (landlord) required the suit building for the purpose of reconstruction and repairs which could not be carried out unless it was vacated by the defendant.
The tenant resisted the suit pointing out that the landlord on his own admission as set out in plaint para 4 was in possession of a major portion of a non residential building of which he acquired possession from the firm of Goraldas Parmanand which accommodation was sufficient for starting the business of Chemists and Druggists shop.
It was also contended that the building was not in a dilapidated condition and did not need reconstruction and repairs.
The trial court recorded a finding that the building was in a dilapidated condition and reconstruction of it was essential and the landlord had sufficient funds to undertake reconstruction.
On the question of personal requirement of plaintiff to start a medicine shop, the trial court recorded a finding that in the front portion of building landlord would start his business as Chemists and Druggists and the rear of the building would be utilized by him for his residence.
It was further held that as the landlord 's requirement was a composite one in that he wanted to reconstruct the building and then use the whole of it for himself, therefore, the tenant was not entitled to be inducted in the reconstructed building which he would have been entitled to claim under section 18 of the Madhya Pradesh Accommodation Control Act, 1961 ( 'Act ' for short).
An appeal by the tenant to the District Court elicited in para 20 a finding that though the landlord was studying he might choose his career for business after he completed his education and he had got Rs. 8,000 in a fixed deposit account in a bank and even though he obtained a decree against the firm of M/s. Goral Parmanand he had not got actual possession as the litigation was still pending and, therefore, the plaintiff 's requirement of the whole building was established.
The finding that the house was in dilapidated condition and required reconstruction was affirmed.
When the matter reached the High Court in second appeal by the tenant an application under Order VI, rule 17, Code of Civil 610 Procedure, was made praying for an amendment to the written statement alleging that the firm Goraldas Parmanand has vacated the whole of the remaining portion of the building excluding the premises in possession of the tenant measuring 7 ' X 22 ' and that the plaintiff has obtained actual possession of the same and if this aspect was taken into consideration the plaintiff landlord would not be entitled to a decree for eviction under section 12(1)(f) of the Act.
The High Court rejected the application observing that the adjoining portion occupied by firm Goraldas Parmanand was vacated by the firm as far back as in the year 1972 and therefore the application for amendment filed 3 1/2 years after the filing of the appeal must be rejected on the ground of delay and laches.
Further, despite the judgment of this Court in Pasupuleti Venkateswarlu vs The Motor and General Traders, the High Court felt considerable hesitation in taking note of this event subsequent to the passing of the decree for eviction by the trial court because of its earlier decision in Taramal vs Laxaman Sewak and Ors in which it was held that the definition of 'tenant ' in the Act would not enable a tenant, though in possession but against whom a decree or order for eviction has been made, to invite the Court to take notice of events subsequent to the passing of the decree for eviction by the trial court.
The decision of this Court was distinguished on the ground that the definition of the expression 'tenant ' in Andhra Pradesh Building (Lease Rent and Eviction) Control Act, 1960, was somewhat different and was wide enough to include such persons.
The High Court accordingly rejected the application and dismissed the second appeal confirming the decree for eviction.
Section 12(1)(f) under which eviction of the tenant is sought by the landlord reads as under: "that the accommodation let for non residential purposes is required bona fide by the landlord for the purpose of continuing or starting his business or that of any of his major sons or unmarried daughters if he is the owner thereof or for any person for whose benefit the accommodation is held and that the landlord or such person has no other reasonably suitable non residential accommodation of his own in his occupation in the city or town concerned.
" In order to be able to seek eviction of a tenant under section 12(1)(f) the landlord has not only to establish that he bona fide requires the 611 accommodation let to the tenant for non residential purposes for the purpose of continuing or starting his business but he must further show that the landlord has no other reasonably suitable nonresidential accommodation of his own in his occupation in the city or the town concerned.
The landlord in this case seeks eviction of the tenant from a building let for non residential purpose.
He can obtain possession either for continuing or starting his business.
He was a student at the relevant time.
He appeared to have completed his education thereafter.
It is stated in the plaint unambiguously that he wanted to start business by opening a medicine shop.
In other words, he wanted to start a Chemist and Druggist shop.
He must, therefore, show that he has not got in his possession a reasonably suitable non residential accommodation of his own in his occupation in the town of Bilaspur.
The suit building, as earlier observed, is in the city of Bilaspur and situated in Sadar Bazar, obviously a business locality.
Respondent landlord claims to be the owner of the whole building.
The suit premises in possession of the tenant in which he is carrying on a small kirana shop admittedly admeasures 7 frontage on the main road and 22 in depth.
In other words it is 7 'X 22 '.
The whole building of which demised premises form a small part appears to be having a frontage of 28.
3 passage has to be excluded.
The premises in possession of the tenant has a frontage of 7.
The length of the building or what is styled as depth was given out to us as 90 by learned counsel for respondent landlord.
18 ' frontage with 90 ' depth was thus in possession of firm Goraldas Parmanand.
Respondent landlord had also initiated proceedings for obtaining possession of the premises occupied by firm Goraldas Parmanand on the same ground, namely, that he wanted to start his business of Chemists and Druggists in the building.
The question is whether the premises occupied by firm Goraldas Parmanand has been vacated by the firm.
If the answer is in affirmative, the respondent landlord has thus obtained vacant possession of the whole of the premises occupied by firm Goraldas Parmanand.
Looking to the map annexed to the plaint and the evidence led in the case and the dimensions of the premises stated at the hearing of this appeal the area vacated by the previous tenant would be 18 'X90 ' plus portion at the back of the premises occupied by the present appellant which would be 7 'X 68 ' and it 612 has come in possession of the respondent.
The last question would be if landlord obtained vacant possession subsequent to the decree passed against the present appellant tenant by the Trial Court, whether the subsequent event could be noticed by the court for moulding the decree against the present appellant tenant.
Section 12 starts with a non obstante clause thereby curtailing the right of the landlord to seek eviction of the tenant which he might have under any other law and the right of eviction is made subject to the overriding provision of section 12.
It is thus an enabling section.
In order to avail of the benefit conferred by section 12 to seek eviction of the tenant the landlord must satisfy the essential ingredients of the section.
The landlord in this case seeks eviction of the tenant under section 12(1)(f).
He must, therefore, establish (i) that he requires bona fide possession of a building let for non residential purpose for continuing or starting his business; and (ii) that he has no other reasonably suitable non residential accommodation of his own in his occupation in the city or town concerned.
The burden to establish both the requirements of section 12(1)(f) is squarely on the landlord.
And before an allegation of fact to obtain the relief required is permitted to be proved, the law of pleadings require that such facts have to be alleged and must be put in issue.
Ordinarily, therefore, when a landlord seeks eviction under section 12(1)(f) the court after satisfying itself that there are proper pleadings must frame two issues namely (i) whether the plaintiff landlord proves that he bona fide requires possession of a building let to the tenant for non residential purpose for continuing or starting his business, and (ii) whether he proves that he has no other reasonably suitable non residential accommodation of his own in the city or town concerned.
Without elaborating we must notice a well established proposition that any amount of proof offered without pleadings is generally of no relevance.
Turning to the pleadings in this case the plaintiff in para 6 of the plaint has stated as under: "The plaintiff intends to start his own business in the said building after the said reconstruction.
He intends to open a medicine shop therein.
The plaintiff bona fide requires the suit house for the above purpose.
He has no other suitable accommodation for the same in the town.
" The cryptic averment is that the plaintiff has not got any other reasonably suitable accommodation in the same town.
However, 613 in para 4 of the plaint it is stated 'that the major portion of the building is in occupation of the firm Goraldas Parmanand and the plaintiff has already obtained a decree for its eviction therefrom '.
The defendant in his written statement has in term stated that the defendant is in possession of a small portion of the building, the remaining portion of which was in possession of firm M/s. Goraldas Parmanand.
In para 6 of the written statement it is further stated that on his own admission, the plaintiff has got a suitable alternative accommodation being the premises for which a decree of eviction is obtained for doing business and which is more than sufficient for his requirement.
The learned Trial Judge framed Issue No. 2(a) on the question whether the plaintiff landlord had no other reasonably suitable accommodation of his own in his occupation in the city.
While recording finding on this issue the cryptic observation in para 19 of the judgment is that the plaintiff is a student and he has no other accommodation for starting his own business.
There is not the slightest reference to the decree admittedly obtained by the plaintiff against firm M/s. Goraldas Parmanand which firm was carrying on business in a portion of the building which the plaintiff himself has described as the major portion of the building, the suit premises being a small portion of the whole building.
In the first appeal this contention is disposed of by observing that the alternative accommodation which the defendant has pleaded in his written statement is under litigation and therefore it cannot be treated as available to the plaintiff. ' In the second appeal in the High Court the defendant appellant moved an application under Order VI Rule 17 for amendment of the written statement for elaborating what was already stated that not only the decree obtained by the plaintiff against the adjoining tenant of the same building namely firm of M/s. Goraldas Parmanand has become final but the plaintiff in execution of the decree way back in 1972 obtained actual possession of the whole of area occupied by that firm and that forms major portion of the whole building.
This application, though, in our opinion, to be wholly superfluous in view of the pleadings hereinbefore set out and in view of the fact that the burden of proof of establishing that the landlord was not in possession of a reasonably suitable accommodation in the same town was on the plaintiff was rejected on untenable ground that the defendant appellant was guilty of delay and laches.
This application for amendent deserves to be granted, and we grant the same.
What is its impact ? Even while rejecting the application the High Court in terms observed in para 4 of its judgment as under: 614 'Adjoining portion was vacated by firm Goraldas Parmanand as far back as in the year 1972 '.
The High Court thus had before it a fact beyond dispute and beyond controversy that the major portion of the building was vacated by the adjoining tenant way back in 1972.
This was an uncontroverted fact.
Therefore remand on this point is an exercise in futility because the fact alleged in the application for amendment is admitted.
After rejecting the application on wholly untenable ground the High Court in 1976 affirmed the finding wholly contrary to record as available at that stage that the plaintiff landlord had no other reasonably suitable non residential accommodation of his own in his occupation in the city even though on landlord 's own admission he had acquired vacant possession of a major portion of the building let for non residential purpose as far back as 1972.
In the course of hearing we were repeatedly told that the finding of facts are sacrosanct.
The finding of fact ignoring incontrovertible admitted position which would non suit the plaintiff if upheld would be travesty of justice.
The burden being on the plaintiff to show that he had no other reasonably suitable accommodation for carrying on the business which he wanted to start in the suit premises, it was for the plaintiff to show that he had not acquired possession from firm Goraldas Parmanand.
Alternatively the plaintiff should have shown that the said adjacent accommodation was not reasonably suitable for the business he wanted to start.
He has done neither.
On the contrary plaintiff has admittedly adopted a position in the plaint that he not only wanted suit premises but also the adjoining premises of which he had obtained possession for starting his business.
In such a situation if the High Court had kept in view that the plaintiff had already with him viz. possession of a building having 18 frontage on the main road and 90 depth plus portion at the back of the suit premises in his possession it would have to come to an affirmative conclusion that the plaintiff had sufficient accommodation for starting his business as a Chemists and Druggists.
It was no where pointed out by the plaintiff that the shop of Chemists and Druggists or a medicine shop would require frontage of more than 18 '.
18 ' frontage on a main road in a city like Bilaspur is sufficiently attractive and accommodating.
The depth of the shop as given out to us being 90 '; therefore landlord has now in his possession shop admeasuring 18 ' x 90 ' plus the area of 7 ' x 90 ' at the back of the suit premises being part of the same building.
Would this not provide more than ample accommodation to the plaintiff to start his business as a Chemists and Druggists ? Not one 615 word has been said that the accommodation which is already in possession of the plaintiff is neither suitable nor reasonably suitable nor sufficient for starting his business.
In fact the very stand of plaintiff landlord as accepted by the High Court that some portion at the back would be utilised by landlord for residence would affirmatively establish that landlord has more than enough vacant accommodation in possession for starting his business.
The difficulty which the High Court experienced was whether a tenant under a decree of eviction could invite the Court to take into consideration the events subsequent to passing of the decree which if noticed would non suit the landlord.
The definition of expression 'tenant ' in the Act excludes from its operation a person in possession against whom any order or decree for eviction has been made.
The High Court referred to its earlier judgment in Taramal 's case wherein it was held that the protection to a statutory tenant lapsed with the passing of a decree and such a person had no right to bring on record new circumstances which were not in existence at the date of the passing of the decree.
This approach wholly overlooks the scheme of the Rent Restriction Act.
The M.P. Act enables a landlord to seek eviction of a tenant and obtain possession under various circumstances set out in section 12.
If a landlord bona fide requires possession of a premises let for residential purpose for his own use, he can sue and obtain possession.
He is equally entitled to obtain possession of the premises let for non residential purposes if he wants to continue or start his business.
If he commences the proceedings for eviction on the ground of personal requirement he must be able to allege and show the requirement on the date of initiation of action in the Court which would be his cause of action.
But that is not sufficient.
This requirement must continue throughout the progress of the litigation and must exist on the date of the decree and when we say decree we mean the decree of the final court.
Any other view would defeat the beneficial provisions of a welfare legislation like the Rent Registration Act.
If the landlord is able to show his requirement when the action is commenced and the requirement continued till the date of the decree of the Trial Court and thereafter during the pendency of the appeal by the tenant if the landlord comes in possession of the premises sufficient to satisfy his requirement, on the view taken by the High Court, the tenant should be able to show that the subsequent events disentitled the plaintiff, on the only ground that here is tenant against whom a decree or order for 616 eviction has been passed and no additional evidence was admissible to take note of subsequent events.
When a statutory right of appeal is conferred against the decree or the order and once in exercise of the right an appeal is preferred the decree or order ceases to be final.
What the definition of 'tenant ' excludes from its operation is the person against whom the decree or order for eviction is made and the decree or order has become final in the sense that it is not open to further adjudication by a court or heirarachy of courts.
An appeal is a continuation of suit.
Therefore a tenant against whom a decree for eviction is passed by Trial Court does not lose protection if he files the appeal because if appeal is allowed the umbrella of statutory protection shields him.
Therefore it is indisputable that the decree or order for eviction referred to in the definition of tenant must mean final decree or final order of eviction.
Once an appeal against decree or order of eviction is preferred the appeal being a continuation of suit, landlord 's need must be shown to continue to exist at appellate stage.
If the tenant is in a position to show that the need or requirement no more exists because of subsequent events, it would be open to him to point out such events and the Court including the appellate court has to examine, evaluate and adjudicate the same.
Otherwise the landlord would derive an unfair advantage.
An illustration would clarify what we want to convey.
A landlord was in a position to show he needed possession of demised premises on the date of the suit as well as on the date of the decree of the trial court.
When the matter was pending in appeal at the instance of the tenant, the landlord built a house or bungalow which would fully satisfy his requirement.
If this subsequent event is taken into consideration, the landlord would have to be non suited.
Can the court shut its eyes and evict the tenant ? Such is neither the spirit nor intendment of Rent Restriction Act which was enacted to fetter the unfettered right of re entry.
Therefore when an action is brought by the landlord under Rent Restriction Act for eviction on the ground of personal requirement, his need must not only be shown to exist at the date of the suit, but must exist on the date of the appellate decree, or the date when a higher court deals with the matter.
During the progress and passage of proceeding from court to court if subsequent events occur which if noticed would non suit the plaintiff, the court has to examine and evaluate the same and mould the decree accordingly.
This position is no more in controversy in view of a decision of this Court in Pasupuleti Venkateswarlu (supra) where Justice Krishna Iyer speaking for the Court observed as under: "We affirm the proposition that for making the right or remedy claimed by the party just and meaningfully as 617 also legally and factually in accord with the current realities, the court can, and in many cases must, take cautions cognisance of events and development subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously observed.
" In order to fully evaluate the law laid down in the aforementioned extracted passage it is worthwhile to give the background of facts in which it was made.
The appellant landlord in that case was the owner of a large building which was leased out in separate portions to several tenants.
One of such tenants was the respondent.
The landlord wanted to start a business in automobile spares and claimed eviction of the respondent under the Rent Restriction Act being Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960.
The petition was resisted and the Rent Controller dismissed the petition.
The appeal of the landlord failed.
But in revision the High Court chose to remand the case to the appellate authority and the appellate authority in turn remitted the case to the Trial Court for fresh disposal in accordance with certain directions.
The landlord preferred a revision petition against the order of remand by the first appellate court.
The High Court dismissed the action of the landlord taking cognisance of a subsequent event namely that the landlord acquired possession of a reasonable suitable non residential building in the same town.
In appeal to this Court it was seriously contended that it was improper for the High Court to take into consideration the subsequent events and this contention was negatived inter alia on the ground in the passage extracted above.
Therefore, it is now incontrovertible that where possession is sought for personal requirement it would be correct to say that the requirement pleaded by the landlord must not only exist on the date of the action but must subsist till the final decree or an order for eviction is made.
If in the meantime events have cropped up which would show that the landlord 's requirement is wholly satisfied then in that case his action must fail and in such a situation it is incorrect to say that as decree or order for eviction is passed against the tenant he cannot invite the court to take into consideration subsequent events.
He can be precluded from so contending when the decree or order for eviction has become final.
In view of the decision in Pasupuleti 's case (supra) the decision of the Madhya Pradesh High Court in Taramal 's case must be taken to have been overruled and it could not be distinguished only on the ground that the definition of 'tenant ' in the Madhya Pradesh Act is different from the one in Andhra Pradesh 618 Act.
Therefore, the High Court was in error in declining to take this subsequent event which was admittedly put forth in the plaint itself into consideration.
The landlord wants to start his business as Chemists and Druggists.
On his own admission he has in his possession a shop admeasuring 18 ' X 90 ' plus 7 ' X 68 ' forming part of the same building the remaining small portion of 7 ' X 22 is occupied by the tenant.
The landlord has not stated that so much space with 18 ' frontage is not reasonably suitable for starting his business as Chemist and Druggist.
In that view of the matter the plaintiff 's suit for eviction on the ground mentioned in section 12(1)(f) must fail and this is being done by not disturbing any finding of fact but relying upon the admission of the plaintiff himself.
There is an error apparent on the face of the record inasmuch as when the High Court was faced with a dilemma whether the landlord required the whole of the building including demised premises now in possession of the appellant tenant for starting his business of Chemists and Druggists and when the High Court had before it an indisputable fact that the respondent landlord has obtained vacant possession of a major portion of the building which was in possession of firm M/s. Goraldas Parmanand, was it necessary for him to have any additional accommodation ? The High Court got over this dilemma by observing and by affirming the finding of the subordinate courts that the remaining portion of the premises would be used by the landlord for his residence and even though the portion utilised for the purpose of running the business would be smaller compared to the one to be utilized for the residence it would still not be violative of sub section (7) of sec.
12 because such a composite user would not radically change the purpose for which the accommodation was let.
This finding is contrary to record and pleadings.
Minutely scanning the plaint presented by the landlord there is not the slightest suggestion that he needs any accommodation for his residence.
He has not even stated whether at present he is residing in some place of his own though he claimed to be residing in the same town.
He does not say whether he is under any obligation to surrender that premises.
Section 12(1)(e) specifically provides for a landlord obtaining possession of a building let for residential purposes if he bona fide requires the same for his own use and occupation.
But there is an additional condition he must fulfil namely he must further show that he has no other reasonably suitable residential accommodation of his own in his 619 occupation in the city or town concerned.
Utter silence of the landlord on this point would be a compelling circumstance for the court not to go in search for some imaginary requirement of the landlord of accommodation for his residence.
In the context of these facts the Trial Court and the first Appellate Court committed a manifest error apparent on the record by upholding the plaintiff 's case by awarding possession also on the ground neither pleaded nor suggested.
The landlord must have been quite aware that he cannot obtain possession of any accommodation for his residence.
There fore, the finding of the High Court and courts subordinate to it that the respondent landlord requires possession of the whole of the building including the one occupied by the tenant for starting his business as Chemists and Druggists as also for his residence is vitiated beyond repair.
Once impermissible approach to the facts of the case on hand is avoided although facts found by the Courts are accepted as sacrosanct yet in view of the incontrovertible position that emerges from the evidence itself that the landlord has acquired major portion of the building in which he can start his business as Chemists and Druggists he is not entitled to an inch of an extra space under section 12(1)(f) of the Act.
Respondent landlord also sought possession on the ground set out in section 12(1)(h) which reads as under: "that the accommodation is required bona fide by the landlord for the purpose of building or rebuilding or making thereto any substantial additions or alternations and that such building or re building or alterations cannot be carried out without the accommodation being vacated." In order to obtain possession under section 12(1)(h) the landlord again has to establish his bona fide requirement of the accommodation in possession of the tenant for the purpose of building or rebuilding or making thereto any substantial additions or alterations and must further show that such building or re building or alterations cannot be carried out without the accommodation being vacated.
The case of the landlord on this point is that he wants possession of the whole of the building including the suit premises and he has Rs. 8,000 in a fixed deposit account and that as the building is in a dilapidated condition, he would reconstruct the same and use it for himself both for residence and starting his business.
If landlord acquires possession under section 12(1)(h), section 620 18 imposes corresponding obligation which reads as under: "18.
Recovery of possession for repairs and rebuilding and re entry. (1) In making any order on the grounds specified in clause (g) or clause (h) of sub section (1) of Sec. 12, the Court shall ascertain from the tenant whether he elects to be placed in occupation of the accommodation or part thereof from which he is to be evicted and, if the tenant so elects, shall record the fact of the before election in the order and specify therein the date on or which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or re building, as the case may be." The courts declined to grant any relief to the tenant under section 18 on the ground that as the landlord 's requirement is a composite one, the tenant is not entitled to be re inducted in the building that may be reconstructed by the landlord after obtaining possession of the same.
Now once it is held that the landlord is not entitled to possession for his residence and he has more than enough accommodation in his possession for carrying on his business, the composite requirement disappears.
Landlord 's case will, therefore, have to be exclusively examined in the context of section 12(1)(h).
Two contentions were urged on behalf of the appellant to negative the case of the landlord in this behalf; one that the building is not in a dilapidated condition and secondly it can be repaired without vacating the premises.
As all the courts have concurrently found that the building is in a dilapidated condition, this finding is entitled to respect and it is not proper for us to interfere with the same.
The question would however be whether the landlord wants to reconstruct the demised portion of the premises even though he is not entitled to acquire possession of the same for his use and that he would be under an obligation to re induct the tenant after its construction.
The further question is whether the landlord is interested in reconstructing the whole building.
It was alternatively contended that no attempt is made to find out whether the landlord would be in a position to reconstruct that part of the building which has come in his possession once he is not in a position to acquire possession of the demised premises for his own use.
This situation calls for a fresh examination of the case of the landlord under section 12(1)(h).
If landlord is to be awarded possession under section 12(1)(h) on the footing that, that is the only ground on which he can seek possession, it will have to be found out after giving oppor 621 tunity to the landlord to prove whether he is interested in re building that portion of the building which is occupied by the appellant and further the court should give necessary direction under section 18.
In that event the court will have also to ascertain whether the portion which is now in possession of the landlord and which he may be interested in reconstructing can be reconstructed without the tenant vacating the demised premises.
As the whole foundation of the landlord 's case of composite requirement disappears the matter has to be examined afresh on the footing that the landlord has come to the court for possession under section 12(1)(h) only and if he succeeds in his prayer for possession on the ground mentioned in section 12(1)(h) it would be necessary for the court to give appropriate direction under section 18 of the Act.
As the matter has not been examined from this angle by any Court it has become inevitable, even though the litigation is pending for a long time, to remit the case for examination of this aspect.
The question is whether the remand should be to the first appellate court or to the trial court.
As the first appellate court is the fact finding court, in our opinion it would be appropriate for us to remit the case, after setting aside the decree of the first appellate court as well as the High Court, to the first appellate court to ascertain : (i) Whether the landlord is interested in reconstructing that portion of the building which is in possession of the tenant as demised premises; (ii) Whether the landlord would be in a position to reconstruct the building in his possession without the tenant being required to vacate the demised premises; and (iii)if the first two queries are answered in favour of the landlord, what should be the appropriate directions to be given in favour of the tenant as enjoined by section 18 ? Accordingly, this appeal is allowed and the decree of eviction made by the trial court and confirmed by the 1st appellate court and also by the High Court is set aside.
The prayer of the landlord for possession under section 12(1)(f) is negatived as he is not entitled to recover possession on the ground mentioned in section 12(1)(f).
The matter is remanded to the 1st Appellate Court for the limited purposes set out in the just preceding paragraph.
In the circumstances of the case there will be no order as to costs.
622 PATHAK J. This is tenant 's appeal by special leave against the judgment of the High Court of Madhya Pradesh arising out of a suit for ejectment.
The suit was filed by the respondent, Raghunath Prasad.
He claimed to be the owner of a building in Sadar Bazar, Bilaspur.
One portion of the building was occupied by a firm Goraldas Permanand.
According to the plaint, the entire building was in a dilapidated condition and the plaintiff intended to reconstruct the front portion of the building and to effect major repairs in the rear portion.
In order to do so it was said to be necessary that the defendants should vacate the accommodation.
In regard to the other portion, the plaintiff stated that he had obtained a decree for ejectment against Goraldas Parmanand.
The plaintiff also alleged that he intended to start the business of a medicine shop and for that purpose he required the accommodation occupied by the defendants as it faced the main road in Sadar Bazar, and that he had no other suitable accommodation in the town for such business.
The suit was resisted by the defendants, and a number of pleas were taken.
In particular it was denied that the accommodation occupied by them was dilapidated and that it was bona fide required by the plaintiff.
It was claimed that in view of the decree for ejectment against Goraldas Parmanand the plaintiff had suitable alternative accommodation for his proposed business.
The trial court found that the entire building, including the accommodation occupied by the defendants, needed reconstruction and repairs, and that for the purpose of his projected business the plaintiff had bona fide need of the accommodation held by the defendants.
It was observed that the accommodation occupied by Goraldas Parmanand was still under litigation as an appeal was pending in the case.
Holding that the grounds under section 12(1) (f) and 12(1)(h) of the Madhya Pradesh Accommodation Control Act were made out, the suit was decreed for ejectment.
The defendants preferred an appeal, and the first appellate court while dismissing the appeal maintained the findings of the trial court and upheld the order of ejectment.
A second appeal by the defendants was dismissed by the High Court on 17th April, 1976.
During the pendency of the appeal the defendants moved an application under Order VI, Rule 17 of the Code of Civil Procedure for leave to amend their written statement 623 by adding the plea that the plaintiff had secured vacant possession of the adjoining portion of the building from Goraldas Parmanand in the year 1972, and that the case should be remanded for deciding whether the accommodation acquired was reasonably suitable for starting a medicine shop, the purpose for which the plaintiff said he required the accommodation held by the defendants.
The High Court rejected the application observing that it had been moved three and a half years after the event had taken place, that it was not made bona fide but was intended merely to gain time and would result in grave injustice to the plaintiff.
The High Court also observed that even if the amendment was allowed it would not affect the decision of the case, because as the plaintiff 's need extended to entire building his securing vacant possession of one part would not conclude the matter.
It was pointed out that the plaintiff intended to reconstruct the entire portion of the building including the accommodation occupied by the defendants, as well as effect major repairs to the rear portion of the building.
In place of the shop of the defendants with a frontage of 7 and a depth of 22 and the adjoining shop with a frontage of 10 and a depth of 90, the plaintiff intended to demolish the front portion of both the shops and to reconstruct the building with a new shop having a wide frontage of 22 ' and a depth of 7 ', and to reside in the rear portion of the building.
The High Court added that residence in the rear portion of the accommodation would not alter the nature of the accommodation as the residence would be incidental to the main purpose of carrying on the medicine business in the front portion of the building.
The defendants having obtained special leave from this Court this appeal is now before us.
As analysis of the plaint shows that the ejectment of the appellants was sought on two grounds.
The respondent intended to reconstruct the front portion of the dilapidated building and to repair the rear portion and according to him this required the appellants to vacate the accommodation occupied by them.
That clearly is the ground envisaged by section 12(1)(h), Madhya Pradesh Accommodation Control Act.
That ground stood on its own.
The respondent also intended to open a medicine shop in the front portion of the building, and he pleaded that he had no other accommodation for the purpose.
That brings into play section 12(1)(f) of the Act.
The plea shows that as the dilapidated building required reconstruction and repairs, the respondent indended to avail of the opportunity to so effect the structural alterations as to accommodate a medicine 624 shop which he planned to start as a business in the premises.
This latter ground arose as a sequel to the first.
If the first ground was made out, the appellants would have to vacate the portion held by them, and if that had been the only ground the court would automatically be called upon to consider section 18 of the Act, which entitles the tenant at his option to be reinstated in a portion of the reconstructed building.
There was the further ground that the respondent proposed to start his own business in the front portion of the building, and the finding of the High Court that the respondent wanted the rear portion of the building for his personal residence.
The subordinate courts were influenced by the consideration that although the respondent had obtained a decree for ejectment against Goraldas Parmanand, the case continued to be the subject of litigation and therefore it could not be said that the respondent was in possession of alternative accommodation.
However, while the second appeal was pending in the High Court the appellants applied for amendment of their written statement to include the plea that the respondent had meanwhile obtained possession from Goraldas Parmanand.
The High Court declined to permit the amendment.
In doing so, it seems to me that the High Court erred.
It was an essential part of the appellants ' defence from the outset that the portion let out to Goraldas Permanand constituted suitable alternative accommodation, and therefore they should not be ejected.
It is immaterial that the amendment was sought more than three years after possession of the portion had passed to the respondent.
The High Court was bound to take the fact into consideration because, as is well settled now, in a proceeding for the ejectment of a tenant on the ground of personal requirement under a statute controlling the eviction of tenants, unless the statute prescribes to the contrary the requirement must continue to exist on the date when the proceeding is finally disposed of either in appeal or revision, by the relevant authority.
That position, to my mind, is indisputable.
The High Court should have allowed the amendment.
The High Court, alternatively observed that the respondent wanted to accommodate his shop in the front portion of the building and therefore, of necessity, he would require the portion occupied by the appellants.
That conclusion is based on the findings rendered by the courts below, which findings the High Court respected as findings of fact.
But the High Court failed to note that both the courts below had proceeded on the assumption that the adjoining portion occupied by Goraldas Parmanand was not immediately available on account of litigation.
It is for that reason that permitting the amendment sought by the 625 appellants became relevant and, indeed, imperative.
If the respondent has obtained possession of that portion, and that does not seem to be disputed, it becomes a serious question for decision whether the respondent needs the front portion of the building for his medicine shop and, if so, according to dimensions proposed by him.
In the consideration of that question the element of the respondent 's need for the rear portion of the building for his personal residence must be ignored.
That need was never pleaded in the plaint and, as will be seen from section 12(1)(e) of the Act, several considerations need to be satisfied before the need can be held proved.
This aspect of the matter was apparently not brought to the notice of the High Court and therefore it fell into the error of taking this element into account.
My brother Desai has in his judgment held that the respondent can accommodate his medicine shop in the portion vacated by Goraldas Parmanand and he has indicated the dimensions of the shop which appear reasonable to him.
With great respect I am unable to concur with what he has said.
Whether or not the shop should be located in the front portion of the building and what should be its dimensions will turn on the evidence adduced by the parties in that behalf.
The original record of the suit is not before us, and without knowledge of the state of the evidence I would refrain from a finding on the point.
Indeed, it seems to me in the circumstances of this case to be pre eminently a task to be entrusted to a subordinate court.
The position which then emerges is this.
The respondent has made out his case under section 12(1)(h) of the Act that he requires the building, including the portion occupied by the appellants, for reconstruction of the front portion and repairs to the rear portion, and that necessitates that the appellants vacate their accommodation.
This matter is concluded by the concurrent findings of fact rendered by the trial court and the first appellate court.
It is also concluded by concurrent findings of fact that the respondent needs a portion of the building for starting the business of a medicine shop.
What should be the location of the shop and what its dimensions is a matter which remains for decision.
And there is the further question of considering the availability of section 18 of the Act to the appellants.
Both these questions, I think, should be left to the first appellate court.
Accordingly, I allow the appeal, set aside the judgment and decree of the High Court and of the first appellate court and remand 626 the case to the latter court for permitting the appellants to amend their written statement and allowing the parties to lead such evidence as is consequentially called for, and thereafter to decide the case afresh in the light of the observations made above.
I would leave the parties to bear their costs.
S.R. Appeal allowed.
| In February 1965, Bungalow No. 16 D, Beli Road (now 26 B.K. Banerjee Road), Allahabad was allotted to the appellant.
On an application made in April 1975 the prescribed authority allowed, on 24th May, 1976, the application directing the release of the bungalow to the landlord.
On appeal the appellate authority by its order dated 25th March, 1977 modified the order by releasing only a portion of the building and by permitting the appellant to continue in the remaining portion with a direction to the prescribed authority to divide the bungalow accordingly.
The said order dated 25th March, 1977 became final, since the writ petition challenging the said order was dismissed.
On the death of the landlord the appellant filed a fresh application before the prescribed authority not to proceed with the partition scheme.
Since the prescribed authority refused to take note of this subsequent event, the issue has come up before this Court by way of special leave.
Dismissing the appeal, the Court ^ HELD: 1.
The order dated 25th March, 1977 of the appellate authority releasing a portion of the premises in favour of the third respondent and leaving the remaining portion in the tenancy of the appellant acquired finality when the proceedings taken against it by the appellant failed.
The prescribed authority was bound to give effect to that final order and was not acting outside its jurisdiction or contrary to law.
[79 C D] 2.
It is true that subsequent events must be taken into account by a statutory authority or court when considering proceeding arising out of a landlord 's petition for ejectment of a tenant on the ground of the landlord 's personal need.
But in the present case the order for release of a portion of the accommodation acquired finality before the death of the landlord and the controversy concluded by it could not be reopened now.
[79 E F] 3.
The present appeal being limited to the question which arose before the prescribed authority on the application of the appellant after the proceedings for release had acquired finality, it is not open even to the Supreme Court, to reopen the proceeding for release.
[79 G H] 78
|
ition (Criminal) No. 941 of 1984.
(Under article 32 of the Constitution of India) S.L. Chibber for the Petitioner.
Ashwani Kumar and R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The short question which arises for decision in this petition under Article 32 of the Constitution is whether it is open to a person who is undergoing imprisonment on being convicted of an offence committed by him to claim that the period occupied by the investigation or inquiry carried on and the trial held while he was undergoing imprisonment in respect of another offence alleged to have been committed by him should be set off against the term of imprisonment imposed on him on being convicted of the latter offence, under section 428 of the Code of Criminal Procedure, 1973 (hereinafter referred to as 'the Code ').
726 The facts relevant for the purpose of this case are these: The petitioner was convicted of an offence punishable under section 307 of the Indian Penal Code and sentenced to undergo rigorous imprisonment for seven years and to pay a fine of Rs. 100/ in a Sessions Case on February 1, 1980 by the Addl.
Sessions Judge, Karnal.
In the same case, he was also convicted of an offence punishable under section 459 of the Indian Penal Code and sentenced to undergo rigorous imprisonment for five years and to pay a fine of Rs. 100/ .
Both the sentences of imprisonment were directed to run concurrently.
The petitioner was in judicial custody with effect from January 11, 1980 in another case F.I.R. No. 315/78 under sections 457/380/411 of the Indian Penal Code before a Metropolitan Magistrate at Delhi.
That case ended in his conviction on February 16, 1981 for an offence punishable under section 457 of the Indian Penal Code and he was sentenced to undergo imprisonment for one year and to pay a fine of Rs. 200/ .
In the same case he was convicted of an offence punishable under section 380 of the Indian Penal Code and sentenced to undergo rigorous imprisonment for four months and to pay fine.
The two sentences of imprisonment imposed in this case were directed to run concurrently.
In this case it was further ordered that the petitioner was entitled to the set off as provided by section 428 of the Code.
It is not necessary to refer to the other case or cases in which he has also been convicted in order to decide the issue involved in this case.
The petitioner is undergoing rigorous imprisonment for seven years as directed by the Addl.
Sessions Judge, Karnal in the Sessions case from February 1, 1980 at the District Jail at Rohtak.
The sentences of imprisonment imposed by the Metropolitan Magistrate, Delhi will commence to run at the expiration of the imprisonment imposed by the Addl.
Sessions Judge, Karnal as prescribed by section 427 of the Code since the court has not directed that the subsequent sentence shall run concurrently with the previous sentence.
The petitioner, however, contends that since he was in judicial custody from January 11, 1980 in connection with the investigation and trial of the case which ended in his conviction by the Metropolitan Magistrate on February 16, 1981, the whole of the period between January 11, 1980 and February 16, 1981 should be set off against the sentence of imprisonment imposed by the Metropolitan Magistrate, Delhi.
This claim of the petitioner is contested by the State Government of Haryana.
It is urged on behalf of the State Government that while the petitioner is entitled 727 to set off under section 428 of the Code, the period between January 11, 1980 and February 1, 1980 on which date he was sentenced to imprisonment for seven years by the Addl.
Sessions Judge, Karnal against the sentence of imprisonment imposed by the Metropolitan Magistrate, Delhi, the period between February 1, 1980 and February 16, 1981 on which date the petitioner was convicted by the Metropolitan Magistrate, Delhi cannot be set off since during that period the petitioner was actually undergoing imprisonment imposed on him in the Sessions case.
The State Government has relied in support of its contention on the instruction issued by the High Court of Punjab and Haryana in No. 29442 Rules VI.V.38 dated November 29, 1975, the relevant part of which reads thus: "The period of detention undergone by a convict in execution of sentence of imprisonment imposed on him by a court of law while facing inquiry or trial in some other case(s) should not be set off against the term of imprisonment imposed on him on conviction in such other case(s).
" We are concerned in the present case with the correctness of the above instruction.
Section 428 of the Code reads thus: "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 imprisonment in 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 imprisonment imposed on him on such conviction, and the liability of such person to undergo imprisonment on such conviction shall be restricted to the remainder, if any, of the term of imprisonment imposed on him.
" There was no provision corresponding to section 428 of the Code in the Code of Criminal Procedure, 1898 which was repealed and replaced by the present Code.
It was introduced with the object of remedying the unsatisfactory state of affairs that was prevailing when the former Code was in force.
It was then found that many persons were being detained in prison at the pre conviction stage for unduly long periods, many times for periods longer than the actual sentence 728 of imprisonment that could be imposed on them on conviction.
In order to remedy the above situation, section 428 of the Code was enacted.
It provides for the setting off of the period of detention as an under trial prisoner against the sentence of imprisonment imposed on him.
Hence in order to secure the benefit of section 428 of the Code, the prisoner should show that he had been detained in prison for the purpose of investigation, inquiry or trial of the case in which he is later on convicted and sentenced.
It follows that if a person is undergoing the sentence of imprisonment imposed by a court of law on being convicted of an offence in one case during the period of investigation, inquiry or trial of some other case, he cannot claim that the period occupied by such investigation, inquiry or trial should be set off against the sentence of imprisonment to be imposed in the latter case even though he was under detention during such period.
In such a case the period of detention is really a part of the period of imprisonment which he is undergoing having been sentenced earlier for another offence.
It is not the period of detention undergone by him during the investigation, inquiry or trial of the same case in which he is later on convicted and sentenced to undergo imprisonment.
He cannot claim a double benefit under section 428 of the Code i.e. the same period being counted as part of the period of imprisonment imposed for committing the former offence and also being set off against the period of imprisonment imposed for committing the latter offence as well.
The instruction issued by the High Court in this regard is unexceptionable.
The stand of the State Government has, therefore, to be upheld.
The petitioner is not, therefore, entitled to claim that the period between February 1, 1980 on which date he was convicted in the Sessions case and February 16, 1981 on which date he was convicted by the Metropolitan Magistrate, Delhi when he was undergoing imprisonment imposed on him in the Sessions case should be set off against the term of imprisonment imposed by the Metropolitan Magistrate, Delhi.
That period should be counted as part of the imprisonment undergone by the petitioner as directed in the Sessions case.
No other contention is urged.
In the result the petition is dismissed.
S.R. Petition dismissed.
| The petitioner was convicted for an offence under Section 307 and Section 459 of the Indian Penal Code and sentenced on February 1, 1980 to a term of rigorous imprisonment.
During the pendency of the trial the petitioner was in judicial custody with effect from January 11, 1980 in another case F.I.R. 315/78 under Sections 457/380/411 of the Indian Penal Code which also ended in his conviction on February 16, 1981 and was sentenced for a term of rigorous imprisonment.
In the latter case it was ordered that the petitioner was entitled to the set off as provided by Section 428 of the Code.
The petitioner claimed that in spite of his conviction in the earlier case from February 1, 1980 he was entitled for set off from 11.1.1980 to 16.2.81.
The question in the present Writ Petition is whether such a claim is in order.
Dismissing the Writ Petition, the Court ^ HELD: 1.
The petitioner is not entitled to claim that the period between February 1, 1980 on which date he was convicted in the Sessions Case and February 16, 1981 on which date he was convicted by the Metropolitan Magistrate, Delhi in another case when he was undergoing imprisonment imposed on him in the Sessions Case should be set off against the term of imprisonment imposed by the Metropolitan Magistrate, Delhi.
That period should be counted as part of the imprisonment undergone by the petitioner as directed in the Sessions Case.
[728G H] 2: 1.
Section 428 of the Code of Criminal Procedure 1973 was introduced with the object of remedying the unsatisfactory state of affairs that was prevail 725 ing when the former Code of 1898 was in force.
It was then found that many persons were being detained in prison at the pre conviction stage for unduly long periods, many times for periods longer than the actual sentence of imprisonment that could be imposed on them on conviction.
[727F G] 2: 2.
In order to secure the benefit of Section 428 of the Code, the prisoner should show that he had been detained in prison for the purpose of investigation inquiry or trial of the case in which he is later on convicted and sentenced.
It follows that if a person is undergoing the sentence of imprisonment imposed by a court of law on being convicted of an offence in one case during the period of investigation, inquiry or trial of some other case, he cannot claim that the period occupied by such investigation, inquiry or trial should be set off against the sentence of imprisonment to be imposed in the latter case even though he had been detained during such period.
In such a case the period of detention is really a part of the period of imprisonment which he is undergoing having been sentenced earlier for another offence.
It is not the period of detention undergone by him during the investigation, inquiry or trial of the same case in which he is later on convicted and sentenced to undergo imprisonment.
He cannot claim a double benefit under Section 428 of the Code that is the same period being counted as part of the period of imprisonment imposed for committing the former offence and also being set off against the period of imprisonment imposed for committing the latter offence as well.
The instruction issued by the High Court of Punjab & Haryana No. 29442 Rules VI.
V. 38 dated 29th November, 1975 is unexceptionable.
[727G H]
|
Appeal No. 707 of 1966.
Appeal by special leave from the judgment and order dated January 20, 1965 of the Allahabad High Court, Lucknow Bench in First Appeal No. 67 of 1948.
V. section Desai and K. P. Gupta, for the appellant.
A. K. Sen, E. C. Agarwala, section R. Agarwala and P. C. Agarwala, for respondent Nos. 1 to 6.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by special leave though number of contentions were taken we have not thought it necessary to go into all of them as in our judgment High Court 's conclusion that Shyam Behari Lal (1st defendant) had been validly adopted by Gopal Das ,is well founded.
The suit from which this appeal arises is for possession of the suit properties on the basis of title.
The 1st plaintiff Debi Prasad claims title to the properties as the nearest heir to Gopal Das, his maternal uncle who died in 1934.
The 2nd plaintiff is an alienee from the 1st plaintiff.
In order to properly understand the controversy in the present case, it is necessary to have before us the family pedigree.
The admitted pedigree is as shown below 103 LAJJA RAM Kooramal (died in 1874) Kedar Nath Hiralal (died Laddoomal Ramass (died in 1897) during his (died father 's life issueless time) in 1871) (1St wife (2nd wife) died in Dwaramal 1874) alias Shyam Behari Dwarkadas Mantoo Mal Lal (died in (died in (adopted by 1885) 1897) at Gopal Das) age 25 or 27.
No. 1 (other children, died during minority).
Changumal Smt.
Misro Smt.
Kaushilla died in 1923 (died in 1917) (dead) Smt.
Raj Rani Shanker Sahai Manohar Das (died childless (died in (alive) 1944 or 1945) 1929) Smt.
Radhey Rani Smt.
Drupati Mukut Behari Lal (Deft.
No. 2) Govind Prasad Ram Kumar Ram Swarup Mahesh Bebari Ram Prasad (Deft. No. 3) (Deft. No. 4) (Four other children died 1940 41) Gopal Das Smt.
Kundan Smt.
Shyamo Masani Din (died on (died in (died in (died issueless) 18 2 34) 1914) 1923 or 1904) Smt.
Bhagwan Baghumal Kedar Nath Del (died in 1932) (died in 1925) (died on 19 10 1934) Debi Prasad Plff.
No. 1 Minor son Minor Minor daughter (all died before 1890) 104 The common ancestor of the family was Lajja Ram who died in 1874.
We are now concerned with the branch of Kedar Nath, the father of Gopal Das who died on February 18, 1934.
His widow Bhagwan Dei died on October 19, 1934.
The contention of Debi Prasad is that Gopal Das had separated from his family; he died intestate and, therefore, being the nearest heir of Gopal Das, he is entitled to the properties left by Gopal Das.
The plaintiffs claim was resisted by the 1st defendant Shyam Behari Lai, who claimed to be the adopted son of Gopal Das.
According to Shyam Behari Lai, he had been adopted by Gopal Das in about the year 1892 when he was only an infant.
He also resisted the suit on the ground that Gopal Das was an undivided member of his family and therefore the 1st plaintiff in any event cannot claim any right to the suit properties.
His further contention was that the 1st plaintiff was estopped from contending that he was not the adopted son of Gopal Das.
Shyam Behari Lai died luring the pendency of the appeal before the High Court and his legal representatives are contesting this appeal Debi Prasad also died during the pendency of this appeal.
The trial court substantially accepted the claim made in the plaint but in appeal the High Court reversed the decree of the trial court and dismissed the suit.
The principal question that we have to decide in this case is whether the adoption pleaded by Shyam Behari Lai is true and valid.
According to Shyam Behari Lai, Gopal Das took him in adoption on February 8, 1892, on the very day he was born.
He says that very soon after his birth, his natural parents handed him over to Gopal Das and his wife who took him over as their adopted son and thereafter performed the necessary ceremonies according to the custom of their community.
He also pleaded that in the community of Gopal Das, there is a custom of taking a child.
in adoption on the very day of its birth.
The plaintiffs have denied both the factum of adoption as well as the custom pleaded.
We may at the very outset mention that Shyam Behari Lai had not been able to establish the custom pleaded by him.
Nor was he able to adduce any satisfactory evidence about the actual adoption but he has produced considerable documentary evidence to show that (Gopal Das) was treating him for over a quarter of century as his son.
There is also plenty of reliable evidence to show that close relations of Gopal Das including Debi Prasad treated Shyam Behari Lai as the son of Gopal Das both during the life time of Gopal Das and also thereafter till about the time the suit from which this appeal arises was instituted.
As mentioned earlier Gopal Das as well as his wife died in 1934 and the suit from which this appeal arises was filed in 1946.
105 While considering the question of proof of the adoption pleaded, we must bear in mind the fact that the same is alleged to have taken place in 1892 nearly 54 years before the present suit was instituted.
Therefore, naturally, it was extremely difficult for Shyam Behari Lai to adduce any oral evidence in proof of that adoption.
All the persons who could have known about the adoption are likely to have died.
Shyam Behari Lai himself could not speak to that adoption.
His evidence is at best hearsay.
It is true, as observed by this Court in Addagada Raghayamma and anr.
vs Addagada Chenchamma and anr.
(1) that it is settled that (a person.
who seeks to displace the natural succession to property by alleging an adoption must discharge the burden that lies upon him by proof of the factum of adoption and its validity).
Again as held by this Court in Lakshman Singh Kothari vs Smt.
Rup Kanwar(2) that in order that an adoption may be valid under the Hindu law, there must be a formal ceremony of giving and taking.
This is true of the regenerate castes as well as of the Sudras.
Although no particular form is prescribed for the ceremony, the law requires that the natural parent should hand over the adoptive boy and the adoptive parent must receive him, the nature of the ceremony varying according to the circumstances.
In the course of the judgment Subba Rao J. (as he then was) who spoke for the, Court quoted with approval the following observations of Gopalchandra Sarkar in his book on Hindu Law, 8th Edn.; "The ceremonies of giving and taking are abso lutely necessary 'in all cases.
These ceremonies must be accompanied by the actual delivery of the child; symbolical or constructive delivery by the mere parol expression of intention on the part of the giver and the taker without the presence of the boy is not sufficient.
Nor are deeds of gift and acceptance executed and registered in anticipation of the intended adoption nor acknowledgment, sufficient by themselves to constitute legal adoption, in the absence of actual gift and acceptance accompanied by actual delivery; a formal ceremony being essential for that purpose.
" That is also the view expressed in Mayne 's Hindu Law wherein it is observed that the giving and receiving are absolutely necessary to the validity of an adoption; they are the operative part of the ceremony, being that part of it which transfers the boy from one family to another; but the Hindu law does not require that there shall be any particular form so far as giving and acceptance are concerned; for a valid, adoption all that the law requires is that the natural father shall be asked by the adoptive (1) ; L11SupCI 8 (2) ; 106 parent to give his son in adoption, and that the boy shall be handed over and taken for this purpose.
There is no doubt that the burden of proving satisfactorily that he was given by his natural father and received by Gopal Das as his adoptive son is on Shyam Behari Lal.
But as observed by the Judicial Committee of the Privy Council in Rajendrao Nath Holder vs Jogendro Nath Benerjee and ors.(1); that although the person who pleads that he had been adopted is bound to prove his title as adopted son, as a fact yet from the long period during which he had been received as an adopted son, every allowance for the absence of evidence to prove such fact was to be favourably entertained, and that the case was analogous to that in which the legitimacy of a person in possession had been acquiesced in for a considerable time, and afterwards impeached by a party, who had a right to question the legitimacy, where the defendant, in order to defend his status, is allowed to invoke against the claimant every presumption which arises from long recognition of his legitimacy by members of his family; that in the case of a Hindoo, long recognition as an adopted son, raised even a stronger presumption in favour of the validity of.
his adop tion, arising from the possibility of the loss of his rights in his own family by being adopted in another family.
In Rup Narain and anr.
vs Mst.
Gopal Devi and ors.
(1), the Judicial Committee observed, that in the absence of direct evidence much value has to be attached to the fact that the alleged adopted son had without controversy succeeded to his adoptive father 's estate and enjoyed till his death and that documents during his life and after his death were framed upon the basis of the adoption.
A Division Bench of the Orissa High Court in Balinki Padhano and anr.
vs Gopalkrishntt Padhano and ors(3); held that in the case of an ancient adoption evidence showing that the boy was treated for a long time as the adopted son at a time when there was no controversy is sufficient to prove the adoption although evidence of actual giving and taking is not forthcoming.
We are in agreement with the views expressed in the decisions referred to above.
In the case of all ancient transactions, it is but natural that positive oral evidence will be lacking.
Passage of time gradually wipes out such evidence.
Human affairs often have to be judged on the basis of probabilities.
Rendering of justice will become impossible if a particular mode of proof is insisted upon under all circumstances.
In judging whether an adoption pleaded has been satisfactorily proved or not, we have to bear in mind the lapse of time between the date of the alleged adoption and the date on which the concerned party is required to adduce proof.
In the (1) 14 Moore 's Indian Appeals p.67. (2) 36 I.A. p. 103.
(3) A.I.R. 1964 Orissa p. 117.
107 case of an adoption said to have taken place years before the same is questioned, the most important evidence is likely to be that the alleged adoptive, father held out the person claiming to have been adopted as his son; the latter treated the former as his father and their relations and friends treated them as father and son.
There is no predetermined way of proving any fact.
A fact is said to have been proved where after considering the matters before it, the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
Hence if after taking an overall view of the evidence adduced in the case, we are satisfied that the adoption pleaded is true, we must necessarily proceed on the basis, in the absence of any evidence to the contrary, that it is a valid adoption as well.
As mentioned earlier Shyam Behari Lal has not been able to substantiate the custom pleaded by him; nor has he adduced any direct evidence relating to the factum of adoption.
His case entirely rests upon the decumentary evidence that he has produced to show that he had been consistently and continuously treated as the son of Gopal Das, by Gopal Das himself, during his life time and by all his friends and relations including Debi Prasad.
Before dealing with the evidence mentioned earlier, it is necessary to mention that the High Court has relied in proof of the adoption pleaded, on the evidence of D.W. 10 Rikhab Das and D.W. 15 Chhotey Lal.
Both of them were the close relations of the wife of Gopal Das.
They are disinterested witnesses.
Their evidence is to the effect that sometime after the birth of Shyam Behari Lal, the wife of Gopal Das took him to her paternal home where Paon Pheri ceremony was performed.
There is satisfactory evidence to show that this ceremony is customarily performed in the parental home of a lady who has given birth to her first child.
We see no reason to disbelieve the testimony of these witnesses.
Their evidence clearly indicates the fact that Shyam Behari Lal must have been taken in adoption by Gopal Das.
We may also at this stage refer to another important circumstance appearing in the case.
As mentioned earlier, both Gopal Das and his wife died in the year 1934.
The suit from which this appeal arises was instituted only in 1946, just a few months before the period of limitation for instituting the same expired.
Debi Prasad has not given any satisfactory explanation for this inordinate delay in instituting the suit.
This circumstance tends to show that the suit is likely to be speculative one.
Now coming to the documentary,evidence referred to earlier, it is proved that Shyam Behari Lal was admitted to school in 1907.
A 658, is the application made for admission on December 12, 1907.
That application was signed by Gopal Das, 108 It recites that Shyam Behari Lal is the son of Gopal Das.
This admission of Gopal Das is an extremely important piece of evidence.
No reason is given why Gopal Das should have made a false statement in that application.
The explanation that someone must have filled in the form and Gopal Das must have signed the same in ignorance is not worthy of credence.
A 261, is the certified copy of the deposition of Gopal Das in Regular Suit No. 104 of 1917 in the court of the Subordinate Judge, Faizabad.
That deposition was given on May 9, 1918.
Therein Gopal Das admitted in more than one place that Shyam Behari Lal was his son.
We next come to Exh.
A 364, a copy of the nomination paper filed by Shyam Behari Lal for election to the municipal council.
Gopal Das was one of the persons who proposed his name.
Therein again Shyam Behari Lal was described as the son of Gopal Das.
Gopal Das was an income tax assessee.
He was assessed as the Karta of his Hindu Undivided Family.
A 299 is the assessment order for the year 1921 22; Exh.
A 300 is the assessment order for the year 1922 23; Exh.
A 3 01 is the assessment order for the year 1923 24; Exh.
A 302 is the assessment order for the year 1924 25; Exh.
A 303 is the assessment order for the year 1925 26; Exh.
A 304 is the assessment order for the year 1926 27; Exh.
A 305 is the assessment order for the year 192728; Exh.
A 306 is the assessment order for the year 1928 29; Exh.
A 307 is the assessment order for the year 1929 30; Exh.
A 309 is the assessment order for the year 1931 32 and Exh.
A313 is the assessment order for the year 1935 36.
While computing the income of the H.U.F. the professional income of Shyarn Behari Lal as a lawyer was taken into consideration.
Those assessment orders proceed on the basis that Gopal Das and Shyam Behari Lal constituted a joint Hindu family.
It may be noted that most of those assessment orders were made during the life time of Gopal Das and evidently on the basis of the returns submitted by him.
If Shyam Behari Lai had not been the son of Gopal Das, he could not have been treated as a member of the 'coparcenary of which Gopal Das was the Karta, nor his professional income would have been added to the income of the joint family of Gopal Das.
These assessment orders have considerable evidentiary value.
It may be noted that these documents came into existence at a time when there was no dispute.
Next we come to the admissions made by the plaintiff him self.
A 233 is the certified copy of the deposition of the plaintiff given in Regular Suit No. 55 of 1935 in the court of Additional Subordinate Judge, Faizabad.
This deposition he 109 gave on May 20, 1935, nearly a year after Gopal Das died.
Is that deposition he stated : "I am partner of the firm of Gopal Dass Chhangamal.
Plaintiff No. 2 is the proprieter of the said firm", If Debi Prasad was the rightful heir to the estate of Gopal Das, he could not have admitted in the year 1935 that Shyam Behari Lal was the proprietor of the firm Gopal Dass Chhangamal.
Debi Prasad 's explanation that on the date he gave that deposition, he was unaware of the fact that he was the heir of Gopal Das, cannot be believed.
In Exh.
A 226, the decree in the aforesaid suit, Shyam Behari Lal was described .as the son of Gopal Das.
A 274 is another certified copy of the deposition given by Debi Prasad.
This was, given on July 19, 1923 in a suit where Gopal Das was the plaintiff.
Therein he stated in cross "The plaintiff No. 1 has got a son named B. Shyam Behari Lal Vakil .
Our business is also ancestral business.
His son Shyam Behari and his grand son Mukut Behari are members of a joint Hindu family.
" He further stated therein "Lala Gopal Das, his son (referring to Shyam Behari Lal) and grand son are the sole owners of the firm styled Kuramal Kedar Nath".
A 236 is the certified copy of the plaint filed by Shyam Behari Lal and Debi Prasad jointly in Suit No. 353 of 1935 in the court of Civil Judge, Faizabad.
In paragraph 1 of the plaint, it is stated : "The proprietor of the said shop was Gopal Das, father of the plaintiff No. 1 till his life time and after his death to which about a year, nine months and half have passed, the plaintiff No. 1, as survivor became and is the proprietor of the said property.
" This is an extremely important admission.
This admission was made after the death of Gopal Das.
Therein Debi Prasad not only admitted that Shyam Behari Lal was the son of Gopal Das, he further admitted that he became the proprietor of the concern by survivorship.
This could have only happened if Shyam Behari Lal had been adopted by Gopal Das.
A 352 and 356 are two applications made for registration of a firm under the .
The first, application was made on March 26, 1936.
It was returned 'with some objection and the second application was made on May 4, 1936.
Both these applications bear the signature of Debi Pradsad as Well 110 as Shyam Behari Lal.
In those applications, it was stated that Shyam Behari Lal had succeeded as a partner of the firm whose registration was sought in the place of his father Gopal Das who had died.
A 358 is an application for transfer of shares made to the Banaras Cotton & Silk Mills Ltd. by Debi Prasad.
Thereunder he sought to transfer his 100 shares to Shyam Behari Lal whom he described in his application as the son of Gopal Das.
Similar avertments were made in Exh.
A 359.
A 262, 656, 657 and A 276 are the statements made by the relations of Shyam Behari Lal and Debi Prasad wherein Shyam Behari Lal was described as the, son of Gopal Das.
A large number of documents have been produced to show that friends, relations and even strangers were treating Shyam Behari Lal as the son of Gopal Das.
The documents produced before the court conclusively prove that right from 1907 till 1946, Shyam Behari Lal wag treated as the son of Gopal Das.
This continuous and consistent course of conduct on the part of Debi Prasad, Gopal Das and others affords a satisfactory proof of the fact that Shyam Behari Lal must have been the adopted son of Gopal Das.
No other reasonable inference can be drawn from the material on record.
Mr. Desai appearing on behalf of the appellants contended that we should not accept the adoption pleaded firstly because, it was unlikely that Gopal Das would have taken a child in adoption as far back as 1892 when he was only 32 years of age; secondly the story that an one day old child was taken in adoption when the family must have been in pollution must be rejected as being repugnant to Hindu notions and lastly in a decree of 1910, Shyam Behari Lal was described as the son of Ram Das, his natural father.
We are unable to accept these contentions.
It is in evidence that Gopal Das had lost three children even before 1890.
Evidently he had lost all hopes of getting a natural son.
Further it is not necessary to speculate in the face of the documentary evidence referred to earlier why Gopal Das should have taken a son in adoption when there was every possibility for him to get a natural son.
Coming to the question of adoption on the very day Shyam Behari Lal was born, that plea rests on hearsay information.
There is no positive evidence before us as to when exactly Shyam Behari Lal was adopted.
From the evidence of D.Ws.
10 and 15, it is clear that he must have been adopted very soon after his birth.
That is the best that can be said on the basis of the evidence.
That a art custom differs from place to place and from community to community.
It is true that in a decree made in 1910, Shyam Behari Lal was described as the son of Ram Das.
But in the very next year in another decree, he was 111 described as the son of Gopal Das.
We do not think that the evidence afforded by that solitary document showing Shyam Behari Lal as the son of Ram Das can outweigh the other evi dence which is both satisfactory as well as voluminous.
On an appreciation of the entire evidence on record, we are in agreement with the High Court 's conclusion that Shyam Behari Lal was the adopted son of Gopal Das and there is nothing to show that the said adoption was invalid for any reason.
In view of this conclusion, it is unnecessary to consider the other contentions raised in the appeal.
In the result this appeal fails and the same is dismissed with costs.
Y.P. Appeal dismissed.
| The appellant filed a suit in 1946 claiming to be the nearest heir to his maternal uncle G, who died in 1934.
S defendant No. 1 (the predecessor of the respondents) resisted the suit on the ground that he had been adopted by G on the very day he was born in 1892.
Close relations of the wife of G deposed that after the birth of S, the wife of G took him to her paternal home where Paon Pheri ceremony was performed, as was customary in that family.
The application for admission to the school recited that S was the son of G, and it was signed by G. G deposed before courts that S was his son.
S filed a nomination paper, proposed by G mentioning that his father was G.
In income tax assessment which proceeded on the basis that G and S formed a H.U.F. of which G was the karta, the professional income of S was added.
Then there were admissions of the appellant in Courts after the death of G that S was the proprietor of the firm of G.
In other application for transfers, the appellant described S as son of G.
But there was a decree of a Court in 1990 where S was described as son of his natural father.
The trial court decreed the suit, but the High Court reversed that decree.
The High Court held on the evidence that S was validly adopted by G, though S had not been able to establish the custom pleaded by him, nor was he able to adduce any satisfactory evidence about the actual adoption but he has produced considerable documentary evidence to show that G was treating him for over a quarter of century as his son; then there was also plenty of reliable evidence to show that close relations including the, appellant treated S as the son of G both during the life time of G and also, thereafter till about the time the suit was instituted.
HELD : A person who seeks to displace the natural succession to property by alleging an adoption must discharge the burden that lies upon him by proof of the factum of adoption and its validity.
In order that an adoption may be valid under the Hindu law, there must be a formal ceremony of giving and taking.
This is true of the regenerate castes as well as of the Sudras.
Although no particular form is prescribed for the ceremony, the law required that the natural parent should hand over the adoptive boy and the adoptive parent must receive him, the nature of the ceremony varying according to the circumstances.
[105 A D] Although the person who pleads that he had been adopted is bound to prove his title as adopted son, as a fact yet from the long period during which he had been received as an adopted son, every 'allowance for the absence of evidence to prove such fact was to be favourably entertained.
The case was analogous to that in which the legitimacy of a person in possession had been acquiesced in for a considerable time, and afterwards impeached by a party, who had a right to question the legitimacy, where the defendant, in order to defend his status, is allowed to invoke against the claimant every presumption which arises from long recognition of his 102 legitimacy by members of his family.
In the case of a Hindu long recognition as an adopted son, raised even a stronger presumption in favour of the validity of his adoption, arising from the possibility of the loss of his rights in his own family by being adopted in another family.
In the absence of direct evidence much value has to be attached to the fact that the alleged adopted son had without controversy succeeded to his adoptive 'father 's estate and enjoyed till his death and that documents during his life and after his death were framed upon the basis of the adoption.
[106 B F] On the evidence, S was the adopted son of G and there was nothing to show that the said adoption was invalid for any reason.
While considering the question of the proof of adoption pleaded, the 'fact that the suit was filed nearly 54 years after the alleged adoption had taken place must be borne in mind.
Therefore, naturally it was extremely difficult far the adopted son to adduce any oral evidence in proof of that adoption.
Addagada Raghavamma and anr.
vs Addagada Chenchamma and anr.
2 S.C.R. 933; Lakshman Singh Kothari vs Smt.
Rup Kanwar ; ; applied.
Rajendrao Nath Holder vs Jogendro Nath Banerjee and ors.
14, Moore 's Indian Appeals p. 67, approved.
|
vil ,Appeal No. 2525 of 1966.
Appeal from the judgment and order dated October 30, 1963 of the Gujarat High Court in Special Civil Application No. 94 of 1962.
C.K. Daphtary, Attorney General and 1.
N. Shroff, for the appellant.
H.R. Gokhale, S.B. Vakil, Janendralal and B.R. Agarwala, for the respondent.
The Judgment of the Court was delivered by Hegde J.
The only question that falls for decision in this appeal is whether on the basis of the notice issued by the Bombay State Electricity Board on January 8, 1959 under section 7 of the (to be hereinafter referred to as the: Act) prior to its amendment in 1959, the appellant can compulsorily purchase from the respondent his concern 'The Bilimora Electric Power Supply Co. '.
In his application before the High Court under article 226 of the Constitution the respondent challenged the vires of section 7 of the Act.
But that contention remains to be examined.
The High Court has chosen to allow the petition.
solely on the ground that as the requirements of section 7 have not been complied with, the appellant cannot compel the respondent to sell the undertaking.
If we come to the conclusion that that conclusion is unsustainable then the matter will have to go back to the High Court for deciding the constitutionality of section 7.
The respendent was given a licenee on.
February 11, 1932, under the provisions of the Baroda Electricity Act Samvat 1983 for supplying electricity within the area mentioned.
in the licenee.
Clause 27 of that licenee provided that the option of purchase 582 given by section 9 of the Baroda Electricity Act shall be exercisable first on the expiration of thirty years computed from the commencement of the licence and thereafter on the expiration of every subsequent period of ten years during the subsistence of the licence.
The manner in which the undertaking should be valued is laid down in that Act.
On the merger of the former Baroda State with the Province of Bombay, the Act as well as the (Act 54 of 1948) were made applicable to the territories of the former State of Baroda, and the corresponding Baroda Acts were repealed with the saving clause that the licences issued under the repealed Act shall continue to remain in force as if issued under the Act, until the expiration of the period of those licences.
In exercise of the powers conferred by section 5 of the Electricity Supply Act, 1948 the Government of Bombay constituted the Bombay State Electricity Board on January 31, 1945.
On January 8, 1959 that Board issued to the respondent a notice under section 7 of the Act.
That notice is important for our present purpose.
Hence we shall quote the relevant portion thereof.
It runs thus: "In exercise of the powers conferred on the Bombay State Electricity Board by virtue of section 71 of the Electri city (Supply) Act, 1948 read with section 7 of the , you are hereby notified that the Bombay State Electricity Board has decided to exercise and shall exercise the option of purchasing your under taking on the expiry on 10 2 1962 of the licence granted to you .
The receipt of this notice may please be acknowledged.
" As a result of the Bombay Re organization Act, 1960, the present Gujarat State came into existence.
In exercise of the powers conferred by section 5 of the read with sub section 4 of section 68 of the Bombay Reorganization Act, 1960 the appellant Corporation was constituted by the Government of Gujarat by means of a notification dated May 1, 1960.
The Central Government by the notification No. EL 1I 1(22)/60 dated the 17th June, 1960 made in exercise of the powers conferred by cl.
(a) of sub section
(4) of section 68 of the Bombay Reorganization Act, 1960 directed that the appellant Corporation shall "with effect from 1st May 1960" take over from the Bombay State Electricity Board all its undertakings, assets, rights and liabilities in the area comprised in the State of Gujarat.
The said notification was amended in some respect by notification of the Government of India dated October 3, 1960 providing therein that the amendment thereby made in the notification dated June 17, 1960 shall be deemed always to have been made.
On the basis of the aforementioned notifications, the appellant is claiming the right to compulsorily purchase the undertaking.
583 The respondent is contesting the right of the appellant to compulsorily purchase his undertaking.
With a view to forestall the appellant from taking action against him, the respondent an application under article 226 of the Constitution in the High Court of Gujarat seeking directions to the appellant to forbear from compelling him to sell or deliver his undertaking, refrain the appellant from ceasing to supply electricity to him for the purpose of his said undertaking and also refrain the appellant from preventing him from supplying electric energy in the area mentioned in his licence.
Some other incidental reliefs were also sought.
The High Court came to the conclusion that though the notice issued by the appellant on January 8, 1959 is a valid notice under section 7(4) of the Act but that by itself is not sufficient to compel the respondent to sell his undertaking to the appellant; before the respondent can be compelled to sell his undertaking to the appellant it was necessary for the appellant to exercise its option to purchase the undertaking on the expiration of the period of licence.
As the appellant had failed to exercise that option on the expiration of the period of licence it cannot compel the respondent to sell his undertaking.
On the basis of these findings the High Court has substantially granted the relief prayed for by the respondent.
The appellant challenged the correctness of this conclusion.
On the other hand the respondent is supporting the judgment of the High Court not only on the ground accepted by the High Court but also on some of the other grounds advanced on his behalf before the High Court but rejected by that Court.
We shall first take up the question whether the High Court was right in holding that the appellant had to take two independent steps viz. ( 1 ) an election to purchase the undertaking followed up by a notice to the respondent in pursuance of that election within the period mentioned in section 7(4) of the Act and (2) exercise its option to purchase on the expiration of the period of licence and communicate the same to the respondent.
Before addressing ourselves to that question it is necessary to mention that the High Court 's finding that the rights of the Shriman Sarkar, (Baroda Government) to purchase the undertaking under section 9 of the Baroda Electricity Act had devolved on the State Government was not challenged before us.
Therefore it is not necessary for us to trace how the rights of the Baroda Government came to devolve on the then State of Bombay.
But the respondent did contest the appellant 's claim to exercise that right.
That question we shall separately consider.
For the present we shall proceed on the basis that the appellant is entitled to exercise the right of purchase conferred on the Baroda Government under the licence read with section 9 of the Baroda Electricity 584 Act.
We may also state at this stage that the conclusion of the High Court that the licence issued under s, 9 of the Baroda Electricity Act should be considered as a licence issued under section 7 of the Act was also not challenged before us.
Now we shall proceed to consider the true scope of section 7 of the Act.
For our present purpose only sub sections 1, 2 and 4 of section 7 of the Act are relevant.
They read as follows: "Section 7 ( 1 ).
Where a license has been granted to any person not being a local authority, and the whole of the area of supply is included in the area for which a single local authority is constituted, the local authority shall, on the expiration of such period, not exceeding fifty years and of every such subsequent period not exceeding twenty years, as shall be specified in this behalf in the license, have the option of purchasing the undertaking, and, ff the local a uthority, with the previous sanction of the State Government, elects to purchase, the licensec shall sell the undertaking to the local authority on payment of the value of all lands, buildings, works, materials and plant of the licensee suitable to, and used by him for, the purposes of the undertaking, other than a generating station declared by the license not to form part of the undertaking for the purpose of purchase,.
such value to be, in case of difference or dispute, determined by arbitration: (4) Not less than two years ' notice in writing of any election to purchase under this section shall be served upon the licensee by the local authority or the State Government as the case may be.
In our opinion sub section
(4 ) of section 7 is complementary to sub as.
(1) and (2) of that Section and therefore they must be read together.
On an analysis of these provisions it is seen that before a licensec can be compelled to sell his undertaking, the authority entitled to purchase must elect to purchase the same by exercise of the option given to it under the licence read with section 7 of the Act followed by a notice as required by section 7 (4) of the Act.
In section 7 the expression "option of purchasing an undertaking" merely means the right of purchasing the undertaking.
The word 'option ' is 'used because two courses are open to the concerned authority namely, either to purchase the undertaking or renew the licenee.
Once the authority elects to purchase then, the notice prescribed in sub section 4 should be given before the period mentioned thereto.
We are not able to agree with the High Court that the Section contemplates two stages namely (1) to elect to purchase the 585 undertaking at least two years before the expiration of the licenee and (2 ) exercise the option to purchase at the end of the licence period.
The exercise of option to purchase as well as electing to purchase is one integral process and not two independent steps.
By the very act of electing to purchase the authority exercises its option to purchase.
In our opinion sub sections 1, 2 and 4 of section 7 are plain and unambiguous.
They do not lend them selves to any subtleties.
In construing a provision, all its relevant parts should be considered together and their true effect ascertained.
One can easily find out the reasons behind the procedure prescribed in section 7.
In view of the term of the licenee read with section 7 (1 ) and (2 ) the concerned authority has two courses open before it.
It can either decide to purchase the undertaking or renew the licence on the expiration of the period for which the licence is granted.
The licensee must know in good time what course the authority is going to adopt so that he may so arrange his affairs as to Cause least inconvenience to himself.
Hence though the power to exercise the option to purchase arises on the expiration of the period of licence as per the terms of the licenee, section 7 lays down that if the authority wants to purchase the undertaking it must elect to do so at least two years before the expiration of the licence and communicate the same to the licensec.
Once the concerned authority exercises its option and communicates the same to the licensee, the same is binding on the authority as well as the licensec.
Otherwise there is bound to be considerable inconvenience both to the licensee and to the public.
We are not able to find any good reason for reading into section 7 a requirement that after a notice under section 7(4) is issued the authority must again exercise its option to purchase on the expiration of the period of licence.
It is no doubt true that the right to purchase the undertaking accrues only at the expiration of the period of licenee but for exercising that right, the authority must make its election within the period prescribed in section 7 (4) and issue a notice as required by that sub section.
The requirements of section 7 were fully complied with by the notice issued by the Bombay State Electricity Board on January 8, 1959.
We shall.
now take up the other contention advanced by Mr. H.R. Gokhale, learned Counsel for the respondent in support of the decision under appeal.
One of his contentions was that whether the State Government was competent to purchase the undertaking or not, neither the Bombay State Electricity Board nor the appellant was competent to exercise that right.
His .argument on this question proceeds thus: Section 7(1) prior to its amendment in 1959 empowered the local authority or the State Government to make the purchase 586 contemplated under that Section; the Electricity Board is not within the contemplation of that Section; the finding of the High Court that the provisions contained in sub sections 1, 2 and 4 of section 7 of the Act read with section 71 of the , confers on the appellant such a power is not correct because the right or option to purchase the undertaking was conferred on the State Government or the appropriate local authority under the licence and not under the provisions of the Act; in other words the said right is merely a contractual right and not a right flowing from the provisions contained in section 7 of the Act as.
held by this Court in Fazilka Electric Supply Co., Ltd. vs The Commr.
of Income Tax, Delhi(1) and therefore the appellant cannot take any assistance from section 71 of the .
This contention did not commend itself to the High Court.
We shall now proceed to examine how far the same is correct.
Section 71 of the provides: "Rights and options to purchase under Act 9 of 1910 to vest in Board.
Where under the provisions of the Indian Electricty Act, 1910 (9 of 1910), any right or option to purchase the undertaking of a licensec vests in the State Government or a local authority such right or option shall be deemed to be transferred to the Board, and shall be exercisable by the Board in accor dance with the provisions of the said Act applicable to the exercise of such right or option by the State Government or a local authority, as the case may be." Board is defined in section 2(2) of that Act as meaning, State Electricity Board constituted under section 5 thereof.
It is true that before section 71 can be held to be attracted to a case it must be shown that the right or option to purchase the undertaking of the licensec vested in the State Government or a local authority under the provisions of the Act.
It is also true that this Court had held in.
Fazilka Electric Supply Company 's(x) case that from the provisions of the Act read with the rules made thereunder it is manifest that the condition as to the option of purchase either by the local authority or by the Government is the result of an agreement between the applicant who had applied for licenee and the Government who granted the licenee.
In that case this Court was consideting whether the sale concerned in that case fell within the scope of section 10(2)(7) of the Indian Income Tax Act or whether it ' 'can be held 'to be compulsory acquisition as contended by the assessee.
A sale compelled by law may also be a 'sale ' under the Sale of Goods Act.
But that does not mean that the right to purchase the undertaking does not vest in the concerned authority (1) [1962] 3 Supp.
S.C.R. 496.
587 by virtue of section 7.
That right may accrue either because it is directly conferred by section 7 or because it is obtained as a result of a contract compelled by that Section.
In either case it is a right obtained by the authority by virtue of section 7.
There is no dispute that the licence granted must conform to the requirements of section 7.
In Okara Electric Supply Ltd. and Anr.
vs State of Punlab(1) this Court observed that sections 5,.
6 and 7 show that in the case of a licensee, specific provisions have been made for the acquisition of the undertaking in cases of revocation or cancellation of licenses.
For the aforementioned reasons we hold that appellant had acquired the right to purchase the undertaking by the combined operation of section 7 of the Act and section 71 of the .
It was next contended on behalf of the respondent that by the time the licence period expired, section 7 of the Act had been amended and section 71 of the Electric (Supply) Act, 1948 repealed, no provision was made to preserve the rights already acquired under those provisions, hence the appellant is not entitled to purchase the undertaking.
It is not the case of the respondent that either expressly or by necessary implication, the new law had taken away the right acquired earlier.
That being so section 6 of the General Clauses Act comes to the aid of the appellant.
That Section provides that where that Act or any Central Act or Regulation made after the commencement of that Act repeals an enactment hitherto made or hereafter to be made then unless a different intention appears, the repeal shall not affect any right, privilege, obligation or liability acquired, 'accrued or incurred under any enactment so repealed.
It also saves the previous operation of any enactment so repealed or anything duly done or suffered thereunder.
The right to purchase the respondent 's undertaking came to vest firsfly in the Bombay State Electricity Board subsequently in the appellant in view.
of the various notifications referred to earlier.
That right has to be worked on the basis of law as it stood on the date the notice under section 7(4) of the Act was given.
In this Court a new contention was taken on behalf of the respondent namely that in any case, the appellant 's right to purchase is conditional on the payment of the price as provided in section 7 and hence the appellant cannot demand possession of the undertaking without paying the price after the same is determined according to law.
This contention had not been taken before the High Court.
The High Court may go into this question while deciding the writ petition.
; 588 For the reasons mentioned earlier we allow this appeal, set aside the order of the High Court and remit the case back to High Court for deciding the issues that were left open.
Costs of this appeal shall be costs in the cause.
G.C. Appeal allowed.
| The appellant claimed that certain property comprised in an Inam which was abolished by virtue of the Andhra Inams (Abolition & Conversion into Ryotwari) Act 36 of 1956 should be registered in his name.
His contention was that prior to its abolition he was the Inamdar of that Inam though he had the liability to repair a tank in his village from out of the income of Inam was granted for a charitable purpose, the object of assuming the Inam was granted for a charitable purpose, the.
object of the charity being a tank, the same could not be considered a charitable institution.
HELD: (i) It was clear from the evidence that the Inam was granted in favour of the tank and was not a grant in favour of the appellant 's family subject to the liability to 'repair the tank; and furthermore that the ancestors of the appellant and subsequently the appellant were looking after the management of the tank.
(ii) Under Hindu law a tank can be an object of charity and when a dedication is made in favour of a tank, it is considered as a charitable institution.
Once it was held that the Inam in the present case was in favour of the tank, the tank in question must be considered a charitable institution within the meaning of section 2(E) of the Act.
Consequently, after the abolition 'of the Inam, the Inam property is converted into Ryotwari property of the tank, to be managed by its manager.
Admittedly the appellant was the present manager and hence the property in question must be registered in the name of the tank but would ' continue to be managed by the appellant so long as he continued to be its manager.
[628 H 629 C] Minister of National Revenue V. Trusts and Guarantee Co. Ltd., ; Masjid Shahid Ganj and Ors.
V. Shiromani Gurdwara Parbandhak Committee, Amritsar and Anr, ; Jamnabai V. Khimji Vallubdass & Ors., I.L.R. at p. 9; and V. Mariyappa and Ors.
B.K. Puttaramayya and Ors.
I.L.R. [1957] Mys.
291: referred to.
|
iminal Appeal No. 49 of 1973.
Appeal by special leave from the judgment and order dated August 22, 1972 of the Delhi High Court at New Delhi in Cr.
No. 93 of 1972.
L.M. Singhvi, section K. Dhingra, K. C. Sharma, section , Sengupta, O. C. Mathur and Ravinder Narain, for the appellant.
F. section Nariman, Additional Solicitor General of India, B. P. Maheshwari, Suresh Sethi, R. K. Maheshwari and N. K. Jain, for the respondent.
The Judgment of the Court was delivered by MATHEW, J.
The Municipal Corporation of Delhi filed a complaint on September 10, 1970, before the Judicial First Class Magistrate, Delhi against the appellants under section 7 read with section 16(f) of the , hereinafter called "the Act", alleging that they gave a false Waranty in respect of the curry powder manufactured by them.
In response to the summons, the appellants appeared and filed an application for quashing the proceedings on the ground that the complaint was incompetent.
The learned Magistrate dismissed the application.
The appellants filed a revision from the order to the Additional Sessions Judge.
That was dismissed.
The appellants then filed a revision against that order before the High Court.
The High Court also dismissed the revision.
It is against this order that the appellants are filed this appeal by special leave.
On November 28, 1968, the Food Inspector went to the shop of one Ram Prakash Oberoi and found that he was storing for sale curry powder.
The, Food Inspector purchase( three sealed tins of curry powder from him and after following the procedure enjoined by the Act, sent one sample to the Public Analyst, who, after examining it, sent his report that the sample was adulterated.
A complaint Was filed against Ram Prakash Oberoi by the Food Inspector alleging that he committed an offence under section 16 read with section 7 of the Act.
Parkash Oberoi, in his statement under section 342, stated that he had purchased the curry powder in sealed tins from the appellants under a warranty given by them and that he solo the curry powder in the same 159 condition in which he had purchased it from the appellants.
The first appellant was examined in the case.
He gave evidence that the curry powder was manufactured by the second appellant company and that it had been sold in tins to the concern of which Ram Prakash Oberoi was the proprietor.
He also admitted the issue of a warranty on behalf of the second appellant.
In the light of the evidence, Ram prakash Oberoi was acquitted, as, according to the Magistrate, he had discharged the onus which lay upon him in order to avail himself the defence under section 19(2) of the Act.
In the concluding portion of the judgment which was pronounced on October 25, 1969, the Magistrate observed that it is open to the Municipal Corporation of Delhi "to institute a complaint against the warrantor concerned for issuing a false warranty for the. sale of adulterated curry powder to M/s. T. D. Bhagwan Dass, the proprietor of which was accused, Ram Prakash Oberoi through bill exhibit DWI /A out of which a sample bearing No. DS.
2385 was taken by P.W. 2 from Ram Prakash Oberoi".
The contention of the appellants in the application before the Magistrate to quash the proceedings was that they ought to have been impleaded in the proceedings against Ram Prakash Oberoi and tried of the offence alleged to have been committed by them and, that not having been done, the, complaint was barred.
The High Court concurred with the conclusions of the, Courts below and held that the fact that the appellants were, not impleaded and tried along with Ram Prakash oberoi under section 20A was no bar to the prosecution of the appellants for the offence of giving false warranty and that the complaint was competent.
The appellants submitted before us that it was incumbent upon the Food Inspector to have filed a joint complaint against Ram Prakash Oberoi and the appellants as them Food Inspector had ever opportunity to know that the appellants, had given a warranty when the "articles which were found to be adulterated were) sold to Ram Prakash Oberoi. 'They submitted that under section 14A, the vendor is bound to disclose the name of the person who given the warranty to the Food Inspector and, as the Food Inspector had knowledge that the vendor was covered by a warranty issued by the appellants it wa s his duty to have joined the appellants as accused in the complaint filed by him against Ram Prakash Oberoi.
They also submitted that in was no duty upon the Food Inspector to have joined the also as accused, the learned Magistrate who tried Prakash Oberoi, in any event, ought to have impleaded the appellant in that case under section 20A of the Act and tried the appellants for the offence alleged to have been committee by them and that not having been done, the present complaint was barred.
We do not think that there is any substance in these contentions.
Section 14 provides that no manufacturer, article of food shall sell such article to any distributor or dealer of any vendor unless he also gives a warranty in writing in the prescribed form about the nature and quality of such article to the vendor.
Section 14A states that every vendor of an article of food shall, if so required, disclose to the Food Inspector the name, address and other particulars of the person from 16 0 whom he purchased the article of food.
In section 19(2) it is said that a vendor shall not be deemed to have committed an offence pertaining to the sale of any adulterated or misbranded article of food.
if he proves : (a) that he purchased the article of food (i) in a case where a licence is prescribed for the sale thereof, from a duly licensed manufacturer, distributor or dealer; (ii) in any other case, from any manufacturer, distributor or dealer, with a written warranty in the prescribed form; and (b) that the article of food while in his possession was properly stored and that he sold it in the same state as he purchased it.
We are not aware of any provision in the Act which obliged the Food Inspector to have joiner the appellants as parties to the complaint filed against Ram Prakash Oberoi.
Section 20 of the Act upon which the appellants relied 'has nothing to do with this matter.
That section only says that no prosecution for an offence under the 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.
The proviso to the section makes an exception to the general rule.
in the case of a prosecution for an offence 'instituted by a purchaser referred to in section 1 2, if he _produces in Court a copy of the report of the public analyst along with the complaint.
On the other hand, section 19(3) seems to proceed on the assumption that it is.
not obligatory on the part of a Food Inspector to join the manufacturer, distributor or dealer in a complaint against a person for an offence alleged to have been committed under the Act That section says that any person by whom a warranty referred to in section 14 is alleged to have been given shall be entitled to appear it the hearing and give evidence.
It would be clear from this provision that if the Food Inspector is bound to join the person who gave the warranty as a party whenever a complaint is filed against the vendor for storing or selling adulterated articles of food, there was no reason why the legislature, should have made a provision enabling the person who gave the warranty to appear in Court and give evidence.
It is to be noted that section 19(3) only gives liberty to the person who gave the warranty to appear and give evidence and that by volunteering to appear and give evidence.
he does not become an accused.
The opportunity to appear and give evidence is to enable the person who gave the warranty to show that the vendor has not properly stored the article while in his possession.
or that he did not sell the article in the same state as he purchase I it and thus to avoid a prosecution against him on the basis of a false warranty.
The further question is whether the failure of the Magistrate who tried the complaint against Ram Prakasi Oberoi to implead the appellants under section 20A of the Act and try them also along with Ram Prakash Oberoi would in any way bar,the present complaint.
Section 20A provides : "20A.
Where at any time during the trial of any offence under this Act alleged to have been committed by any person, not being the manufacturer, distributor or dealer of any article of food, the court is satisfied, on the evidence adduced before it, that such manufacturer, distributor or dealer is 161 also concerned with that offence, then, the court may, notwithstanding anything contained in sub section (1) of s . 351 of the Code of Criminal Procedure, 1898, or in section 20 proceed, against him as though a prosecution had been instituted against.
him under s: 20.
" The section is an enabling one.
There is nothing mandatory about it.
It is left to the discretion of the Magistrate whether, in a particular case having regard to the evidence adduced, it is necessary, in the interest of justice, to implead the manufacturer, distributor or dealer as the case may be.
Even in a case where a Magistrate could properly have impleaded the manufacturer, distributor or dealer in a proceeding against a person alleged to have committed an offen ce under the Act but faded to do so, that would not in any way confer an immunity upon the manufacturer, distributor or dealer from a prosecution for any offence committed by him.
Counsel for the appellants argued that although the word used in section 20A is only 'may ', it imports an obligation on the part of the Magistrate to implead the manufacturer, distributor 'or dealer, as the power to implead is coupled with a duty, when it appears from the evidence that the manufacturer, distributor or dealer, as the case may be, has committed an offence under the Act.
The normal rule under the Criminal Procedure Code is to try each accused separately when the offence committed by him is distinct and separate.
The provisions of sections 233 to 239 would indicate that joint trial is the exception.
In State of Andhra Pradesh vs Cheemallapati Ganeswara Rao and Another() this Court said that separate, trial is the normal rule and joint trial is an exception when the accused have committed separate offences.
Section 5(2) of the Procedure Code provides that the provisions of that , Code will apply to trial of an offence under any law other than, the Indian Penal Code subject.
to any enactment for the time being in force regulating the manner or place.
of investigating, into, trying or (otherwise dealing with such offence.
If that be so, unless there is something in section 20A which creates an exception to the normal procedure r scribed by the Criminal Procedure Code, we would not be justified in importing into the section by implication an absolute obligation to implead the manufacturer, distributor or dealer and try, him also along with the person who is alleged to have committed an offence under the Act in the sense that and tried be.
In be implepded for an offence if the manufacturer, distributor or dealer is not impleaded under the provisions of section 20A, a separate trial would order that the manufacturers distributor or dealer may under.
20A, it is necessary that there should be a trial for an offence committed under the Act by a person and that the manufacturer, distributor or dealer must be concerned in the offence.
, When.
the manufacturer.
distributor or dealer is impleaded.
the trial proceeds as if he is also an accused in the case.
Thai is made clear by the closing word .
of the section.
As already Indicated, no prosecution for an offence under the Act can be instituted by a Food Inspector without the sanction specified in section 2O. When a manufacturer, distributor or (1) ; , 324.
944Sup./CI/73 162 dealer is impleaded, he becomes an accused in the case but no objection can be taken by him on the score that no sanction had been obtained for prosecuting him.
And, at the close of the trial, the Magistrate must pass an order either acquitting or convicting him.
It does not follow that the failure of the Magistrate to implead the manufacturer, distribute or dealer in a case in which he could be impleaded under section 20A would confer an immunity from a separate trial against him for the offence for which he could have been tried under section 20A.
There is also no likelihood of any prejudice being caused to him merely because he was not impleaded in the trial of an offence under the Act committed by any other person as, any evidence taken in that proceeding won d not be binding on him when he is tried separately.
In other words, if a separate prosecution is instituted against the manufacturer, distributor or dealer, the prosecution cannot rely on the evidence in the proceedings against the person who committed the offence as per se ,evidence against him.
It must adduce evidence in the case against the manufacturer, distributor or dealer to show that he is guilty.
of the offence complained of.
The acquittal, for instance, of the vendor who is covered by a warranty, would not prove that the manufacturer, distributor or dealer has given a false warranty or committed any other offence.
The prosecution must show by evidence adduced in the proceedings against the manufacturer, distributor or dealer and prove beyond doubt that he committed the offence charged.
Nor would the conviction of the vendor per se be ground for acquitting the manufacturer, distributor or dealer for giving false warranty, for, the vendor might have further adulterated the article after getting a false warranty.
The real purpose of enacting section 20A is to avoid, as far as possible, conflicting findings.
If, in the prosecution instituted against the vendor, it is found that the vendor has sold the article of food in the same state as he purchased it and that while it was in his possession it was property stored, and the vendor is acquitted, it would look rather ridiculous, if in the prosecution against the manufacturer, distributor or dealer, it is found on the evidence that he did not give a false warranty, but that the article was not stored properly while it was in the possession of the vendor or that be did not sell the article in the same state as he purchased it.
This being so, the object of the legislature in enacting the section will be frustrated if a Magistrate were to exercise his discretion improperly by failing to implead the manufac turer, distributor or dealer under section 20A in a me where he should be impleaded.
But that is no reason to hold that a separate prosecution against the manufacturer, distributor or dealer would be barred.
if he is not impleaded under section 20A, and tried along with the person who is alleged to have committed in offence under the Act.
In order to avoid multiplicity of proceedings and conflict of findings it is imperative that the Magistrate should implead these persons under section 20A whenever the conditions laid down in the section are satisfied.
As I said, it is a far cry from this to say that if this is not done, the manufacturer, distributor or dealer would get an immunity from a separate prosecution.
The appellants then contended that the, procedure in the joint trial will be more advantageous to the manufacturer, distributor or dealer, 163 as the case may be, than a separate trial and, therefore, there could be discrimination if unguided discretion is given to an authority to choose the one or the other.
The argument was that if the manufacturer, distributor or dealer is impleaded under section 20A, he could avail himself of the provisions of section 13(2) and request the Court to have the sample retained by the Food Inspector and production in Court sent to the Central Food Laboratory for analysis, but if he is tried separately he will be deprived of that advantage.
Read literally, section 13 (2) would not enable the manufacturer, distributor or dealer to pray the Court to have the sample sent for analysis by the Central Food Laboratory even if he is impleaded under section 20A and tried along with the vendor, for, that sub section gives the liberty to move the court for that purpose only to the accused vendor and the complainant.
But, even if it is assumed that the manufacturer, distributor or dealer is also entitled to take advantage of the section and move the court to have the sample analysed by the Central Food Laboratory, we see no reason why, when he is separately tried.
he should not have the sample retained by the Food Inspector and produced in Court sent for analysis by the Central Food Laboratory, if it is available and in a fit condition.
The Magistrate may, under section 20A, implead the manufacturer, distributor or dealer at any time in the course of the trial.
At the time he is impleaded, the sample produced in Court by the Food Inspector might not be in a fit condition to be sent for analysis to the Central Food Laboratory.
It is, therefore, impossible t ' predicate in the abstract whether a joint trial would be more advantageous to the manufacturer, distributor or dealer than a separate trial.
, The appellant relied on the decision of this Court in Northern India Gaterers Private Ltd. and Another vs State of Punjab and Another(1) and contended that where two procedures are, permissible, one a joint trial of the manufacturer, distributor or dealer with the vendor and the other a separate trial, and the one is more advantageous than the other, there will be scope for discrimination.
We fail to understand the logic of the argument.
In the above case the facts were : the State of Punjab leased its premises to the appellant for running a hotel and when the lease expired, the appellant was called upon to hand over vacant possession.
On the appellant failing to do so, the Collector issued a notice under section 4 of the Punjab Public Premises and Land (Eviction and Rent Recovery) Act, 1959 requiring the appellant to show cause why an order of eviction should not be passed under section 5.
The appellant thereupon filed a writ petition in the High Court contending that the Act violated article 14 of the Constitution in that it discriminated between the occupants of public premises and those of other premises and that it discriminated bet ween the occupants of public premises inter se as the State could arbitrarily proceed against an occupant either under the Act or by way of suit.
The High Court dismissed the petition holding that the proceeding under the Act is the exclusive remedy for eviction of unauthorised occupants of public premises, that there was a valid classification between the occupiers of public premises and those of private properties, and that as the Act was substitutive and not supplemental (1) [1967] 3 S.C.P,.
164 there was no question of discrimination between the occupiers of public premises inter se.
This Court held that section 5 of the Act violated article 14 by providing two alternative remedies to the government and in leaving it to the unguided discretion of the Collector to resort to one or the other and to pick and choose some of those in occupation of public properties and premises for the application of the more drastic procedure under section 5.
The Court further held that discrimination would result if there are two available procedures, one more drastic or prejudicial to the party concerned than the other and which can be applied at the arbitrary will of the authority.
The appellants have not challenged the vires of section 20A.
That apart, the principle of the ruling has no application here.
That principle can apply only when an unguided discretion is conferred upon an authority or person to choose between two procedures, one of which is more advantageous to the person concerned, than the other.
we do not think that any person has been vested with an unguided discretion to choose between two procedures, the one more advantageous to the appellants than the other.
We see no substance in this appeal and we dismiss It.
G.C. Appeal dismissed.
| R who was tried for an offence under section 16 read with section 7 of the Prevention.
of Food Adulteration Act.
stated in Court that he had purchased the curry powder in question in sealed tins from the appellant under a warranty given by them and that he sold the curry powder in the same condition in which he had purchased it from the appellants.
The first appellant was examined in the case.
He gave evidence that the curry powder was manufactured by, the second appellant company and that it had been sold in tins to the concern of which R was the proprietor.
He also admitted the issue of a warranty on.
behalf of the second appellant.
In the light of this evidence R was acquitted.
Subsequently the appellants were sought to be tried for issuing a false warranty.
The appellants contended that the proceedings against them should be quashed, as according to the provisions of the Act, they ought to have been impleaded in the proceedings against R. The, High Court concurred with the conclusions.
of the Courts below and held that the fact that the appellants were not impleaded and tried along with R was no bar to the prosecution of the appellants.
In appeal by special leave, this Court had to consider the effect of Ss. 20 and 20A of the Act.
Dismissing the appeal, HELD: (1) There is no provision in the Act which obliged the Food Inspector to have joined the appellants as parties to the complaint filed, against R. Section 20 of the Act has nothing to do with the matter.
On the other hand,,, section 19(3) which says that any person by whom a warranty is alleged to have been given shall be entitled to appear at the hearing and give evidence, seems.
to proceed on the assumption that it is not obligatory on the part of the Food Inspector to join the manufacturer, distributor ;Or dealer in a complaint against a person for an offence alleged to have been committed underthe Act [160B L] (ii) Section 20A is an enabling one.
There is nothing mandatory about it.
It is left to the discretion of the Magistrate whether, ina particular case, having regard to the evidence adduced.
it is necessary, in theinterest of justice, to implead the manufacturer, distributor, dealer as the case may be.
[161B] The normal rule under the Criminal Procedure Code is to try each accused separately when the offence committed by him is distinct and separate.
The provisions of Ss. 233 to 239 would indicate hat joint trial is the exception.
Section 5(2) of the Criminal Procedure Code provides that the provision of that Code will apply to trial of an offence under any law other than the Indian, Penal Code subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offence.
If that be so.
unless there is something in section 20A which, creates an exception to the normal procedure prescribed by the Criminal Procedure Code.
there would be no justification for importing into the section by implication an absolute obligation to implead the manufacturer, distributor or dealer and try him also with the person who is alleged to have committed an offence under the Act.
in the sense that if the manufacturer, distributor or dealer is not impleaded and tried under the provisions of section 20A, a separate trial; would be barred.
[161D G] State of Andhra Pradesh vs Cheemalapati Ganeswara Rao and Another,. ; 324, referred to.
158 The real purpose of section 20A is to avoid, as far as possible, conflicting findings.
In order to avoid multiplicity of proceedings and conflict of findings it is imperative that the Magistrate should implead these persons under section 20A whenever the conditions laid down in the section are satisfied.
It is a far cry from this to say that if this is not done.
the manufacturer, distributor or dealer, would get an immunity from a separate prosecution.
[162E, G] (iii) It is impossible to predicate in the abstract whether a joint trial would be more advantageous to the manufacturer.
distributor or dealer than a separate trial.
Therefore the plea that there could be discrimination if unguided discretion is given to an authority to choose one or the other.
could not be accepted.
[163D] Northern India Caterers Private Ltd. and Another vs State of Punjab and Another, ; , referred to.
|
on Nos.
520.23of 1987.
IN Writ Petition Nos.
12437 12460 of 1985, 238 of 1986 and Transferred Cases Nos. 9 11, 12 13 of 1986.
K. Parasaran Attorney General and Ms. A. Subhashini for the Petitioners.
P.H. Parekh, Suhail Dutt, P.D. Sharma and R. Ramachan dran for the Respondents.
The following Order of the Court was delivered: In these petitions for review the learned Attorney General of India urges that certain observations and conclu sions expressed in the individual Judgments of Bhagwati, CJI and one of us (Ranganath Misra, J) appear to conflict with each other, and prays that clarification be made.
In the first place, he has drawn our attention to the observations of Bhagwati, CJI where the learned Chief Justice has taken the view that one of the two alternative options was open to the Government while appointing the Chairman, a Vice Chair man and administrative members of the Administrative Tribu nal.
The learned Chief Justice said that the appointment of Chairman, Vice Chairman and members of the Administrative Tribunal should be made by the concerned government only after consultation with the Chief Justice of India.
The alternative suggestion is that a High Powered Selection Committee should be appointed headed by the Chief Justice of India or a sitting Judge of the Supreme Court or the con cerned High Court to be nominated by the Chief Justice of India.
In his Judgment our brother Ranganath Misra, J. has opted for the latter alternative.
Having considered the matter carefully, we are of opinion that in the case of recruitment to the Central Administrative Tribunal the appropriate course would be to appoint a High Powered Selec tion Committee headed by a sitting Judge of the Supreme Court to be nominated by the Chief Justice of India, while in the case of recruitment to the State Administrative Tribunals, the High Powered Selection Committee should be headed by a sitting Judge of the High Court 235 to be nominated by the Chief Justice of the High Court concerned.
The second contention of the learned Attorney General is that the observations of Bhagwati, CJI that for the appoint ment to the post of Vice Chairman of the Administrative Tribunal, besides a District Judge an Advocate who is quali fied to be a Judge of the High Court should also be regarded as eligible, calls for reconsideration because an Advocate will not have the administrative experience which is re quired for a member of the Administrative Tribunal.
We are unable to accept the contention.
In the first place, an Advocate who is qualified to be a Judge of the High Court is an Advocate who by implication is qualified to perform not only the judicial duties but the administrative functions which a High Court Judge is expected to discharge.
Secondly, whether an Advocate applying for recruitment to the Adminis trative Tribunal has sufficient administrative potential can be examined and judged during the process of selection.
We, therefore, do not propose to interfere with the observations made by Bhagwati, CJI in his Judgment.
The Learned Attorney General then prays that the time fixed in the Judgment for setting up additional Benches of the Administrative Tribunal should be extended to December 31, 1987.
Having regard to the circumstances of the case and the administrative requirements of the situation, we have no hesitation in granting the time prayed for.
The learned Attorney General also prays that time may be extended upto July 31, 1987 for introducing legislation to give effect to the observations made by the Court in these cases.
We grant time accordingly.
The Review Petitions stand disposed of.
P.S.S. Petitions disposed of.
| In these Review Petitions, the Attorney General sought clarification of certain observations made in the individual judgments delivered on December 9, 1986 disposing of the Writ Petitions filed by the petitioners challenging the vires of the .
Disposing of the Review Petitions, HELD: 1.
In the case of recruitment to the Central Administrative Tribunal the appropriate course would be to appoint a High Powered Selection Committee beaded by a sitting Judge of the Supreme Court to be nominated by the Chief Justice of India, while in the case of recruitment to the State Administrative Tribunals the High Powered Selec tion Committee should be headed by a sitting Judge of the High Court to be nominated by the Chief Justice of the High Court concerned.
[234G 235A] 2.
The contention that an advocate will not have the administrative experience which is required for a Member of the Administrative Tribunal cannot be accepted.
An advocate who is qualified to be a Judge of the High Court is an advocate who by implication is qualified to perform not only the judicial duties but the administrative functions which a High Court Judge is expected to discharge.
Whether an advo cate applying for recruitment to the Administrative Tribunal has sufficient administrative potential can be examined and judged during the process of selection.
[235B D] (Time fixed for introducing legislation to give effect to the obser 234 vations made in the Judgment, and, for setting up Additional Benches extended upto July 31, 1987 and December 31, 1987 respectively).
|
: Criminal Appeal No. 74 of 1971.
Appeal by Special Leave from the Judgment and order dated the 25th January 1972 of the Bombay High Court in Criminal Appeal 1025 of 1959.
N. H. Hingoorani and Mrs. K. Hingoorani for the Appellant.
section B. Wad and Al.
N. Shroff for the Respondent.
The Judgment of the Court was delivered by V BEG, J.
The appellant before us by special leave to appeal was convicted under Section 135(b) (ii) of the (hereinafter referred to as 'the Act '), and sentenced to six months rigorous imprisonment and a fine of Rs. 2,000/ , and, in default, to three months further rigorous imprisonment.
Goods in respect of which this offence was found to have been committed were also confiscated.
On 21 4 1967, Police Officers of the Anti Corruption and Prohibition Bureau, Greater Bombay, acting on information received, had searched room No. 10 at 56, Sheriff Deoji Street, Bombay.
This room was divided by partitions into three parts.
In the central portion the police found the appellant and three other persons.
This portion was again sub divided with a locked connecting door fixed in the passage to the sub divided part.
This was opened by one of the two Godrej lock keys produced by the appellant from a side pocket of his trousers.
Eleven wooden boxes covered with jute cloth and secured by iron strips were found there.
On opening them, six of them were found to contain cigarette lighters of "Imco Triplex Junior '? brand "Made in Austria".
Each of the six boxes were tightly packed with 1200 lighters.
The remaining five boxes contained fifty sealed tins of flints for cigarette lighters which bore the following writing: "Tego Lighter Flints of Superior Quality Made in Germany".
On the wooden boxes containing the lighters were found written "Dubai" and "Made in Austria".
The five boxes containing flints had the words "Dubai" and "Made in West Germany" inscribed on them.
A panchnama was prepared before Panchas.
A rent receipt in the name of the appellant in respect of room No. 10, in this house, of which a portion was occupied by the appellant, and a bill for the consumption of electricity were also seized from the custody of the appellant together 541 with the Godrej lock and the keys produced by the appellant.
Subsequently, the seized articles were made over to the inspector of Central Excise and Customs, Marine and Prevention Division, Bombay, on 24 4 1967, under Section 110 of the .
The value of 7200 cigarette lighters was stated as Rs. 14,400/ and of 250 tins of flints as Rs. 15,000/ on which Customs duty of Rs. 15,840/ and Rs. 10,500/ respectively was alleged to be payable.
In the complaint filed on 30th October, 1968, by the Assistant Collector of Central Excise, Marine and Prevention Division, Bombay, it is alleged that the cigarette lighters and flints were imported into India without an import licence and in contravention of provisions of Government of India, Ministry of Commerce & Industry, Import Control order No.17/55 dated 7 12 1955 (as amended) issued under Section 3(2) of the Import & Export (Control) Act, 1947, which was to be deemed to be an order passed under Section 11 of the Act.
It was submitted that the accused, having been concerned in a fraudulent evasion of payment of Rs. 26,340/ as customs duty to the Government, had committed offences punishable under Section 135(a) and (b) of the Act.
The goods were also as a necessary consequence, said to be liable to confiscation under Section 111 (d) of the Act.
The appellant had denied being in possession of the offending goods although he had admitted the production of keys from his possession He alleged that the portion of the room from which the goods were recovered was sublet to Dwarumal and Kishen who had kept the goods there.
The appellant 's explanation had been disbelieved by the trying Magistrate as well as by the High Court.
The production of the key which, according to the prosecution evidence, the appellant had at first refused to produce, proved that the portion in which the boxes were kept was in appellant 's exclusive possession with all that was contained in it.
It is possible that he may have sub let other portions of the partitioned room to other persons, but there is no reason to doubt that the appellant was not only in possession of the bodies but knew something about the incriminating nature of their contents.
Otherwise, why should he, at first, have refused to produce the key he had ? Furthermore, the appellant had not given any evidence to show that his sub tenants had placed the boxes there, or that there was any reason why he should allow them to use the portion reserved by him for himself.
His case rested on his bare assertions in a written statement.
Of course, no one had come forward to state or allege that the goods found, in the circumstances stated above? had been imported without payment of duty.
The only question raised before us was whether the presumption contained in Section 123 of the Act, corresponding to Section 128(A) of the .
Or any other provision of law would place the onus of proving innocent possession of these goods upon the appellant.
Section 123 of the Art reads as follows: "123.
Burden of proof in certain cases.
(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that 542 they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.
(2) This section shall apply to gold, diamonds, manufacturers of gold or diamonds, watches, and any other class of goods which the Central Government may by notification in the official Gazette specify".
lt is true that lighters and flints were notified as provided in Section 123(2) in the official Gazette of 26 8 1967.
Nevertheless, as the provisions of Section 123(1) of the Act only lay down a procedural rule, they could be applied when the case came up for trial before the Presidency Magistrate who actually decided it on 15 7 1969.
Indeed, the complaint itself was filed on 30 10 1968.
It is immaterial that the appellant was found in possession of the goods on 21 4 1967 There is, however, another objection to the applicability of Section 123(1) of the Act.
It is that it would apply only to goods seized under the Act.
lt is contended that the goods in respect of which the appellant was prosecuted were not seized under the Act.
Reliance was placed for this contention upon Gian Chand & ors.
vs the State of Punjab (1) Even if the goods with which we are concerned here were not seized under the Act, as provided by Section 111 of the Act, it is contended on behalf of the State that Section 106, read with Section 114 of the Evidence Act, was sufficient to enable the prosecution to ask the Court to presume that the appellant knew that the goods must have been smuggled or imported in contravention of the law.
The appellant had not produced evidence to show that the goods were legally brought into India.
Reliance was placed on behalf of the prosecution on: Collector of Customs, Madras & ors.
vs D. Bhoormal (2); M/s. Kanungo & Co. vs The Collector of Customs, Calcutta & Ors(3), Issardas Daulat Ram & ors.
vs the Union of India & Ors.(4), Anant Gopal Sheorey vs The State of Bombay(5).
Learned Counsel for the appellant had in his turn, relied upon The State of Punjab vs Gian Chand & ors.(6).
He contended that it was necessary for the prosecution to prove: (1) that, the goods in question were actually smuggled or brought into the country without payment of customs duty at a time when payment of such duty had become obligatory; and, (2) that, the appellant was dealing with them knowing them to be smuggled goods.
It was contended that mere possession by the accused of such goods could not enable the prosecution to apply Section 106 of the Evidence Act when the appellant could not know where the goods came from.
It was urged that there was no evidence which could enable the appellant to know where the goods came from or when the goods were imported or that duty, if leviable was not P d on them.
The admissibility and sufficiency of (1) [1962] (Suppl.) 1 S.C.R. 364.
(2) ; (3) A.I.R. (4) [1962] Suppl.
(1) S.C.R. 358.
(5) ; (6) Criminal Appeal No. 195 of 1962 decided by this Court on 2 4 1968.
543 the inscriptions on the goods and the writing on boxes in which they were found, for proving the place from where they came, or when they were imported, were questioned.
The contention was, that even if the appellant is deemed to be in possession with full knowledge of what the goods actually were, the Court could not go further and assume them to be smuggled or imported into the country from another country of their assumed origin after a time when the restrictions on their import had been imposed.
Unfortunately, the appellant did not admit the possession of the goods at all.
If he could have succeeded in explaining satisfactorily how he was an innocent receiver of such goods without knowing that they were illegally imported or smuggled he may have had a chance of getting the benefit of doubt The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country.
The inscriptions or them and writing on the boxes were parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import could arise.
The appellant 's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or means rea.
In any case, there was some evidence to enable the Courts to come to the conclusion that the goods must have been known to the appellant to be smuggled even if he was not a party to a fraudulent evasion of duty.
Consequently, the appellant had been convicted only under Section 135(1)(ii) of the Act.
We do not find sufficient reasons to interfere with this finding of fact or the sentence imposed.
It would also follow that the goods were rightly confiscated.
Accordingly, this appeal is dismissed.
V.M.K. Appeal dismissed.
| Section 123(1) of the , provided that, where any goods to which this section applies are seized under this Act in the reasonable relief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.
On 21 4 1967 Police officers of the Anti Corruption and Prohibition Bureau.
Greater Bombay, acting on information received, had searched room No. 10 at 56, Sheriff Deoji Street Bombay.
This room was divided by petitions into three parts.
In the central portion the police found the appellant and three other persons.
This portion was again sub divided with a locked connecting door fixed in the passage to the sub divided part.
This was opened by one of the two Godrej lock keys produced by the appellant from a side pocket of his trousers.
Eleven wooden boxes covered with jute cloth and secured by iron strips were found there.
On opening them.
six of them were found to contain cigarette lighters of "Imco Triplex Junior" brand "Made in Austria.".
Each of the six boxes were tightly packed with 1 200 lighters.
The remaining five boxes contained fifty sealed tins of flints for cigarette lighters which bore the Following writing: "Tego Lighter Flints of Superior Quality Made in Germany" inscribed on them.
A panchnama was prepared before Panchas.
A rent receipt in the name of the appellant in respect of room No. 10, in this house, of which a portion was occupied by the appellant, and a bill for the consumption of electricity were also seized from the custody of the appellant together with the Godrej locks and the keys produced by the appellant.
On 30th October.
1968 the Assistant Collector of ' Central Excise, Marine and Prevention Division.
Bombay, filed a complaint alleging that the appellant had committed offences punishable under Section 135(a) and (b) of the .
The appellant had denied being in possession of the offending goods although he had admitted the production of keys from his possession.
The trying Presidency Magistrate convicted him under section 135(b)(ii) of the and sentenced him to six months rigorous imprisonment and a fine of Rs. 2,000/ , and in default, to three months further rigorous imprisonment.
The High Court dismissed his appeal.
This appeal has been preferred on the basis of the special leave granted by this Court.
It was contended for the appellant that: (1) the presumption contained in s.123(1) of the Act would not place the onus of proving innocent possession of the goods in question upon the appellant; and, (ii) the goods in respect of which the appellant was prosecuted were not seized under the Act.
Rejecting the contentions and dismissing the appeal.
the court ^ HELD: (1) Though lighters and flints were notified provided in Section 123(2), in the official Gazette of 26 8 1967 the provisions of Section 123(1) which only lay down a procedural rule, could be applied when the case came up for.
trial before the Presidency Magistrate.
He divided it on 15 7 1969.
The complaint itself ' was filed on 30 10 1968.
It is immaterial that the appellant was round in possession of the goods on 21 4 1967.
[542 B C] (ii) The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country.
The inscriptions on them and writing on the boxes were Parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import 540 could arise.
The appellant 's conduct, including his untruthful denial of their h possession, indicated consciousness of their smuggled character or means rea.
There was some evidence to enable the courts to come to the conclusion that the goods must have been known to the appellant to be smuggled even if he was not party to a fraudulent evasion of duty.
[543 B D] Gian Chand & ors.
vs The State of Punjab, [1962] Suppl.
l S.C.R. 364 Collector of Customs, Madras & ors.
vs D. Bhoormull ; M/s, Kanungo & Co. vs The Collector of Customs, Calcutta & ORS.
A.I. R. 1972 S.C. 2136, Issaradas Daulat Ram & ors vs The Union of India & ors [1962] Suppl.
1 S.C.R. 358, Gopal Sheorey vs The State of Bombay ; and The State of Punjab vs Gian Chand & ors.
Criminal Appeal No. 195 of 1962 decided by this court on 2 4 1968, referred to.
|
87 of 1959.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
M. P. Amin, Dara P. Mehta, P. M. Amin; section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra for the petitioners.
A. V. Viswanatha Sastri, R. Ganapathy Iyer, P. Kesava Pillai and T. M. Sen, for the respondents.
H. N. Sanyal, Additional Solicitor General of India, B. Sen and R. H. Dhebar, for the Intervener.
541 1960.
November, 21.
The, Judgment of P. B. Gajendragadkar, A. K. Sarkar, K. Subba Rao and J. R. Mudholkar, JJ., was delivered by P. B. Gajendragadkar J., K. N. Wanchoo, J., delivered a separate judgment.
GAJENDRAGADKAR, J. This is a petition filed under article 32 of the Constitution in which the validity of the Orissa Mining Areas Development Fund Act,( , 1952 (XXVII of 1952), is challenged.
The first petitioner is a public limited company which has its registered office at Bombay.
A large majority of its shareholders are citizens of India; some of them are themselves companies incorporated under the Indian Companies Act.
Petitioners Nos.
2 to 7 are the Directors of Petitioner No. 1, the second petitioner being the Chairman of its Board of Directors.
These petitioners are all citizens of India.
At all material times the first petitioner carried on and still carries on the business of producing and selling coal excavated from its collieries at Rampur in the State 'of Orissa.
Two leases have been executed in its favour; the first was executed on October 17, 1941, by the Governor of Orissa whereby all that piece or parcel of land in the registration district of Sambalpur admeasuring about 3341.79 acres has been demised for a period of 30 years commencing from September 1, 1939, in consideration of the rent reserved thereby and subject to the covenants and conditions prescribed thereunder; and the second is a surface lease executed in its favour by Mr. Mohan Brijraj Singh Dee on April 19, 1951, in relation to a land admeasuring approximately 211.94 acres for a like period of 30 years commencing from February 4, 1939, in consideration of the rent and subject to the terms and conditions prescribed by it.
Pursuant to section 5 of the Orissa Estates Abolition Act, 1951, all the right, title and interest of the Zamindar of Rampur in the lands demised to the first petitioner under the second lease vested in respondents, the State of Orissa.
Since then the first petitioner has duly paid the rent reserved by the said lease to the appropriate authorities appointed by respondent 1, 69 542 and has observed and performed all the conditions and covenants of the said lease.
In exercise of its rights under the said two leases the first petitioner entered upon the lands demised and has been carrying on the business of excavating and producing coal at its collieries at Rampur.
In December, 1952, the Legislature of the State of Orissa passed the impugned Act; and it received the assent of the Governor of Orissa on December 10, 1952.
It was, however, not reserved for the consideration of the President of India nor has it received his assent.
In pursuance of the rule making power conferred on it by the impugned Act respondent 1 has purported to make rules called the Orissa Mining Areas Development Act Rules, 1955; these rules have been duly notified in the State Gazette on January 25, 1955.
Subsequently, the Administrator, respondent 2, appointed under the impugned Act issued a notification on June 24, 1958, whereby the first petitioner 's Rampur colliery has been notified for the purpose of liability for the payment of cess under the impugned Act.
The area of this colliery has been determined at 3341.79 acres.
In its appeal filed under rule 3 before the Director of Mines the first petitioner objected to the issue of the said notification, inter alia, on the ground that the impugned Act and the rules framed under it were ultra vires and invalid; no action has, however, been taken on the said appeal presumably because the authority concerned could not enter tain or deal with the objections about the vires of the Act and the rules.
Thereafter on March 26, 1959, the Assistant Administrative Officer, respondent 3, called upon the first petitioner to submit monthly returns for the assessment of the cess.
The first petitioner then represented that it had filed an appeal setting forth its objections against the notification, and added that until the said appeal was disposed of no returns would be filed by it.
In spite of this representation respondent 3, by his letter of May 6, 1959, called upon the 543 first petitioner to submit monthly returns in the prescribed form and issued the warning that failing compliance the first petitioner would be prosecuted under section 9 of the impugned Act.
A similiar demand was made and a similar warning issued by respondent 3 by his letter dated June 6, 1959.
It is under these circumstances that the present petition has been filed.
The petitioners contend that the impugned Act and ' the rules made thereunder are ultra vires the powers of the Legislature of the State of Orissa, or in any event they are repugnant to the provisions of an existing law.
According to the petition the cess levied under the impugned Act is not a fee but is in reality and in substance a levy in the nature of a duty of excise on the coal produced at the first petitioner 's Rampur colliery, and as such is beyond the legislative competence of the Orissa Legislature.
Alternatively it is urged that even if the levy imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II of the Seventh Schedule, it would nevertheless be ultra vires having regard to the provisions of Entry 54 in List I read with Central Act LIII of 1948.
The petitioners further allege that even if the said levy is held to be a fee it would be similarly ultra vires having regard to Entry 52 in List I read with Central Act LXV of 1951.
According to the petitioners the impugned Act is really relatable to Entry 24 in List III, and since it is repugnant with Central Act XXXII of 1947 relatable to the same Entry and covering the same field the impugned Act is invalid to the extent of the said repugnancy under article 254.
On these allegations the petitioners have applied for a writ of mandamus or a writ in the nature of the said writ or any other writ, order or direction prohibiting the respondents from enforcing any of the provisions of the impugned Act against the first petitioner; a similar writ or order is claimed against respondent 3 in respect of the letters addressed by him to the 1st petitioner on March 3, 1959 and June 6, 1959.
This petition is resisted by respondent 1 on several grounds.
It is urged on its behalf that the levy 544 imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II and its validity is not affected either by Entry 54 read with Act LIII of 1948 or by 'Entry 52 read with Act LXV of 1951.
In the alternative it is contended that if the said levy is held to be a tax and not a fee, it would be a tax relatable to Entry 50 in List II, and as such the legislative competence of the State Legislature to impose the same cannot be successfully challenged.
Respondent 1 disputes the petitioner 's contention that the impugned Act is relatable to Entry 24 in List III; and so, according to it, no question of repugnancy with the Central Act XXXII of 1947 arises.
After this appeal was fully argued before us Mr. Amin suggested and Mr. Sastri did not object that we should hear the learned Attorney General on the question as to whether even if the levy imposed by the impugned Act is a fee relatable to Entries 23 and 66 in List II of the Seventh Schedule, it would nevertheless be ultra vires having regard to the provisions of Entry 54 in List I read with Central Act LIII of 1948.
Accordingly we directed that a notice on this point should be served on the learned Attorney General and the case should be set down for hearing on that point again.
For the learned Attorney General the learned Additional Solicitor General appeared before us in response to this notice and we have had the benefit of hearing his arguments on the point in question.
The first question which falls for consideration is whether the levy imposed by the impugned Act amounts to a fee relatable to Entry 23 read with Entry 66 in List II.
Before we deal with this question it is necessary to consider the difference between the concept of tax and that of a fee.
The neat and terse definition of tax which has been given by Latham, C. J., in Matthews vs Chicory Marketing Board (1) is often cited as a classic on this subject.
"A tax", said Latham, C. J., "is a compulsory exaction of money by public authority for public purposes enforceable by law, and is not payment for services rendered".
In bringing out the essential features of a tax this defini (1) ; , 276.
545 tion also assists in distinguishing a tax from a fee.
It is true that between a tax and a fee there is no generic difference.
Both are compulsory exactions of money.
by public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it.
If specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee.
Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes, whereas a cess levied by way of fee is not intended to be, and does not become, a part of the consolidated fund.
It is earmarked and set apart for the purpose of services for which it is levied.
There is, however, an element of compulsion in the imposition of both tax and fee.
When the Legislature decides to render a specific service to any area or to any class of persons, it is not open to the said area or to the said class of persons to plead that they do not want the service and therefore they should be exempted from the payment of the cess.
Though there is an element of quid pro quo between the tax payer and the public authority there is no option to the tax payer in the matter of receiving the service determined by public authority.
In regard to fees there is, and must always be, co relation between the fee collected and the service intended to be rendered.
Cases may arise where under the guise of levying a fee Legislature may attempt to impose a tax; and in the case of such a colourable exercise of legislative power courts would have to scrutinise the scheme of the levy very carefully and determine whether in fact there is a co relation between the service and the levy, or whether the levy is either not co related with service or is levied to such an 546 excessive extent as to be a presence of a fee and not a fee in reality.
In other words, whether or not a particular cess levied by a statute amounts to a fee or tax would always be a question of fact to be determined in the circumstances of each case.
The distinction between a tax and a fee is, however, important, and it is recognised by the Constitution.
Several Entries in the Three Lists empower the appropriate Legislatures to levy taxes; but apart from the power to levy taxes thus conferred each List specifically refers to the power to levy fees in respect of any of the matters covered in the said List excluding of course the fees taken in any Court.
The question about the distinction between a tax and a fee has been considered by this Court in three decisions in 1954.
In The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1) the vires of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 195 1), came to be examined.
Amongst the sections challenged was section 76(1).
Under this section every religious institution had to pay to the Government annual contribution not exceeding 5% of its income for the services rendered to it by the said Government; and the argument was that the contribution thus exacted was not a fee but a tax and as such outside the competence of the State Legislature.
In dealing with this argument Mukherjee, J., as he then was, cited the definition of tax given by Latham, C.J., in the case of Matthews (2), and has elaborately considered the distinction between a tax and a fee.
The learned judge examined the scheme of the Act and observed that "the material fact which negatives the theory of fees in the present case is that the money raised by the levy of the contribution is not earmarked or specified for defraying the expense that the Government has to incur in performing the services.
All the collections go to the consolidated fund of the State and all the expenses have to be met not out of those collections but out of the general revenues by a proper method of appropriation as is done in the (1) ; (2) ; 547 case of other Government expenses".
The learned judge no doubt added that the said circumstance was not conclusive and pointed out that in fact there was a total absence of any co relation between the expenses incurred by the Government and the amount raised by contribution.
That is why section 76(1) was struck down as ultra vires.
The same point arose before this Court in respect of the Orissa Hindu Religious Endowments Act, 1939, as amended by amending Act 11 of 1952 in Mahant Sri Jagannath Ramanuj Das vs The, State of Orissa (1).
Mukherjea, J., who again spoke for the Court, upheld the validity of section 49 which imposed the liability to pay the specified contribution on every Mutt or temple having an annual income exceeding Rs. 250 for services rendered by the State Government.
The scheme of the impugned Act was examined and it was noticed that the collections made under it are not merged in the general public revenue and are not appropriated in the manner laid down for appropriation of expenses for other public purposes.
They go to constitute a fund which is contemplated by section 50 of the Act, and this fund to which the Provincial Government contributes both by way of loan and grant is specifically set apart for the rendering of services involved in carrying out the provisions of the Act.
The same view was taken by this Court in regard to section 58 of the Bombay Public Trust Act, 1950 (Act XXIX of 1950) which imposed a similar contribution for a similar purpose in Ratilal Panachand Gandhi vs The State of Bombay (2).
It would thus be seen that the tests which have to be applied in determining the character of any impugned levy have been laid down by this Court in these three decisions; and it is in the light of these tests that we have to consider the merits of the rival contentions raised before us in the present petition.
On behalf of the petitioners Mr. Amin has relied on three other decisions which may be briefly considered.
In P. P. Kutti Keya vs The State of Madras (3), the Madras High Court was called upon to consider, inter (1) ; (2) [1954] S.C.R. 1055.
(3) A.I.R. 1954 Mad. 621.
548 alia, the validity of section 11 of the Madras Commercial Crops Markets Act 20 of 1933 and Rules 28(1) and 28(3) framed thereunder.
Section 11(1) levied a fee on the sales of commercial crops within the notified area and section 12 provided that the amounts collected by the Market Committee shall be constituted into a Market Fund which would be utilised for acquiring a site for the market, constructing a building, maintaining the market and meeting the expenses of the Market Committee.
The argument that these provisions amounted to services rendered to the notified area and thus made the levy a fee and not a tax was not accepted by the Court.
Venkatarama Aiyar, J., took the view that the funds raised from the merchants for a construction of a market in substance amounted to an exaction of a tax.
Whether or not the construction of a market amounted to a service to the notified area it is unnecessary for us to consider.
Besides, as we have already pointed out we have now three decisions of this Court which have authoritatively dealt with this matter, and it is in the light of the said decisions that the present question has to be considered.
In Attorney General for British Columbia vs Esquimalt and Nanaimo Railway Co. (1), the Privy Council had to deal with the validity of forest protection impost levied by the relevant section of the Forest Act R. section B. C. 1936.
The lands in question were statutorily exempted from taxation, and it was urged against the validity of the impost that the levy of the said impost was not a service charge but a tax; and since it contravened the exemption from taxation granted to the land it was invalid.
This plea was upheld by the Privy Council.
The Privy Council did consider two circumstances which were relevant; the first that the levy was on a defined class of interested individuals, and the second that the fund raised did not fall into the general mass of the proceeds of taxation but was applicable for a special and limited purpose.
It was conceded that these considerations were relevant but the Privy Council thought that the weight to be attached to them should not be exagge (1) 540 rated.
In appreciating the weight of the said relevant circumstances the Privy Council was impressed by the fact that the lands in question formed an important part of the national wealth of the Province and their proper administration, including in particular protection against fire, is a matter of high public concern ' as well as one of particular interest to individuals.
In other words, the effect of the impugned provision was, that the expenses of what was the public service of the greatest importance for the Province as a whole had been divided between the general body of tax.
payers and those individuals who had a special interest in having their property protected.
It would thus appear that this decision proceeded on the basis that what was claimed to be a special service to the lands in question was in reality an item in public service itself, and so the element of quid pro quo was absent.
It is true that when the Legislature levies a fee for rendering specific services to a specified area or to a specified class of persons or trade or business, in the last analysis such services may indirectly form part of services to the public in general.
If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area the fact that in benefiting the specified class or area the State as a whole may ultimately and indirectly be benefited would not detract from the character of the levy as a fee.
Where, however, the specific service is indistinguishable from pub lic service, and in essence is directly a part of it, diffe rent considerations may arise.
In such a case it is necessary to enquire what is the primary object of the levy and the essential purpose which it is intended to achieve.
Its primary object and the essential purpose must be distinguished from its ultimate or incidental results or consequences.
That is the true test in determining the character of the levy.
In Parton.
vs Milk Board (Victoria)(1), the validity of the levy imposed on dairymen and owners of milk depots by section 30 of the Milk Board Act of 1933 as amended by subsequent Acts of 1936 1939 was (1) ; 70 550 challenged, and it was held by Dixon, J., that the levy of the said contribution amounted to the imposition of a duty of excise.
This decision was substantially based on the ground that the statutory board "performs no particular service for the dairyman or the owner of a milk depot for which his contribution may be considered as a fee or recompense" that is to say the element of quid pro quo was absent qua the persons on whom the levy had been imposed.
Therefore none of the decisions on which Mr. Amin has relied can assist his case.
Let us now examine the scheme of the impugned Act.
As the preamble shows it has been passed because it was thought expedient to constitute mining areas and a Mining Areas Development Fund in the State of Orissa.
It consists of 11 sections.
Section 3 of the Act provides for the constitution of a mining area whenever it appears to the State Government that it is necessary and expedient to provide amenities like communications, water supply and electricity for the better development of any area in the State of Orissa wherein any mine is situated, or to provide for the welfare of the residents or to workers in any such areas within which persons employed in a mine or a group of mines reside or work.
Under this section the State Government has to define the limits of the area.
and is given the power to include within such area any local area contiguous to the same or to exclude from such area any local area comprised therein; that is the effect of section 3(1).
Section 3(2) empowers the owner or a lessee of a mine or his duly constituted representative in the said area to file objections in respect of any notification issued under section 3(1) within the period specified, and the State Government is required to take the said objection into consideration.
After considering objections received the State Government is authorised to issue a notification constituting a mining area under section 3(3).
Section 4 deals with the imposition and collection of cess.
The rate of the levy authorised shall not exceed 5 per centum of the valuation of the minerals at the pit 's mouth.
Section 5 provides for the constitution of the Orissa Mining Areas Development 551 Fund.
This fund vests in the State Government and has to be administered by such officer or officers as may be appointed by the State Government in that, behalf Section 5(2) requires that there shall be paid to the credit of the said fund the proceeds of the cess recovered under section 4 for each mining area during the quarter after deducting expenses, if any, for collection and recovery.
Section 5(3) contemplates that to the credit of the said fund shall be placed all collections of cess under section 5(2) as well as amounts from State Government and the local authorities and public subscriptions specifically given for any of the purposes of the fund.
Section 5(4) deals with the topic of the appli cation of the said fund.
The fund has to be utilised to meet expenditure incurred in connection with such measures which in the opinion of the State Government are necessary or expedient for providing amenities like communications, water supply and electricity, for the better development of the mining areas, and to meet the welfare of the labour and other persons residing or working in the mining areas.
Section 5(5) lays down that without prejudice to the generality of the foregoing provisions the fund may be utilised to defray any of the purposes specified in cls.
(a) to (e).
Under section 5(6) the State Government is given the power to decide whether any particular expenditure is or is not debitable to the fund and their decision is made final; and section 5(7) imposes on the State Government an obligation to publish annually in the gazette a report of the activities financed from the fund together with an estimate of receipts and expenditure of the fund and a statement of account.
Section 6 prescribes the mode of constituting an advisory committee.
It has to consist of such number of members and chosen in such manner as may be prescribed, provided however that each committee shall include representatives of mine owners and workmen employed in mining industry.
The names of the members of the committee are required to be published in the gazette.
Section 7 deals with the appointment and functions of the statutory authorities to carry out the purpose of the Act, while section 8 confers on the State Government power to 552 make rules.
Section 9 prescribes penalties and provides for prosecutions; and section 10 gives protection to the specified authorities or officers in respect of anything done or intended to be done by them in good faith in pursuance of the Act or any rules or order made thereunder.
Section 11, which is the last section confers on the State Government the power to do anything which may appear to them to be necessary for 'the purpose of removing difficulties in giving effect to the provisions of the Act.
The scheme of the Act thus clearly shows that it has been passed for the purpose of the development of mining areas in the State.
The basis for the operation of the Act is the constitution of a mining area, and it is in regard to mining areas thus constituted that the provisions of the Act come into play.
It is not difficult to appreciate the intention of the State Legislature evidenced by this Act.
Orissa is an underdeveloped State in the Union of India though it has a lot of mineral wealth of great potential value.
Un fortunately its mineral wealth is located generally in areas sparsely populated with bad communications.
Inevitably the exploitation of the minerals is handicapped by lack of communications, and the difficulty experienced in keeping the labour force sufficiently healthy and in congenial surroundings.
The mineral development of the State, therefore, requires that provision should be made for improving the communications by constructing good roads and by providing means of transport such as tramways; supply of water and electricity would also help.
It would also be necessary to provide for amenities of sanitation and education to the labour force in order to attract workmen to the area.
Before the Act was passed it appears that the mine owners tried to put up small length roads and tramways for their own individual purpose, but that obviously could not be as effective as roads constructed by the State and tramway service provided by it.
It is on a consideration of these factors that the State Legislature decided to take an active part in unsystematic development of its mineral areas which would help the mine owners in moving their 553 minerals quickly through the shortest route and would attract labour to assist the excavation of the minerals.
Thus there can be no doubt that the primary and the principal object of the Act is to develop ' the mineral areas in the State and to assist more efficient and extended exploitation of its mineral wealth.
The constitution of the advisory committee as prescribed by section 4 emphasises the fact that the policy of the Act would be to carry out with the assistance of the mine owners and their workmen.
Thus after a mining area is notified an advisory committee is constituted in respect of it, and the task of carrying out the objects of the Act is left to the care of the said advisory committee subject to the provisions of the Act.
Even before an area is notified the mine owners are allowed an opportunity to put forward their objections.
These features of the Act are also relevant in determining the question as to whether the Act is intended to render service to the specified area and to the class of persons who are subjected to the levy of the cess.
Section 5 shows that the cess levied does not become a part of the consolidated fund and is not subject to an appropriation in that behalf; it goes into the special fund earmarked for carrying out the purpose of the Act, and thus its existence establishes a correlation between the cess and the purpose for which it is levied.
It was probably felt that some additions should be made to the special fund, and so section 5(3) contemplates that grants from the State Government and local authorities and public subscriptions may be collected for enriching the said fund.
Every year a report of the activities financed by the fund has to be published together with an estimate of receipt and expenditure and a statement of accounts.
It would thus be clear that the administration of the fund would be subject to public scrutiny and persons who are called upon to pay the levy would have an opportunity to see whether the cess collected from them has been properly utilised for the purposes for which it is intended to be used.
It is not alleged by the petitioners 554 that the levy imposed is unduly or unreasonably excessive so as to make the imposition a colourable exercise of legislative power.
Indeed the fact that the accounts have to be published from year to year affords an indication to the contrary.
Thus the scheme of the Act shows that the cess is levied against the class of persons owning mines in the notified area and it is levied to enable the State Government to render specific services to the said class by developing the notified mineral area.
There is an element of quid pro quo in the scheme, the cess collected is constituted into a specific fund and it has not become a part of the consolidated fund, its application is regulated by a statute and is confined to its purposes, and there is a definite co relation between the impost and the purpose of the Act which is to render service to the notified area.
These features of the Act impress upon the levy the character of a fee as distinct from a tax.
It is, however, urged that the cess levied by section 4(2) is in substance and reality a duty of excise.
As we have already noticed section 4(2) provides that the rate of such levy shall not exceed 5 per centum of the valuation of the minerals at the pit 's mouth; in other words it is the value of the minerals produced which is the basis for calculating the cess payable by mine owners, and that precisely is the nature in which duty of excise is levied under Entry 84 in List I. The said Entry empowers Parliament to impose duties of excise, inter alia, on goods manufactured or produced in India.
When minerals are produced from mines and a duty of excise is intended to be imposed on them it would be normally imposed at the pit 's mouth, and that is precisely what the impugned Act purports to do.
It is also contended that the rate prescribed by section 4(2) indicates that it operates not as a mere fee but as a duty of excise.
This argument must be carefully examined before the character of the cess is finally determined.
It is not disputed that under Entry 23 in List II read with Entry 66 in the said List the State Legislature can levy a fee in respect of mines and mineral development.
Entry 23 reads thus: "Regu lation of Mines and mineral development subject to 555 the provisions of List I with respect to regulation and development under the control of the Union".
We will deal with the condition imposed by the latter part of this Entry later.
For the present it is enough to state that regulation of mines and mineral development is within the competence of the State Legislature.
Entry 66 provides that fees in respect of any of the matters in the said List can be imposed by the State Legislature subject of course to the exception of fees taken in any Court.
The argument is that though the State Legislature is competent to levy a fee in respect of mines and mineral development, if the statute passed by a State Legislature in substance and in effect imposes a duty of excise it is travelling outside its jurisdiction and is trespassing on the legislative powers of Parliament.
This argument is based on two considerations.
The first relates to the form in which the levy is imposed, and the second relates to the extent of the levy authorised.
The extent of the levy authorised would always depend upon the nature of the services intended to be rendered and the financial obligations incurred thereby.
If the services intended to be rendered to the notified mineral areas require that a fairly large cess should be collected and co relation can be definitely established between the proposed services and the impost levied, then it would be unreasonable to suggest that because the rate of the levy is high it is not a fee but a duty of excise.
In the present case, if the development of the mining areas involves con siderable expenditure which necessitates the levy of the prescribed rate it only means that the services being rendered to the mining areas are very valuable and the rate payer in substance is compensating the State for the services rendered by it to him.
It is significant that the petitioners do not seriously suggest that the services intended to be rendered are a cloak and not genuine, or that the taxes levied have no relation to the said services, or that they are unreasonable and excessive.
Therefore, in our opinion, the extent of the rate allowed to be imposed by section 4(2) cannot by itself alter the character of the levy from a 556 fee into that of a duty of excise.
If the co relation between the levy and the services was not genuine or real, or if the levy was disproportionately higher than the requirements of the services intended to be rendered it would have been another matter.
Then as to the form in which the impost is levied, it is difficult to appreciate how the method adopted by the Legislature in recovering the impost can alter its character.
The character of the levy must be determined in the light of the tests to which we have already referred.
The method in which the fee is recovered is a matter of convenience, and by itself it cannot fix upon the levy the character of the duty of excise.
This question has often been considered in the past, and it has always been held that though the method in which an impost is levied may be relevant in determining its character its significance and effect cannot be exaggerated.
In Balla Ram vs The Province of East Punjab (1) the Federal Court had to consider the character of the tax levied by section 3 of the Punjab Urban Immoveable Property 'tax Act XVII of 1940.
Section 3 provided as follows: "There shall be charged, levied and paid an annual to tax on buildings and lands situated in the rating areas shown in the schedule to this Act at such rate not exceeding twenty per centum of the annual value of such buildings and lands as the Provincial Government may by notification in official gazette direct in respect of each such rating area".
The argument urged before the Federal Court was that the tax imposed by the said section was in reality a tax on income within the meaning of Item 54 in List I of the Seventh Schedule to the Constitution Act of 1935, and as such it was not covered by Item 42 in List II of the said Schedule.
This argument was rejected on the ground that the tax levied by the Act was in pith and substance a tax on lands and buildings covered by Item 42.
It would be noticed that the basis of the tax was the annual value of the building which is the basis used in the Indian Income tax Act for determining income from property; and so, the attack against the section was based on (1) 557 the ground that it had adopted the same basis for leaving the impost as the Income tax Act and the said basis determined its character whatever may be the appearance in which the impost was purported to be levied.
In repelling this argument Fazl Ali, J. observed that the crucial question to be answered was whether merely because the Income tax Act has adopted the annual value as the standard for determining the income it must necessarily follow that if the same standard is employed as a measure for any other tax that tax becomes a tax on income.
The learned judge then proceeded to add that if the answer to this question is to be given in the affirmative then certain taxes which cannot possibly be described as income tax must be held to be so.
In other words, the effect of this decision is that the adoption of the standard used in Income tax Act for getting at the income by any other act for levying the tax authorised by it would not be enough to convert the said.
tax into an income tax.
During the course of this judgment Fazl Ali, J. also noticed with approval a similar view taken by the Bombay High Court in Sir Byramjee Jeejeebhoy vs The Province of Bombay (1).
This decision has been expressly approved by the Privy Council in Governor General in Council vs Province of Madras (2).
Consistently with the decision of the Federal Court their Lordships expressed the opinion that "a duty of excise is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced.
It is a tax on goods and not on sales or the proceeds of the sale of goods.
The two taxes, the one levied on the manufacturer in respect of his goods and the other on the vendor in respect of his sales may in one sense overlap, but in law there is no overlapping; the taxes are separate and distinct imposts.
If in, fact they overlap that may be because the taxing authority imposing a duty of excise finds it convenient to impose that duty at the moment when the excisable article (1) I.L.R. (2) (1945) L.R. 72 I.A. 91.
71 558 leaves the factory or workshop for the first time on the occasion of its sale".
In that case the question was whether the tax authorised by the Madras General Sales Tax Act, 1939, was a tax on the sale of goods or was a duty of excise, and the Privy Council held it was the former and not the latter.
Therefore, in our opinion, the mere fact that the levy imposed by the impugned Act has adopted the method of determining the rate of the levy by reference to the minerals produced by the mines would not by itself make the levy a duty of excise.
The method thus adopted may be relevant in considering the character of the impost but its effect must be weighed along with and in the light of the other relevant circumstances.
In this connection it is always necessary to bear in mind that where an impugned statute passed by a State Legislature is relatable to an Entry in List II it is not permissible to challenge its vires only on the ground that the method adopted by it for the recovery of the impost can be and is generally adopted in levying a duty of excise.
Thus considered the conclusion is inevitable that the cess levied by the impugned Act is neither a tax nor a duty of excise but is a fee.
The next question which arises is, even if the cess is a fee and as such may be relatable to Entries 23 and 66 in List II its validity is still open to challenge because the legislative competence of the State Legislature under Entry 23 is subject to the provisions of List I with respect to regulation and development under the control of the Union; and that takes us to Entry 54 in List I.
This Entry reads thus: "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest".
The effect of reading the two Entries together is clear.
The jurisdiction of the State Legislature under Entry 23 is subject to the limitation imposed by the latter part of the said Entry.
If Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union, to 559 the extent of such declaration the jurisdiction of the State Legislature is excluded.
In other words, if a Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act the impugned Act would be ultra vires, not because of any repugnance between the two statutes but because the State Legislature had no jurisdiction to pass the law.
The limitation imposed by the latter part of Entry 23 is a limitation on the legislative competence of (,he State Legislature itself.
This position is not in dispute.
It is urged by Mr. Amin that the field covered by the impugned Act has already been covered by the Mines and Minerals (Regulation and Development) Act, 1948, (LIII of 1948) and he contends that in view of the declaration made by section 2 of this Act the impugned Act is ultra vires.
This Central Act was passed to provide for the regulation of mines and oil fields and for the development of minerals.
It may be stated at this stage that by Act LXVII of 1957 which has been subsequently passed by Parliament, Act LIII of 1948 has now been limited only to oil fields.
We are, however, concerned with the operation of the said Act in 1952, and at that time it applied to mines as well as oil fields.
Section 2 of the Act contains a declaration as to the expediency and control by the Central Government.
It reads thus: "It is hereby declared that it is expedient in the public interest that the Central Government should take under its control the regulation of mines and oil fields and the development of minerals to the extent hereinafter provided".
It is common ground that at the relevant time this Act applied to coal mines.
Section 4 of the Act provides that no mining lease shall be granted after the commencement of this Act otherwise than in accordance with the rules made under this Act.
Section 5 empowers the Central Government to make rules by notification for regulating the grant of mining leases or for prohibiting the grant of such leases in respect of any mineral or in any area.
Sections 4 and 5 thus 560 purport to prescribe necessary conditions in accordance with which mining leases have to be executed.
This part of the Act has no relevance to our present purpose.
Section 6 of the Act, however, empowers the Central Government to make rules by notification in the official gazette for the conservation and development of minerals.
Section 6(2) lays down several matters in respect of which rules can be framed by the Central Government.
This power is, however, without prejudice to the generality of powers conferred on the Central Government by section 6(1).
Amongst the matters covered by section 6(2) is the levy and collection of royalties, fees or taxes in respect of minerals mined, quarried, excavated or collected.
It is true that no rules have in fact been framed by the Central Government in regard to the levy and collection of any fees; but, in our opinion, that would not make any difference.
If it is held that this Act contains the declaration referred to in Entry 23 there would be no difficulty in holding that the declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act.
What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to regulation and development under the control of the Union, and Entry 54 in List I requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest.
Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject matter covered by the said declaration.
In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development of mines under the control of the Union.
In such a case the test must be whether the legislative declaration covers the field 561 or not.
Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII of 1948.
It still remains to consider whether section 2 of the said Act amounts in law to a declaration by Parliament as required by article 54.
When the said Act was passed in 1948 the legislative powers of the Central and the Provincial Legislatures were governed by the relevant Entries in the Seventh Schedule to the Constitution Act of 1935.
Entry 36 in List I corresponds to the present Entry 54 in List I.
It reads thus: "Regulation of Mines and Oil Fields and mineral development to the extent to which such regulation and development under Dominion control is declared by Dominion law to be expedient in public interest".
It would be notic ed that the declaration required by Entry 36 is a declaration by Dominion law.
Reverting then to section 2 of the said Act it is clear that the declaration contained in the said section is put in the passive voice; but in the context there would be no difficulty in holding that the said declaration by necessary implication has been made by Dominion law.
It is a declaration contained in a section passed by the Dominion Legislature ' and so it is obvious that it is a declaration by a Dominion law; but the question is: Can this declaration by a Dominion law be regarded constitutionally as declaration by Parliament which is required by Entry 54 in List I. It has been urged before us by the learned Additional Solicitor General and Mr. Amin that in dealing with this question we should bear in mind two general considerations.
The Central Act has been continued under article 372(1) of the Constitution as an existing law, and the effect of the said constitutional provision must be that the continuance of the existing law would be as effective and to the same extent after the Constitution came into force as before.
It is urged that after the said Act was passed and before the Con stitution came into force no Provincial Legislature could have validly made a law in respect of the field covered by the said Act, and it would be commonsense to assume that the effect of the continuance of the 562 said law under article 372(1) cannot be any different.
In other words, if no Provincial Legislature could have trespassed on the field covered by the said Act before the Constitution, the position would and must be the same even after the Constitution came into force.
It is also contended that for the purpose of bringing the provision of existing laws into accord with the provisions of the Constitution the President was given power to make by order appropriate adaptations and modifications of such laws, and the object of making such adaptations obviously was to make the continuance of the existing laws fully effective.
It is in the light of these two general considerations, so the.
argument runs, must the point in question be considered.
The relevant clause in the Adaptation of Laws Order, 1950, on which reliance has been placed in support of this argument is el. 16 in the Supplementary Part of the said Order.
This clause provides that subject to the provisions of this Order any reference by whatever form of words in any existing law to any authority competent at the date of the passing of that law to exercise any powers or authorities, or to discharge any functions, in any part of India shall, where a corresponding new authority has been constituted by or under the Constitution, have effect until duly repealed or amended as if it were a reference to that new authority.
The petitioners contend that as a result of this clause the declaration made by the Dominion Legislature in section 2 of the Central Act must now be held to be the declaration made by Parliament.
Is this contention justified on a fair and reasonable construction of the clause? That is the crux of the problem.
In considering this question it would be relevant to recall the scheme of the Adaptation of Laws Order, 1950.
It consists of Three Parts.
Part 1 deals with the adaptation of Central Laws and indicates the adaptation made therein; Part 11 deals with the adaptation of Provincial Laws and follows the same pattern; and Part III is a Supplementary Part which contains provisions in the nature of supplementary provisions.
A perusal of the clauses contained in Part 563 I would show that though some adaptation was made in Act LIII of 1948 it was not thought necessary to make an adaptation in section 2 of the said Act whereby the declaration implied in the said section has been expressly adapted into a declaration by Parliament.
Now, the effect of el. 16 in substance is to equate an authority competent at the date of the passing of the existing law to exercise any powers or authorities, or to discharge any functions with a corresponding new authority which has been constituted by or under the Constitution.
Reference to the authority in the con.
text would suggest cases like reference to the Governor General eo nomine, or Central Government which respectively would be equated with the President or the Union Government.
Prima facie the reference to authority would not include reference to a Legislature; in this connection it may be relevant to point out that article 372(1) refers to a competent Legislature as distinguished from other competent authorities.
That is the first difficulty in holding that el.
16 refers to the Dominion Legislature and purports to equate it with the Parliament.
It is clear that for the application of this clause it is necessary that a reference should have been made to the authority by some words whatever may be their form.
In other words it is only where the existing law refers expressly to some authority that this clause can be invoked.
It is difficult to construe the first part of this clause to include authorities to which no reference is made by any words in terms, but to which such reference may be implied; and quite clearly the Dominion Legislature is not expressly referred to in section 2.
In construing the present clause we think it would be straining the language of the clause to hold that an authority to which no reference is made by words in any part of the existing law could claim the benefit of this clause.
Besides, there is no doubt that when the clause refers to any authority competent to exercise any powers or authorities, or to discharge any functions, it refers to the powers, authorities or functions attributable to the existing law itself; that is to say, authorities 564 which are competent to exercise powers or to discharge functions under the existing laws are intended to be equated with corresponding new authorities.
It is impossible to hold that the Dominion Legislature is an authority which was competent to exercise any power or to discharge any function under the existing law.
Competence to exercise power to discharge functions to which the clause refers must inevitably be related to the existing law and not to the Constitution Act of 1935 which would be necessary if Dominion Legislature was to be included as an authority under this clause.
The Constitution Act of 1935 had been repealed by the Constitution and it was not, and could not obviously be, the object of the Adaptation of Laws Order to make any adaptation in regard to the said Act.
Therefore, the competence of the Dominion Legislature which flowed from the relevant provisions of the Constitution Act of 1935 is wholly outside this clause.
We have carefully considered the arguments urged before us by the learned Additional Solicitor General and Mr. Amin but we are unable to hold that cl.
16 can be pressed into service for the purpose of supporting the conclusion that the declaration by the Dominion Legislature implied in section 2 of Act LIII of 1948 can, by virtue of cl. 16, be held to be a declaration by Parliament within the meaning of the relevant Entries in the Constitution.
If that be the true position then the alternative challenge to the vires of the Act based on el.
16 of the Adaptation of Laws Order must fail.
There is another possible argument which may prima facie lead to the same conclusion.
Let us assume that the result of reading article 372 and cl. 16 of the Adaptation of Laws Order is that under section 2 of Act LIII of 1948 there is a declaration by Parliament as suggested by the petitioners and the learned Additional Solicitor General.
Would that meet the requirements of Entry 54 in List I of the Seventh Schedule? It is difficult to answer this question in the affirmative because the relevant provisions of the Constitution are prospective and the declaration by Parliament specified by Entry 54 must be declaration made by 565 Parliament subsequent to the date when the Constitution came into force.
Unless a declaration is made by Parliament after the Constitution came into force it will not satisfy the requirements of Entry 54, and that inevitably would mean that the impugned Act is validly enacted under Entry 23 in List II of the Seventh Schedule.
If that be the true position then it would follow that even on the assumption that el. 16 of the Adaptation of Laws Order and article 372 can be construed as suggested by the petitioners the impugned Act would be valid.
Faced with this difficulty, both the learned Additional Solicitor General and Mr. Amin argued that cl.
21 of the said Order may be of some assistance.
Clause 21 reads thus: "Any Court, Tribunal, or authority required or empowered to enforce any law in force in the territory of India immediately before the appointed day shall, notwithstanding that this Order makes no provision or insufficient provision for the adaptation of the law for the purpose of bringing it into accord with the provisions of the Constitution, construe the law with all such adaptations as are necessary for the said purpose".
Assuming that this clause is valid we do not see how it is relevant in the present case.
All that this clause purports to do is to empower the Court to construe the law with such adaptations as may be necessary for the purpose of bringing it in accord with the provisions of the Constitution.
There is no occasion to make any adaptation in construing Act LIII of 1948 for bringing it into accord with the provisions of the Constitution at all.
The said Act has been continued under article 372(1) and there is no constitutional defect in the said Act for the avoidance of which any adaptation is necessary.
In fact what the petitioners seek to do is to read in section 2 of the said Act the declaration by Parliament required by Entry 54 so as to make the impugned Act ultra vires.
Quite clearly cl. 21 cannot be pressed into service for such a purpose.
Therefore, we reach this position that the field covered by Act LIII of 1948 is substantially the same as the field covered by the 72 566 impugned Act but the declaration made by section 2 of the said Act does not constitutionally amount to the requisite declaration by Parliament, and so the limitation imposed by Entry 54 does not come into operation in the present case.
Act LIII of 1948 continues in operation under article 372; with this modification that so far as the State of Orissa is concerned it is the impugned Act that governs and not the Central Act.
Article 372(1) in fact provides for the continuance of the existing law until it is altered, repealed or amended by a competent Legislature or other competent authority.
In the absence of the requisite parliamentary declaration the legislative competence of the Orissa Legislature under Entry 23 read with Entry 66 is not impaired, and so the said Legislature is competent either to repeal, alter or amend the existing law which is the Central Act LIII of 1948; in effect, after the impugned Act was passed, so far as Orissa is concerned the Central Act must be deemed to be repealed.
This position is fully consistent with the provisions of article 372.
The result is that the material words used in cls.
16 and 21 being unambiguous and explicit, it is difficult to give effect to the two general considerations on which reliance has been placed by the petitioners.
Incidentally the present case discloses that in regard to the requisite parliamentary declaration prescribed by Entry 54 in List I in its application to the pre Constitution Acts under corresponding Entry 36 in List I of the Constitution Act of 1935, there is a lacuna which has not been covered by any clauses of the Adaptation of Laws Order; that, however, is a matter for Parliament to consider.
There is one more point which is yet to be considered.
Mr. Amin contends that Entry 23 in List II is subject to the provisions in List I with respect to regulation and development under the control of the Union, and according to him Entry 52 in List I is one of such provisions.
In this connection he relies on the said Entry which deals with industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest, and Industries (Development and Regulation) Act, 1951 (LXV 567 of 1951).
This Act has been passed to provide for the development and regulation of certain industries one of which undoubtedly is coal mining industry.
Section 2 of this Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule.
This declaration is a declaration made by Parliament, and if the provisions of the Act read with the said declaration covered the same field as is covered by the impugned Act, it would undoubtedly affect the vires of the impugned Act; but in dealing with this question it is important to bear in mind the doctrine of pith and substance.
We have already noticed that in pith and substance the impugned Act is concerned with the development of the mining areas notified under it.
The Central Act, on the other hand, deals more directly with the control of all industries including of course the industry of coal.
Chapter II of this Act provides for the constitution of the Central Advisory Council and Development Councils, chapter III deals with the regulation of scheduled industries, chapter IIIA provides for the direct management or control of industrial undertakings by Central Government in certain cases, and chapter IIIB is concerned with the topic of control of supply, distribution, price, etc, of certain articles.
The last chapter deals with miscellaneous incidental matters.
The functions of the Development Councils constituted under this Act prescribed by section 6(4) bring out the real purpose and object of the Act.
It is to increase the efficiency or productivity in the scheduled industry or group of scheduled industries, to improve or develop the service that such industry or group of industries renders or could render to the community, or to enable such industry or group of industries to render such service more economically.
Section 9 authorises the imposition of cess on scheduled industries in certain cases.
Section 9(4) provides that the Central Government may hand over the proceeds of the cess to the Development Council there specified and that the Development Council shall utilise the said proceeds to achieve the objects mentioned in cls.
(a) to (d).
These 568 objects include the promotion of scientific and industrial research, of improvements in design and quality, and the provision for the training of technicians and labour in such industry or group of industries.
It would thus be seen that the object of the Act is to regulate the scheduled industries with a view to improvement and development of the service that they may render to the society, and thus assist the solution of the larger problem of national economy.
It is difficult to hold that the field covered by the declaration made by section 2 of this Act, considered in the light of its several provisions, is the same as the field covered by the impugned Act.
That being so, it cannot be said that as a result of Entry 52 read with Act LXV of 1951 the vires of the impugned Act can be successfully challenged.
Our conclusion, therefore, is that the impugned Act is relatable to Entries 23 and 66 in List II of the Seventh Schedule, and its validity is not impaired or affected by Entries 52 and 54 in List I read with Act LXV of 1951 and Act LIII of 1948 respectively.
In view of this conclusion it is unnecessary to consider whether the impugned Act can be justified under Entry 50 in List II, or whether it is relatable to Entry 24 in List III and as such suffexs from the vice of repugnancy with the Central Act XXXII of 1947.
The result is the petition fails and is dismissed with costs.
WANCHOO, J. I have read the judgment just delivered by my learned brother Gajendragadkar J. and regret that I have not been able to persuade myself that the cess levied in this case on all extracted minerals from any mine in any mining area at a rate not exceeding five per centum of the value of the minerals at the pit 's mouth by the Orissa State Legislature under section 4 of the Orissa Mining Areas Development Fund Act, No. XXVII of 1952, (hereinafter called the Act) is a fee properly so called and not a duty of ex cise.
The facts are all set out in the judgment just delivered and I need not repeat them.
The scheme of the Act, as appears from section 3 thereof is to give power to the State Government, whenever it 569 thinks it necessary and expedient to provide amenities, like communications, water supply and electricity for the better development of any area in the State where , in any mine is situated or to provide for the welfare of residents or workers in any such area within.
which persons employed in a mine or a group of mines reside or work, to constitute such an area to be a mining area for the purposes of the Act, to define the limits of the area, to include within such area any local area contiguous to the same and defined in the notification and to exclude from such area any local area comprised therein and defined in the notification.
A notification under section 3 is made, after hearing objections from owners or lessees of mines.
After such an area is con stituted under section 3, a cess is imposed under section 4 on all extracted minerals from any mine in any such area at the rate not exceeding five per centum of the value of the minerals at the pit 's mouth.
The cess so collected is credited to a fund called the Orissa Mining Area Development Fund created under section 5 of the Act, besides other amounts with which we are not concerned in this case.
The Fund is to be applied to meet expenditure incurred in connection with such measures, which in the opinion of the State Government, are necessary or expedient for providing amenities like communications, water supply and electricity, for the better development of mining areas and to meet the welfare of labour and other persons residing or working in the mining areas.
Then come other provisions for working out the above provisions including section 8, which gives power to the State Government to frame rules to carry.
into effect the purposes of the Act.
The Rules were framed under the Act in January, 1955.
The constitutional competence of the Orissa State Legislature to levy the cess under the Act is attacked on two main grounds.
In the first place, it is urged that the cess is in pith and substance a duty of excise under item 84 of List I of the Seventh Schedule and therefore the levy of such a cess is beyond the competence of the Orissa State Legislature.
In the second place, it is urged that even if the cess is a fee, in view 570 of the two Acts of the Central Legislature and Parliament, namely, The Mines and Minerals (Regulation and Development) Act, No. LIII of 1948 and The Industries (Development and Regulation) Act, No. LXV of 1951, the Orissa Legislature was not competent to pass the Act.
The petition has been opposed on behalf of the State of Orissa and the main contentions urged on its behalf are that the cess is a fee properly so called and not a duty of excise and therefore the Orissa State Legislature was competent to levy it and the two Central Acts do not affect that competence.
In the alternative it has been urged that even if the cess is a tax the State Legislature was competent to levy it under item 50 of List If of the Seventh Schedule.
The first question therefore that falls for consideration is whether the cess in this ' ease is a tax or a fee.
Difference between a tax properly so called and a fee properly so called came up for consideration before this Court in three cases in 1954 and was considered at length.
In the first of them, namely, The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt it was pointed out that "though levying of fees is only a particular form of the exercise of the taxing power of the State, our Constitution has placed fees under a separate category for purposes of legislation and at the end of each one of the three legislative lists, it has given a power to the particular legislature to legislate on the imposition of fees in respect to every one of the items dealt with in the list itself".
It was also pointed that "the essence of a tax is compulsion, that is to say, it is imposed under statutory power without the taxpayer 's consent and the payment is enforced by law.
The second characteristic of a tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax.
This is expressed by saying that the levy of tax is for the purposes of general revenue, which when (1) ; 571 collected forms part of the public revenues of the State.
As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the tax payer and the public authority.
Another feature of taxation is that as it is a part of the common burden, quantum of imposition upon the tax payer depends generally upon his capacity to pay.
" As to fees, it was pointed out that "a 'fee ' is generally defined to be a charge for a special service rendered to individuals by some governmental agency.
The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed.
Ordinarily, the fees are uniform and no account is taken of the varying abilities of different recipients to pay.
" Finally, it was pointed out that "the distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden, while a fee is a payment for a special benefit or privilege. . .
Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives.
" The consequence of these principles was that "if, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision be co related to the expenses incurred by Government in rendering the services. . .
If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public, it could be counted as fees and not a tax." Having laid down these principles, that case then considered the vires of section 76 of the Madras Hindu Religious and Charitable Endowments Act, No. XIX of 1951, and it was pointed out that the material fact which negatived the theory of fees in that case was that the money raised by levy of the contribution was not ear marked or specified for defraying the expenses 572 that the Government had to incur in performing the services.
All the collections went to the consolidated fund of the State and all the expenses had to be met not out of those collections but out of the general revenues by a proper method of appropriation as was done in the case of other government expenses.
That in itself might not be conclusive, but in, that case there was total absence of any co relation between the expenses incurred by the Government and the amount raised by contribution under the provision of section 76 and in those circumstances the theory of return or counter payment or quid pro quo could not have any possible application to that case.
Consequently, the contribution levied under section 76 was held to be a tax and not a fee.
In the second case of Mahant Sri Jagannath Ramanuj Das vs The State of Orissa (1), a similar imposition by the Orissa Legislature came up for consideration.
After referring to the earlier case, it was pointed out that "two elements are thus.
essential in order that a payment may be regarded as a fee.
In the first place, it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly.
But this by itself is not enough to make the imposition a fee, if the payments demanded for rendering of such services are not set apart or specifically appropriated for that purpose but are merged in the general revenue of the State to be spent for general public purposes." The Orissa imposition was held to be a fee because the collections made were not merged in the general public revenue and were meant for the purpose of meeting the expenses of the Commissioner and his office which was the machinery set up for due administration of the affairs of the religious institution.
They went to constitute a fund which was contemplated by section 50 of the Orissa Act and this fund was specifically set apart for rendering services involved in carrying out the provisions of the Act.
The third case, namely, Ratilal Panachand Gandhi (1) ; 573 vs The State of Bombay (1) came from Bombay.
58 of the Bombay Act, No. XXIX of 1950, provided for an imposition in proportion to the gross annual income of the trust.
This imposition was levied for the purpose of due administration of the trust property and for defraying the expenses incurred in connection with the same.
After referring to the two earlier cases, the Court went on to say that "taxis a common burden and the only return which the taxpayer gets is participation in the common benefits of the State.
Fees, on the other hand, are payments primarily in the public interest, but for some special service rendered or some special work done for the benefit of those from whom the payments are demanded.
Thus in fees there is always an element of quid pro quo which is absent in a tax. .
But in order that the collections made by the Government can rank as fees, there must be co relation between the levy imposed and the expenses incurred by the State for the purpose of rendering such services.
" It was then pointed out that the contributions, which were collected under section 58, were to be credited in the Public Trusts Administration Fund as constituted under section 57.
This fund was to be applied exclusively for the payment of charges for expenses incidental to the regulation of public trusts and for carrying into effect the provisions of the Act.
The imposition therefore was in that case held to be a fee.
These decisions clearly bring out the difference between a tax and a fee and generally speaking there is always an element of quid pro quo in a fee and the amount raised through a fee is co related to the expenses necessary for rendering the services which are the basis of quid pro quo.
Further, the amount collected as a fee does not go to augment the general revenues of the State and many a time a special fund is created in which fees are credited though this is not absolutely necessary.
But as I read these deci sions, they cannot be held to lay down that 'What is in pith and substance a tax can become a fee merely (1) [1954] S.C.R. 1055.
574 because a fund is created in which collections are credited and some services may be rendered to the persons from whom collections are made.
If that were so, it will be possible to convert many taxes not otherwise leviable into fees by the device of creating a special fund and attaching some service to be rendered through that fund to the persons from whom collections are made.
I am therefore of opinion that one must first look at the pith and substance of the levy, and if in its pith and substance it is not essentially different from a tax it cannot be converted into a fee by creating a special fund in which the collections are credited and attaching some services to be rendered through that fund.
Let me then look at the pith and substance of the cess, which has been imposed in this case.
The cess consists of a levy not exceeding five per centum of the value of the minerals at the pit 's mouth on all extracted minerals.
Prima facie such a levy is nothing more nor less than a duty of excise.
Item 84 of List I gives power to levy duties of excise exclusively to the Union and is in these terms : "Duties of excise on tobacco and other goods manufactured or produced in India except (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in sub paragraph (b) of this entry.
" This item gives power to Parliament to impose duties of excise on all goods manufactured.
or produced in India with certain exceptions mentioned therein.
Taking this particular case, coal is produced from the mine and would clearly be covered by the words " other goods produced in India" and a duty of excise can be levied on it.
What then exactly is meant by a duty of excise? Reference in this connection may be made to Governor General in Council vs Province of Madras (1).
In that case the point arose whether the sales tax imposed by the Madras Legislature was a duty of excise.
The Privy Council pointed out that (1) (1945) L.R. 72 I.A. 91.
575 "in a Federal constitution in which there is a division of legislative powers between Central and Provincial legislatures, it appears to be inevitable that controversy should arise whether one or other legislature is not exceeding its own, and encroaching on the other 's, constitutional legislative power, and in such a controversy it is a principle, which their Lordships do not hesitate to apply in the present case, that it is not the name of the tax but its real nature, its 'pith and substance ' as it has sometimes been said which must determine into what category it falls.
" The Privy Council went on to consider what a duty of excise was and said that "it is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced.
It is a tax on goods not on sales or the proceeds of sale of goods.
Though sometimes a duty of excise may be imposed on first sales, a duty of excise and a tax on the sale of goods were separate and distinct imposts and in law do not overlap." The Privy Council approved of the decisions of the Federal Court in re The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 (1) and The Province of Madras vs Messrs. Boddu Paidanna and Sons (2).
It seems to have been urged that because in some cases a duty of excise may be levied on the occasion of the first sale and a sales tax may also be levied on the same occasion, there is really no difference between the two.
It is however clear that a duty of excise is primarily a tax on goods manufactured or produced; it is not a tax on the sale of goods, though the taxing authority may as a matter of concession to the producer not charge the tax immediately the goods are produced and may postpone it, to make it easy for the producer to pay the tax, till the first sale is made by him; nevertheless the charge is still on the goods and is therefore a duty of excise.
On the other hand, a sales tax can only be levied when a sale is made and there is nothing to prevent its levy on the first sale.
The two concepts (1) (2) (1948) F.C.R. go.
576 are however different and, as the Privy Council pointed out, a sales tax and a duty of excise are separate and distinct imposts and in law do not overlap.
The pith and substance of a duty of excise is that it is primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced.
Let me therefore see what the Orissa Legislature has done in the present case.
It has levied a cess at a rate not exceeding five per centum on the value of minerals at the pit 's mouth on all extracted minerals.
All the extracted minerals are nothing other than goods produced and the cess is levied on the goods produced at a rate not exceeding five per centum of the value at the pit 's mouth.
The cess therefore in the present case cannot be anything other than a duty of excise.
The pith and substance of the cess in this case falls fairly and squarely within entry 84 of List I and is therefore a duty of excise, which cannot be levied by the Orissa State Legislature.
I may in this connection refer to the cesses levied by the Central Legislature and Parliament by Act XXXII of 1947 and by the Act No. LXV of of Act XXXII of 1947 lays down that there shall be levied and collected as a cess for the purposes of that Act a duty of excise on all coal and coke dispatched from collieries at such rate not less than four annas and not more than eight annas per ton as may from time to time be fixed by the Central Government by notification in the Official Gazette.
This is obviously a tax on the goods produced, the basis of the tax being so much per ton.
Again sec.
9 of Act LXV of 1951 lays down that there may be levied and collected as a cess for the purposes of that Act on all goods manufactured or produced in any such scheduled industry as may be specified in this behalf by the Central Government by notified order a duty of excise at a rate not exceeding two annas per centum of the value of the goods.
This again is clearly a tax on goods produced or manufactured and is in the nature of a duty of excise, the basis of the tax being so much of the value of the goods.
If these two taxes are duties of excise, 577 I fail to see any difference in pith and substance between these two taxes and the cess levied under the Act.
It is however urged that the method employed in the Act for realising the cess is only a method of quantification of the fee and merely because of this quantification, the pith and substance of the impost does not change from a fee to a duty of excise.
Reference in this connection was made to three cases of quantification.
In Sir Byramjee Jeejeebhoy vs The Province of Bombay (1), a question arose with respect to a tax imposed on urban immovable property, whether it was a tax on lands and buildings.
The challenge to the tax was on the ground that it was tax on income or capital value within items 54 and 55 of List I of the Seventh Schedule of the Government of India Act and could not therefore be imposed by the Bombay Legislature.
It was held that the tax was a tax on lands and buildings within the meaning of item 42 of List II of the same Schedule and that the basis of the tax, which was the annual value, would not convert it into a tax on income or capital value.
The High Court considered the pith and substance of the said Act and came to the conclusion that every tax on annual value was not necessarily a tax on income and it was held that the mode of assessment of a tax did not determine its character and one has to look to the essential character of the tax to decide whether it was a tax on income or on lands and buildings.
Looking to the pith and substance of the tax it was held in that case that it was a tax on lands and buildings.
That decision was in the circumstances of that case right because the intention of the legislature was not to tax the income of any one; the essential character of the tax in that case was to tax the lands and buildings and the annual value of the lands and buildings was only taken as a mode of levying the tax.
In the present case, however, the very mode of the levy of the cess is nothing other than the levy of a duty of excise and therefore the principle of quantification for purposes of a fee cannot be extended to (1) I.L.R. 578 such an extent as to convert what is in pith and substance a tax into a fee on that basis.
The next case to which reference was made is Municipal Corporation, Ahmedabad vs Patel Gordhandas Hargovandas (1).
In that case the Ahmedabad Bo.
rough Municipality had levied a rate on open lands and the basis of the levy was one per centum of the capital value of the land.
It was urged that this amounted to a capital levy within entry 54 of List I; but the court repelled that contention and held that the levy was in pith and substance a tax on lands, which came within entry 42 of List II of the Seventh Schedule to the Government of India Act.
A distinction was made between a tax on land which is levied on the basis of its capital value and a tax which is on capital treating it as an asset itself.
This decision also, if I may say so with respect, is correct, for the basic idea was to tax lands and some method had to be found for doing so and the method evolved, though it might look like a capital levy, was in pith and substance not so.
But the theory of quantification which is the basis of these two cases cannot be stretched so far as to turn levies which are in pith and substance taxes into fees, by the process of attaching certain services and creating a fund.
The third case is Ralla Ram vs The Province of East Punjab (2).
That was a case of a tax on lands and buildings and annual value was the basis on which the tax was levied.
The Federal Court rightly pointed out that the pith and substance of the levy had to be seen and on that view it was not income tax but a tax on lands and buildings and the method adopted was merely a method of quantification.
The Federal Court also pointed out that "where there is an apparent conflict between an Act of the Federal Legislature and an Act of the Provincial Legislature, we must try to ascertain the pith and substance or the true nature and character of the conflicting provisions and that before an Act is declared ultra vires, there should be an attempt to reconcile the two conflicting jurisdictions, and, only if such a reconciliation should prove (1) I.L.R. (2) 579 impossible, the impugned Act should be declared invalid.
" It may also be pointed out that in all these three cases, one source of income of an individual or one item out of the total capital of an individual was the basis of calculation while income tax or capital levy is generally on the total income or the total capital of a person.
That aspect must have gone into the decision that the method employed was merely a mode for imposing a tax on lands and buildings.
In the present case, however, I see no difference between the method of imposing a duty of excise and the method employed in the Act for imposing a cess a matter which will be clear from the cesses imposed under the two Central Acts already referred to (No. XXXII of 1947 and No. LXV of 1951).
It is not as if there could be no method of imposing a fee properly so called in this case except the one employed.
Two methods readily suggest themselves.
A lump sum annual fee could be levied on each mine even on a graded scale depending on the size of the mine as evidenced by its share capital.
Or a similar graded fee could be levied on each mine depending on its size determined by the number of men employed therein.
Where therefore the result of quantification is to bring a particular impost entirely within the ambit of a tax it would not be right to say that such an impost is still a fee, because certain services have to be rendered and a fund has been created in which collections of the impost are credited.
If this were permissible many taxes not otherwise leviable would be converted into fees by the simple device of creating a special fund and attaching certain services to be rendered from the amount in that fund.
That would in my opinion be a colourable exercise of the power of legislation, as explained in K. C. Gajapati Narayan Deo vs The State of Orissa (1).
Let me illustrate how taxes can be turned into fees on the so called basis of quantification with the help of the device of creating a fund and attaching certain services to be rendered out of monies in the fund.
Take the case of income tax under item 82 of List I of the Seventh Schedule, which is exclusively reserved (1) ; 580 for the Union.
Suppose that some State Legislature wants to impose a tax on income other than agricultural income in the garb of fees.
All that it has to do is then to create a special fund out of the amounts collected and to attach rendering of certain services to the fund.
All that would be necessary would be to define the services to be rendered so widely that the amount required for the purpose would be practically limitless.
In that case there would be no difficulty in levying any amount of tax on income, for the amount collected would always be insufficient for the large number of services to be rendered.
What has to be done is to find out a number of items in Lists II and III of the Seventh Schedule in respect of which fees can be levied by the State Legislature.
These fees can be levied on a total basis for a large number of services under various entries of Lists II and III.
A fund can be created, say, for rendering services of various kinds to residents of one district.
In order to meet the expenses of tendering such services, suppose, the legislature imposes a tax on every one in the district at 10 per centum of the net total income (other than agricultural income); the amount so collected is put in a separate fund and ear marked for such special services to be rendered to the residents of that district.
Can it be said that such a levy is a fee justified under various entries of Lists II and III, and not a tax on income, on the ground that this is merely a mode of quantification? As an instance, take, item 6 of List II, "Public health and sanitation, hospitals and dispensaries"; item 9, "Relief of the disabled and unemployable"; item II, Education; item 12, Libraries, museums and similar institutions"; item 13, communications, that is to say, roads, bridges and other means of communications; item 17, "Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power"; and item ', 25, "Gas and gas works"; item 23 of List III, "Social security and social insurance, employment and unemployment"; item 24, "Welfare of labour including conditions of work, provident funds, employers ' liability workmen 's compensation, invalidity and old age 581 pensions and maternity benefits"; item 25, "Vocational and technical training of labour"; and item 38, "Electricity". Assume that a fund is created for rendering, these services to the residents of a district.
The State Legislature is entitled to impose fees for rendering these services to the residents of the district; the costs of these services would obviously be limitless and in order to meet these costs, the State legislature levies a consolidated fee for all these purposes at 10 per centum of the total net income on the residents of the district (excluding his agricultural income) as a measure of quantification of the fee.
Can it be said in the circumstances that such a levy would not be Income tax, simply because a fund is created to be used in the district where collections are made and these services have to be rendered out of the fund so created to the residents of that district and to no others? The answer can only be one, viz., that the nature of the impost is to be seen in its pith and substance; and if in pith and substance it is income tax within item 82 of List I of the Seventh Schedule it will still remain income tax in spite of the creation of a fund and the attaching of certain services to the monies in that fund to be rendered in a particular area.
Such an impost can never be justified as a consolidated fee on the ground that it is merely a method of quantification.
Compare what has been done in this case.
Sec. 3 of the Act which refers to the services to be rendered mentions communications, that is,, roads, bridges and other means of communication (barring those given in List I), water supply and electricity, for the better development of the area.
These three items themselves would mean expenditure of such large amounts that anything could be charged as a fee to meet the costs, particularly in an undeveloped State like Orissa.
Further, the section goes on to mention provision for the welfare of residents or workers in any such area, which would include such things as social security and social insurance, provident funds, employer 's liability, workmen 's compensation, invalidity and old age pensions and maternity benefits and may be even employment and unemployment.
Again large funds would 74 582 be required for these purposes.
Therefore, the services enumerated in section 3 being so large and requiring such large sums, any amount can be levied as a fee and in the name of quantification any tax, even though it may be in List I, can be imposed; and that is exactly what has been done, namely, what is really a duty of excise has been imposed as a fee for these purposes which fall under items 13 and 17 of List II and 23, 24 and 38 of List III.
There can be no doubt in the circumstances that the levy of a cess as a fee in this case is a colourable piece of legislation.
I do not say that the Orissa State Legislature did this deliberately.
The motive of the legislature in such cases is irrelevant and it is the effect of the legislation that has to be seen.
Looking at that, the cess in this case is in pith and substance nothing other than a duty of excise under item 84 of List I and therefore the State legislature was incompetent to levy it as a fee.
The next contention on behalf of the State of Orissa is that if the cess is not justified as a fee, it is a tax under item 50 of List II of the Seventh Schedule.
Item 50 provides for taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development.
This raises a question as to what are taxes on mineral rights.
Obviously, taxes on mineral rights must be different from taxes on goods produced in the nature of duties of excise.
If taxes on mineral rights also include taxes on minerals produced, there would be no difference between taxes on mineral rights and duties of excise under item 84 of List I. A comparison of Lists I and II of the Seventh Schedule shows that the same tax is not put in both the Lists.
Therefore, taxes on mineral rights must be different from duties of excise which are taxes on minerals produced.
The difference can be understood if one sees that before minerals are extracted and become liable to duties of excise somebody has got to work the mines.
The usual method of working them is for the owner of the mine to grant mining leases to those who have got the capital to work the mines.
There should 583 therefore be no difficulty in holding that taxes on mineral rights are taxes on the right to extract minerals and not taxes on the minerals actually extracted.
Thus tax on mineral rights would be confined, for example, to taxes on leases of mineral rights and on premium or royalty for that.
Taxes on such premium and royalty would be taxes on mineral rights while taxes on the minerals actually extracted would be duties of excise.
It is said that, there may be cases where the owner himself extracts minerals and does not give any right of extraction to somebody else and that in such cases in the absence of mining leases or sub leases there would be no way of levying tax on mineral right, ,.
It is enough to say that these cases also, rare though they are, present no difficulty.
Take the case of taxes on annual value of buildings.
Where there is a lease of the building, the annual value is determined by the lease money; but there are many cases where owners themselves live in buildings.
In such cases also taxes on buildings are levied on the annual value worked out according to certain rules.
There would be no difficulty where an owner himself works the mine to value the mineral rights on the same principles on which leases of mineral rights are made and then to tax the royalty which, for example, the owner might have got if instead of working the mine himself he had leased it out to somebody else.
There can be no doubt therefore that taxes on mineral rights are taxes of this nature and not taxes on minerals actually produced.
Therefore the present case is not a tax on mineral rights; it is a tax on the minerals actually produced and can be no different in pith and substance from a tax on goods produced which comes under Item 84 of List I, as duty of excise.
The present levy therefore under section 4 of the Act cannot be justified as a tax on mineral rights.
In the view I have taken, it is not necessary to consider the other point, raised on behalf of the petitioners, namely, that even if it is a fee, in view of the two Central Acts (mentioned earlier) the, Orissa Legislature was not competent to pass the Act.
I would 584 therefore allow the petition, and declare that the Orissa Mining Areas Development Fund Act, 1952, is beyond the constitutional competence of the Orissa Legislature to pass it.
The whole Act must be struck down because there will be very little left in the Act if section 4 falls as it must.
The legislature would never have passed the Act without section 4.
By COURT.
In accordance with the majority Judgment of the Court, the Writ Petition is dismissed with costs.
| The Government of U. P. appointed a Court of enquiry under sections 6 and 10 of the United Provinces , and referred to it the present dispute.
The Court of enquiry submitted its report to the Government, whereupon the Government issued a notification in July, 1950, directing the various sugar factories to pay bonus to their workmen for the years 1948 49 as well as to pay certain amounts as bonus for the years 1947 48.
331 Court against the Government, prohibiting it from enforcing the notification.
The State Government came up in appeal, urging, that the provisions of cl.
(b) of section 3 of the United Provinces , were wide enough to permit it to issue such a direction to the employer because by doing so the State Government would be imposing a condition of employment in future.
The respondents, inter alia, contended that (1) clause (b) of section 3 of the Act does not operate retrospectively ; (2) bonus could only be a term of employment by agreement and could not be imposed by statute ; (3) where there was an industrial dispute cl.
(d) and not cl.
(b) of section 3 of the Act would apply and (4) if cl.
(b) was applicable it was ultra vires being discriminatory and violative of article 14 of the Constitution and also violative of article 19(i) of the Constitution as it confers arbitrary powers on the State Government.
Held, that (i) though cl.
(b) of section 3 of the United Provinces , could not be given a retrospective effect, yet there was nothing therein which prohibited the State Government from giving a direction with regard to the payment of bonus and by giving such a direction the State Government was not giving retrospective effect to the provisions of that clause nor did it add a new term or a condition for a period which was over, it merely required the employer to pay an additional sum of money to their employees as a term and condition of employment in future; (ii) though normally wage is a term of contract it can be made a condition of employment by statute, and it was open to the State Government under cl.
(b) of section 3 to make the payment of bonus to workmen a condition of their employment in future; (iii) where the employees bargained in their collective capacity, the fact that the personnel of the factory when the order for the payment of bonus was made by the Government and in the year to which dispute related were not the same, did not affect the power of the Government as the order would apply only to those employees who had worked during the period in question and not to new employees ; (iv) the normal way of dealing with an industrial dispute would be to have it dealt with judicially and not by resort to executive action, but cl.
(b) of section 3 empowers the Government to act promptly in case of an emergency and arms it with additional powers to deal with such an emergency in the public interest; (v) when the Government had made an executive or per under cl.
(b) of section 3 on the ground that it was in the public interest to do so it was open to the aggrieved party to move the Government to refer the industrial dispute for conciliation or adjudication under cl.
(b) of section 3 of the Act.
332 (vi) the provisions of cl.
(b) of section 3 are not in any sense alternative to those of cl.
(d) and the former could be availed of by the State Government only in an emergency and as a temporary measure.
The right of the employer or the employee to require the dispute to be referred for conciliation or adjudication would still be there and could be exercised by them by taking appropriate steps; (vii) clause (b) of section 3 of the Act is not violative of the provisions of article 19(1)(g) of the Constitution as it permits action to be taken thereunder by the Government only in an emergency and in the public interest.
The restriction placed upon the employer is only a temporary one and having been placed in the public interest falls under cl.
(6) of article 19 of the Constitution.
Ram Nath Koeri and Anr.
vs Lakshmi Devi Sugar Mills and Ors., , approved.
L. D. Mills vs U. P. Government, A.I.R. 1954 All. 705, overruled.
|
Appeal No. 1464 of 1968.
Appeal ,from the judgment and order dated March 18, 1968 of the Patna High Court in C.W.J.C. No. 816 of 1967.
A. K. Sen, Bhola Sen, D. Parkar Gupta, Om Khetan, B.P. Maheshwari and R.K. Maheshwari, for the appellant.
M.C. Chagla and R.C. Prasad, for respondents Nos. 1 and 2.
M.C. Chagla, D.P. Singh, S.C. Agarwal, Uma Dutta and section Chakravarti, for respondent No. 5.
Sobhugmal Jain and Krishna Sen, for respondent Nos. 6 to 8.
The Judgment of the Court was delivered by Hegde, J.
This appeal by certificate arises from the decision rendered on 18th March 1968 by the Patna High Court in C.W.J.C. No. 816 of 1967.
That was a petition filed by the appellant under article 226 of the Constitution praying, inter alia, that the High Court may be pleased to quash the two orders made by the Cane Commissioner, Bihar on November 14, 1967 under which he excluded 99 villages from the area reserved by him in favour of the appellant under cl. 6 of the Sugar Cane (Control) Order 1966 (to be hereinafter referred to as the 'order ') and included those villages in the area reserved in favour of New Siwan Mill (5th respondent in this appeal).
The High Court dismissed that writ petition.
The appellant Co. was established in 1903.
Though its sugar mill is in U.P. it used to draw its sugarcane requirement mainly from the neighboring areas in Bihar State.
The mill in question is within about 100 yards of the Bihar border.
The appellant 's case is that for the last over 30 years the 208 villages of Bihar, with which we are concerned in this appeal had been the principal source of its supply of sugarcane and that the Bihar authorities used to reserve those villages for it.
The appellant claims to have spent huge amount in the development of sugarcane growing areas in the said 208 villages in the course of years.
It also claims to have advanced large sums to the sugarcane growers in the said villages, such sums to be adjusted later on against the price of the sugarcane purchased.
In 1955 the Central Govern 810 ment promulgated the 'order ' in exercise of its powers under the Essential Commodities Act.
One of the main purpose of that order was to regulate the supply and distribution of sugarcane.
Reservation of the said 208 villages in favour of the appellant continued under that order.
But in view of the agitation carried on by the 5th respondent and others, .during the two seasons 1962 63 and 1963 64 those villages were kept unreserved.
Hence any factory was free to make purchases in that area.
Even during that period the appellant continued to get its supplies from that area.
On February 3, 1964, there was a meeting of the Cane Commissioners of Bihar and U.P. with the object of deciding on a long term basis the question of allotting sugarcane grown in the border area among the sugar factories situated near the Bihar U.P. border.
In that meeting it was decided inter alia that the aforementioned 208 villages should be reserved in favour of the appellant; at the same time some of sugarcane growing areas in U.P. were reserved for some of the Bihar sugar mills.
Accordingly the Cane Commissioner of Bihar passed orders reserving the aforementioned 208 villages for the appellant for two seasons i.e. 1964 65 and 1965 66.
For the New Siwan mill (5th respondent) 100 more villages were reserved in Guthani area.
The representation of the New Siwan mill for reserving the 208 villages mentioned earlier was rejected by the Cane Commissioner.
The powers of the Central Government under cls.
6, 7, 8 and 9 of the 'order ' were delegated to the several States and the Cane Commissioners mentioned in the notification issued by the Central Government on July 16, 1966.
The State Government of Bihar and the Cane Commissioner of Bihar are amongst the authorities to whom the powers under those clauses were delegated.
By its order of November 4, 1966, the State Government of Bihar rejected the representation made by New Siwan mill by its application of February 17, 1966 asking for reservation of the 208 villages mentioned earlier.
Thereafter by his order of December 30, 1966, the Cane Commissioner Bihar reserved those villages for the appellant under el.
6(1)(a) of the 'order ' for two seasons (1966 67 and 1967 68).
The New Siwan mill challenged the validity of that order in C.W.J.C. No. 63 of 1967 in the Patna High Court.
The appellant filed its counter affidavit in that proceeding on March 21, 1967.
The application was heard in part on Aprii 13, 1967 and April 14, 1967 but thereafter the case was adjourned.
Later the appellant learnt that the 5th respondent had moved the Chief Minister of Bihar to revoke the reservation made in favour of the appellant.
Apprehending that the appellant 's interest may be jeopardised, one of the Directors of the appellant company wrote to the Chief Minister on June 15, 1967 praying that the reservation made in favour of the appellant should 811 not be disturbed.
Subsequent to that, the appellant made numerous other representations both to the Chief Minister as well as to the Cane Commissioner.
One of the Director of the appellant company met the Chief Minister as well as his Private Secretary.
Meanwhile the 5th respondent was also making representations, to the Chief Minister as well as to the Cane Commissioner.
From the records produced before us, it is clear that the Cane Commissioner was firmly of the opinion that there was no justification for disturbing the reservation made in favour of the appellant.
He strongly recommended to the Chief Minister against interfering with the said reservation.
According to him it was in the interest of the Sugar industry as well as that of the Sugar mills in Bihar not to disturb the agreement arrived at the meeting of the Sugar Cane Commissioners of U.P. and Bihar.
From the records.
produced before us it is seen that one of the grounds urged by the 5th respondent in support of his plea was that while it was a Bihar mill, the appellant was a U.P. mill and as such the Bihar villages should be reserved for its use.
From the note submitted by Shri Taring Sahai, an officer in the Cane Commissioner 's department, to the Assistant Cane Commissioner on July 5, 1967, it is seen that the Chief Minister was interesting himself ' in the controversy between the appellant, and ' the 5th respondent.
That is also clear from the note submitted by section Asanullah another officer in the same department to the Cane Commissioner ' on 7 7 1967.
It is unnecessary to refer to the correspondence that passed between the Cane Commissioner and the Chief Minister but one thing is clear from that correspondence that while the Cane Commissioner was firm in his opinion that the agreement entered into between him and his counter part in U.P. should be respected, the Chief Minister was inclined to alter the reservation made in favour of the appellant.
In the notes submitted by the Assistant Cane Commissioner to the Cane Commissioner we find the following statement: "As verbally ordered by the Cane Commissioner in the background of the above notes of the Assistant Cane Commissioner in connection with the discussions held with the Chief Minister the undersigned examined the geographical positions given in the map.
208 villages of Bihar are reserved for Pratabpur mill.
They are divided as follows: (a) Mirganj police station . 87 (b) Siwan police station . 106 (c) Darauli police station . 15 Total .
208 ", 812 In the note submitted by the Cane Commissioner to the Chic Minister on October 27, 1967, it is stated: "As per order, the above two suggestions (Ka and Kha) have been given for division of 208 villages between the New Siwan Mill and the Pratabpur Mill.
According to one (Ka) the New Siwan Mill gets 121 villages and according to the second proposal (Kha) it gets 99 villages.
As it is clear from the notes of the Assistant Cane Commissioner, the Chief Minister has ordered that most of these 208 villages may be given to the New Siwan Mill.
This order is carried out under proposal 'Kha ', but under it, about 20 22 such villages come as are at a distance of only 2 3 miles from the Pratabpur Mill and the farmers of those villages can also have some objection on account of it.
Hence only after obtaining a clear order from the Chief Minister, the necessary notification will be issued.
Sd/ Illegible 27 10.
" On November 7, 1967, the Chief Minister passed the following order on the above note.
"I agree with the notes as at Kha of page 33.
99 villages be left to the New Siwan Mill and 109 villages to the Pratabpur Mill.
None of the two mills will have the right to keep the weigh bridge of sugar cane collecting centre in the area of each other.
Sd/ Mahamaya Pd.
Sinha 7 11 67.
" On the basis of this direction the Cane Commissioner made the impugned orders on November 14, 1967, which were duly published in the Gazette.
In the High Court the validity of the order made by the Cane Commissioner on November 14, 1967 was challenged on six different grounds i.e. (1 ) that the Cane Commissioner had no jurisdiction to pass those orders; (2) in passing those orders, the Cane Commissioner practically abdicated his statutory functions and mechanically implemented the directions issued by the Chief Minister; (3) the orders are vitiated as the proceeding before the authority culminating in those orders was a quasi judicial proceeding and the authority had failed to afford a reasonable opportunity to the appellant to represent against the orders proposed to be made; (4) even if the proceeding in question should be 813 considered as an administrative proceeding as the orders made involve civil consequence and the proceeding having not been conducted consistently with the rules of natural justice, the impugned orders cannot be sustained; (5) those orders were passed mala fide and lastly (6) they are discriminatory against the petitioner and hence hit by article 14 of the Constitution.
The High Court rejected every one of the contentions.
It came to the conclusion that the Cane Commissioner who had the power to make reservations under cl. 6 of the 'order ' had also the power to modify Or cancel those reservations in view of section 21 of the General Clauses Act; the impugned orders were that of the Cane Commissioner both in fact as well as in law; the proceeding before the Cane Commissioner which resulted in making the impugned orders is a purely administrative proceeding; even if it is considered to be quasi judicial proceeding, reasonable opportunity had been given to the appellant to represent its case and in fact it had represented its case fully and effectively; the plea of mala fide is unsubstantiated and the orders in question did not contravene article 14 of the Constitution.
In this Court Shri A.K. Sen, learned Counsel for the appellant attacked the impugned order on the following grounds: (1) The orders in question though purported to have been made by the Cane Commissioner, were in fact not so; the Cane Commissioner merely acted as the mouth piece of the Chief Minister; in truth he had abdicated his statutory functions and therefore the orders are bad; (2) Every proceeding to modify any reservation made under cl.
6 of the 'order ' is a quasi judicial proceeding.
As the impugned modifications were made without affording the appellant reasonable opportunity for representing its case they are bad in law; (3) Even if the said proceeding is considered as an administrative proceeding, the impugned orders are liable to be set aside on the basis of the rule laid down by this Court in State of Orissa vs Dr. (Miss) Binapani Dei and Ors.
(1), and ( 4 ).
The impugned modifications contravene article 301 of the Constitution.
Shri Sen did not address any arguments on the last ground formulated by him.
Therefore we shall not deal with the same.
The contentions of Shri M.C. Chagla, learned Counsel for the State of Bihar as well as the 5th respondent were as follows: Though the Cane Commissioner had consulted the Chief Minister, the impugned orders were really made by the former, hence it cannot be said that he had abdicated his statutory func (1) ; 814 tions.
According to him, the proceeding before the Cane Commissioner was administrative in character and to such a proceeding rules of natural justice are not attracted.
He further urged that even if it is held that the said proceeding was a quasi judicial proceeding, there was no contravention of the principles of natural justice as the appellant had represented his case fully both before the Chief Minister as well as before the Cane Commissioner.
Before we proceed to examine the contentions advanced on behalf of the parties, it is necessary to refer to the relevant provisions of law.
Clause 5 of the 'order ' which deals with the power to regulation, distribution and movement of sugarcane reads as under: (1) The Central Government may, by order notified in the official gazette: (a) reserve any area where sugarcane is grown (hereinafter in this clause referred to as reserved area) for a factory having regard to the crushing capacity of the factory, the availability of sugarcane in the reserved area and the need for production of sugar, with a view to enabling the factory to purchase the quantity of sugarcane required by it; (b) determine the quantity of sugarcane which a factory will require for crushing during any year; (c) fix, with respect to any specified sugarcane grower or sugarcane growers generally in a reserved area, the quantity or percentage of sugarcane grown by such grower or growers, as the case may be, which each such grower by himself or, if he is a member of a co operative society of sugarcane growers operating in the reserved area, through such society; shall supply of the factory concerned; (d) direct a sugarcane grower or a sugarcane growers ' cooperative society supplying sugarcane to a factory, and the factory concerned to enter into an agreement to supply or purchase, as the case may be, the quantity of sugarcane fixed under paragraph (c); (e) direct that no gur (jaggery) or khandsari sugar or sugar shall be manufactured from sugarcane except under and in accordance with the conditions specified in the licence issued in this behalf; (f) prohibit or restrict or otherwise regulate the export of sugarcane from any area (including a reserved 815 area) except under and in accordance with a permit issued in this behalf.
(2) Every sugarcane grower, sugarcane growers ' co operative society and factory, to whom or to which an order made under paragraph (c) of sub clause (1) applies, shall be bound to supply or purchase, as the case may be, that quantity of sugarcane covered by the agreement entered into under the paragraph and any wailful failure on the part of the sugarcane growers ' cooperative society or the factory to do so, shall constitute a breach of the provisions of this Order: Provided that where the default committed by any sugarcane growers ' co operative society is due to any failure on the part of any sugarcane grower, being a member of such society such society shall not be bound to make supplies of sugarcane to the factory to the extent of such default.
Clause (11 ) deals with delegation of powers.
It reads: "The Central Government may, by notification in the Official Gazette, direct that all or any of the powers conferred upon it by this Order shall, subject to such restrictions, exceptions and conditions, if any, as may be specified in the direction, be exercisable also by: (a) any officer or authority of the Central Government; (b) a State Government or any officer or authority of a State Government." As seen earlier, the Central Government had delegated its power under cl.
(6) to the State Government of Bihar as well as to the Cane Commissioner, Bihar.
In the matter of exercise of the power under rule 6(1) the State Government and the Cane Commissioner are concurrent authorities.
Their jurisdiction is co ordinate.
There was some controversy before us whether a Cane Commissioner who had reserved an area for a sugar factory for a particular period can alter, amend, or modify the area reserved in the middle of the period fixed.
As seen earlier 208 villages With which we are concerned in this case were reserved for the appellant for two seasons i.e. 1966 67 and 1967 68.
The contention was that the Cane Commissioner could not have interfered with that reservation within that period.
The High Court has come to the conclusion that the Cane Commissioner who had the power to make the reservation in question must be held to have had the power to alter or modify that reservation.
But it is not necessary for us to pronounce on this question as we are of the opinion that the 816 impugned orders though purported to have been made by the Cane Commissioner were in fact made by the Chief Minister and hence they are invalid.
We have earlier seen that the Cane Commissioner was definitely of the view that the reservation made in favour of the appellant should not be disturbed but the Chief Minister did not agree with that view.
It is clear from the documents before us that the Chief Minister directed the Cane Commissioner to divide the reserved area into two portions and allot one portion to the 5th respondent.
In pursuance of that direction, the Cane Commissioner prepared two lists 'Ka ' and 'Kha".
Under the orders of the Chief Minister, the villages contained in list 'Ka ' were allotted to the appellant and in list 'Kha ' to the 5th respondent.
The Cane Commissioner merely carried out the orders of the Chief Minister.
It is true that the impugned orders were issued in the name of the Cane Commissioner.
He merely obeyed the directions issued to him by the Chief Minister.
We are unable to agree with the contention of Shri Chagla that though the Cane Commissioner was initially of the view that the reservation made in favour of the appellant should not be disturbed, he changed his opinion after discussion with the Chief Minister.
From the material before us, the only conclusion possible is that the Chief Minister imposed his opinion on the Cane Commissioner.
The power exercisable by the Cane Commissioner under cl.
6(1) is a statutory power.
He alone could have exercised that power.
While exercising that power he cannot abdicate his responsibility in favour of anyone not even in favour of the State Government or the Chief Minister.
It was not proper for the Chief Minister to have interfered with the functions of the Cane Commissioner.
In this case what has happened is that the power of the Cane Commissioner has been exercised by the Chief Minister, an authority not recognised by cl.
(6) read with cl.
(11) but the responsibility for making those orders was asked to be taken by the Cane Commissioner.
The executive officers entrusted with statutory discretions may in some cases be obliged to take into account considerations of public policy and in some context the policy of a Minister or the Government as a whole when it is a relevant factor in weighing the policy but this will not absolve them from their duty to exercise their personal judgment in individual cases unless explicit statutory provision has been made for them to be given binding instructions by a superior.
In Commissioner of Police, Bombay vs Gordhandas Bhanji(1) this Court struck down the order purported to have been passed by the Commissioner of Police in the exercise of his powers (1) ; 817 under the Bombay Police Act and the rules made thereunder as the order in question was in fact that of the Government.
The rule laid down in that decision governs the question under consideratiing.
This Court reiterated that rule in State of Punjab vs Hari Kishan Sharma(1).
Therein this Court held that the State Government was not justified in assuming jurisdiction which had been conferred on the licensing authority by section 5 (1 ) and (2) of the Punjab Cinemas (Regulation) Act.
For the reasons mentioned above we hold that the impugned orders are liable to be struck down as they were not made by the prescribed authority.
This takes us to the question whether the proceeding which resulted in making the impugned orders is a quasi judicial proceeding or an administrative proceeding.
There was some controversy before us whether a proceeding under el.
6(1) of the 'order ' is a quasi judicial proceeding.
It is not necessary for us to decide that question as in this case we are only concerned with the proceeding which resulted in making the impugned orders.
In that proceeding the only question before the authorities was whether all or some of the villages reserved for the appellant should be taken out from the reserved area and reserved for the 5th respondent.
The plea of the 5th respondent was that all those villages should be reserved for it whereas the appellant insisted that the reservation made in its favour should not be disturbed.
Whether there was a lis between the appellant and the 5th respondent at an earlier stage or not, we are of the opinion, as soon as the 5th respondent moved the Government for altering or modifying the reservation made in favour of the appellant, a lis commenced.
The dispute that arose between the appellant and the 5th respondent had to be decided on the basis of the objective criteria, prescribed by cl. 6 of the 'order ' i.e. (1) the crushing capacity of the appellant mill; (2) the availability of the sugarcane in the reserved area and (3) the need for the production of sugar.
There is hardly any doubt that the modification of the reservation made in favour of the appellant would have had serious repercussions on the working of the appellant 's mill.
It was bound to affect its interests adversely.
Hence it is not possible to accept the conclusion of the High Court that the proceeding before the Cane; Commissioner was not a quasi judicial proceeding.
The impugned orders are similar to orders revoking or modifying licenses.
It would not be proper to equate an order revoking or modifying a licence with a decision not to grant a licence.
Therefore Shri Chagla is not right in his contention that (1) ; 818 in this case we are called upon to deal with a privilege and not right.
As observed by S.A. De Smith in his Judicial Review Administrative Action (2nd Edn.) at p. 211: "To equate a decision summarily to revoke a licence with a decision not to grant a licence in the first instance may be still more unrealistic.
Here the "privilege" concept may be peculiarly inapposite; and its aptness has not been enhanced by the manner in which it has been employed in some modern cases.
It is submitted that the courts should adopt a presumption that prior notice and opportunity to be heard should be given before a licence can be revoked.
The presumption should be rebuttable in similar circumstances to those in which summary interference with vested property rights may be permissible.
That the considerations applicable to the revocation of licences may be different from those applicable to the refusal of licences has indeed been recognised by some British statutes and a number of judicial decisions in other Commonwealth jurisdictions.
" In Province of Bombay vs Kusaldas section Advani and Ors.(1) Das, J. formulated the following tests to find out whether proceeding before an authority or a tribunal . 'is a quasi judicial proceeding : (i) that if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi judicial act; , 'red (ii) that if a statutory authority has power to do any act which will prejudicially affect the subject, then although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi judicial act provided the authority is required by the statute to act judicially.
These tests were adopted by this Court in Shivji Nathubhai vs The Union of India and Ors.(2).
Therein this Court was (1) ; at p. 725.
(2) ; 819 considering the validity of cancellation in review by the Central Government a mining lease granted by the State Government.
In that context this Court held that even if the act of the State Government in granting a mining lease was an administrative act, it was not correct to say that no right of any kind passed to the lessee until the review was decided by the Central Government where a review had been applied for.
Rule 52 of the rules framed under the Mines and Minerals (Regulation and Development) Act, No. 53 of 1941 which gives the aggrieved party the right to a review created a lis between him and the lessee and, consequently, in the absence of anything to the contrary either in rule 54 or the statute itself there could be no doubt that the Central Government is required to act judicially under rule 54.
This Court in Board of High School and Intermediate Education U.P, Allahabad vs Ghanshyam Das Gupta and Ors.(1) held that where the statute in question is silent as to the manner in which the power conferred should be exercised by the authority acting under it, the exercise of power will depend on the express provisions of the statute read alongwith the nature of the rights affected, the manner of disposal provided, the objective criteria, if any, to be adopted, the effect of the decision on the persons affected and other indicate afforded by the statute.
The mere fact that the Act in question or the relevant Regulations do not make it obligatory on the authority to call for an explanation and to hear the person concerned is not conclusive on the question whet her the authority has to act as a quasi judicial body when exercising its power under the statute.
On applying the various tests enunciated in the above decisions, there is hardly any doubt that the proceeding before the Cane Commissioner was a quasi judicial proceeding.
In this connection reference may be usefully made to the decision of the Court of Appeal of New Zealand in New Zealand Dairy Board vs Okitu Co operative Dairy Co., Ltd.(2).
We are referring to that decision because the facts of that case bear a close resemblance to the facts of the present case.
Therein as a result of a Zoning Order made by the Executive Commissioner of Agriculture in May 1937, the respondent dairy company, carrying on business in Gisborne and the surrounding district, and the Kia Ora Co operative Dairy Co. Ltd. became entitled to operate exclusively in a defined area in the Gisborne district.
They were excluded from operating outside that area.
The zoning conditions so established continued to exist until 1950, when the appellant Board issued the zoning orders which were impugned in that case.
It may be noted that the zoning orders were made in the exercise of the statutory power conferred on the appellant board.
[1962] Supp. 3 S.C.R. 36.
(1953) New Zealand Law Reports p. 366.
820 Before 1942, the respondent Co. was approached by the Health Department with a request that it undertakes the treatment and supply of pasteurised milk to the public ' schools, and it was informed that other dairy companies had declined the proposal.
the company complied with the request, after overcoming the difficulties of finance.
The scheme was put into operation.
In 1942 the respondent company put up a treatment plant and expanded its business.
This expansion resulted in an annual turnover in the company 's milk department going upto about A 90,000 as against pound 43,000 in its butter department.
In March, 1950, the Kia era company, by letter, expressed its desire that the appellant Board (which had been substituted by regulation for the Executive Commission) should examine the question of cream and milk supplies in the Gisborne and surrounding districts.
This letter was, in substance, an application to the Board to review the whole question of zoning and to require the respondent company to cease the manufacture of butter.
Moreover the letter set out the circumstances in a manner prejudicial to the respondent company.
After various meetings and negotiations between the appellant Board, companies concerned, and interested parties, at none of which were the contents of the Kia Ora company 's letter to the Board disclosed to the respondent company, no agreement was reached.
The result of discussions with the Kia Ora company and detailed replies to complaints were given to the Board by the respondent company, and its letter ended with a statement to the effect that it would appreciate the privilege of appearing before the full Board with the object of stating its case more fully or of answering any questions.
The Board ignored this specific request.
At a full meeting of the Board held on May 31, 1950, the Board decided that only one butter factory should operate in the Gisborne district.
On August 3, the Board by resolution, decided to give notice of its intention of issuing a zonal order to operate as from October 1, 1950 assigning to the Kia Ora company the cream collection area over which the two companies then operated.
On August 29, the respondent company wrote to the Board protecting against its proposal and asking for recession of the Board 's resolution and ,for an opportunity of being heard.
On September 2, 1950, the appellant Board in exercise of the power conferred upon it by Regulation 716 of the Dairy Factory Supply Regulations, 1936 and in terms of its resolution of August 3, 1950, made Zoning Order No./20 which was the subject of the proceedings before the Supreme Court of New Zealand.
That order was to come into force on October 1, 1950.
Its effect was to assign exclusively to the Kia Ora Co. the area defined in Zoning Order (No. 30) of 1937 as that in which the two companies could jointly collect cream produced in supplying dairies situated in that area, and ' to prohibit the res 821 pondent dairy company after October 1, 1950 from collecting or receiving any cream so produced for the purposes of manufacture into cream or butter.
The respondent company and others presented a petition to the Parliament praying for relief and remedy by way of legislation either in the direction of reversing and setting aside the Board 's decision in the matter of the zoning order or setting aside such decision and rehearing of the matter by an independent tribunal.
The petition was heard by a select Committee of the House of Representatives, which decided to make no recommendation on the petition.
On August 4, the Board made an amended Zoning Order (No. 120A) postponing until June 1, 1951, the date of the coming into operation of Zoning Order No. 120 already made, but otherwise confirming that order.
The respondent company commenced an action against the Board claiming (a) a declaration that Zoning Orders Nos. 120 and 120A issued by the Board were invalidly passed and were of no legal effect; (b) an order of certiorari to remove into the Supreme Court and quash the zoning orders; and (c) an injunction restraining the Board from carrying out its intention of promulgating the zoning orders or from proceeding further or exercising any jurisdiction in accordance with the same.
The action was heard by Mr. Justice Hay, who found that, in the conduct of the inquiry instituted by the Board, following the application made to it by the Kia Ora Company, there was, in the various respects mentioned in the judgment, a departure from those principles of natural justice which were incumbent on the Board; and in particular, the plaintiff company was denied a hearing on the crucial issue as to whether or not a zoning order should be made.
The learned Judge held that the plaintiff company was entitled to succeed in the action in respect of all the reliefs it claimed and he gave the judgment in its favour with costs against the Board.
The Court of Appeal affirmed by majority the judgment of the learned trial judge.
The Court held that the New Zealand Dairy Board in making its zoning order No. 120 on September 1, 1950 was determining a question affecting the rights of the respondent company and further that the order of the Board was that of a body that was, at least primarily, an administrative body and the question whether such a body was under a duty to act judicially in the course of arriving at an administrative decision was to be determined on the true construction of the authorising legislative provisions and the conditions and circumstances under which, and in which, the jurisdiction fell to be exercised.
It held that on the facts and circumstances of the case the power exercised by the Board vitiated as the Board had failed to conform to the principles of natural justice in making the zoning order in question and hence the same is unsustainable.
The decision 822 Of the Privy Council in James Edward Jeffs and Ors.
vs New Zealand Dairy Production and Marketing Board and Ors.
(1) proceeded on the basis that the aforementioned decision of the Court of Appeal is correct.
Shri Chagla contended that even if we are to hold that the power exercised by the authorities in making the impugned orders had to be exercised judicially, on the facts of his case we must hold that there was no contravention of the principles of natural justice.
He took us to the various representations made by the appellant.
According to him the appellant had stated in its representations to the authorities all that it could have said on the subject.
Therefore we should not hold that there was any contravention of the principles of natural justice.
It is true as observed by this Court in Suresh Koshy George vs The University Kerala and Ors.(2) that "the rules of natural justice are not embodied rules.
The question whether the requirements of natural justice have been met by the procedure adopted in a given case must depend to a great extent on the facts and circumstances of the case in point, the constitution of the tribunal and the rules under which it functions.
" In this case what has happened is that both the appellant as welt as the 5th respondent were making repeated representations to the Chief Minister as well as to the Cane Commissioner.
The representations made by the 5th respondent or even the substance thereof were not made available to the appellant.
The proposal to split the reserved area into two or the manner in which it was proposed to be split was not made known to the appellant and his objections invited in that regard.
The appellant complains that the manner in which the area had been divided had caused great prejudice to it.
Its grievance may or may not be true but the fact remains that it had no opportunity to represent against the same.
Hence the appellant is justified in complaining that the principles of natural justice had been contravened.
In view of our finding that the proceeding which resulted in the making of the impugned orders was a quasi~judicial proceeding, it is unnecessary to decide whether the impugned orders could have been validly made in an administrative proceeding.
We see no merit in the contention advanced on behalf of the 5th respondent that the Cane Commissioner was not competent to reserve the area in question for the appellant as its mill is in U.P.
The reserved area is in Bihar.
The Cane Commissioner of Bihar had power to reserve that area for any sugar mill whether situated in Bihar or not.
[1967] A.C. 551.
(2) ; 823 The contention of Shri Chagla that as no orders had yet been passed under cls.
6(c) and (d) of the 'order ' the ,appellant cannot be considered as an aggrieved party is not correct.
As soon as a portion of the area reserved for the appellant was ordered to be taken away and added to the reserved area of the 5th respondent, the appellant 's interest was adversely affected.
Therefore it is immaterial for the appellant what orders are passed under sub cls.
(c) and (d) of el.
6 of the 'order ', because it can no more get any sugarcane from the area in question.
What hurts the appellant is the impugned orders and not the further orders that may be passed.
For the reasons mentioned above this appeal is allowed and the orders impugned quashed.
The State of Bihar as well as the 5th respondent shall pay the costs of the appellant both in this.
Court as well as in the High Court.
G.C. Appeal allowed.
| The Central Wage Board was constituted for devising a wage structure, based on the principle of fair wages payable in the Jute industry.
In determining the financial capacity of the industry the Board selected 20 mills from West Bengal and 9 mills from the rest of the region as representing a cross section of the Industry.
The respondent, a fairly small mill in Andhra Pradesh.
was considered 'as a comparable unit with two larger mills in the State as also with some of the very big and prosperous mills in West Bengal.
The Management of the mill refused to accede to the demand of the workmen to pay wages in accordance with the recommendations of the Board fixing a uniform scale for the entire industry, on the plea that the mill had no financial capacity to bear the burden of the wage scale.
The dispute was referred to the Industrial Tribunal.
The Tribunal upheld the claim of the management.
In appeal to this Court it was contended that the Wage Board recommendations did follow the principles laid down by this Court in the matter of fixation of wages and as such the Tribunal should have implemented its recommendations.
HELD: Dismissing the appeal.
The essential pre requisite of deciding the wage structure viz., consider the capacity of the industry to pay on the principles laid down by this Court was absent in the recommendation of the Wage Board.
This Court has laid down that the capacity of the industry to pay should be gauged on an industry cum region basis after taking a fair cross section of the industry and that the cross section to be truly representative and capable of giving a true picture of the conditions of both industry and labour must be one from each region where establishments of the industry in question are situate.
[608 E F] In the present case taking 20 mills from West Bengal and 9 mills from outside as forming a representative.
cross section was manifestly incorrect as the West Bengal mills could not be said to be comparable units with the rest of the mills.
These mills so clubbed together could not reflect the economic and other conditions prevailing in the mills in different regions with their peculiar problems and differing conditions.
The Board ought to have considered the units in each area separately and determined the wage scales for each such area by taking from that area a representative cross section of the industry where possible or where that was not possible by taking comparable units from other industries within that area.
[608 G H] Express Newspapers Ltd. vs Union of India, [1959] S.C.R. 12, French Motor Car Co. vs Workmen, [1963] Supp. 2 S.C.R. 16 and Greaves Cotton & Co. vs Workmen, [1964] 5 S.C.R. 362, followed.
594 If the wage scale had been determined by the Board in the mam aforesaid, even though the Board was not a statutory body and decisions were only of a recommendatory character, it would be possi for Industrial Tribunal to give due weight to its recommendations such recommendations would have been in conformity with the princil of industry cum region, a principle binding on the ' tribunals.
[609 H] [The difficulty felt by the Tribunal faced with the dilemma whether not to follow the recommendations of the Wage Board arrived at principles different from those consistently followed in industrial adjucation should have been realised by the Government before accepti the recommendations of the Wage Board.] [609 F G]
|
Civil Appeal No. 1163 1167 of 1973.
Appeal by Special Leave from the Judgment and order, dated 15 3 1971 of the Allahabad High Court in Wealth Tax Reference No. 232 of 1964.
section T. Desai and Miss A. Subhashini for the Appellant.
section N. Kacker, V. K. Pandita and E. C. Agarwala for the Respondent.
VENKATARAMIAH, J. These appeals by special leave under Article 136 of the Constitution are directed against the judgment, dated March 15, 1971 of the Allahabad High Court in Wealth Tax Reference No. 232 of 1964.
The facts of the case may be briefly stated thus: The Income tax Appellate Tribunal, Allahabad Bench, Allahabad referred under section 27 (1) of the (hereinafter referred to as `the Act ') to the High Court of Allahabad for its opinion the following question of law arising out of the assessment orders made under the Act in respect of the assessment years 1957 58 to 1961 62: Whether the interest of the assessee in the trust fund amounted to an annuity exempt under section 2 (e) (iv) of the ?" The assessee concerned in this case is Shri P. K. Banerji.
Under a deed of trust, dated October 26, 1937 executed by his father, Shri Pyarey Lal Banerji (hereinafter referred to as `the settlor ') the assessee became entitled to receive the income arising out of the trust fund during his (assessee 's) life time after the death of the settlor subject to the liability to pay out of such income certain specified sums periodically as mentioned in the deed to two other persons.
After the death of the assessee, the income of the trust fund was directed to be paid in equal shares to the two other persons referred to above and if either of them should die before the death of the asessee then the whole of such income had to be paid 659 to the survivor of them during his or her life.
There were certain other directions in the trust deed with regard to the disposal of the income arising out of the trust fund with which we are not concerned in this case.
The trust fund consisted of certain India Government loan bonds or securities issued from time to time under which certain specified interest was payable.
The total face value of such bonds amounted to Rs. 10 lacs.
The Imperial Bank of India, Calcutta (hereinafter referred to as `the trustee ') was appointed as the trustee under the trust deed and the Government loan bonds or securities referred to above were transferred and endorsed in favour of the trustee with a direction to discharge the obligations referred to in the trust deed.
Under clause (1) of the trust deed, the settlor directed the trustee to retain with it the said Government loan bonds or securities and upon redemption of any of them to invest the proceeds thereof in the purchase of three and a half per cent Government promissory notes (old issue) or if this was not practicable in any other security of the Government of India or if this too was not practicable then in any other securities authorised for the investment of trust funds by the or any statutory modification thereof and to hold and stand possessed of the Government loan bonds or securities referred to above or any other investments representing the same as the trust fund to be used in accordance with the directions contained in the deed.
The following are the relevant recitals of the trust deed, dated October 26, 1937 containing directions regarding the manner in which the income arising from the trust fund should be appropriated or spent: "(a) The Bank shall pay the net income of the Trust Fund to the settlor during his life and may instead of paying the same to him direct, credit the same to the current account of the settlor with the Bank, so long as there shall be any such current account.
(b) From and after the death of the settlor, the Bank shall pay the net income of the trust fund to the settlor 's son Pranab Kumar Banerji during his life, if he should survive the settlor subject to the payment there out every six months on the thirtieth day of April and thirty first day of October in every year of a sum of Rupees Nine hundred to the settlor 's son Sunab Kumar Banerji and a sum of Rupees six hundred to the settlor 's daughter in law Purnima Banerji during his or her life, if he or she shall survive the settlor.
(c) If the said Pranab Kumar Banerji shall predecease the settlor or if he should die after having survived the settlor, then 660 in the former case on and from the death of the settlor and in the latter case on and from the death of the said Pranab Kumar Banerji, the income of the trust fund shall be paid in equal shares to the said Sunab Kumar Banerji and Purnima Banerji (if he or she should be then alive) or the whole of such income to the survivor of them during his or her life.
(d) If the said Pranab Kumar Banerji, Sunab Kumar Banerji and Purnima Banerji shall predecease the settlor or if they or any one or more of them shall die after having survived the settlor then in the former case on and from the death of the settlor and in the latter case on and from the death of the survivor of the said Pranab Kumar Banerji, Sunab Kumar Banerji and Purnima Banerji, the Bank shall stand possessed of the trust fund and the income thereof UPON SUCH TRUSTS as the said Pranab Kumar Banerji by any deed or deed with or without power of revocation may appoint or by will or codicil shall at any time or times appoint AND IN DEFAULT of and so far as any such appointment shall not extend IN TRUST for the settlor 's nephew Manoj Kumar Banerji and the settlor 's niece Jhuni Banerji (now minors), if they are both alive, or such one of the two as may be alive and in default of both for the person or persons who under the law relating to intestate succession would on the death of the settlor have been entitled thereto, if the settlor had died possessed thereof and intestate.
" In exercise of the power that he had reserved to himself under the trust deed, dated October 26, 1937 to modify the terms thereof, the settlor executed another trust deed, dated April 28, 1950 by which clauses (b) and (c) of the trust deed, dated October 26, 1937 extracted above were substituted by the following clauses: (b) From and after the death of the settlor the Bank shall pay the net income of the trust funds to the settlor 's son Pranab Kumar Banerji during his life time, if he should survive the settlor.
(c) If the said Pranab Kumar Banerji shall predecease the testator or if he should die after having survived the settlor then in the former case on and from the death of the settlor and in the latter case on and from the death of the said Pranab Kumar Banerji, the income of the trust funds should be paid in equal shares to my son Sunab Kumar Banerji and my daughter in law Shakuntala Banerji (if he or she should be then alive) or the whole of such income to the survivor of them during his or her life.
" 661 The name 'Purnima Banerji ' occurring in clause (d) of the trust deed, dated October 26, 1937 was substituted by the name 'Shakuntala Banerji ' by the trust deed, dated April 28, 1950.
The resulting position was that the trustee was obliged to pay the net income of the trust fund to the settlor during his life time and after his death the trustee had to pay the net income of the trust fund to the assessee during his life time if he should survive the settlor.
If the assessee should pre decease the settlor then on and from the death of the settlor and if the assessee should die after the settlor on and from the death of the assessee, the income of the trust fund had to be paid in equal shares to Sunab Kumar Banerji, the other son of the settlor and Shakuntala Banerji, the daugther in law of the settlor (if he or she should be then alive) and the whole of such income had to be paid to the survivor of them during his or her life.
We are concerned in this case principally with the character of the benefit conferred on the assessee by clause (b) of the trust deed as substituted by the trust deed dated April 28, 1950.
The settlor died sometime in 1952 and since then the assessee was receiving the net income from the trust fund in accordance with the said clause as the sole beneficiary.
During the assessment proceedings under the Act relating to the assessment years in question, the assessee contended before the Wealth tax Officer, Allahabad that since the corpus of the trust fund was vested in the trustee and not in him, the value of the trust fund should not be included in his total wealth and that in any event as he had only the right to receive an annuity under the trust deed, the trust fund should not be taken into account by reason of section 2 (e) (iv) of the Act.
The Wealth tax Officer rejected the contentions of the assessee and included the full market value of the trust fund in the total wealth of the assessee in all the five assessment orders passed by him.
The appeals filed by the assessee before the Appellate Assistant Commissioner of Wealth tax, Allahabad were dismissed.
On further appeal, the Income tax Appellate Tribunal, Allahabad Bench, Allahabad confirmed the orders passed by the Wealth tax Officer and the Appellate Assistant Commissioner of Wealth tax in so far as the question of non applicability of section 2 (e) (iv) of the Act was concerned but it held that the inclusion of the entire value of the corpus in the computation of net wealth was not correct as the assessee had merely a life interest in it.
Accordingly it directed the Wealth tax Officer to modify the assessments valuing the life interest of the assessee according to recognised principal of valuation.
Thereafter at the instance of the assessee the common question of law set out above was referred to the High 662 Court of Allahabad under section 27 (1) of the Act.
All the five references relating to the five assessment years were heard together by the High Court in the year 1970.
Since the High Court was of the view that it was necessary to direct the Income tax Appellate Tribunal to submit a supplementary statement of the case on the following questions: "(1) Whether the right of the assessee to receive the amounts in terms of the deeds of trust, referred to above is an annuity" within the meaning of section 2 (e) (iv) of the Act? (2) if so, whether the terms and conditions relating to such annuity preclude the commutation of any portion thereof into a lump sum grant?" it directed the Tribunal by its order, dated February 27, 1970 to submit a supplementary statement of the case on the above questions.
In accordance with the directions of the High Court, the Tribunal submitted a supplementary statement of the case in August, 1970 stating that the asset in question was not an annuity referred to in section 2 (e) (iv) of the Act.
The cases were there after heard by the High Court.
By its judgment, dated March 15, 1971, the High Court answered the common question of law referred to it in the affirmative in favour of the assessee, holding that the interest of the assessee in the trust fund amounted to an annuity exempt under section 2 (e) (iv) of the Act.
Dissatisfied with the judgment of the High Court, the Department has come up in appeal to this Court.
There is no dispute that in the case of assets chargeable to tax under the Act which are held by a trustee under a duly executed instrument in writing whether testamentary or otherwise, wealth tax can be directly levied upon and is recoverable from the person on whose behalf the assets are held.
Section 3 of the Act creates the said charge in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and Company at the rate or rates specified in Schedule I to the Act. 'Net wealth ' according to section 2 (m) of the Act means the amount by which the aggregate value computed in accordance with the provisions of the Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under the Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than those debts referred to in subclauses (i) to (iii) thereof.
In section 2 (e) of the Act, the expression "assets" is defined as including property of every description, 663 movable or immovable but not including in relation to the assessment year commencing on the 1st April, 1969 or any earlier assessment year those items which are mentioned in sub clauses (i) to (v) of section 2 (e) (1).
Sub clause (iv) of section 2 (e) (1) of the Act which is relevant for the purpose of this case excludes from the definition of the word 'assets ' a right to an annuity in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant.
In order to claim that an item of property should not be treated as an asset for purposes of the Act by virtue of sub clause (iv) of section 2 (e) (1), it has to be established (i) that it is an annuity and (ii) that commutation of any portion thereof into a lump sum grant is precluded by the terms and conditions relating thereto.
The property in question is the right of the assessee to receive the net income of the trust funds during his life time.
The primary facts that emerge from the orders of the Tribunal are (1) that under the trust deed, the settlor intended that after the settlor 's death, the assesee should be the sole beneficiary of the net income from the trust fund during his (assessee 's) life time (2) that the assessee had been treating himself as the owner of the trust fund for purposes of income tax payable by him and had been declaring the income of the trust as his own income and claiming in his own income tax returns deduction for tax paid at source by the trust; (3) that in fact the assessee was the sole beneficiary of the net income derived from trust fund; (4) that he had under the trust deed the right of appointment of his successors under certain circumstances and (5) that the trustees had the power to invest the proceeds of the Government loan bonds or securities which constituted the trust fund upon their redemption as provided in the deed and that therefore the net income realisable from the trust fund was subject to variation.
One of the significant features of the trust deed, dated October 26, 1937 is that what was payable to the assessee was not a periodical payment of a definite predetermined sum of money but only the net income of the trust funds, although it was possible to predicate at any given point of time such income with some certainty having regard to the fact that the trust fund in the instant case consisted of Government loan bonds or securities, the proceeds of which on redemption were liable to be invested in other securities as indicated in the trust deed, dated October 26, 1937.
The principal reason given by the High Court to arrive at the conclusion that the property in question was an annuity is set out in its judgment thus: 664 "In the case before us the property settled under the trust deed consists of Government securities, and it is apparent from the schedule appended to the deed that they bear interest at a fixed and determined rates.
The settlor conferred upon the trustee the power to redeem the government securities and to invest the proceeds in the purchase of 3 1/2% Government promissory notes (old issue) or in any other securities of the Government of India, or that if that was not practicable then in any other securities authorised for the investment of the trust fund by the .
There is nothing on the record before us to show that the original securities comprising the trust property were converted or replaced by securities not bearing a fixed rate of interest and returning a fixed and definite income.
Proceeding, therefore, on the basis that a definite and certain income is yielded by the securities, we have no hesitation in holding that what the assessee received was an amount which did not depend upon or was related to the general income of the estate in the sense that it fluctuated with a fluctuating income.
Having regard to the character and nature of the property settled under the trust, no question arises of a rise or fall in the amount of income produced by the trust property and, therefore, in a real sense what the assessee is entitled to is a definite and certain sum.
Also, having regard to the terms of the trust deed it is not possible to say that the interest of the assessee constitutes an interest in the capital of the trust fund.
Therefore, upon the test laid down by Jenkins L. J. in Duke of Norfolk: In re: Public Trustee vs Inland Revenue Commissioner , it cannot be described as a life interest.
We are fortified in the view we are taking by the decision, on somewhat comparable faces of the Andhra Pradesh High Court in Commissioner of Wealth tax vs Nawab Fareed Nawaz Jung & Ors., It is true that the assessee is entitled to the net income only and that because the trustee has the right to deduct from the gross income its remuneration, its annual income fee and the expenses in managing the trust estate, the net income may vary from year to year.
Yet even here the remuneration and the annual income fee can be charged by the trustee at a fixed rate only, and any variation in the net income may be attributed to the varying expenses from year to year in managing the trust estate.
We have already pointed out that freedom from variation is not an absolute test determining the character of an annuity.
We are of opinion that where it varies merely because 665 of the charges and expenses payable on account of the administration of the trust it does not lose its character as an annuity.
Upon the aforesaid consideration, it seems to us that the right of the assessee to the net income from the trust property under the trust deed can be described in law as a right to an annuity." The High Court appears to have felt that the facts of the case were distinguishable from the facts in Ahmed G. H. Ariff & Ors.
vs Commissioner of Wealth tax Calcutta(1) and the facts in Commissioner of Wealth tax, Gujarat II vs Mrs. Arundhati Balkrishna(2).
We shall presently deal with these two cases.
The word 'annuity ' is not defined in the Act.
In one of the earliest legal compilations of the English law, the term 'annuity ' has been explained as an yearly payment of a certain sum of money granted to another in fee or for life or for a term of years either payable under a personal obligation of the grantor or charged upon his pure personality, although it may be made a charge upon his freehold or leasehold lend in which latter case it is commonly called a rent charge (See Co. Litt 144b).
In Halsbury 's Laws of England, Third Edition (Vol. 32, page 534 para 899), the meaning of the said expression is given as a certain sum of money payable yearly either as a personal obligation of the grantor or out of property not consisting exclusively of land; it differs from a rent charge in that a rent charge issues out of land.
In Bignold vs Giles.(3) 'annuity ' is described thus: "An annuity is a right to receive de anno in annum a certain sum; that may be given for life, or for a series of years it may be given during any particular period, or in perpetuity; and there is also this singularity about annuities, that although payable out of the personal assets, they are capable of being given for the purpose of devolution, as real estate; they may be given to a man and his heirs, and may go to the heir as real estate; so an annuity may be given to a man and the heirs of his body; that does not, it is true, constitute an estate tail, but that is by reason of the Statute De Donis, which contains only the word 'tenements ' and an annuity, though a hereditament, is not a tenement; and an annuity so given is a base fee.
" 666 It is further observed in the above decision thus: "But this appears to me at least clear, that if the gift of what is called an annuity is so made, that, on the face of the will itself, the testator shows his intention to give a certain portion of the dividends of a fund, that is a very different thing; and most of the cases proceed on that footing.
The ground is, that the court construes the intention of the testator to be, not merely to give an annuity, but to give an aliquot portion of the income arising from a certain capital fund".
The three illustrations given under section 173 of the dealing with bequests of annuities also refer to the payment of certain definite sums periodically and they do not refer to periodical payments of income arising out of any trust fund.
It is against this background that this Court proceeded to decide the case of Ahmed G. H. Ariff (supra).
In that case, the Court was called upon to determine whether the benefits conferred on the appellants under a deed creating a wakf alal aulad were annuities or not.
The relevant part of the deed, which declared that the ultimate benefit in the case of complete intestacy of the descendants of the settlor was reserved for poor Musalmans of Sunni community deserving help, read thus: "After payment of all necessary outgoings such as establishment charges, collections charges, revenue taxes, costs of repairs, law charges and other expenses for the upkeep and management of the said wakf property, the mutawalli or mutawallis shall apply the net income of the said wakf property as follows, viz.: (a) in payment to me during the term of my life of one fifth of the said net income by monthly instalments; (b) in payment to each of my sons during the respective terms of their lives one sixth of the said net income by monthly instalments; (c) in payment to my wife, Aisha Bibi, during the term of her life one tenth of the said net income by monthly instalments.
The moneys payable as aforesaid to such of my sons as are minors shall until they attain the age of majority be respectively invested (after defraying the expenses of their maintenance and education) in proper securities or in landed property in Calcutta and such securities or property shall be 667 made over to the said sons on their respectively attaining the age of majority." This Court held that the right of the beneficiary to receive an aliquot share of the net income of the properties was an asset covered by the definition of section 2(e) of the Act and not a mere 'annuity ' and affirmed the decision of the Calcutta High Court in Ahmed G. H. Ariff vs Commissioner of Wealth Tax Calcutta.(1) In the case of Mrs. Arundhati Balkrishna (supra) to which one of us was a party, under two trusts created by the father of the assessee and one trust created by her mother in law, she was to be paid annually the net income of each of the trusts after deducting costs and expenses of administration of the trust.
Under the terms of the trusts, after the life time of the assessee, the corpus of the trust in each case had to be dealt with as provided in them.
Since the assessee was entitled to the whole residue of the income from the trust funds available after defraying expenses of the trust and not any specified or pre determined amount, the High Court of Gujarat held that the right of the assessee under each of the trust deeds was not an annuity but only amounted to a life interest.
The decision of the High Court of Gujarat was later affirmed by this Court in Commissioner of Wealth tax, Gujarat vs Arundhati Balkrishna(2) in which it was observed thus: "On an analysis of the relevant clauses in the three trust deeds, it is clear the assessee was given thereunder a share of the income arising from the funds settled on trust.
Under those deeds she is not entitled to any fixed sum of money.
Therefore, it is not possible to hold that the payments that she is entitled to receive under those deeds are annuities.
She has undoubtedly a life interest in those funds.
In Ahmed G. H. Ariff vs Commissioner of Wealth tax (1966) 59 I.T.R. 230 (Cal.), a Division Bench of the Calcutta High Court held that the right of a person to receive under a wakf an aliquot share of the net income of the wakf property is an "asset" within the meaning of the , and the capital value of such a right is assessable to wealth tax.
Therein, the Court repelled the contention that the right in question was an "annuity".
This decision was approved by this Court in Ahmed G. H. Ariff vs Commissioner of Wealth tax Civil Appeals Nos.
2129 2132 of 1968 decided on 668 August 20, 1969) and the same is binding on us.
A similar view was taken by another Bench of the Calcutta High Court in Commissioner of Wealth tax vs Mrs. Dorothy Martin In that case under the will of the assessee 's father the assessee was entitled to receive for her life the annual interest accruing upon her share in the residuary trust fund.
The Wealth tax Officer included the entire value of the said share in the assessable wealth of the assessee and subjected the same to tax under section 16 (3) of the Wealth tax, 1957.
That order was confirmed by the Appellate Assistant Commissioner but the Tribunal in appeal excluded the same in the computation of the net wealth of the assessee.
On a reference made to the High Court, it was held that, on a construction of the various clauses in the will, the assessee was entitled to an aliquot share in the general income of the residuary trust fund and not a fixed sum payable periodically as "annuity" and, therefore, the value of her share was an asset to be included in computing his net wealth.
These decisions in our view correctly lay down the legal position.
In this view, it is not necessary to consider whether the income receivable by the assessee under those deeds, either wholly or in part, is capable of being commuted into a lump sum grant.
For the reasons mentioned above, we agree with the High Court that payments to be made to the assessee under the three trust deeds cannot be considered as annuities, and, hence, she is not entitled to the benefits of section 2(e) (iv).
" It is, however, contended on behalf of the assessee in this case that since the trust fund consisted of Government securities which were yielding definite annual income by way of interest and there was no evidence of the said securities having been converted into other securities yielding higher or lower income, it should be assumed that the benefit conferred on the assesee was only an 'annuity ' and not a life interest.
This contention has to be rejected for the very reason for which a similar contention was rejected by this Court in Commissioner of Wealth tax, Rajasthan vs Her Highness Maharani Gayatri Devi of Jaipur(1) in the following words: "From these clauses it is clear that the intention of the Maharaja was that the assessee should get a half share in the income of the trust fund.
Neither the trust fund was fixed nor the amount payable to the assessee was fixed.
The only thing certain is that she is entitled to a 15/30 share from out 669 of the income of the trust fund.
That being so, it is evident that what she was entitled to was not an annuity but an aliquot share in the income of the trust fund.
Mr. Setalvad, learned counsel for the assessee, contended that during the year with which we are concerned, there was no change in the trust fund and in view of that fact and as we are considering the liability to pay wealth tax, we would be justified in holding that the amount receivable by the assessee in the year concerned was an annuity.
We see no force in this contention.
The question whether a particular income is an annuity or not does not depend on the amount received in a particular year.
What we have to see is what exactly was the intention of the Maharaja in creating the trust.
Did he intend to give the assessee a pre determined sum every year or did he intend to give her an aliquot share in the income of a fund? On that question, there can be only one answer and that is that he intended to give her an aliquot share in the income of the trust fund.
An income cannot be annuity in one year and an aliquot share in another year.
It cannot change its character year after year.
From the facts found, it is clear that the assessee has life interest in the trust fund.
" The decision of the High Court of Andhra Pradesh in Commissioner of Wealth tax, A. P. vs Nawab Fareed Nawaz Jung &Ors.(1) on which the High Court has relied in this case to the extent it takes a contrary view must be held to be incorrect.
We may now to consider the decision in In re Duke of Norfolk: Public Trustee vs Inland Revenue Commissioner(2) on which the High Court relied heavily in arriving at its conclusion.
The point which arose for consideration in the above case was whether, where one continuing annuity for two or more lives was given to two or more persons in succession and charged on property, on the death of any annuitant, other than the last to die, estate duly was payable under section 1 of the Finance Act, 1894 on the footing that it was the annuity which passed on the annuitant 's death.
The estate duty authorities claimed estate duty on the death of an annuitant, who was not the last of the annuitants to die on the slice of the capital required to produce the annuity, on the footing that as annuitant, the deceased had an interest on the capital charged with the annuity and that cesser of that interest gave rise to a benefit taxable under 670 section 2(1)(b) of the Finance Act, 1894.
The Public Trustee, in whom the estate vested, claimed that estate duty became payable on the value of a continuing annuity for the life of the annuitant who succeeded to the annuity on the death of the deceased annitant.
Jenkins L.J. in the course of his judgment in the above case explained the difference between an annuity and a life interest thus: "An annuity charged on property is not, nor is it in any way equivalent to, an interest in a proportion of the capital of the property charged sufficient to produce its yearly amount.
It is nothing more or less than a right to receive the stipulated yearly sum out of the income of the whole of the property charged (and in many cases out of the capital in the event of a deficiency of income).
It confers no interest in any particular part of the property charged, but simply a security extending over the whole.
The annuitant is entitled to receive no less and no more than the stipulated sum.
He neither gains by a rise nor loses by a fall in the amount of income produced by the property, except in so far as there may be a deficiency of income in a case in which recourse to capital is excluded.
On the other hand, a life interest in a share of the income of property is equivalent to and indeed constitutes, a life interest in the share of the capital corresponding to the share of income.
The life tenant enjoys the share of income whatever it may amount to, and his interest, viewed as a life interest in capital, consists of a constant proportion of the whole property, whether the income is great or small, and whether the capital value of the property rises or falls.
The property which changes hands on his death (or in other words passed under section 1) thus clearly consists of the designated share of capital, which then passes from his beneficial enjoyment to that of another, an annuity cannot be so related to any fixed proportion of capital: See De Trafford vs Attorney General Evershed M. R. who delivered a separate judgment agreed with the observation and stated thus: "In the case of one who has enjoyed for his life (say) one fourth of the income of an estate, it seems to me in accordance with common sense and a natural use of language to say that he enjoyed for his life, that he was life tenant of, a fourth part of the (corpus of the) estate; and, accordingly, that upon his death a fourth part of the estate passed to the next successor.
But no such language can, in my judgment, appropriately be used in the case of an annuitant.
He is in no way concerned 671 with changes in the yield of the estate; his right to his annuity will continue whatever income the estate may produce or (unless he has a right to look income only) though the estate produce no income at all." The learned Master of the Rolls distinguished the cases of In re Northcliffe(1) and Christie vs Lord Advocate(2) from the case before him thus: "Both the two last mentioned cases were instances of dispositions of aliquot shares of the general income of an estate to be enjoyed in succession, as distinct from an annuity or yearly sum, which, even though variable (as in the case of In re Cassel (1927) 2 Ch.
275) is in no way dependent upon or related to the general income of the estate." Accordingly the contention of the Crown was rejected.
On going through the above decision carefully, we do not find any support for the contention urged on behalf of the assessee in the present case.
The decision is quite clear on the point that when the payment is dependent upon the income of the corpus, it cannot be called an annuity and that an annuity even though it may be variable as in the case of In re Cassel(3) can in no way be dependent upon or related to the general income of the estate.
The High Court was, therefore in error in relying upon the decision in Duke of Norfolk: In re.
Public Trustee (supra) for holding that notwithstanding the existence of the possibility of variation in the payment to be made in the above case to the assessee depending upon the income of the fresh securities to be acquired by the trustee on the redemption of any of the securities transferred at the time of the execution of the trust deed, the payment would amount to an annuity.
On a consideration of the decisions cited before us, we feel that in order to constitute an annuity, the payment to be made periodically should be a fixed or pre determined one, and it should not be liable to any variation depending upon or on any ground relating to the general income of the fund or estate which is charged for such payment.
In the instant case, as observed in the case of Her Highness Maharani Gayatri Devi of Jaipur (supra) what we have to see is the intention of the settlor, whether he wanted that the assessee should get a pre determined sum every year or whether the assessee 672 should get the whole net income of the trust fund.
Since the intention of the settlor was indisputably the latter one, the right of the assessee cannot be treated as an annuity.
An additional factor which requires us to take the same view is that under the trust deed the trustees had been given the power to reinvest the proceeds of the Government securities which leads to the possibility of variation of the income and consequently of the amount to be received by the assessee.
The fact that no such reinvestment had taken place during the relevant years is immaterial.
In view of the foregoing, the appeals are allowed, the judgment of the High Court is set aside and the question referred to the High Court under section 27(1) of the Act is answered in the negative and against the assessee.
In the circumstances of the case, the assessee shall pay the costs of the Department.
(Hearing fee one set).
Appeal allowed.
| On the allegations that the appellant in the Criminal Appeal along with two other accused were in possession of railway property which they had obtained under forged railway receipts, the Inspector of the Railway Protection Force lodged a complaint against the three accused that they were guilty of offences under section 3(a) of the Railway Property (Unlawful 15 Possession) Act, 1966 and action should be taken against them.
In the Complaint it was mentioned that accused 2 and 3 were absconding and annexed to the complaint was (I) a list of prosecution witnesses and (2) a list of documents.
The appellant, who was accused I appeared before the Presidency Magistrate who commenced an enquiry and recorded the statements of four witnesses one on March 2, 1973 and of the other three on June 12, 1973.
On June 11, 1973 the appellant moved an application before the Magistrate making a grievance that although three witnesses had been examined, no copies of the document were furnished to him.
On June 25, 1973 he made a further application requesting for supply of true copies of all the documents in the case to enable him to prepare the defence and that he should be permitted to take photostat copies of the documents.
The Magistrate on August 9, 1973 rejected the appellants ' application on the ground that the offence complained of against him was not cognizable and that the provisions of section 251 (a) of the Code of Criminal Procedure were not applicable and consequently, he had no right to obtain copies of the documents concerned.
On August 24, 1973 the Magistrate framed a charge under section 3(a) of the Act.
The accused pleaded not guilty and again made an application repeating his request for copies of the statements of witnesses recorded by the Inspector R.P.F.
This application was also rejected by the Magistrate on September 7, 1973.
176 Feeling aggrieved by the orders passed by the Magistrate on August 9, 1973 and September 7, 1973 the appellant invoked the inherent jurisdiction of the High Court by a petition under section 561A of the Code of Criminal Procedure, 1898 and prayed that the orders be quashed.
He challenged the constitutional validity of section 9 of the Act in the petition.
The High Court rejected the petition.
In the appeal to this Court it was contended on behalf of the appellant (a) relying on Raja Ram Jaiswal vs State of Bihar; , that the expression "Police officer" in section 25 of the Evidence Act must be considered in a wide popular sense, so as to include within its ambit all officers of Government who are in substance invested with the power to investigate certain offences in accordance with the provisions of the Code of Criminal Procedure 1898 irrespective of the fact that they are differently labelled such as Excise officers or Customs officers or members of R.P.F., otherwise the very object of section 25 will be defeated.
An Inspector of the R.P.F. making an inquiry under the Railway Property (Unlawful Possession) Act 1966 into an offence under section 3 of that Act, in substance, acts and exercises almost all the powers of a 'Police officer ' making an investigation under the Code of Criminal Procedure and any confessional statement recorded by such Inspector will be hit by section 25 Evidence Act.
The case of State of U.P. vs Durga Prasad, ; was not correctly decided and that its ratio needs reconsideration by a larger Bench because it has overlooked the test laid down by the three Judge Bench in Raja Ram Jaiswal 's case.
(b) As soon as a person is arrested by an officer of the Force on a suspicion or charge of committing an offence punishable under the 1966 Act, he stands in the character of a "person accused of an offence" and any confessional or incriminating statements recorded by an officer of the Force in the course of an inquiry under section 8(1) of the 1966 Act, cannot be used as evidence in view of the constitutional ban against "compelled testimony" imposed by article 20(3) of the Constitution.
On behalf of the respondent it was submitted that: (a) an officer of the R.P.F. while making an inquiry under the 1966 Act cannot be equated with a police officer in charge of a Police Station making an investigation under the Code.
The important difference in their powers is, that the R.P.F. Inspector has no power to submit a report or a charge sheet under section 173 of the Code.
The decision of this Court in Raja Ram Jaiswal 's case stands on its own peculiar facts and was distinguished in a later decision by a Constitution Bench of this Court in Badku Joti Savant vs State of Mysore, ; The correct test for determining whether or not R.P.F. Officer is a police officer for the purpose of section 25 of the Evidence Act is the one which was consistently applied in State of Punjab vs Barkat Ram ; , & Romesh Chandra Mehta vs West Bengal (b) The conditions necessary for the attraction of the ban in article 20(3) do not exist in the instant case because before the filing of the complaint in the Court, the appellant was not a "person accused of an offence" and that it was nowhere alleged that the confessional or incriminating statements were extorted by the R.P.F. Officer under physical duress, threat, inducement or mental torture.
177 on the questions: (1) whether an officer of the Railway Protection Force making an inquiry under the Railway Property (Unlawful Possession) Act, 1966 in respect of an offence under section 3 of that Act of unlawful possession of the railway property is a police officer for the purpose of section 25 of the Evidence Act and section 162 of the Code of Criminal Procedure 1898 and whether any confession or incriminatory statement recorded by him in the course of an inquiry under section 8 of the Act is inadmissible in evidence, and (2) whether a person arrested by an officer of the Railway Protection Force under section 6 of the Act for the alleged commission of an offence under section 3 of the Act is "person accused of an offence" within the meaning of article 20(3) of the Constitution: ^ HELD: 1.
An officer of the R.P.F. conducting an enquiry under section 8(1) of the 1966 Act has not been invested with all the powers of an officer in charge of a police station making an investigation under Chapter XIV of the Code.
Particularly, he has no power to initiate prosecution by filing a charge sheet before the Magistrate concerned under section 173 of the Code, which he has been held to be the clinching attribute of an investigating 'police officer '.
An officer of the R.P.F. could not therefore be deemed to be a "police officer" within the meaning of section 25 of the Evidence Act, and therefore, any confessional or incriminating statement recorded by him in the course of an inquiry under section 8(1) of the 1966 Act, cannot be excluded from evidence under the said section.
[201C E] 2.
The term 'police officer ' has not been defined in the Evidence Act The policy behind sections 25 and 26 of Evidence Act is to make a substantive rule of law that confessions whenever and wherever made to the police shall he presumed to have been obtained under the circumstances mentioned in section ' 24 and therefore, inadmissible except so far as is provided in section 27 of that Act.
[182F, E] Ariel vs State A.I.R. 1954 S.C. 15, referred to.
The primary object of constituting the Railway Protection Force is to secure better "protection and security of the railway property".
The restricted power of arrest and search given to the officers or members of the Force is incidental to the efficient discharge of their basic duty to protect and safeguard Railway Property.
No general power to investigate all cognizable offence relating to Railway Property, under the Criminal Procedure Code has bee.
conferred on any superior officer or member of the Force by the 1957 Act [185F G] 4.
The main purpose of passing the 1966 Act was to "invest powers of investigation and prosecution" of offences relating to railway property in the RPF "in the same manner as in the Excise and Customs." Inspite of provision in the Code of Criminal Procedure to the contrary, offences under this Act have been made non cognizable and, as such, cannot be investigated by a police officer under the Code.
It follows that the initiation of prosecution for an offence inquired into under this Act can only be on the basis of a complaint by an officer of RPF and not on the report of a police officer under section 173(4) of the Criminal Procedure Code, 1898.
[187A, 188B] 5.
Section 14 makes clear that the provisions of the Act shall override all other laws.
which means that anything in the 1966 Act which is inconsistent 178 with the Code, will prevail and the application of the Code pro tanto will be excluded.
The scheme of the 1966 Act, particularly the provisions in sections 5, 8, 9(3), (4) is different from that of the Code.
The Code, therefore, cannot proprio vigore apply to an enquiry conducted under section 8(1) of the 1966 Act by an officer of the Force.
[189G, 190A] 6.
An analysis of clause (3) of article 20 shows three things: Firstly, its protection is available only to a "person accused of any offence".
Secondly, the protection is against compulsion "to be a witness".
Thirdly, this protection avails "against himself".
[202F] 7.
Only a person against whom a formal accusation of the commission of an offence has been made can be a person "accused of on offence" within the meaning of article 20(3).
Such formal accusation may be specifically made against him in an F.I.R. or a formal complaint or any other formal document or notice served on that person, which ordinarily results in his prosecution in Court.
[204F] In the instant case no such formal accusation had been made against the appellant when has statement(s) in question were recorded by the R.P.F. Officer.
He did not at that time, stand in the character of a person "accused of an offence" and as such, the protection of Article 20(3) will not be available to him.
[203F G] Kathi Raning Rawat vs The State of Saurashtra ; , K. Joseph Augusthi & Ors.
vs M. A. Narayanan , Mohamed Destagir vs The State of Madras ; , Bhagwan Das, Crl.
131 132/61 decided on 20 9 63, Bhogilal Shah & Anr vs D. K. Guha & Ors ; , M. P. Sharma vs Satish Chandra ; , Smt.
Nandini Satpathy vs P. L Dani & Anr. ; , In re The Special Courts Bill, , Raja Narayanlal Bansilal vs Maneck Phiroz Mistry & Anr. ; , State of Bombay vs Kathi Kalu Oghad & Ors. ; , ref to.
|
: Criminal Appeals Nos. 418 419 and 484 485/76.
(From the Judgment and Order dated 6 7 1976 of the Andhra Pradesh High Court in Writ Petition Nos.
1865, 1870 of 1976 respectively.) P. Parmeswara Rao, G. Narayana Rao and A. K. Ganguli, for the appellants in Crl.
Appeals Nos. 418 419/76 and respondents in Crl.
Appeals Nos. 484 485/76.
R.K. Jain, fox the appellant in Crl.
A. No. 484/76 and respondent in Crl.
A. No. 418/76.
section Lakshminarasu, for the appellant in Crl.
A. No. 485/76 and for respondent in Crl.
A. No. 419/76.
The Judgment of the Court was delivered by GUPTA, J.
These are a group of four appeals from a common Judgment of the Andhra Pradesh High Court partly allowing two writ petitions, writ petition No. 1865 of 1976 filed by A.V. Rao, and writ petition No. 1870 of 1976 made by N.V. Krishnaiah.
The High Court rejected the petition ers ' prayer for setting off under section 428 of the Code of Criminal Procedure, 1973 the periods during which they were in preventive detention against the term of imprisonment imposed on them on their conviction in a sessions trial, but accepted their contention that they were entitled to the benefit of the remission system under the for the period during which they were in jail as under trial prisoners before their conviction: Criminal Ap peals Nos. 418 and 419 of 1976 by State of Andhra Pradesh are directed against the part of the High Court 's Judgment granting the writ petitioners the benefit of the remission system under the treating for this purpose the period of undertrial detention on the 'same footing as a term of imprisonment on conviction.
Appeal No. 418 arises out of writ petition No. 1865 of 1976 filed by A.V. Rao and Appeal No. 419 is from writ petition No. 1870 of 1976 made by N.V. Krishnaiah.
The writ petitioners have also filed appeals against the part of the.
Judgment disallowing their prayer for set off under section 428 of the Code of Criminal Procedure.
Criminal Appeals Nos.
484 and 485 of 1976 are by A.V. Rao and N.V. Krishnaiah respectively.
All the four appeals are on certificate of fitness granted by the High Court.
The relevant facts are as follows.
A.V. Rao, appel lant in appeal 484 of 1976 and respondent in appeal 418 of 1976, was in detention under the Preventive Detention Act when on December 18, 1969 a first information report was filed naming him among others as an accused in a case involving offences under section 121A and 120B read with section 395, and section 120B read with section 447 of the Indian Penal Code, 'which gave rise to sessions cases Nos. 106 of 1970 and 6 of 1971 on the of the Additional Sessions Judge, Hyderabad.
The detention order under 9 the preventive detention law was revoked by the State Gov ernment on April 11, 1970 and Rao was released on the next day, April 12.
He was then produced before the magistrate in connection with the sessions cases on April 13, 1970; there is some doubt about this date because the record at some places mentions the date as April 18, but the discrepancy is not of any significance on the questions arising for decision in these appeals.
On April 10, 1972 Rao. was convicted along with others and sentenced to various terms of imprisonment for the offences charged against him; the maximum sentence was rigorous imprisonment for four years.
The sentences were directed to run con currently.
His appeal against the order of conviction was.
dismissed by the High Court on November 28, 1975.
He filed writ petition 1865 of 1976 asking for an order on the Government of Andhra Pradesh to set off under section 428 of the Code of Criminal Procedure, 1973 the time between December 19, 1969 and April 13, 1970 against his term of imprisonment treating the said period as the period of detention undergone by him as undertrial prisoner, and to take into account the entire period during which he was in detention for the purpose of remission of his sentence under the .
The petitioner further claimed that had he been free at the time when the F.I.R. was lodged on Decem ber 18, 1969, he would have surrendered immediately and would have been produced before the court for remand on the next day as some of the co accused in the case had been it was submitted that if the "concerned authority" who could but did not "take immediate and necessary steps to produce the petitioner" before the magistrate, the petition er should not be made to suffer.
The facts of N.V. Krishnaiah"s case are similar.
Krish naiah, appellant in appeal No. 485 and respondent in appeal No. 419, was also an accused in the sessions cases 106 of 1970 and 6 of 1971 with A.V. Rao and others.
lie however was not in detention when the F.I.R. was lodged.
He was arrested in connection with the sessions cases on December 19, 1969 and was in detention on remand from December 21, 1969 to April 9, 1972.
He was also convicted by the Addi tional Sessions Judge on April 10, 1972 and the maximum sentence in his case too was rigorous imprisonment for four years.
He also preferred an appeal to the High Court against the order of conviction.
The High Court granted him bail and he was released on bail on April 29, 1972.
He was arrested under the on June 26, 1975.
The High Court dismissed the appeal on November 28, 1975.
A warrant of arrest issued by the Additional 'Sessions Judge on December 1, 1975 was served on him on December 30, 1975, on which date the detention order under the was also revoked.
On these Krishnaiah in his writ petition sought an order on the State of Andhra Pradesh to treat the "period from June 26 1975 to November 28, 1975 as remand period" and to set off under section 428 of the Code of Criminal Proce dure this period during which he was under preventive deten tion, against the term of imprisonment imposed on him on conviction in the sessions cases.
It was also contended that the warrant issued by the Additional Sessions judge on December 1, 1975 should have been served on him immediately, 10 that it was no fault of his that "the concerned authority" chose to serve the warrant on December 30, 1975, and that during this period of one month he should be deemed to have been serving the sentence imposed on him.
, A further prayer was made that the entire period during which he was under detention be taken into account for remission of his sentence under the , The question for consideration in appeals 418 and 419 of 1976, preferred by the State of Andhra Pradesh is, whether the period of detention undergone by the two writ petition ers in connection with the sessions cases before their conviction could be treated as a part of the period of imprisonment on conviction so as to entitle them to remis sion of their sentences under the .
The , as its preamble shows.
, is an Act to "amend the law relating to prisons" and to provide rules for the regula tion of such prisons Section 3(5) of the Act defines "remission system" as the "rules for the time being in force regulating the award of marks to, and the consequent short ening of sentences of, prisoners in jail".
Section 59 of the provides that the State Government may make rules consistent with the Act in respect of the various matters specified in clauses (1) to (28) of the section; under clause (5) of section 59 the State Government is authorised to make rules "for the award of marks and the shortening of sentences".
In their writ petitions both the petitioners speak of remission under the "prison rules" without specifying any rule under which relief is sought.
The High Court viewed the question in this way: Sec.
428 Crl.
P.C. clearly ordains that the remand detention shall be set off against the term of imprisonment imposed on the accused person on conviction.
The section further clarifies that the liability of such person to undergo, imprisonment on such conviction shall be restricted to the remainder, if any, of the term of imprisonment imposed on him.
In other words, the statute equates the under trial detention or remand detention with imprison ment on conviction.
The provision, in so many words, treats the remand ' detention as part of the period of imprisonment after conviction.
If remissions are given for imprisonment after conviction, there is no plausible or understandable reason.
, why it should be denied to the remand period when the statute equates both of them." The High Court accordingly held that all the remissions that are available or permissible to the two petitioners in regard to imprison ment on conviction are available to them oven in respect of the remand period and directed the authorities "to work out these remis sion and give the benefit to the petitioners".
We do not consider the view taken by the High Court on this point as correct.
Section 428 of the Code of Criminal Procedure.
1973 is in these terms: Period of detention undergone by the accused to be set off against the sentence of imprisonment. "428.
Where an accused person has, on conviction, been sentenced to imprisonment for a term, the period of deten 11 tion, 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." Section 428 provides that the period of detention of an accused as an undertrial prisoner shall be set off against the term of imprisonment imposed on him on conviction.
The section only provides for a "set off", it does not equate an "undertrial detention or remand detention with imprisonment on conviction".
The provision as to set off expresses a legislative policy, this does not mean that it does away with the difference in the two kinds of detention and puts them on the same footing for all purposes.
The basis of the High Court 's decision does not, therefore, seem to be right.
Apart from that, the does not confer any right upon the prisoner to claim remission.
It was pointed out in G.V. Godse vs State of Maharashtra(1) that" . the does not confer on any authority a power to commute or remit sentences, it provides only for the regula tion of prisons and for the treatment of prisoners confined therein.
Section 59 of the confers a power on the State Government to make rules, inter alia, for rewards for good conduct.
Therefore, the rules made under the Act should be construed within the scope of the ambit of the Act.
" It was explained that the rules under the do not substitute a lesser sentence for a sentence awarded by the court.
The rules enable a prisoner to earn remis sions but, as held in G.V. Godse 's case, the question of remission is exclusively within the province of the appro priate Government.
If the Government decides to remit the punishment to which a person has been sentenced, the remis sion may be worked out according .to the rules framed under the .
This being the position, appeals 418 and 419 of 1976 must succeed.
The remaining two appeals, 4.84 and 485 of 1976, preferred respectively by Rao and Krishnaiah, may now be taken up for consideration.
The claim in both these appeals is that the period of detention undergone by each appellant under the preventive detention law should be set off under section 428 of the Code Criminal Procedure against the term of imprison ment imposed on them on their conviction in the aforesaid sessions cases.
The argument is that the 'expression "period of detention" in section 428 includes detention under the Preventive Detention Act or the .
It is true.
that the section speaks of the "period of detention" undergone by an accused person, but it expressly says that the detention mentioned refers to the detention during the investigation, enquiry or trial of the case in which the accused person has been convicted.
The section makes it clear that the period of detention which it allows to be set off against the term of imprison ment (1) ; , 446.
12 imposed on the accused on conviction must be during the investigation, enquiry or trial in connection with the "same ease" in which he has been convicted.
We therefore agree with the High Court that the period during which the writ petitioners were in preventive detention cannot be set off under section 428 against the term of imprisonment imposed on them.
There is however substance in the other point raised by the writ petitioners regarding the computation of the period during which the writ petitioner in each ease should be held to have suffered imprisonment on conviction.
In A.V. Rao 's case (W.P. 1865/76), he was already in detention under the 2Preventive Detention Act when the First Information Report was lodged on December 18, 1969 in connection with the sessions eases.
Some of the co accused in these cases were arrested and produced before the magistrate for remand on December 19, 1969, but Rao was produced before the magis trate sometime in April, 1970 after he was released from preventive detention.
It was argued that he also could have been produced before the magistrate for remand on December 19, 1970.
On behalf of the respondent, State of Andhra Pradesh, it was contended that as ' Rao was already in deten tion under the Preventive Detention Act, it was not possible to produce him before the magistrate for remand until the period of preventive detention was over, we do not find any justification in law for the position taken up by the State.
Rao being already in custody, the authorities could have easily produced him before the magistrate when the First Information Report was lodged.
Nothing has been pointed out to us either in the preventive detention law or the Code of Criminal Procedure which can be said to be a bar to such a course.
That being so we think that the claim that the entire period from December 19, .1969, when many of the co accused were produced before the magistrate to April 18, 1970 should be treated as part of the period during which Rao was under detention as an under trial prisoner, must be accepted as valid.
A.V. Rao 's Appeal No. 484 of 1976 is allowed to this extent.
In the case of N.V. Krishnaiah, the Additional Sessions Judge, Hyderabad, issued a warrant on December 1, 1975 after his appeal against conviction was dismissed by the High Court on November 28, 1975.
The warrant, however, was.
served on him only on December 30, 1975 on which date the order under maintenance of Internal Security Act was revoked.
It is claimed ' that the warrant could have been served immediately on that dismissal Of the appeal on November 28, 1975 and the accused was not responsible if the authority concerned chose to serve the warrant on him on December 30, 1975.
In this case also, the argument on behalf of the State of Andhra Pradesh is that it was not possible to forward Krishnaiah to jail consequent on his conviction in the session cases until the period of his detention under the was over.
We do not see why that should be so.
Section 418 requires the court passing the sentence .to forthwith for ward a warrant to the jail or other place in which he (accused) is, or is to be, confined, and, unless the ,ac cused is already confined in such jail or other 13 place, shall forward him to such jail or other place, with the warrant".
Section 418 thus does not exclude a case where the warrant concerns an accused who is already in detention On behalf of the State it was sought to be argued that if the warrant was served on Krishnaiah immediately after his conviction was upheld by the High Court in appeal, the position would have been anomalous, because then he would have been in detention both under the preventive detention law and as a convicted accused in a criminal case.
We have not been referred to any provision either in the Code of Criminal Procedure or in the Maintenance of Internal Securi ty Act which requires the service of the warrant to be delayed until after the period of preventive detention is over.
As regards the alleged anomaly of a man having to suffer two kinds of detention at the same time, one preven tive and the other punitive, we do not find this to be a valid objection.
The position is not different from the case where a man is sentenced on different counts to a term of rigorous imprisonment and another term of simple impris onment, and the sentences are directed to run concurrently.
Counsel for the State referred us to the decision in Harad han Saha and another vs The State of West Bengal & others,(1) in support of his contention.
In our opinion this case does not help him at all.
What was held in this case was, inter alia that the nature of preventive detention is entirely different from punitive detention, and there is no bar to a man being detained under the preventive deten tion law when a criminal proceeding for the offences on which the preventive detention is based is pending.
If that be so, there can be no bar to the preventive and punitive detentions continuing simultaneously.
We therefore allow appeal No. 485 of 1976 to the extent that Krishnaiah should be taken to have serving the sentence imposed on him from December 1, 1975.
In the result the criminal appeals Nos. 418 and 419 of 1976 by the State of Andhra Pradesh are allowed, and the appeals Nos. 484 and 485 of 1976 preferred respectively by A.V. Rao and N.V. Krishnaiah are allowed to the extent indicated above.
M.R. Appeals al lowed.
| The cross appeals arose from two writ petitions filed by A.V. Rao and N. V. Krishnaiah in the High Court.
A.V. Rao 's case was that while he was already in preventive detention.
on December 18.
a First Information Report was lodged against him in connection with some Sessions cases.
Some of the co accused in ' these cases were produced before the Magistrate on December 19, 1969 for remand, but Rao was produced before him only in mid April, 1970 after his release from preventive detention.
The accused in the Sessions cases were thereafter convicted and sentenced, and Rao.
filed a writ petition asking for an order on the State Government to set off u/s , the time between December 19, 1969 and April 13, 1970, against his term of imprisonment, treating the said period as the period of detention undergone by him as an undertrial prisoner, and also to take the same into account, for the purpose of remission of his sentence under the Prisons Act.
Rao con tended that he could have been produced before the Magistrate for remand on December 19, 1969.
The State Government contended that Rao could not be produced before the Magistrate for remand until the period of preventive detention was over.
In the case of Krishnaiah, he was in detention under the MISA, when his appeal against conviction in a criminal case was dismissed by the High Court, and a warrant was issued against him on December 1, 1975, but was served on him only on December 30, 1975, when the order against him under the MISA was revoked.
The High Court rejected the petitioners ' contention regarding set off under section 428 Cr.
P.C. but accepted their contention regarding the benefit of remission.
Allowing the appeals by the State, and partly allowing the appeals by the original writ petitioners, the Court, HELD: (1) Section 428 of the Cr. P.C., 1973 only pro vides that the period of detention of an accused as under trial prisoner shall be set off against the term of impris onment imposed on him on conviction.
It does not equate an "undertrial detention or remand detention with imprisonment on conviction" or do away with the difference in the two kinds of detention and put them on the .same footing for all purposes.
[11B C] G.V. Godse vs State of Maharashtra, ; ; 446, referred to.
(2) section 428 expressly says that the "period of detention" mentioned, refers to the detention during the investigation, enquiry or trial in connection with the "same case" in which the accused person has been convicted.
The period during which the writ petitioners were in preventive detention cannot be set off under section 428 against the term of imprisonment imposed on them.
[11G, 12 A B] (3) Section 418 does not exclude a case where the war rant concerns an accused who is already in detention.
We have not been referred to any provision either in the Cr.
P.C. or in the MISA which requires the service of the war rant to be delayed until after the period of preventive detention is over.
There is no bar to the preventive and punitive detention continuing simultaneously.
[13A B, C] 2 240SCI/77 8 Haradhan Saha & Anr.
vs State of West Bengal & Ors.
; , referred to.
|
126 of 1958.
Petition under Article 32 of the Constitution of India, for enforcement of Fundamental Rights.
N. C. Chatterjee and B. V. section Mani, for the petitioners.
B. Sen and R. H. Dhebar, for the respondent.
November 20.
The Judgment of the Court was delivered by DAS GUPTA J.
The petitioners who describe them selves as Road side Station Masters challenge in this petition under article 32 of the Constitution the constitutionality of the channel of promotion for Guards to higher grade Station Masters ' posts as notified in the issue of the Central Railway 'Weekly Gazette No. 3 dated November 23, 1951.
Under this Notification Guards have two lines of promotion open to them.
One is that by promotion, C grade Guards may become B grade Guards on Rs. 100 185 and thereafter by further promotion A grade Guaids on Rs. 150 225.
The second line of promotion open to them is that by an examination described curiously enough as Slip 45 examination C grade Guards are eligible for promotion to posts of Station Masters on RS.
150 225 scale and thereafter to all the further promotions that are open to the Station Masters, viz., higher ,cales of Rs. 200 to Rs. 300, Rs. 260 to Rs. 350, Rs. 300 to Rs. 400 and finally Rs. 360 to Rs. 500; B grade Guards and A grade Guards are also on passing Slip 45 examination eligible for promotion to posts of Station Masters on Rs. 200 300 pay scale and thereafter to further promotions to the higher scales in the Station Masters ' line.
The Road side Station Masters on pay scale of Rs. 80 to Rs. 170 313 (the scale was formerly Rs. 64 170) can also reach by promotion the grade of Rs. 150 225 but only after going through an intermediate stage of Rs. 100 185.
Similarly Station Masters on Rs. 100 185 scale may also reach the stage of Rs. 200 300 but only after passing through the intermediate stage of Rs. 150 225.
Obviously the provisions enabling Guards to become Station Masters on the pay scale of Rs. 150 225 places the Station Masters of Rs. 80 170 scale at a disadvantage as against Guards on that pay scale and also puts the Road side Station Masters on the pay of Rs. 100 185 pay scale at a disadvantage as against Guards on that scale of pay.
The petitioners contend that the channel of promotion in so far as it enables Guards to be promoted as Station Masters in addition to the other line of promotion open to them as Guards amounts to a denial of equal opportunity as between Road side Station Masters and Guards in the matter of promotion and thus contravenes the provisions of article 16(1) of the Constitution.
It was further alleged in the petition that taking advantage of this channel of promotion, Guards become Station Masters on Rs. 150 225 at a very much younger age than Road side Station Masters and thus block the chances of higher promotion to Road side Station Masters who reach the Rs. 150 225 scale when they are much older.
As instances of how the impugned provisions in the channel of promotion are harmful to the Road side Station Masters, the petitioners state: that while the petitioner No. 2 even after completing 32 years of service has remained in the grade of Rs. 100 185 as Station Master, Guards of equal status and standing have reached gazetted rank within the same period of service; that whereas the petitioner No, 3 has come by promotion to the grade of Rs. 150225 after putting in 21 years of service, Guards of his standing have risen to the grade of Rs. 360 500 by virtue of the impugned channel of promotion and several of his juniors who entered the Railway service long after him as Guards have superseded him and are working in the grade of Rs. 360 500; that while the 314 petitioner No. 4 having entered into service as Telegraph Candidate and having passed all the requisite examinations prescribed for the higher grade of Station Master within a period of 2 1/2 years after putting in 6 1/2 years of service is still in the grade of Rs. 80 170, Guards of his length of service and departmental qualification are entitled for promotion as an Assistant Station Master in the grade of Rs. 150 225 within about the same length of service.
The respondents the General Manager, Central Railways, Bombay, V.T., the Chairman Railway Board, New Delhi and the Union of India, who contest the application contend that the channel of promotion providing these opportunities to Guards does not in any way contravene the provisions of article 16(1) of the Constitution.
They also deny the correctness of the allegation that as a result of these opportunities Guards become Station Masters on Rs. 150 225 pay scale at a Younger age than Road side Station Masters.
On the material before us it is not possible to come to a firm conclusion as regards the relative age at which Guards or Road side Station Masters ordinarily reach the pay scale of Rs. 150 225.
Assuming, however, the position to be as stated in the petition, that may only evoke some sympathy for the Road side Station Masters, but does not in any way affect the decision of the question whether article 16(1) of the Constitution is contravened by this channel of promotion.
article 16(1) of the Constitution is in these words: There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State '.
" The impugned provisions of the channel of promotion are in respect of promotion of persons already employed under the State and not in respect of the first employment under the State.
If the "equality of opportunity " guaranteed to all citizens by article 16(1) does not extend to matters of promotion the petitioners ' contention that the provisions are void must fail at once.
If, however, matters of promotion are 315 also " matters relating to employment" within the meaning of article 16(1) of the Constitution, the next question we have to consider is whether the impugned provisions amount to denial of equality of opportunity within the meaning of that Article.
We propose to consider the second question first, on the assumption that matters of promotion are Cc matters relating to employment ".
So multifarious are the activities of the State that employment of men for the purpose of these activities has by the very nature of things to be in different departments of the State and inside each department, in many different classes.
For each such class there are separate rules fixing the number of personnel of each class, posts to which the men in that class will be appointed, questions of seniority, pay of different posts, the manner in which promotion will be, effected from the lower grades of pay to the higher grades, e.g., whether on the result of periodical examination or 'by seniority, or by selection or on some other basis and other cognate matters.
Each such class can be reasonably considered to be a separate and in many matters independent entity with its own rules of recruitment, pay and prospects and other conditions of service which may vary considerably between one class and another.
A member joins a particular class on recruitment; he leaves the class on retirement or death or dismissal, discharge, resignation or other modes of termination of service, or by joining another class of employees whether by promotion thereto or direct recruitment thereto on passing some examination or by selection in some other mode.
It is clear that as between the members of the same class the question whether conditions of service are the same or not may well arise.
If they are not, the question of denial of equal opportunity will require serious consideration in such cases.
Does the concept of equal opportunity in matters of employment apply, however, to variations in provisions as between members of different classes of employees under the State? In our opinion, the answer must be in the 316 negative.
The concept of equality can have no existence except with reference to matters which are common as between individuals, between whom equality is predicated.
Equality of opportunity in matters of employment can be predicated only as between persons, who are either seeking the same employment, or have obtained the same employment.
It will, for example, plainly make no sense to say that because for employment as professors of colleges, a higher University degree is required than for employment as teachers of schools, equality of opportunity is being denied.
Similarly it is meaningless to say that unless persons who have obtained employment as school teachers, have the same chances of promotion as persons who have obtained employment as teachers in colleges, equality of opportunity is denied.
There is, in our opinion, no escape from the conclusion that equality of opportunity in matters of promotion, must mean equality as between members of the same class of employees, and not equality between members of separate, independent classes.
The Petitioners ' Counsel did not seriously challenge the correctness of the above proposition.
They contended however that Road side Station Masters and Guards really form one and the same class of employees.
In our opinion, there is no substance in this contention.
It has to be noticed first that Appendix 11 of the Indian Railway Establishment Code (Vol. 1) which prescribe rules for the recruitment and training of subordinate staff of Indian Railways classify the subordinate staff governed by the rules into 7 branches: (1) Transportation (Traffic); (2) Commercial; (3) Transportation (Power); (4) Civil Engineering ; (5) Store department Staff; (6) Office clerks and (7) Medical.
Each branch again has been divided into groups.
The first branch, i.e., the Transportation (Traffic) is shown as having 3 groups: (i) Station Masters, (ii) Guards, (iii) Outdoor Clerical Staff.
Rule 2, the definition section defines a " group " to mean a series of classes which form a normal channel of promotion.
Rule 8 shows the classes of posts 317 included in the Station Masters ' group and the normal channels of their promotion which are as follows: Signaller Assist.
Head Signallers Assist.
Station Masters (lower grade) Head Signallers Station Masters (lower grade) Telegraph Inspectors Assist.
controllers Assist.
Yard Foreman Station Masters Controllers Yard Foremen Transportation Inspectors Rule 9 lays down the qualifications necessary for the recruitment to this "group".
Rule 10 says that the recruitment will be initially made as students and further provides that the recruits may be (a) persons to be trained in telegraphy in railway telegraph training schools and (b) persons who have completed a training in telegraphy in recognized private telegraph training schools.
Note 2 of this Rule provides that recruits in either, category will on the satisfactory completion of their training, be eligible for appointment as signallers and will remain on probation for one year after such appointment.
Provisions for training appear in Rule 11.
Rule 12 provides for Refresher and Promotion Courses.
Rules 13 to 17 are in respect of Guards.
Rule 13 states the classes included in this group and the normal channels of their promotion thus: Probationary Guards Goods or passengers guards Assistant Station Masters (higher grades) Assistant controllers Assist.
Yard Foremen Station Masters Controllers Yard Foremen Transportation Inspectors Rule 14 lays down the qualifications necessary for recruitment in this line.
Rule 15 provides that the 41 318 recruitment will normally be to the lower grade of Guards.
Rule 16 provides that during the one year period of probation recruits will undergo training for a period to be fixed by the administration.
Rule 17 provides for the periodical refresher courses at stated intervals and promotion courses as necessary may be prescribed.
In deciding the question whether Road side Station Masters and Guards belong to one and the same class of employees or not, we must not be misled by the words " groups " or " classes of posts " used in the above rules.
The crux of the question is the nature of the differentiation between Road side Station Masters and Guards in recruitment, prospects and promotion.
We find that Road side Station Masters and Guards are recruited separately, trained separately and the several classes of posts which are ordinarily open to them are also distinct and separate.
The only point of contact between them is provided by the rule that Guards may become Station Masters by passing the Slip 45 examination.
If after becoming Station Masters these Guards could continue also as Guards there might be some scope for suggesting that the two classes have coalesced.
It is not disputed however that Guards once they become Station Masters cease to be Guards and continue as Station Masters.
The fact that the qualifications necessary for recruitment as Guards or Station Masters are approximately or even wholly the same can in no way affect the question whether they form one and the same class, or form different classes.
As on the admitted facts the Roadside Station Masters and Guards are, as already stated, recruited separately and trained separately and have separate avenues of promotion, the conclusion is irresistible that they form two distinct and separate classes as between whom there is no scope for predicating equality or inequality of opportunity in matters of promotion.
In view of this conclusion it is unnecessary for the purpose of the present case to decide the other question: whether matters of promotion are included in the words " matters relating to employment in 319 Article 16(1) of the Constitution.
For even assuming that they are so included, the present application must be rejected on the simple ground that the petitioners belong to a wholly distinct.
and separate class from Guards and so there can be no question of equality of opportunity in matters of promotion as between the petitioners and Guards.
The learned Counsel for the petitioners stated before us that this channel of promotion for Guards is peculiar to the Central Railways, and is not now to be found in the other Zones of Indian Railways.
If that be the position, the matter may well deserve the attention of the Government; but this has nothing to do with the merits of the petition before us.
For the reasons mentioned above, we dismiss the application, but in view of all the circumstances, we order that parties will bear their own costs.
Petition dismissed.
| The question for determination in these appeals was whether and to what extent the municipal activities of the Corporation of 943 Nagpur City fell within the term 'industry ' as defined by section 2 (14.) of the C.P. and Berar Industrial Disputes Settlement Act, 1947.
Disputes having arisen between the said Corporation and its employees in its various departments, the State Government referred them for adjudication to the State Industrial Court under section 39 of the Act and that Court by its award held that the Corporation and all its departments were covered by the said definition.
Against that award the Corporation made an application to the High Court under article 26 of the Constitution.
The High Court rejected its contention that the Corporation was not an industry within the meaning of the said section and remanded the case to the Industrial Court for determination as to which of its departments fell within the definition and making an award accordingly.
Thereafter The Industrial Court found all the departments of the Corporation except those dealing with (1) assessment and levy of house tax (2) assessment and levy of Octroi, (3) removal of encroachment and removal and pulling down of dilapidated houses, (4) prevention and control of food adulteration, and (5) maintenance of cattle pounds, to be industries within the meaning of the definition and passed its award accordingly.
The Corporation appealed to this Court by special leave but there was no appeal on behalf of the employees of the five departments excluded from the definition.
Held, that the decision of the Industrial Court except so far as it related to the five departments in respect of which the re was no appeal, must be affirmed.
The definition of the word 'industry ' in section 2 (14) of the C.P. and Berar Industrial Disputes Settlement Act, 1947, although in a language somewhat different from that of section 2 (1) of the , is very comprehensive.
It is in two parts, cl.
(a) defines it from the standpoint of employers and cl.
(b) from that of the employee.
An activity that falls within any of the two clauses must be ,in industry.
D.N. Banerji vs P. R. Mukherjee ; and Baroda Borough Municipality vs Its Workmen.
; , applied.
It is not necessary that an activity of the Corporation must share the common characteristics of an industry before it can come within the section.
The words Of section 2 (14) of the Act are clear and unambiguous and the maxim noscitur a socii can have no application.
The history of industrial disputes and the legislation, however, recognises the basic concept that the activity must be an organised one and not one that pertains to private or personal employment.
State of Bombay vs The Hospital Mazdoor Sabha.
; and Heydon 's Case b., referred to.
But the definition, however wide, cannot include the regal, primary and inalienable, functions of the State though statutorily delegated to a corporation and the ambit of such functions cannot be extended so as to include the welfare activities of a modern state and must be confined to legislative power, administration of law and judicial power.
120 944 Richard Coomber vs The Justices of the County of Berks, Berks.(1883 84) 9 A.C. 61 and The Federated State School Teachers ' Association of Australia vs The State of Victoria.
; , County Council of Middlesex vs Assessment Committee of St. George 's Union.
(1896) 2 Q.B.D. 143, Verisimo Vasquez Vilas vs City of Manila, 220 U. section 345, and The Federated Municipal and Shire Council Employees ' Union of Australia vs Mclbourne Corporation.
; , referred to.
The real test as to whether a service undertaken by a corporation is an industry must be whether that service, if ' performed by an individual or a private person, would be an industry.
Monetary cosideration cannot be an essential characteristic of industry in a modern State.
It was, therefore, incorrect to say that only such activities as were analogous to trade or business could come within section 2 (14) of the Act.
D. N. Banerji vs P.R. Mukherjee, ; , explained.
The Federated Municipal and Shire Council Employees ' Union of Australia vs Melbourne Corporation.
(19l8 19) ; , Federated Engine Drivey and Fireme 's Association and Ors.
vs The Broken Hill Proprietary Company Limited and Ors.
5 and The Federated State School Teachers ' Association Australia vs The State of Victoria; , , referred to.
Where a service rendered by a Corporation is an industry, the employees of the departments connected with that service, whether financial, administrative or executive, would be entitled to the benefits of the Act.
Baroda Borough Municipality vs Its Workmen.
[1957] S.C.R. 33, referred to.
If a department of a municipality discharges many functions, some within and some without the definition of industry given by the Act, the predominant functions of the department shall be the criterion for the purposes of the Act.
|
Appeals Nos.
401 to 403 of 1960.
Appeals by special leave from the judgment and orders dated March: 1, 1960, of the Punjab High Court 601 (Circuit Bench) at Delhi in Civil Revision Cases Nos.
166 D, 167 D and 168 D of 1958.
A. V. Viswanatha Sastri, section section Chadha and R. section Narula, for the appellants (in all the appeals).
C. B. Aggarwala and B. Kishore, for the respondents (in C. A. No. 401 of 60).
C. B. Aggarwala, R. M. Gupta and G. O. Mathur, for the respondents (In C. As.
402 & 403 of 60).
September 8.
The Judgment of the Court was delivered by KAPUR J.
These appeals are directed against three judgments and orders of the Punjab High Court in three Civil Revisions Nos.
166 D, 167 D and 168 D which were brought by the appellants against three of their tenants under section 35 of the Delhi & Ajmer Rent Control Act (XXXVIII of 1952), hereinafter termed the Act.
The appellants in all the three appeals are the landlords and the respondents in the three appeals are three different tenants.
The appellants filed three separate suits for the eviction of their three tenants under cl.
(g) of proviso to section 13(1) of the Act on the ground that the premises were bona fide required for purposes of rebuilding.
On February 27, 1953, the parties in all the three suits entered into a compromise in the following terms : "We have compromised the case with the plaintiff.
A decree may be passed for Rs. 82/8/ on account of rent in suit and for ejectment in respect of the shop in suit in favour of the plaintiff against the defendants ' The defendants will vacate the shop by 4 3 53 and hand over possession to the plaintiff and the plaintiff will hand over its possession again (second time) to the defendants within six months from 4 3 53 after constructing it afresh.
We shall pay such rent as this court will fix ".
Thereupon the court passed the following order and a decree followed thereon: " In terms of the statements of the plaintiff., defendant and counsel for defendants a decree for Rs. 82/8/ on account of rent in suit be passed in favour 602 of the plaintiff against the defendants.
Also decree for ejectment be passed in respect of the shop in suit in favour of the plaintiff against the defendants and that the defendants do give possession of the shop in suit by 4 3 53 to the plaintiff and that the plaintiff after constructing it afresh within six months from 4 3 53 give it to the defendants.
From out of the money deposited, a sum of Rs. 82/8/ be paid to the plaintiff and the balance returned to the defendants.
The defendants shall be responsible to pay the rent fixed by the court ".
According to the decree the possession was to be given to the appellants on March 4, 1953, but it was actually delivered by the three respondents between March 7 and 15, 1953.
On the completion of the building the three respondents filed three separate applications under section 15 of the Act for their being put into possession.
These applications were filed on October 7, 1953.
The High Court held that the compromise did not comprise any matter which was not the subject matter of the suit ; that the respondents could enforce the terms of the decree in the proceedings which they took, i. e., under section 15 of the Act; that time was not of the essence of the compromise and therefore of the decree and consequently in spite of the possession of the premises having been given by the respondents after the date specified in the decree, i. e., March 4, 1953, the respondents were entitled to enforce the decree by execution and apply for possession being restored to them ; at any rate they could apply for restitution under the inherent powers of the Court.
Thus the High Court was of the opinion that though section 15(2) of the Act was not applicable to the proceedings they could be treated as Execution proceedings.
Against this judgment and order the appellants have come in appeal to this court by special leave.
Under section 13 of the Act the respondents are protected against eviction excepting for the reasons given in the proviso.
The appellants had filed the original suits for eviction under section 13, proviso (g), which was as under 603 Section 13: " Notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any court in favour of the landlord against any tenant including a tenant whose tenancy is terminated): Provided that nothing in this sub section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied (g) that the premises are bona fide required by the landlord for the purpose of rebuilding the premises or for the replacement of the premises by any building or for the erection of other building and that such building or rebuilding cannot be carried out without the premises being vacated ; ".
Thus when the suits were brought the provisions of the Act were invoked.
The decrees passed were on the basis that the premises were required by the landlord for rebuilding which falls under section 13 and the decrees also incorporated the requirements of section 15 which provides: "The Court shall, when passing any decree or order on the grounds specified in clause (f) or clause (g) of the proviso to sub.
section (1) of section 13 ascertain from the tenant whether he elects to be placed in occupation of the premises or part thereof from which he is to be evicted and if, the tenant so elects, shall record the fact of the election in the decree or order and specify therein the date on or before which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or rebuilding, as the case may be.
(2) If the tenant delivers possession on or before the date specified in the decree or order, the landlord shall, on the completion of the work of repairs or building or rebuilding place the tenant in occupation of the premises or part thereof.
(3) If, after the tenant has delivered possession on or before the date specified in the decree or order the landlord fails to commence the work of repairs or building or rebuilding within one month of the specified date or fails to complete the work in a reasonable 604 time or having completed the work, fails to place the tenant in occupation of the premises in accordance with sub section (2), the Court may, on the application of the tenant made within one year from the specified date, order the landlord to place the tenant in occupation of the premises or part thereof on the original terms and conditions or to pay to such tenant such compensation as may be fixed by the Court".
The compromise, the order and the decree provided (1) that the respondents will vacate their respective shops on March 4, 1953, and hand over possession to the appellants; (2) they elected to get back possession after rebuilding,which the appellants agreed to hand back on September 4, 1953; (3) the rent after such possession was to be determined by the court.
It was contended on behalf of the appellants that the above facts taken with the circumstances that the decree was passed in a suit under section 13(1), proviso (g), show that this was an order passed and a decree made in accordance with the terms of section 15 of the Act.
It is significant that the respondents themselves made the applications to the court under section 15 of the Act.
For the respondents it was argued that the decree was not one under section 15 of the Act because the decree was based on a compromise whereby the parties fixed the date of delivery of possession to the appellants; fixed the date for completion of the rebuilding and agreed between themselves as to repossession by the respondents.
It was submitted that although the time for giving delivery to the appellants was fixed in the compromise it was not of the essence of the contract.
In our opinion the contentions raised by the appellants are well founded and the appellants must succeed.
The suits for eviction were brought within the framework of the Act and were based on the provisions of section 13, proviso (g).
No eviction would have been possible excepting when conditions laid down in section 13 were satisfied.
The decrees which were passed were substantially in accordance with the provisions of section 15 of the Act and as was contended by the appellants they were decrees under which the premises had to be vacated by the respondents on a specified day.
605 Under that section they had the right to elect and did elect to get possession after rebuilding; this possession was to be given by the landlords to the tenants within a reasonable time and six months ' period was fixed by Consent between the parties and the rent, if the respondents were not put into possession on the same terms as before, was to be settled by court and that is what was done under the terms of the consent decree.
The applications for being put into possession which were filed by the respondents were really under section 15(3) of the Act.
As the respondents did not deli ver possession to the appellants on or before the dates specified in the decree the provisions of section 15 contained in sub section
(3) of that Act were not available to them and they were ,not entitled to be put into possession as prayed by them.
It was argued that the appellants had taken possession of the premises after the specified date without protest and had even accepted rent upto then and were therefore estopped from raising that defence.
The appellants had conceded in the court,% below that plea could be raised in a suit if it was brought.
In the view we have taken we think it unnecessary to express any opinion oil this point.
The High Court was, in our opinion, in error in ordering possession to be, delivered to the respondents.
The appeals must therefore be allowed and the judgments and orders of the High Court set aside.
The appellants will have their costs in this Court.
One set of hearing Costs.
Appeal allowed.
| Three separate suits for eviction by the appellant were brought against the three respondents within the framework of the Delhi & Ajmer Rent Control Act and were based on the provisions of section 13(g) for the bona fide requirements of rebuilding.
Terms of compromise which were substantially in accordance with the provisions of section 15 of the Act were put in by the parties and decrees were passed in the suits, under which the premises had to be vacated by the respondents on a specified day, which condition the respondents failed to observe and actually handed over the possession of the premises in suit at a later date.
On completion of the building the respondents filed an application under section 15 of the Act for their being put into possession.
The High Court inter alia held that though section 15 of the Act was not applicable to the proceedings yet the respondents could impose the terms of the decree and the proceedings could be treated as execution proceedings for enforcing the said terms.
The appellants challenged the judgments of the High Court and contended that on the facts of the case and the circumstances, the decrees in suit under section 13(1) proviso (d) shows that the order was passed and a decree made in accordance with the terms of section 15 of the Act and further it was significant that the respondents them selves had made the application to the Court under section 15 of the Act.
The respondents submitted that the decree was not one under section 15 of the Act because the decree was based on a compromise and the time for giving possession was not.
of the essence of the contract : Held, that as the tenant respondents did not deliver posses sion of the premises to the landlord appellant on or before the dates specified in the decree, the provisions of section 15 (3) of the Delhi and Ajmer Rent Control Act (38 of 1952) were not available to them and they were not entitled to be put in possession.
|
Appeal No. 427 of 1957.
Appeal from the judgment and order dated September 9, 1955, of the Bombay High Court in Income tax Reference No. 31/X of 1954.
K.N. Rajagopal Sastri and D. Gupta, for the appellant.
N. A. ~Palkhivala, section N. ~Andley and J. B. Dadachanji, for the respondents and intervener.
955 1960.
May 4.
The Judgment of the Court was delivered by HIDAYATULLAH J.
The High Court of Bombay in a reference under section 66(1) of the Indian Income tax Act by the Income tax Appellate Tribunal, Bombay, was referred the following two questions for decision: (1) Whether the assessee Company was liable to pay additional income tax ? and (2) If the answer to question No. 1 is in the affirmative, whether the levy of the additional income tax is ultra vires The High Court answered the first question in the negative and in the circumstances, left the second question unanswered.
This appeal is against the judgment and order of the High Court on a certificate granted by it.
The Commissioner of Income tax is the appellant, and the Elphinstone Spinning and Weaving Mills Co. Ltd., Bombay (the assessee Company) is the respondent.
The facts may now be stated briefly.
For the assessment year 1951 52 (the previous year being the calendar year 1950), the assessee Company was found to have incurred a loss of Rs. 2,19,848 and was thus adjudged to be not liable to income tax.
In that year, the assessee Company had made profits, but the depreciation allowance under the Income tax Act came to Rs. 7,84,063, thus converting the profit into loss for income tax purposes.
In the same year, the assessee Company declared dividends &mounting to Rs. 3,29,062.
The Income tax Officer treated this amount as 'excess dividend ' and levied additional income tax as provided in Paragraph B of Part I of the First Schedule to the Indian Finance Act, 1951.
This additional income tax was computed to be Rs. 41,132 12 0.
The contention of the assessee Company that it was not liable to pay additional incometax was not accepted by the Tribunal, but the High Court, on an examination of the relevant provisions and the scheme of the Indian Income tax Act and the Finance Act, 1951, held that it was sound.
Hence this appeal by the Commissioner of Income tax.
We are concerned with the Finance Act, 1951, and Paragraph B of the First Schedule reads: 956 B.
In the case of every company Rate Surcharge On the whole of Four annas one twentieth total income in the of the rate rupee specified in the preceding column: Provided that in the case of a company which, in respect of its profits liable to tax under the Income tax Act for the year ending on the 31st day of March, 1952, has made the prescribed arrangements for the declaration and payment within the territory of India excluding the State of Jammu and Kashmir, of the dividends payable out of such profits, and has deducted super tax from the dividends in accordance with the provisions of subsection (3D) or (3E) of section 18 of the Act (i) Where the total income, as reduced by seven annas in the rupee and by the amount, if any, exempt from income tax, exceeds the amount of any dividends (including dividends payable at a fixed rate) declared in respect of the whole or part of the previous year for the assessment for the year ending on the 31st day of March, 1952, and no order has been made under sub section (1) of section 23A of the Income tax Act, a rebate shall be allowed at the rate of one anna per rupee on the amount of such excess; (ii) Where the amount of dividends referred to in clause (1) above exceeds the total income as reduced by seven annas in the rupee and by the amount, if any, exempt from income tax, there shall be charged on the total income an additional income tax equal to the sum, if any, by which the aggregate amount of income tax actually borne by such excess (hereinafter referred to as 'the excess dividend ') falls short of the amount calculated at the rate of five annas per rupee on the excess dividend.
For the purposes of the above proviso, the expression ' dividend ' shall have the meaning assign ed to it in clause (6A) of section 2 of the Income tax Act, but any distribution included in that expression, 957 made during the year ending on the 31st day of March, 1952, shall be deemed to be a dividend declared in respect of the whole or part of the previous year.
For the purposes of clause (ii) of the above proviso, the aggregate amount of income tax actually borne by the excess dividend shall be determined as We, follows: (i) the excess dividend shall be deemed to be out of the whole or such portion of the undistributed profits of one or more years immediately preceding the previous year as would be just sufficient to cover the amount of the excess dividend and as have not likewise been taken into account to cover an excess dividend of a preceding year; (ii) such portion of the excess dividend as is deemed to be out of the undistributed profits of each of the said years shall be deemed to have borne tax, (a) if an order has been made under sub section (1) of section 23A of the Income tax Act, in respect of the undistributed profits of that year, at the rate of five annas in the rupee, and (b) in respect of any other year, at the rate applicable to the total income of the company for that year reduced by the rate at which rebate, if any, was allowed on the undistributed profits.
" The contention of the assessee Company was that inasmuch as there was no income at all which was taxable, the words "OD the total income" (lid not apply to it and no additional income tax could be charged.
The Tribunal interpreted the Paragraph to cover even a case where there was a loss holding that even a loss may be a total income ', because if total income had to be computed in the manner laid down in the Indian Income tax Act, the total income might, be a negative figure.
The Tribunal also held that inasmuch as excess dividend,,; were to be deemed to have come out of the undistributed profits of the preceding year or years and such undistributed profits ",ere available,, the assessee Company was liable.
The High Court did not accept those reasons, and reluctantly held, for reasons which may not be detailed at the present 124 958 moment, that the assessee Company did not come (If within the letter of the law, however much the intention might have been to impose an additional income tax under such circumstances.
The Commissioner now contends that, the High Court ought to have read the Paragraph B as modified by the intention or to have treated it as an independent charging Section.
The liability to tax is imposed not by the Finance Act but by the Indian Income tax Act.
Section 3 of the latter Act is the charging section, and it provides that the tax should be collected at such rate or rates on the total income as laid down in any Central Act.
The Finance Act is an annual Act prescribing the rate or rates.
We are concerned with the Finance Act, 1951.
Section 2 of the Finance Act prescribes the rates of income tax by its First, Schedule, and by the seventh subsection of that section provides: "For the purposes of this section and of the rates of tax imposed thereby, the expression 'total income ' means total income as determined for the purposes of income tax or super tax, as the case may be, in accordance with the provisions of the Income tax Act. " It is thus clear from this that if there is no income, there is no question of applying a rate to the ' total income ' and no income tax or super tax can possibly result.
The Commissioner, however, relies upon the proviso to Paragraph B of the First Schedule, and says that the tax is imposed on excess dividend and if excess dividend is paid out, the liability to tax must arise.
The proviso was framed to discourage the paying of large dividends quite disproportionate to the income.
For this purpose, A ceiling was laid down.
That ceiling was nine annas in the rupee of the total income reduced by any portion of that income which was exempt from income tax.
If only nine annas in the rupee from the income were paid as dividend, there were no consequences in law.
If, however, the dividends paid amounted to less, a rebate of one anna in the rupee in the tax was given.
This was provided by the first part of the proviso.
There was, 959 however, a provision for enhanced tax.
in the second part, which worked the other way round.
Where the dividend distributed exceeded the total income as reduced by seven annas in the rupee, there was charged on the total income an additional, income tax equal to the sum, if any, by which the aggregate amount of income tax actually borne by such excess We.
(hereinafter referred to as the " excess dividend ") falls short of the amount calculated at the rate of five annas per rupee on the excess dividend.
In simpler language, there was a rebate of one anna on anything saved from 9/16th of the total income, and there was an extra payment of one anna on the amount paid in excess of it.
The income tax, in either event, was payable on the total income and the additional incometax on the excess dividends.
Now, the difficulty arises in applying this proviso.
Where there is a total income and there is a payment of dividend either more or less than the limit fixed, one can easily find the figures by which the total income as reduced exceeds or falls short of the dividends and the additional tax that has to be paid.
But when the total income is a negative figure and no tax on the total income is levied, the words of the second part of the Paragraph 'total income ', 'profits liable to tax ', 'dividends payable out of such profits ' and ' an additional income tax ', cease to have the meaning they were intended to convey.
The Commissioner contends that some of these words may be ignored as being surplusage or a drafting error, and refers to rulings in which such a course was adopted.
The first case he relies on is Curtis vs Stovin (1).
In that case, the words of the statute were: " It shall be lawful for either party to the action. to apply to a judge of the High Court . to order such action to be tried in any court in which the action might have been commenced, or in any court convenient thereto. " The word " court " was defined as " county court " in that statute.
Lord Esher, M.R., held that the words should be extended to mean " in any county court in which, if it had been a county court action, the action (1) 960 might have commenced".
The ambiguity which would have otherwise arisen was removed by taking aid from the alternative clause " or in any court convenient there to" which referred to locality, and it was said that the first clause meant a county court in the district of which the parties resided, or in which one of them resided.
In that case, however, there were determinative words helping construction.
It is to be noticed that Lord Esher, M. R., also warned against doing by construction what only a legislature could do by enactment, in the following words: " It is, no doubt, very easy for a judge to say that be is introducing words into an Act only by way of construing it, while he is really making a new Act.
" The words " if it had been a county court action " which were read as implicit in the section were necessary to give a sensible meaning consistent with the intention expressed by other clear words.
The above case was applied and followed in Commissioner of Income tax vs Teja Singh(1), which is next relied upon.
In that case, the construction, if literally made, was apt to make one section nugatory.
This Court laid down that "a construction which leads to such a result must, if that is possible, be avoided ".
It, however, quoted also the observations of Lord Dunedin in Whitney vs Commissioners of Inland Revenue (2) that: " A statute is designed to be workable, and the interpretation thereof by a court should be to secure that object, unless crucial omission or clear direction makes that end unattainable.
" The next case relied upon is Special Commissioners of Income tax vs Linsleys Ltd. (3).
It dealt with an obvious drafting error.
Section 68(2) of the English Finance Act,1952, contained a reference to Paragraph(a) of the proviso to sub section
(2) of section 262 of the Incometax Act, 1952, and the section went on to say of that Paragraph parenthetically " which relates to the deductions allowable in computing the actual income from all sources of an investment company in relation to which a direction is in force under sub section I of (1) S.C. (2) , 11o.
(3) 961 that section".
As a summary of Paragraph (a), it was entirely wrong and misleading.
Since the Paragraph was there for every one to read, the draftsman 's summary of it in the brackets was not accepted.
Lord Reid observed: " The difficulty does not arise from the enacting words but from the words in brackets which purport to describe the proviso to Section 262(2) of the Income Tax Act, 1952.
Those words could well be held to support the view of the Court of Appeal, but they seem to me to be a misdescription of the proviso to Section 262(2).
This is one of the places where 1 think that obscurity has resulted from a; failure of the draftsman to anticipate a case like the present as I have said, a very natural failure.
In fact the proviso merely deals with the deductions to be allowed in computing actual income.
But the words in brackets in Section 88(2) refer to deductions in computing actual income of a company in relation to which a direction is in force ' under Section 262(1).
It would seem that these words have crept in because the draftsman assumed that a direction would always be given automatically in the case of an investment company and did not realise that a computation must first be made to determine whether the company has in fact any actual income.
Whether that be the true explanation or not, I cannot regard the presence of these words in brackets, which are mere description, as of much weight in comparison with the other considerations to which I have referred.
" If the section was there, its meaning could be taken from the words used there and not from a description of what it enacted, put parenthetically in another statute.
The case cited is hardly in point.
The last case cited is Commissioners of Inland Revenue vs South Georgia Co. Ltd. (1).
The words of a: proviso there construed, ran as follows: " Provided that where the said gross relevant distributions exceed the profits computed without abatement and including franked investment income, (1) 962 the net relevant distributions shall be. " (section 34(2) of the English Finance Act, 1947).
The word " including "gave some difficulty.
In the Court of Session, the word was equated to " adding " correcting, as it was felt, a drafting inaccuracy.
In the House of Lords, however, this change was not accepted and a meaning was found.
The learned counsel for the respondent, on the other hand, relies upon the observations of Rowlatt, J., in The Cape Brandy Syndicate vs The Commissioners of Inland Revenue (1) to the effect that in a taxing measure one can only look at the language since there is no room for an intendment.
He also refers to the speech of Lord Simonds in Wolfson vs Commissioners of Inland Revenue (2), where the following passage occurs at p. 169: " 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.
It is the duty of the Court to give to the words of this Sub section their reasonable meaning and I must decline on any ground of policy to give to them a meaning which, with all respect to the dissentient Lord Justice, I regard as little short of extravagant.
It cannot even be urged that unless this meaning is given to the Section it can have no operation.
On the contrary, given its natural meaning it will bring within the area of taxation a number of cases in which by a familiar device tax had formerly been avoided." The learned counsel contends that the artificial construction should not be resorted to in this case.
There is no doubt that if the words of a taxing statute fail, then so must the tax.
The Courts cannot, except rarely and in clear cases, help the draftsman by a favourable construction.
Here, the difficulty is not one of inaccurate language only.
It is really this (1) , 366, (2) , 169.
963 that a very large number of taxpayers are within the words but some of them are not.
Whether the enactment might fail in the former case on some other ground (as has happened in another case decided to day) is not a matter we are dealing with at the moment.
It is sufficient to say here that the words do not take in the modifications which the learned counsel for the appellant suggests.
The word ' additional ' in the expression 'additional income tax ' must refer to a state of affairs in which there has been a tax before.
The words 'charge on the total income ' are not appropriate to describe a case in which there is no income or there is loss.
The same is the case with the expression 'profits liable to tax '.
The last expression ' dividends payable out of such profits ' can only apply when there are profits and not when there are no profits.
It is clear that the legislature had in mind the case of persons paying dividends beyond a reasonable portion of their income.
A rebate was intended to be given to those who kept within the limit and an enhanced rate was to be imposed on those who exceeded it.
The law was calculated to reach those persons who did the latter even if they resorted to the device of keeping profits back in one year to earn rebate to pay out the same profits in the next.
For this purpose, the profits of the earlier years were deemed to be profits of the succeeding years.
So far so good.
But the legislature failed to fit in the law in the scheme of the Indian Income tax Act under which and to effectuate which the Finance Act is passed.
The legislature used language appropriate to income, and applied the rate to the ' total income '.
Obviously, therefore, the law must fail in those cases where there is no total income at all, and the Courts cannot be invited to supply the omission made by the legislature.
It is quite possible that the legislature did not con template the imposition of tax in circumstances such as these, and we are not prepared to read the proviso without the words on the total income ' or after modifying this and other expressions.
The High Court has given adequate reasons to show that these words are quite inappropriate, where the total income, if it 964 can be described as income at all, is a loss.
The imposition of the additional.
income tax is conditioned by the existence of income and profits, to the total of which income the rate is made applicable.
Unless some other amount, not strictly income, is by law deemed to be income (see for example, McGregor & Balfour Ltd. vs Commissioner of Income tax (1)), we cannot improve the existing law by deeming it to be so by our interpretation.
The Commissioner next contends that the proviso speaks of excess dividends, which means that dividends in excess of the permissible limits have been paid.
He sayS that where the income is nit or a negative figure, whatever is paid is excess dividend, and indeed, the Tribunal also felt that the excess dividends in this case were more because of the loss sustained.
This argument has a familiar ring, It is really that " you can have more than nothing ".
Reference was made in this connection to Commissioners of Inland Revenue vs South Georgia Co. Ltd. (2) where Lord Simonds observed at p. 736: " Upon this proviso, interpreted in the light of Paragraph "of the Schedule as amended, the Crown makes a very simple case: upon the undisputed figures the gross relevant distributions were pound 181,000, and the profits including franked investment income were nil (I may interpolate that the reference to abatement may throughout be disregarded) : therefore the net relevant distribution must be the excess of pound 181,000 over nil, i.e., pound 181,000: nothing has to be brought in under (a ' of the proviso, for there were no profits.
" Reliance was also placed upon the observations at p. 737 (ibid) where it was observed : ,,The learned Dean of Faculty on behalf of the Respondents urged, in support of the construction that he invited your Lordships to adopt, that it was really meaningless to speak of a nil profit or of adding something to it, and this plea found favour with the Lord President.
As I understood it, this was only relevant if the view was accepted that there were two separate operations and not a single (1) (1950] S.C. (2) [[1958] 965 computation.
In the view which I take, therefore, it does not arise, but I think it right to say that I see no impropriety of language in ,;peaking of a nil profit where the question is whether any or what profit has been made.
And the answer would be equally valid in the case of an exact balance or of a loss.
" These passages were used in the other case decided today, in which there were no profits of the previous years.
There is, however, this difficulty that there the tax was laid on the net relevant distribution, and it was conceded that no charge could be imposed if the proviso was inapplicable (see p. 736).
The provisions of Paragraph 7 of the Schedule as amended by section 32 of the English Finance Act, 1947, were entirely different, and the proviso to section 34(2) of the English Act was held applicable.
The scheme of the provisions we are interpreting is entirely different.
Reliance was also placed upon Rajputana Agencies Ltd. vs Commissioner of Income tax (1), but we find nothing there to support the appellant 's case.
Similarly, in McGregor and Balfour Ltd. vs Commissioner of Income tax(1), the words were held to be apt ' to impose a charge '.
It is obvious enough that unless they were so or unless the Act covered the instant cases, the tax must fail.
The gist of the matter is not the possibility of an arithmetical calculation as in the English case.
The rate in the proviso is applicable to the 'total income ' though after the application of a simple arithmetical calculation.
The 'total income ', however, is still the total income as determined for the purpose of incometax, and in the case of businesses, the rules require that the total income shall not include the depreciation allowance.
By the application of those rules if the total income ceases to exist, the second paragraph of the proviso, as it is worded, ceases to be workable.
All the four expressions to which we have referred earlier cease to have natural meaning, and the Com missioner is again driven to contend that we must delete the offending words or suitably modify them.
This we are not prepared to do, because the intention might well have been not to comprehend such cases.
(1) 125 (2) S.C. 966 The Commissioner next contends that we may treat this as an independent charging section and give effect to it.
The proviso is to Paragraph B in the First Schedule of the Finance Act, and the Schedule only imposes a rate of tax and this rate, either by itself or with rebate or with additional tax at a higher rate, has to be applied to the total income.
The extra tax under the second part of the proviso, though called an additional tax, is only the difference between the tax charged at one rate and the tax subsequently chargeable at another rate.
The function of the proviso is thus to prescribe varying rates for varying circumstances, and it deals with rate or rates, first and last, and not with chargeability to tax, which is the subjectmatter of section 3 of the Income tax Act.
There are no words here making the excess dividend into income or subjecting it to tax independently of the charge to tax on the total income.
We are thus unable to treat the proviso as an independent charging section.
In this view of the matter, no useful purpose will be served by referring to those cases noted by this Court in Commissioner of Income tax vs Calcutta National Bank Ltd. (1), where a schedule which went beyond the purpose for which it was enacted was given effect to.
The proviso here was framed to lay down the rates, and has done no more.
It remains to consider two other arguments, which were addressed to us on behalf of the Commissioner.
The first pointed out an anomaly that if there was a total income of even one rupee, the proviso could be made applicable according to its terms but not if the income was nil or negative.
The Commissioner contended that such an anomaly should be avoided, and that the proviso should be interpreted in such a way as to take in all the kinds of cases.
Our answer to this is much the same as was given by the learned Chief Justice of the Bombay High Court.
The learned Chief Justice observes: " There seems to be no logic, there seems to be no reason nor principle why a distinction should be made between the cases of two such companies.
But if life is not logic, income tax is much less so, (1) 967 and it is clear that we cannot impose tax upon a subject by implication or because we think that the object of the legislature was a particular object.
" We respectfully agree with the learned Chief Justice that though the interpretation we have placed upon the proviso might lead to some anomalies, it is for the legislature to avoid the anomalies which, according to us, spring not from our interpretation but from the language employed.
The second argumeint is that the proviso itself states that the excess dividend shall be deemed to be out of the undistributed profits of one or more years immediately preceding the previous year, and that the fiction makes the profits take the place of total income for purposes of tax.
In our opinion, the fiction cannot be carried further than the purpose for which it has been put in the statute.
The Income tax Act creates an assessment year and a corresponding previous year.
Assessment to tax in any assessment year can only be in respect of the profits of the immediately preceding previous year.
All that the fiction does is to bring profits of back years into the immediately preceding previous years, so that the requirements of the Income tax law may be complied with.
As we have already stated, this fiction cannot be carried further than what it is intended for; it cannot be used to make these profits take the place of total income, which did not exist in the previous year and to which the rate is to be applied under the terms of the proviso.
We do not accept both the arguments, and agree with the High Court in the answer given to the first question.
As pointed out by the High Court, the second question does not survive, after the first question is answered against the Department.
In the result, the appeal fails, and will be dismissed width costs.
Appeal dismissed.
| The assesses held the managing agency of a limited company in what was then called " British India and had also a pharma 728 ceutical business in the Baroda State which was at the relevant time an Indian State.
The business in British India showed profits assessable under the provisions of the Business Profits Tax Act, 1947, but the business carried on in Baroda resulted in a loss, in the relevant chargeable accounting periods between 1946 and 1949.
Before the Income tax authorities the assessee claimed that the loss suffered by it in its business in Baroda should be deducted in computing its business income liable to business profits tax, but this claim was rejected on the ground that though under section 5 Of the Act, if it stood by itself without any of the provisos, the Act would be applicable to the Baroda business, the third proviso had the effect of excluding that business from the purview of the Act, except in so far as the income, profits or gains of the business were received or deemed to be received in or brought into British India: Held, that the effect of the third proviso to section 5 of the Business Profits Tax Act 1947, was merely to exempt the income, profits and gains of the Baroda business except when they were received or brought into British India, but the business itself was one to which the Act was applicable under the substantive part Of section 5.
Consequently, the losses of the business could be set off against the profits of the business in British India.
The relevant provisions of the Act are set out in the judg ment.
|
Appeal No. 1650 of 1970.
Anneal from the Judgment and order dated January 31, 1970 of the Bombay High Court in April No. 94 of 1967.
section T. Desai, P. C. Bhartari.
Ajit Mehta.
Kirit Mehta, J. B. Dadaichanji O. C. Mathur and Ravinder Narain, for the appellant.
14 L736SuPCT/72 966 B. Sen, section K. Aiyar and R. N. sachthey, for the respondents.
The Judgment of the Court was delivered by Dua, J.
The Colaba Land and Mills Co., Ltd., (in liquida tion) was ordered by the Bombay High Court on October 7, 1959 to be wound up under the provisions of the Companies Act, 1 of 1956 and the Official Liquidator was appointed its liquidator.
Earlier on May 1, 1959 the Official Liquidator had been appointed by the High Court its provisional liquidator.
On August 23, 1966 the Income tax Officer (Companies Circle) concerned issued six different notices under section 148 of the Income tax Act, 1961 proposing to reopen the assessment of the Company and to re assess it in respect of the assessment years 1950 51 to 1955 56.
On December 31, 1966, the Income tax Officer served further notices under section 142(1) of the Income tax Act upon the Official Liquidator calling upon him to produce accounts and documents speci fied at the back of the notices and to furnish any information called for by the said officer.
At the foot of the said notices it was stated that failure on the part of the Official Liquidator to comply with the terms of those notices would not only result in exparte assessment against the Company but might also entail penalty under section 271 of the Income tax AcL Certain negotiations followed between the Official Liquidator and the Inspecting Assistant Commissioner of Income tax but they were infructuous.
On an application made by the Official Liquidator in the High Court questioning the jurisdiction of the Income tax Officer to issue the said notices or to proceed with the reassessment of the Company without the leave of the High Court winding up the Company, Vimadlal J., on 28th September, 1967 held that the income tax authorities were not entitled to commence the assessment or reassessment proceedings contemplated against the Colaba Land and Mills Co., Ltd., or to continue the same without obtaining leave of the Court under section 446(1) of the (Act No. 1 of 1956) (hereinafter called the Act).
The learned Judge on this view granted an injunction restraining the Incometax Officer from assessing or re assessing the said Company for the assessment years 1950 51 to 1955 56.
On appeal by the Income tax Officer and the Union of India before the appellate bench of the High Court against the order of injunction, the Division Bench (Modi and Desai, JJ.) reversed the order of the learned single Judge and set aside the injunction issued by him.
Before the appellate bench two contentions were raised on behalf of the Income tax Officer: (1) that notices for reassessment issued under section 148 were not legal proceedings within the meaning of that phrase as used in section 446(1) of the Act, and (2) that, assuming the re assessment proceedings started under the 967 said notices to be legal proceedings, leave of the Company Court under section 446(1) of the Act was not necessary because the Incometax Officer had exclusive jurisdiction to make re assessment and to determine the tax liability.
The proceedings by way of assessment before the Income tax Officer, according to the contention were outside the pale of jurisdiction of all civil courts including the Company Court.
The appellate bench did not consider it necessary to decide the first contention because, on the authority of Damji Valji Shah vs Life Insurance Corporation of India(1), the second contention deserved to be accepted and that was considered sufficient to conclude the appeal.
The Official Liquidator, after securing a certificate of fitness from the High Court under article 133(1)(c) of the Constitution has appealed to this Court and the only question which requires consideration here is, if it is necessary for the Income tax Officer to obtain leave of the liquidation court when he wants to re assess the company for escaped income in respect of past years.
Section 446 of the Act reads : "(1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the Court and subject to such terms as the Court may impose.
(2) The Court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of (a) any suit or proceeding by or against the company; (b) any claim made by or against the company (including claims by or against any of its branches in India); (c) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company; whether such suit or proceeding has been instituted or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or (1) ; 968 after the order for the winding up of the company, or before or after the commencement of the Companies ,(Amendment) Act, 1960.
(3) Any suit or proceeding by Or against the company which is pending in any Court Other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and ,disposed of by that Court.
(4) Nothing in sub section (1) or sub section (3) shall apply to any proceeding pending in appeal before the Supreme Court or High Court." To appreciate and understand the precise scope of this section so far as it concerns us in the present controversy, we consider it pro per to turn to the scheme of the Act on this aspect.
Chapter II of Part VII of the Act beginning with section 433 deals with winding up by the Court.
Section 439 provides for applications for winding up and section 441 tells us when the winding up of a company is to be deemed to commence.
Section 442 which confers power on courts to stay or restrain proceedings against the company reads "442.
At any time after the presentation of a winding up petition and before a winding up order has been made, the company or any creditor or contributory may (a) where any suit or proceeding against the company is pending in the Supreme Court or in any High Court, apply to the Court in which the suit or proceeding is pending for a stay of proceedings therein; and (b) where any suit or proceeding is vending against the company in any other Court, apply to the Court having jurisdiction to wind up the company, to restrain further proceedings in the suit or proceeding; and the Court to which application is so made may stay or restrain the proceedings accordingly, on such terms as it thinks fit.
" Section 444 enjoins the Court making an order for the winding up of a company to cause intimation thereof to be sent forthwith to the Official Liquidator and the Registrar appointed under the .
Official Liquidators attached to the High Courts are appointed by the Central Government under section 448 and the Registrars by the Central Government under section 609 of the Act.
969 It is the duty of the petitioner in the winding up proceedings and also of the company to file under section 445 a certified copy of the order of winding up with the Registrar who has to notify in the Official Gazette that such an order has been made.
Such order is to be deemed to be a notice of discharge of the officers and employees of the company except when the business of the company is continued vide section 445 (3).
Then comes section 446, which has already been set out.
The present sub section
(2) of this section was substituted for the old one in 1960 by Act 65 of 1960 and sub & (4) was also added by that Act.
Sub section (2) is on the lines of section 7 of the Presidency Towns Insolvency Act, 1909, section 4 of the and section 45B of the Banking .
The object of this sub section appears to be to empower "the court as in exercise of insolvency jurisdiction to decide, all claims made by or against any company and other questions whatsoever so that winding up proceedings might be expedited".
Subsections (2) and (3) both seem to have been inserted to give effect to the recommendation of the Company Law Committee Report contained in para 207(c), namely, that "all suits by or against a company in winding up should, notwithstanding any provisions in any law for the time being in force, be instituted in the court in which the winding up proceedings are pending".
This was considered to be to quote the exact words "on balance an advantage to all concerned, including the parties which have a claim against the companies, to institute suits relating to its affairs in the Court where the winding up proceedings are pending".
In the Indian Companies Act, 1913, section 171 provided for preventing litigation against a company in the process of being wound up and it read as : " 171.
When a winding up order has been made or a provisional liquidator has been appointed no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose.
" The words underlined were inserted by the Companies Amend ment Act, 1936 which followed the English Act.
It is hardly necessary to point out that company legislation in India has, ever since the first enactment of 1850 (Registration of Joint stock Companies Act, No. XLIII of 1850) broadly been following the lines of development of the company law in England.
The object of section 171 was designed to achieve was to prevent all litigation against the company in the process of being wound up except with the consent of the court.
We have reproduced this section because the decisions to which reference has been made by Shri Desai in the very beginning of his arguments relate to the cons 970 truction of this section by the Federal Court of India and by this Court.
The Federal Court in The Governor General in Council vs
Shiromani Sugar Mills Ltd.(1) while construing this section held that the words "other legal proceedings" in this section comprise any proceedings by the revenue authorities under section 46(2) of the Indian Income tax Act and accordingly, before forwarding the requisite certificate under section 46(2) to the Collector, which would put the machinery for the collection of the arrears of land revenue into motion, the Income tax Officer should have applied under section 171 of the Indian Companies Act for leave of the winding up Court.
The passage on which Shri Desai specifically relied is where, disagreeing with the observations of a Full Bench of the Lahore High Court in Shakuntla vs The People 's Bank of Northern India Ltd. (In Liquidation,)(2), Spens, C.J. observed that the expression "or other legal proceedings" in section 171 need not and, therefore, should not be confined to "original proceedings in a court of first instance analogous to a suit initiated by means of a petition similar to a plaint".
The learned Chief Justice there went on to observe : "Section 171 must, in our judgment, be construed with reference to other sections of the Act and the general scheme of administration of the assets of a company in liquidation laid down by the Act.
In particular, we would refer to section 232.
Section 232 appears to us to be supplementary to section 171 by providing that any creditor (other than Government) who goes ahead, notwithstanding a winding up order or in ignorance of it with any attachment, distress, execution or sale, without the previous leave of the Court, will find that such steps are void.
The reference to 'distress ' indicates that leave of the Court is required for more than the initiation of original proceedings in the nature of a suit in an ordinary Court of law.
Moreover, the scheme of the application of the company 's property in the pari passu satisfaction of its liabilities, envisaged in section 211 and other sections of the Act, cannot be made to work in coordination, unless all creditors (except such secured creditors as are ' outside the winding up in the sense indicated by Lord Wrenbury in his speech in Food Controller vs Cork(3) are subjected as to their actions against the property of the company to the control of the Court.
Accordingly, in our judgment, no narrow construction should be placed upon the words 'or other legal proceeding ' in section 171.
In our judgment, the words can and should be held (1) (2) Lah.
(3) 971 to cover distress and execution proceedings in the ordinary Courts.
In our view, such proceedings are other legal proceedings against the company, as contrasted with ordinary suits against the company.
" In that case a company was ordered to be wound up in April, 1942 and an order of assessment to income tax of the profits made by the company in the year ending May 31, 1940 was made in 1943 and the Income tax Officer, without obtaining leave of the winding up court, commenced proceedings for recovery of tax as If it were an arrear of land revenue.
It was on these facts that it was observed that the words "or other legal proceedings" can and should be held to cover distress and execution proceedings.
This expression was not held to cover assessment proceedings to which apparently no objection was raised by the parties though they were represented by eminent counsel.
The decision of this Court to which Shri Desai has next referred is M. K. Ranganathan vs Government of Madras(, ').
The head note which gives a clear idea of the ratio of this decision is in these words "The secured creditor is outside the winding up and can realise his security without the leave of the winding up Court, though if he files a suit or takes other legal proceedings for the realisation of his security he is bound under section 171 of the Indian Companies Act to obtain the leave of the winding up Court before he can do so although such leave would almost automatically be granted.
It is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them.
It is also a well recognized rule of construction that the legislature does not intend to make a substantial alteration in the law beyond what it explicitly declares either in express words or by clear implication and that the general words of the Act are not to be so construed as to alter the previous policy of the law, unless no sense or meaning can be applied to those words consistently with the intention of preserving the existing policy untouched.
Held, therefore, that having regard to the context in which the words 'any sale held without leave of the Court of any of the properties ' added in section 232(1) by the amending Act XXII of 1936 have been used in aposition with "any attachment, distress or execution put into force without leave of the Court against the estate or effects" it would be a legitimate construction to (1) ; 972 be put upon them that they refer only to sales held through the intervention of the Court and not to sales effected by the secured creditor outside the winding up and without the intervention of the Court, and that the amendment was not intended to bring within the sweep of the general words sales effected by the secured creditor outside the winding up.
Held accordingly that in the present case the sale effected by respondent No. 2 as the receiver of the trustees of the debenture holders in July 1954 was valid and binding on all parties concerned and could not be chal lenged as it was sought to be done by the Official Receiver.
" In this case the observations already reproduced from the judgment of the Federal Court in Shakuntla 's case (supra) were approved.
It may also be pointed out that in this decision this Court observed that the winding up court assures pro rata distribution of the assets of the company in the same way in which the court under the Presidency Towns Insolvency Act or the ensures such distribution of assets.
Section 232(1) of the Act of 1913 which was held supplemental to section 171 was also stated to have reference to legal proceedings in the same way as such proceedings were envisaged by section 171.
These two decisions in our opinion do not lay down that assessment proceedings under the Income tax Act should be held to be within the contemplation of section 171 of the Indian Companies Act, 1913.
The next decision to which reference has been made by Shri Desai is Union of India vs India Fisheries (P) Ltd. (1).
In that case the respondents, Fisheries (P) Ltd., had been directed to be wound up by the winding up court and an Official Liquidator had been appointed by an order of the High Court in October, 1950.
The head note in that case gives a clear idea of the facts and the decision.
It reads : "The respondent company was directed to be wound up and an official liquidator appointed by an order of the High Court in October, 1950.
In December 1950 the respondent was assessed to tax amounting to Rs. 8737 for the year 1948 49.
A claim made for this tax on the official liquidator was adjudged and allowed as an ordinary claim and certified as such in April, 1952.
The Liquidator declared a dividend of 9 1/2 annas in the Rupee in August, 1954 and paid a sum of Rs. 5188 to the Department, leaving a balance of Rs. 3549.
(1) 973 In June, 1954, the Department made a demand from the respondent and was paid Rs. 2565 as advance tax for the year 1955 56.
On a regular assessment being made for that year, only Rs. 1126 was assessed as payable so that a sum of Rs. 1460, inclusive of interest, be came refundable to the respondent.
However, the Income Tax Officer, purporting to exercise the power available to him under section 49E of the Income Tax Act, 1922, set off this amount against the balance of Rs. 3549 due for the year 1948 49.
A revision petition filed by respondent in respect of this set off was rejected by the Commissioner of Income tax.
Thereafter, petition under article 226 filed by the respondent to set aside the orders of the Income Tax Officer and Commissioner was allowed by the High Court, on the ground that the demand for Rs. 8737 in respect of 1948 49, being adjudged and certified came to have all the incidents and character of an unsecured debt payable by the liquidator to the Department; it was therefore governed by the provisions of Company Law and no other remedy or method to obtain satisfaction of the claim was available to the creditor.
In the appeal to this Court it was contended on behalf of the appellant that section 49E gave statutory power to Income Tax Officer to set off a refundable amount against any tax remaining payable and that this power was not subject to any provision of any other law.
Held the Income Tax Officer was in error in applying section 49E and setting off the refund due to the respondent.
The effect of sections 228 and 229 of the Companies Act, 1913, is, inter alia, that an unsecured creditor must prove his debts and all unsecured debts are to be paid pari passu.
Once the claim of the Department has to be proved and is proved in liquidation proceedings, it cannot, by exercising the right under section 49E get priority over other unsecured creditors and thus defeat the very object of sections 228 and 229 of the Companies Act.
Furthermore, if there is an apparent conflict between two independent provisions of law, the special provision must prevail.
Section 49E is a general provision applicable to all assessees in all circumstances; sections 228 and 229 deal with proof of debts and their payment in liqui 97 4 dation.
Section 49E can be reconciled with sections 228 and 229 by holding that section 49E applies when insolvency rules do not apply.
" In our opinion this decision is of no greater assistance to the appellant on the narrow point which requires determination by us.
On the contrary to some extent it goes against Shri Desai because the assessment made in December, 1950, after the appointment of the Official Liquidator was assumed to be in order.
It may be recalled that in Shiromani Sugar Mills case (supra) the assessment made after the winding up order was not challenged though on the argument addressed by Shri Desai before us it could have been challenged.
The ratio decidendi or the principle accepted and applied in none of the decisions cited supports the appellant 's contention on the precise point of assessment of tax.
Shri Desai has next referred us to a more recent decision of this Court in Balwant Singh vs L. C. Bharumal, Income tax Officer, New, Delhi.(1) In this case the Income tax Officer was held to be a court for the purpose of section 195 (1) (b), Cr. P. C. though it was added that the Income tax Officer could not be treated as a re venue court and, therefore, neither section 476 nor section 479 A, Cr. P. C. would be applicable.
This decision has been cited for the purpose of contending that if the expression "other legal proceeding" in section 446 is to be construed to mean a proceeding in a court, then, the Income tax Officer must be considered to be a court when holding assessment or re assessment proceedings.
This contention may be disposed of with the observation that merely because the Income tax Officer is considered to be a court for the purpose of section 195 (1) (b), Cr. P. C. it does not necessarily follow that the said officer must be considered to be a court for the purposes of section 446 of the Act.
There is no justification for extending the scope of this decision beyond its own facts.
The decisions which apparently seem to lend more direct support to the appellants contention are Union of India vs Seth Spinning Mills Ltd., (In Liquidation) (2) and Mysore Spun Silk Mills Ltd., (In Liquidation), In re Official Liquidator vs Commissioner of Income tax, Bangalore(").
Both of them are decisions by single Judges, the former by the Punjab High Court and the latter by the Mysore High Court.
In Seth Spinning Mills case (supra) it was observed "that section 171 of the Indian Companies Act, 1913 provides that when a winding up order has been made no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.
The language of this section is wide enough to include proceedings under the Income tax Act.
(1) [1968]70 I.T.R.89(S.C.) (2) (3) 975 No leave of the court has been obtained.
In view of this the claim of the petitioner for Rs. 4,000 on account of the penalty order passed on 14th April, 1956 cannot be entertained".
in this case the Union of India through the Commissioner of Income tax had applied to the learned single Judge, who was apparently functioning as a company Judge, praying that the department 's claim amounting to Rs. 16,500 should have been admitted by the Official Liquidator and that his refusal to do so was not justified in law.
This amount, it appears, consisted of the penalty imposed by the Income tax Department.
Part of the penalty was imposed by means of an order passed prior to the company 's going into liquidation but a sum of Rs. 4,000 related to the penalty imposed after the date of winding up.
The learned single Judge while dealing with that petition observed : "Section 171 of the Indian Companies Act, 1913, provides that when a winding up order has been made no suit or other legal proceedings shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.
The language of this section is wide enough to include proceedings under the Income tax Act.
No leave of the court has been obtained.
In view of this, the claim of the petitioner for Rs. 4,000 on account of the penalty order passed on 14th April, 1956, cannot be entertained.
" In the Mysore case it appears that in the course of winding up of the mills in liquidation large sums of money came into the hands of the liquidator which could not be immediately applied for distribution of dividends to the creditors.
Those moneys were invested pursuant to the relevant provisions of the Companies (Court) Rules.
The question arose whether in respect of the receipts of income the liquidator was liable to pay income tax on those receipts.
The learned single Judge, after discussing the scheme of the Companies Act, observed : "The liquidator is only an officer of the court.
Unlike a receiver in the case of insolvency, properties of the insolvent do not vest in him but come within the control of the court.
All his actions are subject to the control of the court for which purpose the court issues to him appropriate directions from time to time in the course of winding up.
No court or other authority (subject to the exception contained in sub section (4) of section 446 of the Companies Act) can take any proceedings or attach or otherwise reach any of the matters, the winding up court treats the liquidator as its special 97 6 officer specially charged with the duty of representing the company and protecting its interests in winding up.
In the light of the above principles, it is the duty of the court to see that all liabilities of a company are properly met in accordance with the provisions of the law and the special provisions in that behalf contained in the Companies Act.
Liability to income tax is also one of the liabilities which the court is expected to provide for in the course of winding up.
Such being the position, the question is whether, because the liquidator does not answer the description of the principal officer as defined in the Income tax Act, the liability, if any, of the company for payment of income tax itself comes to an end and therefore the winding up court may ignore that liability.
" The Court thereafter observed that the corporate existence of the company continues even after the winding up order; but after the winding up order the question of payment of income tax has to be dealt with or answered on a joint application of the terms or provisions of the Income tax Act and the Companies Act.
After so observing the court proceeded : "that even after a winding up order is passed, the company continues to be a person within the meaning of section 4 of the Income tax Act, that therefore any receipt in the course of winding up which would attract liability to income tax under appropriate provisions of the Income tax Act would be liable to income tax or for payment of tax under Income tax Act, but that before any action can be taken by the appropriate Incometax Officer under the Income tax Act for the purpose of quantification or collection of the income tax he should obtain the leave of the winding up court under section 446 of the Companies Act, and further that the collection of the tax can only be by securing the orders of the winding up court for payment of tax in the light of the appropriate provisions of the Companies Act.
" In this case so far as collection of the tax assessed is concerned there can scarcely be any difficulty in agreeing with the view taken there.
But it is only when the court said that for the purpose of quantification of the income tax also leave under section 446 of the Act ha , to be obtained that we have to consider if this view 977 is correct.
It is on this observation that Shri Desai has principally relied.
The decisions of the Federal Court and of this Court already cited by Shri Desai, it may be recalled, do not support this view.
Reference by Shri Desai has also been made to Abdul Aziz Ansari vs The State of Bombay(1) in which assessment proceedings under the Bombay Sales Tax Act, 1946 were considered to be legal proceedings for the purpose of continuance of those proceedings after repeal of the Bombay Sales Tax Act, 1946 by section 48(2) of the Bombay Sales Tax Act, 3 of 1953.
We do not think this decision is of any assistance for considering the question whether assessment or re assessment proceedings can be considered to be legal proceedings as contemplated by section 446 of the Act.
The learned counsel for the appellant has also drawn our attention to Shiromani Sugar Mills vs Governor General in Council(2) where, after referring to section 171 of the Companies Act, 1913 it was held by the Allahabad High Court, that initiation by the Income tax Officer of steps to recover the amount of assessment under section 46 of the Income tax Act of 1922 and the prosecution by the Collector of those steps amounted to "commencement" or "proceeding with" a "suit or other legal proceeding.
" Needless to point out that this is the view which the Federal Court on appeal upheld in the decision already referred to.
The further submission pressed by Shri Desai that section 446 of the Act is a special provision and section 148 of the Income tax Act a general provision of law was sought to be supported by reference to India Fisheries case(3).
It may here be pointed out that in that case it was, while dealing with section 49E of the Income tax Act, that this Court observed that the revenue could not, by exercising the right under that section get priority over other unsecured creditors, and it was in this context that it was said that there being apparent conflict between two independent provisions of law the special provision must prevail.
In order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts of the case in which the decision was given and what was the point which had to be decided.
Thus considered India Fisheries case(3) lends no assistance to Shri Desai and we are unable to construe the observations in that decision to support Shri Desai 's contention that section 446 of the Act is a special provision as against section 148 of the Income tax Act under which Income tax Officers hold proceedings for assessment or re assessment of income tax and that therefore the former should prevail over the latter.
(1) A.I.R. 1958 Bom.
(2) I.L.R. 1945 Allahabad 352.
(3) 978 Turning now to the Income tax Act it is noteworthy that section 148 occurs in Chapter XIV which beginning with section 139 pres cribes the procedure for assessment and section 147 provides for assessment or re assessment of income escaping assessment.
This section empowers the Income tax Officer concerned subject to the provisions of sections 148 to 153 to assess or re assess escaped income.
While holding these assessment proceedings the Income tax Officer does not, in our view, perform the functions of a court as contemplated by section 446(2) of the Act.
Looking at the legislative history and the scheme of the Indian Companies Act, particularly the language of section 446 read as a whole, it appears to us that the expression "other legal proceeding" in sub section
(1) and the expression "legal proceeding" in sub section
(2) convey the same sense and the proceedings in both the sub sections must be such as can appropriately be dealt with by the winding up court.
The Income tax Act is, in our opinion, a complete code and it is particularly so with respect to the assessment and re assessment of income tax with which alone we are concerned in the present case.
The fact that after the amount of tax payable by an assessee has been determined or quantified its realisation from a company in liquidation is governed by the Act because the income tax payable also being a debt has to rank pari passu with other debts due from the company does not mean that the assessment proceedings for computing the amount of tax must be held to be such other legal proceedings as can only be started or continued with the leave of the liquidation court under section 446 of the Act.
The liquidation court, in our opinion, cannot perform the functions of Income tax Officers while assessing the amount of tax payable by the assessees even if the assessee be the company which is being wound up by the court.
The orders made by the Income tax Officer in the course of assessment or re assessment proceedings are subject to appeal to the higher hierarchy under the Income tax Act.
There are also provisions for reference to the High Court and for appeals from the decisions of the High Court to the Supreme Court and then there are provisions for revision by the Commissioner of Income tax.
It would lead to anomalous consequences if the winding up court were to be held empowered to transfer the assessment proceedings to itself and assess the company to income tax.
The argument on behalf of the appellant by Shri Desai is that the winding up court is empowered in its discretion to decline to transfer the assessment proceedings in a given case but the power on the plain language of section 446 of the Act must be held to vest in that court to be exercised only if considered expedient.
We are not impressed by this argument.
The language of section 446 must be so construed as to eliminate such startling consequences as investing the winding up) court with the powers of an Income tax Officer conferred on him by the Income 979 tax Act, because in our view the legislature could not have intended such a result.
The argument that the proceedings for assessment or re assessment of a company which is being wound up can only be started or continued with the leave of the liquidation court is also, on the scheme both of the Act and of the Income tax Act, unacceptable.
We have not been shown any principle on which the liquidation court should be vested with the power to stop assessment proceedings for determining the amount of tax payable by the company, which is being wound up.
The liquidation court would have full power to scrutinise the claim of the ' revenue after income tax has been determined and its payment demanded from the liquidator.
It would be open to the liquidation court then to decide how far under the law, the amount of Income tax determined by the department should be accepted as a lawful liability on the funds of the company in liquidation.
At that stage the winding up court can fully safeguard the interests of the company and its creditors under the Act.
Incidentally, it may be pointed out that at the bar no English decision was brought to our notice under which the assessment proceedings were held to be controlled by the winding up court.
On the view that we have taken, the decisions in the case of Seth Spinning Mills Ltd., (in Liquidation) (1) and the Mysore Spun Silk Mills Ltd., (In Liquidation) (2) do not seem to lay down the correct rule of law that the Income tax Officers must obtain leave of the winding up court for commencing or continuing assessment or reassessment proceedings.
For the foregoing reasons we have no hesitation in dismissing the appeal with costs.
S.C. Appeal dismissed.
| A company (in liquidation) was ordered by the High Court to be wound up and the official liquidator was appointed its liquidator.
Thereafter the I.T.O. issued notices under section 148 of I.T. Act proposing to reopen the assessment of the Company in respect of the assessment years 1950 51 to 1955 56.
The I.T.O. further notified the official liquidator to produce accounts and documents specified at the back of the notice.
The official liquidator made an application before the High Court questioning the jurisdiction of the I.T.O. to issue the said notices without the leave of the High Court, as required under section 446(1) of the companies Act.
The learned single Judge of the High Court issued an injunction restraining the I.T.O. to reassess the said Company.
On appeal, the appellate bench of the High Court reversed the order and set aside the injunction.
On appeal to this Court only one question arose for determination as to whether it was necessary for the I.T.O. to obtain leave of the liquidation court when he wants to reassess the company for escaped income in respect of the past years.
Dismissing the appeal, HELD : The Income Tax Officer need not obtain leave of the winding up court for commencing or continuing assessment or reassessment proceedings. 'Me Income tax Act is a complete Code and section 147 empowers the Income, Tax Officer to assess or reassess escaped income.
Further while holding these assessment proceedings, the Income Tax Officer does not perform the functions of a Court as contemplated by section 446(2) of the Act.
The liquidation court cannot perform the functions of Income Tax Officers while assessing the amount of tax payable by the assessees even if the assessee be the Company which is being wound up,, by the Court.
It would lead to anomalous consequencs if the winding up Court were to be held empowered to transfer the assessment proceedings to itself and assess the Company to Income tax.
[978 B D] Grovernor General in Council vs Shiromani Sugar Mills Ltd. , Shakuntala vs The Peoples ' Bank of Northern India Ltd. (in liquidation).
Lab. 760 and M. K. Ranganathan vs State of Madras.
; , referred to and discussed.
|
Appeal No. 681 of 1966.
sup CI/69 14 202 Appeal by special leave from the judgment and order dated April 22, 1965 of the Punjab High Court in Civil Writ No. 719 of 1964.
B.P. Maheshwari and Sobhag Mal Jain, for the appellant.
W.S. Barlingay, Brij Mohan Lal and Ganpat Rai, for respondents Nos. 1 and 3.
Hardev Singh, R.N. Sachthey, and B.D. Sharma, for respondents Nos. 2, 4 and 5.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from the judgment of the Punjab High Court in which the sole question involved is whether the Additional District Magistrate, Gurdaspur who had been invested with all the powers of the District Magistrate under section 10(2) of the Code of Criminal Procedure could make an order under section 29(1) of the Defence of India Act, 1962, hereinafter called the "Act", requisitioning a shop belonging to Batala Engineering Co. Ltd. which was in occupation of the appellant as.
a tenant.
The facts may be shortly stated.
The appellant claims to have been carrying on the business of a Commission Agent in machines in the said shop at Batala for the last 10 years as a tenant on a monthly rental of Rs. 20.
According to the allegations made by the appellant herein in the petition which he filed in the High Court under articles 226 and 227 of the Constitution, Batala Engineering Co. Ltd. (respondent No. 1 herein) had filed an application for his ejectment in January 1964 before the Rent Controller, Batala but realising the weakness of its case the said respondent resorted to the device of getting the shop requisitioned at the instance of the Labour Commissioner who wrote to the Additional District Magistrate that the shop was required for setting up a Cooperative Consumer Store.
On March 24, 1964, the Additional District Magistrate (respondent No. 2 herein) issued a requisitioning order purporting to be under section 29 of the Act requisitioning the shop in question and directing the tenant to surrender and deliver possession thereof to the Manager, Cooperative Consumer Store, Batala, within two days of the service of the order.
The requisitioning order was challenged by means of a writ petition on two grounds; the first was that it had been made mala fide and the second was that the notification which had been issued under section 40 (1 ) of the Act by the Central Government empowering among others the District Magistrate to exercise powers which were exercisable by the Central Government under section 29 in addition to other sections (which it is unnecessary to mention) was illegal and invalid.
The petition was resisted by respondents 1 and 2 and the assertions and contentions of the appellant were controverted.
203 The Division Bench of the High Court (the writ petition had been referred by a learned Single Judge to a Division Bench) held that the allegation of mala fides had not been proved.
It further held that the Additional District Magistrate was competent to make the requisitioning order since he had been empowered to exercise the powers of a District Magistrate under section 10(2) of the Cr. P. Code.
The writ petition was consequently dismissed.
It is necessary first to notice certain provisions of the Act.
Section 29 empowers the Central Government or the State Government to requisition any immoveable property in the circumstances mentioned in the section by an order in writing.
Section 40 which provides for the power to delegate may be set out in entirety: "section 40( 1 ) The Central Government may, by order, direct that any power or duty which by this Act or by any rule made under this Act is conferred or imposed upon the Central Government shall, in such circumstances and under such conditions, if any, as may be specified in the direction, be exercised or discharged also (a) by any officer or authority subordinate to the Central Government, or (b) whether or not the power or duty relates to a matter with respect to which a State Legislature has power to make laws, by any State Government or by any officer or authority subordinate to such Government, or (c) by any other authority.
(2) The State Government may, by order, direct that any power or duty which by this Act or by any rule made under this Act is conferred or.
imposed on the State Government or which, being by this Act or any such rule conferred or imposed on the Central Government, has been directed under sub section (1) to be exercised or discharged by the State Government, shall, in such circumstances and under such conditions, if any as may be specified in the direction, be exercised or discharged by any officer or authority not being (except in the case of a Union territory) an officer or authority subordinate to the Central Government." On December 13, 1962 the Central Government promulgated a notification delegating its power under certain sections of the Act including section 29.
This notification need not be set out in extensor.
Its material part is as follows : 204 "G.S.R. 1716 In exercise of the powers conferred by sub section (1) of section 40 of the Defence of India Act 1962 (5 of 1962) and of all other powers enabling it in this behalf, the Central Government hereby directs that the powers exercisable by it under the provisions the said Act specified in column (2) of the Schedule hereto annexed shall also he exercisable by each of the authorities mentioned in the corresponding entry in column (3) of the said schedule in respect of any immovable property situated within its jurisdiction.
Schedule S.No.
Provision of the Act Authorities.
1 2 3 1.Section 29,30(ex All collectors, District Mag cept the provise the istrates and Deputy Commission reto),31,32,33,35, and ers in the State and all politi 36 and sub ss.(1)and (3) officers in Nefa.
of section 37.
It is necessary now to turn to.
the relevant provisions of the Criminal Procedure Code in order to.
determine whether the Additional District Magistrate would be one of the authorities mentioned in column 3.
In Part II which is headed 'Constitution and Powers of Criminal Courts and Offices ', section 6 gives the classes of criminal courts and section 7 deals with Sessions, divisions and districts.
Section 9 provides for establishment of court of Session.
Section 10 lays down that in every district outside the presidency towns the State Government shall appoint a Magistrate of the first class who shall be called the District Magistrate.
It is further provided that the State Government may appoint any Magistrate of the first class to be an Additional District Magistrate and such Additional District Magistrate shall have all or any of the powers of a District Magistrate under the Code or under any other law for the time being in force as the State Government may direct.
It may be mentioned that in the State of Punjab after the separation of judiciary from the executive by the Punjab Separation of Judicial & Executive Functions Act, 1964 (Act XXV of 1964) certain amendments were made in section 10 but in the present case we are not concerned with them because the impugned order requisitioning the shop in question was made before the said Act (XXV of 1964) came into force.
It is well known that the object of appointing an Additional District Magistrate is to relieve the District Magistrate of some 205 of his duties and that he is subordinate to the District Magistrate to the extent specified in sub section
(3) of section 10.
It is equally well known that the District Magistrate occupies a very important position in the district and is the head of the Executive there and he exercises powers of superintendence and control over the other Magistrates in the district.
Apart from the powers which have been conferred by the Code of Criminal Procedure on him the District Magistrate is also.
known as the Collector for purposes of revenue laws.
He is variously called Collector in some States and Deputy Commissioner in other States.
Under section 11 of the Code whenever in consequence of the office of District Magistrate becoming vacant, any officer succeeding temporarily to the Chief executive administration of the district such officer also exercises all the powers and performs all the duties conferred and imposed by the Code on the District Magistrate.
The Additional District Magistrate as has previously been noticed, can similarly exercise all or any of the powers of a District Magistrate if the State Government makes a direction under section 10(2) of the Code but even an officer who heads the chief executive administration of the district temporarily under section 11, exercises all the powers of a District Magistrate.
The scheme of section 10 of the Code leaves no, room for doubt that the District Magistrate and the Additional District Magistrate are two different and distinct authorities and even though the latter may be empowered under sub section
(2) to exercise all or any of the powers of a District Magistrate but by no stretch of reasoning can an Additional District Magistrate be called the District Magistrate which are the words employed in sub section
(1) of section 10.
The argument which prevailed in the High Court and which the appellant has had to seriously meet in this Court, is that the Additional District Magistrate when invested by the State Government under section 10 (2) of the Code with all or any of the powers of the District Magistrate under the Code or under any other law for the time being in force, would squarely fall within the expression "District Magistrate" employed in column 3 of the notification dated December 13, 1962 by means of which the Central Government delegated its power under certain sections of the Act including section 29.
The reasoning of the High Court was that on a proper construction of the notification it was clear that the "Central Government was desirous of delegating its power in favour of the officers in fact and actually discharging duties and functions in exercising the powers of Collectors, District Magistrates and Deputy Commissioners.
The High Court also looked at the other provisions in respect of which the powers had been delegated and drew the conclusion that the delegation was not confined only to officers appointed as such under section 10(1 ) of the Code of Criminal Procedure.
Learned counsel for the appel 206 lant has assailed the decision of the High Court principally on two grounds for which he has sought support from a decision of the Nagpur High Court in Prabhulal Ramlal Kabra vs Emperor(1).
In that case an order had been made under Rule 26 of the Defence of India Rules by the Additional District Magistrate of Raipur directing the detention of one Bharatchandra Kabra.
That Rule conferred power of detention on the Central Government and the Provincial Government but by virtue of the provisions relating to delegation the District Magistrate had been empowered by the Provincial Government to exercise those powers.
The Additional District Magistrate who made the order of detention had been conferred powers under section 10(2) Cr.
Code almost in similar terms as are to be found in the present case.
In other words he could exercise all the powers of a District Magistrate under the Code or under any other law for the time being in force.
Two points were agitated before the Nagpur court; the first was that the word "law" in "any other law" occurring .in section 10(2) of the Code was not meant to include an executive order but only legislative enactments, and rules, regulations or orders which had the force of law.
The second was that the Act and the Rules made thereunder were special laws enacted to meet an emergency and they conferred extraordinary and drastic powers on the executive and it was precisely for that reason that it was imperative that those powers must be exercised with due sense of responsibility and with circumspection by an officer or authority of a certain status and experience and, therefore, that power had been delegated to the District Magistrate.
Both these contentions prevailed with the Nagpur High Court and it was held that the Additional District Magistrate could not exercise powers under Rule 26 of the Defence of India Rules simply by virtue of the notification under section 10(2) of the Code of Criminal Procedure.
There is an exhaustive discussion on the first point in the Nagpur judgment but it is altogether unnecessary to examine its correctness because we are of the opinion that most of the reasons given in support of the determination of the second point are clear and cogent and must be accepted as correct.
These reasons may be summarised as follows (i) very wide, 'almost autocratic, powers are conferred on the Government in the matter of detention .and therefore they must be exercised with a due sense of responsibility and circumspection by an officer of a certain status and experience; (ii) when the Government delegates its power to an officer or authority subordinate to it, is not unreasonable to assume that it fully considers the fitness of the delegate before making the order in respect of delegation: (iii) the Additional District Magistrate who is invested with the powers of a District Magistrate does not thereby attain the status of a District Magistrate as there can be only one person (1) A.I.R. 1944 Nag.
207 in the district who can be a District Magistrate and (iv) the Government when it conferred the power on the District Magistrate conferred it on the officer actually holding the office of the District Magistrate and no one else.
It has not been disputed that the powers of requisitioning are of a very drastic nature and involve the fundamental rights in respect of property guaranteed under article 19(1)(f) of the Constitution.
The Central Government while making the delegation of its power under section 29 of the Act must ordinarily be presumed to be fully conscious of this aspect of the matter and it was for that reason that an officer or authority of the high status of a District Magistrate in the district was empowered to exercise that power.
Apart from these considerations we see no reason to deviate from the normal rule that the expressions or words which have been used in the notification must be read as such and not in any other manner unless the context requires that the latter course should be followed.
In the present case the words "District Magistrate" could not possibly be read as Additional District Magistrate and it is only by resorting to the notification issued under section 10(2) of the Code that the Additional District Magistrate can be said to have empowered to exercise the powers of the District Magistrates.
The reasons which prevailed with the Nagpur court and which have already been summarised adequately meet the contrary view that the Additional District Magistrate should be held to be competent to act under section 29 of the Act even though the Nagpur case was one of detention.
Coming to.
the decisions of this Court not much assistance can be derived from them.
In Ajaib Singh vs State of Punjab(1) the Additional District Magistrate of Amritsar who had been invested with the powers of a District Magistrate under section 10(2) of the Code was incharge of the office of the District Magistrate when the latter was transferred.
He passed an order detaining a person under Rule 30(1)(b)of the Defence of India Rules 1962.
It was held that the Act and the Rules showed unmistakably that the powers of detention could be exercised only by the State Government or by an officer or authority to whom it might be delegated but who.
shall, in no case, be lower in rank than a District Magistrate.
The Additional District Magistrate was below the rank of a District Magistrate and even though he had been invested with all the powers under the Code and also under any other law for the time being in force he was still not the District Magistrate unless the Government appointed him as such under section 10(1).
This case would have been most apposite for the present case but for the clear distinction that in provisions (1) ; 208 under which the detention was made it was provided that the powers could be delegated to no one who.
was lower in rank than a District Magistrate.
There is no such provision in the matter of delegation in the present case.
One rule, however, emerges quite clearly which is even otherwise unexceptionable that unless a person has been appointed under section 10( 1 ) of the Code he cannot be called a District Magistrate and that an Additional District Magistrate is below the rank of a District Magistrate.
The Central Talkies Ltd. Kanpur vs Dwarka Prasad(1) on which reliance was placed by the counsel for the respondents related to interpretation of certain provisions of the U.P. (Temporary) Control of Rent and Eviction Act 1947.
Section 3 of that Act enabled a landlord to file a suit for eviction of the tenant with the permission of the District Magistrate.
Section 2(d) defined District Magistrate as including an officer authorised by the District Magistrate to perform any of his functions under the Act.
By a notification issued under section 10(2) of the Code of Criminal Procedure one Mr. Seth was appointed as an Additional District Magistrate with a, Il the powers of the District Magistrate.
The landlord applied to the District Magistrate for permission to file a suit for ejectment against the tenant.
The District Magistrate transferred that application to the Additional District Magistrate who granted permission.
The tenant challenged the same on the ground that the permission granted by the Additional District Magistrate was invalid as the District Magistrate mentioned in section 3 of the aforesaid Act was persona designate.
This contention was repelled by this Court and it was observed that a persona designate was a person selected as an individual in his private capacity, and not in his capacity as filling a particular character or office.
This case is clearly distinguishable on the ground that under section 3 of the U.P. Act the District Magistrate himself could authorise any officer to perform any of his functions.
That showed that the legislature did not intend that the functions to be performed under section 3 must be performed by the District Magistrate alone and by no one else.
Counsel for the appellant has called attention to a Bench decision of the Punjab High Court in Guru Datt vs Sohan Singh & Another(2) in which a question arose whether the Deputy Commissioner for the purposes of an election petition under the Punjab Panchayat Samities and Zila Parishads.
Act 1961 and the Rules framed thereunder was a persona designate and it was held that it was the Deputy Commissioner alone who could perform the functions which the statute and the rules conferred on him even though the Governor had made an order declaring the ex cadre posts of Additional Deputy Commissioners to be equivalent in (1) ; (2)I.L.R. 1969 Punj.
134. 209 status to the cadre posts of Deputy Commissioners.
This decision may be open to some criticism owing to the observations made in Central Talkies ' case(1).
However, in the present case we are not basing .our decision by taking into consideration the line of argument of persona designata.
For the reasons which have already been stated the appeal is allowed with costs, with the result that the writ petition filed in the High Court succeeds and the impugned order shall stand quashed.
G.C. Appeal allowed.
| By notification under section 40(1) of the Defence of India Act, 1962 the powers of the Central Government in respect of certain sections of the Act including section 29 thereof were conferred on Collectors, District Magistrates, Deputy Commissioners and political officers in Nefa.
The Additional District Magistrate of Batala in the Punjab acting under section 29 of the Act passed an order requisitioning a shop belonging to the respondent which was occupied by the appellant as a tenant.
The appellant challenged the order of requisition in a writ petition to the High Court without success.
In appeal before this Court the question that fell for consideration was whether an additional District Magistrate was empowered under section 10(2) of the Code of Criminal Procedure to exercise the powers under section 29 of the Defence of India Act delegated by the Central Government to District Magistrates.
HELD: The powers of requisitioning are of a very drastic nature and involve the fundamental rights in respect of property guaranteed under article 19 ( 1 ) (f) of the Constitution.
The Central Government while making the delegation of its power under section 29 of the Act must ordinarily be presumed to be fully conscious of this aspect of the matter and it was for that reason that an officer or authority of the high status of a District Magistrate in the District was empowered to exercise that power.
There was also No. reason in the present case to deviate from the normal rule that the expressions or words used in the notification must be read as such and not in any other manner unless the context requires that the latter course should be followed, and the words "District Magistrate" could not be possibly read as "Additional District Magistrate".
[207 B D] The notification issued under section 10(2) of the Code of Criminal Procedure could not serve to confer on the Additional District Magistrate the powers of the District Magistrate under section 29 of the Defence of India Act for the same reasons as prevailed with.
the Nagpur High.
Court in Prabhulal Ramlal Kabras case in denying to the Additional District Magistrate the power of the District Magistrate under R. 26 of the Defence of India Rules.
[207 E, 206 E F] Prabhulal Ratnlal Kabra vs Emperor, A.I.R. 1944 Nag. 84, approved and applied.
Ajaib Singh vs State of Punjab, ; , Central Talkies Ltd. Kanpur vs Dwarka Prasad, ; and Guru Dutt vs Sohan Singh & Ant.
I.L.R. 1965 Punj.
134, referred to.
|
Appeal No. 454 of 1957.
Appeal from the judgment and order dated December 16, 1954, of the Court of Judicial Commissioner, Ajmer in Civil Appeal No. 134 of 1952.
A. V. Viswanatha Sastri, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellants.
G. C. Kasliwal, Advocate General, Rajasthan, section K. Kapur and T. M. Sen, for the respondent.
325 1961.
April 24.
The Judgment of the Court was delivered by AYYANGAR, J.
This is an appeal on a certificate granted by the Judicial Commissioner, Ajmer, and is directed against the judgment of that Court dated December 16, 1954 by which the decree in favour of the respondent Union of India was affirmed.
Seth Lal Chand Kothari the original first appellant in the appeal before us (he died pending this appeal and his heirs have been brought on record as his legal representatives appellants 1 to 6) was appointed by the Commissioner Ajmer Merwara as Government Treasurer, Ajmer Merwara, by an order dated February 20, 1940, the treasuries to be under his charge being two that at Ajmer and a subtreasury at Beawar.
Before accepting office he had, under the rules, to deposit Government promissory notes to the extent of Rs. 60,000 and also execute a Security Bond for a like amount with two sureties to cover any loss to the Government in these treasuries.
He accordingly made the deposit, and a security bond was executed by him on February 27, 1940 with Seth Phool Chand who is now the 7th appellant in the appeal and one Seth Kanwarlal Ranka who died even before the suit and was not impleaded in it.
Thereupon Lal Chand Kothari was directed to take charge of the office as Treasurer and he did so on March 6, 1940.
We are not concerned with the treasury at Ajmer, but only with that at Beawar.
Lal Chand, at the time of his taking charge, executed a receipt headed " charge report" and in it is recited that he had taken over from the previous incumbent (VI. L. Patni) the amount of cash which tallied with what had to be in the treasury according to the books.
Nothing happened between 1940 and 1948 and the business at the treasury appeared to be proceeding regularly and according to the rules.
It may be mentioned that there were the usual periodical checks and audits by 42 326 Government officials but no impropriety was discovered during these checks or audits.
On March 31, 1948, the Extra Assistant Commissioner, Ajmer, made a check of the treasury at Beawar.
The treasury staff who ought to have been there were however absent in spite of their having had prior intimation of his arrival and there upon he directed the treasury to be sealed.
There were two cash chests at this sub treasury one secured with a single lock, the key of which was with the staff of the Treasurer and the other with doublelocks, the keys of which were held, one by the emplo yee of the Treasurer and the other by the Government Treasury Officer the Tahsildar.
A verification of the balance in the two chests disclosed that a sum of 7 annas, 9 pies was missing from the single lock chest and Rs. 84,215 from the chest with the double lock.
The Government thereupon took proceedings to realise the missing amount from the security of Rs. 60,000 which had been under deposit.
The Government securities were sold and they realized about rupees 58 thousands and odd leaving a sum of Rs. 25,786 13 9 ,still due.
The Union of India thereupon filed a suitCivil Suit 125 of 1951 before the Sub Judge First Class, Beawar on the security bond dated February 27, 1940 against Lal Chand Kothari and Seth Phool Chand for recovery of this sum.
Several defences were raised by the defendants but they were all rejected by the learned Subordinate Judge who granted the respondents a decree in terms prayed for in the suit.
The defendants filed an appeal to the Judicial Commissioner who dismissed it, but having regard to the fact that some of the defences turned on the interpretation of the security bond dated February 27, 1940, granted a certificate under article 133(1) of the Constitution and that is how the appeal is now before US.
Neither the factum of the loss by embezzlement nor its amount is in question, and the only points raised for consideration are: (1) whether on the terms of the bond the decree in favour of the appellants could be sustained; (2) whether the claim in the suit was not barred by limitation.
The argument on this second 327 point was that if article 83 of the Indian Limitation Act governed the claim it would be barred, and that the provision contained in article 149 prescribing a 60 year period of limitation for suits by the Government was Si, unconstitutional as violative of article 14 of the Consti tution.
It is this last plea that has led to the appeal being heard by this larger Bench.
As regards the first point that the suit claim was not comprehended within the terms of the security bond, learned Counsel made three submissions: (1) In order to render the defendants liable, the loss sustained by the Government must be proved to have occured on or after March 6, 1940 on which date alone Lal Chand Kothari took charge of the treasury.
Though loss to the extent set out in the plaint did occur at the treasury in Beawar, learned Counsel urged, the plain.
tiff respondent had not proved that it occurred after March 6, 1940.
In other words, the argument was that there was no physical checking on March 6, 1940 when he took over and because of this one could not be certain whether it was a loss which had occurred during the period of the previous incumbent in office or could with certainty be attributed to the period subsequent to March 6, 1940.
This argument was rejected by the courts below and, in our opinion, correctly.
In the face of the receipt executed by Lal Chand Kothari it would not be open to him to contend that the recitals in it were not correct, and in any event it would be for him to show that it was incorrect and, of course, there was no possibility of his establishing this.
(2) It was next urged that on the terms of the Bond read in the context of the surrounding circumstances Lal Chand Kothari would be liable only for the deficiency in the chest with the single lock and not for the loss or embezzlement or deficiency in the other chest with the double lock.
The whole basis of this argument was that the security deposit of Rs. 60,000 and the security bond for the like amount executed by the Treasurer was an indication that it was with reference to the amount which was the maximum in the chest under the single lock and from this feature it was 328 urged that it was the intention of the parties that Lal Chand Kothari would not be responsible for any embezzlement, loss or deficiency in the other chest.
This submission is without any foundation, because the liability under the Bond would depend upon its terms and in the face of the language used in the document learned Counsel realised that the submission could not be seriously maintained.
(3) The last submission under this head was that the loss having occurred in the chest with the doublelock, this could not have been without the connivance of Government officials and that therefore the liability of the Treasurer was excluded.
Learned Counsel also drew our attention to the fact that the terms of the bond made Lal Chand liable even for embezzlement by government officers, notwithstanding that he had no control over them.
But if Lal Chand agreed to those terms and this is not disputed, the terms must pre vail.
Apart from the terms of the security bond however, it would be apparent that if the key of one of the locks was with the employee of the Treasurer the defecation could not have occurred without such employee 's connivance or negligence.
If so, the fixing of liability upon the employer could not be characterised even as unreasonable apart from the liability flowing from the terms of the Bond, and such a vicarious liability for the negligence or misconduct of his servants, is not lessened by reason of the assistance or negligence of Government officials.
These exhaust the points urged based on the terms of the Bond.
It remains to deal only with the contention that the claim is barred by Limitation under article 83 of the Limitation Act on the plea that article 149 of the Limitation Act which fixes a period of 60 years for suits by the Government is unconstitutional as violating article 14 of the Constitution.
It is urged that there is no rational basis for treating claims by Government differently from those of private individuals in the matter of the time within which they could be enforced by suit.
Learned Counsel urged that statutes of limitation were statutes of repose and enacted to ensure that stale 329 claims were not agitated, so that after a reasonable length of time people might proceed on the footing that they would not be held liable for possible claims against them.
Basing himself on these principles, the argument of the learned Counsel was that for the purpose of agitating claims no distinction could be drawn between Government and private ' individuals and that on no rational basis could a legislation which permitted a longer period of limitation for claims by the State be sustained.
It is, no doubt, true that Lord Kenyon described statutes of limitation as "Statutes of repose" (vide per Dallas, C. J. in Tolson vs Kaye (1)) and Bramwell, B. as "Statutes of peace" (Hunter vs Oibbons (2)), though sometimes contrary opinions have been expressed.
In re Baker (3), Cotton, L. J. observed that pleas of limitation would never be looked upon with any favour since they are used to defeat debts clearly due.
It is however unnecessary to examine further the theory underlying statutes of limitation.
We shall proceed on the generally accepted basis that they are designed to effectuate a beneficent public purpose, Viz.
to prevent the taking away from one what he has for long been permitted to consider his own and on the faith of which he plans his life,, habits and expenses.
This however does not militate against there being a rational basis for a distinction being drawn between the claims of the State and the claims of the individual in the matter of a provision of a bar of limitation for enforcing them.
In considering this matter two points have to be kept separate: (1) whether a distinction could be drawn or a classification supported between the provision of any variation in the time that should be available for enforcing claims by private individuals and claims by the State, (2) whether, if such a classification were good, the period of 60 years provided by article 149 of the Indian Limitation Act is such a long period of time as to be unreasonable.
We are drawing attention to the distinction between these two points because learned Counsel laid (1) , 223: ; , 126g.
(2) ; , 5.
(3) , 270.
330 much stress on the fact that the period, of limitation fixed by article 149 was 60 years and that this was an unreasonably long period of time.
If learned Counsel is right in his submission that there is no rational basis for placing private individuals and the Government in different classes while framing a legislation providing for limitation for actions he might succeed; but if he is wrong there and the correct view is that there is a rational basis of classification, then the period that should be allowed to the Government to file a suit would be a matter of legislative policy and could not be brought within the scope or purview of a challenge under article 14 or indeed of any other article in the Constitution.
It is sufficient therefore if we confine ourselves to the first point, viz., whether there is a rational basis for treating the Government differently as regards the period within which claims might be put in suit between the Government on the one hand and private individuals on the other.
First and foremost there is this feature that the Limitation Act, though a statute of repose and intended for quieting titles, and in that sense looks at the problem from the point of view of the defendant with a view to provide for him a security against stale claims, addresses itself at the same time also to the position of the plaintiff.
Thus, for instance, where the plaintiff is under a legal disability to institute a suit by reason of his being a minor or being insane or an idiot, it makes provisions for.
the extension of the period taking into account that disability.
Similarly, public interest in a claim being protected is taken into account by section 10 of the Act by providing that there shall be no period of limitation in the case of express trusts.
It is not necessary to go into the details of these provisions but it is sufficient to state that the approach here is from the point of view of protecting the enforceability of claims which, if the ordinary rules applied, would become barred by limitation.
It is in great part on this principle that it is said that subject to statutory provision, while the maxim vigilantibus et non dormientibus jura Subveniunt is a rule for the subject, the maxim nullum tempus occurit regi 331 is in general applicable to the Crown.
The reason assigned was, to quote Coke, that the State ought not to suffer for the negligence of its officers or for their fraudulent collusion with the adverse party.
It is with this background that the question of the special provision contained in article 149 of the Act has to be viewed.
First, we have the fact that in the case of the Government, if a claim becomes barred by limitation, the loss falls on the public, i.e., on the community in general and to the benefit of the private individual who derives advantage by the lapse of time.
This itself would appear to indicate a sufficient ground for differentiating between the claims of an individual and the claims of the community at large.
Next, it may be mentioned that in the case of governmental machinery, it is a known fact that it does not move as quickly as in the case of individuals.
Apart from the delay occurring in the proper officers ascertaining that a cause of action has accrued Government being an impersonal body, before a claim is launched there has to be inter departmental correspondence, consultations, sanctions obtained according to the rules.
These necessarily take time and it is because of these features which are sometimes characterised as red tape that there is delay in the functioning of government offices.
It is precisely for this reason that we have from the earliest Civil Procedure Codes provisions which find place in the Code of 1908, like O.27,rr.5 and 7 reading: "0. 27.
The Court in fixing the day for the Government to answer to the plaint, shall allow a reasonable time for the necessary communication with the Government through the proper channel, and for the issue of instructions to the Government Pleader to appear and answer on behalf of the Government and may extend the time at its discretion. 0. 27.
r. 7(1).
Where the defendant is a public officer and, in receiving the summons, considers it proper to make a reference to the Government before answering the plaint, he may apply to the Court to 332 grant such extension of the time fixed in the summons as may be necessary to enable him to make such reference and to receive orders thereon through the proper channel.
(2) Upon such application the Court.
shall extend the time for so long as appears to it to be necessary.
" These matters apart, the ratio underlying the special provisions for summary recovery of amounts due to Government without resort to suits by a procedure not available for enforcing the dues of private individuals, like the "Revenue Recovery Acts" and "Public Demands Recovery Acts" which, have been on the statute book for over a century is also similar, viz., the interest of the public and of the community in realising what is due to it expeditiously; and the constitutional validity of such provisions have been sustained by this Court.
In Purshottam Govindji Halai vs Desai (1) this Court held that section 13 of the Bombay Land Revenue Act, 1876, by virtue of which a person had been arrested in pursuance of a warrant issued for recovery of a demand certified under section 46(2) of the Indian Income tax Act, did not offend article 14 of the Constitution.
Similarly, in Collector of Malabar vs Ebrahim (2) the arrest of a defaulter in respect of an income tax demand under section 48 of the Madras Revenue Recovery Act was held not to offend article 14 of the Constitution.
Perhaps another decision of this Court of more immediate relevance, in which the point now raised that there is no rational basis for distinguishing between the claims of the Government and the claims of private individuals was considered and negatived, is that in Mannalal vs Collector, Jahalwar (3) in which judgment was delivered on December 7, 1960.
In this last case it was urged before this Court that the summary mode of recovery of amounts due to the Government for which provision was made by the Rajasthan Public Recovery Act there impugned a mode of recovery which was not available to the private citizen contravened the equal protection of (1) ; (2) ; (3) ; 333 the laws guaranteed by article 14 and this contention was repelled.
The argument of learned Counsel for the appellants has therefore to be rejected both on the around of principle as well as on the ratio under lying the decisions of this Court.
The appeal fails and is dismissed with costs.
Appeal dismissed.
| A private limited company of which G and S were the only two members owned 5,000 shares in a Mill.
The company did not pay the calls and the 5,000 shares held by them were forfeited on the 5th September, 1941, and re allotted to other persons on the 16th November.
Notice of the forfeiture was sent to the company on the 10th September but this was returned undelivered.
In the meantime the company was struck off the Register under section 247 of the Companies Act with effect from 9th September.
On the application of S the company was restored to the Register and an Official Receiver was appointed on 16th February, 1945, to wind it up.
On the 5th March, 1946, the Official Receiver took out a summons calling upon all parties to show cause why the share register of the Mills should not be rectified by restoring the name of the company to the register in respect of the 5,000 shares, as the forfeiture thereof was invalid.
The trial Judge held that the forfeiture was invalid for want of sufficient notice, that the plea of estoppel, acquiescence and laches raised by the Mills was untenable, and that the application as governed by article 120 of the Limitation Act and was not time barred, and ordered that, as the advocates had agreed to such a course, 5,000 new shares may be issued to the company.
The High Court on appeal found that the forfeiture was invalid, that the application was not time barred and that no acquiescence, waiver or estoppel had been established, but held that the company had, by the conduct of G and S and the long delay in reviving the company, abandoned its right to challenge the forfeiture and that there was also no legal basis on which the order passed by the trial Judge could be supported.
On further appeal: Held, (i) if the facts on record were insufficient to sustain a plea of waiver, acquiescence or estoppel as held by both the lower Courts, a plea of abandonment of right which is an aggravated form of waiver, acquiescence or laches and akin to estoppel cannot be sustained on the same facts.
46 352 (ii) Whatever be the effect of mere waiver, acquiescence or laches on the part of a person on his claim to equitable remedy to enforce his rights under an executory contract, mere waiver, acquiescence or laches which does, not amount to an abandonment of his right or to an estoppel against him, cannot disentitle that person from claiming relief in equity in respect of his executed interests.
Prendergast vs Turton ([18411 ; , Clarke and Chapman vs Hart ([1858] 6 H.L.C. 632), Jones vs North Vancouver Land and Improvement Co. ([1910] A.C. 317) explained.
Garden Gully United Quartz Mining Company vs Hugh Mclister ([1875] 1 App.
Cas. 39) relied on.
(iii) There was no evidence in the case of any conduct on the part of S or G subsequent to the date of forfeiture and anterior to the Mills changing its position to its detriment, upon which a plea of abandonment of the right to challenge the forfeiture could be based.
Smith, Stone and Knight vs Birmingham Corporation ([1939] 4 All E.R. 116) distinguished.
(iv) On a proper construction of the statements made by the counsel, the form of the order to which the counsel had agreed could not be challenged by the Mills.
(v) The application was not governed by articles 48 or 49 of the Limitation Act as a claim for rectification of the register simpliciter does not necessarily involve a claim for the return of the share scrips and there was no prayer in the ease for return of the scrips.
(vi) Article 181 applies only to applications under the Civil Procedure Code, and even if the said article was applicable, time began to run under the article only from the date on which the company knew of the forfeiture of the shares; and as the company bad no knowledge until 9th September, 1941, when it became defunct, and the company came to life again only on 16th February, 1945, knowledge could not be imputed to the company before the latter date and the application was therefore not barred under article 181.
(vii) If article 181 does not apply the only article that could apply was article 120 and even under that article the application was not barred.
Hansraj Gupta vs Official Liquidators, Dehra Dun, Mussoorie Electric Tramway Co. ([1933] 60 I.A. 13), Hurdutrai Jagdish Prasad vs Official Assignee of Calcutta ([1948] 52 C.W.N. 343) approved.
Asmatali Sharif vs Mujahar Ali Sardar ([1948] and Sarvamangal Dasi vs Paritosh Kumar Das (A.I.R. doubted.
BOSE J. Waiver and abandonment are in their primary con text unilateral sets and except where statutory or other limitations intervene unilateral acts in themselves cannot effect a change in legal status.
Consequently it is fundamental that 353 abandonment and waiver cannot unilaterally bring about a change in legal status in the absence of either a statutory mandate or an act of acceptance, express or implied by another person.
There is also a fundamental difference between executed and executory interests in this connection.
A man who has a vested interest and in whom the legal title lies does hot, and cannot, lose that title by mere laches, or mere standing by or even by saying that he has abandoned his right, unless there is something more, namely inducing another party by his words or conduct to believe the truth of that statement and to act upon it to his detriment, that is to say, unless there is an estoppel, pure and simple.
It is only in such a case that the right can be lost by what is loosely called abandonment or waiver, but even then it is not the aban donment or waiver as such which deprives him of his title but the estoppel which prevents him from asserting that his interest in the shares has not been legally extinguished, that is to say, which prevents him from asserting that the legal forms which in law bring about the extinguishment of his interest and pass the title which resides in him to another, were not duly observed.
|
Appeal No.241 of 1961.
Appeal from the judgment and decree dated March 4, 1958, of the Patna High Court in Appeal from Appellate Decree No. 1335 of 1952.
634 R.S. Sinha and R.C. Prasad, for the appellants.
Sarjoo Prasad and B. P. Jha, for the respondents nos.
1 and 2.
April 3, 1964.
The judgment of the Court was delivered by DAS GUPTA, J.
This appeal arises out of a suit for re demption of a large number of usufructuary mortgages in favour of the defendants.
The plaintiff who owned 1.67 acres.
of lands which were recorded in Khata 56 and 10.56 acres in Khata 57 in village Sarifabad gave 1.27 acres out of Khata 56 and 8.24 acres out of Khata 57 lands in mortgage to the several defendants by separate mortgage bonds.
Part of the remaining land was sold by him and the rest settled by him with the first defendant on Batai terms.
The plaintiff 's case is that under the terms of the mortgage bonds the mortgagees were liable to pay rent to the landlord.
The mortgagees however defaulted in the payment of rent for some years.
A suit for the arrears of rent was brought by the landlord and a decree obtained.
In execution of the decree the lands were sold.
The purchasers were one Besolal and Mst.
Kirti Kuer, who according to the plaintiff, were only benamidars of defendants 1 and 2 and other mortgagees.
It is his case that this purchase enured for the benefit of the mortgagor, that is, the plaintiff, and so the right of redemption of the mortgagees has not been affected.
The prayers were for a declarations that the purchase was for the benefit of the plaintiff and for redemption of the mortgagees.
The suit was contested by defendants 1 and 2 only.
Of these defendants, Chamroo Sao is the purchaser, and Besolal, defendant 2 is the son of the other purchaser Mst.
Kirti Kuer.
They denied the allegation that Besolal and Mst.
Kirti Kuer were their benamidars and contended that the right of redemption has been extinguished by the court sale.
The Trial Court held that the plaintiff had failed to show that the auction purchasers were benamidars of the mortga gees and in that view dismissed the suit.
On appeal, the Additional District Judge, Patna, came to a contrary conclusion.
He held that the put chase, though in the name of Besolal and Mst.
Kirti Kuer was really by the, first and the second defendants.
He also accepted the plaintiff 's case that under the terms of the mortgage bonds the mortgagees were liable to pay the rent and the rent sale having been brought about due to the default of the mortgagor and the mortgagee they could not be allowed to take advantage of the sale.
So, according to the learned Judge, the equity of 635 redemption in favour of the plaintiff still subsisted and that he was entitled to redeem the mortgaged property.
Accordingly, he set aside the judgment of the Trial Court and passed a preliminary decree for redemption.
Against this decree the two defendants appealed to the High Court of Patna.
The appeal came up for hearing in the first instance before a Single Judge (Mr. justice Sahai).
On a consideration of the evidence, he was of opinion that the liability of rent of 2.67 acres was upon defendant I and that payment of rent of 87 acres which was purchased and 1.76 acres which was taken in ijra, the total being 2.43 acres, was upon defendant 2, that for payment of rent of 3.83 acres was upon the other defendants, and the plaintiff was liable to pay the rent of only about 3.39 acres out of the entire area of 1.67 acres of Khata No. 56 and 10.65 acres of Khata No. 57.
The question which therefore arose was whether section 90 of the Trusts Act would operate to keep the equity of redemption alive in cases where the sale took place due to the default of the mortgagor as well as the mortgagees, the default on the part of the mortgagees, who purchased the properties at the sale being also substantial.
The learned Judge referred this point for decision to a Division Bench.
The Division Bench of the High Court held that section 90 of the Trusts Act did not apply to these circumstances.
In this view the High Court allowed the appeal, set aside the decree of the first appellate court and restored the decree of the Trial Court.
The present appeal by Mst.
Basmati Devi, who is the legal representative of the original plaintiff who was substituted in his place, is against the High Court 's decision dismissing the suit.
In coming to a conclusion that section 90 of the Trusts Act did not apply to cases where the sale took place due to the default of the mortgagor as well as the mortgagee, the High Court appears to have followed a number of previous decisions of the same High Court.
In support of the appeal it is urged that the view taken by the High Court in the present case as well as the previous decisions of the Patna High Court is incorrect and defeats the very object of section 90 of the Indian Trusts Act.
Section 90 of the Indian Trusts Act is in these words: "Where a tenant for life, co owner, mortgagee or other qualified owner of any property, by availing himself of his position as such, gains an advantage in 636 derogation of the rights of the other persons interested in the property, or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold, for the benefit.
of all persons so interested, the advantage so gained but subject to repayment by such persons of their due share of the expenses properly incurred, and to, an indemnity by the same persons against liabilities properly contracted, in gaining such advantage.
" The question for consideration is whether in circumstances like the present where the decree and the sale in execution of it are brought about by the default of both the mortgagor and the mortgagee, the mortgagee can be said to have taken advantage of his position by purchasing the property at the sale.
The High Court appears to think that unless the sale was brought about by the default of the mortgagee alone the mortgagee cannot be said to have taken advantage of his position in making the purchases.
What seems to have weighed with the learned Judges is that even if the mortgagee had done his duty by paying the rent he was liable to pay, the sale would still have taken place as the mortgagor did not pay that portion of the rent which he was liable to pay.
So, they thought that the mortgagees, though they took advantage of the fact that the property had been brought to sale, could not be said to have taken advantage of their position as mortgagees.
With this view we are unable to agree.
In our opinion, the fact that the mortgagor had made a default, does not alter the position that the mortgagee had also defaulted in paying the rent he was liable to pay.
By his default he has contributed to the position that a suit had to be brought for arrears of rent and ultimately to the position that the property was put to sale in execution of the decree obtained in the suit.
This contribution to the bringing about of the sale was a. direct result of his position as a mortgagee.
When therefore he purchased the property himself at the sale in execution of the rent decree he clearly gained an advantage by availing himself of his position as a mortgagee.
This, in our opinion, is the position in law even if the mortgagee 's liability was to pay less than the major portion of the rent of the holdings.
Whether this would be true even where the portion which the mortgagee is liable to pay is so very small that the property is not ordinarily likely to be brought to sale for that amount, it is unnecessary for us to decide in the present case.
In the present case, the finding is that the liability of the defendants 1 and 2 was to pay a substantial portion of the rent.
To say in such circumstances that they did not take 637 advantage of their position as mortgagees is entirely unrealistic Such a construction would put a premium on dishonesty on the part of mortgagees whenever the entire burden of payment of rent was not left squarely on the mortgagee as under the provision of s.76 of the Transfer of Property Act.
Mr. Sarjoo Prasad, who appeared before us on behalf of the respondents, tried to persuade us that in any case the plaintiff 's suit should fail as regards the lands recorded in Khata No. 57.
As, according to him, these mortgagees were not at all liable to pay any portion of the rent of this holding.
He drew our attention in this connection to exhibit 2, the mortgage bond executed in favour of Chamroo Sao, and to the statement made therein: "Annual rent payable to the zamindar is the concern of me, the executant".
This argument proceeds on the basis that the holding recorded in Khata No. 57 continued to be separate and distinct from the Khata No. 56.
It is thus in direct conflict with the plea of these very defendants in their written statement that the two holdings had been consolidated into one holding with one rental.
As the oral and documentary evidence on the Paper Book prepared in the appeal did not clearly show whether or not these two holdings had become one, we called for one of the documents, exhibit B which seemed likely to throw some light on the matter.
The document has now been received.
It is the copy of a judgment of a suit between these parties in which this very question, viz., whether the two holdings had been consolidated into one or not, was raised.
It was decided hat such consolidation had taken place.
It is clear that it was after such consolidation that the second rent suit was brought in respect of that consolidated holding and it was that consolidated holding which was sold in execution of the decree.
It is clear therefore that the mortgage bond Ex.2 in which the mortgagor accepted liability to pay rent to the zamindar in respect of the mortgaged land in Khata No. 57 does not affect the correctness of the High Court 's finding that the liability to pay rent of the holding that was sold was partly of the mortgagor and partly of the mortgagees and, that it was the default of both the mortgagor and the mortgagees that brought about the sale.
Accordingly, we allow the appeal, set aside the judgment and decree of the High Court and restore the decree made by the Additional District Judge, Patna.
A Pleader Commissioner shall be appointed by the trial court on a deposit of Rs. 50/ as his fees by the present appellant within two months from this date for taking accounts as to the amount due to the defendants on the date of the decree.
A preliminary decree for redemption shall be passed in the usual terms.
As the suit as also the appeal before the District Judge had been brought in forma pauperis the High Court made an order 638 directing the plaintiff to pay the court fee on the plaint as well as on the memorandum of appeal.
That order is set aside.
Instead, we order the first and the second defendants in the suit to pay the court fee payable on the plaint as also on the memorandum of appeal.
The present appeal to this Court has also been brought by the appellant as a pauper.
As she has succeeded in the appeal, we order the contesting respondents, i.e., the first and the second defendants, to pay the court fee payable on the memorandum of appeal to this court.
The appellant will get her costs from the first and the second defendants through out.
Appeal allowed.
| On inspection three of the workmen were found working in a factory before their shift commenced.
It was stated that the Inspector of Factories was informed by a letter written a day prior to this inspection about the change of the timing though the letter did not reach the Inspector till the day after the inspection.
This change in the hours of work was not notified and displayed as required by section 61(1) of the .
The respondent as the occupied/manager of the factory was convicted under section 63 of the Act.
On appeal, the Sessions Judge acquitted the respondent holding that the second part of section 61(10) of the Act applied to a case of second or subsequent change in the system of work in a factory and this being the first change there was no need to wait for a week or to obtain the previous sanction of the Inspector as required by the later part of section 61(101), and further section 117 of the Act protected the action because it was bonafide.
The State appealed to the High Court which agreed with the Sessions Judge in his interpretation of section 61(10) but expressed no opinion on section 117 of the Act and it dismissed the appeal.
On appeal by special leave: Held: (i) The respondent was not saved from the opera tion of section 63 which is peremptory, by reason of anything contained in section 61(10) and the sending of the letter to the Inspector of Factories was therefore misconceived.
The words "change in the system of work in any factory which will necessitate a change in the notice" in section 61(10) refer not to departure from the notice but to a change in the system, a change which would require the notice to be recast.
The notice shows "the period during which adult workers may be required to work" and these words are descriptive of the scheme of employment of labour in the factory but are not apt to contemplate the time of employment for each individual worker.
That can only be found by referring to the register which goes with the notice.
Sub section (1) makes no mention of the change in the register but of the change in the notice and thereby indicates that the change which is contemplated is an over all change affective to a whole group and not an individual worker.
The latter part of the sub section also points in the same direction because it implies that such changes should not be frequent and if the change is for the second time it should not be made until one week has.
elapsed since the last change.
(ii) The language of section 117 of the Act is not limited to officers but is made wide to include "any person".
The protection conferred can only be claimed by a person who can plead that he was required to do or omit to do something under the Act or that he intended to comply with any of its provisions.
It cannot confer immunity in respect of actions which are not done under the Act but are done contrary to it.
657 (iii) The occupier and manager, are exempted from liabi lity in certain cases mentioned in section 101.
Where an occupier or a manager is charged with an offence he is entitled to make a complaint in his own turn against any person who was the actual offender and on such proof the occupier or the manager is a solved from liability.
This shows that compliance with the peremptory provisions of the Act is essential and unless the occupier or the manager brings the real offender to book he must bear the responsibility.
It is not necessary that means rea must always be established.
The responsibility exists without a guilty mind.
Ranjit Singh vs Emperor, A.I.R. (1943) Oudh 308, Ranjit Singh vs Emperor, A.I.R. (1943) Oudh 311, Public Prosecutor vs Mangaldas Thakkar, A.I.R. , In re P. Lakshmaiah Naidu, I.L.R. , Public Prosecutor vs Vattem Venkatramayya, A.I.R. 1963.
Pra. 106, Provincial Government C.P. and Berar vs Seth Chapsi Dhanji Oswal Bhate and Anr.
I.L.R. and Superintendent and Remembrancer of Legal Affairs, Bengal vs H. E. Watson, , referred to.
|
ivil Appeal Nos.
635 642 of 1981.
From the Judgment and order dated 19/22.9.1980 of the Gujarat High Court in S.C.A. Nos.
3295, 3480, 3481, 3648, of 1979, 668, 669,889and 1205 of1980.
G. Ramaswamy, Additional Solicitor General, G.A. Shah, Hameed Qureshi and M.N. Shroff for the Appellants.
B.K. Mehta, M.N. Goswami, P.V. Nanavathy and H.S. Parihar, for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
These appeals by special leave are filed against the common judgment in eight writ petitions on the file of the High Court of Gujarat.
The respondents in these appeals i.e. the 1000 petitioners in the said writ petitions questioned the applicability of the provisions of the Urban Land (Ceiling and Regulation) Act, 1976 (Act 33 of 1976) (hereinafter referred to as `the Act ') to several pieces of land belonging to them situated within the limits of the Ahmedabad Municipal Corporation.
They raised three contentions before the High Court (i) that the Act was beyond the legislative competence of Parliament insofar as the State of Gujarat was concerned; (ii) that the lands in question were not vacant lands as defined in the Act and, therefore, the proceedings instituted in respect of them under the Act were liable to be quashed; and (iii) that the land acquisition proceedings under the Land Acquisition Act, 1894 which had been initiated in respect of the lands in question should be completed and the Land Acquisition Officer should be directed to pass awards in favour of the respondents.
The writ petitions were resisted by the State of Gujarat and despite such opposition the High Court allowed the writ petitions.
The High Court negatived the contention of the respondents regarding the legislative competence of Parliament to pass the Act in view of the decision in Union of India etc.
vs Valluri Basavaiah Chaudhary etc etc.
; The High Court, however, quashed the proceedings instituted under the Act in respect of the aforesaid lands which were pending before the Additional Collector and the Competent Authority, Ahmedabad.
While the High Court declined to issue a writ in the nature of mandamus directing the Land Acquisition Officer, before whom the proceedings commenced under the Land Acquisition Act, 1894 were pending as he had not been made a party to the writ petitions, it, however, made a declaration that the land acquisition proceedings did not suffer from any infirmity.
Indirectly the High Court indicated that the land acquisition proceedings should be proceeded with.
Aggrieved by the judgment of the High Court the appellants have filed these appeals by special leave.
The principal question which arises for consideration in this case is whether the lands in question are the lands to which the Act would apply.
The Act came into force with effect from 17.2.1976.
The object of the Act, as can be seen from its preamble, is to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the constructions 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 subserve the common good.
Section 3 of the Act, which may be considered to be the key section of the Act, pro 1001 vides that except as otherwise provided in the Act, on and from the commencement of the Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which the Act applies under sub section (2) of section 1.
The State of Gujarat is one of the States to which the Act has been made applicable by virtue of the provisions in sub section (2) of section 1 of the Act.
The ceiling limit is prescribed by section 4 of the Act.
The expression 'vacant land ' is defined in section 2(q) of the Act thus: "2(q) `Vacant land ' means land, not being land mainly used for the purpose of agriculture, in an urban agglomeration, but does not include (i) 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; (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: Provided that where any person ordinarily keeps his cattle, other than for the purpose of dairy farming or for the purpose of breeding of live stock, on any land situated in a village within an urban agglomeration (described as a village in the revenue records), then, so much extent of the land as has been ordinarily used for the keeping of such cattle immediately before the appointed day shall not be deemed to be vacant land for the purposes of this clause.
" Section 6 of the Act requires every person holding vacant land in excess of the ceiling limit at the commencement of the Act to file a statement before the competent authority having jurisdiction on the area in which the land is situated.
Section 7 of the Act is ancillary to section 6 of the Act.
Section 8 of the Act provides for the preparation of the draft statement as regards the vacant land held by any person in 1002 excess of the ceiling limit and for calling for objections from the owner to the said statement.
It also empowers the competent authority to consider the objections raised by the owner of the land and to pass such order as it deems fit.
After the disposal of the objections the competent authority is required by section 9 of the Act to make the necessary alterations in the draft statement in accordance with the orders passed on the objections aforesaid and to determine the vacant land held by the person concerned in excess of the ceiling limit.
A copy of the draft statement as so altered as the final statement under section 9 of the Act.
After the service of the final statement prepared under section 9 of the Act on the person concerned the competent authority is required to acquire the land held by the person concerned in excess of the ceiling limit in accordance with the procedure prescribed therein.
Section 11 of the Act provides for payment of compensation in accordance with the principles contained therein.
The Act contains provisions regarding the constitution of the Urban Land Tribunal and makes provisions for appeal to the Urban Land Tribunal and also a second appeal to the High Court.
Section 19 of the Act provides that subject to the provisions of sub section (2) thereof nothing in Chapter III of the Act would apply to vacant lands held by the Central Government or any State Government or any local authority or corporation or other institution specified therein.
Section 15 of the Act imposes ceiling limit on future acquisition of vacant lands also.
It is not necessary to refer to the several other provisions in the Act except section 42 thereof.
Section 42 of the Act provides that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith in any other law for the time being in force or any custom, usage or agreement or decree or order of a court, tribunal or other authority.
Thus the Act is given an overriding effect.
We have already given the definition of the expression `vacant land ' found in section 2(q) of the Act.
`Vacant land ' means any land which is not being used mainly for the purpose of agriculture.
But it does not include (i) 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; (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.
The proviso to the definition in section 2(q) of the Act 1003 provides that where any person ordinarily keeps his cattle, other than for the purpose of dairy farming or for the purpose of breeding of live stock, on any land situated in a village within an urban agglomeration (described as a village in the revenue records), then, so much extent of the land as has been ordinarily used for the keeping of such cattle immediately before the appointed day shall not be deemed to be vacant land for the purposes of this clause.
The expression `appointed day ' is defined in section 2(a) of the Act.
Under that clause `appointed day ' means in relation to any State to which the Act applied in the first instance, the date of introduction of the Urban Land (Ceiling and Regulation) Bill, 1976 in Parliament, and in relation to any State which adopts the act under clause (1) of Article 252 of the Constitution, the date of such adoption.
So far as the State of Gujarat is concerned, the appointed date is the date of introduction of the Urban Land (Ceiling and Regulation) Bill, 1976 in Parliament since the Act became applicable to the State of Gujarat at the first instance by virtue of section 1(2) of the Act.
The first contention raised by the respondents, namely, that the lands in question were agricultural lands under the Bombay Land Revenue Code, 1879, and, therefore, they were not vacant lands under the Act was rejected by the High Court itself and we need not dwell on it in these appeals since the said contention has not been raised before us.
The second contention raised by the respondents who were petitioners before the High Court was that the lands in question were lands on which the construction of buildings was not permissible under the building regulations in force in the area in which the lands were situated and, therefore, they were outside the scope of the expression `vacant land '.
In other words the contention was that as the lands in question were lands which came within the scope of sub clause (i) of clause (q) of section 2 of the Act, they could not be treated as vacant lands.
Three grounds were urged in support of the above contention and they were based on the existence of a town planning scheme, namely, the Town Planning Scheme No. 29 framed by the Ahmedabad Municipal Corporation under the Bombay Town Planning Act, 1954 which was in force at the relevant time.
The first ground urged in this behalf by the respondents before the High Court was that permission to build on the lands in question could not be granted by the authorities concerned as they had been included within the `green belt ' around the city of Ahmedabad under the Town Planning Scheme and hence they were not vacant lands.
This plea was not accepted by the 1004 High Court because the proposal to retain the `green belt ' had been abolished in the year 1975 and the restrictions on building, if any, on those lands on that account were no longer in existence.
The second ground urged before the High Court was that on the coming into force of the Town Planning Scheme No. 29 framed under the Bombay Town Planning Act, 1954 no building activity was permissible on the aforesaid lands because the said lands had been reserved for a public purpose, namely, construction of Government staff quarters.
In support of this submission reliance was placed on section 29 of the Bombay Town Planning Act, 1954.
The relevant part of section 29 of the Bombay Town Planning Act, 1954 reads as follows: "Restriction after declaration for town planning scheme.
29(1).
On or after the date on which the local authority 's declaration of intention to make a scheme under section 22 or the notification issued by the State Government under section 24 is published in the Official Gazette, (a) no person shall within the area included in the scheme erect or proceed with any building or work or remove, pull down, alter, make additions to or make any substantial repair to any building, part of a building, a compound wall or any drainage work or remove any earth, stone or material, or sub divide any land, or change the user of any land or building unless such person has applied for and obtained the necessary permission which shall be contained in a commencement certificate granted by the local authority in the form prescribed . . . ." The High Court treating section 29(1)(a) of the Bombay Town Planning Act, 1954 as a building regulation within the meaning of that expression used in sub clause (i) of clause (q) of section 2 of the Act was of the view that the ban contained in clause (a) of section 29(1) of the Bombay Town Planning Act, 1954 brought the lands in question within sub clause (i) of clause (q) of section 2 of the Act.
Assuming for purposes of argument that section 29(1)(a) of the Bombay Town Planning Act, 1954 amounted to a building regulation it cannot be said that the construction of buildings on the land in question was not permissible at all.
Section 29(1)(a) of the Bombay Town Planning Act, 1954 only required a person who owned a piece of land situated within an 1005 area included in the scheme to obtain the permission from the local authority before erecting or constructing any building or pulling down or altering any building as provided therein.
Merely because section 29(1)(a) of the Bombay Town Planning Act, 1954 requires a person owning the land to which a scheme applied to obtain permission of the local authority to construct a building on it, it cannot be said that the land was one on which construction of building was not permissible.
The embargo in question was not total.
It was only where the ban was complete it could be said that no construction was permissible on the land.
The High Court omitted to notice that the owners were entitled to construct buildings on the lands after the permission was accorded by the local authority.
The finding of the High Court that by virtue of section 29(1)(a) of the Bombay Town Planning Act, 1954 the lands fell outside the definition of `vacant land ' in the Act is, therefore, unsustainable.
It was no doubt true that the State Government had issued a notification dated March 31, 1976 published in the Gujarat Government Gazette dated April 8, 1976 under section 4(1) of the Land Acquisition Act, 1894 stating that the lands in question were likely to be needed for a public purpose, namely, for providing housing accommodation for the employees of the Ahmedabad Municipal Corporation and that after making an enquiry under Section 5 A of the Land Acquisition Act, 1894 the State Government had issued declaration under section 6 of that Act declaring that the aforesaid lands along with other lands were needed for the public purpose referred to above.
In the meanwhile the Act came into force with effect from 17.2.1976.
The respondents filed statements before the competent authority under section 6 of the Act including the lands in question which were in excess of the ceiling limit which each of them could retain after the coming into force of the Act.
Thereafter they filed the above writ petitions out of which these appeals arise contending that the acquisition proceedings under the Land Acquisition Act, 1894 should be proceeded with and the acquisition of proceedings of the surplus land under the ceiling law should be dropped.
In this connection the respondents relied upon the provisions contained in section 24 of the Land Acquisition Act, 1894 in which clause `seventhly ' stated that any outlay or improvements on, or disposal of the land acquired, commenced, made or effected without the sanction of the Collector after the date of publication of the notification under section 4, sub section (1) of the Land Acquisition Act, 1894 should not be taken into consideration by the Court at the time of determining compensation payable under the said Act.
The argument of the respondents was that 1006 clause `seventhly ' in section 24 of the Land Acquisition Act, 1894 again amounted to an embargo on construction of buildings on the lands which attracted sub clause (i) of clause (q) of section 2 of the Act and, therefore, the lands were not vacant lands.
Reliance was placed by the respondents on the decision of the High Court of Delhi in Smt.
Shanti Devi vs The Competent Authority under U.L. (C. & R.) Act, 1976, Delhi and others, AIR 1980 Delhi 106 in which the High Court of Delhi had taken the view that a land in respect of which a notification under section 4(1) of the Land Acquisition Act, 1894 had been issued was a land on which construction of buildings was not permissible and was thus outside the definition of the expression `vacant land ' in section 2(q) of the Act.
The reason given by the Delhi High Court for reaching the above conclusion is set out in para 12 of the said decision.
It reads thus: "12.
It is pertinent to note that the land in Sant Nagar is under threat of acquisition by issue of section 4 notification of the Land Acquisition Act, 1894.
This is not denied by the respondents.
In this view of the matter also building activity would not be permissible as no prudent person would construct on land already notified under section 4 of the said Act because he will get no compensation for it unless the construction is made with the permission of the Land Acquisition Collector.
For all intents and purposes the effect of section 4 notification, therefore, is that building activity is not permissible in Sant Nagar.
This would also result in excluding the Sant Nagar plots from the total holding of the petitioner for the purposes of computing vacant land under the Act." With great respect to the High Court of Delhi it has to be stated that the view taken by it is wholly incorrect.
The High Court of Delhi omitted to notice that in order to exclude a land from the definition of `vacant land ' it should be shown that it was a land on which construction of a building was not permissible under the building regulations in force in the area in which such land was situated.
The question whether a piece of land is a vacant land or not does not depend upon the fact whether a prudent man would put up a building on that land or not after the issue of a notification under section 4(1) of the Land Acquisition Act, 1894.
Nor a land will cease to be a vacant land merely because the permission of certain authority is to be taken to put up a building thereon.
It may be further seen that what clause `seventhly ' in section 24 of the Land Acquisition Act, 1894 provides is that any 1007 outlay or improvements on, or disposal of the land acquired, commenced, made or effected without the sanction of the Collector after the date of the publication of the notification under section 4(1) of the Land Acquisition Act shall not be taken into consideration while awarding compensation.
It does not ban the construction of any building on the land which is so notified.
The High Court of Gujarat against whose judgment these appeals have been filed also committed an error in accepting a similar contention which was urged before them.
The declaration made by the High Court in these cases that the land acquisition proceedings did not suffer from an infirmity which indirectly suggests that the proceedings should go on is again erroneous.
It is open to the State Government to drop the land acquisition proceedings and to withdraw the lands from acquisition under section 48 of the Land Acquisition Act, 1894.
We are informed that the State Government has in fact subsequently withdrawn these lands from acquisition.
The proceedings under the Land Acquisition Act, 1894 cannot therefore have any bearing on the question whether the lands in question are vacant lands or not for purposes of the ceiling law contained in the Act.
When the lands in question or bulk of them are likely to be acquired under the ceiling law by paying compensation as provided therein, it would not be proper to compel the Government to acquire them under the provisions of the Land Acquisition Act, 1894.
As already stated the Act has the overriding effect on all other laws.
It was, however, urged before this Court by the learned counsel for the appellants that because the lands in question have been reserved under the Town Planning Scheme for purposes of building staff quarters the lands could not be treated as vacant lands.
We do not find any substance in this submission because the construction of buildings on the lands in question is permissible though not by the owners of land.
Sub clause (i) of clause (q) of section 2 of the Act does not provide that a land on which the owner cannot construct a building will cease to be vacant land for purposes of the Act.
As long as construction of building can be done on a land by some person or authority, the land does not get excluded from the definition of the expression `vacant land ' under the Act.
The lands in question, therefore, are vacant lands.
Before concluding our judgment we wish to refer to the decision of the Full Bench of the High Court of Bombay in Prabhakar Narhar Pawar vs State of Maharashtra and another, AIR 1984 Bombay 122 in which the following passage appears at page 130: 1008 "Reliance was placed on the decision of the Delhi High Court in Shanti Devi vs Competent Authority, (AIR 1930 Delhi 106).
In that decision, the learned Judges of the Delhi High Court took the view that section 2(q) of the Act contemplated that the activity of building is not permissible on the date when the land is sought to be dealt with and not at any future time and the possibility that such activity could come to be permitted in future or that there are buildings constructed in the area or that there is no prohibition to construct in an unapproved colony or that there is no permanent prohibition to construct would not be sufficient to treat the land as `vacant land ' within the meaning of the provision.
So far as the decision holds that the relevant date for determination for the purpose of section 2(q)(i) of the Act is the date on which the land is sought to be dealt with, that is, the commencement date referred to in section 3 there can be no dispute.
In a part of the decision, the Division Bench seems to have taken the view that land notified for acquisition under the Land Acquisition Act must be held to be one on which construction of buildings was not permitted.
We are really not concerned with that view, so far as the present petitions are concerned, but it is sufficient to point out that the correctness of that view has not been accepted by this Court in Dattatraya vs State of Maharashtra, [1981] Mah LJ 764; (AIR 1981 Bom 326) and in an unreported decision of this Court in D.P. Dani vs State of Maharashtra (Writ Petition No. 1650 of 1979 decided on 31st January, 1983).
In Dattatraya 's case the contention was that certain plots of land which were reserved for various public activities, such as buildings of primary school, high school, civil hospital, bus terminus etc.
under the Town Planning Scheme should be excluded for the purpose of computation of vacant land, because, according to the petitioners, in that case no building activity was permitted on those lands so far as the petitioners were concerned.
The Division Bench after referring to the primary object of the Act as set out in the case of Union of India vs Valluri Basavaiah Choudhary, (AIR rejected the contention that merely because the petitioners are prohibited from constructing any building under the building regulations contained in the Town Planning Scheme the land should not be treated as vacant land.
The Division Bench found that if the regulations allowed the 1009 building activity not to a person who holds that land but by public bodies or the State Government then certainly construction of building is permitted either by an individual or even by public authority and cannot be taken out of the definition.
" We agree with the observations made in the above case.
A Full Bench of the Allahabad High Court has in The State of U.P. and another vs Radha Raman Agarwal and another, AIR 1987 Allahabad 272 also taken the view that a land will cease to be a `vacant land ' for purposes of the Act only where the construction of a building on it is wholly impermissible.
We agree with the views expressed by the High Courts of Bombay and Allahabad.
In the result we allow these appeals, set aside the judgment of the High Court and dismiss the writ petitions filed in the High Court.
There will, however, be no order as to costs.
N.V.K. Appeals allowed.
| Regulation No. 132 of Pension Regulation for the Army, 1961 (Part I) prescribes minimum qualifying colour service of fifteen years for earning service pension.
Regulation No. 126 provides for counting of former service.
The petitioner 's representation for pension was rejected on the ground that he had not been in the Army service for a period of 15 years as required under the Army Pension Rules.
In the writ petition the petitioner claimed that he had served in the Army from November 1939 to August 1948, when he was released in the rank of Havaldar, that he was again recalled and served in the Army Supply Corps (MT) from July 1948 to July 1953 in the rank of Havaldar, when he was again recalled by the Kumaon Regiment and served in the Lok Sahayak Sena from July 1953 to July 1956 in the rank of Havaldar.
He further stated that service rendered by him in the LSS (third spell) should be treated as services in the army and he having served for more than 15 years m the army was entitled to pension.
His claim that he was in the army service for over 19 years, was contested by the respondents, who stated that the petitioner was enrolled in the Army on November 24, 1940 and discharged from service with effect from October 26, 1946, that he was subsequently re enrolled in ASC (MT) with Army on March 8, 1948 and discharged from there on May 20, 1952, and that he has re enrolled with the Kumaon Regiment on March 2, 1955 for Lok Sahayak Sena and discharged from there on September 2, 1957.
It was further stated that the service rendered by him in LSS was not countable towards pension and that his service in the first two spells was 10 years and 54 days only.
The petitioner could not produce relevant documents in support of his statement.
770 Dismissing the writ petition, ^ HELD: The petitioner has not rendered 15 years of army service to be able to get the benefit of army pension as required under the army rules.
[772F] The statements of the petitioner regarding the periods of service rendered by him in the first and the second spell are inconsistent with his record of service produced by the respondents at the hearing.
[772D E] His service in the National Volunteer Force (LSS) cannot be treated as army service countable towards pension.
[772D]
|
Appeal No. 245 of 1964.
Appeal by special leave from the judgment and order dated February 13, 1963, of the Calcutta High Court in Award Case No. 8 of 1963.
A.V. Viswanatha Sastri and D.N. Gupta, for the appellant.
S.T. Desai and P.K. Mukherjee, for the respondent.
The Judgment of the Court was delivered by Subba Rao, J.
On or about October 2, 1879, the Corporation of the town of Calcutta incorporated under Bengal Act IV of 1876 entered into an agreement in writing with Dillwyn Parrish, Alfresh Parrish and Robinson Souttar, hereinafter called the grantees 355 whereunder the Corporation granted to the said grantees the right to construct, maintain and use certain tramways in Calcutta on payment of certain rents as provided in the said agreement.
The agreement contained an arbitration clause which provided for referring any disputes arising under the said agreement to arbitration in the manner prescribed thereunder.
The said agreement further provided in cl. 28 that the words "the said Corporation" would include the Corporation and its successors.
Different agreements were entered into between the successors of the Corporation of Calcutta and the grantees from time to time, namely, on November 22, 1879, September 2, 1893 and December 9, 1899, and were confirmed by appropriate Acts.
In all these agreements the appellant 's predecessor in interest agreed to pay the rents to the respondent 's predecessors in interest in respect of the tramways constructed, maintained and used by them.
All the said agreements contained an arbitration clause similar to that contained in the first agreement.
The Corporation of Calcutta is now the successor of the properties of the Corporation of the town of Calcutta constituted under the Bengal Act IV of 1876.
It was constituted by Bengal Act II of 1888.
The appellant, i.e., the Calcutta Tramways Co. Ltd., is the successor or the assignee of the said grantees.
On August 30, 1951, the State of West Bengal entered into an agreement with the appellant whereby the Government agreed to purchase the undertaking of the appellant as provided in the said agreement.
The said agreement was subject to an Act being passed by the appropriate Legislature ratifying the agreement and giving effect to it.
The Calcutta Tramways Act, 1951 (W.B. Act XXV of 1951) was passed and it came into effect on October 18, 1951.
Under that Act the Government of West Bengal was practically substituted for the Corporation of Calcutta under the various agreements subject to a reservation that any sums payable under the said agreements shall be payable by the appellant to the Corporation.
Disputes arose as regards the track rent payable by the appellant to the Corporation and the dispute was referred to arbitration in accordance with the terms of the arbitration clause.
Though the parties appointed arbitrators in terms of the arbitration clause of the agreements, the appellant nominated its arbitrator without prejudice to its rights and filed on January 7, 1963, an application in the Original Side of the Calcutta High Court, inter alia, for the determination of the question whether there was a valid arbitration agreement between the appellant and the respondent and for other incidental reliefs.
The application was heared by A.N. Ray, J. who held that there was an agreement between the appellant and the respondent and that the appellant was a party to the arbitration clauses contained in the relevant agreements, that the respondent could make a reference to arbitration in terms of the said agreements and that the reference to the arbitrators was valid, legal and effective.
The appellant, by special leave, has filed the present appeal against the said order of the High Court.
L/B(N)3SCI 10 356 Mr. A.V. Viswanatha Shastri, learned counsel for the appellant, contended that all the rights of the Corporation of Calcutta under the various agreements stood transferred under the Tramways Act, 1951, and vested in the Government of West Bengal except only in regard to the sums payable to the Corporation and that, therefore, the Corporation could not rely on the arbitration clauses of the agreements and refer the disputes arising in respect of the sums payable in terms of the said agreements to arbitration.
The point raised is in a small compass and turns upon the relevant provisions of the West Bengal Act XXV of 1951, hereinafter called the Act.
Under the Act the agreement entered into on August 30, 1951, between the Governor of West Bengal on the one part and the Calcutta Tramways Co. Ltd. on the other part was confirmed.
Section 3 of the Act says, "The transfer agreement is hereby confirmed and made binding on the parties thereto and the several provisions thereof shall have effect as if the same had been enacted in this Act.
" "Section 4 enacts that notwithstanding anything to the contrary in any other law, all the powers and duties of the Corporation of Calcutta.
the Commissioners of the Howrah Municipality, the Commissioners of the South Suburban Municipality and the Commissioners for the New Howrah Bridge with respect to the construction, maintenance, use, leasing of or otherwise dealing with tramways are transferred to and vested in the Government".
Section 5, which is the crucial section, reads: (1) The several agreements particulars whereof are set out in the Second Schedule to this Act 'shall have effect as if the Government were parties thereto in lieu of the respective bodies and persons set out in column 2 of the said Schedule and any reference in any such agreement to any of such bodies or persons shall unless the subject matter or the context otherwise requires be deemed to be a reference to the Government: Provided that any sums payable under any such agreement to any of such bodies or persons shall continue to be payable as if this Act had not been passed.
The Second Schedule contains a list of the titles of the various agreements mentioned by us earlier.
Under section 5 of the Act the Government is statutorily substituted for the respondent or its predecessors in interest in the various agreements stated supra.
The fiction is a well defined one.
The Government replaces the Corporation and its predecessors in interest as a party to the agreements unless the subject matter or the context otherwise requires.
The natural presumption is that but for the proviso the enacting part of the section would have included the subject matter of the proviso also.
The proviso to section 5 saves from the operation of the substantive section the sums payable under any such agreements to any such bodies mentioned therein: it excludes the operation of the 357 fiction in respect of such sums payable.
In respect of the said sums payable the agreements entered into with the said bodies will remain intact as if the Act had not been passed; that is to say, the respondent would still continue to be a party to the said agreements for the said purpose.
The relevant agreements provided for the recovery of the rents and also for the procedure for the recovery of the sums so payable in accordance with the terms of the arbitration clauses of the agreements.
Had not the Act been passed and had the Government not been substituted in the place of the Corporation, it cannot be denied that the Corporation, if a dispute arose in regard to the rent, could have referred the dispute to arbitration.
The substantive right to the payment of rent and the procedural one to have any dispute arising in respect of that right referred to arbitration embodied in the agreements are interconnected and are not severable.
To preserve the substantive right and to withhold the procedural right to enforce it is to save the right and to deny the remedy.
To accept the contention of the appellant is to make out a new agreement between the parties in respect of the sums payable.
The acceptance of this suggestion compels the Corporation to give up its agreed remedy.
The alternative suggestion, namely, that in respect of the amounts payable to the Corporation the arbitration clauses of the agreements could be enforced by the Government against the appellant introduces an incongruity.
While the dispute would be between the appellant and the Corporation, the arbitration would be between the appellant and a third party.
The argument that the Government would be acting as a trustee of the Corporation in respect of the sums payable to the Corporation is not supported by any of the provisions of the Act.
A fair construction of the proviso to section 5 of the Act removes all the anomalies.
Further, in the substantive part of section 5 of the Act the fiction takes effect unless the subject matter or the context otherwise requires.
The proviso in terms as well as by necessary implication brings the subject matter of the sums payable under the agreements both under the substantive and procedural aspects within the scope of the said exception.
The fiction in section 5 of the Act shall yield.
to that extent, to the terms of the contract.
On such a construction we hold, as we have indicated earlier, that both the right to the said sums payable and the procedure of arbitration are saved thereunder.
In the result, we agree with the view expressed by the High Court and dismiss the appeal with costs.
Appeal dismissed.
| The respondent obtained permits under the Iron and Steel (Control) Order, 1956 on the representation that he wanted to purchase iron goods for the purpose of building a temple and a dharamshala.
The permits were obtained from the authorities of District Deoria in U.P.
At the back of the permit a condition was printed tematerials required against the permit will be used only that "h.q for the purpose for which it was asked for and has been given".
The respondent was tried for the contravention of cl. ? of the aforesaid order on the allegation that he had not used the goods purchased under the permits for the purpose for which ,they were issued.
The trial Magistrate found him guilty.
In appeal, however, the Sessions Judge acquitted him on the ground that the possibility of his retaining the iron at some other place was not entirely excluded.
The High Court in appeal by the State confirmed the acquittal holding that it had not been proved that the respondent had "used" the iron which he had obtained on the basis of the permit.
The High court further held that it was not possible to look into the application in order to see for what purpose the applicant took the permit and no condition actually printed at the back of the permit had been broken.
By special leave the State appealed to the Supreme Court, On behalf of the appellant it was urged: (1) the word "use" in cl. 7 of the order includes "kept for eventual use for another purpose." (2) The High Court erred in holding that the application cannot be referred to for the purpose of construing the conditions appearing in the permit.
HELD: The respondent could not be held guilty of a contravention of cl. 7 of the order.
(i) No doubt the legislative intent of the Iron & Steel (Control) Order is that this essential commodity should be utilised in accordance with the conditions contained in the permit, but no clause in the Control Order in question evinces a legislative intent that a mere non user is also prohibited and made punishable.
[165 H] The word 'use ' must take its colour from the context in which is used.
In cl. ? the expression "use. in accordance with the conditions contained" suggests something done positively e.g. utilisation or disposal.
Mere "non use" is not included in the word "use".
165 D] (ii) The High Court was wrong in holding that it is not permissible to look at the application to determine the purpose for which permit is obtained.
However in the present case the applications did not disclose that the respondent wanted to build a temple or dharamshala at any particular place.
From the mere fact that the applications were made to the authorities in Deoria District, or the fact that in the applications it was mentioned that the goods were not available in Deoria District, it did not necessarily follow that the goods were intended to be used in that District.
[166 H] 162
|
: Criminal Appeal No. 57 of 1972.
Appeal by Special Leave from the Judgment and Order dated 5 3 1971 of the Calcutta High Court in Crl.
Revision No. 35/71.
P. K. Chatterjee and G. section Chatterjee for the Appellant.
D. N. Mukherjee for the Respondent.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal by special leave is directed against a judgment, dated March 5, 1971, of the High Court of Calcutta.
The facts are as follows: Abani Maity, respondent herein, and three other persons were tried by the Magistrate, First Class, Alipore, District 24 Parganas, in respect of a charge under Section 46(a) of the Bengal Excise Act, 1909 (hereinafter referred to as the Act).
On the night of July 29, 1963, at about 7.30 p.m., the Excise staff intercepted Motor Car No. WBD 8169 at village Rajpur, Police Station Sonarpur.
The car was searched and thereupon 199 kgs.
700 grams contraband Ganja was recovered from inside the car.
The respondent, Abani Maity, who was the registered owner of the car, and held a driving licence was himself on the steering wheel.
Abani Maity and the three other occupants of the car were arrested.
After completing the investigation, a charge sheet was submitted against Abani Maity and his companions in respect of an offence under Section 46(a) of the Act.
During the trial, out of the accused, Robin, died Kalipada absconded; and the case proceeded only against Abani Maity and his coaccused, Mihir Bose.
The Magistrate, ultimately, by his order dated August 21, 1970, convicted both the accused persons under Section 46(a) of the Act and sentenced each of them to pay a fine of Rs. 800/ , and, in default, to suffer six months ' rigorous imprisonment.
The Magistrate, however, failed to pass orders for the disposal of the contraband Ganja, and the confiscation of the seized car.
In the course of the trial, it was established by evidence that the respondent, Abani Maity, was the registered owner of the car and he was driving the vehicle at the time of its interception.
It was further 474 established that some packets of contraband Ganja were seized from underneath the driver 's seat and some from the luggage boot which was opened with a key produced by the respondent.
Thus, the evidence on record indubitably established that the car (Registered No. WBD 8169) was used for the transport of this contraband Ganja by its owner, Abani Maity, respondent.
After his conviction, on November 16, 1970, Abani Maity made an application to the Magistrate, praying for return of the car and the other articles seized by the Excise Staff.
On the same day, the Magistrate, without issuing any notice to the prosecution, passed an ex parte order directing return of the seized car and other articles to the accused respondent.
Against that order, dated November 16, 1970, of the Magistrate, the State preferred a Revision in the High Court, which was finally heard by a Division Bench, who, by an order dated March 5, 1971, affirmed the Magistrate 's order relating to the return of the car to the accused respondent, but directed confiscation of the Ganja.
Mr. Chatterjee, appearing for the appellant State, does not now request the Court to pass an order of confiscation of the aforesaid car, obviously because the passing of such an order after a lapse of about 16 years from the date of its seizure, will be an exercise in futility.
The learned counsel, however, submits that this Court should for the guidance of the courts below, clarify the law on the point so that the efficacy of the provisions contained in Sections 63 and 64 of the Act as an instrument for combating and preventing such anti social crime is not undermined due to misinterpretation or misunderstanding in regard to their import, nature and application.
It is contended that as soon as Abani Maity, the owner driver of this car was found guilty of using this car for transport of contraband Ganja, the Magistrate was bound in addition to the conviction of Abani Maity for that offence, to pass an order for confiscation of the car, or to give its owner, Abani Maity, an option to pay in lieu of confiscation a fine, as the Magistrate thought fit.
The point sought to be made out is that the words "shall be liable to confiscation" occurring in Section 63(1) read with sub section (1) of Section 64, make it obligatory on the Magistrate in the event of the conditions laid down in these provisions being satisfied, to adopt either of the two alternatives, namely, to confiscate the car, or, in lieu of confiscation, to impose a fine at the option of its owner.
In support of this contention, reliance has been placed upon certain observations of 475 this Court in Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Additional Collector of Customs & Ors(1).
As against this, learned counsel for the respondent, submits that the words "liable to" used in the context of "confiscation", in Section 63(1) of this Act or in some other penal statutes, do not convey an absolute imperative; they are merely directory and leave it to the discretion of the Magistrate to confiscate or not to confiscate the vehicle by means of which such offence has been committed.
Section 63 of the Act defines the things liable to confiscation, while Section 64 indicates when the order of confiscation is to be passed by the Magistrate or Collector.
Section 63 and 64 read as follows: "63 (1).
Whenever an offence has been committed which is punishable under this Act, the (intoxicant) materials, steel, utensils, implement and apparatus in respect of or by means of which such offence has been committed shall be liable to confiscation.
(2) Any (intoxicant) lawfully imported, transported, manufactured; had in possession or sold along with, or in addition to, any (intoxicant) which is liable to confiscation under sub section (1) and the receptacles, packages and coverings in which any such (intoxicant) as first aforesaid, or any such materials, steel, utensils, implement or apparatus as aforesaid, is found, and the other contents, if any, of such receptacles or packages, and the animals, carts, vessels, rafts or other conveyances used in carrying the same shall likewise be liable to confiscation: Provided that no animal, cart, vessel, raft or other conveyance as aforesaid shall be liable to confiscation unless the owner thereof is proved to have been implicated in the commission of the offence.
Explanation.
For purpose of this Section "owner" includes, in relation to any animal car, vessel, raft or other conveyance.
(a) which is the subject of a hire purchase agreement, the person in possession thereof under that agreement." "64(1).
When in any case tried by him, the Magistrate decides that anything is liable to confiscation under Section 476 63, he may either order confiscation or give the owner of such an option to pay, in lieu of confiscation, such fine as the Magistrate thinks fit: Provided that the Magistrate shall in cases order confiscation of the intoxicants decided by him to be liable to confiscation under Section 63.
(2) Whenever anything is liable to confiscation under Section 63, and the offender or the person entitled to possession is not known or cannot be found, the case shall be inquired into and determined by the Collector, who may order confiscation: Provided that no such order shall be made until the expiration of two months from the date of seizing the thing intended to be confiscated, or, without giving such person as may, before such expiration, claim any right thereto, an opportunity of being heard and of producing such evidence as he may like to produce in support of his claim: Provided further that if the thing in question is liable to speedy and natural decay, or if the Collector is of opinion that its sale would be for the benefit of its owner, the Collector may at any time direct it to be sold, and the provisions of this sub section shall, as early as may be practicable, apply to the net proceeds of the sale.
" It will be seen that the liability to confiscation of a conveyance, such as, a car or cart or vessel under Section 63 is incurred only if two conditions are established, namely: (a) that the conveyance was used in carrying the contraband intoxicant, (b) the owner of that conveyance is implicated in the commission of the offence.
In the instant case, both these conditions were established.
It has been found by all the courts below that the car in question (WBD 8169) was used in carrying and transporting contraband Ganja and it was being driven by its owner, Abani Maity, who was convicted of the offence of possessing and transporting the contraband Ganja in this car.
The liability to confiscation of the car had, therefore, been incurred.
It may be further marked that in sub section (2) of section 63 the Legislature has used the words "shall be" in the context of "liable to confiscation".
Even, in the proviso to sub section (2) the expression "shall be liable to confiscation" has been reiterated.
Once 477 the facts essential for incurring the liability to confiscation are established, the Magistrate has no option but to adopt any of the two alternative courses indicated in sub section (1) of Section 64, that is to say, he may either order confiscation of that conveyance; or give its owner an option to pay in lieu of confiscation, such fine as the Magistrate thinks fit.
The Magistrate cannot just ignore to adopt any of these alternatives.
Since sub section (1) of Section 64 talks of the imposition of fine in lieu of confiscation, it appears that such an order of confiscation or fine in lieu of confiscation, is to be passed at the conclusion of the trial, when after conviction, a sentence for the commission of the offence is awarded.
It is true that ordinarily, the word "liable" denotes: (1) "legally subject or amenable to", (2) "Exposed or subject to or likely to suffer from (something prejudicial)", (3) "Subject to the possibility of (doing or undergoing something undesirable)" (See Shorter Oxford Dictionary).
According to Webster 's New World Dictionary, also, the word "liable" denotes "something external which may befall us".
Accordingly, the word "liable" occurring in many statutes, has been held as not conveying the sense of an absolute obligation or penalty but merely importing a possibility of attracting such obligation, or penalty, even where this word is used along with the words "shall be".
Thus, where an American Revenue Statute declared that for the commission of a certain act, a vessel "shall be liable to forfeiture", it was held that these words do not effect a present absolute forfeiture but only give a right to have the vessel forfeited under due process of law.
(See Kate Haron, 14 Fed.
139, 141 6 Sawy.
106) quoted in Words and Phrases, Vol.
25 page 109.
Permanent Edition, West Publishing Co.) Similarly, it has been held that in Section 302, Indian Penal Code, the phrase "shall also be liable to fine" does not convey a mandate but leave it to the discretion of the Court convicting an accused of the offence of murder to impose or not to impose fine in addition to the sentence of death or transportation for life.
But a statute is not to be interpreted merely from the lexicographer 's angle.
The court must give effect to the will and inbuilt policy of the Legislature as discernible from the object and scheme of the enactment and the language employed therein.
Exposition ex visceribus actus is a long recognised rule of construction.
Words in a statute often take their meaning from the context of the statute as a whole.
They are therefore, not to be cons 478 trued in isolation.
For instance, the use of the word "may" would normally indicate that the provision was not mandatory.
But in the context of a particular statute, this word may connote a legislative imperative, particularly when its construction in a permissive sense would relegate it to the unenviable position, as it were, "of an ineffectual angel beating its wings in a luminous void in vain".
If the choice is between two interpretations", said Viscount Simon L.C. in Nokes vs Doncaster Amalgamated Collieries, Ltd,(1) "the narrower of which would fail to achieve the manifest purpose of the legislation we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that Parliament would legislate only for the purpose of bringing about an effective result".
The provisions of Sections 63 and 64 of the Act are to be interpreted in the light of this principle.
The language and scheme of the Excise Act, taken as a whole, show that the purpose of this legislation is not only to raise revenue but also to control and restrict the import, export, transport, manufacture and sale of intoxicants.
Free and unrestricted use of intoxicants and illicit trade in contraband intoxicants not only means a loss of revenue to the public exchequer but also has a harmful effect on public health and morals.
Moreover, illicit trade and smuggling of intoxicants is often committed in an organised and clandestine manner, and is difficult to detect.
We have, therefore, to adopt that construction of the expressions "shall be liable to confiscation" used in Section 3(2) and "may" in sub section (1) of Section 64, which will preserve the efficacy of the provisions as an instrument for combating these anti social activities, and reject the other which will render them ineffective.
Thus considered, it seems clear that the expressions "shall be liable to confiscation" and "may" in the aforesaid provisions were intended to have a compulsive force.
We need not dilate on the topic further.
We will close the discussion by noticing one decision of this Court which has been cited by the counsel for the appellant.
That case is: Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Additional Collector of Customs Ors.
(ibid), wherein this Court was considering the interpretation of certain provisions of the Sea Customs Act.
In dealing with an offence under Section 167(12A) of the , the Customs Officer has also to exercise his jurisdiction under Section 183 of that Act, which expressly requires 479 the adjudicating Officer to give an option to the owner of the offending vessel to pay fine in lieu of confiscation.
Question arose as to what was the nature of the responsibility prescribed by Section 167(12A).
Gajendragadkar, C.J., speaking for the Court elucidated the position, thus: "We have already seen that Section 167(12A) provides that if a vessel contravenes Section 52A, it shall be liable to confiscation and the master of such vessel shall be liable to a penalty not exceeding Rs. 1,000/ .
Can it be said that the penalty prescribed by Section 167(12A) may in any given case not be imposed against the ship on the ground that the contravention proved against it is of a very trivial character, or has been the result of an act on the part of a criminal who acted on his own contrary to the instructions of the master of the ship? The words used in the third column of Cl.
(12A) are that "such vessel shall be liable to confiscation".
The context seems to require that it is not open to the Customs Authority to refuse to confiscate the vessel on the ground that there are any extenuating circumstances surrounding the contravention of section 52A in a given case and that it would be unfair to impose the penalty of confiscation.
Two penalties are prescribed, one is the confiscation of the ship, and the other is a fine against the master.
In regard to the later penalty, it is within the discretion of the Customs Authority to decide what amount of penalty should be imposed; just as in the case of the first penalty it is not open to it to say that it would not impose the penalty of confiscation against the offending ship, so in the case of the second penalty it is not open to it to say that it will not levy any penalty against the master.
In its discretion, it may impose a very small fine against the master if it is satisfied that the master was innocent and despite his best efforts, he could not prevent the contravention of section 52A.
If the two penalties prescribed by cl.
(12A) had been alternative, the position may have been different, but they are independent penalties, one is against the ship and the other is against the master; and so, there is no scope for contending that the Customs Authority may refuse to impose one penalty and impose the other, or may refuse to impose either of the two penalties.
It must be regarded as an elementary requirement of clause 12A that as soon as the offence referred to in column 1 of the said clause is 480 proved, some penalty has to be imposed and cl.
(12A) indicates that two penalties have to be imposed and not one, there being discretion in regard to the penalty imposable against the master as regards the amount of the said penalty.
Therefore, we do not think it would be possible to take the view that if there are extenuating circumstances attending the contravention of section 52A in a given case the Customs Authority can refrain from confiscating the vessel.
Confiscation of the vessel is the immediate statutory consequence of the finding that an offence under cl.
12A is established, just as the imposition of some penalty against the master is another statutory consequence of the same contravention.
" The language of Section 167(12A) and 183 of the , is not in pari materia with those of Sections 63 and 64 of the Bengal Excise Act.
It was on the language of these provisions, as they then stood, it was held that the penalties prescribed under Sections 167(12A) and 183 are independent and not alternative.
The observations, extracted above therefore, are not applicable in their entirety.
Nevertheless, they are a useful guide inasmuch as the expression "shall be liable to confiscation" used in Section 167(12A) in the context of a vessel found in the Customs waters in circumstances that amounted to a contravention of Section 52A, was held to cast on the Customs Authority an imperative duty to confiscate such vessel.
For all that has been said above and keeping in view the purpose, the scheme and the language of the provisions in question, we are of opinion that as soon as on proof of the conditions necessary under Section 63, a conveyance incurs the liability to confiscation, the word "may" used in Section 64(1) acquires the force of "must", and the Magistrate is bound to abide by either of the two alternatives viz., confiscation of the conveyance or imposition of the fine in lieu thereof in accordance with that Section.
Thus, the discretion of the Magistrate is restricted to choice between these two alternatives.
This limited discretion, also, is not to be exercised whimsically, but judicially, in a manner which will not emasculate these provisions or debilitate their potency as an instrument for suppressing the mischief which the Legislature had in view.
In the circumstances of this case therefore, it was imperative for the Magistrate, to pass, at the 481 conclusion of the trial, in addition to the conviction of the accused respondent, an order of confiscation of the car by means of which the offence was committed.
With this clarification of the law on the point, the appeal stands disposed of.
P.B.R. Appeal allowed.
| As a result of devaluation of Indian Currency in June, 1966, Ss. 14 & 15 of the were amended by the Customs (Amendment) Ordinance, 1966 which was later replaced by an Act with effect from July 7, 1966.
Section 15(1) provides that the rate of duty, rate of exchange and tariff valuation applicable to any imported goods shall be the rate and valuation in force. . (b) in the case of goods cleared from a warehouse under section 68, on the date on which the goods were actually removed from the warehouse.
The appellant stored on December 22, 1965 in the Customs warehouse, goods imported by him under a licence, and cleared them on various dates between September 1, 1966 and February 20, 1967.
Under protest, they paid customs duty at the enhanced rates in accordance with the amended provisions.
Later, they claimed rebate alleging that since the consignments had been received, stored and assessed to duty much before the promulgation of the Ordinance, they were liable to pay duty at the rate prevailing on the date of ware housing.
Their appeals and revision were unsuccessful.
In appeal to this Court it was contended that the material change in section 15 being only the substitution of the words "the rate of duty, rate of exchange" for the words "the rate of duty" the customs authorities were not entitled to take into account the new rate of exchange at the appreciated value of currency in respect of the consignments stored in the warehouse prior to the coming into force of the Ordinance.
Dismissing the appeal, ^ HELD: The customs authorities were right in taking the view that the rate of duty applicable to the imported goods should be determined according to the law prevalent on the date they were actually removed from the warehouse.
Section 15(1)(b) clearly requires that the rate of duty, rate of exchange and tariff valuation applicable to any imported goods shall be the rate and valuation in force on the date on which goods are actually removed from the warehouse.
Under section 49 an importer may apply to the Assistant Collector of Customs for permission to store the imported goods in a warehouse pending their clearance and he may be permitted to do so; and section 68 provides that an importer of any warehoused goods may clear them if the import duty leviable on them has been paid.
That is why clause (b) of sub section (1) of section 15 makes a reference to section 68.
[1146D, 1145H 1146C] 1143 In the instant case the goods were removed from the warehouse after the Ordinance came into force on July 7, 1966.
[1146D]
|
iminal Appeal No. 12 of 1961.
Appeal from the judgment and order dated April 26 1960, of the Madhya Pradesh High Court Jabalpur in Criminal Appeal No. 388 of 1958.
B. Sen and I. N. Shroff, for the appellant.
The respondent did not appear.
September 28.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
A charge sheet was presented by the appellant the State of Madhya Pradesh against the respondents Peer Mohammad and his wife Mst.
Khatoon under section 14 of the (hereinafter called the Act) read with cl. 7 of the Foreigners Order, 1948 (hereinafter called the Order) in the Court of the Magistrate 1st Class, Burhanpur.
The case against the respondents was that they had entered India on May 13, 1956, on the strength of a Pakistani passport and a visa issued in their favour on.
May 8, 1956, and reached Burhanpur on May 15, 1956.
Even after the period of the 431 visa had expired, they continued to stay in India.
Consequently, the district Magistrate, Burhanpur, served a notice on them on May 14, 1957 calling upon them to leave India on or before May 28, 1957.
The respondents did not comply with the notice and by their unauthorised and illegal over stay in India, they rendered themselves liable under section 14 of the Act and cl. 7 of the Order.
The respondents pleaded that they were not foreigners but were citizens of India.
They were born in India at Burhanpur and had been permanent residents of the said place; and so the present criminal proceedings instituted against them were misconceived.
The prosecution, however, urged that the respondents had left India for Pakistan some time after January 26, 1950, and under article 7 of the Constitution they cannot be deemed to be citizens of India.
In the alternative, it was urged that since the respondents had obtained a Pakistani passport, they have acquired the citizenship of a foreign country and that has terminated their citizenship of India under section 9 of the (LVII of 1955).
It appears that before the learned Magistrate, only this latter plea was pressed and the learned Magistrate held that the question as to whether the respondents had lost their citizenship of India under section 9 (2) of the has to be decided by the Central Government and cannot be agitated in a court of law.
Therefore, the learned Magistrate passed an order under section 249 of the Code of Criminal Procedure, directing that the respondents should be released, and the passport seized from them should be returned to them after the period of appeal, if any.
Against this order, the appellant preferred an appeal in the High Court of Madhya Pradesh, and before the High Court it was urged by the appellant that on a fair and reasonable construction of article 7 432 it should be held that the respondents cannot be deemed to be citizens of India *and so, they were liable under section 14 of the Act and cl. 7 of the Order.
This appeal was heard by Shrivastava and Naik, JJ.
Shrivastava, J., took the view that article 7 did not apply to the case of the respondents who had left India for Pakistan after January 26, 1950, and so, they could not be held to be foreigners on the ground that they had left India as alleged by the prosecution.
Naik,J., however, came to a contrary conclusion.
He took the view that since it was proved that the respondents had left India for Pakistan after January 26, 1950, article 7 was attracted and so, they must be deemed to be foreigners.
Since there was a difference of opinion between the two learned judges who heard the appeal, it was referred to Newaskar.
J. Newaskar, J., agreed with the conclusion of Shrivastava, J., and so, in the light of the majority opinion, it was held that under article 7, the respondents could not be held to be foreigners.
In regard to the alternative case of the prosecution that the respondents had obtained a Pakistani passport and so, had lost their citizenship under section 9(2) of the , the High Court held that it was a matter which had to be determined by the Central Government and it is only after the Central Government decides the matter against the respondents that the appellant can proceed to expel them from India.
It, however, appears that the High Court read the order passed by the trial Magistrate as amounting to an order of acquittal, and so, quashed the said order with liberty to the appellant to institute fresh proceedings against the respondents if and when considered necessary by it.
In fact, as we have already mentioned, the order passed by the trial Court was one under section 249 Cr.
It is.
against this decision of the High Court that the appellant has come to this Court with a certificate granted by the High Court.
At this stage, we may add that there were eleven 433 other cases of a similar nature which were tried by the Magistrate along with the present case and considered by the High Court at the appellate stage.
Appeals against the companion matters are pending before this Court, but their fate will be decided by our decision in the present appeal.
Section 14 of the Act provides, inter alia, that if any person contravenes the provisions of this Act or of any order made thereunder, he shall be punished in the manner prescribed by the section.
Clause 7 of the Order issued under the said Act prescribes that every foreigner who enters India on the authority of a visa issued in pursuance of the Indian Passport Act, 1920 shall obtain from the Registration Officer, specified therein, a permit indicating the period during which he is authorised to remain in India and shall, unless the period indicated in the permit is extended by the Central Government, depart from India before the expiry of the said period.
The prosecution case is that the respondents having entered India with a visa have overstayed in India after the expiration of the visa and the period indicated in the permit and so, they are liable to be punished under section 14 of the Act and cl. 7 of the Order.
It would be noticed that in order that the respondents should be liable under the said provisions, it must be shown that when they entered India, they were foreigners.
In other words, cl. 7 of the order applies to every foreigner who enters India in the manner therein indicated ; and that raises the question as to whether the respondents were foreigners when they entered India.
The prosecution contends that the respondents were foreigners at the relevant date on two grounds.
It is urged that they left India for Pakistan after January 26, 1950, and so, under article 7 they cannot be deemed to be citizens of India at the relevant time.
The alternative ground is that they have acquired a passport from the Pakistan 434 Government and as such they lost the citizenship of this country under section 9(2) of the citizenship Act.
It is common ground that the latter question has to be decided by the Central Government, and so, this J. Court is not concerned with it.
The only question which falls for our decision, therefore, is: can the respondents be said to be foreigners at the relevant date under article 7, because they left India for Pakistan after January 26, 1950 ? The answer to this question would depend on the construction of article 7.
In construing article 7, it would be necessary to examine briefly the scheme of the seven Articles that occur in Part 11.
These Articles deal with the question of citizenship.
Article 5 provides that at the commencement of the constitution, every person who has his domicile in the territory of India and who satisfies one or the other of the three tests prescribed by cls.
(a), (b) and (c), shall be a citizen of India.
Article 6 deals with persons who have migrated to the territory of India from Pakistan and it provides that they shall be deemed to be citizens of India at the commencement of the Constitution if they satisfy the requirements of clauses (a) & (b).
In other words, article 6 extends the right of citizenship to persons who would not satisfy the test of article 5, and so, persons who would be entitled to be treated as citizens of India at the commencement of the Constitution are covered by articles 5 and 6.
Article 7 with which we are concerned provides that notwithstanding anything in articles 5 and 6, a person who has after March 1, 1947, migrated from the territory of India to the territory now included in Pakistan shall not be deemed to be a citizen of India.
The proviso deals with persons who having migrated to Pakistan have returned to the territory of India under a permit for resettlement or permanent return, but with that class of persons we are not concerned in the present appeal.
Article 8 deals with the 435 rights of citizenship of persons of Indian origin who reside outside India.
Article 9 provides that no person shall be a citizen of India by virtue of articles 5, 6 or 8, if he has voluntarily acquired the citizenship of any foreign State.
Articles 10 and 11 then lay down that the rights of citizenship prescribed by articles 5 and 6 shall be subject to the provisions of any law that may be made by Parliament; that is to say, the said rights will continue unless they are otherwise affected by any law made by Parliament in that behalf.
Article 11 makes it clear that the provisions of Part 11 Will Dot derogate from the power of Parliament to make any provision with respect to the acquisition and termination of ' citizenship and all other matters relating to citizenship.
That, in brief, is the scheme of Part 11.
It is urged by Mr. Sen on behalf of the appellant that where the Constitution wanted to limit the scope of the Article by reference to the date of the commencement of the Constitution, it has used appropriate words in that behalf, and in that connection, he relies on the use of the words "at the commencement of the Constitution" which occur in articles 5 and 6.
Article 7 does not include such a clause, and so, the migration from the territory of India to the territory included in Pakistan to which it refers should not be construed to be limited to the migration prior to the commencement of the Constitution.
Just as a person who has migrated to Pakistan from India prior to January 26, 1950 shall not be deemed to be a citizen of India by virtue of such migration, so should a person who has migrated from India to Pakistan even after the commencement of the Constitution be denied the right of citizenship.
That is the appellant 's case and it Is based substantially on the ground that the clause "at the commencement of the Constitution" is not used by 436 This argument, however, cannot be accepted because it is plainly inconsistent with the material words used in the Article.
It will be noticed that a person who shall not be deemed to be a citizen of India is one "who has, after the first day of March, 1947, migrated from the territory of India to the territory of Pakistan.
" It is true that migration after January 26, 1950, would be migration after March 1, 1947, but it is clear that a person who has migrated after January 26, 1950, cannot fall within the relevant clause because the requirement of the clause is that he must have migrated at the date when the Constitution came into force. "Has migrated" in the context cannot possibly include cases of persons who would migrate after the commencement of the Constitution.
It is thus clear that it is only persons who had migrated prior to the commencement of the Constitution that fall within the scope of article 7.
The use of the present perfect tense is decisive against the appellant 's contention and so, the absence of the words on which Mr. Sen relies has no significance.
Besides, as the article is worded, the use of the said words would have been inappropriate and having regard to the use of the present perfect tense, such words were wholly unnecessary.
The proviso to article 7 which deals with cases of persons who having migrated to Pakistan have returned to India under a permit for resettlement, also supports the same conclusion.
The migration there referred to appears to be migration prior to the commencement of the Constitution.
It is relevant to refer to article 9 in this connection.
This Article deals with cases of persons who have voluntarily acquired the citizenship of any foreign State and it provides that such persons shall not be deemed to be citizens of India by virtue of articles 5, 6 or 8.
Now, it is clear that the acquisition of the citizenship of any foreign State to which this Article refers is acquisition made prior to the commencement, 437 of the Constitution. "Has voluntarily acquired" can have no other meaning, and so, there is no doubt that the application of article 9 is confined to the case of acquisition of citizenship of foreign State prior to the commencement of the Constitution.
In other words, the scope and effect of article 9 is, in a sense, comparable to the scope and effect of article 7.
Migration to Pakistan which is the basis of article 7 like the acquisition of citizenship of any foreign State which is the basis of article 9, must have taken place before the commencement of the Constitution.
It will be noticed that migration from Pakistan to India as well as migration from India to Pakistan which are the subject matters of articles 6 and 7 deal with migrations prior to the commencement of the Constitution.
The Constitution makers thought it necessary to make these special provisions, because migrations both ways took place on a very wide scale prior to January 26, 1950, on account of the partition of the country.
Migrations to Pakistan which took place after January 26, 1950, are not specially provided for.
They fall to be considered and decided under the provisions of the ; and as we will presently point out, citizens migrating to Pakistan after the said date would lose their Indian citizenship if their cases fall under the relevant provisions of the said Act.
It is true that as article 7 begins with a non obstante clause by reference to articles 5 & 6, and there is a little overlapping.
The non obstante clause may not serve any purpose in regard to cases falling under article 5 (c), but such overlapping does not mean that there is any inconsistency between the two Articles and it can, therefore, have no effect on the construction of article 7 itself.
Therefore, we are satisfied that article 7 refers to migration which has taken place between March 1, 1947, and January 26, 1950.
That being so, it cannot be held that the respondents fall within article 7 by virtue of the fact that they migrated from India to Pakistan some time after 438 January 26, 1950, and should, therefore, be deemed not to be citizens of India.
In this connection, it is necessary to add that cases of Indian citizens acquiring the citizenship of any foreign State are dealt with by article 9, and the relevant provisions of the .
If the foreign citizenship has been acquired before January 26, 1950, article 9 applies; if foreign citizenship has been acquired subsequent to January 26, 1950, and before the came into force, and thereafter, that is covered by the provisions of the , vide Izhar Ahmed Khan vs Union of India(1).
It is well known that the has been passed by the Parliament by virtue of the powers conferred and recognised by articles 10 and 11 of the Constitution and its relevant provisions deal with the acquisition of citizenship of India as well as termination of the said citizenship.
Citizenship of India can be terminated either by renunciation under section 8, or by naturalisation, registration or voluntary acquisition of foreign citizenship in any other manner, under section 9, or by deprivation under section IO.
The question about the citizenship of persons migrating to Pakistan from India after January 26, 1950, will have to be determined under these provisions of the .
If a dispute arises as to whether an Indian citizen has acquired the citizenship of another country it has to be determined by such authority and in such a manner and having regard to such rules of evidence as may be prescribed in that behalf That is the effect of section 9(2).
It may be added that the rules prescribed in that behalf have made the Central Government or its delegate the appropriate authority to deal with this question, and that means this particular question cannot be tried in courts.
The result is that the respondents cannot be said to be foreigners by virtue of their migration to Pakistan after January 26, 1950, and that is the only question (1) [1962] Supp.
2 S.C.R. 235. 439 which can be tried in courts.
If the State contends that the respondents have lost their citizenship of India under section 9 (2) of the , it is open to the appellant to move the Central Government to consider and determine the matter, and if the decision of the Central Government goes against the respondents, it may be competent to the appellant to take appropriate action against the respondents.
So far as the appellant 's case against the respondents under article 7 is concerned, the High Court was right in holding that the respondents were not foreigners within the meaning of cl. 7 of the Order and cannot, therefore, be prosecuted under section 14 of the Act.
The appeal accordingly fails and is dismissed.
Appeal dismissed.
| Teja Singh and Jhandha Singh were co sharers in certain agricultural land.
They partitioned the land taking 1 and 7 shares respectively and applied for mutation of names to the revenue authorities.
In the mutation by mistake the entire land was shown against the name of Teja Singh.
On discovering the mistake jhandha Singh applied for correction of the entry.
During the pendency of these proceedings Teja Singh died and his brother and heir Mula Singh sold the entire land in favour of the appellant.
Mula Singh appeared before the revenue authorities and admitted the mistake.
On this admission and on the report of an enquiry made into the matter by a subordinate revenue officer the authorities corrected the mistake and the correct shares of Teja Singh and jhandha Singh were shown as 1/8 and 7/8.
The appellant filed a suit for declaration of his exclusive title to the land.
The trial court decreed the suit holding that the corrected mutation entry which was made on the admission of Mula Singh after he had already sold the property was not properly made.
On appeal the first appellate court upheld the decree, holding that Gurbaksh Singh was a bonafide purchaser in good faith but without giving any finding on the question of title.
In second appeal the High Court reversed the findings and dismissed the suit.
The appellant contended that the High Court had no jurisdiction to set aside concurrent findings of fact in second appeal and that no presumption could arise in favour of the corrected entry.
Held, that the High Court was justified in interfering in second appeal as the first appellate court had given no finding on the question of title.
The finding that the appellant was a bonafide purchaser in good faith was not based upon any evidence and the onus was on the transferee to show that the transferor was the ostensible owner.
The appellant had full knowledge of the defect in the title of Mula Singh.
56 Held, further, that the presumption under section 44 of the Punjab Land Revenue Act arose that the corrected entry was true as the entry was made in accordance with law.
Section 37 provided that such an entry could be made in accordance with facts proved or admitted to have occurred.
Though Mula Singh 's admission after he had parted with the interest in the property, could not have been relied upon, the entry was made in accordance with the facts proved before the revenue authorities by the report of the subordinate revenue officer which recited the, terms of the partition also.
The appellant did not adduce any evidence to rebut the presumption.
|
Appeal No. 598 of 1962.
Appeal from the judgment and order dated March 18, 1961 of the Maharashtra High Court (Nagpur Bench) at Nagpur in Special Civil Application No. 30 of 1960.
WITH Civil Appeals Nos. 695 and 700 of 1962.
Appeals from the judgment and orders dated October 12, 1961 and March 18, 1961 of the Madhya Pradesh High Court in Misc.
Petitions Nos.
122 of 1961 and 319 of 1960 respectively.
949 M. C. Setalvad and section Shaukat Hussain, for the appellant (in C.A. No. 598/62).
W. section Barlingay and A. G. Ratnaparkhi, for respondent No. 1 (in C.A. No. 598 of 1962).
section G. Patwardhan, Udai Pratap Singh and M. section Gupta, for the appellant (in C.A. No. 695/62).
A. N. Goyal, for respondent No. 1 (in C.A. No. 695/ 62).
N. Shroff, for respondent No. 2 (in C.A. No. 695/62).
M.C. Setalvad and M. section Gupta, for the appellant (in C.A. No. 700/62).
G. section Pathak, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondents Nos. 1 to 4 and 6 to 9 (in C.A. No. 700/62).
N. Shroff, for respondent No. 10 (in C.A. No. 700/62).
March 3, 1964.
The Judgment of the Court was delivered by AYYANGAR, J.
These three appeals which are on certificates of fitness granted by the High Courts the first by the High Court of Bombay at Nagpur and the two others by the High Court of Madhya Pradesh raise a common question as regards the construction of article 277 of the Constitution and the validity of certain terminal taxes imposed by the respective appellant municipal authorities under notifications issued under Ch.
IX of the C.P. & Berar Municipalities Act, 1922, subsequent to the coming into force of the Constitution, and so have been heard together.
Civil Appeal 598 of 1962 is an appeal from the High Court of Bombay at Nagpur and has been filed by the Municipal Committee of Amravati against a decision of the High Court allowing the 1st respondent 's petition under articles 226 and 227 of the Constitution.
The Municipal Committee of Amravati has been established under the 950 C.P. & Berar Municipalities Act, 1922 (C.P. & Berar Act II of 1922) hereinafter referred to as the Act.
Chapter IX of the Act deals with the imposition, assessment and collection of taxes which might be imposed by the Municipal Committee.
Section 66 specifies the taxes which, subject to the provisions of the Chapter, the Committee may from time to time impose.
Its first sub section specifies in its several clauses 15 varieties of taxes and among them is cl.
(o) which reads: "The terminal tax on goods or animals imported into or exported from the limits of the municipality provided that terminal tax under this clause and an octroi under cl.
(e) shall not be in force in any municipality at the same time , ' The other sub clauses which are relevant for the considera tion of the question arising in the appeal are sub cls.
(2),(3) and (4) of section 66 and they read : (2) The State Government may, by rules made under this Act, regulate the imposition of taxes under this section, and impose maximum amounts of rates for any tax.
(3) The first imposition of any tax specified in subsection (1) shall be subject to the previous sanction of the State Government.
(4) Subject to the control of the State Government, a committee may abolish any tax already imposed and specified in sub section (1) clauses (a) to (in) inclusive, or may, within the limits imposed under sub section (2), vary the amount or rate of any such tax : Provided that in the case of any municipality indebted to the Government, the abolition of any tax or a reduction in the amount or rate thereof shall be subject to the previous sanction of the State Government.
" 951 Section 67 lays down the procedure for the imposition of taxes and it provides : "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 shall 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) (4) (5) The State 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) No modification affecting the substance shall be made under sub section (5), unless and until the modification has been accepted by the committee at a special meeting.
(7) (8) 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 provisions of this Act.
" The procedure for the variation of the taxes is to be found in section 68 and it reads "68.
(1) A committee may, at a special meeting, pass a resolution to propose the abolition of any tax already imposed, or a variation in the amount or rate thereof.
(2) 952 (3) If the proposal is to increase the amount or rate of any tax, the committee shall publish, in the manner prescribed by rules made under this Act, a notice showing in detail the effects of the proposal.
(4) Any inhabitant of the municipality objecting to the proposed increase may, within thirty days from the publication of the notice, submit his objection in writing to the committee.
(5) The committee shall take the proposal and all objections received thereto )into consideration at a special meeting, and may modify the proposals as it may think fit, and may pass a final resolution on the proposal.
(6) If the proposal requires the previous sanction of the State Government under the provisions of section 66, sub section (4) or sub section (5), the committee shall forward it to the State Government and it shall be dealt with in the manner provided in section 67, sub sections (4), (5) and (6).
(7). . . . (8). . . . (9) The publication in the manner prescribed of the abolition or variation of any tax under this section shall be conclusive proof that such abolition or variation has been made in accordance with the provisions of this Act." From even before the constitution of the municipality under the Act and at a time when the municipal committee was governed by the Berar Municipal Law of 1886 which was in force prior to the Act and whose taxation provisions were continued by the Act of 1922, a terminal tax on goods imported by road or rail had been imposed by the Munici pality by virtue of a notification dated August 10, 1916 on several specified kinds of goods.
This notification exempted silver, bullion and coin from the operation of this tax.
This was superseded by a notification of June 2, 1921 under which the Schedules were modified and the terminal tax 953 imposed was confined to goods imported into or exported out of the Municipal area by rail.
The notification of June 1921 was amended from time to time by other items being added and the rates being increased but no change was effected in the taxes imposed after 1936.
Under the scheme of the distribution of taxing powers between the provinces and the Central Government under the Government of India Act, 1935 terminal taxes on goods carried by rail were assigned exclusively to the Federal Centre under item 58 of List I to Sch.
VII, but the validity of the levy and collection of the terminal tax in force, before the 1st April, 1937 was continued by section 143 of the Government of India Act, 1935 and it was by virtue of this continuance that these taxes were continued to be levied after April 1, 1937 Their continuance after January 26, 1950 when after the repeal of the Government of India Act, 1935, the Consti tution came into force with the same scheme of distribution of taxing power on the relevant item identical with that under the Government of India Act, was by reason of article 277 which was practically in the same terms as section 143 of the Government of India Act, 1935.
The taxes imposed by the pre Constitution notification could, therefore, be legally levied and collected even after the Constitution came into force.
Subsequent to January 26, 1950 there was a notification on December 1, 1959, under which to the list of goods liable to terminal tax imported into or exported out of the Municipal area, not merely by rail, but also by road were added three new items silver and silver jewellery, gold and gold jewellery, and precious stones, and these three specified items were subjected to the tax at the same rates as had been imposed on other articles by the notifications which were in force from before the Constitution.
Before the notification was issued the procedure indicated by section 67 was gone through and the Government accorded their sanction to the rules made by the Municipal Committee for the imposition of the tax on the newly added articles.
The validity of the tax imposed by this notification was challenged by the 1st respondent who was carrying on business within Amravati municipality in gold, silver and precious stones, 954 on the ground of legislative incompetency which had not been saved by Article 277 of the Constitution, in a petition under Article 226.
The learned Judges of the High Court by a majority accepted the contention raised by the respondent and allowed the petition but granted a certificate of fitness and hence this appeal.
The facts of the other two appeals are nearly similar but we shall refer to them after dealing with the, common question which arises in these appeals.
It is common ground that the right to levy a terminal tax is now vested in the Union Parliament under Entry 89 of the Union List which reads : "Terminal taxes on goods or passengers carried by railway, sea or air; taxes on railway fares and freights", so that if the levy by the appellant of the terminal tax on the newly added items, and the same principle would apply to an increase in the rate of the duty, had to rest on the independent taxing power of the State, the same would have to be struck down for want of legislative competence.
Besides it is necessary to add that whereas under the notifications in force prior to 1st April 1937 when Part III of the Government of India Act was brought into force, articles imported into or exported out of the municipal area by road were not subject to the tax, and that state of affairs continued till long after the Constitution came into force, a terminal tax was imposed by the impugned notification of December 1959 on goods imported or exported by road a tax which it was not open to the State to impose even with the aid of article 277.
But ignoring this feature of the impugned notification, insofar as it brought in goods carried by road within the scope of the terminal tax, it is admitted that the validity of the imposition cannot be justified if it was a fresh imposition.
What is, however, urged in support of the validity of the imposition is that the same is saved by article 277 which runs: "277.
Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the 955 Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List.
continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law.
" If learned Counsel for the appellant is right in his contention 'that the impugned tax which he is now seeking to sustain, 'was the tax which "was being lawfully levied" by the municipality before the commencement of the Constitution he would certainly be well founded in the submission that the fact that the terminal taxes are under the distribution ,of taxing powers under the Constitution assigned to the Union would make no difference for the valid continuance of the levy.
The question, therefore, is whether this was the tax which was being levied by the municipal authority before the Constitution and for whose continuance the Article provides.
The first submission of Mr. Setalvad for the appellants was that this condition would be satisfied whenever a ,terminal tax (without reference either to the article on which it was levied or the rate) was being lawfully levied by the municipality prior to the commencement of the ,Constitution and as in this case admittedly a terminal tax was being levied on certain articles that condition was satisfied.
His argument was that the words 'tax or duty ' in the opening part of article 277 should be read as meaning a tax or duty under a specified legislative Entry, and if such a tax or duty was being levied before the commencement ,of the Constitution other duties of the same type or falling within the same category might be imposed after the Constitution notwithstanding that such duties or taxes were mentioned in the Union List by reason of the words "shall continue to be levied".
Secondly, he said that the word 'levy ' meant not merely the ascertainment, i.e., assessment and collection of the tax but included its imposition, i.e., also the charging and if that expression were understood in that wide sense it would comprehend a case where other 956 items than those originally specified were brought into the fold of the taxing provision.
The learned Attorney General who appeared for the State and supported Mr. Setalvad, however, went a step further and submitted that it was not even necessary that a terminal tax should be actually imposed and was being collected prior to the Constitution, but that it was sufficient if the State enactment had vested in the municipality a power to levy such a tax.
The argu ment of the learned Attorney General has to be rejected as lacking any substance, for on no construction, wide or narrow, of the expression 'levy ' in the phrase 'continue top be levied ' can such a case be comprehended.
From the mere fact that a State enactment has authorised a municipality to levy a tax it cannot be said that a tax which had never been imposed was "being lawfully levied" by the municipality, not to speak of the tax etc.
collected being "applied to the same purposes" before the commencement of the Constitution as contemplated by the concluding portion of the Article.
Coming next to what one might term the narrower submission of Mr. Setalvad we do not find it possible to agree with it either.
His first submission may be expanded thus : The expression "taxes, duties, cesses" with which article 277 opens, has to be read in the context of Part XII in which the Article occurs and so read has to be understood as referring to the class or category of taxes which were levied and collected by the State, municipality etc.
before the commencement of the Constitution.
In other words, the reference here is to the entries in the legislative lists which permit such taxes to be levied, and so read and taken in conjunction with the circumstance that the Article is one designed to prevent the dislocation of the finances of the State or other local authorities, the terms of the Article would be satisfied and the legislative power to continue to levy the tax would be conferred "notwithstanding that the tax, etc.
are mentioned in the Union List".
This argument, in our opinion, proceeds on ignoring the terms of article 277.
If, as is admitted, the sole object sought to be achieved by this provision for "continuance" is to avoid dislocation of the finances of the State and local authorities, 957 by depriving them of the revenues which they were deriving at the commencement of the Constitution, it would mean that the intention was to permit the existing range of taxes to be continued, not that the Article conferred on them authority to expand the range of their taxation by subjecting new items to taxation or by increasing the rates of duty.
This consideration apart, it is not possible to read the words "notwithstanding that the taxes etc.
are mentioned in the Union List" as conferring an unlimited legislative power to impose what in effect the argument involves new taxes, though of the same type or nature as existed before the Constitution.
The question of the proper construction of section 143(2) of the Government of India Act, 1935 which is for all practical purposes identical with article 277 came up for consideration before this Court in Rama Krishna Ramanath vs The janpad Sabha, Gondia(1).
There it was submitted on behalf of the respondent local authority that by virtue of section 143 (2) of the Government of India Act the Provincial Legislature was vested with a plenary power to legislate in respect of every tax which was being lawfully levied by local authorities prior to the commencement of the Government of India Act.
This Court rejected that contention and observed "Section 143 (2) which is a saving clause and obviously designed to prevent a dislocation of the finances of Local Governments and of local authorities by reason of the coming into force of the provisions of the Government of India Act distributing heads of taxation on lines different from those which prevailed before that date, cannot be construed as one conferring a plenary power to legislate on those topics till such time as the Central Legislature intervened.
Such a construction would necessarily involve a power in the Provincial Legislature to enhance the rates of taxation a result we must say from which Mr. Sanyal did not shrink, but having regard to the language of the section (1) [1962] Supp. 3 S.C.R. 70.
958 providing for a mere continuity and its manifest purpose this construction must be rejected.
" No doubt, even the words "continue to be levied and to be applied to the same purposes" might import and imply a limited legislative power in the State.
The scope of this limited power was also examined by this Court in the same case and it was stated : "In the context the relevant words of the sub section could only mean 'may continue to be levied if so desired by the Provincial Legislature ' which is indicated by or is implicit in the use of the expression 'may ' in the clause 'may be continued until provision to the contrary is made by the Federal Legislature. ' This would therefore posit a limited legislative power in the Province to indicate or express a desire to continue or not to continue the levy.
If in the exercise of this limited power the Province desires to discontinue the tax and effects a repeal of the relevant statute the repeal would be effective.
Of course, in the absence of legislation indicating a desire to discontinue the tax, the effect of the provision of the Constitution would be to enable the continu ance of the power to levy the tax but this does not alter the fact that the provision by its implication confers a limited legislative power to desire or not to desire the continuance of the levy subject to the overriding power of the Central Legislature to put an end to its continuance and it is on the basis of the existence of this limited legislative power that the right of the Provincial Legislature to repeal the taxation provision under the Act of 1920 could be rested.
Suppose for instance, a Provincial Legislature desires the continuance of the tax but considers the rate too high and wishes it to be reduced and passes an enactment for that purpose, it cannot be that the legislation is incompetent and that the State Government 959 must permit the local authority to levy tax at the same rate as prevailed on April 1, 1937 if the latter desired the continuance of the tax.
If such a legislation were enacted to achieve a reduction of the rate of the duty, its legislative competence must obviously be traceable to the power contained in words 'may continue to be levied ' in section 143 (2) of the Government of India Act.
" Dealing next with the import of the words 'may continue to be levied ' the same was summarised in these terms : (1) The tax must be one which was lawfully levied by a local authority for the purpose of a local area, (2) the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised 'and the purposes for which the utilization is to take place continue to be the same, and (3) the rate of the tax is not enhanced nor its incidence in any manner altered, so that it continues to be the same tax.
It is obvious that if these tests were applied the submission on behalf of the appellant cannot be accepted.
But authority apart, we cannot, even if this decision were put aside, accede to the construction for which Mr. Setalvad contends.
It is not disputed that in ultimate analysis the answer to the question raised should turn on the meaning of the word 'levied ' in the phrase 'continue to be levied ' which is the operative word conferring a power.
Mr. Setalvad submits that 'levied ' is a word of wide and varying import and includes in its denotation not merely the actual collection of the tax, but the imposition in the sense of the creation of the charge by the statute, as well as the ascertainment of the amount due from the tax payer.
Mr. Setalvad is right, for before a tax can be collected from any tax payer, its quantum must be ascertained and assessed, and for this to be lawfully done there must be legislative sanction in other words an imposition of the charge because it is the charge under the Statute that is quantified ' by the authorities acting under the taxing enactment.
The acceptance of this construction however does not lead to the result desired, for what can "continue to be levied" is what "was being lawfully levied" in the same sense of the, 960 word "levied", prior to the Constitution.
Admittedly, there was no imposition of the charge now sought to be recovered prior to the Constitution, i.e., the Act did not impose the charge by section 66 but merely enabled the Municipal Committee by appropriate procedure to impose the tax.
If, of course, this power had been availed of and a charge had been imposed it would be a different matter.
So long as the Municipal Committee did not pass the necessary resolutions and impose the tax there was no charge levied on the commodity, so that it could not be said that the tax "was being lawfully levied" before the commencement of the Constitution.
The words "was being lawfully levied ' obviously mean "was actually levied" and it would not be sufficient to satisfy those words that the Municipal authority could lawfully levy the tax, but had not availed itself of that power.
There is another circumstance to which also reference may be made.
The last portion of article 277 uses the words "continue to be levied" and "to be applied to the same "purposes".
By reason of this collocation between the concept of the levy and of application of the proceeds of the tax , the Constitution makers obviously intended the word 'levy ' to be understood as including the collection of the ,tax, for it is only when a tax is collected that any question of its application to a particular purpose would arise.
It is apparent that if the word "levied" were understood in the sense which Mr. Setalvad contends, there could be no "application" of the proceeds of the tax to the same pur poses as at the commencement of the Constitution.
For ex concessis at that date there were no proceeds to be applied.
In this connection learned Counsel for the respondent referred us to the decision in Chuttilal vs Bagmal and Balwantrai(1) where the relationship between the levy and the application of the tax has been referred to as an aid to the construction of the expression "continue to be levied" in article 277.
We find ourselves in agreement with the views there expressed.
The decision of the High Court is, therefore, correct and "the appeal fails.
(1) I.L.R. [1956] Madhya Bharat 339.
961 CIVIL APPEAL No. 695 OF 1962.
In this appeal a notification was issued under sub sections
(5) and (7) of section 67 of the C.P. & Berar Municipalities Act, 1922, on December 9, 1960 imposing a terminal tax on gun powder imported into or exported out of the municipal area by rail.
It is admitted that previous to the Constitution there was no tax imposed on gun powder.
The position in this case is, therefore, identical with that in Civil Appeal No. 598 of 1962 which we have just disposed of and it follows that this appeal also fails and should be dismissed.
CIVIL APPEAL No. 700 OF 1962.
In Civil Appeal 700 of 1962 the original notification imposing terminal taxes in respect of goods coming into or going out of the municipal area by rail was one dated March 17, 1926 which was operative from April 1, 1926.
This was amended by a notification under section 67 (5) of the C.P. Berar Municipal Act, 1922 dated September 23, 1960 by which new articles were included to the list of items imported into or exported from the municipal area by rail subject to the terminal tax and besides the rate of tax on the previously existing items was also increased.
It was this inclusion of new articles for the levy of terminal tax by the notification of 1960 and the increase in the rate of duty on articles, already subjected to tax, that was impugned in the writ petition filed by the respondent before the High Court.
On our reasoning on the basis of which we have dismissed Civil Appeal 598 of 1962 it would follow that this appeal should also fail.
We can see no difference between the inclusion of new items and the increase in the rate of duty because if there is an increase it would not be a mere continuance of the duty which had been lawfully levied which is the only purpose and function of article 277.
The judgment of the High Court allowing the writ petition of the respondent was therefore correct.
In the result, ;all the three appeals fail and are dismissed with costs of the contesting respondent or respondents.
in each appeal.
Appeals dismissed.
| The appellant entered into an agreement with the respondent to purchase African raw cotton.
The agreement included a clause that the contract would be subject to the " usual Force Majeure clause ", the Bye laws of East India Cotton Association Ltd., Bombay, except bye law 35, the said Bye laws having statutory force, and to the jurisdiction of the Bombay High Court.
Clause 6 of the agreement provided that the buyers were to obtain import licence from the Government of India, failing which the seller would be entitled either to carry over the goods at the cost of the buyers or call upon them to take immediate delivery on payment in British East Africa, and in default to sell the goods in British East Africa and claim the deficit, if any between the contractual price and the price obtained on re sale.
Clause 7 further provided that notwithstanding the import policy followed by the Government of India in respect of the import of the contracted goods, the buyers would be bound to obtain the necessary import licences and communicate the numbers thereof to the sellers on specified dates, failing which cl. 6 would operate.
The buyers did not perform the contract and the sellers after notice to them re sold the goods and thereafter claimed the deficit which the,buyers refused to pay.
The sellers invoked the arbitration clause and the rules contained in bye law 38A of the Bye laws and others following it, which conferred on the Chairman of the Board of Directors of the East India Cotton Association Ltd., the power of selecting the arbitrator or arbitrators, and applied to the High Court under section 20 of the Indian for filing the agreement and referring the dispute to arbitration.
The buyers resisted and the trial judge dismissed the application, but the Court of appeal reversed that decision.
It was urged in this Court on behalf of the buyers that (1) cls.
6 and 7 contemplated acquisition of property or Exchange in Africa and thus involved a breach of section 5 of the Foreign Exchange Regulation Act, since no general or special exemption had been granted thereunder by the Reserve Bank, (2) that the expression " subject to the usual Force Majeure clause " was vague and uncertain and rendered the agreement void, (3) that the application of bye law 48A et seq left no powers in the Court to act under sub sections
(1) and (4) of section 20n 1021 of the and the section was thus inapplicable and (4) that the law applicable to the case was the law of British East Africa and not that of India.
Held, that the contentions must fail.
The provisions of sub sections
(2) and (3) of section 21 of the Foreign Exchange Regulation Act, properly construed, left no manner of doubt that they contemplated matters which were within the prohibition of section 5 of the Act and had the effect of engrafting on the agreement of parties a term that it would be for the decreeholder before he could enforce the decree or order of the court to obtain the permission of the Reserve Bank and were thus designed to prevent the non performance of the contract under a cover of illegality.
The contract involved no actual or contingent right to acquisition of property abroad, and even assuming it did, it was saved by section 21 of the Act subject to its conditions.
The agreement was thus enforceable.
Nor was the contract void for uncertainty.
It was clear from judicial decisions that a reference to "force majeure " means the saving of the performing party from the consequence of factors beyond his control.
The condition in respect of "force majeure " did not, therefore" make the contract vague.
Further, the use of the word " usual " made it clear that the clause could be made certain by evidence and so it was protected by section 29 of the Contract Act.
Lebeaupin vs CriSpin, , referred to.
British Industries vs Patley Pressing, and Scammell (G) and Nephew Ltd. vs Ouston (H. C. and J. G.) , distinguished.
Bishop & Baxter Ld.
vs Anglo Eastern Trading & Industrial Co. Ld., [1944] I.K.B. 12, Shamrock section section Co. vs Storey, (1899) 5 Corn.
Cas. 21, Hillas & Co. vs Arcos Ltd., ; and Adamastos Shipping Co. Ltd. vs Anglo Saxon Petroleum Co. Ltd., L,959) A.C. 133, relied on.
Although by section 46 of the , the Bye laws, if inconsistent with the provisions of the Act, must prevail, it was not correct to say that their application made the Courtfunctus officio under section 20 of the Act.
It must not be overlooked that although the present was a case of statutory arbitration governed by its own rules, the court under section 20(4) of the had two distinct powers, (1) of judicially considering whether or not the arbitration agreement should be filed in court and (2) whether there should be a reference to the arbitrator or arbitrators appointed by the parties or selected by it.
Since in the instant case the parties had by their agreement empowered the Chairman of the Board of Directors of the East India Cotton Association, Ltd., to select the arbitrator or arbitrators, the court could send the agreement to him to be dealt with under the pro, cedure laid by the said Bye laws.
1022 Whether the law of the country where the contract is made or of the country where it is to be performed should apply is sometimes a matter of presumption.
But the declared intention of the parties overrides such presumption.
Where there is no such declaration, the intention may be inferred from the terms and nature of the contract and the general circumstances of the case.
In the instant case, since the parties agreed that in case of dispute the Bombay High Court would have jurisdiction and the arbitration clause indicated arbitration in India, there could be no doubt that the Indian law was to apply.
N. V. Kwick Who Tong vs James Finlay & Co., [1927] A.C. 604, Hamlyn & Co. vs Tallisker Distillery, and Spurrier vs La Cloche, , referred to.
|
Civil Appeal No. 484 of 1969.
From the Judgment and order dated 28 7 1967 of the Allahabad High Court in Special Appeal No. 352/67.
M. section Gupta for the Appellant.
G. N. Dikshit and O. P. Rana.
for the Respondents.
The Judgment of the Court was delivered by SARKARIA, J.
This is an appeal by certificate against a judgment, dated July 28, 1967, passed by the High Court of Allahabad in Special Appeal 352 of 1967.
It arises our of these fact.
Jai Dutt, appellant, was in possession of public land bearing Survey Nos 230, 131A and 131B, with an aggregate area of 80 Bighas and 19 Biswas in the area of village Guljarpur PurraamSingh, Tehsil Kala chungi, Distt.
Nainital.
The Public Authority, Nainital; served a show cause notice, dated August 26, 1963, under Section 3(1) of the U.P. Land (Eviction and Recovery of Rent and Damages) Act, 1959 (here inafter called the Eviction Act) on the appellant for his eviction from this land on the ground that he was in its unauthorised occupation.
The appellant contested the notice on the ground that he was in its possession for more than 12 years and had acquired the rights of a hereditary tenant in the land under Section 180(2) of the U.P. Tenancy Act, 1939 (for short, called the Tenancy Act).
On these premises, the appellant contended that the land was not 'public land ', and as such, the Eviction Act has no application and the notice was illegal.
By its order dated October 31, 1963, the Public Authority dismissed the objections, holding that the appellant "has not filed any documentary evidence to show that the land in dispute was allotted to him by a competent authority, while the documents filed on behalf of the State show that it is a public land and "the O.P. (appellant herein) is a trespasser thereon", and he is, therefore, liable to be evicted therefrom 177 under Section 4(1) of the Eviction Act.
The Public Authority further assessed Rs. 12/ as damages payable by the appellant.
Against this order of the Public Authority, Jai Dutt carried an appeal under Section S of the Eviction Act to the District Judge.
The appeal was heard by the Additional District Judge, Kummaon Nainital, before whom the appellant reiterated the contention that he had been in possession of the land in question for the preceding 12 years, and as such, had acquired the rights of a hereditary tenant thereon.
There, the appellant seems to have further contended that he had been paying "rent" for his occupation of the land He appears to have shown some receipts also to the Additional District Judge.
The Additional District Judge negatived all the contentions and dismissed the appeal.
The appellant then filed a writ petition under Article 226 of the Constitution before the High Court to impugn the orders of the Public Authority and of the Add.
District Judge, inter alia, on the ground that since he had been paying rent for the land which has been in his cultivating possession for a number of years preceding the eviction proceedings, he could not be said to be all 'unauthorised occupant ', but a hereditary tenant under Section 180(2) of the Tenancy Act The learned Single Judge of the High Court, who heard the writ petition, rejected this contention with the observation that 'the Khatauni of 1368 Fasli entered the petitioner 's possession over the disputed plots as ranging from 1 to 6 years.
The oral evidence led by the petitioner does not outweigh the force of the entries in the Khatauni.
The petitioner, therefore, did not acquire any title under Section 180 of the U.P. Tenancy Act before 1953.
" The learned Single Judge further observed that the decision of the Division Bench of that High Court in Shri Chandra vs State of U.P. & Ors.
(W.P. No. 3277 of 1966 decided on 13 2 67) was applicable to the case and the land in dispute will be public land and the possession of the appellant unauthorised.
In the result, the writ petition was dismissed with costs.
The appellant 's special Appeal was dismissed by a Division Bench of the High Court on July 28, 1967.
In the meantime, the Eviction Act was successfully challenged before the High Court in Writ Petitions 3755 and 3756 of 1962 which were decided on May 24, 1968.
Keeping in view the value of the subject matter which exceeded Rs. 20,000/ and the question of the Constitutional validity of the Eviction Act, the High Court granted a certificate under Article 133 (l)(a) and (c) of the Constitution, that the case was fit for appeal to this Court.
Hence, this appeal.
178 Mr M. section Gupta, appearing for the appeal, has now given up the challenge to the Constitutional validity of the Eviction Act on the ground of its being violative of Article 14 of the Constitution, because this ground of attack no longer survives in view of this Court 's judgement in Maganlal Chhagganlal vs Municipal Corporation of Greater Bombay & ors.(1) He, however, sought to make out these points: (i) The appellant had been in cultivatory possession of the land for a number of years and no action for his eviction was taken for a long time and since no steps were taken by the Government to evict him evict two years of his entry into possession, he became a here ditary tenant under Section 180(2) of the Tenancy Act.
(ii) Even if the appellant did not acquire the rights of a hereditary tenant in the disputed land, he had by long possession acquired the rights of a tenant or tenure holder of any other kind under the Government.
He has been paying rent in respect of the land to the Government, and, as such, was not in unauthorised occupation of the land.
Since the land was held by the appellant as a tenant, it did not fall within the definition of 'public land ' given in Section 2(a) of the Eviction Act.
(iii) Since the objections raised by the appellant in response to the show cause notice issued under Section 3(1) of the Eviction Act were substantial, the Public Authority was bound to refer the dispute to the Civil Judge under Sec. 7 of the Eviction Act.
Its failure to do so, vitiates the code of eviction passed by it.
(iv) one of the prerequisites of taking action under Section 3(1) of the Eviction Act is that title Public land is required "for one or more public purposed of this Act".
Sub section (2) (a) of Section 3 requires that the notice shall "specify the grounds on which the order of eviction is proposed to be made".
The impugned notice issued by the Public Authority did not comply with these, requirements of Section 3 and was therefore, illegal.
Points (i) and (ii): Mr. Gupta did not seriously press the first point, obviously because it was without substance.
It may be noted that Section 180 of the Tenancy Act is subject to the, restrictions contained in Section 30 of that Act, which provides: "Notwithstanding anything in Section 29, hereditary rights shall not accrue on. (1) [1975] I S.C.R. 1. 179 (3) land acquired or held for a public purpose or work of public A utility.
" Even if it is assumed that the appellant was at the material time in occupation of this land for more than two years, he would not acquire rightmost of a hereditary tenant under Section 180(2).
Omission of the State Government, therefore, to institute a suit under Section 180(l) within the prescribed period of limitation would not bring into existence relationship of landlord and tenant between the Government and the appellant, and the letter 's possession would remain, as it was at its inception, that of a trespasser or unauthorised occupant.
This point is further highlighted by the definition of "unauthorised occupation" given in clause (h) of Section 2 of the Eviction Act, which states: "Unauthorised occupation means occupation of a public land by any person without the authority of the owner for such occupation and includes its continued occupation after the expiry of the period of allotment, lease or grant. anything contained in.
O.P. Tenancy Act, 1939. to the contrary notwithstanding." n In the context, the definition of "Public Land" given in Section 2(e) of the Eviction Act may also be seen.
This definition, so far as material for our purpose, states: "Public land means land belonging to or owned by the State Government but does not include land (i) for the time being held by a tenure holder for the State Government under the U.P. Tenancy Act, 1939.
(ii) . .
" Section 2 (b) of this Act defines "Lease" to mean "a lease as defined in Section 105 of the ".
There is neither any factual nor legal basis for the appellant 's contention that he had acquired some kind of tenure as a tenant by remaining in twelve years ' continuous possession of the land in dispute.
As noticed by Additional District Judge and the learned Single Judge of the High Court, the Khasra tendered in evidence before the Public Authority, shows that in the years 1362, 1363, 1365 and 1367 Fasli (which we are told roughly corresponds to 16655 56, 1956 57, 1958 59 and 1960 61 A.D.) the land in dispute was lying Banjar (barren).
That is to say, in the years 1955 to 1961, the appellant was not in occupation of this land.
During these years, when the land was lying Banjar, its possession would be presumed to be of the lawful owner, viz., the State Government.
The appellant 's possession over the land is shown for the first time in Khasra of the year 1368 Fasli (roughly 180 corresponding to 1961 62) as "bila tasfia, Ziman 10 Ka".
Same is the position shown in the Khatauni 1368 Fasli "Bil Tasfia" obviously means "without settlement or allotment or grant".
The documentary evidence from the revenue records, accepted by the courts below, had thus discounted the appellant 's claim that he had been in cultivator possession of the disputed land for 12 years preceding the issue of the impugned notice under Section 3(1).
It was never the case of the appellant that he had lawfully entered into possession of the land.
On the contrary, his case was that he took possession of the land without any grant, settlement or lease from the land owner.
Indeed, by clanging acquisition of a hereditary tenancy under Section 180(2), he admitted that he had taken possession without any title and without the consent of the land owner.
Mr. Gupta has been unable to show that the appellant 's occupation of the land even for one or two years preceding the notice under Section 3(1) was that of a "tenure holder" within the contemplation of the saving sub clause (i) in the definition of "public land` ' in Section 2(e) of the Eviction Act.
The appellant 's contention that he has been paying rent for this land does not appear to be well founded.
No such plea appears to have been raised before the Public Authority, much less was any evidence, such as a rent receipt produced there.
The Public Authority has nob d in its order dated October 3, 1963, that the O.P. (appellant herein) did not produce any documentary evidence to show that he was holding the land with title permission of or under allotment from any competent authority.
Nor was this plea agitated or pressed before the learned Single Judge or the Division Bench of the High Court.
Even now, before us, counsel has not referred to any rent receipt or like document on record showing that the appellant had paid rent in respect of this land to the Government for the period of his possession preceding the notice under Section 3 (1) of the Eviction Act.
Even the Additional District Judge, to whom for the first time in appeal, some "rent receipts" appear to have been shown by the appellant, has not recorded any clear cut finding that those documents evidence the receipt of rent by the Government in respect of the disputed land for the relevant period preceding the issue of notice under Section 3(1).
This being the situation, in this appeal arising out of writ proceedings under Article 226, we decline to embark upon a speculative examination of this argument for which there is no firm factual foundation and was never raised before the Public Authority, nor pressed before the High Court.
181 Be that as it may, the provisions of Sections 2(18), 30, 180(2) of the Tenancy Act on the one hand and Sections 2(b), 2(e)(i) and 2(h) of the Eviction Act on the other, are to be construed in harmony with each other.
So construed, a person occupying land belonging to the State Government, as a trespasser or without title or a person holding over after the revocation or cancellation of the lease, allotment or grant in accordance with the conditions thereof, cannot be considered "a tenure holder from the State Government under .
the U.P. Tenancy Act, 1939" within the meaning of Section 2(e)(i) of the Tenancy Act.
There was thus no doubt that the disputed land was "public land" and the appellant was in its "unauthorised occupation" within the meaning of the Eviction Act.
Point (iii) : Section 7, (so far as material) reads thus: "7(1) Where an objection is taken on the ground that the disputed land is not public land and the Public Authority is of the opinion that the objection is not prima facie base less or frivolous, he shall refer the question to the Civil Judge, having jurisdiction, stating the facts of the case and the, point in issue.
" From a plain reading of Section 7(1), extracted above, it is clear that the obligation to refer the question whether or not the land is public land, is not absolute, but contingent.
It arises only if the Public Authority is of the opinion that objection is not prima facie baseless or frivolous.
In the instant case, a perusal of the impugned order would show that although the Public Authority did not say in the phraseology of the Statute that the objection raised by the appellant was prima facie "baseless", yet in substance, .
_ unhesitatingly came well nigh to the same conclusion when he observed: "The O.P. has not filed any documentary evidence to show that the land in dispute was allotted to him by a competent authority.
The documents filed on behalf of the State show that the land in dispute is a public land and the C.P. is a trespasser thereon.
" We are therefore of opinion that there was no infraction of Section 7.
Point (iv): This point was not raised before the Public Authority, nor in any of the Courts below.
It is sought to be raised for the first time in this Court, now.
We decline to entertain it at this state.
It is not 182 a pure question of law which could be decided on the basis of material already on record.
The appellant has not produced even the copy of the notice under Section 3 (1) which was served upon him and is supposed to be in his possession.
In the circumstances of the case, the maxim omnia praesumuntur rite essa acta will be attracted.
It will be presumed that the public purpose of the Act for which the appellant was sought to be evicted from the public land, was only specified in the notice in compliance with the requirement of sub section (2) of Section 3 of the Act.
Thus, all the contentions advanced by the appellant are devoid of merit.
In the result, the appeal fails and is dismissed with costs.
P.B.R. Appeal dismissed.
| In appeal to this Court it was contended that the appellant had become a hereditary tenant under section 180(2) of the Tenancy Act by reason of the fact that he had been in cultivator possession of the land for a number of years and no steps had been taken to evict him within two years of his entry into possession of the land, (2) that since he had been paying rent to the Government he was not in unauthorised occupation of the land and (3) failure of the Public Authority to refer the dispute to a Civil Judge under Section 7 of the Act vitiated the order of eviction Dismissing the appeal, ^ HELD: l(a) The appellant 's claim was not that he lawfully entered into possession of the land but that he took possession without any grunt, settlement or leases from the owner.
By claiming acquisition of a hereditary tenancy) under section 180(2) he admitted that he had taken possession without any title anal without the consent of the land owner.
1180 C] (b) The provisions of Section 2(18), 30, 180(2) of the Tenancy Act are to be construed in harmony with each other.
So construed, a person occupying land belonging to the State Government, as a trespasser or without title or a person holding over after the revocation or cancellation of the lease, allotment or a grant in accordance with the condition thereof, cannot be "a tenureholder.
from the State Government under the U.P. Act, 1939.
" within the meaning of Sec.
2(e)(i) of the Tenancy Act.
There was thus no doubt that the land was "public land" within the meaning of the Eviction Act.
[181 A B] (2) The obligation to refer the question whether or not the land is public land, under Section 7, is not basic but contingent.
Although the Public Authority did not say in the phraseology of the statute that the objection raised by the 176 appellant was prima facie baseless, yet, in substance, it well nigh came to the same conclusion.
It was, therefore, not obligatory for the authority to refer the question to the Civil Court.
[181 F] (3) The plea that the notice did not comply with the requirements of section 3 of the Eviction Act and for that reason illegal had not been raised in the Courts below.
It is not a pure question of law.
The appellant has not produced a copy of the notice served on him.
Tn the circumstances, the maxim omnia prae sumuntur vite essa acta will be attracted.
It will be presumed that the purpose for which the appellant was sought to be evicted was duly specified in the notices compliance with the requirements of section 3(2).
[182 A B]
|
N: Civil Appeal Nos. 3321/82 and 3524 of 1983.
From the Judgment and Order dated 2.5.
1980 of the Punjab and Haryana High Court in C.W.P. Nos.
677/79 and 97/79.
P.P. Rao and C.M. Nayar for the Appellants in both the appeals.
N.S. Das Behl for the Respondent in C.A. No. 3524 of 1983.
Awadh Behari Rohtagi, Mahabir Singh, A.G. Prasad and Prem Malhotra for the state of Haryana.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
1.
Since common questions of facts and law arise for decision in these two appeals, they are dis posed of by a common judgment.
Civil Appeal No. 3221/82 and Civil Appeal No. 3524/83 arise out of the common judgment in Civil Writ Petition Nos.
677/79 and 97/79 and a few other petitions dated May 2, 1980, on the file of High Court of Punjab and Haryana at Chandigarh.
The writ petitions were dismissed and the appellants had leave of this court under Article 136 of the Constitution.
The facts lie on a short compass 538 and reference to the facts on record in Civil Writ No. 97 of 1979 are sufficient for disposal of these appeals.
Writ Petition No. 97 of 1979 relates to Punjab service while Civil Writ Petition No. 677/79 relates to Haryana.
The appellants were direct recruits to the ministeri al services in the subordinate offices of the Directorates of Agriculture of the respective states.
Admittedly all are governed by Punjab Subordinate Agricultural Service Rules 1933, for short 'rules '.
The respective state Governments upgraded on February 8, 1979 offices of the Directorates as 'A ' Class and the Subordinate Offices situated elsewhere remained as 'B ' Class.
The appellants and other filed writ petitions on February 26, 1976 seeking a writ of mandamus to direct the respondents to upgrade the Subordinate Offices of the Department of Agriculture as 'A ' Class; to treat the appellants on par with the similar employees working in the office of the Directorates of Agriculture; treat the Direc torate of Agriculture and Subordinate Offices as one depart ment for maintaining common seniority of all of them; to upgrade their scales of pay on the basis of the said senior ity and to quash the order dated February 8, 1979 declaring the Directorate as 'A ' Class as wholly arbitrary and dis criminatory.
Pending appeals, the respective Governments by proceedings dated March 2, 1982 classified the Directorate and Subordinate Offices as 'A ' Class.
The Government have also accorded equal pay to the employees similarly situated.
Therefore, the only question that survives to be resolved is whether the Subordinate Offices and the Directorate would be treated as one unit and common seniority of all the employ ees should be maintained.
Shri P.P. Rao and Shri C.M. Nayyar, learned counsel for the appellants in the respective appeals contended that the appellants were selected along with the persons appoint ed in the office of the respective Directorates.
They pos sessed the same qualifications; their scales of pay are now the same.
Their service conditions are also the same under the rules, and therefore, they are entitled to maintenance of common seniority for the purpose of promotion.
It is seen that the appointments were made somewhere in 1973.
From the list produced before us in Civil Appeal No. 3221/82 relating to the State of Haryana, among the persons selected by the Recruitment Board, though some of the persons are found to have secured higher ranking in the list prepared by the Selection Board, they were appointed to the Subordinate Offices while persons below them, in ranking were appointed in the Directorate.
When we enquired from the counsel for the State Shri Rohtagi, the learned Senior Counsel has produced before us the not 539 ings which show that the Director had taken five of them, one of whom had secured first class in Matriculation, two ex service candidates and two candidates who secured higher percentage of marks at the qualifying matriculation examina tion.
In the view we are taking this solitary circumstances does not militate against the ultimate conclusion that we have reached in the matter.
Admittedly, rule 3 of the rules provides that the service shall consist of seven sections and in each section there shall be such number of posts whether permanent or temporary of each grade specified in the appendix as the Local Government from time to time may determine.
Under rule 4(1) the Director of Agriculture shall make appointment to all the posts in the service except the post of Junior Clerks, other than those sanctioned for Head Office, Mukaddams and the posts shown under Section 7 of the appendix.
All other appointments shall be made by the Head Office concerned, vide rule 4(").
Rule 7 prescribes the method of recruitment.
Rule 7(1)(I) specifies thus: "In the case of Superintendent, Office of the Director (i) by promotion from the amongst the Head Assistants em ployed in the office, or (ii) by selection from amongst Superintendents or Head Assistants with at least five years clerical experience in other Government office.
" Rule 7(i)(J) read thus: "In the case of Head Assistant (i) by promotion from amongst Assistant and Stenographers with clerical experience who have proved their fitness for the appointment, or (ii) by selection from amongst clerks employed in the office of Government other than the office of the Director." Rule 7(1)(K): the case of Superintendent or Head Clerk of a Subordinate Office 540 (i) by promotion from amongst Senior Clerks who have proved their fitness for the post, or (ii) by selection from amongst clerks employed in Government Office other than the office in which the post/office is to be filled.
" Rule 7( 1)(L): "In the case of Assistant (i) by promotion from amongst Senior Clerks in their respec tive offices who have proved their fitness for appointment to the post; or (ii) by selection from amongst clerks employed in Government Offices other than the office in which the post is to be filled; or (iii) by direct recruitment provided that no graduate not already in Government service shall be appointed to be an Assistant unless he has been recommended as fit for appointment by the Punjab University Appointment Board.
" Sub rule (2): "Appointment to any post by the promotion of officials already in service or by the transfer of officials shall be made strictly by selection and no official shall have any claim to such an appointment as of right.
" The candidates have to undergo probation as provided in Rule 9, the details of which are not relevant.
Rule 10 provides seniority of members of the service.
The seniority of the members in the service shall, in each class of ap pointment shown in the appendix, be determined by the dates of their substantive appointment on probation or otherwise to a permanent vacancy in such class.
The other details are not necessary.
Hence omitted.
In the appendix, the office of the Director of Agri culture, Section 6 mentions ministerial posts of Superin tendent, Head Assis 541 tants, Assistants, Stenographers, Senior Clerks, Junior Clerks.
Their varying pay scales have also been mentioned, the details of which are now not material.
In the Subordi nate Offices one Superintendent, seven Head Clerks and two Senior Clerks are the cadres.
A resume of these rules clearly shows that for the appointment of all the posts including Junior Clerks in the Head Office, the appointing authority is the Director.
All appointments to the post of Junior Clerks other than Head Office shall be by the concerned Head Office.
As per the appendix, the staffing pattern in the Office of the Director of Agriculture and the Subordinate Offices is entirely different.
The only common element is the Senior Clerks.
The seniority is to be maintained on the basis of the substan tive appointment to the respective cadres.
The seniority Of the members of the service shall, in each class of appoint ment shown in the appendix be determined by the date of their substantive appointment or promotion or otherwise to permanent vacancies in such a class.
The method of appoint ment has been adumbrated under Rule 7(1)(I) to (L) by promo tion from amongst the persons working in the respective subordinate posts in the respective offices in the first instance, or by selection from amongst persons working in the Government Offices including Subordinate Offices and in some cases by the direct recruitment.
Thereby it is clear that for filling up the vacancies arising in the post of Superintendent, Assistants and Senior Clerks, the persons working in the Subordinate Offices or the Government Offices are the feeder channels, or in some cases by direct recruit ment.
Sub rule (2) of Rule 7 makes the matter clear that they have got right to be considered, but it is strictly by selection and they have no claim to the appointment as of right.
It is open to the Government to constitute different cadres in any particular service as it may choose according to its administrative convenience and expediency.
The office of the Director is the apex office obviously to control and oversee the functioning of the subordinate offices and the other allied departments under his control monitoring the implementation of the Government 's agricultural programmes.
It may not be necessary to maintain a common cadre of the employees of the Directorate and the Subordinate Offices.
Each cadre is a separate service or a part of the service sanctioned for administrative expediency.
Therefore, each may be a separate unit and the posts allocated to the cadre may be permanent or temporary.
It is seen from the appendix that in the office of the Directorate there is one Superin tendent, three Head Assistants, four Assistances, two Ste nographers, seven Senior Clerks and twelve Junior Clerks.
In the Subordinate Offices, there is one Superintendent, seven Head Clerks and two 542 Senior Clerks.
This is obviously on the basis of administra tive need.
No doubt the office of the Directorate and the Subordinate Offices have been compendiously shown in Section 6 of the Appendix.
That does not by itself mean that office of the Directorate and Subordinate Offices are treated under the rules as one unit or at par.
as contended for by Shri P.P. Rao.
As pointed out in the beginning, the Director had committed some irregularities at the time of initial ap pointments in the year 1973 when he picked up five persons out of the select list of the candidates and appointed them in the Directorate of Haryana Government deviating from the order of merit prepared by the Board.
They were selected at a common selection by the Recruitment Board along with other candidates who stood higher in the order of merit prepared by the Selection Board.
But this was done in the year 1973 and the appointments have not been challenged till date of filing of the writ petition in 1979.
Even in the writ peti tion no challenge was made.
This is pressed into service only to show that the appellants are similarly situated with them.
After the appointments were made and the candidates joined in the respective posts for consideration for promo tion the Rules occupy the field and the claims are to be considered according to Rule 7.
Therefore, though we may not agree with the learned counsel for the State that the Direc tor had absolute discretion to pick and choose arbitrarily and make appointment of the posts, yet undoubtedly, he had power to appoint them.
Normally the order of appointment would be in the order of merit of candidates from the list and must be in accordance with rules.
His exercise of power should not be arbitrary.
The absence of arbitrary power is the first postulate of rule of law upon which our whole constitutional edifice is based.
In a system governed by Rule of Law, discretion when conferred upon an executive authority must be confined within clearly defined limits.
The rules provide the guidance for exercise of the discre tion in making appointment from out of selection lists which was prepared on the basis of the performance and position obtained at the selection.
The appointing authority is to make appointment in the order of gradation, subject to any other relevant rules like, rotation or reservation, if any, or any other valid and binding rules or instructions having force of law.
If the discretion is exercised without any principle or without any rule, it is a situation amounting to the anti thesis of Rule of Law.
Discretion means sound discretion guided by law or governed by known principles of rules, not by whim or fancy or caprice of the authority.
We refrain from going into the correctness of the choice made by the Director due to latches in not assailing the correct ness of the appointment for well over six years.
The validi ty of the rules have not been questioned.
The only question is, as stated earlier, whether the 543 employees working in the Head Office and the Subordinate Office are entitled to common seniority.
The rules them selves made a distinction between the persons appointed in the Directorate and the Subordinate Offices as separate cadres and the subordinate cadre in some cases is the feeder cadre for promotion to the post in the Head Office.
In this view, by no stretch of imagination, the appellants can be considered to be equally placed for treating them at par with the Directorate employees for being treated as being in a common cadre.
There is reasonable nexus to differentiate the two cadres.
Therefore, the classification cannot be said to be arbitrary violating Articles 14 and 16 of the Consti tution.
It is not necessary to burden the judgment with the decisions cited by either counsel as they are not directly or nearer to the core in the case.
Accordingly we hold that the appellants are not entitled to be treated at par with the employees working in the respective Directorates for giving direction to the respondents to maintain common seniority between the employees of the Directorate and Subordinate Offices.
The appeals are accordingly dismissed, but without costs.
T.N.A. Appeals dis missed.
| The appellants belonging to the ministerial service in the subordinate offices of the Directorates of Agriculture of the States of Punjab and Haryana filed writ petitions in the Punjab and Haryana High Court seeking a direction that subordinate offices and the Directorates should be treated as one unit and common seniority of all the employees should be maintained.
The High Court dismissed the petitions.
Hence these appeals by special leave.
In these appeals it was contended that the appellants are entitled to common seniority with their counterparts in the Directorates because their service conditions, pay scales and qualifications were same.
In 536 order to show similarity with their counterparts in the Directorates it was also pointed out that though a common selection was made for Directorates and subordinate offices yet the appointing authority picked up some candidates out of the select list and appointed them in the Directorates thereby deviating from the order of merit prepared by the Selection Board.
Dismissing the appeals, this Court, HELD: 1.
The Punjab Subordinate Agricultural Service Rules 1933 themselves made a distinction between the persons appointed in the Directorate and the Subordinate Offices as separate cadres and the subordinate cadre in some cases is the feeder cadre for promotion to the post in the Head Office.
In this view by no stretch of imagination, the appellants can be considered to be equally placed for treat ing them at par with the Directorate employees for being treated as being in a common cadre.
There is reasonable nexus to differentiate the two cadres.
Therefore, the clas sification can not be said to be arbitrary violating Arti cles 14 and 16 of the Constitution.
[543A B] 1.1 The fact that the office of the Directorate and the subordinate offices have been compendiously shown in section 6 of the Appendix to Rules does not by itself mean that office of the Directorate and Subordinate Offices are treat ed under the rules as one unit or at par.
[542A] 2.
It is open to the Government to constitute different cadres in any particular service as it may choose according to its administrative convenience and expediency.
[541E] 2.1 The office of the Director is the apex office obvi ously to control and oversee the functioning of the subordi nate offices and the other allied departments under his control monitoring the implementation of the Government 's agricultural programmes.
It may not be necessary to maintain a common cadre of the employees of the Directorate and the Subordinate offices.
Each cadre is a separate service or a part of the service sanctioned for administrative expedien cy.
Therefore, each may be a separate unit and the posts allocated to the cadre may be permanent or temporary.
[541F G] 2.2 Accordingly the appellants are not entitled to be treated at par with the employees working in the respective Directorates for giving direction to the respondents to maintain common seniority between the employees of the Directorate and Subordinate Offices.
[543D] 537 3.
Normally the order of appointment would be in the order of merit of candidates from the list and must be in accordance with rules.
The exercise of power should not be arbitrary.
The absence of arbitrary power is the first postulate of rule of law upon which our whole constitutional edifice is based.
In a system governed by Rule of Law, discretion when conferred upon an executive authority must be confined within clearly defined limits.
The rules provide the guidance for exercise of the discretion in making ap pointment from out of selection lists which was prepared on the basis of the performance and position obtained at the selection.
The appointing authority is to make appointment in the order of gradation, subject, to any other relevant rules like, rotation or reservation, if any, or any other valid and binding rules or instructions having force of law.
If the discretion is exercised without any principle or without any rule, it is a situation amounting to the antith esis of Rule of Law.
[542D E, F] 3.1 Discretion means sound discretion guided by law or governed by known principles of rules, not by whim or fancy or caprice of the authority.
1542G]
|
N: CRIMINAL APPEAL No. 253 of 1971.
Appeal by Special leave from the Judgment and order dated 11.2.1971 of the Allahabad High Court in Criminal Appeal No. 1285/70.
O. P. Rana, For the appellant Shiv Pujan Singh, for the respondent The Judgment of the Court was delivered by 381 GOSWAMI, J.
This appeal by special leave at the instance of the State of Uttar Pradesh is against the judgment of acquittal of the High Court of Allahabad.
Balram, Ram Khelawan and Rhuddi are three sons of one Ram Charan.
The injured Vishwanath (PWI), Shankar, Kankar and deceased Chhannu are sons of Balram.
Accused Sheo Murat, Ram Kishan, Shobha and Moti Lal are sons of Ram Khelawan.
Accused Shyam Lal is the son of accused Ram Kishan.
Shiv Nath (PW 2) e and Jagan Nath are sons of Bhuddi.
Thus all of them have branched off from Ram Charan and all the members have got share in their ancestral house at village Bhiwanipur.
In this ancestral house Vishwanath, Kankar, Chhannu, Jagan Nath and accused Ram Kishan along with his mother and married younger sister Bhagwantia resided.
All others along with the rest of the four accused lived in a nearby separate house.
on March 18, 1969, certain quarrel ensued between Bhagwantia and Kankar 's wife Patia.
Vishwanath tried to pacify both the quarrelling women.
Since Bhagwantia did not heed to Vishwanath 's words, the latter gave her one or two slaps.
Ram Kishan and his brothers were not in the village on that day but learning about this incident on the following day accused Sheo Murat, Ram Kishan, Shobha, Moti Lal and Shyam Lal went to Vishwanath 's place at about 7.00 or 8.00 P.M.
What followed may be described in the words of the in jured Vishwanath: "On the next day at 7 or 8 P.M.
I was sitting at the door of my osara.
My younger brothers, Kankar and Chhannu, were sitting at a short distance from me at the well.
Sheonath, my cousin, was also sitting near Kankar and Chhannu.
A burning lantern was hanging from a bamboo pole outside the osara; and there was sufficient light from it.
Ram Kishan, Shobha, Sheo Murat, Shyam Lal and Moti, accused present in the court, came there, Ram Kishan asked from me as to why I had slapped Bhagwantia and that I should come out and settle up.
I stood up and said, "Brother, what will you settle up".
At this Ram Kishan instigated his companions saying, "Beat the salas".
At once Shobha caught hold of my hand and Sheo Murat dealt knife blows to me.
Chhannu, my younger brother, came to save me, whereupon Shyam Lal and Moti caught hold of him and Sheo Murat started giving knife blows to him.
On hearing their instigation, Mohan, Phool Chand, Budhi and others came over there and began to forbid them.
Chhannu and I fell down on sustaining injuries.
Then all the five accused persons ran away with the knife.
" What has been stated above by Vishwanath has been repeated by Shiv Nath (PW 2), Hansla Prasad (PW 9).
Phool Chand (PW 10) and Sohan (PW 13).
The story given by these witnesses remains absolutely unshaken in the scanty cross examination by the defence.
Indeed there was little or no cross examination with regard to the incident itself.
10 L522SCI/76 382 Deceased Chhannu had the following external injuries on his person as stated by Dr. U. P. Singh who held the autopsy: (1) Incised stab wound 1/2X1/3", on right side chest, 1" medical to right nipple going into the chest cavity.
(2) Incised stab wound 1/2"x 1/4" x 1" to the right of left nipple and 1" below it, going into the chest cavity.
(3) Incised stab wound 1/2"x 1/4" abdominal cavity deep, on lower part of right side abdomen.
(4) Incised stab wound 1/2"x1/4"on lower part of abdomen, 3" above the joint of hip bones.
(S) Incised stab wound 1/2"x1/4" deep, on left hip.
(6) Incised stab wound 1/2"x1/4" chest cavity deep, on left side back, 6" below scapula.
(7) Abrasion 1/2"x 1/2" lateral aspect of right elbow.
(8) Abrasion 1/2"x1/2" on lateral aspect of right hand.
Internal examination revealed that the cartilage of fifth rib had been cut under injury No. (3).
There were punctured wounds ill the chest cavity in relation to injury Nos.
(1), (2) and (6).
Right vertrical of heart had a punctured wound 1/4"x1/4" and the pericardial cavity contained blood.
The upper lobe of left lung had a punctured wound 1/2" X 1/4" in relation to injury No. 2.
In the opinion of the Doctor death was due to shock and haemorrhage resulting from injuries to heart and lungs.
Another Doctor Siddiqui (PW 5) found the following injuries on the person of Vishwanath: (1) Incised wound 1/4"x1/8"x 1 1/2" deep, on front side of lower part of neck, directed downwards, backwards and leftwords.
The wound was in the middle of the neck and 1" above the bone.
On coughing air passed through the wound.
(2) Incised wound 1/2"x1/8"x3" or more than this, abdominal cavity deep, 1 1/2" above and to the left of umbilious.
Direction of wound was backwards, slightly upwards and towards centre of abdomen.
The injuries were fresh and described by the Doctor as dangerous.
All the five accused were charged under section 302/149 IPC for causing the death of Chhannu and also under section 307/149 IPC for attempting to murder Vishwanath.
While Sheo Murat was charged under section 149 IPC the other four accused were charged also under section 147 IPC.
The Sessions Judge convicted accused Sheo Murat under section 148, 307 and 302 IPC.
He was sentenced to death under section 302 IPC, to seven years rigorous imprisonment under section 307 IPC, and to two years rigorous imprisonment under section 148 IPC.
Accused Ram Kishan, Shobha, Moti Lal and Shyam Lal (the present respondents) were convicted under section 302/149 IPC, section 307 read with section 149 and section 383 147 IPC.
These four accused were sentenced to one year 's rigorous A imprisonment under section 147 IPC, to seven years ' rigorous imprisonment under section 307/149 IPC and to imprisonment for life under section 302/149 IPC.
The sentences of all the accused were to run concurrently.
The accused appealed to the High Court.
There was also a reference under section 374, Criminal Procedure Code, to the High Court for confirmation of the death sentence on Sheo Murat.
Both the matters were heard together by the High 1 Court and a common judgment was delivered on February 11, 1971.
The High Court maintained conviction and sentence of the accused Sheo Murat under section 307 IPC and also maintained his conviction under section 302 IPC but reduced the sentence to imprisonment for life.
The conviction and sentence of Sheo Murat under section 148 IPC were, however, set aside.
The conviction and sentence of the four other accused (the present respondents) were set C aside.
The State prayed for special leave against the rejection of the reference by reducing the death sentence to imprisonment for life but this Court rejected the same.
The State 's special leave application with regard to the respondents ' acquittal was, however, admitted on October 13, 1971 and non bailable warrants were issued against them.
We are, therefore, not concerned in this appeal with the conviction of accused Sheo Murat, who was the assailant of the deceased as well as of Vishwanath.
We have to consider whether the High Court has committed a grave and palpable error in acquitting the respondents resulting in miscarriage of justice.
It is well settled that in an appeal against acquittal this Court is slow to interfere with the decision of the High Court, even though it has interfered with the conviction by the trial court, where the same is reached after a proper appreciation of the entire evidence.
The possibility that it may just be reasonably feasible for this Court to take a different view of the evidence from that of the High Court is not the test in an appeal against acquittal.
Even so, we are unable in this case to sustain the order of the High Court for the reasons, which will presently follow.
We have already quoted the evidence of Vishwanath which is unerringly corroborated by all the other eye witnesses.
Both the trial court as well as the High Court believed the evidence.
Indeed the High Court has observed and, in our opinion, rightly that "there is no infirmity in the prosecution case".
We then find that the High Court has read the evidence in a rather unusual way which is at once obvious when we peruse the judgment.
We are not told wherefrom the High Court could describe the evidence as follows: "After reaching the house of Vishwanath they (the accused persons) entered into a conversation which became heated and ultimately ended in exchange of abuses".
The High Court also observed that "it is not at an clear from the prosecution evidence whether Shohha kept on holding Vishwanath till the very end i.e. 384 till both the knife injuries had been caused to him, or whether he let go his hold as soon as Sheo Murat started the attack".
The High Court further observed that "there is nothing in the prosecution evidence to indicate in what order those injuries were caused to Chhannu, and whether or not the injuries on the back were caused first".
The High Court further gave unusual importance to the statement of PW 13 when he deposed in cross examination to the following effects: "I cannot remember whether the two persons who had caught hold of Chhannu had held him from the front or from the back or from the side.
Further, I do not remember whether they were holding him each with both his arms or whether each of them held him only with one arm.
I do not re collect whether Sheo Murat had caused injuries to Chhannu from the front side or from the back side".
We are unable to appreciate how the evidence of PW 13, who could not remember certain details, could help the court in coming to any conclusion for the purpose of displacing the clear and unambiguous prosecution evidence.
The injuries on the two victims are res, ipso loquiter and tell tale.
Accused Shobha caught hold of Vishwanath 's hands and Sheo Murat gave him two stab blows, one on the neck and the other on the abdomen.
When deceased Chhannu advanced in order to save Vishwanath he was caught by accused Shyam Lal and Moti Lal and Sheo Murat gave as many as six stab injuries in quick succession.
None of these stab wounds are on any part of the hands or arms which would have necessarily been caused if the victims were not caught hold of by a person or persons while they were attacked with a knife.
It would be unnatural to expect that the victims would not have exercised their natural instinct of self preservation by trying to stave off the stab in juries by raising their hands.
And in that process if they were not caught hold of by some person or persons there would have been one or two injuries on the hands or arms.
This would clearly go to show that the story that Vishwanath was caught by Shobha and Chhannu was caught by Moti Lal and Shyam Lal, as deposed to by the PWs, stands corroborated by the medical evidence.
The High Court completely ignored this most relevant and important aspect in the prosecution case but felt satisfied to acquit the accused on the sole ground that there was no evidence to show whether Shobha caught Vishwanath all the time when the two blows were given and also whether Moti Lal and Shyam Lal were catching hold of deceased Chhannu during the entire period of the assault.
The High Court particularly felt in that direction because PW 13 being an independent witness could not re collect certain things to which we have already referred to above.
The injuries would clearly show that the victims were caught hold of by a Person or persons when these were inflicted upon them.
We are clearly of opinion that this is a completely erroneous view of the prosecution evidence adduced in this case resulting in failure of justice.
We are further satisfied that if the High Court had not read 385 the evidence by introducing an extraneous gloss for the purpose of its A conclusion it could not have acquitted the accused.
It is also evidence that the accused came in a body to challenge Vishwanath for the previous day 's incident.
Although the four respondents were unarmed, Sheo Murat had a knife with him.
There is nothing to show from the evidence that Vishwanath gave any provocation to the accused persons.
He only replied to the challenge by saying "Brother, what will you settle up" ? At this Ram Kishan instigated the other accused persons saying "beat the salas".
At once accused Shobha caught held of Vishwanath 's hands and Sheo Murat stabbed him twice with his knife.
Assunung the respondents had no earlier knowledge about Sheo Murat 's carrying a knife, from this moment they came to know that Sheo Murat had a knife with which he had already stabbed Vishwanath.
What did they then do when deceased Chhannu came to the aid of Vishwanath to save him from further assault ? Now Moti Lal and Shyam Lal caught hold of Chhannu and Sheo Murat inflicted several stab blows in quick succession.
It is, therefore, clear that Moti Lal and Shyam Lal shared the common intention with Sheo Murat in inflicting stab injuries to Chhannu by participating in the assault.
Sheo Murat has been convicted under section 302 IPC.
We may only give these two accused Moti Lal and Shyam Lal benefit of doubt with regard to participation with Sheo Murat in the common intention to cause death of Chhannu.
It is, however, absolutely impossible to relieve them of any liability whatsoever in connection with the stab injuries which were facilitated by their catching hold of Chhanu when Sheo Murat was inflicting the stab wounds.
There is no escape from the conclusion on this evidence that Moti Lal and Shyam Lal shared at least the common intention.
with Sheo Murat to cause grievous hurt under section 326 IPC.
A clear case has been established against both the accused persons under section 326/34 IPC.
They are, therefore, convicted under section 326/34 IPC and sentenced to four years ' rigorous imprisonment.
With regard to accused Ram Kishan he merely instigated by saying "beat the salas".
He is the person who started the affair by challenging Vishwanath and also instigating the other accused persons to beat.
From this alone it is not possible to attribute to him any common intention to cause more than simple assault.
He is, therefore, found guilty only under section 323/109 IPC.
He is, therefore, convicted under section 323/109 IPC and sentenced to rigorous imprisonment for one year.
Accused Shobha, who caught hold of Vishwanath to facilitate the two stab injuries on him by Sheo Murat, is also guilty under section 326/34 IPC.
We are prepared to give him the benefit of doubt only with regard to section 307 IPC but the evidence clearly establishes the case under section 326/34 lPC.
He is accordingly convicted under section 326/34 IPC and sentenced to four years ' rigorous imprisonment.
386 We should observe that no prejudice is caused to the accused by alteration of the conviction to section 326/34 although they had been originally charged under section 302/149 and section 307/149 IPC on the particular facts of the prosecution case which clearly pointed to participation by the respective accused in the two attacks and which they had to meet in the trial.
Since the respondents are detained in jail in pursuance of the non bailable warrants issued by this Court on October 13, 1971, at the time of granting special leave, they will be entitled to the benefit of section 438, Criminal Procedure Codes, and that period shall be set off against the sentences which we have passed in this apepal.
In the result the judgment of the High Court is set aside, the appeal is allowed and the four accused stand convicted and sentenced as aforesaid subject to the observations mentioned above.
S.R. Appeal allowed.
| Nine accused were charged with offences of murder and causing hurt.
The trial Court acquitted two and convicted the others under sections 325 and 147, I.P.C. on appeal by the State, the High Court convicted the two appellants also under section 302 read with 8. 34.
I.P.C. Partly allowing their appeal to this Court, ^ HELD: The High Court has not examined the liability of the accused with due regard to the facts and circumstances of the case.
Instead of giving a categorical finding, the High Court stated at one place in its judgment that the appellants must be taken to have had the knowledge that the injury which they intended to cause to the victim was "likely to result" in his death, and in an other place, that the appellant were guilty of an offence under section 300, fourthly, because they "ought to have known that their act was so imminently dangerous having regard to the age and condition of the victim that their act must in all probability cause death or such bodily injury as is likely to cause death.
" But the evidence on record shows that the appellants did not have the common intention of giving a beating to the deceased when they reached his house but were only bent upon settling scores with his son.
It was only when the deceased asked another witness to get ready a bullock cart for making a complaint about the beating of his son that the appellants inflicted injuries on him.
But there was nothing to show that their intention was to inflict any fatal injury.
Only one of the injuries was a forceful blow on the head of the deceased and it resulted on his death.
But the other injuries were on the back of the neck, knees and right elbow of the deceased and not on any vital part of the body.
Therefore, the appellants had only the common intention of causing Grievous hurt.
Since there was no reliable evidence to show which of the two appellants gave the fatal blow, the appellants could only be convicted of an offence under section 325 read with section 34, I.P.C. [431F; 432C D, P G; 433E 434C]
|
Civil Appeals Nos.
133 188 of 1975.
[Appeals by Special Leave from the Judgments and Orders dated the (1) 29 4 1970, (2) 28 7 1970, (3) 12 3 1970, (4) 28 7 1970, (5) 7 9 1970, (6) 7 4 1970 & (7) 12 3 1970 of the Madras High Court at Madras in (1) W.P. Nos.
2929, 3253 and 68, 123 and 260 of 1970, (2) W.P. Nos.
1606 and 1607/70, (3) W.P. Nos.
1998, 2484, 2567, 2568, 2569, 2663 65, 3046, 3125, 3126, 3182, 3363 65, 3410, 3508, 3555 60, 3630, 3631, 3667 3668, 3810 3812 and 869 3650 of 1969, (4) W.P. Nos.
2647, 2648/69 and 1121, 1451, 1452 and 1495 and 1496 of 1970, (5) W.P. Nos.
1912, 1913, 1919, 2123, 2318, 2516 and 2610 of 1970, (6) W.P. Nos.
2088, 2317 and 2515/70 and (7) W.P. No. 3666 of 1969 respectively.
Niren De, Attorney General of India and R. N. Sachthey, for the Appellants.
M. R. M. Abdul Karim and Shaukat Hussain for the Respondents (In Cas.
Nos. 137, 140, 149, 152 155, 164, 169, 178, 179, 181, 182, 183 and 187/75.) Mrs. section Gopalakrishnan for the Respondents (In CA No. 177 of 1975).
The Judgment of the Court was delivered by RAY, C.J.
These appeals arise out of the judgment dated 11th December, 1968 in writ petition No. 3838 of 1968 in the High Court at Madras.
In the present appeals the writ petitions in the High Court were allowed following the judgment of the High Court in the aforesaid writ petition No. 3838 of 1968.
In Civil Appeals No. 262 273 of 1971 arising out of the common judgment dated 11 December, 1968 of the High Court at Madras in writ petition No. 3838 of 1968 this Court in the decision in Union of India & Anr.
vs M/s Parameswaran Match Works etc.
set aside the orders of the High Court and dismissed the writ petitions.
The present appeals were not heard at that time because service was not complete.
This Court by order dated 14 July, 1975 directed that these appeals be listed for hearing on 21 November, 1975.
The Union made an application for consolidation of appeals, reduction of security and early hearing of the appeals.
The respondents were served in that application.
Pursuant to that application this Court ordered on 14 July, 1975 the hearing of the appeals on 21 November, 1975.
The respondents have entered appearance in all these appeals.
In these appeals the respondents who were petitioners in the High Court asked for a writ of prohibition restraining the appellants from collecting any duty in excess of Rs. 3.75 per gross from the petitioners in pursuance of notification dated 21 July, 1967 as amended by notification dated 4 September, 1967.
The case of the respondents in the High Court was that they filed declaration on 22 December, 1969 for 1969 70 that they would not produce more than 75 million match sticks during the financial year.
The respondents claimed to be entitled to the concessional 870 rate of excise duty at Rs. 3.75 per gross pursuant to the notification dated 21 July, 1967.
The further case of the respondents in the High Court was that the notification dated 4 September, 1967 was issued stating that the concession of Rs. 3.75 per gross would be available to such "D" Class manufacturers who had filed the declaration before 4 September, 1967.
The respondents challenged the fixing of the date 4 September, 1967 as an arbitrary time limit making unreasonable discrimination between the same category of manufacture simply on the basis of the application being before or after 4 September, 1967.
The respondents craved reference to the judgment of the High Court in writ petition No. 3838 of 1968 dated 11 December, 1968 and prayed for orders in terms of that judgment.
The High Court accepted the petition of the respondents following the judgment in writ petition No. 3838 of 1968 dated 11 December, 1968.
The appellants challenged the decision of the High Court and relied on the decision of this Court in M/s Parameswaran Match Works case (supra).
This Court in M/s Parameswaran Match Works case (supra) held that the purpose of the notification dated 4 September, 1967 was to enable bonafide small manufacturers of matches to earn a concessional rate of duty by filing the declaration.
The small manufacturers whose estimated clearance in a year was less than 75 million matches would have availed themselves of the opportunity by making the declaration as early as possible because they would become entitled to the concessional rate of duty on their clearance from time to time.
The purpose of the notification was to prevent larger units who were producing or clearing more than 100 million matches in a year and who could not have made a declaration from splitting up into smaller units in order to avail of the concessional rate of duty by making the declaration subsequently.
The classification founded on a particular date was held to be reasonable because the choice of a date was to protect the smaller units in the industry from competition by the larger ones and that object would have been frustrated if by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of the bounty.
Counsel for the respondents relied on an observation of this Court in M/s Parameswaran Match Works case (supra) at page 576 of the Report to the effect that the manufacturers who came to the field after 4 September, 1967 were entitled to concessional rate of duty if they satisfied the condition prescribed in clause (d) of the notification dated 4 September, 1967.
In M/s Parameswaran Match Works case (supra) the match works asked for a licence on 5 September, 1967 for manufacturing matches stating that it began the industry from 5 March, 1967 and also filed a declaration that the estimated manufacture for the financial year 1967 68 would not exceed 75 million matches.
Parameswaran Match Works contended there that it was denied the benefit of the concessional rate of duty on the ground that it applied for a licence and filed the declaration on 5 September, 1967 after the expiry of the fixed date.
This Court held that the 871 concessional rate would be availed by them who satisfied the condition laid down in the notification.
The case of the respondents as laid in the petition before the High Court was that they were claiming an order in terms of the judgment in writ petition No. 3838 of 1968.
There is no allegation in the petition that the respondents came to the field after 4 September, 1967 or that they started manufacturing matches after 4 September, 1967.
The notification dated 4 September, 1967 gave relief, inter alia, to factories mentioned in sub clause (d) of the notification.
The factories mentioned in sub clause (d) are those "whose production during any financial year does not exceed or is not estimated to exceed 100 million matches and are recommended by the Khadi and Village Industries Commission for exemption under this notification as a bonafide cottage unit or which is set up by a cooperative society registered under any law relating to cooperative societies for the time being in force".
There are no allegations in the petitions in the High Court that the respondents were recommended by the Khadi and Village Industries Commission for exemption as bonafide cottage units or were set up by cooperative society registered under any law relating to cooperative societies.
No case was made by the respondents in the petitions on the basis of exemption under sub clause (d).
A contention was advanced by the respondents that the Khadi and Village Industries Commission was not competent to make any recommendation as contemplated in sub clause (d) .
Section 15 of the which speaks of the functions of the Commission states in clauses (c), (d), (f), (g) and (h) that the Commission may take steps to provide for the sale and marketing of khadi or of products of village industries, to encourage and promote research in the development of village industries.
to undertake, assist or encourage the development of village industries, to promote and encourage cooperative efforts among manufacturers of khadi and persons engaged in village industries.
Section 15(h) specifically states that the Commission may take steps for ensuring the genuineness of, and for granting certificates to producers of, or dealers in, khadi or the products of any village industry.
These provisions indicate that the Khadi and Village Industries Commission is competent to grant certificates recommending village industries for exemption under clause (d) of the notification dated 4 September, 1967.
The appeals are all covered by the decision in M/s Parameswaran Match Works case (supra).
The appeals are accepted.
The orders of the High Court are set aside and the petitions are dismissed.
There will be one set of costs to the appellants.
P.B.R. Appeals allowed.
| The resondent filed a suit against the Union of India alleging that due to negligence of the railways a consignment of tobacco despatched by him to Gaya was substituted in transit and that in its place inferior tobacco was delivered at Gaya.
The railways on the other hand alleged fraud and collusion between the respondent and his father, also a bidi tobacco merchant in Gujarat, because by deliberate manipulation, the respondent consigned inferior goods to Gaya and superior goods to Gujarat.
The trial court dismissed the respondent 's suit.
The High Court allowed the suit for damages but refused refund of excise duty said to have been paid by the respondent.
Dismissing the appeal to this Court, ^ HELD: (1) The appellant had not been able to make out a case of fraud.
The High Court was justified in negativing the plea of fraud and in decreeing the suit.
[904 FG] (2) Fraud, like any other charge of criminal offence, whether made in civil or criminal proceedings must be established beyond reasonable doubt.
However suspicious may be the circumstances, however strange the coincidences and however grave the doubts, suspicion alone can never take the place of proof.
[904 FG] A. L. N. Narayanan Chettyar vs Official Assignee, High Court Rangoon, A.I.R. 1941 P.C. 93, referred to.
In the instant case there is absolutely no evidence to show any prior meeting of the minds between the respondent and his father before the consignment was sent either to Gujarat or Gaya so as to raise an inference that these two persons had hatched up a conspiracy in order to defraud the appellant.
[904 EF]
|
: Criminal Appeal No. 316 of 1971.
(Appeal by Special Leave from the Judgment and Order dated the 17th September, 1971 of the Patna High Court in Criminal Revision No. 2488 of 1971) and Criminal Appeal No. 317 of 1971.
(Appeal by Special Leave from the Judgment and Order dated the 7th October, 1971 of the Patna High Court in Criminal Revision No. 1491 of 1971.) D. Goburdhan and D.P. Sharma for the appellants in both the appeals.
S.C. Agrawala and V.J. Francis for respondents in both the appeals.
The Judgment of the Court was delivered by SHINGHAL, J.
The point for consideration in these appeals by special leave is whether affidavits, sworn or affirmed before magistrates who are not in seisin of the case under section 145 of the Code of Criminal Procedure, hereinafter referred to as the Code, could be read in evi dence under that section ? The High Court has held such affidavits to be inadmissible in evidence, in its impugned judgments dated September 17, 1971 and October 7, 1971, and that is why the present appeals by special leave have arisen at the instance of the aggrieved parties.
It is not in controversy that in the absence of any specific provision to the contrary in the Code, the affida vits have to be Sworn or affirmed in accordance with the provisions of the Oaths Act, 1873.
It is also not in con troversy that the Oaths Act of 1969 has no application to the controversy.
Sub section (1) of section 145 of the Code provides, inter alia, that the Magistrate making an order under it shall require the parties concerned in the dispute to attend his court in person or by pleader and to put in such docu ments, or to adduce, "by putting in affidavits, the evidence of such persons" as they rely upon in support of their claims.
The affidavits contemplated by the sub section are therefore evidence for purposes of the proceedings before the Magistrate concerned even though the Evidence Act does not apply to them by virtue of the express provision of section 1 of that Act.
Chapter XLVI of the Code deals with miscellaneous mat ters including the affidavits referred to in sections 539, 539 A and 539 AA.
Section 539 deals with courts and persons before whom affidavits and affirmations to be used before any High Court or any officer of such Court may be sworn and affirmed.
Section 539 A relates to 176 affidavits in proof of conduct of public servants, while section 539 AA relates to the authorities before whom affi davits to be used under section 510A or 539 A may be sworn or affirmed.
An affidavit under section 145 is not however of a formal character because it is meant to prove or dis prove the competing claim of the parties as respects the fact of actual possession of the subject or dispute.
There is thus no provision in the Code specifying the courts or persons before whom the affidavits referred to in section 145 have to be sworn and affirmed.
This has therefore to be done according to the general provisions relating to affidavits.
The definition of "affidavit" in section 3(3) of the (Act X of 1897) only states that it shall include affirmation and declaration in the case of persons by law allowed to affirm or declare instead of swearing.
But it is an essential characteristic of an affidavit that it should be made on oath or affirmation before a person having authority to administer the oath or affirmation It is here that section 4 of the Oaths Act comes into operation which provides as follows: "4.
The following Courts and persons are authorised to administer by themselves or by an officer empowered by them in this behalf, oaths and affirmations in discharge of the duties or in exercise of the powers imposed or conferred upon them respectively by law : (a) all Courts and persons having by law or consent of parties authority to receive evidence;" Then follow clause (b) and a proviso, with which we are not concerned.
It is therefore clear that all courts and persons having by law or consent of parties authority to receive evidence are authorised to administer oaths and affirmations, but they can do so only where they are otherwise acting" in the discharge of the duties or in exercise of the powers imposed or conferred upon them respectively by law." So the court or person mentioned in clause (a) of section 4 of the Oaths Act can administer oath or affirmation to the deponent in an affidavit only if the, court or person in acting in the "discharge of the duties or in exercise of the powers im posed or conferred upon them respectively by law." In the present cases, the Magistrates concerned with the proceeding under section 145 of the Code were discharging the duties imposed and exercising the powers conferred by the Code, and they alone could administer the oaths and affirmations to the persons who made the affidavits, and not the magistrates who were not discharging any such duty or exercising any such power.
As the affidavits in the cases before us were admittedly not sworn or affirmed before Magistrates who were dealing with the disputes under section 145 of the Code, they were not proper affidavits and did not constitute evidence for purpose of section 145.
A similar view 177 has been taken in Nandial Ghost vs Emperor(1), Hemdan vs State Rajasthan and others(2), Govind vs State and oth ers(3), Krishna Chandra Naik vs Sk.
Makbul and others(4) Mahesh Thakur and others vs Lakshman Prasad Thakur and another(5) and State Madhya Pradesh vs Triveni Prasad(6) on which reliance has been placed by counsel for the respond ents.
We have gone through Ahmad Din vs Abdul Selem,(7) which has been cited with approval in Shambhu Nath Chopra vs State,(8) on which reliance. has been placed by counsel for the appellants.
We find however that in Ahmad Din 's case (supra) the Punjab High Court did not take proper notice of the requirement of section 4 of the Oaths Act that the courts and persons mentioned in clause (a) could administer oaths only "in discharge of the duties or in exercise of the powers imposed or conferred upon them respectively by law.
" We have also examined the reasoning in Shambhu Nath Chopra 's case (supra), but the Delhi High Court there went wrong in holding that the evidence on affidavits referred to in section 145 of the Code was of a formal character within the meaning of section 510A so as to attract section 539 AA.
At the High Court has rightly held in the two impugned judgments that the affidavits were inadmissible in evidence as they were sworn before Magistrates who were never in seisin of the case, we find no force in these appeals and they are hereby dismissed.
P.H,P. Appeals dis missed.
(1) A.I.R. 1944 Cal.
(2) A.1.R. (3) A.I.R. 1969 All.
(4) A.I.R. 1970 Orissa 209.
(5) (1971) 19 Bihar, Law Journal 727.
(6) [1971] XVI M.P.L. J. 1059a (7) A.I.R. (8) A.I.R. 1970 Delhi 210. 13 1:158SCI/77 178 STATE OF KERALA vs M.T. JOSEPH November 25, 1976 [A. N. RAY, C.J., M.H. BEG AND JASWANT SINGH, JJ.] Kerala Land Reforms Act 1963 Kerala Government Land Assignment Act 1960 Sec.
8 Whether after a person ac quires title to Government land any further restrictions can be imposed.
The Government of Travancore sanctioned a scheme for the reclamation of the Vimbana Lake upon terms and conditions contained in at document dated 4 10 1963.
The document provided that one Joseph his father on payment of Rs. 10 '/ per acre which was to.
be recovered in 10 equal instalments would be given possession of certain tracts of land which they undertook to reclaim.
The said agreement was modified by an order dated 12 2 1941 and a fresh agreement was exe cuted in July 1941.
The said agreement provided that till tie remittances of all amounts due to the Government by way of land value are paid the executant shall have no right of alienation in respect of the property in question and that till then the property shall remain with the Government as sole owner.
It further provided that, until the entire land value is paid by the executant and until the assignment of the land and issue of Patta is completed, the executant undertook not to do any act which might reduce the value of tie property.
Joseph complied with the conditions laid down in the agreement and ;acquired full ownership rights by fulfilling the said terms.
In 1957, Joseph executed a deed of settlement of this land.
Thereafter Kerala Land Reforms Act of 1963 was passed so that the State Land Board started proceedings for the surrender of the land.
The question before the Land Board was whether the whole land should be treated as a single unit belonging to Joseph or whether it may be divided and treated as separate units of persons in whose favour Joseph made the settlement.
If the children of Joseph had acquired rights under the settlement each of them could be treated as entitled to compensation for a separate unit.
The State relied on section 8 of the Kerala Government Land Assignment Act 1960 which pro vides that all provisions, restrictions conditions and limitations contained ha any Patta or other document evi dencing an assignment of Government land shall be valid and take effect according to their tenure, any rule of law or usage to the contrary notwithstanding.
Dismissing the appeal, HELD: Tie terms in the 1941 agreement operated as a restraint upon the alientation of the rights only so long as all the amounts due to the Government by way of land revenue were not paid up.
Since, in the present case the entire amount had been paid by 10 yearly instalments before the year 1957 and since the Government had effected the mutation in its record acting upon the settlement of 1957 in favour of the children of Joseph, it could not be said that there was any patta or other documents containing any condition to which section 8 of the Act applied.
The chil dren derived rights under the deed of settlement and there fore, each of them is entitled to compensation for a sepa rate unit.
[180 C E] CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
587 696 & 598 600 of 1976.
(Appeals by Special Leave from the Judgment and order dated 13th of July 1975 of the Kerala High Court in CRP Nos. 1188, 1227, 1250, 1272.
1278, 1279.
, 1284 1287, 1309, 1312 and 1386/73).
179 M.M. Abdul Khader, Adv.
and K.M.K. Nair, for the Appellants.
T.S. Krishnamoorthy Iyer and P.K. Pillai, for RR.
ex cepting R. 8 in CA 587/76.
The Judgment of the Court was delivered by BEG, J.
These appeals by special leave raise the ques tion whether the Kerala High Court had correctly interpreted and applied Section 8 of the Kerala Govt.
Land AsSignment Act, 1960 (hereinafter referred to as 'the Act ') to the cases before us.
This provision reads as follows: "8.
All provisions, restrictions, conditions and limitations over, contained in any Patta or other document evidencing an assignment of Government land shah be valid and take effect according to their tenor, any rule of law of usage to the contrary notwithstanding".
The facts upon which the provision was sought to be applied are these: On 23 October, 1939, the Government of Travancore sanctioned a. scheme for the reclamation of the Vimbang Lake upon terms and conditions which were set forth in a document dated 4 October, 1939.
The agreement provided that one M. T. Joseph and his father, on payment of Rs. 10/ per acre, which were to be recovered in ten equal instal ments, would be given possession of certain tracts of land which they undertook to reclaim.
For the first two years after what is called the "Registry" of the names of the two lessees no tax was to be levied.
The "Registry" was liable to be cancelled if adequate progress was not made within these two years.
It appears that the agreement was modified by an order dated 12 February, 1941 and a fresh agreement was executed in July 1941 by M.T. Joseph (now dead) who entered into possession of Keyal land, constructed the ring bunds at considerable expense, and brought the very large tracts of and to be reclaimed under paddy cultivation.
In June 1957, M.T. Joseph executed a deed of settlement of all this land, after he had acquired full ownership rights by fulfilling the terms of the agreement.
The Act which is sought to be now applied was then passed.
After that, the Kerala Land Reforms Act of 1963.
was passed so that the, "State Land Board" started proceedings for the surrender of these lands in accordance with the provisions of the Land Reforms Act.
The only question now before us is whether, by an appli cation of section 8 of the Act, the whole land is to be treated as a single unit belonging to M.T. Joseph (since dead), on the dispositions made by M.T. Joseph, under the deed of settlement executed by him on 15th June, 1957, distributing the land among his children, resulted in sepa rate units for the purposes of compensation for the land surrendered.
If the children had acquired right under the deed of settlement each of them could be treated as entitled to compensation for a separate unit.
If the deed was of no effect, the mere fact that the children were in possession, under an authority from their father could not change the ' ownership of the land in the constructive possession of the father.
We have been taken through the deed of agreement of July, 1941, with the Government.
which contains the follow ing term, the effect of which has to be determined: 180 "Till the remittance of all amount due to.
the Government by way tharavila (land value) etc.
the executant shall have no right of alienation in respect of the schedule property and the property shall remain with the Government as sole owner.
The executant shall remit the tax at the thirteenth thoram in the village office every year after the first two years of registry so long as no default is made in the payment of instalment and obtain receipt therefor.
Until the entire tharavila (land value under this agreement as stated above is paid by the executant and until the assignment of the land and issue of patta is completed the executant undertakes not to do any act which may reduce the value of the property and if as stated above due to any reason the property is recovered.
from the executant he shall not put forward any claim for improvements etc.
and the property shall be surrendered to Government".
It is clear to us that this term in the agreement oper ated as a restraint upon the alienation of rights only so.
long as.
all the amounts due to the Government as Tharavila had not been paid up.
The whole amount had to be paid up in ten yearly instalments.
It has been paid up before 1957.
Furthermore, as the Kerala High Court found, the settlement of land on 15th June, 1957 had not merely been given effect to by a mutation in the relevant Government records but pattas had actually been given by the Government, acting upon the settlement of 1957, in favour of the children of M.T. Joseph.
Hence, it could not be said that there was any patta of other document containing any condition to which Section 8 of the Act could apply.
We find, from the Judgment under appeal, that several questions, which have no real bearing on the rights of the parties, were: also. argued.
One of these questions was whether land could be acquired by adverse possession by the alienees of the allottees of the. land from the Government under the scheme for its reclama tion.
We fail to see how a question of adverse possession arises here when the Government itself recognises the rights of the children of M.T. Joseph in the pattas executed by it in their favour.
The High Court recorded the following findings about the Government acting on the terms of the settlement of 15th June, 1957, the correctness of which had not been challenged before us: "This settlement deed has been recognised by the Government mutation has been effected in the names of the children and pattas have also. been issued to them.
It has been further stated on behalf of the revision petitioners (the heirs of the said Joseph and those who took under the settlement deed dated 15.6.1957) that levy under the Kerala Rice and Paddy (Procurement by Levy) Order, 1966, has been collected from each of the shares under the deed of 1957, that land tax has been imposed on each of the shares sepa rately and agricultural income tax collected on the income of the properties of each of the sharers".
We do not think it is necessary to go into any other question.
The High Court was of opinion that some facts had still to be as 181 certained when the case goes back to the Land Board for proceeding on the footing determined by the High Court.
We think that we should make it clear that matters to.
be still determined could not, in view of our finding, involve deter mination of any question of adverse possession of the claimants, the children of M.T. Joseph.
For the reasons given above, we dismiss these appeals.
We make no order as to costs.
P.H.P, Appeals dis missed.
| In the Rajasthan Legislative Assembly elections held in March,1972, the respondent defeated the appellant by a margin of over 22000 votes.
The appellant filed an elec tion petition in the Rajasthan High Court challenging the election of the respondent alleging that the respondent and his election agent committed the following corrupt prac tices.
(1) A pamphlet containing defamatory and false statements touching the personal character of the appellant was distributed by the respondent and his election agent in a meeting on 23 2 72 at Nehru Park.
(2) Several copies of a Weekly newspaper called Patal Shakti dated 27 2 1972 containing a scurrilous editorial were distributed by the respondent and his election agent at a meeting of the Socialist Party held at Public Park on 27 2 1972.
The High Court dismissed the election petition filed by the appellant.
The High Court discarded the evidence of the appellant 's witnesses on the ground that they were interest ed witnesses.
This Court by consent of parties remitted the following two additional issue to the High Court with liberty to the parties to lead evidence on those issues.
(1) Whether the pamphlet was printed at the instance and with the consent of the respondent and whether the payment for that pamphlet was made by his election agent ? (3) Whether the editorial in Patal Shakti was read over in the meeting of 27 2 1972 by Vijay Kumar Talwar in the presence of the respondent.
The High Court after remand held in favour of the respondent on both the issues.
Dismissing the appeal under section 116A of the Repre sentation of the People Act, 1951, HELD: 1.
It is matter of common occurrence in election petitions that parties manage to collect a large volume of oral evidence in support of allegations of corrupt practice.
Very often, the allegations are connected and are attempted to be established with the evidence of partisan witnesses, On rare occasions when the allegations are true, untrue evidence is led to strengthen the charges.
[4D E] 2.
The High Court should not have brushed aside the evidence of the appellant 's witnesses merely on the ground.
that they belong.to the, same party as the appellant or that they were otherwise interested in his success in the 2 1458SCI/76 2 election.
Interested witnesses are not necessarily false witnesses though the fact that the witness has a personal interest or stake in the matter must put the court on its guard.
The evidence of such witnesses must be subjected to a closer scrutiny and the Court may in a given case be justified in rejecting that evidence unless it is corrobo rated from an independent source.
The reasons for corrobo ration must arise out of the context and the texture of evidence.
Even interested witnesses may be interested in telling the truth to the Court and, therefore, the Court must assess the testimony of each important witness and indicate its reasons for accepting or rejecting it.
A broad and general comment that a particular witness is an election agent of a candidate cannot therefore be relied on is not a judicial assessment of evidence.
Evidence can be assessed only after a careful analysis.
[4F H] 3.
Since the High Court rejected the evidence of the appellant on the omnibus ground that the witnesses were interested, this Court went through the relevant evidence and on a consideration of that evidence came to conclusion that it is impossible to accept the allegations of corrupt practice made against the respondent.
[5A B] 4.
The allegations that the respondent and his agent distributed the pamphlet in the meeting held at the Nehru Park was disbelieved by this Court on the following grounds: (a) The meeting was addressed by the Prime Minister and over a lakh of people were present.
It is fantastic to think that in a meeting called by the rival party which was so largely attended the respondent and his election agent would be so foolish as to distribute a scandalous pamphlet.
(b) None of the recipients of the highly defamatory document took any action after receiving it.
(c) It is impossible to accept the allegation of the appellant that the pamphlets were distributed to the Additional District Magistrate and the Circle Officers who were present at that meeting in their official capacity.
(d) Neither the Additional District Magistrate nor the Circle Officer produced a copy of the pamphlet nor did they take any action on the pamphlet.
(e) The election agent of the respondent is an advocate and the respondent had won 3 consecutive assembly elections by a good margin.
It is impossible that these two old hands would so openly and incontrovertibly lend an easy ground for the success of a possible election petition.
(f) Although the matter was remanded no proper evidence was led by the appellant.
The appellant tried to lead evidence on facts which even if proved would not decide the issue in his favour.
[5B H, 6A C] 5.
The Court negatived the appellant 's contention that the editorial was published with the consent of the respond ent or his agent for the following reasons: (a) Gyan Devi Talwar the mother of Vijay Kumar Talwar is styled as the Director of Patal Shakti.
Raj Kumar Sethi is said to be the Chief Editor of the weekly while Vijay Kumar Talwar is an Assistant Editor.
The proceedings of the meetings of the Congress workers of 18 2 1972 show that the said meeting which was called by the party to which the appellant belonged was attended amongst others by Gyan Devi Talwar, Rat Kumar Sethi, Madan Lal Kanda, Chandram Sherpal one of the Assistant Editors of Patal Shakti.
The said meeting resolved unanimously to support the candidature of the appellant.
3 (b) Gyan Devi Talwar had called a meeting of the Trade Union workers to support the appellant 's candidature.
(c) Seeing that persons closely connected with the Journal had taken a prominent part in the appellant 's election campaign, it is absurd to think that these very persons would be parties to the publication of the editorial.
(d) The receipt of Rs. 2000/ alleged to have been paid by the respondent for publication of the editorial is uninspiring.
(e) Raj Kumar Sethi has perjured himself on several important points.
(f) The letter of the appellant alleged to have been addressed to the editor and the reply of the editor are got up documents prepared for supporting the appellant 's case that the editorial was published at the instance of the respondent.
(g) Raj Kumar Sethi was pliable and could for consideration be made to say different things at different times.
(h) The evidence of the appellant suffers from serious infirmities.
(i) The evidence of the other witnesses only shows that several witnesses conspired to create false evidence.
[6E H, 7A H, 8A H, 9A C]
|
Civil Appeal No. 1583 of 1970.
Appeal by special leave from the Judgment and order dated the 22 12 1969 of the Gujarat High Court in S.C.A. No. 1630 of 1969.
V. A. Bobde and A. G. Ratnaparkhi for the Appellant.
R. B. Datar and Ms. Madhu Moolchandani for the Respondent.
The Judgment of the Court was delivered by DESAI J.
Appellant Sureshbhai is the owner of land bearing Survey No. 21 situated at Village ode, Taluka Anand, District Kaira in Gujarat State.
One Nathabhai Zaveribhai and the present respondent were recorded as tenants on the tillers ' day i.e. Ist April, 1957.
Section 32 of the Bombay Tenancy and Agricultural Lands Act, 1948 ( 'Tenancy Act for short) provided that on the 1st day of April, 1957 (hereinafter referred to as the tillers ' day) every tenant shall subject to the other provisions of the section and the provisions of the next succeeding sections, be deemed to have purchased from his landlord, free from all encumbrances subsisting thereon on the same date the land held by him as tenant.
Section 32G provided for the follow up action of the compulsory purchase that ensues by the 994 operation of sec.
Section 32G thus envisages the determination of the price in accordance with the various provisions of the Act, of the land deemed to have been purchased by the tenant on the tillers ' day and the methodology of its payment.
In order to determine the price the Agricultural Lands Tribunal ( 'Tribunal ' for short) has to serve a notice in the prescribed manner to (a) all tenants who u/s 32 are deemed to have purchased the lands (b) all landlords of such lands; and (c) all other persons interested therein to appear before it on the date specified in the notice.
Sub sec.
2 provides that the Tribunal shall record in the prescribed manner, the statement of the tenant whether he is or is not willing to purchase the land held by him as a tenant.
Sub sec.
3 provides that where tenant fails to appear or makes a statement that he is not willing to purchase the land, the Tribunal shall by an order in writing declare that such a person is not willing to purchase the land and that the purchase is ineffective.
The remaining sub secs.
provide the manner and method of determining the price.
The Tribunal having jurisdiction in the area in which the land involved in the dispute is situated issued notice to Nathabhai Zaveribhai and the present appellant as well as the landlord of the land u/s 32G.
It appears both the tenants i.e. Nathabhai Zaveribhai and the present respondent refused to accept notice to remain present and when summons was served by substituted service both of them did not remain present The Tribunal accordingly declared the sale ineffective as provided by sec.
32G(3).
The Tribunal accordingly made its order annexure dated July 20, 1962 declaring that the sale is ineffective.
Subsequently the present respondent made an application u/s 32 PP requesting the Tribunal to determine the price of the land deemed to have been purchased by him being Survey No. 21 of Village ode on April 1, 1957.
It may be clarified that sec.
32 PP was designed to give a further opportunity to the tenant who had failed to appear before the Tribunal which led to the sale being held ineffective, to purchase the land.
This application was resisted by the appellant landlord The Tribunal held that the present respondent was not a tenant of the suit land and Nathabhai Zaveribhai was the only tenant who has not made an application u/s 32 PP and therefore the present respondent is not entitled to be declared a deemed purchaser and accordingly it is not necessary to determine the purchase price.
The respondent preferred an appeal to the Deputy Collector.
This appeal was dismissed by the Deputy Collector concurring with the findings of the Tribunal.
The respondent moved a revision petition u/s 76 995 of the Tenancy Act in the Gujarat Revenue Tribunal.
A learned member of the Gujarat Revenue Tribunal held that once the notice was issued to person who is shown to have purchased the land u/s 32 and if the sale is held ineffective because of his absence under sec.
32 G, in a subsequent proceeding u/s 32 PP it is not open to the landlord to challenge that such a person was not tenant.
Alternatively, on the merits it was held that the present respondent was tenant of the land on April 1, 1957 and he has become a deemed purchaser and the Tribunal was bound to determine the price.
The matter was accordingly remitted to the Tribunal.
Present appellant landlord moved a petition under article 227 in the High Court of Gujarat which was dismissed in limine.
Hence this appeal by special leave.
It is not in dispute that the notice u/s 32G was issued to the present respondent and Nathabhai Zaveribhai with a view to determining the price of land bearing Survey No. 21.
The notice was also served upon the appellant landlord.
In a proceeding for determining the price, the necessary parties are the landlord and the tenant as the tenant becomes the owner of the land by operation of law.
A statutory duty is cast on the Tribunal to proceed to determine the purchase price.
But as held by a Constitution Bench of this Court in Sri Ram Ram Narain.
Medhi vs The State of Bombay(1), that "the title of the landlord to the land passes immediately to the tenant on the tillers ' day and there is a completed purchase or sale thereof as between the landlord and the tenant.
The title of the land which was vested originally in the landlord passes to the tenant on the tillers ' day and this title is defeasible only in the event of the tenant failing to appear or making a statement that he is not willing to purchase the land or commit default in payment of the price thereto as determined by the Tribunal.
" Thus, it is clear that the title passes by the operation of law.
The Tribunal has to determine the price as envisaged by section 32G.
In order to effectively dispose of the proceedings in the presence of the necessary parties, the Tribunal is under an obligation to issue notice to the landlord and the tenant.
Order of the Tribunal dated July 20, 1962 shows that both the tenants and the landlord were served.
The order further shows that the tenants refused to accept the notice and after substituted service did not remain present.
It 996 appears that the landlord remained present.
The Tribunal declared the sale ineffective on account of the absence of the tenants.
So far there is no dispute, It appears that the Legislature became aware of the fact that for want of legal literacy a sizeable number of tenants did not appreciate the implication of such a revolutionary measure and presumably under some influence of the landlord and the local atmosphere, the tenants did not appear before the Tribunal with the result that the statutory sales were declared ineffective.
The Legislature took notice of this phenomenon defeating an agrarian reform legislation and introduced sec.
32 PP by the Amending Act of 1965.
32 PP was designed to give a further opportunity to the tenant to purchase the land.
The relevant portion of sec.
32 PP reads as under; "section 32 PP.
Notwithstanding anything contained in sections 32G and 32P, where before the date of the coming into force of the Bombay Tenancy and Agricultural Lands (Gujarat Amendment) Act, 1935 (hereinafter referred to in this section as "the said date") (i) any land has been at the disposel of the Collector under section 32P on account of the purchase of the land by the tenant thereof having become ineffective under sub section (3) of section 32G by reason of the tenant failing to appear before the Tribunal or making a statement expressing his unwillingness to purchase the land, and" * * * Pursuant to this fresh opportunity afforded by sec.
32PP respondent made an application requesting the Tribunal to determine the purchase price.
The Gujarat Revenue Tribunal (Revenue Tribunal for short) held that the sale had become ineffective under sub sec.
(3) of sec.
32G by reason of the tenant failing to appear before the Revenue Tribunal and therefore in an application under sec.
32PP the status of the applicant being a tenant is no more open to debate or dispute and must be deemed to be concluded between the parties.
It is difficult to subscribe to this view.
32PP 997 confers a right upon a person claiming to be a tenant and the precondition is that he having failed to appear before the Tribunal in a proceeding u/s 32G, can make an application for determining the price.
In such a situation, the landlord is a necessary party.
The landlord can and would be entitled to contend that the person claiming to be a tenant and making an application u/s 32PP was not a tenant on April 1, 1957.
It is difficult to subscribe to the inter pretation of sec.
32PP adopted by the Tribunal.
Undoubtedly only that person is entitled to make an application u/s 32PP who having failed to appear before the Tribunal in a proceeding u/s 32G, the statutory saie was declared ineffective but on that account such person making an application under sec.
32PP must be accepted as tenant without further enquiry and without permitting the landlord to challenge the status of the applicant is not warranted by the language of sec. 32PP.
It is undoubtedly true that an application u/s 32PP can be made where the purchase of the land by the tenant has been declared ineffective u/s 32G(3) by reason of the tenant failing to appear before the Tribunal or making a statement expressing his unwillingness to purchase the land.
But it should not be overlooked that where a notice was sent by the Tribunal u/s 32G to the person to whom the Tribunal prima facie believed to be a tenant and if such a tenant did not appear and the Tribunal without anything more proceeded to declare the sale becoming ineffective, the application u/s 32 PP would not preclude the landlord from contesting the petition by showing that the applicant was not a tenant on 1.4.57.
In any proceeding u/s 32G and 32PP the most important issue to be determined is whether the person claiming to be a tenant was a tenant on April 1, 1957 and an additional issue will have to be determined in an application u/s 32PP whether to such a person notice had been issued u/s 32G and on his failure to appear the sale became ineffective.
The Revenue Tribunal appears to be of the view that unless the landlord challenged the order u/s 32G declaring the sale having become ineffective on the footing that a person to whom notice was sent was a tenant on April 1, 1957 and is failure to appear without anything more would clothe him with the status of a tenant.
This approach overlooks the possibility of a person to whom notice is served, not appearing because he had nothing to do with the land.
In such a situation an unadjudicated inferential determination of status cannot preclude an inquiry into the status which is a sine 998 qua non for claiming the right in a subsequent proceeding between the parties.
Therefore the failure of the landlord to question the sale being declared ineffective on account of the absence of the person to whom notice was sent and who defaulted would not either on the general principle of res judicata or principle analogous to constructive res judicata preclude the landlord from challenging the status in the subsequent enquiry.
There is only one situation which may preclude the enquiry in that if on receipt of notice the tenant did not appear and the landlord appeared and unequivocally admitted that the defaulting person was a tenant on the relevant date and on his failure to appear the sale should be declared ineffective, the landlord in subsequent proceeding under sec.
32 PP would be estopped from challenging the status of the applicant tenant.
Such is not the case.
Otherwise on a challenge by the landlord in a proceeding under sec.
32 PP the Tribunal have to determine the jurisdictional facts that (i) the applicant was a tenant on April 1, 1957 and (ii) that the sale was declared ineffective under sec.
35G. Therefore, the view of the Tribunal that in a proceeding u/s 32PP, the status of the applicant as a tenant is incontrovertible does not commend to us and is not correct.
Mr. Bobde contended that once the view of the Tribunal is not in consonance with law the only course open to us is to remit the matter to the Tribunal.
We are not inclined to accept the submission for the obvious reason that there is material on record that the respondent was a tenant on the relevant date.
Apart from a piece of circumstantial evidence that a notice was sent to the respondent both by a registered post and service was sought to be effected by substituted service on the basis of tenancy record, his name appears in the record of tenancy for certain years.
Further the landlord has not put on record his statement in the proceeding u/s 32G whether he disputed the status.
The landlord did not take any step under sec.
15 after the sale was declared ineffective.
Nathabhai Zaverbhai who according to the landlord was the only tenant of land was not examined by the landlord.
The cumulative effect of these circumstances would affirmatively show that the respondent was a tenant and if he was a tenant on the relevant date, the Tribunal was right in directing that the purchase price be determined.
This is the only point involved in this appeal.
As we find no merit in it, the appeal fails and is dismissed with costs.
H.S.K. Appeal dismissed.
| By the operation of section 32 of the Bombay Tenancy and Agricultural Lands Act 1948 the respondent who was recorded as a tenant on the tillers ' day i e. 1st April, 1957 was deemed to have purchased the land from the appellant landlord subject to other provisions of the Act.
The respondent having refused to accept notice u/s 32G for determining the price of the land and failing to appear, the Tribunal declared the sale ineffective.
Subsequently the respondent made an application under section 32 PP that afforded a fresh opportunity to a tenant who had failed to appear before the Tribunal as a result of which the sale was held ineffective, requesting the Tribunal to determine purchase price of the land.
The Tribunal held that the respondent was not a tenant of the land and was not entitled to be declared a deemed purchaser and accordingly it is not necessary to determine the price The Deputy Collector dismissed the appeal preferred by the respondent.
The Revenue Tribunal in a revision petition held that once the notice was issued to a person who is shown to have purchased the land u/s 32 and if the sale is held ineffective because of his absence in the proceeding under section 32G, in a subsequent proceeding u/s 32 PP it is not open to the landlord to challenge that such a person was not tenant.
A petition under Article 227 of the Constitution moved by the appellant landlord was dismissed in limine by the High Court, Dismissing the appeal, ^ HELD: The view of the Revenue Tribunal is not correct.
Section 32 PP confers a right upon a person claiming to be a tenant to make an application for determining the price and the pre condition is that he failed to appear before the Tribunal in a proceeding u/s 32G.
In such a situation, the landlord is a necessary party.
The landlord can and would be entitled to contend that the person claiming to be a tenant and making an application u/s 32 PP was not a tenant on April 1, 1957.
Undoubtedly only that person is entitled to make an application u/s 32 PP who having failed to appear before the Tribunal in a proceeding u/s 32G, the statutory sale was declared ineffective but on that account such person making an application under section 32 PP must be accepted as tenant without further enquiry and without permitting the landlord to challenge the status of the applicant is not warranted by the 993 language of section 32 PP.
The Revenue Tribunal 's view that unless the landlord challenged the order u/s 32G declaring the sale having become ineffective on the footing that a person to whom notice was sent was a tenant on April 1, 1957 and his failure to appear without anything more would clothe him with the status of a tenant overlooks the possibility of a person to whom notice is served not appearing because he had nothing to do with the land.
[996 H, 997 A H] The failure of the landlord to question the sale being declared ineffective on account of the absence of the person to whom notice was sent and who defaulted would not either on the general principle of res judicata or principle analogous to constructive res judicata preclude the landlord from challenging the status in the subsequent enquiry.
There is only one situation which may preclude the enquiry in that if on receipt of notice the tenant did not appear and the landlord appeared and unequivocally admitted that the defaulting person was a tenant on the relevant date and on his failure to appear the sale should be declared ineffective, the landlord in subsequent proceeding under section 32 PP would be estopped from challenging the status of the applicant tenant.
[998 A.C]
|
Civil Appeal No. 3189/1989.
From the Judgment and Order dated 11.3.1987 of the Delhi High Court in C.W.P. No. 875 of 1986 R.B. Datar and Ranjit Kumar for the Appellant.
V.B. Saharya for the D.D.A. Jose P. Verghese and O.P. Verma for the Respondent.
The Judgment of the Court was delivered by SEN, J.
The main question involved in this appeal from a judgment and order of a Division Bench of the Delhi High Court dated March 11, 1987 is whether the High Court was justified, in the facts and circumstances of the case, in issuing a direction to the appellant Municipal Corporation of Delhi to construct a stall or a kiosk on the pavement near the OPD gate of the Irwin Hospital, Delhi within two months from the date of its order or in the alternative, to furnish a plan with requisite sanction to the respondent Gurnam kaur to enable her to construct a stall of her own.
The issue involved is as to the precedential value of a direction earlier made by this Court on a petition under article 32 of the Constitution based on consent of the parties with the reservation that it should not be treated as a precedent.
It appears that sometime in 1984, the appellant Municipal Corporation of Delhi sought police help to clear the pavement near the OPD gate of the Irwin Hospital, now known as Lok Nayak Jai Prakash Narain Hospital, which is one of the largest hospitals in Northern India, on a complaint made by the Hospital authorities that the pavement hawkers by setting up their stalls or pitching their wares were causing inconvenience to the ingress or egress of the ambulances besides causing congestion on the pavements and obstructing the free flow of traffic.
The Municipal Corporation was satisfied that if the squatters continued to cover pathways meant for pedestrians, a time would come when no room would be left for people to walk on the footpaths.
In a police action, the pavements hawkers were removed from outside the main gate of the Irwin PG NO 933 Hospital in and around the subway of Jawahar Lal Nehru Marg on January 15, 1984.
On February 22, 1984, eight of these pavement squatters instituted separate suits in the Court of the Subordinate Judge, II Class, Delhi against the Municipal Corporation seeking the relief of perpetual injunction restraining the appellant, its officers and servants from interfering with their business of hawking on the pavements out side the main gate of the hospital and/or from demolishing or removing any temporary structures put up by them for plying their trade.
In denial of the claim, the appellant Municipal Corporation pleaded, inter alia, (i) that the construction of the kiosks or stalls by the plaintiffs was without permission and therefore amounted to an encroachment on the pavement.
The Municipal Corporation accordingly under section 322 of the Delhi Municipal Corporation Act, 1957 had the right and authority to remove such encroachment without notice, and (ii) that the plaintiffs had no legally enforceable right under the terms of the tehbazari licence, they having committed violation of the terms and conditions there of besides being in arrears of licence fee.
Accordingly, it pleaded that the plaintiffs ' claim in suit was wholly misconceived.
The suits were consolidated together for trial as they raised a common issue.
It is common ground that the plaintiffs had each been occupying a site admeasuring 6 ft.
x 4 ft.
on tehbazari basis since the year 1975.
The contention of the plaintiffs was that the Municipal Corporation having itself allotted the plaintiffs licence under section 321 of the Act on tehbazari basis to use the pavement in front of the main gate of the Irwin Hospital for carrying on their business on specific terms and conditions, such grant of licence or permission gave to them a right under section 430 of the Delhi Municipal Corporation Act, 1957 which could not be terminated unilaterally without affording them an opportunity of a hearing under proviso (a) to sub section
(3) of section 430 of the Act.
On February 24, 1984, Shri B.P. Bhalla, learned counsel appearing for the plaintiffs in all the suits made a statement to the effect: "The plaintiffs shall occupy only 6 ft.
x 4 ft. space as allotted to them by the defendants and no further space beyond those limits.
They have not constructed any permanent structure on the site and shall not construct any structure thereon, whether permanent or temporary. ' ' Accordingly, the learned Subordinate Judge during the course of his judgmeat observed: PG NO 934 "In view of the above statement by the counsel for plaintiffs, it is clear that the stall if any erected or posted at the suit sites is without authority.
Placing of such a stall at the suit site amounts to encroachment within the meaning of sec.
322 of the DMC Act which stall can be removed at any time by the defendant MCD without notice.
In this light the plaintiffs have no right to claim an injunction against demolition or removal of any stall or other structure if posted or placed or affat the same time defendant MCD cannot remove the plaintiffs nor interfere with their business at the suit site in any other manner without terminating their licence to occupy the said sites in accordance with the procedure contained in sec.
430(3) of DMC Act.
" The learned Judge accordingly partly decreed the plaintiff 's claim to the extent indicated hereafter: "Consequently, all these suits are partly decreed to the effect that the defendants are restrained permanently from removing the palintiffs from the suit sites without terminating the Tehbazari permission granted in their favour in accordance with the provisions of section 430(3) of the DMC Act.
The prayer for injunction against demolition or removal of the stalls of the plaintiffs is disallowed.
" It therefore follows that the learned Subordinate Judge accordingly disallowed the plaintiffs main claim seeking a declaration that the Municipal Corporation had no right or authority to remove the stalls built up by them on the pavement in front of the main gate of the Irwin Hospital.
He however held that by virtue of the tehbazari licence granted in their favour, the plaintiffs had acquired the right to occupy and carry on business at the suit site each admeasuring 6 ft.
x 4 ft.
in question and till their licence was not terminated by the Municipal Corporation after PG NO 935 following the procedure laid down in proviso (a) to sub section
(3) of section 430 of the Act.
It had no power to remove the plaintiffs nor interfere with their business at the suit sites.
It could not take recourse to its power of removal of encroachment without notice under section 322(a) of the Act.
It is equally evident that the learned Subordinate Judge partly decreed the plaintiffs ' claim only to that extent that it restrained the Municipal Corporation from taking any steps for removal of such encroachment by the plaintiffs inasmuch as the power under section 322(a) of the Act cannot be exercised without following the procedure laid down in section 430(3) of the Act and without terminating the tehbazari licence granted in their favour.
The respondent Gurnam Kaur was one of the plaintiffs and she had been in occupation of a site admeasuring 6 ft.
x 4 ft.
on the basis of tehbazari licence intermittently since the year 1960 and had been paying the licence fee therefor.
The decree passed by the learned Subordinate Judge not having been appealed from by the Municipal Corporation of Delhi has since become final.
The rights of the parties therefore stand crystallized by the terms of th decree passed by the learned Subordinate Judge.
There was a further development.
Two of the squatters, namely, one Jamna Das and his brother moved this Court by petition under article 32 of the Constitution, being Writ Petition Nos.
981 82/84 Jamna Das & Anr.
vs Delhi Administration & Ors., seeking a writ in the nature of mandamus ordaining the Municipal Corporation to allot each of them a suitable site on the pavement in front of the main gate of the Irwin Hospital.
Their grievance was that they were similarly situate like 10 other squatters who were all plying their trade on the pavement in front of the main gate of the Irwin Hospital catering to the needs of the visitors to the hospital by selling tea, snacks, pan, bidi etc.
and although the Municipal Corporation had rehabilitated the said 10 squatters by allotment of stalls to them, despite repeated applications there was no redressal of the wrong done to them inasmuch as the Municipal Corporation had arbitrarily and without any rational basis, denied them such facility.
Further, it was alleged in that case that the father of the petitioners had been occupying the site admeasuring 6 ft.
x 4 ft.
on tehbazari licence since the year 1947 till his death in 1975 and thereafter the petitioners were permitted to occupy the same on similar terms but the Municipal Corporation illegally caused their removal with police help.
It was averred that the Municipal Corporation could not take recourse to its power of eviction under section 322(a) of the Act without terminating the tehbazari licence in their favour and without following the procedure prescribed by proviso (a) to section 430(3) of the Act.
Several adjournments were taken in an effort to find a solution to PG NO 936 the problem by learned counsel appearing for the Municipal Corporation.
Eventually, Desai, J. speaking for a Bench of two Judges by his order dated March 29, 1985 made a direction for rehabilitation of the petitioners.
Virtually, it was a consent order as learned counsel appearing both for the Delhi Development Authority and the Municipal Corporation requested the Court to give a direction keeping in view the sketch plan furnished by the Municipal Corporation, and gave an undertaking that any direction made by the Court for rehabilitation of the petitioners would be carried out.
The Court accordingly directed that the petitioners be rehabilitated by the Municipal Corporation by construction of stalls according to the sketch plan with a further direction that each of them would be put in possession of one of the stalls.
The direction was however made subject to the condition that such construction of stalls would not cause any further obstruction to the free flow of traffic.
The Court also made it clear that the direction should not be treated as a precedent.
Presumably because of the direction made by this Court in Jamna Das ' case.
the respondent Gurnam Kaur moved the High Court under article 226 of the Constitution in April, l986 for the issuance of an appropriate writ or direction restraining the Municipal Corporation from evicting her without the due process of law.
A Division Bench of the High Court by the impugned judgment has partly allowed the writ petition holding that the judgment of the learned Subordinate Judge which was a judgment inter partes had become final, not having been appealed from and therefore the respondent could not be removed from pitching her stall on the pavement outside the main OPD gate of the Irwin Hospital where she was squatting.
The learned Judges relied upon the decision of this Court in Jamna Das case where a direction was made requiring the Municipal Corporation to construct stall for the petitioners in that case, so that they could be rehabilitated.
The learned Judges felt that it was equally desirable that the respondent Gurnam Kaur instead of being allowed to squat on the pavement, should be provided with a stall of the same pattern and design as had been done for the two squatters in Jamna Das case.
The High Court gave an option to the Municipal Corporation either to construct a stall similar to the one they had constructed in compliance with the direction made by this Court in Jamna Das ' case or, in the alternative, furnish to the respondent a plan of the stall with requisite permission so that she could build her own stall accordingly.
PG NO 937 We find it rather difficult to sustain the judgment of the High Court.
The learned Judges failed to appreciate that this Court in Jamna Das ' case made a direction with the consent of parties and with the reservation that it should not be treated as a precedent.
It expressed no opinion on the question whether there was any statutory obligation cast on the Municipal Corporation to provide alternative site to a person making illegal encroachment on a public place like any public street etc.
contrary to section 320 of the Act, as a condition precedent to the exercise of its powers under section 322 of the Act for the removal of such encroachment on any public street, footpath or pavement.
That apart,the High Court could not have made the impugned direction contrary to the provisions contained in sections 320 and 322 of the Act.
section 320(1) in terms creates a statutory bar against illegal encroachment on any portion of a public street.
It provides that "No person shall, except with the permission of the Commissioner granted in this behalf, erect or set up any booth or other structure whether fixed or movable or whether of a permanent or temporary nature, or any fixture in or upon any street etc".
Having regard to this express provision, the High Court failed to see that the respondent Gurnam kaur had no legally enforceable right to the grant of a writ or direction in the nature of mandamus.
The High Court could not obviously issue any such direction which would be tantamount to a breach of the law.
Furthermore the High Court could not also make the impugned direction in view of the provision contained in section 322(a) of the Act, which expressly confers power on the Commissioner to cause the removal of any structure which constitutes an encroachment on a public place like a street which is meant for the use of the pedestrains.
It is axiomatic that when a direction or order is made by consent of the parties, the Court does not adjudicate upon the rights of the parties nor lay down any principle.
Quotability as 'law ' applies to the principle of a case, its ratio decidendi.
The only thing in a Judge 'sdecision binding as an authority upon a subsequent Judge is the principle upon which the case was decided.
Statements which are not part of the ratio decidendi are distinguished as obiter dicta and are not authoritative.
The task of finding the principle is fraught with difficulty because without an investigation into the facts, as in the present case, it could not be assumed whether a similar direction must or ought to be made as a measure of social justice.
That being so, the direction made by this Court in Jamna Das ' case could not be treated to be a precedent.
The High Court failed to realise that the direction in Jamna Das 'case was made not only with the consent of the parties but there was an interplay of various factors and the Court was moved by compassion to evolve a situation to mitigate hardship which PG NO 938 was acceptable by all the parties concerned.
The Court no doubt made incidental observation to the Directive Principles of State Policy enshrined in article 38(2) of the Constitution and said: "Article 38(2) of the Constitution mandates the State to strive to minimise, amongst others, the inequalities in facilities and opportunities amongst individuals.
One who tries to survive by one 's own labour has to be encouraged because for want of opportunity destitution may disturb the conscience of the society.
Here are persons carrying on some paltry trade in an open space in the scorching heat of Delhi sun freezing cold or torrential rain.
They are being denied continuance at that place under the specious plea that they constitute an obstruction to easy access to hospitals.
A little more space in the access to the hospital may be welcomed but not at the cost of someone being deprived of his very source of livelihood so as to swell the rank of the fast growing unemployed.
As far as possible this should be avoided which we propose to do by this short order.
" This indeed was a very noble sentiment but incapable of being implemented in a fast growing city like the metropolitan City of Delhi where public streets are overcrowded and the pavement squatters create a hazard to the vehicular traffic and cause obstruction to the pedestrians on the pavement.
Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative.
With all respect to the learned Judge who passed the order in Jamna Das ' case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it.
It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavement or public streets, and without any citation of authority.
Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions.
A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute.
So far as the order shows, no argument was addressed to the Court on the question or not whether any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a PG NO 939 pavement squatter.
Professor P.J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn.
explains the concept of sub silentio at p. 153 in these words: "A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind.
The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon.
It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the court.
In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio.
In Gerard vs Worth of Paris Ltd. (k).
, [1936] 2 All E.R. 905 (C.A.), the only point argued was on the question of priority of the claimant 's debt, and, on this argument being heard, the Court granted the order.
No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator.
When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. vs Bremith, Ltd., the Court held itself not bound by its previous decision.
Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided.
We went on to say that the point had to be decided by the earlier court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed.
Precedents sub silentio and without argument are of no moment.
This rule has ever since been followed.
One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened.
The weight accorded to dicta varies with the type of dictum.
Mere casual expressions carry no weight at all.
Not every passing expression of a Judge, however eminent, can be treated as an ex cathedra statement, having the weight of authority.
PG NO 940 At the end of the day, we must make a mention that Shri Verghese, learned counsel for the respondent made a valiant effort to bring into play the principles laid down by this Court in Olga Tellis & Ors.
vs Bombay Municipal Corporation & Ors., ; and Bombay Hawkers ' Union & Ors.
vs Bombay Municipal Corporation & Ors., ; We are afraid, we cannot permit the question to be raised for two reasons.
In the first place, no such point was taken in the writ petition nor any contention advanced before the High Court that the removal of the illegal encroachment by the Municipal Corporation constitutes a threat to life and liberty guaranteed under article 21 of the Constitution or that the right to life includes a right to livelihood.
Secondly, the rights of the parties now stand crystallized by the aforementioned judgment of the learned Subordinate Judge in the suit brought by the respondent, and the rights have to be worked out in terms of the decree passed by him which has since become final.
Besides, the decision in Olga Tellis is of little avail.
Chandrachud, CJ.
speaking for the Constitution Bench observed that the word 'life ' in article 21 included livelihood, but upheld the validity of sections 313(1) and 314 of the Bombay Municipal Corporation Act, 1888 which provided that the Commissioner may 'without notice, cause to be removed ' obstructions as an encroachment on footpaths could not be regarded as unreasonable, unfair or unjust.
The learned Chief Justice however said that the section conferred a discretionary power which like all power must be exercised reasonably and in conformity with the provisions of our Constitution.
In Bombay Hawkers ' Union, Chandrachud, CJ.
speaking for himself and one of us (Sen, J.) held that the impugned provision was in the nature of a reasonable restriction in the interests of the general public, on the exercise of the right of hawkers to carry on their trade or business.
The learned Chief Justice added: "No one has any right to do his or her trade or business so as to cause nuisance, annoyance or inconvenience to the other members of the public.
Public streets are meant for the use of the general public and cannot be used to facilitate the carrying on of private trade or business.
" These cases undoubtedly raise a human problem and both the Delhi Development Authority as well as the Municipal Corporation of Delhi should seek to evolve an innovative plan to rehabilitate the unfortunate persons who by force of circumstances are forced to ply their trade by squatting in the open on the pavements.
At the same time, these pavement squatters create a serious problem to the civic administration as it creates congestion on the public streets and obstructs free flow of traffic.
As Chandrachud, PG NO 941 CJ.
rightly observed in Bombay Hawkers ' Union: "No one has a right to do his or her trade or business so as to cause nuisance, annoyance or inconvenience to the other members of the public", and further that "All public streets are meant for the use of the general public and cannot be used to facilitate the carrying on of private trade or business".
We feel that the Municipal Corporation authorities in consultation with the Delhi Development Authority should endeavour to find a solution on the lines as suggested in Bombay Hawkers ' Union i.e. by creating Hawking and Non Hawking Zones and shifting the pavement squatters to areas other than Non Howking Zones.
The authorities in devising a scheme must endeavour to achieve a twin object viz., to preserve and maintain the beauty and the grandeur of this great historic city of Delhi from an aesthetic point of view, by reducing congestion on the public streets and removing all encroachments which cause obstruction to the free flow of traffic, and rehabilitate those unfortunate persons who by force of circumstances, are made to ply their trade or business on pavements or public streets.
In the result, the appeal must succeed and is allowed.
The judgment and order passed by the High Court are set aside and the writ petition filed by the respondent in the High Court is dismissed.
We direct however that the appellant Municipal Corporation of Delhi shall act in conformity with the judgment of the Subordinate Judge, II Class, Delhi in the aforementioned suits, which, not having been appealed from, has since become final inter partes.
No costs.
| In this appeal by special leave, the dispute arose out of a lease by a charitable trust in favour of a company.
The respondent Trust Bled a for possession of a property taken on lease from it by the appellant company.
The appellant responded by filing an application claiming protection under section 9 of the Tamil Nadu City Tenant 's Protection Act (the `Act ').
The application was accepted by the trial court which held that the company was entitled to the benefit of the Act and appointed a Commissioner to inspect the property and fix the minimum extent of the property required by the defendant for convenient enjoyment of the super structure which it would be entitled to purchase in terms of section 9.
The trustees filed an appeal, contending that the company was not entitled to the protection of section 9.
The appeal was allowed.
The company preferred a revision petition before the High Court, which dismissed it, holding that the application of the company under section 9 was not maintainable.
The company appealed to this Court, Dismissing the appeal, the Court, HELD: The short question to be decided was whether the company was entitled to the protection under section 9 of the Act.
This piece of legislation was enacted primarily for the protection of small tenants, who in certain municipal towns and adjoining areas had constructed buildings on others ' lands, by ensuring that they were not evicted so long as they paid a fair rent for the lease.
The Act also contained a provision whereunder a tenant could put up a claim to purchase the land in question from the owner.
[758C] PG NO 755 PG NO 756 The Act applies only to tenants in respect of land situated in certain areas where the tenancy has been created before a prescribed date.
The only controversy here was whether the lease in question could be said to be a lease of `land '.
Before a right of purchase can be exercised under section 9, the tenant must be a tenant of land, not comprising buildings or lands appurtenant thereto.
The High Court had held that there had been a lease not of the vacant land but of a building with the land appurtenant thereto and the provisions of the Act would not apply.
[764E, F G; 765F G] The case involved construction of the lease deed.
The language employed in the lease deed only showed that both land and building were leased.
Whether the land was to he treated as an appurtenant or not would depend upon the extent and nature of the land and its situation vis a vis the building thereon and not on whether the lease deed described the subject matter as `call that land and building" or Vice Versa.
If the deed had described the demised premises as `building and appurtenant land '.
that would have helped in ascertaining the intention of the parties but even that would not have been conclusive.
[766E G] The question whether a certain land is appurtenant or not is one of fact.
There was no reason to disturb the finding of the first appellate Court and the High Court that the land was appurtenant to the building.
The use of the land, in the circumstances of the case, was incidental to the enjoyment and beneficial use of the building.
[768B d] The clauses of the lease deed could not be construed as consisting of two separate leases, one, of the building and the other, of the land, as suggested by the lessees.
There were clear indications in the lease deed that it was a single, indivisible lease of both the building and the vacant land.
It was impossible to consider the document as comprising two leases.
It was a composite lease of a building with appurtenant land, sad having regard to the definitions contained in the Act, the Lessee was not entitled to the rights conferred by section 3 or section 9 of the Act.
[769D; 770F] Whether the Act applied to the lease or not was something which had to be considered on the terms of the lease deed, having regard to the nature of the property.
The clause regarding removal of the structures is the normal clause that occurs in the leases under the Transfer of Property Act.
The clause in this case made no mention of compensation and only talked of the lessees ' right to remove structures.
Even if no such clause had been inserted, that would have been the position in law.
It was not PG NO 757 possible to infer from such a natural clause that it had been put in with a view to denying compensation to the lessee and getting over the hurdle of the lessee putting in a claim for acquiring the property by purchase.
The lease deed was a simple lease deed containing the usual clauses and covenants expected in it and nothing more.
If the parties had been conscious of the possibility of the lessee claiming any rights under the Act, the lessors would have tried to safeguard themselves by making clear that what was let out was only a building and the appurtenant land.
[771C F] The appeal was dismissed.
Maharaja Singh vs State of U. P., [1977] 7 S.C.C. l55r referred to.
|
o. 2 of 1972.
Appeal by Special Leave from the judgment and order dated April 13, 1970 of.
the Allahabad High Court in Special Appeal No. 1074 of 1968.
M. C. Setalvad, P. N. Tiwari J. B. Dadachanji and Co. for the appellant.
R. K. Garg and section C. Agarwal, for the respondents.
The Judgment of the Court was delivered by Mathew, J.
The appellant filed a writ petition before the High Court of Allahabad, Lucknow Bench, challenging the validity of a resolution passed on 12 11 1967 by the Managing Committee of the Jai Narain College, Lucknow, formerly known as Kanyakubja Degree College, an associated college of the Lucknow University, terminating his services, and praying for issue of an appropriate writ or order quashing the resolution.
A learned single judge of that Court, finding that in terminating the services, the Managing Committee acted in violation of principles of natural justice, quashed the resolution and allowed the writ petition.
The Managing Committee appealed against the order.
A Division Bench of the High Court found that the relationship between the College and the appellant was that of master and servant and that even if the service of the appellant has been terminated in breach of the audi alteram partem rule of natural justice, the remedy of the appellant was to file a suit for damages and not to apply under Article 226 of the Constitution for a writ 322 or order in the nature of certiorari and that in fact no principle of natural justice was violated by terminating the services of the appellant as the appellant was given an opportunity of submitting his explanation to the charges.
The Bench, therefore, set aside the order of the learned single judge and dismissed the writ petition.
It is from this judgment that the appeal has been preferred by special leave.
The appellant joined the service of the college as lecturer in 1946.
He was promoted to the post of Head of the Department of Zoology in 1959.
On the basis of certain complaints against him received by the Manager of the College, charges were framed against him and his explanation was called for.
He submitted an explanation.
The explanation was found not to be satisfactory and the Managing Committee passed a resolution on 12 11 1967 for removal of the appellant from service.
As already stated, this was the resolution challenged by the appellant in the writ petition.
On behalf of the appellant, Mr. M. C. Setalvad, contended that the appellant had a statutory status, that his services were terminated in violation of the provisions of statutes passed under the.
Lucknow University Act, 1920 and, therefore the High Court was wrong in its conclusions that no application for a writ or order in the nature of certiorari would lie.
He further submitted that the appellant was not given a reasonable opportunity of defending himself against the charges.
it is well settled that, when there is a purported termination of a contract of service, a declaration that the contract of service still subsisted would not be made in the absence of special circumstances, because of the principle that Courts do not ordinarily enforce specific performance of contracts of service [see Executive Committee of U.P. State Warehousing Corporation Ltd. vs Chandra Kiran Tyagi(1)] and Indian Airlines Corporation vs Sukhdeo Rai( ').
If the master rightfully ends the contract, ,there can be no complaint.
If the master wrongfully ends the contract, then the servant can pursue a claim for damages.
So even if the master wrongfully dismisses the servant in breach of the contract, the employment is effectively terminated.
In Ridge vs Baldwin(3), Lord Reid said in his speech : "The law regarding master and servant is not in doubt.
There cannot be specific performance of a contract of service, and the master can terminate the contract with his servant at any time and for any reason or for none.
But if he does so in a manner not (1) ; (2) ; (3) (1965) Weekly Law Reports, Vol 1, 79.
323 warranted by the contract he, must pay damages for breach of contract.
So the question in a pure case of master and servant does n ot at all depend on whether the master has heard the servant in his own defence; it depends on whether the facts emerging at the trial prove breach of contract. 'But this kind of case can resemble dismissal from an office where the body employing the man is under some statutory or other restriction as to the kind of contract which it can make with its, ser vants, or the grounds on which it can dismiss them." A teacher appointed by a University constituted under a statute was held not to be holding an office or status in Vidyodaya University vs Silva(1).
In that case the services of the respondent was brought to an end by a resolution of the University Council set up under the statute establishing the University.
The resolution was admittedly passed without hearing the teacher.
Under the statute, the Council was empowered to institute professorships and every appointment was to be by an agreement in writing between the University and the professor and was to be for such period and on such terms as the Council might resolve.
Under section 18(e) of the Act, the Council had the power to dismiss an officer or a teacher on grounds of incapacity or conduct which, in the opinion of not less than two third of the members of the Council, rendered him unfit to be an officer or a teacher of the University.
Such a resolution with the requisite majority was passed.
The Act gave no right to the teacher of being heard by the Council.
The Privy Council held that the mere circumstances that the University was established by the statute and was regulated by statutory enactments contained in the Act did not mean that the contracts of employment made with teachers, though subject to section 18(e), were other than ordinary contracts of master and servant and, therefore, the procedure of being heard invoked by the respondent was not available to him and no writ could be issued against the University.
The decision in this case has been criticised by academic .writers (see Jaffe, English and American Judges as Law Makers, p. 26; S.A. de Smith, Judicial Review of Administrative Action, pp. 214 215; G. Ganz, Public Law Principles applicable to Dismissal from Employment, Modem Law Review, Vol.
30 pp. 288291).
Recently the House of Lords considered the question in Malloch vs Aberdeen Corporation (2) .
That case concerned a teacher in Scotland who was dismissed by the Education Committee for the reason that he was not registered in terms of paragraph 2 of schedule 2 to the Teachers ' (Education, Training and Registration) (Scotland) Regulations, 1967, made under section (1) [1964] 3 All F.R. 865.
(2) 324 2(1) of the Education (Scotland) Act, 1962, and the amending regulation 4(2) of the Schools (Scotland) Code, 1956.
In an action against the education authority, he claimed that the purported dismissal was a nullity in that it was contrary to natural, justice since he had not been given a hearing.
It was held (Lord Morris and Lord Guest dissenting) that the teacher had a right to be heard before he was dismissed as according to the majority he was holding an office.
In the course of his speech, Lord Wilberforce made certain observations "A comparative list of situations in which persons have been held entitled or not entitled to a hearing, or to observation of rules of natural justice, according to the master and servant test, looks illogical and even bizare.
A specialist surgeon is denied protection which is given to hospital doctor; a University professor, as a servant, has been denied the right to be heard, a dock laborer and an undergraduate have been granted it; examples can be multiplied [see Barber vs Manchester Regional Hospital Board , Palmar vs Inverness Hospitals Board of Management, [1963], $.C. 311, Vidyodaya University Council vs Silva , Vine vs National Dock Labour Board , Glynn vs Keele University One may accept that if there are relationships in which all requirements of the observance of rules of natural justice are excluded (and I do not wish to assure that this is inevitably so), these must be confined to what have been called "pure master and servant cases", which I take to Mean cases in which there is no element of public employment or service, no support by statute, nothing in the nature of an office or a status which is capable of protection.
If any of these elements exist, then, in my opinion, whatever the terminology used, and even though in some inter parties aspects the relationship may be called that of master and servant, there may be essential procedural requirements to be observed, and failure to observe them may result in a dismissal being declared to be void.
" and then he said as regards the decision in VidyodaYa University, Council vs Silva(1) : "It would not be necessary or appropriate to disagree with the procedural or even the factual basis on which this decision rests : but I must confess that I (1) 325 could not follow it in this country in so far as it involves a denial of any remedy of administrative law to analogous employments.
Statutory provisions similar to those on which the employment rested would tend to show, to my mind, in England or in Scotland, that it was one of a sufficiently public character, or one partaking sufficiently of the natu re of an office, to attract appropriate remedies of administrative law.
" Whether the decision in Vidyodaya University Council vs Silva(1) is correct or not, in this.
case, we think there was no element of public employment, nothing in the nature of an office or status which is capable of protection.
In section R. Tewari vs District Board, Agra(2), this Court formulated the exceptions to the general rule that when there is a termination of a contract of service, a declaration that the contract of service still subsisted would not be made, by saying : "But this rule is subject to certain well recognised exceptions.
It is open to the Courts, in an appropriate case, to declare that a public servant who is dismissed from service in contravention of Article 311 continues to remain in service, even though by so doing the State is in effect forced to continue to employ the servant whom it does not desire to employ.
Similarly, under the industrial law, jurisdiction of the labour and industrial tribunals to compel the employer to employ a worker, whom he does not desire to employ, is recognised.
The Courts are also invested with the power to declare invalid the act of a statutory body, if by doing the act, the body has acted in breach of a mandatory obligation imposed by the statute, even if by making the declaration the body is compelled to do something which it does not desire to do." Mr. Setalvad contended that since the college in question is affiliated to a statutory body, namely, the University of Lucknow,and is governed by the relevant statutes and ordinances framed under the provisions of Lucknow University Act, 1920, any violation of the statute or the ordinance in the matter of terminating the services of a teacher would attract the jurisdiction of the High Court under Article 226 of the Constitution as statutes and ordinances have the force of law.
In support of this, counsel relied upon the decision of this Court in Prabhakar Ramakrishna Jodh vs A. L. Pande and another(").
The appellant before this Court in that case was a teacher in a college affiliated to the University of Saugar and managed by the Governing Body (1) (2) ; (3) 326 established under the provisions of the relevant ordinance made under the University of Saugar Act.
Certain charges were framed against the appellant by the Principal of the College and he was asked to submit his explanation.
The appellant in his explanation denied all the charges and requested for particulars on which one of the charges was based.
The particulars were not supplied and the Governing Body terminated his services without holding any enquiry.
The appellant moved the High Court under Article 226 of the Constitution for a writ quashing the order of the Governing Body and for his reinstatement.
He contended that the Governing Body had made the order in violation of the provisions of Ordinance 20, otherwise called the 'College Code, framed under section 32 of the University of Saugar Act read with section 6 (6) of that Act.
Clause 8 (vi (a) of the College Code provided that the Governing Body of the college shall not terminate the services of a confirmed teacher without holding an enquiry and without giving him an opportunity of defending himself.
The High Court held that the conditions of service of the appellant were governed not by the 'College Code ' but by the contract made between the Governing Body and the appellant under clause 7 of the College Cod& which stated that all teachers of the college shall be appointed under a written contract in the form prescribed , that the provisions of the 'College Code ' were merely conditions prescribed for affiliation of colleges and that no legal rights were created by the 'College Code ' in favour of the teachers of the affiliated colleges as against the Governing Body.
The High Court, therefore, dismissed the petition.
In appeal to this Court it was held that the 'College Code ' had the force of law and that it not merely regulated the legal relationship between the affiliated colleges and the University but also conferred legal rights on the teachers of affiliated ,colleges.
The Court further said "It is true that Clause 7 of the Ordinance provides that all teachers of affiliated colleges shall be appointed on a written contract in the form prescribed in Sch.
A but that does not mean that teachers have merely a contractual remedy against the Governing Body of the College.
On the other hand, we are of opinion that the provisions of Clause 8 of the Ordinance relating to security of the tenure of teachers are part and parcel of the teachers ' service conditions. . " When once this Court came to the conclusion that the 'College Code ' had the force of law and conferred rights on the teachers of affiliated colleges, the right to challenge the order terminating the services of the appellant, passed in violation of clause 8 (vi) (a) of the 'College Code ' in a proceeding under Article 226 327 followed 'as the night the day ' and the fact that the appellant had entered into a contract was considered as immaterial.
In the case in hand, the position is entirely different.
The relevant statutes governing this case are statutes 151, 152 and 153, framed under the provisions of the Lucknow University Act, 1920.
Statute 151 provides that teachers of an Associated College including the ' principal shall be appointed on written contract and that the contract shall inter alia provide the conditions mentioned therein in addition to such other conditions not inconsistent with the Act and the statutes as an Associated College may include in its own form of agreement.
Then the conditions as regards salary, age of retirement, etc., are enumerated.
The statute then goes on to specify the grounds on which a teacher 's services can be terminated.
Statute 152 states that the form of agreement to be adopted by each college shall be approved by the Executive Council before it is put in force.
Statute 153 provides for a form of agreement which shall serve as a model.
It may be noted that statute 151 does not provide for any particular procedure for dismissal or removal of a teacher for being incorporated in the contract.
Nor does the model form of contract lay down any particular procedure for that purpose.
The appellant had entered into an agreement when he was employed in the college.
Clause 5 of the agreement provided that : "the period of probation shall be one year unless extended by the Managing Committee and the College may at any time during the said period of probation put an end to this engagement, or if service shall continue beyond the said term, at any time thereafter, dispense with the services of the said Lecturer without notice, if the Managing Committee of the said College is satisfied that it is necessary to remove the said Lec turer for misconduct, insubordination or habitual neglect of duty on the part of the said Lecturer 'or in case any of the conditions herein specified have been broken by the said Lecturer provided that an oppor tunity is given to him by the said Managing Committee to give his explanation before a decision is arrived at.
" On a plain reading statute 151, it is clear that it only provides that the terms and conditions mentioned therein must be incorporated in the contract to be entered into between the college and the teacher concerned.
It does not say that the terms and conditions have any legal force, until and unless they are embodied in an agreement.
To put it in other words, the terms and conditions of service mentioned in Statute 151 have proprio 328 vigore no force of law.
They become terms and conditions of service only by virtue of their being incorporated in the contract.
Without the contract, they have no vitality and can confer no legal rights.
Whereas in the case of Prabhakar Ramakrishna Jodh vs A. L. Pande and another(1), the terms and conditions of service embodied in clause 8 (vi) (a) of the 'College Code ' had the force of law apart from the contract and conferred rights on the appellant there, here the terms and conditions mentioned in Statute 151 have no efficacy, unless they are incorporated in a contract.
Therefore, appellant cannot found a cause of action on any breach of the law but only on the breach of the contract.
As already indicated, Statute 151 does not lay down any procedure for removal of a teacher to be incorporated in the contract; So, clause 5 of the contract can, in no event, have even a statutory flavor and for its breach, the appellant 's remedy lay elsewhere.
Besides, in order that the third exception to the general rule that no writ will lie to quash an order terminating a contract of service, albeit illegally, as stated in section R. Tewari vs District Board, Agra(2) might apply, it is necessary that the order must be the order of a statutory body acting in breach of a mandatory obligation imposed by a statute.
The college, or the Managing Committee in question, is not a statutory body and so the argument of Mr. Setalvad that the case in hand will fall under the third exception cannot be accepted.
The contention of counsel that this Court has sub silentio sanctioned the issue of a writ under Article 226 to quash an order terminating services of a teacher passed by a college similarly situate in Prabhakar Ramakrishna Jodh vs A. L. Pande and another(1), and, therefore, the fact that the college or the managing committee was not a statutory body was no hindrance to the High Court issuing the writ prayed for by the appellant has no merit as this Court expressly stated in the judgment that no such contention was raised in the High Court and so it cannot be allowed to be raised in this Court.
In this view of the matter, it is quite unnecessary to go into the question whether the appellant was given sufficient opportunity to meet the charges against him.
We hold that the High Court was right in its view that the writ petition was incompetent.
We, therefore, dismiss the appeal but, in the circumstances, we make no order as to costs.
section N. Appeal dismissed.
| The appellant joined as a lecturer in a College in U.P.
On the hub ,of certain complaints received by the Manager of the College, charges were framed against him and his explanation, was called for.
He submitted an explanation.
The explanation was found unsatisfactory and the Managing Committee passed a resolution for removal of the appellant from service.
The relevant statutes governing the present case are Statutes 151, 152 and 153 framed under the provisions of the Lucknow University Act, 1920.
The appellant filed a writ petition before the High Court challenging the validity of the resolution and a learned single judge finding that the Managing Committee acted in violation of the principles of natural justice, quashed the resolution and allowed the writ petition.
On appeal, a Division Bench set aside the order of the learned single judge and dismissed the writ petition on the ground that no writ lies in the facts and circumstances of the case.
The remedy of the appellant lay in a suit for damages.
On behalf of the appellant it was contended that the appel lant had a statutory status, that his services were terminated in violation of the provisions of the statutes passed under the Lucknow University Act, 1920 and therefore, the High Court was wrong in its conclusions that no writ of certiorari would lie against the respondent.
It was further submitted that ,the appellant was not given a reasonable opportunity of defending himself against the charges.
Statue 151 provides that a teacher of an associated College shall be appointed on a written contract and the contract shall provide the conditions mentioned there in addition to such other conditions as the associated College may include in the agreement.
Clause 5 of the agreement provides that the Managing Committee may dispense with the services of a lecturer without notice if the Committee is satisfied that it is necessary to remove the said lecturer for misconduct or otherwise, provided, an opportunity is given to him by the Committee to give his explanation before a decision is arrived at.
Dismissing the appeal.
HELD : (1) When there is a purported termination of a contract of service,.
a declaration that a contract of service 'still subsisted would not be made in the absence of special circumstances and courts do not ordinarily enforce specific performance of a contract of service.
The remedy of the victim lies in a claim for damages, not a claim for a declaration that the contract of service still subsisted.
[322 E F] Executive Committee of U.P. State Warehousing Corporation Ltd. vs Chandra Kiran Tyagi, ; ; and Indian Airlines Corporation vs Sukh Dev Rai, ; followed.
(2) On a plain meaning of statute 151, it is clear that it only provides that the terms and conditions mentioned therein must be incorporated in 321 the contract to be entered into between the College and the teacher concerned.
It does not say that the terms and conditions have any legal force, until: and unless they are embodied in an agreement.
The terms and conditions of service mentioned in Statute 151 have proprio vigore, no force of law.
They become terms of service only by virtue of their being incorporated in a contract.
Without the contract, they have no vitality and can confer no legal right.
Therefore, the appellant cannot find a cause of action of any breach of law, but only on the breach of the con tract, for which a writ in the nature of ceritiorari will not lie [327 H] (3) A writ will lie when the order is the order of a statutory body acting in breach of a mandatory obligation imposed by a statute.
The College or the Managing Committee in question, is not a statutory body and so the High Court is right is dismissing the petition.[328 D] Further, since the High Court has no jurisdiction, it is not necessary to go into the question as to whether the appellant was given sufficient opportunity to meet the charges against him.
[328 G] Prabhakar Ramkrishna Jodh vs A. L. Pande & anr.
[1965] 2 S.C.R. 713, and Vidyodaya University vs Silva discussed and distinguished.
|
No. 307 of 1971.
Under article 32 of the Constitution of India for a writ in the nature of habeas corpus.
R. K. Jain, for the petitioner G. L. Mukhoty and G. section Chatterjee, for the respondent.
The Judgment of the Court was delivered by Khanna, J.
This is a petition through jail under article 32 of the Constitution of India for the issuance of a writ of habeas corpus by Ram Krishna Paul who has been ordered to be detained under section 3 of the West Bengal (Prevention of Violent Activities) Act, 1970 (President 's Act No. 19 of 1970), hereinafter referred to as the Act.
402 The order of detention was made against the petitioner under sub section (1) read with sub section (3) of section 3 of the Act by the District Magistrate, Murshidabad on January 27, 1971.
According to the order of detention, the District Magistrate was satisfied with respect to the petitioner that with a view to preventing him from acting in any manner prejudicial to the maintenance of public order, it was necessary to make an order directing his detention.
The petitioner in pursuance of the detention order was arrested on January 28, 1971 and was served with the same day with the ground of detention together with vernacular translation thereof.
Report about the making of the detention order was sent by the District Magistrate to the State Government along with the grounds of detention and other particulars on January 27, 1971.
The report and the particulars were considered by the State Government and the order of detention was approved by the said Government on February 5, 1971.
The same day the State Government submitted a report to the Central Government together with the grounds of detention and other particulars.
On February 18, 1971 the State Government in its Home Department received re presentation dated February 15, 1971 sent by the petitioner.
The said representation after consideration was rejected by the State Government 'on March 23, 1971.
In the meanwhile, on February 25, 1971 the State Government placed the case relating to the petitioner before the Advisory Board.
The representation made by the petitioner was sent by the State Government to the Board on March 23, 1971.
The Advisory Board after hearing the petitioner, sent its report to the State Government on April 5, 1971.
Opinion was expressed in its report by the Advisory Board that there was sufficient cause for the detention of the petitioner ' The State Government confirmed the order of detention of the peti tioner on May 31, 1971.
The confirmation order was communi cated to the petitioner as per memorandum dated June 10, 1971.
The petition was resisted by the respondents and the affidavit of Shri Manoranjan Dey, Assistant Secretary, Home (Special) Department, Government of West Bengal was filed in opposition to the petition.
After hearing Mr. R. K. Jain who argued the matter amicus curiae on behalf of the petitioner and Mr. G. L. Mukhoti on behalf of the respondents on January 13, 1972, we directed that, for reasons to be recorded later, the petitioner should be set at liberty.
We now proceed to give reasons in support of our decision.
Although a number of submissions were made on behalf of the petitioner at the hearing, it is, in our opinion, not necessary to deal with all of them as the detention order is liable to be quashed because one of the grounds for the detention of the petitioner was 403 extraneous and did not in law justify the making of the detention order.
The grounds of detention which were supplied to the peti tioner under sub section (1) of section 8 of the Act read as under : " (1) That on 8 12 70 at about 20.00 hours you along with your associates went to Jnanada Pharmacy in Berhampore town posing yourself a purchaser of medicine and demanded money from the owner of the Pharmacy in the name of collection towards party fund.
Out of fear, the owner of the pharmacy delivered Rs. 10/to you.
(2) That on 18 12 70 at about 20.00 hours you along with your associates had been to Punjab Dastralaya Khagra, P. section Berhampor and demanded Rs. 100/from the shopkeeper at the point of dagger on the plea of collecting donation towards the party fund.
Putting the owner of the shop in fear of instant death, you induced him to deliver up an amount of Rs. 100/ then and there, (3) That on 22 10 70 at about 19.30 hours you along with your associates had been to Jnanada Pharmacy, Berhampore town and demanded Rs. 250/ from the owner of the Pharmacy at the point of dagger putting him in fear of instant death.
The owner of the Pharmacy was spared on payment of Rs. 50/ forthwith.
You and your associates went away fixing 26 12 70 for payment of the remaining amount.
(4) That on 26 12 70 a,.
about 20.00 hours you along with your associates came to Jnanada Pharmacy, Berhampore and realised Rs. 20/ from the owner of the Pharmacy at the point of dagger putting him in fear of instant death.
" The various circumstances under which a Person can be ' ordered to be detained have been set out in the different clauses of section 3 of the Act.
Ground No. 1 supplied to the petitioner, in our opinion, does not fall under any of those clauses.
According to Mr. Mukhoti the facts set out in ground No. 1 would show that the petitioner received Rs. 10/ from the owner of Jnanada Pharmacy as a result of extortion.
Extortion has been defined in section 383 of the Indian Penal Co& as under : "Whoever intentionally puts any person in fear of any injury to that person, or to any other, and thereby 404 dishonestly induces the person so put in fear to deliver to any person any property or valuable security or anything signed or sealed which may be converted into a valuable security, commits "extortion.
" It would appear from the above definition that before a person can be guilty of extortion, he should intentionally put any person in fear of injury, to that person or to any other, and thereby induce that person so put in fear to deliver to any person some property, valuable security or anything signed or sealed which may be converted into valuable security.
Intentionally putting a person in fear of injury to himself or any other is, thus, a necessary ingredient of the offence of extortion.
In ground No. 1, however, there is no allegation that the petitioner had put any person in fear of any injury, to that person or to any other.
As such, it cannot besaid that the petitioner was guilty of extortion.
We thus find that ground No. 1 was of an extraneous character and did not justify an order of detention.
There is also nothing to show that the District Magistrate would have passed an order of detention of the petitioner in case he was not influenced by facts given in ground No. 1.
The extraneous nature of even one of the grounds of detention would, in our opinion, vitiate the order of detention.
We, therefore, quash the order of detention of the petitioner.
| Admission to the integrated M.B.B.S. Course in the government medical colleges in Andhra Pradesh was from two sources, namely, those who had passed the pre University Course and those who had passed the Higher Secondary Course (Multi purpose) and a student from either course had to appear at a competitive test.
By G.O. No. 1648/Health dated July 23, 1970 40% of the seats were reserved for those candidates who had passed the Higher Secondary Course (Multi purpose).
Seats.
were also reserved for Scheduled Tribes and Scheduled Caste candidates.
Apart from these there was a reservation of 25% in favour of Backward Classes as enumerated by the Andhra Pradesh Backward Classes Com mission.
This reservation was provided by G.O. No. 1793/Education.
dated September 23, 1970.
The respondents who were candidates at the entrance examination for admission to these colleges were not selected on account of these reservations.
They filed writ petitions in the High Court challenging rule 9 under which 40% reservation had been made in favour of those passing Higher Secondary Course (Multi purpose) and the aforesaid G.O. making 25% reservation in favour of the Backward Classes.
The High Court by its judgment allowed the writ petitions and directed the State to give admission to the writ petitioners in the lst year, Integrated M.B.B.S. Course.
The High Court held that the only basis for selection for the first year course is the marks obtained by a candidate ,at the entrance test.
The selection thereafter should only be on the basis of highest number of marks irrespective of the fact as to whether the candidate was from the pore university course or the higher secondary course.
Rule 9 providing for the reservation of the 40%, in favour of ' HSC (M.P.) candidates was, therefore, struck down as offending Article, 14 of the Constitution.
Regarding the 25% seats in the colleges reserved for the Backward Classes the High Court held that the government order concerned was violative of Article 15(1) of the Constitution read with Article 29 and that it was not saved by Article 15(4) of the Constitution.
In appeal by the State of Andhra Pradesh, HELD : (1) It is no doubt open to the State to prescribe the source from which the candidates are declared eligible for applying for admission to the medical colleges; but when once a common entrance test has been prescribed for all the candidates on the basis of which the selection has to be made the rule providing further that 40% of the, seats will have to be reserved for H.S.C. candidates is arbitrary.
In the first place after 248 common test has been Prescribed there cannot be a valid classification ,,of PUC and Hsc candidates.
Even assuming that such classification is valid, the said classification has no reasonable relation to the object sought to be achieved, namely, selecting best candidate for the admission to the Medical Colleges.
The reservation of 40% to the H.S.C. candidates has no reasonable relation to the said object.
Hence the High Court was right when it struck down this reservation under rule 9 contained in G.O. No. 1648 of 1970 as violative of Article 14.
[266 C E] (ii) (a) Though prima facie the list of Backward Classes which was under attack may be considered to be on the basis of caste, a closer examination would clearly show that it is only a description of the group following the particular occupations or professions, exhaustively referred to by the Commission.
Even on the assumption that the list is based exclusively on caste, it was clear from the materials before the Commission and the reasons given by it in its report that the entire caste is socially and educationally backward and therefore the inclusion of subcaste in the list of Backward Classes is warranted by article 15(4).
The groups mentioned therein have been included in the list of Backward Classes as they satisfy the various tests which have been laid down by this Court for ascertaining social and educationally backward classes.
The list of Backward Classes as well as reservation of 25% of seats in Pro fessional Colleges for the persons mentioned in the said list was valid and was saved by article 15(4) of the Constitution and the High Court was wrong balding to the contrary.
[285 C D; 287 F G] (b) The actual living conditions of habitation of the classes under investigation can be satisfactorily judged and found out only on a personal visit to the areas which will give a more accurate Picture of their living conditions and their surroundings.
If the personal impression gathered 'by the members of the commission had also been utilised to augment the various other materials gathered as a result of detailed investigation it could not be said that the report of the Commission suffered from any vice merely on the ground that they imported personal knowledge.
[285 H286 A] (c) The criticism that the Commission had divided classes into more 'backward and less backward was not well founded.
on the other hand what the Commission had recommended was the distribution of seats amongst the reserved classes in proportion to their population.
This was not a division of the Backward Classes as more backward and less backward.
[286 D] (d) If a situation arises wherein the candidates belonging to the group included in the list of backward classes are able to obtain more seats on the basis of their own, merit it is the duty of the government to review the question of further reservation of seats for such groups If once a class appears to have reached a stage of progress from which it could be safely inferred that no further protection is necessary the State will do well to review such instances and suitably revise the list of Backward Classes.
[286 H] (e) In the present case under G.O. No. 1793 of 1970 the total reservation was only 43%.
The break up of that percentage is 25%, 4% and 14% for the Backward Classes, Scheduled Tribes and Scheduled Castes respectively.
The quantum of reservation was thus well within limit mentioned in Balaji 's case.
[287 E] State of Andhra Pradesh and another vs Lavu Narendra Nath and ,Others, , Gullapalli Nageswara Rao and Others vs 249 Principal Medical College, Guntur and Others, A.I.R. 1962 A.P. 212.
P. Sagar and Others vs State of Andhra Pradesh, represented by Health Department, Hyderabad and ' Others, A.I.R. 1968 A.P. 165, State Of Andhra Pradesh and Another vs P. Sagar, , Chitra Ghosh and Another vs Union of India and Others, ; , Minor P. Rajendra vs State of Madras, ; , Ganga Ram and Others vs Union of India and Others, A.I.R. 1970 S.C. 2178, D. N. Chanchala etc.
vs State of Mysore and Others ; , State of Maharashtra and Another vs Lok Shikshan Sanasatha and Ors., ; , Minor A. Periakaruppan and Anr.
vs State of Tamil Nadu and Ors.
; , P. Sukhadev vs The Government of Andhra Pradesh, , Triloki Nath Tiku and Anr.
vs State of Jammu & Kashmir and Ors.
[1967] 2 S.C.R. 265, M. R. Balaji and Ors.
vs State of Mysore, [1963] Supp.
I S.C.R. 438, R. Chitralekha and Anr.
vs State of Mysore and Ors.
, ; , State of Madras vs Shrimati Champakam Dorairajan, ; and Triloki Nath and Anr.
vs State of Jammu & Kashmir and Ors., [1969] I S.C.R.103, referred to.
|
ition No. 2701 of 1981.
(Under article 32 of the Constitution of India.) section K Mehta, P. N. Puri, E. M. Sardul Anam, M. K Dua and K M. Jain for the Petitioner.
V. M. Tarkunde and section K Jain for Respondents Nos. 7, 8, 15, 25 28, 29, 31, 33, 38, 41.
K Parasaran Sol.
Gen. and Badri Das Sharma for Respondent No. 1.
N.L. Jain and Badri Das Sharma for Respondent No. 2.
Badri Das Sharma for Respondent No. 3.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
What is the ideal mode of selection to a Public Service, by written examination, by oral test (viva voce), or by a combination of both ? If the last, what is the proper, relative weight that should be attached to the written examination and the oral test ? Is the oral test so pernicious in practice, as suggested by some, that it should be abandoned without regrets or the weight to be attached to it be made minimal ? Has any such consensus emerged among the informed and the cognoscenti as to require the Court to scrap a selection as arbitrary on the sole ground that the weight accorded to the oral test appeared to be high ? 323 Pursuant to the Rajasthan Judicial Service rules made by the Governor of Rajasthan in consultation with the Rajasthan Public Service Commission and the High Court of Rajasthan, the Rajasthan Public Service Commission held a competitive examination for recruitment of Munsifs.
The competitive examination consisted of a written examination with two papers in law carrying 100 marks each and two papers, one in Hindi and the other in English, each carrying SO marks and a viva voce examination carrying 100 marks.
The viva voce examination was conducted by a Board consisting of Hon 'ble Mr. Justice P. D. Kudal, Judge, Rajasthan High Court, Shri Hari Datt Gupta, Chairman, Rajasthan Public Service Commission, Adaviappa, Member, Rajasthan Public Service Commission and an expert.
The expert Member was either Dr. I. C. Saxena, or Shri Kagzi or Shri Jallan who sat by rotation.
Schedule III of the Rajasthan Judicial Service rules prescribes the criteria to be considered and the matters to be tested in the viva voce examination.
The relevant paragraph is as follows: "In interviewing the candidates, the suitability for employment to the judicial service shall be decided with reference to his record at the school, College and University and his character, personality, address and physique.
The questions which may be put up to him may be of a general nature and will not necessarily be academic or legal.
The candidates will also be put questions to test the general knowledge including knowledge of current affairs and present day problems.
The marks so awarded shall be added to the marks obtained in the written test by each candidate. '.
The result of the competitive examination was announced by the Rajasthan Public Service Commission on March 12, 1981 and respondent Nos. 3 to 41 were declared selected for appointment.
Out of the 39 candidates who were selected for appointment, one belonged to the scheduled castes and the rest belonged to the general category.
The last of the candidates belonging to the general category who was selected for appointment obtained a total of 190 marks in the examination, 135 in written examination and 55 in the viva voce.
The petitioner who obtained a total of 189 marks, 159 in the written test and 30 in the viva voce was not selected for appointment.
He has filed the present writ petition under article 32 of the Constitution questioning the selection.
324 Shri Mehta learned counsel for the petitioner raised two principal contentions before us.
The first was that the entire selection was vitiated by the allocation of 25 percent of the total marks for the viva voce examination.
The submission was that the allocation of so high a percentage of marks for the interview test introduced an irredeemable element of arbitrariness so as to offend Articles 14 and 16 of the Constitution.
In support of this submission reliance was placed on the decisions of this Court in Ajay Hasia etc.
Khalid Mujib Sehravardi & ors.
etc.(l) Shri Mehta 's second contention was that marks were awarded in the interview test in a single lot instead of sub dividing and awarding marks separately under various heads for the various matters tested in the interview.
Reliance was placed on Periakaruppan vs Stare of ' Tamil Nadu (2).
The object of any process of selection for entry into a public service is to secure the best and the most suitable person for the job, avoiding patronage and favouritism.
Selection based on merit, tested impartially and objectively, is the essential foundation of any useful and efficient public service.
So, open competitive examination has come to be accepted almost universally as the gateway to public services".
"The ideal in recruitment is to do away with unfairness(3)".
"Competitive examinations were the answer to the twin problems represented by democracy and the requirements of good administration.
They were the means by which equality of opportunity was to be united with efficiency.
By this means favouritism was to be excluded and the goal of securing the best man for every job was to be achieved(4)".
"open competitive examinations are a peculiarly democratic institution.
Any qualified person may come forward.
His relative competence for appointment is determined by a neutral, disinterested body on the basis of objective evidence supplied by the candidate himself.
No one has "pull"; everyone stands on his own feet.
The system is not only highly democratic it is fair and equitable to every competitor.
The same rules govern, the same procedures apply, the same yardstick is used to test competence(S).
How should the competitive examination be devised ? The 325 Kothari Committee on Recruitment Policy and Selection methods in their report said: "A system of recruitment almost totally dependent on assessment of a person 's academic knowledge and skills, as distinct from ability to deal with pressing problems of economic and social development, with people, and with novel situations cannot serve the needs of today, much less of tomorrow.
We venture to suggest that our recruitment procedures should be such that we can select candidates who can not only assimilate knowledge and sift material to understand the ramifications of a situation or a problem but have the potential to develop an original or innovative approach to the solution of problems".
It is now well recognised that while a written examination assesses a candidate 's knowledge and intellectual ability, an interview test is valuable to assess a candidate 's overall intellectual and personal qualities.
While a written examination has certain distinct advantage over the interview test there are yet no written tests which can evaluate a candidate 's initiative, alertness, resourcefulness, dependableness, cooperativeness, capacity for clear and logical presentation, effectiveness, in discussion, effectiveness in meeting and dealing with others, adaptability, judgment, ability to make decision, ability to lead, intellectual and moral integrity.
Some of these qualities may be evaluated, perhaps with some degree of error, by an interview test, much depending on the constitution of the interview Board.
O. Glenn Stahl in his Public Personnel Administration points out: "Any form of written test possesses certain administrative advantages over the oral and performance types.
The written form is much easier and cheaper to administer.
It can be given to a large number of individuals at the same time, thus conserving the time of the examiners.
As a general rule it is easier to evaluate objectively, and the technical proficiency demanded in rating is usually, although not always, less.
The oral test has long served as a basic selection tool in private employment but has been more slowly accepted in the public field.
This conservatism arises out of three considerations: (I) the difficulty of developing valid and reliable oral tests; (2) the difficulty of securing a reviewable record of an oral test; and (3) public suspicion of the oral as a channel for the exertion of politi 326 cal influence through the destruction of anonymity.
Despite these acknowledged disadvantages, however, orals have been used increasingly in public personnel testing and have become important instruments wherever tests of personal attributes are considered essential.
As we have noted no satisfactory written tests have yet been devised for measuring such personal characteristics as initiative, ingenuity and ability to elicit cooperation, many of which are of prime importance.
When properly employed, the oral test today deserves a place in the battery used by the technical examiner.
The general principle is that resort should never be had to an oral if the relevant factor to be tested can be measured at some other point in the examining process.
The reason is that the reliability of the oral, even under the best of conditions, tends to be lower than that of the well designed written test.
The oral test should be confined, then, to the evaluation of relevant traits which cannot be measured in any other way" (p. 92) In the United Nations Hand Book on Civil Service Laws and Practice it is said: ". the written papers permit an assessment of culture and intellectual competence.
The interview permits an assessment of qualities of character which written papers ignore; it attempts to assess the man himself and not his intellectual abilities".
Thus, the written examination assesses the man 's intellect and the interview test the man himself and "the twain shall meet" for a proper selection.
If both written examination and interview test are to be essential features of proper selection, the question may arise as to the weight to be attached respectively to them.
In the case of admission to a college, for instance, where the candidate 's personality is yet to develop and it is too early to identify the personal qualities for which greater importance may have to be attached in later life, greater weight has per force to be given to performance in the written examination.
The importance to be attached to the interview test must be minimal.
That was what was decided by this Court in Periakaruppan vs State of Tamil Nadu, Ajay Hasia etc.
vs Khalid Mujib Sehravardi & ors.
, (supra) and other cases.
On the other hand, in the case of services to which recruitment has necessarily to be made from persons of mature 327 personality, interview test may be the only way, subject to basic and essential academic and professional requirements being satisfied.
To subject such persons to a written examination may yield unfruitful and negative results, apart from its being an act or cruelty to those persons.
There are, of course, many services to which recruitment is made from younger candidates whose personalities are on the threshold of development and who show signs of great promise, and the discerning may in an interview test, catch a glimpse of the future personality.
In the case of such services, where sound selection must combine academic ability with personality promise, some weight has to be given, though not much too great weight, to the interview test.
There cannot be any rule of thumb regarding the precise weight to be given.
It must vary from service to service according to the requirements of the service.
the minimum qualifications prescribed, the age group from which the selection is to be made, the body to which the task of holding the interview test is proposed to be entrusted and a host of other factors.
It is a matter for determination by experts.
It is a matter for research.
It is not for Courts to pronounce upon it unless exaggerated weight has been given with proven or obvious oblique motives.
The Kothari Committee also suggested that in view of the obvious importance of the subject, it may be examined in detail by the Research Unit of the Union of Public Service Commission.
In this background, let us now examine the situation presented by the Rajasthan rules.
The Rajasthan Judicial Service rules leave been made by the Governor of Rajasthan in consultation with the High Court of Rajasthan and the Rajasthan Public Service Commission.
The High Court may be expected to know the precise requirements of the judicial service of the State and the calibre of the available source material, while the Public Service Commission is an expert body thoroughly conversant with recruitment policies and selection methods.
Both the High Court and the Public Service Commission are independent bodies, outside executive control, occupying special positions and enjoying special status under the constitution.
Neither is an outside agency.
Both are well acquainted with the particular needs of their State and the people.
If the Governor, in consultation with the High Court and the Public Service Commission of the State makes rules stipulating seventy five percent of the marks for the written examination and twenty five percent for the interview test, on what basis can a Court say that twenty five percent for the interview test is on the high side ? It must not also be forgotten that the interview test is generally conducted 328 and was, in the present case, conducted by a body consisting of a Judge of the High Court, the Chairman and a member of the Public Service Commission an d a special invitee expert.
There can surely be no legitime grievance or hint of arbitrariness against this body.
Yet another factor worthy of consideration is that the candidates expected to offer themselves for selection are not raw Graduates freshly out of college but are persons who have already received a certain amount of professional training.
The source material is such that some weightage must be given to the interview test and can it possibly be said that twenty five per cent of the total marks is an exaggerated weightage.
We may add here that it has been made clear by the Chairman, Rajasthan Public Service Commission on whose behalf a counter affidavit has been filed before us that the marks obtained by the candidates at the written examination were not made available to the members of the interview Board either before or at the time of the interview.
We are unhesitatingly of the view that the selection cannot be struck down on the ground that more than due weightage was given to the interview test.
The second ground of attack must fail for the same reason as the first ground of attack.
The rules themselves do not provide for the allocation of marks under different heads at the interview test.
The criteria for the interview test bas been laid down by the rules.
lt is for the interviewing body to take a general decision whether to allocate marks under different heads or to award marks in a single lot.
The award of marks under different heads may lead to a distorted picture of the candidate on occasions.
On the other hand the totality of the impression created by the candidate on the interviewing body may give a more accurate picture of the candidate 's personality.
It is for the interviewing body to choose the appropriate method of marking at the selection to each service.
There cannot be any magic formulae in these matters and courts cannot sit it judgment over the methods of marking employed by interviewing bodies unless, as we said, it is proven or obvious that the method of marking was chosen with oblique motive.
Both the cases cited before us Periakaruppan 's case and Ajay Hasia 's case were cases of admission to colleges.
We have already pointed out that the provision for marks for interview test need not and cannot be the same for admission to colleges and entry into public services.
In fact in Periakaruppan 's case, even in the case of college admissions the Court observed: 329 "While we do feel that the marks allotted for interview are on the high side and it may be appropriate for the Government to re examine the question, we are unable to uphold the contention that it was not within the power of the Government to provide such high marks for interview or that there was any arbitrary exercise of power".
It is true that in Periakaruppan 's case the Court held that the non allocation of marks under various heads in the interview test was illegal but that was because the instructions to the Selection Committee provided that marks were to be awarded at the interview on the basis of five distinct tests.
It was thought that the failure to allocate marks under each head or distinct test was an illegality.
But, in the case before us, the rule merely and generally indicates the criteria to be considered in the interview test without dividing the interview test into distinct, if we may so call them, sub tests.
We do not think that Periakaruppan 's case, which, as we said, deals with admission to a college, affords any true guidance to us.
Ajay Hasia 's case was also a case of admission to a college.
The Court while upholding the interview test as not irrational or irrelevant though unsatisfactory and capable of abuse, made the following observation: "We would, however, like to point out that in the matter of admission of colleges or even in the matter of public employment, the oral interview test as presently held should not be relied upon as an exclusive test, but it may be resorted to only as an additional or supplementary test and, moreover, great care must be taken to see that persons who are appointed to conduct the oral interview test are men of high integrity, calibre and qualification".
The Court then proceeded to consider the next question raised before them, whether the allocation of 33 113 percent of the total marks for the interview test vitiated the selection procedure as arbitrary and unreasonable.
It was held that it did and reference was made to the fact that even for selection of candidates for the Indian Administrative Service the marks allocated for the interview test were only 12.2 percent of the total.
It was then observed, "under the existing circumstances, allocation of more than 15% of the total marks for the oral interview would be arbitrary and unreasonable and would be liable to be struck down as constitutionally invalid".
The observations of the Court were made, primarily 330 in connection with the problem of admission to colleges, where naturally, academic performance must be given prime importance.
The words "or even in The matter of public employment" occurring in the first extracted passage and the reference to the marks allocated for the interview test in the Indian Administrative Service examination were not intended to lay down any wide, general rule that the same principle that applied in the matter of admission to colleges also applied in the matter of recruitment to public services.
The observation relating to public employment was per incuriam since the matter did not fall for the consideration of the Court in that case.
Nor do we think that the Court intended any wide construction of their observation.
As already observed by us the weight to be given to the interview test should depend on the requirement of the service to which recruitment is made, the source material available for recruitment, the composition of the interview Board and several like factors.
Ordinarily recruitment to public services is regulated by rules made under the proviso to article 309 of the Constitution and we would be usurping a function which is not ours, if we try to redetermine the appropriate method of selection and the relative weight to be attached to the various tests.
If we do that we would be rewriting the rules but we guard ourselves against being understood as saying that we would not interfere even in cases of proven or obvious oblique motive.
There is none in the present case.
The Writ Petition is therefore dismissed but in the circumstances there will be no order regarding costs.
V.D.K. Petition dismissed.
| One Smt.
Ram Kali, widow of Tikam Singh, was the land holder of the agricultural lands in dispute situated in villages Agaota and Khaiya Khera in District Bulandshahr (U.P.).
On June 14, 1915 Smt.
Ram Kali, who was a Sirdar and a "disabled person" falling within section 157(1) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, executed a registered deed of lease fora period of five years in favour of Uttam Singh and Murli Singh (the predecessors in title of the respondents) but before the expiry of the period of five years she died in August, 1945 and Dan Sahai, who was also "disabled person" within the meaning of section 157(1) of the Act, (her husband 's real brother and predecessors in title of the appellants) inherited her interest.
After the expiry of the period of registered lease Uttam Singh and Murli Singh continued to hold the lands as tenants from year to year under Dan Sahai.
In consolidation proceedings a question arose, whether Uttam Singh and Murli Singh, who were lessees (adhivasis) under Smt.
Ram Kali and Dan Sahai acquired the status of Sirdars, being entitled to be treated so under section 240B of the Act or they remained Asamis of the plots in dispute.
The Division Bench of the Allahabad High Court, relying on the earlier view taken by its Full Bench in Smt.
Maya vs Raja Dulaji and others , decided the appeals in favour of the respondents by holding that they were not Asamis but had become Sirdars.
Hence the appeals by certificate by successors in title of Ram Kali and Dan Sahai.
Allowing the appeals, the Court ^ HELD: 1.
On true construction of section 21(1)(h) of the U.P. Zamindari Abolition and Land Reforms Act the benefit thereof would be available to the land holder on the date of vesting, if the same land holder or his predecessor existing on the material dates was a person or persons belonging to one or more clauses mentioned in section 157(1) of the Act.
[378 C D] Since, in the instant case, which falls under sub clause (a) of clause (h) on the date of actual letting Smt.
Ram Kali was a "disabled person" and since on the next material date, namely, April 9,1946 Dan Sahai (successor in interest of Smt.
Ram Kali) was also a disabled person, the land holder on the date of vesting who incidentally happened to be Dan Sahai would be entitled to the benefit of section 21(1)(h) and the respondents (successors of Uttam Singh and 369 Murli Singh) would remain Asamis and cannot be said to have become Sirdars within the meaning of section 240B of the U.P. Zamindari Abolition and Land Reforms Act, 1950.
[378 E F] 2.
Section 21(1)(h) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 provides that every person occupying or holding land in any one of the capacities mentioned in clause (h) on the date immediately preceding 1 7 1952 shall be deemed to be an Asami thereof notwithstanding anything contained in the Act, if the land holder or if there are more than one all of them were "disabled persons" within the meaning of section 157(1) both on the date of letting as well as on April 9, 1946 where the letting has taken place prior to April 9, 1946 or were disabled persons on the date of letting if the letting has occurred after April 9, 1946.
[373 A B] 3:1.
It is true that clause (h) contains the phrase "where the land holder or if there are more than one land holder all of them were person or persons belonging" to any one or more than one of the clauses mentioned in section 157(1) of the Act.
Under section 3(26) of the Act, the definition of "landholder" as given in the U.P. Tenancy Act, 1939 has been adopted since the expression is not defined in the Act.
The expression "land holder" who obviously is a possessor of interest in land under section 3(11) of the U.P. Tenancy Act, 1939 means a person to whom rent is payable, and under section 3(1), ibid.
by legal fiction it shall include his predecessor in interest as also successor in interest to whom the rent was or is payable.
It is such definition that will have to be read in the U.P. Zamindari Abolition and Land Reforms Act wherever that expression occurs.
Therefore the expression "land holder" occurring in section 21(1)(h) of the Act must mean a person to whom rent is payable and by fiction would include his predecessor in interest.
Read in this light there would be no question of adding the words predecessor in interest of the land holder in section 21(1)(h) as that would be implicit in the term "land holder" on account of deeming provision of section 3(1) read with section 3(11) of the U.P. Tenancy Act, 1939.
[375 G H, 376 A, D F] 3:2.
Section 157(1) of the U P. Zamindari Abolition and Land Reforms Act permits leases by disabled persons and provides that a Bhumidar or on an Asami holding land in lieu of maintenance allowance under section 11, who is a disabled person falling under any of the clauses (a) to (g), may let the whole or any part of his holding, "provided that in the case of a holding held jointly by more persons than one, but one or more of them but not all are subject to the disabilities mentioned in clauses (a) to (g), the person or persons may let out his or their share in the holding".
Having regard to the proviso under which even in the case of a joint holding a lease of his share by a disabled land holder is permissible and the same is liable to be separated by a partition, the expression "all of them" must refer to all such land holders who were disabled land holders on the material dates.
When under the proviso to section 157(1) a lease of his share by a disabled land holder in joint holding (held along with a non disabled person) is expressly permitted and under section 157(2) the Court has to determine such share of the disabled lessor and partition the same on an application being made in that behalf, it cannot be said that the Legislature intended to deprive the protection of section 21(1)(h) to such disabled land holder simply because on the date immediately preceding the date of vesting such land holder comes to hold the 370 land jointly with some other non disabled land holder.
On true construction of the crucial phrase occurring in clause (h) it is not possible to read into the provision the additional requirement, namely, that the identity of the land holder or land holders must remain unchanged up to the date of vesting.
[376 G H, 377 A, B D, G H] Further the scheme of the U.P. Zamindari Abolition and Land Reforms Act is different from the Agra Tenancy Act, 1926 and U.P. Tenancy Act, 1939.
In each of the two provisions of these two Acts express words have been used conferring personal rights on the individuals concerned which is not the case with section 21(1)(h) of the Zamindari Abolition and Land Reforms Act.
[378 B C] Smt.
Maya vs Raja Dulaji and Ors.
[1 over ruled.
Dwarika Singh vs Dy.
Director of Consolidation All W.C. 213 1981 All.
L.J. 484 approved.
|
N: Criminal Appeal No. 154 of 1972.
From the Judgment and Order dated 12 11 1971 of the Allahabad High Court in Criminal Revision No. 865 of 1970.
Shiv Pujan Singh for the Appellant.
D.P. Uniyal and M. V. Goswai for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY J.
Jorma who was convicted by the learned Sessions Judge, Dehradun under Section 302 Indian Penal Code and 449 sentenced to suffer imprisonment for life, was directed by the High Court of Allahabad to be released on bail on furnishing bail to the satisfaction of the District Magistrate, Dehradun.
The District Magistrate (Judicial) Dehradun ordered Jorma to execute a personal bond in a sum of Rs. 5,000/ and to furnish two sureties in a sum of Rs. 10,000/ each.
Ram Lal the present appellant was one of the persons who executed a surety bond.
Another, Abdul Jabbar, also executed a surety bond.
By some oversight no personal bond was taken from Jorma nor was his signature taken on the reverse of the bonds executed by the two sureties as appeared to have been usually done.
Jorma jumped bail and the sureties were unable to produce him when required to do so.
The District Magistrate, Dehradun, therefore, forfeited the surety bonds and issued a warrant of attachment against the sureties under Section 514 of the Code of Criminal Procedure, 1898.
The appellant preferred an appeal to the High Court of Allahabad against the order of forfeiture.
Before the High Court it was submitted that the surety bond executed by the appellant could not be forfeite when no personal bond had been taken from the accused who had been released on bail.
The High Court over ruled the submission of the appellant and confirmed the order of forfeiture.
The appellant has filed this appeal on a certificate granted by the High Court under Article 134(1)(c) of the Constitution.
Shri Shiv Pujan Singh, learned Counsel for the appellant submitted that the question of forfeiting the surety bond for the failure of the accused to appear would arise only if the accused himself had executed a personal bond for his appearance.
He submitted that someone must be primarily bound before the surety could be bound and his bond forfeited.
He invited our attention to Section 499 of the Code of Criminal Procedure, 1898, and form No. 42 of the forms in Schedule V.
He relied on the decisions in Brahma Nand Misra vs Emperor, (1), and Sailash Chandra Chakraborty vs The State(2).
A reference was also to Bakaru Singh vs State of U.P. (3) On the other hand the learned Counsel for the State urged that the bond to be executed by the surety was independent of the bond to be executed by the accused and there was no impediment in the way of the forfeiture of the surety bond even in the absence of a personal bond executed by the accused.
He relied upon the decisions in Abdul Aziz & Anr.
vs Emperor(4), and Mewa Ram & Anr.
vs State (5).
450 Section 499(1) of the Code of Criminal Procedure Code 1898 was in the following terms: "Before any person is released on bail or released on his own bond, a bond for such sum of money as the police officer or Court, as the case may be, thinks sufficient shall be executed by such person, and, when he is released on bail, by one or more sufficient sureties conditioned that such persons shall attend at the time and place mentioned in the bond, and shall continue so to attend until otherwise directed by the police officer or Court, as the case may be".
Now, this provision contemplated the execution of a bond by the accused, and by the sureties.
The provision did not imply that a single bond was to be executed by the accused and the sureties, as it were, to be signed by the accused and counter signed by the sureties.
Form No. 42 of Schedule V, Code of Criminal Procedure, 1898, was as follows: "XLII bond and bail bond on a preliminary Inquiry before a Magistrate.
(See Sections 496 and 499) I, (name), of (place), being brought before the Magistrate of (as the case may be charged with the offence of, and required to give security for my attendance, in his Court and at the Court of Session, if required, do bind myself to attend at the Court of the said Magistrate on every day of the preliminary inquiry into the said charge, and, should the case be sent for trial by the Court of Session, to be, and appear, before the said Court when called upon to answer the charge against me; and, in case of my making default, herein, I bind myself to forfeit to Government the sum of rupees Dated this day of 19 (Signature) I hereby declare myself (or we jointly and severally declare ourselves and each of us) surety (or sureties) for the said (name) that he shall attend at the Court of on every day of the preliminary inquiry into the offence charged against him, and, should the case be sent for trial by the Court of Session, that he shall be, and appear, before the said Court to answer the charge against him, and, in case of his 451 making default therein, I bind myself (or we bind ourselves) to forfeit to Government the sum of rupees Dated this day of 19 (Signature)" The undertaking to be given by the accused as may be seen from form No. 42 of Schedule V was to attend the Court on every day of hearing and to appear before the Court whenever called upon.
The undertaking to be given by the surety was to secure the attendance of the accused on every day of hearing and his appearance before the Court whenever called upon.
The undertaking to be given by the surety was not that he would secure the attendance and appearance of the accused in accordance with the terms of the bond executed by the accused.
The undertaking of the surety to secure the attendance and presence of the accused was quite independent of the undertaking given by the accused to appear before the Court whenever called upon, even if both the undertakings happened to be executed in the same document for the sake of convenience.
Each undertaking being distinct could be separately enforced.
It is true that before a person is released on bail he must execute a personal bond and, where necessary, sureties must also execute bonds.
There can be no question of an accused being released on bail without his executing a personal bond.
But it does not follow therefrom that if a person is released by mistake without his executing a personal bond the sureties are absolved from securing his attendance and appearance before the Court.
The responsibility of the surety arises from the execution of the surety bond by him and is not contingent upon execution of a personal bond by the accused.
Nor is the liability to forfeiture of the bond executed by the surety contingent upon the execution and the liability to forfeiture of the personal bond executed by the accused.
The forfeiture of the personal bond of the accused is not a condition precedent to the forfeiture of the bonds executed by the sureties.
The Calcutta High Court in Sailash Chandra Chakraborty vs The State (supra) and single Judge of the Allahabad High Court in Brahma Nand Misra vs Emperor, (supra) proceeded on the assumption that the bond executed by the accused and the sureties was single and indivisible and if the accused did not join in the execution of the bond, the bonds executed by the sureties alone were invalid.
We do not find any warrant for this assumption in Section 499 of the Criminal Procedure Code of 1898.
We are afraid that there has been some confusion of thought by the importation of the ideas of 'debt ' and 'surety ' from the civil law.
As pointed out in Abdul Aziz & Anr.
vs Emperor(supra) under Section 499 Criminal Procedure Code, the surety did not guarantee the payment of any sum of money by the person accused 452 who was released on bail but guaranteed the attendance of that person and so the fact that the person released on bail himself did not sign the bond for his attendance did not make the bond executed by the surety an invalid one.
In Mewa Ram & Anr.
vs State (supra) the difference between a surety under the Code of Criminal Procedure and a surety under the Civil Law was pointed out and the view taken in Abdul Aziz & Anr.
vs Emperor (supra) was reiterated.
We agree with the view expressed in Abdul Aziz & Anr.
vs Emperor, and Mewa Ram & Anr.
vs State (supra).
In Bakaru Singh vs State of U.P., (supra) the question presently under consideration did not arise.
The question which was considered in that case was whether it was necessary that the personal bond of the accused should be executed on the other side of the bond executed by the surety on the same paper.
It was held that it was not necessary.
And, it was pointed out that the mere fact that form No. 42, Schedule V Criminal Procedure Code, printed the contents of the two bonds, one to be executed by the accused and the other by the surety together, did not mean that both the bonds should be on the same sheet of paper.
To the extent that it goes the decision helps the State and not the appellant.
For the reasons stated above, the appeal is dismissed.
N.V.K. Appeal dismissed.
| After having fallen out and parted company with his wife Kanchan in the year 1963, the appellant, belonging to Telli community contracted a second marriage prevalent amongst his community with Gopi on 20th March 1969.
A complaint filed by his first wife ended in his conviction under section 494 I.P.C. and sentence of two years R.I. and a fine of Rs. 2,000/ , the conviction and sentence having been upheld by the Rajasthan High Court.
Dismissing the appeal by special leave, the Court, ^ HELD: 1.
The second marriage was a valid marriage according to the custom of the nata marriage prevalent in the Telli community which requires the following two essential ceremonies: (a) that the husband should take a pitcher full of water from the head of the prospective wife, and (b) that the wife should wear chura by the husband.
The prosecution through PWs.
2, 3, 4 and 5 having proved that these ceremonies have been duly performed, that there was such a custom which requires the said ceremonies having been admitted by the defence witnesses 3 and 5 and the validity of the first marriage not having been disputed, Section 494 I.P.C. applies in terms and the appellant must be held to have committed the offence of Bigamy as contemplated by section 494 I.P.C. [1176A E] 2.
The combined effect of section 17 of the Hindu Marriage Act and section 494 I.P.C. is that when a person contracts a second marriage after the coming into force of the said Act while the first marriage is subsisting, such a person commits the offence of bigamy.
[1174 E] Section 17 of the makes it absolutely clear that the provision has to be read in harmony and conjunction with the provisions of section 494 I.P.C., the essential ingredients of which are: (i) that the accused spouse must have contracted the first marriage (ii) that while the first marriage was subsisting the spouse concerned must have contracted a second marriage, and (iii) that both the marriages must be valid in the sense that the necessary 1172 ceremonies required by the personal law governing the parties had been duly performed and (iv) the second marriage must have become void by virtue of the fact that it had taken place in the life time of one of the spouses.
[1173F H] 3.
Where a spouse contracts a second marriage while the first marriage is still subsisting the spouse would be guilty of bigamy under section 494, I.P.C. if it is proved that the second marriage was a valid one in the sense that the necessary ceremonies required by law or by custom have been actually performed.
The voidness of the marriage under section 17 of the is in fact one of the essential ingredients of section 494 because the second marriage will became void only because of the provisions of section 17 of the .
Therefore, the contention that the second marriage being void section 494 I.P.C. will have no application is not correct.
[1175F G] Bhaurao Shankar Lokhande and Anr.
vs State of Maharashtra and Ors., [1965]2 S.C.R. 837; Kanwal Ram and Ors.
vs The Himachal Pradesh Administration, [1966]1 S.C.R. 539 and Priya Bala Ghosh vs Suresh Chandra Ghosh; [1973]3 S.C.R. 961 applied.
[Bigamy being a serious offence for which the maximum punishment is seven years, the Court while maintaining the conviction reduced the sentence to one year.]
|
Civil Appeal No. 24 of 1959.
Appeal by special leave from the Award dated September 18, 1957, of the Industrial Tribunal, Delhi, in 1.
D. No. 3 of 1957.
H. N. Sanyal, Additional Solicitor General of India, Vidya Sagar and B. N. Ghosh, for the appellant.
Frank Anthony and Janardan Sharma, for the respondents.
April 4.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave arises from an industrial dispute between the appellant, Assam Oil Company Ltd., and the respondent, its workmen.
The dispute was in regard to the termination of services of Miss P. Scott, one of the employees of the appellant.
The respondent alleged that the said termination of Miss Scott 's services was illegal and that was one of the points referred to the Industrial Tribunal, New Delhi, for its adjudication.
The other point of dispute between the parties was in regard to the quantum and conditions of the payment of bonus for the year 1955 56 to the appellant 's workmen.
The industrial tribunal has directed the appellant to reinstate Miss Scott and to pay her all the back wages from the date of her dismissal until the date of her reinstatement.
It has also ordered that Miss Scott should be paid bonus for the two years in question as specified in the award.
The direction for the payment of bonus is not challenged by the appellant; but the validity of the order asking the appellant to reinstate Miss Scott and to pay her the whole of the back wages during the relevant period is questioned before us, and so the main point which calls for 459 our decision is whether the appellant was justified in terminating the services of Miss Scott, and if not, whether in the circumstances of this case it would be appropriate to direct an order of reinstatement ? The appellant company is chiefly engaged in searching for and refining crude oil and it has a refinery at Digboi in Assam.
At New Delhi it has a small office with 3 or 4 employees.
Miss Scott was originally in the employment of M/s. Burmah Shell, New Delhi, as a lady secretary.
Her services were lent to the Delhi representative of the appellant company sometime in January, 1954.
In September, 1954, the appellant set up its own office at New Delhi and then offered Miss Scott direct employment on the same terms and conditions that governed her employment with M/s. Burmah Shell.
Miss Scott then resigned her service from M/s. Burmah Shell and joined the appellant as a regular employee in October, 1954.
Her appointment was subsequently confirmed on September 1, 1955, on terms and conditions which were communicated to her and which she accepted.
One of the terms was that the appointment in question may be terminated on one month 's notice on either side.
During the course of her employment Miss Scott did not give satisfaction to the appellant and on many occasions she was verbally warned to improve her work and not to repeat her lapses.
On February 26, 1957, Mr. Gowan, the Delhi representative of the appellant, warned Miss Scott in writing about her lapses and added that he did not consider her work satisfactory.
He told her to strive to improve her work and mend matters failing which he would have to consider whether she was suitable to continue in the appellant 's employment.
On February 28, 1957, the services of Miss Scott were terminated by Mr. Gowan and she was told that the faults pointed out to her had not been corrected and that her performance during her service had not matched up to the standard required.
Miss Scott was given one month 's pay in lieu of notice and she accepted it.
At the time when her services were terminated Miss Scott used to receive the total remuneration of Rs. 535 per month.
460 On March 13, 1957, Miss Scott made a representation to the Conciliation Officer, New Delhi, against the termination of her services, and it is out of the proceeding. , taken by the Conciliation Officer on this representation that the present dispute ultimately came to be referred to the industrial tribunal for adjudication.
The union of the appellant 's workmen which sponsored her case alleged before the tribunal that the termination of Miss Scott 's services was wrongful and illegal and she was entitled to reinstatement.
It was urged on her behalf that no enquiry was held by the appellant before terminating Miss Scott 's services and that made the impugned termination illegal and unjustified.
A claim for bonus for the years 1955 and 1956 was also made on her behalf.
The appellant resisted this claim.
It was urged by the appellant that the dispute was an individual dispute and as such the reference was incompetent.
It was alleged that Miss Scott was not a workman under section 2(s) of the (hereinafter called the Act), and so the tribunal had no jurisdiction to deal with the dispute.
On the merits the appellants case was that it had purported to terminate the services of Miss Scott in terms of the contract after paying her one month 's wages in lieu of notice, and that the industrial tribunal would not be justified in interfering with such an order.
The tribunal has held that Miss Scott was a workman under section 2(s) and since the union had sponsored her cause the dispute was an industrial dispute under section 2(k) of the Act.
According to the tribunal the termination of Miss Scott 's services in substance amounted to dismissal for misconduct, and since no, enquiry had been held it was illegal and unjustified.
On the merits the tribunal took the view that even if Miss Scott had been guilty of some negligence the punishment of dismissal was unduly severe.
The tribunal also observed that in dismissing her Mr. Gowan was influenced by the consideration that Miss Scott had become a member of the union and that was substantially responsible for her dismissal.
It is on these findings that the tribunal has passed an order of reinstatement.
461 In the present appeal the learned Additional Solicitor General has raised two points before us.
He contends that the appellant has terminated the services of Miss Scott in pursuance of the terms of the contract and an order of discharge passed strictly according to the contract cannot be questioned before the industrial tribunal.
Alternatively he argues that even if the order of discharge is found to be unjustified because no enquiry was held the whole evidence relating to the alleged misconduct of Miss Scott has been led before the tribunal and in the light of the said evidence the order of discharge should not have been interfered with and reinstatement should not have been ordered.
At the highest it may be a case for awarding com pensation and no more.
The other findings recorded by the tribunal against the appellant have not been challenged in the present appeal.
The wide scope of the jurisdiction of industrial tribunals is now well established.
As early as 1949 it was held by the Federal Court in Western India Automobile Association vs Industrial Tribunal, Bombay (1) that the argument based upon the sanctity and the validity of contracts between the employer and the employees it overlooks the fact that when a dispute arises about the employment of a person at the instance of a trade union or a trade union objects to the employment of a certain person, the definition of industrial dispute would cover both those cases.
In each of those cases, although the employer may be unwilling to do so, there will be jurisdiction in the tribunal to direct the employment or non employment of the person by the employer.
This is the same thing as making a contract of employment when the employer is unwilling to enter into such a contract with a particular person ".
It was also observed that the industrial tribunal " can direct in the case of dismissal that an employer or employee shall have the relation of employment with the other party, although one of them is unwilling to have such relation " (p. 337).
In other words, the jurisdiction of the industrial tribunal to direct reinstatement of a discharged or dismissed employee is no longer in doubt.
That being the nature and extent of the juris (1) , 336, 59 462 diction of the industrial tribunal it is too late now to contend that the contractual power of the employer to discharge his employee under the terms of the contract cannot be questioned in any case.
If the contract gives the employer the power to terminate the services of his employee after a month 's notice or subject to some other condition it would be open to him to take recourse to the said term or condition and terminate the services of his employee ; but when the validity of such termination is challenged in industrial adjudication it would be competent to the industrial tribunal to enquire whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the contract.
If the discharge has been ordered by the employer in bona fide exercise of his power then the industrial tribunal may not interfere with it; but the words used in the order of discharge and the form which it may have taken are not conclusive in the matter and the industrial tribunal would be entitled to go behind the words and the form and decide whether the discharge is a discharge simpliciter or not.
If it appears that the purported exercise of the power to terminate the services of the employee was in fact the result of the misconduct alleged against him then the tribunal will be justified in dealing with the dispute on the basis that despite its appearance to the contrary the order of discharge is in effect an order of dismissal.
The exercise of the power in question to be valid must always be bonafide.
If the bona fides of the said exercise of power are successfully challenged then the industrial tribunal would be entitled to interfere with the order in question.
It is in this context that the industrial tribunal must consider whether the discharge is mala fide or whether it amounts to victimisation or an unfair labour practice, or is so capricious or unreasonable as would lead to the inference that it has been passed for ulterior motives and not in bona fide exercise of the power conferred by the contract.
In some cases the employer may disapprove of the trade union activities of his employee and may purport to discharge his services under the terms of the contract.
In such cases, if it appears that the real reason 463 and motive for discharge is the trade union activities of the employee that would be a case where the industrial tribunal can justly hold that the discharge is unjustified and has been made mala fide.
It may also appear in some cases that though the order of discharge is couched in words which do not impute any misconduct to the employee, in substance it is based on misconduct of which, according to the employer, the employee has been guilty; and that would make the impugned discharge a punitive dismissal.
In such a case fairplay and justice require that the employee should be given a chance to explain the allegation weighing in the mind of the employer and that would necessitate a proper enquiry.
Whether or not the termination of services in a given case is the result of the bona fide exercise of the power conferred on the employer by the contract or whether in substance it is a punishment for alleged misconduct would always depend upon the facts and circumstances of each.
In this connection it is important to remember that just as the employer 's right to exercise his option in terms of the contract has to be recognised so is the employee 's right to expect security of tenure to be taken into account.
These, principles have been consistently followed by industrial tribunals and we think rightly (Vide: Buckingham and Carnatic Company Ltd. vs Workers of the Company (2).
Therefore we are not prepared to accede to the argument urged before us by the learned Additional Solicitor General that whenever the employer purports to terminate the services of his employee by virtue of the power conferred on him by the terms of contract, industrial tribunals cannot question its validity, propriety or legality.
In the present case there is no doubt that the order of discharge passed against Miss Scott proceeds on the basis that she was guilty of a misconduct.
As we have already pointed out Mr. Gowan communicated to her what he thought were grave defects in her work and in the letter of discharge itself the same allegations are made against her.
That being so, it must be held that the discharge in the present case is (2) [1952) L.A.C. 490.
464 punitive.
It amounts to a punishment for alleged misconduct and so the tribunal was right in holding that the appellant was not justified in discharging Miss Scott without holding a proper enquiry.
It, however, appears that evidence has been led by the appellant before the tribunal in support of its case that Miss Scott was guilty of dereliction of duty on several occasions which justified her dismissal.
Mr. Gowan has given evidence about the quality and standard of Miss Scott 's work and he has sworn that a long series of instances of bad work and failure to carry out orders, insolence and untruthfullness had come to his notice.
On one occasion the letter typed from a draft had been incorrectly typed and more than a complete paragraph had been omitted, and in addition Miss Scott told him that she had checked the letter.
According to Mr. Gowan she was disobedient to him and he had occasion to warn her verbally several times in the past.
It is true that Mr. Gowan has also stated that he knew that Miss Scott had become a member of the union and he thought that a person who was holding a confidential position in his office should not have become a member of the union.
The evidence given by Mr. Gowan on the whole appears to be straightforward and it leads to two con clusions: (1) that Mr. Gowan was thoroughly dissatisfied with the work of Miss Scott, and (2) that he did not approve of Miss Scott 's conduct in joining the union.
Since the latter circumstance has at least partially weighed in the mind of Mr. Gowan in terminating the services of Miss Scott it must be held that the said termination is not justified.
It would not be open to an employer to dismiss his employee solely or principally for the reason that he or she had joined a trade union.
That is a fundamental right guaranteed to every citizen in this country and it would be idle for anybody to contend that the mere exercise of the said right would incur dismissal from service in private employment.
Therefore we are prepared to accept the finding of the tribunal that the dismissal of Miss Scott is not justified.
That raises the question as to whether reinstatement can be ordered in the present case.
There is no doubt 465 that the normal rule is that in cases of wrongful dismissal the dismissed employee is entitled to reinstatement ; but there can be cases where it would not be expedient to follow this normal rule and to direct reinstatement.
In the present case the appellant 's office is very small and Miss Scott undoubtedly occupied a position of some confidence with Mr. Gowan.
The warnings given by Mr. Gowan to Miss Scott from time to time clearly bring out his dissatisfaction with her work, and if Mr. Gowan has sworn that he has lost confidence in Miss Scott it would be unfair to hold that the loss of confidence is due solely or substantially because Miss Scott joined the union of the appellant 's workmen.
It is no doubt true that the effect of the employer 's plea that he has lost confidence in the dismissed employee cannot ordinarily be exaggerated; but in the special circumstances of this case we are inclined to hold that it would not be fair either to the employer or to the employee to direct reinstatement.
It appears that subsequent to her dismissal and in spite of it Miss Scott found employment with Parry & Company and Nestles Products (India) Ltd., between May 19, 1958 to October 31, 1958 and December 1, 1958 to November 30, 1959, respectively.
The first of the said two companies paid her Rs. 500 per month except for October when she was paid Rs. 525 and the latter company has paid her Rs. 500 per month except for November when her salary was Rs. 525 and for December and January when she was paid Rs. 15 per day.
Besides she has received from the appellant Rs. 2,700 as subsistence allowance during the pendency of the present appeal.
We are, therefore, satisfied that it would be fair and just to direct the appellant to pay a substantial amount of compensation to her.
The learned Additional Solicitor General has agreed to pay Rs. 12,500 in addition to Rs. 2,700 which have been already paid to her as subsistence allowance.
We think that in the circumstances of this case the amount of Rs. 12,500 represents a fair amount of compensation on the payment of which the order of reinstatement passed by the tribunal should 466 be set aside.
We would accordingly set aside the order of reinstatement and direct that the appellant should pay to Miss Scott Rs. 12,500 as compensation.
The order in respect of bonus has not been challenged and is confirmed.
There will be no order as to costs.
Appeal partly allowed.
| The plaintiff, a Rajput belonging to Tehsil Garhshankar in the District of Hoshiarpur (Punjab), instituted a suit against the defendant for the recovery of the properties which belonged to a deceased Gurkha woman R and which she had acquired by way of gift from a stranger, alleging that he was the lawfully wedded husband of Rand that accord ing to custom which applied to the parties with regard to succession he was entitled to succeed to the moveable and immoveable properties of R in preference to the defendant who was his daughter by R. Held, that even if it be assumed that R was lawfully married to the plaintiff, the question to be decided would be whether succession to property which R had received as a gilt from a stranger and which she owned in her own right would be governed by the custom governing her husband 's family and not her own.
Such marriage as was alleged to have been contracted by the plaintiff being evidently an act of rare occurrence, the rule of succession set up by the plaintiff cannot be said to derive its force from long usage and the plaintiff was not, in any event, entitled to succeed.
Their Lordships laid down the general principles which should be kept in view in dealing with questions of custom ary law as follows: (1) It should be recognised that many of the agricultur al tribes in the Punjab are governed by a variety of cus toms, which depart from the ordinary rules of Hindu and Muhammadan law, in regard to inheritance and other matters mentioned in section 5 of the .
(2) In spite of the above fact, there is no presumption that a particular person or class of persons is governed by custom, and a party who is alleged to be governed by custom ary law must prove that he is so governed and must also prove the existence of the custom set up by him.
(See Daya Ram vs Sohel Singh and Others, 110 P R. (1906) 390 at 410; Abdul Hussein Khan vs Bibi Song Dero, L.R. 45 I.A. 10).
(3) A custom, in order to be binding, must derive its force from the fact that by long usage it has obtained the force of law, but the English rule that "a CUstOm, in order that it may be legal and binding, must have been used so long that the memory of man runneth not to the contrary" should not be strictly 826 applied to Indian conditions.
All that is necessary to prove is that the usage has been acted upon in practice for such a long period and with such invariability as to show that it has, by common consent, been submitted to as the established governing rule of a particular locality.
(See Mt. Subhani vs Nawab, A.I.R. 1941 P.C. 21 at 32).
(4) A custom may be proved by general evidence as to its existence by members of the tube or family who would natur ally be cognizant of its existence and its exercise without controversy, and such evidence may be safely acted on when it is supported by a public record of custom such as the Riwaj i am or Manual of Customary Law.
(See Abroad Khan vs Mt. Channi Bibi, A.I.R. 1925P.C. 267 at 271).
(5) No statutory presumption attaches to the contents of a Riwaj i am or similar compilation, but being a public record prepared by a public officer in the discharge of his duties under Government rules, the statements to be found therein in support of custom are admissible to prove facts recited therein and will generally be regarded as a strong piece of evidence of the custom.
The entries in the Riwaj i am may however be proved to be incorrect, and the quantum of evidence required for the purpose of rebutting them will vary with the circumstances each case.
The presumption of correctness attaching to a Riwaj i am may be rebutted, if it is shown that it affects adversely the rights of females or any other class of persons who had no opportunity of appearing before the revenue authorities.
(See Beg vs Allah Ditta, A.I.R. 1916 P.C. 129 at 131 ;Saleh Mohammad vs Zawar Hussain A.I.R. 1944 P.C. 18; Mt. Subhani vs Nawab, A.I.R. 1941 P.C. 21 at 25).
(6)When the question of custom applicable to an agricultur ist is raised, it is open to a party who denies the applica tion custom to show that the person who claims to be gov erned by it has completely and permanently drifted away from agriculture and agricultural associations and settled for good in urban life and adopted trade, service, etc., as his principal occupation and means and source of livelihood, and does not follow other customs applicable to agriculturists.
(See Muhammad Hayat Khan vs Sandhe Khan and Others, 55 P.R. (1906) 270 at 274; Muzaffar Muhammad vs Imam Din, I.L.R. (1928) 9 Lab.
120, 125).
(7) The opinions expressed by the compiler of a Riwaj i am or Settlement Officer as a result of his intimate knowledge and investigation of the subject, are entitled to weight which will vary with the circumstances of each case.
The only safe rule to be laid down with regard to the weight to be attached to the compiler 's remarks is that if they repre sent his personal opinion or bias and detract from the record of long standing custom, they will not be sufficient to displace the custom, but if they are the result of his inquiry and investigation as to the scope of the 827 applicability of the custom and any special sense in which the exponents of the custom expressed themselves in regard to it, such remarks should be given due weight.
(See Narain Singh vs Mr. Basant Kaur A.I.R. 1935 Lah.
419 at 421,422; Mr. Chinto vs Thelur, A.I.R. 1935 Lah. 98S; Khedam Hussain vs Mohammad Hussain, A.I.R. 1941 Lah.
73 at 79).
|
ivil Appeal No. 3561 of 1986.
From the Judgment and Order dated 28.2.1986 of the Gujarat High Court in SCA No. 1176 of 1974.
Mehta, Shishir Sharma and P.H. Parekh for the Appel lants.
Respondent in person.
(N.P.) The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the High Court of Gujarat dated 28.2.1986 allowing the respondent 's writ petition and quashing order of discharge from service and directing his reinstatement in service.
The respondent joined service as technical assistant with the Gujarat State Electricity Board (hereinafter re fened to as the Board).
He was promoted to the post of Deputy Engineer.
While he was posted at Surat as Deputy Engineer he was transferred to Ukai subdivision under the order of the Superintending Engineer dated 29th March, 1974.
Pursuant to the order of transfer he was relieved from his duties at Surat on 30th March, 1974 to enable him to join at Ukai.
He made representation to the Additional Chief Engi neer for cancelling his transfer order on the ground that his mother aged 70 years was ailing and it would cause great inconvenience to him if he was required to join at Ukai.
His representation was rejected and he was directed to 361 join at Ukai but he did not do so instead he filed a civil suit at Baroda challenging validity of the order of trans fer.
Meanwhile, the Chief Engineer by his order dated 27th May, 1974 discharged the respondent from service with effect from 31st March, 1974 in accordance with service Regulation No. 113.
The respondent challenged the validity of the order of his discharge from service by means of a writ petition under Article 226 of the Constitution before the High Court of Gujarat.
A learned Single Judge of the High Court quashed the order of termination on the findings that the order of discharge was issued m violation of the basic principles of natural justice as no opportunity was afforded to the re spondent before discharging him from services under Regula tion No. 113.
The learned Single Judge granted a declaration in respondent 's favour holding the order void and illegal but having regard to recalcitrant attitude of the appellant and his continued conduct of disobedience of the orders of his superior authorities, he refused to grant consequential reliefs regarding reinstatement or payment of back wages.
The respondent as well as the appellant board, both pre ferred Letters Patent appeals against the order of learned Single Judge.
A Division Bench of the High Court dismissed the appeal preferred by the Appellants but it allowed the respondent 's appeal.
The Division Bench upheld the order of the learned Single Judge holding the order of discharge illegal and void but it set aside the order of the learned Single Judge refusing to grant consequential relief instead it directed the appellants to reinstate the respondent, and to treat him in service without any break in service and to grant him benefits of increments, seniority, and promotion to which he may be entitled under the rules.
The Bench, however, did not grant full back wages to the respondent instead it directed the Board to pay him 50 per cent of back wages.
Aggrieved, the appellant has preferred the instant appeal after obtaining special leave of this Court.
This appeal came up for hearing before us on 28th Janu ary, 1988 and on that day Sh.
B.K. Mehta, Advocate appearing for the appellants and Sh.
Vimal Dave, Advocate, appearing for the respondent were fully heard.
After hearing learned counsel for the parties we were satisfied that the learned Single Judge as well as the Division Bench both had commit ted error in allowing the writ petition and granting relief to the respondent.
We expressed our view in the Court and suggested to Mr. Vimal Dave, counsel for the respondent, that if he agreed the original writ petition of the respond ent could be dismissed without directing him to refund the amount which he had already been paid by the appellants in pursuance to the orders of the High Court and of this Court as during the pendency of the appeal, the appellants 362 were directed by means of interim order of this Court to continue to pay salary to the respondent which was being paid to him regularly.
The hearing was adjourned to enable Sh.
Vimal Dave, to obtain instructions from the respondent.
The appeal came up for hearing before us on 16.2.1988 when another counsel appeared to argue the appeal on behalf of the respondent on merits.
We refused to hear the counsel as we had already completed hearing.
Thereupon, the respondent himself appeared in person and sought permission to make his submissions personally.
We refused to accede to his request as oral heating had already been completed and the matter had been adjourned only to enable the respondent 's counsel to obtain instructions.
However, in the interest of justice we permitted the respondent to file written submissions.
if any, in support of his case.
Thereafter, the case was listed several times but no written submissions were filed instead the respondent adopted an unusual course by sending an application by post expressing his no confidence in us with a prayer to transfer the case to some other Bench.
Since this was unusual, uncalled for and unjustified request we ignored the same and reserved the order.
We are constrained to note that instead of utilising the opportunity granted to him for filing written submissions the respondent has mis used adjournments for the purposes of raising frivolous objections for getting the case transferred to some other Bench.
No party is entitled to get a case transferred from one Bench to the other, unless the Bench is biased or there are some reasonable grounds for the same, but no right to get a case transferred to any other Bench, can legitimately be claimed merely because the judges express opinion on the merits of the case on the conclusion of hearing.
In the instant case on the conclusion of the oral hearing we had expressed our opinion on 28.1.1988 in the open court, that we were inclined to allow the appeal and set aside the order of the High Court and dismiss the writ petition but taking a sympathetic view we requested Sh.
Vimal Dave, learned coun sel appearing for the respondent to obtain instructions as aforesaid.
The opportunity granted to the respondent has, however, been misused by raising mischievous and frivolous objections instead of filing written submissions.
The re spondent 's prayer is accordingly rejected and since oral hearing has already been completed, and in spite of several adjournments respondent failed to appear before the Court or to file the written submissions we proceed to decide the case on merits.
Transfer of a Government servant appointed to a particu lar cadre of transferable posts from one place to the other is an incident of service.
No Government servant or employee of Public Undertaking has legal tight for being posted at any particular place.
Transfer from 363 one place to other is generally a condition of service and the employee has no choice in the matter.
Transfer from one place to other is necessary in public interest and efficien cy in the Public administration.
Whenever, a public servant is transferred he must comply with the order but if there be any genuine difficulty in proceeding on transfer it is open to him to make representation to the competent authority for stay, modification or cancellation of the transfer order.
If the order of transfer is not stayed, modified or cancelled the concerned public servant must carry out the order of transfer.
In the absence of any stay of the transfer order a public servant has no justification to avoid or evade the transfer order merely on the ground of having made a repre sentation, or on the ground of his difficulty in moving from one place to the other.
If he fails to proceed on transfer in compliance to the transfer order, he would expose himself to disciplinary action under the relevant Rules, as has happened in the instant case.
The respondent lost his serv ice as he refused to comply with the order of his transfer from one place to the other.
There is no dispute that the respondent was holding a transferable post and under the conditions of service ap plicable to him he was liable to be transferred and posted at any place within the State of Gujarat.
The respondent had no legal or statutory right to insist for being posted at one particular place.
In fact, during the tenure of his service in the Board the respondent had been transferred from one place to an other place several times.
In March, 1974 he was transferred .
from Surat to Ukai.
The distance between the two places as was stated before us during the hearing of the case is less than 50 kms.
He was relieved from his duties at Surat on 30th March, 1974 but he did not join at Ukai till the impugned order of discharge was issued on May 27, 1974.
The Chief Engineer who discharged the respondent 's services exercised his power under Service Regulation No. 113, which runs as under: "113.
The continued absence from duty or overstay, m spite of warning, to return to duty shall render the employee liable to summarily discharge from service without the necessity of proceedings under the Gujarat Electricity Board, Conduct, Discipline and Appeal Procedure.
" The above Rule provides that if an employee of the Gujarat Electricity Board continues to remain absent from duty or overstays the period of sanctioned leave and in spite of warning, he fails to return to duty, he renders himself liable to be discharged summarily from service without 364 complying with the procedure prescribed for taking discipli nary action, under the Gujarat Electricity Board, Conduct, Discipline and Appeal Procedure.
Regulation 113 confers wide powers on the authorities to summarily discharge an employee from service, if he continues to be absent from duty in an unauthorised manner and refuses to join his duty even after warning.
Under the disciplinary rules detailed procedure is required to be followed for removing an employee from serv ice but Regulation 113 provides for summary discharge from service.
Before this power is exercised, two conditions must be satisfied; Firstly, the employee must be found to be absent from duty without leave or overstaying the period of sanctioned leave, and secondly, he failed to join his duty even after a warning.
The object and purpose of giving warning is to remind the delinquent employee that if he continues to be absent from duty he would be liable to action under Regulation 113 and to afford him an opportunity to make amends by joining his duty.
If even thereafter he fails to join duty, his services are liable to be terminated by an order of discharge.
It is noteworthy that the validity of Regulation 113 was not challenged before the High Court and the parties proceeded on the assumption that Regulation 113 was valid and applicable to the respondent 's service.
The Chief Engineer discharged the respondent from service as he had continued to remain absent from duty w.e.f. March 30, 1974 to May 27, 1974.
The Division Bench of the High Court held that no warning as contemplated by service Regulation No. 113 had been issued to the respondent nor he had been afforded any opportunity of showing cause before the im pugned order of discharge was passed and consequently, the order of discharge was null and void being contrary to service Regulation No. 113 itself.
On perusal of the materi al on record we are of the opinion that the view taken by the High Court is not sustainable as there is sufficient material on record which shows that warning had been issued to the respondent before the order of discharge was issued.
In determining the question whether any warning was given to the respondent it is necessary to refer to the sequence of events and the correspondence which ensued between the appellants and the respondent.
On March 29, 1974 the Superintending Engineer of the Board issued the order, transferring the respondent from Surat to Ukai, on 30.3.1974 the respondent was relieved from Surat and directed to join his duty at Ukai, but the respondent did not join his duty at the new place of posting.
Instead he made a representa tion to the Additional Chief Engineer on 8.4.1974 after the transfer order.
The Transfer order was not stayed and as the respondent did not join 365 his duties, he continued to be absent without sanction of any leave.
In this situation the Superintending Engineer by his letter dated 18th April, 1974 directed the respondent to show cause as to why action should not be taken against him for disobeying the order of transfer and also for unautho rised absence from duty in breach of service Regulation No. 113.
The letter is as under: "GUJARAT ELECTRICITY BOARD O & M DIVISION Nana Varchha Road Surat.
Dated 18th April, 1974 To Shri A.S. Pohani Junior Engineer, Ukai 37, Gurunagar Society Near Jakat Naka, Surat 3.
Sub: Transfer from Surat to Ukai.
You have been relieved on 30.3.1974 A.N. on account of your transfer from Surat to Ukai, but you have not reported to Ukai till today and remained on unauthorised absence on re lief, which is breach of S.R. No. 112 and 113.
Please submit your explanation as to why action should not be taken against you for disobeying order of superior and breach of S.R. No. 112 and 113 within 7 days from re ceipt of this letter.
Sd/ Execut ive Engineer (O & M) Surat Copy f.w.c.s.
to Superintending Engineer, GEB, Utran.
" There is no dispute that the respondent received the afore said letter as he sent a reply to the Superintending Engi neer on April 20, 1974, a copy of which was annexed as Annexure 'J ' by the petitioner, to his 366 petition before the High Court.
By that letter respondent stated that he was waiting for the decision of his represen tation made for reconsideration of his transfer from Surat to Ukai and therefore, the question of his remaining on unauthorised leave was misconceived.
Since the respondent had not obtained any sanctioned leave for his absence his absence from duty was unauthorised.
No Government servant or employee of any public undertaking has a right to be absent from duty without sanction of leave, merely on account of pendency of representation against the order of transfer.
Since the respondent continued to be absent from duty the Superintending Engineer by a registered post acknowledgment due letter dated April 24, 1974 informed the respondent that his request to postpone his transfer was rejected and he was directed to join his duty at Ukai and on his failure to do so disciplinary action would be taken against him.
The Establishment Officer (P) of the Board, also informed the respondent by his letter dated May 6, 1974 that his repre sentation against the order of transfer was not accepted and he was directed to obey the order of transfer.
A copy of the letter filed by the petitioner himself as Annexure 'K ' to the writ petition in the High Court.
But even thereafter, the respondent did not join his duties.
Ultimately, the Chief Engineer of the Board took action against the respond ent and discharged him from service with effect from 31.3.1974 by his letter dated May 27, 1974.
The sequence of events and the correspondence which ensued between the officers of the Board and the respondent clearly show that the respondent disobeyed the order of transfer and he re mained absent from duty in an unauthorised manner without obtaining sanction of leave.
The aforesaid documents leave no room for any doubt that the respondent was reminded of his failure to join his duties at Ukai and he was further reminded that his unauthorised absence had exposed him to disciplinary action.
In fact, the Superintending Engineer had by his letter dated 18th April, 1974 clearly reminded the respondent that his unauthorised absence was in breach of Service Regulation No. 113 and called upon to show cause why action should not be taken against him but in spite of these letters the respondent failed to join his duties.
The Division Bench of the High Court has held that since no warning was issued to the respondent action taken under Service Regulation No. 113 was not in accordance with law.
This finding is wholly misconceived.
A warning need not be in any particular form.
The object and purpose of the warn ing as contemplated by the Regulation,.
is to remind the delinquent employee that his continued unauthorised absence from duties was liable to result in discharge of his serv ice.
The substance of the Superintending Engineer 's letter dated 18th April, 1974 which was admittedly served on the respondent, contained 367 warning to the respondent, which fully met the requirement of Regulation No. 113.
Before the High Court a controversy was raised as to whether the registered letter dated 24.4.1974 addressed by the Superintending Engineer to the respondent was received by him or not.
The registered cover, containing the letter dated 24.4.1974 was returned back by the postal authorities with an endorsement that the addressee refused to accept the same.
The respondent 's case was that no such registered letter was tendered to him by the postman nor he ever re fused to accept the same.
The Division Bench held that letter dated 24.4.1974 which contained a warning had not been served on the respondent and since the Board had failed to raise the question before the learned Single Judge it could not do so in the letters patent appeal.
The Division Bench further held that since the letter dated 24.4.1974 was not served on the respondent, there was no material to show that any warning had been issued to the respondent before he was discharged from service.
We do not agree with the view taken by the Division Bench.
Firstly, even if the letter dated 24.4.1974 was not served on the respondent there is no dispute that the Superintending Engineer 's letter dated 18th April, 1974 had been served on him.
By that letter warning as contemplated by Regulation No. 113 had been issued to the respondent.
Therefore even if the letter dated 24.4.1974 was not served on the respondent the order of discharge as contemplated by Regulation No. 113 is sustainable in law.
But even otherwise, the Division Bench committed error in holding that the Board had raised the question of service of the letter dated 24.4.1974 for the first time before the Division Bench in the letters patent appeal.
Perusal of the averments made in paragraphs 17, 18, 23 and 25 (2)(ii) of the counter affidavit filed in reply to the petitioner 's writ petition before the learned Single Judge shows that the Board had categorically pleaded that the respondent was informed by letter dated 24.4.1974 that his representation to postpone his transfer was rejected and he should obey the order of transfer.
It was further pleaded that the respond ent had refused to accept the registered letter and the same had been returned back by the postal authorities with an endorsement that the addressee refused to accept the same.
In his rejoinder affidavit the respondent denied the afore said allegations and asserted that the letter was not ten dered to him and he never refused to accept the registered cover and the postal endorsement was wrong and incorrect.
Apart from denying the postal endorsement, the respondent placed no material before the Court in support of his plead ing.
In this view, we are of the opinion that the Division Bench was totally wrong in holding that 368 no opportunity was afforded to the respondent to meet the case set up by the Board that the letter dated 24.4.1974 was served on the respondent.
No new plea had been raised by the Board before the Division Bench instead the plea relating to service of the aforesaid letter had already been before the learned Single Judge.
There is presumption of service of a letter sent under registered cover, if the same is returned back with a postal endorsement that the addressee refused to accept the same.
No doubt the presumption is rebuttable and it is open to the party concerned to place evidence before the Court to rebut the presumption by showing that the address mentioned on the cover was incorrect or that the postal authorities never tendered the registered letter to him or that there was no occasion for him to refuse the same.
The burden to rebut the presumption lies on the party, challenging the factum of service.
In the instant case the respondent failed to dis charge this burden as he failed to place material before the Court to show that the endorsement made by the postal au thorities was wrong and incorrect.
Mere denial made by ,the respondent in the circumstances of the case was not suffi cient to rebut the presumption relating to service of the registered cover.
We are, therefore, of the opinion that the letter dated 24.4.1974 was served on the respondent and he refused to accept the same.
Consequently,the service was complete and the view taken by the High Court is incorrect.
In view of the above discussion, we therefore hold that the respondent 's failure to join his duties at Ukai resulted in unauthorised absence and his failure to join his duties in spite of the repeated reminders and letters issued to him constituted sufficient valid ground for taking action under Regulation No. 113.
We further hold that before issuing the order of discharge the respondent was not only warned but he was also afforded an opportunity to explain as to why disci plinary action should not be taken against him.
The respond ent acted in an irresponsible manner in not complying with the order of transfer which led to his discharge from serv ice in accordance with the Service Regulation No. 113.
The learned Single Judge as well as the Division Bench both erred in law in setting aside the order of discharge.
We, accordingly, allow the appeal, set aside the order of the Single Judge as well as Division Bench and dismiss the respondent 's petition.
There would be no order as to costs.
The respondent has been paid a sum of Rs. 1,04,170 towards salary under the interim orders of this Court.
Now, since the order of 369 discharge is held to be valid the amount paid to the re spondent is liable to be recovered from him, but having regard to the facts and circumstances of the case and the hardship which could be caused to the respondent, we direct the appellant not to recover the amount already paid to the respondent.
S.K.A. Appeal al lowed.
| The respondent joined service as technical assistant with the Gujarat State Electricity Board and was later promoted to the post of Deputy Engineer.
While he was posted at Surat he was transferred to Ukai Sub division under the order of the Superintending Engineer dated 29th March, 1974 and he was relieved from his duties at Surat on 30th March, 1974.
He made representation to the Addl.
Chief Engineer for cancelling his transfer order which was rejected and he was directed to join at Ukai but he did not do so and continued to be absent without sanction of any leave and instead he filed a civil suit challenging validity of the order of transfer.
The Superintending Engineer by his letter dated 18th April, 1974 directed the respondent to show cause as to why action should not be taken against him for disobeying the order of transfer and also for unauthorised absence from duty in breach of service Regulation No. 113.
The respondent failed to join his duty even after a warning.
Thereafter the Superintending Engineer sent a letter dated 24th April, 1974 by registered cover which contained a warning but the same was returned back by the postal authorities with an endorse ment that the addressee refused to accept the same.
Meanwhile, the Chief Engineer by his order dated 27th May, 358 1974 discharged the respondent from service in accordance with service Regulation No. 113 as he had continued to remain absent from duty since 30th March, 1974.
The respondent filed a writ petition before the High Court challenging the validity of the order of his discharge from service.
A learned Single Judge of the High Court quashed the order of discharge but looking to the attitude of the respondent and continued conduct of disobedience of the orders of his superior he was not granted consequential reliefs.
The respondent as well as the appellant Board preferred Letter Patent Appeals.
A Division Bench of the High Court dismissed the appeal of the appellant Board and allowed the respondent 's appeal upholding the order of discharge as illegal and void and directed the appellants to reinstate the respondent, to treat him in service, and to grant him benefits of incre ments, seniority, and promotion.
The Division Bench, howev er, did not grant full back wages but directed the Board to pay the respondent 50 per cent of back wages.
Against the order of the Division Bench of the High Court the appellants preferred an appeal to this Court by special leave.
The appeal came up for hearing and advocates for both the parties were fully heard.
Being satisfied that the Single Judge as well as Division Bench of the High Court committed error in allowing the writ petition of the re spondent, this Court suggested to the counsel for the re spondent that if he agreed the original writ petition of the respondent could be dismissed without directing him to refund the amount which he had already been paid by the appellants in pursuance to the orders of the High Court and of this Court.
The bearing was adjourned to enable counsel to obtain instructions from the respondent.
On the next hearing another counsel appeared on behalf of the respondent to argue on merits.
The Court refused to hear fresh argu ments as the hearing had already been completed.
Thereupon, the respondent appeared in person to make his submissions which the Court refused as oral.
hearing has already been completed.
However, in the interest of justice the respond ent was permitted to file written submissions.
No written submissions were filed, instead the respondent adopted an unusual course by sending an application by post expressing his no confidence in the Bench of this Court with a prayer to transfer the case to some other Bench.
The Court ignored the request of the respondent as it was unusual, uncalled for, and unjustified.
359 Allowing the appeal by special leave, this Court, HELD: No party is entitled to get a case transferred from one Bench to the other, unless the Bench is biased or there are some reasonable grounds for the same.
but no right to get a case transferred to any other Bench, can legiti mately be claimed merely because the Judges express opinion on the merits of the case on the conclusion of hearing.
[362E] Transfer of a Government servant appointed to a particu lar cadre of transferable posts from one place to other is an incident of service.
No Government servant or employee of public undertaking has legal right for being posted at any particular place.
Transfer from one place to other is gener ally a condition of service and the employee has no choice in the matter.
Transfer from one place to other is necessary in public interest and efficiency in the Public Administra tion.
[362H; 363A] Whenever, a public servant is transferred he must comply with the order but if there be any genuine difficulty in proceeding on transfer it is open to him to make representa tion to the competent authority for stay, modification, or cancellation of the transfer order.
If the order of transfer is not stayed, modified, or cancelled the concerned public servant must carry out the order of transfer.
[363B] If he fails to proceed on transfer in compliance to the transfer order, he would expose himself to disciplinary action under the relevant Rules, as has happened in the instant case.
The respondent lost his service as he refused to comply with the order of his transfer from one place to the other.
[363C] No Government servant or employee of any public under taking has a right to be absent from duty without sanction of leave, merely on account of pendency of representation against the order of transfer.
[366B] There is presumption of service of a letter sent under registered cover, if the same is returned back with a postal endorsement that the addressee refused to accept the same.
No doubt the presumption is rebuttable and it is open to the party concerned to place evidence before the Court to rebut the presumption by showing that the address mentioned on the cover was incorrect or that the postal authorities never tendered the registered letter to him or that there was no occasion for him to refuse the same.
The burden to rebut the presumption lies on 360 the party, challenging the factum of service.
[368B C] In the instant case, the respondent 's failure to join his duties at Ukai resulted in unauthorised absence and his failure to join his duties in spite of repeated reminders and letters issued to him constituted sufficient valid ground for taking action under Regulation No 113.
Before issuing the order of discharge the respondent was not only warned but he was also afforded an opportunity to explain as to why disciplinary action should not be taken against him.
The respondent acted in an irresponsible manner in.
not complying with the order of transfer which led to his dis charge from service in accordance with the Service Regula tion No. 113.
The Single Judge as well as the Division Bench both therefore erred.
in law in setting aside the order of discharge.
[368E G]
|
Civil Appeal No. 1363 of 1974.
Appeal by special leave from the judgment and order dated the 20th May, 1971 of the Patna High Court at Patna in C.W.J.C. No. 306 L. N. Sinha and Girish Chandra, for the appellants section N. Mishra, B. P. Singh and A K Srivastava, for the respondents.
9 L522SCI/76 366 The Judgment of the Court was delivered by RAY, C.J.
This appeal by special leave turns on the question whether the Coal Mines Provident Fund Commissioner is to hear an employer before making an order requiring the employer to pay damages under section 10F of the Coal Mines Provident Fund and Bonus Scheme Act, 1948 (hereinafter referred to as the Act).
The employer being the respondent to this appeal was directed by a letter dated 3/4 January, 1969 to pay provident fund contributions amounting to Rs. 5821.21 for the months of July to September, 1968 and damages at the rate of 25 per cent on the above dues amounting to Rs. 1455.5O.
The employer was required to pay damages under the provisions of section 10F of the Act.
The employer filed an objection explaining the circumstances under which there was delay in the payment of provident fund contributions.
The employer prayed that damages might not be imposed at the rate of 25 per cent for the delay in payment.
The employer paid the provident fund contributions.
The employer was informed that damages charged on the delayed payments of provident fund contribution could not be waived.
The employer thereafter filed an application in the High Court for an order that the demand notice be quashed.
The High Court acceded to the application of the employer.
The High Court gave two reasons.
First, that the computation of amount of damages should arise upon consideration of facts and circumstances and a mechanical computation of damages is not contemplated.
Second, the authorities should have given opportunity to the employer to .
represent the case.
The High Court did not accept the contention of the employer that section 10F of the Act suffered from the vice of excessive delegation.
The provision contained in section 10F of the Act are as fol lows: "Where an employer makes default in the payment of any contribution or bonus or any charges payable by him under any scheme framed under this act, or where any person who is required to transfer provident fund accumulations in accordance with the provisions of section 3D makes default in the transfer of such accumulations, the Central Government may recover from such employer or person, as the case may be, such damages, not exceeding twenty five per cent of the amount of arrears, as it may think fit to impose.
" The Central Government under sub section (1) of section 10 C of the Act is authorised to delegate any power exercisable by it under the Act, or any Scheme framed thereunder, to the Coal Mines Provident Fund Commissioner or any other officer.
The Central Government in exercise of the power conferred under section 10C(1) of the Act by notification dated 1st October, 367 1966 directed that powers exercisable by it under sections 10A and A 10F of the Act and specified in column (1) of the Table attached to the notification shall, subject to the conditions specified in the corresponding entry in column (2) of the Table attached, be exercisable by the Coal Mines Provident Fund Commissioner appointed under section 3C(l) of the Act.
There is a Schedule attached to the notification where sliding scale of damages has been fixed by the Central Government under section 10F of the Act.
The Schedule attached to the notification is as follows: "Sliding rate of recovery of damages under section 10F of the Coal Mines Provident Fund and Bonus Scheme Act, 1949.
" C S.No. of Period of defaultault , duting one over over over over over the year.
month one two three four five or less month months months months months up to up to up to up to two three fourfive months months months months 2 3 4 5 6 7 Ist default 2% of S% of 18% of 15% of 20% of 25% of arrears alTears alTears arrears arTears arrears 2nddefault S% " IO% " 15% " 20% " 25% " 2S% " 3rd default IO% " IS% " 20% " 2S% " 2S% " 2S% " 4thdefault IS% " 20% " 2S% " 2S% " 2S% " 2S% 5th default 20% " 2S% " 2S% " 2S% " 2S% " 2S% " 6th or subsequent 2S% " 2S% " 2S% " 2S% " 2S% " 2S% " default li Under section 78 of the Act the Coal Mines Provident Fund Commissioner or any other officer authorised in that behalf by the Central Government may, by order, determine the amount due from any employer under any provision of this Act or any scheme framed thereunder and for this purpose may conduct such enquiry as he may deem necessary.
Section 78(3) also contemplates giving of reason able opportunity to represent the case.
The High Court held that the provisions of section 78 are attracted in the case of an order relating to determination of damages for delay in payment of contribution under the Act.
The Solicitor General contended that section 78 of the Act does not apply for two reasons.
First, section 78 of the Act would be applicable only where liability is to be determined.
Neither liability to pay nor default in payment is disputed in the present case.
Second, under section 10F of the Act the amount of damages is quantified and a 368 personal hearing is not necessary because the employer has said everything in his representation and an order for payment of damages is not one of punishment.
The provisions contained in section 78 of the Act indicate first that the Coal Mines Provident Fund Commissioner may determine the amount due from the employer, and, second, for this purpose he may conduct such enquiry as he may deem necessary.
Therefore, an enquiry is contemplated.
Section 78(3) speaks of reasonable opportunity being given to an employer to represent his case.
The provisions in section 10F of the Act also indicate that determination of damages is not a mechanical process.
The words of importance in section 10F of the Act are "such damages not exceeding 25 per cent of the amount of arrears as it may think fit to impose".
Here the two important features are these.
First, the words of importance are "damages not exceeding 25 per cent".
These words show that the determination of damages is not an inflexible application of a rigid formula.
Second, the words "as it may think fit to impose" in section 10F of the Act show that the authorities are required to apply their mind to the facts and circumstances of the case.
This Court in The India Sugars and Refineries Ltd. vs Amravathi Service Co op.
Society Ltd. & Anr. etc.(l) said that "situations in which a duty will arise to act judicially according to the natural justice cannot be exhaustively enumerated.
A duty to act judicially will arise in the exercise of a power to deprive a person of legitimate interest or expectation that addition price would be paid.
The facts which point to an exercise of powers judicially are the nature of the interest to be affected, the circumstances in which the power falls to be exercised and the nature of the sanctions, if any involved".
When a body or authority has to determine a matter involving rights judicially the principle of natural justice is implied if the decision of that body or authority affects individual rights or interests.
Again, in such cases having regard to the particular situation it would be unfair for the body or authority not to have allowed a reasonable opportunity to be heard.
(See State of Punjab vs K. R. Erry & Sobhag Rai Mehta.(2) The High Court was correct in holding that an opportunity should have been given to the employer to be heard before the damages were determined.
The appeal is, therefore, dismissed with costs.
section R.Appeal dismissed.
| Section IOF of the Coal Mines Provident Fund and Bonus Scheme Act 1948 is a penal section under which for default in the payment of any Provident Fund contribution, the Central Government may recover from such employer or person as the case may be, such damages, not exceeding 25% of the amount of arrears, as it may think fit to impose.
ln respect of tho period from July to September, 1968, the respondent employer was asked to pay a sum of Rs. 1455.50 as damages being 25% of the arrears of Provident Fund contributions by the appellant to which he filed an objection explaining the delay.
The employer ' request for waiving the damages was negatived.
The writ application of the employer against that order was allowed by the High Court on two grounds, viz. (i) that the computation of damages should arise upon consideration of the facts and circumstances, and (ii) the authorities should have given an opportunity to the employer to represent the case.
Dismissing the appeal by special leave, the Court. ^ HELD: ( I ) The provisions contained in a 78 of the Act indicate first that the Coal Mines Provident Fund Commissioner may determine the amount due from the employer, and second, for this purpose he may conduct such enquiry as he may deem necessary.
Therefore, an enquiry is contemplated.
Section 78 (3 ) speaks of reasonable opportunity being given to an employer to represent his case.
The provision in section 10F of the Act also indicates that determination of damage is not a mechanical process.
The words of importance in section 10F of the Act are "such damages not exceeding 25 per cent of tho amount of arrears as it may think fit to impose".
Here the two important features are these: First the words of importance are "damages not exceeding 25% show that the determination of damages is not an inflexible application of the rigid formula.
Second, the words "as it may think fit to impose" in section 10F show that the authorities are required to apply their mind to the facts and circumstances of the case.
[368A C] (2) When a body or authority has to determine a matter involving rights judicially, the principle of natural justice is implied if the decision of that body or authority affects individual rights or interest.
[368E E] Indian Sugars & Manufacturers Ltd vs Amravati Services Co operative Society Ltd. Anr.
r[1976] 2 S.C.R. 740 and State of Punjab vs K R. Erry k Sobhag Rai Mefta ; , applied.
|
ition (Criminal) No. 148 of 1983.
(Under article 32 of the Constitution of India) C.S. Vaidyanathan and Ms. Nandita Haksar for the Petitioner.
K.G. Bhagat, Addl.
Solicitter General, P.P. Singh and Ms. A. Subhashini for the Respondent.
V.C. Mahajan, Balbir Singh Shant, S.K. Mehta and Mrs. Urmila Kapur for the State of Manipur.
The Judgment of the Court was delivered by DESAI, J.
Petitioner is a student of Political Science studying in Jawaharlal Nehru University at Delhi.
He belongs to Naga community and hils from Manipur.
He has moved this petition under article 32 of the Constitution praying for a writ of habeas corpus calling upon the respondents Union of India, State of Manipur and Commandant, 21st Sikh Regiment to produce before this Court Shri C. Daniel, a former Naik Subedar attached to Manipur Rifles and at the relevant time Head Master of Junior High School, Huining, 907 Ukhrul East District Manipur State and Shri C. Paul Assistant Pastor, attached to the Baptist Church in Huining village who according to the petitioner were whisked away on March 10, 1982 from Huining village to Phungrei Camp and detained by the officer incharge of 21st Sikh Regiment and are held incommunicado, not released till today nor their whereabouts are made known.
Petitioner averred that 21st Sikh Regiment has set up a camp at Phungrei.
Some jawans attached to this regiment visited Huining village on March 5, 1982 rounded up villagers and detained them in the playground and the women folk and children were confined in the S.D.A. Church Building.
Most of villagers were released on March 6, 1982 around 10.30 a.m. Three students K. Nelson, H.R. Aaron and K. Paul studying in Petigrew College were arrested and taken away.
The jawans resorted to firing which resulted in the death of one Luinam.
It was only at about 11.00 p.m. on March 6, 1982 when the Major and Captain of the 21st Sikh Regiment were presented with some shawls that the captives were released.
On March 7, 1982 one Mr. Joshi, Deputy Commissioner, East Ukhrul accompanied by Additional District Magistrate visited Huining village to enquire about the incidents of the previous day.
The army, jawans, who were present in the village, produced before the aforementioned officers certificates of villagers exonerating them of allegation of ill treatment and praising the conduct of jawans, which according to the petitioner were obtained under duress from the local residents.
On March 7, 1982, the Sunday service by Sri C. Paul, Assistant Pastor and C. Daniel, Head Master in the Church was disturbed by one Subedar and 4 jawans who proceeded to collect some signatures under duress from those who had assembled to participate in the Church service.
The certificates were ostensibly obtained to show that the army officers and jawans had not treated the villagers with force or cruelty and nothing untoward had happened on the previous two days.
On March 10, 1982, C. Daniel and C. Paul were arrested by the army jawans and were taken away from the village.
At the same time, some signatures were obtained by the jawans on blank papers from Machihan, village headman, and from one Shangnam a member of the village authority.
On the next day, Machihan village headman, reported the fact of arrest of C. Daniel and C. Paul to the Deputy Commissioner, East Ukhrul Shri Joshi.
As C. Daniel and C. Paul did not return to the village till March 15, 1982, Mrs. C. Thingkhuila, wife of Shri C. Daniel and Mrs. Vangamla, wife of Shri C. Paul went to Phungrei camp in search of their respective 908 husband and when they were waiting there, they saw C. Daniel and C. Paul being led away by 4 army jawans towards the west.
In the meantime, on a complaint made by Machihan, Shri Joshi, Deputy Commissioner directed Superintendent of Police to make enquiries about the absence of C. Daniel and C. Paul from March 10, 1982.
A radiogram message was sent on March 15, 1982 to the Superintendent of Police (East) Ukhrul requesting him to enquire about and ascertain the whereabouts of (1) Roshing (2) C. Daniel and (3) C. Paul, all of Huining village and four others.
The direction given to the Superintendent of Police was to find out the whereabouts of the persons named in the radiogram and to submit his report at an early date.
Accordingly, the Superintendent of Police submitted his report on March 27, 1982 stating therein that three persons of Phungcham village mentioned in the radiogram have been released by Assam Rifles on March 19, 1982.
The report further recites as under: "As regards persons belonging to Huining village it is learnt that K. Roshing is still under interrogation with Army and whereabouts of other persons are not known.
They were released one day after arrest by Army as reported.
" On March 29, 1982, 5 residents of Huining village including Machihan, village headman, submitted a written complaint to the Deputy Commissioner, Manipur East District, Ukhrul setting out therein the circumstances in which on March 10, 1982 C. Daniel and C. Paul were taken away by the army jawans.
They also complained how the village people were forced to put their signatures on blank paper.
They further complained that they have not issued any certificate showing that C. Daniel and C. Paul were released in their presence on March 11, 1982.
On March 30, 1982, the Deputy Commissioner in response to the query from the Chief Secretary, Manipur State, reported that the village headman and other village authority members of Huining have given a report in writing that it is not correct that C. Daniel and C. Paul were released in presence of village authority members and that both of them were still missing.
It is further stated that the village headman and other members of the village authority have reported that they had not issued any certificate as claimed by the army authority that C. Daniel and C. Paul were released by the army authority on March 11, 1982 in their presence.
The report further recites that a complaint has been made that the security forces personnel had 909 obtained signature on blank papers from village people during their combing operation in Huining village on March 10, 1982.
Petitioner further averred that after C. Daniel and C. Paul were taken away by army jawans of 21st Sikh Regiment on March 10, 1982 around 3.00 p.m. from Huining village, they have not been released by the officers and jawans incharge of 21st Sikh Regiment and they are illegally and unauthorisedly detained and they are held incommunicado.
It is alleged that this continuous detention by the officers and jawans of the army is illegal, invalid and contrary to article 21 and that all attempts to secure the knowledge as to how the officers and jawans of 21st Sikh Regiment have dealt with the aforementioned two persons have not met with success and he has no other option but to file this petition for a writ of habeas corpus.
Photostat copies of the affidavits of Mrs. C. Thingkhuila, wife of Shri C. Daniel, Mrs. C. Vangamla, wife of Shri C. Paul and C. Shangnam, originals of which were produced in earlier writ petitions were annexed to the present writ petition.
The petitioner also annexed original affidavit of Shri H. L. Machihan, village headman and Shri C. Sangnam, village authority member to the petition.
The petitioner impleaded four respondents being (1) Union of India through the Secretary, Ministry of Defence, (2) Union of India through the Secretary, Ministry of Home Affairs, (3) State of Manipur through the Chief Secretary and (4) Commandant, 21st Sikh Regiment, Phungrei Camp, Ukhrul.
On February 9, 1983, the Court directed notice to be served upon the respondents.
In response to the notice, one J. C. Sachdeva, Under Secretary, Ministry of Defence, Govt.
of India, New Delhi filed the first return.
He claimed his source of knowledge about the facts stated in the affidavit as being personal, being conversant with the facts but remained conspicuously silent about his access to any record on the strength of which he filed his affidavit save making a vague statement in the last para of his affidavit, "that the factual statements made above, are based on the reports and information received which I believe to be correct.
" In his affidavit, he referred to three other writ petitions being W.P. No. 550 of 1982, W.Ps.
9229 30 of 1982 and W.P. No. 5328 of 1980 in which constitutional validity of Assam 910 Disturbed Areas (Special Power of Armed Forces) Ordinance, 1947 and Armed Forces (Special Powers) Regulations, 1958 was questioned.
He proceeded to reproduce some of the paragraphs from the counter affidavit filed in earlier petitions.
Dealing with the petition for habeas corpus, it was admitted that on March 6, 1982 jawans of 21st Sikh Regiment carried out the search in Huining village lasting for a period of 3 to 4 hours and admitted that certain certificates were obtained by the army personnel from village authorities, Pastors etc.
contradicting the allegations made in the writ petition.
Copies of those certificates were annexed to the return filed in W.P. No. 550 of 1982.
Concerning C. Daniel and C. Paul, it was reiterated that both of them were called for the purpose of identification of certain suspects on March 10, 1982 and after spending the night at the army camp they were allowed to go on March 11, 1982 and since then the security forces have no knowledge about their whereabouts.
Proceeding further it was admitted that a Deputy Commissioner of Ukhrul (presumably Mr. J.P. Joshi) did visit village Huining on March 7, 1982.
It was denied that Mrs. Thingkhuila and Mrs. Vangamla ever visited the army post on March 15, 1982.
It was admitted that in response to an appeal made to the Chief Minister regarding C. Daniel and C. Paul not having returned to their village, the Security Forces alongwith a police constable (presumably Yangya Anei Thangkhul also known as Maluganai Tankhul) did visit village Huining on May 8, 1982 in order to inform the wives of C. Daniel and C. Paul that they had left the Army Camp on March 11, 1982.
It was denied that at the time of this visit signatures from the village headman or members of the village authority or from other inhabitants of the village were obtained on blank papers There was a perfunctory deniel about the affidavits annexed to the present writ petition.
A request was made that either the writ petition may be disposed of relying upon the statements made in the affidavit of Shri Sachdeva or that the present writ petition be tagged on with the earlier writ petitions.
The petitioner filed a rejoinder affidavit in which inter alia it was stated that the earlier writ petitions were not specifically concerned with the mysterious disappearance of Shri C. Daniel and Shri C. Paul after they were taken away by the army personnel but they were primarily concerned with the constitutional validity of the aforementioned Armed Forces (Special Powers) Act, 1958.
It was further stated that the Court should direct the respondents to produce the 911 report of enquiry made by the Superintendent of Police, Ukhrul to the Deputy Commissioner and the connected documents.
After hearing both the parties, rule nisi was issued.
In response to the rule, again Shri J.C. Sachdeva filed a return maintaining an eloquent silence with the regard to the source of knowledge about the various factual statement made by him in the affidavit save and except repeating the same vague statement with slight modification that "the statements made above are correct to the best of my knowledge as from the records of the case.
" The change in the tune is deliberate as will be presently mentioned.
This return is almost a carbon copy of the earlier return omitting the extracted statements from the still earlier affidavit.
It was specifically stated that C. Daniel and C. Paul were respectable persons who were asked to go to the Army Camp on March 10, 1982 to identify some suspects (names not mentioned) and that after the identification they were permitted to leave.
It was stated that after they work of identification was over C. Daniel and C. Paul were permitted to leave the Army Camp but as it was evening time and it was dangerous to travel at night on account of fear of the insurgents, both of them preferred to spend the night at the Army Camp which the Camp Commandant permitted and they left in the morning of March 11, 1982.
It was further stated that since the suspects belonging to the insurgents group are mixed up with the local population, it is not easy to identify them or apprehend them unless there is information or identification through loyal and respectable citizens of the country.
It was further stated that C. Daniel and C. Paul were not suspects or accused in any of the cases initiated by the Security Forces and that they were never arrested or apprehended by the Security Forces.
With regard to the request for production of the reports of the Superintendent of Police and Deputy Commissioner, it was stated that they were produced on an earlier occasion in another Writ Petition in the Court.
But a privilege was claimed by the Government of Manipur on the ground that the nature of the contents of the said document did not permit the production of the same being against public interest.
The matter was then set down for hearing on May 5, 1983.
Mr. P.P. Singh appeared for the Union of India.
The first enquiry the Court made was about the source of knowledge of Mr. Sachdeva with special reference to reports and information received at Delhi and the record of the case.
Mr. Singh was called upon to disclose 912 the records if any, on the basis of which factual averments were made in the affidavit.
It was pointed out to him that Mr. Sachdeva is a Delhi based officer and either he must explain his source of knowledge or if he has relied on any record the same may be produced before the Court, on the pain of both the returns being rejected as utterly unreliable.
In response to the query of this Court surprisingly, Mr. P.P. Singh, learned counsel for the Union of India stated that the Union of India is not in possession of any record which may shed light about how C. Daniel and C. Paul were dealt with after admittedly they were taken to the Army Camp on March 10, 1982 and spent the night between 10th and 11th March, 1982 at the Army Camp.
The credibility and authenticity of documents produced at a later stage have to be adjudged and evaluated in the back drop of the earlier statements in the affidavit of Mr. Sachdeva and the statement of Mr. P.P. Singh.
At the request of Mr. Singh, the matter was then again adjourned.
Things moved faster thereafter.
The stand earlier taken became very inconvenient when presumably the position adopted by the Court forced the respondents to disclose some documents and therefore Sachdeva had to be replaced and another officer was selected to file one more affidavit.
On behalf of Union of India, Shri H.S. Pruthi, another Under Secretary in the Ministry of Defence filed an affidavit disclosing the source of his knowledge the records of the case and copies of original documents with the Union of India.
This is a complete summersault.
To this affidavit were annexed telex communications between 59 Mountain Brigade and 21st Sikh Regiment, Annexures A/1 & A/2 dated August 25, 1982 and August 26, 1982 respectively; Annexure A/3 being a communication from 59th Mountain Brigade to 8 Mountain Division dated August 28, 1982; Annexures B/1 and B/2 being extracts from the registers maintained by the 21st Sikh Regiment at Phungrei Camp; Annexure C/1 being an affidavit of Shri Lt. Col. N.D. Garg, Commanding Officer of 21st Battalion, Sikh Regiment; Annexure C/2 being an affidavit of Major Joginder Singh Lamba attached at 21st Battalion of the Sikh Regiment; Annexure C/3 being an affidavit of Subedar Joginder Singh also attached to the same battalion, Annexure C/4 being an affidavit of Naik Gurdip Singh; Annexure C/5 being affidavit of Naik Gurcharan Singh; Annexure C/6 being an affidavit of Naik Bachan Singh who was on Sunday duty at the entrance gate of the 21st Battalion between 12.00 hours to 18.00 hours on March 10, 1982; Annexure C/7 being an affidavit of Subedar Sucha Singh 913 who was Subedar Adjutant of 21st Battalion at the relevant time; and Annexure C/8 being an affidavit of Havildar Kultar Singh who stated amongst others that on March 11, 1982, two persons Shri Machihan Shri Shangham came to the gate where he was on duty and they enquired about C. Daniel and C. Paul whereupon after obtaining permission from Adjutant he and Shri Subedar Sucha Singh brought C. Daniel and C. Paul at the gate and they left in company of Shri Machihan and Shri Shangham.
At a later date, Mr. V.C. Mahajan, learned counsel appeared for the State of Manipur and filed a return on behalf of the State of Manipur.
One Shri E. Kunjeswar Singh, Secretary (Home), Govt.
of Manipur swore the affidavit on behalf of the State of Manipur.
The affidavit was limited in character being a response to the request made by the learned counsel for the petitioner to produce: (i) Report of the Superintendent of Police; (ii) Report of the Deputy Commissioner; and (iii) Statement of Yangya Anei Tankhul @ Malugnai Tangkhul.
It was stated that with regard to the events of March 10, 1982, the Deputy Commissioner (East) Ukhrul on receipt of the information (not in writing) on March 11, 1982 sent a wireless message to the Superintendent of Police (East) Ukhrul on March 15, 1982, a copy of which was annexed as R 3/A.
It was further stated that on receipt of the wireless message, the Superintendent of Police conducted an enquiry and sent his report to the Deputy Commissioner on March 27, 1982 (Annexure R 3/B).
The Deputy Commissioner in turn sent a report on March 30, 1982 to the Government (Annexure R 3/C).
It was further stated that with regard to the incident on March 10, 1982, the Deputy Commissioner received a written complaint for the first time on March 29, 1982 (Annexure R 3/D).
With regard to the reports dated April 28, 1982 and May 31, 1982, privilege was claimed under Sec. 123 of the Evidence Act on the ground that the production of the report in Court and being made available to the petitioner will be against public interest.
It was further stated that in the records with the State Government there is no statement of Police Constable Vangya Anei Tangkhul @ Maluganai Tangkhul of a date prior to the filing of the present writ petition and a notice was ordered to be issued.
As a clarificatory effort, after receipt of notice, an attempt was made by the State to ascertain the fact from the concerned constable by recording his statement, a copy of which was produced at R 3/F 1.
An affidavit of the constable Annexure R 3/E 2 was also produced.
914 In a writ petition under article 32 rarely, if ever pleadings are meticulously extracted and reproduced in the judgment.
It however become a compelling necessity in this case for the obvious reason that certain inferences were drawn and submitted for the consideration of this Court by both sides after referring to facts admitted and/or not controverted.
We would, therefore, be justified in deducing the indisputable fact situation that emerges from the rival affidavits and then proceed to draw necessary permissible inferences that flow from them.
It is established that C. Daniel and C. Paul for whose production before this Court this petition is filed are admittedly respectable citizens, the former being the Headmaster of the Junior High School at Huining village and the latter being Assistant Pastor, residing at Huining village.
It is equally well established that the 21st Sikh Regiment is stationed at Ukhrul, Manipur East District and has set up a camp known as Phungrei Camp, and that Huining village falls within the operational area of this Regiment.
The jawans of this Regiment admittedly visited Huining village on March 6, 1982 and carried out extensive combing operation for couple of hours.
They arrested at some point of time one R. Rashing of Huining village.
It is admitted that Mr. Joshi, Commissioner (East) Ukhrul visited Huining village on March 7, 1982 which would show that something untoward had occurred as complained by the petitioner, on March 6, 1982 at Huining village.
And this inference is reinforced by the fact that certain certificates purporting to vouchsafe good conduct of the personnel of security forces which carried out combing operation were obtained by the army jawans from the village inhabitants which have been produced in the earlier petitions.
C. Daniel and C. Paul were at Phungrei Camp the allegation of the petitioner being that they were arrested and taken away while the contention of the respondents is that they were called at the camp for identification of R. Rashing.
The fact which indisputably emerges is that C. Daniel and C. Paul were brought from Huining village by the army jawans and were taken to Phungrei Camp.
It is admitted by the respondents that C. Daniel and C. Paul were at Phungrei Camp at the instance of army officers on March 10, 1982 and spent the night at the camp between March 10 and March 11, 1982.
According to the respondents ' Shri Machihan and Shri Shangam arrived at Phungrei Camp on March 11, 1982 between 9.45 a.m. and 10.00 a.m. and they left in company with C. Daniel and C. Paul who were brought to the camp gate by Subedar Sucha Singh.
It therefore 915 unquestionably transpires that from March 10, 1982 somewhere in the noon or afternoon till March 11, 1982 around 10.00 a.m. C. Daniel and C. Paul were, if not in the custody under the surveillance and at the request and behest of the 4th respondent in the camp and they left Paungrei Camp around 10.00 a.m. on March 11, 1982 in company of Mr. Machihan and Mr. Shangnam, a fact disputed and seriously controverted by the petitioner.
Since March 10, 1982 C. Daniel and C. Paul have not returned to their village and their whereabouts are not known.
They were last seen alive in Phungrei Army Camp.
Therefore, the first question which on preponderance of probabilities this Court must examine is whether C. Daniel and C. Paul left Phungrei Camp on March 11, 1982 around 10.00 a.m. or somewhere thereabout because it could not be seriously questioned that since then no one has seen them, except as stated by the two ladies that they were seen being led away by army jawans on March 15, 1982.
Affidavit of Mrs. Thingkhulia, wife of C. Daniel even if it is one of a vitally interested witness would permit us to hold that since the jawans and officers of the 4th respondent took away C. Daniel on March 10, 1982, he has not been seen by anyone including her except on March 15, 1982 again in custody of army jawans.
That averment is disputed and for the present it may be kept out of consideration.
That would be equally true of C. Paul in respect of whom his wife Mrs. Vangamla has filed an affidavit.
Mr. K.G. Bhagat, Additional Solicitor General while reiterating that once these two persons left the army camp on March 11, 1982 by about 10.00 a.m. the 4th respondent and its subordinate will have no knowledge about their where abouts and they cannot be called upon to explain why they are not traceable, and he proceeded to explore various possibilities as to what, might have happened.
It is not necessary to speculate in that behalf because the real question is whether on the material placed on record, is it possible to affirmately arrive at a conclusion that C. Daniel and C. Paul left the Phungrei Camp latest by 10.00 a.m. or thereabout on March 11, 1982.
Obviously, the burden would be on the respondents 1, 2 and 4 to substantiate their contention once having admitted that C. Daniel and C. Paul were in the camp, at their request and behest even if not actually arrested from the afternoon of March 10, 1982.
916 The stand taken in the first affidavit of Shri J.C. Sachdeva, which merely reproduces extracts from the affidavits in earlier writ petitions, is that C. Daniel and C. Paul were called for the purpose identification of certain suspects on March 10, 1982 and were allowed to go on March 11, 1982 and the security forces have no information about them after they "were released".
Mark the words `called at the army camp and were released '.
The word `released ' would indicate that they were once held captive and were subsequently permitted to go.
But the more important lacuna or omission in the first affidavit is about the name of Mr. Mr. Shangnam as having come to the army camp and C. Daniel and C. Paul accompanied him and Machihan.
Name of Shangnam is conspicuous by its silence.
This omission is glaring because at that stage it was not clear whether Shangnam would be disclosing some facts.
H.L. Machihan 's name is referred to because he had already made a complaint to the Deputy Commissioner on March 29, 1982.
The stand now taken is that C. Deniel and C.Paul were brought to the army camp as army authority wanted them to indentify R. Rashing, who was arrested as a suspect and that C. Daniel and C. Paul were not arrested or were not held as suspects.
It is not made clear whether C. Daniel and C. Paul were brought in an army vehicle.
It is equally not made clear why soon after identifying R. Rashing which would hardly require a couple of minutes, they were not sent back in army vehicle.
It is asserted on behalf of the 4th respondent that C. Daniel and C Paul were reluctant to leave the army camp at night and at their request they were allowed to stay at the army camp.
This is far from convincing.
If what the petitioner asserts is true that C. Daniel and C. Paul were arrested and treated in an unbecoming manner, they would be least inclined to spend a night, if they were free agents to leave the place, at the Army camp, hardly a cosy place in an insurgently infested area.
Assuming that the respondents are right in saying that on account of fear of moving out at night in a jungle area infested with insurgents, according to them, they left the army camp on March 11, 1982 around 10.00 a.m.
The respondents assert that H. L. Machihan, a village Headman and C. Shangnam, village Authority Member came to army camp on March 11, 1982 to enquire about C. Daniel and C. Paul and further to enquire why they had not returned and at that time Subedar Sucha Singh on being informed by Guard Commander Havaldar Kultar Singh that two persons from Huining village had come and wanted to meet someone from the battalion whereupon Subedar Sucha Singh 917 went to the gate and met the two persons.
It is further averred that at that time H. L. Machihan and C. Shangnam introduced themselves as such and enquired from Subedar Sucha Singh about C. Daniel and C. Paul, whereupon Subedar Sucha Singh told them that they had spent the night at the army camp.
Subedar Sucha Singh thereupon informed Maj.
Joginder Singh Lamba, Adjutant that two persons have come to enquire about C. Daniel and C. Paul whereupon Joginder Singh Lamba told Subedar Sucha Singh that C. Daniel and C. Paul should return to their village with Shri H. L. Machihan and Shri C. Shangnam.
The respondents further averred that thereupon Havaldar Kultar Singh and Subedar Sucha Singh accompanied C. Daniel and C. Paul to the gate and permitted them to accompany H. L. Machihan and Shangnam.
There are affidavits to that effect of Major Joginder Singh Lamba, Adjutant, Subedar Sucha Singh and Havaldar Kultar Singh.
They have also produced extracts from the register maintained at the camp gate showing the entry and exist in and out of the army camp.
The relevant extracts were produced at Annexures B/1 and B/2.
The original registers were submitted to the Court in sealed envelope with a request that the other entries except the relevant entries may not be exposed as the same may endanger the safety of some innocent persons.
We have glanced through the registers.
As copies of the relevant entries from the registers were annexed to the affidavit of Mr. Pruthi, it was unnecessary to give inspection of the whole of the registers to the petitioner in the facts and circumstances of this petition.
The evidence furnished by entries in the registers leaves us cold and unconvinced.
It appears to be an attempt at supporting affidavits by some so called contemporaneous documents which apart from being unworthy of credit, the circumstances in which they came to light add to our apprehension about its genuineness.
We may recall here the wavering position about existence or otherwise of any record taken in the affidavit of Mr. Sachdeva and the statement made by Mr. P. P. Singh before the Court denying the existence of any record as late as May 5, 1983.
And the affidavits of various members of security forces personnel bear the date between May 24, 1983 and first week of June 1983 that is subsequent to the order dated May 5, 1983.
To begin with, both H. D. Machihan and C. Shangam in their affidavits filed long time back stated that they had not gone to Phungrei Camp on March 11, 1982 either in the morning or at any 918 time of the day.
H. L. Machihan denied that C. Daniel and C. Paul were released in his presence on March 11, 1982.
There is an affidavit to the same effect of Shri Shangnam.
These are two persons in whose company according to respondents C. Daniel and C. Paul left army camp on March 11, 1983.
Turning to the affidavits filed on behalf of the respondents to substantiate the stand of the respondents, Havaldar Kultar Singh says in his affidavit that at about 9.45 A.M. on March 11, 1982, two persons from Huining village arrived at the gate of the army camp and introduced themselves as Shri Machihan and Shri Shangnam.
He further says that they told him that they had come to enquire about C. Daniel and C. Paul as they had not returned to the village on the previous day.
He does not say that H.D. Machihan and Shri C. Shangnam individually or collectively was or were permitted to enter the camp.
In fact, his affidavit read with the affidavit of Subedar Sucha Singh clearly shows that Havaldar Kultar Singh went to Subedar Sucha Singh and informed him about the arrival of Machihan and Shangnam and inquired about C. Daniel and C. Paul whereupon Subedar Sucha Singh came to the gate, talked to H.L. Machihan and Shri Shangnam and then returned inside the camp and came out with C. Daniel and C. Paul and they were brought to the gate and they both left in company of H.L. Machihan and Shangnam.
This would unmistakably show that H.L. Machihan and Shangnam never entered the army camp, and surprisingly yet in the two extracts Annexures B/1 and B/2, Machihan and Shangnam are shown to have entered the army camp one after the other between 9.45 A.M. and 10.00 A.M. and left at 10.05 A.M.
If Machihan and Shangnam came upto army gate, never entered the same and according to the respondents C. Daniel and C. Paul were brought to the gate of the army camp, there was absolutely no justification for making an entry in the register evidencing that they had both entered the army camp.
There is a further infirmity in that the entry in the name of Shri C. Daniel appearing in the Register on March 10, 1982 appears to be overwritten over another entry which was already there.
Therefore in view of the direct evidence furnished by the affidavits of H.L. Machihan and C. Shangnam, coupled with the suspicious circumstances herein discussed and effort made to bolster up the stand by entries of dubious character as also the eloquent silence in the earlier stage of the proceedings about existence of any record 919 leave us with no alternative but to hold that the respondents have failed to prove that C. Daniel and C. Paul left the army camp on March 11, 1982 around 10.00 A.M.
This inference is further buttressed by the fact that all these documents along with the affidavits were placed on record after this Court made an order on May 5, 1983 clearly pointing out that the affidavit of Shri Sachdeva lacks credibility as the source of information is not traced therein and after Mr. P.P. Singh, learned counsel for the Union of India stated that the first respondent is not in possession of any record in respect of C. Daniel and C. Paul.
There is one curious feature of the whole case which cannot be overlooked.
Petitioner averred and it is supported by the affidavits of H.L. Machihan and C. Shangnam that the army jawans ransacked the houses and tortured the inhabitants in the course of the search on March 6, 1982.
They further averred that in order to save their skin, army jawans obtained false certificates as also signatures on blank papers.
Now if the army authorities had acted within the bounds of legitimate combing operation to trace insurgents, it was not necessary for them to obtain certificates from the inhabitants of village Huining.
In the first affidavit of Mr. Sachdeva, it is stated that in the counter affidavit in Writ Petition No. 550 of 1982 certificates from village authorities and Pastor were obtained by the army authorities contradicting the allegations made in the statements and averments set out in the petition.
There is further evidence that after the authorities of the Manipur State such as Deputy Commissioner and Superintendent of Police started making enquiries, the army jawans again went to Huining village on May 8 1982 and obtained some more certificates as well as signatures on blank papers.
One Yangya Anei Tanghul @ Maluganai Tangkhul, a Police Constable attached to Manipur Police Department was asked to accompany the army jawans when they visited Huining village on May 8, 1982.
It is admitted that this Police Constable accompanied the army jawans on May 8, 1982.
In his affidavit, the Police Constable states that security forces personnel obtained the signatures from the Village Authority Members as proof of their having furnished the information to the village people regarding release of C. Daniel and C. Paul and even he was asked to put his signature as a witness which he duly complied.
Why were army jawans so keen to obtain certificates from village people both on March 6, 1982 and on May 8, 1982 and certificates appear to have been obtained with a view to either 920 white washing their activities or exonerating the army jawans from their improper actions which were questioned by the village people.
We may here briefly refer to the various certificates Appendix `O ', annexures to the counter affidavit by Mr. J.C. Sachdeva in Writ Petition No. 550 of 1982 to show that the very language used in the certificates obtained by the personnel of the security forces would be a give away showing how the army people were trying to cover their illegitimate actions.
These certificates provide tell tale evidence of how a very spurious attempt was made to white wash some of the actions of the jawans of the army.
We may specifically refer to certificates produced at Appendix `L ' in which it is stated that the Deputy Commissioner of Ukhrul Mr. J.P. Joshi visited village Huining on March 7, 1982 from 7 A.M. to 11 A.M. and instigated the villagers against the security forces.
The village residents of Huining were so co operative with the security forces that they refused to be instigated by him and on other hand they praised the security forces for the good treatment meted out to the villagers by the security forces.
The attempt to blemish the good name of Mr. Joshi when the village headman and others had approached to ventilate their grievance against the army personnel, we refrain from using strong term, is crude, if not counter productive.
On the contrary, it would be legitimate to infer that there was something very despicable in the conduct of the army jawans and therefore to forestall any action they procured certificates which inevitably must be under threat, duress or coercion.
Therefore, these certificates leave us cold.
In the meantime, certain events occurred of which notice should be taken.
The first search was carried out by the army jawans on March 6, 1982.
Soon after presumably upon a complaint of the local inhabitants, Mr. Joshi, Deputy Commissioner visited Huining village on March 7, 1982.
This is admitted by Mr. Sachdeva in his first affidavit.
Obviously, the village people must have complained to the Deputy Commissioner about the misbehavior of the members of the security forces.
Presumably, acting upon the complaint, Deputy Commissioner Mr. Joshi directed Superintendent of Police (East) Ukhrul to enquire about various persons detained by the army officers and missing since then.
Amongst the names of 7 persons, the Deputy Commissioner has set out the names of C. Daniel and C. Paul.
The Superintendent of Police was called upon to furnish the report about the whereabouts of the persons whose names were set out in the direction given to him.
In response 921 to this enquiry by the Deputy Commissioner, the Superintendent of Police submitted his report on March 27, 1982 part of which may be extracted: "Following persons were released by Assam Rifles on 19/3/82: 1) Rr.
Nganaopam () 2) Pr.
Pheireisang () All of Phungcham village 3) Hr.
Wungnaokan () As regards persons belonging to Huining village it is learnt that K. Rashing is still under interrogation with Army & whereabouts of other persons are not known.
They were released one day after arrest by army as reported.
" It appears from this report that with regard to C. Daniel and C. Paul, the Superintendent of Police could not ascertain their whereabouts but he noted the fact that according to the army authority, they were released one day after the arrest by army authorities.
It again appears that the assertion by Respondents 1, 2 and 4 that C. Daniel and C. Paul were invited to identify R. Rashing, is not borne out by this report because the Superintendent of Police states that they were released after their arrest.
Pursuant to this report, the Deputy Commissioner submitted a report to the Chief Secretary, Manipur State that C. Daniel and C. Paul are missing and that the certificates are not correct and that the village headman had stated that they were made to sign blank papers.
Before this report was submitted, the Deputy Commissioner had received an application signed by five persons including village headmen Machihan setting out the details about the events that occurred on March 10, 1982 and the fact that their signatures were obtained by the army authorities on blank papers and that they had not signed the certificates and it was not true that C. Daniel and C. Paul were released in their presence on March 11, 1982.
From the evidence herein collated, it unquestionably follows that not only C. Daniel and C. Paul after admittedly they were taken presumably under arrest to Phungrei Camp on March 10, 1982 in the afternoon, they never left the Phungrei Camp on March 11, 1982 as claimed on the respondents in company of H.L. Machihan and 922 Shangnam, but a very crude attempt was made to concoct evidence in the from of certificates with a view to disowning the responsibility to explain what happened to C. Daniel and C. Paul after they were taken to army camp on March 10, 1982.
The affidavit of gateman Kultar Singh and Adjutant Subedar Sucha Singh and the Registers do not carry conviction, more so in the light of the fact that if what is claimed is genuine this subsequent attempt to doctor facts would not have been undertaken.
We are therefore constrained to reject the contention that C. Daniel and C. Paul left the army camp on March 11, 1982 either on their own or in company of Machihan and Shangnam.
In reaching the conclusion that the respondents have failed to discharge the burden heavily lying on them to affirmatively establish, once having admitted taking them to army camp on March 10, 1983 that C. Daniel and C. Paul left Phungrei Camp on March 11, 1982 around 10.00 A.M., we have completely overlooked and not take into consideration the affidavits of Mrs. Thingkhuila, wife of Shri C. Daniel and Mrs. Vangamala, wife of Shri C. Paul that they had seen C. Daniel and C. Paul being led away by army personnel on March 15, 1982, as contended by Mr. Bhagat.
Once we unerringly reach the conclusion that C. Daniel and C. Paul were taken to Pungrei Camp by officers and jawans of 21st Sikh Regiment on March 10, 1982 and they never left the army camp as canvassed on behalf of the respondents on March 11, 1982, it is obligatory upon the respondents to produce C. Daniel and C. Paul and to explain their whereabouts, more so because respondents claim the power to arrest and question anyone under the provisions of Armed Forces (Special Powers) Act, 1958.
We may now examine some technical contentions raised on behalf of the respondents.
Mr. Bhagat for the respondents contended that once the respondents have adopted a position that C. Daniel and C. Paul had come to the army camp at the request of the army authority, but they left that place on their own in company of their friends, a writ of habeas corpus cannot be issued, and the respondents cannot be called upon to file a return to the writ.
When a petition for a writ 923 of habeas corpus under article 32 of the Constitution is moved before the Court, ordinarily the Court would not issue ex parte a writ of habeas corpus unless the urgency of tee situation so demands or issuing of a notice motion was likely to result in defeat of justice.
Further the Court will be reluctant to issue a writ of habeas corpus ex parte where the fact of detention may be controverted and it may become necessary to investigate the facts.
The normal practice is that when a petition for a writ of habeas corpus is moved, the Court would direct a notice to be served upon the respondents with a view to affording the respondents to file evidence in reply.
If the facts alleged in the petition are controverted by the respondents appearing in response to the notice by filing its evidence, the Court would proceed to investigate the facts to determine whether there is substance in the petition for a writ of habeas corpus.
(See Holsbury 's Laws of England, Fourth Edition, Vol.
11, paragraph 1482).
If on investigation of facts, the Court rejects the contention of the respondent and is satisfied that the respondent was responsible for unauthorised and illegal detention of the person or persons in respect of whom the writ is sought, the Court would issue a writ of hebeas corpus which would make it obligatory for the respondents to file a return.
It is in this sense that in Thomas John Barnardo vs Mary Ford(1), the House of Lords held that even if upon a notice of motion, it is contended by the person against whom the writ is sought that the person alleged to be in the custody of the respondents has long since left the custody, a writ can be issued and return insisted upon.
A few facts of that case will render some assistance in ascertaining the ratio of the case.
One Harry Gossage was put at the instance of a clergyman in an institute comprising homes for destitute children and of which appellant Thomas John Barnardo was the founder and director.
Mother of Harry Gossage desired that her son Harry Gossage be transferred to St. Vincent 's Home, Harrow Road, a Catholic home and a request to that effect was made to the appellant.
After some correspondence was exchanged between the parties, a petition was moved in the Queen 's Bench Division, whereupon a summons was served upon the appellant to attend the Court to show cause why a writ of habeas corpus commanding him to produce the body of the said Harry Gossage should not be issued.
The appellant filed several affidavits inter alia contending that the boy Harry Gossage, was adopted by one Mr. 924 Norton of Canada on November 16, 1888 long before the respondent mother coveyed a desire to transfer the boy to the Catholic home.
It was further contended on behalf of the appellant that Harry Gossage was not with him since November 16, 1888 when he transferred him into the care of Mr. Norton and at the time of the service of the summons, he was not in his custody or power.
In a proceeding before Methew, J. after cross examination of the appellant the learned Judge refused to order the writ to be issued.
In the meantime, the case in Reg.
vs Barnardo Tye 's(1) case was decided by the Court of Appeal in which it was laid down that it was not an excuse for non compliance with a writ that the defendant had parted with the custody of the child to another person if he had done so wrongfully, and accordingly a fresh application was made for a writ of habeas corpus.
After hearing the arguments, the Judges of the Queens Bench Division made absolute the order for the issue of the writ.
The appellant approached the House of Lords.
It is in this context that the Court held that the respondent was entitled to a return of the writ.
To some extent, the position before us is identical, if not wholly similar.
When the petition in the present case was moved before this Court, rule nisi was issued calling upon the respondents to submit their version about the detention of C. Daniel and C. Paul.
The respondents 1, 2 and 4 in their various affidavits adopted a positive stand that C. Daniel and C. Paul were taken by the army jawans on March 10, 1982, though not under arrest, to the army camp for the purpose of identifying Rashing and that they spent the night at the army camp and that they left the army camp on March 11, 1982 in company of H.L. Machihan and C. Shangnam.
The petitioner and those filing affidavits in support including H.L. Machihan, C. Shangnam and Smt.
Thingkhuila, wife of C. Daniel and Smt.
Vangamla, wife of Shri C. Paul denied that C. Daniel and C. Paul left army camp on March 11, 1982 and returned to the village, therefore an issue squarely arose to ascertain whether the positive stand of the respondents was borne out by the facts alleged and proof offered.
The burden obviously was on the respondents to make good the defence.
Now that the facts are clearly established which led to the rejection of the contention of the respondents that C. Daniel and C. Paul ever left the army camp on March 11, 1982 around 10.00 A.M., the necessary corollary being that they were last seen alive under the surveillance, control and 925 command of the army authority at Phugrei Camp, it would be necessary not only to issue a writ of habeas corpus thereby calling upon the respondents 1,2 and 4 to file the return.
In this context, it may be pointed out that the petitioner has prayed for issuing of a writ of habeas corpus directing the respondents to produce C. Daniel, retired Naib Subedar of Manipur Riffles and Headmaster of the Junior High School of Huining village and C. Paul, Assistant Pastor of Huining Baptist Church, the writ must be issued and the petition must succeed to that extent.
It may be mentioned that the Manipur State Authorities Respondent 3 had received numerous complaints about the behaviour of the army personnel.
The search in village Huining was taken by the jawans of 21st Sikh Regiment on March 6, 1982.
On March 7, 1982, Mr. Joshi had to visit the village when he received complaints of torture and ill treatment of village inhabitants at the hands of the personnel of the security forces.
Thereafter certain enquiries were made by the Chief Secretary, Manipur State which we have already deal with.
In the course of hearing, a request was made by Mr. Vaidyanathan, learned counsel for the petitioner and at a later date by Miss Haskar that the Manipur State Government be called upon to produce; (1) Report of the Superintendent of Police (ii) Report of the Deputy Commissioner and (iii) Statement of Yangya Anei Tangkhul alias Malugnai Tangkhul.
A copy of the third document is already produced.
As far as reports mentioned at (i) and (ii), privilege was claimed on behalf of the E. Kunjeshwar Singh, Secretary (Home), Manipur.
In the affidavit claiming privilege, it is stated that the aforementioned two reports dated April 28, 1982 and 31st may, 1982 were with regard to the incident that occurred on March 10, 1982.
Before adjudicating upon the claim of privilege, we called upon Mr. V. C. Mahajan, learned counsel for the State of Manipur to produce the reports for our perusal.
We read the reports.
We are not inclined to examine the question of privilege for the obvious reason that these reports are hardly helpful in any manner in the disposal of this petition, and further the three relevant documents, namely, the telex message sent by the Deputy Commissioner to Superintendent of Police, the report made by the Superintendent of Police to the Deputy Commissioner and the short report submitted by the Deputy Commissioner to the Chief Secretary, Manipur State have been disclosed in the proceedings.
Therefore, we do not propose merely to add to the length of the judgment by examining the question of the privilege claimed in respect of the two reports first dated 926 April 28, 1982 by the Superintendent of Police and another dated May 31, 1982 by the Deputy Commissioner.
Accordingly, this petition is allowed and we direct that a writ of habeas corpus be issued to the respondents 1, 2 and 4 commanding them to produce C. Daniel, retired Naik Subedar of Manipur Riffles and Headmaster of the Junior High School of Huining Village and C. Paul, Assistant Paster of Huining Baptist Church, who were taken to Phungrei Camp by the jawans of 21st Sikh Regiment on March 10, 1982 before this Court on Dec. 12, 1983 and file the return.
H. section K. Petition allowed.
| The respondent who was a party to a subsisting contract with the Government for widening or a road wrote a letter to the concerned Executive Engineer stating that he was closing the said contract.
1 he appellant contended that the contents of the letter did not have the effect of putting an end to the contract.
Dismissing the appeal, ^ HELD: After the letter, the contract came to an end by breach and was no longer subsisting.
Acceptance of the letter by the authorities was unnecessary for putting an end to the contract although the breach may give rise to an action for damages.
[864 B C]
|
has indisputably been done pursuant to an order of the Court of law and the party who has done the work must be paid its remuneration.
[400C] & CIVIL APPELLATE.JURISDICTION: Civil Appeal No. 2121 of 1989.
385 From the Judgment and Order dated 4.6.1987 of the Jammu and Kashmir High Court in Application No. 180 of 1987.
Altar Ahmed and S.K. Bhattacharya for the Appellant.
S.N. Kacker, E.C. Agarwala and Ms. Purnima Bhat for the Respondent.
The following Judgments of the Court were delivered: SHARMA, J.
The present respondent who is an approved contractor of the Jammu & Kashmir State Forest Corporation (appellant before us) filed an application under sections 8, 11 and 20 of the Jammu & Kashmir Arbitration Act, 2002 (Smvt.), on the original side of the High Court of Jammu & Kashmir praying for a direction to the Corporation defendant to file an agreement between them fully described therein, and to refer the dispute mentioned in the application to an arbi trator.
Jammu & Kashmir Arbitration Act is similar to the , enacted in identical language.
The Corporation objected, pleading inter alia that the entire work allotted to the plaintiff contractor under the agree ment had been completed by him without any dispute, and the present claim of the plaintiff is not covered by the agree ment in question or its arbitration clause A learned single Judge of the High Court allowed the prayer for reference to the dispute described in the respondent 's application, and further granted an interim relief.
This judgment is under challenge before this Court by the defendant Corporation.
Special leave is granted.
As stated in the affidavit of the plaintiff contrac tor, the Corporation was created under the Jammu & Kashmir Forest Corporation Act, 1978 and its main functions are: (i) to undertake research programmes and to render technical advice to the State Government on the matters relating to forestry, (ii) to manage, maintain and develop forests transferred or entrusted to it by the Government, and (iii) to undertake removal and disposal of trees and exploitation of forest resources entrusted to it by the Government.
In February 1986 the Corporation invited tenders for extraction of timber from an area described as Compartment No. 59 Marwa which included the work of felling and removal of trees.
The plaintiff submitted his tender and was ultimately granted the work contract with reference to 4 lac cft.
standing volume timber.
Subsequently in 1987 he was also entrusted with an additional work contract for a further quantity of 2 lac cft.
in the said Compartment 59 Marwa.
Although a deci sion by the authorities had 386 been taken for extraction of a total standing volume of 10,08,000 cft.
, the plaintiff was entrusted with the extrac tion work of only 6 lac cft.
Thus 4,06,000 cft.
of standing volume remained in the area to be extracted later.
According to his case the plaintiff was entitled to get this addition al work in accordance with the practice prevalent in the Corporation and assurances given to him.
It was alleged that since the Managing Director of the Corporation was not agreeable to allow this additional work, the plaintiff approached the Chief Minister of the State who asked the Managing Director to allot him the remaining work.
The Manging Director first agreed to issue necessary orders but later refused to carry out the Chief Minister 's direction which necessitated the filing of the application before the High Court.
The Corporation denied any such practice and refuted the allegation about any assurance given on its behalf as also the statement about the Managing Director agreeing at one stage to allot the additional work in ques tion on the intervention of the Chief Minister.
It was further stated by the Corporation that a large amount of extracted timber was lying in the area and had to be re moved.
Admittedly the timber had to be transported to a distant place through difficult terrain (as has been specif ically mentioned by the contractor himself) and was, there fore, likely to take a considerable time.
The Corporation said that a decision had been taken not to work the Compart ment further till the entire timber already extracted was removed to its destination, and there was, therefore, no question of entrusting the remaining work to anybody for the present.
A decision as to how and when the additional trees will be felled and the timber removed is for the Corporation to make and it is under no obligation to the contractor in this regard.
So far as the work allotted to the contractor under the agreement is concerned, it is already complete without giving rise to any difference between the parties.
Reliance has been placed on behalf of the plaintiff before us on paragraph 41 of the agreement under which the work contract in respect to 6 lac cft.
was obtained by him, and which says that the terms and conditions of the tender notice issued by the Corporation will be terms and condi tions of the agreement.
The 15th paragraph of the tender notice reads thus: 15.
Extension for the additional volume available in the coupe will not be claimed as matter of right.
But may be consid ered by the Management where the achievement is 100%.
" 387 The arbitration clause being Clause 42 of the agreement states thus: "42.
Any dispute, difference or question which may at any time arise between the parties in respect of the work to be executed by the second party under this agreement shall be referred for arbitration to the Managing Director, J & K. State Forest Corporation, whose decision shall be final and binding on both the parties.
" As it appears from the plaintiff 's application before the High Court, his claim was rounded on "procedure", "practice," "custom", and "assurances extended to the peti tioner to that effect by the respondent Corporation through its functionaries from time to time." Although it has been contended before us that since paragraph 15 of the tender notice refers to additional volume of work to be allotted in the future, the agreement between the parties including the arbitration clause must be interpreted to include within its sweep the present claim of the respondent to the additional work of extraction, the case for reference pressed before the High Court rested mainly on the alleged "practice" and "assurances".
The High Court has emphasized in its judgment the fact that the trees in question had already been marked for extraction and, therefore, have to be felled "one day or the other" and deprecated the attitude of the Corporation in the following words: "The contention of the learned connsel for the respondents is that the respondents do not want the remaining timber to be extracted presently for unknown reasons and as such the corporation cannot be compelled for grant of sanction for extraction of remaining marked timber.
1 think the attitude of the respondent corporation is most derogatory to the facts and circumstances of the case when the peti tioner is prepared to accept all sorts of offers.
It cannot be denied that the remaining timber is to be extracted one day or the other and simply to put the petitioner to loss would not be justifiable in any manner.
" There was absolutely no justification for the Court to have commented as above when it was leaving the matter to be decided by the arbitrator.
A court, while considering the question whether an alleged dispute between the parties has to be referred for arbitration or not should refrain from expressing its opinion on the merits of the dispute which may embarrass the arbitrator.
However, the main issue before us is whether the dispute mentioned in the contractor 's application 388 could have been referred to arbitration at all.
If the foundation of the claim of the respondent be any alleged assurance or custom or practice, it cannot be said that such claim arises out of the written agreement between the parties; and so the prayer for reference has to be rejected.
If the case pleaded is true, the appropriate forum for the respondent will be a court of law directly granting the relief in an appropriate legal proceeding.
It was, however, argued on behalf of the respondent before us that in view of paragraph 15 of the tender notice, quoted earlier, which must be treated as a part of the agreement, the respondent has a right to be considered for allottment of the additional work since his past performance has been excellent.
We are afraid, the impugned judgment of the High Court cannot be defended on this basis and the prayer of the respondent for reference of the dispute, as mentioned in his application before the High Court, cannot be granted under the 15th paragraph of the tender notice aforementioned.
The language of the said term is explicit in declaring that the contractor would not be allowed to claim as a matter of right additional volume of work.
His right extends only to a consideration of his case by the management when the ques tion of allotment of additional work is taken up.
But by the application filed before the High Court the respondent did not ask for reference of a dispute as to whether he is entitled to consideration or not; the prayer is for refer ence of a higher claim of immediately getting the additional work, and this prayer has been allowed.
This issue cannot be said to have any connection with the 15th term of the tender notice or any other provision thereof or of the agreement.
A reference to the decision of this Court in Seth Thawardas Perumal vs The Union of India, [1955,] 2 SCR 48, will be helpful.
The appellant, a contractor, entered into a con tract with the Dominion of India for the supply of bricks.
A Clause in the contract required, " . . all questions and disputes relating to the meaning of the specification and in structions hereinbefore mentioned and as to quality of materials or as to any other ques tion, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, specification, instructions, orders or these conditions, or otherwise concerning the supplies whether arising during the progress or delivery of after the completion of abandonment thereof . " emphasis added) to be referred to arbitration.
It was agreed that the bricks would be 389 prepared in lots and it would be the duty of the Government to remove the bricks as soon as they were ready for deliv ery.
In order to keep to the schedule for delivery, the contractor had to prepare 'kateha ' bricks and place them in his kilns for baking, and while this lot was baking he had to prepare another lot of 'kateha ' bricks ready to take the place of the baked bricks as soon as the Government removed them.
At a certain stage the Government department failed to remove the baked bricks in time which caused a jam in the kilns and prevented the contractor from placing a fresh stock of unburnt bricks in the kilns.
Consequently the stock pile of kateha bricks kept on mounting up when the rains set in, destroying 88 lacs of katcha bricks.
The contractor claimed the loss arising out of the neglect of the Govern ment department in performing its duty in time.
The Govern ment denied the claim and a reference of the dispute was made to the arbitrator designated in the agreement who made an award and filed it in court.
On the Constitution coming into force the Dominion of India was replaced by the Union of India as the defendant in the case and it was contended on its behalf that the katcha bricks did not form part of the contract and that the loss that was occasioned by the damage to them was too remote to be covered by the arbitra tion clause.
The second ground of defence was based on Clause 6 of the agreement which absolved the Government from any liability for a damage to unburnt bricks.
The stand of the contractor was that the chief reason of the destruction of the katcha bricks was the failure of the department to lift the monthly quota of the bricks in accordance with the written agreement; and, Clause 6 of the agreement referred only to such cases where the department had no control, and would not cover a case of its own default.
The Supreme Court did not agree with him and set aside the award, inter alia observing, that if he chose to contract in the terms includ ing Clause 6 of the written agreement he could not go back on his agreement when it did not suit him to abide by it.
In the case before us, the plaintiff contractor is trying to connect the allotment of future work by a reference to paragraph 15 of the tender notice which specifically says that additional work could not be claimed as a matter of right.
The High Court, therefore, was not correct in inter preting the aforementioned Clause 15 in the following words: "There was clause 15 in the tender notice according to which extension of addi tional volume available in the coupe would not have to be claimed by the contractor as a matter of fight but he would have to be con sidered by the management where his achieve ment was 100%.
In the present case the achievement of the petitioner was 300% and 390 under such circumstances the petitioner had all the right to claim additional work in the said coupe.
" Besides, if this view be assumed to be correct, what was there left for the arbitrator to decide? Further, it is not alleged or suggested that the Corporation has ever indicated its unwillingness to consider the respondent when it takes up the question of allotting the additional work.
In absence of a repudiation by the Corporation of the respondent 's right to be considered, if and when occasion arises, no dispute can be said to have arisen which may be referred for arbitration.
In order that there may be reference to arbi tration, existence of a dispute is essential and the dispute to be referred to arbitration must arise under the arbitra tion agreement.
When in the future, the Corporation makes a decision for the execution of the additional work and takes up the question of executing a contract for the purpose, the stage for consideration of the plaintiff respondent 's claim would be reached and a dispute may then arise if the Corpo ration refuses to consider the claim.
Neither the agreement nor the tender notice deals with the question as to the conditions and time for grant of any additional work to the plaintiff and if his claim be interpreted as a demand for immediate allotment of any future work, the same cannot be connected with the agreement or the tender notice.
We, therefore, do not agree with the observations of the High Court that the conduct of the Corporation in not taking up immediate deforestation of a part of Compartment No. 59 Marwa is reprehensible, simply for the reason that the trees in the area concerned are "to be extracted one day or the other" or that the plaintiff has the right to claim the additional work on the ground that his achievement in the past has been more than 100%.
We also hold that the claim raised by the plaintiff in his application before the High Court is not covered by the arbitration clause and cannot be referred for a decision of the arbitrator.
The order of reference passed by the High Court, therefore, has to be set aside.
By the interim order the High Court permitted the plaintiff to execute the additional work claimed by him without waiting for the award.
On the quashing of the main order of reference, the interim order automatically disap pears, but we would, however, like to briefly indicate the scope of Court 's power to issue interim orders at the time of reference of a dispute to arbitration, and point out how in the present case the High Court was in grave error in granting the interim relief.
The relevant provision in the Jammu & Kashmir Arbitration Act, 2002 (Smvt.) is in section 41(b) which is quoted below: 391 "41. ,Procedure and powers of Court.
Subject to the main provisions of this Act and of rules made thereunder (a). . . . . . . . (b) the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceed ings before the Court: Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any such mat ters.
" section 18 deals with the power of Court to.
pass interim orders after award is actually filed in Court.
So far as clause (a) of section 41 is concerned, it makes only the proce dural rules of the Civil Procedure Code applicable.
The source of power to grant interim relief cannot be traced to clause (a), otherwise as was pointed out in H.M. Kamaluddin vs Union of India, , clause (b) would become otiose.
So far as clause (b) is concerned, it circumscribes the Court 's power within the limits indicated in the Second Schedule and further qualifies it by declaring in the Provi so that it cannot be used to the prejudice of any of the powers of the arbitrator.
The interim direction can be issued only "for the purpose of" arbitration proceedings and not to frustrate the same.
In the present ease the plain tiff contractor was allowed by the High Court to execute the extraction work which was the subject matter of the arbitra tion.
Mr. Kacker, appearing for the plaintiff.
respondent, argued that in pursuance of this part of the impugned judg ment the plaintiff was able to cut down all the trees in question before this Court passed an order of stay.
In other words it is claimed on behalf of the plaintiff respondent that he was able to completely frustrate the arbitration proceeding in a very short time on the strength of the interim order.
This statement of fact has been seriously challenged by the petitioner Corporation; but whatever be the factual position, the High Court by granting the interim relief, not in the shape of an injunction in the negative form, but by a mandatory direction clothing the plaintiff with the right to do something which he could have been entitled to, only after a final decision on the merits of the case in his favour, committed a serious error.
Paragraph 1 of the 392 Second Schedule speaks of the preservation of subject matter of the reference and paragraph 3 also highlights that as pect.
The 4th paragraph which mentions "interim injunction or the appointment of a receiver" has also to be interpret ed in that light specially because of the language of clause (b) of section 41 and the Proviso thereto.
The second part of the judgment under appeal is also, therefore, set aside.
It has been averred before us on behalf of the plain tiffrespondent that all the trees in question were cut down, and so the plaintiff must be permitted to complete the remaining work including their transportation to the desti nation.
The learned counsel for the Corporation placed reliance on the statements in several affidavits and con tended that if the entire circumstances including the period which could have been available to the respondent for the purpose of felling the trees, are examined, there is no escape .from the conclusion that the respondent had felled the trees or majority of them after service of the stay order passed by this Court.
We do not think it necessary to examine and decide this controversy as in our view the respondent, in the facts and circumstances of this case, cannot take any advantage from or claim compensation for the hurried steps he alleges to have taken under the strength of the illegal order interim in nature, which we are setting aside.
In the result, the appeal is allowed.
The impugned judgment the High Court is set aside and the respondent 's application filed before the High Court for reference is dismissed.
The respondent shall pay the costs of this Court and of the High Court to the appellantCorporation.
SABYASACHI MUKHARJI, J.
I have read the judgment pro posed to he delivered by L.M. Sharma, J. with which the learned Chief Justice has agreed.
With great respect, I am unable to agree with them on the view that there was no arbitration agreement subsisting covering the dispute in question between the parties.
It is, therefore, necessary to refer to certain facts, as I view these.
This appeal by special leave is directed against the judgment and order of the High Court of Jammu & Kashmir, dated 4th June, 1987.
The Jammu & Kashmir Forest Corporation is the appellant.
The undisputed facts leading to this appeal are that one Abdul Karim Wani, the respondent No. 1, filed an application for referring certain matters alleged to he in dispute to an independent arbitrator; and that for the last 15 years the respondent had been working as a contractor for the 393 appellant Corporation, namely, Jammu & Kashmir Forest Corpn.
and was carrying on various activities in different forest areas in Jammu Province, including felling, machine sawing, pathroo, paccinali, rope span, mahan and transportation.
It is stated that in February, 1986 the said Corporation issued tenders for felling, handsawing, pathroo, paccinali and mahan work of timber to be extracted from compartment No. 59 Marwah, In response thereto the petitioner to the original application being the respondent herein, submitted his quotation and offered the lowest rate of 11.74 per cft.
and thereby secured the contract.
A formal agreement was also executed between the parties.
In October, 1987 after about 7 months from the issuance of first work order the appellant Corporation through its General Manager (Extrac tion) issued a sanction for further quantity of 2 lac cft.
sawn volume in compartment No. 59 Marwah, on the same rates, terms and conditions as contained in the original contract.
The sanction appears at pages 26 & 28 of the present appeal papers before us.
It appears that the total marking carried out in com partment No, 59 was 10,08,000 cft.
standing out of which only 6 lac cft.
was sanctioned in favour of the respondent.
The compartment in question is at a distance of Over 70 kms.
from the nearest road point and the timber extracted from the compartment had to travel by pathroo, paccinali and mahan through Chenab river for a total distance of 80 kms.
before it is collected at loading point of Dedpeth.
1t is, further, the case of the respondent that "as per the procedure, practice, custom and assurances extended to the respondent by the appellant Corporation through its functionaries, from time to time," the entire marking con ducted in a particular compartment for extraction was re quired (emphasis supplied) to be handed over to the respond ent in compartment No. 59.
As regards sale, it is suggested that as the compartment is situated in one of the remotest area of Jammu province where making arrangements for extrac tion of timber including cartage/carriage of foodgrains, saws, tools and implements is very difficult, it was never intended that the balance work remaining in the compartment for extraction would be given to any other contractor.
The case of the respondent is that acting upon the assurances and representations of the appellant Corporation that the entire work in the aforesaid compartment would be handed over to him, the respon 394 dent had made adequate arrangement after investing Rs.5 lacs by way of provision for rations, saws, tools and implements etc.
All these arrangements at that scale were necessary and were made just to extract entire marked timber from the compartment in question and not just initially tendered quantity.
That would have been wholly uneconomical.
It was further asserted that there was also the practice in the Corporation that once a compartment was handed over to the contractor for work, it was taken back from him only after the entire available work in the said compartment stood concluded.
The contractor further alleged that the appellant Corporation was not allotting rest of the work to him contrary to the policy adopted and assurances extended, as mentioned hereinbefore.
The respondent furnished in stances where such conduct or procedure of making allot ments, as alleged by the respondent, had been followed.
We were referred to the sanction in favour of M/s. Ghulam Hussain, Sukhjinder Singh in respect of compartment No. 82 Lander on 28.4.87, Mst.
Jana Begum in respect of compartment No. 30 B, Dachhan and 62 Marmat dated 10.3.87, Sh.
Rehmatul lah Bhat for compartment No. 19A Paddar dated 5.5.87, Nas sarnllah Malik for compartment No. 16 Ramban on 12.5.87 and Irshad Ahmed Shah in respect of compartment No. 62 Sewa dated 4.2.87.
On behalf of the Corporation and others, it was stated before the learned Judge of the High Court that there was no assurance and no practice regarding grant of the contract to the respondent contractor Abdul Karim Wani, in the manner alleged.
Further, it was alleged that the respondent and the Corporation had decided not to work on the compartment till the entire extracted timber was removed to sale depot.
Once that decision was there the instances quoted by the contrac tor proved useless, according to the appellant.
It, however, very clearly appears that in compartment No. 59 Marwah marked standing trees were to the extent of 10,08,000 eft.
The second aspect emerging is that out of this volume only 6 lac eft.
standing timber had been sanctioned in favour of the contractor on two different occasions, and such timber had been extracted, removed and taken to the loading point.
The only dispute subsisting was about the rest of the stand ing trees i.e., 4,80,000 cft.
It is not disputed that the said remaining cfts.
have been marked.
These remained as marked timber which required to be extracted.
The respondent claims preference for grant of contract of extraction by way under the clause in the relevant sanction.
The only conten tion of the appellant was that they had no intention to extract 395 the said timber till other extracted timber was taken to the depot.
The case of the appellant as noted by the learned Judge in his judgment, was that the remaining timber to be extracted presently for 'unknown reasons ' was not to be then extracted and, as such, the Corporation could not be com pelled to grant or sanction extraction of remaining marked timber.
The learned Judge by his impugned judgment and order deprecated the conduct of the authorities concerned.
He proceeded on the basis that inasmuch as the remaining timber had to be extracted one day or the other, the entire work should have been given to the respondent.
In the present case, the learned Judge noted that the performance of the respondent contractor as 300%.
The respondent was entitled to the grant of this contract even if his performance had merely been 100%.
The learned Judge found that there were two different points to be examined.
He found that there existed a dispute between the parties touching the agreement executed between them.
The matter in dispute was referred to the named arbitrator, namely, the Managing Director of the State Forest Corporation, who was directed to adjudicate upon the same and submit his award within the statutory period of four months.
The learned Judge went further and as an interim measure directed that the petitioner before him, namely, the re spondent herein be allowed to do the remaining work of extraction of timber of standing marked trees in compartment No. 59 Marwah and the rates were to be determined by the arbitrator, after hearing both the parties.
This order is the subject matter of the appeal.
The main question involved in this appeal is whether there was any subsisting arbitration agreement in respect of the matters sought to be referred.
The second aspect in volved herein is whether the learned Judge was justified in making the impugned order by directing that the petitioner be allowed to do the remaining work of extraction of timber of standing marked trees in compartment No. 59 Marwah, and the rates be determined by the arbitrator after hearing both the sides.
It was contended on behalf of the appellant that the learned Judge travelled beyond the scope of his juris diction.
It was submitted that there was no subsisting arbitration agreement covering the entire area of 10,08,000 eft.
There were only two subsisting contracts one being a contract for felling trees of 4 lacs eft dated 6th March, 1986, and another for 2 lacs eft in addition, dated 28th October, 1986.
The agreement dated 6.3.86 provided that dispute in respect of these 396 should be referred to arbitration but there was, according to the appellant, no subsisting contract in respect of the remaining 4 lacs cft.
The respondent had only a right to be considered in respect of the rest and yet no contract had been granted to him.
Therefore, there being no subsisting contract there was no scope for reference to arbitration.
In my opinion, it is not the correct way to look at the facts of this case.
It appears from the first agreement, which is at page 142 onwards of the present paper book that it con tained, inter alia, the following clauses.
"The quantum of work under each activity/sub activity is estimated and as such cannot be guaranteed and can be increased or decreased upto 25% by the General Manager Ext.
East Jammu East on the contract rates subject to prior approval of the Managing Director.
Any subsequently marking carried out in a section/unit under work with the contractor shall be included in this increase of 25%.
" It also contained clause 15 which was to the following extent: "Extension for the additional volume available in the coupe will not be claimed as matter of right.
But may be considered by the Management where the achievement is 100%.
" Clause 17 of the said agreement which provided for reference to arbitration was the following: "Any dispute, difference, question which may at any time arise between the parties in respect of the works to be executed by the contractor(s) shall be referred for arbitra tion to the Managing Director J&K SFC whose decision shall be final and binding on both the parties.
" In respect of the second contract that similar terms were there, was not disputed before us.
Therefore, even though where the achievement of the contractor was 100% the contractor had a right only to be considered for grant of the additional work.
In this case it was contended on behalf of the appellant Corporation that the Corporation could not be compelled by the process of an application under Section 20 of the Arbitration Act to grant additional work to the contractor.
On the other hand, the contractor had pleaded that where the 397 achievement of the contractor in respect of the subsisting contract was 100% the contractor had a right to be consid ered for grant of the additional work, while in this case his performance was 300%.
Additional volume available in the coupe was liable to be granted to him or, at least, he was entitled to be considered in accordance with equity and justice.
The contractor has further alleged that while others in similar position had been granted this additional work, he had been wrongfully denied.
His claim was that he having fulfilled 300% performance, was entitled to the remaining work of the additional work.
It was contended on behalf of the appellant before us that there cannot be any application for filing of an arbi tration agreement for the arbitrator in respect of the contract which had not been entered into.
I am unable to accept this submission.
Clause 17 of the arbitration agree ment provided that any dispute, difference, question which might at any time arise between the parties in respect of the works to be executed by the contractor(s) should be referred to the arbitration of the Managing Director of the Jammu & Kashmir State Forest Corpn.
Therefore, it appears to me that dispute which had arisen between the parties in respect of the "works to be executed" by the contractor was a dispute which was referable in terms of the clause 17 and the dispute was, according to the pleadings, the custom, practice and procedure of granting additional volume of available coupe where the timber trees had been marked but not extracted to be considered by the Government for grant of the contract.
The contract alleged if such proper consid eration or lawful consideration in accordance with the principles of equity and justice had been made, the contract would have been granted to the contractor.
Therefore, the contractor claimed that he was entitled to the grant of additional volume of work.
In my opinion, there was a dis pute whether the contractor was entitled to the grant of additional volume of the work.
Such dispute was a dispute between the parties in respect of the "works to be executed by the contractor.
" I am clearly of the opinion that the dispute in this case was a dispute between the parties in respect of the "works to be executed by the. contractor".
In that view of the matter and in the light of clause 15 read with clause 17, the dispute in this case was clearly referable to arbi tration of the Managing Director, Jammu & Kashmir State Forest Corpn.
An arbitration agreement is one which is defined in Section 2(a) of the as a written agreement to submit present or future differences to arbi tration.
There was, in this case, an arbitra 398 tion agreement, that is to say, the parties had been ad idem.
The agreement was in writing.
It was not a contingent or a future contract.
It was a contract at present time to refer the dispute arising out of the present contract en tered into by the parties as a result of which the contrac tor got a right or a privilege to ask for consideration of grant of the further work.
It was not as sought to be argued a mere right to get the additional work.
Hence, in my opin ion, it could not be contended that there was no agreement.
Endeavour should always be to find out the intention of the parties, and that intention has to be found out by reading the terms broadly, clearly, without being circumscribed.
This contention of the appellant cannot, therefore, be accepted.
In the light in which I have read the facts, I am unable to accept the position that the claim raised by the plain tiff in this application before the High Court was not covered by the arbitration clause.
The amplitude of the arbitration clause, in my opinion, was wide enough and should be so read for the reasons mentioned hereinbefore.
If that is the position then the order of reference by the High Court was not bad and cannot be set aside.
I am unable to agree that the decision of this Court in Seth Thawardas Pherumal vs The Union of India, indicated that in the facts of this case, there could not be reference to the arbitration.
That was a case where the appellant, a contractor, entered into a contract with the Dominion of India as it then was for supply of bricks.
A clause in the contract required all disputes arising out of or relating to the contract to be referred to arbitration.
Disputes arose and the matter was duly referred.
The arbitrator gave an award in the contractor 's favour.
It was held that it was not enough for the contract to provide for arbitration but something more was necessary.
An arbitrator only got juris diction when either, both the parties specifically agreed to refer specified matters or, failing that, the court com pelled them to do so under the arbitration clause if the dispute was covered by it.
That case was mainly concerned with a specific question of law.
This Court referred to the decision of this Court in A.M. Mair & Co. vs Gordhandass Sagarmull, ; at 798 where this Court quoted a passage from Viscount Simon 's speech in Heyman vs Darwins Ltd., [1942] Appeal Cases 356 at 368.
Here in this case the clause as I read it gave the respondent a right to be con sidered.
The respondent 's grievance was, if properly consid ered his performance being 300% achievement he was entitled in the facts and circumstances set out hereinbefore to the grant of the contract and further similarly placed persons had been so given.
That right had not been duly considered.
That is the dispute in the present case and that dispute is clearly referable to the arbitration 399 clause as mentioned hereinbefore.
I am, therefore, unable to accept the position that the order of reference passed by the High Court is bad.
The second challenge to the order of the High Court was that the order so far as it directed under Section 20 of the that the petitioner be allowed to do the remaining work of extraction of timber of standing market trees in compartment No. 59 Marwah, was wholly without jurisdiction.
For this reference may be made to Section 41 of the which provides that for the purpose of and in relation to arbitration proceedings, the Court has such powers to pass interim orders for detention, preserva tion, interim custody and sale of any property the subject matter of the reference for preservation or inspection of any property or thing the subject matter of the reference or as to which any question may arise therein for taking of samples and making observations and experiments; for secur ing the amount in difference in the reference; for granting an interim injunction and appointing a receiver as the Court has in relation to any proceeding before it.
But though under Section 41(b) the Court has power to pass an interim order of injunction or appointment of receiver, in my opin ion, the Section does not empower the Court to direct execu tion of the contract, the extent of which is in dispute and is a matter referable to be adjudicated by the arbitrator.
If the Court does so then the decision of the dispute be comes academic because the contract is executed.
Where the question is whether the contract was to be executed by the respondent, if the contract is in fact executed by the respondent by virtue of the order of the Court, then nothing remains of the dispute.
There is nothing arbitrable any more and proceedings before the arbitrator cannot, in my opinion, be forestalled by interim order by ordering execution of the contract before it is decided whether it had any right to the contract for additional work in the garb of preservation of the property.
In that view of the matter, I am clearly of the opinion that the interim directions given by the High Court that the "contractor be allowed to do the remaining work of extrac tion of timber of standing marked trees in compartment No. 59, Marwah" was beyond the competence of the Court.
In this respect I agree with my learned brothers.
But so far as the Court directed that the rates be determined by the arbitrator after hearing both the parties, this direction, in my opinion, was clearly within the juris diction provided this dispute was referred to the arbitra tion.
In this case unfortunately after the order of the High Court was passed and before any order of stay could be 400 passed by this Court in a petition under Article 136 of the Constitution, the respondent had done the work of extraction of timer of standing marked trees in compartment No. 59 Marwah.
Therefore, it would be inappropriate to interfere with this order.
The events have overreached the decision of the Court.
It would be unjust to deprive any party of its dues simply because the work has been done in view of a wrong order or incorrect order of the Court of justice when there was no stay.
Would it be just to deprive a suitor of his dues in this manner under Article 136 of the Constitu tion? I have no doubt in my mind that it would be unjust.
The work indisputably has been done pursuant to an order of the Court of law and the party who has done the work must be paid its remuneration.
How would that remuneration be set tled, would it be by a decree in the suit or would it be by adjudication of an award? In the view I have taken that there was a valid reference on the contention of the re spondent, this question which was incidental thereto must be decided along with that contention.
In any view of the matter, however, for determining the work done pursuant to the liberty or right given by the Court which was not stayed by this Court arbitration undoubtedly is a better method of finding out the dues in respect of that work done.
I would not, therefore, in any event alter this direction of the High Court.
In the aforesaid view of the matter, in my opinion, it would be inappropriate to interfere with the interim direc tion of the High Court though the direction was beyond jurisdiction.
In the premises I would have disposed of the appeal by directing the arbitrator to determine the rates in respect of the extraction of the remaining timber of stand ing marked trees in compartment No. 59 Marwah.
In the aforesaid view of the matter, I would have made no order as to costs.
N.V.K. Appeal al lowed.
| The appellant, a Corporation was created under the Jammu functions was to undertake the removal and disposal of trees and exploitation of the forest resources entrusted to it by the Government.
The Corporation took a decision for the extraction of timber of a total volume of 10.08 lakh c. ft. which included the work of felling and removal of trees.
The respondent an approved contractor submitted his tender and was granted the works contract initially with reference to 4 lakh c. ft., and subsequently he was entrusted with an additional work for a further quantity of 2 lakh c. ft.
The respondent completed the entire work under the contract.
Thereafter, he claimed that he was entitled to the remaining volume of the work, namely, 4.08 lakh c.ft.
as per the procedure, prac tice, custom and usage extended to him.
The appellant denied any such practice, custom or assurance and said that a decision had been taken not to work the area further till the entire timber already extracted was removed to its destination.
There was, therefore, no question of entrusting the remaining work to anybody.
Paragraph 15 of the Tender Notice stipulated that: "Extension for the additional volume in the coupe will not be claimed as a matter of right but may be considered by the Management where the achievement 381 is 100 per cent.
" The agreement provided for arbitration which was contained in clause 42, and which stipulated: "that any dispute, differences or question that may arise was to be referred for arbitration to the Managing Director of the Jammu & Kashmir Forest Corporation.
" The respondent filed an application under sections 8, 11 and 20 of the Jammu and Kashmir Arbitration Act, 2002 (Smvt) in the High Court for a direction to the Corporation to file the agreement and to refer the dispute to an arbitrator.
The High Court deprecated the attitude of the Corpora tion in not awarding the remaining work to the respondent.
It held that the trees in question had already been marked and had, therefore, to be felled 'one day or the other ', and as the contractor 's achievement was 300 per cent he had all the right to claim the remaining work as provided in para graph 15 of the Tender Notice.
The High Court also found that as there existed a dispute touching the contracts executed between the parties, it referred the matter under clause 42 of the agreement to the named arbitrator, namely, the Managing Director of the State Forest Corporation.
The High Court went further and by an interim order directed that the contractor be permitted to do the remain ing work of extraction of timber of standing marked trees and the rates be determined by the arbitrator after hearing both the parties pursuant to the said interim order.
Aggrieved by the aforesaid orders of the High Court the appellant appealed to this Court by special leave.
On the questions: (i) whether there was any subsisting arbitration agreement in respect of the matters sought to be referred, and (ii) whether the interim order of the High Court directing the respondent to do the remaining work was without jurisdiction, and whether the respondent was enti tled to any compensation for the work done.
Allowing the appeal, the Court, HELD: [R.S. Pathak.
CJ and L.M. Sharma, J. Majority Per L.M. Sharma.
J.] 1.
The claim raised by the respondent in his application before the High Court is not covered by the arbitration clause and cannot be 382 referred for a decision of the arbitrator.
The order of reference passed by the High Court has therefore to be set aside.
[390F] 2.
If the foundation of the claim of the respondent be any alleged assurance or custom or practice, it cannot be said that such claim arises out of the written agreement between the parties; and so the prayer for reference has to be rejected.
If the case pleaded is true, the appropriate forum for the respondent will be a Court of Law directly granting the relief in an appropriate legal proceeding [388A B] 3.
The language of the term contained in para 15 of the tender notice is explicit in declaring that the contractor would not be allowed to claim as a matter of right the additional volume of work.
His right extends only to a consideration of his case by the management when the ques tion of allotment of additional work is taken up.
But by the application filed before the High Court the respondent did not ask for reference of a dispute as to whether he is entitled to consideration or not; the prayer is for refer ence of a higher claim of immediately getting the additional work, and this prayer has been allowed.
This issue cannot be said to have any connection with the 15th term of the tender notice or any other provision thereof or of the agreement.
[388D E] 4.
In the absence of a repudiation by the Corporation of the respondent 's right to be considered, if and when occa sion arises, no dispute can be said to have arisen which may be referred for arbitration.
[390B] 5.
In order that there may be a reference to arbitra tion, existence of a dispute is essential, and the dispute to be referred must arise under the arbitration agreement.
[390C] Seth Thawardas Pherumal vs The Union of India, relied on.
There was no justification for the High Court in deprecating the Corporation for not awarding the remaining work 10 the contractor when it was leaving the matter to be decided by the arbitrator. [387G] 7.
A Court, while considering the question whether an alleged dispute between the parties has to be referred for arbitration or not, should refrain from expressing its opinion on the merits of the dispute which may embarrass the arbitrator.
[387G H] 383 8.
Section 18 deals with the power of the Court to pass interim orders after award is actually filed in Court.
So far as clause (a) of Section 41 is concerned, it makes only the procedural rules of the Civil Procedure Code applicable.
The source of power to grant interim relief cannot be traced to clause (a), otherwise clause (b) would become otiose.
So far as clause (b) is concerned, it circumscribes the Court 's power within the limits indicating in the second Schedule, and further qualifies it by declaring in the Proviso that it cannot be used to the prejudice of any of the powers of the arbitrator.
[391 D E] H.M. Kamaluddin vs Union of India, relied on.
Interim directions can be issued only 'for the pur pose of ' arbitration proceedings and not to frustrate the same.
[391E] 10.
The High Court in the instant case, by granting the interim relief, not in the shape of an injunction in the negative form, but by a mandatory direction clothing the respondent plaintiff with the right to do something which he could have been entitled to only after a final decision on the merits of the case in his favour committed a serious error.
[391G H] [Per Sabyasachi Mukharji, J partly dissenting] 1.
There was a dispute in the instant case, whether the contractor was entitled to the grant of the additional volume of work.
Such dispute was a dispute between the parties in respect of the 'works to be executed by the contractor '.
In that view of the matter and in the light of clause 15 read with clause 17 of the Agreement the dispute was clearly referable to the arbitration of the Managing Director, Jammu & Kashmir State Forest Corporation.
[397F G] 2.
Endeavour should always be to find out the intention of the parties, and that intention has to be found out by read ing the terms broadly, clearly, without being circumscribed.
[398B C] 3.
An arbitration agreement is one which is defined in section 2(a) of the as a written agreement to submit present or future differences to arbi tration.
There was, in the instant case, an arbitration agreement that is to say, the parties had been ad idem.
The agreement was in writing.
It was not a contingent or a future contract.
It was a contract at present time to refer the dispute arising out of the present contract entered into by the parties as a result of which the 384 contractor got a right or privilege to ask for consideration of grant of the further work.
It was not a mere right to get the additional work.
The amplitude of the arbitration clause was wide enough and should be so read.
[397H; 398A B, C D] Seth Thawardas Pherumal vs The Union of India, distinguished.
A.M. Mair & Co. vs Gordhandass Sagarmull ; at 798 and Heyman vs Darwins Ltd., [1942] Appeal Cases 356 at 368 referred to.
Though under section 41(b) the Court has power to pass an interim order or injunction or appointment of re ceiver, the Section does not empower the Court to direct execution of the contract, the extent of which is in dispute and is a matter referable to be adjudicated by the arbitra tor.
If the Court does so, then the decision of the dispute becomes academic because the contract is executed.
[399D E] 5.
Where the question is whether the contract was to be executed by the respondent, if the contract is in fact executed by the respondent by virtue of the order of the Court, then nothing remains of the dispute.
There is nothing arbitrable any more land proceedings before the arbitrator cannot be forestalled by interim order by ordering execution of the contract before it is decided whether the contractor had any right to the contract for additional work in the grab of preservation of the property.
[399E F] 6.
The interim directions given by the High Court that the contractor be allowed to do the remaining work of ex traction of timber of standing marked trees was beyond the competence of the Court.
[399F G] 7.
It would be unjust to deprive any party of its dues simply because the work has been done in view of a wrong order or incorrect order of the Court of justice when there was no stay. ]400B]
|
any case of successful prosecution of the husband or wife at the instance of the wife or the husband could be brought to the notice of the Supreme Court in the course of the arguments in this appeal would show that the spouses had not lightly rushed in the past to criminal courts with complaints of criminal breach of trust against the other spouses though in the day to day life.
There must have been numerous instance where the wife had used the property or cash of the husband for purposes different from the one for which they were given by the husband to be applied by the wife and vice versa.
Therefore, the minimum requirement in such cases is a specific separate agreement whereby the property of the wife or husband was entrusted to the husband or wife and or his or her close relations.
In the absence of such a specific separate agreement in the present case the complaint was rightly quashed.
[242D F] & CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 684 of 1982 From the judgment and order dt.
the 31st May, 1982 of the High Court of Punjab & Haryana at Chandigarh in Crl.
No. 4876M/81.
V.C. Mahajan, and N.S. Das Bahl for the Appellant.
Altat Ahamed for the Respondents.
Mrs. U. Kapoor for the Intervener.
T The following Judgments were delivered FAZAL ALI, J. Sometimes the law which is meant to impart justice and fair play to the citizens or people of the count is so torn and twisted by a morbid interpretative process that instead of giving haven to the disappointed and dejected litigants it negatives their well established rights in law.
The present case reveals the sad story of a helpless married woman who, having been turned out by her husband without returning her ornaments, money and clothes despite repeated demands, and dishonestly misappropriating the same, seems to have got some relief by the court of the first instance but to her utter dismay and disappointment when she moved the High Court she was forced like a dumb driven cattle to seek the dilatory remedy of a civil suit such was the strange and harsh approach of the High Court, with due respect, which seems to have shed all the norms of justice and fair play.
Even so, the High Court is not much to be blamed because in the process of following precedents or decisions of doubtful validity of some courts, it tried to follow suit.
It may be stated that even the old 199 classic Hindu law jurists and celebrated sages conceded certain substantial rights to the women, one of which was what is called Saudayika or stridhan, with which we are concerned here.
This now brings us to a brief discussion of the nature, character and concomitants of stridhan.
In the instant case, we are mainly concerned with that part of stridhan which is the absolute property of a married women during coverture.
Sir Gooroodas Banerjee in 'Hindu Law of Marriage and Stridhana ' while describing the nature of stridhan quoted Katyayana thus: "Neither the husband, nor the son, nor the father, nor the brother, has power to use or to alien the legal property of a woman.
And if any of them shall consume such property against her own consent he shall be compelled to pay its value with interest to her, and shall also pay a fine to the king.
Whatever she has put amicably into the hands of her husband afflicted by disease, suffering from disease, or sorely pressed by creditors, he should repay that by his own freewill. " (P.341) At another place while referring to the nature of a husband 's rights over stridhan during coverture, the author referring to Manu says thus: " . and by the law as expounded by the commentators of the different schools, the unqualified dominion of the husband is limited to only some descriptions of the wife 's property, while as regards the rest he is allowed only a qualified right of use under certain circumstances specifically defined." (p.340) Similarly, while describing the nature of stridhan generally, which is known as saudayika, the author says thus: "First, take the case of property obtained by gift.
Gifts of affectionate kinderd, which are known by the name saudayika stridhana, constitute a woman 's absolute property, which she has at all times independent power to alienate, and over which her husband has only a qualified right, namely, the right of use in times of distress.
" 200 The entire classical text on the subject has been summarised by N.R. Raghavachariar in 'Hindu Law ' (5th Edn) at page 533 (section 487) where the following statement is made: "487.
Powers During Coverture.
Saudayika, meaning the gift of affectionate kindred, includes both Yautaka or gifts received at the time of marriage as well as its negative Ayautaka.
In respect of such property, whether given by gift or will, she is the absolute owner and can deal with it in any way she likes.
She may spend, sell or give it away at her own pleasure by gift or will without reference to her husband and property acquired by it is equally subject to such rights.
Ordinarily, the husband has no manner of right or interest in it.
But in times of extreme distress, as in famine, illness or imprisonment, or for the performance of indispensable duty the husband can take and utilise it for his personal purposes, though even then he is morally bound to restore it or its value when able to do so.
But this right is purely personal to him and cannot be availed of by a holder of a decree against the husband, and if the husband dies with out utilising the property for the liquidation of his debts, his creditors cannot claim to proceed against it in the place of her husband.
" To the same effect is Maines ' treatise on Hindu Law at page 728.
The characteristics of Saudayika have also been spelt out by Mulla 's Hindu law at page 168 (section 113) which gives a complete list of the stridhan property of a woman both before and during coverture, which may be extracted thus: "113.
Manu enumerates six kinds of stridhana: 1.
Gifts made before the nuptial fire, explained by Katyayana to mean gifts made at the time of marriage before the fire which is the witness of the nuptial (adhyagni).
Gifts made at the bridal procession, that is, says Katyayana, while the bride is being led from the residence of her parents to that of her husband 201 (adhyavanhanika) 3.
Gifts made in token of love, that is, says Katyayana, those made through affection by her father in law and mother in law (pritidatta), and those made at time the of her making obeisance at the feet of elders (padavan danika).
Gifts made by father.
Gifts made by mother.
Gifts made by a brother.
" It is, therefore, manifest that the position of stridhan of a Hindu married woman 's property during coverture is absolutely clear and unambiguous; she is the absolute owner of such property and can deal with it in any manner she likes she may spend the whole of it or give it away at her own pleasure by gift or will without any reference to her husband.
Ordinarily, the husband has no right or interest in it with the sole exception that in times of extreme distress, as in famine illness or the like, the husband can utilise it but he is morally bound to restore it or its value when he is able to do so.
It may be further noted that this right is purely personal to the husband and the property so received by him in marriage cannot be proceeded against even in execution of a decree for debt.
Such being the nature and character of stridhan of a woman, it is difficult to countenance the view of the Punjab & Haryana High Court in Vinod Kumar Sethi & Ors.
vs State of Punjab & An.(l) that the stridhan property of a married woman becomes a joint property as soon as she enters her matrimonial home.
We shall deal with this aspect of the matter a little later.
We would first like to narrate the facts of the case to show how the complaint filed by the appellant was wrongly quashed by the High Court.
The general allegations made in the complaint may be summarised as follows: (1) 202 The complainant was married to Suraj Kumar, Accused No. 1 (respondent) on 4.2.72 at Ludhiana according to Hindu rites and customs in the presence of respectable persons.
Accused No.2 was the father and accused Nos.3 to 5 were brothers and No.6 was brother in law of accused No.; It is further alleged that all the accused attended and actively participated in the marriage of the complainant and demanded dowry.
The must important allegation made by the appellant was that her parents and relatives gave by way of dowry articles worth Rs. 60,000/ inclusive of gold ornaments, clothes and other things which were entrusted to accused Nos.1 to 6 on 5.2.72 which were taken into possession by them.
Soon after the marriage, accused No. 1 started harassing, teasing and beating the complainant and ultimately turned her out alongwith her children sometime in the year 1977.
It was avered in para 4 of the complaint that accused never returned the articles to her, the relevant portion of the allegations may be extracted thus: "The articles above mentioned were never given by the accused to the complainant for her use and possession of the same was illegally, dishonestly and malafidely retained by the accused in order to make a wrongful gain to them selves and wrongful loss to the complainant.
The accused refused to give the entrusted articles of dowry, which were the stridhan of the complainant.
On 10.2.1981 when the accused Nos. 1 to 5 came to Ludhiana to attend the proceeding u/s 125 Cr.P.C., filed by the complainant in the Court of Shri S.S. Tiwana, they were persuaded by the parents of the complainant to send the articles entrusted to them at the time of marriage but they gave flat refusal to its notice which was served upon the accused No.1 which was dated 17.12.80, but to no effect.
The accused have thus dishonestly used and converted the articles aforementioned to their own use, who are still in possession of the same in violation of the direction given by the parents of complainant.
The parents of the complainant directed the accused at the time of marriage to give the articles to the complainant for her use, in the presence of the aforesaid persons, but the accused have not done the needful of the demand and have thus committed criminal breach of trust punishable u/s 406 IPC." 203 A perusal of the allegations made in the complaint undoubtedly makes out a positive case of the accused having dishonestly misappropriated the articles handed over to them in a fiduciary capacity.
To characterise such an entrustment as a joint custody or property given to the husband and the parents is wholly unintelligible to us.
All the ingredients of an offense under s.405 IPC were pleaded and a prima facie case for summoning the accused was made out.
In such circumstances, the complainant should have been given an opportunity by the High Court to prove her case rather than quashing the complaint.
Such an exercise of jurisdiction under s.482 Cr.
P.C. is totally unwarranted by law.
We might also mention that alongwith the complaint, a list of valuable articles had also been given, the relevant portion of which may be extracted thus; I. " Jewellery" 1.
Nine complete gold sets 2.
One complete diamond set 3.
Three gold rings 4.
Two golden Bahi (Baju Band) 5.
One golden chain 6.
One shingar patti with golden tikka 7.
One golden nath (Nose ring) 8.
Twelve golden bangles II.
Silver articles 1.
Six glasses and one jug 2.
Two surma danies 3.
One tagari 4.
Two payals III.
Clothes Fifty one sarees, twenty one suits alongwith petti 204 coats, blouses, nighties, shawls, sweaters, night suits, gowns and woollen coat etc., six complete beds with sheets, etc.
" A perusal of the list reveals that so far as the jewellery and clothes, blouses, nighties and gowns are concerned they could be used only by the wife and were her stridhan.
By no stretch of imagination could it be said that the ornaments and sarees and other articles mentioned above could also be used by the husband, If, therefore, despite demands these articles were refused to be returned to the wife by the husband and his parents, it amounted to an offence of criminal breach of trust.
In mentioning the articles in the list, we have omitted furniture and utensils which though also belonged to the complainant yet there is some room for saying that these were meant for joint use of the husband and wife.
Thus, the facts mentioned in the complaint taken at their face value reveal a clear allegation that the stridhan property of the appellant was entrusted to the husband who refused to return the same to her Some courts were of the opinion that in view of section 27 of the and section 14 of the Hindu Succession act, the concept of stridhan property of a woman was completely abolished.
For instance, the Punjab & Haryana High Court in a case reported in Surindra Mohan etc.
vs Smt.
Kiran Saini(1) held thus: "That under the present law on claim can be made on the basis of stridhan, as it has now been completely abolished and cannot avail against statute which makes it the joint property of the parties.
" We are of the opinion that this view of the High Court is not legally sustainable because neither of the two Acts, referred to above, go to the extent of providing that the claim of a woman on the basis of stridhan is completely abolished.
All that the two sections, mentioned above, provide is that if the husband re (1) 1977 Chandigarh Law Report 212 205 fuses to return the stridhan property of his wife, it will be open to the wife to recover the same by properly constituted suit.
The sections nowhere provide that the concept of stridhan is abolished or that a remedy under the criminal law for breach of trust is taken away.
In a later decision in Bhai Sher Singh & Anr.
vs Smt.
Virinder Kaur(1), it was very rightly pointed out by the same High Court that section 27 of the Marriage Act merely provides an alternate remedy to the wife to bring a properly constituted suit in respect of the stridhan property which the husband refused to return.
Thus, it is clear that section 27 merely provides for an alternate remedy and does not touch or affect in any way the Criminal liability of the husband in case it is proved that he has dishonestly misappropriated that stridhan of his wife.
It cannot also be spelt out from any textbook or the sastric law of the Hindus that the two Acts mentioned above take away the stridhan right of a woman at the most these Acts merely modify the concept of stridhan.
It may be useful to refer to certain pertinent observations in the aforesaid case.
"The aforementioned passage shows that a female has an absolute right to use her stridhan in any way she likes and even if her husband can take this property at the time of distress, this right is personal to him, The allegations made in the instant complaint are not that the husband of the respondent has placed her ornaments and jewellery etc.
Out of her way.
What has been alleged therein is that the petitioners who are the parents in law of the respondent have converted the ornaments and clothes, etc.
presented to the respondent at the time of her marriage to their own use.
Section 27 of the empowers a Court while deciding a matrimonial dispute to also pass a decree in respect of property which may jointly belong to both the husband and the wife.
This section at best provides a civil remedy to an aggrieved wife and does not in any way take away her right to file a crimi (1) 206 nal complaint if the property belonging to her is criminally misappropriated by her husband. ' ' In these circumstances, the decision reported in 1977 Chandigrah Law Reporter 212 can no longer be considered good law.
Even in Vinod Kumar 's case (supra) the Full Bench reiterated the view that section 27 in no way abolishes stridhan but expressly recognises the property exclusively owned by the wife.
In this connection, the Court observed thus: "The express words of the provision refer to property 'which may belong jointly to both the husband and the wife '.
It nowhere says that all the wife 's property be longs jointly to the couple or that Stridhan is abolished and she cannot be the exclusive owner thereof.
Indeed, in using the above terminology the statute expressly recognises that property which is exclusively owned by the wife is not within the ambit of Section 27 of the Equally no other provision in the could be pointed out which erodes the concept of Stridhan or in anyway incapacitates the Hindu wife to hold property as an exclusive owner.
" The sheet anchor of the arguments of the counsel for the respondents which is based on the decision of the Punjab & Haryana High Court in Vinod Kumar 's case is that the moment a woman after Marriage enters her matrimonial home, her stridhan property becomes a joint properly of both the spouses and the question of application of section 406 I.P.C is completely eliminated.
It is true that to a great extent this part of the argument of the learned counsel is supported by the aforesaid decision but, in our opinion, the decision, so far as this aspect of the matter is concerned, is wholly unsustainable.
We would first extract the exact ratio held by the High Court in Vinod Kumar 's case: "To conclude, it necessarily follows from the aforesaid discussion that the very concept of the matrimonial home connotes a jointness of possession and custody by the spouses even with regard to the moveable properties exclusively owned by each of them.
It is, therefore, inapt to view the same in view of the conjugal relationship as 207 involving any entrustment or passing of dominion over property day to day by the husband to the wife or vice versa.
Consequently, barring a special written agreement to the contrary, no question of any entrustment or dominion over property would normally arise during coverture or its imminent break up.
Therefore, the very essential prerequisites and the core ingredients of the offence under S.406 of the Penal Code would be lacking in a charge of criminal breach of trust of property by one spouse against the other.
" These observations on doubt support the contention of the learned counsel for the respondent but we find it impossible to agree with the aforesaid observations for the reasons that we shall give hereafter.
We fail to understand the logic of the reasoning adopted by the High Court in investing the pure and simple stridhan of the wife with the character of a joint property.
We are surprised that the High Court should have taken the view that a woman 's absolute property though well recognised by law is interpreted by it as being shorn its qualities and attributes once a bride enters her matrimonial home.
We are clearly of the opinion that the mere factum of the husband and wife living together does not entitle either of then to commit a breach of criminal law and if one does then he/she will be liable for all the consequences of such breach.
Criminal law and matrimonial home are not strangers.
Crimes committed in matrimonial home are as much punishable as anywhere else.
In the case of stridhan property also, the title of which always remains with the wife though possession of the same may sometimes be with the husband or other members of his family, if the husband or any other member of his family commits such an offence, they will be liable to punishment for the offence of criminal breach of trust under sections 405 and 406, IPC.
Afterall how could any reasonable person expect a newly married women living in the same house and under the same roof to keep her personal property or belongings like jewellery, clothing, etc., under her own lock and key, thus showing a spirit of distrust to the husband at the very behest.
We are surprised how could the High Court permit the husband to cast his covetous eyes on the 208 absolute and personal property of his wife merely because it is kept in his custody, thereby reducing the custody to a legal farce.
On the other hand, it seems to that us even if the personal property of the wife is jointly kept, it would be expressly or impliedly kept in the custody of the husband and if he dishonestly misappropriates or refuses to return the same, he is certainly guilty of criminal breach of trust, and there can be no escape from this legal consequence.
The observations of the High Court at other places regarding the inapplicability of section 406 do not appeal to us and are in fact not in consonance with the spirit and trend of the criminal law.
There are a large number of cases where criminal law and civil law can run side by side.
the two remedies are not mutually exclusive but clearly coextensive and essentially differ in their content and consequence.
The object of the criminal law is to punish an offender who commits an offence against a person, property of the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life.
This does not, however, affect the civil remedies at all for suing the wrong deer in cases like arson, accidents, etc.
It is an anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred.
The two types of actions are quite different in content, scope and import.
It is not at all intelligible to us to take the stand that if the husband dishonestly misappropriates the stridhan property of his wife, though kept in his custody, that would bar prosecution under section 406 I.P.C. Or render the ingredients of section 405 IPC nugatory or abortive.
To say that because the stridhan of a married woman is kept in the custody of her husband, no action against him can be taken as no offence is committed is to override and distort the real intent of the law.
Coming back to the theory of matrimonial home and the stridhan becoming a joint property of the two spouses, the logical effect of the observation made by the High Court is that once a woman enters her matrimonial home she completely loses her exclusive stridhan by the same being treated as a joint property of the spouses.
In other words, if this view is taken in its literal sense the consequence would be to deprive the wife of the absolute character and nature of her stridhan and make the husband a co owner of the same such a concept is neither contemplated nor known to Hindu law of stridhan, nor does it appeal to pure 209 common sense.
It is impossible to uphold the view that once a married woman enters her matrimonial home her stridhan property undergoes a vital change so as to protect the husband from being prosecuted even if he dishonestly misappropriates the same.
For instance, properties like jewellery, clothing, cash, etc.
given by her parents as gifts cannot be touched by the husband except in very extreme circumstances, viz., where the husband is in imprisonment or is in serious distress.
Even then the religion and the law enjoins that the husband must compensate the wife and if he cannot do so, he must pay fine to the King which means that the husband would` be liable to penal action under the present law of the land.
One of the arguments addressed by the counsel for the respondent which had appealed to thee full Bench of the Pun jab & Haryana High Court in Vinod Kumar 's case (supra) as also to our learned Brother Varadarajan, J., is that after entering the matrimonial home the custody of the stridhan entrusted by the wife to her husband becomes a sort of a partnership firm and in this view of the matter the question of criminal breach of trust does not arise.
In our opinion, it is neither appropriate nor apposite to import the concept of partnership in the relationship of husband and wife for the simple reason that the concept of partnership is entirely different from that of the husband 's keeping the stridhan in his custody.
Section 4 of the (hereinafter referred to as the 'Partnership Act ') defines 'partnership ' thus: "partnership" is the relation between persons who have agreed to share the profit of a business carried on by all or any of them acting for all.
Persons who have entered into partnership with one another are called individually "partners" and collectively "a firm" and the name under which their business is carried on is called the "firm name".
The essential ingredients of a partnership are: (1) that there should be an actual or physical overt act on the part of two persons to embark an a business adventure.
(2) that if any business is carried on by one or any 210 of the partners the profits of the business shall be shared by them in the ratio contained in the partnership agreement.
It is, therefore, manifest that in a partnership the wife must by some clear and specific act indicates that the stridhan which has been entrusted to the husband is to be used for a partnership business and the losses of the firm, if any would have to be shared by both.
In other words, one of the essential conditions of a partnership firm is that every partner must have dominion over the property by virtue of the fact that he is a partner.
This aspect of the matter was highlighted in a decision of this Court in Velji a Raghavji vs State of Maharashtra(1) where the following observations were made: ".
Every partner has dominion over property by reason of the fact that he is a partner.
This is a kind of dominion which every owner of property has over his property.
But it is not dominion of this kind which satisfies the requirements of section 405.
In order to establish 'entrustment of dominion ' over property to an accused person the mere existence of that person 's dominion over property is not enough.
It must be further shown that his dominion .
was the result of entrustment.
" In the instant case, however, there is neither any allegation nor anything in the complaint to show that when the wife entered her matrimonial home she had entrusted the property to her husband so as to make him part owner of the same.
Therefore, the question of the husband 's having dominion over the property does not at all arise.
In fact, the wife has nothing to do with the partnership, if any, and the husband is a pure and simple custodian of the property and cannot use the same for any purpose without her consent.
A pure and simple act of entrustment of the stridhan to the husband does not attract any of the essential ingredients of a a partnership as defined in the Partnership Act.
In the instant case, there is also no question of the wife constituting herself a partner with her husband merely by allowing him to keep the articles or money in his custody.
There is neither any pleading nor any allegation that after her marriage, the appe (1)AIR 211 llant transferred all her properties to her husband for carrying on a partnership business in accordance with the provisions of the Partnership Act.
Thus, in our opinion, it cannot be said that a bare act of keeping stridhan property in the custody of the husband constitutes a partnership and, therefore, a criminal case under section 406 IPC is not maintainable.
It is not necessary for us to multiply cases on this point on which there does not appear to be any controversy.
We have already pointed out that the stridhan of a woman is her absolute property and the husband has no interest in the same and the entrustment to him is just like something which he wife keeps in a Bank and can withdraw any amount whenever she likes without any hitch or hindrance and the husband cannot use the stridhan for his personal purposes unless he obtains the tacit consent of his wife.
When the essential conditions of a partnership do not exist the mere act or factum of entrustment of stridhan would not constitute any co ownership or legal partnership as defined under s.4 of the Partnership Act.
To sum up the position seems to be that a pure and simple entrustment of stridhan without creating any rights in the husband excepting putting the articles in his possession does not entitle him to use the same to the detriment of his wife without her consent.
The husband has no justification for not returning the said articles as and when demanded by the wife nor can he burden her with loss , of business by using the said property which was never intended by her while entrusting possession of stridhan.) On the allegations in the complaint, the husband is no more and no less than a pure and simple custodian acting on b half of his wife and if he diverts the entrusted property elsewhere or for different purposes he takes a clear risk of prosecution under s.406 of the IPC.
On a parity of reasoning, it is mainfest that the husband, being only a custodian of the stridhan of his wife, cannot be said to be in joint possession thereof and thus acquire a joint interest in the property.
For these reasons, the custody or entrustment of stridhan with the husband does not amount to a partnership in any sense of the term and therefore, we are unable to agree with view taken in Vinod Kumar 's case as also with the opinion expressed by our Brother on the points arising in the case.
Another serious consequence as a result of the ratio of the full Bench decision in Vinod Kumar 's case would be to render the 212 provisions of section 406 IPC inapplicable and nugatory even if the husband has the audacity or the importunity of refusing to return the stridhan of his wife.
Furthermore, we shall hereafter show that the view of the Full Bench is in direct contravention of a long course of decisions of this Court on the ingredients of section 405 IPC.
Before coming to this chapter, we would like to say a few things more about the judgment of the High Court which on deeper probe and careful scrutiny seems to be self contradictory.
We are clearly of the opinion that the concept of stridhan property of a married woman becoming a joint property of both the spouses as soon as she enters her matrimonial home and continues to be so until she remains there or even if there is a break in the matrimonial alliance, is in direct contravention of Hindu Law of Sadayika which has been administered since more than a century by High Courts, Privy Council as also this Court.
By a pure and simple figment of the fertile imagination the Judges in Vinod Kumar 's case seem to have rewritten the law of criminal breach of trust contained in sections 405 and 406 IPC so as to carve out an imaginary exception to the application of the Penal Code.
A more tragic consequence of the view taken by the High Court is that even if there is a break in the matrimonial alliance and the wife wants her husband to return her exclusive property and he refuses to return, even then the provisions of section 406 IPC would not apply.
It is an extreme travesty of justice for a court to say that whenever a married woman demands her stridhan property from her husband she should be driven to the dilatory process of a civil court and her husband would be debarred from being prosecuted by a criminal court.
By a strange and ingenious process of holding that such an act of a husband does not attract the provisions of the Penal Code, as the property being joint there is no question of the husband being a trustee or holding the same in a fiduciary capacity.
Such a view, in our opinion, is not only contradictory but what the High Court has said before regarding the applicability of s.27 of the and the nature of stridhan as referred to above is also neither in consonance with logic and reason nor with the express provisions of the Penal Code and seems to us to be inspired by a spirit of male chauvininism so as to exclude the husband from criminal lability merely because his wife has refused to live in her matrimonial 213 home.
We are indeed surprised how could the High Court, functioning in a civilised and socialistic society such as ours, play havoc with judicial interpretation of an important branch of law.
We shall now show how the final view taken by the High Court is clearly contradictory to what it has observed before.
In paragraphs 22A, 23 and 24 of the judgment, the High Court observes as follows: "It must, therefore, be unreservedly stated that the law, as it stands today, visualises a complete and full ownership of her individual property by a Hindu wife and in this context the factum of marriage is of little or no relevance and she can own and possess property in the same manner as a Hindu male.
Once it is held that a Hindu wife can own property in her own right, then it is purely a question of fact whether the dowry or the traditional presents given to her, were to be individually owned by her or had been gifted to the husband alone or jointly to the couple. .
For instance jewellery meant for the personal wearing of the bride, wedding apparel made to her measures specifically, cash amounts put into a fixed deposit ill a bank expressly in her E name; are obvious examples of dowry raising the strongest, if not conclusive presumption, of her separate owner ship in these articles.
Once it is found as a fact that these articles of dowry were so given to her individually and in her own right, then I am unable to see how the mere factum of marriage would alter any such property right and divest her of ownership either totally or partially.
" In these paragraphs the High Court unequivocally and categorically expresses the view that a Hindu woman has complete and full ownership of her individual property and the factum of marriage is of no relevance to determine the nature of the property It also holds that articles like jewellery, wedding apparel and cash, etc., cannot alter any such property right.
In view of this clear finding given by the High Court, how could it make a complete volte face by holding that these very properties after marriage become joint property of both the spouses.
The High Court has not realised that the theory or philosophy of matrimonial home 214 propounded by it stands directly contradicted by its own observations referred to above.
In paragraph 49 of the judgment, the High Court clearly finds that the mere use by the relations of the husband would not have the effect of passing the possession of the property to the Hindu undivided family and in this connection observes thus : Equally, the common use and enjoyment of certain articles of dowry and traditional presents, by the other members of a joint family with the leave and licence of a Hindu wife, cannot have the effect of extending the jointness Of control and custody of the couple to undefined and unreasonable limits.
Consequently, there is no reason to assume that the mere user or enjoyment of the dowry by other members of the house hold, would have the effect of passing the possession and control thereof jointly to the Hindu Undivided Family as such." Thus, these observations run counter and are totally inconsistent and irreconcilable with the view taken by the High Court in paragraph 41 where it has observed thus: "In the light of the above it would be farcical to assume that despite the factum of a marriage and a common matrimonial home the two spouses would stand in a kind of a formal relationship where each is entrusted with or has been passed dominion over the exclusive property of the other. .
The matrimonial home so long as it subsist presumes a jointness of custody and possession by the spouses of their individual as also of their joint properties line.
The inevitable presumption during the existence or the imminent break up of the matrimonial home there fore is one of joint possession of the spouses which might perhaps be dislodged by the special terms of a written contract.
However, to be precise this presumption of joint possession properties within the matrimonial home can subsist only as long as the matrimonial home subsists or on the immediate break up thereof.
" At other places the High Court has observed thus: 215 "47.
In view of the above, it would be equally untenable to hold that either the desertion or the expulsion of one of the spouses from the matrimonial home would result in entrusting dominion over the property belonging to the other so as to bring the case within the ambit of this pre requisite under S.405, Indian Penal Code.
The joint custody and possession once established would thereafter. . exclude either express entrustment or the passing of dominion over the property.
It was rightly argued that if an irate husband or wife walks out from the matrimonial home in a huff, this cannot constitute an entrustment or dominion over the property to the other.
Consequently, unless a special written agreement to the contrary can be established, the strongest presumption arises that during the existence and immediately after the crumbling of the matrimonial home, there was in essence, a joint possession and custody of the property of the spouses therein, including dowry and traditional presents, which would preclude the essentials of entrustment or dominion over the property which form the cornerstone of criminality under s.405, Indian Penal Code.
It cannot, therefore, be prim.
facie presumed that these are exclusively the ownership of the wife or inevitably entrusted either to the husband or his close relations.
As was noticed earlier, if an irate wife in a tantrums abandons the matrimonial home, such like property does not in the eye of law become entrusted to the parents in law or other close relations of the husband No such gullible presumption of entrustment or passing of the dominion of property can be raised in such a situation to come within the mischief of criminality for breach of trust.
Entrustment or dominion over the property has to be unequivocally alleged and conclusively established by proof later.
" The High Court had itself rightly spelt out the legal propositions that the pure and traditional presents given to a bride in a Hindu wedding may be divided into three categories, viz., (a) property intended for exclusive use of the bride, e. g., her personal jewellery, wearing apparel, etc.
216 (b) articles of dowry which may be for common use and enjoyment in the matrimonial home, and (c) articles given as presents to the husband or the parent in law and other members of his family.
With regard to category (a) above, the High Court observed thus: "Similarly as regards the first category of articles meant for the exclusive use of the bride she would retain her pristine ownership therein irrespective or her entry and presence in the matrimonial home or that of her parents in law." The High Court thus accepts the well established rule of Hindu law of stridhan that that articles mentioned in category (a) are meant for the exclusive use of the bride and are her personal property.
Unfortunately, however, with regard to category (c) while discussing the question of the rights of the bride to her exclusive property upon her entry in her matrimonial home, the High Court has wrongly applied what it had previously held with regard to category (a).
In one breath the Judges say that the bride is entitled to retain her ownership irrespective of her entry and presence in the matrimonial home and in the other they come to the conclusion that the moment a married woman enters her matrimonial home, all her properties, including her exclusive property, become a joint property by a fiction of being placed in the custody of her husband or his relations.
While we agree with the first part of the categories, as extracted above, we find it difficult to accept the other propositions adumbrated at a later stage of the judgment which have been fully discussed by us.
We fail to understand how the High Court while finding that joint enjoyment does not divest a Hindu wife of her exclusive ownership still chose to treat it a joint property of the two spouses by the mere factum of joint user.
The two views expressed by the High Court stand contradicted by its own findings and are wholly understandable.
Thus, a detailed analysis of the judgment of the Punjab & Haryana High Court in Vinod Kumar 's case (supra) appears to us to be a mass of confusion and lacks both clarity and coherence.
We are, therefore, unable 217 to uphold or support the view of the High Court that upon entering the matrimonial home the ownership of stridhan property becomes joint with her husband or his relations To this extent, therefore, we overrule this decision and hold that with regard to the stridhan property of a married woman, even if it is placed in the custody of her husband or in laws they would be deemed to be trustees and bound to return the same if and when demanded by her.
The Supreme Court in a large number of cases has held that the fundamental core of the offence of criminal breach of trust.
is that a property must be entrusted and the dominion of the property should be given to the trustee.
In the present case, all these conditions, even according to the findings of the Court though not its conclusion, are clearly established.
That the view of the High Court is absolutely wrong would be clear from a number of authorities, some of which we would like to discuss here.
In Chelloor Manaklal Narayan Ittiravi Nambudiri vs State of Travancore(1) this Court made the following observations: "As laid down in section 385, Cochin Penal Code (corresponding to section 405, Indian Penal Code) to constitute an offence of criminal breach of trust it is essential that the prosecution must prove first of all that the accused was entrusted with some property or with any dominion or power over it It follows almost axiomatically from this definition that the ownership or beneficial interest in the property in respect of which criminal breach of trust is alleged to have been committed, must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit." In Jaswantrai Manilal Akhaney vs, State of Bombay(2) Sinha, J. (as he then was) observed thus: "For an offence under section 409, Indian Penal Code, the first essential ingredient to be proved is that the property was entrusted But when section 405 which defines "criminal breach of trust speaks of a person being (1) (2) ; 218 in any manner entrusted with property, it does not contemplate the creation of a trust with all the technicalities of trust.
It contemplates the creation of a relationship whereby the owner of property makes it over to another person to be retained by him until a certain contingency arises or to be disposed of by him on the happening of a certain events.
" In Akharbhai Nazorali vs Md. Hussain Bhai(1) the Madhya Pradesh High Court made the following observations: "It may be that the deduction and retention of the employees ' contribution is a trust created by virtue of that very fact, or by virtue of a provision in statute or statutory rule.
But even apart from the latter, the mere fact of telling the employees that it is their contribution to the provident fund scheme and then making a deduction or recovery and retaining it, constitutes the offence of criminal breach of trust.
This is so obvious that nothing more need be said about it." These observations were fully endorsed and approved by this Court in Harihar Prasad Dubey vs Tulsi Das Mundhra & Ors.(2 where the following observations were made: "This, in our opinion, is a correct statement of the position and we also agree with the learned Judge of the Madhya Pradesh High Court that "this so obvious that nothing more need be said about it We, therefore, think that the impugned order quashing the charge against the respondents is obviously wrong." In Basudeb Patra vs Kanai Lal Haldar(3) the Calcutta High Court observed thus: "Whereas the illustration to section 405 show equally clearly that the property comes into.
(1) AIR 1961 M. P. 37: (2) ; (3) AIR 1949 Calcutta 207, 219 the possession of the accused either by an express entrustment or by some process placing the accused in a position of trust. .
On the facts of the present case, which, as I have said, are not open to question at this stage, it is quite clear that the ornaments were handed over to the petitioner by the beneficial owner in the confidence that they would be returned to the beneficial owner in due time after having been used for the purpose for which they were handed over.
If this is not an entrustment, if is impossible to conceive what can be an entrustment." (Emphasis ours) This ratio was fully approved by this Court in Velji Raghavji Patel vs State of Maharashtra(1) where the following observation were made: "In order to establish " entrustment of dominion" over property to an accused person the mere existence of that person 's dominion over property is not enough.
It must be further shown that his dominion was the result of entrustment.
Therefore, as rightly pointed out by Harris, C.J. the prosecution must establish that dominion over the assets or a particular asset of the partnership was by a special agreement between the parties, entrusted to the accused person.
" In the case of State of Gujrat vs Jaswantlal Nathalal,(2) Hegde, J., speaking for the Court, observed thus: "The expression 'entrustment ' carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continues to be its owner.
Further the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them.
" In Sushil Kumar Gupta vs Joy Shanker Bhattacharjee(3) this Court observed thus: (1) ; (2) ; (3) ; 220 "The offence of criminal breach of trust is committed when a person who is entrusted in any manner with property or with dominion over it, dishonestly misappropriates it or converts it to his own use.
The appellant 's manner of dealing with the money entrusted to his custody clearly constitutes criminal breach of trust.
" In the case of Superintendent & Remembrancer of Legal Affairs, West Bengal vs S.K. Roy (1) this Court held that for 'entrustment ' two things are necessary, viz., (l) the entrustment may arise in "any manner" whether or not it is fraudulent, and (2) the accused must have acquisition or dominion over the property.
In Bhai Sher Jang Singh & Anr.
vs Smt.
Virinder Kaur (supra) the Punjab & Haryana High Court observed thus: It might be that some of the articles which were presented to her are for the use of both the spouses but the ornaments and things of the like nature are certainly meant for her and her alone.
When she makes an allegation in the complaint that either her husband or her parents in law had converted to their own use the ornaments forming the part of her stridhan which she had entrusted to them, the Court has to give legal effect to such allegation and to assume that such ornaments had been made the subject matter of criminal breach of trust.
It is settled law that even in a criminal complaint the complainant is under no obligation to plead the legal effect of the allegations made.
All that is required is that the facts constituting a complaint should be specifically mentioned so that the Court may be able to perform its duty of punishing the accused under the appropriate provision of law if such allegations are made out.
Further more, in a case like this a complaint cannot be quashed without giving the aggrieve wife an opportunity of proving that the ornaments had been given to her at the time of her marriage for her use only." (Emphasis supplied) We fully endorse this decision and hold that it lays down the correct law on the subject.
(1) [1974] 4 S.C.C. 230.
221 There is a judgment of the Allahabad High Court which more or less takes the same view as the Punjab & Haryana High Court in Vinod Kumar 's case (supra).
In Criminal Misc.
Case No. 676 of 1981 (connected with) Criminal Misc.
Case No. 2753 of 1981, Kailash Nath Agarwal & Ors.
vs Prem Pal Agarwal & Anr., (decided on 22.12.1983), the Allahabad High Court, out of the three categories laid down by Punjab & Haryana High Court in Vinod Kumar 's case, accepted only the third category, viz., articles which constitute the individual property of the person for whose use it was given, and held that the rest of the property falling under categories (a) and (b) would be property exclusively meant for the use of the bride and once it was brought to the family home, the possession would be joint unless by an express written agreement there was an entrustment of the property of the bride to other members of the family.
The Allahabad High Court thus also accepts the concept of the property being a joint property in the matrimonial home.
By and large this decision toes the line of the view taken by the Punjab and Haryana High Court in Vinod Kumar 's case.
Furthermore, the High Court has gravely erred in holding that the property could only be claimed by filing a properly constituted civil suit or in accordance with the provisions of the Dowry Prohibition Act or the as the case may be.
This proposition, in our opinion, is wholly incorrect as conceded even by the Punjab , & Haryana High Court in Vinod Kumar 's case.
There is an earlier decision of the Punjab & Haryana High Court which clearly holds that where there is a clear allegation of entrustment by the wife against the husband, he could be prosecuted by a criminal court on a complaint filed by the wife.
In this connection, the Court in Avtar Singh & Anr.
vs Kirpal Kaur Criminal Misc.
No.2144 M of 1979 and Criminal Misc.
No.2145 of 1979, decided on 16 8.79) made the following observations: "In my opinion, where certain thing is lying in trust with a person, offence of dishonest misappropriation would be committed on a date the demand for return of the entrusted articles is made and the same is declined.
According to the complaint, the first demand for the return of the articles was made on January 27, 1976 and it was that date when the demand was declined.
Hence, the offence of misappropriation of the dowry articles lying in trust was committed on January 27, 1976.
" 222 We find ourselves in entire agreement with this decision and hold that this was correctly decided.
This Court has pointed out more than once that the High Court should very sparingly exercise its discretion under section 482 Cr.
In L.V. Jadhav vs Shankarrao Abasaheb Pawar & Ors.(l) (to which two of us were a party), this Court made the following observations: "The High Court, we cannot refrain from observing, might well have refused to invoke its inherent powers at the very threshold in order to quash the proceedings, for these powers are meant to be exercised sparingly and with circumspection when there is reason to believe that the process of law is being misused to harass a citizen." In Smt.
Nagawwa vs Veeranna Shivalingappa Konjalgi & Ors.(2) this Court observed as follows : "Thus, it may be safely held that in the following cases an order of the magistrate issuing process against the accused can be quashed or set aside: (1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused; (2) Where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused; (3) where the discretion exercised by the Magistrate in suing process is capricious and arbitrary having been either on no evidence or on materials which are wholly irrelevant or inadmissible; and (1) AIR [1983]SC 1219.
(2) [1976] Supp.
SCR123 223 (4) where the complaint suffers from fundamental legal defects, such as, want of section, or absence of a complaint by legally competent authority and the like.
The cases mentioned by us are purely illustrative and pro vide sufficient guidelines to indicate contingencies where the High Court can quash proceedings.
" B The same principles would apply mutatis mutandis to a criminal complaint.
We now come to the question as to whether or not a clear allegation of entrustment and misappropriation of properties was made by the appellant in her complaint and, if so, was the High Court justified in quashing the complaint at that stage.
It is well settled by a long course of this Court that for the purpose of exercising its power under section 482 Cr.P.C. to quash a FIR or a complaint the High Court would have to proceed entirely on the basis of the allegations made in the complaint or the documents accompanying the same per se.
It has no jurisdiction to examine the correctness or otherwise of the allegations.
In case no offence is committed on the allegation and the ingredients of s.405 & 406, I.P.C. are not made out, the High Court would be justified in quashing the proceedings.
In the present case, we shall show that the allegations are both clear, specific and unambiguous and, therefore, the complainant should have been given a chance to prove her case.
It is, of course, open to the accused at the trial to take whatever defence that were open to him but that stage had not yet come and therefore, the High Court was totally ill advised to speculate on the merits of the case at that stage and quash the proceedings.
We have narrated the facts in detail in the earlier part of our judgment but we might again, even at the risk of repetition, indicate the bare facts which prima facie make out a clear case under s.406, IPC against the accused.
The important portions of the complaint may be spelt out thus: (1) that all the accused attended the marriage of the appellant with the respondent and demanded dowry from the parents of the appellant in consideration of the marriage.
(2) that the parents of the appellant spent Rs,75,000 on the marriage and dowry articles worth Rs.60,000 224 (inclusive of jewellery, wearing apparel, etc.) were given and entrusted to accused Nos.1 to 6 at the time of the Doli on 5.2.72, (3) that the articles entrusted to the accused were meant for the exclusive use of the appellant, (4) that the dowry articles were never given by the accused to the appellant even for her use and possession of the same was illegally, dishonestly and mala fidely retained by the accused in order to obtain a wrongful gain to themselves and wrongful loss to the appellant, (5) that on 11.12.1980 in the morning, the accused brought the appellant to Ludhiana in three clothes and refused to give the entrusted articles which were the stridhan of the appellant.
Taking all the allegations made above, by no stretch of imagination can it be said that the allegations do not prima facie amount to an offence of criminal breach of trust against the respondent.
Thus, there can be no room for doubt that all the facts stated in the complaint constitute an offence under section 406 IPC and the appellant cannot be denied the right to prove her case at the trial by per empting it at the very behest by the order passed by the High Court.
We therefore, overrule the decisions of the Punjab & Haryana High Court in Vinod Kumar 's case.
By way of post script we might add that we are indeed amazed to find that so deeply drowned and inherently engrossed are some of the High Courts in the concept of matrimonial home qua the stridhan property of a married women that they simply refuse to believe that such properties are meant for the exclusive use of the wife and could also be legally entrusted to the husband or his relatives.
Thus, if the husband or his relatives misappropriate the same and refuse to hand it over to the wife and convert them to their own use and even though these facts are clearly alleged in a complaint for an offence under section 405/406 I.P.C., some courts take the complaint is not maintainable.
Thus, even when clear and specific allegations are made in the complaint 225 that such properties were entrusted to the husband, they refuse to believe these hard facts and brush them aside on the ground that they are vague.
The allegations of the complainant in this appeal and the appeal before the Allahabad and the Punjab & Haryana High Court show that it is not so but is a pure figment of the High Court 's imagination as a result of which the High Court completely shut their eyes to the fact that the husband could also be guilty under section 405/406 I P.C. in view of the clear allegations made in the complaint.
In other words, the High Courts simply refuse to believe that there can be any such entrustment and even if it is so no offence is committed.
Such an approach amounts to a serious distortion of the criminal law, resulting in perpetrating grave and substantial miscarriage of justice to the wife at the hands of the High Courts.
We cannot countenance such a wrong and perverse approach.
For the reasons given above, we are satisfied that as the complaint prima facie disclosed an offence of criminal breach of trust as defined in section 405/406 of the Indian Penal Code the High Court was not justified in quashing`the complaint.
We, therefore, allow this appeal, set aside the judgment of the High Court and restore the complaint filed by the appellant and direct that the accused may be summoned, if not already summoned, and put on trial in accordance with law.
VARADARAJAN, J.
This criminal appeal by special leave is directed against the judgment of a learned Single Judge of the Punjab and Haryana High Court in Criminal Misc.
Case No.4876 of 1981.
The appellant, Pratibha Rani is the estranged wife of the first respondent Suraj Kumar who is the brother of the second respondent Krishan Lal.
One Rattan Chand is the father of respondents 1 and 2 and two others Chander Kumar and Vishwinder Kumar.
One Jugal Kumar is the brother in law of the first respondent.
The appellant filed a criminal complaint for an offence under s.406 I.P.C. against her husband and his father and brothers and brother in law mentioned above in the Court of the Additional Chief Judicial Magistrate, Ludhiana, alleging that she was married to the first respondent at Ludhiana on 4.
2. 1972 according to the Hindu rites and customs.
The material averments in the complaint 226 are these: The aforesaid persons, namely, father, brother and brother in law of the first respondent attended the marriage and demanded dowry from the appellant 's parents as consideration for the marriage.
Accordingly, dowry articles mentioned in the list appended to the complaint, worth Rs. 60,000, in the form of golden articles, clothes and other valuables were given and entrusted to the respondents and four others mentioned in the complaint at Ludhiana time of 'doli ' on 5.2.1972 in the presence of Kapur Chand Jain and six others.
The six respondents in the complaint started teasing, harassing and beating the appellant and they kept her without even food to extract more money from her parents.
They turned out the appellant with her children in the beginning of 1977.
After a great deal of persuasion and intervention by Panchayatdars, respondent 1 came to Ludhiana and took the appellant to his house after giving an undertaking in writing on 21.
6. 1977 not to misbehave with and maltreat the appellant her children.
But after some time all the respondents in the complaint started maltreating the appellant and misbehaving with her.
The articles mentioned in the list were never given by the respondents in the complaint to the appellant for her use but were retained by them illegally and with the dishonest intention of causing wrongful gain to themselves and wrongful loss to the appellant.
The respondents in the complaint brought the appellant to Ludhiana at 4.30 a.m.
On 11.12.1980 and left her near Kailash Cinema Chowk.
They refused to give the articles mentioned in the list which are the stridhan of the appellant to her.
When the appellant 's husband and his brother, Vishwinder Kumar, respondents 1 and 5 in the complaint, came to Ludhiana on 10.2.1981 to attend the proceeding started by the appellant under section 125 Cr.
P.C., her parents persuaded them to return the articles entrusted to them at the time of the marriage but they flatly refused to comply with that demand.
The articles have not been returned in spite of service of notice dated 17.
1981 on the first respondent.
Thus the respondents in the complaint have dishonestly converted the articles belonging to the appellant for their use in violation of the direction of the appellant 's parents given at the time of the marriage to give the articles for the appellant 's use.
The respondents in this appeal filed Criminal Misc.
Case No.4876 of 1981 in the Punjab and Haryana High Court under s.482 of the Code of Criminal procedure for quashing the criminal 227 Proceedings and the complaint taken on file by the Additional Chief Judicial Magistrate, Ludhiana under section 406 I.P.C. and his order summoning them.
Sukhdev Singh Kang, J. before whom the matter came up in the High Court relied strongly upon the observations made by a Full Bench of that High Court in Vinod Kumar Sethi & Ors.
vs State of PunJab and Ors.(l) and has observed in his judgment that the mere handing over of the articles of dowry of stridhana to the husband and other relations at the time of the marriage does not constitute entrustment in the sense of the word used in sections 405 and 406 I P.C. and that it does not amount to passing of dominion over those articles to them.
The learned Judge has observed that there can be such an entrustment only by a subsequent conscious act of volition ` and that in the absence of such an act any allegations of breach of trust between the husband and wife cannot constitute an offence under s.406 I.P.C.
The learned Judge has further observed that between the husband and wife there is always a jointness of control and possession of the properties of the spouse within the matrimonial home and that it goes against the very concept of entrustment of his or her property by one spouse to the other.
In this view, he allowed the petition and quashed the proceeding arising out of the appellant 's complaint, observing that the allegations in the appellant 's complaint are similar to the one in Vinod Kumar 's case (supra) and that this case is fully covered by the ratio in that decision.
The appellant has, therefore, come to this Court in appeal by special leave, impleading the petitioners before the High Court, who are only two out of the six respondents in the complaint, as respondents in this appeal.
In a petition under s.482 Cr.
P.C. for quashing a criminal complaint, the allegations made in the complaint have to be taken to be correct in order to find out whether they constitute the various ingredient of the offence alleged.
In Nagawa Veernna Shivalingappa Konjalgi & Ors ) illustrations have been given of cases in which it may be safely held that an order of a Magistrate issuing process against an accused can be quashed or set aside.
They are: (1) (2) 228 (1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same, taken at their face value, make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused; (2) Where the allegations made in the complaint are palpably absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused; (3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects such as want of sanction, or absence of a complaint by a legally competent authority and the like." Article 126 in Mulla 's Hindu Law, Fifteenth Edition, describing what constitutes Stridhana reads: "property given or bequeathed to a Hindu female whether during maidenhood, coverture or widowhood by her parents and their relation or by her husband and his relations is stridhana according to all schools except that the Dayabhaga does not recognise immovable property given or bequeathed by husband to his wife as stridhana." Section 2 of the Dowry prohibition Act, 1961 defines "dowry" as meaning: "any property or valuable security given or agreed to be given either directly or indirectly (a) by one party to a marriage to the other party to the marriage, or (b) by the parents of either party to the marriage, or by any other person to either party to the marriage or to any other person at or before of after the marriage in connection with the marriage of the said parties but does not include dower or mahr in the case of person to whom the Muslim personal law (Shariat) applies.
" 229 In the present complaint of the wife against the husband and , his three brothers, father and brother in law, it is alleged that the marriage was performed at Ludhiana on 4.2.1972 according to Hindu rites and customs and that the father and three brothers and the brother in law of the husband attended the marriage and demanded dowry from the wife 's parents as consideration for the marriage and that accordingly dowry articles worth Rs.60,000, mentioned in the list attached to the complaint, consisting of gold articles, clothes and other valuables were given and entrusted to the husband and the other five respondents in the complaint, at the time of the 'doli ' at Ludhiana on 5.2.
1972 in the presence of Kapur Chand Jain and six other persons.
For the purpose of the petition under s.482 Cr.
P.C. those articles must be prima facie considered to be dowry or stridhana of the appellant wife.
In Velji Raghavjl Patel vs State of Maharashtra,(1) it is observed: "Upon the plain reading of s.405, I.P.C. it is obvious that before a person can be said to have committed criminal breach of trust it must be established that he was either entrusted with or entrusted with dominion over property which he is said to have converted to his own use or disposed of in violation of any direction of law etc.
Every partner has dominion over property by reason of the fact that he is a partner.
This is a kind of dominion which every owner of property has over his property.
But it is not dominion of the kind which satisfies the requirements of section 405.
In order to establish "entrustment of dominion" over property to an accused person the mere existence of that person 's dominion over property is not enough.
It must be further shown that his dominion was the result of entrustment.
Therefore, as rightly pointed out by Harris C.J., the prosecution must establish that dominion over the assets or a particular asset of the partnership was by a special agreement between the parties, entrusted to the accused person.
If in the absence of such a a special agreement a partner receives money belonging to the partnership he cannot be said to have received it in a (1) ; 230 fiduciary capacity or in other words cannot be held to have been "entrusted" with dominion over partnership properties.
" In State of Gujarat vs Jaswantlal Nathalal(1) it is observed: "Before there can be any entrustment there must be a trust meaning thereby an obligation annexed to the owner ship of property and a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another or of another and the owner.
But that does not mean that such an entrustment need conform to all the technicalities of the law of trust see Jaswantrai Manilal Akhaney vs State of Bombay ; , 498 500.
The expression 'entrustment ' carries with it the implication that the person handing over any property or on whose behalf that property is handed over to anther, continues to be its owner.
Further the person handing over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them.
" In Sushil Kumar Gupta vs Joy Shankar Bhattacharyya(2), it is observed: "The offence of criminal breach of trust is committed when a person who is entrusted in any manner with property or with dominion over it, dishonestly misappropriates it, or converts it to his own use, or dishonestly uses it or disposes it of, in violation of any direction of law prescribing the mode in which the trust is to be discharged, or of any lawful contract, express or implied, made by him touching such discharge, or wilfully suffers any other person so to do.
" In Superintendent Remembrancer of Legal Affairs, West Bengal vs S.K. Roy(8), it is observed: "There are, however, two distinct parts involved in the commission of the offence of criminal breach of trust.
The first consists of the creation of an obligation in rela (1) ; (2) ; (3) [1974] 4 SCC,230.
231 tion to the property over which dominion or control is acquired by the accused.
The second is a misappropriation or dealing with the property dishonestly and contrary to the terms of the obligation created.
The most important ingredient of an offence under section 406, which is alleged by the wife against her husband, his three brothers, father and brother in law in her complaint in the present case is the entrustment of the dowry articles to the respondent in the complaint and ,their dishonest conversion thereof to their own use.
There is no doubt an allegation in the complaint that these articles were given and entrusted to the respondents in the complaint at Ludhiana at the time of doll on 5 2 1972.
Apart from the husband the other respondents in the complaint, as already stated, are his father, three brothers and brother in law.
The articles were given for the use of the wife If so, could there be entrustment of the articles to such a number of diverse persons? In the background of what usually happens in Hindu marriages namely, placing of the articles presented to the bride in the presence of the elders and others assembled for the occasion and removal thereof after the function is over it has to be seen whether the allegation made in the complaint amounts to entrustment as required by law to make out an offence under section 406 l.
This question has been considered in detail by a Full Bench of the Punjab and Haryana High Court in Vinod Kumar 's case (supra) after an analysis of several decision relating to the question.
The learned Single Judge who has quashed the complaint in the present case on a petition of the husband and one of his brothers has heavily relied upon that Full Bench decision of his Court.
What runs through the judgment of the learned Judges in that case is the concern of the Court for the peaceful and harmonious relationship between the spouses in a matrimonial home and a careful consideration of the question whether the ingredient of entrustment" exists in such cases.
Therefore, it is necessary to note what has been observed in some of the paragraphs of the judgment to that case.
The learned Chief justice speaking for the Bench has observed: "21.
The present set of cases presents a sad spectacle of a house divided against itself, not merely in the biblical but in the literal sense, where wives are ranged against their husbands in acrimonious criminal prosecu 232 tions.
The challenge on behalf of the husbands and their relations is focussed basically against the charge of breach of trust under Section 406 of the Indian Penal Code, levelled against them.
Now the core of the argument on behalf of the petitioners is that the very concept of any entrustment or passing dominion over her property by the wife to the husband does not arise at all so long as the marriage subsists.
The contention is that the very nature of the conjugal relationship itself would negative any such stand.
On this premise it is contended that the basic pre requisite of the entrustment of property or dominion over property being lacking and non existent, no offence under Section 406, Indian renal Code, can possibly be made out.
Therefore, it was argued that even accepting the first information reports as they do not and indeed cannot disclose a cognizable offence under Section 406.
The petitioners, therefore, seek the quashing of the proceedings forthwith rather than being obliged to go through the tortuous mill of a police investigation or the consequent criminal trial." "25.
Now apart from the principle, the most ancient texts of Hindu Law have always been categoric that dowry, as commonly understood, was stridhana and thus in the exclusive ownership of the bride." "26.
Now once it is so held that articles of dowry and traditional presents given at the wedding are owned by the bride individually in her own right, then one fails to see how by the mere fact of her bringing the same into her husband 's or parents in law 's household, would forth with divest her of the ownership thereof.
Separate and individual right to property of the wife therein cannot vanish into thin air the moment the threshold of the matrimonial home is crossed.
To say that at that point of time she would cease to own such property altogether and the title therein would pass to her husband or in any case she would lose half of her right therein and become merely a joint owner of the same, with the family of her husband, does not appear to me as even remotely warranted either by the statute, principles or logic.
No such marriage hazard against the wife can be implied in law.
233 Once she owns property exclusively, she would continue to hold and own it as such despite marriage and coverture and the factum of entering the matrimonial home. " "35.
To conclude on this aspect, I find nothing in the codification of Hindu Law which in any way abolishes the concept of stridhana or the right of a Hindu wife to exclusive individual ownership.
Indeed the resultant effect of such enactments is to put the Hindu female wholly at par with the Hindu male, if not at a higher pedestal with regard to individual ownership of the property.
Now having held as above that Hindu wife can exclusively own and hold property including her dowry and traditional presents given at the wedding, the decks are cleared for tackling the core question posed at the very outset.
What indeed is the true legal relationship of the husband and wife qua the property individually owned by each within the four walls of the matrimonial home? Does the wife stand entrusted with the property belonging to her husband individually and vice versa the husband stands entrusted with such property vesting in the exclusive ownership of the wife? It is the answer to this question which in essence would determine the attraction and applicability of Section 405, I.P.C betwixt the spouses. " "41.
It bears 'repetition that the question herein has to be examined against the backdrop of the matrimonial home.
What truly is the concept and essence thereof had come up for exhaustive consideration earlier before a Full Bench in Kailash Vati vs Ayodhia Parkash, ILR (1977) 1 Punj.
& Har. 642 in the context of Hindu Law itself.
It is, therefore, apt to refer to the authoritative enunciation therein: "To my mind, the idea of the matrimonial home appears to lie at the very centre of the concept of marriage in all civilised societies.
It is indeed around it that generally the marriage tie revolves.
The home epitomizes the finer nuances of the marital status.
The bundle of indefinable rights and duties which 234 bind the husband and the wife can perhaps be best understood only in the context of their living together in the marital home The significance of the conjugal home in the marriage tie is indeed so patent that it would perhaps be wasteful to elaborate the 8 same at any great length.
Indeed, the marital status and the conjugal home have been almost used as interchangeable terms." and "To summarise, I have attempted to show by reference to Anglo American Jurisprudence that the a concept of the marital home lies at the very centre of the idea of marriage in all civilised societies.
Perhaps from primeval times when human beings lived sheltered in subterranean caves to the modern day when many live perched in flats in high rise apartments within the megapolis, the husband and the wife have always hankered for a place which may be their very own and which they may call a home.
The innumerable mutual obligations and rights which stem from the living together of man and wife are undoubtedly beyond any precise definition and stand epitomized by the concept of the matrimonial home.
" In the light of the above it would be farcical to assume that despite the factum of a marriage and a common matrimonial home the two Spouses would stand in a kind of a formal relationship where each is entrusted with or has been passed dominion over the exclusive property of the other.
Rather it appears to me that the conjugal relationship and the existence of a matrimonial home automatically obviates any such hyper technicalities of an entrustment or dominion over property.
It seems inapt to conceive the relationship as a day to day entrustment of the property of the husband to the custody of the wife or vice versa of the property of the wife to the husband.
The matrimonial home so long as it subsists presumes a jointness of custody and possession by the spouses of their individual as also of their joint properties which can not be divided by any metaphorical line.
In a homely metaphor in the context of the modern commercialised world it has been said that the marriage relationship is not one of 235 "I and You limited" but that of "We limited".
Whilst the law undoubtedly now clearly recognises the individual ownership of property by the husband and wife, the necessary assumption in law, therefore, would be that during the existence or even the imminent break up the matrimonial home the concept of jaintness of possession therein seems to be a paramount one.
The inevitable presumption during the existence or the imminent break up of the matrimonial home therefore is one of joint possession of the spouses which might perhaps be dislodged by the special terms of a written contract.
However, to be precise this presumption of joint possession of properties within the matrimonial home can subsist only as long as the matrimonial home subsists or on the immediate break up thereof." "42 43.
The aforesaid position seems to be well borne out by a homely example which was rightly advanced by Mr. Bhandare on behalf of the petitioners.
It was submitted that where a husband entrusts a specific amount to a wife for paying the school fees of their children but in a shopping spree she converts the same into sarees for herself, would she thereby become liable to breach of trust under Section 406, Indian Penal Code? The answer would obviously appear to be in the negative.
Similarly where a husband misuses or even appropriates any property exclusively belonging to his wife within the matrimonial home he hardly comes within the ambit of criminality under Section 406, Indian Penal Code.
Usually if not invariably where the husband is the bread winner he brings home the month 's wages and bands them over to the wife to be spent on the family.
Would it be possible to say that if she use the same for herself and even against the consent of her husband she would be committing a criminal breach of trust? Obviously the answer would appear to be in the negative." "44.
One may now turn precisely to the language of the Code itself.
405 is in the following terms: 236 "405.
Criminal Breach of trust: Whoever being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in, which such trust is to be discharged or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other Person so to do, commits criminal breach of trust.
" It is well setted that from a legal contract, or violation of direction of law, the entrustment of property or dominion over property are the per requisites for the applicability of the aforesaid provision.
Once it is held as above, that property within the matrimonial home is in the joint possession and custody (despite rights of the individual ownership therein) then these very per requisites of entrustment or dominion over property cannot be easily satisfied betwixt the spouses inter se.
It is indeed well settled that the very concept of the jointness of possession and custody would rule out the entrustment or dominion over property betwixt such joint custodians.
In line with the concept of joint ownership where the possession of one joint owner is deemed to be the possession of all, the analogy,is to be extended that existence of the property within the matrimonial home rises a presumption that both the husband the wife are in possession thereof jointly and not that each one has entrusted his exclusive property to the custody of other.
Subscribing to the latter view would be both overly hypertechnical and subversive of the very concept of marriage, the matrimonial home and the inevitable mutual trust which conjugality necessarily involves." "45.
It is obviously because of the afore said legal position and this inarticulate peremise underlying the same that the learned counsel for the State and the complainants were unable to cite even a single case of conviction for criminal breach of trust betwixt husband and wife.
Even when 237 pointedly asked, counsel conceded that despite the diligent research neither under the Indian Penal Code, nor under the analogous provisions of English law could they lay their hands for over a century and a half on any case where such a conviction had been upheld.
This paucity, rather the total absence of precedent, indirectly buttresses the view I have expressed above on principle and the statutory provisions.
An analogy in their context may well be drawn from the Law of Partnership.
However, at the very outset I would notice that the position is not identical because partnership envisages a joint or co ownership of partnership property whereas in a conjugal relationship, as shown above, the spouses may well be the individual and exclusive owners of their respective properties.
Nevertheless a marked similarity therein is that in partnership, co ownership necessarily connotes a jointness of possession of partnership properties whilst the same position inheres in the matrimonial home where the spouses are deemed to be jointly in possession and custody.
Now, barring some ancient notes of discordance, it seems to be now well accepted that a partner cannot be held guilty of criminal breach of trust qua partnership property except by virtue of a special agreement either written or conclusively established.
This had always been so in English law until it was specifically and altered by Statute 31 and 32 Victoria c. 116 and it is now governed by the special provisions of the same and subsequent legislation.
In India, however, in the absence of any statutory change, the legal position would continue to be the same.
This came up for pointed consideration before a Full Bench of five Judges in Bhuban Mohan Das vs Surendra Mohan Das, AIR 1951 Cal, 69.
The relief sought therein of quashing the proceedings under section 406, Indian Penal Code, betwixt partners, was granted whilst holding that a charge under section 406, Indian Penal Code cannot be framed against a person who, according to the complainant, is a partner with him and is accused of the offence in respect of property belonging to them as partners.
P.B. Mukharji, J. in his concurring judgment observed as under (Para 46) : "The question here is of much broader application and of a more fundamental nature.
Its fundamen 238 tal nature is this that the very conception of partner ship precludes possibility of entrustment or dominion of the partnership property by one partner as against the other and, therefore, precludes any possible operation of the crime under Section 406 Penal Code, of criminal breach of trust by one partner against the other in respect of the partnership property." The aforesaid view has been expressly referred to and approved by their Lordships in Velji Raghavji vs State of Maharashtra,(1) with the following added observations (at pp.
1435 36) : ".
Every partner has dominion over property by reason of the fact that he is a partner.
This is a kind of dominion which every owner of property has over his property.
out it is not dominion of this kind which satisfies the requirements of S.405.
In order to establish `entrustment of dominion ' over property to an accused person the mere existence of that person 's dominion over property is not enough.
It must be further shown that his dominion was the result of entrustment.
Therefore, as rightly pointed out by Harris, C.J., the prosecution must establish that dominion over the assets or a particular asset of the partnership was, by a special agreement between the parties entrusted to the accused person.
If in the absence of such a special agreement partner receives money belonging to the partnership he cannot be said to have received it in a fiduciary capacity or in other words cannot be held to have been 'entrusted ' with dominion over partnership properties.
" If that is so in the partnership relation it appears to me that it would be more so in the conjugal relationship with regard to the property within the matrimonial home." "46. .
The nature, character and the incident of property within the matrimonial home, so long as the marriage subsists, seem to be such that except by a special written agreement, no entrustment or dominion etc.
Of the individual property of the spouses to each other can b e presumed.
Equally, herein the specific and ascertainable (I) A.T.R. 1965 S.C. 1433 239 property of each spouse within the matrimonial home can , be so equivocal and problematic as to oust the requisite mens rea with consequent criminality with regard thereto until the title to such property is clearly and specifically established.
If the civil remedy seems to be adequate betwixt partners, during the subsistence of partnership there is no reason why it would not equally be so betwixt spouses in an existing matrimonial home during the subsistence of the conjugal relationship.
As already referred to, apart from the civil remedy under the general law, added provisions exist in this context under S.27 of the buttressed by the procedural provisions of 0.32 A of the Code of Civil Procedure.
" "47.
In view of the above, it would be equally untenable to hold that either the desertion or the expulsion one of the spouses from the matrimonial home would result in entrusting dominion over the property belonging to the other so as to bring the case within the ambit of this pre requisite under S.405, Indian Penal Code.
The joint custody and possession once established would thereafter exclude either express entrustment or the passing of dominion over the property.
It was rightly argued that if an irate husband or wife walks out from the matrimonial home in a huff, this cannot constitute an entrustment or dominion over the property to the other.
Consequently, unless a special written agreement to the contrary can be established, the strongest presumption arises that during the existence and immediately after the crumbling of the matrimonial home, there was in essence, a joint possession and custody of the property of the spouses therein, including dowry and traditional presents, which would preclude the essentials entrustment of dominion over the property which form the corner stone of criminality under S.405, Indian Penal Code." "49.
Equally the common use and enjoyment of certain articles of dowry and traditional presents, by the other members of a joint family with the leave and licence of a Hindu wife, cannot have the effect of extending the jointness of control and custody of the couple to undefined 240 and unreasonable limits.
Consequently, there is no reason to assume that the mere use or enjoyment of dowry by other members of the household, would have the effect of passing the possession and control thereof Jointly to the Hindu Undivided Family a such.
" "50.
In the aforesaid context, pointed reference must be made to the opening word 'whoever ' of S.405 of the Code to highlight that the criminal law does not take ken of any proximity of relationship for the offence of breach of trust.
"Whoever" would include within its ambit the parents in law, the brothers in law, sisters in law (and other close relations of the husband) of a Hindu wife provided that the basic ingredients of entrustment or passing of dominion over her separate individual property stands fully satisfied.
Apart from the peculiarity of the conjugal relationship and the consequent sharing of the matrimonial home, the existence of the blood relationship of the parties does not seem to be relevant for the applicability or otherwise of S.406 of the Code, Since the other members of the Hindu Joint family, to which the husband may belong, would not be covered by the presumption of jointness of custody v and possession of their individual properties by the spouses alone, they cannot by the mere fact of kinship be excluded from the scope of sections 405 and 406 of the Code.
" "56.
To conclude, it necessarily follows from the aforesaid discussion that the very concept of the matrimonial home cannotes a jointness of possession and custody by the spouses even with regard to the movable properties exclusively owned by each of them.
It is, therefore, inapt to view the same in view of the conjugal relationship as involving any entrustment or passing of dominion over property day to day by the husband to the wife or vice versa.
Consequently, barring a special written agreement to the contrary, no question of any entrustment or dominion over property would normally arise during coverture or its imminent break up.
There fore, the very essential pre requisites and the core ingredients of the offence under S.406 of the Penal Code would be lacking in a charge of criminal breach of trust of 241 property by one spouse against the other.
Inevitably, therefore, the purported allegations of breach of trust betwixt husband and wife so long as the conjugal relation ship lasts and the matrimonial home subsists, cannot constitute an offence under Section 406 of the Indian Penal Code, subject to any special written agreement.
Equally, as against the close relations of the husband, no facile presumption of entrustment and dominion over the dowry can be raised prims facie and this inevitably has to be by a subsequent conscious act of volition which must be specifically alleged and conclusively established by proof.
Lastly, because of the definition in section 2 of the Dowry Prohibition Act, the offences under the said Act cannot come within the ambit of section 406 of the Indian Penal Code as these cannot stand together on the same set of facts." "57.
Hence the answer (to the question) posed at the very outset is rendered in the affirmative.
The bond of matrimony, therefore, bar the spectre of the criminal breach of trust qua the property of the spouses at the very threshold of the matrimonial home.
It cannot enter its hallowed precincts except through the back door of a special written contract to the contrary with regard to such property.
" I have extracted above several passages from the Judgment of the learned judges of the Full Bench in Vinod Kumar 's case (supra) since I share their view and concern for peace and harmony in matrimonial homes and feel that the learned Single Judge who has quashed the wife 's complaint in the present case was justified in relying heavily upon that judgment of the Full Bench.
In these circumstances, 1 think that in the absence of a separate agreement and specific entrustment by the wife to the husband and of his relations and vice versa of the property of the husband to the wife and or her relation, it would not be possible to draw an inference of entrustment of custody or dominion over the property of one spouse to the other and his or her relations so as to attract the stringent provisions of s.406 I.P.C.
The offense of criminal breach of trust is cognizable and non bailable and punishable with imprisonment for a term of three years or 242 with fine or with both.
In the absence of such a separate agreement for specific entrustment of the property of either spouse the appropriate remedy would appear to be by way of a civil suit where there is scope for the parties to the marriage coming together at the instance of relations, elders and well wishers and patching up their differences.
Entertaining complaints of the irate wife or husband against the husband or wife without even an allegation of a specific and separate agreement constituting entrustment of the property of the wife or the husband would have disastrous effects and consequences on the peace and harmony which ought to prevail in matrimonial homes.
It is seen from para 45 of the judgment in Vinod Kumar 's case (supra) that in spite of diligent research no instance of any case of successful prosecution of the husband of wife at the instance of the wife or the husband could be brought to the notice of the learned Judges.
It may be stated that none was brought to the notice of this Court either in the course of the arguments in this appeal.
This would show that the spouses had not lightly rushed in the past to criminal courts with complaints of criminal breach of trust against the other spouses though in the day to day life there must have been numerous instances where the wife had used the property or cash of the husband for purposes different from the one for which they were given by the husband to be applied by the wife and vice versa.
I am anxious that no light hearted change should be brought about in the position and that the minimum requirement in such cases is a specific separate agreement whereby the property of the wife to husband was entrusted to the husband or wife and or his or her close relations.
In the absence of such a specific separate agreement in the complaint, in the present case, I am of the opinion that the learned Single Judge was perfectly justified in following the decision of the Full Bench in Vinod Kumar s case (supra) and quashing the wife 's complaint filed against the husband and his close relations.
I would, therefore, dismiss the appeal.
In view of the majority decision, this appeal is allowed, the judgment of the High Court is set aside and the complaint filed by the appellant is restored.
The accused may now be summoned and put on trial in accordance with law.
| The respondent was carrying on business of manufacturing fertilizers at Ludhiana under the name and style of Messrs Varinder Agro Chemicals (India) and marketed his product through his agent Messrs Sachdeva Enterprises Kapurthala.
On finding the sample collected by a Fertilizer Inspector from the said agent on December 12, 1978 to be of sub standard, quality the Chief Agricultural officer, Kapurthala filed a criminal complaint being CC No. 156 C of 1980 on December 24, 1980 in the Court of the Chief Judicial Magistrate, Kapurthala against the two partners of Messrs Sachdeva Enterprises and the Respondent under section 13A of the read with section 13(1) (a) of the Fertilizers Control order 1957.
On July 20, 1981 respondent moved an application before the trial court praying that he be discharged and the proceedings be dropped against him on the ground that the Kapurthala Court had no territorial jurisdiction to try him because he carried on business of manufacture of fertilizers at Ludhiana.
Relying no the decision of the Gujarat High Court in State of Gujarat vs Agro Chemicals etc.
(1980 Cr. L. J. p. 516) the Learned Chief Judicial Magistrate discharged the respondent and dropped the proceedings against him.
The Criminal Revn.
Application No. 48 of 1981 filed by the State of Punjab was allowed by the Additional Sessions Judge, Kapurthala holding that in view of the provisions of Section 180 of the Code of Criminal Procedure, the Kapurthala Court had jurisdiction to try the Respondent along with the other co accused.
Thereupon the respondent preferred a revision petition being Crl.
No. in the High Court of Punjab and Haryana.
A learned Single Judge of the High Court relying on the decision of that Court in Satinder Singh and Ors.
vs State af Punjab, Crl.
Appln.
No. 1158 M/1981 dated 24 2 1982 which accepted the view taken by the Gujarat High Court, allowed the revision petition and set aside the decision of the Additional Sessions Judge.
Hence the State Appeal by Special Leave of the Court.
Allowing the appeal, the Court 840 ^ HELD: 1.
The Court in whose jurisdiction sub standard fertilizer was found to be marketed will have the jurisdiction to try manufacturer of sub standard fertilizer even if the manufacturing activity is at an entirely different place.
The manufacturer as well as the dealer can be tried at a place where the consequences of the manufacturing and selling of sub standard fertilizer had ensued as envisaged in sections 179 and 180 of the Code of Criminal Procedure.
[in] 1: 2.
Now if manufacturing sub standard fertilizer is by itself an offence and marketing the sub standard fertilizer is itself a distinct offence but they are so inter connected as cause and effect, both can be tried at one or the other place.
If one manufacturers the sub standard fertilizer, wherever it is marketed the inter relation or casual connection is of cause and effect.
The situation will be adequately covered by sections 179 and 180 of the Code of Criminal Procedure.
[843G H] Incharge Production, Haryana State Coopt.
Supply And Marketing Federation Ltd. (HAFED) Fertilizer vs State of Punjab; Crl.
No. 6763 M of 1982 decided by the High Court on 9 3 1983 approved.
Where a sample of fertilizer is taken from a bag which was in the same condition as delivered by the manufacturer and it was in possession of a marketing agent manufacture and sale of sub standard fertilizer would constitute indisputably one transaction.
But this is predicated upon the facts which may be disclosed in the trial and proved.
[844D E] Bhagwan Das Jagdish Chander vs Delhi Administration [1975] Supp.
S.C.R 30, distinguished.
|
Review Petition No. 249 of 1984.
In Special Leave Petition (C) No. 13618 of 1983 CHAMBER MATTER By Circulation The order of the Court was delivered by CHINNAPPA REDDY, J.
This application for Review is nothing 206 short of an abuse of the process of the Court and waste of the time of this Court, time which has now become so dear and precious because of the daily mounting arrears.
No ground for seeking a review is mentioned or even hinted at in the petition.
In the first paragraph of the petition it is stated "This is an application for Review of the order dated 9.12.83, whereby this Hon 'ble Court was pleased to dismiss the above Special Leave to Appeal (Civil).
The said order discloses an error apparent on the face of the record as will be clear from perusal of the various grounds and facts mentioned in the petition for Special Leave to Appeal.
It is submitted that since the order is unsustainable in view of the facts and circumstances of the case, this Hon 'ble Court may be pleased to review the order".
In the second paragraph we are told that no detailed grounds have been taken (though in point of fact not a single ground is even mentioned) as limitation is about to expire and "If so advised, further set of grounds would be submitted for the consideration of the Hon 'ble Court" The petition was filed on 9.1.1984 and nothing has been done though more than six months have passed since then.
The offer to file detailed grounds remains an unredeemed promise.
Possibly he was advised to file no further grounds as there was none to be submitted.
Good words were not to be thrown away after bad.
To that extent, we may consider ourselves spared.
We must however express our deep dissatisfaction and anguish with the indiscriminate manner in which petitions for special leave and petitions for review are being filed.
The present application is entirely frivolous and is accordingly dismissed.
section R. Petition dismissed.
| The expenditure incurred by a company carrying on the manufacture and sale of textile goods in registering for the first time its trade marks which were not in use prior to the 25th January, 12 1937, is revenue expenditure and an allowable deduction under Sec.
10 (2) (xv) of the Indian Income tax Act.
The fact that a trade mark after registration could be sepa rately assigned and not as a part of the goodwill of the business only, does not make the expenditure for registra tion capital expenditure.
It is only an additional and incidental facility given to the owner of the trade mark; it adds nothing to the trade mark itself.
Judgment of the Bombay High Court affirmed.
Commissioner of Income tax, Bombay vs The Century Spin ning and Weaving and Manufacturing Co. Ltd. ([1947] approved.
British Insulated and Helsby Cables Ltd. vs Atherton ([1926] A.C. 205), Southern vs Borax Con solidated Ltd. ([1942] 10 I.T.R. Supp. 1), Henriksen vs Grafton Hotel Ltd. ([1942] 2 K.B. 184) referred to.
|
ivil Appeal No. 177 (NL) of 1984.
From the Judgment and order dated 5.9.1983 of the High Court of Bombay in Special Civil Application No. 59 of 1983 Dr. Y.S. Chitale and V.N. Ganpule for the Appellant.
G.B. Pai, Parveen Kumar and Vivek Ghambir for the Respondents.
606 The Judgment of the Court was delivered by VENKATARAMIAH, J.
The short question which arises for consideration in this case is whether a teacher employed in a school falls within the definition of the expression 'workman ' as defined in section 2(s) of the (hereinafter referred to as 'the Act ').
The appellant, Miss A. Sundarambal, was appointed as a teacher in a school conducted by the Society of Franciscan Sisters of Mary at Caranzalem, Goa.
Her services were terminated by the Management by a letter dated 25th April, 1975.
After she failed in her several efforts in getting the order of termination cancelled she raised an industrial dispute before the Conciliation officer under the Act.
The conciliation proceedings failed and the Conciliation officer reported accordingly to the Government of Goa, Daman and Diu by his letter dated 2nd May, 1982.
On receipt of the report the Government considered the question whether it could refer the matter for adjudication under section 10(1)(c) of the Act but on reaching the conclusion that the appellant was not a 'workman ' as defined in the Act which alone would have converted a dispute into an industrial dispute as defined in section 2(k) of the Act, it declined to make a reference.
Thereupon, the appellant filed a writ petition before the High Court of Bombay, Panaji Bench, Goa for issue of a writ in the nature of mandamus requiring the Government to make a reference under section 10(1)(c) of the Act to a Labour Court to determine the validity of the termination of her services.
The said writ petition was registered as Special Leave Application No. 59 of 1983.
That petition was opposed by the respondents.
After hearing the parties concerned, the High Court dismissed the writ petition holding that the appellant was not a workman by its judgment dated 5th September, 1983.
Aggrieved by the judgment of the High Court, the appellant has filed this appeal by special leave.
Two questions arise for consideration in this case; (1) whether the school, in which the appellant was working, was an industry, and (2) whether the appellant was a 'workman ' employed in that industry.
It is, however, not disputed that if the appellant was not a 'workman ' no reference under section 10(1)(c) of the Act could be sought.
The first question need not detain us long.
In University of Delhi & Anr.
vs Ram Nath, ; a bench consisting of three learned judges of this Court held that the University of Delhi, which 607 was an educational institution and Miranda House, a college affiliated to the said University, also being an educational institution would not come within the definition of the expression 'industry ' as defined in section 2(j) of the Act.
Section 2(j) of the Act states that 'industry ' means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen.
Gajendragadkar, J., (as he then was) who decided the said case, held that the educational institutions which were predominantly engaged in teaching could not be considered as industries within the meaning of the said expression in section 2(j) of the Act and, therefore, a driver who was employed by the Miranda House could not be considered as a workman employed in an industry.
The above decision came up for consideration in Bangalore Water Supply & Sewerage Board, etc.
vs R. Rajappa & others; , before a larger bench of this Court.
In that case the decision in University of Delhi & Anr.
vs Ram Nath, (supra) was overruled.
Krishna Iyer, J. who delivered the majority judgement observed at Page 283 of the Report thus: "(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 the University of Delhi case or 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 true test.
The whole undertaking will be 'industry ' although those who are not 'workmen ' by definition may not benefit by the status.
" The learned Judge, however, observed that while an educational institution was an industry it was possible that some of the employees in that industry might not be workmen.
At page 261 of the Report with reference to the case of University of Delhi & Anr.
vs Ram Nath, (supra) the learned Judge observed thus: "The first ground relied on by the Court is based upon the preliminary conclusion that teachers are not 'workmen ' by definition.
Perhaps, they are not, because teachers do not do manual work or technical work.
We are not too sure whether it is proper to disregard, with contempt, manual work and separate it from education, nor are we too sure whether in our technological universe, edu 608 cation has to be excluded.
However, that may be a battle to be waged on a later occasion by litigation and we do not propose to pronounce on it at present.
The Court, in the University of Delhi, proceeded on that assumption viz. that teachers are not workmen, which we will adopt to test the validity of the argument.
" Thus it is seen that even though an educational institution has to be treated as an industry in view of the decision in the Bangalore Water Supply & Sewerage Board, etc.
vs R. Rajappa & others, (supra) the question whether teachers in an educational institution can be considered as workmen still remains to be decided.
Section 2(s) of the Act defines 'workman ' thus: "2(s). 'workman ' means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be expressed or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person (i) who is subject to the (46 of 1940), or the (45 of 1950), or the Navy (Discipline) Act, 1934 (34 of 1934); or (ii) who is employed in the police service or as an officer or other employee of a prison; or (iii) who is employed mainly in managerial or administrative capacity; or (iv) who, being employed in a supervisory capacity, draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
" 609 In order to be a workman, a person should be one who satisfies the following conditions: (i) he should be a person employed in an industry for hire or reward; (ii) he should be engaged in skilled or unskilled manual, supervisory, technical or clerical work; and (iii) he should not be a person falling under any of the four clauses, i.e., (i) to (iv) mentioned in the definition of 'workman ' in section 2(s) of the Act.
The definition also provides that a workman employed in an industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, an industrial dispute, or whose dismissal, discharge or retrenchment has led to that dispute.
We are concerned in this case primarily with the meaning of the words 'skilled or unskilled manual, supervisory, technical or clerical work '.
If an employee in an industry is not a person engaged in doing work falling in any of these categories, he would not be a workman at all even though he is employed in an industry.
The question for consideration before us is whether a teacher in a school falls under any of the four categories, namely, a person doing any skilled or unskilled manual work, supervisory work, technical work or clerical work.
If he does not satisfy any one of the above descriptions he would not be workman even though he is an employee of an industry as settled by this Court in May and Baker (India) Ltd. vs Their Workmen., [1961] (II) L.L.J. 94.
In that case this Court had to consider the question whether a person employed by a pharmaceutical firm as a representative (for canvassing orders) whose duties consisted mainly of canvassing orders and any clerical or manual work that he had to do was only incidental to his main work of canvassing could be considered as a workman as defined in the Act.
Dealing with the said question Wanchoo, J. (as he then was) observed thus: "As 'workman ' was then defined as any person employed in any industry to do any skilled or unskilled manual or clerical work for hire or reward.
Therefore, doing manual or clerical work was necessary before a person could be called a workman.
This definition came for consideration before industrial tribunals and it was consistently held that the designation of the employee was not of great moment and what was of importance was the nature of his duties.
If the nature of the duties is manual or clerical, then the person must be held to be a workman.
On the other hand if manual or clerical work is only a small part of the duties of 610 the person concerned and incidental to his main work which is not manual or clerical, then such a person would not be a workman.
It has, therefore, to be seen in each case from the nature of the duties whether a person employed is a workman or not, under the definition of that work as it existed before the amendment of 1956.
The nature of the duties of Mukerjee is not in dispute in this case and the only question therefore is whether looking to the nature of the duties it can be said that Mukerjee was a workman within the meaning of section 2(s) as it stood at the relevant time.
We find from the nature of the duties assigned to Mukerjee that his main work was that of canvassing and any clerical or manual work that he had to do was incidental to his main work of canvassing and could not take more than a small fraction of the time for which he had to work.
In the circumstances the tribunal 's conclusion that Mukerjee was a workman is incorrect.
The tribunal seems to have been led away by the fact that Mukerjee had no supervisory duties and had to work under the directions of his superior officers.
That, however, would not necessarily mean that Mukerjee 's duties were mainly manual or clerical.
From what the tribunal itself has found it is clear that Mukerjee 's duties were mainly neither clerical nor manual.
Therefore, as Mukerjee was not a workman, his case would not be covered by the and the tribunal would have no jurisdiction to order his reinstatement.
We, therefore, set aside the order of the tribunal directing reinstatement of Mukerjee along with other reliefs." The Court held that the employee Mukerjee involved in that case was not a workman under section 2(s) of the Act because he was not mainly employed to do any skilled or unskilled manual or clerical work for hire or reward, which were the only two classes of employees who qualified for being treated as 'workman ' under the definition of the expression 'workman ' in the Act, as it stood then.
As a result of the above decision, in order to give protection regarding security of employment and other benefits to sales representatives, parliament passed separate law entitled the .
It is no doubt true that after the events leading to the above decision took place section 2(s) of the Act was amended by including persons doing technical work as well as supervisory work.
The question for consideration is whether even after the inclusion of the above two classes of employees in the definition of the expression 611 'workman ' in the Act a teacher in a school can be called a workman We are of the view that the teachers employed by educational institutions whether the said institutions are imparting primary, secondary, graduate or post graduate education cannot be called as 'workmen ' within the meaning of section 2(s) of the Act.
Imparting of education which is the main function of teachers cannot be considered as skilled or unskilled manual work or supervisory work or technical work or clerical work.
Imparting of education is in the nature of a mission or a noble vocation.
A teacher educates children, he moulds their character, builds up their personality and makes them fit to become responsible citizens.
Children grow under the care of teachers.
The clerical work, if any they may do, is only incidental to their principal work of teaching.
We agree with the reasons given by the High Court for taking the view that teachers cannot be treated as 'workmen ' as defined under the Act.
It is not possible to accept the suggestion that having regard to the object of the Act, all employees in an industry except those falling under the four exceptions (i) to (iv) in section 2(s) of the Act should be treated as workmen.
The acceptance of this argument will render the words 'to do any skilled or unskilled manual, supervisory, technical or clerical work ' meaningless.
A liberal construction as suggested would have been possible only in the absence of these words.
The decision in May and Baker (India) Ltd. vs Their Workmen, (supra) precludes us from taking such a view.
We, therefore, hold that the High Court was right in holding that the appellant was not a 'workman ' though the school was an industry in view of the definition of 'workman ' as it now stands.
We may at this stage observe that teachers as a class cannot be denied the benefits of social justice.
We are aware of the several methods adopted by unscrupulous managements to exploit them by imposing on them unjust conditions of service.
In order to do justice to them it is necessary to provide for an appropriate machinery so that teachers may secure what is rightly due to them.
In a number of States in India laws have been passed for enquiring into the validity of illegal and unjust terminations of services of teachers by providing for appointment of judicial tribunals to decide such cases.
We are told that in the State of Goa there is no such Act in force.
If it is so, it is time that the State of Goa takes necessary steps to bring into force an appropriate legislation providing for adjudication of disputes between teachers and the Managements of the educational institutions.
We hope that this lacuna in the legislative area will be filled up soon.
This appeal, however, fails and it is dismissed.
Before we con 612 clude we record the statement made on our suggestion by the learned counsel for the Management, Shri G.P. Pai that the Management would give a sum of Rs 40,000 to the appellant in full and final settlement of all her claims.
The learned counsel for the appellant has agreed to received Rs 40,000 accordingly.
We direct the Management to pay the above sum of Rs 40,000 to the appellant in six instalment.
They shall pay Rs 6,000 on 1.9.1988, Rs 6,000 on 1.10.1988, Rs 6,000 on 1.11.1988, Rs 6,000 on 1.12.1988, Rs 6,000 on 1.1.1989 and Rs 10,000 on 1.2.1989.
There is no order as to costs.
G.N. Appeal dismissed.
| On receiving secret information that smuggled diamonds had been kept by petitioners Nos. 1 and 2 in the premises of M/s Gems Impex Corporation, Bombay, petitioner No. 3, which firm was being managed by Petitioners Nos. 1 and 2, the Customs officers searched the premises and found large quantities of unaccounted diamonds, precious stones, pearls, gold manufactures, Indian currency etc.
The petitioners showed their inability to produce evidence of legal acquisition of the goods except to state that they had purchased these locally on cash payment.
The cash books however revealed no such payment.
Various incriminating documents were also found.
On these facts, the Customs officers formed a prima facie belief under section 110 read with section 123 of the that the unaccounted diamonds were smuggled goods, and seized them.
In his statement recorded under section 108 of the Act, petitioner No. 2 produced certain notes issued by four dealers saying that some quantity of diamonds had been given to the petitioners on approval basis.
The said dealers when questioned under section 108 stated that they had issued anti dated and fake notes in order to help the petitioners.
The explanation given by the petitioners having been found unacceptable, a show cause notice was issued ' to the petitioners who were called upon to explain as to why the goods be not confiscated and penalty imposed.
In reply, the petitioners stated that the goods were Iying with them on approval basis and relied on affidavits of other diamond merchants and persons.
These transactions were however not entered in the books of accounts of the dealers and persons who filed the affidavits.
545 The Collector of Customs by his order directed release of jewellery but ordered absolute confiscation of various officer goods including the diamonds and also imposed heavy penalties under section 112 of the Act.
An appeal to the Collector of Customs under 128 of the Act failed.
The Customs, Excise & Gold (Control) Appellate Tribunal confirmed the order of confiscation in respect of diamonds.
The Tribunal held that seizure of diamonds was in the reasonable belief that these are smuggled goods and consequently the onus of proof, according to section 123 of the Act, was on the petitioners which they had failed to discharge.
The Tribunal however reduced the penalties imposed under section 112.
The petitioners challenged the Tribunal 's order before the High Court of Delhi under Article 226.
Moreover, on an application filed by the petitioners under section 130 of the Act, the Tribunal referred two questions to the Bombay High Court.
The reference pending in the Bombay High Court was transferred by the supreme Court to the Delhi High Court, and both the Writ Petition and the reference were heard and disposed of together.
The contentions raised before the High Court and reiterated before this Court were (1) that there was no material before the Customs officer to form the reasonable belief that seized goods were smuggled goods, and the seizure was bad in law, and therefore the provisions of section 123 of the Act did not apply, (2) that assuming that the onus was upon the petitioners, they had amply discharged the said burden by tendering affidavits; (3) that there was no profit element in smuggling the diamonds and, hence, no presumption should be inferred against the petitioners; and (4) that the conclusions of the fact finding body or statutory authority must be arrived at after giving fair opportunity to the party.
Dismissing the Special Leave Petition, it was, ^ HELD: (l) Section 123 of the Act itself recognises that diamonds have great potential for smuggling into India and that is why it is mentioned in sub section (2) of section 123 of the Act, and onus placed on the person from whose possession these are recovered.
[552C] (2) The High Court rightly found that there was evidence lo presume that the goods in question were smuggled.
A large quantity of diamonds was found in the possession of the petitioners.
No trustworthy evidence, documentary or oral, was produced in favour of the petitioners as to its legal acquisition/importation or possession.
[551G] 546 (3) In this case there was certainly a nexus between the available material and the formation of the belief that the goods were liable to confiscation.
The existence of the material was justiciable but not the sufficiency.
[553A B] (4) The conclusions arrived at by the fact finding bodies, the Tribunals or the statutory authorities, on the facts, cannot be interfered with where the fact finding body or authority has acted reasonably upon the view which can be taken by any reasonable man.
Courts will be reluctant to interfere in such a situation.
Where however, the conclusions of the fact finding authority are based on no evidence, then the question of law arises and that may be looked into by the Courts.
[553E F] (5) The High Court rightly found the affidavits as merely bald statements to come to the conclusion that by filing the affidavits the burden had not been discharged.
[554B] (6) A fair opportunity has two justiciable elements.
The first is that an opportunity of hearing must be given and the second is that the opportunity must be reasonable.
Whether a person has a fair hearing can be gone into by the Court and the Court 's conscience must be satisfied that an Administrative Tribunal charged with the duty of deciding a dispute has conformed to the principles of natural justice.
Judged by the aforesaid two aspects, the High Court was right that a reasonable and fair hearing was afforded to the petitioners.
[555A C] Shanti Lal Mehta vs Union of India, ; State of Gujarat vs Mohan Lal Jitamalji Porwal, ; M.A. Rasheed vs State of Kerala, ; ; The Barium Chemicals Ltd. & Anr.
vs The Company Law Board and ors.
, ; M/s Mehta Parikh & Co. vs C.l.
T. Bombay; , ; Pukhraj vs D.R. Kohli, [1962] Suppl 3 SCR 866; Rabindra Kumar Dev vs State of Orissa, ; ; Bal Kissen Kejriwal vs Collector of Customs Calcutta & ors., AIR 1962 Cal 460, referred to.
|
minal Appeal NO.
134 of 1961.
Appeal from the judgment and order dated March 28/29, 1961, of the Calcutta High Court in Criminal Appeal No. 769 of 1960.
D. N. Mukherjee, for the appellant.
P. K. Chakravarti and P. K. Bose, for the respondent.
December 10.
The judgment of the Court was delivered by AYYANGAR, J.
This is an appeal on a certificate under article 134 (1) (c) against the conviction of the appellant under section 302, Indian Penal Code and the sentence for imprisonment for life passed against him for the said offence.
One Pancham Sukla was an employee under the Calcutta Port Commissioner where also the 854 appellant was employed.
Pancham attended office last on the 10th of March, 1960 and at about 5.30 that evening he was seen in the company of the appellant.
That was the last time he was seen alive and since then he has not been found.
Pancham not having returned to his house, his brother in law and another lodged a report with the police stating that Pancham had been missing for the previous two days and in the said report gave a description of the missing person as well as the clothes that he wore at the time he left his residence.
The fact that Pancham was last seen with the appellant was stated in a further report which the brother in law lodged with the police on the next day March 13, 1960.
The appellant was arrested on March 21, 1960 and on interrogation by the police he stated that Pancham Sukla was dead and admitted that he had buried the body of the deceased in the mud in a tank of which he gave a description.
The place pointed out was searched and therefrom a human skeleton partly covered with a torn dhoti, underwear and a torn kurta in the side pocket of which was found a flag, were discovered.
The appellant was also stated to have pointed out to the police in the course of further investigation that he had thrown a knife into the same tank.
A search was made when not merely a knife but a shoe with a rubber sole, a human lower jaw bone etc., were recovered.
After some more investigation a complaint was laid before the Magistrate, who after enquiry committed the appellant to take his trial before the Sessions Court where he was tried with the aid of a jury.
of two offences : (1) under section 364, Indian Penal Code of having abducted Pancham Sukla in order that he might be murdered, and (2) the substantive offence of having committed the murder under section 302, Indian Penal Code.
It may be mentioned that at the trial the articles recoverd the dhoti, shirt, underwear, 855 shoe and the flag were all indentified as having belonged to and being worn by the deceased when he was last seen.
The jury accepted the evidence of the prosecution and returned a verdict of guilty against the appellant on both the counts.
The learned Session 's judge accepted the verdict and sentenced him to death under section 302, Indian Penal Code and to rigorous imprisonment for life in respect of the offence under section 364, Indian Penal Code.
The appellant filed an appeal to the High Court of Calcutta and the learned judges acquitted the appellant of the offence of kidnapping under section 364, Indian Penal Code but confirmed the finding of guilt as regards the offence of murder tinder s.302, Indian Penal Code but reduced the sentence to imprisonment for life.
Having regard to the points which have been urged before us we do not think it necessary to canvass the grounds upon which the learned judges set aside the verdict of guilty returned by the jury and the conviction of the appellant by the Sessions judge in respect of the offence under section 364, Indian Penal Code, but are concerned only with two points which have been made by learned Counsel in support of the appeal.
The first point urged relates to the identification of the skeleton which was found in the tank as that of the deceased Pancham Sukla; in other words, whether there was proof that Pancham Sukla was killed or had even died.
The identification of the skeleton rested on three distinct lines of evidence : (1) The statement of the appellant to the police under section 27 of the Indian Evidence Act which led to the discovery of the skeleton; (2) The identification of the clothes, shoe etc.
which were found on or near the skeleton as those which were worn by Pancham Sukla at the time he last left his house.
The place where these articles were discovered in relation to that where the skeleton was 856 found unmistakably pointed to the articles having formed part of the dress of person whose skeleton was there found; and (3) a photograph of Pancham Sukla superimposed on the photograph of the skeleton.
judge and the High Court as regards the admissibility in evidence of the superimposed photograph as a means of identifying the skeleton as that of the deceased and it is this legal objection raised by the appellant that forms the ground of the certificate granted by the learned judges of the High Court.
Learned Counsel urged before us that the superimposed photograph was not admissible in evidence and that its reception vitiated the verdict of the jury.
We are clearly of the opinion that even if this photograph was not admissible in evidence the verdict of the jury and the conviction of the appellant could not be set aside, because there was very cogent other evidence to prove the identity of the skeleton.
Since, however, the learned judges of the High Court have thought fit to grant a certificate, though they were themselves conscious of the fact that besides the photographs there was plenty of other evidence to sustain the conviction, we consider it proper to express our opinion on the question.
The process adopted for taking the superimposed photograph as explained by P. W. 18 the Assistant Chemical Examiner of the West Bengal Government was this : He first got a photogrgph of Panchom Sukla.
This was photographed, the negative being taken on a quarter plate and the negative was enlarged.
He got the skull and as the skull Was broken in some parts the bones were pieced together and an enlarged photograph of the skull as reconstructed was taken.
A negative of this was enlarged to the same size as the negative of the photo of the deceased with the angle and positions of the two being identical.
The two negatives were 857 then superimposed.
For the superimposition the technique employed by him was thus explained : "The ground glass of the camera was taken out, the negative of the photograph alleged of Pancham Sukla was placed on it, prominent markings of the negative were carefully jotted down on the ground glass, the markings being the following, viz., nasion nasomental line, malar bones with prominences and two outer canthuses and two inner canthuses of the two eye balls and the inner ends of the supra orbital ridges, thereafter the ground glass was fitted in the camera, the skull was so orientated that all the points of the skull came in exact position with the markings made on the ground glass as mentioned when the photograph of the skull was taken; then the two negatives were placed by aligning in such a way that all the points as mentioned above corresponded on a sensitive bromide paper under an enlarger.
The resultant is the photograph submitted to the Court.
" The photographer who executed this work under the supervision of P. W. 18 was Tapendra Nath Mazumder, who was examined as P. W. 19.
This superimposed photograph showed the shape and contour of the bones of the face underneath the face as it looked when the deceased was alive, and the prosecution sought by means of this document to establish the identity of the skull as that of the deceased, or in any event to dispel any positive argument for the.
defence that the skull was not that of the deceased.
The contention urged before us by learned Counsel was that this photograph was not admissible under any section of the Indian Evidence Act.
If learned Counsel is right here, he could succeed in 858 having this evidence rejected as inadmissible.
We are, however, clearly of the opinion that it is admissible in evidence under section 9 of the Evidence Act.
The section reads: "9.
Facts necessary to explain or introduce a fact in issue or relevant fact, or which support or rebut an inference suggested by a fact in issue or relevant fact, or which establish the identity of any thing or person whose identity is relevant, or fix the time or place at which any fact in issue or relevant fact happened, or which show the relation of parties by whom any such fact was transacted, are relevant in so far as they are necessary for that purpose.
" The question at issue in the case is the identity of the skeleton.
That identity could be established by its physical or visual examination with reference to any peculiar features in it which would mark it out as belonging to the person whose bones or skeleton it is stated to be.
Similarly the size of the bones, their angularity or curvature, the prominences or the recessions would be features on which examination and comparison might serve to establish the " 'identity of a thing" whithin the meaning of section 9.
What we have in the present case is first a photograph of that skull.
That the skull would be admissible in evidence for establishing the identity of the deceased was not disputed, and similarly a photograph of that skull.
That a photograph of the deceased was admissible in evidence to prove his facial features, where these are facts in issue or relevant facts, is also beyond controversy.
Now what P.W. 18 with the assistance of P.W. 19 has done is to combine these two.
The outlines of the skull which is seen in the superimposed photograph show the nasion prominences, the width of the jaw bones and their shape.
the general contours of the cheek bones, the position of the eye cavity 859 and the comparison of these with the contours etc., of the face of the deceased as seen in the photograph serve to prove that features found in the skull and the features in the bones of the face of the deceased are indentical or at least not dissimiliar.
It appears to us that such evidence would clearly be within section 9 of the Evidence Act.
The learned Counsel for the appellant urged that the superimposed photograph was not a photograph of any thing in existence and was for that reason not admissible in evidence.
This argument proceeds on a fallacy.
In the first place, a superimposed photograph is not any trick photograph seeking to make something appear different from what it is in reality.
There is no distortion of truth involed in it or attempted by it.
A superimposed photograph is really two photographs merged into one or rather one photograph seen beneath the other.
Both the photographs are of existing things and they are superimposed or brought into the same plane enlarged to the same size for the purpose of comparison.
Possibly some illustrations might make this point clear.
For instance, if the photo of the deceased when alive were printed on a transparent medium and that were placed above a photograph of the skull both being of the same size the visual picture seen of the two together would approximate to the document objected as inadmissible.
In the above, it would be seen both the photographs would be admissible in evidence and no objection could be taken to their being examined together.
Again for instance, if instead of a two dimensional photograph we had first a hollow model of the head of the deceased say of transparent or semi transparent material constructed or made from a photograph, that certainly would be admissible in evidence provided there was proof that the model was exactly and accurately made.
If the model were dismantled into segments and placed upon the skull with a view 860 to show that the curves and angles, the prominences or depressions etc.
exactly corresponded there could be no dispute that it would be a perfect method of establishing identity.
If this were granted the superimposed photograph which is merely a substitute for the experiment with the model which we have just now described would be equally admissible as evidence to establish the identity of a thing.
It was pointed out that this was the first occasion that in India an identity of a skeleton was sought to be established by means of superimposed photographs and that P. W. 18 had done this experiment by reference to what he had read in the books on the subject and that on that ground the evidence could ' not be accepted.
Any deficiency in scientific accuracy might go to the weight of the evidence which in the case on hand was a matter for the jury to consider, but we are now only on a very narrow question as to whether it is excluded from evidence as inadmissible.
Our answer is that it was admissible in evidence.
, The next point urged was that there had been a misdirection to the jury in setting out the statement of the accused to the police which led to the discovery of the skeleton.
We have carefully gone through the charge to the jury and are satisfied that there is no substance in this objection.
The learned Sessions judge has quoted extracts from the decision of the Privy Council in Kotayya vs Emperor (1) and of this Court in State of U. P. vs Deoman Upadhyaya (2) in which the scope of section 27 of the Indian Evidence Act has been discussed and has drawn to the attention of the jury only that portion of the statement of the accused which led to the discovery of the skeleton and the knife etc.
Lastly it was urged that the grounds upon which the learned judges had set aside the conviction of the appellant of the offence under section 364, Indian Penal Code would necessarily lead to the conclusion (1) A.I.R. 1947 P.C. 67.
(2) ; , 861 that he could not be held guilty of an offence under section 302, Indian Penal Code.
The argument was on these lines.
The learned judges considered that the appellant had not, having regard to certain facts which they considered had been made out, the intention of killing Pancham when he took him out and that the killing must have taken place as a result of some quarrel which arose between them.
From this learned Counsel sought to urge : (1) that there was a quarrel, (2) that having regard to the quarrel the appellant must have had the right of private ,defence, and that (3) consequently killing was either fully protected or at the most it was a case of an offence under section 304 Part 1, Indian Penal Code.
We consider that there is no foundation for this argument.
The trial was by jury whose verdict was that the appellant was guilty of murder.
As we stated earlier, we are not now concerned with the correctness of the acquittal by the High Court of the appellant of the offence under section 364, Ind tan Penal Code or of the reasons on which that order was based.
We must, however, point out that there is no suggestion before us that save and except what we have discussed earlier there had been any misdirection by the Sessions judge in his charge to the jury.
There is therefore no scope for the argument that that verdict should be interfered with or the conviction based on it altered on hypothetical considerations not founded on any facts on record.
| In determining the validity or otherwise of a pre Constitution statute on the ground of any of its provisions being repugnant to the equal protection clause of the Constitution, two principles 86 662 have to be borne in mind.
Firstly, the clause bag no retrospective effect and even if the law is in any sense discriminatory, it must be held to be valid for all past transactions and for, enforcement of rights and liabilities accrued before the coming into force of the Constitution.
Secondly, article 13 (1) of the Constitution does not necessarily make the whole statute invalid even after the advent of the Constitution.
It invalidates only those provisions which are inconsistent with the fundamental rights guaranteed under Part III of the Constitution.
Further, the fact that trial was continued even after 26th January, 1950, under the earlier Regulation which is in some respects discriminatory would not necessarily render the subsequent proceedings invalid.
All that the accused could claim is that what remains of the trial must not deviate from the normal standard in material respects, so as to amount to a denial of the equal protection of laws within the meaning of article 14 of the Constitution.
For the purpose.
of determining whether the accused was deprived of such protection, the Court has to see first of all whether after eliminating the discriminatory provisions in the Regulation, it was still possible to secure to the accused substantially the benefits of a trial under the ordinary law; and if so, whether that was actually done in the particular case.
On the 5th January, 1950, the case of the accused who was charged with murder, arson, rioting and other offences which was pending before a Special Tribunal was made over to a Special Judge in pursuance of the provisions of the Hyderabad Regulation X of 1359 F., which abolished the Special Tribunal Regulation of 1949.
The trial commenced on the 11th February, 1950, after the new Constitution came into force and the accused was convicted and sentenced to death.
His appeal was dismissed and the sentence of death was ultimately confirmed by the High Court.
It was contended that the entire trial was illegal inasmuch as the Regulation under which the accused was tried contained several provisions which were in conflict with the equal protection clause (article 14) of the Constitution and became void after the 26th January 1950.
Held, (1) The provisions in the Regulation eliminating committal proceedings and substituting the warrant procedure for sessions procedure in the trial of offences did not render the trial illegal as the committal proceeding was not an indispensable preliminary to a sessions trial under the Hyderabad Criminal Procedure Code.
(2) On a proper interpretation of section 8 of the Regulation the right of an accused to apply for transfer of his case was not taken away and the right of revision was taken away only in respect of non appealable sentences.
(3)Section 8 of the Regulation was void in so far as it took away the provisions relating to confirmation of sentences but as this part of the Regulation was severable from the remaining 663 portion of the section the provisions of the Hyderabad Criminal Procedure Code relating to confirmation of sentences could be followed, and those provisions did not in any way affect the procedure for trial laid down in the Regulation.
(4)The fact that the Nizam 's consent had not been obtained could not vitiate the trial as such consent is necessary only before execution of the sentence.
Held also, that the delegation of the authority of the Chief Minister to make over cases for trial to the Special Judge, by a general notification authorising all civil administrators of the districts to exercise within their respective jurisdictions the powers of the Chief Minister under section 5 (b) was not invalid.
Section 5 (b) does not require that the delegatee must be mentioned by name.
Qasim Bazvi 's case ([1953] S.C.R. 589) applied.
|
Appeals Nos. 2007 and 2008 of 1966.
Appeals by special leave from the judgment and order dated September 28, 1965 of the Kerala High Court in O.P. Nos. 219 and 223 of 1964.
83 D.R. Prem, R. N. Sachthey and section P. Nayar, for the appel lants (in both the appeals).
S.T. Desai and R. Gopalakrishnan, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Sikri, J.
These appeals, by special leave, are directed against the judgment of the High Court of Kerala allowing two petitions filed by the respondent, M/s. A. section Bava, under article 226 of the Constitution.
The High Court, by this judgment, quashed two orders dated February 4, 1964, and directed the Collector of Customs, & Central Excise, Cochin, to hear the appeals preferred by M/s. A. section Bava.
The relevant facts are as follows: M / section A. section Bava.
hereinafter referred to as the petitioner, is a firm of dealers in Tobacco.
By two orders of adjudication dated March 31, 1963, the Assistant Collector of Customs demanded the payment of duty under Rule 40 of the Central Excise and Salt Rules, 1944.
The petitioner filed appeals against these orders on or about July 4, 1963, to the Collector of Customs & Central Excise.
The petitioner made a representation on October 3, 1963, requesting that it may not be required to deposit.
the duty demanded pending appeal.
The Collector, by letter dated January 9, 1964, rejected the representation and requested the petitioner to deposit the duty within 15 days of the receipt of the letter.
On the petitioner failing to deposit the amount, the appeals were dismissed on December 4, 1964.
Thereupon, as already stated, the petitioner filed two petitions under article 226 and the petitions having been allowed, and the appellant having obtained special leave, the appeals are now before us.
The High Court allowed the petitions on the ground that the notification No. 68/63 dated May 4, 1963, issued under section 12 of the Excise and Salt Act, 1944, hereinafter referred to as the Excise Act, declaring that section 129 of the , relating to matters specified therein shall be applicable in regard to like matters in respect of the duties imposed by section 3 of the Excise Act was in excess of the powers conferred under section 12 of the Excise Act.
The High Court also rejected the argument of the Collector of Customs and Central Excise that the petitioner having invoked section 129 of the , in the appeals preferred by it by praying for the dispensation of deposit, was precluded from proceeding under article 226 of the Constitution.
The learned counsel for the appellants has raised three points before us: (1)The petitions under article 226 were not maintainable as the petitioner did not avail himself of the remedy of revision provided by section 36 'of the Excise Act.
p(N)1SCI 7(a) 84 (2)The petitioner having availed of the remedy under section 12( of the was debarred from challenging the impugned notification, dated May 4, 1963.
(3)The impugned notification applying section 129 of the Custom: Act was good.
There is no force in the first point.
First, the point was no taken in the High Court.
Secondly, it is settled that the existence of a remedy by way of revision does not bar the jurisdiction of the High Court to entertain a petition under article 226.
Moreover the petitioner had alleged that the Collector had no jurisdiction to demand the deposit or duty pending the appeals as the notification dated May 4, 1963, was bad insofar as it applied section 129 of the .
In these circumstances it was not necessary for the petitioner to have filed revisions.
There is equally no force in the second point.
If the petitioner had not applied for dispensation of the deposit of the duty, the appellants would have contended that the petitions under article 226 were not maintainable.
Moreover, as already stated, the petitions raised a question of jurisdiction.
To appreciate the third point, it is necessary to extract the relevant statutory provisions.
Section 12 of the Excise Act authorises the Central Government to apply provisions of the , now replaced by the , in the following terms: "12.
The Central Government may, by notification in the Official Gazette, declare that any of the provisions of the , relating to the levy of an exemption from customs duties, drawback of duty, such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by section 3".
The relevant part of the impugned notification dated May 4, 1963, reads as follows: " In exercise of the powers conferred by Sec. 12 of the Central Excise & Salt Act, 1944 (1 of 1944) the Central Government declares that the provisions of Section 129 of the , relating to matters specified herein shall be applicable in regard to like matters in respect of the duties imposed by Sec. 3 of the first mentioned Act. " Section 129 of the reads thus: "129.
(1) Where the decision or order appealed against relates to any duty demanded in respect of goods 85 which are not under the control of customs authorities or any penalty levied under this Act, any person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied: Provided that where in any particular case the appellate authority is of opinion that the deposit of duty demanded or penalty levied will cause undue, hardship to the appellant, it may in its discretion dispense with such deposit, either unconditionally or subject to such conditions as it may deem fit.
(2)If upon any such appeal it is decided that the whole or any portion of such duty or penalty was not leviable, the proper officer shall return to the appellant such amount of duty or penalty as was not leviable.
" It will be noticed that section 129 requires an appellant to deposit the duty or penalty levied pending an appeal.
In other words, before an appeal can be heard the appellant must deposit the duty or penalty levied.
But under section 35 of the Excise Act, a person ,Aggrieved byany decision or order has an unfettered right to appeal.
Thequestion that arises in these appeals is whether the provisions ofs.
129 of the can be said to be provisions relating to procedure. relating to appeals ' within section 12 of the Excise Act.
As we have already said, the appeals are filed under section 35 of the Excise Act.
Section 129 of the debars the hearing of them unless the duty or penalty is paid.
This, it seems to us, is not procedure relating to appeals.
This Court in Hoosein Kasam Dada (India) Ltd., vs The State of Madhya Pradesh(1) had to consider a similar provision in section 22 of the Central Provinces and Berar Sales Tax Act, 1947.
Section 22(1), as originally enacted, read thus: " 22.
(1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid." (1) [1953]987;4 S.T.C 114, 86 It was amended thus: "22.
(1) Any dealer aggrieved by an order under this Act May, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order or assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred.
S.R. Das, J., as he then was, repelled the argument of the learned) Advocate that 'the requirement as to the deposit of the amount of the assessed tax does not affect the right of appeal itself, which still remains intact, but only introduces a new matter of procedure ', and observed: "There can be no doubt that the new requirement 'touches ' the substantive right of appeal vested in the appellant.
Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right.
The right that the amended section gives is certainly less than the right which was available before.
A provision which is calcu lated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure.
Indeed the new requirement cannot be said merely to regulate the exercise of the appellant 's pre existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure.
" These observations are fully applicable in the present case.
1 Section 35 of the Excise Act gave a right of appeal, but section 129 of the whittles down the substantive right of appeal and accordingly it cannot be regarded as "procedure relating to appeals" within section 12 of the Excise Act.
The appeals accordingly fail and are dismissed with costs.
One hearing fee.
V P S Appeals dismissed.
| The Mysore Recruitment of Gazetted Probationers ' Rules 1959, make provision for direct recruitment to several cadres in the State Services on the basis of the result of a competitive examination.
Under the first part of r. 9(2), the candidates are required to indicate in their applications their preferences for the cadres they wished to join.
After the examination, the list of successful cardi dates in order of merit is published.
and, subject to certain reservations for Scheduled castes and tribes and Backward classes, the successful candidates have preferential claim in the order of merit to appointment in the cadres for which they indicated their preference.
The latter part of r. 9(2), however, reserves to the Government the right of appointing to any particular cadre any candi date whom it considers more suitable for such cadre.
In the present case an open competitive examination was '.held for recruitment to the posts of Assist ant Commissioners in the Mysore Administrative Service and of Assistant Controllers in the Mysore State Accounts Service.
Though both are Class I cadres the post of Assistant Commissioner had better prospects.
There were 20 vacancies in the posts of Assistant Commissioners.
The respondent indicated his preference for the post of Assistant Com missioner.
Though his rank was fourth, the Public Service Commission recommended that he and some others should be appointed as Assistant Controllers while those who ranked after the respondent were recommended for appointment as Assistant Commissioners.
The State Government accepted the recommendation.
The respondent thereupon filed a writ petition in the High Court asking for an order directing the State to appoint him as Assistant Commissioner.
The High Court held that the Government had under the latter part of r. 9(2) the power to decide to which post or cadre the respondent should be appointed.
but that the Government should itself make up its mind without consulting the Public Service Commission, and directed the Government to decide accordingly.
The State appealed to this Court Held: The latter part of r. 9(2) was violative of articles 14 and 16(1) of the Constitution and therefore the State Government had no power to withhold the post of Assistant Commissioner from the respondent who bad a right to be appointed to that post having regard to his rank in order of merit.
The High Court should, therefore, have directed the Government to appoint the respondent to the post.
[354B C] L/S5SCI 350 The Rules are silent on the question as to how the Government was to find out the suitability of a candidate for a particular cadre, nor do the Rules give the Public Service Commission the power to test the suitability of a candidate for a particular cadre or to recommend that he is more suitable for it.
Further, there is no provision in the Rules under which the Government can test the suitability of a candidate for any cadre after the result of the examination is published.
Therefore, the latter part of r. 9(2) gives the,Government an arbitrary power of ignoring the just claims of successful candidates, for recruitment to offices under the State, and thus, subvert '$ the basic objectives of ensuring equality of opportunity in the matter of employment by open competition.
[352H: 353B C; 354A B]
|
Appeals Nos. 322 and 25 of 1955.
Appeal from the judgment and order dated April 13, 1954, of the Nagpur High Court in Miscellaneous Civil Case No. 71 of 1956 and appeal from the judgment and order dated August 26, 1952, of the Punjab High Court in Civil Reference No. 11 of 1952.
C. K. Daphtary, Solicitor General of India, G. N. Joshi and R. H. Dhebar, for the appellant in C.A. No. 322 of 1955 and respondent in C.A. No. 25 of 1955.
R. J. Kolah, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the respondent in C.A. No. 322 of 1955.
G. section Pathak and M. L. Kapur, for the appellant in C.A. No. 25 of 1955.
May 17.
The Judgment of Bhagwati and J.L. Kapur JJ.
was delivered by Bhagwati J. S.K.
Das J. delivered a separate judgment.
BHAGWATI J.
These two appeals with certificates under Section 66A (2) of the Indian Income Tax Act (hereinafter referred to as the Act) raise a common question of law and will be governed by this common judgment.
3 The facts leading up to these appeals may be shortly stated as under.
Prior to October 18, 1944, one Rai Bahadur Narsingdas Daga (since deceased), his wife Shrimati Sodradevi (the assessee), and his three major and three minor sons constituted a joint and undivided Hindu family.
There was a severance of joint status between the erstwhile members of the said joint family on October 18, 1944, and the joint family properties were accordingly partitioned.
On such partition, the business of the Spinning and Weaving Mills and agency shop at Hinganghat fell to the share of the assessee and her three major and three minor sons.
A partnership was entered into between the assessee and her three major sons for the purpose of carrying on the business of the Spinning and Weaving Mills and the agency firm at Hinganghat.
The three minor sons of the assessee were admitted to the benefits of the partnership.
The genuineness of the partnership was not disputed.
The only question which arose for the consideration of the Tribunal was whether the income falling to the share of the three minor sons was liable to be included in the total income of the assessee.
Oil a construction of section 16 (3) (a) (ii) of the Act, the Tribunal held that the income falling to the shares of the three minor sons of the assessee was liable to be included in her total income.
The assessee thereupon applied to the Tribunal for a reference to the High Court of Judicature at Nagpur of the question of law arising out of its order under section 66 (1) of the Act and the Tribunal submitted a statement of case referring the following question of law for the determination of the High Court: " Whether on a true construction of the provisions of section 16 (3) (a) (ii) of the Indian Income tax Act, 1922, the income of the three minor sons of the assessee is liable to be included in her total income.
" The High Court heard the reference and came to the conclusion that it was not the intention of the Legislature to include in the income of the mother, the income of her minor children arising from the benefits of partnership of a firm in which the mother is a 4 partner and accordingly answered the referred question in the negative.
The High Court, however, granted the necessary certificate under section 66A (2) of the Act to the Commissioner of Income tax, Madhya Pradesh and Bhopal, and hence Civil Appeal No. 322 of 1955 before us.
One Ishwardas Sahni who died on November 7, 1946, was a partner in the firm of Messrs. Ishwardas Sahni & Bros. The firm 's accounting year ended on March 31, 1947.
The said Ishwardas Sahni left him surviving his widow Damayanti (the assessee) and two minor sons.
The assessee became a partner in the said firm which also admitted her two minor sons to the benefits of the partnership.
The Income tax authorities included the minor sons ' shares in the reconstituted firm 's profits in computing the income of the assessee on the ground that " individual " in section 16 (3) (a) (ii) of the Act meant an individual person of either sex.
The Income tax Appellate Tribunal held that the word "individual" must be taken as referring only to a male assessee wherever that occurred in section 16 (3) and directed the deletion from the assessee 's income of the shares of her minor sons in the profits of the firm.
At the instance of the Commissioner of Income tax, Delhi, the Tribunal referred to the High Court of Punjab at Simla the question of law arising out of its order under section 66 (1) of the Act together with a statement of case.
The referred question was: " Whether the word " individual " in Section 16(3) (a) (ii) of the Income Tax Act, 1922, includes also a female and whether the shares of the two minor sons of Shrimati Damayanti Sahni in the profits of the re constituted firm of Messrs. Ishwardas Sahni and Brothers should be included in the income of Shrimati Damayanti Sahni in assessing her income, profits and gains.
" The High Court heard the reference and following the decision given by the High Court of Allahabad in Shrimati Chanda Devi vs The Commissioner of Incometax (1), answered the referred question in the affirmative.
(1) 5 The assessee obtained the requisite certificate under section 66A (2) of the Act from the High Court and that is how Civil Appeal No. 25 of 1955 is before us.
The common question of law which we have to determine in these appeals is whether the word " individual " in section 16 (3) (a) (ii) of the Act includes also a female and the income of the minor sons derived from a partnership to the benefits of which they have been admitted is liable to be included in the income of the mother who is a member of that partnership.
Section 16(3) of the Act provides: " In computing the total income of any individual for the purpose of assessment, there shall be included (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly: (i)from the membership of the wife in a firm of which her husband is a partner; (ii)from the admission of the minor to the benefits of the partnership in a firm of which such individual is a partner; (iii)from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (iv)from assets transferred directly or indirectly to the minor child, not being a married daughter, by such individual otherwise than for adequate consideration; and (b)so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both." Section 3 of the Act may also be referred to in this context and it runs as follows: Section 3.
Charge of Income Tax: " Where any Central Act enacts that income tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of this Act in respect of the total income of the previous year of every individual, Hindu undivided 6 family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually.
" The same description of the assessee is also to be found in section 4A, which deals with residence in the taxable territories, section 48 dealing with refund and section 58 dealing with the charge of super tax.
The word assessee is wide enough to cover not only an "individual" but also a Hindu undivided family, company and local authority and every firm and other association of persons or the partners of the firm or the members of the association individually.
Whereas the word " individual " is narrower in its connotation being one of the units for the purposes of taxation than the word " assessee ", the word " individual " has not been defined in the Act and there is authority for the proposition that the word " individual " does not mean only a human being but is wide enough to include a group of persons forming a unit.
It has been held that the word " individual " includes a Corpora tion created by a statute, e.g., a University or a Bar Council, or the trustees of a baronetcy trust incorporated by a Baronetcy Act.
It would also include a minor or a person of unsound mind.
If this is the connotation of the word " individual " it follows that when section 16(3) talks of an "individual" it is only in a restricted sense that the word has been used.
The section only talks of " individual " capable of having a wife or minor child or both.
It therefore necessarily excludes from its purview a group of persons forming a unit or a corporation created by a statute and is confined only to human beings who in the context would be comprised within that category.
The Revenue urges before us that the word " individual " as used qua human beings is capable of including within its connotation a male as well as a female of the species and having regard to the context in which the word has been used in section 16(3), it should be construed as meaning a male of the species when used in Juxtaposition with " a wife " and as meaning both a male and a female when used in juxtaposition with "minor child" so that when section 16(3) talks of 7 such individual" in sub cls.
(ii) and (iv) of cl.
(a) thereof it refers to both a male and a female of the species so as to include within its compass not only a father of the minor child but also a mother.
The assessees, on the other hand, contend that the word " individual " used in section 16(3) is not used in its generic sense but is used in a restricted and narrower sense as connoting only human being and if it is thus restricted there is ample justification for restricting it still further to the male of the species when regarded in the context of section 16(3).
Sub clauses (i) to (iv) of cl.
(a) are specific cases where the income of a wife or a minor child of ,such individual" arising directly or indirectly from the several sources therein indicated is to be included in computing the total income of the "individual" for the purpose of assessment and the word could not have been 'Used in a different sense for the purposes of sub cls.
(i) and (iii) and sub cls.
(ii) and (iv) of cl.
The word " such individual " as used in sub cl.
(a) can only have been used in one sense and one sense only and if that is the sense in which it could have been used " such individual " should be one who is capable of having a wife or minor child or both and that individual can only be a male of the species and not a female.
The question for our determination is a very narrow one and it turns on the construction of section 16(3) of the Act.
The High Court of Madhya Pradesh plunged headlong into a discussion of the reasons which motivated the Legislature into enacting section 16 (3) by Act IV of 1937, and took into consideration the recommendations made in the Income Tax Enquiry Report, 1936 and also the statement of objects and reasons for the enactment of the same, without considering in the first instance whether there was any ambiguity in the word individual " as used therein.
It is clear that unless there is any such ambiguity it would not be open to the court to depart from the normal rule of construction which is that the intention of the Legislature should be primarily gathered from the words which are used.
It is only when the words used are ambiguous that they would stand to be examined and 8 construed in the light of surrounding circumstances and constitutional principle and practice (Per Lord Ashbourne in Nairn vs University of St. Andrews(1).
In the latter event the following observations of Lord Lindley M. R. in Thomson vs Lord Clanmorris(2) would be apposite: " In construing any statutory enactment, regard must be had not only to the words used, but to the history of the Act and the reasons which led to its being passed.
You must look at the mischief which had to be cured as well as at the cure provided" (See also the observations of Goddard C. J. in B. vs Paddington and St. Marylebone Rent Tribunal (3).
The position in law has been thus enunciated in the judgment of Das, Actg.
C.J. (as he then was) in the Bengal Immunity Company Limited vs The State of Bihar (4) : " It is a sound rule of construction of a statute firmly established in England as far back as 1584 when Heydon 's Case (5) was decided that ". . for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered: 1st.
What was the common law before the making of the Act.
, 2nd.
What was the mischief and defect for which the common law did not provide.
, 3rd.
What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth., and 4th.
The true reason of the remedy; and then the office of all judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and pro privato commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico. " (1) ; (2) , 725 (3) , 203.
(4) , 632.
(5) ; ; 76 E.R. 637, 9 In In re Mayfair Property Company (1) Lindley M. R. in 1898 found the rule " as necessary now as it was when Lord Coke reported Heydon 's case ".
In Eastman Photographic Materials Company vs Comptroller General of Patents, Designs and Trade Marks (2) Earl of Halsbury re affirmed the rule as follows: " My Lords, it appears to me that to construe the statute now in question, it is not only legitimate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the remedy.
These three things being compared, I cannot doubt the conclusion.
" The High Court of Punjab based its conclusion primarily on the use of the word "or" between the word "wife" and the words "minor child" in section 16(3)(a) of the Act and it was of opinion that these words were used disjunctively and the "individual" referred to in section 16(3) (a) of the Act may have a wife and minor child or may not have a wife but have a " minor child ".
If the individual assessed to income tax is a female that individual will have no wife but she may have a minor child and therefore section 16 (3) (a) of the Act does not imply that the individual must necessarily be a male.
The argument based on the disjunctive user of the word "wife" and the words "minor child" is capable of being summarily disposed of.
Even if the words "such individual" in section 16 (3)(a) of the Act meant only a male of the species the word "wife" and the words "minor child" could only have been used with the word "or" in between.
A male of the species may.
not necessarily have both a wife and a minor child.
He may have a wife but no "minor child".
He may have a minor child but may have no wife at the relevant period.
If therefore provision had to be made for the inclusion of the income of a wife or minor child or both in the total income of a male of the species the word "or" was absolutely necessary to be interposed between the word "wife" and the words 'minor child".
To construe the word "or" as disjunctive between the word "wife" and (1) , 35.
(2) , 576.
10 the words "minor child" does not necessarily lead to the conclusion that the words "such individual" were used for both a male and a female of the species and were necessarily inconsistent with the user of those words for the male of the species if the context otherwise lead to that conclusion.
The reasoning adopted by the learned Judges of the High Court of Punjab therefore does not clinch the matter.
We have therefore got to examine whether the use of the word "individual" in section 16(3) (a) of the Act is in any manner ambiguous.
The opening words of section 16(3) talk of "any individual" whose total income has got to be computed for the purpose of assessment and the words "such individual" used in section 16(3) (a) have reference only to that individual.
That individual must be an assessee and it is in the computation of his total income for the purpose of assessment that the income of the persons mentioned in cls.
(a) and (b) have got to be included.
Sub clause (a) refers to two distinct sets of persons bearing a relationship with "such individual", the assessee.
One is a wife and the other is a minor child.
The case of the wife is dealt with in sub cls.
(i) and (iii) and the case of a minor child is dealt in sub cls.
(ii) and (iv).
Sub clauses (i) and (iii) use the word "her husband" or "the husband" in place of the words "such individual" with reference to the income derived by the wife in the circumstances therein mentioned, though, it may be observed that the user of the words "such individual" would not have made the slightest difference to the position.
Subclauses (ii) and (iv) which deal with a "minor child" use the words "such individual" in relation to the minor child whose income under the circumstances therein mentioned has to be included in computing the total income of "such individual" for the purpose of assessment.
Whereas the words used in sub cls.
(i) and (iii) are specific and refer only to "her husband" and "the husband" as "such individual", the words used in sub cls.
(ii) and (iv) leave it indefinite as to which is meant by the words "such individual" whether a male and/or a female of the species.
If the words used in all these four sub clauses were to be 11 harmoniously read and the two cases which are mentioned in sub cls.
(i) and (iii) are not to be read differently from the cases mentioned in sub cls.
(ii) and (iv) the only way in which the words "such individual" as used in sub cls.
(ii) and (iv) could be understood would be to read them as confined to a male of the species and not including the female.
If these words "such individual" as used in sub cls.
(ii) and (iv) are thus read restricted to a male of the species, all these sub clauses would have reference only to the male of the species irrespective of the fact that the words "her husband" and "the husband" have been used in sub cls.
(i) and (iii) instead of the words "such individual".
If the words "such individual" had been used in sub cls.
(i) and (iii) as they have been used in sub cls.
(ii) and (iv) the position would have been just the same because in that event also we would have had to determine whether there was any justification for reading the words "such individual" used with reference to sub cls.
(i) and (iii) in any different sense from the same words "such individual" as used in sub cls.
(ii) and (iv).
The crux of the question, therefore, is whether the words "such individual" used in the opening part of section 16 (3) (a) are used to mean a male of the species when they are read in juxtaposition with the words "a wife" and are used to mean both a male as well as a female of the species, as the case may be, when used in juxtaposition with the words "minor child".
If that was the intention of the Legislature there was nothing to prevent it from dividing cl.
(a) into two sub clauses whether they were numbered (a) and (ai) or (a) and (b) respectively.
The Legislature could as well have enacted the provisions in the manner following: (a):so much of the income of a wife of such individual as arises directly or indirectly; (i)from the membership of the wife in a firm of which her husband (or such individual) is a partner; or (ii)from assets transferred directly or indirectly to the wife by the husband (or such individual) 12 otherwise than for adequate consideration or in connection with an agreement to live apart; (ai) or (b): so much of the income of a minor child of such individual as arises directly or indirectly ; (i)from the admission of the minor to the benefits of the partnership in a firm of which such individual is a partner; or (ii)from assets transferred directly or indirectly to the minor child, not being a married daughter, by such individual otherwise than for adequate consideration.
If these provisions had been enacted in the manner aforesaid it would have been possible to urge, as has been urged before us by the Revenue, that cl.
(a) referred only to a male of the species who only could have a wife and cl.
(ai) or (b) referred to a male and/or a female of the species.
The Legislature however chose to adopt a peculiar mode of enactment either for the purpose of economy of words or structural beauty and mixed up both these sets of provisions into the enactment of cl.
(a) of section 16(3) of the Act as it stands at present.
It rolled in both these sets of cases and used the words "a wife" or "minor child" of "such individual" raising thus the question of construction which has got to be determined by us.
"Such individual" as is talked of in section 16(3) (a) may have a wife, may have a minor child or may have both a wife and a minor child.
When "such individual" is thought of in connection with a wife, it can only be a male of the species, but when "such individual" is thought of in connection with a minor child it can be both a male as well as a female of the species, though, of course, when "such individual" is thought of in connection with "both" then again it would have to be a male of the species and certainly not a female.
Such an interpretation would lead to the interpretation of the same words "such individual" as meaning two different things in two different contexts.
They would mean one thing when used in relation to "a wife" and would mean another thing when used in relation to a " minor child".
They would be capable ' of being understood in a narrower sense when used in connection with "a wife" and would be capable of being 13 understood in a wider sense when used in connection with a "minor child".
One may as well question the elegance or the propriety of such user of the words "such individual" where the words "as the case may be" are necessarily to be imported in order to understand the true import of these words, when again they are used not in different parts of the same section but at one place only.
If one turns to section 16 (3) (b) the words used therein are "transferred. . by "such individual" for the benefit of his wife or a minor child or both".
There is the indefinite article "a" used before the words "minor child".
If that indefinite article "a" had not been used, the expression would have run "for the benefit of his wife or minor child or both" thus leaving no doubt at all that in cl.
(b) at least the words "such individual" meant only a male of the species.
It is urged however that the use of the indefinite article "a" shows that the words "his wife" and "minor child" mid "both" have been used disjunctively and should be read in the same manner as in section 16(3)(a) of the Act.
The words " his wife " would appropriately go with a male of the species but the words "a minor child" would appropriately go with a male as well as a female of the species, though the word "both" could only be appropriate in relation to a male of the species and not a female who can have a minor child but not both a wife and a minor child.
The same want of elegance or propriety can be predicated of this expression also and the use of such expressions both in section 16 (3)(a) and section 16 (3)(b) raise questions of construction whether what was meant by the Legislature was only a male of the species in both these contexts or a male and/or female of the species, as the case may be, applying one or the other in accordance with the circumstances attendant, upon the computation of the total income of " any individual " for the purpose of assessment.
We are of opinion that the very manner in which all the four sub clauses have been grouped together in section 16 (3) (a) and the manner in which the expression "for the benefit of his wife, a minor child or both" is used in section 16 (3) (b) renders the words "any individual" 14 or " such individual " ambiguous.
There is no knowing with certainty as to whether the Legislature meant to enact these provisions with reference only to a male of the species using the words "any individual" or " such individual " in the narrower sense of the term indicated above or intended to include within the connotation of the words "any individual" or " such individual " also a female of the species, wherever appropriate which would of course only be possible in the cases contemplated in sub cls.
(ii) and (iv) of section 16 (3)(a) and in one of the three cases contemplated in section 16 (3)(b).
The Legislature certainly was guilty of using, an ambiguous term in enacting section 16 (3) of the Act as it did.
In order to resolve this ambiguity therefore we must of necessity have resort to the state of the law before the enactment of the provisions; the mischief and defect for which the law did not provide; the remedy which the legislature resolved and appointed to cure the defect and; the true reason of the remedy within the meaning of the authorities referred to above.
Before the enactment of section 16 (3) of the Act by the Indian Income tax (Amendment) Act, 1937 (IV of 1937), there was no provision at all for the inclusion of the income of a wife or a minor child in the computation of the total income of " any individual " for the purpose of assessment.
Whatever may have been the income of a wife from her membership in a firm of which her husband was a partner or from assets transferred directly or indirectly to her by her husband otherwise than for adequate consideration or in connection with an agreement to live apart, her income was not included in the income of her husband in computing the total income of the husband for the purpose of assessment.
Similar was the position in the case of income derived by a minor child from the admission of the minor to the benefits of partnership in a firm of which "such individual" was a partner or from assets transferred directly or indirectly to the minor child, not being a married daughter, by "such individual" otherwise than for adequate consideration.
The income derived by such minor child could not be added to the 15 income of the father for the purpose of assessment.
The income derived by the wife or minor child could only be included in computing his or its total income for the purposes of assessment and neither the husband nor the father could be made liable for income tax in respect of such income, whatever may be the reason which actuated them in providing such income for the wife or the minor child.
The position was pregnant with difficulties for the Revenue.
There were no doubt genuine cases where a wife or the minor child as the case may be, was provided with such income on bona fide severance of joint status between the erstwhile members of a joint and undivided Hindu family and where after such partition the adult member of the family entered into a bona fide partnership admitting the minors to the benefits of the partnership.
There were, on the other hand, innumerable cases where such severance of joint status was resorted to mainly with a view to evade a higher incidence of income tax.
There were also cases where husbands and fathers provided shares for their wives and minor sons and thus evaded payment of income tax in regard to their shares in the profits of such partnerships.
This evil was so rampant that the Income Tax Enquiry Report, 1936, recognised the same and made the following recommendations for remedying the situation (vide pp.
19 & 20 of the Report).
CHAPTER III Assessees Section I Individuals.
(a) Wife 's Income.
Our attention has been drawn to the extent to which taxation is avoided by nominal partnerships between husband and wife and minor children.
In some parts of the country, avoidance of taxation by this means has attained very serious dimensions.
The obvious remedy for this state of affairs so far as husband and wife are concerned is the aggregation for assessment of their incomes, but such a course would involve aggregation in a quite different class of cases i.e., where the wife 's income arises from sources unconnected with the husband. . . . . . . . . . .
16 We recommend, therefore, that the incomes of a wife should be deemed to be, for income tax purposes, the income of her husband, but that where the income of the wife is derived from her personal exertions and is unconnected with any business of her husband, her income from her personal exertions upto a certain limit, say Rs. 500, should not be so included .
(b) Income of Minor Children.
There is also a growing and serious tendency to avoid taxation by the admission of minor children to the benefits of partnership in the father 's business.
Moreover, the admission is, as a rule, merely nominal, but being supported by entries in the firm 's books, the Income Tax Officer is rarely in a position to prove that the alleged participation in the benefits of partnership is unreal. . . . . .
We suggest that the income of a minor should be deemed to be the income of the father (i) if it arises from the benefits of partnership in a business in which the father is a partner or (ii) if, being the income of a minor other than a married daughter, it is derived from assets transferred directly or indirectly to the minor by his or her father or mother, (iii) if it is derived from assets apportioned to him in the partition of a Hindu Undivided Family.
It may be noted that the recommendations of the Enquiry Committee even in the cases hereinbefore mentioned went to the length of including the income of the wife or the minor child as the case may be in the income of the husband or the father in the computation of his total income for the purpose of assessment.
The mischief which the Enquiry Report sought to remedy by its recommendations was one which was the result of husbands entering into nominal partner ships between themselves and their wives and fathers admitting their minor children to the benefits of such partnerships.
The mischief, if any, resulting from the mothers admitting their minor children to the benefits of partnerships in which they were members was farthest from the thoughts of the Enquiry Committee and was nowhere sought to be remedied.
Having 17 regard to the circumstances which prevailed at the time when the Enquiry Committee made its report, the only mischief which they sought to remedy by their recommendations was the one resulting from the male assessees indulging in such tactics for the evasion of income tax by creating nominal partnerships between themselves and their wives on the one hand and their minor children on the other.
These recommendations were duly considered by the Government and as a result thereof Act IV of 1937 was enacted introducing a. 16(3) in the Act.
What was intended to be done by the Legislature in enacting this amendment may be gleaned to a certain extent from the statement of objects and reasons appended to the Bill which eventually became the amending Act.
Though it is not legitimate to refer to the statement of objects and reasons as an aid to the construction or for ascertaining the meaning of any particular word used in the Act or Statute (See Aswani Kumar Ghose vs Arabinda Bose (1), nevertheless, this Court in The State of West Bengal vs Subodh Gopal Bose(2) referred to the same "for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill to introduce the same and the extent and urgency of evil which he sought to remedy.
" The statement of objects and reasons which led to the passing of Act IV of 1937 ran as follows: " Reference is made in sections I and 4 of Chapter III of the Income Tax Enquiry Report, 1936, to the practice of avoiding taxation by means of nominal partnerships between husband and wife or parent and minor child or by the nominal transfer of assets to a wife or minor child (or to an " Association " consisting of husband and wife) when there is no substantial separation of the interests of the assessee and the wife or child.
These practices are reported to have become very widespread already, with considerable detriment to the revenue, and there is little doubt that if they are not checked there will be progressive deterioration.
The proposals in the Report regarding the aggregation (1) ; (2) ; , 628.
3 18 of the incomes of husband and wife go beyond the immediate necessities of the case and to that extent their adoption would involve the admission of a new principle which the Government of India do not desire to establish in advance of the general public discussion of the Report which has been arranged; and the present Bill has been so drafted as to deal only with the abuses to which I have referred.
" It is clear from the above extracts that the evil which was sought to be remedied was the one resulting from the widespread practice of husbands entering into nominal partnerships with their wives and fathers admitting their minor children to the benefits of the partnerships of which they were members.
This evil was sought to be remedied by the enactment of section 16(3) in the Act.
If this background of the enactment of section 16(3) is borne in mind, there is no room for any doubt that howsoever that mischief was sought to be remedied by the amending Act, the only intention of the Legislature in doing so was to include the income derived by the wife or a minor child, in the computation of the total income of the male assessee, the husband or the father, as the case may be, for the purpose of assessment.
If that was the position, howsoever wide the words "any individual" or "such individual" as used in section 16(3) and section 16(3)(a) may appear be so as to include within their connotation the male as well as the female of the species taken by the themselves, these words in the context could only have been meant as restricted to the male and not including the female of the species.
If these words are used as referring only to the male of the species the whole of the section 16(3)(a) can be read harmoniously in the manner above comprehending within its scope all the four cases specified in sub cls.
(i) to (iv) thereof and so also section 16(3)(b).We are, therefore, of opinion that the words" any individual" and "such individual" occurring in section 16(3) and section 16(3)(a) of the Act are restricted in their connotation to mean only the male of the species, and do not include the female of the species, even though by a disjunctive reading of the expression "the wife" or "a minor child" of "such individual" in section 16(3)(a) 19 and the expression "by such individual" for the benefit of his wife or a minor child or both" in section 16(3)(b), it may be possible in the particular instances of the mothers being connected with the minor children in the manner suggested by the Revenue to include the mothers also within the connotation of these words.
Such inclusion which involves different interpretations of the words "any individual" or "such individual" in the different contexts could never have been intended by the Legislature and would in any event involve the addition of the words "as the case may be" which addition is not normally permissible in the interpretation of a statute.
We shall now refer to the decisions of the several High Courts in India bearing on the construction of section 16(3) of the Act.
The earliest decision is that of the High Court of Allahabad in Shrimati Chanda Devi vs Commissioner of Income tax, U.P. (1).
That decision emphasised that the sub cl.
(i) of cl.
(a) of sub section
(3) of section 16 made it clear that where the husband was a partner the income of the wife, by reason of her being a member of the firm, was to be computed in the income of the husband, and if the Legislature had intended that the word "individual" in sub cl.
(ii) should mean only the father and not the mother there was no reason why they should not have used similar language as in sub cl.
(i) and said "from the admission of the minor to the benefits of partnership in a firm in which his father is a partner.
" Why the Legislature used a particular expression and why it did not use any expression which would have been clearer and better expressive of its intention is really difficult to fathom.
We may as well wonder why the Legislature did not use the words "such individual" in sub cls.
(i) and (iii), of section 16(3)(a) in place of the words "her husband" or "the husband" when the intention of the Legislature would have been equally carried out by the use of those words.
It may be that the draftsman considered the use of the words "her husband" or "the husband" when he used the same in juxtaposition with the words "a wife" as appropriate or more elegant and therefore ignored the obvious user of the words "such (1) 20 individual" which would have been equally appropriate in that context.
It would have been better expressive of the intention of the Legislature, as we have already divined above (viz., to use the words "any individual" and "such individual" in section 16(3) and 16(3)(a) respectively in the restricted meaning of the male of the species), to have used the words "the father" in place of the words "such individual" in sub cls.
(ii) and (iv) of section 16(3)(a).
It is however difficult to fathom the mind of the draftsman when he used one particular expression in preference to the other and not much help can be derived from the ratio adopted by the learned Judges of the High Court of Allahabad in the decision just referred to.
It is also significant to observe that the learned Judges considered that the language of the section does not create any real difficulty and therefore did not think it worth their while to refer to the Income Tax Enquiry Report, 1936, and the passage therefrom which we have quoted above.
Suffice it to say that we do not concur with the reasoning adopted by the learned Judges of the High Court of Allahabad and are of the opinion that the decision just referred to in so far as it militates against the reasoning adopted by us herein is incorrect.
The later case of Musta Quima Begum, In re(1) decided by the same High Court merely follows the judgment in Shrimati Chanda Devi 's case (2) and is subject to the same criticism as above.
The decision of the High Court of Punjab in Shrimati Damayanti Sahni vs Commissioner of Incometax, Delhi (3) is the one under appeal before us in Civil Appeal No. 25 of 1955.
The learned Judges there followed the decision of the High Court of Allahabad in Shrimati Chanda Devi 's case (2) and answered the referred question in the affirmative.
It follows from what we have said above that that decision is also incorrect and the referred question ought to have been answered by them in the negative.
The latest decision in this context is that of the High Court of Madhya Pradesh in commissioner of (1) (2) (3) 21 Income tax,Madhya Pradesh and Bhopal vs Smt.
Sodra Devi (1) which is the subject matter of Civil Appeal No. 322 of 1955 before us.
The High Court there observed that the word "individual" as used in section 16(3) of the Act was ambiguous and referred to the above quoted passage from the Inquiry Committee 's Report, 1936, as also the statement of objects and reasons and came to the conclusion that the word "individual" was restricted to the male of the species and it was not the intention of the Legislature to impose additional tax on a mother assessee by including in her income the income of her minor children arising from the benefits of partnership of a firm in which the mother and the minors were partners.
We are of opinion that the decision reached by the learned judges of the High Court of Madhya Pradesh in that case was correct and the referred question was rightly answered by them in the negative.
The result therefore is that Civil Appeal No. 322 of 1955 will be dismissed with costs, and Civil Appeal No. 25 of 1955 will be allowed with costs, the referred question being answered in the negative.
section K. DAS J.
The substantial question which falls for decision in these two appeals is if the word "individual" in sub section
(3) of section 16 of the Indian Income tax Act, hereinafter referred to as the Act, includes also a female, and therefore the income of the minor sons which arises directly or indirectly from their admission to the benefits of partnership in a firm of which their mother is a member is to be included in computing the total income of the mother within the meaning of sub section
(3), cl.
(a), sub cl.
(ii), of section 16.
The question is really one of pure construction, that is, construction of sub section
(3) of section 16 of the Act.
Nothing turns upon the facts of the case, and as the material facts have been clearly set out in the judgment just read by my learned brother Bhagwati J.
I do not think that any useful purpose will be served by restating them.
Therefore, I proceed at once to a consideration of sub section
(3) of section 16 of the Act and state at the very (1) 22 outset that, to my great regret, I have come to a conclusion different from that of my learned brethren.
I shall presently read the sub section; but before I do so, it will help the exposition which follows if I explain in a few words the standpoint from which I have approached the question.
Speaking generally, the expression "construction" includes two things: first, the meaning of the words; and, secondly, their legal effect or the effect which is to be given to them by the courts.
As in the case of documents, so in the case of statutes also, they should be construed in a manner which carries out the intention of the Legislature.
It may be reasonably asked how is the intention of the Legislature to be discovered? The answer is that the intention must first be gathered from the words of the statute itself.
If the words are unambiguous or plain, they will indicate the intention with which the statute was passed and the object to be attained by it; in other words, the intention is best declared by the words themselves, and the words of a statute are to be interpreted as bearing their ordinary, natural meaning unless the context requires a different meaning to be given to them.
If, however, the words are ambiguous, the policy of the legislation and the scope and object of the statute, where these can be discovered, will show the intention, which may further be brought to light by applying the various well settled rules and presumptions of construction.
One such rule is that the statute must be read as a whole and the construction made of all the parts together.
I am emphasising this aspect of the question to guard against any possible suggestion that I have started with some a priori idea of the meaning or intention behind subs.
(3) of section 16 of the Act and have tried by construction to work that idea into the words of the sub section.
I have been conscious all through of the warning given by Lord Halsbury, in the following observations in Leader vs Duffey (1): " All these refinements and nice distinctions of words appear to me to be inconsistent with the modern view, which is I think in accordance with reason and (i) , 301.
23 common sense, that, whatever the instrument, it must receive a construction according to the plain meaning of the words and sentences therein contained.
But I agree that you must look at the whole instrument, and, inasmuch as there may be inaccuracy and inconsistency, you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it.
But it appears to me to be arguing in a vicious circle to begin by assuming an intention apart from the language of the instrument itself, and having made that fallacious assumption to bend the language in favour of the presumption so made." Keeping that warning in mind, I shall first take the words of sub section
(3) of section 16 and see if they are plain or unambiguous.
Alternatively, I shall also consider the proper construction of sub section
(3) of section 16 on the assumption that the word "individual" used in the sub section is ambiguous and should therefore be interpreted consistently with the principles laid down in the locus classicus on the subject, namely, the celebrated Heydon 's case (1) reported by Lord Coke and decided by the Barons of the Exchequer in the sixteenth century.
I shall now read sub section
(3) of section 16 of the Act: " 16.
(3) In computing the total income of any individual for the purpose of assessment, there shall be included (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly (i) from the membership of the wife in a firm of which her husband is a partner; (ii)from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner; (iii)from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (1) ; , 24 (iv)from assets transferred directly or indirectly to the minor child, not being a married daughter, by such individual otherwise than for adequate consideration ; and (b) so much of the income of any person or association of persons as arises from asset,,; transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both.
" I have already stated that the sub section must be read as a whole and in the context of the other provisions of the Act, particularly section 16 of which it is a part; it is only then that we shall arrive at its correct meaning consistent with the other provisions of the Act.
The word "individual" used in sub section
(3) of section 16 occurs in several other provisions of the Act, e.g., section 3, section 4A, section 48 and section 55.
It is necessary to quote section 3 in extensor That section is in these terms: " Where any Central Act enacts that income tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of this Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually.
" It is not disputed before us that the word "individual " occurring in sections 3, 4A, 48 and 55 means either a male or a female; nor has it been disputed before us that, according to the ordinary accepted meaning of the word, it means a single human being as opposed to "society," "family" etc., and that a single human being may be of either sex.
Learned counsel appearing for the assessees in the two appeals have pointed out, however, that the word "individual" has not the same width of meaning in sub section
(3) of section 16 as it has in the other provisions; for example, in section 3, the word "individual" has been held to include a Corporation created by a statute, e.g., a University or a Bar 25 Council or the trustees of a baronetcy trust incorporated by a Baronetcy Act etc; whereas sub section
(3) of section 16 makes it quite clear that the word " individual " there does not include a Corporation created by a statute.
This indeed is correct.
But the question before us is whether, in its context, sub section
(3) of section 16 imposes a further restriction on the word "individual", confining it to a male individual only.
The critical question before us is whether such a further restriction is imposed on the word "individual" either by the express words used in the sub section or by necessary implication from the clauses and sub clauses thereof.
It is said to be a presumption in construction that the same words are used in the same meaning in the same statute and particularly in the same section or sub section.
The presumption is, however, of the slightest, and there are many instances where the application of this rule or presumption is impossible.
The same words may often receive a different interpretation in different parts of the same Act, for words used with reference to one set of circumstances "may convey an intention quite different from what the selfsame set of words used with reference to another set of circumstances would or might have produced." (Edinburgh Street Tramways Co. vs Torbain (1), per Lord Blackburn).
The classic example of the same word having a somewhat different meaning in the same section is provided by Offences against the Person Act, 1861, section 57 of which deals with bigamy and enacts: "Whosoever, being married, shall marry any other person during the life of the former husband or wife. .
Shall be guilty of felony.
" It is obvious that the word "marry" is used in two different senses in the same section.
There is another classic example in article 31 of our Constitution where the word "law" in el.
(3) of the said Article has been used in different senses.
This is referred to in a decision of this Court in The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga (2).
(1) , 68.
(2) , 908, 909.
26 The word "individual" is not defined in the Act, but the meaning of the word in sections 3, 4A, 48 and 55 is reasonably clear.
The word "assessee" is defined in cl.
(2) of section 2 of the Act, as meaning a person by whom income tax or any other sum of money (which would include super tax, penalty or interest) is payable under the Act.
It also includes every person in respect of whom any proceeding under the Act is taken for the assessment (a) of his income, (b) of his loss or (c) of the amount of refund due to him.
Thus the definition covers two categories: first, persons by whom any tax, penalty or interest is payable under the Act, whether any proceeding under the Act has been actually taken against them or not; and secondly, persons against whom any of the proceedings specified in this clause has been taken, whether he is or is not liable to pay any tax, penalty or interest. 'A person ', under section 3(42) of the General Clauses Act, includes any company or association or.
body of individuals, whether incorporated or not; and under cl.
(9) of the section 'a person ' also includes a Hindu undivided family and a local authority.
Thus, we have six categories of assessees referred to in section 3 (a) the individual, (b) the Hindu undivided family, (c) the local authority, (d) the company, (e) the firm and (f) other association of persons.
Read in the context of section 3 of the Act, the word "individual" means, in the other sections, one of the six categories of assessees referred to in section 3.
The same category is also referred to in sub section
(3) of section 16, subject only to this restriction that in the context of the sub section, the word "individual" does not include a Corporation etc.
We now turn to the critical question before us is there a further restriction in the sub section confining the word "individual" to a male individual only? My answer is that there is nothing in the context of section 16 or of the sub section which confines the word "individual" to a male individual only.
Section 16 deals with the computation of total income and provides what sums are to be included or excluded in determining the total income.
The effect of including exempted income in the assessee 's total income is 27 mainly two fold: first, the tax payable by the assessee is determined with reference to the total income and therefore exempted income which is included in the total income would affect the rate of tax applicable to the chargeable portion of the total income; secondly, in several cases reliefs are given or calculations made with reference to the total income.
Sub section (3) of section 16 appears ex facie to be directed towards preventing an individual 's attempt to avoid or reduce the incidence of tax by transferring the assets to his wife or a minor child or admitting the wife as a partner or admitting a minor child to the benefits of partnership in a firm in which such individual is a partner.
I agree that the sub section creates, to some extent, an artificial liability to tax by including the income of A in the income of B, and must therefore be strictly construed; that merely means that the words of the subsection must be given their strictly natural meaning, and there should be no attempt at artificial stretching one way or the other.
What then is the proper construction of the subsection ? It naturally falls into three interconnected parts.
The first part controls both cl.
(a) and cl.
(b), and states that "in computing the total income of any individual for the purpose of assessment, there shall be included so much of the income etc.
" as is specified in cls.
(a) and (b).
The second part is cl.
( 'a) itself which starts with an opening sentence that "so much of the income of a wife or minor child of such individual as arises directly or indirectly" from four specific cases shall be included in the total income of the individual, and then the cases are enumerated in four sub clauses numbered (i), (ii), (iii) and (iv).
Then, comes the third part which deals with cl.
I have divided the sub section into its three natural parts, but I must make it clear that all the three parts must be construed together as they are interconnected and interdependent.
In the first part, there is no difficulty whatsoever, in my opinion, in giving the word "individual" its natural meaning, that is, that the word means either a male or a female.
The opening sentence of cl.
(a) contains the expression "so much of the income of a 28 wife or minor child of such individual".
Does the use of the word "individual" in the opening sentence of cl.
(a) give rise to any ambiguity or difficulty? I do not think that it does.
It is quite obvious that a female individual cannot have a wife, but she can have a minor child whereas a male individual can have a wife, minor child or both.
It has been argued that el.
(a) must be interpreted noscitur a sociis, and as the expression "a wife or minor child" is capable of meaning only when used in connection with a male individual, the whole sub section must be confined to a male individual.
I am unable to accede to this argument.
The collocation or association of the words "a wife or minor child" in connection with the words "such individual" in the opening sentence of cl.
(a) does not necessarily mean that the individual contemplated is a male individual only.
I agree that the word "or" in between the words "wife" and "minor child" must be there, even when the individual talked of is a male only; in other words, the use of the dis junctive word "or" does not necessarily clinch the issue.
But I do not see any real difficulty in reading the opening sentence of el.
(a) distributively so as to mean a male individual when the wife is being talked of and either a male or a female individual when a minor child is talked of I do not think that such a construction does any violence to the words used; on the contrary, in my opinion, it gives effect to the plain meaning of the word "individual".
Turning now to the sub clauses numbered (i) to (iv), there can be no doubt from the phraseology used that sub cls.
(i) and (iii) refer only to a male individual, because a female individual cannot have a wife.
It is worthy of note, however and this is very important that sub cls.
(ii) and (iv) make it equally clear that they are not confined to the male individual only in the manner in which sub cls.
(i) and (iii) are so confined.
In sub cls.
(i) and (iii) the word "individual" is not used, and the words used are "her husband" and "the husband".
In sub cls.
(ii) and (iv) the words used are "such individual".
Why did the Legislature make this difference in phraseology? If the intention was to 29 confine the entire sub section to a male individual only, nothing could have been easier than to qualify the word "individual" by the adjective "male" in the first part of the sub section which controls both clauses (a) and (b); alternatively, in sub cls.
(ii) and (iv) it would have been easy to use the word "father" instead of "such individual".
It is true that a change of language is some, though possibly slight, indication of a change of intention.
I am unable, however, to accept the argument advanced before us that the phraseology employed in sub cls.
(i) and (iii) different as it is from that employed in sub cls.
(ii) and (iv) can be accounted for on the ground of elegance or felicity of expression.
It seems to me that if the intention was to confine the word "individual" to a male individual only, elegance and clarity both required that the word "individual" should be qualified by the adjective "male", and the word "father" should have been used in sub cls.
(ii) and (iv).
I am aware that a draftsman often uses different words merely to avoid repetition.
I am also aware that it is dangerous to suppose that the Legislature foresees every possible result that may ensue from the "unguarded use of a single word, or that the language used in statutes is so precisely accurate that you can pick out. this and that expression and skilfully, piecing them together, lay a safe foundation for some remote inference." (as per Lord Loreburn, L.C., in Nairn vs University of St. Andrews and Others (1).
But what is noteworthy in the present case is that the difference in phraseology between sub cls.
(i) and (iii) on the one side and sub cls.
(ii) and (iv) on the other, is so striking that the conclusion appears to me to be reasonably plain; it is not really a case of the unguarded use of a single word or picking out an expression here or picking out another expression there in order to piece out some remote inference.
The striking difference in phraseology hits, as it were, one in the face when one reads the four sub clauses.
It seems to me that the meaning, is very clear.
In the opening part of el.
(a), the word "individual" is used to mean a male or a female; two of the sub clauses, however, are confined (1) ; , 161. 30 to the male only and therefore the word "husband" is used in juxtaposition to the word "wife".
In the other two sub clauses, however, the word "individual " is used in order to make it clear that they refer either to a male or to a female individual.
I do not see any incongruity or disharmony in the enumeration of the four sub clauses, nor do I appreciate the argument urged before us that the word " individual ", on the construction adopted by me, has a different meaning in two of the four sub clauses of cl.
The word "individual" has and retains the same meaning, namely a male or a female, all throughout the subsection.
All that happens is that in two of the subclauses of cl.
(a), when the Legislature intends that they should be confined to a male individual only, the word "husband" is used to make the intention clear.
On the same reasoning, when the Legislature intends in two other sub clauses that they should apply to either a male or a female, the word " individual " is used to include either of them.
I am unable to accept the contention that such an interpretation offends against the rule of harmonious construction.
So far as el.
(b) of the sub section is concerned, the word " individual " is again used and that again relates to a male or a female.
The last part of the clause reads "by such individual for the benefit of his wife or a minor child or both.
" Here again the sentence has to be read distributively that is, when the wife is talked of, the individual can only be a male; when a minor child is talked of, the individual can be a male or a female; when both wife and minor child are talked of, the individual can again be a male only.
There was some argument before us with regard to the use of the indefinite article "a" before the words "minor child" and it was submitted by the learned Solicitor General that if the Legislature intended to confine cl.
(b) to a male individual only, it could have easily dropped the indefinite article and used the word "his" before the words "minor child".
Personally, I do not attach much significance to the use of the indefinite article "a".
It is to be noted that no such indefinite article is used before the words "minor child" in the opening 31 sentence of cl.
(a); but I do not see any compelling reasons why the natural meaning of the word " individual " should not be given to it in el.
(a) and cl.
(b) of the sub section.
Such meaning can be easily given to both the clauses if they are read distributively, and such reading does not, in my opinion, do any violence to the language used.
On a plain reading of the sub section, I have come to the conclusion that there really is no ambiguity and the word "individual" has been used in the sub section in its ordinary accepted connotation, that is, either a male or a female individual; two of the sub clauses of cl.
(a) are no doubt confined to a male individual and that has been made clear by the use of the words " wife" and "husband", instead of the words "such individual ".
Assuming, however, that there is some ambiguity in the sub section by reason of (1) the use of the phraseology in sub cls.
(i) and (iii) of cl.
(a), and (2) of the opening sentence of cl.
(a) which controls all the four sub clauses of that clause, what then is the position ? The four principles laid down in Heydon 's case have been thus summarised: " That for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered: (1) what was the common law before the passing of the Act; (2) what was the mischief and defect for which the common law did not provide; (3) what remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth; (4) the true reason of the remedy.
And then the office all the Judges is always to make such construction as shall suppress the mischief and advance the remedy, and to suppress subtle inventions and evasions for the continuance of the mischief and pro privato commedo, and to add force and life to the cure and remedy according to the true intent of the makers of the Act pro bono publico.
" Let me now apply these principles in the construction of sub section
(3) of section 16 of the Act, 32 The subjection was introduced in 1937, and before the enactment of the sub section, there was no provision for the inclusion of the income of a wife or a, minor child in the computation of the total income of an individual.
The Income Tax Enquiry Report, 1936, referred to the widespread evil of the evasion of tax by the severance of the joint status amongst members of a joint and undivided Hindu family.
The Report said : " Our attention has been drawn to the extent to which taxation is avoided by nominal partnerships between husband and wife and minor children.
In some parts of the country, avoidance of taxation by this means has attained very serious dimensions.
The obvious remedy for this state of affairs so far as husband and wife are concerned is the aggregation for assessment of their incomes, but such a course would involve aggregation in a quite different class of case, i.e., where the wife 's income arises from sources quite unconnected with the husband We recommend, therefore, that the incomes of a wife should be deemed to be, for Income tax purposes, the income of her husband, but that where the income of the wife is derived from her personal exertions and is unconnected with any business of her husband, her income from her personal exertions up to a certain limit, say Rs. 500, should not be so included. . . . . . (b)Income of minor children.
There is also a growing and serious tendency to avoid taxation by the admission of minor children to the benefits of partnership in the father 's business.
Moreover, the admission is, as a rule, merely nominal, but being supported by entries in the firm 's books, the Income tax Officer is rarely in a position to prove that the alleged participation in the benefits of partnership is unreal.
. . . . . . . We suggest that the income of a minor should be deemed to be the income of the father (i) if it arises 33 from the benefits of partnership in a business in which the father is a partner or (ii) if, being the income of a minor other than a married daughter, it is derived from assets transferred directly or indirectly to the minor by his or her father or mother, (iii) if it is derived from assets apportioned to him in the partition of a Hindu Undivided Family.
" It is clear, however, that the report is of very little help in the construction of the sub section, because the Legislature did not accept in full the recommendations made in the Report.
Two of the rules in Heydon 's case lay down (1) that we must find what was the mischief or defect for which the earlier law did not provide and (2) what remedy the Parliament has resolved and appointed to cure the mischief or defect.
In the case under our consideration, the interpretation which has been put by me on sub section
(3) of section 16 does not militate against any of the aforesaid rules of Heydon 's case.
The interpretation put by me undoubtedly remedies the mischief or defect for which the earlier law did not provide.
The only serious criticism made by learned counsel for the assessees against that interpretation Is that the remedy not merely cures the mischief for which the earlier law did not provide, but it goes a little further and attacks the evil even when the evil is committed by a female individual, though the Income Tax Enquiry Report (except in one part) did not in specific terms refer to such an evil committed by a female individual.
I can see nothing in the rules laid down in ' Heydon 's case which militates against the view taken by me.
There is no presumption that, while remedying an evil, the Legislature may not cast its net very wide so as to remedy the evil in all its aspects.
Let me again refer to sub cls.
(i) and (ii) of cl.
(a) of sub section
(3) of section 16 of the Act.
Those two sub clauses are absolute and unqualified in terms and not subject to any exception.
If the wife owns and manages a business and she takes her husband into partnership with her in the business, the result of the partnership would be that the wife 's income from the business would be no longer taxable in her hands but would be included in the total income of her 5 34 husband under the sub section, even though the husband may be a dormant partner.
This clearly shows that the Legislature was not confining itself to the recommendations made in the Income Tax Enquiry Report.
What is to be included in the total income of an individual under cl.
(a) is the income of a wife or minor child arising directly or indirectly "from the membership of the wife" in the firm or "from the admission of the minor to the benefits of partnership" in the firm of which the individual is a partner.
The clause covers the share of the profits of the firm received by the wife in her capacity as a partner or by the minor child in his or her capacity as one admitted to the benefits of partnership.
But the income received from the firm by the wife or the minor child under any other contract with the firm or in any other capacity, does not fall within the clause and is not included in the husband 's or parent 's total income.
From what is stated above, it is clear that the Legislature did not confine itself strictly or solely to the recommendations made by the Income Tax Enquiry Committee but provided for all such aspects of the evil or mischief as it thought fit to remedy by the Indian Income tax (Amendment) Act, 1937 (Act IV of 1937).
In these circumstances, I do not think that the recommendations made by the Income tax Enquiry Committee can be relied upon to restrict the meaning of the word "individual" used in sub section
(3) of section 16 of the Act.
, As to the Statement of Objects and Reasons which led to the passing of Act IV of 1 937 and which has been set out in the judgment of the High Court of Madhya Pradesh, I do not think that the Statement can be referred to as an aid to construction for ascertaining the meaning of the word "individual" used in the sub section.
Even if it is referred to "for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill to introduce the same and the extent and urgency of the evil which he sought to remedy", the use of the word "Parent" in the Statement of Objects and Reasons shows that the evil was not confined to the male individual only, and the sponsor of the Bill was aware of 35 it.
The Statement reads: "Sec.
16(3) was thus designed to bring within the ambit of taxation incomes of wives and minor children as income of husband or parent, which otherwise would escape the whole burden of taxation.
" I emphasise the use of the word "parent" which would show that the evil contemplated was an evil which was not confined to the "father" only but included the mother as well.
My conclusion therefore is that there is nothing in the policy of the legislation and the scope and object of the statute which compels one to cut down the natural meaning of the word "individual" used in sub section
(3) of section 16 of the Act so as to confine it to a male individual alone.
I now turn to such authorities as have been cited before us.
There has been a difference of opinion in the High Courts with regard to the interpretation of sub section
(3) of section 16 of the Act.
In Shrimati Chanda Devi vs Commissioner of Income tax (1), the Allahabad High Court has taken the view that the minor 's income which arises directly or indirectly from the admission of the minor to the benefits of partnership in a firm of which the, mother is a partner, can be included in the mother 's assessable income under section 16(3)(a)(ii) of the Act.
The Allahabad High Court proceeded on the footing that the language of the sub section.
did not create any real difficulty and it was not open to it to take the help of the Income tax Enquiry Report.
I have considered this case from both the points of view, and have arrived at the same conclusion at which the Allahabad High Court arrived.
It is not necessary to mention the other reasons given by the Allahabad High Court, because they have already been stated by me in an earlier part of this judgment.
This decision of the Allahabad High Court was followed by the Punjab High Court in Commissioner of Income tax, Delhi vs Shrimati Damayanti Sahni(2), which has given rise to one of the two appeals before us.
The Punjab High Court gave no additional reason except to state that in cl.
(a) of sub section
(3) of section 16, the word "wife" and the (1) (2) 36 words "minor child" were used disjunctively.
I have already stated that the use of the disjunctive "or" is not decisive; but there is no real difficulty in reading clauses (a) and (b) distributively.
The Madhya Pradesh High Court took a different view in Sahodradevi N. Daga vs Commissioner of Income tax (1), which has given rise to the other appeal before us.
In my view, the learned Judges in that case did not attach sufficient importance to sub cls.
(ii) and (iv) of cl.
If I may say so with great respect, they confined their attention primarily to sub cls.
(i) and (iii) of el.
(a) and to cl.
(b), and from those provisions they inferred that the intention was to confine the word "individual" to a male individual.
I venture to think that all the three parts of the sub section, including the four sub clauses of cl.
(a), must be read together in order to understand the true meaning and effect of the sub section.
The learned Judges further seemed to think that the use of the words "such individual" in sub cl.
(ii) of el.
(a) was due to inadvertence.
I am unable to agree.
I have already pointed out that the phraseology in sub cls.
(i) and (iii) of cl.
(a) is so strikingly different from the phraseology used in sub cls.
(ii) and (iv) that only one and one reasonable conclusion can be drawn, namely, that the word "individual" has been used in its accepted connotation, and when the Legislature wanted to confine the operation of a sub clause to the male individual only, it used the word "wife" and "husband"; where, however, the Legislature wanted to refer to either a male or a female, it used the word "individual" which, in its ordinary connotation, means either a male or a female.
For the reasons given above, I agree with the view expressed by the Allahabad and the Punjab High Courts and do not accept the interpretation given by the Madhya Pradesh High Court.
In my opinion, the question should be answered in the way the Allahabad and the Punjab High Courts answered it; therefore, Civil Appeal No. 322 of 1955 should be allowed with costs and Civil Appeal No. 25 of 1955 should be dismissed with costs.
(1) 37 By COURT: In accordance with the Judgment of the majority Civil Appeal No. 322 of 1955 is dismissed with costs and Civil Appeal No. 25 of 1955 is allowed with costs, the referred question being answered in the negative.
| The common question of law for determination in these two appeals was whether the word 'individual ' in section 16(3) of the 'Indian Income tax Act, 1922, as amended by Act IV of 1937, includes a female and whether the income of minor sons from a partnership, to the benefits of which they were admitted, was liable to be included in computing the total income of the mother who was a member of the partnership.
Held, (Per Bhagwati and Kapur jj.
, section K. Das J. dissenting) that the question must be answered in the negative.
The word 'individual ' occurring in section 16(3) of the Indian Income tax Act, as amended by Act IV Of 1937, means only a male and does not include a female.
Shrimati Chanda Devi vs The Commissioner of Income tax, and Musta Quima Begum, In re, , disapproved.
Where the Legislature uses ambiguous language in enacting a statute, as it has undoubtedly done in the instant case, recourse must necessarily be had, for a clarification of such ambiguity, to the pre existing state of the law in order to see what defect or mischief therein was being sought to be remedied, the remedy that was prescribed by the statute and the reason for it.
Bengal Immunity Company Limited vs The State of Bihar, , Thomson vs Lord Clanmorris, and Eastman Photographic Materials Company vs Comptroller General of Patents, Designs and Trade Marks, , relied on.
A reference to the Income Tax Enquiry Report, 1936, and the Statement of objects and reasons that led to the passing of the Indian Income tax (Amendment) Act IV of 1937 makes it clear beyond doubt that the mischief the Legislature was seeking to remedy was one that resulted from a husband entering into a 2 nominal partnership with his wife or a father admitting his minor children to the benefits of a partnership, and the possibility of a mother doing so was not even thought of.
Per section K. Das J.
There is no ambiguity in section 16(3) of the Indian Income Tax Act, as amended by Act IV Of 1937, and, read in the context of the other provisions of the Act and construed as a whole, it clearly indicates that the Legislature used the word 'individual ' in that sub section in its ordinary connotation to mean both a male and a female person.
Even if, on the assumption that there is ambiguity in the phraseology used in the sub section, reference is made to the Income Tax Enquiry Report, 1936, and the Statement of objects and reasons of the Amending Act IV of 1937 for the limited purpose for which it is permissible to do so, they disclose nothing concerning the policy adopted by the Legislature or the object the, statute was intended to accomplish that makes any other meaning inevitable.
The recommendations made by the Report were not fully accepted by the Legislature and it cannot be a reliable guide and the use of the word 'parent ' in the Statement clearly shows that the mischief envisaged was not confined to the father alone.
|
ivil Appeal No. 591 of 1974.
Appeal by Special Leave from the Judgment and order dated the 15th February, 1974 of the Gujarat High Court in Civil Revision Appln.
No. 326/71.
P. H. Parekh and Manju Jaitley, for the appellant.
section section Khanduja and R. N. Bhalgoha, for respondents 2 4.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by special leave from the judgment dated 15 February, 1974 of the Gujarat High Court dismissing the revision petition filed by the appellant.
536 The appellant filed a Revision Petition in the High Court against the judgment and decree passed by the District Judge dismissing his appeal against the decree for eviction of the appellant from the suit premises.
The respondent filed the suit against the appellant for possession of the premises on the ground that the appellant had sublet a portion of the premises.
Section 13(1) (e) of the Bombay Rents, & Hotel and Lodging House r Rates Control Act, 1947 which is the relevant section for the purpose of this appeal runs as follows : "13(1)(e) That the tenant has, since the coming into operation o this Act, unlawfully sublet, or after the date of Cr commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Act, 1973, unlawfully given on licence, the whole or part of the premises or assigned or transferred in any other manner his interest therein".
The appellant took on lease on 1 January, 1960 the premises, namely, first floor consisting of four rooms at a rent of Rs. 50/ per month.
The respondent alleged that the appellant sublet a portion thereof, namely, two rooms, in the month of August, 1965.
The respondent on 1 April, 1967 gave a notice to the appellant terminating the tenancy.
The appellant denied that there was any unlawful subletting of two rooms to respondent No. 5 Jitendra Shankerji Desai.
The appellant further alleged that the respondent No. 5 Desai vacated the suit premises on 14 April, 1967.
At the trial the issues were whether the appellant unlawfully sublet two rooms to respondent Desai.
The Trial Court held that the appellant sublet the suit premises to respondent No. section The Trial Court gave the plaintiff respondent a decree for possession of the suit premises.
The appellant preferred an appeal.
The appeal was dismissed.
The appellant, thereafter, filed a revision petition in the High Court.
In the High Court the contentions were these.
The expression "the tenant has sublet" in section 13(1)(e) of the above mentioned Act means that the subletting must continue at the date of the suit for passing the decree.
The notice was given on 1 April, 1967.
The respondent No. 5 vacated the premises in suit on 14 April, 1967.
When the suit was filed the sub tenant was not in occupation of the premises.
Therefore, the plaintiff respondent was not entitled to a decree.
The High Court relied on a Bench Decision of that High Court Maganlal Narandas Thakkar & Anr.
vs Arjan Bhanii Kanbi(1) (1) 1969 G.L.R. Vol.
10 p. 837.
537 where it was held that the words "has sublet" in section 13(1) (e) of the Saurashtra Rent Control Act mean that a subletting has take place and as a result of that subletting the impediment in the way of the landlord to recover possession has been removed.
The provisions contained in section 13(1)(e) of the Saurashtra Rent Control Act are r similar to the provisions contained in the Bombay Act; 1947.
The High Court also held that the wards 'has sublet ' do not include any element of the sub tenancy being in existence at the date when the suit is filed.
The appellant relied on a decision on this Court in Goppal vs Thakurji Shriji Shriji Dwarkadheeshji & Anr support of the proposition that the words "has sublet" means that the subletting is to subsist at the date of the suit.
This Court in Goppulal 's case (supra) considered section 13(1) of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950.
Section 13(1) (e) of the Rajasthan Act provides that no decree evicting the tenant shall be passed unless the Court is satisfied "(e) that the tenant has assigned, sublet or otherwise parted with the possession of the whole or part of the premises, without the permission of the landlord".
The High Court in Goppulal 's case (supra) held that two.
shops were sublet after October 15, 1947 when the Jaipur Rent Control order, 1947 came into force.
Subletting was a ground for ejectment under paragraph 8 (1) (b) (ii) of the Jaipur Rent Control order, 1947.
The High Court held that the tenant 's liability for eviction on this ground continued after the promulgation of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950.
This Court said that the High Court was in error that there was one "integrated tenancy" for six shops.
The facts found were that four shops were let out in 1944 and two shops were let out after 1945.
This Court found that the High Court was in error in holding that two shops were sublet after 15 October, 1947.
This Court held that the plaintiffs in Goppulal 's case (supra) did not establish that the subletting was after 15 October, 1947 and on the Date of the subletting in 1944, no Rent Control Legislation was in force.
lt is in that context that it is said that the words "has sublet" contemplate a completed event connected in some way with the present time".
This Court said that the words "has sublet" take within their sweep any subletting which was made in the past and has continued upto the present time".
What is meant by these observations is that the vice of subletting which fell within the mischief of the Act continues to be a mischief within the Act.
In Goppulal 's case (supra) there was no subletting in 1947 to violate the 1947 Jaipur Rent Control order and therefore there could not be any subletting which could continue upto the 1950 Rajasthan Act.
On the date of the subletting in 1944, this Court found in Goppulal 's case (supra) that there was no Rent Control Legislation in (1) ; 4 L925SupCI/75 538 force This Court did not consider the question as to whether subletting to be within the mischief of the relevant statute was to subsist at the date of the suit.
This Court held that section 13(1)(e) of the Rajasthan Act would include any subletting which though made in the past would continue at the point of the time when the Act came into force.
The appellant repeated the same contentions which had been advanced before the High Court.
The provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 indicate that a tenant is disentitled to any protection under the Act if he is within the mischief of the provisions of section 13(1)(e), namely, t that he has sublet.
The language is that if the tenant has sublet, the protection ceases.
To accede to the contention of the appellant would mean that a tenant would not be within the mischief of unlawful subletting if after the landlord gives a notice terminating the tenancy on the ground of unlawful subletting the sub tenant vacates.
The landlord will not be able to get any relief against the tenant in spite of unlawful subletting.
In that way the tenant can foil the attempt of landlord to obtain possession of the premises on the ground of subletting every time by getting the sub tenant to vacate the premises.
The tenant 's liability to eviction arises once the fact of unlawful subletting is proved.
At the date of the notice, if it is proved that there was unlawful subletting, the tenant is liable to be evicted.
The High Court rightly rejected the revision petition.
The appeal is dismissed with costs. ] P.H.P. Appeal dismissed.
| The appellant in this appeal had been assessed to Income Tax which was reduced on appeal but that assessment was set aside by the Income Tax Appellate Tribunal on the ground that the Indian Finance Act of 1939 was not in force during the assessment year in Chota Nagpur.
On a reference by the Tribunal the High Court con firmed the setting aside of this assessment.
By the promulgation of Bihar Regulation IV of 1942 by the Governor of Bihar (which was assented to by the Governor General) the Indian Finance Act of 1939 was brought into force in Chota Nagpur retrospectively as from the 30th March 1939.
On the 8th February 1944 the Income Tax Officer passed an order in pursuance of which a fresh notice was issued under section 34 which resulted in the assessment of the appellant to income tax.
The question for determination in this appeal was whether the notice under section 34 was validly issued.
Held (i) that for the purposes of section 34 of the Act the income, profits or gains sought to be assessed were chargeable to income tax according to the scheme of the Act and the provisions of sections 3 and 4 of the Act; (ii) that it was a case of chargeable income escaping assessment within the meaning of section 34 and was not a case of mere non assessment of income tax because the earlier assessment proceedings in the present case had in fact been taken but failed to result in a valid assessment owing to some lacuna which was not attributable to the assessing authorities.
C.I.T., Bombay vs Sir Mahomed Yusuf Ismail ([1944] , Fazal Dhala vs C.I.T., B. & O. ([1944] 12 I.T.R. 341), Baghavalu Naidu & Sons vs C.I.T., Madras ([1945] , Raja Benoy Kumar Sahas Boy vs C.I.T., West Bengal ([1953] , Chatturam vs C.I.T., Bihar ([1947] F.C.R. 116), Whitney vs Commissioners of Inland Revenue ([1926] A.C. 37), C.I.T. Bombay & Aden vs Khemchand Ramdas ([1938] at 428), Sir Rajendranath Mukherjee vs C.I.T., Bengal ([1934] , Madan Mohan Lal vs C.I.T., Punjab ([1935] , C.I.T., Bombay vs Pirojbai N. Contractor ([1937] , Kunwar 291 Bishwanath Singh vs C.I.T., C.P. ([1942] , Raja Bahadur Kamakshya Narain Singh vs C.I.T. B. & 0.
([1946] and Chatturam vs C.I.T., B. & 0.
([1946] , referred to.
|
tition Nos 7597 99 of 1983.
And Writ Petition Nos.
7606 09 of 1983.
(Under Article 32 of the Constitution of India).
A.K. Sen, F.S. Nariman, S.N. Kacker, A.K. Ganguli, R.F. Nariman, A. Patnaik and M.M. Kshatriya for the Petitioners.
F Shanti Bhushan, S.N. Chatterjee, G.L. Sanghi, Dr. Y.S. Chitale, G. Rath, Advocate General, R.K. Patra, R.K. Mehta and H. K .
Puri for the Respondents.
The Judgment of the Court was delivered by G JAGANNATHA SHETTY, J.
"Sal seed" which is a minor forest produce at Orissa has again become the major subject of litigation between commercial users and the State of orissa.
The petitioners herein are holders of long term license from the 318 Government of orissa for collection of sal seeds from certain A specified forest divisions on payment of royalty.
The State of orissa enacted Orissa Forest.
Produce (Control of Trade) Act, 1981 (The "Act").
It received the assent of President on August 21, 1981.
The object of the Act was to prevent smuggling forest and also to provide State monopoly in such forest produce.
Under Section 1(3) }3 of the Act the State is empowered from time to time to issue a notification specifying the area or areas the forest produce in relation to which and the date from which the Act shall come into force.
Purporting to act under this provision a notification dated December 9.
1982 was issued by the State Government directing that the Act shall come into force at once in the whole of the State of Orissa in relation to sal seeds.
Thereafter, the Government refused to accept royalty from the petitioners in respect of certain forest divisions on the ground that the notification had the effect of rescinding the existing contracts between the Government and the petitioners.
The petitioners thereupon moved the orissa High Court with Writ Petitions for declaration that the said notification was void and did not have the effect of rescinding their contracts in relation to sal seeds.
The orissa High Court dismissed the Writ Petitions.
The matter was brought before this Court in Civil Appeal Nos.
6230 31 of 1983.
This Court allowed the appeals by judgment dated May 5, 1987.
which has been since reported in Utkal Contractors & Joinery Pvt. Ltd. and ors.
vs State of orissa and ors.
, AIR 1987 SC 1455 = ; The nub of the arguments in those appeals was that the Act was not concerned with the sal seeds grown in the Government lands or Government Forests, and in any event, the petitioners ' contract remained untouched by the notification dated December 9, 1982.
It was also contended that since the Government was already the owner of forest produce in Government lands, all that was necessary to create a State monopoly in any forest produce, was to vest in the Government the exclusive right to such forest produce grown in private holding.
After dealing with the object of the Act and relevant provisions, a bench of this Court consisting one of us (o. Chinnappa Reddy, J.) said: "Thus none of these provisions deals with forest produce grown in Government lands nor is there any other provision in the Act which expressly deals with forest produce grown in Government lands.
The scheme of the Act is, 319 therefore, fully in tune with the object set out in the Statement of objects and Reasons and in the Preamble, namely that of creating a monopoly in forest produce by making the Government the exclusive purchaser of forest produce grown in private holdings.
It as argued by the learned Additional Solicitor General that section 5(1)(1) was totally out of tune with the rest of the provisions and, while the rest of the provisions dealt with forest produce grown in private holdings the very wide language of section S(1)(a) made it applicable to all forest produce whether grown in private holdings or Government forests.
We do not think that it is permissible for us to construe section 5(1)(a) in the very wide terms in which we are asked to construe it by the learned Additional Solicitor General because of its wide language, as that would merely introduce needless confusion into the scheme of the Act.
Having scanned the object and the scheme of the Act, having examined each of the provisions of the Act textually and contextually, we do not think it is proper for us to construe the words of section S(1)(a) in their literal sense; we think that the proper way to construe.
section 5(1)(a) is to give a restricted meaning to the wide and general words there used so as to fit into the general scheme of the Act and section 5(1)(b) are concerned by the conjunction 'and ', and having regard to the circumstances leading to the enactment and the policy and design of the Act, we think that clauses (a) and (b) must be construed in such a way as to reflect each other.
We have no doubt that the contracts relating to specified forest produce which stand rescinded are contracts in relation to forest produce grown in private holdings only.
If the very object of the Act is to create a monopoly in forest produce in the Government so as enable the Government, among other things, to enter into contracts, there was no point in rescinding contracts already validly entered into by the Government.
Again section 5(1) does not bar any future contracts by the Government in respect of forest produce; if so, what is the justification for construing section 5(1) in such a way as to put an end to contracts already entered into by the Government.
Viewing section 5(1)(a) and 5(1)(b) together and in the light of the preamble and the Statement of objects and Reasons and against the decor of the remaining provisions of the Act, we have no doubt that section 5(1) like the rest of the provisions applied to forest produce grown in private hold 320 ings and not to forest produce grown in Government landS. " Then the conclusion was expressed in the following terms: "We declare that the Act and the notification issued under the Act do not apply to forest produce grown in Government forests and that it was not, therefore, open to the Government to treat the contract dated May 25, 1979, as rescinded.
" On May 29, 1987, the Governor of (Orissa promulgated orissa Forest Produce (Control of Trade) (Amendment and Validation) ordinance, 1987, (The "ordinance").
The ordinance shall be deemed to have come into force with effect from September 5, 1981 when the principal Act was notified in the Orissa Gazette.
The ordinance purports to render the aforesaid decision ineffective.
The petitioners have again approached this Court challenging the validity of the ordinance.
Before we examine the contentions raised in these petitions, lt will be useful to set out the provisions of ordinance: "(2) It shall be deemed to have come into force on the date on which the Orissa Forest Produce (Control of Trade) Act 1981 (hereinafter referred to as the principal Act) had come into force, i.e. 5.9.1981 when the principal Act was notified in the orissa Gazette.
2. 3 In clause (c) section 2 of the principal Act, the full stop at the end of the clause shall be substituted by a comma and thereafter the following shall be added at the end, namely: "Whether grown or found on land owned by private persons or on land owned by the State Government (j, or in Government forests.
In Section 5 of the principal Act, in sub section (1) (1) "(i) for clause (a) the following clause shall be substituted, namely: 321 "(a) all contracts for the purchase, sale, gathering or collection of specified forest produce grown or found in the said area shall stand rescinded, whether such forest produce is grown or found on land owned by private persons or on land owned by the State Government or in Government forests.
" (ii) After Explanation III, the following Explanation shall be added, namely: "Explanation IV The Explanations I to III shall be deemed to be explanations to clause (b) of this sub section only and shall not be deemed as in any manner qualifying or detracting from clause (a) of this sub section or saving any contracts referred to in clause (a) from the operation of the provision for recission of contracts contained in the said clause (a)".
In section 9 of the principal Act for sub section (4) the following sub section shall be substituted namely: "(4) The State Government or its authorised officer or agent shall be entitled to take delivery of any specified forest produce collected by any person from land owned by the State Government or Government Forests on payment of only such collection charges as may be determined by the State Government from time to time.
Provided that it shall be open to the State Government or the authorised officer or agent to refuse to take delivery of any such forest produce which is not fit for consumption or use as raw material for manufacture or for trade: Provided further that in the case of any dispute, the Divisional Forest officer or such other officer who may be specifically empowered in this behalf, as specified in sub section (2), shall hear and dispose of the same in the manner provided in this Act and the Rules made thereunder. " 5.Notwithstanding any judgment, decree or order of any Court to the contrary, the Notification dated the 9th 322 December, 1982, issued by the State Government under sub section (3) of section 1 of the principal Act in respect of sal seeds shall be deemed to have been issued in respect of sal seeds whether grown or found on land owned by private persons or on land owned by the State Government or in Government forests and shall be as valid and effectual as if it were issued under sub section (3) of section 1 of the principal Act as amended by this ordinance and all instructions and orders issued or made and all actions taken or things done pursuant to the said Notification in respect of sale, purchase and collection of sal seeds shall be deemed to have been validly made, taken or done under the principal Act as amended by this ordinance." Section 2(c) of the Act has now been enlarged to include forest produce whether grown or found on land owned by private persons or on land owned by the State Government or in Government forests Section 5 of the Act has been amended to nullify all existing private contracts in relation to specified forest produce.
It reads: "5.
Restriction on the purchase and transport and rescission of subsisting contracts.
(1) on the issue of a notification under sub section (3) of section 1 in respect of any area (a) All contracts for purchase, sale gathering or collection of specified forest produce grown or found in the said area shall stand rescinded, whether such forest produce is grown or found on land owned by the State Government or in Government forests, (b) No person, other than (i) the State Government, (ii) an officer of the State Government authorised in writing in that behalf; or (iii) an agent in respect of the unit in which the specified forest produce is grown or found shall purchase or transport any specified forest produce in the said area.
323 Section 5 would come into effect only upon the notification issued by the Government under Section 1(3) of the Act.
The Government has not issued a fresh notification under Section (3) so far as sal seeds are concerned.
But the ordinance itself by Section 5 purports to validate the notification issued by the Government on December 9, 1982 the legality of which we will presently consider.
Mr. Nariman, learned Counsel for the petitioners, contended that the object and drift of the Act was to provide state monopoly in specified forest produce only to prevent smuggling and the notification dated December 9, 1982 was extraneous to the purpose of the Act.
In support of the contention, the Counsel relied upon the Statement of objects and Roasons of the Act, the ordinance and Industrial Policy of the State Government.
We do not think that the purpose of the Act or the ordinance was to provide State monopoloy only to prevent smuggling.
Even in the previous decision of this Court, it was observed that the object of the Act was to prevent smuggling and to provide for State monopoly in the specified forest produce.
The Preamble of the Act which is a key to the enactment is also clear on the object.
It reads: "An Act to provide for control and regulation of trade in certain forest produce by creation of State monopoly in such trade " Secondly, the validity of the statutory notification cannot be judged merely on the basis of statement of objects and reasons accompanying the Bill.
Nor it could be tested by the Government policy taken from time to time.
The executive policy of the Government, or the Statement of objects and reasons of the Act or ordinance cannot control the actual words used in the legislation.
In the Central Bank of India vs Their Workmen, [ ; section K., Das.
J. said: "The statement of objects and reasons is not admissible, however, for construing the section; far less can it control the actual words used." In State of West Bengal vs Union of India, [ 1964] 1 SCR 371 at p. 382.
Sinha, C.J. Observed: "It is however well settled that the Statement of objects and reasons accompanying a bill, when introduced in Parliament cannot be used to determine the true meaning and effect of substantive provisions of the statute.
They 324 cannot be used except for the limited purpose of understanding the background and the antecedent state of affairs leading up to the legislation.
But we cannot use this statement as an aid to the construction of the enactment or to how that the legislature did not intend to acquire the proprietary rights vested in the State or in any way to affect the State Governments ' rights as owner of minerals.
A statute, as passed by Parliament, is the expression of the collective intention of the legislature as a whole, and any statement made by an individual, albeita a Minister, of the intention and objects of the Act cannot be used to cut down the generality of the words used in the Statute.
" The petitioners cannot also contend that the annulment of their contracts and the restrictions brought about on their rights to trade are unreasonable or arbitrary.
Such restrictions must be presumed to be reasonable and in the interest of general public.
It is open to the State to make laws for creating State monopolies either partially or complete in respect of any trade or business or industry or service.
The State may enter into trade like any other person either for administrative reasons or with the object of mitigating the evils in the trade, or even for the purpose of making profits in order to enrich the State exchequer.
The law relating to such trading activities must be presumed to be reasonable and in the interest of general public.
That was the view taken by this Court in Akadasi Padhan vs State of Orissa, [1963] 2 Supp.
SCR 691 where it was observed that the law relating to such state monopoly should be presumed to be reasonable and in the interest of general public within the scope of Article 19(6)(ii) of the Constitution.
As to the contention of Mr. Nariman, that the provisions of the Act and the Rules made thereunder do not bar future contracts the like of which the petitioners are having, we may say that it would be impermissible for the State to enter into such contracts hereafterwards.
The parties or Agents employed by the State cannot work for their own benefits.
They must work on behalf of the State.
That is what has been stated in Akadasi Padhan vs State of orissa, (Supra).
"It seems to us that when the State carries on any trade, business or industry it must inevitably carry it on either departmentally or through its officers appointed in that be half.
In the very nature of things, the States as such, cannot function without the help of its servants or employees and 325 that inevitably introduce the concept.
Of agency in a narrow and limited sense.
If the State cannot act without the aid and assistance of its employees or servants, it would be difficult to exclude the concept of agency altogether.
Just as the State can appoint a public officer to carry on the trade or its business so can it appoint an agent to carry on the trade on its behalf.
Normally and ordinarily, the trade should be carried on departmentally or with the assistance of public servants appointed in that behalf.
But there may be some trade or business in which it would be inexpendient to undertake the work of trade or business department or with the assistance of State servants.
In such cases, it would be open to the State to employ the services of agents, provided the agents work on behalf of the State and not for themselves.
" The next question to be considered is whether the State while purporting to amend the Act has encroached upon the judicial power and set aside the binding judgment of this Court.
We do not think that Mr. Nariman was justified in contending so.
The principles have been well established in a string of decisions of this Court, and we may briefly summarise as follows: The legsilature may, at any time, in exercise of the plenary power conferred on it by Articles 245 and 246 of the Constitution render a judicial decision ineffective by enacting a valid law.
There is no prohibition against retrospective legislation.
The power of the legislature to pass a law postulates the power to pass it prospectively as well as retrospectively.
That of course, is subject to the legislative competence and subject to other constitutional limitation.
The rendering ineffective of judgments or orders of competent Courts by changing their basis by legislative enactment is a well known pattern of all validating acts.
Such validating legislation which removes the causes of ineffectiveness or invalidity of action or proceedings cannot be considered as encroachment on judicial power.
The legislature, however, cannot by a bare declaration, without more, directly overrule, reverse or set aside any judicial decision.
[Hari Singh & ors.
vs The Military Estate officer & Anr., [ 19731 1 SCR 515; Government of Andhra Pradesh & Anr.
vs Hindustan Tools Ltd., 11975] Supp.
SCR 394; V.N. Saxena vs State of M.P.; , 326 and Misri Lal Jain Etc.
vs State of Orissa & Anr.
, [ ] In the instant case having regard to the then existing provisions of the Act, this Court declare.
that the Act and notification issued thereunder in relation to sal seeds did not apply to sal seeds grown in Government forests.
The Act has been suitably amended by the impugned ordinance by removing the cause of ineffectiveness pointed out by this Court.
The new provisions would now cover specified forest produce whether grown or found on land owned by private persons or on land owned by the State Government or in Government forests and the contracts relating thereto.
Such contracts shall stand rescinded when a notification under Section 1(3) of the Act is issued.
What remains to be considered is, whether it is necessary for the Government to issue a fresh notification under Section 1(3) of the Act.
Mr. Nariman contended that the notification issued on December 9, 1982 was held to be applicable only to sal seeds grown in the private holdings, and in the absence of amendment to section 1(3), the validation of such a notification would not be effective to nullify the con tracts which the petitioners are having.
It was also urged that the notification was "still born" and could not have been validated.
We are unable to accept this contention also.
The definition of "forest produce" under Section 2(c) has been enlarged to include among others, sal seeds, grown or found on Government lands or in Government forests.
Clause (a) of Sub section (1) of Section 5 has been substituted covering all contracts for the purchase, sale, gathering or collection or 'specified forest produce ' grown or found.
in the area specified in the notification issued under Section 1(3) of the Act.
Both these provisions shall be deemed to have come into force with effect from September S, 1981 the date on which the Act had come into F; force.
The notification dated December 9, 1982 issued under Section 1(3) of the Act reads: "SRO No. 852/82 In exercise of the powers conferred by sub section(3) of Section 1 of the Orissa Forest Produce (Control of Trade) Act, 1981 (orissa Act 22 of 1981), the State Government do hereby direct that the Act shall come into force at once in the whole of the State of Orissa in relation to sal seeds. " This notification has been validated under Section 5 of the ordinance not withstanding any judgment, decree or order of any Court to the contrary.
It shall be deemed to have been issued in respect of sal 327 seeds also grown or found in Government forests.
It shall be valid and effectual as if it were issued under Section 1(3) of the Act as amended by the ordinance.
This validation, in our opinion is more than sufficient to make it operative to cover the contracts of the petitioners.
It does not suffer from any infirmity.
The impugned ordinance is, therefore, valid and cannot be challenged on any ground.
In the result, these petitions fail and are dismissed, but we make to order as to costs.
N.P.V. Petitions dismissed.
| The appellant was a sub tenant of the tenant respondent.
The landlord served a notice of eviction on him in November, 1980 alleging that there was unlawful subletting by the respondent and that he had decided to terminate the tenancy with the expiry of that month.
The appellant thereupon attorned in favour of the landlord agreeing to pay him the rent.
After becoming the direct tenant, the appellant stopped paying rent to the respondent.
The respondent asserting to be the lessor commenced proceedings for eviction of the appellant under section 10(2)(i) and (vi) and section 10(3)(b)(iii) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Act, 1960 on the ground that the appellant was in wilful default in payment of rent, that there was denial of title on appellant 's part, and that he required the premises bona fide for his use.
F The Rent Controller disallowed the application on the ground that the respondent not being a lessor had no locus standi to initiate the proceedings for eviction.
The first appellate court, however, directed eviction of the appellant under section 10(2)(i) and (vi), holding that in view of the denial of respondent 's title as well as non payment of rent, the appellant was estopped from denying the title.
The High Court having upheld this view, the appellant appealed to this Court by special leave.
Allowing the appeal, ^ HELD: 1.
There could be no order of termination in terms of section H 146 10(2)(i) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act unless it could be said that in the facts and circumstances of the case the dispute as to title was not bona fide.
In the instant case, there is no such finding by the High Court.
Furthermore, the appellant could not be treated to be in arrears of rent since he has been paying rent to the head lessor.
Therefore, the order of eviction passed against the appellant under section 10(2)(i) and (vi) of the Act is not sustainable in law.
[151G; 152B] 2.1 The rule of estoppel embodied under section 116 of the Evidence Act is that a tenant who has been let into possession cannot deny his landlord 's title at the commencement of the tenancy, however, defective it may be, so long as he has not openly restored possession by surrender to his landlord.
During the continuance of the tenancy, the tenant cannot acquire by prescription a permanent right of occupancy in derogation of the landlord 's title by mere assertion of such a right to the knowledge of the landlord.
The words 'during the continuation of the tenancy ' occurring in section 116 of the Evidence Act mean "during the continuance of the possession that was received under the tenancy in question.
" The rule of estoppel is thus restricted not only in extent but also in time, i.e., restricted to the title of the landlord and during the continuance of the tenancy.
[149E F; C D] 2.2 The general rule of estoppel under section 116 is, however, subject to certain exceptions, in that, a tenant is not precluded from denying the derivative title of the persons claiming through the landlord.
Similarly, such estoppel is restricted to the denial of the title at the commencement of the tenancy, it is open to the tenant even without surrendering possession to show that since the date of tenancy the title of the landlord came to an end or that he was evicted by a paramount title holder or that even though there was no actual eviction or dispossession from the property, under a threat of eviction he had attorned to the paramount title holder.
[149G H; 150A B] 2.3 In order to constitute eviction by title paramount it is not necessary that the tenant should be dispossessed or even that there should be a suit of ejectment against him.
It will be sufficient if there was threat of eviction and if the tenant as a result of such threat attorns to the real owner, he can set up such eviction by way of defence either to an action for rent or to a suit in ejectment.
If the tenant, however, gives up possession voluntarily to the title holder, he cannot claim the benefit of this rule.
When the tenancy has been determined by eviction by title paramount, no question of estoppel arises under section 116 of the Evidence 147 Act.
The principle must equally apply when the tenant has attorned under a threat of eviction by the title paramount and there comes into existence a new jural relationship of landlord and tenant as between them.
[150B D] In the instant case, having regard to the fact that the appellant was under threat of eviction by the title paramount, it cannot be said that the rule of estoppel under section 116 of the Evidence Act applied and therefore, he was not entitled to dispute the title of the respondent.
Furthermore, the appellant having, after being served with the notice of eviction, attorned to the head lessor, there came into existence a direct tenancy.
[151H; 152A B] Bilas Kunwar vs Desraj Ranjit Singh, ILR (1915) All.
557 (PC); Atyam Veerraju & ors.
vs Pechetti Venkanna & Ors., ; ; Kumar Krishna Prosad Lal Singha Deo vs Baraboni Coal Concern Limited & ors., ; Adyanath Ghatak vs Krishna Prasad Singh & Anr., AIR (1949) PC 124; 27Halsbury 's Laws of England, 4th Edn., pars 238; Mangat Ram & Anr.
vs Sardar Meharban Singh & ors.
, , Fide Hussain vs Fazal Hussain & ors.
, AIR (1963) MP 232; K.S.M. Curuswamy Nadar vs N.G. Ranganathan, AIR (1954) Mad, 402; S.A.A. Annamalai Chettiar vs Molaiyan & ors.
, AIR (1970) Mad. 396 and Chidambara Vinayagar Devasthanam vs Duraiswamy, ILR , referred to,
|
ivil Appeal No. 653 of 1981.
466 From the Judgment and Order dated 11.8.80 of the Punjab and Haryana High Court in C.W.P. No. 1192 of 1980.
M.K. Ramamurthy and Jitender Sharma for the Appellants.
Rajinder Sachar, Govind Mukhoty Dr. Shankar Ghosh, Mahabir Singh, S.C. Patel, T.C. Sharma, C.V. Subba Rao, C.M. Nayyar, P.P. Singh and S.K. Verma for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of a Division Bench of the Punjab and Haryana High Court dated 11th August, 1980 dismissing the appellants ' writ petition under Article 226 of the Constitution chal lenging validity of the appointment of Bhagwan Das Sardana, respondent No. 3 to the post of Executive Engineer in Public Works Department (Public Health Branch).
The post of Executive Engineer in Public Works Depart ment (Public Health Branch) in the State of Haryana is borne on Class I Engineering Service, recruitment to which is made by direct recruitment and promotion under the provisions of the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules, 1961 (hereinafter referred to as 'the Rules ').
Under Rule 5, 50% of the posts of Executive Engi neers in Class I are required to be filled by direct re cruits while the remaining 50% posts are to be filled by promotion from members belonging to Class II service.
Rule 8 provides for constitution of a Committee for making selec tion for promotion to the post of Executive Engineer.
The list so prepared is forwarded to the State Public Service Commission and on its approval the State Government is required to make the appointments.
Rule 9 lays down that promotion shall be made by selection on the basis of merit and suitability in all respects.
Rule 9(3) lays down that a member shall not be eligible for promotion to the rank of Executive Engineer, unless he has rendered five years ' service as an Assistant Executive Engineer, and has passed the departmental examination as provided in Rule 15.
The first proviso to the Rule lays down that an Assistant Execu tive Engineer found suitable for promotion shall be given preference over an eligible Class II officer.
The second proviso to Rule 9(3) confers power on the Government to reduce the period of five years ' service as an Assistant Executive Engineer.
Rule 11 lays down that an officer ap pointed to the service shall remain on probation for a period of two years in case of direct recruitment.
Rule 15 lays down that officers 467 appointed to the service unless they have already done so, shall pass departmental examination and within such period as may be prescribed by the Government.
Under the proviso to Rule 15(1) the Government is empowered to extend the period within which an officer may pass the departmental examina tion.
Rule 22 confers power on the Government to relax the requirements of Rules if it is satisfied that the operation of any of these Rules causes undue hardship in any particu lar case.
The appellants S/Shri K.K. Khosla and L.C. Goyal were holding the post of Sub Divisional Engineers PWD (Public Health Branch) in the State of Haryana in Class II Service of Engineers.
They were considered for promotion to the post of Executive Engineer, Class I Service.
The Selection Com mittee, on scrutiny of cases of eligible Class II officers prepared a select list for promotion.
The list so prepared contained the names of nine officers including the two appellants but ultimately the appellants were not appointed by promotion to the post of Executive Engineer instead other seven officers belonging to Class II Service were promoted and in addition to that Bhagwan Das Sardana, respondent No. 3 a direct recruit was also appointed on the recommendation or ' the Public Service Commission.
Aggrieved, the appellants filed a writ petition in the High Court challenging the validity of the appointment of respondent No. 3 on the ground that he had not rendered five years ' service as an Assistant Executive Engineer and had not passed the depart mental examination which was the minimum requisite qualifi cation for promotion to the post of Executive Engineer in Class I Service.
On behalf of the State Government, it was pleaded that the State Government had relaxed the require ment of Rule 9(3)(a) with regard to five years ' period of service not only to respondent No. 3 but to other officers also.
The High Court dismissed the writ petition on the finding that there was no infirmity in the Government 's order granting exemption to respondent No. 3 and his promo tion and appointment to the post of Executive Engineer did not suffer from any legal infirmity.
The appellants have challenged the view taken by the High Court in the instant appeal.
On behalf of the appellants it was urged that the promo tion and appointment of respondent No. 3 to the post of Executive Engineer was made in utter disregard of the Rules as he had not rendered five years ' service as an Assistant Executive Engineer as required by Rule 9(3)(a) and he had not passed the departmental examination as contemplated by Rule 15 and lastly he was not eligible for promotion as he had not completed two years ' probationary period as Assist ant Execu 468 tive Engineer on the date of his promotion.
On a careful scrutiny of the Rules and the material on record we do not find any merit in the submission made on behalf of the appellants.
No doubt respondent No. 3 had not rendered five years ' service as an Assistant Executive Engineer but the State Government had granted relaxation to the respondent No. 3 by reducing the period of service under Clause (a) to Rule 9(3) in exercise of its power under the proviso to the said Rule.
This relaxation was granted as the respondent No. 3 was the only officer in the Department who was a direct recruit to Class I Service.
The State Govern ment had power to grant relaxation under the second proviso to Rule 9(3) therefore we find no legal infirmity in the respondent 's promotion.
In addition to that Rule 22 further confers power on the State Government to grant relaxation with regard to the operation of the Rule.
The Government 's order granting relaxation in favour of respondent No. 3 is sustainable under Rule 22 also.
The scope of State Govern ment 's power to relax operation of Rules has been discussed by us in J.C. Yadav & Ors.
vs State of Haryana & Ors.
, On the application of those principles we find no illegality in the order of the Government granting relaxation to respondent No. 3, in respect of operation of Rule 9(3)(a).
As regards the departmental examination is concerned, it is true that the respondent No. 3 did not pass the depart mental examination afresh in the Public Health Branch.
On behalf of the State Government it is pointed out that prior to his recruitment to the post of Assistant Executive Engi neer in the Public Health Branch respondent No. 3 had been working as Sub Divisional Engineer (SDE) in the Public Works Department (Building and Road Branch) for a period of 6 1/2 years and during that period he had passed departmental examination.
In this view the Government did not consider it necessary to require the respondent No. 3 to pass the de partmental examination once again.
The Public Health Branch as well as the Building and Road Branch both belong to the Public Works Department.
The syllabus prescribed for the departmental examination in the Building and Road Branch as well as in the Public Health Branch is almost the same, as except one, all other subjects are common to both the Branches.
The State Government 's opinion that since the respondent No. 3 had already passed a departmental examina tion while working in the Building and Road Branch, it was not necessary for him to have passed the departmental exami nation again was justified though it had at an earlier stage directed the respondent No. 3 to pass the depart 469 mental examination again.
Later on the Government was satis fied that since the respondent had already passed the de partmental examination in Building and Road Branch, there was no necessity for the respondent to pass the examination again.
In these circumstances we hold that respondent 's promotion to the post of Executive Engineer was not rendered illegal merely because he had not undergone departmental examination in the Public Health Branch afresh.
Respondent No. 3 had been appointed as a direct recruit to the post of Assistant Executive Engineer on 7.12.
1977 on probation for a period of two years.
Before the expiry of the probation period he was selected for promotion to the post of Executive Engineer.
The appellants ' contention that unless the respondent had satisfactorily completed the probation period, he could not be promoted to the post of Executive Engineer, is misconceived.
There is no specific provision in the Rules requiring completion of probationary period for the purposes of promotion within the service.
Under Rule 11 an officer is required to be appointed on probation, if during the period of probation his work is not found satisfactory his services are to be dispensed with and in the event of his services being found satisfactory he is entitled to confirmation on the post.
It is thus clear that the completion of the probationary period of respondent was relevant only for the purpose of confirmation in Class I Service and Same was not a precondition for the purpose of promotion within the service.
Moreover, the Government issued an order waiving the probationary period of one year in the respondent 's case.
Non completion of probationary period of two years on the post of Assistant Executive Engineer did not affect the validity of the respondent 's promotion to the post of the Executive Engineer under the Rules.
In view of the above discussion, we find no merit in the appeal and it is accordingly dismissed.
There will be no order as to costs.
P.S.S. Appeal dismissed.
| The appellant along with his father and mother, were the joint owners of the suit property.
After the death of the appellant 's mother, he and his father executed an agreement dated 23rd August, 1951 by which they severed their status as joint owners and agreed to hold the property as tenants in common.
On 16th April, 1952 the appellant 's father trans ferred his undivided half share in the suit property in favour of his another son Sohrab.
Thus, the appellant and his brother Sohrab came to hold an equal undivided one half share each as tenants in common in respect of the said property.
After Sohrab 's death, his widow, the first respondent, and his minor sons, the second and third respondents, sold on 16th April, 1987 their undivided one half share in the property to the fourth respondent and his wife.
On 18th April, 1987 the appellant filed a suit under section 44 of the Transfer of Property Act against the respondents inter alia on the ground that the suit property was a dwelling house belonging to an undivided family and therefore the.
fourth respondent who was a stranger to the family had no right to have joint possession or common enjoyment of the property on the basis of purchase of undivided share.
The appellant also took out a notice of motion in the suit in which it was claimed that he was entitled to inter im/perpetual injunction restraining respondents 1, 2 and 3 from parting with possession of the suit property.
He fur ther claimed that if the said relief was not granted irrepa rable loss and great prejudice will be caused to him which could not be compensated in terms of money, and that the equity and balance of convenience was in his favour.
The, Trial Court granted interim injunction the same day but when the order was sought to be executed, it was report ed that the 4th respondent had already taken possession.
333 The suit and the notice of motion were resisted on the grounds that the appellant and respondents 1, 2 and 3 were owners of the property in equal moity but the property was not joint family property or property belonging to an undi vided family; that there had already been a partition as to the user of the property with the result that Sohrab 's family were in exclusive possession of ground floor and a garage in the building, and that the fourth respondent had already taken possession of that portion of the property.
It was further contended that the respondents would suffer irreparable loss and great prejudice if the injunction was granted, and that the balance of convenience was not in favour of the appellant.
The Trial Court found that the suit property was a dwelling house belonging to an undivided family, that there was no partition of the same by metes and bounds; that so far as the suit property was concerned the appellant and his family and the family of respondents 1, 2 and 3 were joint and undivided; that the case would fail within the scope of the second paragraph of section 44 of the Transfer of Property Act; and that respondent No. 4 and his wife as strangers were not entitled to joint possession of the said dwelling house.
Since the 4th defendant had claimed that he had already entered into possession, the Court granted interim mandatory injunction to the effect that the fourth respondent, his servants and agents were restrained from remaining in possession or enjoyment of the suit property.
On appeal, the High Court was of the view that prima facie the facts indicate that throughout the parties have lived separately; that there appears to have been a sever ance in status and it is not possible to give a finding that there has been no partition between the parties, that the matter requires evidence on either side as to what extent the ground floor could have ever been considered as a family dwelling house; that granting of interim mandatory injunc tion will have the effect of virtually deciding the suit without a trial; and that the plaintiff has not made out a prima facie case that he would suffer irreparable damage if injunction was not granted or that the balance of conven ience was in his favour.
In that view, the learned Single Judge allowed the appeal and set aside the order granting the injunction.
Before this Court it was also contended on behalf of the appellant that the fourth respondent was fully aware of the limited and restrictive title of respondents 1, 2 and 3 and the bar for joint possession provided in the second para graph of section 44 of the Transfer of Property Act, and having purchased with such full knowledge he tried to over reach 334 the Court by keeping the whole transaction secret and taking possession Of the property purchased before the appellant could get legal redress from the Court.
Allowing the appeal, this Court, HELD: (1) The courts can grant interlocutory mandatory injunction in certain special circumstances.
[340E] (2) The relief of interlocutory mandatory injunction is granted generally to preserve or restore the status quo of the last non contested status which preceded the pending controversy until the final hearing when full relief may be granted.
But since the granting or non granting of such an injunction may cause great injustice or irreparable harm to one of the parties, the Courts have evolved certain guide lines.
[343F H] (3) Generally stated, the guidelines are: (1) The plain tiff has a strong case for trial.
That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction; (2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money; (3) The balance of convenience is in favour of the one seeking such relief.
[344A B] Shepherd Homes Ltd. vs Sandham, ; Evans Marcgall & Co. Ltd.
Bertola SA, ; Films Rover International Ltd. & Ors.
vs Cannon Film Sales Ltd., ; Rasul Karim & Anr.
vs Pirubhai Amirbhai, ILR ; Champsey Bgimji & Co. vs The Jamna Flour Mills Co. Ltd., ILR 1914 (16) Born.
566; M. Kandaswami Chetty vs P. Subramania, ILR ; Israil vs Shamser Rahman, ILR and Nandan Pictures Ltd. vs Art Pictures, AIR 1956 Cal.
428, referred to.
(4) Being essentially an equitable relief, the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the Court to be exercised in the light of the facts and circum stances in each case.
[344C] (5) In considering the question of interim mandatory injunction in a suit filed under section 44 of the Act, the Court has also to keep in mind the restriction on the rights of the transferee to joint possession under that section.
[344D] 335 (6) In order to attract the second paragraph of section 44 of the Act the subject matter of the transfer has to be dwelling house belonging to an undivided family and the transfer is of a share in the same to a person who is not a member of the family.
[345A] Sultan Begam and Ors.
vs Debi Prasad, All 324; Khirode Chandra Ghoshal & Anr.
vs Saroda Prasad Mitra, ; Nil Kamal Bhattacharjya & Anr.
vs Kamakshya Charan Bhattacharjya & Anr., ; Sivaramayya vs Benkata Subbamma, AIR 1930 Madras 561; Bhim Singh vs Ratnakar, AIR 1971 Orissa 198 and Udayanath Sahu vs Ratnakar Bej, AIR 1957 Orissa 139, referred to.
(7) The ratio of the decisions rendered under section 4 of the Partition Act equally apply to the interpretation of the second paragraph of section 44 as the provisions are complementary to each other and the terms "undivided family" and "dwelling house" have the same meaning in both the sections.
[349B] (8) Even if the family is divided in status in the sense that they were holding the property as tenants in common but undivided qua the property, that is, the property had not been divided by metes and bounds, it would be within the provisions of section 44 of the Act.
[350D] (9) In the absence of a documents evidencing partition of the suit house by metes and bounds and on the documentary evidence showing that the property is held by the appellant and his brother in equal undivided shares, the plaintiff appellant has shown a prima facie case that the dwelling house belonged to an undivided family consisting of himself and his brother.
Therefore, the transfer by defendants 1 to 3 would come within the mischief of second paragraph of section 44 of the Act.
[350B C] (10) Clause 6 of the agreement to sell clearly shows that the fourth respondent knew that respondents 1 to 3 had only a limited right to transfer their undivided one half share to a stranger purchaser and they comtemplated litiga tion in this regard.
The said sale was itself hurriedly executed in a hush hush manner keeping the entire transac tion secret from the appellant.
The purchasers were also inducted in the premises in a manner which clearly suggests that the respondents were attempting to forestall the situa tion and to gain an undue advantage in hurried and clandes tine manner defeating the appellant 's attempt to go 336 to court for appropriate relief.
The respondents in such circumstances cannot be permitted to take advantage of their own acts and defeat the claim of the appellant in the suit by saying that old cause of action under section 44 of the Transfer of Property Act no longer survived in view of their taking possession.
(11) The facts in the instant case clearly establish that not only a refusal to grant an interim mandatory in junction will do irreparable injury to the appellant but also balance of convenience is in favour of the appellant for the grant of such injunction.
[352F]
|
il Appeal No. 1049 of 1968.
167 Appeal by special leave from the order, dated August 11, 1967 of the Delhi High Court in L.P.A. No. 85 of 1967.
Niren De, Solicitor General, B.P. Maheshwari and R.K. Maheshwari, for the appellant.
M.C. Chagla and Urmila Kapoor, for the respondents.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by the Municipal Corporation of Delhi, by special leave, is directed against the judgment and order, dated August 11, 1967 passed by the High Court of Delhi High Court, dated May 10, 1967 whereby a writ of manda Patent Bench had confirmed an order of the learned Chief Justice, Delhi High Court, dated May 10, 1967 whereby a writ of Mandamus had been issued to the appellant to approve the plans submitted by the respondents and grant the sanction asked for.
The circumstances leading up to the issue of the writ of mandamus against the appellant may be briefly adverted to.
The respondents are the owners and are.
in possession of the building bearing municipal door Nos. 3766 to 3776, situated in the main Chawri Bazar, Delhi.
As the building was an old construction and required urgent and extensive repairs, on October 16, 1965 the respondents submitted to the appellant plans for its sanction for execution of work consisting of repairs, additions as well as alterations to the said building.
The Commissioner of the appellant Corporation, by letter, dated February 4, 1966 informed the respondents that their application for execution of construction work in respect of house Nos.
3766 to 3776 had been refused on the grounds "that the proposal was under acquisition and also effected in the ROW and the land was residential against proposal of commercial".
A controversy appears to have been raised by the appellant before the High Court that the application, by the respondents, related also.
to certain other municipal door numbers, but as that is not material for the present purpose, we do not refer to the same.
Attempts made by the respondents to satisfy the Commissioner that their application was quite legal and that there was no violation of any law or rules having failed, they filed Civil Writ Petition No. 410 D of 1966 in the Circuit Bench of the Punjab High Court at Delhi, under article 226 of the Constitution praying for the issue of an order or direction in the nature of mandamus directing the appellant to accord sanction to the plan for execution of work in respect of the building.
as per their application of October 16, 1965.
According to the respondents it was.
incumbent on the Commissioner of the appellant, under section 336 of the Delhi Municipal Corporation Act, 1957 (Act LXVI of 1957) (hereinafter referred to as the Corporation Act), to sanction the plans of a building or 168 execution of a work unless such a building or work contravened any of the provisions, of sub section
(2) of section 336 or section 340 of the Corporation Act.
It was further stated that the plan submitted by them did not contravene any of the provisions of sub section
(2) of section 336 or section 340 of the Corporation Act.
The reasons given for rejection, by the Commissioner, were also challenged as being vague and unintelligible apart from being extraneous to the provisions of the Act.
The respondents further averred that the build Lags required extensive repairs.
as was clear from the notice, dated March 3, 1966, issued by the Commissioner of the appellant stating that the building posed a danger to the residents of the area and that the necessary repairs had to be carried out immediately, after obtaining sanction from the building department, and threatening penal consequences if the respondents did not comply with the notice.
On these grounds.
they urged that the order, dated February 4, 1966 passed by the Commissioner refusing to accord sanction was illegal and ultra vires and in consequence they prayed for the issue of a writ of mandamus directing the appellant to accord sanction, as asked for by them.
On behalf of the appellant, the Assistant Engineer had filed a counter affidavit.
The material averments, relevant for the present purpose, are that the respondents are the owners of the premises and that the construction was old and required repairs; but the plans submitted by the respondents did not conform to bye laws and contravened section 336(2) (a) in respect of land use and section 340(2) with respect to requisitioning of land by the Delhi Development Authority for their Scheme and that the plans were also affected by road widening.
In their reply affidavit the respondents controverted the averments of the Assistant Engineer that the plans did not conform to bye laws or the provisions of section 336(2) or any other law in respect of land use.
They stated that according to.
the Master Plan prepared under the Delhi Development Act, 1957 certain areas, including Chawri Bazar, would be the Central Business District of Delhi and that the proposed user, mentioned by them in the plan sent for sanction was not in contravention of the Master Plan.
They also denied that the Delhi Development Authority had any scheme for road widening.
They further referred to a letter, dated April 30, 1966 of the Delhi Development Authority stating that the Zonal Development Plan has not been prepared for the area in question.
They finally reiterated the plea that the order refusing sanction was not based on any of the grounds envisaged by section 336(2) or section 340 or any other provision of the Corporation Act or of any other Act.
The learned Chief Justice of the Delhi High Court, who heard the writ petition in the first instance, by his judgment and order 169 dated May 10, 1967 accepted the writ petition filed by the respondents and issued a mandamus to the appellant to approve the plans and grant the sanction asked for '.
The learned Chief Justice has expressed the view that the Commissioner could decline the sanction only if there was a contravention of sub section
(2) of section 336 or section 340 of the Corporation Act.
In this case, according to the learned Chief Justice, there was no such contravention established by the appellant and if that were so the Commissioner had no power to refuse to accord the sanction asked for by the respondents.
He was of the further view that the grounds on which the Commissioner refused sanction were wholly irrelevant and not germane to the sanction asked for.
Taking the further view that the Commissioner had a statutory duty to grant the sanction asked for, the learned Chief Justice directed the issue of a writ of mandamus.
This judgment of the learned Chief Justice as mentioned earlier, was affirmed by the judgment of the Letters Patent Bench of the Delhi High Court, dated August 11, 1967.
The learned Solicitor General, on behalf of the Corporation, has urged that the order of the Commissioner refusing sanction is legal and is justified by the provisions, of cl.
(a) of sub section
(2) of section 336 of the Corporation Act.
Even at the outset he has made it clear that he is relying upon only one of the grounds given in the order, dated February 4, 1966 of the Commissioner, viz., that the plan submitted was affected by the proposals contained in the Master Plan in respect of widening of the read in the area in question.
The expression 'ROW ' used in the order refers to 'right of way ' which is with reference to the road proposed under the Master Plan.
The Master Plan has been prepared under section 7 of the Delhi Development Act, 1957 (Act LXI of 1957 ) (hereinafter referred to as the Development Act) and it has come into operation, under section 11, in the area concerned.
The building operation proposed by the respondents as per the plans submitted by the:m will be contrary to.
the Master Plan and, as such, will be hit by section 14 of the Development Act.
In short, the contention of the ]earned Solicitor General is that the Master Plan prepared by the Authority for Delhi, which has statutory force, has come into effect under the Development Act.
Under section 336(2)(a) of the Corporation Act, the Commissioner is entitled to refuse sanction of a building or work if the building or work or use of the site for building or work would contravene 'any other law '.
As the proposed construction would not be in conformity with the Master Plan, section 14 of the Development Act will be violated, in which case there will be a contravention of 'any other law '.
Hence the order of rejection passed by the Commissioner is legal and valid.
In this connection the learned Solicitor General referred us to the Master Plan wherein it is stated that the proposed road (in Chawri Bazar, which is the area with which we are concerned) CI 69 12 170 from Hauz Kazi to Jama Masjid is recommended to have a width of 60 feet.
The width of the existing road is only 48 feet.
The object of the Development Act is to freeze new building constructions which will be inconsistent with the Master Plan; and, if the Master Plan mentions the width of a proposed road and the width of an existing road is less, no new construction will be permissible on either side of the road till the excess area required for the road is found.
The Solicitor General has further urged that though a Zonal Development Plan for each of the Zones in which Delhi will have to be divided will have also to be prepared and has not come into operation for the zone concerned, nevertheless, till such a Zonal Development Plan comes into operation, the Master Plan will hold the field.
If a Zonal Development Plan comes into force and has made any alteration, the Zonal Development Plan will then have effect and the Master Plan will stand abridged or modified.
At present, it is the Master Plan that holds the field and, as according to it an excess area of 12 feet for the proposed road will have to be found, all building operations on either side of the proposed road will have to come to a standstill.
That is, the learned Solicitor General was prepared to take the stand that, so to say, there is a freezing of all building operations, on either side of the existing road which, according to him, is warranted by section 14 of the Development Act.
In support of his contentions, the learned Solicitor General drew our attention to certain provisions contained in the Corporation Act and the Development Act.
The stand taken by the learned Solicitor General has been very strenuously controverted by Mr. M.C. Chagla, learned counsel for the respondents.
Mr. Chagla, apart from criticising the order, dated August 11, 1967 as laconic and unintelligible and not containing any valid reasons has urged that the Master Plan, so strongly relied on by the learned Solicitor General, does not, as such, refer to the survey numbers in respect of which the respondents had asked for sanction.
Before the High Court the appellant has not relied upon the Master Plan nor did it place any material to show that any part of the proposed road shown in the Master Plan will pass through any of the properties of the respondents.
The Master Plan prepared under the Development Act is nothing but a broad outline of what Delhi would look like, in future.
The plan, which may probably give more accurately the lands in the area which are reserved for roads, is the Zonal Development Plan, the preparation of which is mandatory under section 8 of the Development Act.
Admittedly no such plan has been prepared, much less has come into operation in the concerned zone.
So long as the Master Plan does not state that any part of the property belonging to the respondents will be covered by the proposed road, it cannot be stated that when the respondents are attempting to renovate the building they are using the land in the zone otherwise than in conformity with the Master Plan.
Mr. Chagla further points out 171 that if the contentions advanced on behalf of the appellant are accepted, the entire building operations in Delhi will have to come to a standstill for an indefinite number of years and, according to him, that position is not envisaged either by the Master Plan or the provisions of the Development Act.
He finally urged that section 14 of the Development Act has no application at all.
From the contentions of both the parties set out above, it will be noticed that according to the appellant ii building operations are allowed to be carried on, there will be a violation of the Master Plan, and in consequence of the provisions of section 14 of the Development Act; whereas, according to the respondent, there is no violation of either the Master Plan or any provisions of the Development Act or of any other law.
A reference to the material provisions of the Corporation Act and the Development Act, which will be made by us presently, will clearly establish that the contentions of the learned Solicitor General cannot be accepted.
We shall first take up the provisions of the Corporation Act.
Section 332 prohibits the erection or commencement of the erection of any building, or execution of any of the works specified in section 334, except with the previous sanction of the Commissioner.
Section 333 makes its mandatory on a person intending to erect a building to apply to the Commissioner in that behalf.
Section 334 makes it obligatory on a person, who intends to execute any of the works mentioned therein, to apply for sanction to the Commissioner.
Section 336 deals with sanction or refusal of building or work.
It is only necessary to refer to sub section
(1) and cl.
(a) of sub section
(2) of this section, because, as we have already stated, the order of rejection by the Commissioner is sought to be justified under this provision.
These provisions are:, "336.
( 1 ) The Commisioner shall sanction the erection of a building or the execution of a work unless such building or work would contravene any of the provisions of sub section (2) of this section or the provisions of section 340.
(2) The grounds on which the sanction of a building or work may be refused shall be the following, namely : (a) that the building or work or the use of the site for the building or work or any of the particulars comprised in the site plan, ground plan, elevation, section or specification would contravene the provisions of any byelaw made in this behalf or of any other law or rule, byelaw or order made under such other law; 172 Sub section
(3) of section 336 provides for the Commissioner communicating the sanction to the person who has given the notice; and in cases where he refuses sanction on any of the grounds specified in subs.
(2) of section 336 or under section 340, to record a brief statement of his reasons for such refusal and communication of the refusal along with the reasons to the party concerned.
It will be clear, from a perusal of section 336, that the Commissioner has to give sanction for the erection of a building or the execution of a work, unless such building or work would contravene any of the provisions of sub section
(2) of section 336 or the provisions of section 340.
Therefore, in order to sustain the validity of the order of rejection passed by the Commissioner the appellant has to establish, as it seeks to, that the proposed building or the use of the site for the building, by the respondents, would contravene the provisions of 'any other law '.
If the proposed building or use of the site for the building would contravene the provisions of any other law ', the Commissioner has ample powers under cl.
(a) of section 336(2) to refuse sanction.
Section 340 gives power to the Commissioner to refuse sanction for erection of any building on either side of a new street, under the circumstances mentioned therein.
We shall now refer to some of the provisions of the Development Act in order to appreciate the scheme of that statute.
The Development Act is an Act to provide for the development of Delhi according to plan and for matters ancillary thereto.
Section 2, clauses (d) and (e), define the expressions 'development ' and 'development area ' respectively.
Chapter II deals with the Delhi Development Authority and its objects.
Section 3, therein, provides for the Central Government constituting for the purposes of the Act an authority to be called the Delhi Development Authority.
It is referred to in the Act as the Authority.
Section 5 provides for the Authority constituting an Advisory Council for the purpose of advising the Authority on the preparation of the Master Plan and the Zonal Development Plans and on such other matters in connection with the administration of the Act.
Such Advisory Council also has been duly constituted.
Section 6 provides that the object of the Authority shall be to promote and secure the development of Delhi according to plan and clothes the Authority with the various powers mentioned therein.
Chapter III deals with Master Plan and Zonal Development Plans.
Section 7, therein, provides for the Authority carrying out a civic survey of and preparing a Master Plan for Delhi.
Under sub section
(2), the Master Plan shall (a) define the various zones into which Delhi may be divided for the purposes of development and indicate the manner in which the land in each zone is proposed 173 to be used (whether by the carrying out thereon of development or otherwise) and the stages by which any such development shall be carried out; and (b) serve as a basic pattern of frame work within which the zonal development plans of the various zones may be prepared '.
Section 8 provides for the preparation by the Authority of a zonal development plan for each of the zones into which Delhi may be divided and also refers to the various matters which are to be indicated in the same.
The material provisions of section 8 which, according to us, will have a vital bearing in considering the soundness of the stand taken by the appellant are as follows: "8.
(1 ) Simultaneously with the preparation of the master plan or as soon as may be thereafter, the Authority shall proceed with the preparation of a zonal development plan for each of the zones into which Delhi may be divided.
(2) A Zonal Development Plan may (a) contain a site plan and use plan for the development of the zone and show the approximate locations and extents of land uses proposed in the zone for such things as public buildings and other .public works and utilities, roads, housing, recreation, industry, business, markets, schools, hospitals and public and private open spaces and other categories of public and private uses; (d) in particular, contain provisions regarding all or any of the following matters, namely : (ii) the allotment or reservation of land for roads, open spaces, gardens, recreation grounds, schools, markets and other public purposes; Section 9 (1 ) states that the expression 'plan ' in that section and in sections 10, 11, 12 and 14 means the Master Plan as well as the Zonal Development Plan for a zone.
Sub section
(2) provides for the plan which means the Master Plan as well as the Zonal Development Plan being submitted after preparation by the Authority to the Central Government for approval and it also gives power to the Government to approve the plan, without modification or with such modifications as it may consider necessary, or reject the plan with directions to the Authority to prepare a fresh plan.
174 Section 10 provides for the procedure to be followed in the preparation and approval of plans.
A perusal of that section shows that ample opportunity has to be provided for persons and every local authority to submit objections at the stage of the draft, and it also requires the authority to consider any objections, suggestions and representations that may have been made, before the final plan is prepared and submitted to the Central Government for its approval.
It also empowers the Central Government to call for any information that it thinks necessary from the Authority for the purpose of approving any plan submitted to it.
Section 11 provides for the date of operation of the plan.
There is no controversy, in this case, that the Master Plan has been prepared under section 7 by the Authority on September 1, 1962 and it has also come into force, as contemplated by section 11.
Though section 8 contemplates the preparation of a Zonal Development Plan simultaneously with the preparation of the Master Plan, or as soon as may be thereafter, no Zonal Development Plan for the zone concerned has been prepared up to now.
It may also be pointed out that if and when such a Plan is prepared, containing the various matters referred to in sub section
(2) of section 8, before it is finalized and sent to the Central Government for approval, parties and local authorities will have to be given an opportunity of sending their objections and suggestions and representations, which have all to be duly and properly considered by the Authority concerned.
Chapter III A deals with modifications to the Master Plan and the Zonal Development Plan.
Section 1 I A, therein, provides for the Authority and the Central Government making modifications in the Master Plan or the Zonal Development Plan under the circumstances and after following the procedure, mentioned therein.
Chapter IV deals with development of lands.
Sub section
(1 ) of section 12 gives power to the Central Government, by notification in the Official Gazette, to declare any area in Delhi to be a development area for the purposes of the Act.
Sub section
(2) prohibits the Authority, except as otherwise provided for in the Act, to undertake or carry out any development of land in any area which is not a development area.
Sub section
(3) provides that after the commencement of the Act no development of land shall be undertaken or carried out in any area by any person or body (including a department of Government) except in the manner provided therein.
Section 14, on which considerable reliance has been placed, on behalf of the appellant, is as follows: "14.
After the coming into operation of any of the plans in a zone no person shall use or permit to be 175 used any land or building in that zone otherwise than in conformity with such plan: Provided that it shall be lawful to continue to use upon such terms and conditions as may be prescribed by regulations made in this behalf any land or building for the purpose and to the extent for and to which it is being used upon the date on which such plan comes into force.
" A copy of the Master Plan for Delhi has been placed before us by the learned Solicitor General.
Chapter I deals with the Land Use Plan under various sub heads.
Chapter II deals with Zoning and Sub division Regulations.
There are certain maps annexed to this Plan.
Under the heading 'Proposed rights of way in Old City ', in paragraph 11 of Chapter I, item 7 refers to the area concerned, viz., Chawri Bazar.
Against that it is stated that the road from Hauz Kazi to Jama Masjid, which is approximately 1,800 feet long is recommended to have a road width of 60 feet.
There is no controversy that the existing .road is only 48 feet wide.
Our attention has also been invited to two of the maps annexed to this Master Plan, viz. the Zonal Map and the Proposed Circulation Pattern of Walled City and it was stated that the area marked 'A ' in the Zonal Map refers to the Walled City which is divided into 27 zones.
The second map viz. the Proposed Circulation Pattern of Walled City, is an enlargement of the area 'A ' shown in the Zonal Map and the Chawri Bazar is shown there.
As stated earlier, considerable reliance has been placed by the learned Solicitor General on the statement in the Master Plan that the road in Chawri Bazar is to have a width of 60 feet and on the two maps annexed to the Master Plan which, according to him, will show the lay out of the proposed road.
The Master Plan and the two maps relied on by the appellant do not give any indication that any part of the land belonging to the respondents will be covered by any portion of the proposed road.
The provisions of section 7 of the Development Act clearly indicate and that is borne out by the various matters mentioned in the Master Plan that the Master Plan will only give a very broad outline of DeLhi as it will look in future.
Though there is an obligation on the Authority to prepare the Zonal Development Plan simultaneously with the preparation of the Master Plan, or as soon as there may be thereafter, no such Zonal Development Plan has been prepared.
That assumes considerable importance in this case because it is the Zonal Development Plan, under section 8(2)(a) which will show the approximate locations and extents of land uses proposed in a zone for roads; further, under sub cl.
(ii) of cl.
(d) of sub section
(2) of section 8, the said Zonal Development Plan will also contain provision regarding the allotment or reservation of land for roads.
It is only when such allotment or reservation of land for roads is made that it will be possible to know clearly as to which part of 176 a person 's land and what portion thereof is allotted or reserved for a road.
If such an indication is made available by the Zonal Development Plan, then section 14 will quite naturally stand attracted, because any user of a land or building otherwise than in conformity with the Zonal Development Plan will be hit by that section.
In the absence of any indication in the Master Plan, in this case, that any part of the land of the respondents will be covered by a road, or portion of a road it is not possible to accept the contention of the learned Solicitor General that there will be any violation of section 14 of the Development Act if the respondents be permitted to use the land, as.
asked for by them.
To attract section 14, the appellant will have to establish that any land or part of a land or a building in a Zone has been dealt with in a particular manner by the Master Plan and that it is proposed to be used in a different manner.
If a Zonal Development Plan is prepared for the area, before it comes into operation in the Zone, the procedure indicated in section 10 will have to be followed and parties will have to be given an opportunity of placing any objections or making any representations or offering any suggestions.
So far as we can see, it is certainly not the scheme of the Development Act that the moment a Master Plan has come into operation and if it contains a proposal regarding the width that a road should have, all use of land adjoining that road is prohibited for an indefinite period.
The reasonable interpretation to be placed on section 14 will be that if any particular and definite use of land is indicated in a Master Plan, a different use of that land cannot be permitted.
Similarly, if a Zonal Development Plan provides for a particular use of any land or any building in that zone, it cannot be put to a different use.
If neither of the plans provide for the particular use of any land or building in the area or Zone, section 14 will have No. application whatsoever.
We have already stated that the respondents ' lands are not in any manner indicated as being taken up by any part of the proposed road, mentioned in the Master Plan and, if that is so, there is no violation of section 14 of the Development Act.
It .also follows that there is no violation of 'any law ' under cl.
(a) of sub section
(2) of section 316 of the Corporation Act.
The High Court was perfectly justified, in the circumstances, in issuing the writ of mandamus.
The result is that the appeal fails, and is dismissed.
The appellant will pay the costs of the respondents.
Appeal dismissed.
| The appellant 's husband was one of the applicants for a permanent stage carriage permit on a route under the jurisdiction of the North Bihar Regional Transport Authority.
On her husband 's death during the pendency of the aforesaid application, the appellant came into possession of all his transport vehicles.
The Regional Transport Authority allowed the appellant to prosecute the application and directed the grant of the permit to her.
The appeal filed by the unsuccessful applicants against this order was allowed by the State Transport Authority but the Transport Minister, in revision under section 64A of the , decided in favour of the appellant.
Against the orders of the Transport Minister writ petitions were filed in the High Court and were allowed.
The ,appellant came to this Court.
The question for consideration was whether on the death of an applicant for a stage carriage permit in respect of his transport vehicles the Regional Authority has power to a11ow the person succeeding to the possession of the vehicles, to prosecute the application filled by the deceased applicant.
HELD: The High Court was in error in setting aside the order of the Transport Minister., A person in possession of a transport vehicle is not entitled to a permit as a matter of right.
His only right is to make an application under section 45 of the and to a consideration of the application under the provisions of the Act.
If he dies after obtaining the permit, the Regional Transport Authority has power under section 61(2) to transfer the permit to the person succeeding to the possession of the vehicles covered by the permit.
In the case of death of the applicant before the final disposal of his application for the grant of a permit in respect of his vehicles the Regional Transport Authority has power to substitute the person succeeding to the possession of the of the. deceased applicant.
As the relief sought for in the application is dependent upon and related to the possession of the vehicles, the application is capable of being revived at the instance of the person succeeding to the possession of the vehicles.
[509 G 510 C] Verappa Pillai.v.
Raman.
& Raman Ltd., ; , 591, 595.
referred to.
Under section 57 an application for a stage carriage permit or a public carrier permit must be made within the appointed time and published in the prescribed manner.
The representations relating thereto must also be made at the appointed time.
In the event of the death of the applicant after the expiry of the time appointed for making the application, the person succeeding to the possession of the vehicles cannot, having regard to the lapse of dine, make another application in his own right.
508 The successor cannot obtain the permit unless he is allowed to prosecute the application filed by his predecessor and there is no reason why he cannot be permitted to do so.
Section 57 does not deal with the situation arising on the death of an applicant nor has it prescribed any time for the making of an application for substitution of the successor or for the filing of objections against the grant of the permit to him.
In the absence of any statute or statutory rule the Regional Transport Authority may devise any procedure for dealing with the situation.
The Regional Transport Authority has complete discretion in the matter of allowing or refusing substitution.
It is not bound to embark on a prolonged investigation into disputed questions of possession.
Nor is it bound to allow substitution if such order will delay the proceedings unreasonably or will otherwise be detrimental to the interests of the public generally.
[510 C 511 A] The same principle would apply to applications under sections 57(1), 58(8) and 58, as well as to appeals under section 64, and revisions under section 64A. [511 B] Ratanlal vs State Transport Authority, A.I.R. 1957 All 471, disapproved Meenakshi vs Mysore S.T.A. Tribunal, A.I.R. 1963 Mys. 279, Hanuman Transport Co. vs Meenakshi, C.A. No. 794/63 dt.
20 12 63, Maruthavanan vs Balasubramaniam A.I.R. 1963 Mad. 292, Kuppu swarmi vs Ramchandran, A.I.R. 1964 Mad. 356, and Director of Public 'Works vs Ho Po Sang & Ors., [1961] A.C. 901, referred to.
|
t Petition (Civil) No. 27860 of 1987 In Writ Petition (Civil) No. 591 of 1987.
In Writ Petition (Civil) No. 591 of 1987.
282 (Under Article 32 of the Constitution of India).
Pankaj Kalra for the Petitioners.
M.K. Banerjee, Solicitor General, A.K. Ganguli, Ms. A. Subhashini, P. Parmeshwaran and B. Parthasarthi for the Respondents.
The following order of the Court was delivered: O R D E R An application under Article 32 of the Constitution being Writ Petition No. 591 of 1987 has been filed in this Court on behalf of 40 employees working in the Pension Paying office, Pokhara in Nepal asking for a direction to the Union of India to make the services of the petitioners permanent and for further directions in the matter of payment of allowances and other material benefits as payable to similar employees under the Union Government.
Notice was ordered on the application on 14th July, 1987, and two weeks ' time was allowed to the respondents for filing their counter affidavit.
On 3rd August, 1987, the court directed as follows: "Two weeks are allowed to the respondents for filing a counter affidavit.
No further time will be allowed.
One week thereafter is allowed for filing rejoiner.
Put up this matter after three weeks.
Meanwhile, status quo as on today shall be maintained." (underlining is ours).
On 7th August, 1987, the Court made the following further order: "Issue notice returnable on August 14, 1987.
Mr. B. Parathasarathy accepts the notice for Union of India.
Respondent is directed to file counter affidavit within one week from today.
In the meanwhile petitioner No. 9 will not be evicted from the quarter now occupied by him. " Again on 14th August, 1987, the Court further directed: 283 " .
Petitioner No.9 will be put back in possession of the government quarter if he has already been evicted . " Ultimately on 11th September, 1987, a three Judge Bench of this Court directed: "Petitioner No. 9 will be reinstated in service and he will also have to be put in possession of his quarter forth with." On the allegation that the directions of this Court in regard to petitioner No. 9 were not implemented, the present contempt proceeding has been initiated on behalf of the petitioners.
Petitioners have alleged that with the filing of the writ petition, the treatment provided to the petitioners by the establishment has undergone a change and those of the respondents who have local base in Nepal have started ill treating the petitioners.
Several allegations have been made in support of the aforesaid plea.
After notice was issued on this petition, the different respondents have filed separate affidavits in return.
The Indian Embassy for Nepal is located at Kathmandu.
The Pension Paying office is maintained at some distance at a place called Pokhara.
It is the common case of the parties that the necessity to maintain such an office is linked up with the historical fact that several inhabitants of Nepal worked in the Indian Army under the Gorkha Regiment.
Mainly for their convenience this extra territorial establishment is being maintained.
Some of the petitioners are India based while others are residents of Nepal.
The establishment at Pokhara is under the direct control of an officer attached to the Indian Embassy styled as officer in Charge, Indian Embassy, Pension Paying office, Pokhara.
The Ambassador of the Indian Embassy at Kathmandu, being the head of Indian Government establishments in Nepal, has also supervisory jurisdiction over the Pay office.
Respondent No. S, the Military and Air Attache of the Indian Embassy is the link between the Embassy establishment at Kathmandu and the said Officer in Charge at Pokhara.
Respondent No. 3 is the Controller of Defence Accounts who inter alia oversees the disbursement of the pension of the ex Army personnel.
Respondent No. 1 is the Union of India through its Defence Secretary and respondent No. 2 is the Secretary of the Ministry of External Affairs.
Admittedly both these respondents 284 are based in Delhi and have been impleaded being in overall charge of their establishments.
Shri S.K. Bhatnagar, Defence Secretary, in his affidavit has taken the stand that he was not personally impleaded in the writ petition.
Only when he was served with notice in the contempt matter he came to know about Court 's directions and realised the full implication of the situation when he had a conference with his senior counsel on December 6, 1987.
Immediate action was taken to ensure appropriate compliance.
Shri K.P.S. Menon, Foreign Secretary in the Ministry of External Affairs has also taken the plea that he was not personally impleaded as a party in the writ petition and came to know about the Court 's order at the same conference with senior counsel on December 6, 1987, and ensured immediate compliance with Court 's directions.
Both these Secretaries to the Government have tendered unconditional apology.
The third respondent is the Controller of Defence Accounts, Central Command, Meerut.
He has taken the stand that petitioner No. 9, Shri C.N. Dubey, is not an employee of the establishment of the Controller of Defence Accounts at Meerut nor is he an employee under his administrative control.
According to him, he has no concern with any executive or administrative matter relating to the Pension Paying office at Pokhara.
Respondent No. 4, the Ambassador, was not subjected to the contempt proceedings.
Respondent No. 5 is the Military and Air Attache of the Indian Embassy at Kathmandu and is in charge of the general administration of the military wing.
Apart from offering unconditional apology, he has indicated that Dubey has been restored to service and he has been provided with residential accommodation and for the period he was out of possession of the official residence, rent by way of compensation has already been ordered to be paid to him.
It is clear from the orders made by this Court and the facts appearing on the record that the responsibility for implementation of the Court 's orders in regard to petitioner No. 9 squarely rested with respondent No. 6, the officer in Charge of the Pension Paying office.
He, in his affidavit, has stated that Dubey was dispossessed from his residential accommodation on 14th August, 1987, and by then the order of this Court dated 7th August, 1987 had not been received by him.
That accommodation was given to one Krishna Bahadur.
Later Dubey has been restored to service, given possession of a similar accommodation as the one from which he was displaced and with a view to giving effect to the spirit of the order of this Court, the rent which Dubey had paid for private accommodation has been decided to 285 be borne out of Government account.
His affidavit explains the delay in implementation thus: A "There has been delay in implementation of the orders of this Hon 'ble Court due to delay in communication, administrative bottlenecks and for security reasons.
It is further stated that we had no intention to flout or disobey the orders of this Hon 'ble Court but for the reasons beyond our control, the same could not be implemented notwithstanding the fact that we had all intentions to implement the same in the right earnest.
The orders have since been implemented, the petitioner has since been reinstated and also given accommodation.
The delay in implementing the same may kindly be condoned and we be excused for such delay for which we have tendered an unconditional apology at the outset of this affidavit.
" There is some material which, if probed into further, might have established that respondent No. 6 had the notice of the order of this Court before physical dispossession of Dubey was effected.
As already noticed, there is allegation of adoption of an attitude of resentment by respondent No. 6 or for the matter of that the local officers, when the writ petition was filed in this Court.
That backdrop, as contended by counsel for the petitioners, perhaps could be taken to supply the motive for the delay in complying with the directions of this Court.
We have not considered it expedient to probe into the matter further on account of the fact that there has been compliance and each of the respondents has tendered unqualified apology.
We would part with the matter by recording our serious concern and disapproval of the growing conduct of parties and public officers in particular of ignoring the directions of the Courts and the multiplying instances of confrontation.
The Court, including the apex one, is a part of the State and is a built in mechanism of the Constitution to administer justice in accordance with law.
For discharging that duty, the Court has got to adopt an attitude of critical assessment of situations connected with litigation brought before it for adjudication.
The manner of functioning of the Court in accord with the Rule of Law has to be dispassionate, objective and analytical.
The Judges who preside over these courts do not act with a sense of superiority; nor do they look down upon others in the community.
In order that the system may efficiently work and the purpose for which the courts are established is duly served, it is necessary that everyone within the framework of the 286 Rule of Law must accept the system, render due obedience to orders made and in the event of failure of compliance, the rod of justice must descend down to punish.
We hope and trust that everyone within the system realises this situation and does not unnecessarily get into a confrontation.
The apologies tendered by the respondents are accepted and the contempt notice is discharged.
Respondent No. 6 is directed to pay to the petitioners the costs of the proceedings which are assessed at Rs.2,000 within one month.
| % The Supreme Court issued certain directions in respect of petitioner No. 9 regarding accommodation and reinstatement in service in a writ petition filed on behalf of forty petitioners, working in Pension Paying officer, Pokhara, in Nepal, praying for directions to the Union of India, regarding their permanency and other benefits applicable to similar Union Government employees.
In the petition for contempt, it was alleged that these directions were not implemented, and that consequent to the filing of the writ petition, the authorities, especially local officers, were ill treating the Petitioners.
On notice being issued, affidavit on behalf of respondents Nos.
1 to 3 and 5 were filed tendering unconditional apology, and explaining their positions regarding the implementation of the Court 's orders.
Respondent No. 6, who was the officer ln charge of the Pension Paying officer and who was responsible for the implementation of the Court 's orders, also tendered an unconditional apology and stated, in his affidavit, that petitioner No. 9 was dispossessed of the residential accommodation on 14th August, 1987, by which time the Court 's orders of 7th August, 1987 had not been received by him, and the accommodation had already been given to another person, that petitioner No. 9 was later restored to service and given possession of similar accommodation and that the rent paid by the petitioner for the private accommodation will be paid out of Government account, and requested for condonation 281 of delay in implementing the orders of this Court.
Disposing of the Petition, ^ HELD: This Court records it serious concern and disapproval of the growing conduct of parties and public officers, in particular, of ignoring the directions of the Court and the multiplying instances of confrontation.
[285F] The Court, including the apex one is a part of the State and is a built in mechanism of the Constitution to administer justice in accordance with law.
For discharging that duty, the Court has got to adopt an attitude of critical assessment of situations connected with litigation brought before it for adjudication.
The manner of functioning of the Court in accord with the Rule of Law has to be dispassionate, objective and analytical.
The Judges who preside over these courts do not act with a sense of superiority; nor do they look down upon others in the community.
[285F G] In order that the system may efficiently work and the purpose for which the courts are established is duly served, it is necessary that everyone within the framework of the Rule of Law must accept the system, render due obedience to orders made and in the event of failure of compliance, the rod of justice must descend down to punish.
Everyone within the system must realise this situation and should not unnecessarily get into a confrontation.
[285H; 286A B] In the instant case, there is some material which if probed into further, might have established that respondent No. 6 had notice of the order of this Court before physical dispossession of the petitioner was effected.
There is allegation of adoption of an attitude of resentment by respondent No. 6 or for the matter of that the local officers, when the writ petition was filed in this Court.
That backdrop could supply the motive for the delay in complying with the directions of this Court.
It is, however, not considered expedient to probe further into the matter on account of the fact that there has been compliance and each of the respondents has tendered unqualified apology which is accepted and the contempt notice is discharged.
[285D E; 286B]
|
Appeal No. 312 of 1955.
On appeal by special leave from the judgment and order dated the 19th October 1955 of the Andhra High Court at Guntur in 0.
section Appeal No. I of 1955 1068 arising out of the Order dated the 26th day of September 1955 of the said High Court in its Ordinary Original Civil Jurisdiction in O.P. No. 3 of 1955.
M. section K. Sastri, for the appellant.
D. Narasaraju, Advocate General, Andhra (T. Anantha Babu and T. V. R. Tatachari with him), for respondent No. 1. D. Narasaraju, Advocate General, Andhra (A. Krishnaswami and K. B. Chowdhry, with him) for respondents Nos. 2 and 3. 1955.
December 16.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
This appeal arises out of an application filed by the first respondent under section 162, clauses (v) and (vi) of the Indian Companies Act for an order that the Rajahmundry Electric Supply Corporation Ltd., be wound up.
The grounds on which the relief was claimed were that the affairs of the Company were being grossly mis managed, that large amounts were owing to the Government for charges for electric energy supplied by them, that the directors had misappropriated the funds of the Company, and that the directorate which had the majority in voting strength was "riding roughshod" over the rights of the shareholders.
In the alternative, it was prayed that action might be taken under section 153 C and appropriate orders passed to protect the rights of the shareholders.
The only effective opposition to the application came from the Chairman of the Company, Appanna Ranga Rao, who contested it on the ground that it was the Vice Chairman, Devata Ramamobanrao, who was responsible for the maladministration of the Company, that he had been removed from the directorate, and steps were being taken to call him to account, and that there was accordingly no ground either for passing an order under section 162, or for taking action under section 153 C.
The learned Judge of the Andhra High Court before whom the application came up for hearing, held that 1069 the charges set out therein had been substantially proved, and that it was a fit case for an order for winding up being made under section 162(vi).
He also held that under the circumstances action could be taken under section 153 C, and accordingly appointed two administrators for the management of the Company for a period of six months vesting in them all the powers of the directorate and authorising them to take the necessary steps for recovering the amounts due, paying the debts and for convening a meeting of the shareholders for the purpose of ascertaining their wishes whether the administration should continue, or whether a new Board of Directors should be constituted for the management of the Company.
Against this order, the Chairman, Appanna Ranga Rao, acting in the name of the Company preferred an appeal to a Bench of the Andhra High Court.
The learned Judges agreed with the trial Judge that the affairs of the Company, as they stood, justified action being taken under section 153 C, and dis missed the appeal.
Against this order, the Company has preferred this appeal by special leave.
On behalf of the appellant, it was firstly contended that the application in so far as it was laid under section 153 C was not maintainable, as there was no proof that the applicant bad obtained the consent of the requisite number of shareholders as provided in sub clause (3)(a)(i) to section 153 C.
That clause provides that a member is entitled to apply for relief only if he has obtained the consent in writing of not less than one hundred in number of the members of the company or not less than one tenth in number of the members, whichever is less.
The first respondent stated in his application that he bad obtained the consent of 80 shareholders, which was more than onetenth of the total number of members, and had thus satisfied the condition laid down in section 153 C, sub clause (3) (a) (i).
To this, an objection was taken in one of the written statements filed on behalf of the respondents that out of the 80 persons who had consented to the institution of the application, 13 were not share holders at all, and that two members 1070 had signed twice.
It was further alleged that 13 of the persons who had given their consent to the filing of the application had subsequently withdrawn their consent.
In the result, excluding these 28 members, it was pleaded, the number of persons who had consented would be reduced to 52, and therefore the condition laid down in section 153 C, sub clause (3) (a) (i) was not satisfied.
This point is not dealt with in the judgment of the trial court, and the argument before us is that as the objection went to the root of the matter and struck at the very maintainability of the application, evidence should have been taken on the matter and a finding, recorded thereon.
We do not find any substance in this contention.
Though the objection was raised in the written statement, the respondents did not press the same at the trial, and the question was never argued before the trial Judge.
The learned Judges before whom this contention was raised on appeal declined to entertain it, as it was not pressed in the trial court, and there are no grounds for permitting the appellant to raise it in this appeal.
Even otherwise, we are of opinion that this contention must, on the allegations in the statement, assuming them to be true, fail on the merits.
Excluding the names of the 13 persons who are stated to be not members and the two who are stated to have signed twice, the number of members who had given consent to the institution of the application was 65.
The number of members of the Company is stated to be 603.
If, therefore, 65 members consented to the application in writing, that would be sufficient to satisfy the condition laid down in section 153 C, subclause (3)(a) (i).
But it is argued that as 13 of the members who had consented to the filing of the application bad, subsequent to its presentation, withdrawn their consent, it thereafter ceased to satisfy the requirements of the statute, and was no longer maintainable.
We have no hesitation in rejecting this contention.
The validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when 1071 presented cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation.
In our opinion, the withdrawal of consent by 13 of the members, even if true, cannot affect either the right of the applicant to proceed with the application or the jurisdiction of the court to dispose of it on its own merits.
It was next contended that the allegations in the application were not sufficient to support a winding up order under section 162, and that therefore no action could be taken under section 153 C.
We agree with the appellant that before taking action under section 153 C, the court must be satisfied that circumstances exist on which an order for winding up could be made under section 162.
The true scope of section 153 C is that whereas prior to its enactment the court had no option but to pass an order for winding up when the conditions mentioned in section 162 were satisfied, it could now in exercise of the powers conferred by that section make an order for its management by the court with a view to its being ultimately salvaged.
Where, therefore, the facts proved do not make out a case for winding up under section 162, no order could be passed under section 153 C.
The question therefore to be determined is whether the facts found make out a case for passing a winding up order under section 162.
In his application the first respondent relied on section 162, clauses (v) and (vi) for an order for winding up.
Under section 162(v), such an order could be made if the company is unable to pay its debts.
It was.
alleged in the application that the arrears due to the Government on 25 6 1955 by way of charges for energy supplied by them amounted to Rs. 3,10,175 3 6.
But there was no evidence that the Company was unable to pay the amount and was commercially insolvent, and the learned trial Judge rightly held that section 162(v) was inapplicable.
But he was of the opinion that on the facts established it was just and equitable to make an order for winding up under section 162(vi), and that view has been affirmed by the learned Judges on appeal.
1072 It was argued for the appellant that the evidence only established that the Vice Chairman, Devata Ramamohan Rao, who had been ineffective management was guilty of misconduct, and that by itself was not a sufficient ground for making an order for winding up.
It was further argued that the words "just and equitable" in clause (vi) must be construed ejusdem generis with the matters mentioned in clauses (i) to (v), that mere misconduct of the directors was not a ground on which a winding up order could be made, and that it was a matter of internal management for which resort must be bad to the other remedies provided in the Act.
The decisions in In re Anglo Greek Steam Company(1) and In re Diamond Fuel Company(2) were relied on in support of this position.
In In re Anglo Greek Steam Company(1), it was held that the misconduct of the directors of a company was not a ground on which the court could order winding up under the just and equitable clause, unless it was established that by reason of such mismanagement the company bad become insolvent.
In In re Diamond Fuel Company(2), it was observed by Baggallay, L.J. that, ". mere misconduct or mismanagement on the part of the directors, even although it might be such as to justify a suit against them in respect of such misconduct or mismanagement, is not of itself sufficient to justify a winding up order".
The contention of the appellant is that as all the charges made in the application amounted only to misconduct on the part of the directors, and as there was no proof that the Company was unable to pay its debts, an order for winding up under section 162 could not be made.
The authorities relied on by the appellant reflect the view which was at one time held in England as to the true meaning and scope of the words "just and equitable" in the provisions corresponding to section 162(vi) of the Indian Act.
In Spackman 's Case(3), Lord Cottenham, L.C. construed them as ejusdem (1) [1866] L.R. 2 Eq.
(2) , 408.
(3) [1849) 1 M. & G. 170; ; , 1230.
1073 generis with the matters mentioned in the other clauses to the section, and that construction was followed in a number of cases.
Vide Re Suburban Hotel Co.(1), In re Anglo Greek Steam Company(2), Re European Life Assurance Society(3) and In re Diamond Fuel Company(4).
But a different view came to be adopted in later decisions (vide In re Amalgamated Syndicate(5)), and the question must now be taken to be settled by the pronouncement of the Judicial Committee in Loch vs John Blackwood Ld.(6), where after an elaborate review of the authorities, Lord Shaw observed that, ". . it is in accordance with the laws of England, of Scotland and of Ireland that the ejusdem generis doctrine (as supposed to have been laid by Lord Cottenham) does not operate so as to confine the cases of winding up to those strictly analogous to the instances of the first five sub sections of section 129 of the British Act '.
The law is thus stated in Halsbury 's Laws of England, Third Edition, Volume 6, page 534, para 1035: "The words 'just and equitable ' in the enactment specifying the grounds for winding up by the court are not to be read as being ejusdem generis with the preceding words of the enactment".
When once it is held that the words "just and equitable" are not to be construed ejusdem generis, then whether mismanagement of directors is a ground for a winding up order under section 162(vi) becomes a question to be decided on the facts of each case.
Where nothing more is established than that the directors have misappropriated the funds of the Company, an order for winding up would not be just or equitable, because if it is a sound concern, such an order must operate harshly on the rights of the share holders.
But if, in addition to such misconduct, circumstances exist which render it desirable in the interests of the shareholders that the Company should be wound up, there is nothing in section 162(vi) (1) (3) (5) (2) [1866] L.R. 2 Eq.
(4) , 408.
(6) ; , 790.
1074 which bars the jurisdiction of the court to make such an order.
Loch vs
John Blackwood.(1)was itself a case in which the order for winding up was asked for on the ground of mismanagement by the directors, and the law was thus stated at page 788: "It is undoubtedly true that at the foundation of applications for winding up, on the 'just and equitable ' rule, there must lie a justifiable lack of confidence in the conduct and management of the company 's affairs.
But this lack of confidence must be grounded on conduct of the directors, not in regard to their private life or affairs, but in regard to the company 's business.
Further more the lack of confidence must spring not from dissatisfaction at being outvoted on the business affairs or on what is called the domestic policy of the company.
On the other hand, wherever the lack of confidence is rested on a lack of probity in the conduct of the company 's affairs, then the former is justified by the latter, and it is under the statute just and equitable that the company be wound up".
Now, the facts as found by the courts below are that the Vice Chairman grossly mismanaged the affairs of the Company, and had drawn considerable amounts for his personal purposes, that arrears due to the Government for supply of electric energy as on 25 6 1955 was Rs. 3,10,175 3 6, that large collections had to be made that the machinery was in a state of disrepair, that by reason of death and other causes the directorate had become greatly attenuated and "a powerful local junta was ruling the roost", and that the shareholders outside the group of the Chairman were apathetic and powerless to set matters right.
On these findings, the courts below had the power to direct the winding up of the Company under section 162(vi), and no grounds have been shown for our interfering with their order.
It was urged on behalf of the appellant that as the Vice Chairman who was responsible for the mismanagement had been removed, and the present (1) ; , 790.
1075 management was taking steps to set things right and to put an end to the matters complained of, there was no need to take action under section 153 C.
But the findings of the courts below are that the Chairman himself either actively co operated with the ViceChairman in various acts of misconduct and maladministration or that he had, at any rate, on his own showing abdicated the entire management to him, and that as the affairs of the Company where in a state of confusion and embarrassment, it was necessary to take action under section 153 C.
We are of opinion that the learned Judges were justified on the above findings in passing the order which they did.
It was also contended that the appointment of administrators in supersession of the directorate and vesting power in them to manage the Company was an interference with its internal management.
It is no doubt the law that courts will not, in general, intervene at the instance of shareholders in matters of internal administration, and will not interfere with the management of a company by its directors, so long as they are acting within the power conferred on them under the Articles of Association.
But this rule can by its very nature apply only when the company is a running concern, and it is sought to interfere with its affairs as a running concern.
But when an application is presented to wind up a company, its very object is to put an end to its existence, and for that purpose to terminate its management in accordance with the Articles of Association and to vest it in the court.
, In that situation, there is no scope for the rule that the court should not interfere in matters of internal management.
And where accordingly a case had been made out for an order for winding up under section 162, the appointment of administrators under section 153 C cannot be attacked on the ground that it is an interference with the internal management of the affairs of the Company.
If a Liquidator can be appointed to manage the affairs of a company when an order for winding up is made under section 162, administrators could also be 136 1076 appointed to manage its affairs, when action is taken under section 153 C.
This contention must accordingly be rejected.
In the result, the appeal fails and is dismissed with costs, of the first respondent.
The costs of the administrator will come out of the estate.
| The Maharashtra Legislature passed the Maharashtra Debt Relief Act.
By the said Act the existing debts of some classes of some indigents have been liquidated.
The Act is a temporary measure.
The validity of the said Act was challenged in the present writ petition and appeals on the following grounds: (1) Money lending was a trade covered by Article 304 of the Constitution.
The restric tion both substantive and procedural imposed by the impugned Act are not reasonable within the meaning of Article 304(b).
(2) The State legislature has no legislative competence to enact the statute.
(3) So far as the Gold ornaments are concerned the field is occupied by the Gold Control Act 1968 passed by the Parliament.
Therefore, inasmuch as the said Act deals with Gold Ornaments it is beyond the legislative competence.
829 The respondents contended that: (1) The money lending in the present case was not a trade.
(2) Even if it was trade the restrictions imposed by the statute are reasonable.
(3) The State Legislature is competent to enact the impugned Act.
(4) The doctrine of occupied field has no application.
(5) The Gold Control Act and the impugned Act deal with two completely different situa tions.
(6) In any case, there is no inconsisten cy between the two Acts.
Upholding the validity of the Act, HELD: (1) It is cruel legal like to legitimate as trade this age and bleeding business whereby the little peasant, the landless tiller, the bonded labour, the pave ment tenant and the slum dweller born and buried during the Raj and the Republic in chili penury.
[836 B C] Atiabari Tea Co. ; , 843, referred to.
(2) The topics of legislation listed in the 7th Schedule must receive a large liberal and realistic interretation.
[836 E] (3) The freedom while it is wide is not absolute.
Every systematic, profit oriented activity, however sinster, suppressive or socially diabole, cannot ipso facto exalt itself into a trade.
Dealings of Banks and similar institu tions having some nexus with trade, actual or potential, may itself be trade or intercourse.
All modern commercial credit and financial dealings amount 10 trade.
However, village based age old, feudal pattern of money lending to those below the subsistence level to the village artisan, the bonded labourer, the marginal tiller and the broken farmer, who borrows and repays in perpetual labour, hereditary service, periodical delivery of grain and unvouchered usuri ous interest is a countryside incubus.
Such debts ever swell.
never shrink, such captive debtor never become quits.
Such countryside creditors never get off the backs of the victims.
[840 D, 841 F H] Ibrahim , referred to.
Automobile Transport (1963) 1 SCR 491, followed.
(4) The economic literature, official and other, on agricultural and working class indebtedness is escalating and disturbing.
Indeed the money lender is an oppressive component of the scheme.
[844 G] (5) The test of reasonableness is not to be applied in vacuum but in the contest of life 's realities.
The Legis lature was confronted with the cruel species of money lend ers.
The life of the law is not noisis but actual experi ence.
The perspective of poverty jurisprudence is radically different from the canons and values of traditional Anglo Indian Jurisprudence.
The subject matter of the impugned legislation is indebtedness, the beneficiaries are petty farmers,manual workers and allied categories steeped in debt and bonded to the money lending tribe.
So, in passing on its constitutionality, the principles of Developmental Jurisprudence must come into play.
[846B, 848G H] (6) The exemption granted by the statute to credit institutions and banks is reasonable because liabilities due to Government, local authorities and other credit institu tions are not tainted with exploitation of the debtor.
Likewise, debts due to banking companies do not ordinary suffer from over reaching, unscrupulous or harsh treatment.
Financial institutions have until recently treated the village and urban worker and petty farmer as untouchables.
[849 E H] (7) Maybe some stray money lenders may be good souls but the Legislature cannot easily make meticulous exceptions and has to proceed on broad categorisations, not singular indi vidualisations.
The creditors have not placed material before the Court to contradict the presumption which must be made 830 in favour of the legislative judgment.
Since nice dis tinctions to suit every kindly creditor is beyond the law making process, the court has to uphold the grouping as reasonable and the restrictions as justified in the circum stances of the case.
[850 C E] Australian Bank Nationalisation Case: Commonwealth of Australia vs Bank of New South Wales: , 311, approved.
(8) The Court negatived the contention of the petitioner that there was procedural unreasonableness in the Act.
The section which imposes the obligation on the money lender to prove the debtor 's financial position, the issuance of a certificate in favour of the debtor having a presumptive value without hearing the creditor, the absence of appeal, obligation of the creditor to move the machinery and the period of 7 days and the deposit of the ornaments before the proceedings can commence are all reasonable in the circum stances of the case.
Viewed in the abstract, those griev ances look genuine but when we get down to the reality, nothing so exists in the so called provision.
The provision requiring the creditor to move and not the debtor is reason able because between the two.
the money lender .,is sure to be far shrewder and otherwise more capable of initiating proceedings.
To cast that obligation on the debtor when in bulk of cases he is the village artisan, landless labourer or industrial worker is to deny relief in effect while bestowing it in the book.
There is nothing objection able in the debtor seeking a certificate of qualification from the small officer of the area.
The officer or the Government servant possesses familiarity with the wherewith al and the whereabouts of the persons.
Hearing the creditor before the certificate is issued would merely prolong and puzzle the proceedings.
The creditor does not suffer because the certificate that the applicant is a debtor raises only a rebuttable presumption and it is idle to argue that the creditor has no means of disproving .the income or assets of his debtor.
Ordinarily, the money lender and the petty borrower live in and around the same neighbourhood.
As proforma of the certificate to be issued needs mentioning several particulars these have to be filled by the certify ing officer who has, therefore.
to make the necessary en quiries from and about the debtor.
Authorised Officer is one who exercises quasi judicial powers even otherwise on the Revenue side.
The adoption of the procedure under the Maharashtra Land Revenue Code is a fair safeguard although it is a summary procedure.
To equate summary with arbitrary is contrary to common experience.
The obligation for the production of the pledged article by the creditor as a preliminary to the institution of the proceedings is also a just measure so that when a decision is reached the article may be returned to the debtor in the event of the verdict going in his favour.
Where the subject matter is substan tial and fraught with serious consequences and complicated quest.ions are litigatively terminated summarily, without a second look at the findings by an appellate body it may be that unfairness is inscribed on the face of the law but where little men with petty debts, legally illiterate and otherwise handicapped are pitted against the money lend ers.
absence about appeal cannot invalidate the statute.
Where the enquiry is a travesty of justice or violation of provisions, where the finding is a perversity of 'adjudica tion or fraud on power the High Court is not powerless to grant remedy even after the recent package of constitutional amendments.
[852 A H, 853 A H, 854 A B] (9) Entry 30 in List II in the 7th Schedule is money lending and money lenders; relief of agricultural indebted ness.
If common sense and common English are components of Constitutional construction relief against loans by scaling down, discharging, reducing interest and principal, and staying the realisation of debts will among other things fall squarely within the topic.
[854 F H] (10) The argument that the subject matter of the present legislation would fall under the residuary power under Entry 97 of List I is negatived.
[855 B] (11) Where Parliament has made a law under Entry 52 of List I and in the course of it framed incidental provisions affecting gold loans and money lending business involving gold ornaments.
The State making a law on a different topic but covering in part the same area of gold loans must not go into irreconcilable conflicts.
The doctrine of occupied field does not totally 831 deprive the State Legislature from making any law inciden tally referable to gold.
In the event of a plain conflict the State Law must step down unless Article 252(2) 'can be invoked.
In that case the State law would still prevail if the assent of the President has been obtained.
There is no conflict between the Gold Control Act and the impugned Act.
Secondly, the subjects of both the legislations can be traced to the Concurrent List and Article 254(2) validates within the State the operation of the impugned Act since the assent of the President has been Obtained.
[858 B D]
|
:Civil Appeal No. 1970(NT) of 1975 & 855(NT)/1975.
From the Judgment and Order dated 22.4.1974 of the Allahabad High Court in Civil Miscellaneous Writ No. 152 of 1974 Dr. V. Gauri Shankar, Miss A. Subhashini and K.C. Dua for the Appellants.
S.C. Manchanda, Ms. section Janani, Mrs. Urmila Kapoor and Ms. Meenakshi for the Respondent.
The Judgment of the Court was delivered by MISRA, J.
Civil Appeal No. 1970 of 1975 is by the Reve nue by certificate of the High Court while the other is an appeal by the assessee by special leave.
Both arise out of the same judgment of the Allahabad High Court dated 22.4.1974 in an application under article 226 of the Constitu tion by the assessee challenging the notices issued under section 148 read with sections 142(1) and 143(2) of the Income Tax Act of 1981, all dated 7th of March, 1973 relating to the assess ment year 1965 66.
The notice under section 148 was on the basis of three cash credit entries dated 22nd of August, 1964 from Messrs Meghraj Dulichand, Messrs Associated Commercial Organisation Private Limited and Messrs Laxminarain Atmaram, the first two being for a sum of Rs. 30,000 each and the last one for a sum of Rs.40,000.
The High Court ultimately found: "The result is that the notice dated 7th March 1973, was within jurisdiction only in regard to the cash credit entry from the firm Meghraj Dulichand of Calcutta.
In regard to the other two transactions, the case did not fall within the purview of clause (a) of section 147.
607 As seen above, the Income Tax Offi cer had no material in his possession on the basis of which he could have reason to believe (mere suspicion apart) that income had escaped assessment.
For this reason the case was not covered by clause (b) of section 147 either.
In regard to those two items the notice was totally without jurisdiction.
The Income Tax Officer had no jurisdiction to re open the assessment in respect of these two cash credit entries.
In this view it is unnecessary to decide whether the notice was barred by time on the footing that it was covered by clause (b) to section 147.
In the result, the petition succeeds and is allowed in part.
The respondent Income Tax Officer is directed not to re open the assessment of the petitioner firm for the assessment year 1965 66 in relation to the cash credit entries of Rs.30,000 from M/s. Associated Commercial Organisation Private Ltd. and of Rs.40,000 in respect of M/s. Laxminarain Atmaram.
" The appeal by the Revenue is in relation to the two transactions totaling Rs.70,000 and the appeal by the asses see is in regard to the remaining one in respect of a sum of Rs.30,000.
Dr. Gouri Shankar appearing for the Revenue has contended that it was not for the High Court to go into the question as to whether the notice under section 148 of the Act was partly valid and partly not because if the Income Tax Officer proceeded to issue notice under section 148 of the Act for reopening the assessment, he would require the assessee to furnish a fresh return and the entire assessment proceed ing has to be re done after the assessee furnishes the return.
In the present case, along with the notice under section 148 of the Act the Income Tax Officer did call upon the assessee to furnish a return as required under section 142 of the Act.
That notice casts an obligation on the assessee to make a fresh return and therein it was obliged to make a complete disclosure of its income in accordance with law and it was open to the Income Tax Officer to examine not only the three items referred to in the notice but also whatever came within the legitimate ambit of an assessment proceeding.
This being the legal position, Dr. Gouri Shankar for the Revenue contends, once the High Court sustained the notice in respect of a sum of Rs.30,000 that gave full jurisdiction to the Income Tax Officer to reopen the assessment and take to a fresh assessment proceeding.
The High Court should not have examined the tenability of the assessee 's 608 contenton in regard to the two transactions of Rs.30,000 and Rs.40,000 and that aspect should have been left to be con sidered by the Income Tax Officer while making the reassess ment.
A Division Bench of the Punjab High Court in Commission er of Income Tax, Punjab, Himachal Pradesh & Bilaspur, Simla vs Jagan Nath Maheshwary, examined this aspect of the matter with reference to a proceeding for reassessment under section 34 of the earlier Act of 1922 and came to hold: "When a notice is issued under section 34 based on a certain item of income that had escaped assessment, it is permissible for the Income tax authorities to include other items in the assessment, in addition to the item which had initiated and resulted in the notice under section 34." A Division Bench of the Andhra Pradesh High Court in Pulavarthi Viswanadham vs Commissioner of Income Tax, Andhra Pradesh, considered the same position with refer ence to section 34 of the earlier Act.
After extracting the two clauses in sub section
(1) of section 34, the Court held: "It is immediately plain that when once the Income tax Officer reaches the conclusion on the material that is before him that there has been a non disclosure as regards part of the income, profits or gains chargeable to income tax by the assessee, he is entitled to issue a notice either under clause (a) or (b), as the case may be, under section 22(2) of the In come tax Act." After extracting section 22(2) the High Court proceeded to say: "What emerges from sub section (2) of section 22 is that when once an assessee is required to submit a return of his income, he is obliged to disclose the totality of his in come.
The question that falls to be decided on the language of these two sections is whether after notice is issued under section 34(1)(a) the assessment should be limited to items which escaped assessment by reason of the failure on the part of the assessee to dis close all his income, profits or gains which are subject to tax.
The contention of learned counsel for the assessee is that having regard to the terms of clause (b) it was not within the powers of the Income tax 609 Officer to bring to charge such of the items as have escaped from being taxed without any remissness on his part.
It is only items that escaped assessment due to omission or failure of the assessee that come within the range and sweep of section 34, continues learned counsel for the assessee.
We do not think that we can accede to this proposition.
When once the assessment is reopened, no distinction could be made between items falling under clause (a) and those coming within the pale of clause (b).
As pointed out by a Division Bench of this Court in R.C. No. 12 of 1960 (Parimisetti Seetharamamma vs Commissioner of Incometax, , to which one of us was a party: " . . when once an assessment is reopened under section 34, the Income tax Officer proceeds de novo under the relevant sections of the Income tax Act, i.e., he issues notice under section 22(2) and proceeds to assess the assessee.
He has to follow the same procedure as in the case of the first assessment as is clear from the clause in section 34 and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that subsection.
The proceedings under section 34 must be deemed to relate to proceedings which commence with publication of notice under section 22(1).
" The view taken by the two High Courts has been supported by this Court in V. Jaganmohan Rao & Ors.
vs Commissioner of Incometax & Excess Profits Tax, Andhra Pradesh, There, repelling the same argument on behalf of the assessee this Court said: "This argument is not of much avail to the appellant because once proceedings under section 34 are taken to be validly initiated with regard to two thirds share of the income, the jurisdiction of the Income tax Officer cannot be confined only to that portion of the income.
Section 34 in terms states that once the Income tax Officer decides to reopen the assessment he could do so within the period prescribed by serving on the person liable to pay tax a notice containing all or any of the requirements which may be included in a notice under section 22(2) and may proceed to assess or reassess such income, profits or gains.
It is, therefore, manifest that once assessment is reopened 610 by issuing a notice under sub section (2) of section 22 the previous under assessment is set aside and the whole assessment proceedings start afresh.
When once valid proceedings are started under section 34(1)(b) the Income tax Officer had not only the jurisdiction but it was his duty to levy tax on the entire income that had escaped assessment during that year.
" No serious effort, however, was made by Mr. Manchanda appearing for the assessee respondent to counter this sub mission advanced on behalf of the Revenue.
Accepting the legal position indicated in these cases we come to the conclusion that it was not for the High Court to examine the validity of the notice under section 148 in regard to the two items if the High Court came to the conclusion that the notice was valid at least in respect of the remaining item.
Whether the Income Tax Officer while making his reassessment would take into account the other two items should have been left to be considered by the Income Tax Officer in the fresh assessment proceeding.
With this conclusion the decision of the High Court would ordinarily have been reversed.
As we have already stated, the assessee has also appealed against that part of the judgment of the High Court which was adverse to it.
Mr. Manchanda contended that in this case the regular assessment had been made for the assessment year 1965 66 on 22.1.1966.
Notice under section 147 of the Act was issued on 7th of March, 1973, i.e., more than seven years after the assessment had been completed.
The three amounts mentioned in the notice under section 148 of the Act were found in the assessee 's accounts by the Income Tax Officer when he exam ined the same in course of the assessment proceedings.
We had called upon the assessee to substantiate the genuineness of the transactions and the assessee had produced material to support the same.
The Income Tax Officer accepted the documents produced and treated all the three transactions to be genuine and on that footing completed the assessment.
The primary facts were before the Income Tax Officer at the time of the regular assessment and he called upon the assessee to explain to his satisfaction that the entries were genuine and on the basis of materials provided by the assessee satisfaction was reached.
It was then open to the Income Tax Officer to make further probe before completing the assess ment if he was of the view that the material provided by the assessee was not sufficient for him to be satisfied that the assessee 's contention was correct.
This Court in Calcutta Discount Company Limited vs I. T. 0., held that the expression 'Material facts ' used in el.
(a) 611 referred only to primary facts and the duty of the assessee was confined to disclosure of primary facts and he had not to indicate what factual or legal inferences should properly be drawn from the primary facts.
In the facts appearing on the record we are in agreement with Mr. Manchanda that cl.
(a) of section 147 did not apply to the facts of the case as the alleged escapement of income for assessment had not resulted from failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for that year.
The notice in the instant case did not indi cate whether it was a case covered by cl.
(a) or cl.(b).
On our finding that cl.
(a) was not invokable, the power under cl.
(b) could be called in aid under section 149(1)(b) of the Act within four years from the end of the relevant assessment year.
Admittedly, the notice has been issued beyond a period of four years and, therefore, the notice itself was beyond the time provided under the law.
On the facts appearing in the case the High Court overlooked to consider this aspect of the matter.
Since the proceedings before the High Court were under article 226 of the Constitution and not by way of reference under the Act, the jurisdiction of this Court is not advisory and confined to the questions referred for opinion.
On the facts we are satisfied that ends of justice require our intervention and we would accordingly allow the appeal of the assessee by holding that the notice under section 148 of the Act cannot be sustained in law for the reasons indicated above.
The appeal by the assessee is allowed and the appeal by the Revenue is dismissed.
The notice under section 148 of the Act is quashed.
Both parties are directed to bear their respec tive costs throughout.
G.N. Appeal by the assessee is allowed and Appeal by the revenue is dismissed.
| In respect of assessment year 1965 66, the Income tax Officer issued notices to the assessee under section 148 read with sections 142(1) and 143(2) of the Act on the ground that income has escaped assessment in respect of three cash credit entries totaling Rs. 1 lakh.
The assessee challenged the notices by way of writ petitions before the High Court.
The High Court gave a finding that the notice was within jurisdiction only in respect of an entry of Rs.30,000 and in respect of the other two entries viz. Rs.40,000 and Rs.30,000 it directed the Income tax Officer not to reopen the assessment.
These two appeals are against the High Court 's judgment.
The appeal by ReVenue, by certificate, is in respect of the two entries of Rs.40,000 and Rs.30,000 and the other appeal of the assessee, by special leave, is in respect of the entry of Rs.30,000.
On behalf of the Revenue, it was contended that once the High Court sustained the notice in respect of a sum of Rs.30,000, that gave full jurisdiction to the Income tax Officer to reopen the assessment and that the High Court should not have examined time tenability of the assessee 's contention in regard to the two transactions of Rs.30,000 and Rs.40,000 and that aspect should have been left to be considered by the Income tax Officer while making the reas sessment.
The contention of the assessee was that the notice was issued more than 7 years after the assessment was completed and was also beyond the period of limitation, viz., four years, that the escapement of the income from assessment had not resulted from failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment.
605 Allowing the appeal of the assessee, and dismissing the appeal by the Revenue.
HELD: 1.
The notice issued under section 148 of the Act is quashed.
It was not for the High Court to examine the valid ity of the notice under section 148 in regard to the two items if the High Court came to the conclusion that the notice was valid at least in respect of the remaining item.
Whether the Income tax Officer while making the reassessment would take into account the other two items, should have been left to be considered by the Income tax Officer in the fresh assess ment proceeding.
[610C D] CIT.
Punjab, H.P. & Bilaspur, Simla vs Jagan Nath Ma heshwary, 32 AIR 418 and Pulavarthi Viswanadham vs CIT.
A.P., approved.
V. Jagan Mohan Rao & Ors.
vs CIT & Excess Profits Tax, A.P., and Parimisetti Seetharamamma vs CIT, referred to.
2.1 The three amounts mentioned in the notice under section 148 of the Act were found in the assessee 's account by the Income tax Officer when he examined the same in course of the assessment proceedings.
He had called upon the assessee to substantiate the genuineness of the transactions and the assessee had produced material to support the same.
The Income tax Officer accepted the documents produced and treated all the three transactions to be genuine and on that footing completed the assessment.
The primary facts were before the Incometax Officer at the time of the regular assessment and he called upon the assessee to explain to his satisfaction that the entries were genuine and on the basis of materials provided by the assessee, satisfaction was reached.
It was then open to the Income Tax Officer to make further probe before completing the assessment if he was of the view that the material provided by the assessee was not sufficient for him to be satisfied that the assessee 's contention was correct.
[610E H] 2.2 The expression 'material facts ' used in section 147(a) referred only to primary facts and the duty of the assessee was confined to disclosure of primary facts and he had not to indicate what factual or legal inferences should properly be drawn from primary facts and this clause did apply to the facts of the present case as the alleged escapement of income for assessment had not resulted from failure on the part of the assessee to disclose fully and truly all materi al facts necessary for its assessment for that year.
The notice in the instant case, did not indicate 606 Whether it was a case covered by cl.
(a) or cl.
On the finding of this Court that cl.
(a) was not invokable, the power under cl.
(b) could be called in aid under section 149(1)(b) of the Act within four years from the end of the relevant assessment year.
Admittedly, the notice has been issued beyond a period of four years and, therefore, the notice itself was beyond the time provided under the law.
The High Court overlooked to consider this aspect of the matter.
[610H; 611A C] Calcutta Discount Company Ltd. vs ITO, , followed.
|
l Appeals Nos. 1449 to 1454 of 1967.
Appeals by special leave from the judgments and orders dated December 15, 1966 of the Madhya Pradesh High Court in Misc.
Petitions Nos.
303 of 1966 etc.
I. N. Shroff, for the appellants (in all the appeals).
M. N. Phadke, K. L. Hathi and P. C. Kapur, for the respondents (in C.As.
1449, 1450 and 1452 of 1967).
V.S. Desai, K. L. Hathi and P. C. Kapur, for the respondents (in C.As.
1453 and 1454 of 1967).
The Judgment of the Court was delivered by Grover, J.
All these appeals arise out of writ petitions that were filed in the High Court of Madhya Pradesh challenging the notices of demand issued by the Deputy Transport Commissioner for payment of the amount of passenger tax said to be due under the Madhya Pradesh Motor Vehicles (Taxation of Passengers) Act, 1959, hereinafter referred to as the 'Act '.
By a common judgment dated November 8, 1966 the High Court allowed the petitions and quashed the demand notices.
The appeals may be divided into two categories.
In C. As. 1449 and 1453 of 1967 returns had been duly filed as contemplated by section 5 of the Act but no tax had been deposited as required by section 6.
Demand 9 85 notices were issued in respect of the tax payable pursuant to the returns some years later.
Proceedings were also taken as no payment was made for recovery of the tax as arrears of land revenue.
In the other four appeals the returns were never filed but it appears the authorities did take certain proceedings under section 7 of the Act and in some cases accounts of the respondents were checked and their liability determined.
When demand notices were sent and recoveries sought to be made the writ petitions were filed.
The High Court did not go in these matters fully ,and treated all the petitions as if the facts were similar.
Section 3 of the Act which is the charging section provides that there shall be levied and paid to the State Government a tax on all passengers carried by stage carriages at a rate equivalent to 15 % of the fare inclusive of the tax payable to the operator of a stage carriage.
The tax has to be collected by the operator of a stage carriage and paid to the State Government in accordance with the provisions of the Act.
Under section 5 the operator must deliver to the tax officer or to such prescribed officer as may be specified a return in the prescribed form and manner either daily or at such intervals as may be prescribed.
Section 6 lays down that the tax payable during any month in accordance with the return submitted under section 5 shall be paid into a Government treasury by the operator and the receipt evidencing such payment has to be forwarded to the Tax Officer.
Sections 8, 9 and 10 are in the following terms "(8) Fares escaping assessment.
If, for any reason, the whole or any portion of the tax leviable under this Act, for any month has escaped assessment, the Tax Officer may, at any time within, but not beyond, one year from the expiry of that month, assess the tax which has escaped assessment, after issuing a notice to the operator and making such inquiry as the officer may ,consider necessary.
(9)Penalty for non payment of tax.
Where the whole orany portion of the tax payable to the State Government in respect of any stage carriage for any month or portion thereof in pursuance of sections 6, 7 and 8 has not been paid to it in time the Tax Officer may, in his discretion, levy in addition to the tax so payable, a penalty not exceeding 25 per cent of the maximum tax which would have been payable to the State Government if the stage carriage had carried its full complement of passengers during such month or portion thereof.
(10)Recovery of tax, etc, (1 ) In the cases referred, to in sections 7, 8 and 9 the, Tax Officer shall serve on the operator a notice of demand for the sums payable 9 86 to the State Government and the sums specified in such notice may be recovered from the operator as arrears of land revenue.
(2)The tax shall be a first charge on the stage carriage in respect of which it is due as also on its accessories and such stage and the accessories thereof may be attached and sold for the recovery of the tax under the appropriate law relating to the recovery of arrears of land revenue.
" Section 12 provides for an appeal against a notice of demand ' served under section 10.
The scheme of the above provisions apparently is that the operator of a stage carriage has to submit a return in accordance with section 5 and pay tax into the Government treasury every month as provided by section 6.
No question can arise of any assessment order being made under section 7 by the Tax Officer where the returns are found to be correct and complete.
It is only where either no returns have been submitted or where the return submitted appear to the Tax Officer to be incorrect or incomplete that the Tax Officer has to follow the procedure laid down in section 7 and determine the tax payable by the operator.
The High Court was of the view that even where returns had been filed and accepted as correct the Tax Officer has to pass a proper assessment order holding the operator liable for payment of tax in accordance with the return submitted by him.
In other words no notice of demand can be issued until the Tax Officer makes such an order quantifying the amount of tax.
We are unable to accede to the contention which prevailed ' with the High Court that even where returns had been submit ted but the tax has not been paid the Tax Officer is bound to, make an order before serving a notice of demand even though the demand is strictly in accordance with the returns which have been submitted.
Section 7 rules out any such course to be followed by the Tax Officer.
It is only when the returns have not been submitted or when return submitted are found to be incorrect and incomplete that the Tax Officer has to make an inquiry, and determine the sum payable by the operator by way of tax.
Similarly if there has been escapement of tax proceedings have, to be taken under section 8 and an order has to be made after an enquiry.
The position would be same if penalty is sought to be levied, under section 9.
But where returns have been accepted as correct nothing more need be done except to recover the tax due which has not been paid and no asessment order need be passed in view of the express language of section 7.
987 We are satisfied that in the two appeals, i.e., C. As. 1449 and 1453/67 in which returns had been filed the Tax Officer was not bound to make any order quantifying the amount of tax before issuing the notice of demand.
The amount sought to be realized was quantified in the returns themselves vide Form IV read with Rule 4(2)(c) of the M. P. Motor Vehicles (Taxation of Passengers) Rules.
It has not been shown that any penalty was sought to be imposed in those two cases.
The order of the High Court, therefore, in these appeals cannot be sustained and is hereby set aside and the writ petitions are ordered to be dismissed.
As regards C. As.
1450, 1451, 1452 and 1454/67, it appears, as has been stated earlier, that some proceedings were held of the nature contemplated by section 7 and the notices of demand were issued after orders had been duly made by the Tax Officer.
But this is a matter which was not examined in each case by the High Court and we would like to express no opinion with regard to it.
These appeals are also allowed and the orders of the High Court are set aside.
The High Court will rehear and redecide the same in accordance with law.
There will be no order as to costs in all.
the appeals.
K. B. N, Appeals allowed.
| Respondents 1 to 9 filed a suit against the Appellants and some of the other respondents for a declaration that they hid been carrying on, and were entitled to the worship without interference of the idol of Adeshwarji in the temple named after him at Paroli according to the tenets observed by the Digambri Sect of the Jain religion.
They further alleged : that the temple was constructed and the idol consecrated according to and by the followers of their sect; that in December, 1949, the defendants had attempted to convert the said idol into the idol of the Swetambri Sect by putting Chakshus (artificial eyes) thereon, but were prevented due to strong opposition of the followers of Digambri Sect.
It was claimed that although a temporary settlement was reached between the two sects while the rights in the temple were to be adjudicated upon by a Civil Court, the defendants had made arrangements to alter the temple according to their tenets and that they were intending to enclose the idol by doors and locks with the object of interfering with the free exercise of a Digambris ' right to worship the idol.
It was therefore prayed that the defendants be restrained by a permanent injunction from altering the nature and shape and appearance of the idol in any manner or from doing any act which would interfere with the right of worship of the followers of the Digambri Sect.
The defendants denied that the Digambri Sect had any right of worship of the idol or had ever exercised such a right and contended that the idol and the temple is in all respects a temple of the Jain Swetambri Sect.
The Trial Court decreed the suit and the District Judge in appeal as well as the High Court confirmed the decree.
The High Court also fixed three hours a day when the Digambris may use the temple for worship In appeal to this Court, it was contended inter alia on behalf of the appellant that the reliefs claimed made it clear that the dispute was not of a civil nature; and that the judgment of the Trial Court was wholly vitiated because the Trial Judge not having accepted the evidence produced before him, based his findings on his own inspection.
It was also contended that unless the ownership of the temple, was established or that the idol belonged to the Digambri Sect, no injunction could be given nor could the respondents be permitted to worship there; in the plaint the respondents had averred that the idol is a Digambri idol and as they had failed to prove this, their right to worship also failed.
HELD:Dismissing the appeal, (i)From the pleadings and the controversy between the parties it was clear that the issue was not one which was confined merely to rites and rituals but one which effected the rights of worship.
If the Digambries have a right to worship at the temple, the attempt of the Swetam 837 belies to put Chakshus or to place Dhwajadand or Kalash in accordance with their tenets and to claim that the idol is a Swetamberi idol was to preclude the Digamberies from exercising their right to worship at the temple, with respect to which a civil suit is maintainable under Section 9 of the Civil Procedure Code.
This position is well established.
[843 B] Sir Seth Hakam Chand & Ors.
vs Maharaj Bahadur Singh & Ors., 60 I.A. 313 and Nar Hari Sastri and Ors.
vs Shri Badrinath Temple Committee; , , referred to.
(ii)While, giving his findings the Trial Judge remarked that the evidence led by the Plaintiffs appeared to be correct.
These observations themselves show that the evidence on record was an element in the formulation of the Trial Court 's judgment buttressed by the observations of the learned Judge during the site inspection.
it was clear that the description given by the learned Judge of the idols in the Adeshwarji Temple and the Temple of the Swetemberies were observations made during an inspection at which both the Plaintiffs and Defendants Advocates were present and that there must have been notes also in respect of the inspection made on both the occasions.
There was therefore no validity in the contention that the finding of the Trial Judge was based entirely on the result of his inspection.
[844 G 845 C] (iii)The concurrent findings of the Courts below that the idol was Nirker ' (naked), that there were no Chakshus, no Mukat, no Armlet, no Dhwajadand or no Kalash, would show that the idol was consecrated by the Digamberies.
It was also clear that it was an ancient temple and that both the Digamberies and the Swetamberies worship the idol.
It was not denied that while the Digamberies will not worship an idol which has Chakshus or which has clothes or Mukat, the Swetamberies would worship a Digamberi idol without these and hence the right to worship a Digamberi idol by both the sects is possible and it has been rightly so held by all the courts.
[846 E] Once the right of worship of Digamberies was established they would be entitled to the injunction sought for by them against the Appellants from preventing them from worshiping or from interfering with that right by placing Chakshus in the idol, Dhwajadand, Kalash on the Temple.
The directions of the High Court extending the time for worship by Digamberi Sect from one hour to three hours was not unreasonable.
[848 A B]
|
on (c) No. 857/87 etc.
(Under Article 32 of the Constitution of India).
Altaf Ahmed, Addl.
SolicitorGeneral, M.L. Verma, G.L. Sanghi.
K. Labiri, Sarva Miner, Narain, section Bhattacharya, Vivek Gambhir, S.K. Gambhir, Vijay Hansaria, P. Pameswaran, P.K.Jain, Rajiv Dutta, M.N. Shroff, Ms. A.Subhashini, Ms. PratibhaJain, L.K. Gupta, M.A. Firoz, Naresh K. Sharma, A.K. Goel, Ashok K. Mahajan, Ms. 54 Sushma Suri and Kailash Vasdev for the appearing parties.
The judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
The petitioners in this batch of writ petitions question in the validity of the levy and collection of cess under section 3 of the Vegetable Oils Cess Act, 1983 for the period commencing 1st March, 1986 and ending with 31st March, 1987.
Parliament enacted in the year 1983 the National Oilseeds and Vegetable Oils Development Board Act, 1983 (being Act 29 of 1983) hereinafter referred to as the Board Act.
The Act was intended to provide for the development, under the control of the Union, of the oilseeds Industry and the Vegetable Oils Industry and for matters connected therewith.
The Act contemplated establishment and constitution of a board called the National Oilseeds and Vegetable Oils Development Board.
The functions of the Board were specified in section 9.
In short the duty of the Board was to promote the development, by such measures as it thought fit, subject to the control of the Central Government, the Oilseeds Industry and the Vegetable Oils Industry.
Section 12 provided for constitution of Oilseeds and Vegetable Oils Development Fund.
The fund was to be applied for promoting the purposes of the Act.
Simultaneously with the Board Act was enacted the Vegetable Oils Cess Act, 1983 (being Act 30 of 1983), hereinafter referred to as the Cess Act.
The purpose of this Act is stated in sub section (1) of section 3.
It is to levy and collect "by way of cess, for the purposes of the National Oilseeds and Vegetable Oils Development Board Act, 1983, a duty of excise on vegetable Oils produced in any m ill in India at such rate not exceeding Rs.5 per quintal on vegetable oil, as the Central Government may, from time to time, specify by notification in the Official Gazette".
Sub section (2) of Section 3 clarified that the duty of excise levied under sub section (1) section 3 shall be in addition to the duty of excise leviable on vegetable oils under the or any other law for the time being in force.
Sub section (3) stated that the duty of excise levied on section 3 (1) shall be payable by the occupier of the mill in which the vegetable oil is produced.
Sub section (.4) provided that the provisions of the 55 Central Excise Act and the Rules made thereunder including those relating to refunds and exemptions from duty, "shall so far as may be, apply in relation to the levy and collection of the said duty of excise as they apply in relation to the levy and collection of the duty of excise on vegetable oils under that Act".
Section 4 provided that the proceeds ,of the duty of excise levied under section 3 (1) shall first be credited to the Consolidated Fund of India.
Subject to appropriation made by law by the Parliament, the Central Government could pay to the Board from time to time such amounts from out of the said collections as it thought fit for being utilised for the purposes of the Board.
Section 7 amended certain provisions of the .
It is thus clear that the cess, which is called a duty of excise, levied under section 3 of the cess Act was intended to serve the purposes of the Board Act.
The said cess was accordingly levied and collected on and from 1983.
The Cess Act was, however, repealed by section 12 of the Cotton, Copra and Vegetable Oils Cess (Abolition) Act, 1987 (being Act 4 of 1987), hereinafter referred to as the Repeal Act.
Chapter IV of the Repeal Act provides for the repeal inter alia of the Vegetable Oil Cess Act, 1983.
Section 12 is the repealing section.
Chapter V, containing only one section namely section 13, is relevant for purposes.
Chapter V carries the heading "COLLECTION OF ARREARS OF DUTIES OF EXCISE",.
Section 13 reads as follows: "13.
Collection and payment of arrears of duties of excise Notwithstanding anything contained in the amendments made to the (15 of 1966) or the repeal of the Copra Cess Act, 1979 (4 of 1979) or the Vegetable Oils Cess Act, 1983 (30 of 1983) , by this Act, any duty of excise, levied under any of the said Acts immediately before the commencement of this Act, but has not been collected before such commencement, shall be liable to be collected after such commencement in accordance with the provisions of the said Acts for being paid into the Consolidated Fund of India as if this Act had not been enacted," The Statement of Objects and Reasons appended to the Bill,.
56 (which became the Repeal Act) stated inter alia that the abolition of the said cess was with a view to reduce the number of cesses and multiplicity of taxes.
The petitioners do not dispute the validity of the levy of the said cess/duty of excise till the 28th February, 1986.
Their submission is confined, as stated hereinbefore, to the period commencing on.
March 1, 1986 and ending with March 31, 1987.
As noticed here in before, the Cess Act was repealed on and with effect from March 31, 1987 by section 12 of the Repeal Act.
Section 13 of the Repeal Act expressly provides notwithstanding the said repeal, the duty of excise levied under the said Act immediately before the commencement of the Repeal Act, but which has not been collected before such commencement, shall be liable to be collected even after the repeal, in accordance with the Cess Act, as if the said Cess Act has not been repealed.
In the face of this provision, it would appear that the petitioners ' dispute as to their liability to pay the said cess for the period March 1, 1986 to March 31, 1987 is of little avail.
The petitioners, however, rely upon certain circumstances/grounds in support of their contention which we may now deal with.
The petitioners are manufacturers of vegetable oil, which was subject to the cess/duty of excise under section 3 of the Cess Act.
They rely upon the following circumstances and ground in supports of their plea: (1) In his Budget Speech delivered on 28.2.1986, presenting the Budget 1986 87, the Union Minister of Finance stated: "the long term Fiscal Policy recognises that cesses levied as excise duties contribute to the multiplicity of taxes.
As an endeavour to reduce the number of the cesses it has been decided to dispense with the cess on cotton, copra and vegetable oils.
The Ministry of Agriculture will take appropriate action in the matter.
The loss to the exchequer on this account will be Rs.5.90 crores.
" The Budget proposals also specify the loss of revenue on account of the decision to dispense with the cess on vegetable oils among others.
This, Speech made on the floor of the Lok Sabha speaks of a decision already taken by the Government and is enforceable and effective from the said date.
57 (2) In pursuance of the said decision of the Government of India, the Directorate of Vanaspati, Vegetable Oils and Fats addressed the letter dated August 11, 1986 to the Commissioner (Tax Research) Department of Revenue,.
New Delhi asking him to issue instructions to all concerned indicating that the cess on vegetable oils has been dispensed with and as such the cess shall not be collected.
It was further directed that the cess collected, if any, since April 1, 1986 shall be refunded.
A copy of this letter was sent to the President, Central Organisation for Oil Industries and Trade, Bombay.
Counsel for the petitioners Shri M.L. Verma and G.L. Sanghi urged the following contentions: (a) The Budget Speech of the Finance Minister delivered on the floor of the Lok Sabha constitutes a enforceable and effective decision upon which the petitioners were entitled to act.
The said decision was exemplified and implemented by way of a communication from the Directorate of Vanaspati, Vegetable Oils and Fats referred to above.
In view of the said communication, the petitioners did not pass on the burden of the said cess to their purchasers on and from March 1, 1986.
It is not open to the Government to go back upon the said decision and demand cess for the period subsequent to March 1, 1986.
(b) By virtue of sub section (4) of section 3 of the Cess Act, Rule 8 of the Central Excise Rules is attracted among other provisions of the Central Excise Act and Rules.
Rule 8 empowers the Central Government to grant exemption on any excisable goods from the whole or any part of duty leviable on such goods.
Sub rule (1) of Rule 8 empowers the Central Government to grant exemption while Sub rule (2) em powers the Central Board of Excise and Customs to grant exemption.
Inasmuch as section 3 (4) of the Cess Act applies the provisions of the Central Excise Act and the Rules subject to the rider "so far as may be", the provisions in Rule 8 should be read with the necessary modification.
In other words, while sub rule (1) of rule 8 must be read as empowering the Central Government to grant exemption, sub rule (2) must be read as conferring a similar power upon the Central Government and/or the Directorate of Vanaspati, Vegetable Oils and Fats.
Unlike sub rule (1), sub rule (2) does not require the order of exemption to be published in the Official Gazette nor does it require that such 58 exemption should be through a notification.
The budget proposals of the Finance Minister and the letter of the Directorate of the Vanaspati and Vegetable Oils aforesaid are relatable to sub rule (2) or Rule 8 of Central Excise Rule read with sub section (4) of section 3 of the Cess Act.
Reading them together it must be held that the Government and the Directorate have exempted the vegetable oils from the levy under section (1) of section 3.
We find it difficult to agree.
It is not brought to our notice that the budget proposals contained in the Finance Minister 's speech were accepted by the Parliament.
The cess having been imposed by a Parliamentary enactment could be rendered inoperative only by a Parliamentary enactment.
Such repealing enactment came only in the year 1987 with effect from April 1, 1987.
Not only that.
The repealing Act expressly provided in section 13 that the cess due before the date of said repeal.
but not collected, shall be collected according to law as if the Cess Act is not repealed.
This provision amounts to a positive affirmation of the intention of the Parliament to keep the said imposi tion alive and effective till the date of the repeal of the Cess Act.
In the face of the said statutory provisions, no rights can be founded nor can the levy of the cess be said to have been dispensed with by virtue of the alleged decision referred to in the Finance Minister 's speech or on account of the letter dated August 11, 1986.
The Finance Minister 's speech is not law.
The Parliament may or may not accept his proposal.
Indeed, in this case, it did not accept the said proposal immediately but only a year later.
It is only from the date of the repeal that the said levy becomes inoperative.
Now coming to the argument based upon Rule 8 of the Central Excise Rules read with section 3(4) of the Cess Act, we find it totally unacceptable.
No notification has been issued under rule 8 (1) by the Central Government much less was any such notification published in the Gazette.
No special order has also been made by the Central Board of Excise and Customs in this behalf under rule 8 (2).
The cess imposed under section 3 (1) of the Cess Act, it may be remembered, is a duty or Excise as stated in section 3 itself.
Therefore, the Central Board of Excise and Customs was perhaps competent to grant exemption even in the case of said cess though we do not wish to express any definite opinion on this question since it was not debated at the Bar.
Suffice it to say that the Central Government cannot again be brought 59 in under sub rule (2) of rule 8 in the place of Central Board nor can the Directorate of Vanaspati and Vegetable Oils be equated to Central Board of Excise and Customs.
The words "so far as may be" occurring in section 3 (4) of the Cess Act can not be stretched to that extent.
Above all it is extremely doubtful whether the power of exemption conferred by rule 8 can be carried to the extent of nullifying the very Act itself.
It would be difficult to agree that by virtue of the power of exemption, the very levy created by section 3(1) can be dispensed with.
Doing so would amount to nullifying the Cess Act itself.
Nothing remains thereafter to be done under the Cess Act.
Even the language of rule 8 does not warrant such extensive power.
Rule 8 contemplates merely exempting of certain excisable goods from the whole or any part of the duty leviable on such goods.
The principle of the decision of this Court in Kesavananda Bharti Sripadagalvaru and others vs State of Kerala and another A.I.R. 1973 S.C. 1461 applies here perfectly.
It was held therein that the power of amendment conferred by Article 368 cannot extend to scrapping of the Constitution or to altering the basic structure of the constitution.
Applying the principle of the decision, it must he held that the power of exemption cannot be utilised for, nor can it extend to, the scrapping of the very Act itself.
To repeat, the power of exemption cannot be utilised to dispense with the very levy created under section 3 of the Cess Act or for that matter under section 3 of the Central Excise Act.
Mr. Sanghi submitted that the Board contemplated under the Board Act never did actually start functioning and, therefore, the levy of cess is impermissible.
It is difficult to agree with this contention either.
As the Preamble to the Cess Act indicates, the levy of the said cess was not for the purpose of the Board but for the purpose of the development of the Oilseeds Industry and Vegetable Oils Industry.
The Board was merely a medium in that effort.
It must be noticed that the cess was to be credited to the Consolidated Fund of India, out of which requisite sums of money to be utilised for the purpose of the Board Act.
In any event there is nothing to show that the Board did not become operational except the bare assertion to that effect.
A vague allegation cannot merit any credence.
In Writ Petition 963 of 1987 Mr. Sanghi raised an additional contention that the goods concerned therein cannot be called "Veg 60 eatable Oil" within the meaning of section 3 (1) of the Cess Act and, therefore, the levy of the cess thereon is incompetent.
We cannot, however, allow this contention to be raised in a petition under Article 32 of the Constitution.
It is open to the petitioner to raise the said contention before the appropriate authority at the appropriate stage.
For the above reasons the writ petitions fail and are dismissed but in the circumstances without costs.
N. V. K. Petitons dismissed.
| On 28.5.1984, the High Court intimated the government of ten vacancies in the category of Munsifs and requested it to initiate appropriate steps for selection of candidates.
Written test was held in the year 1985 and viva voce was also held by the Public Service Commission.
On 10.12.1985 the High Court requested the Government to select twenty candidates in the place of ten.
On 27.12.1885 the Government requested the public Service Commission to select twenty candidates.
On 11.3.1986 the public service commission sent three select lists, one containing twenty candidates the other containing three Scheduled castes candidates and a waiting list of ten candidates.
The Government received several complaints against the pro cess of selection.
It was toying with the idea of scrapping the entire list and asking for a fresh selection.
95 On 23.12.1986, as the High Court said that there was urgent need for at least thirteen Munsifs, the government approved the name,,, of thirteen persons out of the list recommended by the Public Service commission and published the same.
They were appointed on 30.12.
Meanwhile a writ petition had been riled in the High Court for a direction to the Government to approve and publish the list recommended by the Public Service Commission.
On 30.12.1986, the State stated before the High court that it has already approved thirteen names and approval of the remaining seven persons was under its active consideration.
The High Court dismissed the writ petition as settled.
The Government did not approve any other names in the list in view of the complaints against the selection process by the Public Service Commission.
The candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list and the High Court was also pressing the Government to approve the list in view of the vacancies.
Another writ petition was riled to direct the Government to approve the remaining seven names from the select list.
The High Court (Single judge) allowed the writ petition and directed the Government to approve and publish the list of the remaining candidates submitted by the Public Service Commission to it for appointment as Munsifs, immediately in accordance with the Jammu and Kashmir Civil Services (judicial) Recruitment Rules, 1967 and to consider the appointment of the candidates (including the writ petitioner .) as Munsifs in the vacancies existing or likely to arise, in accordance with the recommendations to he made by the High Court.
On appeal, the division Bench of the High Court reversed the decision of the Single Judge.
The present appeals by special leave were flied against the 96 decision of the Division Bench,.
contending that once the Public Service Commission prepared and recommended a select list, the Government had no power to sit in judgment over it; that the Government was bound to approve the list as recommended; that the function of the Government under Rule 39 of the 1967 Rules was merely ministerial and formal; that the Government 's action was arbitrary and capricious and vitiated by any admissible and extraneous consideration.
The State Government submitted that the function of the Gov ernment under Rule 39 was not merelY formal or ministerial; that the Government, being the appointing authority, was entitled to scrutinies the list open to the Government either to approve or disapprove the list, either whollY or in part , that a number of complaints were received bY the Government against the selection and many of them were found to he not without substance; that in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration; that refusal to approve the remaining seven names inasmuch as no vacancies were available at that time was a valid and bonafide exercise of power and discretion ton the part of the Government; that the appellants had no legal right to be appointed just because their names were included in the select list prepared by the Public Service Commission.
Dismissing the appeals.
this Court.
HELD: 1.1.
It is true that the Government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the Government has an absolute power.
Such an argument does violence to the constitutional scheme.
(102 F) 1.2.
Rule 39 does not confer an absolute power upon the Government to disapprove or cancel the select list sent by the Public Service Commission Where, however, the Government is satisfied, after due enquiry that the selection has been vitiated either (on account of violation of a fundamental procedural requirement or is vitiated by consideration or corruption.
favourtism or nepotism.
it can refuse to 97 approve the select list.
In such a case, the Government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323.
(103 F H) 1.3.
article 323 (2) is meant as a check upon the power of the Government.
The provision militates against the theory of absolute power in the Government to disapprove or reject the recommendations of the commission.
For the same reason, it must he held that the Government cannot pick and choose candidates out of the list.
It is equally not open to the Government to approve a part of the list and disapprove the balance.
(104 B) 1.4.
Where is respect of any particular candidates an), material is discovered disclosing his involvement in any criminal activity the Government can always refuse to appoint such person but this would not he a case touching the select list prepared and recommended by the commission.
(104 C) 1.5.
In this case the Government itself had asked for a list of twenty and the commission had sent a list of twenty.
It could not have been approved in part and rejected in part.
The number of vacancies available on the date of approval and publication of the list is not material.
By merely approving the list of twenty, there was no obligation upon the Government to appoint them forthwith.
Their appointment depended upon the availability of vacancies.
The list remains valid for one year from the date of its approval and publication, if within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared.
(104 E F) 1.6.
If the Government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded.
Not having done that and having approved the list partly (thirteen out of twenty names), they cannot put forward any ground for not approving the remaining list.
Indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or to have disapproved the 98 entire list of twenty.
The objection, the Government have pertains to the very process of selection i.e., to the entire list and not individually to any of the remaining seven candidates.
(104 G) 1.7.
Mere inclusion in the select list does not confer upon the candidates included therein an indefeasible right to appointment.
(104 H) State of Haryana vs Subhash Chandara Marwaha, ; , M. section Jain vs State of Haryana , A.I.R. 1977 S.C. and State of Kerala vs A. Lakshmikutty: A.I.R. 1987 S.C. 331, referred to.
(111 E) 1.8.
The other aspect is the obligation of the Government to act fairly.
The whole exercise cannot be reduced to a more farce.
Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the Government the Government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment.
(105 B C) Shankarsan Dash vs Union of India.
; , referred to.
The Government 's action In not approving the rest of the seven names in the select list is unsustainable but there are certain circumstances which induce the Court not to interfere in this matter.
They are: (1) During the period of one year from the date of approval of thirteen names (23.12.1986/30.121986) no vacancy had arisen, which means that even if the list of twenty had been approved and published on December 23 or December 30, 1986 none of the seven persons would have been appointed.
At the end of one year, the list lapses and becomes inoperative.
(II) When the Government failed to act within a reasonable period from the date of the order (December 30, 1986) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General) the petitioners ought to have moved in the matter.
They did not do so.
They waited for more than twenty months and approached the High Court only on 99 September 14, 1988.
This delay disentitles the petitioners from any relief in the facts and circumstances of the case.
(106 C G)
|
Appeals Nos. 10 to 12 of 1962.
Appeals from the judgment and order dated February 5, 1960 of the Punjab High Court in T. R. No. 20 of 1956.
895 A.V. Viswanath Sastri and R. Gopalakrishnan for the Appellant.
Gopal Singh and R. N. Sachthey for the Respondent.
August 31.
The Judgment of the Court was delivered by SARKAR, J.
In certain assessment proceedings under the Indian Income tax Act, 1922, the assessee was charged with interest under sub see.
(8) of P. 18A of that Act, That sub section provided that in the cases there mentioned interest calculated in the manner laid down in sub sec.
(6) of a. 18A shall be added to the tax assessed.
The assessee contends that he could not be made liable to pay the interest as in his case it could not be calculated in the manner indicated.
The only question that arises in this appeal is whether this contention is right.
The assessee 's contention was rejected by the Appellate Commissioner but not by the Appellate Tribunal.
The respondent Commissioner thereupon obtained a reference of the following question to the High Court of Punjab for its decision : "Whether, on a true construction of sub Sections(6),(8) and(9 of Section 18A of the Indian Income tax Act, the interest referred to in sub Section (8) is chargeable for failure on the part of an assessee to submit an estimate of his income and pay tax, as required by the terms of sub Section (3) of that Section".
The High Court answered that question against the assessee.
Hence the present appeals by him.
There are three appeals because there are three 896 orders charging interest under s 18A(8), one in respect of each of three assessment years.
It would help now to refer briefly to some of the provisions of section 18A.
That Section deals with advance payment of income tax and Super tax, that is, payment of such taxes on income of the year in which taxes are paid and therefore before assessment Sub section (1) of this section gives power in certain cases to an Income tax Officer to make an order directing a person to make an advance payment of tax of an amount equal to the amount of the tax payable for the latest previous year in respect of which he has been assessed.
Sub section (2) gives an assessee on whom an orders under sub see.
(1) has been make, power to make his own estimate of the advance tax payable by him and to pay according to such estimate instead of according to that order.
Sub section (3) deals with the case of a person who has not been assessed before and requires him to make his own estimate of the tax payable by him in advance and pay accordingly.
This sub section applies to the assessee in the present case for he had not been assessed earlier.
The assessee however neither submitted any estimate nor paid any tax.
It remains now to states that the payment of tax in advance has to be made on June 15, September 15, December 15, and March 15 in each financial year or on such of these dates as may not have expired in the cases contemplated by sub secs.
(2) and (3), and that the income on which tax is payable in advance under the section does not include income in respect of which provision is made by section 18 for deduction of the tax at the source of the income.
Now we shall take up Sub secs.
(6) and (8) of section 18A both of which have to be considered in some detail as the decision in this case depends on the words used in them Sub section (6) is the 897 sub section which has created the difficulty felt in this case and the relevant portion of it is in these terms "Where in any year an assessee has paid tax under sub section (2) or sub section (3) on the basis of his own estimate, and the tax so paid is less than eighty per cent of the tax determined on the basis of regular assessment simple interest at the rate of six per cent per annum from the 1st day of January, in the financial year in which the tax was paid up to the date of the said regular assessment shal l be payable by the assessee upon the amount by which the tax so paid fails short of the said eighty per cent".
It is designed to apply to cases 'where tax has been paid by the assessee according to his own estimate but that estimate is on regular assessment found to be deficient.
Under this sub section interest has to be calculated from January 1, in the financial year in which the tax mentioned was paid and such calculation has to be made on the shortfall between the amount paid and eighty per cent of the tax which was found payable on the regular assessment sub section (8) provides: " where, on making the, regular assessment the income tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub section (6) shall be added to the tax as determined on the basis of the regular assessment.
The assessee does not dispute that sub secs (3)of section 18A applies to him and that he should have made an estimate and paid tax according to it but he has not done either.
He admits that he is a person to whom sub sec.
(8)applies.
His contention is that in 898 his case since he has not paid tax at all, it is not possible to calculate interest in the manner laid down in sub sec.(6).
Now sub sec.
(8) by its terms applies to a case where no payment of tax has been made and, therefore, there is no first day of January of a financial year in which tax was paid, from which day the calculation of interest has to commence.
Neither, the assessee contends, can any question of a shortfall between eighty per cent of the tax payable on regular assessment and the amount paid arise where nothing had been paid.
The assessee really says that as the language of sub sec.
(6) stands, it can have no operation in his case and therefore he has been wrongly charged with interest.
To clear the ground we may state before proceeding further that the assessee has no other objection to the orders under sub sec.
(8) making him liable for interest.
The question thus raised is one of construction of sub secs.
(6)and (8).
The assessee relies on a rule of construction applicable to taxing statutes which has been variously stated.
Rowlatt J.put it in these words in Cape Brandy Syndicate vs
Inland Revenue Commission, (1).
"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 a tax.
Nothing is to be read in, nothing is to be implied.
One can only look fairly at the language used.
" The object of this rule is to prevent a taxing statute being construed "according to its intent, though not according to its words": In re Bethlem Hospital (2).
This Court has accepted this rule.
(1) , 71.
(2) , 459. 899 Bhagwati J. in A. V. Fernandez vs The State of Kerala (1) said, "If. . the case is not covered within the four corners of the provisions of the tax ing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.
" It has been said that "If the provision is so wanting in clarity that no meaning is responsibly clear, the courts will be unable to regard it at; of any effect." : see Inland Revenue Commissioners vs Baldnoch Distillery Co. Ltd. (2) The assessee therefore contends that on the plain words of sub as.
(8) and (6) he cannot be charged any interest and in fact in a case like his, subsection (8) has to be regarded as of no effect.
Now it is well recognised that the rule of construction on which the assessee relies applies only to a taxing provision and has no application to all provisions in a taxing statue.
It does not, for example, apply to a provision not creating a charge for the tax but laying down the machinery for its calculation or procedure for its collection.
The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature which is to make a charge levied effective.
Reference may be made to a few oases laying down this distinction.
In Commissioner of Income tax vs Mahaliram Ramjidas (3) it was said, "The Section, although it is part of a taxing Act, imposes no charge on the subject, and deals merely with the machinery of (1) 7, 847.
(2) , 625.
(3) A.I.R. (1940) P.C. 124.126 127.
900 assessment.
In interpreting provisions of this kind the rule is that construction should be preferred which make the machinery workable utres valeat potius quam pereat." In India United Mills Ltd. vs Commissioner of Excess Profits Tax (1) This Court observed, "That section is, it should be emphasised, not a charging section, but a machinery section.
And a machinery section should be so construed as to effectuate the charging sections.
" We may now profitably read what Lord Dunedin said in Whitney vs Commissioners(2) of Inland Revenue : "My Lords, I shall now permit myself a general observation.
Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective.
A statute is designed to be workable and the interpreta tion thereof by a Court should be to secure that object, unless crucial omission or clear direction makes that end unattainable.
Now there are three stages in the imposition of a tax: there is the declaration of liability, that is the part of the statute which determines what persons in respect of what property are liable.
Next, there is the assessment, Liability does not depend on assessment.
That, ex hypothesis, has already been fixed.
But assessment particularises the exact sum which a person liable has to pay.
Lastly, come the methods of recovery, if the person taxed does not voluntarily pay." (1) ; , 816.
(2) , 110.
901 There is one other case to which we think it useful to refer and that is Allen vs Trehearne where section 45(5) of the English Finance Act, 1927 which laid down that "Where in any year of assessment a person ceases to hold an office or employment. chargeable under Schedule 'E ' tax shall be charged for that year on the amount of his emoluments for the period beginning on the sixth day of April in that year and ending on the date of the cessation" came up for construction.
It was contended that a sum of pound 10,000 which became payable to the assessee as the executor of the deceased holder of an office under the terms on which the office was held was not liable to tax under the section as it could not be said to be " his emoluments" since it was payable after his death.
It was observed by Scott L.J., "the rules. in Section 45, Sub section (5) and (6), are rules affecting assessment and collection, and that if there is any difficulty in the precise applicability of the language of those Sub sections, it should be interpreted largely and generously in order not to defeat the main object of liability laid down by Rule 1 of Schedule E." Dealing with the words "his emoluments occurring in the subsection the learned Lord Justice said, "It is quite true that strictly speaking the emoluments in question never became his in the sense that the quantitative amount of pound 10,000 became his property, It never became payable to him, because he died.
But that it was his emoluments under the agreement with the Company in a broad sense seems to me to be obvious, and in order to prevent the Revenue 's failure to get the tax which was intended b Rule 1 of schedule E, it appears to me to be legitimate to treat the words in (1) , 26 27.
902 question as meaning on the amount of the emoluments attaching to the office which he held '.
" On this interpretation of Sub section (5) tax was assessed in this case.
Now it seems to us that we are dealing here with a provision which lays down the machinery for the assessment of interest.
That sub section (8) intended to and did in the clearest term impose a charge for interest seems to us to be beyond dispute.
It says that interest calculated in a certain mariner "shall be added to the tax.
" We do not here have to resort to any equitable rule of constructing or to alter the meaning of the language used or to add to or vary it in order to arrive at the conclusion that the provision intended to impose a liability to pay interest.
That is the plain affect of the language used.
But the Subsection also provides that the interest for which liability was created, has to be calculated in a certain manner.
It is this provision which has given rise to the difficulty.
But obviously this provision only lays down the machinery for assessing the amount of interest for which liability was clearly created; it in substance says that in calculating the amount of interest the machinery of calculation laid down in sub, sec.
(6) shall be applied.
The proper way to deal with such a provision is to give it an interpretation which, to use the words of the Privy Council in Mahairam Kamjidas 's(1)case ', 'makes the machinery workable, utres valeat potius quam pereat".
We, therefore, think that we should read sub sec.(6), according to the provision of which interest has to be calculated as provided in sub sec.(8) in a manner which makes it workable and thereby prevent the clear intention of sub sec.(8) being defeated.
Now, how is that best done? As we have (1) ,126 127.
903 earlier said sub sec.(6) deals with a case in which tax has been pail and therefore it says that interest would be calculated "from the I at day of January in the financial year in which the tax was paid".
This obviously cannot literarily be applied to a case where no tax has been paid.
If however the portion of sub see.
(6) which we have quoted above is read as, "from the 1st day of January in the finan cial ear in which the tax ought to have been paid", the provisions becomes workable.
It would not be doing too much violence to the words used to read them in this way.
The tax ought to have been paid on one or other of the dates earlier mentioned.
The intention was that interest should be charged from January 1 of the financial year in which the tax ought to have been paid.
Those who paid the tax but a smaller amount and those who did not pay tax at all would than be put in the same position substantially which is obviously fair and was clearly intended.
Which is the precise financial year in any case would depend on its facts and this, would make no difference in the construction of the provision.
With regard to the other question about there being no shortfall between eighty per cent.
of the amount of tax found payable on the regular assessment and the amount of tax paid in a case where no tax was paid, it seems to us the position is much simpler.
If no tax is paid, the amount of such shortfall will naturally be the entire eighty per cent.
We also think that the case before us is very near to Allen 's case(1) It remains now to refer to sub s,(9) of section 18A.
That subsection provides for payment of penalty in terms of section 28 upon submission of estimates under sub sees.
(2) and (3) known or reasonably believed to be untrue or upon failure without (1) (138) 16, 17.
904 reasonable cause to comply with the provisions of sub sec.(3).
We are unable to see that this provision in any way affects the construction of sub secs.(6) or (8) or assists in the solution of the, difficulty which has arisen in this case.
The penalty under sub sec.(9) is in addition to the liability under sub sec.
(6) and (8) which his not penalty in the real sence, and is leviable for reasons different from those on which the levy of interest under sub secs.
(6) and (8) is besad.
The result, therefore, is that these appeals are dismissed and the decision of the High Court answering the question framed is upheld for the reasons earlier mentioned.
The respondent will get the costs of these appeals.
Appeals dismissed.
| The appellants were tried and convicted for conspiracy to cheat certain banks.
The prosecution had put on record a letter from the Under Secretry to Government which stated that the Governor had been pleased to grant sanction for the prosecution of the appellants.
The sanction was not challenged before the trial court or the High Court, but before the Supreme Court the appellants contended that no sanction as required by section 196A, Code of Criminal Procedure was on record and that the document on record did not show on its face that the facts of the case had been considered by the Governor.
The appellant further contended that for conviction for cheating the prosecution had to establish both that the appellants had caused wrongful gain to themselves and caused wrongful loss to the banks and that as no wrongful loss to the banks had been established, the appellants could not be convicted of cheating or of conspiracy to cheat.
Held, that the appellants were not entitled to raise the question of sanction for the first time in the Supreme Court as it required for its decision investigation of facts.
The document on record was an official communication which recited the fact that the Governor had granted the sanction.
A presumption arose ,that the sanction had in fact been accorded.
A further presumption arose that the official act of granting sanction to which reference was made in the communication had been regularly performed.
The document on record prima facie satisfied the requirements of section 196A. Held, further, that to establish that the accused had disho nestly induced another to part with property within the meaning of section 420, Indian Penal Code, it was not necessary to prove both wrongful gain and wrongful loss.
Wrongful gain and wrongful 383 loss were two facets of the definition of dishonesty and it was enough to establish the existence of one of them.
In the present case, the appellants had made wrongful gain to themselves by obtaining credits by unlawful means and even if no wrongful loss was caused to the banks, the appellants were guilty of cheating.
Sanjiv Ratanappa Bonad vs Emperor, (1932) I. L. B, LVI Bom.
488, and Kotamraju Venkatarayudu vs Emperor, , distinguished.
The sentences of imprisonment imposed on four of the appellants were reduced to the period already undergone and a fine of Rs. 3,000/ was imposed on each on the grounds that no useful purpose would be served by sending these appellants to jail after a long interval of time, that these appellants were very young at the time of the commission of the offences and that they had acted under the influence of the dominating personality of the main accused.
|
minal Appeal No. 149 of 1954.
Appeal by special leave from the judgment and order dated October 20, 1953, of the Bombay High Court in Criminal Appeal No. 349 of 1953.
680 section A. Desai and I. N. Shroff, for the appellant.
Porus A. Mehta and R. H. Dhebar, for the respondent.
February 19.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with special leave under article 136 of the Constitution is directed against a judgment of the High Court of Judicature at Bombay setting aside the acquittal of the appellant by the Court of the Presidency Magistrate, 19th Court, Bombay and ordering his re trial by the Court of the Special Judge, Greater Bombay in accordance with the provisions of the Criminal Law Amendment Act, 1952 (Act XLVI of 1952).
The appellant was accused No. 3 in the Court of the learned Presidencv Magistrate.
Accused No. 1 was the Mehta in the employ of a firm called Messrs. M. M. Baxabhoy & Co., accused No. 2 was the mana.
ger of the said firm.
The appellant and accused Nos. 4 and 5 were Receivers of the firm in litigation in regard to it.
They were all charged with offences under section 161 read with section 116 and further read either with section 109 or section 114 of the Indian Penal Code for offering to one Jibhai Chhotalal Barot, a sub inspector of police attached to the Anti Corruption Branch of the C. 1.
D. the sum of Rs. 1,25,000 as illegal gratification other than legal remuneration as ' a motive or reward for his showing favour to the accused and to the firm M/s. M. M. Baxabhoy & Co., in the exercise of his official functions.
The offence was alleged to have been committed on July 28, 1950, and the accused were charge sheeted on June 16, 1951; the trial commenced on July 14, 1951 and charges were framed on September 27, 1951.
40 witnesses were examined and 226 documents were exhibited in the course of the trial, and the prosecution closed its case on July 15, 1952.
During the course of the trial the Criminal Law Amendment Act, 1952 (XLVI of 1952) hereinafter called the impugned Act was enacted by Parliament 681 on July 28, 1952, being an Act further to amend the Indian Penal Code and the Code of Criminal Procedure, 1898 and to provide for a more speedy trial of certain offences, viz., offences punishable under section 161,s.165 or section 165A of the Indian Penal Code or sub section 2 of section 5 of the Prevention of Corruption Act, 1947 (ActII of 1947) and any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified above.
The learned Presidency Magistrate proceeded with the trial and after the examination of the appellant under section 342 of the Code of Criminal Procedure, the appellant filed his written statement on August 14, 1952.
The addresses commenced thereafter.
The prosecution commenced its address on August 26, 1952, ending it on September 5, 1952.
The defence thereafter addressed the learned Magistrate.
In the meantime on September 23, 1952, the Government of Bombay by a notification appointed a Special Judge to try offences specified above and this appointment was notified in the Official Gazette on September 26, 1952.
The defence concluded its address on September 26, 1952 and the learned Presidency Magistrate delivered his judgment on September 29, 1952, whereby he convicted the Accused Nos.
I and 2 of the offences with which they were charged and sentenced them each to nine months rigorous imprisonment and a fine of Rs. 1,000 in default 6 months ' rigorous imprisonment.
He however acquitted the appellant and the accused Nos. 4 and 5 of these offences.
The accused No. 2 carried an appeal before the High Court of Bombay being Criminal Appeal No. 1304 of 1952.
The State of Bombay also thereupon filed an appeal against the acquittal of the appellant and accused Nos. 4 and 5 being Criminal Appeal No. 349 of 1953.
In the memorandum of appeal in Criminal Appeal No. 349 of 1953 a point was taken that the learned Presidency Magistrate had no jurisdiction to continue the trial and acquit the appellant and accused Nos. 4 and 5 as the same was ousted by the impugned Act.
It was contended that since the date the said Act came into force the Special Judge alone 682 had jurisdiction to try the accused for the offence under section 161 read with section 116 of the Indian Penal Code, that the duty of the learned Presidency Magistrate was to transfer this case to the Court of the Special Judge for Greater Bombay, specially appointed to try such offences by the impugned Act and that the order of acquittal of the appellant and accused Nos. 4 and 5 was therefore erroneous in law being without jurisdiction.
Both these Criminal Appeals came up for hearing before a Bench of the Bombay High Court consisting of Bavadekar & Vyas JJ.
These appeals were heard only on the preliminary point as to the jurisdiction of the learned Presidency Magistrate to try and decide the case.
In reply to the point as to jurisdiction which had been taken by the State of Bombay, the appellant and the accused Nos. 4 and 5 urged that the provisions of the impugned Act were violative of the principle of equal protection of laws contained in article 14 of the Constitution and therefore the impugned Act was ultra vires the Constitution.
If that was so, it was contended, the learned Presidency Magistrate had jurisdiction to continue the trial in spite of the commencement of the impugned Act and the order of acquittal of the appellant and accused Nos. 4 and 5 recorded by him was correct.
The learned judges of the High Court rejected this contention of the appellant and held that the impugned Act was intra vires and that the learned Presidency Magistrate had no jurisdiction to try the case after the commencement of the impugned Act.
The learned Magistrate 's order convicting the accused No. 2 and acquitting the appellant and the accused Nos. 4 and 5 complained of by the State of Bombay was accordingly set aside.
The High Court ordered a re trial of the appellant and the other accused by the Court of the Special Judge, Greater Bombay, and remanded the case for disposal according to law.
The appellant applied to the High Court for a certificate under article 134 (1) (c) of the Constitution which was however refused.
The appellant thereafter 683 applied for and obtained from this Court special leave to appeal against the judgment and order passed by the High Court.
This is how the appeal has come up for hearing and final disposal before us.
It will be convenient at this stage to set out the relevant provisions of the impugned Act.
As already noted the preamble to the Act stated that it was an Act further to amend the Indian Penal Code and the Code of Criminal Procedure, 1898, and to provide for a more speedy trial of certain offences.
Section 5 of the Act inserted sub section
(2 B) in section 337 of the Code of Criminal Procedure, 1898 and provided that in every case where the offence is punishable under section 161 or section 165 or section 165 A of the Indian Penal Code or sub section
(2) of section 5 of the Prevention of Corruption Act, 1947, . . . . . . . then notwithstanding anything contained in sub section
(2 A), the Magistrate shall, without making any further enquiry, send the case for trial to the Court of the Special Judge appointed under the impugned Act.
This amendment was to remain in force for a period of two years from the commence ment of the impugned Act, but was subsequently incorporated in the Code of Criminal Procedure, 1898, as section 337 (2 B) by section 59 (b) of the Code of Criminal Procedure Amendment Act, 1955 (Act XXVI of 1955).
Section 6 of the Act provided for the appointment of Special Judges and empowered the State Governments by notification in the Official Gazette to appoint as many Special Judges as may be necessary for such area or areas as may be specified in the notification to try the following offences, namely: (a) an offence punishable under section 161, section 165 or section 165 A of the Indian Penal Code or sub section
(2) of section 5 of the Prevention of Corruption Act, 1947; and (b) any conspiracy to commit or any attempt to commit or any abetment of the offences specified in el.
(a) above.
Section 6 (2) laid down the qualifications for the appointment of a Special Judge and provided that: a person shall not be qualified for appointment as a Special Judge under this Act unless he was or had been 88 684 a Sessions Judge or an Additional Sessions Judge or an Assistant Sessions Judge under the Code of Criminal Procedure, 1898.
Section 7 of the Act is important and provided that notwithstanding anything contained in the Code of Criminal Procedure, 1898 or any other law the offences specified in sub section
(1) of section 6 shall be triable by special judges only.
Section 7(2) further provided that when trying any case, a Special Judge.
may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898 be charged at the same trial.
The procedure and powers of special judges were laid down in section 6 of the Act.
A Special Judge was empowered to take cognizance of offences without the accused being committed to him for trial, and in trying the accused persons, he was to follow the procedure prescribed by the Code of Criminal Procedure, 1898 for the trial of warrant cases by magistrates.
A Special Judge was also empowered to tender a pardon to any person supposed to have been directly or indirectly concerned in, or privy to, an offence on condition of his making a full and true disclosure of the whole circumstances within his knowledge relating to the offence and to every other person concerned, whether as a principal or abetter, in the commission thereof.
Save as above the provisions of the Criminal Procedure Code, 1898 were so far as they were not inconsistent with the Act made applicable to the proceedings before a Special Judge.
and for the purposes of the said provisions, the Court of the Special Judge was deemed to be a Court of Sessions trying cases without a jury or without the aid of assessors.
A Special Judge was empowered to pass upon any person convicted by him any sentence authorised by law for the punishment of the offences of which such person was convicted.
Section 9 of the Act provided for appeal and revision and the High Court was to exercise as far as applicable all the powers conferred by Chapters XXXI and XXXII of the Code of Criminal Procedure, 1898 on the High Court, as if the Court of the Special Judge were a Court of Sessions trying cases without a jury within the local limits of the jurisdiction of the High Court.
685 Section 10 is also important and provided for the transfer of certain cases pending before magistrates.
It was laid down that all cases triable by a Special Judge under section 7, which immediately before the commencement of the Act, were pending before any Magistrate shall, on such commencement, be forwarded for trial to the Special Judge having jurisdiction over such cases.
It is clear from the provisions of the impugned Act set out hereinabove that the intention of the legislature in enacting the same was to amend the Indian Penal Code and the Code of Criminal Procedure, 1898 with a view to provide for a more speedy trial of offences punishable under sections 161, 165 or 165 A, of the Indian Penal Code or sub section
(2) of section 5 of the Prevention of Corruption Act, 1947.
Special Judges of the status of a Sessions Judge or an Additional Sessions Judge or an Assistant Sessions Judge were to be appointed for the purpose of trying these offences and these offences were made triable only by these Special Judges.
Not only were the special judges invested with the exclusive jurisdiction to try these offences but they were also empowered while trying any case involving these offences to try any offence other than those offences with which the accused may, under the Code of Criminal Procedure, 1898 be charged at the same trial.
Committal proceedings were also done away with and the special judges were empowered to take cognizance of these offences without the accused being committed to them for trial and were empowered to try the accused persons of the same by following the procedure prescribed by the Code of Criminal Procedure, 1898, for the trial of warrant cases by magistrates.
The courts of the Special Judges were deemed to be courts of Sessions trying cases without a jury or without the aid of assessors and were also empowered to pass upon the persons convicted by them of any offence any sentence authorised by law for the punishment of such offences.
The powers of appeal and revision vested in the High Court were to be exercised as if the courts of Special Judges were the courts of sessions trying cases without a jury or without the aid of assessors within the local limits 686 of the jurisdiction of the High Court.
The procedure for trial before the Special Judges was thus assimilated to that obtaining in the case of trial of the accused by the courts of sessions.
Having thus provided for the trial by Special Judges of these offences which would be triable by them after the commencement of the impugned Act, the Act further provided for a transfer of cases falling within that category but pending before the magistrates.
It may be noted that the other provisions of the Act were prospective in operation and could not affect pending cases as such.
Provision had therefore to be made for divesting the magistrates who had already taken cognizance of these cases, of jurisdiction to try the same any further and for the transfer of such pending cases to the special judges who were.
appointed under the Act.
The cases which were pending before the courts of sessions did not require to be so transferred because they would be tried by the procedure obtaining in the courts of sessions and nothing further required to be done.
The cases which were pending before the Magistrates however required to be transferred to the Special Judges because otherwise the Magistrates would continue to try the same and would have to ' commit them to the courts of sessions, they themselves being unable to mete out the enhanced punishment which could be meted out to the accused on conviction.
The Committal proceedings were sought to be eliminated by the impugned Act and the Special Judges were empowered to try these cases as if they were courts of sessions trying cases without a jury or without the aid of assessors.
It was therefore provided that cases falling under this category which were pending before the magistrates should on the commencement of the impugned Act be forwarded for trial to the special judges having jurisdiction over such cases.
This provision was made when these cases triable by the Special Judges under section 7 of the Act were pending before the magistrates and the magistrates trying the same were ipso facto divested of the jurisdiction to try the same any further, the Special Judges appointed Under the Act having been invested with exclusive 687 jurisdiction to try the same after the commencement of the Act.
If this was the position under the impugned Act it followed without anything more that the instant case which was pending before the learned Presidency Magistrate on July 28, 1952, which was the date of the commencement of the Act, could not proceed any further before him.
By the operation of section 7 of the impugned Act, the learned Presidency Magistrate was divested of jurisdiction to try it and whatever proceedings were continued before him after July 28, 1952, were without jurisdiction and void.
The examination of the appellant under section 342 of the Code of Criminal Procedure and the further proceedings by way of filing of the written statement and the arguments addressed by the prosecution as well as the defence were all without jurisdiction and so were the orders of conviction of the accused Nos.
I and 2 and the acquittal of the appellant and the accused Nos. 4 and 5.
It was however contended by the learned counsel for the appellant before us that the provisions of the impugned Act were violative of the fundamental right enshrined in article 14 of the Constitution and were therefore ultra vires.
The respondents on the other hand urged that there was no classification at all and even if there was one, it was based on intelligible differentia and had a rational relation to the object sought to be achieved.
The provisions of the impugned Act in substance amended the Indian Penal Code and the Code of Criminal Procedure, 1898 pro tanto making the speci.
fied offences triable by special judges and all persons who committed these offences became punishable by higher sentences and were subjected to, procedure for trial of warrant cases, the courts of the special judges being deemed to be courts of sessions trying cases without a jury or without the aid of asessors.
It can therefore be legitimately urged that there was no classifi cation at all, the provisions thus enacted being equally applicable to all citizens alike without any discrimination whatever.
688 The matter was however argued before the High Court and also before us on the basis that the offenders who committed these specified offences formed a group or category by themselves and were classified as distinct from the offenders who committed the other offences under the Indian Penal Code.
We do not want to express any opinion as to whether there is any classification discernible within the provisions of the impugned Act, but will proceed to deal with this aspect of the question on the assumption that there was such a classification intended to be made by the Legislature while enacting the impugned Act.
The principles underlying article 14 of the Constitution have been completely thrashed out in the several decisions of this Court ere this.
The earliest pronouncement of this Court on the meaning and scope of article 14 was made in the case of Chiranjit Lal Chowdhury vs The Union of India(1).
The principles enunciated in that case were summarized by Fazl Ali J. as follows in The State of Bombay vs F. N. Balsara (2) : (1) The presumption is always in favour of the constitutionality of an enactment, since it must be assumed that the legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and its discriminations are based on adequate grounds.
(2) The presumption may be rebutted in certain cases by showing that on the face of the statute, there is no classification at all and no difference peculiar to any individual or class and not applicable to any other individual or class, and yet the law hits only a particular individual or class.
(3) The principle of equality does not mean that every law must have universal application for all persons who are not by nature, attainment or circumstances in the same position, and the varying needs of different classes of persons often require separate treatment.
(4) The principle does not take away from the State the power of classifying persons for legitimate purposes.
(1) [1950] S.C.R. p. 869.
(2) ; , at P. 708.
689 (5) Every classification is in some degree likely to produce some inequality, and mere production of inequality is not enough.
(6) If a law deals equally with members of a well defined class, it is not obnoxious and it is not open to the charge of denial of equal protection on the ground that it has no application to other persons.
(7) While reasonable classification is permissible, such classification must be based upon some real and substantial distinction bearing a reasonable and just relation to the object sought to be attained, and the classification cannot be made arbitrarily and without any substantial basis.
" The latest pronouncement on this topic is to be found in the judgment of this Court in the case of Budhan Choudhry and Others vs The State of Bihar (1) where it was observed as follows: " The provisions of article 14 of the Constitution have come up for discussion before this Court in a number of cases, namely, Chiranjit Lal Chowdhury vs The Union of India (supra), The State of Bombay vs F. N. Balsara (supra), The State of West Bengal vs Anwar Ali Sarkar (2 Kathi Raning Rawat vs The State of Saurashtra(3), Lachmandas Kewalram Ahuja vs The State of Bombay (4) Syed Qasim Razvi vs The State of Hyderabad(5) and Habeeb Mohamad vs The State of Hyderabad(6) It is, therefore, not necessary to enter upon any length discussion as to the meaning, scope and effect of the article in question.
It is now well established that while article 14 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) that 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 (1) [1955] I S.C.R. I045 at p. 1048.(4) [1952] S.C.R. 710.
(2) [1052] S.C.R. 284.(5) (3) ; 690 by the statute in question.
The classification may be founded on a different base namely, geographical, or according to objects or occupations or the like.
What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration.
It is also well established by the decisions of this Court that article 14 condemns discrimination not only by a substantive law but also by a law of procedure We have to scrutinize the provisions of the impugned Act in the light of the principles enunciated above.
The first question which we have to address to ourselves is whether there is in the impugned Act a reasonable classification for the purposes of legislation.
It we look to the provisions of the impugned Act closely it would appear that the legislature classified the offences punishable under sections 161, 165 or 165 A of the Indian Penal Code or sub section 2 of section 5 of the Prevention of Corruption Act, 1947 in one group or category.
They were offences relating to bribery or corruption by public servants and were thus appropriately classified in one group or category.
The classification was founded on an intelligible differentia which distinguished the offenders thus grouped together from those left out of the group.
The persons who committed these offences of bribery or corruption would form a class by themselves quite distinct from those offenders who could be dealt with by the normal provisions contained in the Indian Penal Code or the Code of Criminal Procedure, 1898 and if the offenders falling within this group or category were thus singled out for special treatment, there would be no question of any discriminatory treatment being meted out to, them as compared with other offenders who did not fall within the same group or category and who continued to be treated under the normal procedure.
The next question to consider is whether this differentia had a rational relation to the object sought to be achieved by the impugned Act.
The preamble of the Act showed that it was enacted for providing a more speedy trial of certain offences.
An argument was however addressed before us based on certain 691 observations of Mahajan J. (as he then was) at page 314, and Mukherjea J. (as he then was) at p. 328 in Anwar Ali Sarkar 's Case(1) quoted at page 43 by Patanjali Sastri C.J. in the case of Kedar Nath Bajoria V.
The State of West Bengal (2) that the speedier trial of offences could not afford a reasonable basis for such classification.
Standing by themselves these passages might lend support to the contention urged before us by the learned counsel for the appellant.
It must be noted, however, that this ratio was not held to be conclusive by this Court in Kedar Nath Bajoria 's Case(2) where this Court held: " (1) That when a law like the present one is impugned on the ground that it contravenes article 14 of the Constitution the real issue to be decided is whether, having regard to the underlying purpose and policy of the Act as disclosed by its title, preamble and provisions, the classification of the offences for the trial of which the Special Court is set up and a special procedure is laid down can be said to be unreasonable or arbitrary and therefore violative of the equal protection clause; (2) having regard to the fact that the types of offences specified in the Schedule to the Act were very common and widely prevalent during the post war period and has to be checked effectively and speedily tried, the legislation in question must be regarded as having been based on a perfectly intelligent principle of classification, having a clear and reasonable relation to the object sought to be achieved, and it did not in any way contravene article 14 of the Constitution.
" In the instant case, bribery and corruption having been rampant and the need for weeding them out having been urgently felt, it was necessary to enact measures for the purpose of 'eliminating all possible delay in bringing the offenders to book.
It was with that end in view that provisions were enacted in the impugned Act for speedier trial of the said offences by the appointment of special judges who were invested with exclusive jurisdiction to try the same and were also empowered to take cognizance thereof without the (1) ; 89 (2) ; 692 accused being committed to them for trial, and follow ,the procedure prescribed for the trial of warrant cases by magistrates.
The proceedings before the Special Judges were thus assimilated to those before the courts of sessions for trying cases without a jury or without the aid of assessors and the powers of appeal and revision invested in the High Court were also similarly circumscribed.
All these provisions had the necessary effect of bringing about a speedier trial of these offences and it cannot be denied that this intelligible differentia had rational relation to the object sought to be achieved by the impugned Act.
Both these conditions were thus fulfilled and it could not be urged that the provisions of the impugned Act were in any manner violative of article '14 of the Constitution.
It was next contended that even if the impugned Act was intra vires, the learned Presidency Magistrate trying the case of the appellant was not divested of jurisdiction to try the same after the commencement of the impugned Act and the acquittal of the appellant recorded by him could not be set aside.
Reliance was placed upon section 10 of the impugned Act in support of this contention.
It was urged that even though the case related to the offence mentioned in section 6(1) of the Act and was thus triable exclusively by the Special Judge, no Special Judge was appointed by the State Govern ment by notification in the Official Gazette until September 26,1952, that the arguments were concluded and the trial came to an end also on September 26, 1952 and the only thing which remained to be done thereafter was the pronouncement of the judgment by the learned Presidency Magistrate and that therefore even though the case may be deemed to have been pending before the learned Magistrate there was no occasion for forwarding the same for trial to the Special Judge appointed by the State Government on September 26, 1952.
We do not accept this contention.
It cannot be denied that on July 28,1952, the date of the commencement of the impugned Act the case of the appellant was pending before the learned Presidency Magistrate.
On that day the prosecution had closed its case and S.C.R. SUPREME COURT REPORTS 693 the appellant had not yet been called upon to enter upon his defence.
The examination of the appellant under section 342 of the Code of Criminal Procedure took place after that date.
The appellant filed his written statement on August 14, 1952 and the addresses by the prosecution as well as the defence continued right up to September 26, 1952.
The word " pending " is thus defined in Stroud 's Judicial Dictionary, 3rd Edition, Vol.
III, p. 2141: PENDING: (1) A legal proceeding is "pending" as soon as commenced and until it is concluded, i.e., so long as the Court having original cognizance of it can make an order on the matters in issue, or to be dealt with, therein.
Similar are the observations of Jessel, M. R.
In re Clagett 's Estate, Fordham vs Clagett (1): " What is the meaning of the word " pending " ? In my opinion, it includes every insolvency in which any proceeding can by any possibility be taken.
That I think is the meaning of the word " pending. . . . . . . . .
A cause is said to be pending in a Court of justice when any proceeding can be taken in it.
That is the test.
" There is no doubt therefore that the case of the appellant was not concluded and was pending before the learned Presidency Magistrate at the date of the commencement of the impugned Act.
We were however told that as many as 40 witnesses had been examined and 226 documents exhibited in the course of the trial before the learned Presidency Magistrate and it could not have been intended by the Legislature when enacting section 10 of the impugned Act that a case where everything had been finished except the addresses and the pronouncement of the judgment should be forwarded for trial before the Special Judge appointed under the Act.
The fallacy underlying this argument is that on July 28, 1952, when the impugned Act.
came into, operation the trial even in the restricted sense of the term had not been concluded.
The prosecution had closed its case but the appellant (1) at p. 653.
694 lad yet to enter upon his defence and lead evidence, if any, in reply to the case set up by the prosecution.
The same was the position even on September 26, 1952, when by a notification in the Official Gazette the Special Judge was appointed having jurisdiction over such cases.
The notification came into operation from the commencement of September 26, 1952, which was immediately after the mid night of September 25, 1952 and the defence address had not concluded by this time but was continued when the learned Presidency Magistrate 's Court assembled at 11 a. m. on September 26, 1952 and was concluded thereafter.
The word " trial " is also defined in Stroud 's Judicial Dictionary, 3rd Edition, Vol.
IV, at page 3092: TRIAL: (1) A "trial" is the conclusion, by a competent tribunal, of questions in issue in legal proceedings whether civil or criminal.
(2) The " trial " (Criminal Justice Act, 1948 (11 & 12 Geo.
C. 58) section 23 (1) is not complete until sentence has been passed or the offender has been ordered to be discharged (R. vs Grant The trial of the appellant therefore could not be said to have been concluded on July 28, 1952 and even on the September 26, 1952, assuming for the sake of argument that the effective commencement of the impugned Act could not be said to have come about until the Special Judge was appointed by the State Government by notification in the Official Gazette.
This contention of the appellant therefore is in any event devoid of substance.
We are aware that in cases like the present one, the provisions contained in section 10 of the impugned Act would work to the prejudice of the appellant in that he would be subjected to a re trial before the Special Judge having jurisdiction over the case involving a re hearing of the whole case with 40 witnesses to be examined and 226 documents to be exhibited.
The time which would have to be spent, the anxiety which the appellant would have to undergo, the expenses which he Would have to make in the matter of his defence by competent counsel and the possibility Which he would have to face of the Special Judge trying the same coming to a conclusion different 695 from the one which was reached by the learned Presidency Magistrate are all considerations which would have made us consider his case very sympathetically and try to find out ways and means whereby he would be saved these troubles and tribulations.
The words of section 10 of the impugned Act however are very clear and categorical and are not capable of being construed in any other manner except that all cases triable by the Special Judges which were pending immediately before the commencement of the impugned Act before any magistrate must be forwarded for trial to the Special Judge having jurisdiction over such cases, the magistrates having cognizance of the same and trying them being divested of jurisdiction to proceed further with the trial thereof immediately after the commencement of the Act.
The only persons who were invested with jurisdiction to try these cases after the commencement of the impugned Act were the Special Judges having jurisdiction over the same and whatever Was done by the magistrates thereafter was without jurisdiction and void.
The case of the appellant is unfortunate.
For ought we know the Special Judge trying him would acquit him of the offence with which he has been charged in the same manner as the learned Presidency Magistrate himself did, but there is no escape from the fact that he will have to face a re trial and undergo the expenses and anxiety in defending himself over again.
We have therefore come to the conclusion that the order for re trial of the appellant made by the High Court was correct and the appeal must be dismissed.
We hope and trust that the re trial before the Special Judge will be conducted with all possible dispatch and the trial will be concluded as early as possible.
The appeal will accordingly stand dismissed.
Appeal dismissed.
| As a result of proceedings taken and settlement arrived at in 1952 under the Taxation on Income (Investigation Commission) Act, 1947 certain sums were determined as payable by the respondents assessee companies on its secreted profits, and schemes for the payment of the said liability by instalments were laid down.
The assessee companies claimed that the balance of the demand that had remained unpaid was a debt owed by it and should be allowed as a deduction while computing its net wealth for the concerned year of assessment.(1957 58) The Wealth tax Officer computed the net wealth of each company by adopting the figures of assets and liabilities as shown in their balance sheets as on their respective valuation dates after making such adjustments as considered necessary but in both the cases he disallowed the aforesaid claim for deduction on the ground that the liability was outstanding for more than 12 months on the valuation dates.
The Appellate Assistant Commissioner confirmed the disallowance.
He took the view that the tax liabilities assessed by the Income tax Investigation Commission had no relation to the assets or the declared wealth of assessee companies, which were the basis of the wealth tax assessment and since the assets on which the said liability was assessed, namely, the secret profits, were not included in the declared assets the disallowance was justified.
In further appeals by the assessee companies to the Tribunal, the Tribunal confirmed the disallowance on the ground that sections 2(m) (i), 2 (m) (ii), 5 (1) and 5 (2) indicated a scheme of the Act which suggested that debts which qualified for deduction in computation of the net wealth were only those which were incurred in relation to the assets declared by the assessee, that is to say, in computing the net wealth the principle to be adopted was that when any assets were included the corresponding debts should be allowed, but that when such assets were excluded or were liable to be excluded from the net wealth the corresponding debts should also be excluded.
38 In the References to the High Court, at the instance of the assessee companies the Tribunal 's conclusion was overruled and the High Court opined that the deductions claimed were allowable in computing the net wealth of the assessee companies.
In the appeals to this Court, by the Revenue on the question whether the balance of the payments payable by the companies as a result of the findings and orders of the Income Tax Investigation Commission in the settlements made under the Taxation on Income (Investigation Commission) Act 1947 are deductible as debts owed by them in determining the net wealth of the companies.
Dismissing the appeals, ^ HELD: [By the Court] Section 2 (m) (iii) requires that the tax liability must be one which is "payable in consequence of any order passed" under any law relating to taxation on income or profits etc.
such liability so payable under an order must remain "outstanding for a period of more than 12 months on the valuation date".
The expression `outstanding ' in section 2 (m) (iii) (a) and(b) will have to be construed in the background of the phrase "amount of tax payable in consequence of an order," and in that context it must mean remaining unpaid after the obligation to pay is incurred.
[48D, 48G] In the instant case, it was the admitted position before the Tribunal that under the scheme of instalments sanctioned in the settlements the two sums, in respect thereof deductions were claimed, had not become due for payment before the valuation dates.
The deductions claimed, therefore, do not fall within the exclusionary part contained in section 2 (m) (iii) of the Act.
[48H 49A] Per Tulzapurkar, J.
The scheme emerging from the key provisions of the Act, Sections 2 (m), 3 and 4 clearly show that barring those debts which fall within the exclusionary part of section 2 (m) all other debts owed by the assessee have to be deducted from the aggregate value of the assets belonging to him on the valuation date.
In order to get disqualified for the purposes of deduction a debt must fall within the exclusionary part and there is nothing in the exclusionary part which suggests that the debt must either by relatable to any asset at all or if it is relatable to any asset, such asset must be included in the books of accounts or the balance sheet of the assessee before a deduction in respect thereof is allowed.
[45C D] In the instant cases, the secret profits admittedly earned by the assessee companies related to an assessment year prior to September, 1948 (as proceedings under Taxation on Income (Investigation Commission) Act.
1947 could be taken only in respect of the assessment year prior to 1.9.1948) and the tax liability in respect thereof was determined in 1952, but the valuation dates are 30.6.1956 and 31.12.1956.
[47D] Annamma Paul Perincherry vs Commissioner of Wealth Tax, Kerala and Commissioner of Wealth Tax, Kanpur vs J.K. Jute Mills Co.Ltd., , approved 39 [Per Sabyasachi Mukharji J.] There is no evidence to show whether the profits had remained with the assessee companies either in the form of assets in the Balance sheet or otherwise.
The relevant valuation dates were much later.
Had there been any finding that these profits, in some form, either as assets in the Balance Sheet or otherwise were with the assessee.
It could have perhaps been examined whether so long as the assessee does not bring those profits in the computation of the wealth, the assessee would be disentitled to the deductions of liabilities in respect of the same.
These should have been examined by the Wealth tax Officer with the aid of the principles of section 106 and section 114 of the Evidence Act.
Had that been done it could have, perhaps been examined whether by the principle of purposive interpretation, in order the give effect to the intention of the legislature in enacting the Wealth Tax and evolving the scheme of settlement under Taxation on Income (Investigation Commission Act, 1947, whether the assessee was entitled to the deduction of these two tax liabilities.
[50 A D] Commissioner of Wealth Tax, West Bengal III vs Banarashi Prashad Kedia, and Commissioner of Wealth Tax, U.P. and others vs Padampat Singhania, 84 I.T.R. 799, approved.
|
Civil Appeal Nos.
219 220 of 1982.
From the Judgment and Order dated 19.9.1979 of the High Court of Orissa in D.J C. Nos. 811 & 1048/77.
Anil B. Divan and R. K. Mehta for the Appellants. S.,T.
Desai, S.R. Banerjee and Vinoo Bhagat, B.R. Aggarwal, Miss Vijaylakshmi Menon Vinod Bobde for the Respondents.
39 The Judgment of the Court was delivered by MADON J.
These two Appeals by Special Leave granted by this Court are against the judgment and order of the Orissa High Court allowing 209 writ petitions under Article 226 of the Constitution of India filed before it.
Genesis of the Appeals On May 23, 1977, the Government of Orissa in the Finance Department issued two Notifications under the Orissa Sales Tax Act 1947 (Orissa Act XIV of 1947).
We will hereinafter for the sake of brevity refer to this Act as "the Orissa Act".
These Notifications were Notification S.R.O. 372/77 and Notification S.R.O No. 373/ 77.
Notification S.R.O. No. 372/77 was made in exercise of the powers conferred by section 3 B of the Orissa Act and Notification S.R.O. No. 373/77 was made in exercise of the powers conferred by the first proviso to sub section (1) of section 5 of the Orissa Act.
We will refer to these Notifications in detail in the course of this judgment but for the present suffice it to say that notification S.R.O.No.
372/77 amended notification No. 20209 CTA 14/76 F dated April 23, 1976, and made bamboos agreed to be severed and standing trees agreed to be severed liable to tax on the turnover of purchase with effect from June 1, 1977, while notification S.R.O. No 373/77 amended with effect from June 1, 1977, Notification No. 20212 CTA 14/76 F dated April 23, 1979, and directed that the tax payable by a dealer under the Orissa Act on account of the purchase of bamboos agreed to be severed and standing trees agreed to be severed would be at the rate of ten per cent.
After the promulgation on December 29, 1977, of the Orissa Sales Tax (Amendment) Ordinance 1977 (Orissa Ordinance No, 10 of 1977 ), which amended the Orissa Act, two other notifications were issued on December 29, 1977, by the Government of Orissa in the Finance Department, namely Notification No. 67178 C.T.A.135/77(Pt.) F(S.R.O. No900/77) and Notification No. 67181 C.T.A. 135/77 F (S.R.O. No. 901/77).
The first Notification was expressed to be made in exercise of the powers conferred by section 3 B of the Orissa Act and in supersession of all previous notifications issued on that subject.
By the said notification the State Government declared that the goods set out in the Schedule to the said Notification were liable to be taxed on the turnover of purchase with effect from January 1. 1978.
Entries Nos. 2 40 and 17 in the Schedule to the said Notification specified bamboos agreed to be severed and standing trees agreed to be severed respectively.
The second Notification was expressed to be made in exercise of the powers conferred by sub section (1) of section 5 of the Orissa Act and in supersession of all previous notifications in that regard.
By the said notification the State Government directed that with effect from January 1, 1978, the tax payable by a dealer under the Orissa Act on account of the purchase of goods specified in column (3) of the Schedule to the said Notification would be at the rate specified against it in column (3) thereof.
In the said Schedule the rate of purchase tax for bamboos agreed to be severed and standing trees agreed to be severed was prescribed as ten per cent.
The relevant entries in the Schedule in that behalf are Entries Nos. 2 and 17.
The Orissa Tax (Amendment) Ordinance, 1977, was repealed and placed by the Orissa Sales Tax (Amendment) Act, 1978 (Orissa Act No. 4 of 1978).
As many as 209 writ petitions under Article 226 of the Constitution of India were filed in the High Court of Orissa challenging the validity of the aforesaid two Notifications dated May 23, 1977, and the said Entries Nos. 9 and 17 in each of the said two notifications dated December 29, 1977 (hereinafter collectively referred to as "the impugned provisions").
The petitioners before the High Court fell into two categories.
The first category consisted of those who has entered into agreements with the State of Orissa for the purpose of felling, cutting obtaining and removing bamboos from forest areas "for the purpose of converting the bamboo into paper pulp or for purposes connected with the manufacture of paper or in any connection incidental therewith".
This agreement will be hereinafter referred to as "the Bamboo Contract".
The other group consisted of those who had entered into agreements for the purchase of standing trees.
We will hereinafter refer to this agreement as "The Timber Contract".
All the Bamboo Contracts before the High Court were in the same terms except with respect to the contract area, the period of the agreement and the amount of royalty payable; and the same was the case with the Timber contracts.
By a common judgment delivered on September 19, 1979, reported as The Titaghur Paper Mills Company Ltd. and another vs State of Orissa and other (and other cases)1, the High Court allowed all the (1) (1980) 45 S.T.C. 170.
41 said writ petitions and qauashed the impugned provisions.
The High Court made no order as to the costs of these petitions.
Each of the present two Appeals has been filed by the State of Orissa, the Commissioner of Sales Tax Orissa, and the Sales Tax Officer concerned ill the matter, challenging the correctness of the said judgment of the High Court.
The Respondents in Civil Appeal No. 219 of 1982 are the Titaghur Paper Mills Company Limited (hereinafter referred to as 'the Respondent Company") and one Kanak Ghose, a shareholder and director of the Respondent Company.
The Respondents in Civil Appeal No. 220 of 1982 are Mangalji Mulji Khara, a partner of the firm of Messrs. M.M. Khara, and the said firm.
The Chief Conservator of Forests, Orissa, the Divisional Forest Officer, Rairkhol Division.
and the Divisional Forest Officer, Deogarh Division have also been joined as proforma Respondents to the said Appeal.
Facts of C. A. No. 219 of 1985 D The Respondent Company is a public limited company.
Its registered office is situated at Calcutta in the state of West Bengal.
The Respondent Company carries on inter alia the business of manufacturing paper.
For this purpose it owned at the relevant time three paper mills one at Titaghur in the State of West Bengal, the second at Kankinara also in the State of west Bengal and the third at P. O. Choudwar, Cuttack District, in the State of Orissa.
For the purpose of obtaining raw materials for its business of manufacturing paper, the Respondent Company entered into a Bamboo Contract dated January 20, 1974, with the State of Orissa.
This agreement was effective for a period of fourteen years from October 1, 1966, in respect of Bonai Main Areas of Bonai Division, for a period of thirteen years of with effect from October 1, 1967, in respect of Kusumdih P. section Of Bonai Division; and for a period of eleven years with effect from October 1, 1969, in respect of Gurundia Rusinath P. section Of Bonai Division, with an option to the Respondent Company to renew the agreement for a further period of twelve years from October 1, 1980.
For the present it is not necessary to refer to the other terms and conditions of this Bamboo Contract.
After the said two Notification dated May 23, 1977, were issued, the Sales Tax Officer, Dhenkanal Circle, Angul, Ward (the Third Appellant in Civil Appeal No. 219 of 1982) issused to 42 the manager of the Respondent Company 's mill at P. O. Choudwar a notice dated August 18, 1977, under Rules 22 and 28(2) of the Orissa Sales Tax Rules, 1947, stating that though the Respondent Company 's gross turnover during the year immediately preceding June 1, 1977, had exceeded Rs. 25,000; it had without sufficient cause failed to apply for registration as a dealer under section 9 of the Orissa Act and calling upon him to submit within one month a return in Form IV of the forms appended to the said Rules, showing the particulars of "turnover for the quarter ending 76 77 & 6/77".
By the said notice the said manager was required to attend in person or by agent at the Sales Tax Office at Angul on October 30, 1977, and to produce or cause to be produced the accounts and documents specified in the said notice and to show cause why in addition to the amount of tax that might be assessed a penalty not exceeding one and half times that amount should not be imposed under section 12(5) of the Orissa Act that is, for carrying on business without being registered as a dealer.
By its letter dated August 25, 1977 the Respondent Company asked for time to seek legal advice.
Thereafter by its letter dated September 27, 1977 addressed to the said Sales Tax Officer, the Respondent Company contended that the said notice was invalid and called upon him to cancel the said notice.
A copy of the said letter was also sent to the Commissioner of Sales Tax, Orissa, who is Second Appellant in Civil Appeal No. 219 of 1982 as also to the Chief Secretary to the Government of the State of Orissa.
As no reply was received to the said letter, the Respondent company and the said Kanak Ghosh filed writ petition in the High Court of Orissa, being O.J.C No. 811 of 1977, challenging the validity of the said two Notifications dated May 23, 1977, and the said notice.
While the said writ petition was part heard, the said two Notifications were replaced by the said two Notifications dated December 29, 1977.
Accordingly, the Respondent Company applied for amendment of the said writ petition.
It also filed along with Kanak Ghosh another writ petition, being O.J.C. No. 740 of 1978, challenging the validity not only of the said two Notifications dated May 23, 1977, but also of Entries Nos. 2 and 17 of the said two Notifications dated December 29, 1977, and the said notice dated August 18 1977, on the same grounds as those in the earlier writ petition.
The principal contentions raised in the said writ petitions were that the subject matter of the Bamboo Contract was not a sale or 43 purchase of goods but was lease of immovable property or in any event was the creation of an interest in immovable property by way of grant of profit a prendre which according to the Respondent Company amounted in Indian law to an easement under the (Act V of 1882), and that for the said reason the amounts of royalty payable under the Bamboo Contract could not be made exigible to either sales tax or purchase tax in the exercise of the legislative competence of the State, and, therefore, the impugned provisions were unconstitutional and ultra vires the Orissa Act.
It was further contended that the Bamboo Contract was a works contract and for the said reason also the transaction covered by it was not exigible to sales tax or purchase tax.
It was also contended that as the said Notifications dated December 29, 1977, were expressed to be made in supersession of all earlier notifications on the subject, the liability, if any, under the said Notifications dated May 23, 1977, was wiped out.
The said writ petitions prayed for quashing the impugned provisions and for writ of mandamus against the respondents to the said petitions, namely, the State of Orissa, the Commissioner of Sales Tax, Orissa, and the said Sales Tax Officer, restraining them from giving any effect or taking any further steps or proceedings against the Respondent Company on the asis Or the impugned provisions or the said notice.
In addition to the said two writ petitions filed by the Respondent Company and the said Kanak Ghosh, three other writ Petitions were also filed by other parties Who had entered into Bamboo Contracts with the State of Orissa in which similar contention were raised and reliefs claimed.
The record is not clear whether any assessment order was made against the Respondent Company in pursuance of the said notice or whether further proceedings in pursuance of the said notice were stayed by the High Court by an interim order.
As mentioned earlier, by the said common judgment delivered by the High Court, the said writ petitions were allowed.
As a natural corollary of the High Court, quashing the impugned provisions it ought to have also quashed, the said notice dated August 18, 1977, and the assessment order, if any, made in pursuance thereof.
The High Court, however, did not do so, perhaps because as it heard and decided all the said 209 writ petitions together it did not ascertain the facts of each individual petition or the exact consequential reliefs to be given to the petitioner therein.
44 Facts of C. A. No. 220 of 1982 Messrs. M.M. Khara, Second Respondent to Civil Appeal No. 220 of 1982 (hereinafter referred to as "the Respondent Firm"), is a partnership firm of which the first Respondent to the said Appeal, Mangalgi Mulji Khara, is a partner.
The Respondent Firm carried on business at P. O. Sambalpur in the District of Sambalpur in the State of Orissa and was registered as a dealer both under the Orissa Act and the (Act LXXIV of 1956), with the Sales Tax Officer, Sambalpur I Circle.
The business of the Respondent Firm so far as concerns this Appeal consisted of bidding at auction held by the Government of Orissa in respect of trees standing in forest areas and if it was the highest bidder, entering into an agreement with the Government for felling and removing such trees and in its turn selling the trees felled by it in the shape of logs to other.
The procedure followed by the State of Orissa in giving forest areas was to publish notices of proposed auction sales of timber and other forest products in particular forest areas.
After the auctions were held, ratification orders would be issued by the State Government to the forest contractors who were the highest bidders as also an agreement would be entered into between the State of Orissa through its Governor and the forest contractor in respect of the forest produce governed by the agreement.
During the relevant period, the Respondent Firm was successful at five auction sales held by the State of Orissa.
Its bids were ratified by the State Government.
The Respondent Firm also entered into five separate agreements (hereinafter referred to as "Timber Contractors") for felling and removing trees standing in such forest areas.
Three of the said five Timber Contracts were for the period October 31, 1977, to January 31, 1979, the fourth was for the period October 1, 1977 to December 31, 1978, and the fifth was for the period October 28, 1977 to July 31, 1979.
After the said Notifications dated May 23, 1977 were issued, the Respondent Firm along with its said partner Mangalji Mulji Khara filed a writ petition in the Orissa High Court, being O.J.C. No. 1048 of 1977, against the State of Orissa, Commissioner of Commercial Taxes, Orissa, Sales Tax Officer, Sambalpur Circle, Divisional Forest Officer, Roirkhol Division, and Divisional Forest Officer, Deogarth Division.
Two main grounds were taken in the 45 said writ petition, namely, (l) the levy of a purchase tax on standing timber agreed to be severed was beyond the legislative competence of the State Legislature and (2) the said Notifications imposed a tax both at the point of sale and point of purchase and were, therefore, invalid and ultra vires the Orissa Act.
It was also contended that the power conferred upon the State Government under section 3 B of the Orissa Act to declare any goods or class of goods to be liable to tax on the turnover of purchase as also the power conferred upon the State Government to specify the rate of tax subject to the conditions that it should not exceed thirteen per cent amounted to excessive delegation of legislative power to the State Government and that too without prescribing any guidelines in respect thereof.
It was further contended that the Timber Contracts were works contracts and the amounts payable under them were, therefore, not exigible either to purchase tax or sales tax.
The reliefs sought in the said writ petition were for quashing the said two Notifications dated May 23, 1977 D While the said writ petition was pending, the Sales Tax Officer, Sambalpur I Circle, by his assessment order dated November 28, 1978, assessed the Respondent Firm to tax under the Orissa Act for the period April 1, 1977, to March 31, 1978.
He held that the Respondent Firm had paid royalty to the Forest Department in the aggregate sum of Rs. 11,52,175 on which purchase tax at the rate of ten per cent was payable by it.
It was further stated in the said assessment order that the Respondent Firm had not shown this amount in its gross turnover.
Accordingly, the Sales Tax Officer enhanced the gross turnover to include this amount.
The amount of purchase tax assessed on the Respondent Firm amounted to Rs. 1,16,217.50p.
Thereupon, the Respondent Firm and its partner amended the said writ petition No. O.J.C. 1048 of 1977 and challenged the validity of the said assessment order and prayed for quashing the same.
On an application made by the Respondent Firm and its said partner, by an interim order the High Court stayed the recovery of the amount of purchase tax pending the hearing and final disposal of the said writ .
Apart from the Respondent Firm, 203 other forest contractors who had entered into similar agreements with the State Government also filed writ petitions in the High Court challenging the validity of the impugned provisions.
By its judgment under appeal, 46 the High Court allowed the said petition filed by the Respondent Firm.
As in the case of the writ petition filed by the Respondent Company and very probably for the same reason, the High Court did not pass any order quashing the said assessment order consequent upon it holding that the impugned provisions were ultra vires the Act.
Judgment of the High Court All the said 209 writ petitions were heard by a Division Bench of the Orissa High Court consisting of S.K.Ray, C.J., and N.K. Das, J.
The main judgment was delivered by Das.
J., while Ray, C.J., delivered a short, concurring judgment.
Das, J. rejected the contention that the effect of the word 'supersession ' used in the Notifications dated December 29, 1977, was to wipe out the liability under the earlier Notifications dated May 23, 1977.
He held that the Notifications dated May 23,1977, remained in force until the Notifications dated December 29, 1977, came into operation.
So far as the other points raised before the High Court were concerned, Das, J., summarized the conclusions reached by the court in paragraphs 19 and 2() of his judgment as follows: "19.
For the reasons stated above, we hold as follows: (1) That the bamboos all i trees agreed to be severed are nothing but bamboos and timber after those are felled.
When admittedly timber and bamboos are liable for taxation at the sale point, taxation of those goods at the purchase point amounts to double taxation and, as such, the notifications arc ultra vires the provisions of the the Act.
(2) The impugned notifications amount to taxation on agreements of sale, but not on sale and purchase of goods; and (3) In the case of bamboo exploitation contracts, the impugned notifications amount also to impost of tax on profit a prendre and, as such, arc against the provisions of the Orissa Sales Tax Act.
In view of the aforesaid findings, we do not consider it necessary to go into the other questions raised 47 by the petitioners, namely, whether it is a works contract and whether the notifications amount to excessive delegation or whether there has been business of purchase by the petitioners or whether there has been restriction on trade and business" In his concurring judgment Ray, C. J., agreed with Das, J. and further held that in the series of sales in question the first sale, that is the taxable event, started from the Divisional Forest Officer and that the Divisional Forest Officer was the taxable person who had sold taxable goods, namely, timber, and that as what was sold by the Divisional Forest Officer was purchased by the petitioners before the High Court the identity of goods sold and purchased was the same, and that where such a sale was taxed, the purchase thereof was excluded from the levy of tax by virtue of sections 3 B and 8 of the Orissa Act and consequently the levy of purchase tax by the impugned provisions was bad in law.
In view of its above findings, the High Court allowed all the writ petitions and quashed the impugned provisions.
The High Court made no order as to the costs of the writ petitions.
We will set out the submissions advanced at the Bar at the hearing of these Appeals when we deal with the various points which fall to be decided by us.
In order, however, to test the correctness of the judgment of the High Court as also of the rival contentions of the parties, it is necessary to see first the relevant provisions of the constitution of India as also of the Orissa Act and of the various notifications issued thereunder.
Constitutional provisions The Orissa Act received the assent of the Governor General of India on April 26, 1947, and was published in the Orissa Gazette on May 14, 1947.
Under section 1(13) of the Orissa Act, section 1 was to come into force at once and the rest of the Orissa Act on such date as the Provincial Government may by notification in the Orissa Gazette appoint.
The rest of the Orissa Act was brought into force on August l, 1947.
The Orissa Act is thus a pre constitution Act.
At the date when it was enacted as also when it came into force? the constitutional law of India was the Government of 48 India Act, 1935, prior to its amendment by the Indian Independence Act, 1947.
Under section 100(3) of the Government of India Act 1935, the Legislature of a Province alone had the power to make laws for a province or any part thereof in respect any of the matters enumerated in List 11 in the Seventh Schedule to that Act, namely the Provincial Legislative List.
Entry 48 in the provincial Legislative List provided for "Taxes on the sale of goods and on advertisements".
Thus, under the Government of India Act, 1935, Sales tax was an exclusively provincial subject and the legislative competence of the Orissa Provincial Legislature to enact the Orissa Act was derived from section 100(3) of the Government of India Act, 1935, read with Entry 48 in the Provincial Legislative List.
Under the Constitution of India as originally enacted, the legislative topic "Taxes on the sale or purchase of newspapers and on advertisements published therein" was exclusively a Union subject in respect of which under Article 245(1) read with Article 246(1) parliament alone could make laws for the whole or any part of the territory of [India, this topic being the subject matter of Entry 92 in List I in the Seventh Schedule to the Constitution (namely, the Union List), while "Taxes on the sale or purchase of goods other than news papers" and "Taxes on advertisements other than advertisements published in newspapers" were exclusively State subjects in respect of which under Article 245(1) read with Article 246(3) of the Constitution of India, the Legislature of a State alone could make laws ' for such State or any part thereof, these topics being the subject matter of Entries 54 and 55 in , List ll in the Seventh schedule to the Constitution, namely, the State List ' By the constitution (Sixth Amendment ) Act, 1956, a new Entry, namely Entry 92A, was inserted in the Union List and Entry 54 in the State List was substituted by a new Entry.
Entry 92A in the Union List reads as follows: "92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce.
" The amended Entry 54 in List ll reads as follows: "54.
Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92A of List I." 49 We are not concerned in these Appeals with the amendment made in Entry 55 in the State List by the Constitution (Forty second Amendment ) Act, 1976.
We are not concerned with Entry 92 B inserted in the Union List or with the extended meaning given to the expression "tax on the sale or purchase of goods" by the new clause (29A) inserted in Article 366 of the Constitution whereby that expression inter alia includes a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, by the Constitution (Forty sixth Amendment) Act, 1982.
We are equally not concerned in these Appeals with the restrictions imposed by Article 286 of the Constitution on a State 's power to levy a tax on certain classes of sales and purchases of goods.
The Orissa Act In keeping with the legislative history of fiscal measures in general, the Orissa Act has been amended several times.
Thus, by the middle of July 1981 it had been amended twenty eight times.
It is needless to refer to all the provisions of the Orissa Act or of the various amendments made therein except such of them as are relevant for the purpose of these Appeals.
The Orissa Act when enacted levied a tax only on the sales of goods taking place in the province of Orissa.
By the Orissa Sales tax (Amendment) Act, 1958 (Orissa Act No.28 of 1958), a purchase tax was for the, first time introduced in the State of Orissa with effect from December 1, 1958.
The tax under the Orissa Act is levied not on goods but on sales and purchases of goods or rather on the turnover of sales and turnover of purchases of goods of a dealer.
Under section 4(2) of the Orissa Act, a dealer becomes liable to pay tax on sales and purchases with effect from the month immediately following a period not exceeding twelve months during which his gross turnover exceed the limit specified in that sub section which during the relevant period was Rs. 25,000.
Under section 4(3) a dealer who has become liable to pay tax under the Orissa Act continues to be so liable until the expiry of three consecutive years during each of which his gross turnover has failed to exceed the prescribed limit and such further period after the date of The said expiry as may be 50 prescribed by the Orissa Sales Tax Rules and his liability to pay tax ceases only on the expiry of the further period so prescribed.
A special liability is created by section 4 A on a casual dealer as defined in clause (bb) of section 2.
We are not concerned in these Appeals with any question relating to a casual dealer.
Section 2 is the definition section.
Clause (c) of that section defines the term "dealer".
The definition as it stood during the relevant period and at the date when the judgment of the High Court was delivered (omitting what is not relevant) read as follows: "(c) 'Dealer ' means any person who carries on the business of purchasing or selling or supplying goods, directly or otherwise, whether for commission, remuneration or other valuable consideration and includes (i) . a company, . firm or association which carries on such business; Explanation The manager or agent of a dealer who resides outside Orissa and who carries on the business of purchasing or selling or supplying goods in Orissa shall, in respect of such business, be deemed(l to l c a dealer for the purposes of this Act".
It was on the basis of the above Explanation to section 2(c) that the notice impugned in Civil Appeal No. 219 of 1982 was issued to the manager of the Respondent Company and he was sought to be made liable to purchase tax under the said Notifications dated May 23, 1977.
Under the aforesaid definition of the term "dealer" before a person can be a dealer, he must be carrying on the business of purchasing or selling or supplying goods.
There was no definition of the word "business" in the Orissa Act and the orissa High Court had interpreted it as connoting an activity carried on with the object of making profit.
By the Orissa Sales Tax (Amendment) Act 1974 (Orissa Act No. 18 of 1974), a definition of "business" was for he first time inserted as clause (b) in section 2, the original clause (b) which defined the term contract" having been omitted by the Orissa Sales Tax (Amendment) Act, 1959.
after the decision of this Court in The State of Madras vs Gannon Dunkerley & Co. (Madras) 51 Ltd1.
The effect of this definition of the term "business" was to do away with the requirement of profit motive.
As a consequence of the decision of the Orissa High Court in Straw Products Limited vs State of Orissa and others2, the above definition of the term "dealer" in clause (c) was substituted with retrospective effect by the Orissa Sales Tax (Amendment) Ordinance, 1979 (Orissa Ordinance No. 11 of 1979), which was replaced by the Orissa Sales Tax (Amendment) Act, 1979 (Orissa Act No. 24 of 1979).
In the Straw Product 's Case the petitioner company had entered into two agreements with the State of Orissa.
From the facts set out in the judgment of the High Court in that case it would appear that these two agreements were similar to the Bamboo Agreement before us.
The Divisional Forest Officer, Balliguda Division, called upon the petitioner company to reimburse to him the amount of sales tax to which he had been assessed, stating that he was a registered dealer and had been assessed to tax on the sale of all standing trees including bamboos.
The petitioner company thereupon filed two writ petitions in the Orissa High Court challenging this demand.
The contention that the transactions covered by the said two agreements were not sales of goods and, therefore, not exigible to sales tax does not appear to have been raised in those writ petitions.
The High Court held that the State of Orissa and not the Divisional Forest Officer could be the dealer qua the transactions covered by the said agreements in case they were exigible to sales tax and that the liability under the Orissa Act being a statutory one, it was not open to the State in the discharge of its administrative, business or at its volition to name an employee under it as the person to pay sales tax under the Orissa Act, and.
therefore, the Divisional Forest Officer could not have been assessed to sales tax on the transactions in question.
The High Court further held that though the requirement of profit motive did not exist any more as an ingredient of the term "business" as defined by the said clause (b) of section 2, whether a person carried on business in a particular commodity depended upon the volume, frequency, continuity and regularity of transactions of purchase and sales in a class of goods, and as these ingredients were not satisfied in the cases before it, the transactions were not exigible to sales tax.
The judgment in that case was delivered on May 3, 1977.
The State as also the Commissioner of Sales Tax, (1) (2) (1978) 42 S.T.C. 302 (1977)1 C.W.R. 455.
52 Orissa, have come in appeal by Special Leave in this Court against the said judgment and these appeals are still pending, being Civil Appeals Nos.
1237 1238 of 1979 State of Orissa and others vs Straw Products Limited and others and Civil Appeals Nos.
1420 1421 of 979 Commissioner of Sales Tax, Orissa and another vs Straw Product Limited and others.
However, to get over the judgment of the High Court, the State Government issued the two impugned Notifications dated May 23, 1977, which were replaced along with others by the said two Notifications dated December 29, 1977.
Further, the Governor of Orissa promulgated the Orissa Sales Tax (Amendment and Validation) Ordinance, 1979 (Orissa Ordinance No. I l of 1979), substituting with retrospective effect from the date of the Orissa Act the definition of "dealer" given in clause (c) of section 2.
The said Ordinance was repealed and replaced by the Orissa Sales Tax (Amendment and Validation) Act, 1979 (Orissa Act No. 24 of 1979).
This amending and validating Act came into force with effect from July 19, 1979, being the date of the promulgation of the said Ordinance.
Section 3 of the said amending Act validated assessments or re assessments, levy or collection of any tax or imposition of any penalty made or purporting to have been made under the Orissa Act before July 19, 1979, as if all such acts had been done under the Orissa Act as so amended, notwithstanding anything contained in any judgment, decree or order of any court or other authority to the contrary.
The substituted definition of "dealer", omitting the portion thereof not relevant for our purpose, reads as follows: "(c) 'Dealer ' means any person who carries on the business of purchasing, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration and includes (i) . a company, . firm or association which carries on such business; X X X X Explanation I y and every local branch of a firm registered outside the State or of a company the principal office or headquarters whereof is outside the State, shall be .
deemed to be a dealer for the purposes of this Act.
53 Explanation II The Central Government or a State Government or any of their employees acting in official capacity on behalf of such Government, who, whether or not in the course of business, purchases, sells, supplies or distributes goods, directly or otherwise for cash or for deferred payment or for commission, remuneration or for other valuable consideration, shall, except in relation to any sale, supply or distribution of surplus, unserviceable or old stores or materials or waste products, or obsolete or discarded machinery or parts or accessories thereof, be deemed to be a dealer for the purposes of this Act.
What is pertinent to note about the new definition of "dealer" is that in the case, of the Central Government, a State Government or any of their employees acting in official capacity on behalf of such Government, it is not necessary that the purchase, sale, supply or distribution of goods should be in the course of business, while in all other cases for a person to be a dealer he must be carrying on the business of purchasing, selling, supplying or distributing goods.
Writ petitions challenging the validity of this amending and validating Ordinance and Act have been filed in this Court under Article 32 of the Constitution of India and are still pending.
These writ petitions are Writ Petition Nos. 958 of 1979 Orient Paper Mills and another vs State of Orissa and others and Writ Petition No. 966 of 1979 Straw Products Limited and another vs State of Orissa and others.
We are concerned in these Appeals only with purchases and sales of goods and not with their supply or distribution.
The terms "sale" and "purchase" are defined in clause (g) of section 2.
Clause (g), omitting the Explanation which is not relevant for our purpose, reads as follows: "(g) 'Sale ' means, with all its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge and the words "buy" and "purchase" shall be construed accordingly; X X X X X 54 The expressions "goods".
"purchase price" and "sale price" are defined in clause (d), (ee) and (h) of section 2 as follows: " (d) 'Goods ' means all kinds of movable property other than actionable claims, stocks, shares or securities and includes all growing crops, grass and things attached to or forming part of the land which are agreed before sale or under the contract of sale to be severed, " (ee) 'Purchase Price ' means the amount payable by a person as valuable consideration for the purchase or supply of any goods less any sum allowed by the seller as cash discount according to ordinary trade practice, but it shall include any sum charged towards anything done by the seller in respect of the goods at the time of or before deli very of such goods other than the cost of freight or delivery or the cost of installation when such cost is separately charged; "(h) 'Sale Price ' means the amount payable to a dealer as consideration for the sale or supply of any goods, less any sum allowed as cash discount according to ordinary trade practice, but including any sum charged for anything done by the dealer in respect of the goods at the time of, or before delivery thereof".
As the liability of a dealer to pay tax under the Orissa Act depends upon his gross turnover exceeding the limit prescribed by ` section 4(2), it is necessary to see the definition of the expression "gross turnover".
"Gross turnover" is defined by clause (dd) of section 2 as follows "(dd) 'Gross Turnover ' means the total of 'turnover of sales ' and 'turnover of purchases".
G The expression 'turnover of sales" and "turnover of purchases" are defined in clauses (i) and (j) of section 2 as follows: "(i) 'Turnover of sales ' means the aggregate of the amounts of sale prices and tax, if any, received and receivable by a dealer in respect of sale or supply of goods other 55 than those declared under section 3 B effected or made during a given period; X X X X "(j) 'Turnover of purchases ' means the aggregate of the amounts of purchase prices paid and payable by a dealer in respect of the purchase or supply of goods or classes of goods declared under section 3 B; So far as is material for our purpose, section 5(1) provides for the rates at which the tax under the Orissa Act is payable.
Sub section (I) of section 5 and the first proviso thereto as they stood prior to the Orissa Sales Tax (Amendment) Ordinance, 1977, read as follows: "5.
Rate of Tax: (1) The tax payable by a dealer under this Act shall be levied at the rate of six per cent on his taxable turnover; Provided that the State Government may, from time to time, by notification and subject to such conditions as they may impose, fix a higher rate of tax not exceeding thirteen per cent or any lower tax payable under this Act on account of the sale or purchase of any goods or class of goods specified in such notification; The words "at the rate of six per cent" in the main subsection (I) were substituted for the words "at the rate of five per cent" and the words "not exceeding thirteen per cent" were substituted for the words "not exceeding ten per cent" in the first proviso thereto by the Orissa Sales Tax (Amendment) Act, 1967 (Orissa Act No. 7 of 1976), with effect from May 1, 1976.
Amongst the amendments made by the Orissa Sales Tax (Amendment) Ordinance, 1977, which were re enacted by the Orissa Sales Tax (Amendment) Act, 1978, was the substitution of sub section (I) of section 5 and the first proviso thereto by a new sub section (1).
Thus, with effect from January 1, 1978 sub section (1) reads as follows: 56 5.
Rate of Tax (1) The tax payable by a dealer under this Act shall be levied on his taxable turnover at such rate, not exceeding thirteen percent, and subject to such conditions as the State Government may, from time to time, by notification, specify; X X X X The other proviso to the said sub section (1) are not relevant for our purpose.
Sub section (2) (A) of section S defines the expression "taxable turnover" as meaning that part of a dealer 's gross turnover during any period which remains after deducting therefrom the turnover of sales and purchases specified in that subsection.
Section 3 B confers upon the State Government the power to declare what goods or classes of goods would be liable to tax on the turnover of purchases.
Section 3 B reads as follow. "3 B. Goods liable to purchase tax The State Government may, from time to time, by notification, declare any goods or class of goods to be liable to tax on turnover of purchases: Provided that no tax shall be payable on the sales of such goods or class of goods declared under this section " This section was inserted in the Orissa Act with effect from December 1, 1958, by the Orissa Sales Tax (Amendment) Act, 1958.
As the tax under the Orissa Act is intended to be a single point levy, section 8 confers upon the State Government the power to prescribe points at which goods may be taxed or exempted, Section 8 provides as follows: "8.
Power of the State Government to prescribe points at which goods may be taxed or exempted Notwithstanding anything to the contrary, in this Act, the State Government may prescribe the points in the series 57 of sales or purchases by successive dealers at which any goods or classes or descriptions of goods may be taxed or exempted from taxation and in doing so may direct that sales to or purchases by a person other than a registered dealer shall be exempted from taxation: Provided that the same goods shall not be taxed at more than one point in the same series of sales or purchases by successive dealers.
Explanation Where in a series of sales, tax is prescribed to be levied at the first point, such point, in respect of goods despatched from outside the State of Orissa shall mean and shall always be deemed to have meant the first of such sales effected by a dealer liable under the Act after the goods are actually taken delivery of by him inside the State of Orissa.
" Rules 93 A to 93 G of the Orissa Sales Tax Rules, 1947, prescribe the goods on which tax is payable at the first point in a series of sales.
The goods so prescribed have no relevance to these Appeals.
Notifications under the Act In exercise of the powers conferred by section 3 B of the Orissa Act the State Government from time to time issued notifications declaring what goods or classes of goods were liable to tax on the turnover of purchases.
As a result of the amendments made in the rates specified in sub section (1) of section 5 and the first proviso to that sub section by the Orissa Sales Tax, (Amendment) Act 1976, with effect from May 1,1976, all these notification were superseded and a fresh list of goods declared under section 3 B by Notification No. 20209C.T.A.L. 14/76 F, dated April 23,1916.
All the notifications issued from time to time under the first proviso to sub section (1) of section 5 specifying the rates of purchase tax on goods declared under section 3 B were also superseded and new rates of purchase tax in respect of the goods declared in the said new list were specified with effect from May 1.1976, by Notification No. 20212 C.T.A. 14/76 F, dated April 23,1976.
But is these two Notifications which were amended by the impugned Notifica 58 tions dated May 23, 1977.
The said two impugned Notifications are as follows: "Notification S.R. O.No.
372/77 dated the 23rd May 1977 In exercise of the powers conferred by section 3 B Of the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947), the State Government do hereby declare that standing trees and bamboos agreed to be severed shall be liable to tax on turnover of purchase with effect from the first day of June, 1977 and direct that the following amendment shall be made in the notification of Government of Orissa, Finance Department No. 20209 CTA 14/76 F., dated 23rd April 1976.
AMENDMENT In the schedule to the said notification after serial numbers 2 and 16, the following new serial and entry shall be inserted under appropriate heading, namely: Serial No. Description of goods (1) (2) 2 A Bamboos agreed to be severed.
16 A Standing trees agreed to be Severed. "Notification S.R.O. No; 373/77 dated the 23rd May 1977 In exercise of the powers conferred by the first proviso to sub section (1) of section 5 of the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947), the State Government do hereby direct that the following amendment shall be made in the notification of the Government of Orissa, Finance Department No. 20212 CTA 14/76 F., dated the 23rd April 1976 and that the said amendment shall take effect from the first day of June, 1977.
AMENDMENT In the schedule to the said notification after serial 59 numbers 2 and 16, the following new serial and entry shall be inserted under appropriate heading, namely: Serial No. Description of goods Rate of Tax (1) (2) (3) 16 A Bamboos agreed to Ten per cent served to be 2 A Standing trees agreed Ten per cent." to be severed The above two Notifications were struck down by the High Court by its judgment under appeal.
The State Government had also issued from time to time Notifications in exercise of the powers conferred by the first proviso to sub section (1) of section 5 prescribing a rate of tax different from the rate specified in section 5(1) so far as sales of certain goods were concerned.
As a result of the amendments made by the Orissa Sales Tax (Amendment) Act, 1916, all these notifications were superseded and new rates specified with effect from May 1, 1976, by Notification No. 20215 C T.A. 14/76 F. dated April 23, 1976.
By Notification No. S.R.A. 374/77 dated May 23, 1977, made in exercise of the powers conferred by the first proviso to sub section (1) of section 5, the State Government directed that with effect from June 1, 1977, the said Notification No. 20215 C.T.A. 14/76 F. dated April 23, 1976, should inter alia be amended by inserting a new entry therein as Entry No. 86 A, By this entry the rate of sales tax on timber was enhanced to ten per cent, Tn view of the amendment made in sub section (1) of section 5 by the Orissa Sales Tax (Amendment) Ordinances 1977 (replaced by the Orissa Sales Tax (Amendment) Act, 1978), the State Government issued three Notifications, (1) declaring the goods liable to purchase tax, (2) specifying the rates of purchase tax on such goods.
and (3) specifying the rates of sales tax.
The relevant portions of the notification declaring the goods liable to purchase tax read as follows: "Notification No. 67178 C.T.A. 135/77 (Pt. ) Fdated the 29th December 1977.
60 S.R.O.No.900/77 In exercise of powers conferred by section 3 B of the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947), and in supersession of all previous notifications issued on the subject, the State Government do hereby declare that the goods mentioned in column (2) of the schedule given below shall be liable to tax on turnover of purchase, with effect from the first day of January, 1978.
SCHEDULE Serial No. Description of goods (1) (2) X X X X 2.
Bamboos agreed to be severed X X X X 17.
Standing trees agreed to be severed X X X X . " The relevant portions of the Notification specifying the rates of purchase tax read as follows: Notification No.67181 C.T.A. 135/77 F. dated the 29th December 1977 S.R.O. NO.
901/77 In exercise of the powers conferred by sub section (1) of section 5 of the Orissa Sales Tax Act, 1947(Orissa Act 14 of 1947), as amended by the Orissa Sales Tax (Amendment) Ordinance, 1977 (Orissa Ordinance No. 10 of 1971) and in supersession of all previous notifications in this regard, State Government do hereby direct that with effect from the first day of January, 1978 the tax payable by a dealer under the said Act on account of the purchase of the goods specified in column (2) of the schedule given below, shall be at the rate specified against each in column (3) thereof; 61 SCHEDULE Serial No. Description of goods1 Rate of Tax (1) (2) (3) X X X X 2.
Bamboos agreed to be Ten per cent severed X X X X 17.
Standing trees agreed to Ten per cent be served X X X X The relevant portions of the Notification specifying the rates of sales tax read as follows: "Notification No. 67184 C.T.A. 135/77 F., dated the 29th December 1977.
S.R.O. No. 902/77 In exercise of the powers conferred by sub section (I) of section 5 of the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947), as amended by the Orissa Sales 'Tax (Amendment) Ordinance, 1977 (Orissa Ordinance, No. 10 of 1977) and in supersession or all previous Notifications on the subject, the State Government do hereby direct that with effect from the first day of January, 1978, the rate of tax payable by a dealer under the said Act on account of the sale of goods specified in column (2) of the Schedule given below shall be at the rate specified against each in column (3) thereof.
SCHEDULE Sl.
Description of goods Rate of Tax (1) (2) (3) X X X X 101 All other articles Seven percent".
Entries Nos. 2 and 17 in the schedule to each of the said 62 Notifications Nos. 67178 C.T.A. 135/17 (Pt.) F and 67181 C.T.A135/77 F were also struck down by the High Court by its judgment under appeal.
The ambit of the Orissa State 's taxing power The validity of the impugned provisions is challenged on two grounds: (1) they levy a tax on what is not a sale or purchase of goods and are, therefore, unconstitutional, and (2) assuming the subject matter of the impugned provisions is a sale or purchase of goods, they levy a tax on the same goods both at the sale point and purchase point and are therefore, ultra vires the Orissa Act.
In order to test the correctness of these challenges, it is necessary to bear in mind the ambit of the Orissa State ' s power to levy a tax on the sale or purchase of goods This power is subject to a two fold restriction one Constitutional; and the other, statutory.
The Constitutional restriction on the legislative competence of the Orissa State in this behalf is shared by it in common with all other States, while the statutory restriction is self imposed and flows from the provisions of the Orissa Act.
We have already set out earlier the relevant provisions of the Government of India Act.
, 1935, the Constitution of India and the Orissa Act.
To recapitulate, the Orissa Act is a pre Constitution Act and the legislative competence of the Orissa Provincial Legislature to enact the Orissa Act was derived from section 100(3) of the Government of India act 1935, read with Entry 48 in List II in the Seventh Schedule to that Act.
After the coming into force of the Constitution of India the power of the Orissa State Legislature to enact law imposing a tax on the sale or purchase of goods (other than newspapers) is to be found in Articles 245(1) and 246(3) of the Constitution of India read with Entry 54 of the Constitution of India.
Thus, Entry 54 in the State List in the Constitution of India is, with certain modifications, the successor entry to Entry 48 in the Provincial Legislative List in the Government of India Act, 1935.
While Entry 48 spoke of "taxes on the sale of goods", Entry 54 speaks of "taxes on the sale or purchase of goods".
The addition of the word "purchase" permits the State Legislature to levy a II purchase tax and does not confine its taxing power merely to levying 63 a sales tax.
Sale and purchase are merely two ways of looking at the same transaction.
Looked at from the point of view of the seller a transaction is a sale, while looked at from the point of view of the buyer the same transaction is a purchase.
Entry 48 in List II of the Seventh Schedule of the Government of India Act, 1935, came up for interpretation by this Court in The Sales Tax officer, Pilibhit vs Messrs. Budh Prakash Jai Prakash.
This Court held in that case that there having existed at that time of the enactment of the Government of India Act, 1935, a well defined and well established distinction between a sale and an agreement to sell, it would be proper to interpret the expression "sale of goods" in Entry 48 in the sense in which it was used in legislation both in England and India and to hold that it authorized the imposition of a tax only when there was a completed sale involving transfer of title.
In that case the Uttar Pradesh Sales Tax Act, 1948, had been amended so as to include forward contracts in the definition of 'sale ' and to provide that forward contracts should be deemed to have been completed on the date originally agreed upon for delivery.
These amendments were held by this Court to be ultra vires.
In State of Madras vs Gannon Dunkerly & Co., (Madras) Ltd., another Constitution Bench of this Court held that at the time when the Government Or India Act, 1935, was enacted the expression "sale of goods" was a term of well recognized import in the general law relating to sale of goods and the legislative practice relating to that topic and, therefore, that expression must be interpreted when used in the said Entry 48 as having the same meaning as in the sale of goods Act, 1930.
The Court further held that any attempt, therefore, to give to the expressions "sale", ' goods" or "sale of goods" an artificial meaning or an enlarged meaning or to bring within their scope what would not be comprehended within it would be ultra vires and unconstitutional.
The court further observed (at page 413 4): " . both under the common law and the statute law relating to sale of goods in England and in India, to constitute a transaction of sale there should be an agreement, express or implied, relating to goods to be complete (1) [1955] I S.C.R. 243, 246 64 by passing of title in those goods.
It is of the essence of this concept that both the agreement and the sale should relate to the same subject matter.
Where the goods delivered under the contract are not the goods contracted for, the purchaser has got a right to reject them, or to accept them and claim damages for breach of warranty.
Under the law, therefore, there cannot be an agreement relating to one kind of property and a sale as regards another.
We are accordingly of opinion that on the true interpretation of the expression 'sale of goods ' there must be an agreement between the parties for the sale of the very goods in which eventually property passes " In that case the definition of term "sale" in the Madras General Sales Tax Act, 1939, was enlarged by an amendment so as to include "a transfer of property in goods involved in the execution of a works contract" and the definition of "turnover" was expanded to include within it the amount payable for carrying out a works contract less such portion as may be prescribed.
A new definition of "works contract" inserted in the said amendments included within its meaning inter alia the construction, fitting but, improvement or repair of any building, road, bridge or other immovable property.
The Court held these amendments to be void and beyond the legislative competence of the Madras Provincial Legislature on the ground that in the case of a building contract, which was one and indivisible, the agreement between the parties was that the contractor should construct the building according to the specification contained in the agreement and in consideration therefore receive payment as provided therein, and that in such an agreement there was neither a contract to sell the materials used in the construction nor any property passed in such materials as movables.
The same interpretation as was placed on Entry 48 in the Provincial Legislative List in State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd. was adopted by this Court while construing Entry 54 in the State List and attempts by the State Legislatures to enlarge the meaning of the expressions sale ', 'sale of goods ' or 'goods ' have been held to be beyond their legislative competence: sec, for instance, Bhopal Sugar Industries Ltd. M.P. and another .v.
D.P. Dube, Sales Tax Officer, Bhopal Region, Bhopal and another (1) A.I.R. 1964 SC 1037.
65 K.L. Johar and Company vs Deputy Commercial Tax Officer Joint Commercial Tax Officer.
Harbour Div II.
Madras vs Young, Men 's Indian Association (Reg.) Madras and others ; and State of Maharashtra and another vs Champalal Kishanlal Mohta2.
In Addition to the above Constitutional limitations on the Orissa State 's power to tax sales or purchases of goods, there are other restrictions imposed by sections 3 B and 8 of the Orissa Act.
A State is free when there is a series of sales in respect of the same goods to tax each one of such sales or purchases in that series or to levy the tax at one or more points in such series of sales or purchases.
Legislation of all States in this respect is not uniform.
Some States have adopted a single point levy, others, a two point levy; and yet others, a multi point levy.
The State of Orissa has adopted a single point levy.
It has done this by enacting the provision to section 3 B and the proviso to section 8.
Under the proviso to section 3 B no tax is payable on the sales of goods or class of goods declared under that section to be liable to taxes on the turnover of purchase .
The proviso to section 8 states that "the same goods shall not be taxed at more than one point in the same series of sales or purchases by successive dealers".
Where, therefore, In a series of sales by successive dealers sales tax or purchase tax is levied at a particular point, neither sales tax nor purchase tax can be levied at another point in the same series ; and similarly can be levied in respect of the same transaction or any other transaction of sale of the same goods.
As any attempt on the part of the State to impose by legislation sales tax or purchase tax in respect of what would not be a sale or a sale of goods or goods under the , is unconstitutional, any attempt by it to do so in the exercise of its power of making subordinate legislation, either by way of a rule or notification would be equally unconstitutional; and so would such an act on the part of the authorities under a Sales Tax Act purporting to be done in the exercise of powers conferred (1) (2) ; (3) [1971] 1 S.C.R. 46. 66 by that Act or any rule made or notification issued thereunder.
Similarly where any rule or notification travels beyond the ambit of the parent Act, it would be ultra vires the Act.
Equally, sales tax authorities purporting to act under an act or under any rule made or notification issued thereunder cannot travel beyond the scope of such Act, rule or notification.
Thus, the sales tax authorities under the Orissa Act cannot assess to sales tax or purchase tax a transaction which is not a sale or purchase of goods or assess to sales tax any goods or class of goods which are liable to purchase tax or assess to tax, whether sales tax or purchase tax, goods at another point in the same series of sales or purchase of those goods by successive dealers when those goods are liable to be taxed at a different point in that series.
Subject matter of the impugned provisions What now falls to be determined is the subject matter of the impugned provisions.
Relying upon the definition of the term "goods" in the , and in the Orissa Act, it was submitted on behalf of the Appellant State that the subject matter of the impugned provisions is goods and that what is made exigible to tax under the impugned provisions is a completed purchase of goods.
On behalf of the contesting Respondents it was submitted that by impugned provisions a new class of goods not known to law sought to be created and made exigible to purchase tax and that this attempt on the part of the State Government was unconstitutional as being beyond its legislative competence.
The High Court held that the impugned provisions amounted to a tax on an agreement of sale and not on a sale or purchase of goods.
It further held that in the case of Bamboo Contracts, the impugned provisions also amounted to levying a tax on a profit a prendre.
The term "goods" is defined in clause (7) of section 2 of the as follows (7) 'goods ' mean every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be served before sale or under the contract of sale ;" 67 We have already reproduced earlier the definition of "goods" given in clause (d) of section 2 of the, Orissa Act.
However for the purposes of ready reference and comparison, we are reproducing the same here again.
That definition is as 'follows: "(d) 'Goods ' means all kinds of movable property other than actionable claims, stocks, shares or securities and includes all growing crops, grass and things attached to or forming part of the land which are agreed before sale or under the contract of sale to be severed " What is pertinent to note, however, is that under both the definitions the term 'goods" mean all kinds of movable property (except the classes of movable property specifically excluded) and includes growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.
The (Act IV of 1882), does not give any definition of the term "movable property", but clauses (36) of section 3 of the (Act X of 1897), clause (27) of the Orissa General Clauses Act, 1937 (Orissa Act I of 1937), and clause (9) of section 2 of the (Act XVI) of (1908) do.
Clause (36) of section 3 of the General Clauses Act provides as follows: "(36) 'movable property, shall mean property of every description, except immovable property.
" The definition in the Orissa General Clauses Act is in identical terms.
The definition in the is as follows: "(9) 'moveable property ' includes standing timber, growing crops and grass, fruit upon and juice in trees, and property of every other description, except immovable property.
" The does not give any exhaustive definition of "immovable property.
" The only definition given therein is in section 3 which states: 'immovable property ' does not include standing timber, growing crops, or grass.
" This is strictly speaking not a definition of the term "immovable property" for it does not tell us what immovable property is but merely tells us what it does not include.
We must, therefore, 68 turn to other Acts where that term is defined.
Clause (26) of section 3 of the General Clauses Act defines "immovable property" as follows: "(26) 'immovable property ' shall include land, benefit to arise out of land, and things attached to the earth, or permanently fastened to any thing attached to the earth.
" The definition of "immovable property" in clause (21) of section 2 of the Orissa General Clauses Act is in the same terms.
A more elaborate definition is given in clause (6) of section 2 of the which states: "(6) 'immovable property ' includes land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth or permanently fastened to anything I) which is attached to the earth, but not standing timber, growing crops nor grass.
" What is pertinent to note about these definitions is that things attached to the earth are immovable property.
The expression "attached to the earth" is defined in section 3 of the as follows: " 'attached to the earth, means (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.
" Thus, while trees rooted in the earth are immovable property as being things attached to the earth by reason of the definition of the term "immovable property" given in the General Clauses Act, the Orissa General Clauses Act and the , read with the definition of the expression "attached to the earth" given in the , standing timber is movable property by reason of its being excluded from the definition of 69 "immovable property" in the and the and by being expressly included within the meaning of the term "movable property" given in the .
The distinction between a tree and standing timber has been pointed out by Vivian Bose, J., in his separate but concurring judgment in the case of Shrimati Shantabai vs State of Bombay and others 1 as follows: "Now, what is the difference between standing timber and a tree? It is clear that there must be a distinction because the draws one in the definitions of 'immovable property and 'attached to the earth '; and it seems to me that the distinction must lie in the difference between a tree and timber.
It is to be noted that the exclusion is only of 'standing timber ' and not of 'timber trees ' "Timber is well enough known to be wood suitable for building houses, bridges, ships, etc., whether on the tree or cut and seasoned. ' (Webster 's Collegiate Dictionary).
Therefore, 'standing timber ' must be a tree that is in a state fit for these purposes and, further, a tree that is meant to be converted into timber so shortly that it can already be looked upon as timber for all practical purposes even though it is still standing.
If not, it is still a tree because, unlike timber, it will continue to draw sustenance from the soil. "Now, of course, a tree will continue to draw sustenance from the soil so long as it continues to stand and live, and that physical fact of life cannot be altered by giving it another name and calling it 'standing timber ' But the amount of nourishment it takes, if it is felled at a reasonably early date, is so negligible that it can be ignored for all practical purposes and though, theoretically, there is no distinction between one class of tree and another, if the drawing of nourishment from the soil is the basis of the rule, as I hold it to be, the law is grounded, not so much on logical abstractions as on sound and practical commonsense.
It grew empirically from instance to instance and decision to decision until a recognisable (1) ; , 275 6. 70 and workable pattern emerged; and here, this is the shape it has taken." Thus, trees which are ready to be felled would be standing timber and, therefore, movable property.
What is, however, material for our purpose is that while trees (including bamboos) rooted in the earth being things attached to the earth are immovable property and if they are standing timber are movable property trees (including bamboos) rooted in the earth which are agreed to be severed before sale or under the contract of sale are not only a movable property but also goods.
In this connection it may be mentioned that in English law there exists (or rather existed) a difference between fructus natwriles and fructus industriales.
Fructus naturales are natural growth of the soil, such as, grass.
timber and fruit on trees, which were regarded at common law as part of the soil.
Fructus industriales are fruits or crops produced "in the year, by the labour of the year" in sowing and reaping, planting, and gathering e.g. corn and potatoes.
Fractus industriales are traditionally chattels being considered the "representative" of the labour and expense of the occupier and thing independent of the land in which they are growing and were not treated as an interest in land.
Fructus naturales are regarded until severance as part of the soil and an agreement conferring any right or interest in them upon a buyer before severance was a contract or sale of an interest in land and were, therefore, governed by section 4 of the Statute of Frauds of 1677 (29 Car.
II c. 3).
If they were severed before sale, section 17 of that Statute applied P (see Benjamin 's Sale of Goods, Second Edition, para 90, p. 62) This distinction was, therefore, important in England for the purposes of the formalities required under the Statute of Frauds.
Under the definition of goods ' given in section 62 (1) of the old English of 1893, "goods" included inter alia all industrial growing crops and things attached to or forming part of the land which were agreed to be severed before sale or under the contract of sale.
The formalities required for a contract for the sale of goods of the value of L10 and upwards by section 17 of the Statute of Frauds were re enacted in section 4 of the Sale of Goods Act, 1893.
This section was repealed by the Law Reform (Enforcement of Contracts) Act, 1954.
The definition of 'goods ' in section 61 (1) of the new Sale of Goods Act, 1979, is the same as in 71 the earlier Sale of Goods Act.
Thus, the position now in English law is that crops and other produce whether fructus naturales or fructus industriales (except in the case of a sale without severance on a landlord, incoming tenant or purchaser of the land) will always be "goods" for the purposes of a contract of sale since the agreement between the parties must be that they shall be severed either "before sale" or "under the contract of sale" (see Benjamin 's Sale of Goods, Second Edition, para 91, p.63).
As pointed out in Mahadeo vs The State of Bombay the distinction which prevailed in English law between fructus naturales and fructus industriales does not exist in Indian law, and the only question which would fall to be considered in India is whether a transaction concerns "goods" or "movable property" or "immovable property" ' The importance of this question is twofold: (I) in the case of immovable property, a document of the kind specified in section 17 of the requires to be compulsorily registered and if it is not so registered, the consequences mentioned in sections in sections 49 and 50 of that Act follow, while a document relating to goods or movable property is not required to be registered; and 2) by reason of the interpretation placed on Entry 54 in List II in the Seventh Schedule to the Constitution of India by this Court a State cannot levy a tax on the sale or purchase of any property other than "goods" .
The submission of the Respondent that the impugned provisions levied a purchase tax on immovable property and not on goods and hence travelled beyond the taxing power of the State Government under the said Entry 54 was based upon the omission in the impugned provisions of the words "before sale or under the contract of sale.
" It was urged that unless these words qualified the phrase "agreed to be severed", standing trees and bamboos would not be "goods" within the meaning of the definition of that term in the Sale of goods Act and the Orissa Act.
The High Court held that the impugned provisions amounted to levying a tax on an agreement of sale and not on actual sale or purchase.
According to the High Court, on tax can be imposed unless the taxable event (namely, the transfer of property in the goods from the seller to the buyer) takes place; and standing trees including bamboos) being (1) [1959] Supp. 2 S.C.R. 339.
349 72 unascertained goods, under the forest contracts entered into by the State Government, they continue to be the property of the State Government until felled and, therefore, the title to such trees or bamboos is transferred in favour of the forest contractor only when the trees or bamboos are felled and severed after complying with the conditions of the forest contract.
We find that there is a fallacy under lying the above submissions of the Respondents and in the reasoning of the High Court, the fallacy being to read merely the description of the goods given in the impugned provisions by itself and not in conjunctions with the governing words of the said provision.
These impugned provisions declare that standing trees agreed to be severed and bamboos agreed to be severed shall be liable to tax on the turnover of purchases.
The tax that is levied under section 3 B is not on goods declared under that section but on the turnover of purchases of such goods.
It one reads the Notifications issued under section 3 B and 5 (1) as a whole.
it is clear that the taxable event is not an agreement to sever standing trees or bamboos but the purchase of bamboos or standing trees agreed to be severed.
Does the absence of the words "before sale or under the con tract of sale" make any difference to this position ? The answer in our opinion must be in the negative.
The very use of the word "agreed" in the description of goods shows that there is to be an agreement between the buyer and the seller and under this agreement standing trees must be agreed to be severed and so also bamboos.
According to the definition of "goods" such severance may be either before sale or under the contract of sale.
At the first blush, therefore, it would appear that the goods which form the subject matter of the impugned provisions are either bamboos and standing P trees agreed to be severed before sale or bamboos and standing trees agreed to be severed under the contract of sale.
The question is "Which one is it ?".
The answer to this question depends upon the distinction in law between an agreement to sell and sale.
Section 4 of the , deals with a sale and an agreement to sell and it provides as follows: "4.
Sale and agreement to sell.
(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.
There may be a contract of sale between one part owner and another.
73 (2) A contract of sale may be absolute or conditional.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.
" Thus, where there is a transfer from the buyer to the seller of property in the goods which are the subject matter of the agreement to sell, the contract of sale, is a sale but when the transfer of property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, it is an agreement to sell which become a tale when the time elapses or such conditions are fulfilled In the first case the contract is executed, while in the second case it is executory The distinction between an agreement to sell and sale and the legal consequences flowing from each have been succinctly stated in Benjamin 's Sale of Goods, paras 25 26 at page 23, as follows: "Agreement to sell .
An Agreement to sell is simply a contract, and as such cannot give rise to any rights in the buyer which are based on ownership or possession, but only to claims for breach of contract.
In the normal case at least, so long as the property in the goods remains in the seller, they are his to deal with as he chooses (except that he may be in breach of his contract with the buyer); they are liable to seizure in distress or execution as his property; and they pass to the trustee in the event of his bankruptcy.
The Sale of Goods Act 1979 defines a sale in the following passages: first 'where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale '; and secondly, 'an agreement to sell becomes a sale when the time elapses or 74 the conditions are fulfilled subject to which the property in the goods is to be transferred.
It is therefore possible for a sale within the statutory meaning to come about ill one of two ways: either by a contract which itself operates to transfer the goods from the ownership of the seller to that of the buyer, the property passing when the contract is made; or by a contract which is initially only an agreement to sell, but is later performed or executed by the transfer of the property.
In either case it is clear that the sale involves not only a contract, but also a conveyance of the property in the goods, and so it may confer on the buyer the right to bring a claim in tort for wrongful interference with the goods as well as rights in contract.
" The test, therefore, is the transfer of the property in the goods from the seller to the buyer.
In order to determine whether for the impugned provisions to apply standing trees or bamboos are to be severed before sale or under the contract of sale, what is required to be ascertained, therefore, is the point of time when the property in the goods is transferred from the seller to the buyer Under section 18 of the Sale of Goods Act, where there is a contract for the sale of unascertained goods, no property in the goods transferred to the buyer unless and until the goods are ascertained.
Under section 19, where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred and for the purpose of ascertaining the intention of the parties regard is to be had to the terms of the contract, the conduct of the parties and circumstances of the case.
Further, unless a different intention appears, the rules contained in sections 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.
Sections 20 to 23 provide as follows: "20.
Specific goods in a deliverable state.
Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed." 75 "21.
Specific goods to be put into a deliverable state.
Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property goes not pass until such thing is done and the buyer has notice thereof." "22.
Specific goods m a deliverable state, when the seller has to do anything thereto in order to ascertain price.
Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done and the buyer has notice thereof." "23.
Sale of unascertained goods and appropriation.
(1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer.
Such assent may be expressed or imp lied, and may be given either before or after the appropriation is made.
(2) Delivery to the Carrier.
Where in pursuance of the contract, the seller deli vers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.
" We are not concerned with section 24 which provides when property in the goods passes to the buyer where goods are delivered 76 to the buyer on approval or "on sale or return" or other similar terms.
The terms "deliverable state" and "specific goods" are defined in clauses (3) and (14) of section 2 of the Sale of Goods Act as follows: "(3) goods are said to be in a 'deliverable state ' when they are in such state that the buyer would under the con tract be bound to take delivery of them;" "(14) 'specific goods ' means goods identified and agreed upon at the time a contract of sale is made.
" Under the Orissa Act also "sale" is defined as meaning "transfer of property in goods" and the word "purchase" is to be construed accordingly.
The language of the impugned provisions, especially the governing words thereof, makes it clear that what is made eligible to tax is not an executory contract of sale but an executed contract of sale or in other words, not an executory con tract of purchase but a completed contract of purchase.
Bearing in mind the statutory provisions referred to above, it is further clear that such purchase would be complete when the standing trees or bamboos are specific goods, that is, when they arc identified and agreed upon at the time the contract of sale is made, and the con tract is unconditional and further such standing trees or bamboos arc in a deliverable state, that is, nothing remains to be done except for the buyer to enter upon the land of the seller and to fell and remove the trees Of bamboos, as the case may be, without any let or hindrance.
If these factors exist, then unless a different intention appears either from the terms of the contract or can be infer red from the conduct of the parties and other circumstances of the case, the property in such standing trees and bamboos would pass from seller to the buyer when the contract is made and it is immaterial whether the time of payment of the price or the time of taking delivery of standing trees agreed to be severed or bamboos agreed to be severed or both is postponed.
If, however, there is an unconditional contract for the sale of standing trees or bamboos which are unascertained, then unless a different intention appears, the property in them would be transferred to the buyer when the standing trees and bamboos are ascertained and it would be equally immaterial whether the time of payment of the price or the time of taking delivery of standing trees agreed to be severed or bamboos agreed to be severed or both is postponed.
In either event, the sale and purchase would be completed before severance as under 77 the impugned provisions there has to be a completed purchase of standing trees or bamboos agreed to be severed for the impugned provisions to apply.
The severance obviously cannot be before sale because in that case the property would only pass and the sale completed after severance and the impugned provisions would have no application.
Therefore, for the impugned provisions to apply the severance of the standing trees or bamboos must not be before sale but under the contract of sale, that is, after the sale thereof is completed.
The absence in the impugned provisions of the words "before sale or under the contract of sale" thus makes 'no difference.
The subject matter of the impugned provisions is goods and the tax that is levied thereunder is on the completed purchase of goods.
The fallacy underlying the reasoning of the High Court is that it has confused the question of the interpretation of the impugned provisions with the interpretation of Timber Contracts and the Bamboo Contract.
On the interpretation it placed upon the Timber Contracts it came to the conclusion that the property in the standing trees passed only after severance and after complying with the conditions of that contract ar d, therefore, the impugned provisions purported to levy a purchase tax on an agreement to sell.
In the case of bamboos agreed to be severed, the High Court on an interpretation of the Bamboo Contract held that it was a grant of a profit a prendre and from that it further held that the impugned provisions were bad in law because they amounted to a levy of purchase tax on a profit a prendre.
This approach adopted by the High Court was erroneous in law.
The question of the validity of the impugned provisions had nothing to do with the legality of any action taken thereunder to make exigible to tax a particular transaction.
If a notification is invalid, all actions taken under it would be invalid also.
The converse, however, is not true.
Where a notification is valid, an action purported to be taken thereunder contrary to the terms of that notification or going beyond the scope of that notification would be bad in law without affecting in any manner the validity of the notification.
Were the interpretation placed by the High Court on the Bamboo Contract and the Timber Contracts correct, the transactions covered by them would not be liable to be taxed under the impugned provisions and any attempt or action by the State to do so would be illegal but the validity of the impugned provisions would not be 78 affected thereby.
The challenge to the validity of the impugned provisions on the ground of their unconstitutionality must, therefore, fail.
Double taxation Another ground on which the High Court invalidated the impugned provisions was that bamboos agreed to be severed and trees agreed to be severed were the same as bamboos and timber after they are felled and as bamboos and timber were liable to tax at the sale point, the taxation of the same goods at the purchase point amounted to double taxation and was contrary to the provisions of the Orissa Act.
The general rule of construction is that a taxing statute will not be so construed as to result in taxing the same person twice in respect of the same income or transaction.
There is, however, nothing to prohibit the legislature from so enacting it.
If what the High Court held were correct, it would not be double taxation in the strict sense of the term because the same person is not being taxed twice in respect of the same transaction but the same transaction is being taxed twice though in different hands, that is, the seller in a transaction Or sale is being subjected to sales tax and the purchaser in the same transaction is being subjected to purchase tax.
Not only does the Orissa Act expressly forbid this but it also forbids the levying of tax at more than one point in the same series of sales or purchases by successive dealers.
The provisions in this behalf are to be found in the proviso to section 3 B and the proviso to section 8.
Under the proviso to section 3 B, no tax is to be payable on the sales of goods or class of goods declared under that section to be liable to tax on the turn over of purchases.
Under the proviso to section 8, the same goods are not to be taxed at more than one point in the same series of sales or purchases by successive dealers.
According to the High Court, under the Orissa Act all goods are liable to sales tax unless exempted from tax by the State Government under section 6, and, therefore, if particular goods are liable to sales tax, no purchase tax is leviable in respect of the same goods unless the State Government issues three notifications, namely, (I) a notification under section 3 B declaring the goods to be taxable at the purchase point, (2) a notification under section 5 prescribing the rate of purchase tax, and (3) a notification deleting the goods from the list of goods taxable at the sale point.
The High Court has illustrated this by setting out what was done when fish was made liable to purchase tax instead of sales tax 79 We find that the High Court has misunderstood the scheme of taxation under the Orissa Act.
As the Notifications dated December 29, 1917, were issued as a result of the amendments made by the Orissa Sales Tax (Amendment) Ordinance, 1977, replaced by the Orissa Sales Tax (Amendment) Act, 1978, while the Notifications dated May 23, 1977, were issued prior to these amendments, it is necessary to consider the scheme of taxation under the Orissa Act both prior to and after January 1, 1978, being the date on which the relevant provisions of the said Ordinance came into force.
Prior to January 1, 1978, under section 5 (1) the tax payable by a dealer under the Orissa Act on his taxable turnover was at the rate specified in that sub section.
At the relevant time the rate was six per cent.
The rate specified in section 5 (1) was for both sales tax and purchase tax.
As under the Orissa Act a dealer is liable to pay tax on his turnover of sales as also on his turnover of purchases and as purchase tax is payable only on the turnover of purchases of those declared under section 3 B, in respect of the goods not so declared a dealer would be liable to pay sales tax.
Under the proviso to section 3 B, when any goods are declared to be liable to tax on the turnover of purchases, no tax is payable on the sales Or such goods.
Prior to January 1, 1978, a notification was to be issued by the Slate Government under the first proviso to section 5 (1) only when it wanted to fix a rate of tax higher or lower than that specified in section 5(1).
If no such notification was issued, then the tax which was payable, whether it was sales tax or purchase tax, was to be at the rate mentioned in section 5 (1).
The illustration given by the High Court was in respect of goods for which under the first proviso to section 5(1) the State Government had notified a rate of tax different from that mentioned in section 5(1).
Where, however, any goods were declared under section 3 B to be liable to tax on the turnover of purchases, the notification prescribing a higher or lower rate of sales tax issued under the first proviso to section 5(1) would there upon cease to be operative by reason of the operation of the proviso to section 3 B and it was not necessary to repeal expressly that notification.
It was also not necessary for the State Government to issue a notification fixing the rate of purchase tax unless it wanted to fix a rate higher or lower than that specified in section 5 (1).
Where no such notification was issued, the rate of purchase tax would be the one which was mentioned in section 5(1), 80 After January 1, 1978, the scheme of taxation is that no rate of tax is specified in the Orissa Act but under section 5(1) the State Government is given the power to notify from time to time the rate of tax, whether sales tax or purchase tax, by issuing notifications.
The notifications issued under section 5 (1) fixing the rate of sales tax, namely, Notification No. 67184 C.T.A. 135/77 F dated December 29, 1977, does not contain any entry in respect of bamboos or timber or in respect of bamboos agreed to be severed or standing trees agreed to be severed.
If they were liable to sales tax, they would fall under the residuary entry No. 101 and be liable to sales tax at the rate of seven per cent.
If, however, any goods falling under the residuary entry or any other entry in that notification arc declared under section 3 B to be liable to tax on the turnover of purchases, the residuary entry or that particular entry would automatically cease to operate in respect of those goods by reason of the proviso to section3 B without there being any necessity to delete that particular entry or to amend the residuary entry by excluding those goods therefrom.
It would, however, be necessary for the State Government to issue a notification specifying the rate of purchase tax on those goods because unlike what the position was prior to January 1, 1978, on and after that date the new sub section 5(1) does not specify any rate of tax but leaves it to the State Government to notify it from time to time.
The High Court was, therefore, in error in holding that the impugned provisions were invalid and ultra vires the Orissa Act as they amounted to "double taxation".
Effect of "Supersession" Yet another contention raised by the contesting Respondents with respect to the impugned provisions was that the two Notifications dated December 29, 1977, having been made in "supersession" of all previous Notifications issued on the subject, the effect was to wipe out all tax liability which had accrued under the Notifications dated May 23, 1977.
The High Court held that to hold that the liability was so wiped out would amount to giving a retrospective effect to the Notifications dated December 29, 1977, and as the Legislature had not conferred upon the State Government the power to issue notifications having retrospective effect, to so hold would be to render the said Notification void.
The High Court referred to a number of decisions on the question of the power to make subordinate legislation having retrospective effect.
81 We find it unnecessary for the purpose of deciding this point to refer to any of the authorities cited by the High Court.
Both the Notifications dated December 29, 1977, are in express terms made with effect from January 1, 1918.
They do not at all purport to have any retrospective effect and, therefore, they could not affect the operation of the earlier Notifications dated May 23, 1977, until they came into force on January 1, 1978.
Further, both section 3 B and section 5(1) in express terms confer power upon the State Government to issue notifications "from time to time".
Section 3 B provides that "the State may, from time to time by notifications, declare. "goods liable to purchase tax.
Prior to January 1, 1978, the proviso to sub section (l) of section 5 provided that "The State Government may, from time to time by notification. fix a higher rate not exceeding thirteen per cent or any lower rate of tax. " Section S (I) as amended with effect from January, 1978, provides that "The tax shall be levied. at such rate, not exceeding thirteen per cent. as the State Government may, from time to time by notification, specify." Thus, the Power of the State Government to issue notification under these two sections is to be exercised by it "from time to time" and, therefore, the State Government can under section 5(1) issue a notification and repeal and replace it by another notification enhancing or lowering the rate of tax and similarly it can issue a notification under section 3 B declaring particular goods or class of goods to be liable to tax on the turnover of purchases and subsequently by another notification repeal that notification with the result that the particular goods or class of goods will from the date of such repeal be again liable to pay tax on the turnover of sales.
In the Notifications dated December 29, 1977, the word "supersession" is used in the same sense as the word "repeal" or rather the words "repeal and replacement".
The Shorter Oxford English Dictionary, Third Edition, at page 2084, defines the word 'supersession ' as meaning "The action of superseding or condition of being superseded.
" Some of the meanings given to the word 'supersede ' on the same page in that Dictionary which are relevant for our purpose are "to put a stop to; to render superfluous or unnecessary; to make of no effect; to annul; to take the place of (something set aside or abandoned); to succeed to the place occupied by; to supply the place of a thing".
Webster 's Third New International Dictionary at page 2296 defines the word "supersession" as "the state of being superseded; removal and replacement".
Thus, by using in the Notifications dated December 29, 1977, 82 the expression 'in suerssion of all previous notification ' that was done was to repeal and replace the previous notifications by new notifications.
By repealing and replacing the previous notifications by other notifications, the result was not to wipe out any liability accrued under the previous notifications.
If this contention of the Respondents were to be accepted, the result would be startling.
It would mean, for example, that when a notification has been issued under section 5 (13 prescribing a rate of tax, and that notification is later superseded by another notification further enhancing the rate of tax, all tax liability under the earlier notification is wiped out and no tax can be collected by the State Government in respect of any transactions effected during the period when the earlier notification was in force.
The two Notifications dated December 29, 1977, impugned by the Respondents were not the only notifications which were issued on that date.
There was another notification issued on that date, namely, Notification No. 67184 C.T.A. 135/77 F, directing that with effect from January l, 1978, the rate of tax payable by a dealer under the Orissa Act on account of the sale of goods specified in column (2) of the Schedule to the said Notifications would be at the rate specified against each in column (3) thereof.
The issuance of these three Notifications became necessary by reason of the change brought about in the scheme of taxation by the Orissa Sales Tax (Amendment) Ordinance, 1977.
Prior to that Ordinance, the rate of tax was as specified in sub section (l) of section 5 with power conferred upon the State Government by the first proviso to that sub section to fix by notification issued from time to time a higher rate of tax not exceeding the limit mentioned in the said proviso or to fix from time to time a lower rate of tax on account of the sale or purchase of any goods or class of goods specified in such notification.
Thus, if no notification was issued by the State Government enhancing or lowering the rate of tax, the tax, whether sales tax or purchase tax, payable by a dealer would be at the rate specified in sub section (1) of section 5 which at the relevant time was six percent.
In pursuance of the power conferred by the said proviso, the State Government had from time to time issued notifications enhancing and in some cases lowering the rate of tax payable on account of either sale or purchase of goods.
The new section 5(1) did not specify any rate of tax but what was done was to confer upon the State Government the power by notification to specify 83 from time to time the rate of tax subject to a maximum of thirteen per cent.
Therefore, With effect from January 1, 1978, unless a notification was issued specifying the rate of tax, no dealer would be liable to pay any tax under the Orissa Act.
It was for this reason that the Notification No. 67184 C.T.A 135/17 F dated December 29, 1977, was issued specifying the rates of sales tax with effect from January 1, 1978.
As under section 3 B the State Government had to declare the goods or class of goods which were liable to tax on the turnover of purchases, the State Government had issued from time to time notifications declaring such goods or class of goods.
The purchase of such goods or class of goods were liable to purchase tax at the rate specified in the old section 5(1).
Where, however, the State Government wanted that the turnover of purchase of particular goods or class of goods should be taxed at a higher or lower rate, it issued notifications specifying such rate.
As no rate of tax was specified in the new section 5(1) but it was left to the Government to specify the rate of tax by notification both in respect of sales tax and purchase tax, from the date the amending Ordinance of 1977 came into force, namely from January 1, 1978, it was necessary to issue a notification consolidating all previous notifications on the subject in respect of goods liable to purchase tax which the State Government did by the impugned Notification No. 67178 C.T.A. 135/77 (Pt) F. dated December 29, 1977, declaring what goods would be liable to tax on the turnover of purchases with effect from January 1, 1978.
Unless, however, the rate of purchase tax in respect of these goods was specified under the new section 5(1) the goods though declared to be liable to tax on the turnover of purchase would not be exigible to any tax at all, it, therefore, became necessary for the State Government to issue Notification No. 67181 C.T.A. 135/77 F. dated December 29, 1977, specifying the rates of purchase tax with effect from January 1, 1978.
Exigibility to tax Preliminary Contention The question which now remains to be considered is as regards the exigibility to purchase tax of the amounts payable under the Bamboo Contract and the Timber Contracts.
Before we address ourselves to this question, it is necessary to dispose of a preliminary contention raised by the Appellant with respect to this part of the case.
It was submitted that the question whether a particular contract is a sale or purchase of goods is a question of fact or a question of interpretation of documents and one to be decided by 84 the assessing authorities and, therefore, if this Court holds that the impugned provisions are valid (as we have now done), it should not go into the question of the exigibility to purchase tax of the transactions in question.
This plea was not raised at any stage before the High Court but has been raised for the first time in the Petitions for Special Leave to Appeal, and that too only with respect to the Bamboo Contract though during the course of hearing before us, it was raised with respect to the Timber Contracts also.
Before the High Court the matter proceeded on the basis that the question of validity of the impugned provisions and of the exigibility to purchase tax of the transactions covered by the Bamboo Contract and the Timber Contracts were inextricably linked together as if the impugned provisions were issued only in order to levy a purchase tax on the transactions covered by these Contracts.
The Appellant can, therefore, hardly raise such a plea for the first time before this Court.
It is true that normally it is for assessing authorities to ascertain .
the facts and to interpret the documents in question, if there be any, and to decide whether a particular transaction is exigible to tax.
Here, however, the facts are not in dispute and the determinations of this question involves only an interpretation of the documents.
The major part of the hearing before the High Court was taken up with the nature of the transactions covered by these Contracts.
We have also heard the parties at length on the merits of this question.
Even though the judgment of the High Court with respect to the validity of the impugned provisions has been held by us to be erroneous in law, it may well be said that the High Court 's finding on the true nature of the Bamboo Contract and the Timber Contracts remains unaffected.
If we refuse to decide this question and leave it to the assessing authorities to do so, they may well feel themselves bound by the High Court 's findings on this point or on the other hand, they may consider that the whole judgment of the High Court has been reversed, particularly in view of the fact that in their writ petitions the Respondent company had challenged the notice issued to it to file a return and the Respondent Firm had challenged the assessment order made against it and, therefore, feel free to determine the question afresh.
In either event the matter would ultimately come back for decision to this Court and that too after the lapse of several years a consequence not to be contemplated with equanimity by this Court.
We, therefore, reject this preliminary contention raised by the Appellant.
85 Timber Contracts We will first take up the Timber Contracts.
The High Court held that standing trees were unascertained goods and continued to be the property of the State Government until felled and, therefore, the title to them was transferred to the forest contractor only when the trees were felled or severed by him after complying with all the conditions of the forest contract and as the impugned provisions applied only to standing trees, that is, to trees before their severance, purchase tax was not attracted and any attempt to levy purchase tax on the amounts payable under the Timber Contracts would amount to taxing an agreement of sale of goods and not a completed sale or purchase of goods.
The High Court further held that the trees so severed in which the property passed to the forest contractor were liable to sales tax by reason of the retrospectively amended definition of the term "dealer" in clause (c) of section 2 of the Orissa Act and they could not, therefore, be again made liable to purchase tax.
The High Court also rejected the contention of the Appellant State that timber and dressed or sized logs were different commercial commodities and that sales tax could, therefore, be levied on both.
According to the High Court they were the same commodity and, therefore, they could not be made liable to sales tax at two points in the same series of sales.
The High Court did not decide the question whether the Timber Contracts were works contracts.
This point was, however, urged before us "on behalf of the Respondent firm.
We will deal with this point separately but for the present suffice it to say that according to us none of the Timber Contracts is a works contract.
On behalf of the Appellant State it was submitted that the Timber Contracts read with the sale notice advertising the auction in respect of the standing trees showed that the standing trees which were the subject matter of the Timber Contracts were goods identified and agreed upon at the time when the contract of sale was made and were thus specific goods and that, therefore, there was an unconditional contract for the sale of specific goods in a deliverable state and the property in the said trees passed to the forest contractor, namely, the Respondent Firm, when the contract was made, and the fact that the time of delivery as also payment of price was postponed was irrelevant.
It was the Appellant 's 86 submission that for the reason set out above the amounts payable under the Timber Contract were exigible to purchase tax.
It was further submitted that in any event the property in the standing trees passed when the forest contractor was permitted to get into the area as delineated under Rule 12 of the Orissa Forest Contract Rule, 1966 (hereinafter referred to as "The Forest Contract Rules"), to enable the contractor to fell the trees.
The same submissions as found favour with the High Court were advanced before us on behalf of the Respondent Firm.
While setting out the facts of Civil Appeal No. 220 of 1982, we have outlined the procedure followed by the State of Orissa in entering into forest contracts.
The notice of public auction with which we are concerned was published in the Orissa Gazette and was headed "Sale Notice of Timber and Other Forest Products. " This Sale Notice related to different forest produce and was in three parts.
Part I gave "the list of timber and other forest products" for the session 1977 78 which would be "sold by public auction" and the places and dates where such auction sales were to be held.
Clause 2 of Part I of the Sale Notice stated that the sale lots were subject to the Special Conditions of Sale as published in Part II of the Sale Notice, the General Conditions of Sale as published in Part III of the Sale Notice so far as they may be applicable and the Conditions mentioned in the sanctioned form of agreement.
Clause 3 stated that the successful bidders shall be bound by the Orissa Forest Act.
1972, the Forest Contract Rules, the Orissa Timber and other Forest Produce Transit Rules, and all other relevant rules in force or which might hereinafter come into force and promulgated under the Orissa Forest Act, 1972.
Under condition 1 of the Special Conditions of Sale set out in Part II of the Sale Notice, the contract period of timber coupes was to commence from the date of the ratification of sale by the competent authority and was to include the number of working months mentioned in the sale notice against each lot.
Condition 2 stated the time and manner of "payment of purchase price" in full or by instalments.
Under condition, the intending bidders were asked to inspect the coupes and lots before bidding in the auction and their act of bidding was to be deemed as sufficient proof of their having inspected the coupes the coupes and satisfied themselves about the correctness of the quality and quantity of the 87 produce and the area of the contract.
Condition 9 provided that no extension of time for working any coupe beyond the contract period as published in the Sale Notice and declared in the auction hall would be allowed except under very exceptional circumstances.
Under condition 14, the prescriptions contained in the working plan, working schedule and their amendments or the executive instructions of the higher authority and local rules were to be binding on the contractors as regards felling of trees in coupes.
Under condition 21, the purchaser was to pay the sales tax as per the Orissa Act over and above the bid amount.
In the event of his delay in payment of sales tax, the same was to be adjusted from the earnest money deposit or the security deposit, as the case may be, and the purchaser was bound to replenish the same forthwith.
Condition 22 provided that the contractor was to pay sales tax on the amount of each instalment as per the Sales Tax Rules along with the instalment of consideration money and non payment of sales tax or non submission of appropriate declaration under the Sales Tax Rules was to amount to incomplete payment of instalment and thereupon Rule 9 A of the Forest Contract Rules was to be applicable.
a Under condition 1 of the General Conditions of Sale Published in Part III of the Sale Notice, the bid was to be accepted by the Divisional Forest Officer subject to the approval of the competent authority and the right to take contract for exploiting forest produce in the lots advertised in Part I of the Sale Notice was to be granted when the competent authority approved the bid.
Under condition 4, intending bidders were to deposit as earnest money a sum of Rs. 200 .
In the case of unsuccessful bidders this amount was to be refunded immediately after the auction was held and in the case of successful bidders the amount was to be adjusted towards the security deposit.
Under condition 10, a bidder whose bid was conditionally of finally accepted by the Divisional Forest Officer was to make the security deposit in cash.
On payment of the security deposit, the bidder was to sign the necessary agreement but the signing of such agreement was not to confer any right on the bidder unless the sale was ratified by the competent authority and the ratification order was communicated to him.
No sale of any lot was to be considered valid or complete unless these conditions had been complied with and in the event of failure to do so, the Divisional Forest Officer was to be at liberty to quash the sale and forfeit the 88 earnest money or the security deposit, as the case may be, and resell the lot and recover from the successful bidder who had failed to comply with the conditions the shortfall on such resale.
Condition 12 provided for the payment of purchase price in full or by instalments.
Under condition 15 orders of ratification of sale by the competent authority were to be communicated to the successful bidder by the Divisional Forest Officer specifying there in the dates of the payment of instalments in accordance with condition 12 and the period of the contract.
Under condition 16, the contractor was not to commence the work in the contract area before the payment of the first instalment or the full consideration money if it was payable in one instalment and before furnishing the coupe declaration certificate or intimation about starting work, as the case may be, as required by Rule 12 of the Forest Contract Rules.
Under condition 18, an agreement was to be executed by the competent authority on behalf of the Government and a copy thereof was to be delivered to the contractor as soon as may be.
On its bids being accepted the Respondent Firm entered into five Timber Contracts in the forms prescribed in the Schedule to the Forest Contract Rules.
The main heading of each of these Timber Contracts is 'Forest Contract Agreement Form ' and the long heading states that it is "An agreement for the sale and purchase of forest produce".
Under clause 1, the forest produce "sold and purchased under" the Timber Contract was to be as specified in Schedule I thereof and the forest area in which it was situated was indicated in Schedule V thereof and was to be referred to as the contract area.
Schedule I in each of the Timber Contracts mentioned that the forest produce "sold and purchased under" the Timber Contract consisted of a certain number of sound and unsound trees marked and numbered serially on the blazes, one at the base of the trees and the other about 4 1/2 ' from the ground level, with the hammer mark of facsimile shown in the Sale Notice.
Clause 2 stated that the quantity of the forest produce "sold and purchased under" the Timber Contract was all the said forest produce which then existed or might come into existence in the contract area which the forest contractor might remove from the said area during the period of the contract and it was further provided that the said U forest produce was to be extracted by the forest contractor only 89 during the aforesaid period.
That part of clause 2 which spoke of forest produce which might come into existence in the contract area was obviously inapplicable to the Respondent Firms 's case inasmuch as the Timber Contracts were in respect of a certain number of existing trees.
This provision was there because the Timber Contract was in the form which is the prescribed form of contract in respect of all forest produce and under Rule 33 of the 1 Forest Contract Rules all forest contracts are required to be made in this form.
Clause 4 started that the routes by which the said forest produce was to be removed from the contract area and the depots at which it was to be presented for examination were to be those specified in Schedule 111.
Under clause 5, it was agreed that the Timber Contract was to be subject to the Forest Contract Rules and conditions laid down in the Sale Notice except to the extent that the said Rules and conditions were deemed to be modified to the extent prescribed in Schedule IV.
Under Schedule 4 to the contract, the Forest Contract Rules were deemed to be modified by the Special Conditions in the Sale Notice.
By clause 6 the forest contractor bound himself to perform all acts and duties required and to abstain from performing any act forbidden by or under the Orissa Forest Act, 1972, and the Forest Contract Rules and by the Timber Contract.
Schedule II set out the number and amounts of instalments and the dates of payment of the instalments.
The bids given by the Respondent Firm were ratified in due course by the Government of Orissa and the fact of such ratification was communicated to the Respondent Firm by the Divisional Forest Officer.
Each of these notification letters specified the number and amounts of the instalments payable by the Respondent Firm and the dates when each instalment was payable.
Each of these ratification letters required the Respondent Firm to take delivery of the particular coupe within one and half months from the date of issue of the ratification order and to get the Respondent Firm ' s property hammer mark registered in the office of the Divisional Fores ' Officer on payment of the appropriate registration fee.
Each of these letters required the Respondent Firm not to commence work in the contract area before the payment of the first instalment and before furnishing the Coupe Declaration Certificate or intimating in writing that it intended to commence work from a particular date, as the case may be, as required under Rule 12 Of 90 the Forest Contract Rules.
By the said letters the Respondent Firm was also required to submit monthly returns of removal of forest produce from the contract area to the concerned Range Officer.
A copy of each of these letters was forwarded to the concerned Range Officer with a direction that he should give delivery of the coupe to the Respondent Firm within one and a half months from the date of the ratification order and allow the Respondent firm to commence work in the contract area after it had furnished the Coupe Declaration Certificate and made payment of the first instalment.
As the Orissa Forest Contract Act, 1972 (Orissa Act 14 of 1972), and the Forest Contract Rules formed part of the agreement between the State of Orissa and the Respondent Firm, it may be convenient at the stage to look at the relevant provisions thereof.
Clause (g) of section 2 of the Orissa Forest Contract Act defines "forest produce" ' as including inter alia timber, whether found in or brought from a forest or not, and trees when found in or brought from a forest.
Clause (n) defines "timber" as including "trees fallen or felled and all wood cut up or sawn".
Clause (o) of section 2 of the Act defines "trees" as including bamboos.
Section 36 of the Orissa Forest Act confers powers upon the State Government to make rules inter alia for the cutting, sawing, conversion and removal of trees and timber, and the collection, manufacture and removal of forest produce, from protected forests Under section 37, any infringement of a rule made under section 36 is an offence punishable with imprisonment for a term which may extend to one year or with fine which may extend to Rs. 2000 or both.
Under section 45(1) the control of all rivers and their banks as regards the floating of timber as well as the control of all timber and other forest produce in transit by land or water is vested in the State Government and the State Government is conferred the power to make rules to regulate the transit and possession of all timber and other forest produce, including rules prescribing the routes by which alone timber or other forest produce may be imported, exported or moved into, from or within the State, and to provide for punishment of imprisonment which may extend to one year or fine which may extend to Rs. 1,000 or both for any breach of such rules.
Under rule 2 of the Forest Contract Rules, all contracts whereby 91 the Government sells forest produce to a purchaser are, subject to the Forest Contract Rules in so far as they are applicable, and the Forest Contract Rules are deemed to be binding on every forest contractor.
The Forest Officer executing a forest intricate is, however, given the power to vary the rules by express provision in such intricate.
A "forest contract ' is defined in clause (1) of Rule 3 as meaning ' a contract whereby Government agrees to sell and purchaser agrees to buy forest produce" and a 'forest contractor ' is defined in clause (2) of Rule 3 as meaning "the person who purchases produce under a forest contract".
Under Rule 6, a forest contract is to carry with it an accessory licence entitling the forest contractor and his servants and agents to go Upon the land specified in the contract and to do all acts necessary for the proper extraction of the forest produce purchases under the contract.
Under Rule 6 where a period is specified in the forest contract for the extraction of the forest produce purchased under the contract, time is deemed to be of the essence of such contract and upon the completion of the specified period the contractor 's right under the contract is to cease and any forest produce not removed across the boundaries of the contract area is to become the absolute property of the Government.
The Conservator of Forests or the Divisional Forest Officer, as the case may be, is, however, given the right, for special reasons, to grant an extension of time on such terms as may be decided for a total period (inclusive of the original contract period) not exceeding the period for which he is empowered to sanction contracts on payment of a monthly extension fee Of one per cent of the amount of the contract.
Under Rule 9, the Divisional Forest Officer or the Range Officer, as the case may be, is given the power to stop extraction of the forest produce where the consideration payable to the Government under a forest contract is payable by instalments and, at any time before the last instalment is paid, he considers that the value of the forest produce removed by the contractor exceeds the amount of instalments already paid.
Further removal is to be permitted only after the contractor has paid such further sum as in the opinion of the Divisional Forest Officer or the Range Officer is sufficient to cover such excess.
Under Rule 9 A, it is open to the Divisional Forest Officer or the Range Officer of the concerned range to stop extraction if the contractor fail s to pay any instalment due from him within the grace period of ten days beyond the date fixed for payments of the instalment.
It is equally open to these officers 92 to stop work in the contract area if the contractor fails to pay two instalments due from him.
Under Rule 12, before commencing any work in the contract area the forest contractor is to sign and submit to the Divisional Forest Officer or the e concerned Range Officer a written declaration to the effect that he or his authorized agent or both have been shown the boundaries and limits of the lot covered by the contract by the Range Officer or by a subordinate deputed by him for the purpose and that the area shown on the ground agrees with the area delineated on the map annexed to the forest contract and until such a declaration has been given, the Divisional Forest Officer or the Range Officer may refuse to allow any work to commence and the contractor is not to be entitled to any compensation for any loss that might be sustained by him by reason of any delay in commencing the work owing to such refusal.
Rule 12 further provides that if such declaration is not furnished within one and a half months from the date of issue of the ratification order, the Divisional Forest Officer is to cancel the contract, forfeit the security deposit, resell the contract at the risk of the contractor and recover the shortfall from him.
Condonation of delay in furnishing such intimation or declaration is expressly prohibited.
Under Rule 13, a forest contractor is not to remove any forest produce from the contract area unless it is accompanied by a permit signed by the contractor or his authorized agent.
Such permits are to be obtained on payment from the Range Officer.
Further, the divisional Forest Officer or the Range Officer, as the case may be, has the power to withdraw a permit book, if in his opinion, such permit book has been misused for unlawful gain.
In the event of such withdrawal the forest contractor is not entitled to any compensation for any loss that might be sustained by him for any stoppage of his work in or extraction from the contract area.
Under Rule 14, the method employed by the forest contractor for extraction of forest produce along forest roads is to be subject to the approval of the Divisional Forest Officer and the forest contractor is not to cart any produce over forest roads between such periods as the Divisional Forest Officer might appoint without the previous permission in writing of the Divisional Forest Officer Further, the Divisional Forest Officer is given the discretion to close forest roads for extraction of forest produce on any rainy days and for three days thereafter during the rest of the year.
He may also close roads temporarily for urgent or special repairs should this in his opinion become 93 necessary.
Further, the forest contractor is prohibited from extracting forest produce by dragging along forest roads.
Under Rule 15, except with the special permission of the Divisional Forest Officer, a forest contractor is not to remove any forest produce from the contract area after sunset or before sunrise.
Under Rule 16, a forest contractor is not to remove any forest produce except by routes specified by rules made under the Orissa Forest Act or by the forest contract and is to take all forest produce removed by him to such depots or places as may be similarly prescribed for check and examination.
Under Rule 19, the forest contractor is to keep and submit accounts of the amount of the various kinds of forest produce removed by him from the contract area in such form as the Divisional Forest Officer may prescribe or approve, and such accounts are to be open to inspection at any time by the Divisional Forest Officer or by any subordinate duly authorized by him.
Rule 20 prescribes the mode of felling standing trees.
The Divisional Forest Officer has the power to stop further felling until these provisions are complied with.
Under Rule 21, the Divisional Forest Officer is to divide the contract area into such number of sections as he may think fit and has the power to regulate and confine the operations of the forest contractor within these sections in accordance with the provisions set out in the said Rule.
Under the said Rule, the work is to be allowed progressively from section to section.
When the forest contractor begins his operations under the contract, he is to be allowed to carry out cutting operations in sections Nos.
I and 2 E only.
As soon as he begins cutting operation in section No. 3 he is deemed to have surrendered all his rights to standing trees in section No. 1.
When he begins cutting operations in section No. 4 he is deemed to have surrendered all his rights to the standing trees in section No. 2 and so on, throughout the contract area.
Under Rule 22, the forest contractor unless otherwise directed to do so in writing by the Divisional Forest Officer, is to register his property mark or trade mark in the Office of Divisional Forest Officer and get it registered by paying the registration fee in respect thereof.
No timber is to be conveyed from the contract area without the impress of the forest contractor 's registered property or trade mark, and the Divisional Forest Officer and his subordinates have the right to mark any piece of timber with the Government hammer mark before it is removed from the stump side beyond the limits of such 94 checking station as the Divisional Forest Officer may appoint in writing.
Under Rule 34, if the forest contractor makes default in the payment of the consideration for his contract or any instalment thereof or does not pay the compensation assessed under any of the Forest Contract Rules, the contract is liable to be terminated by the authority competent to do so.
The termination is to be notified to the forest contractor and the contract is deemed to have been terminated unless the contractor pays within one month from the date of receipt of the notice of termination all arrears due to the Government together with interest assessable under Rule 42 and renewal fee not exceeding one per cent of the arrears due and if he fails to do so, all his rights under the contract including all necessary licences are to cease and all the forest produce remaining within the contract area or at the depots and bearing the contractor 's registered property or trade mark and the Government hammer mark are to become the absolute property of she Government, Further, the Government becomes entitled to keep all sums already paid by the contractor and to recover as arrears of land revenue any compensation which may be assessed and to resell the contract together with produce at the depots and other produce which has become the property of the Government and to recover the shortfall as arrears of land revenue and to forfeit the security deposit of the contractor.
Under Rule 35, if the forest contractor commits any breach of condition of the contract other than those mentioned in Rule 34(1), the contract is liable to be terminated and thereupon all the contractor 's rights under the contract including all accessory licences are to cease and all the forest produce remaining within the contract area or at the depots is to become the absolute property of the Government.
Under Rule 36, 'if in the opinion of the State Government it is considered necessary to supply any kind of forest produce from any contract area to the people in case of flood, famine, cyclone and other calamities and if the contractor does not supply the materials at the rate fixed by the Government, such contract can be terminated by the Government in writing by a written notice to the contractor and from the date of such termination, the contractor is to forfeit all his rights in the coupes.
Under Rule 40, a forest contractor is not to be entitled to any compensation for any loss that may be sustained by reason of fire, tempest, disease, pest, flood, drought or other natural calamity or by reason of any wrongful act committed by any third party or 95 by reason of the unsoundness or breakage of any forest produce purchased by him or for any loss sustained by him through any operation undertaken in the interest of fire conservancy.
He is equally not entitled to claim any reduction or refund of the sums payable or paid by him under his contract on the ground that the roads provided by the e Forest Department or any other department are insufficient or in bad order or remain closed under any special order or that the quantity of produce falls short of any quantity specified in the schedule annexed to the contract or in the sale notice or that the area of the contract area differs in any way from that indicated in the schedule attached to the e contract.
Under Rule 44, all forest produce removed from a contract area in accordance with the forest Contract Rules is to be at the absolute disposal of the forest contractor.
Bearing in mind the terms and conditions of the Timber Contracts not only those expressly set out therein but also those incorporated therein by reference, namely, the terms of the Sale Notice, the Special Conditions of Contract, the General Conditions of Contract and the various statutory provisions we have now to determine whether the property in the trees which were the subject matter of the Timber Contracts passed to the Respondent Firm while the trees were still standing or after they were severed.
In the first case the impugned provisions would apply and the amounts payable under the Timber Contracts would become exigible to purchase tax, while in the second, case the impugned provisions would not apply and no purchase tax would be payable.
The above conspectus of these terms and conditions shows that the heading of the Sale Notice, namely, "Sale Notice of Timber" as also the use of the words "timber and other forest products. will be sold by public auction" are not determinative of the matter.
Though clause 1 of the Timber Contracts speaks of "the forest produce sold and purchased", the other terms and conditions of the contract make it clear that the Timber Contracts were not unconditional contracts for the sale of goods in a deliverable state and the property in the trees specified in Schedule I of the Contract, therefore, did not pass to the Respondent Firm when each of the Contracts was made.
As mentioned earlier the Timber Contracts are in the prescribed form for all forest produce annexed to the Forest Contract Rules and the provisions of the Orissa Forest Act and the Forest Contract Rules are expressly made applicable thereto.
Clause (1) of Rule 3 of the 96 Forest Contract Rules defines a "forest contract" as meaning "a contract whereby Government agrees to sell and purchaser agrees to buy forest produce.
" That this is also such an agreement is borne out by the long heading of the Timber Contracts which describes these contracts as "an agreement for the sale and purchase of forest produce.
" In fact, the signing of the Timber Contracts did not result in a concluded contract because each contract was conditional upon the State Government ratifying the acceptance of the bid given by the Respondent Firm.
Even after the ratification order was issued by the Government, it did not become an unconditional contract for the sale of specific goods in a deliverable state for the Respondent Firm had no right to severe the trees and take them away before it had complied with the other conditions of the contract set out above.
To recapitulate the most important amongst them, under Rule 12 of the Forest Contract Rules the respondent Firm had to furnish a Coupe Declaration Certificate within one and half months of the issue of the ratification order.
If it did not do so, the contract would stand cancelled.
It had also under Rule 22 of the Forest Contract Rules to register within the same period its property mark or trade mark with the Divisional Forest Officer.
Further, the Respondent Firm could not commence any work unless it had given the required security deposit and before paying the first instalment as under the Timber Contracts in the present Appeals the amounts were payable by instalments.
That the property in the trees did not pass to the respondent Firm while the trees were standing is also shown by the fact that the Divisional Forest Officer or the concerned Range Officer had the power to stop further removal of the felled trees until the Respondent Firm had paid the amount required to make up the excess of the value Of the felled trees removed over the amount of the installments already paid by it and under Rule 9 A it was further open to the Divisional Forest Officer or the concerned Range Officer to stop further work if there was a default in payment of any instalment or in payment of any two instalments and the contract could also be terminated under Rule 33 for such default.
Further work or removal could not be stopped or the contract terminated if the property in the trees had passed to the Respondent Firm because in such event the only remedy open to the seller would be to sue for the balance of the price.
It is also pertinent that under Rule 33 the contract could Also be terminated and the Respondent Firm would forfeit its right to all further trees to he severed by it if it 97 committed a breach of any of the other conditions of the contract.
The mode of felling the trees was also not of the choice of the Respondent Firm but was one prescribed by Rule 20.
Even after felling the trees the Respondent Firm was not entitled to remove the felled trees by any route which it liked but only by routes which were prescribed and that too only if covered by a permit signed by the Respondent Firm or its duly authorized agent from a permit book obtained from the Range Officer.
Further, under Rule 16, after felling the trees the Respondent Firm had to remove them to the prescribed depots or places for check and examination and it was only after the trees felled by it were checked and examined to ascertain that they were felled in the manner prescribed in Rule 20 and were the trees which were the subject matter of the contract that it could take them out of the contract area.
Unless the Respondent Firm felled and removed all the trees which were the subject matter of the contract within the period of the contract, on the expiry of such period it would lose all rights to the trees not so removed.
It is true that under Rule 40 if the trees were destroyed by reason of fire, tempest, disease, pest, flood, drought or other natural calamity or by reason of any wrongful act committed by any third party or by reason of the unsoundness or breakage of any trees which were the subject matter of the contract, the Respondent Firm was not entitled to any compensation for any loss sustained by it.
This would show that after a Timber Contract was concluded, the risk passed to the Respondent Firm.
Under section 26 of the Sale of Goods Act, the goods remain at the seller 's risk until the property in the goods is transferred to the buyer and when the property is transferred to the buyer, the goods are at the buyer 's risk whether delivery has been made or not.
Section 26 is, however, qualified by the phrase "Unless otherwise agreed." Thus, this section is subject to a contract to the contrary and what we have stated above is sufficient to show that the Timber Contracts were subject to a contract to the contrary and under them the risk passed to the Respondent Firm before the property passed to it.
This is made abundantly clear by Rule 44 which states that "All forest produce removed from a contract area in accordance with these rules shall be at the absolute disposal of the forest contractor.
" It is, therefore, clear that the Timber Contracts were not 98 transactions of sale or purchase of standing trees agreed to be severed.
They were merely agreements to sell such trees.
As pointed out above, each stage of the felling and removal operations was governed by the Forest Contract Rules and was under the control and supervision of the Forest Officers.
The property passed to the Respondent Firm only in the trees which were felled, that is, in timber, after all the conditions Of contract had been complied with and after such timber was examined and checked and removed from the contract area; The impugned provisions therefore, did not apply to the transactions covered by the Timber Contracts.
It will be useful in the context of the conclusions which we have reached to refer to the decision of this Court in Badri Prasad vs State of Madhya Pradesh & Anr.
the question in that case was whether there was a contract of sale of standing timber and whether under the contract the property had passed to the appellant or whether the property had passed after the trees had been felled and hence the right of the appellant 's transferor had vested in the State Government before the trees were felled by reason of the provisions of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (M.P. Act No. I of 1951).
The Court held that under the terms of the contract the trees had to be felled before they become the property of the appellant.
The Court observed (at pages 390 1) "It will be noticed that under cl. 1 of the contract the plaintiff was entitled to cut teak trees of more than 12 inches girth.
It had to be ascertained which trees fell within that description.
Till this was ascertained, they were not 'ascertained goods ' within section 19 of the Sale of Goods Act.
Clause 5 of the contract contemplated that stumps of trees, after cutting, had to be 3 inches high.
In other words, the contract was not to sell tile whole of the trees.
In these circumstances property in the cut timber would only pass to the plaintiff under the contract at the earliest when the trees are felled.
But before that happened the trees had vested in the state.
" It is pertinent to note that conditions 16 to 18 of the special Conditions of Sale which form part of the Timber Contracts also (1) ; 99 prescribe the girth of the trees which are to be felled and the height above the ground level at which they are to be felled.
Timber and Logs.
On our above finding that the transactions under the Timber Contracts are sales of Timber and not sales of standing trees agreed to be severed the tax which would be attracted would be sales tax and not purchase tax under the impugned provisions.
This would, however, be so if the Divisional Forest Officer were a dealer.
Under the terms of the Timber Contracts the Respondent Firm is liable to reimburse the Divisional Forest Officer the amount of sales tax he would which be liable to pay.
T he question whether the Divisional Forest Officer is a dealer within the meaning of that term as defined in clause (c) of section 2 prior to its being substituted with retrospective effect by the Orissa Sales tax (Amendment and Validation) Act, 1979, which repealed and replaced the Ordinance with the same title, is pending before the Court in Civil Appeals Nos.
1237 1238 of 1979 and 1420 1421 of 1979 Whatever be the position under the old definition, after the substitution of that definition with retrospective effect by the said Amendment and Validation Act, the Divisional Forest Officer ought be a dealer.
The validity of this amendment is, however, also under challenge in this Court in Writ Petitions Nos.
958 of 1979 and 966 of 1979.
We therefore, express no opinion on either OF these questions.
It was, however, submitted on behalf of the Respondent Firm that assuming these challenges fail, it would be called upon to reimburse the Divisional Forest Officer According to the Respondent Firm, the Divisional Forest Officer.
would not be entitled to do so because it had made sized and dressed logs from the timbers which it had purchased under the Timber Contracts and had sold such logs and paid sales tax on these sales and, therefore, to tax the sales of timber to them would be to levy the tax at an earlier point in the same series of sales which is not permissible by reason of the prohibition contained in the proviso to section 8.
According to them, timber and sized or dressed logs are one and the same commercial commodity.
This contention was upheld by the High Court.
Though the High Court had so decided in order to consider whether the same transaction could be taxed both at the sale point as also at the purchase point, it none the less becomes necessary for us to determine this question in or to prevent needless litigation in the future.
Though under section 8 the State Government has the power to 100 prescribe the points in the series of sales or purchases by successive dealers at which any goods or class or description of goods may be taxed, it has not done so either in the case of timber or logs, though in the case of some of other goods, as pointed out earlier, the State Government has made rules prescribing that the tax would be levied at the first point of sale.
Thus, if the contention of the the Respondent Firm were correct, as tax has already been levied at one point in the same series of sales, it would not be now open to the State Government to say that by reason of the substituted definition of the term "dealer", sales tax could also be levied at another point.
We will first see how different High Courts have dealt with this question.
In Saw Bros. and Co. vs The State of West Bengal1 all learned Single Judge of the Calcutta High Court held that planks sawed out of logs are different things from logs and timber in its nascent state.
No reasons are given in that Judgment for reaching this conclusion, In Bachha Tewari and another vs Divisional Forest Officer, West Midnapore Division, and others2 the same learned Judge held that the the chopping of timber into firewood was a manufacturing process.
and, therefore, the imposition of a tax on timber and on firewood manufactured from that timber did not amount to double taxation The question in both those cases was whether sawing of planks and chopping of timber into firewood amounted to manufacture so as to make the assessee liable to pay sales tax on the manufactured goods.
This is a different question from that to which we have to address ourselves.
We may, however, point out that even where the question is whether a certain process has resulted in a manufacture, the resultant product must be a different commercial commodity and merely because certain articles are known by different names it does not mean that they are different commercial commodities if in fact they are merely different forms of the same commodity.
Thus, in Tungabhadra Industries Ltd. Kurnool vs Commercial Tax Officer, Kurnool3, hydrogenated groundnut oil, commonly called 'Vanaspati ' was held by this Court to be groundnut oil within the meaning of Rules S (I) (k) and 18 (2) of the Madras General Sales Tax (Turn (1) [1963] 14 S.T.C. 878.
(2) [1963] 14 S.T.C. 1067.
(3) [1960] 11 S.T.C. 827; ; 101 Over and Assessment) Rules, 1939.
The Court further held that the processing of groundnut oil to render it more acceptable to the customer by improving its quality would not render the oil a commodity other than groundnut oil.
Similarly, in the State of Gujarat vs Sakarwala Bros.(l) this Court held that 'pates ', `harda ' and `alchidana ' were sugar in different forms and fell within the definition of sugar in Entry 47 of Schedule to the Bombay Sales Tax Act, 1959.
A decision more relevant to our purpose than the two Calcutta decisions is a decision of a Division Bench of the Madhya Pradesh High Court in Mohanlal Vishram vs Commissioner of` Sales Tax Madhya Pradesh, Indore(2).
In that case the Madhya Pradesh High Court held that by felling standing timber trees, cutting them and converting some of them into` ballis ', a dealer did not alter their character as timber or used them for manufacture of other goods within the meaning of section 8(1) of the Madhya Pradesh Sales Tax Act, 1958.
Another decision equally relevant for our purpose is that of a Division Bench of the Andhra Pradesh High Court in G. Ramaswamy and others vs The State of Andhra Pradesh and others(3) in which the question was very much the same as the one which we have to decide.
The assessees in that case purchased nascent timber, that is, logs of wood, and had swan or cut them into planks, rafters, cut sizes, etc., and sold them for the purpose of construction of buildings and the like.
Under section 5(2)(a) of the Andhra Pradesh General Sales Tax Act, 1957, read with Item 63 in the First Schedule to that Act, a dealer in timber was liable to pay sales tax at the rate of three pies in a rupee at the point of first sale.
The assessees were, however, sought to be taxed under section 5(1) of that Act on their sales of, planks, rafters, out sizes, etc.
treating them as general goods.
The contention of assessees was that these goods were timber which was taxable at the first point of sale and the first point of sale was when the Forest Department sold the standing timber trees to them and, therefore, the planks, rafters, cut sizes, etc., sold by them could not again be made liable to sales tax (1) [1967] 19 section T.C.24 (S.C.) ( (2) [1969] 24 S.T.C. 101.
(3) [1973] 32 S.T.C. 309. 102 treating those goods as different commercial commodities.
The Division Bench held that in dealing with matters relating to the general public, statutes are presumed to use words in their popular rather than their narrowly legal or technical sense, and that as the provision levying a tax on timber was directed to deal with a matter affecting people generally, as timber is in common use the word "timber" would have the same meaning attached to it as in the common and ordinary use of language.
The Division Bench further held that although dictionaries are not to be taken as authoritative exponents of the meanings of words used in a statute, it was a well known rule of courts of law that words should be taken to be used in the ordinary sense and courts are, there fore, sent for instruction to the dictionaries in the absence of any legislative or judicial guidance.
The Division Bench then referred to the meaning given to the word "timber" in different dictionaries.
The Division Bench also considered the meaning in commercial parlance of the term "timber".
In that case the assessees in their affidavits had asserted that timber in the commercial field also meant planks, cut sizes, etc.
There was no convincing denial by the Government of that assertion.
The Division Bench then turned to the "Rules for gradation of cut sizes of timber" prepared and issued in October, 1960, by the Indian Standards Institution which showed the word "timber" was freely used for kinds of standard cut sizes for building purposes.
The Division Bench also looked at Indian Airlines Quotation No. 406 of April 26, 1972, in which the words used were "timber teak wood" setting out the particular sizes thereafter.
The Division Bench also referred to the other documentary evidence produced in that case and held that the documents and affidavits before it clearly made out that even the cut sizes of timber were commonly known as timber in commercial field and that, therefore, both in the popular sense and in the commercial sense, the word "timber" had the same meaning.
The Division Bench also laid emphasis on the interpretation given to the term "timber" by the sales tax Administration.
For all these reasons the Division Bench held that merely because planks, rafters, cut sizes, etc., were sawn or cut from logs of woo(3, they did not alter their character and still continued to be raw materials which by themselves and in the same form could not be directly put to use for construction purposes and the logs of wood purchased by the assessees were merely cut or sawn to sizes 103 for the sake of convenience and to make them acceptable to the customers and that by reason of this process they did not lose their character as timber.
We will now turn to the decisions of the Orissa High Court on this point.
In State of Orissa vs Rajani Timber traders(l) a Division Bench of that High Court held that timber logs and sized timber U were different commodities in the commercial sense though sized timbers were brought out only from timber logs by a particular process.
The Division Bench further observed that the person who had a need of timber logs would not be satisfied had sized timber been offered to him and similarly a person requiring sized timber would not be satisfied if timber logs were supplied.
In Kripasindhu Sahu & Sons vs State of Orissa(2) another Division Bench of the same High Court held that the dictum in the Rajani Timber Traders ' case was too widely stated and it did not indicate the meaning of the word "timber" as used in common parlance in commercial circles and it also did not purport to specify the meaning of the expression "sized timber" as used in that judgment.
The Division Bench further held that timber in common parlance in Orissa took within its ambit only long and big sized logs of wood ordinarily used in house construction as beams and pillars and that when timber was converted into planks, rafters and other wood products like tables and chairs or cut into various small sizes so as to be unfit for use as beams and pillars and similar such uses they could not be termed as timber in common parlance though they may retain their essential character as wood because the essential characteristic of timber as a commercial commodity was lost after such conversion.
The judgment in that case does not indicate any basis for holding that the word "timber" had in common parlance in Orissa the meaning which according to the Division Bench it bore.
It is also curious to note that one learned Judge was common to both the Division Benches though in each case the judgment was delivered by the other learned judge Having seen how the different High Courts have dealt with this question, we will now ascertain the true position for our (1) [1974] 34 S.T.C. 374.
(2) [1975] 35 S.T.C. 270.
104 selves.
In Ganesh Trading Co., Karnal vs State of Haryana and another(l) Hedge, J., speaking for this Count, said: ' This Court has firmly ruled that in finding out the true meaning of the entries in a Sales Tax Act, what is relevant is not the dictionary meaning, but how those entries are understood in common parlance, specially in commercial circles".
Applying this principle, the Court held that although rice was produced out of paddy, paddy did not continue to be paddy after dehusking and that when paddy was dehusked and rice produced, there was a change in the identity of the goods and, therefore, rice and paddy were two different things in ordinary parlance.
A careful reading of the judgment in that case shows that there was no evidence before the court to show how "paddy" and "rice" were understood in commercial circles or what these words meant in commercial or trade parlance and that what the Court did was to refer to various authorities dealing not with rice or paddy but with other goods and the meaning in ordinary parlance of the words "paddy" and ' rice" in order to ascertain the meaning of these words in the sense stated by it above.
So far as the case before us is concerned, there is material on the record to show what the word "timber" and "logs" mean in commercial or trade parlance nor do the pleadings of the parties filed in the Orissa High Court throw any light on the matter.
The averment of the Respondent Firm in this behalf is to be found in paragraph 13 of its writ petition in the High Court and all that is stated therein is that under the impugned provisions it would be required to pay purchase tax on "timber agreed to be severed" and after savering the timber while effecting sales of timber would be liable to pay sales tax on such sales.
In the counter affidavit of the Law Officer in the office of the Commissioner of Commercial Taxes, Orissa, filed on behalf of the Commissioner of Commercial Taxes and the Sales Tax Officer, Sambalpur Circle, while replying to the said paragraph 13 all that is stated is that timber commercially does not remain the same after being cut, sized and shaped, and, therefore, there was no legal obstruction to tax an altogether different commercial commodity at sale point.
(1) [1973] 32 S.T.C. 623, 625 (S.C.) 105 In view of this state of the record we must seek to ascertain the meaning of these two terms in common parlance with such aid as is available to the Court.
It is now well settled that the dictionary meaning of a word cannot be looked at where that word has been statutorily defined or judicially interpreted but where there is no such definition or interpretation, the court may take the aid of dictionaries to ascertain the meaning of a word in common 1 parlance.
In doing so the court must bear in mind that a word is used in different senses according to its context and a dictionary gives all the meanings of a word and the court, therefore have to select the particular meaning which would be relevant to the context in which it has to interpret that word.
The Orissa Act does not define the term ' 'timber" or "logs".
Orissa is, however, a State which is rich in natural wealth and mostly all, if not all, forests in the State of Orissa are protected or reserved forests and come within the purview of the Orissa Forest Act, 1972, which was an Act passed to consolidate and amend the laws relating to the protection and management of forests in the State of Orissa.
The real object behind the issue of impugned provisions was to levy purchase tax on standing trees agreed to be severed and bamboos agreed to be servered in view of the judgment of the Orissa High Court in Straw Products Ltd, vs State of Orissa in which it was held that a Divisional Forest Officer was not a dealer and, therefore, not liable to pay sales tax and hence could not call upon forest contractors to reimburse him in respect thereof.
In view of this background, it would be relevant for our purpose to look at the statutory definition of the term "timber".
given in the Orissa Forest ' Act, 1972.
That term is defined in clause (n) of section 2 of that Act, which reads as follows. "(n) 'timber ' includes trees fallen or felled and all wood cut up or sawn.
" Prior to the enactment of the Orissa Forest Act, 1972, there were two Forest Acts in force in the State of Orissa, namely, the Madras Forest Act, 1882 (Madras Act V of 1882), and the (Act XVI of 1927).
The Madras Forest Act applied to the districts of Koraput and Ganjam and part of Phulbani District, namely, Baliguda and G. Udaygiri Taluks.
The applied to the rest of the State.
Both these Acts were repealed in their application to the State Of H 106 Orissa by the Orissa Forest Act but as prior to the enactment of the Orissa Forest Act, these were the two Acts which provided for the protection and management of forests in the State of Orissa, we may also refer to the definition of the word "timber" given in those Acts.
Section 2 of the Madras Forest Act defines "timber" as including trees when they have fallen or have been fallen, and all wood, whether cut up or fashioned or hollowed out for any purpose or not".
Clause (6) of section 2 of the defines "timber" in identical terms.
Though none of these definitions is an exhaustive one since each of them uses the word "includes '` and not "means", there is a large and substantial measure of identity in these definitions and it will be apparent from these definitions that the word "timber" is not confined merely to felled trees in forestry in the State of Orissa.
In this connection, it would not be out of place to see how this word has been defined in subsequent legislation In August 1981 trade in certain forest produce in Orissa was made a State monopoly and the Orissa Forest Produce (Control of Trade) Act, 1981 (Orissa Act No. 22 of 1981), was passed to achieve that purpose.
The list of forest produce set out in the definition of that term given in clause (c) of section 2 of that Act includes timber of any species specified in clause (j) of that section.
Clause (j) of section 2 defines "timber " as meaning "marketable wood, round, sawn or fashioned, straight piece of and above two metres in length, standing or felled (excluding fuel) of the following categories, namely: ".
The portion of the definition omitted above lists the different species of timber.
The definition of "timber given in the Orissa Forest Produce (Control of Trade) Act is an exhaustive definition inasmuch as the object of that Act was to create a State monopoly of trade in specified forest produce and therefore such forest produce had to be particularized.
What is, however, pertinent is that even in subsequent legislation the cardinal concept that timber is not merely felled trees has been underlined and emphasized.
On turning to various dictionaries, we find that the dictionary meaning largely coincides with the statutory meaning of the word "timber".
While discussing the question of the subject matter of the impugned provisions we have set out the definition of the word "timber" contained in the Webster Collegiate Dictionary occurring ring in the passage from the judgment of Vivian Bose, J, in 107 Shrimati Shantabai v State of Bombay The relevant meanings of the term "timber" given in the Shorter Oxford Dictionary, Third Edition, are "building material generally; wood used for the building of houses, ships, etc., or for the use of the carpenter, joiner, or other artisan".
This definition also states that the word is "applied to the wood of growing trees capable of being used for structural purposes; hence collectively to the trees themselves".
Amongst the meanings given in the Concise Oxford Dictionary, Sixth Edition, are "wood prepared for building, carpentry, etc;.
trees suitable for this; woods, forests, piece of wood, beam".
One of the meanings of the word "timber" given in Webester 's Third New International Dictionary, is "wood used for or suitable for building (as a house or boat) for carpentry or joinery".
A "log" according to the Shorter Oxford English Dictionary means "a bulky mass of wood; now usually an unhewn portion of a felled tree, or a length cut off for firewood" and according to the Concise Oxford Dictionary it means "unhewn piece of felled tree, or similar rough mass of wood especially cut for firewood".
Thus, logs will be nothing more than wood cut up or sawn and would be timber.
A question which remains is whether beams, rafters and planks would also be logs or timber.
The Shorters Oxford English Dictionary defines "beam" inter alia as a large piece of squared timber, long in proportional to its breadth and thickness and the Concise Oxford Dictionary defines it as a ' long piece of squared timber supported at both ends, used in houses, ships, etc." and according to Webester 's Third New International Dictionary, it means "a long piece of heavy often squared timber suitable for use in house construction.
" A beam is thus timber sawn in a particular way.
"Rafter" as shown by the Shorter Oxford English Dictionary is nothing but "one of the beams which give shape and form to a roof, and bear the outer covering of slates, tiles, thatch, etc." The Concise Oxford Dictionary and Webster 's New International Dictionary define "rafter" in very much the same way; the first defines it as "one of the sloping beams forming framework of a roof" and the seconds as "one of the often sloping beams that sup port a roof.
" Rafter would also, therefore, be timber or log put to a particular use.
A "plank" is defined in Shorter Oxford English Dictionary as "a long flat piece of smoothed timber, thicker than a board, specially a length of timber sawn to a thickness of from two to six inches, a width of nine inches or more, and eight feet or H 108 upwards in length.
" According to the Concise Oxford Dictionary it is a "long wide piece of timber, a few inches thick" and according to Webster 's Third New International Dictionary, it is "a heavy thick board that in technical specifications usually has a thickness of 2 to 4 inches and a width of at least 8 inches.
" The exact thickness and width of a plank may be of importance in technical specifications but in ordinary parlance planks would be flattened and smoothed timber.
Such flatness and smoothness can only be achieved by using a saw and other implements required for that purpose.
The same would be the case when timber is rounded or shaped.
The statutory definitions of timber extracted above read along with the meaning of the word "timber" given in different dictionaries would show that the conclusion reached by the Madhya Pradesh High Court in Mohanlal Vishram vs Commissioner of Sales Tax, Madhya Pradesh, Indore, and by the Andhra Pradesh High Court in G. Ramaswamy and others vs The State of Andhra Pradesh and others is more germane to our purpose than the two Orissa cases neither of which has referred to the statutory definition of the word "timber" in the relevant statutes.
The observations of the Orissa High Court in the case of Krupasindhu Sahu & Sons vs State of Orissa that timber in common parlance in Orissa takes within its ambit only long and big sized logs of wood ordinarily used in house construction as beams and pillars but not when timber is converted into planks, rafters and other wood products like tables and chairs cannot, therefore, be said to be correct so far as planks and rafters are concerned.
In our opinion, planks and rafters would also be timber.
The result is that sales of dressed or sized logs by the Respondent Firm having already been assessed to sales tax, the sales to the First Respondent Firm of timber by the State Government from which logs were made by the Respondent Firm cannot be made liable to sales tax as it would amount to levying tax at two points in the same series of sales by successive dealers assuming without deciding that the retrospectively substituted definition of "dealer" in clause (c) of section 2 of Orissa Sales Tax Act, 1947, is valid.
Yet another aspect of this question now arises for our consideration.
During the period from June 1, 1977, to December 31, 3 1977, by reason of Notification No. S.R.O. 374/77 dated May 23, 109 1977, the rate of sales tax on timber was fixed at ten per cent by the State Government.
Since it was the contention of the State Government that logs are commercially a different commodity, the tax could not have been assessed on the sales of logs by the Respondent Firm during this period at the rate of ten per cent but would have been assessed at the general rate of six per cent specified in section 5(1) of the Orissa Act.
If such was the case, on the findings given by us above, the Respondent Firm would be liable to pay sales tax not at the rate of six per cent but at the rate of ten per cent and it might be argued that the Respondent Firm has been under assessed or part of its turnover of sales of logs has escaped assessment.
The assessment order made on the Respondent Firm referred to earlier includes both the amount of purchase tax and sales tax but this is not a composite assessment order but a severable one because the turn over of sales as also the turnover of purchases have been shown separately and the amount of sales tax and purchase tax have equally been shown separately.
Thus, though as a result of our holding that the amounts paid by the Respondent Firm under the Timber Contracts are not eligible to purchase tax, the assessment order would require to be modified and corrected, such modification and correction would not affect the rest of the assessment order.
The question then is "Whether the sales tax authorities can reopen the assessment of the Respondent Firm so far as the turnover of sales of logs is concerned?" Under sub section (8) of section 12 of the Orissa Act, the Commissioner of Sales Tax or those sales tax authorities to whom such power is delegated have the power to reopen an assessment but under section 12(8) the exercise of this power is subject to a period of limitation, namely, thirty six months from the expiry of the year to which that period for which the assessment is to be reopened relates.
Since three years have long since expired from the year to which the period in question relates, it would not now be open to the sales tax authorities assuming it was a case for re opening the assessment, to reopen the Respondent Firm 's assessment and tax the turnover of sales of dressed or sized logs at the rate of ten per cent instead of six per cent.
This question, of course, would not arise for any period on or after January 1, 1978, on which date the substituted sub section (1) of section 5 came into force, as under the notification issued under the substituted sub section (1), no separate rate of tax is specified either for timber or logs or any of the other goods which we have been considering above and all of them would fall for the purpose of payment of sales tax under the residuary 110 Entry No. 101 of the Notification No. 67184 C.T.A. 135/77/1 ; dated December 29, 1977, and would be liable to sales tax at the rate of seven percent and there would thus be no under assessment or escapement of assessment.
Bamboo Contract We will now ascertain the nature of the Bamboo Contract.
Unlike the Timber Contracts, the Bamboo Contract is not in a prescribed statutory form but it appears from the judgment of the High Court that all the Bamboo Contracts before it contained identical terms and conditions except with respect to the contract area, the period of the contract and the amount of royalty.
The parties to the Bamboo Contract were the Governor Or the State of Orissa referred to in the said Contract as "the Grantor" and the Respondent Company.
The Bamboo Contract is headed "Agreement of Bamboo Areas in Bonai Forest Division to the Titaghur Paper Mills Company Limited.
" The second and the third recitals of the Bamboo Contract are as follows: "AND WHERAER the Company is desirous of obtaining grant from the Grantor of exclusive right and licence to fell, cut, obtain and remove bamboos from all felling series of Bamboos Working Circle in the Bonai Forest Division in the State of Orissa for the purpose of converting the bamboos into paper pulp or for purposes connected with the manufacture of paper or in any connection incidental therewith.
AND WHEREAS the Grantor has agreed to grant the said licence to the Company subject to the restrictions, terms and conditions hereinafter appearing." Clause T of the Bamboo Contract is headed "Arc a over which the grant operates".
Sub clause (a) of clause I sets out the dates of commencement of the Bamboo Contract in respect of different contract areas.
Under Sub clause (b) of clause l, the forest produce "sold and purchased" is stated to be as specified in Schedule I and to be situated in the areas indicated in Schedule V. Under the said subclause, the grantor understood to render at all times to the Respondent Company all possible facilities to enable it to extract II and obtain its requirements of bamboos upto the limit imposed by 111 the Bamboo Contract.
Under clause II, the quantity of forest A produce "sold and purchased" is stated to be "all the said forest produce which now exist or may come into existence in the contract area which the Company may fell, cut, obtain and remove from the said area in accordance with the time table given in Schedule V during the period. " and then the periods in respect of different areas, already mentioned while reciting the facts of Civil Appeal No. 219 of 1982, have been set out.
Clause III provides that the Bamboo Contract can be terminated in accordance with the provisions in that behalf contained in the Forest Contract Rules subject to the right of the Respondent Company to appeal to the State Government in which case the Respondent Company could with the previous permission of the State Government, on such conditions as the Government might think fit to impose, be entitled "to carry on its business in terms of the agreement" until the final decision by the Government.
Under clause IV, the Respondent Company is given an option to renew the Bamboo Contract for a further term of twelve years.
Under clause V, the Respondent Company was to perform all acts and duties and to refrain from doing any act forbidden by the Orissa Forest Act, 1972, and to give a sum of Rs. 58,190 as security for the due performance and observance by it of the terms of the Bamboo Contract, which sum was to be returned to it on the expiry of six months after the termination or expiry of the Bamboo Contract.
The Grantor was to be entitled to forfeit the said deposit and to appropriate the whole or part thereof in the event of the Respondent Company committing a breach of the terms of the Bamboo Contract such as would entitle the Grantor to terminate the Bamboo Contract.
Clause VI provided that "this licence shall be subject to the Orissa Forest Contract Rules as modified from time to time" subject to the amendments thereto set out in the said clause which are not material for our purpose.
Clause VIII stated that "the forest produce sold and purchased under this Agreement consists of all Salia and Daba bamboos subject to the cutting rules in the annual coupe of the felling series" Clauses IX to XIII deal with the payment of royalty.
What is pertinent to note about these clauses is that under clause XIII, the Respondent Company was to pay an annual minimum royalty in the sums mentioned therein and was not to be entitled to the refund of the whole or any part of such minimum royalty should it fail to cut the minimum quantity of bamboos in any year except on the ground that the yield of the area fell below the quantity required to 112 make up the minimum royalty payable for the year owing to gregarious or sporadic flowering of bamboos in the contract areas or from any cause whatsoever not being due to the negligence on the part of the Respondent Company or failure on its part to extract the minimum number of bamboos.
The amount of royalty was to be calculated on all bamboos which the Respondent Company would cut from the contract area, whether such bamboos were removed or not, to be ascertained as provided in clauses XI and XII.
Under clause XI, for ascertaining the quantity of the bamboos so cut, the Respondent Company was to remove the bamboos through such river ghats, railway, motor and other transport depots as may be agreed upon between the parties from time to time and under clause XII, the royalty was to be paid in advance in such manner that it would always be in excess of the royalty actually due.
Under clause XIV, for the purpose of checking the felling and keeping an account of all bamboos to be cut by the Respondent Company, the Forest Department had the right to employ such staff as it might deem necessary and was to have free access to the contract area and to the books and other records of the Respondent Company.
Further, the Respondent Company was to submit to the Divisional Forest Officer a yearly account of bamboos cut and removed from the contract area and under clause XV the company was to issue to the carter of each cart or the driver of each truck on its leaving the forest a machine numbered pass of a pattern to be approved by the Chief Conservator of Forests, Orissa.
Such pass was to state the number of bamboos which each cart or truck would carry.
Clause XVI prescribed the routes by which the bamboos were to be removed as also the depots at which they were to be presented for examination, Under clause XVII, at every naka the checking staff was to check each cart or truck with the pass referred to in clause XV before such cart or truck left the depot.
Clause XVIII gave to the Respondent Company, subject to such restrictions as might be imposed from time to time by the Divisional Forest Officer, Bonai Division, the right during the continuance of the Bamboo Contract to use any lands, roads or streams outside the licensed areas which belonged to or were under the control of the Grantor for the purposes of having free ingrees to or egrees from the contract areas and also to such lands, roads or streams within the contract areas.
Under clause X[X, the Respondent Company was bound to meet the local demands of bamboos in which event the royalty on such bamboos was not to be paid by the Respondent 113 Company but was to be paid by the local people.
Under clause XX, subject to obtaining prior written consent of the Grantor, the Respondent Company was to be at liberty to make dams across streams, cut canals, make water courses, irrigation works, roads, bridges, buildings, tramways and any other work useful or necessary "for the purpose of the said business" in or upon the licensed areas and also with the like consent to widen or deepen existing streams, channels or waterways "for the purpose of the said business" and all timber and other forest produce required for this purpose was to be paid for by the Respondent Company at current schedule of rates.
All such dams, canals, irrigation works, roads, bridges, building and other works which were not removed by the Respondent Company within six months from the expiry of or earlier termination of a the contract were to become the property of the Grantor.
Clause XXI prohibited the Respondent Company from interfering with the surface of the land except in so far as it might be necessary for immediate purpose of "carrying on the necessary operations in connection with the said business".
Clause XXII expressly reserved and excepted to the Grantor in regard to the contract area granted to the Respondent Company (l ) the possession and beneficial ownership in the soil and all mines and minerals upon, in or under the contract area and the right to make such use of the soil, to erect such buildings or structures and install such plant upon it and subject it to such operations for the purpose of extraction of minerals or otherwise as the Grantor might deem proper, (2) the surface of the licensed areas and all.
grazing, cultivating and other surface E rights other than those expressly granted to the Respondent Company by the Bamboo Contract, (3) the right to all trees other than trees made over to the Respondent Company and the natural products of the soil other than bamboos, (4) the right of the Grantor to destroy bamboos in any portion of the contract areas for silvicultural purposes Including the raising of plantations subject in each case to the minimum area limit of 500 acres per annum and further subject to giving in place of such area equal facilities for bamboos extraction in other convenient areas, and (5) the right to extract bamboos from any portion in the contract areas for departmental works in Bonai Forest Division subject to a limit of 5,000 bamboos yearly.
Clause XXIII prescribed cutting rules for bamboos.
Clause XXIV conferred upon the Respondent Company the right to extract fuel from areas allotted for that purpose in order to meet the fuel requirements of domestic consumption in the houses and offices of H 114 the persons employed by it in "connection with its business in the contract areas" subject to the payment of a fixed royalty per tonne.
Under that clause, the Respondent Company had the right to cut and collect such poles of unreserved species and creepers as might be necessary for construction of rafts on obtaining a permit in that behalf and on payment of royalty according to the schedule of rates.
Under clause XXV, the Grantor, if so required by the Respondent Company, was to lease to it a suitable site or sites to be selected by it out of such sites as were at the disposal of the Grantor within the licensed areas for the erection of store houses, sheds, depots, bungalows, staff offices, agencies and other buildings of a like nature bonafide required by it "for the purposes of the business connected with" the Bamboo Contract rent free for the term of such contract.
Under clause XVI, in the event of the Grantor setting fire to the forest for silvicultural purposes, it was to give to the Respondent Company as long a notice as possible of the commencement of such operations and it was the Respondent Company which was to be responsible for safeguarding the forest produce which was the subject matter of the Bamboo Contract.
Under clause XXIX, the contract areas were to be worked on four years cutting cycle for Salia and twelve years cutting cycle for Daba and were to comprise the areas stated in the said clause.
It was submitted on behalf of the Appellant that the Bamboo Contract was a composite contract of sale, in that it was an agreement to sell existing goods" namely, bamboos standing in the contract areas at the date of the Bamboo Contract, coupled with an agreement to sell future goods, namely, bamboos to come into existence in the future.
According to the Appellant the property in the existing bamboos would pass after they were ripe for cutting and under Rule 12 of the Forest Contract Rules the Divisional Forest Officer had delineated the boundaries and limits of the annual coupe from which bamboos were to be cut for the Respondent Company to take delivery of them in as much as the bamboos then became ascertained goods.
In the alternative it was submitted that the property passed when the Respondent Company started the work of cutting bamboos.
According to the Appellant, in either event property passed before the bamboos were severed.
So far as the bamboos which were not in existence at the date of the Bamboo Contract but were to come into existence thereafter were concerned, it was submitted that as they were future goods once they came 115 into existence and became ripe for cutting, the property in them passed to the Respondent Company in the same way as in the case of bamboos in existence at the date of the Bamboo Contract.
While discussing the subject matter of the impugned provisions we have already held that they apply where there is a completed con tract of purchase and the property in the goods which are the subject matter of the contract passes from the seller to the buyer when the contract is made.
In other words, the purchase would be complete when the standing trees or bamboos are specific goods, that is, when v ' they are identified agreed upon at the time the contract of sale is made, and the contract is unconditional and further such standing trees or bamboos are in a deliverable state that is, nothing remains to be done except for buyer to enter upon the land of the seller and to fell and remove the trees or bamboos, as the case may be, without any let or hindrance.
The very submission of the Appellant with respect to when the property passes to the Respondent Company in the case of the Bamboo Contract are sufficient to show that the impugned provisions cannot have any application to the case.
The Bamboo Contract like the Timber Contract is also made subject to the Forest Contract Rules and while with Timber Contract we have pointed out that by reason of the operation of those Rules property in the trees passed to the forest contractor after the trees were felled and taken to the inspection points and there checked and examined and thereafter removed from the contract area.
The same position would apply to the case of the Bamboo Contract assuming for the sake of argument that it is a contract of sale of goods.
In this view of the matter, the impugned provisions would have no application and the amounts payable under the Bamboo Contract would not be exigible to purchase tax.
By reason, however, of the substitution of the definition of the term "dealer" in clause (c of section 2 of the Orissa Act with retrospective effect, it may be argued that if the Bamboo Contract was a contract of sale of goods, then on the sale taking place to the Respondent Company, sales tax would become payable and the Respondent Company would be bound to reimburse to the Forest Department the amount payable by it as sales tax.
In order to avoid future legal controversy and particularly in view of the fact that the High Court has held the Bamboo Contract to be a grant of a profit a prendre it becomes 116 necessary to determine whether the Bamboo Contract is at all a contract of sale of goods.
According to the Respondent Company the High Court was right in holding that Bamboo Contract was not a contract of sale of goods but was a grant of a profit a prendre.
The meaning and nature of a profit a prendre have been thus described in Halsbury 's Laws of England, Fourth Edition, Volume 14, paragraphs 240 to 242 at pages 115 to 117: "240.
Meaning of 'profit a prendre ' A profit a prendre is a right to take something off another person 's land.
It may be more fully defined as a right to enter another 's land to take some profit of the soil, or a portion of the soil itself, for the use of the owner of the right The term 'profit a prendre ' is used in contradistinction to the term 'profit a prendre ', which signified a benefit which had ' to be rendered by the possessor of land after it had come into his possession.
A profit a prendre is a servitude.
Profit a prendre as an interest in land.
A profit a prendre is an interest in land and for this reason any disposition of it must be in writing.
A profit a prendre which gives a right to participate in a portion only of some specified produce of the land is just as much an interest in the land as a right to take the whole of that produce.
What may be taken as a profit a prendre.
The subject matter of a profit a prendre, namely the substance which the owner of the right is by virtue of the right entitled to take, may consist of animals, including fish and fowl, which are on the land, or of vegetable matter growing or deposited on the land by some agency other than that of man, or of any part of the soil itself, including mineral accretions to the soil by natural forces.
The right may extend to the taking of the whole of such animal or vegetable matters or merely a part of them.
Rights have been established as profits a prendre to take acorns and beech mast, brakes, fern, heather and litter, thorns, turf and peat, boughs and branches of growing trees, rushes, 117 freshwater fish, stone, sand and shingle from the seashore A and ice from a canal; also the right of pasture and of shooting pheasants.
There is, however, no right to take seacoal from the foreshore.
The right to take animals ferae naturae while they are upon the soil belongs to the owner of the soil, who may grant to others as a profit a prendre a right to come and take them by a grant of hunting, shooting, fowling and so forth.
" A profit a prendre is a servitude for it burdens the land or rather a person 's ownership of land by separating from the rest certain portions or fragments of the right of ownership to be enjoyed by persons other than the owner of the thing itself (see Jowitt 's Dictionary of English Law, Second Edition, Volume 2, page 1640.
under the heading "Servitude").
"Servitude" is a wider term and includes both easements and profits a prendre (see Halsbury 's Laws of England, Fourth Edition, Volume 14, paragraph 3, page 4).
The distinction between a profit a prendre and an easement has been thus stated in Halsbury 's Laws of England, Fourth Edition, paragraph 43 at pages 21 to 22: "The chief distinction between an easement and a profit a prendre is that whereas an easement only confers a right to utilise the servient tenement in a particular manner or prevent the commission of some act on that tenement, a profit a prendre confers a right to take from the servient tenement some part of the soil of that tenement or minerals under it or some part of its natural produce or the animals ferae naturae existing upon it.
What is taken must be capable of ownership, for otherwise the right amounts to a mere easement".
In Indian law an easement is defined by section 4 of the Indian Easement Act, 1882 (Act No. V of 1882) as being ' a right which the owner or occupier of certain land possesses, as such, for the beneficial enjoyment of that land, to do and continue to do something, or to prevent and continue to prevent something being done, in or upon, or in respect of, certain other land not his own".
A profit a prendre when granted in favour of the owner of a dominant heritage for the beneficial enjoyment of such heritage would, therefore, be an easement but it would not be so if the grant was not for the beneficial enjoyment of the grantee 's heritage.
118 Clause (26) of section 3 of the , defines "immovable property" as including inter alia "benefit to arise out of land".
The definition of "immovable property" in clause (f) of section 2 of the , illustrates a benefit to arise out of land by stating that immovable property "includes. rights to ways, lights ferries, fisheries or any other benefit lo arise out of land".
As we have seen earlier, the , does not give any definition of "immovable property" except negatively by stating that immovable property does not include standing timber, growing crops, or grass.
The was enacted about fifteen years prior to the , However, by section 4 of the , the definitions of certain words and expressions, including "immovable property" and "movable property", given in section 3 of that Act are directed to apply also, unless there is anything repugnant in the subject or context, to all Central Acts made after January 3 1968, and the definitions of these two terms, therefore, apply when they occur in the .
In Ananda Behra and another vs The State of Orissa and another (1) this Court has held that a profit a prendre is a benefit arising out land and that in view of clause (26) of section 3 of the , it is immovable property within the meaning of the .
The earlier decisions showing what constitutes benefits arising out of land have been summarized in Mulla on The ", and it would be pertinent to reproduce the whole of that passage.
That passage (at pages 16 17 of the Fifth Edition) is as follows: "A 'benefit to arise out of land ' is an interest in land and therefore immovable property.
The first Indian Law Commissioners in their report of 1879 said that they had 'abstained from the almost impracticable task of defining the various kinds of interests in immovable things which are considered immovable property.
The , however, expressly includes as immovable property benefits to arise out of land, here diary allowances, rights of way lights, ferries and fisheries '.
The definition of immovable property in the applies to this Act.
The following have been held to be immovable (1) 11955] 2 section C. R. 919 119 property: varashasan or annual allowance charged on land; a right to collect dues at a fair held on a plot of land; a hat or market; a right to possession and management of a saranjam; a malikana; a right to collect rent or jana: a life interest in the income of immovable property; a right of way; a ferry; and a fishery; a lease of land".
B Having seen what the distinctive features of a profit a prendre are, we will now turn to the Bamboo Contract to ascertain whether it can be described as a grant of a profit a prendre and thereafter to examine the authorities cited at the Bar in this connection.
Though both the Bamboo Contract in some of its clauses and the Timber Contracts speak of "the forest produce sold and purchased under this Agreement", there are strong countervailing factors which go to show that the Bamboo Contract is not a contract of sale of goods.
While each of the Timber Contracts is described in its body as "an agreement for the sale and purchase of forest produce", the Bamboo Contract is in express terms described as "a grant of exclusive right and licence to fell, cut, obtain and remove bamboos. for the purpose of converting the bamboos into paper pulp or for purposes connected with the manufacture of paper. " Further, throughout the Bamboo Contract, the person who is giving the grant, namely, the Governor of the State of Orissa, is referred to as the "Grantor." While the Timber Contracts speak of the consideration payable by the forest contractor, the Bamboo Contract provides for payment of royalty.
"Royalty" is not a term used in legal parlance for the price of goods sold.
"Royalty" is defined in Jowitt 's Dictionary of English Law, Fifth Edition, Volume 2, page 1595, as follows. "Royalty, a payment reserved by the grantor of a patent, lease of a mine or similar right, and payable proportionately to the use made of right by the grantee.
It is usually a payment of money, but may be a payment in kind, that is, of part of the produce of the exercise of the right.
Royalty also means a payment which is made to an author or composer by a publisher in respect of each copy of his work which is sold, or to an inventor in respect of each article sold under the patent.
" We are not concerned with the second meaning of the word H 120 "royalty" given in Jowitt.
Unlike the Timber Contracts, the Bamboo Contract is not an agreement to sell bamboos standing in the contract areas with an accessory licence to enter upon such areas / for the purpose of felling and removing the bamboos nor is it, unlike the Timber Contracts, in respect of a particular felling season only.
It is an agreement for a long period extending to fourteen years, thirteen years and eleven years with respect to different con tract areas with an option to the Respondent Company to renew the contract for a further term of twelve years and it embraces not only bamboos which are in existence at the date of the contract but also bamboos which are to grow and come into existence thereafter.
The payment of royalty under the Bamboo Contract has no relation to the actual quantity of bamboos cut and removed.
Further, the Respondent Company is bound to pay a minimum royalty and the amount of royalty to be paid by it is always to be in excess of the royalty due on the bamboos cut in the contract areas.
We may pause here to note what the Judicial Committee of the Privy Council had to say in the case of Raja Bahadur Kamkashya Narain Singh of Ramgarh vs Commissioner of Income tax, Bihar and Orissa about the payment of minimum royalty under a coal mining lease.
The question in that case was whether the annual amounts payable by way of minimum royalty to the lessor were in his hands capital receipt cr revenue receipt.
The Judicial Committee held that it was an income flowing from the covenant in the lease.
While discussing this question, the Judicial Committee said (at pages 522 3): "These are periodical payments, to be made by the lessee under his covenants in consideration of the benefits which he is granted by the lessor.
What these benefits may be is shown by the extract from the lease quoted above, which illustrates how inadequate and fallacious it is to envisage the royalties as merely the price of the actual tons of coal.
The tonnage royalty is indeed only payable when the coal or coke is gotton and despatched: but that is merely the last stage.
As preliminary and ancillary to that culminating act, liberties are granted to enter on the land and search, to dig and sink pits, to erect engines an (1) (1943)11 I.T.R. 513 P.C. 121 machinery, coke ovens, furnaces and form railways and , roads.
All these and the like liberties show how fallacious it is to treat the lease as merely one for the acquisition of a certain number of tons of coal, or the agreed item of royalty as merely the price of each ton of coal.
" Though the case before the Judicial Committee was of a lease of a coal mine and we have before us the case a grant for the purpose of felling, cutting and removing bamboos with various other rights and licences ancillary thereto, the above observations of the Judicial Committee are very pertinent and apposite to what we have to decide.
Under the Bamboo Contract, the Respondent Company has the right to use all lands, roads and streams within as also outside the contract areas for the purpose of free ingress to and egress from the contract areas.
It is also given the right to make dams across streams, cut canals, make water courses, irrigation works, roads, bridges, buildings, tramways and other work useful or necessary for the purpose of its business of felling, cutting, and removing bamboos for the purpose of converting the same into paper pulp or for purposes connected with the manufacture of paper.
For this purpose it has also the right to use timber and other forest produce to be paid for at the current schedule of rates.
The Respondent Company has the right to attract fuel from areas allotted for that purpose in order to meet the fuel requirements of the domestic consumption in the houses and offices of the persons employed by it and to pay a fixed royalty for this purpose.
Further, the Government was bound, if required by the Respondent Company, to lease to it a suitable site or sites selected by it for the erection of store houses, sheds, depots, bungalows, staff offices, agencies and other buildings of a like nature.
We have highlighted above only the important terms and conditions which go to show that the bamboo Contract is not and cannot be a contract of sale of goods.
It confers upon the Respondent Company a benefit to arise out of land, namely, the right to cut and remove bamboos which would grow from the soil couple with several ancillary rights and is thus a grant of a profit a prendre.
It is equally not possible to view it as a composite contract one, an agreement relating to standing bamboos agreed to be severed H 122 and the other, an agreement relating to bamboos to come into existence in the future.
The terms of the Bamboo Contract make it clear that it is one, integral and indivisible contract which is not capable of being severed in the manner canvassed on behalf of the Appellant.
It is not a lease of the contract areas to the Respondent Company for its terms clearly show that there is no demise by the State Government of any area to the Respondent Company.
The Respondent dent Company has also no right to the exclusive possession of the contract areas but has only a right to enter upon the land to take a part of the produce thereof for its own benefit.
Further, it is also pertinent that while this right to enter upon the contract areas is described as a "licence", under clause XXV of the Bamboo Contract the Respondent (company has the right to take on lease a suitable site or sites of its choice within the contract areas for the erection of store houses, sheds, depots, bungalows, staff offices, agencies and other buildings of alike nature required fourth purpose of its business.
The terms and conditions of the Bamboo Contract leave no doubt that it confers upon the Respondent Company a benefit to arise out of land and it would thus be an interest in immovable property.
As the grant is of the value exceeding Rs. 100, the Bamboo Contract is compulsorily registrable.
It is, in fact, not registered.
This is, however, immaterial because it is a grant b the Government of an interest in land and under section Registration Act it is exempt from registration.
The High Court was, therefore, right in holding that the Bamboo Contract was a grant of a profit prendre, though the grant of such right not being for the beneficial enjoyment of any land of the Respondent Company it would not be an easement.
Being a profit a prendre or a benefit to arise out of land any attempt on the part of the State Government to tax the amounts payable under the Bamboo Contract would not only be ultra vires the Orissa Act but also unconstitutional as being beyond the State 's taxing power under Entry 54 in List II in the Seventh Schedule to the Constitution of India.
We will now turn to the authorities cited at the Bar.
The cases which have come before the courts on this point have mainly involved the question whether the document before the court required registration.
After the coming into force of the Constitution of India and the introduction of land reforms with consequent abolition of 'Zamindari ' and other proprietary into rests in land, the question whether a particular document was a 123 grant of a proprietary interest in land has also fallen for determination by various courts.
It is unnecessary to refer to all the decisions which were cited before us and we propose to confine ourselves to considering only such of them as are directly relevant to the question which we have to decide.
Of the High Court decisions the one most in point is that of a Full Bench OF the Madras High Court in Seeni Chettiar vs Santhanathan Chettiar and others.(l) The question in that case was whether a document which granted to the defendant a right to enjoy the produce of all the trees on the bank and bed of a tank as also the grass and the reeds and further to cut and remove the trees for a period exceeding four years required registration.
The court held that the document was not a lease because it did not transfer to the defendant exclusive possession of the tank but conferred upon him merely a right of access to the place for the reasonable enjoyment of what he was entitled to under the contract The court, however, came to the conclusion that the document required registration as it transferred an interest in immovable property, and that it was not a sale of mere standing timber but it was contemplated by the document, as shown by the fact that a comparatively long period of a little more than four years was granted to the defendant for cutting and removing the trees, that "the purchaser should derive a benefit from the further growth of the thing sold, from further vegetation and from the nutriment to be afforded by the land".
The above words quoted in the judgment in that case were those of Sir Edward Vaughan Williams in the following passage cited with approval by Lord Coleridge, C.J., in Marshall vs Green 2): "The principle of these decisions appears to be this, that wherever at the time of the contract it is contemplated that the purchaser should derive a benefit from the further growth of the thing sold, from further vegetation and from the nutriment to be afforded by the land, the contract is to be considered as for an interest in land; but where the process of vegetation is over, or the par ties agree that the thing sold shall be immediately with drawn from the land, the land is to be considered as a (1) I.L.R. (18971 F.B. (2) , 39.
H 124 mere warehouse of the thing sold, and the contract is for goods.
" So far as the decisions of this Court are concerned, the one which requires consideration first is Firm Chhotabhai Jethabai Patel & Co. (and other cases) vs The State of Madhya Pradesh.
This was one of the two cases strongly relied upon by the Appellant, the other being State of Madhya Pradesh & Ors.
v, Orient Paper Mills Ltd2.
The facts in Chhotabhai 's Case were that the petitioners had entered into contracts with the proprietors of certain estates and mahals in the State of Madhya Pradesh under which they acquired the right to pluck, collect and carry away tendu leaves; to cultivate, culture and acquire lac; and to cut and carry away teak and timber and miscellaneous species of trees called hardwood and bamboos.
On January 26, 1951, the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (Madhya Pradesh Act I of 1951), came into force and on the very next day a notification was issued under the said Act putting an end to all proprietary rights in estates, mahals and alienated villages and vesting the same in the State for the purposes of the State free of all encumbrances with effect from March 31, 1952.
The petitioners therupon approached this Court under Article 32 of the Constitution of India praying for a writ prohibiting the State of Madhya Pradesh from interfering with the rights which they had acquired under the contracts with the former proprietors.
It was averred in the petitions that not only had the petitioners paid the consideration under the said contracts but had also spent large sums of money in the exercise of their rights under the said contracts.
This Court held that the contracts appeared to be in essence and effect licenses granted to the petitioners to cut, gather and carry away the produce in the shape tendu leaves, lac, timber or wood and did not create any interest either in the land or in the trees or plants.
In arriving at this conclusion the Court relied upon a decision of the Judicial Committee of the Privy Council in Messrs Mohanlal Hargovind of Jubbulpore vs Commissioner of income tax, C.P. & Berar, Nagpur3.
In that case the assesses carried on (1) [19531 S.C.R. 476.
(2) ; ( 3) L.R. [1949] 76 I.A. Nag.
P.C. 311.
125 business as manufacturers and vendors of bidis composed of tobacco contained or rolled in tendu leaves.
The contracts entered into by the assesees were short term contracts under which in consideration of a sum payable by instalments the assessees ' were granted the exclusive right to collect and remove tendu leaves from specified areas.
Some of the contracts also granted to the assessees a small ancillary right of cultivation.
The Judicial Committee held that the amounts paid by the assessees under the said contracts constituted expenditure in order to secure raw materials for their business and, therefore, such expenditure was allowable as being on revenue account.
In Chhotabhai 's Case this Court took the view that the contracts before it were similar to the contracts before the Judicial committee and quoted with approval the following passage from the judgment in Messrs Mohanlal Hargovind 's Case (at page 241): "The contracts grant no interest in land and no interest in the trees or plants themselves.
They are simply and solely contracts giving to the grantees the right to pick and carry away leaves, which, of course, implies the right to appropriate them as their own property.
The small right of cultivation given in the first of the two contracts is me rely ancillary and is of no more significance than would be, e.g., a right to spray a fruit tree given to the person who has bought the crop of apples.
The contracts are short term contracts.
The, picking of the leaves under them has to start at once or practically at once and to proceed continuously.
" According to this Court, the contracts entered into by the petitioners before it related to goods which had a potential existence and there was sale of a right to such goods as soon as they came into existence, the question whether the title passed on the date of the contract itself or later depending upon the intention of the parties.
This Court, therefore, came to the conclusion that the State had no right to interfere with the petitioners ' rights under the said contracts.
As we will later point out, the authority of the decision in Chhotabhai 's Case has been considerably shaken, if not wholly eroded, by subsequent pronouncements of this Court.
For the 126 present it will be sufficient for us to point out that the reliance placed in Chhotabhai 's Case on the decision of the Judicial Committee in Messrs Mohanlal Hargovind 's Case does not appear to be justified for the contracts before the Judicial Committee and before this Court were different in their contents and this Court appears to have fallen into an error in assuming that they were similar.
For instance, the contracts before the Privy Council were short term contracts while those before the Court in Chhotabhai 's Case were for different periods including terms of five to even fifteen years.
Apart from this, we have pointed out above the features which go to make the Bamboo Contract a benefit to arise out of land.
These features were conspicuously absent in the contracts before the court in Caotabhai 's Case.
The decision next in point of time on this aspect of the case is Ananda Behare and another vs The State of Orissa and another.
The petitioners in that case had obtained oral licenses for catching and appropriating fish from specified sections of the Chilka Lake from its proprietor, the Raja of Parikud, on payment of large sums of money prior to the enactment of the Orissa Estates Abolition Act, 1951 (Orissa Act I of 1952).
Under the said Act, the estates of the Raja of Parikud vested in the State of Orissa and the State refused to recognize the rights of the petitioners and was seeking to re auction the rights of fishery in the said lake.
The petitioners, contending that the State had infringed or was about to infringe their fundamental rights under Articles 19 (1) (f) and 3 (1) of the Constitution of India, filed petitions in this Court under Article 32 of the Constitiution.
In their petition, the petitioners claimed that the ; transactions entered into by the were sales of future goods, namely, fish in the sections of the lake covered by the licences and that a s fish was movable property, the sai Act was not attracted because it was confined to immovable property.
The Court observed that if this contention of the petitioners was correct, then their petition under Article 32 was misconceived because until any fish was actually caught, the petitioners would not acquire any property in it.
The Court held that what was sold to the petitioners was the right to catch and carry away fish in specific sections of the lake for a specified future period and that this amounted to a licence to enter on the land coupled with a grant to catch and carry away the fish which right was a profit and in England it would be regarded as an interest in land because it was a right to take some profit of the soil 127 for the use of the owner of the right in and India it would be regarded as a benefit arising out of the land and as such would be immovable property.
The Court then pointed out that fish did not come under the category of property excluded from the definition of "immovable property".
The Court further held that if a profit a prendre is regarded as tangible immovable property, then the 'property ' being over Rs. 100 in value, the document creating such right would repuire to be registered, and if it was intangible immovable property, then a registered instrument would be necessary whatever the value; but as in the case before the Court the sales were all oral and therefore, there being neither writing nor registration, the transactions passed no title or interest and accordingly the petitioners had no fundamental rights which they could enforce, Ananda Behera 's Case was the first decision in which Chhotabhai 's Case was distinguished.
The relevant passage in the judgment (at pages 9234) is as follows: "It is necessary to advert to Firm Chhotabhai Jethabai Patel & Co. vs The State of Madhya Pradesh and explain it because it was held there that a right to pluck, collect and carry away ' tendu leaves does not give the owner of the right any proprietary interest in the land and so that sort of right was not an 'encumbrance ' within the meaning of the Madhya Pradesh Abolition of Proprietary Rights Act.
But the contract there was to 'pluck, collect and carry away, the leaves.
The only kind of leaves that can be 'plucked ' are those that are growing on trees and it is evident that there must be a fresh drop of leaves at periodic intervals.
That would make it a growing crop and a growing crop is expressly exempted from the definition of 'immovable property ' in the .
That case is distinguishable and does not apply here".
The next decision which was cited and on which a considerable debate took place at the Bar was Shrimati Shantabhai vs State of Bombay & Others.
The faces in that case were that by an unregistered document the petitioner 's husband had granted to her in consideration of a sum of Rs. 20,000 the right to take and appropriate all kinds of wood from certain forests in his Zamindari.
On the coming into force of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, all proprietary rights in land vested in the State of Madhya Pradesh and the petitioner 128 could no longer cut any wood.
She thereupon applied to the Deputy Commissioner and obtained from him an order permitting her to work the forest and started cutting the trees.
The Divisional Forest Officer took action against her and passed an order directing that the cut materials be forfeited.
She made representations to the Government and they proving fruitless, she filed in this Court a petition under Article 32 of the Constitution of India alleging breach of her fundamental rights under Article 19 (1) (f) and (g) of the Constitution.
Four of the five learned Judges who heard the case pointed out that the foundation of the petitioner 's claim was an unregistered document and that it was not necessary to determine the true meaning and effect thereof for whatever construction be put on it, the petitioner could not complain of breach of any of her fundamental rights.
The majority of the learned Judges held that if the document were considered as conveying to the petitioner any part or share in her husband 's proprietary right, no such part or share was conveyed to her as the document was not registered and assuming that any such part or share was conveyed, it had become vested in the State under section 3 of the said Act; if the document were considered as a licence coupled with a grant, then the right acquired by the petitioner would be either in the nature of a profit a prendre which being an interest in land was immovable property and would require registration and as the document was not registered, it did not operate to transmit to her any such profit a prendre as held in Ananda Behera 's Case; and if the document were construed as conferring a purely personal right under a contract, assuming without deciding that a contract was property" within the meaning of Article 19(1)(f) and 31(1) of the Constitution, she could not complain as the State had not acquired or taken possession of the contract which remained her property and as the State was not a party to the contract and claimed no benefit under it, the petitioner was free to sue the grantor upon that contract and recover damages by way of compensation; and assuming the State was also bound by the contract, she could only seek to enforce the contract in the ordinary way and sue the State if so advised and claim whatever damages or compensation she might be entitled to for the alleged breach of it.
After so holding the majority of the learned Judges observed (at page 269): "This aspect of the matter does not appear to have been brought to the notice of this when it decided the case 129 of Chhotobhai Jethabai Patel and Co. vs The State of Madhya Pradesh and had it been so done, we have, no doubt that case would not have been decided in the way it was done." Unlike the majority of the Judges, Vivian Bose, J,.
in his separate judgment considered in detail the nature of the document in that case.
Vivian Bose, J,.
pointed out the distinction between standing timber and a tree.
We have earlier extracted those passages from the learned Judge 's judgment.
The learned Judge then pointed out that the duration of the grant was for a period of twelve years and that it was evident that trees which would be fit for cutting twelve years later would not be fit for felling immediately and; therefore, the document was not a mere sale of trees as wood.
Vivian Bose, J,.
held that the transaction was not just a right to cut a tree but also to derive a profit from the soil itself; in the shape of the nourishment in the soil that went into the tree and made it to grow till it was of a size and age fit for felling as timber and if already of that size, in order to enable it to continue to live till the petitioner chose to fell it The learned judge, therefore, held that though such trees as can be regarded as standing timber at the date of the document, both because of their size and girth and also because of the intention to fall at an early date would be movable property for the purposes of the and the , the remaining trees that were covered by the grant would be immovable property, and as the total value was Rs. 26,000, the deed required registration and being unregistered, it did not pass any title or interest and, therefore, as in Ananda Behera 's Case the petitioner had no fundamental right which she could enforce.
According to learned Counsel for the Appellant, the judgment of Vivian Bose, J,.
in that case was not the judgment of the Court since the other learned Judges expressly refrained from expressing any opinion as to the actual nature of the transaction under the document in question.
Learned Counsel submitted that what the Court really held in that case was that there was no breach of any fundamental right of the petitioner which would entitle her to approach this Court under Article 32 of the Constitution, and this decision was, therefore, not an authority for the proposition that a document of the type before the Court was a grant of a profit a prendre as held by Vivian Bose.
J It is true as contended by learned Counsel 130 that the majority expressly refrained from deciding the nature of the document because, as it pointed out, in any view of the matter, the petition would fail and it would, therefore, be difficult to say that what Vivian Bose, J,.
held was that the decision of the Court as such.
However, the judgment of Vivian Base, J., is a closely reasoned one which carries instant conviction and cannot, therefore, be lightly brushed aside as learned Counsel has attempted to do.
It is also pertinent to note that the majority in that case pointed out the principal errors into which the Court had fallen in Chhotabhai 's Case and disapproved of what was decided in that case.
The decision to which we must now advert is Mahadeo vs The State of Bombay (and connected petitions).
The facts in that case were that some proprietors of Zamindaris situate in territories, then belonging to the State of Madhya Pradesh and on the reorganization of States transferred to the erstwhile State of Bombay, granted to the petitioners right to take forest produce, mainly tendu leaves, from forests included in their Zamindaris.
The agreements conveyed to the petitioners in addition to the tendu leaves other forest produce like timber, bamboos, etc., the soil for making bricks, and the right to build on and occupy land for the purpose of their business.
In a number of cases, these rights were spread over many years.
Some of the agreements were registered and the others unregistered.
After the coming into force of the Madhya Pradesh Abolition of Proprietary Right 's (Estates, Mahals, Alienated Lands) Act, 1950, the Government disclaimed the agreements and auctioned the rights afresh, acting under section 3 of the said Act.
The petitioners thereupon filed petitions under Article 32 of the Constitution of India challenging the legality of the action taken by the Government on the ground that it was an invasion of their fundamental rights.
The main contention of the petitioners was that the agreements were in essence and effect licenses granted to them to cut, gather and carry away the produce in the shape of tendu leaves, or lac, or timber or wood, and did not grant to them any "interest in land" or 'benefit to arise out of land ' and the object of the agreements could, therefore, only be described as sale of goods as defined in the Indian Sale of Goods Act.
In support of that contention, the petitioners relied upon the decision in Chhotabhai 's case.
The Court examined the terms of the agreements in question and concluded that under none of them was there a naked right to take leaves of tendu trees together with a right of ingress and of regress 131 from the land but there were further benefits including the right to accupy the land, to erect buildings and to take other forest produce not necessarily standing timber, growing crop or grass.
The Court further held that whether the right to the leaves could be regarded as a right to a growing crop had to be examined with reference to all the terms of the documents and all the rights conveyed thereunder and that if the right conveyed comprised more than the leaves of the trees, it would not be correct to refer to it as being in respect of growing crops simpliciter.
On an examination of the terms of the documents and the rights conveyed thereunder the Court came to the conclusion that what was granted to the petitioners was an interest in immovable property which was a proprietary right within the meaning of the said act and, therefore, it vested in the State.
With reference to Chhotabhai Case relied upon by the petitioners.
Hidayatullah, J., as he then was , speaking for the court, said (at page 346): " It is clear from the foregoing analysis of the decision in Chhotabhai 's Case that on a construction of the documents there under consideration an adopting a principle enunciated by the privy Council in Mohanlal Hargovind of Jubbalpure vs Commissioner of Income tax Central Provinces and Berar and relying upon a passage each in Benjamin on Sale and the well known treatise of Baden Powell, the Bench came to the conclusion that the documents there under consideration did not create any interest in land and did not constitute any grant of any proprietary interest in the estate but were merely contracts or licenses given to the petitioners to cut, gather and carry away the produce in the shape of tendu leaves, or lac, or timber or wood '.
But then, it necessarily followed that the Act did not purport to affect the petitioners ' rights under the contracts or licences.
But what was the nature of those rights of the petitioners? It is plain, that if they were merely contracual rights, then as pointed out in the two later decisions, in Ananda Behera vs The State of Orissa, Shantabai 's case, the State has not acquired or taken possession of those rights but has only declined to be bound by the agreements to which they were not a party.
If, on the other hand, the petitioners were mere licensees, then also, as pointed out in the second of the two cases cited, the licences came to T l 132 an end on the extinction of the title of the licensors.
In either case there was no question of the breach Or any fundamental right of the petitioners which could support the petitions which were presented under article 32 of the Constituion.
It is this aspect of the matter which was not brought to the notice of the Court, and the resulting omission to advert to it has seriously impaired, if not completely nullified, the effect and weight of the decision in Chhotabhai 's case as a precedent.
" We may also usefully reproduce the following passages (at page 354) from the concluded portion of the judgment: "From this, it is quite clear that forests and trees be longed to the proprietors, and they were items of proprietary rights. " "If then the forest and the trees belonged to the proprietors as items in their 'proprietary rights ', it is quite clear that these items of proprietary rights have been transferred to the petitioners.
Being a 'proprietary right ', it vests in the State under sections 3 and 4 of the Act.
The decision in Chhotabhai 's case treated these rights as bare licences, and it was apparently given perincuriam and cannot; therefore; be followed." (Emphasis supplied) Faced with this decision, learned Counsel for the Appellant sought to distinguish it on the ground that the terms of the agreements in that case were different from the terms of the Bamboo Contract.
We are unable to accept this submission.
It is unnecessary to set out in detail the terms of the agreements in Mahadeo 's Case.
The differences sought to be pointed out by learned Counsel for the Appellant are unsubstantial and make no difference.
The essential and basic features are the same and the same interpretation as was placed upon the agreements in Mahadeo 's Case must, there fore, apply to the Bamboo Contract.
In State of Madhya Pradesh vs Yakinuddin(1) the respondents had entered into agreements with the former proprietors of certain estates in the State of Madhya Pradesh acquiring the right to pro pagate lac, collect tendu leaves and gather fruits and flowers of Mahua leaves.
Some of these documents were registered and others (1) ; 133 unregistered.
On the coming into force of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, the State of Madhya Pradesh took possession of all the villages comprised in the respective estates of the proprietors who had granted the aforesaid rights to the respondents and refused to recognize the respondents ' rights.
The respondents thereupon filed petitions under Article 226 of the Constitution in the High Court of Madhya Pradesh and the High Court relying upon the decision in Chhotabhai 's Case, granted to the respondents the reliefs claimed by them.
A Bench of five Judges of this Court allowed the appeals filed by the State of Madhya Pradesh.
In its judgment, this Court considered its earlier decisions in Shantabai vs State of Bombay and others and Mahadeo vs the State of Bombay and observed as follows (at page 21): "In view of these considerations, it must be held that these cases are equally governed by the decisions aforesaid of this Court, which have overruled the earliest decision in the case of Chhotabhai Jethabai Patel and Co. vs The State of Madhya Pradesh.
In Board of Revenue Etc.
vs A.M. Ansari Etc.(1) the respondents were the highest bidders at an auction of forest produce, namely, timber, fuel, bamboos, minor forest produce, bidi leaves, tanning barks, parks, mohwa, etc., held by the Forest Department of the Government of Andhra Pradesh.
They were called upon to pay in terms of the conditions of sale stamp duty on the agreements to be executed by then as if these documents were leases of immovable property.
The respondents there upon filed petitions under Article 226 of the Constitution in the High Court of Andhra Pradesh.
In the said petitions, the State contended that under the agreements, the respondents had acquired an interest in immovable property.
The High Court held in favour of the respondents.
The State went in appeal to this court.
On consideration of the terms of the agreements, this Court held that the agreements were licences and not leases.
The Court laid emphasis upon three salient features of those agreements for reaching its conclusion, namely, (l) that these were agreements of short duration of nine lo ten months, (2) that they did not create any estate or interest in the (1) (1976] 3 S.C.R 661.
H 134 land, and (3) that they did not grant exclusive possession and control of the land to the respondents but merely granted to them the right to pluck, cut, carry away and appropriate the forest produce that might have been existing at the date of the agreement or which might have come into existence during the short period of the currency of the agreements, and that the right of the respondents to go on the land was only ancillary to the real purpose of the contract.
The Court observed as follows (at page 667): ".
Thus the acquisition by the respondents not being an interest in the soil but merely a right to cut the fructus naturales, we are clearly of the view that the agreements in question possessed the characteristics of licences and did not amount to leases so as to attract the applicability of Article 31(c) of the Stamp Act".
"The conclusion arrived at by us gains strength from the judgment of this Court in Firm Chhotabhai jethabai Patel and Co. & Ors.
The State of Madhya Pradesh where contracts and agreements entered into by person with the previous proprietors of certain estates and mahals in the State under which they acquired the rights to pluck, collect and carry away tendu leaves, to cultivate, culture, and acquire lac, and to cut and carry away teak and timber and miscellaneous species of trees called hardwood and bamboos were held in essence and effect to be licences." "There is, of course, a Judgment of this Court in Mahadeo vs State of Bombay where seemingly a somewhat different view was expressed but the facts of that course were quite distinguishable.
In that case apart from the bare right to take the leaves of tendu trees, there were further benefits including the right to occupy the land to erect buildings and to take away other forest produce not necessarily standing timber, growing crop or grass and the rights were spread over many years.
" We fail to see how this authority in any way supports the case of the Appellant before us or resuscitates the authority of Chhotabhai 's Case.
In Ansari 's Case the Court seems to have assumed that Chhotabhai 's Case dealt with short term contracts while, as we have seen above, most of the contracts in Chhotabhai 's 135 Case were of far greater duration extending even to fifteen years, nor was the Court 's attention drawn to the case of State Or Madhya Pradesh vs Yakinuddin.
While the agreement in Ansari 's Case was a mere right to enter upon the land and take away tendu leaves, etc., the right under the Bamboo Contract is of a wholly different nature.
Further, the question whether the agreements were a grant of a profit a prendre or a benefit to arise out of land was not raised and, therefore, not considered in Ansari 's Case and the only point which fell for decision by the Court was whether the agreements were licences or leases.
In fact, another question which arose in that case was whether the respondents were liable to pay the amounts demanded from them as reimbursement of sales tax.
Affirming the decision of the High Court on this point, the Court held that the Forest Department did not carry on any business s by holding auctions of forest produce and was, therefore, not a dealer within the meaning of that term as defined in the Andhra Pradesh General Sales Tax Act, 1957.
The question whether the agreements were contracts of sale of goods was, however, not considered in that case We now come to the case of State of Madhya Pradesh and others vs Orient Paper Mills Ltd., the second of the two cases on which learned Counsel for the Appellant relied so strongly in support of his submission that the Bamboo Contract was a contract of sale of goods.
The facts in that case as appearing from the judgment of the High Court reported as Orient Paper Mills Ltd. vs State of Madhya Pradesh and Others(l) were that the President of Indicating on behalf of the former Part State of Vindhya Pradesh had entered into an agreement with the respondent.
The said agreement was a registered instrument and was styled as a lease and under it the respondent acpuired the right for a period of twenty years with an option of renewal for a further period of twenty years to enter upon "the leased area" to fell, cut or extract bamboos and salai wood and to remove, store and utilize the same for meeting the fuel requirement of its paper mill.
A copy of the said agreement has been produced before us.
Some of the terms of the said agreement were the same as those contained in the Bamboo Contracts as also in the case of Mahadeo vs The State of Bombay.
The said agreement provided for payment of royalty including a minimum royalty.
It also conferred upon the respondent the right to take on lease such (1) [1972] 28 S.T.C. 532.
136 suitable site or sites as were at the disposal of the State Government within "the leased area" for the erection of store houses, sheds, depots, bungalows, staff offices, agencies and other buildings of a like nature bonafide required for the purposes of its business connected with the said agreement as also a right to make dams across reams, cut canals, make water course, irrigation works, construct roads, railways and tramways and do any other work useful or necessary for the purposes of its business connected with the said agreement in or upon "the leased area" in terms very similar to those in the Bamboo Contract.
After the States Reorganization Act, 1956, came into force, the territories comprised in the State of Vindhya Pradesh became part of the new State of Madhya Pradesh.
At the date when the said agreement was entered into the . P. and Berar Sales Tax Act, 1947, was in force in the State of Vindhya Pradesh and the definition of "goods" contained in clause (g) of section 2 of that Act as modified and in force in that State excluded from the purview of the said Act foresr contracts that gave a right to collect timber or wood to forest produce.
The C. P. and Berar Sales Tax Act was repealed by the Madhya Pradesh General Sales Tax Act, 1958, with effect from April 1, 1959, and the new Act did not contain any exclusion of forest contracts from the definitions of ' goods".
Further, the term "dealer" as defined in the 1958 Act included the Central Government and the State Government or any of its departments.
The Forest Department of the State Government was, however, exempted from the payment of sales tax for the period April 1, 1959, to November 2, 1962.
After the period of the said exemption expired, the Forest Department got itself registered as a dealer and the Divisional Forest Officer called upon the respondent to reimburse to him the amount which, according to him, he was liable to pay as sales tax in respect of the transaction covered by the said agreement.
Challenging his right to do so, the respondent filed in the High Court of Madhya Pradesh a writ petition under Article 226 of the Constitution.
In the said writ petition the respondent contended that the transaction covered by the said agreement was not a sale of goods and accordingly, no sales tax was payable in respect of bamboos and salai wood extracted by the respondent thereunder, that the said agreement did not provide for the recovery of the amount of sales tax from the respondent, and that neither the State Government nor the Forest Department of that Government was a "dealer" and that even if the sales tax was payable, it was not recoverable as arrears of land 137 revenue.
The High Court held that the transaction was one of sale of goods and that if sales tax was payable it would be recoverable under section 64A of the Sale of Goods Act, 1939, but the State Government or the Forest Department could not merely by selling the forest produce grown on its own land be regarded as carrying on any business of buying, selling, supplying or distributing goods and, therefore, in respect of mere sales of forest produce neither the State Government nor the Forest Department was a "dealer" within the meaning of that term as defined in the 1958 Act.
In coming to the conclusion that the said agreement was a contract of sale of goods, the High Court proceeded upon the basis that what it had to consider was "the stage when bamboo and salai wood have already been felled and appropriated ' '.
By reason of the judgment of the High Court, the definition of the term "dealer" was amended with retrospective effect by the Madhya Pradesh General Sales Tax (Amendment and Validation) Act, 1971, so as to nullify the finding of the High Court that neither the State Government nor its Forest department was a "dealer".
The State of Madhya Pradesh as also the respondent came in appeal to the Supreme Court.
The appeals were heard in the Court by a Division Bench of two learned Judges.
At the hearing of the appeals, the respondent desired to challenge the vires of the amending Act, but in view of the Presidential Proclamation suspending the operation of Article 14, it could not do so and the court held that after the proclamation lapsed, it was open to the respondent to take up the point but so far E the appeals were concerned that challenge was not available and the appeals must be decided on the basis that the amendment was valid and constitutional.
The main point before this Court, therefore, was whether the said agreement was a lease as it was styled or a simple sale of standing timber coupled with a licence to enter and do certain things on another 's land.
The Court held that the label given to a document was not conclusive of its real nature and that under the said agreement, possession of the land was not given to the respondent as it would have been had the said agreement been a lease and that as the terms of the said agreement showed, it conferred in substance a right to cut and carry away timber of specified species G and till the trees were cut, they remained the property of the owner, namely, the State, and that once the trees were severed, the property in them passed to the respondent.
The Court further observed that the term used in the said agreement, namely, "royalty", was "a feudalistic euphemism for the 'price ' of the timber".
138 We are unable to agree with the interpretation placed by the Court on the document in the Orient Paper Mill* ' Case.
We find that in that case this Court as also the High Court adopted a wrong approach in construing the said document.
It is a well settled rule of interpretation that a document must be construed as a whole.
This rule is stated in Halsbury 's Laws of England, Fourth Edition, Volume 12, paragraph 1469 at page 602, as follows: "Instrument construed as whole.
It is a rule of construction applicable to all written instruments that the instrument must be construed as a whole in order to ascertain the true meaning of its several clauses, and the words of each clause must be so interpreted as to bring them into harmony with the other provisions of the instrument, if that interpretation does no violence to the cleaning of which they are naturally susceptible.
The best construction of deeds is to make one part of the deed expound the other, and so to make all the parts agree.
Effect must as far as possible, be given to every word and every clause".
In Mahadeo vs State of Bombay a five Judge Bench of this Court categorically held (at page 349) that "Whether the right to the leaves can be regarded as a right to a growing crop has, however, to be examined with reference to all the terms of the documents and all the right.
conveyed thereunder".
In spite of this clear and unequivocal pronouncement by a five Judge Bench of this Court, the learned Judges of the High Court who decided the Orient Paper Mills ' Case held (at page 538) that "we have to consider the stage when bamboos and salai wood have already been felled and appropriated", while a two Judge Bench of this Court evolved for itself in the appeal from that judgment a rule of interpretation which was thus stated (at page 152) by Krishna Iyer, J., who spoke for the Court: "The meat of the matter is the judicial determination of the true character of the transaction of 'lease ' from the angle of the MPGST Act and the Sale of Goods Act whose combined operation is pressed into service for making the tax exigible from the Forest Department and, in turn, from the respondent mills.
It is the part of judicial prudence to 139 decide an issue arising under the specific statute by confining the focus to that statuary compass as far as possible.
Diffusion into wider jurisprudential areas is fraught with unwitting conflict or confusion.
We, therefore, warn ourselves against venturing into the general law of real property except for minimal illumination thrown by rulings cited.
In a large sense, there are no absolutes in legal propositions and human problems and so, in the jural cosmos of relativity, our observations here may not be good currency beyond the factual legal boundaries of sales tax situations under a specific statute.
" A little later the learned Judge stated (at page 157) as follows: "We may also observe that the question before us is not so much as to what nomenclature would aptly describe the deed but as to whether the deed results in sale of trees after they are cut.
The answer to that question, as would appear from the above has to be in the affirmative".
The above rule enunciated by this Court in that case falls into two parts, namely, (I) a document should be so interpreted as to bring it within the ambit of a particular statute relevant for the purpose of the dispute before the Court, and (2) in order to do so, the court can look at only such of the clauses of the document as also to just one or more of the consequences flowing from the document which would fit in with the interpretation which the court wants to put on the document to make that statute applicable.
The above principle of interpretation cannot be accepted as correct in law.
It is fraught with considerable danger and mischief as it may expose documents to the personal predilections and philosophies of individual judges depending upon whether according to them it would be desirable that documents of the type they have to construe should be made subject to a particular statute or not.
The result would be that a document can be construed as amounting to a grant of a benefit to arise out of land when the question before the Court is whether proprietary rights and interests in estates have been abolished and the same document or a document having the same tenor could be construed as a contract of sale of goods when the question Is whether the amounts payable thereunder are exigible to sales tax or purchase tax, making the interpretation of the document dependent upon the personal views of the judges with respect to the 140 legislation in question.
In the very case which we are considering, namely, the Orient Paper Mill 's Case as shown by the very first sentence in the judgment, this Court obliquely expressed its disapproval of the transactions of the type represent by the document before it.
That sentence is as follows (at page 150) .
"The State of Madhya Pradesh, blessed with abundant forest wealth, whose exploitation, for reasons best known to that government, was left in part to the private sector.
viz., the respondent, Orient Paper Mills " We may point out here that in making this observation the Court overlooked three important aspects of the matter, namely, (I) it was a matter of policy for the State to decide whether such transactions should be entered into or not, (2) the transaction was entered into by the State so that a paper mill could be started in the State as shown by the various terms of the said agreement and thus was an encouragement to setting up of industries in the State, and (3) the transaction ensured employment for the people of the area because the said agreement expressly provided that the respondent was to engage minim m 50 per cent of the labour for the working of the contract area from the local source if available.
Just as a document cannot be interpreted by picking out only a few clauses ignoring the other relevant ones, in the same way the nature and meaning of a document cannot be determined by its end result or one of the results or consequences which flow from it.
If the second part of the above rule were correct, the result would be startling.
There would be almost no agreement relating to immovable property which cannot be construed as a contract of sale of goods.
Two instances would suffice to show this.
If a man were to sell his building to another and the deed of sale were to provide that the building should be demolished and reconstructed and the price should be paid to the vendor partly in money and partly by giving him accommodation in the new building, according to this rule of interpretation adopted by the Court in the Orient Paper Mills Case it would for the purpose of sales tax be a sale of goods because the old building when demolished would result in movable property, namely, debris, doors, windows, water pipes: drainage pipes, water tanks, etc., which would be sold by the purchaser as movables.
Similarly, if a man were to give a lease of his orchard or field, the lessee would be entitled to the fruits already in existence as also to 141 the fruits which would come into existence in the future and equally in the case of a field the same would be the case wlth respect to the crop growing in the field as also the crops to grow thereafter.
The fruits and crop, whether existing or future, when plucked or harvested, would be movable property and would be sold as such by the lessee; but on the second part of the rule of interpretation laid down the Orient Paper Mills ' Case, the document, indisputably a lease of immovable property, would for the purposes of sales tax law be a sale of goods.
In looking merely at the end result of the agreement before it, namely, that the bamboos would be cut and then would be goods in the hands of the respondent and holding therefrom that the transaction was exigible to sales tax, the Court overlooked what had been firmly established by the decision of the five Judge Bench of this Court in State of Madras vs Gannon Dunkerly Co. (Madras) Ltd. that both the agreement and the sale must relate to the same subject matter and, therefore, there cannot be an agreement relating to one kind of property and a sale as regards another.
This principle has been consistently followed and applied by this Court (see, for instance.
Commissioner of Sales Tax.
M. P. vs Purshottam Premji).(1) Incidentally, we may also point out that in the Orient Paper Mills Case this Court itself had reservations as regards what it was deciding as is shown 'by its statement that "in the journal cosmos of relativity, our observations here may not be good currency beyond the factual legal boundaries of sales tax situations under a specific statute.
" We are constrained to observe that they are not "good currency" so far as even those situations are concerned.
It is true that the nomenclature and description given to a contract is not determinative of the real nature of the document or of the transaction thereunder.
These, however, have to be determined from all the terms and clauses of the document and all the rights and results flowing therefrom and not by picking and choosing certain clauses and the ultimate effect or result as the Court did in the Orient Paper Mills ' Case.
Thus, in coming to the conclusion that the term "royalty" used in the document before it was merely "a feudalistic euphemism for the 'price ' of the timber", the Court overlooked the fact that the amount of royalty payable by the respondent was consideration for all the rights conferred upon the respondent under the contract though it was to be calculated according to the quantity (1) [1970] 26 S.T.C. 38, 41 S.C. 142 of the bamboos felled, and the Court also overlooked the fact that this was made further clear by the provision for payment of a minimum royalty.
It is also true that an interpretation placed by the court on a document is not binding upon it when another document comes to be interpreted by it but that is so where the two documents are of different tenors and not where they have the same tenor.
On the ground that they dealt with the general law of real property, the Court in Orient Paper Mils ' case did not advert to the earlier decisions of this Court relating to documents with similar tenor even though those cases referred to in the judgment of the Madhya Pradesh High Court under appeal before it.
In view of this, the Orissa High Court in the judgment under appeal before us held that the Orient Paper Mill 's Case was decided by this Court per in curium because it did not take into consideration decisions of larger Benches of this Court.
In Union of India and another vs K. section) Subramanian(1) this Court held as follows: "But, we do not think that the High Court acted correctly in skirting the views expressed by larger benches of this Court in the manner in which it had done this.
The proper course for a High Court, in such a case, is to try to find out and follow the opinions expressed by larger benches of this Court in preference to those expressed by smaller benches of the Court.
That is the practice followed by this Court itself.
The practice has now crystallized in to rule of law declared by this Court.
" Had the Court looked at these decisions of larger Benches, it would have appreciated that the only question before it could not be whether the document was a lease or a contract of sale of goods and that even though the document was not a lease it could be a grant of a profit a prendre and that where there is a grant of a profit a prendre that is, a benefit to arise out of land, it is immaterial whether the possession of the land is given to the grantee or whether the grantee is given only a licence to enter upon the land to receive the benefit.
The bacic and salient features of the agreement before the Court in the Orient Paper Mills. ' Case were the same as in the case of Mahadeo state of Bombay and this Court was not (1) (1977) I S.C.R. 87, 92, 143 justified in not adverting to that case and the other cases referred to by us earlier on the ground that these cases dealt with the general law of real property.
A chameleon may change its surroundings but document is not a chameleon to change its meaning according to the purpose of the statute with reference to which it falls to be interpreted and if documents having the same tenor are not to be construed by courts in the same way, it would make for great uncertainty and would introduce confusion, leaving people bewildered as to how they should manage their affairs so as to make their transactions valid and legal in eye of the law.
The authorities discussed above show that the case of Firm Chhotabhai Jethabai Patel & Co. vs The State of Madhya Pradesh is not good law and has been overruled by decisions of larger Benches of this Court.
They equally show that the case of State of Madhya Pradesh vs Orient Paper Mills Ltd., is also not good law and that this decision was given per incurium and laid down principles of interpretation which are wrong in law and cannot be assented to.
The discussion of the above authorities also confirm us in our opinion that the Bamboo Contract is not a contract of sale of goods but is a grant of a Profit a prendre, that is, of a benefit to arise out of land and that it is not possible to bifurcate the Bamboo Contract into two: one for the sale of bamboos existing at the date of the contract and the other for the sale of future goods, that is, of bamboos to come into existence in the future.
In order to ascertain the true nature and meaning of the Bamboo Contract, we have to examine the said contract as a whole with reference to all its terms and all the rights conferred by it and not with reference to only a few terms or with just one of the rights flowing therefrom.
On a proper interpretation, the Bamboo Contract dose not confer upon the Respondent Company merely a right to enter upon the land and cut bamboos and take them away.
In addition to the right to enter upon the land for the above purpose, there are other important rights flowing from the Bamboo Contract it which we have already summarized earlier and which make in clear that what the Bamboo Contract granted was a benefit to arise out of land which is an interest in immovable property.
The attemp on the part of the State Government and the officer of its Sales Tax Department to bring to tax the amounts payable under the Bmboo 144 Contract was, therefore, not only unconstitutional but ultra vires the Orissa Act.
Works Contract The only point which now remains to be considered is the one canvassed by the contesting Respondents namely, that the Bamboo Contract as also the Timber Contracts arc works contracts and the amounts payable thereunder cannot, therefore, be made exigible to any tax under the Orissa Act.
A works contract is a compendious term to describe conveniently a contract for the performance of work or services in which the supply of materials or some other goods is incidental.
The simplest example of this type of contract would be where an order is given to a tailor to make a suit from suiting supplied by the customer.
This would be a contract of work or servies in which the suyply of materials, namely, thread, lining, and buttons used in making the suit, would be mrely incidental.
Similarly, if an artist is commissioned to paint a portrait, it would be a contract of work and services in which the canvass on which the portrait is painted and the paint used in painting the portrait would be merely incidental.
In Commissioner of Sale Tax, M.P. vs Pershottam Premji, this Court pointed out the distinction between a works contract and a contract for the sale of goods as follows (at page 41): "The primary difference between a contract for work or service and a contract for sale of goods is that in the former there is in the person performing work or rendering service no property in the thing produced as a whole notwithstanding that a part or even the whole of the materials used by him may have 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, at some time before delivery, and the property therein passes only under the contract relating thereto to the other party for price " As pointed out above the Timber Contracts are agreements relating to movables while the Bamboo Contract is a grant of an interest in immovable property.
The question, therefore, whether there is a works contract or a contract of sale of goods can arise only with respect to the Timber Contracts.
but the very meaning 145 of a works contract would show that the Timber Contracts cannot be works contracts.
The payee of the price, namely, the Government has not undertaken to do any work or labour.
The work or labour under the Timber Contracts is to be done by the payer of the price, namely, the forest contractor, that is, the Respondent Firm.
It is the Respondent Firm which has to enter upon the land and to fell the standing trees and to remove them.
Assuming for the sake of argument that the Bamboo Contract were a contract relating to movables, the same position would apply to it.
This contention of the Respondents is, therefore, without any substance.
Conclusions To summarize our conclusions (1) The impugned provisions, namely, (1) Notification S.R.O. No. 372177 dated May 23, 1977, (2) Notification S.R.O. No. 373177_ dated May 23, 1977, (3) Entries Nos. 2 and 17 in the Schedule to Notification No. 67178 C.T.A. 135177 (Pt.) F (S.R.O. No.900/77) dated December 29, 1977, and (4) Entries Nos. 2 and 17 in the Schedule to Notification No. 67181 C.T.A. 135/77 F (S.R.O. No.901/77) dated December 29, 1977, levying purchase tax at the rate of ten per cent on the purchase of , bamboos agreed to be severed and standing trees agreed to ` be severed, are not ultra vires either Entry 54 in List II in the Seventh Schedule to the Constitution of India or the 'Orissa Sales Tax Act, 1947, but are constitutional and valid.
(2) Under the impugned provisions the taxable event is not an agreement to sever standing trees or bamboos but the purchase of standing trees or bamboos agreed to be severed.
(3) The absence in the impugned provisions of the words "before sale or under the contract of sale" is immaterial for the impugned provisions read as a whole clearly show that the severance of standing trees or bamboos has to be under the contract of sale and before the purchase thereof has been completed and not before sale of such trees or bamboos.
146 (4) The subject matter of the impugned provisions is goods and the tax that is levied thereunder is on a completed purchase of goods.
(5) When under section 3 B of the Orissa Sales Tax Act, 1947, any goods are declared to be liable to tax on the turnover of purchases, such goods automatically cease to be liable to sales tax by reason of the proviso to that section.
(6) The word "supersession" in the Notifications dated December 29, 1977, is used in the same sense as the words "repeal and replacement" and, therefore, does not have the effect of wiping out the tax liability under the previous notifications.
All that was done by using the words "in supersession of all previous notifications" in the Notifications dated December 29, 1977, was to repeal and replace previous notifications and not to wipe out any I) liability incurred under the previous notifications.
The Timber Contracts are not works contracts but are agreements to sell standing timber.
Under the Timber Contracts the property in the trees which were the subject matter of the contracts passed to the Respondent Firm, Messrs M.M. Khara, only in the trees which were felled, that is, in timber, after all the Conditions of the contract had been complied with and after such timber was examined and checked and removed from the contract area.
The impugned provisions, therefore, did not apply to the transactions covered by the Timber Contracts.
(9) The dictionary meaning of a word cannot be looked at where that word has been statutorily defined or judicially interpreted but where there is no such definition or interpretation, the court may take the aid of dictionaries to ascertain the meaning of a word in common parlance, bearing in mind that a word is used in different senses according to its context and a dictionary gives all the meanings of a word, and the court has, therefore, to select particular meaning which is relevant to the content in which it has to interpret that word 147 (10) Timber and sized or dressed logs are one and the same commercial commodity.
Beams, rafters and planks would also be timber.
(11) As the sales of dressed or sized logs by the Respondent Firm have already been assessed to sales tax, the sales to the First Respondent Firm of timber by the State Government from which logs were made by the Respondent Firm cannot be made liable to sales tax as it would amount to levying tax at two points in the same series of sales by successive dealers, assuming without deciding that the retrospectively substituted definition of "dealer" in clause (c) of section 2 of the Orissa Sales Tax Act, 1947, is valid.
(12) During the period June 1, 1977, to December 31, 1977, the sales of logs by the Respondent Firm would be liable to tax at the rate of ten per cent.
Assuming that these sale s have been assessed to tax at the rate of ten per cent, by reason of the period of limitation prescribed by section 12(8) of the Orissa Sales Tax Act, 1947, the Respondent Firm 's assessment for the relevant period cannot now be reopened to reassess such sales at ten Per cent.
(13) The Bamboo Contract is not a lease of the contract ' areas to the Respondent Company, The Titaghur Paper Mills (Company Limited.
(14) The Bamboo Contract is also not a grant of an easement to the Respondent Company.
(15) The Bamboo contract is a grant of a profit a prendre which in Indian law is a benefit to arise out of land and thus creates an interest in immovable property.
(16) Being a benefit to arise out of land, any attempt on the Part of the State Government to tax the amounts payable under the Bamboo Contract would be not only ultra vires the Orissa Act but also unconstitutional as being beyond the State 's taxing power under Entry 54 in List II in the seventh Schedule to the Constitution of India.
148 (17) The case of Firm Chhotabhai Jethabai Patel & Co. vs The State of Madhya Pradesh is not good law and has been overruled by decisions of larger Benches of this Court as pointed out by this Court in State of Madhya Pradesh vs Yakinuddin.
(18) The case of State of Madhya Pradesh & Ors vs Orient Paper Mills Ltd. is also not good law as that decision was given per incurium and laid down principles of interpretation which are wrong in law.
(19) The real nature of a document and the transaction thereunder have to be determined with reference to all the terms and clauses of that document and all the rights and results flowing therefrom.
On the above conclusions reached by us the judgment of the High Court in so far as it hold the impugned provisions to be unconstitutional and ultra vires the Orissa Sales Tax Act 1947, requires to be reversed.
This, however, does not mean that the writ petitions filed by the Respondent Company and the Respondent Firm in the High Court should be dismissed because in its writ petitions the Respondent Company had played for quashing the notice dated August 18, 1977, issued against it under Rules 22 and 28(2) of the Orissa Sales Tax Rules, 1947, and the Respondent Firm in its writ petition had prayed for setting aside the assessment order dated November 28, 1978, for the priod April 1, 1977, to March 31, 1978.
On the findings given by us the said notice must be quashed.
So far the said assessment order is concerned, as we have pointed out earlier, it is severable and does not require to be set aside in toto but only so far as it imposed purchase tax on the amounts paid by the Respondent Firm under the Timber Contract.
Though the High Court did not give these consequential reliefs in view of its findings that the impugned provisions were invalid, it becomes necessary for us to do so in order to do complete justice between the parties as we are entitled to do under Article 142 of the Constitution of India.
In the result, we reverse the judgment of the High Court in so for as it holds (1) Notification S.R.O. No. 372/77 dated May 23. 1977, issued under section 3 B of the Orissa Sales Tax Act, 1947, 149 (2) Notification S.R.O. No. 373/77 dated May 23, 1977, issued under the first proviso to sub section (1) of section 5 of the said Act prior to the amendment of the said sub section by the Orissa Sale Tax (Amendment) Act, 1978, which repealed and replaced the Orissa Sales Tax (Amendment) Ordinance, 1977, (3) Entries 2 and 17 in the Schedule to Notification No. 67178 C.T.A 135/77 (Pt.) F (S.R.O).
No. 900/77) dated December 29, 1977, issued under the said section 3 B and (4) Enteries No. 2 and 17 in the Schedule to Notification No. 67181 C.T.A. 135/77 F (S.R.O. No. 901/77) dated December 29, 1977, issued under sub section (1) of the said section S after its amendment by the Orissa Sales Tax (Amendment) Act, 1978, to be unconstitutional as being ultra vires Entry 54 in List II in the Seventh Schedule to the Constitution of India and as being ultra vires the Orissa Sales Tax Act, 1947, and we declare these provisions to be constitutional and valid.
In Civil Appeal No. 219 of 1982, we further quash and set aside the notice dated August 18, 1977, under Rules 22 and 28(2) of the Orissa Sales Tax Rules 1947, issued against the Respondent Company, The Titaghur Paper Mills Company Limited, and the assessment order, if any, made in pursuance thereof.
In Civil Appeal No. 220 of 1982, we further modify the assessment order dated November 28, 1978, for the period April 1, 1977, to March 31, 1978, made against Respondent Firm; Messrs M.M. Khara, by deleting therefrom the item of purchase tax on the amounts paid by the Respondent Firm under the Timber Contracts entered into by it with the State of Orissa and direct consequential modifications to be made therein.
As the real object of the State Government in making the mpugned provisions was to make exigible to purchase tax the amounts payable under the Bamboo Contracts and the Timber Contracts in which object it has failed, in our opinion, a fair order for costs would be that the parties should bear and pay their own costs of these Appeals and we direct accordingly.
| Section 3B of the Orissa Sales Tax Act 1917 empowers the State Government to declare from time to time any goods or class of goods to be liable to tax on turnover of purchases.
The proviso provides that no tax shall be payable on the sales of such goods or class of goods declared under this section.
Section 5(1) prior to its amendment by the Orissa Sales Tax (Amendment) Ordinance, 1977 provides that the tax payable by a dealer under the Orissa Act should be levied on his taxable turnover at such rate not exceeding thirteen percent and subject to such conditions as the State Government might from time to time by notification specify.
On May 23, 1977 the State Government issued two notifications.
Notification No. SRO 372/77 was made under section 3B amending the earlier notification dated April 23, 1976.
This notification made standing trees and bamboos agreed to be severed liable to tax on the turnover of purchase with effect from 27 June 1, 1977.
Notification SRO No. 373177 issued under the first proviso to section 5(1) of the Orissa Act amended with effect from June 1, 1977 the second of the two notifications of April 23, 1976 and directed that the tax payable by a dealer under the Orissa Act on account of purchase of bamboos agreed to be severed and standing trees agreed to be severed would be at the rate of 10%.
On December 29, 1977 the Orissa Sales Tax (Amendment) Ordinance, 1977 was promulgated amending the Orissa Act with effect from January, 1978.
With effect from the same date two notifications SRO No 900177 and SRO No. 901177 were issued; the first notification which was issued under the provisions of section 3B and in supersession of all previous notifications on the subject, declared that the goods mentioned in Column (2) of the schedule to the notification were liable to be taxed on the turnover of purchase with effect from January 1, 1978.
Entries 2 and 17 in the schedule of this notification specified "bamboos agreed to be severed" and "standing trees agreed to be severed" respectively.
Notification No. 901/77 issued under section 5 (1) was in supersession of all previous notifications in that regard.
The State Government, by this notification, directed that with effect from January l 1978 the tax payable by a dealer under the Orissa Act on account of purchase of goods specified in column (2) of the schedule to the notification would be at the rate specified against it in column (3) thereof.
The rate of purchase tax for bamboos agreed to be severed and standing trees agreed to be severed was prescribed at 10%.
The Ordinance was repealed and replaced by Orissa Sales Tax (Amendment) Act of 1978.
A large number of writ petitions were filed before the High Court impugning the notifications dated May 23, 1977 and December 29, 1977.
One group of petitioners consisted of those who had entered into agreements with the State for the felling, cutting, obtaining and removing bamboos from forest areas for the manufacture of paper (bamboo contracts), and the other group consisted of those who had entered into agreements for the purchase of standing trees (Timber Contracts).
The bamboo contracts were a grant of exclusive right and license to fell, i cut and remove bamboos from the forest.
Under the terms of auction the respondent was bound to pay a minimum royalty irrespective of the quantity of bamboos cut and removed.
The Governor of the State was called the "grantor" of the licence.
The bamboo contracts were in respect of different areas for periods ranging from 11 to 14 years with an option to renew the agreements for further periods.
The respondent in CA No. 219182 contended before the High Court that the subject matter of the Bamboo contract was not a sale or purchase of goods but was a lease of immovable property or in any went was a creation of an interest in immovable property by way of grant profit a prendre which amounted to an easement under the and that for that reason the royalty payable under the bamboo contracts could not be made exigible to either sales tax or purchase tax and that the impugned provisions of the notifications were ultra vires the Act.
It was also contended that the bamboo contract was 28 a works contract and for this reason also the transaction was not exigible to sales tax or purchase tax, and since the two notifications of December 29, 1977 were expressed to be made in supersession of all earlier notifications on the subject, the liability to sales tax under the said notifications of May 23, 1977 was wiped out.
In Civil Appeal No. 220/82 the bids of the respondent firm at auctions held by the Government in respect of trees standing in forest areas were accepted and on confirmation of the bids by the competent authority it entered into agreements with the Government for felling and removing such trees.
The respondent, in turn, sold the trees felled by it in the form of logs to others At the relevant time the respondent was successful at five auction sales and on ratification of the bids entered into five separate agreements (timber contracts) for felling and removing the trees standing in the forest areas.
After the issue of the notifications of May 23.
1977 the respondent filed a writ petition in the High Court against the State and the Sales Tax and Forest Authorities contending (I) that the levy of purchase tax on standing timber agreed to be severed was beyond the legislative competence of the State Legislature and (2) the notifications imposed a tax both at the point of sale and at the point of purchase and for this reason were invalid and ultra vires the Act.
It was also contended that timber contracts were works contracts and the amounts payable under them were not exigible either to purchase tax or sales tax.
The High Court allowed all the writ petitions and quashed the impugned notifications.
In appeal to the Supreme Court the State contended that the subject matter of the impugned provisions is "goods" within the meaning of the term in the Sales of Goods Act and the Orissa Act, and that what was made exigible to tax under the impugned provisions notifications, was a completed purchase of goods.
^ HELD: (I) Notification SRO Nos.
372/77 and 373/77 dated May 23, 1977, (2) entries Nos. 2 and 17 in the schedule to notification No. 900177 and (3) entries Nos. 2 and 17 in the schedule to notification No. 901177 dated December 29, 1977 levying purchase tax at the rate of ten per cent on the purchase of bamboos agreed to be severed and standing trees agreed to be severed, are not ultra vires either Entry 54 List II of the Seventh Schedule to the Constitution of India or the Orissa Sales Tax Act 1947 but are constitutional and valid [145D F] (a) The Legislative competence to enact the Orissa Act, which was a pre constitution enactment, was derived from section 100 (3) of the Government of India Act, 1935 read with Entry 48 in List II in the Seventh Schedule to that Act.
While Entry 48 spoke of "taxes on the sale of goods" Entry 54 of List II of the Seventh Schedule of the Constitution speaks of "taxes on the sale or 29 purchase of goods.
" The addition of the word "purchase" in Entry 54 permits the State Legislature to levy a purchase tax and does not confine its taxing power merely to levying sales tax.
[62F; H] (b) A cantena of decisions of this Court had held that the expression "sale of goods" had been used in the Government of India Act, 1935 in the same sense in which it is used in the and that it authorised the imposition of a tax only when there was a completed sale involving transfer of title to the goods.
While construing Entry 54 in List II of the Seventh Schedule to the constitution interpretation was adopted and any attempt by the State Legislature to give that expression an artificial meaning or an enlarged meaning or to bring within its scope what would not be comprehended within that expression would be unconstitutional and ultra vires.
[63F; 64G H; 63G] State of Madras vs Cannon Dunkerley & Co. (Madras) Ltd. ; ; The Sales Tax Officer Pilibhit vs Messrs. Budh Prakash Jai Prakash [955] 1 SCR 243, 247.
Bhopal Sugar Industries Ltd. M.P. & Anr.
vs P. Dube Sales Tax Officer Bhopal Region Bhopal & Anr.
AIR 1964 SC 1037; K.L. Johar & Co vs Deputy Commercial Tax Officer ; Joint Commercial Tax Officer Harbour Div.
II Madras vs Young Men 's India Association (Reg.) Madras & Anr. ; ; State of Maharashtra & Anr.
vs Champalal Kishanlal Mohta [1971] 1 SCR 46, followed.
(c) Although a State is free to impose a tax at one or more points in a series of sales or purchases in respect of the same goods, the Orissa Act has adopted a single point levy by enacting the proviso to section 3 under which no tax is payable on the sale of goods or class of goods declared under that section to be liable to tax on the turnover of purchases.
The proviso to section 8 states that "the same goods shall not be taxed at more than one point in the same series of sales or purchases by successive dealers.
" Therefore, where in a series of sales or purchases tax is levied at a particular point neither sales tax nor purchase tax can be levied at another point in the same series.
[65C E] (d) Since any attempt on the part of the State to impose by legislation tax on sales or purchases in respect of what would not be "sale" or a "sale of goods" under The is unconstitutional, any attempt by it to do so in the exercise of its power of making subordinate legislation, would be equally unconstitutional.
Similarly.
where any rule or notification travels beyond the ambit of the parent Act, it would be ultra vires the Act.
Equally, sales tax authorities purporting to act under the Act or under any rule made or notification issued thereunder cannot travel beyond the scope of such Act, rule or notification.
Thus, the sales tax authorities under the Orissa Act cannot assess to sales tax or purchase tax, a transaction which is not a sale or purchase of 30 goods or assess to sales tax any goods or class of goods which are liable to purchase tax or assess to tax, whether sales tax or purchase tax, goods at another point in the same series of sales or purchases of those goods by successive dealers who are liable to be taxed at a different point in that series.
[65G H: 56A C] (2) There is no substance in the argument of the respondent that by the impugned provisions a new class of goods.
not known to law, had been created.
The definition of the expression "goods ' in both the and the Orissa Act which is almost in identical terms, includes "things attached to or forming part of The land which are agreed to be severed before sale or under the contract of sale." [66E; G H] (a) An examination of the definitions of movable property and immovable property given in the General Clauses Act, Registration Act and Transfer of Property Act, show that things attached to the earth are "immovable property.
" The term "attachment" means "rooted in the earth as in the case of trees and shrubs." Thus, while trees rooted in the earth are immovable property as being things attached to the earth by reason of the definition of the term "immovable property" in various statutes namely the General Clauses Act and the Orissa General Clauses Act and the Registration Act read with the definition of the expression "attached to the earth" given in the Transfer of Property Act, standing timber is "movable property" by reason of its exclusion from the definition of "immovable property" in the Transfer of Property Act and the Registration Act and by being expressly included within the meaning of the term "movable property" given in the Registration Act.
[67E; 68F; 68G H; 69A] (b) The term "standing timber" has been judicially recognised as "a tree which ii in a state fit for the purposes of being used as wood for buildings, houses, bridges, windows, whether on the tree or cut and seasoned", that is, a tree meant to be converted into timber so shortly that it could already be looked upon as timber for all practical purposes even though it is still standing.
Thus, trees which are ready to be felled would be standing timber and therefore "movable property." While trees (including bamboos) rooted in the earth being things attached to the earth are immovable property and if they are "standing timber", are movable property, trees (including bamboos) rooted in the earth which are agreed to be severed before sale or under the contract of sale are not only movable property but also goods.
[o9D E; 70B C] Smt.
Shantabai vs State of Bombay & Ors.
; , 275 6, followed.
(c) The distinction which existed in English law between fructus naturales (natural growth of soil regarded as part of the soil until severance) and fructus industriales (which are chattels considered as representing the labour and expense of the occupier and thing independent of the land) does not exist in Indian law.
In a case of this nature the only question that falls for consideration in Indian law is whether a transaction relates to "goods" or "movable 31 property".
If it is sale of immovable property, a document of the kind specified in section 17 of the Registration Act is required to be compulsorily registered but a document relating to sale of goods or of movable property is not required to be registered.
Secondly under Entry 54 of List 11 of the Seventh Schedule the State cannot levy a tax on the sale or purchase of any property other than goods.
[71C D] 3.
The respondent 's contention that the impugned provisions levied a purchase tax on immovable property and not on goods and that the State Government has travelled beyond its taxing power has no merit.
[71F] (a) The High Court erred in holding that the impugned provisions amounted to levying a tax on an agreement to sell and not on actual sale or purchase, that standing trees being unascertained goods continued to be the property of the State Government until felled and therefore the title to such trees or bamboos is transferred in favour of the Forest Contractor only when the trees or bamboos were felled and severed in accordance with the terms of the contract.
There is a fallacy in the reasoning of the High Court in that the High Court read merely the description of the goods given in the impugned provisions by itself and not in conjunction with their governing words.
[71G H; 72A B] (b) Tax levied under section 3B is not on goods declared under that section but on the turnover of purchases of such goods.
A reading of the notification, issued under sections 3B and 5(1) as a whole makes it clear that the taxable event is not an agreement to sever standing trees or bamboos but the purchase of bamboos or standing trees agreed to be severed.
[72C D] (c) The use of the terms "agreed" in the description of goods showed that there must be an agreement between the buyer and the seller and under this agreement standing trees as also bamboos must be agreed to be severed.
According to the definition of "goods" such severance may be either before sale or under the contract of sale, The makes a distinction between sale and agreement to sell and provides that where there is a transfer from the buyer to the seller of property in the goods which are the subject matter of the agreement to sell, the contract of sale is a sale but when the transfer of property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled it is an agreement to sell which becomes a sale when the time elapses or such conditions are fulfilled.
In the first case the contract is "executed contract" while in the second it is "executory." [72E; 73C D] (d) A conspectus of the relevant sections o, the shows that a purchase would be complete when the goods (in the case standing trees or bamboos) are specific goods.
If these factors exist, then unless a different intention appears either from the terms of the contract or can be inferred from the conduct of the parties and other circumstances of the case, the property in such goods would pass from the seller to the buyer when the contract is made and it is immaterial whether the time of payment of the price or the time of 32 taking their delivery (of standing trees agreed to be severed or bamboos agreed to be severed or both) is postponed.
If, however, there is an unconditional contract for the sale of unascertained goods then unless a different intention appear , the property in them would be transferred to the buyer when the goods are ascertained and it would be immaterial whether the time of payment of the price or the time of taking delivery of standing trees agreed to be severed or bamboos agreed to be severed or both is postponed.
In either event, the sale and purchase would be completed before severance.
Therefore for the impugned provisions to apply the severance of the standing trees or bamboos must not be before sale but under the contract of sale, that is, after the sale thereof is completed.
The absence in the impugned provisions of the words "before sale or under the contract of sale" thus made no difference.
The subject matter of the impugned provisions was goods and the tax levied thereunder was on the completed purchase of goods.
[76F H; 77A C] 4.
The High Court has confused the question of interpretation of the impugned provisions with the interpretation of Timber Contracts and Bamboo Contracts.
The question of the validity of the impugned provisions had nothing to do with the legality of any action taken thereunder to make exigible to tax a particular transaction.
If a notification is invalid, all action taken under it would be invalid also.
Where on the other hand, a Notification is valid, an action purported to be taken thereunder contrary to the terms of that notification would be bad in law without affecting in any manner the validity of the notification.
Were the interpretation placed by the High Court on the Bamboo contracts and the Timber Contracts correct, the transactions covered by them would not be liable to be taxed under the impugned provisions and any attempt or action by the State to do so would be illegal but the validity of the impugned provisions would not be affected thereby.
There is no merit in the challenge to the validity of the impugned provisions on the ground of their unconstitutionality.
[77D; F H; 78A] 5.
(a) The High Court also erred in its view that bamboos and trees agreed to be severed were the same as bamboos and timber after they were felled and that since bamboos and trees were liable to tax at the sale point, taxation of the same goods at the purchase point amounted to double taxation and that this was contrary to the provisions of the Orissa Act.
[78C] (b) Not only does the Orissa Act expressly forbids double taxation but it also forbids the levying of tax at more than one point in the same series of sales or purchases by successive dealers This is evident from the provisos to sections 3B and 8.
Under the proviso to section 3B no tax is payable sales of goods or class of goods declared under that section to be liable to tax on the turnover of purchases.
Under the proviso to section 8 the same goods are not to be taxed at more than one point in the same series of sales or purchases by successive dealers.
[78E F] (c) The two notifications of December 29, 1977 were issued as a result the Orissa Sales Tax (Amendment) ordinance 1977 which later became the 33 Orissa Sales Tax (Amendment) Act, 1978, while the two notifications of May 23, 1977 were issued prior to the amendment.
[79A] (d) Prior to January 1, 1978 under section 5(1) tax was payable by a dealer on his taxable turnover of sales as also purchases at n certain fixed percentage.
This rate applied both to sales tax and purchase tax.
But the purchase tax was payable only on the turnover of purchases of goods declared B under section 3B.
In respect of goods not so declared a dealer was liable to pay only sales tax.
Under the proviso to this section, if goods were declared to be liable to purchase tax, no tax was payable on sales of such goods.
Under section 5(1) the State Government was required to issue t notification only when it wanted to fix a rate of tax higher or lower than that specified in this section.
If no such notification was issued then the tax payable, be it sales tax or purchase tax, was to be at the rate mentioned in section 5(l).
Where, however, any goods were declared under section 3B to be liable to tax on the turnover of purchases, the notification prescribing a higher or lower rate of sales tax issued under the first proviso to section 5(1) would thereupon ceases to be observative by reason of the operation of the proviso to section 3B and it was not necessary to repeal expressly that notification.
It was also not necessary for the State Government to issue a notification fixing the rate of purchase tax unless it wanted to fix a rate higher or lower than that specified in section 5(1).
Where no such notification was issued, the rate of purchase tax would be the one which was mentioned in section 5(1).
[79C H] (e) After January 1, 1978 no rate of tax was specified in the Orissa Act.
Under section 5(1) the State Government is given power to notify from time to time the rate of tax sales tax or purchase tax by issuing notifications.
The notification dated December 29, 1977 issued under section 5(1) does not contain any entry in respect of bamboos, or timber or in respect of bamboos agreed to be severed or standing trees agreed to be severed.
If they were liable to sales tax, they would fall under the residuary entry No. 101 and be liable to sales tax at the rate of seven percent.
If any goods feeling under the residuary entry or any other entry in that notification are declared under section 3B to be liable to tax on the turnover of purchases, the residuary entry or that particular entry would automatically cease to operate in respect of those goods by reason of the proviso to section 3B without there being any necessity to delete that particular entry or to amend the residuary entry by excluding those goods therefrom.
It would be necessary for the State Government to issue a notification specifying the rate of purchase tax on those goods because unlike what the position was prior to January 1, 1978, on and after that date the new sub section 5(1) does not specify any rate of tax but leaves it to the State Government to notify it from time to time.
The High Court was in error in holding that the impugned provisions were ultra vires the Orissa Act as they amounted to "double taxation." [80A E] 6.
(a) There was no substance in the contention that the two notifications of December 29, 1977 having been made in supersession of all previous notifications issued on the subject their effect was to wipe out all tax liability which accrued under the earlier notifications of May 23, 1977.
[80G H] 34 (b) The word "supersession" in the notifications of December 29, 1977 was used in the same sense as the words "repeal and replacement" and, there fore, does not have the effect of wiping out the tax liability under the previous notifications.
All that was done by using the words "in supersession of all previous notification" in the Notifications of December 29, 1977, was to repeal and replace the previous notifications and not to wipe out any liability incurred under the previous notifications.
[146C D] (c) Both sections 3B and 5(1) in express terms conferred power upon the State Government to issue notification from time to time.
Under these provisions the State Government can issue a notification and repeal and replace it by another notification.
[81C] (d) The issuance of the notifications became necessary by reason of the change brought about in the scheme of taxation in 1977.
With effect from January 1, 1978 unless a notification was issued specifying the rate of tax, no dealer would be liable to pay any tax under the Orissa Act.
Under the amended section if the State Government wanted to tax any goods Or class of goods at a higher or lower rate it issued notifications specifications specifying such rate.
Since no rate of lax was specified in the new section but was left to the State Government to fix it, it was necessary to issue a notification consolidating all previous notifications on the subject in respect of goods liable to purchase tax which the State Government did.
[82E; 83A; C; D] 7.
(a) Timber contracts were not works contracts but were agreements to sell standing timber.
[146D] (b) Timber contracts were not transactions of sale or purchase of standing trees agreed to be severed They were merely agreements to sell such trees.
The property in the trees passed to the respondent firm only in the trees which were felled, that is, in timber, after all the conditions of the contract had been complied with and after such timber was examined and checked and removed from the contract area.
The impugned provisions, therefore, did not apply to the transactions covered by the Timber Contracts [98 A B] (c) A conspectus of the terms of the Sale Notice, the Special Conditions of Contract, the General Conditions of Contract and the various statutory provisions shows that the heading "sale notice of timber` ' as also the use of the words ' timber and other forest products will be sold by public auction" are not determinative of the matter.
The other terms and conditions of the contract make it clear that the Timber Contracts were not unconditional contracts for the sale of goods in a deliverable state and the property in the trees specified in Schedule I of the Contract did not pass to the respondent firm when each of the contracts was made.
The signing of the Timber Contracts did not result in a concluded contract because each contract was conditional upon the y State Government ratifying the acceptance of the bid, the ratification order did not become an unconditional contract for the sale of specific goods in a deliver able state for the respondent firm had no right to sever the trees and take them away before complying with the other conditions of the contract, namely, furni 35 shing a Coupe Declaration Certificate within the prescribed time, registering the property mark or trade mark, making the security deposit and so on.
This apart, the respondent firm was not at liberty to fell trees of his choice nor was he entitled to remove the felled trees by any route which it liked but only by specified routes.
[95F H; 96B C; 97A B] (d) Although under rule 40 of the Orissa Forest Contract Rules 1966, Rules stipulates that the respondent, firm was not entitled to any compensation for loss sustained by reason of fire, tempest, disease, natural calamity or any wrongful act of a third party this only showed that after a Timber Contract was concluded the risk passed to the respondent firm.
Under section 26 of the when the property is transferred to the buyer, the goods are at the buyer 's risk whether delivery had been made or not; but this section is qualified by the phrase "unless otherwise agreed.
" The Timber Contracts in this case were subject to contract to the contrary.
This is made clear by rule 44 which states that "all forest produce removed from a contract area in accordance with these rules shall be at the absolute disposal of the forest contractor." [97E H] 8.
(a) On the question whether the words "timber" and "logs" mean the same thing in commercial parlance the no material had been produced by the parties.
Where a term has not been statutorily defined or judicially interpreted and there is insufficient material on record as to the meaning of the words, the Court must seek to ascertain its meaning in common parlance with such aid as is available to it.
The court may take the aid of dictionaries in such cases to ascertain its meaning in common parlance.
In doing so, the Court must bear in mind that a word is used in different senses according to its context and a dictionary gives all the meanings of a word and the Court would have to select the particular meaning which would be relevant to the context in which it has to interpret that word.
[104E; 105B C; 146G H] (b) The Orissa Act does not define the term "timber" or "logs.
" The statutory definition of "timber" given in the Orissa Forest Act, 1972 is that timber includes "trees fallen or felled and all wood cut up or sawn." The Madras Forest Act, 1882 and the , the two Acts in force in the State of Orissa prior to the enactment of the Orissa Forest Act, 1972 too have not given any exhaustive definition of the term "timber.
" But what is apparent from these definitions is that the word "timber" is not confined merely to felled trees in the forests In subsequent Act like the Orissa Forest Produce (Control of Trade) Act, 1981 the concept that timber is not merely felled trees has been emphasised.
Therefore.
a conspectus of the meanings given to the term "timber" in statutes, different dictionaries and as judicially interpreted by this Court as well as by some High Courts shows that it means "building material, generally wood, used for building of houses, ships etc. and the word is applied to wood of growing trees capable of being used for structural purposes.
Hence, collectively to the trees themselves." A log according to the dictionaries means a bulky mass of wood now usually an unhewn portion of a felled tree or a length cut off for firewood.
These logs will be nothing more than wood cut up or 36 sawn and would be timber.
Similarly, a beam is timber sawn in a particular way.
So too ratters would be timber logs put to a particular use.
In ordinary parlance a plank would be flattened and smoothed timber.
; 107A D; F] Mohanlal Vishram vs Commissioner of Sales Tax, Madhya Pradesh, Indore [1969] 24 STC 101; G. Ramaswamy and others vs The State of Andhra Pradesh and others [1973] 32 STC 309, approved and Krupasindhu Sahu & Sons vs State of Orissa [1975] 35 STC 270.
overruled.
(a) Sales of dressed or sized logs having been assessed to sales tax, sales to the respondent Firm of timber by the State Government from which logs were made by the respondent firm cannot be made liable to sales tax as it would amount to levying tax at two points in the same series of sales by successive dealers, assuming that the retrospectively substituted definition of "dealer" in clause (c) of section 2 of the Orissa Sales Tax Act, 1947 is valid.
[147B C] (b) Sales of logs by the respondent firm during the period June 1, 1977 and December 31, 1977 would be liable to tax at the rate of ten percent.
Assuming that the sales had been assessed to tax at the rate of six percent as contended by reason of the period of limitation prescribed by section 12(8) of the Orissa Act, the respondent firms assessment for the relevant period cannot be re opened to reassess such sales at ten per cent.
[147D E] 10.
(a) The Bamboo Contract is not a lease of the contract area to the respondent company in CA 219182.
Nor is it a grant of an easement to the respondent company, as it was not a grant of any right for the beneficial equipment of any of the respondent company.
In addition to the right of entry there are other important rights flowing from the contract.
It is a grant of a profit a prendre which in Indian law is a benefit to arise out of land and thus creates an interest is immovable property.
A profit a prendre is a benefit arising out of land and in view of section 3(26) of the General Clauses Act, it is "immovable property" within the meaning of the Transfer of Property Act.
[147F H] (b) There are countervailing factors which 80 to show that a Bamboo contract is not a contract of sale of goods.
It is a grant of exclusive right and licence to fell, cut, obtain and remove bamboos.
The person giving the grant the Governor of the State, is referred to as "grantor"; the consideration payable is "royalty" which is not a term used in legal parlance for the price of goods sold.
It is not an agreement to sell bamboos standing in the contract area with the accessory licence to enter upon such area for the purpose of felling and removing bamboos nor is it for a particular felling season only.
It is an agreement for a period ranging from fourteen, thirteen and eleven years with the option to renew the contract for further terms of twelves years.
The payment of royalty has no relation to the actual quantity of bamboos cut and removed.
The respondent company was bound to pay a minimum royalty and the royalty paid was always in excess of the royalty due on the bamboos cut in the contract areas.
The Bamboo contract conferred upon the respondent company a 37 benefit to arise out of land, namely, the right to cut and remove bamboos which would grow from the soil coupled with several ancillary rights and was thus a grant of a profit a prendre.
Being a profit a prendre or a benefit to arise out of land any attempt on the part of the State Government to tax the amounts payable under the Bamboo Contract would not only be ultra vires the Orissa Act but also unconstitutional as being beyond the State 's taxing power under Entry 54 in List II in the Seventh Schedule to the Constitution of India.
[119C; E; 120B D; 121G H] 11.
The decision of Firm Chhotabhai Jethabhai Patel & Co. vs The State of Madhya Pradesh on which the appellant relied is not good law and has been overruled by decisions of larger Benches of this Court.
(State of Madhya Pradesh vs Yakinuddin ; [148A] M/s Mohanlal Hargovind of Jubbulpore vs Commissioner of Income Tax C.P. & Berar Nagpur L.R. [1949] 76 I A. 235; ILR 1949 Nagpur 892; AIR 1449 PC 311; Ananda Behra and another vs The State of Orissa and another ; and Smt.
Shantabai vs State of Bombay & Orissa ; 275 6 referred to; and Board of Revenue Etc.
vs A.M. Ansari Etc.[1976] 3 SCR 661 held 1 inapplicable.
(a) The case of State of M.P. vs Orient Paper Mills Ltd. on which the appellant relied is not good law as that decision was given per incurium and had laid down principles of interpretation which are wrong in law.
The basic and salient features of the agreement before the Court in Orient Paper Mills ' Case were the same as in the case of Mahadeo vs State of Bombay and the Court was not justified in not adverting to that case and the other cases referred to on the ground that these cases dealt with the general law of real property.
[142 H; 143A].
(b) The enunciation of law made by the Court in the Orient Paper Milts case that a document should be so construed as t o bring it within the ambit of a particular statute relevant for the purpose of the dispute before the court and that in order to do so, the Court could look at only such of the clauses of the document as also to just one or more, of the consequences flowing from he document which would fit in with the interpretation which the court wanted to put on the document to make that statute applicable, is fraught with considerable danger and mischief as it may expose documents to the personal predilictions and philosophies of individual judges depending upon whether according to them it would be desirable that documents of the type they have to construe should be made subject to a particular statute or not.
[139E G] (c) Secondly, in observing that the State Government, for reasons best known to it had "left the exploitation of the forest resources in part to the private sector" the court had overlooked that it was a matter of policy for the State to decide whether such transactions should be entered into or not, whether the transactions entered into by the State was for the industrial development of 38 the State and whether the transaction ensured employment for the people of the area and so on.
(d) Thirdly, the nature and meaning of a document cannot be deter mined by its end result or one of the consequences which flow from it.
In look in merely at the end result of the agreement the court overlooked a firmly established principle that both the agreement and the sale must relate to the same subject matter and therefore, there cannot be an agreement relating to one kind of property and a sale as regards another.
[141C D] (e) In coming to the conclusion that the term "royalty" used in the document before it was merely a 'euphimism" for the "price of timber".
the court overlooked the fact that the amount of royalty payable by the respondent was consideration for all the rights conferred upon it under the contract though it was to be calculated according to the quantity of bamboos felled.[141H; 142A] 13.
Where there are two or more conflicting views of this court on the same point the proper course for the High Court or even for smaller Benches of this court is to find out and follow the views expressed by larger Benches of this court in preference to those expressed by smaller benches This practice has crystallised into a rule of law declared by this Court.
[142E F] U.O.I. vs K.S. Subramanian [1977]1 SCR 87, 92, followed.
A works contract is a compendious term to describe conveniently a contract for the performance of work or services in which the supply of materials or some other goods is incidental.
In the instant case, the timber Contracts being agreements relating to movable property and the Bamboos Contracts being a grant of an interest in immovable property, cannot be works contracts.
The payee of the price, namely, the Government has not undertaken to do any work or labour.
It was the contractor who had to enter upon the land to fell the trees and remove them.
So is the case of Bamboo Contracts.
[144H; 145A] Commissioner of Sales tax, M.P. v Purshottam Premji [1970] 26 STC 38, 41 S.C., referred to.
|
In the matter of maintainability of appeal in the Supreme Court of India.
Mohan Lal Agarwala, for the petitioner.
G. C. Mathur and C. P. Lal, for the respondent No. 1. 1960.
September 14.
The Judgment of the Court was delivered by RAGHUBAR DAYAL J.
Narain Das filed a civil writ petition under article 226 of the Constitution in the High Court of Judicature at Allahabad.
He subsequently moved an application under section 476 of the Code of Criminal Procedure (hereinafter called the Code) for making a complaint under section 193, Indian Penal Code, against Phanish Tripathi alleging that a certain statement in an affidavit filed by the latter was false.
The learned Judge who heard this application, holding that the appellant had not succeeded in showing that any portion of the affidavit of Tripathi filed on May 14, 1959, was false, dismissed the same.
It is against this order of the learned Judge of the High Court that Narain Das has filed this memorandum of appeal under section 476B of the Code.
The Registry has submitted the memorandum of appeal with a report for determining the question whether the appeal is competent in this Court.
Section 476 of the Code is to be found in Ch.
XXXV which is headed 'Proceedings in case of certain Offences Affecting the Administration of Justice '.
Section 476 empowers any Civil, Revenue or Criminal Court, when it is of the opinion that it is expedient in the interests of justice that an inquiry should be made into any offence referred to in section 195(1) (b) or (c) which appears to have been committed in or in relation to a proceeding before it, to file a complaint, after such inquiry as it thinks necessary, before a Magistrate of Class having jurisdiction.
It is clear therefore that where an offence referred to in section 195(1) (b) or (c) is committed in or in relation to a proceeding in a Civil Court, an inquiry under section 476 and.
the action taken 678 on that inquiry by the Civil Court, are in relation to that proceeding itself.
Any person aggrieved by an order of a Court under section 476.
of 'the Code may appeal in view of section 476B to the Court to which the former Court is subordinate within the, meaning of section 195(3), which provides that for the purposes of the section a Court shall be deemed to be subordinate to the Court to which appeals ordinarily lie from the appealable decrees or sentences of such former Court, or, in the case of a Civil Court from whose decrees no appeal ordinarily lies, to the,, principal Court having ordinary original civil jurisdiction within the local limits of whose jurisdiction such Civil Court is situate.
The decrees of a single Judge of the High Court exercising civil jurisdiction are ordinarily appealable to the High Court under el.
10 of the Letters Patent of the Allahabad High Court read with el. 13 of the United Provinces High Courts (Amalgamation) Order, 1948.
It is true that the decision of a single Judge of the High Court is as much a decision of the High Court as the decision of the appellate Bench hearing appeals against his decrees.
But the Court constituted, by the single Judge is a Court subordinate to the appellate Bench of the High Court in view of the artificial judicial subordination created by the provisions of section 195(3) to the effect ' ' a Court shall be deemed to be subordinate to the Court to which appeals ordinarily lie from the appeal.
able decrees. '.
In the case of a Civil Court which passes appealable decrees, that Court is deemed to be subordinate to the Court to which appeals ordinarily lie from its decrees.
In ' the case of a Civil Court from whose decrees no appeal ordinarily lies, that Court is deemed subordinate to the principal Court having ordinary original civil jurisdiction within the local limits of whose jurisdiction the former Court is situate, even though normally such a Court will not be subordinate to the principal Court having ordinary original civil jurisdiction within whose local limits it is situate.
It was urged by the learned Advocate for Narain Das that the order of the learned single Judge under 679 s.476 did not amount to a decree and that therefore the provisions of section 195(3) were not applicable.
It is not necessary for us to express an opinion on the question whether the order of the learned single Judge under section 476 is appealable under cl. 10 of the Letters Patent or not.
A right of appeal against that order is given by the provisions of section 476 B.
The forum of appeal is also determined by the provisions of section 476B read with section 195(3), and the only relevant consideration to determine the proper forum for an appeal against such an order of the single Judge is as to which Court the appeals against appealable decrees of the single Judge ordinarily lie.
Such appeals lie to the High Court under cl. 10 of the Letters Patent of the Allahabad High Court, and therefore this appeal lies to ' the High Court.
Learned counsel for the appellant relied on the decision of this Court in M. section Sheriff vs The State of Madras (1) in support of his contention that an appeal under section 476B lay to this Court from the decision of a single Judge of a High Court refusing to file a complaint under section 476 of the Code.
That case is distinguishable as the question considered in that case was whether an appeal lay to this Court under section 476B of the Code from an order of a Division Bench of a High Court.
It did not deal with the question whether an appeal lay to this Court under section 476B of the Code from an order of a single Judge of the High Court.
No appeal lies to the High Court against the decision of a Division Bench of the High Court and therefore an appeal under section 476B from an order of the Division Bench of the High Court must lie to this Court.
The fact that an appeal lies to this Court from the order of a single Judge of the High Court where the High Court certifies, under article 132 of the Constitution, that the case involves a substantial question of law as to the interpretation of the Constitution, is of no assistance to the appellant 's contention 'that this appeal is competent in this Court.
It cannot be said that an appeal ordinarily lies to this Court from the (1) [1954] S.C.R. 1144.
87 680 judgment of a single Judge of a High Court because such an appeal lies with a certificate granted under article 132.
We therefore hold that the present appeal does not lie to this Court and that it lies to the High Court of Judicature at Allahabad.
We therefore direct that the memorandum of appeal be returned for presentation.
to the proper Court.
Appeal incompetent.
| Under a quolnama the assessee company was granted exclusive rights in the nature of a monopoly to extract Shahabad Flag Stones without limit to quantity or measurement from quarries situated in six villages for a period of 12 years on annual payment of Rs. 28,000 but not to manufacture cement.
The stones had to be extracted methodically and skilfully before they could be dressed and sold.
The assessee company paid an initial sum of Rs. 96,000 as security and the balance of Rs. 20,000 was payable each year in monthly instalments of Rs. 1,666 10 8 each.
The payments were to be made even if no stones were extracted or could not be extracted.
The question was whether the amounts paid were allowable as business expenditure under section 12(2)(xv) of the Hyderabad Income Tax Act: Held (Per Kapur and Hidayatullah, jj. section K. Das, J., dissenting), that under the quolnama the assessee acquired by his long term lease a right to win stones and the lease conveyed to him a part of land.
The stones in situ were not his stock intrade in a business sense but a capital asset from which after extraction he converted the stones into his stock in trade.
The payment though periodic in fact was neither rent nor royalty but a lump sum payment in instalments for acquiring a capital asset of enduring benefit to his trade.
The right acquired is to a source from which the raw material was to be extracted.
The expenditure was outgoings on capital account and was not allowable as deductions under section 12(2)(XV) Of the Hyderabad Income Tax Act.
Per section K. Das, J. That on its true construction the trans action was the sale of raw materials coupled with a licence to the assessee to come on the land and remove the materials sold, the purchase price being paid partly in a lump sum and partly in monthly instalments, that the object was the procuring of the stones for making flag stones and not the acquisition of an enduring asset or advantage, that the payments made were the price of raw materials and that the assessee was therefore entitled to claim them as business expenditure under section 12(2)(xv) of the Hyderabad Income Tax Act.
Assam Bengal Cement Works Ltd. vs Commissioner of Income Tax, West Bengal, , distinguished.
|
ivil Appeal No. 4599 of 1989.
From the Judgment and order dated 16.9.1988 of the Punjab and Haryana High Court in Review Application 22 CII of 1988 in Civil Revision No. 2439 of 1980.
S.P. Goel, G.B. Singh and K.K. Mohan for the Appellant.
S.M. Ashri for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
Special leave granted.
This appeal under Article 136 arises against the order dated Sept. 16, 1988 of the High Court of Punjab & Haryana refusing to review the order dated August 11, 1988 made in Civil Revision No. 2439/80 on its file.
The facts leading to the decision are that the respondent Govind Ram, the father of the respondents/landlord laid the suit No. 118/77 (ini tially numbered as O.S. No. 276/75) on the file of Sr.
Sub Judge for ejectment and recovery of arrears of rent and damages for use and occupation of the shop in Gurgaon, let out to the appellant/tenant.
The suit was originally laid in the Court of Sub 152 Judge, IIIrd Class, Gurgaon, which was transferred later to the Sr.
Sub Judge, Gurgaon, which was decreed ex parte on October 20, 1977.
The application under Order 9 Rule 13 C.P.C. to set aside the ex parte decree was dismissed on January 10, 1979, and was confirmed on appeal on August 17, 1979 and in revision by the High Court on October 15, 1979.
When the landlord laid the execution application for eject ment the appellant objected under section 47 of C.P.C. contending that the decree of the Civil Court is a nullity as the premises in question is governed by the Haryana Urban (Control of Rent & Eviction) Act 11 of 1973, for short 'the Act '.
The Controller under the Act is the competent forum regarding claims for ejectment on fulfilment of any of the conditions enumerated under Section 13 thereof.
The Civil Court is divested of jurisdiction to take cognisance and pass a decree for ejectment of the appellant.
That objection was overruled and on further revision the High Court dis missed the revision by order dated March 19, 1980.
Simulta neously he also filed Writ Petition under Article 227 which was dismissed on September 30, 1988.
This appeal is directed against that order of dismissal.
The contention raised by Shri S.P. Goel, the learned Sr. counsel for the appellant is that by operation of Section 13 of the Act the only authority to pass a decree of ejectment of the appellant tenant is the Controller under the Act and by necessary implication the jurisdiction of the Civil Court is ousted.
The Civil Court lacked inherent jurisdiction to take cognisance of the cause and to pass a decree.
The decree is thus a nullity.
The challenge to a decree on the ground of nullity can be raised at any stage and even in execution.
The courts below have committed manifest error of law in not considering the legal question in its proper perspective.
The shop consists of the original building belonging to the landlord, but a small part thereof in the frontside was constructed on municipal land.
Tenancy of the building is governed by the Special Act and, therefore, the decree of the Civil Court is a nullity and is inexecutable.
Shri Ashri, the learned counsel for the respondents refuted this contention.
Firstly he argued that the leave applica tion is barred by limitation.
Secondly, he contended that the appellant had raised the plea of want of jurisdiction at the trial.
Though he remained ex parte, the trial court considered the objection under issue Nos. 4 and 5 and over ruled the objection.
The decree became final; thereby the decree operates as res judicata.
He also further contends that the Act does not apply to the building in question.
Under Section 3, municipal land is exempted from the provi sions of the Act and thereby the only forum to lay the action is the Civil Court.
The Civil Court having jurisdic tion has validly granted the 153 decree.
The decree having been allowed to become final, it is not open to the appellant to ask the executing court to go behind the decree The question that emerges is whether the Civil Court lacked inherent jurisdiction to entertain the suit for ejectment of the appellant tenant and the decree so passed is a nullity.
The Act was enacted with the object of con trolling the increase of rent of buildings and rented lands situated within the limits of urban areas and "the eviction of the tenants therefrom".
Section 2(a) defines 'building ' which means any building or a part of a building let for any purpose whether being actually used for that purpose or not, including any land . . . . appurtenant to such building . . . . but does not include a room in a hotel, hostel or boarding house.
Section 2(b) defines 'Controller ' as any person who is appointed by the State Government to perform the functions of a Controller under the Act.
Landlord has been defined under Section 2(c) and Section 2(f) defines rented lands to mean any land let separately for the purpose of being used principally for business or trade. 'Tenant ' has been defined under Section 2(h).
Section 3 authorises the State Government by notifica tion to exempt any particular building or rented land or any class of building or rented lands from the application of any or all the provisions of the Act.
Section 13 contains the provisions for eviction of tenants, Sub section
(1) thereof reads: "Eviction of tenants (1) A tenant in posses sion of a building or a rented land shall not be evicted therefrom except in accordance with the provisions of this section.
" The other provisions are not necessary.
The sole ground raised by the landlord for eviction was that the appellant had committed default in the payment of rent and thereby had became liable for ejectment.
Accordingly, he issued a notice under Section 106 of the Transfer of Property Act determin ing the tenancy and laid this suit.
Section 13 gives the right to the landlord to seek eviction of the tenant for default in the payment of rent.
The Act provides the protec tion of continued tenancy and remedy of ejectment for breach of covenants in the lease and other statutory grounds as provided.
It provides that the remedy and the forum and the decree of ejectment passed by the Controller or the appel late authority or the revisional authority or confirmation thereof either in appeal or revision is final under the Act.
Thereby the exclusive jurisdiction to take cognisance of the cause of action for ejectment of the tenant from a building or rented land situated in urban areas is governed by the provisions of the Act and is 154 exclusively to be dealt with under Section 13 of the Act.
By necessary implication the jurisdiction of the Civil Court under Section 9 of C.P.C. is excluded.
It is undoubtedly true that open land is a part of the frontage of the shop and belonged to the municipality which the landlord had taken on lease from the Municipality.
As regards the munici pal land, the landlord was a lessee of the Municipal Commit tee.
But on construction of the building covering a portion of the municipal land the landlord became landlord and the appellant his tenant for the purposes of the Act.
This view was held by the full Bench of the Punjab and Haryana High Court in Hari Parshad Gupta vs Jitender Kumar Kaushik, [1982] Vol.
84, Punjab Law Reporter, 150.
We agree with the view.
Thereby though there is a notification issued by the State Government exempting the lands belonging to Gurgaon Municipality from the provisions of the Act, the building of the respondent does not get exempted from the provisions of the Act.
It is the finding of the forums below that the shop in question stands mainly on the land of the landlord and a small portion is located on municipal land.
Therefore, we are of the view that the building was governed by the provi sions of the Act and the exemption accorded by the Govern ment under Section 3 was not attracted to the premises.
In Sadhu Singh vs District Board, Gurdaspur & Anr., [1962] Punjab Law Reporter, Vol.
64, 1 the question was whether to the reconstructed building governed by the provisions of East Punjab Urban Rent Restriction Act the exemption under Section 3 applied.
It was held to be so by the Division Bench.
But the present facts are different.
In Barrachlough vs Brown, the House of Lords held that when a special statute gave a right and also provided a forum for adjudication of rights, remedy has to be sought only under the provisions of that Act and the common law court has no jurisdiction.
In Doe vs Bridges, ; at 859 the famous and oft quoted words of Lord Tenterdan, occur: "Where an Act creates an obligation and en forces the performance in a specified manner, we take it to be a general rule that perform ance cannot be enforced in any other manner." This statement of law was approved not only by the House of Lords in several cases, but also by this Court in Premier Automobiles vs K.S. Wadke, ; where this Court was called upon to consider whether the Civil Court can decide a dispute squarely coming 155 within the provisions of the Industrial Disputes Act.
While considering that question, this Court laid down four propo sitions and third of them is relevant for consideration here.
It is as follows: "(3) If the industrial dispute relates to the enforcement of a fight or an obligation creat ed under the Act, then the only remedy avail able to the suitor is to get an adjudication under the Act." Thus on construction of relevant provisions of the Act and in the light of the position in law it must be held that the provisions of Section 13 of the Act applies to the building leased out to the appellant by the landlord and the Controller was the competent authority to pass a decree of ejectment against the appellant and the Civil Court lacked inherent jurisdiction to take cognisance of the cause and to pass a decree of ejectment therein.
The next question is whether the impugned decree is a nullity and whether the plea can be raised in execution and further whether the decree in the suit does not operate as res judicata.
In Kiran Singh & Ors.
vs Chaman Paswan & Ors.
, ; = AIR 1954 SC 430 the facts were that the appellant had undervalued the suit at Rs.2,950 and laid it in the court of the Subordinate Judge, Monghyr for recovery of possession of the suit lands and mesne profits.
The suit was dismissed and on appeal it was confirmed.
In the second appeal in the High Court the Registry raised the objection as to valuation under Section 11.
The value of the appeal was fixed at Rs.9,980.
A contention then was raised by the plaintiff in the High Court that on account of the valuation fixed by the High Court the appeal against the decree of the court of the Subordinate Judge did not lie to the District Court, but to the High Court and on that account the decree of the Dis trict Court was a nullity.
Alternatively, it was contended that it caused prejudice to the appellant.
In considering that contention at page 121, a four Judge Bench of this Court speaking through Vankatarama Ayyar, J. held that: "It is a fundamental principle well estab lished that a decree passed by a Court without jurisdiction is a nullity, and that its inva lidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings.
A defect of jurisdic tion, whether it is pecuniary or territorial, or whether it is in respect of the subject matter of the 156 action, strikes at the every authority of the Court to pass any decree, and such a defect cannot be cured even by consent of parties.
If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was coram non judice, and that its judgment and decree would be nullities.
" On merits it was held that since the appellant himself had invoked the jurisdiction of the Civil Court with under valuation, the objection as to jurisdiction was not avail able by operation of Section 99 of the Code and as to the territorial jurisdiction he was precluded by operation of Section 21 of C.P.C.; and on such premise it was held that the decree of the District Court could not be treated to be a nullity and person who invoked the jurisdiction cannot plead prejudice to himself by his own act.
This Court has held that it is a well established prin ciple that a decree passed by a court without jurisdiction is a nullity and the plea can be set up whenever and wherev er the decree is sought to be enforced or relied upon, and even at the stage of execution or in collateral proceedings.
In the case of Ferozi Lal Jain vs Man Mal & Anr., AIR 1979 SC 794 the facts were that the appellant was the owner of a shop.
One of the covenants under the lease was that the lessee respondent should not sub let the shop.
On the ground that the respondent had sub let the shop, a suit was laid for eviction under Section 13 of the Delhi and Ajmer Rent Control Act, 1952.
The matter was compromised and a compro mise decree was passed.
Twice time was given for delivery of the vacant possession by the respondent.
On his failure to deliver vacant possession the appellant filed execution to recover possession.
The tenant raised the objection that unless any one of the grounds prescribed under Section 13 of the Rent Control Act was satisfied, the decree even on compromise was a nullity, and therefore, he could not be evicted.
This Court held that the order made did not show that it was satisfied that the sub letting complained of had taken place, nor was there any other material on record to show that it was so satisfied.
It is clear from the record that the Court had proceeded solely on the basis of the compromise arrived at between the parties.
That being so there was hardly any doubt that the Court was not competent to pass the impugned decree.
Hence the decree under execu tion must be held to be a nullity.
On that basis it was held that the objection could be 157 raised even at the execution stage.
Ultimately, the decree was held to be void.
In Bahadur Singh vs Muni Subrat Dass, the decree under execution was made on the basis of an award and it was held that the decree was passed in contravention of section 13(1) of the Rent Control Act.
Thereby the decree was held to be void and hence no execution could be levied on the basis of the void decree.
A similar view was also taken by this Court in Smt.
Kaushalya Devi & Ors.
vs K.L. Bansal, AIR 1970 SC 838.
This was also a case under the Delhi and Ajmer Rent Control Act and was on the basis of a compromise.
It was held that the decree passed on the basis of the award was in contravention of Section 13(1) of the Act as the Court had passed the decree without satisfying itself that any good ground of eviction existed.
Therefore, the decree for delivery of possession was held to be a nullity and could not be executed.
This is also a decision by a Bench of three Judges speaking through Sikri, J. as he then was.
In Chandrika Misir & Anr.
vs Bhaiya Lal, ; Palekar J. speaking for a Bench of two Judges held that the decree passed by the Civil Court in relation to matters governed by U.P. Zamindari Abolition and Land Reforms Rules, 1952 for possession was a nullity and in the appeal it was for the first time permitted to be raised in this Court and the decree was declared to be a nullity.
In Ledgard vs Bull, [1886] Law Report, 13 AC, 134 the Privy Council laid down that where the original Court in a suit was inherently lacking jurisdiction, and was incompe tent to try the same, on its transfer by consent of parties, to a Court with jurisdiction such consent did not operate as a waiver of the plea of want of jurisdiction.
In Bartan vs Fincham, [1921] 2 Kings Bench Division, 291 at 299 it was held that: "Parties cannot by agreement give the Courts jurisdiction which the Legislature has enacted they are not to have The Court cannot give effect to an agreement whether by way of compromise or otherwise, inconsistent with the provisions of the Act.
" In Peachery Property Corporation vs Robinson, [1966] 2 All Eng.
158 Report 981 at 983 Winn, Lord J. took the same view.
In Choudari Rama (dead) per L.R. Choudhary Ganapathi vs Qureshi Bee, [1983] 2 Andhra Law Times 133 one of us Ramas wamy, J. was called upon to consider the question on a set of similar facts.
Therein the petitioner who died subse quently was protected under A.P. (Telangana Area) Tenancy and Agricultural Holdings) Act, 1950.
The protected tenant was given possession in exercise of statutory power under Section 38 A of that Act.
That was done during the pendency of the suit for partition between the co sharers.
The tenant was impleaded co nominee defendant to the suit.
A prelimi nary decree for partition and for possession was passed.
A final decree followed.
The decree became final and execution was levied for possession.
Objection was taken that since the tenant was a protected tenant under the Act, the decree was a nullity and could not be executed against the legal representatives.
After considering the scope of relevant provisions of the Act, it was held that the Civil Court cannot go into the legality or correctness of the Exhibit B I issued by the Tehsildar.
The revenue authorities consti tuted under that Act were competent to go into the validity thereof.
Civil Court inherently lacked jurisdiction and the decree of ejectment of the protected tenant from the lands covered by the protected tenancy was a nullity because of the provisions of Chapter IV of the Act.
The plea can be set up even at the stage of execution, as was rightly done in that case.
Otherwise it would have the effect of nullifying the operation of the statutory provisions in Chapter IV of the Act and deprived the protected tenant of his vested interest in the land created in his favour under the tenancy certificate (exhibit B I).
It was also held in paragraph 64 that "Its validity can be assailed in the execution proceedings.
" We approve the view of the High Court.
In Mathura Prasad Bajoo Jaiswal & Ors.
vs Dossibai N.B. Jeejeebhey; , the Bench consisting of Shah, CJ., Hegde and Grover, JJ. was called upon to consider whether a decree passed without jurisdiction operates res judicata.
The facts therein were that the respondent leased out the land for construction of a building to the appel lant, which was duly constructed.
The tenant applied for fixation of the standard rent.
The Civil Court rejected the prayer holding that the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 does not apply to the open land let out for construction.
But later the High Court reversed that view in another decision and held that the Act applied to the open land leased out.
Relying upon that judgment, an application was again filed for fixation of the standard rent of the 159 premises.
Objection was raised that the earlier rejection operated as res judicata.
In that context, in negating the contention, this Court held that the doctrine of res judica ta belongs to the domain of procedure.
It cannot be exalted to the status of a legislative direction between the parties so as to determine the question relating to the interpreta tion of enactment affecting the jurisdiction of a Court finally between them, even though no question of fact or mixed question of law and fact relating to the right in dispute between the parties has been determined thereby.
A decision of a competent Court on a matter in issue may be res judicata in other proceedings between the same parties.
The matter in issue may be an issue of fact.
The fact decid ed by a competent Court is final determination between the parties and cannot be re opened between them in another proceeding.
The previous decision on a matter in issue alone is res judicata.
The reasons for the decision are not res judicata.
A matter in issue between the parties is the right claimed by one party and denied by the other.
The claim of right from its very nature depends upon proof of facts and application of the relevant law thereto.
A pure question of law unrelated to facts which give rise to a right, cannot be deemed to be a matter in issue.
When it is said that a previous decision is res judicata, it is meant that the right claimed has been adjudicated upon and cannot again be placed in contest between the same parties.
A previous decision of a competent Court on facts which are the founda tion of the right and the relevant law applicable to the determination of the transactions which is the source of the right is res judicata.
A previous decision on a matter in issue is a composite decision; the decision of law cannot be dissociated from the decision on facts on which the right is founded.
A decision on an issue of law will be res judicata in a subsequent proceeding if it be the same as in the previous proceeding, but not when the cause of action is different, nor when the law has since the earlier decision been altered by a competent authority, nor when the decision relates to the jurisdiction of the Court to try the earlier suit nor when the earlier decision declares valid a transac tion which is prohibited by law: "A question of jurisdiction of the Court, or of procedure, or a pure question of law unre lated to the right of the parties to a previ ous suit, is not res judicata in the subse quent suit.
Rankin, CJ., observed in Tarini Charan Bhattacherjee 's I.L.R. case: "The object of the doctrine of res judicata is not to fasten upon parties special principles of law as applicable to them inter se, but to ascertain their rights and 160 the facts upon which these rights directly and substantially depend; and to prevent this ascertainment from becoming nugatory or pre cluding the parties from reopening or recon testing that which has been finally decided." "A question relating to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court.
If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, in our judgment, operate as res judicata.
Similarly, by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute, the question cannot operate as res judicata between the same parties, whether the cause of action in the subsequent litiga tion is the same or otherwise." (Emphasis supplied) In that case it was held that since it relates to the jurisdiction of the Court as per law declared by the legis lature, it does not operate as res judicata.
In Vasudev Dhanjibhai Modi vs Rajabhai Abdul Rehman & Ors., a Bench of three Judges of this Court consisting of Shah, J., as he then was, Hegde and Grover, JJ. was considering the question of nullity of a decree.
The facts therein were that the appellant, owner of the plot of land, leased out the same to the respondent at an annual rental of Rs.411.
The suit was dismissed and on appeal it was reversed and suit was decreed.
On revision it was con firmed by the High Court.
Special leave petition filed in this Court was also dismissed.
In the execution the conten tion was raised that the Small Causes Court had no jurisdic tion to entertain the suit.
It was contended that the decree was a nullity on the ground that Bombay Rents Hotel and Lodging House Rates (Control) Act 57 of 1947 applied to the facts in that case.
In that context Shah, J., as he then was, speaking for the Court held that challenge to a decree which is a nullity can be raised at any time, but the Court executing the decree cannot go behind the decree between the parties or on their representation it cannot entertain any objection that the decree was incorrect in law or on facts, unless it is set aside by an appropriate proceeding in appeal or revision.
A decree even if it be erroneous is still binding between the parties.
In that context it was held that the question whether the Court of Small Causes had jurisdiction to entertain the Suit depended upon 161 the interpretation of the terms of the agreement of lease, and the use to which the land was put at the date of the grant of the lease.
These questions cannot be permitted to be raised in an execution proceedings so as to displace the jurisdiction of the Court which passed the decree.
It was further held that for the purpose of determining whether the Court which passed the decree had jurisdiction to try the suit, it is necessary to determine facts relevant to the issue on which the question depends, and the objection does not appear on the face of the record, the executing Court cannot enter upon an enquiry into those facts.
It is seen that on the facts in that case it is for the first time the executing Court is to adjudicate upon the terms of the lease whether the Court of Small Causes had jurisdiction to enter tain that suit.
It is not a case of interpretation of the statutory provisions or inherent lack of jurisdiction.
It is already seen that in fact for the first time this Court in Chandrika Misir 's case (supra) had to go into the statutory provisions though no case in that regard had been set up in the courts below and held that the Civil Court lacked inher ent jurisdiction to pass the decree.
Therefore, the ratio in this case is not in conflict with the view taken by this Court.
It is no doubt true that in Seth Hiralal Patni vs Sri Kali Nath, ; the facts were that the suit was instituted on the original side of the Bombay High Court against the appellant for recovery of certain arrears out of transactions taking place at Agra.
The dispute was referred to arbitration.
The arbitrator gave his award in favour of the respondent which was upheld on appeal by the High Court.
In execution proceedings an objection was raised by the appellant that the Bombay High Court has no jurisdiction to entertain the suit to make the award a decree of the Court as no part of the cause of action had arisen within its territorial jurisdiction.
Therefore, the decree was without jurisdiction.
It was held that since the parties had agreed to refer the matter to arbitration through Court, which had jurisdiction, he would be deemed to have waived the objec tion as to the territorial jurisdiction of the Court.
There fore, it is not a nullity and the appellant was held to be estopped from challenging the jurisdiction of the Bombay High Court.
The ratio therein does not apply to the facts of this case.
The case of Phool Chand Sharma & Ors.
vs Chandra Shanker Pathak & Ors., 828 also does not help the respondent.
It was a case where the suit was decreed and possession was taken thereunder.
On appeal by the respondent it was dismissed.
On Second Appeal before the Board of Revenue the matter was com 162 promised, whereunder Ramprasad was recognised as a tenant of the land in dispute and the order of eviction was thus nullified.
When he made an application under Sec.
144 C.P.C. for restitution it was resisted by the tenants subsequently inducted on the ground that the respondent was inducted as tenant by the decreeholder, and the decree does not bind them.
This was upheld by the trial court and on appeal.
A writ petition was also dismissed on merits.
The decree became final.
The order of the High Court under article 227 became final.
Then against the order of the Board of Revenue an appeal under article 136 was filed in this Court.
A prelimi nary objection was raised that the decision of the High Court under article 227 operated as res judicata.
In that context it was held by this Court that the appeal was barred by res judicata as the decision of the High Court was on merits and would bind the parties unless it was modified or reversed in appeal or by other appropriate proceedings.
The facts are clearly distinguishable.
The case of Mohanlal Goenka vs Benoy Krishna Mukherjee & Ors., ; is also of little assistance to the respondent.
The decree passed by the Calcutta High Court on its original side was transferred for execution to the Court of Subordinate Judge of Asansol with proper certified copy of the decree and order of transmission.
The execution application was dismissed for default and a certificate was sent under Sec.
41 C.P.C. stating that the execution case was dismissed for default without transmitting the decree or the covering letter sent by the High Court.
The decree holder again applied for execution.
It was accordingly executed.
Then an application to set aside the sale was made under Order 21 Rule 90 C.P.C. on the ground that the decree is a nullity and the Court had no jurisdiction to execute the decree.
While negating the contention it was held that since the decree sent was not transmitted it would be re garded as a fresh application for execution and, therefore, the executing Court had jurisdiction and the decree was not a nullity.
That case also is not one of inherent lack of jurisdiction.
Thus it is settled law that normally a decree passed by a Court of competent jurisdiction, after adjudication on merits of the rights of the parties, operates as res judica ta in a subsequent suit or proceedings and binds the parties or the persons claiming right, title or interest from the parties.
Its validity should be assailed only in an appeal or revision as the case may be.
In subsequent proceedings its validity cannot be questioned.
A decree passed by a Court without jurisdiction over the subject matter or on other grounds which goes to the root of its exercise or jurisdiction, lacks inherent jurisdiction.
It is a corum non 163 judice.
A decree passed by such a Court is a nullity and is non est.
Its validity can be set up whenever it is sought to be enforced or is acted upon as a foundation for a right, even at the stage of execution or in collateral proceedings.
The defect of jurisdiction strikes at the authority of the Court to pass a decree which cannot be cured by consent or waiver of the party.
If the Court has jurisdiction but there is defect in its exercise which does not go to the root of its authority, such a defect like pecuniary or territorial could be waived by the party.
They could be corrected by way of appropriate plea at its inception or in appellate or revisional forums, provided law permits.
The doctrine of res judicata under Sec.
11 C.P.C. is founded on public policy.
An issue of fact or law or mixed question of fact and law, which are in issue in an earlier suit or might and ought to be raised between the same parties or persons claiming under them and was adjudicated or allowed uncontested becomes final and binds the parties or persons claiming under them.
Thus the decision of a competent Court over the matter in issue may operate as res judicata in subsequent suit or proceedings or in other proceedings between the same parties and those claiming under them.
But the question relating to the interpretation of a statute touching the jurisdiction of a Court unrelated to questions of fact or law or mixed questions does not operate as res judicata even between the parties or persons claiming under them.
The reason is obvi ous; a pure question of a law unrelated to facts which are the basis or foundation of a right, cannot be deemed to be a matter in issue.
The principle of res judicata is a facet of procedure but not of substantive law.
The decision on an issue of law founded on fact in issue would operate as res judicata.
But when the law has since the earlier decision been altered by a competent authority or when the earlier decision declares a transaction to be valid despite prohibi tion by law it does not operate as res judicata.
Thus a question of jurisdiction of a Court or of a procedure or a pure question of law unrelated to the right of the parties founded purely on question of fact in the previous suit, is not res judicata in the subsequent suit.
A question relating to jurisdiction of a Court or interpretation of provisions of a statute cannot be deemed to have been finally deter mined by an erroneous decision of a Court.
Therefore, the doctrine of res judicata does not apply to a case of decree of nullity.
If the Court inherently lacks jurisdiction consent cannot confer jurisdiction.
Where certain statutory rights in a welfare legislation are created, the doctrine of waiver also does not apply to a case of decree where the Court inherently lacks jurisdiction.
In the light of this position in law the question for determination is whether the impugned decree of the Civil Court can be assailed by 164 the appellant in execution.
It is already held that it is the Controller under the Act that has exclusive jurisdiction to order ejectment of a tenant from a building in the urban area leased out by the landlord.
Thereby the Civil Court inherently lacks jurisdiction to entertain the suit and pass a decree of ejectment.
Therefore, though the decree was passed and the jurisdiction of the Court was gone into in issue Nos. 4 and 5 at the ex parte trial, the decree there under is a nullity, and does not bind the appellant.
There fore, it does not operate as a res judicata.
The Courts below have committed grave error of law in holding that the decree in the suit operated as res judicata and the appel lant cannot raise the same point once again at the execu tion.
It is seen from the dates mentioned that there is no delay in filing the leave application.
The leave application was filed within the limitation from the date of original order of dismissal of the revision or on a later date dis missing the review application.
It is true that the writ petition was filed against the order in revision, but it does not preclude the appellant to contest its invalidity in the appeal under article 136.
The decree was executed pending the special leave petition.
This Court would relieve the party from injustice in exercise of power under article 136 of the Constitution when this Court notice grave miscarriage of justice.
It is always open to the appellant to take aid of Sec.
144 C.P.C. for restitution.
Therefore, merely because the decree has been executed, on the facts when we find that decree is a nullity, we cannot decline to exercise our power under article 136 to set at nought illegal orders under a decree of nullity.
The appeal is accordingly allowed.
But in the circumstances parties are directed to bear their own costs.
Y. Lal Appeal allowed.
| The appellant is a firm dealing in the manufacture and sale of Tents and Tarpaulins at Jodhpur in Rajasthan.
It carried on a regular business of supplying these goods to defence services.
The Director General of Supplies and Dis posal invited tenders for the supply of tents and the appel lant firm submitted its tender, which was accepted.
The said contract was of two kinds of tents viz, "Flies Inner" and "Flies Outer", the agreed rate of the latter was Rs.225 per tent and the quantity was 15,000.
As per the terms of the contract, the goods were to be inspected at the premises of the appellant firm and after inspection the same were to be despatched to Commandant, C.O.D., Kanpur.
As regards the mode of payment of the price of the goods, 95% of the price was to be paid on proof of despatch of goods and production of inspection note, and 5% latter.
On October 14, 1968 one consignment of 1500 tents was despatched to C.O.D. Kanpur from Jodhpur by the appellant under Railway Receipt No. 502671 and 95% of the price was paid to the appellant.
The commandant, C.O.D. Kanpur, the consignee reported that 224 tents out of the said sale consignment had not been received at Kanpur and for that reason a sum of Rs.51,912 being the price of 224 tents was deducted from the amounts due to the appellant, under anoth er contract.
The Traffic Officer, Commandant C.O.D. had filed a claim with the railways for short delivery of 224 tents.
Despite repeated requests by the appellant for the payment of the said amount, the same was not paid to it.
As such the appellant filed a suit in Delhi High Court for the recovery of the principal amount as also for the interest thereon.
In the suit, the appellant also claimed interest on two other consignments, as its balance price i.e. 5% amount ing to Rs.24,357 was paid after a delay of 3 years and thus a sum of Rs.8,525 was claimed as interest @ 12% per annum from 1.1.69 to 1.12.71.
Thus the total claim was of Rs.74.972.
128 The defence of Respondents 1, 2 & 5 was that 224 tents were received short and as such a sum of Rs.51,912 its price was rightly deducted from the appellant 's bill.
Respondents 3 & 4 (Railways ' Officials) filed a State ment that only 11 tents were delivered short for which the admitted liability was Rs.2,475, the same having been paid to C.O.D. Kanpur by debit adjustment.
The Trial Judge by his Order dated February 12, 1982 dismissed the claim of the appellant substantially but so for as the amount of Rs.2,475 regarding the shortage of 11 tents was concerned, the same was decreed with interest.
Against the Judgment and Order of the Trial Judge, the appellant preferred an appeal before the Division Bench of the High Court and the same having been dismissed, the appellant has come up in appeal to this Court after obtain ing Special Leave.
Allowing the appeal, this Court, HELD: In view of the terms and conditions of the con tract embodied in clause 11 of the schedule of acceptance of tender regarding the place of delivery "F.O.R. Jodhpur", the property in the goods passed immediately on to the seller after delivering the goods and loading the same in the railway wagons at Jodhpur for transmission to the buyer, the consignee, without reserving any right of disposal.
[136D] On consideration of the place of delivery as well as the terms of delivery embodied in clause 11 of the schedule of Acceptance of Tender, the property in the goods alongwith the risk in the goods passed from the appellant to the Respondent No. 5 when the goods were delivered and dis patched by railway wagons at Jodhpur i.e. F.O.R. Jodhpur.
The consignee, Commandant, C.O.D. Kanpur is, therefore, liable for the price of 224 tents which was deducted by him from the other bills of the appellant.
[137A B] The plaintiff is entitled to get a decree of interest on the price from 1.1.69 to 1.12.1971 @ 6% per annum which is considered to be a reasonable rate of interest as claimed by the plaintiff appellant.
[139C] Girija Proshad Pal vs The National Coal Co. Ltd., AIR 1949 Cal.
472; The Commissioner of Sales Tax, Eastern Divi sion, Nagpur vs 129 Husenali Adamji & Co., [1959] 2 Supp.
SCR 702; B.B. Bose vs National Coal Trading Company, AIR 1966 (Patna) 346 and M/s. M.K.M. Moosa Bhai Amin, Kota vs Rajasthan Textile Mills, Bhawanimandi, Raj.
L.W. 77, referred to.
|
Appeals Nos.
207 to 209 of 1961.
Appeals from the judgment and decree dated August 23, 1957, of the Bombay High Court at Nagpur in First Appeals Nos. 105 to 107 of 1952 from Original Decree.
section T. Desai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants.
C. K. Daphtary, Solicitor General of India, N. section Bindra and R. H. Dhebar for P. D. Menon, for the respondent No. 1 Girish Chandra for sardar Bahadur, for respondents Nos. 3 and 8. 1963.
February 11.
The judgment of the Court was delivered by DAS GUPTA, J.
The appellant is a building contractor.
He constructed buildings for the Bai 982 Gangabai Memorial Hospital, Gondia, Kunwar Tilaksingh Civil Hospital, Gondia, and also for the Twynam Hospital, Tumsar, all within the district of Bhandara in Madhya Pradesh, in execution of three separate contracts in respect of the three hospitals which were concluded between him and Deputy Commissioner of Bhandara.
Though he received part payment in respect of each of these contracts he claims not to have received full payment of what was due to him.
On April 1, 1948 he brought the three suits out of which these three appeals have arisen for obtaining payments which he claims was due to him.
His averments in all the three plaints are similar, except that in respect of one of the suits, viz., the one in respect of the construction work done for the Bai Gangabai Memorial Hospital, he has also claimed the price of some furniture said to have been supplied by him at the request of the Deputy Commissioner.
The common case of the plaintiff in these three suits was that the Deputy Commissioner entered into these contracts ""as repre sentative of the Provincial Government" after having obtained previous sanction of that Government.
It was further his case that the Deputy Commissioner, Bhandara, as the administration head of the hospitals entered into these contracts and as such was liable to pay the amounts due on the contracts.
The plaint also averred that the Gondia Municipal Committee, Gondia, in the suit in respect of Bai Gangabai Memorial Hospital and the Dispensary Funds Committee in the other two suits were liable to satisfy plaintiff 's claim inasmuch as they had taken the benefit of the work done under the contract which was not intended to be done gratuitously.
On these averments the plaintiff impleaded the Provincial Government of the Province of Central Provinces and Berar as the first defendant, and the Deputy Commissioner of the Bhandara District, as the second defendant, in all the three suits.
The Gondia Municipal Committee was impleaded as the third defendant in 983 Suit No. 3 B of 1948, i. e., the suits in respect of Bai Gangabai Memorial Hospital.
The Dispensary Funds Committee was impleaded as the third defendant in the other two suits.
In both, the members of the Dispensary Funds Committee were also impleaded by name as defendants.
Mr. G. K. Tiwari, who as Deputy Commissioner, Bhandara, signed the argument was impleaded in his personal capacity in all the three suits (Defendant No. 4 in Suit No. 3 B, Defendant No. 9 in Suit No. 2 B and defendant No. 14 in Suit No. 1 B).
The State of Madhya Pradesh was later substituted for the Provincial Government of the Province of Central Provinces and Berar as the first defendant in all the three suits.
It was admitted in the plaint that the construction could not be completed within the time mentioned in the contracts but it was pleaded that the time was not the essence of the contract and further, that the delay was due to the Deputy Commissioner 's failure to supply the necessary materials in time and inclemency of weather and also that time was extended by the Deputy Commissioner.
In all the three suits the plaintiff made his claim at a higher rate than the contract rate on the plea that, the Deputy Commissioner had sanctioned these higher rates.
For the purpose of the present appeals in which we are concerned solely with a question of law it is unnecessary to mention the various other averments in the plaint.
It is necessary to mention however that in Suit No.3 B the plantiff asked for a decree of Rs. 21,281/ with costs and interest from the date of suit against defendants 1 to 3 and in the alternative, against defendant No. 4, i. e., Mr. G. K. Tiwari.
In suit No. 1 B, the plaintiff claimed a decree for Rs. 12,000/ with full costs and future interest from the date of suit against defendants 1 to 3 and/or defendant No. 14, i. e., Mr. G. K. Tiwari.
In Suit 984 No. 2 B, the plaintiff asked for a decree for Rs. 32,208/ with costs and future interest against defendants 1 to 3 and/or defendant No. 9, i. e., Mr. G. K. Tiwari.
The main contention of the State of Madhya Pradesh in resisting the suits was that the agreement for the construction of the buildings was not made on behalf of the State Government and also that the hospital was not government hospital and therefore it had no liability.
The same contentions were raised by the Deputy Commissioner, Bhandara and Mr. Tiwari, personally.
All of them further contended that even on merits the plaintiff was not entitled to any relief, for, though time was essence of the contract the work was not finished within the time agreed upon.
They also resisted the plantiff 's claim to increased rates on the ground that the previous sanction of the Deputy Commissioner had not been obtained.
Another contention raised in all the suits was that the plaintiff 's claim was barred by time.
The other defendants also contested the suits on grounds which it is unnecessary for the purpose of the present appeals to set out.
The Trial judge held that the agreements in question were made for and on behalf of the State and further, that the constructions had "beyond doubt benefited the State" and so the State was liable.
The learned judge also rejected the various objections raised by the defendants to the plaintiff 's claim on merits except that he disallowed part of the plaintiff 's claim and gave the plaintiff a decree for part of his claim against the State of Madhya Pradesh in all the three suits.
He also held that none of the other defendants were liable and dismissed the suits as against them.
Against the Trial Court 's decision in these suits the State of Madhya Pradesh preferred appeals to 985 the High Court of judicature at Nagpur.
During the pendency of these appeals the State of Madhya Pradesh was substituted by the State of Bombay.
In all these appeals the plaintiff Pannalal was impleaded as the first respondent; and all the other defendants were also impleaded as respondents.
Disagreeing with the Trial Court the High Court held that the contract entered into by the Deputy Commissioner was not binding on the State Government; that the Deputy Commissioner signed the contract at his own discretion; and further, the contracts not having been entered into in the form as required under section 175(3) of the Government of India Act, 1935, were not enforceable against the State Government.
The High Court also held that the Government could not be held to have ratified the action of the contracts entered into by the Deputy Commissioner.
The High Court also rejected the argument that the Government having received the benefit of the works must pay for them, on their finding that the hospitals were not government hospitals and Government "can in no sense be regarded as having benefited by anything done with respect to them".
On these findings the High Court set aside the decree passed by the Trial Court against the State Government and allowed the appeals with costs.
It appears that a prayer was made on behalf of the plaintiff respondent that the High Court should pass decrees against the Deputy Commissioner, Bhandara, under Or. 41, r. 33 of the Code of Civil Procedure.
That prayer was rejected by the High Court in these words : "Shri Phadke then prayed that under Order 41 rule 33 of the Code of Civil Procedure we should pass decrees against the Deputy Commissioner, Bhandara, who was indubitably, a party to the contracts.
Though the provisions of Order 41, 986 rule 33 are wide enough to permit this we do not see any reason why we should exercise our power when it was open to the respondent No. 1 to prefer a cross objection against the dismissal of his suits against those defendants, as well as against some other defendants.
" The High Court also rejected the Counsel 's prayer to grant him leave to file a cross objection at that stage.
In the result, all the three suits were dismissed by the High Court in their entirety.
The High Court however granted a certificate under article 133(1)(c) of the Constitution.
On the basis of that certificate these three appeals have been preferred by the plaintiff.
Two grounds were urged in support of the appeals.
The first was that the High Court was wrong in holding that the State Government was not liable.
The second ground urged was that, in any case, the High Court ought to have granted relief to the plaintiff against such of the other defendants as it thought fit under the provisions of Order 41, rule 33 of the Code of Civil Procedure.
There is, in our opinion, no substance in the appellant 's contention that the State Government was liable.
On the materials on the record, it appears clear to us that the Deputy Commissioner did not act on behalf of the State Government in signing the contracts.
Nor can it be said that the State Government derived benefit from the work done by the plaintiff.
In our opinion, the High Court was right in its conclusion that the State Government was not liable in respect of any of these contracts and rightly dismissed the suits as against the defendant No. 1.
This position was not seriously disputed before us.
There is however much force in.
the appellant 's contention that the High Court ought to have exercised its jurisdiction under Or. 41, r. 33 of the Code 987 of Civil Procedure in favour of the plaintiff.
The operative portion of that rule, which was for the first time introduced in the Civil Procedure Code in 1908, is in these words : "33.
The appellate court shall have power to pass any decree and make any order which ought to have been passed or made, and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection.
" A proviso was added to this by Act 9 of 1922 which, however, does not concern us.
It is necessary however to set out the illustration to the rule which runs thus : "A claims a sum of money as due to him from X or Y, and in a suit against both obtains a decree against X. X appeals and A and Y are respondents.
The appellate court decides in favour of X. It has power to pass a decree against Y." Even a bare reading of Order 41, rule 33 is sufficient to convince any one that the wide wording was intended to empower the appellate court to make whatever order it thinks fit, not only as between the appellant and the respondent but also as between a respondent and a respondent.
It empowers the appellate court not only to give or refuse relief to the appellant by allowing or dismissing the appeal but also to give such other relief to any of the respondent as "the case may require." In the present case, if there was DO impediment in law the High Court could 988 therefore, though allowing the appeal of the State by dismissing the plaintiff 's suits against it, give the plaintiff a decree against any or all the other defendants who were parties to the appeal as respondents.
While the very words of the section make this position abundantly clear the illustration puts the position beyond argument.
The High Court appears to have been in no doubt about its power to give the plaintiff relief by decreeing the suits against one or more of the other defendants.
But say the learned judges, "we do not think it proper to do so as the plaintiff could have asked for this relief by filing a cross objection under Or. 41, r. 22, C. P. C., but has not done so.
" The logic behind this seems to be that the cross objection under Or. 41, r. 22 could be filed only within the time as indicated therein and if a respondent who could have filed a cross objection did not do so, is given relief under Or. 41, r. 33, Or.
41, r. 22 is likely to become a dead letter.
The whole argument is based on the assumption that the plaintiff could, by filing a cross objection under Or. 41, r. 22, Civil Procedure Code,, have challenged the Trial Court 's decree in so far as it dismissed the suits against the defendants other than the State.
, We are not, at present advised, prepared to agree that if a party who could have filed a cross objection under Or. 41, r. 22 of the Code of Civil procedure has not done so, the appeal Court can under no circumstances give him relief under the provisions of Or. 41, r. 33 of the Code.
It is, however, not necessary for us to discuss the question further as, in our opinion, the assumption made by the High Court that the plaintiff could have filed a cross objection is not justified.
Whether or not a respondent can seek relief against any other respondent by a cross objection 989 under Or. 41, r. 22.
Civil Procedure Code, was a vexed question in Indian courts for a long time.
The present Order 41, r. 22 has taken the place of the former section 561 of the Code of 1882.
Indeed, the provision as regards raising an objection by a respondent without a separate appeal appears even in the Code of 1859 as section 348. 'The same provision in a little more detailed form was enacted in the Code of 1877 as section 561.
It was reproduced in the Code of 1882 also as section 561 with slight amendments in these words : "Any respondent though he may not have appealed against any part of the decree, may upon the hearing not only support the decree on any of the grounds decided against him in the court below, but take any objection to the decree which he could have taken by the way of appeal, provided he has filed a notice of such objection Dot less than seven days before the date fixed for the hearing of the appeal.
Such objection shall be in the form of a memo randum., and the provisions of section 541, so far as they relate to the form and contents of the memorandum of appeal shall apply thereto.
Unless the respondent files with objection a written acknowledgement from the appellant or his pleader of having received a copy thereof, the Appellate Court shall cause such a copy to be served, as soon as may be after the filing of the objection, on the appellant or his pleader, at the expense of the respondent.
" The question whether a respondent could by way of cross objection seek relief against another respondent under these provisions was first raised before the courts almost a century ago.
Both the Calcutta and the Bombay High Courts held in a number of cases that ordinarily it was not open to a respondent 990 to seek relief as against a co respondent byway of objection, though in exceptional cases this could be done.
(Vide Burroda Soundree Dossee vs Nobo Gopal Mullick (1), Maharaja Tarucknath Roy vs Tuboornnissa Chowdhrain (2), Ganesh Pandurang Agte vs Gangadhar Ramkrishna (3) , Anwar Jan Bibi vs Azmut Ali(4).
These decisions it is proper to mention were given under the Code of 1859 where section 348 provided that "Upon hearing of the appeal, the respondent may take any objection to the decision of the lower court which he might have taken if he had preferred a separate appeal from such decision.
" After this section was replaced by section 561 in the Code of 1877 and the Code of 1882 the question whether a respondent can file an objection against another respondent came up before the courts several times and the decision remained the same.
The Patna and the Allahabad High Courts also took the view that as a general rule the right of a respondent to urge cross objections should be limited to asking relief against the appellant only and it is only where the appeal opens up questions which cannot be disposed of properly except by opening up matters as between correspondents that relief against respondents can also be sought by way of objections.
The Madras High Court took a different view in Timmayya vs Lakshmanan (5), and held that the words of the section were wide enough to cover all objections to any part of the decree and it was open to a respondent seek relief under this section even against another respondent, and this view was reiterated by that Court even after the Code of 1908 made an important change in the provision by using the word "cross objection" in place of "objection".
Ultimately however in 1950 a Full Bench of the Madras High Court in Venkateshwarlu vs Rammama (1), considered the question again and decided overruling all previous decisions that on a proper construction of the language, Or. 41, r. 22 confers only a restricted (1) (2) (3) (1869) 6 Bom.
H.C. Rep. 244.
(4) (5) (6) L R. 991 right on the respondent to prefer objection to the decree without filing a separate appeal; that such objection should, as a general rule, be primarily against the appellant, though in exceptional cases it may incidentally be also directed against the other respondents.
The Lahore High Court which had earlier followed the former view of the Madras High Court also decided in Jan Mohamed vs P. N. Razden (1), to adopt the other view held by the High Courts of Allahabad, Bombay, Calcutta and Patna.
The Nagpur High Court has also adopted the same view.
(Vide Chandiprasad vs Jugul Kishore) (2).
In our opinion, the view that has now been accepted by all the High Courts that Order 41, r. 22 permits as a general rule, a respondent to prefer an objection directed only against the appellant and it is only in exceptional cases, such as where the relief sought against the appellant in such an objection is intermixed with the relief granted to the other respondents, so that the relief against the appellant cannot be granted without the question being re opened between the objecting respondent and other respon dents, that an objection under Or. 41, r. 22 can be directed against the other respondents, is correct.
Whatever may have been the position under the old section 561, the use of the word " 'cross objection" in Or.
41 r. 22 expresses unmistakably the intention of the legislature that the objection has to be directed against the appellant.
As Rajammannar C. J., said in Venkataswrlu vs Ramamma (3).
"The legislature by describing the objection which could be taken by the respondent as a "cross objection" must have deliberately adopted the view of the other High Courts.
One cannot treat an objection by a respondent in which the appellant has no interest as a cross objection.
The appeal is by the appellant against a respondent, the cross objection must be an objection by a respondent against the appellant".
We think, with respect, that these observations put (1) A.I.R. 1944 Lah.
(2) A.I.R. 1948 Nag.
(3) I.L.R. 992 the matter clearly and correctly.
That the legislature also wanted to give effect to the views held by the different High Courts that in exceptional cases as mentioned above an objection can be preferred by a respondent against a correspondent is indicated by the substitution of the word "appellant" in the third paragraph by the words "the party who may be affected by such objection.
" On the facts of the present case, we have come to the conclusion that it was not open to the plaintiff appellant before the High Court to file any cross objection directed against the other defendants who were correspondents.
The High Court was therefore wrong in refusing to consider what relief, if any, could be granted to the plaintiff under the provisions of Or. 41, r. 33, Civil Procedure Code.
Learned Counsel who appeared for the Gondia Municipality in Civil Appeal No. 209 of 1961, relied on the decision of the Privy Council in Anath Nath vs Dwarka Nath (1), for his contention that rule 33 could not be rightly used in the present case.
In that case the plaintiff challenged a revenue sale as wholly void for want of jurisdiction and bad for irregularities and further contended that the respondent had been guilty of fraud or improper conduct to the prejudice of his co owners in the estate.
The Trial Court rejected the plaintiff 's case that the sale was void for want of jurisdiction and bad for irregularities but accepted the other contention and gave the plaintiff a decree.
On appeal, the High Court held that no fraud or improper conduct towards co owners in respect of the revenue sale had been proved against respondent No. 1.
The High Court refused to grant any relief to the plaintiff on the other ground which had been rejected by the Trial Court in the view that it was no longer open to the plaintiff who had not filed any cross objections to the decree of the Trial Court to maintain that the revenue (1) A.I.R. 1939 P.C. 86.
993 sale should be set aside for want of jurisdiction or irregularity.
In accepting this view of the High Court the Privy Council observed : "In their Lordships view the case came clearly within the condition imposed by the concluding words of sub r.
(1) of R. 22, " 'provided he has filed such objections in the Appellate Court, etc., etc".
It was contended however that the language of R. 33 of the same Order was wide enough to cover the case.
Even if their Lordships assume that the High Court was not wholly without power to entertain this ground of appeal an assumption to which they do not commit themselves they are clearly of opinion that Rule 33 could not rightly be used in the present case so as to abrogate the important condition which prevents an independent appeal from being in effect brought without any notice of the grounds of appeal being given to the parties who succeeded in the courts below.
" This decision is of no assistance to the respondents.
For the question which we have considered here, viz., how fir it is open to a respondent to seek relief against a co respondent by way of cross objection did not fall for consideration by the Privy Council.
The Privy Council based its decision on the view that it was open to the respondent before the High Court to file a cross objection under Or. 41, r. 22 against the appellant and had not to consider the question now before us.
We think it proper also to point out that the decision of the Privy Council in Anath Nath 's case (1), should not be considered as an authority for the proposition that the failure to file a cross objection where such objection could be filed under the law invariably and necessarily excludes the application of Or. 41, r. 33.
There their Lordships assumed, without deciding, that the (1) A.I.R. 1939 P. C. 86, 994 High Court was not wholly without power to entertain the other ground of appeal but in the special circumstances of the case they thought that it would not have been right to give relief under the provisions of Rule 33 to the appellant.
As the High Court has refused to exercise its powers under Or. 41, r. 33 of the Code of Civil Procedure on an incorrect view of the law the matter has to go back to the High Court.
We maintain the High Court 's order in so far as it dismisses the suits against the State of Bombay but set aside the order in so far as it dismisses the suits against the other defendants and send the case back to the High Court in order that it may decide, on an examination of the merits of the case, whether relief should be granted to the plaintiff under the provisions of Or. 41, r. 33, Civil Procedure Code.
Costs incurred in this Court will abide the final result in the appeals before the High Court at Bombay.
Appeals allowed in part.
Case remanded.
| The appellant brought three suits claiming full payment with interest in respect of three hospitals constructed by him in execution of three separate contracts between him and the Deputy Commissioner.
The trial Judge decreed the suits for part of his claim against the State of Madhya Pradesh and held that other defendants were not liable, and accordingly dismissed the suits against them.
On appeals preferred by the State of Madhya Pradesh, the High Court set aside the decree against the State Government ' and allowed the, appeals with costs.
The plaintiff at that stage prayed for leave of the High Court to file a cross objection and also for decrees to be passed against the Deputy Commissioner under O. 41, r. 33 of the Code Of Civil Procedure, which was rejected and all the suits were dismissed.
It was urged that (1) the State Government was liable in respect of all of these contracts and (2) the High Court ought to have granted relief against such of the other defendants as it thought fit under O. 41, r. 33 of the Code of Civil Procedure.
Held, that the State Government was not liable in respect of any of these contracts.
Held, further, that the wide wording of O. 41, r. 33 empowers the appellate court to make whatever order it thinks fit, not only as between the appellant and the respondent but also as between a respondent and a respondent.
It could not be said that if a party who could have filed a cross objection under O. 41, r. 22 did not do so, the appeal court could under no circumstances give him relief under the provision of O. 41, r. 33.
Order 41, r. 22 permits as a general rule, a respondent to prefer an objection directed only against the appellant and 981 it is only in exceptional cases that an objection under O. 41, r. 22 can be directed against the other respondents.
On the facts of these cases the High Court refused to exercise its powers under O. 41, r. 33 on an incorrect view of the law and so the appeal must be remanded to the High Court for decision what relief should be granted to plaintiff under O. 41 r. 33.
Burroda Soundree Dasee v, Nobo Gopal Mullick, , Maharaja Tarucknath Boy vs Tuboorunissa Chowdhrain, , Ganesh Pandurang Agte vs Gangadhar Ramakrishna, (1869) 6 Bom.
H.C.Rep.
2244, AnwarJan Bibee vs Azmut Ali, , Tirmnama vs Lakshmanan, Venkateswarulu vs Rammama, I.L.R. , Jan Mohamed vs P. N. Razden, A.I.R. and Ghandiprasad vs Jugul Kishore, A.I.R. , referred to.
Anath Nath vs Dwarka Nath, A.I.R. (1939) P. C. 86, held inapplicable.
|
Civil Appeal Nos. 761 & 762. of 1971.
(Appeals by Special Leave from the Judgment and order dated the 14 3 1969 of the Patna High Court in M.J.C. Nos.
182 and 183 of 1962).
B. Sen, T. A. Ramachandran and section P. Nayar, for the appellant.
Hardayal Hardy, and Bishamber Lal, for respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
These two appeals by special leave are directed against the common judgment of March 14, 1969, of the Patna High Court in the matter of two references under section 66(1) of the Indian Income tax Act, 1922, relating to assessment years 1953 54 and 1954 55 of the respondent (hereinafter to be referred to as the company) .
The case has a rather chequered history as will appear from the facts narrated below: The company at the material time was a private limited company and at the end of the relevant previous years, namely, August 31, 1952 and August 31, 1953, the shareholding was as follows: Number of shares on: 31 8 1952 31 8 1953.
Sri Ashok Kumar Jain, 10,000 10,000 Managing Director.
Sri R. Sharma Director 10 10 3.
Sri N. C. Jain Director 10 10 4.
Sri section P. Jain 10,000 10,000 5.
RamaJain 10,000 10,000 6.
Sri Alok Prakash Jain 10,000 10,000 7.
Sri Rishabh Investment Ltd 5,000 5,000 8.
Dalmia Jain Co. Ltd. 2,000 2,000 9.
Universal Bank of India Ltd 980 980 10.Ashoka Agencies Ltd.
2,000 2,000 50,000 50,000 401 Of these shareholders Rama Jain is the wife of section P. Jain and Alok Prakash Jain and Ashok Kumar Jain are the sons of section P. Jain and Rama Jain.
Ashok Kumar Jain (briefly A. K. Jain), the Managing Director, attained majority on March 5, 1952, while Alok Prakash Jain was a minor during both the accounting years.
The three companies, namely, Rishabh Investment Ltd., Dalmia Jain Co. Ltd. and Universal Bank of India Ltd., are companies to which the provisions of action 23A of the Income tax Act, 1922 (briefly the Act) prior to its amendment by the Finance Act 1955, applied.
section P. Jain was the principal shareholder of the Universal Bank of India Ltd. holding 980 shares.
Ashoka Agencies Ltd. with 2000 shares was a company to which admittedly section 23A did not apply.
R. Sharma and N. C. Jain holding 10 shares each were employees, N. C. Jain being the Secretary of section P. Jain.
The Income tax officer by his orders of September 25, 1957 and October 30, 1957, held that section 23A was attracted in the case of the company for both the years.
On appeal, the Appellate Assistant Commissioner remanded the matter back to the Income tax officer for a finding on certain additional facts.
The Income tax officer in his remand report submitted certain additional facts to the Appellate Assistant Commissioner who in due course affirmed the orders of the Income tax officer.
The company appealed to the Income tax Appellate Tribunal, Bihar, at Patna.
The Tribunal allowed the appeal by its order of January 26, 1961 (7) and held that section 23A was not applicable to the company in respect of both the assessment years.
At the instance of the Commissioner Income tax, Bihar, the following question was referred by the Tribunal to the High Court: "Whether on the facts and circumstances of the case the Tribunal was justified in holding that the provisions of section 23A of the Income tax Act were not applicable to the assessee company for the assessment years 1953 54 and 1954 55" ? The High Court by its order of December 9, 1965, in view of two decisions of this Court, namely, Raghuvanshi Mills Ltd. vs Commissioner of Income tax, Bombay,(l) decided on December 7, 1960 and Commissioner of Income tax Bombay vs Jubilee Mills Ltd.(2) Bombay, decided on September 1, 1962, directed the Tribunal to submit a supplementary statement of case to it: "Whether bearing in mind the principles laid down by the Supreme Court in Raghuvanshi Mills Ltd. vs Commissioner of Income tax (41 Income Tax Reports 613) and Commissioner of Income tax, Bombay City vs Jubilee Mills Ltd. (48 Income Tax Reports 9) Shrimati Rama Jain and Sri Ashok Kumar Jain, or either of them could be safely taken to have acted in concert with Sri section P. Jain during the years in question, in respect of the affairs of the assessee company" ? (1) ; (2) [1963] Supp. 1 S.C.R. 83. 402 The High Court also directed that "the Tribunal may take additional evidence, if it considers it necessary to enable it to state the supplementary case as directed above".
The Tribunal thereafter, after hearing the parties, submitted a supplementary statement of case to the High Court on September 30, 1966.
A controversy arose before the Tribunal with regard to entertainment of additional evidence which the Revenue wanted to adduce before it, particularly in view of the direction of the High Court, but the Tribunal did not accede to the request and additional evidence was not received.
The matter then came up before the High Court resulting in the impugned order against the Revenue.
Hence these two appeals by special leave.
The Revenue reiterated its grievance before the High Court about the Tribunal 's refusal to entertain additional evidence without success and the matter is no longer in controversy in view of a decision of seven Judges of this Court in The Keshav Mills Co. Ltd. vs Commissioner of Income tax, Bombay North,(1) affirming the earlier decisions of this Court in the case of the New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax, Bombay North( ') and The Petlad Turkey Red Dye Works Co. Ltd. Petlad vs The Commissioner of Income tax, Bombay, Ahmedabad(3).
It is now well settled that when the Tribunal has disposed of the matter and is preparing a statement of the case either under Section 66(1) or under section 66(2), there is no scope for any further or additional evidence and the power of the High Court under section 66(c) can be exercised only in respect of material and evidence which has already been brought on the record.
It was contended on behalf of the Revenue before the High Court that the finding of the Tribunal was perverse.
Mr. Sen appearing on behalf of the Revenue before us has fairly and, in our opinion, rightly not pressed this submission before us.
Similarly on behalf of the company also it was contended before the High Court that there was no principle of law involved in drawing any inference in the cases answer to the plea of the Revenue that the finding whether section 23A was not attracted was a mixed question of law and fact.
It is not possible to hold that the question referred to the High Court is not a question of law as undoubtedly on the statement of case an important question of law does arise and the composite reference was competent.
The question that arises for consideration is whether on the facts and circumstances that are established before the Tribunal the company in the two assessment years can escape the reach of section 23A of the Act.
(1) ; (2) ; (3) [19631 Supp.
1 S.C.R. 871.
403 Section 23A prior to its amendment in 1956 and so far as it is material read as follows: "23A (1) .
Power to assess individual members of certain companies.
Where the Income tax officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company up to the end of the sixth month after its accounts for that previous year are laid before the company in general meeting are less than sixty per cent, of the assessable income of the company of that previous year, as reduced by the amount of income tax and super tax payable by the company in respect thereof he shall, unless he is satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profit made, the payment of a dividend or a larger dividend than that declared would be unreasonable, make with the previous approval of the Inspecting Assistant Commissioner an order in writing that the undistributed portion of the assessable income of the company of that previous year as computed for income tax purposes and reduced by the amount of income tax and super tax payable by the company in respect thereof shall be deemed to have been distributed as dividends amongst the share holders as at the date of the general meeting aforesaid, and thereupon the proportionate share thereof of each shareholder shall be included in the total income of such shareholder for the purpose of assessing his total income: * * * * Provided further that this sub section shall not apply to any company in which the public are substantially interested Explanation.
For the purpose of this sub section, a company shall be deemed to be a company in which the public are substantially interested if shares of the company . carrying not less than twenty five per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and are at the end of the previous year beneficially held by the public . and if any such shares have in the course of such previous year been the subject of dealings in any stock exchange or are in fact freely transferable by the holders to other members of the public '`.
In this case the company did not declare any dividend for the assessment year 1953 54.
In the next assessment year 1954 55, only a sum of Rs. 50,000/ was distributed as dividend.
It is not in dispute that the company had sufficient requisite assessable income out of which sufficient or larger dividend could have been paid.
There is no dispute that the payment of an adequate dividend for the first year and larger dividend for the next year would have been 404 at all unreasonable in respect of these two assessment years.
The only controversy between the parties is with regard to the exclusion of the company from the application of section 33A in view of the third proviso read with the Explanation.
In other words, is the company one in which the public are substantially interested ? It could be so in terms of the Explanation if 25 per cent shares of the company or more had been allotted unconditionally to, or acquired unconditionally by, and are at the end of the previous year beneficially held by the public and if any such shares in the course of such previous year were in fact freely transferable by the holders to other members of the public.
It was not in dispute that the shares of the company were in fact freely transferable by the holders to other members of the public.
The controversy, therefore, is within a very narrow compass, namely, whether, as stated earlier, the company is one in which the public has 25 per cent or more shares allotted unconditionally to, or acquired unconditionally by it and are at the end of the previous year beneficially held by it.
It may be mentioned that section 23A(l), as it stood before the amendment by the Finance Act 1956, did not authorise amalgamation of the shares held by "relatives" as if they represented a single shareholder.
It will, therefore, be a question of fact and a matter of inference in each case whether any "relatives" forming themselves into a company acted as a group or block in concert in controlling the affairs of the company.
Relationship would not, per se, lead to such a conclusion.
The Tribunal in its order observed: "Sri A. K. Jain became major on 5 3 1952.
Therefore, as at the end of the two previous years, his holding of 10,000 shares cannot ipso facto be amalgamated with the shareholding of Sri section P. Jain as if he was the nominee of his father The shareholding of 10,000 shares by Mrs. Rama Jain has also to be left out of account since, as already observed, there is no finding that Sri section P. Jain provided the consideration for the acquisition of 10,000 shares held by her.
Assuming, therefore, that Sri section P. Jain was controlling shareholder, the shares held by the members of the 'public ' which would include Sri A. K. Jain and Mrs. Rama Jain would be at least 22,000 shares".
" G In the supplementary statement of case filed by the Tribunal enclosing various orders and other documents, it is shown that section P. Jain was Director of the company from August 3, 1950 to September 25, 1950.
He was appointed Managing Director from June 6, 1953, subject to approval of the Government.
A. K. Jain was Director of the company from August 3, 1950 even when he was a minor (his date of birth being March 5, 1934) and was appointed Deputy Managing Director from June 6, 1953, subject to approval of the Government.
R. Sharma was Director from 3 8 1950 to 405 7 9 1956.
He was Secretary of R. K. Dalmia and employee of Sahu Jain Limited.
H. C. Jain was Director from 25 9 1950 to 25 3 1954.
He was Secretary of section P. Jain and employee of Ashoka Agencies Limited.
From the above it appears that the Deputy Managing Director and the two other Directors held amongst themselves 10,000 shares and out of the balance 30,000 shares were held by the relations of the Managing Director, namely, by the father, the mother and the minor brother.
It also appears that section P. Jain along with Ashok Kumar Jain, R. Sharma and N. C. Jain were the promoters and subscribed to the Memorandum of Association at the start of the company in July 1950.
It also appears Ashok Kumar Jain, Director, was getting a remuneration of Rs. 6,000/ per month w.e.f. September 1951 in accordance with the resolution passed in an extra ordinary general meeting of the shareholders on October 1, 1951.
At the meeting of the Board of Directors dated November 29, 1950, Ashok Kumar Jain and R. Sharma, Directors of the company, were authorised to execute managing agency agreements with different companies.
Ashok Kumar Jain was generally presiding over the meetings from November 1950.
The Tribunal further observed in its statement of case that "A perusal of the minutes or the proceedings of the general meetings does not lead to any inference that Sri section P. Jain, Smt.
Rama Jain and Sri A. K. Jain were necessarily acting in concert.
On the other hand, it appears that despite his young age, Sri A. K. Jain seems to have been taking active interest in the management of the affairs of the asses see company and the companies managed by it.
Unless it is to be presumed that because of relationship, Sri section P. Jain, Smt.
Rama Jain and Sri A. K. Jain should be regarded as acting in concert, there is no other material on record on the basis of which such a conclusion could be supported".
The Tribunal also observed: "that in spite of opportunity afforded by the Appellate Assistant Commissioner, the Income tax officer had not brought on record materials to show that the voting rights of Mrs. Rama Jain or Sri A. K. Jain were controlled by Sri section P. G The Tribunal concluded by observing that " The revenue had failed to establish that Sri section P. Jain, his wife and his son Sri A. K. Jain were acting in concert".
Section 23A again came up for consideration before this Court in Commissioner of Income tax, West Bengal vs East Coast Commercial 406 Co. Ltd.(l).
This Court made a reference to the Raghuvanshi Mills ' case (supra) where it was observed: "The word 'public ' is used (in the Explanation) in contradistinction to one or more persons who act in unions and among whom the voting power constitutes a block.
If such a block exists and possesses more than seventy five per cent of the voting power, then the company cannot be said to be one in which the public are substantially interested . the test is first to find out whether there is an individual or . group which controls the voting power as a block.
If there be such a block, the shares held by it cannot be said to be 'unconditionally ' and 'beneficially ' held by members of the public".
This Court further observed: " The Tribunal had to decide in the first instance whether there was a group of persons acting in concert holding a sufficient number of shares which may control the voting as a block.
But the existence of a block is not decisive.
If there be a group of persons holding control over voting, the Company would still be a Company in which the public are substantially interested, if twenty five per cent or more of the voting power has been allotted unconditionally to and beneficially held by the public and the shares were in the previous years subject of dealings in any stock exchange in the taxable territories or were in fact freely transferable by the holders to other members of the public.
The two enquiries are distinct".
This Court further referred to Jubilee Mills ' case (supra) and Raghuvanshi Mills ' case (supra) and observed as follows: "But in Commissioner of Income tax, Bombay City l vs Jubilee Mills Ltd. (supra) this Court held that no direct evidence of overt act or concert between the members of the group having control over voting was necessary to prove that the Company was not one in which the public were substantially interested.
It was observed in Raghuvanshi Mills ' case (supra) that 'in deciding if there is such a controlling interest, there is no formula applicable to all cases.
Relationship and position as director are not by themselves decisive.
If relative act, not freely, but with others, they cannot be said to belong to that body, which is described as 'public ' in the Explanation '.
In Jubilee Mills ' case (supra) this Court elaborated those observations and stated: The test is not whether they have actually acted in concert but whether circumstances are such that human experience tells us that it can safely be taken that they must (1)[1967] I S.C.R. 821.
407 be acting together.
It is not necessary to state the kind of evidence that will prove such concerted actings.
Each case A must necessarily be decided on its own facts".
This Court finally in the above East Coast Commercial Company 's case concluded as follows: "On an analysis of the reasons recorded by the Tribunal and the High Court, it is clear that the Tribunal held that the Kedias did not form a controlling group because there was no evidence that they actually controlled the voting, even though they held more than seventy five per cent of the shares issued by the Company: the High Court observed that the members of the Kedia family held 4,016 shares of the Company and were in a position to control the affairs of the Company, but there was no evidence to show that they did in fact act in concert and controlled the affairs of the Company as a block.
But, as already observed, if the members of the Kedia family formed a block and held more than seventy five per cent of the voting power, it was not necessary to prove that they actually exercised controlling interest.
It is the holding in the aggregate of a majority of the shares issued by a person or persons acting in concert in relation to the affairs of the Company which establishes the existence of a block.
It is sufficient, if having regard to their relation etc., their conduct, and their common interest, that it may be inferred that they must be acting together; evidence of actual concerted acting is normally difficult to obtain, and is not insisted upon".
We may also observe in passing that it does not appear that the East Coast Commercial Company 's case (supra) was referred to during the hearing in, nor was lt noticed by, the High Court.
The Tribunal in the supplementary statement observed as follows: " Unless it is to be presumed that because of relationship, P Sri section P. Jain, Smt.
Rama Jain and Sri A. K. Jain should be regarded as acting in concert, there is no other material on record on the basis of which such a conclusion could be supported".
The High Court also observed to the same effect: " It may be that in view of the relationship of the parties as to a group consisting of the father, two minor sons and their mother, a possible inference was that the relationship was such that they could reasonably be taken to be acting as a group in concert. " but "the assessee could not be placed in the category of such a company accordingly because of close relationship".
Keeping in the forefront the test laid down by this Court in East Coast Commercial Company 's case (supra), Mr. Sen on behalf of the 408 Revenue submitted for our consideration the following facts and circumstances from which, according to counsel, an inference can be reasonably drawn about the controlling power in a block confined to a family group holding more than 75 per cent shares: (1) 80 per cent of the share capital (40,000 out of 50,000) is held by section P. Jain, his wife and two sons, one of whom was a minor throughout the period of the two accounting years and the other son, A. K. Jain, for a portion of the period upto March 1952.
The remaining 20 per cent of the shares was held by the companies which were under the control by section P. Jain and out of which 20 shares were held by two employees under the control of section P. Jain.
(2) A. K. Jain was appointed as Director in the company in August 1950 when he was a minor, aged 16 years, and he became the Managing Director on 1 2 1954 at a salary of Rs. 6,000/ per month.
According to counsel this could not have been possible if he was not the son of the controlling shareholder, section P. Jain.
(3) section P. Jain who was a Director resigned making room for his Private Secretary N. C. Jain for appointment as Director.
(4) During the assessment year 1953 54 the assessee company claimed Rs. 2,02,500/ as loss in a transaction in hessian through Messrs Kabra & Co. in settlement of August 18, 1952, and the same amount was shown as profit in hessian through the same broker by Smt.
Rama Jain wife of section P. Jain in the settlement.
(5) section P. Jain, A.K. Jain, R. Sharma and N. C. Jain were the promoters of the company and were the signatories to the Memorandum of Association.
Mr. Hardy, the learned counsel for the respondent, on the other hand, replied to the submissions as follows: (1) Rama Jain and A. K. Jain are independent assessees.
The minutes of the Board 's meetings clearly show A. K. Jain as a competent Director taking independent decisions.
Mere relationship, therefore, would not lead to the conclusion that these two shareholders acted with section P. Jain in concert.
He, however, admits that section P. Jain may be said to control the voting power of the minor son, Alok Prakash Jain, as his natural guardian.
According to Mr. Hardy if Rama Jain and A. K. Jain are holding 20,000 shares out of 50,000, they cannot be held to be acting in concert with section P. Jain and section 23A will not be attracted.
(2) With regard tn the second submission of Mr. Sen, Mr. Hardy submits that there is sufficient evidence 409 in the record, which is even referred to in the further A statement of the case, that A. K. Jain was an in dependent shareholder and was not under the control of section P. Jain or any other Director or shareholder.
He further submits that there is no evidence whatsoever that the money for purchasing the shares of A. K. Jain or even of Rama Jain was advanced by S P Jain.
(3) With regard to the third submission of Mr. Sen, Mr. Hardy had to admit that N. C. Jain was Director from 1950 to 1954 and section P. Jain was Director from August 3, 1950 to September 25, 1950 and section P. Jain became Managing Director of the company on June 6, 1953, subject to the approval of the Government on a remuneration of Rs. 8,000/ per month and A. K. Jain was appointed as Deputy Managing Director on a remuneration of Rs. 6,000/ per month subject to the approval of the Central Government (vide minutes of Board 's meeting of June 6, 1953).
According to Mr. Hardy, appointment of Directors or even Managing Director is a regular matter of the company and no particular significance should be attached to these appointments.
(4) With regard to the fourth.
submission Mr. Hardy submits that such transactions are common with brokers and even the purchaser is not known in most of the cases.
Hence no undue importance should be attach ed to the hessain transaction so as to influence the conclusion.
It is also pointed out that there was no controversy about the genuineness of the hessian transaction.
We are of the view that the genuineness of the aforesaid transaction is, however, irrelevant for the purpose of considering its effect in acting in concert by the shareholders.
(5) With regard to the fifth submission Mr. Hardy submits that it is true that section P. Jain, A. K. Jain R. Sharma and N. C. Jain were the promoters of The company but admittedly two of them, namely, R. Sharma and N. C. Jain were outsiders.
That they were employees would not affect their character as shareholders of the company or even as Directors.
It is clear that this company was a family concern with only 20 shares out of 50,000 shares allotted to two outsiders who again happened to be paid employees.
The presence of these two outsiders is of the least significance in the matter of management of the affairs of the company.
It is true that most of the meetings of the Board of Directors were presided over by A. K. Jain with either of the two employees or one of them attending the same.
It must, how ever, be noted that A. K. Jain became a Director even when he was a minor aged 16 years.
He would not ordinarily be able to play the role he is supposed to have done in the Board 's meetings unless section P. 410 Jain was confident that the Board was carrying out his mandates with regard to the affairs of the company.
It is also true that A. K. Jain and the other Directors were authorised to sign agreements on behalf of the company, but this is not of great significance since this was in pursuance of a decision of the Board 's meeting which could not have been passed but for the concurrence of section P. Jain.
There is no evidence whatsoever to show that Rama Jain, wife of section P. Jain, was at all independently acting.
When a company is composed mostly of family members owning lion 's share in the entire share capital of the company the onus to keep clear of the reach of section 23A(l) will be on the shareholders by adducing some positive evidence about the absence of control by the controlling shareholders.
So far as Rama Jain is concerned it is not possible to hold that section P. Jain would not be able to control his wife 's voting power along with that of his minor son, Alok Prakash Jain.
It is true that mere relationship or being a Director is not decisive.
As a matter of fact no single factor can be decisive but having regard to the totality of the circumstances revealed in the case and the conduct of the transactions of the company taken with the relationship which, in the circumstances of the case is not a negligible element, we are clearly of the opinion that it is a case in which it cannot be said that the 'public ' is substantially interested in 25 per cent or more shares of the company.
Even if we allow A. K. Jain to be a member of the 'public ', he only holds 10,000 shares and taken with 2,000 shares of Ashoka Agencies Ltd., the total shareholding comes only to 12,000 shares, that is to say, 500 less than the minimum shareholding requisite to earn the benefit of the third proviso to section 23A read with the Explanation.
Further, between August 1], 1951 and May 1, 1952, A. K. Jails and two employee Directors, the latter having a modicum of 10 shares each, apparently took all decisions for the company in the Board 's meetings.
This is not ordinarily possible but for collaboration with the major shareholders.
This is a case where more is meant than meets the eye.
We are unable to hold in this case, in absence of any reliable evidence to the contrary, that the voting power of the three Directors was free and uninhibited and not within the orbit of control of the other major shareholders, section P.` Jain and Rama Jain acting in concert.
It is a clear case of all the shareholders acting in concert and in unions and the two employee Directors were merely dummies.
There is not the slightest inkling of 'public ' being interested, far less substantially interested, in this company.
There was no one who could come within the term 'public ' outside the ring of the shareholders acting in concert for their own ends with a common purpose.
There is no evidence whatsoever in this case that the shareholders did not cohere together in the matter of transaction of the company 's affairs.
When the reality is manifest some reliable evidence within the special knowledge of the assessee must be forthcoming from its side to contradict the obvious in order to be covered by the exception.
This has not happened in this case.
411 Unless the two employees were nominees of the major shareholders it is ordinarily absurd to suppose that they could aspire to be and become Directors of the company.
The Appellate Assistant Commissioner in his order, which is annexed with the statement of the case, mentions that "In fact Shri section P. Jain as a controlling shareholder had brought himself in as a Director of the company right from the inception of the company and was the first Director of the company from 3 8 SO to 25 9 50.
From September 'SO to March '54, however, he temporarily gave up the directorship by putting in an employee as a nominee director, Sri N. C. Jain, for the intervening period so that there may be no hitch in the appellant company being appointed as Managing Agent of certain other companies under his control on which also Sri section P. Jain was a Director, such as the Rohtas Industries Ltd., Bharat Collieries Ltd., section K. G. Sugar Ltd., Dehri Rohtas Light Railway Co. Ltd. and New Central Jute Mills Ltd.
As soon as this objective was achieved, Sri section P. Jain staged a come back as a Director of the appellant company on 25 3 54 when the nominee director Sri N. C. Jain re signed his directorship to make room for his master Sri section p Jain".
The factual position, not the opinion, revealed in the above extract is more than eloquent with regard to the core of the company.
Having regard to the intimate relationship of the shareholders, with not the least evidence of any disconcert amongst them, the ordinary expectation for individual profit in commercial undertakings, natural reluctance to forego the same, the history of the company and its continued smooth working in a manner which is normally inconsistent with anything other than full unison amongst the shareholders in decisions about the conduct of company 's affairs in common inter est of all, this was a company of one paramount mind operating with out the least doubt.
The Board 's meetings are evidence of a well organised, well knit close unity of views in all affairs and which in ordinary course of human conduct would not have been at all possible but for a single or concerted action in the company 's management by a controlling group.
When all the above conditions are present in a company, the onus would be on the assessee to satisfy by some reliable evidence that what appears on the surface is that which is real.
That is not to say that the Revenue has no burden to bring the case within the mischief of section 23A.
Application of law cannot be bereft of commonsense.
The object of section 23A being to prevent avoidance of super tax by the share holders by piling up the profits of the company in its own hands, the facts and circumstances revealed in this case clearly bring the company within the reach of that section.
We are unable to accede to the submission of Mr. Hardy in this case that because A. K. Jain and Rama Jain were independent assessees and A. K. Jain was pre siding in the Board 's meetings and as such was taking independent 412 decisions and was also doing extra work for the company in Calcutta on salary basis, they should be held to be members of the 'public ' who were substantially interested in the company with the requisite shareholding for the purpose of the Explanation read with the third proviso.
The High Court was therefore, not right in answering the question in favour of the assessee and against the Revenue.
We, therefore, answer the original question in the negative and the revised question in the affirmative both in favour of the Revenue.
The appeals are allowed but we leave the parties to pay and bear their respective costs.
P.H.P. Appeals allowed.
| Sahu Jain was a private limited company during the assessment years l952 53 and 1953 54.
All the shareholders of the company are the family member J of Mr. section P. Jain except two employees who held 20 out of 50,000 shares and excepting the three Companies which were also sister concerns.
Under section 23A of the Income Tax Act, 1922, prior to its amendment in the year 1955, where the Income Tax officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any Company are less than 60 per cent of the assessable income of the company as reduced by the Income Tax and Super Tax payable by the company in respect there of, he shall unless he is satisfied that having regard to the loss incurred by the company in earlier years or to the smallness of the profit made, the payment of a dividend or a larger dividend than declared would be unreasonable, make an order in writing that the undistributed portion of the income of the company of that previous year as computed for income tax purposes and reduced by the amount of income tax and supertax payable by the company in respect thereof shall be deemed to have been distributed as dividends amongst the shareholders.
The proviso to the said section provides that the provisions of the section would not apply to any company in which the public are substantially interested if shares of the company carrying not less than 25 per cent of the voting power have been allotted unconditionally to or acquired unconditionally by the public or beneficially held by public.
The Income Tax officer held that the provisions of section 23A were attracted in the case of the company for both the years.
The Appellate Assistant Commissioner confirmed the order of the Income Tax officer.
The Tribunal held that section 23A was not applicable to the company in respect of both the assessment years.
The Tribunal held that unless.
it is presumed that because of relationship Shri section P. Jain, Smt.
Rama Jain and Shri A. K. Jain should be regarded as acting in concert there is no other material on record on the basis of which such a conclusion could be supported.
On a reference made by the Tribunal, The High Court answered the question in favour of the assessee and against the Revenue.
In an appeal by special leave the appellant contended: 1. 80 per cent of the share capital was held by section P. Jain and his wife and two sons.
One of whom was a minor throughout the period and another for a portion of the period and that the remaining shares were held by tho company which were under the control of section P. Jain and that only 20 share out of 50,000 shares were held by two employees under the control of section P Jain.
A. K. Jain was appointed as a Director when he was a minor and he became a Managing Director on a salary of Rs. 6,000/ per month when he was 20 years old.
3. section P. Jain who was a Director resigned making room for his Private Secretary for appointment as Director.
The Company showed a loss of Rs. 2 lacs and odd in a transaction in hessian and the same was shown as profit by Smt.
Rama Jain wife of section P. Jain.
section P. Jain, A. K. Jain.
R. Sharma and N. C. Jain were the promoters of the company ant were signatories to the Memorandum of Association.
399 The respondent contended: 1. Smt.
Rama Jain and A. K. Jain were independent assessees.
A. K. Jain was taking independent decisions as a competent Director.
Mere relationship would not lead to the conclusion that the said two shareholders acted in concert with section P. Jain.
A. K. Jain was an independent shareholder and was not under the control of section P. Jain or any other Director or shareholder.
N. C. Jain was Director from 1950 to 1954 and section P. Jain became Managing Director subject to the approval of the Government.
A. K Jain was appointed as Deputy Managing Director on a remuneration of Rs. 6,000/ per month subject to the approval of the Central Government.
The transactions like one of hessian are common transactions and no undue importance can be attached to it.
Merely because some persons are promoters or employees of a Company that would not affect their character as shareholders of the Company.
Allowing the appeals by special leave, ^ HELD: 1.
The controversy is whether the company is one in which the public has 25 per cent or more shares.
[404C] 2.
This Court held in the case of Commissioner of Income Tax West Bengal vs East Coast Commercial Co. Ltd., that the word 'public ' is used in the explanation to section 23A in contra distinction to one or more persons who act in unison and amongst whom the voting power constitute s a block.
This Court also held that the Tribunal had to decide in the first instance wreathe there was a group of persons acting in concert holding a sufficient number of shares which may control the voting as a block.
But the existence of block is not decisive.
The company would still be a company in which public are substantially interested if 25 per cent or more of the voting power has been allotted unconditionally to and beneficially held by the public.
This Court also held that the relationship and position as Director are not by themselves decisive.
But if the relatives act not freely but with others they cannot be said to belong to the public.
The test is not whether they have actually acted in concert but whether the circumstances are such that human experience tells us that it can safely be taken that they must be acting together.
[406A, C D, H, 407A] 3.
It is clear that this company was a family concern with only 20 shares out of 50,000 shares allotted to the two outsiders who again happened to be paid employees.
The presence of these two outsiders is of the least significance in the matter of management of the affairs of the company.
A. K. Jain became a Director even when he was a. minor.
He would not ordinarily be able to play the role he is supposed to have done in the Board meetings unless section P. Jain was confident that the Board was carrying out its mandates with regard to the affairs of the Company.
The fact that A. K. Jain and others were authorised to sign agreements on behalf of the Company is not of great significance.
There is no evidence whatsoever to show that Rama Jain wife of section P. Jain was at all independently acting.
[409G, H, 410] 4.
When a company is composed mostly of family member owning lion 's share in the entire share capital of the company the onus to keep clear of the reach of section 23A will be on the shareholders by adducing some positive evidence about the absence of control by the controlling shareholders.
[410 B] 5.
No single factor can be decisive but having regard to the totality of the circumstances revealed in the case and the conduct of the transactions of the company taken with the relationship which in the circumstances of this case is not a negligible element this Court is dearly of the opinion that it is a case in which it cannot be said that the public is substantially interested in 25 per cent or more shares of the company.
[410D E] 6.
Even if A. K. Jain is said to be a member of the public, his shares together with the shares of Ashoka Agencies Limited is 500 less than the r minimum shareholding requisite to earn the benefit of the third proviso to section 23A read with the explanation.
[410 E] 400 7.
Between August 11, 1951 and May 1, 1952, A. K. Jain and 2 employee Directors apparently took all decisions for the company in the Board 's meetings.
This is not ordinarily possible but for collaboration with the major shareholders.
This is a case where more is meant than meets the eye.
[410E F] 8.
It is A clear case of all the shareholders acting in concert and in unison and the two employee Directors were merely dummies.
There is not the slightest inkling of the public being interested far less substantially interested in this company.
[410G] 9.
The intimate relationship of the shareholders, with not the least evidence of disconcert amongst them, the ordinary expectation for individual profit in commercial undertaking, the history of the company and its continued smooth working is inconsistent with anything but full unison amongst the shareholders.
The Board 's meetings are evidence of well organised, well knit, close unity of vie vs in all affairs which in ordinary course of human conduct would not have been at all possible but for a single or concerted action in the company management by a controlling group.
[410D F]
|
Civil Appeal No. 1234 of 1977.
From the Judgment and Order dated 19.8.74 of Allahabad High Court in Civil Writ Petition No. 4827 of 1974 R.K. Garg and Shakeel Ahmed Syed for the appellant.
Prithviraj, Mrs. section Dikshit, S.K. Kulshreshta and P. Mishra for the respondents .
The Judgment of the Court was delivered by VARADARAJAN, J.
This appeal by special leave is directed against an order of a Division Bench of the Allahabad High Court dated 19.8.1974 dismissing in limine Miscellaneous Writ Petition No. 4827 of 1974 which had been filed by the appellant for quashing the 246 first respondent 's order dated 3.5.1974 removing him from service pursuant to the finding of the second respondent, U.P. Administrative Tribunal, Lucknow dated 10.7.1972 that the appellant was guilty of three of the four charges framed against him.
The appellant was employed as a Deputy Superintendent of Police at Pilibhit at the relevant time.
The fourth charge of which the appellant 'has been exonerated was that he had transferred his Vespa Scooter bearing Registration No. UPI 9117 and valued at more than Rs. 500/ to One Lal Mohd. without obtaining the previous sanction of the appropriate authority and he thereby.
contravened Rule 24(2) of the U.P. Government Servants ' Conduct Rules, 1956.
The appellant 's defence was that the transfer was effected through a reputed dealer and therefore previous sanction of the appropriate authority was not necessary.
The Tribunal found that the transaction of sale of the scooter by the appellant to Lal Mohd was effected through M/s. Anand Agencies, automobile engineers and reputed dealers in scooters and therefore there was sufficient compliance with Rule 24(2).
Charges 1 to 3 were more serious ones.
The substance of the first charge was that the appellant while posted as Deputy Superintendent of Police at Pilibhit was granted 30 days leave with effect from 11.11.1967 and had to resume his duties on 10.12.1967 but failed to resume his duties and absented himself without previous permission or intimation to the Superintendent of Public and without good or sufficient cause.
He failed to report about his whereabouts until an application was made by him on 24.4.1968 for extension of the leave.
The appellant 's defence was that he suffered from an attack of a mental disease, melancholia and was under the treatment of Dr. Mukerji at Calcutta from 1.12.1967 to 20.4.1968 and he has informed about his sudden illness and had applied for extension of the leave directly and also through his wife and he had furnished his leave address when he proceeded on 30 days leave.
The substance of the second charge was that while applying for extension of leave on 20.4.1968 he attempted to willfully deceive the Inspector General of Police by attempting to make him believe that he had been ill from 1.12.1967 to 20.4.1968 and was under treatment of a doctor at Calcutta although in fact he had been to Pakistan during the period and had obtained a medical certificate through deceitful and fraudulent ' means.
The defence of the appellant was one of denial.
He reiterated that he was under treatment of Dr. Mukerji at Calcutta from 1.12.1967 to 20.4.1968 and contended that in that 247 period he was treated by Dr. Das at Howrah from 10.1.1968 to 30.1.1968 for injuries to his nose.
The substance of the third charge was that after having proceeded on leave with effect from 11.11.1967 he unauthorisedly and unlawfully visited Karachi in Pakistan some time between 22.11.1967 and 20.4.1968 without any valid passport or travel document and the he by contravened section 3 of the Passport Act, 1967.
The appellant denied the charge and contended that he had never visited Karachi and had been suffering from melancholia and treated by Dr. Mukerji at Calcutta.
A number of witnesses for the department and some witnesses tor the defence were examined before the Tribunal which a after considering the oral and documentary evidence found charges 1 to 3 against the appellant.
One Harish Kumar, Superintendent of Police who was appointed as an assessor in the inquiry conduct before the Tribunal agreed with the findings of the Tribunal.
Subsequently, the Tribunal submitted copies of its findings to the Government with its recommendation that the appellant may be dismissed from service.
The Governor accepted the Tribunal 's findings, took a tentative decision to dismiss the appellant from service; and issued a second show cause notice dated 29.9.1972 to him.
The appellant submitted his interim reply and final reply on 19.11.1972 and 31 3.1973 respectively.
After considering the appellant 's replies the Governor agreed with the Tribunal that the charges 1 to 3 are fully established against the appellant and ordered his removal from service by the order dated 1.8.1974.
The appellant challenged his removal from service in W.P. No. 4827 of 1974 which was dismissed in limine by a Division Bench of the Allahabad High Court.
Hence this appeal by special leave.
This appeal deserves to be allowed on a short point which unfortunately has not been noticed by the learned Judges of the High Court before dismissing the writ petition in limine.
The appellant had prayed for summoning 8 witnesses for being examined in his defence by filing an application dated 17.1.1972 for that purpose.
The Tribunal dismissed that application on 19.1.1972 on the ground that it had already taken into consideration the relevant rules in the Financial Code Volume III and that it does not consider it necessary to revise its views.
The Tribunal observed in that order that the appellant has to bear the expenses of the witnesses who are private persons if he wanted to have them examined in his 248 defence.
He was, however, given one week 's time to deposit a sum of Rs.900 initially by way of travelling and daily allowances for the witnesses as well as compensation for the loss of their professional income and he was ordered to make good any shortfall.
The appellant had not deposited that amount and the witnesses had not been summoned for being examined in his defence.
The question for consideration is whether on this account there is non compliance with the principles of natural justice.
The Tribunal has relied upon Rule 20A of the Travelling Allowances Rules (Financial Handbook Volume III) in making the above order.
Sub rule l of that Rule reads thus: "20A. (13 Persons, who, not being servants of the Government, are called as witnesses in a departmental inquiry either by the authority conducting the inquiry or on behalf of the government servant whose conduct is under inquiry, shall receive the same travelling allowance and diet money as are admissible to non official witnesses summoned in criminal cases, provided that in the case of such persons who are called on behalf of the government servant whose conduct is under inquiry, the payment of travelling allowance and diet money shall be subject to the following principles: (a) travelling allowances may be Paid to witnesses summoned in the event of the government servant concerned clearing himself; (b) such allowances will be paid only in respect of witnesses whose evidence is considered of material value by the authority conducting the inquiry; and (c) in exceptional cases the authority conducting the & inquiry may, on grounds to be recorded, recommend to the Government that the principles laid down above be departed from owing to special reasons.
In such cases it will be for the Government to decide, after taking into consideration all the circumstances of the case, whether the recommendation should be accepted or not.
The authority, conducting the inquiry shall determine the class of each witness for the purpose of calculating travel 249 ling allowance and diet money under the scale prescribed for witnesses in criminal case.
" This sub rule is not quite clear, for it does not say who should bear the expenses initially or whether the inference to be made by the inquiring authority under class (c) should be made before or 1 after the examination of the witnesses.
Clause (b) of this sub rule seems to have been considered satisfied in the present case as the Tribunal had decided to summon the witnesses provided the amount was deposited by the appellant as directed.
The appellant has contended in para 31 of his writ petition that in view of G.O. No. 4l97 R/VIIIA 500 (146)/68 travelling allowance and diet money of witnesses to be examined before the Tribunal must have been paid by the State Government but he was asked to deposit a sum of Rs.900 for the witnesses being summoned and this is in violation of the relevant provision relating to conduct of proceedings before the Tribunal.
The said G.O. marked Annexure 11 to the writ petition relates to one Kunhi Ram and was evidently intended to clarify.
Rule 20A of the Traveling Rules and it reads thus: "In continuation of G.O. No. 1371 1/VIII 2000 (10/61, dt.
July 3, 1961) I am directed to say that in the special appeal the appellant had contended that the additional S.P. Agra had asked him to deposit the expenses for T.A. etc.
of defence witnesses before he summoned them.
The position in this connection has been examined by the Govt and is being clarified here.
Under para 490(5) of the police regulations the S.P. has to decide whether he should refuse to summon a , witness whose evidence he does not consider material to the issue.
The witnesses who are accepted by the S.P. for being produced in defence can be either summoned by him or allowed to be produced by the party charged, So far as the question of payment of expenses for the journey by a defence witness is concerned it is not material when once a witness is permitted to be produced whether he is summoned officially or is called by the party charged himself.
The responsibility for payment of travelling expenses to the defence witnesses produced during departmental trial conducted under section 7 of the Police Act is of the Government.
Thus if a witness has been permitted to be produced in defence, it is not open to the inquiring officer to lay down a condition that this travelling expenses should be first deposited 250 before he is summoned.
However, no expenses are to be paid for persons who are not permitted to be produced in defence.
The position with regard to the payment of travelling expenses to the defence witnesses is as follows: (i) Govt.
servants who appear as defence witnesses to give evidence of the facts which come to their knowledge in their official capacity are governed by Rule 59(1) of the Financial Handbook Volume III for the purpose of travelling allowance; (ii) As regards govt.
servants who appear as witnesses to facts which have come to their knowledge in the private capacity and appear as private individuals the position under rule 59(2) of Financial Handbook Volume III is that they are entitled to receive their actual travelling expenses from the Court and as suck they will get T.A, on an ad hoc basis and as on tour.
Thus if he is a Govt.
servant travelling in a train. . as an ordinary passenger and has to bear witness to that in his private capacity he should be paid T.A. as on tour.
The Meharrirs of the Police Stations bringing records which they maintain at P.S.s. in their official capacity will be governed by class (1) above.
(iii) Non official witnesses called or allowed to be produced by the S.P. will get T.A. under rule 20A of Financial Handbook Volume Ill." This G.O. makes it clear that responsibility for payment of travelling allowance to defence witnesses produced in departmental inquiry conducted under section 7 of the Police Act is of the Government and that if a witness has been permitted to be produced in defence it is not open to the inquiry officer to lay down a condition that his travelling expenses should be first deposited by the delinquent officer before the witness is examined.
In the present case, the Tribunal has considered the witnesses to be material but has insisted on the appellant depositing initially a sum of Rs. 900 for the travelling expense and daily allowances of the witnesses with an obligation to make good any shortfall in those allowances and loss of professional income of the witnesses.
Mr. Prithvi Raj, Senior Counsel appearing 251 for the respondent State did not contend that this G.O. does not A apply to the case of the appellant.
Moreover, the appellant was under suspension from 11.12.1967 and there is nothing on record to show that he was financially sound and in a position to deposit the sum of Rs.900 and pay any further amount which may be required to meet any shortfall in the travelling and daily allowances and the loss of professional income of the 8 more witnesses whom he wanted to be examined on his side.
The failure to cause the production of those witnesses at the expense, of the Government might have caused prejudice to the appellant for it cannot be predicated what conclusion the Tribunal would have reached in regard to charges 1 to 3 if the evidence of those witnesses was available for its consideration.
We are, therefore, of the opinion that there is no compliance with the principles of natural justice in this case.
The appeal has to be allowed on this short ground and it is accordingly allowed.
The finding of the Tribunal that the appellant is guilty of charges l to 3 and the consequent order of the Government/Governor removing the appellant from service are quashed.
The matter is remitted to the Tribunal for fresh disposal after summoning at government expense such of the material witnesses as the appellant may wish to be examined in his defence.
The appellant shall be entitled to costs quantified at Rs. 2,000.
It is needless to say that the appellant would be entitled to subsistence allowances from the date of his removal from service until the proceedings taken against him terminate and final order is passed.
This shall be paid in six weeks.
| The appellants plaintiffs instituted a suit for declaration of title and delivery of possession of immovable properties.
The first respondent was the State Government.
Prior to the institution of the suit the plaintiffs, had issued notice to the 1st respondent under section 80 CPC, but without waiting for the statutory period of two months to expire, the plaintiffs instituted the suit.
In the written statement filed on behalf of the State it was contended that the suit was not maintainable for want of proper notice under section 80 CPC.
The Trial court upheld the contention and dismissed the suit.
The order was confirmed by the first appellate court and the second appeal preferred by the appellants to the High Court was dismissed in limine.
Dismissing the appeal to this Court, ^ HELD: 1.
A suit against the Government or a public officer, to which the requirement of a prior notice under section 80 CPC is attracted, cannot be validly instituted until the expiration of the period of two months next after the notice in the writing has been delivered to the authorities concerned in the manner prescribed in the said section and if filed before the expiry of the said period, the suit has to be dismissed as not maintainable.
[314 A B] 2.
The effect of section 80 CPC prior to its amendment by Act 104 of 1976 is clearly to impose a bar against the institution of a suit against the Government or a public officer in respect of any act purported to be done by him in his official capacity until the expiration of two months after notice has been delivered.
There is clearly a public purpose underlying this mandatory provision.
310 3.
The examination of the scheme of the Section reveals that the section has been enacted as a measure of public policy with the object of ensuring that before a suit is instituted against the Government or a public officer, the Government or the officer concerned is afforded an opportunity to scrutinise the claim in respect of which the suit is proposed to be filed and if it be found to be a just claim, to take immediate action and thereby avoid unnecessary litigation and save public time and money by settling the claim without driving the person who issued the notice, to institute the suit involving considerable expenditure and delay.
[312 E] 4.
When the language used in the Statute is clear and unambiguous it is the plain duty of the Court to give effect to it and considerations of hardship will not be a legitimate ground for not faithfully implementing the mandate of the legislature.
[313 B] Bhagchand Dagadusa vs Secretary of State for India, 54 IA 338; Vellayan vs Madras Province; 74 Indian Appeals 223; and Sawai Singhai Nirmal Chand vs Union of India referred to.
Nani Amma Nannini Amma vs State of Kerala AIR 1963 Kerala 114, overruled.
|
TION: C.M.P. Nos.
21903 06 of 1988.
IN Transfer Petitions Nos.
192 & 193 of 1988.
(Under Article 139(A)(i) of the Constitution of India).
F.S. Nariman, V.C. Kotwal, M.H. Baig, Harish N. Salve, Mrs. P.S. Shroff, S.A. Shroff, A.K. Desai and S.S. Shroff for the Petitioner.
G. Ramaswamy, Additional Solicitor General, Ram Jethmalani, C.V. Subba Rao, Ms. A. Subhashini, Mrs. Sushma Suri, P. Parmeshwaran, Mukul Kohtagi, Ms. Bina Gupta, Ms. Madhu Khatri, Parveen Anand, Anip Sachthey, B.L. Bagaria, P.K. Jain, P.S. Goyal, Arun Jatley, R.F. Nariman, Rajan Karanjawala and Mrs. Manik Karanjawala for the Respondents.
The following Judgments of the Court were delivered: SABYASACHI MUKHARJI, J.
At this stage, we are concerned with the question whether there is need for the continuance of the Order of injunction passed by this Court on 25th August, 1988.
In order to appreciate the question it is necessary to state a few facts.
A petition was moved before this Court on l9th August, 1988 under the for initiation of contempt proceedings against PG NO 217 the proprietors of Indian Express Newspapers Bombay Pvt. Ltd., Shri Arun Shourie, Indian Express Newspapers Bombay Pvt. Ltd., Shri Hari Jaisingh, Resident Editor, Indian Express Newspapers Bombay Pvt. Ltd., Shri A.C. Saxena, News Editor, Indian Express Newspaper Pvt. Ltd., Delhi, Shri H.K. Dua, Chief, New Delhi Bureau, Indian Express Newspaper Pvt. Ltd., New Delhi, and Shri V. Ranganathan, Indian Express Bombay Pvt.
Ltd. The petition was moved on behalf of Reliance Petrochemicals Ltd. (hereinafter called "Reliance Petrochemicals").
It was stated therein that this Court should take cognisance of the contempt alleged to have been committed by the respondents and it was further prayed that pending the consideration of the question of criminal contempt, this Court should pass an order restraining the Express Group of Newspapers and their related publications from publishing any materials or articles in relation to the subject matter of the proceedings in the Transfer Petitions Nos. 192 and 193 of 1988 which was sub judice issue in Writ Petition No. 1276 of 1988 in Karnataka High Court, Writ Petition No. 1791 of 1988 in Delhi High Court, Writ Petition No. of 1988 Radhey Shyam Goel vs Union of India, Suit No. 1172 of 1988 K.S. Brahmabhatt vs Reliance Petrochemicals Ltd and MRTP proceedings instituted in J.P. Sharma vs Reliance Petrochemicals Ltd. as the same was alleged to be calculated to affect the Reliance debenture issue which was to open on 22nd August, 1988 till the decision of the transfer petitions pending herein.
The subject matter of dispute related to the Public Issue by the petitioner company of 12.5% Secured Convertible Debentures of Rs.200 each for cash at par aggregating to Rs.593.40 crores (inclusive of retention of 15% excess subscription of Rs.77.40 crores).
It was stated that Reliance Petrochemicals was to set up what was claimed to be the largest petrochemical complex in the private sector for the manufacture of critically scarce raw material known as Mono Ethylene Glycole (MEG) and plastic raw materials like High Density Polyethlene (HDPE) and Poly Vinyl Chloride (PVC] which are used for making various articles from films to pipes, auto parts to cable coating, containers to furnishings.
It was asserted that the issue was of global and national importance.
It was claimed that Reliance 's public issue was the largest public issue in India till date and the second largest issue in the world.
The public issue was due to open on Monday, the 22nd August, 1988 and was scheduled to be closed on 31st August, 1988.
It was the claim of the petitioner that the debentures were being issued after obtaining the consent of the PG NO 218 Controller of Capital Issues and on the basis of schedule indicated therein, and after complying with all the requirements of the Companies Act and otherwise.
Certain writ petitions and a suit had been filed in some High Courts, namely, Karnataka, Bombay, Rajasthan, Delhi and later on in Allahabad challenging the grant of consent or sanction for the issue of debentures.
Such applications in the different High Courts and the Courts were filed at the last moment when enormous amount of money had already been spent, it was claimed.
It was stated that enormous monies on publicity had been spent.
In some of these proceedings orders of injunction had been obtained.
It was contended that issue was prima facie legal and valid and the consent and permission of the necessary authorities specially the Controller of Capital Issues had been obtained properly.
In such circumstances an application for transfer of these proceedings under Article 139A of the Constitution of India read with Part IV A of the Supreme Court Rules 1966 was moved by Reliance Petrochemicals Ltd. against the Union of India, Controller of Capital Issues and the petitioner in the suit in Bangalore and writ petition in Delhi.
It was stated that the Certificate of Incorporation was granted to the petitioner on or about 11th January, 1988 and the Certificate of Commencement of Business was granted on 21st January, 1988.
On 4th May, 1988 an application was made to the Controller of Capital Issues for raising Equity Share Capital/Cumulative Convertible Preference Shares/Convertible Debentures for financing the proposed projects for manufacture of PVC HDPE and MEG.
On 4th July, 1988, as mentioned before, the consent of the Controller of Capital Issues was granted to the petitioner for capital issue of 5,75,00,000 Equity Shares of Rs. 10 cash inclusive of retainable excess subscription of Rs.7.5 crores and for 2,96,70,000 12.5 per Secured Fully Convertible Debentures of Rs.200 each for cash at par to public.
It is not necessary for the present purpose to set out the details of the same.
It is stated that the consent of the Controller of Capital Issues was given on 4th July, 1988 on certain terms which are again the relevant to be set out for the present purpose.
The consent order of the Controller was modified and further condition of obtaining the Reserve Bank of India 's permission for allotment of debentures of Non Residents as required under FERA 1973 and for allotment of debentures to employees on certain terms was imposed on 19th July, 1988.
On 27th July, 1988 a prospectus was filed with the Registrar of Companies, Gujarat, Ahmedabad, for the public issue of 12.5% Secured Fully Convertible Debentures of Rs.200 each for cash at par, as indicated before.
PG NO 219 A petition was filed in the Karnataka High Court on 17th August, 1988 by one Shri Balkrishna Pillai.
In the Delhi High Court another writ petition was filed on 18th August, 1988.
On 18th August, 1988 a transfer petition was filed in this Court.
It was claimed that any injunction order after the satisfaction of the Central Government, through the Controller of Capital Issues would make the public issue stillborn and sums in excess of Rs.4.5 crores had already been incurred for the public issue as pre Issue expenses and a sum of Rs.20 crores was allocated as Issue Expenses for what was popularly known as 'Mega Issue" as mentioned hereinbefore.
It was claimed that grave prejudice would be caused to the petitioner company as well as the public at large who were investing in the issue.
if the issue is not allowed to go through.
It was claimed that there was no ground for the High Court to grant injunction or stay order in the facts and circumstances of this Issue and this Court should vacate those orders and transfer the applications pending in different Courts to this Court.
On that application being moved on 19th August, 1988, this Court issued notices to all concerned making the same returnable on 9th September, 1988 in terms of prayer (a) and paragraphs 2 and 4 of the affidavit of Mr. Balkrishna Bhandari affirmed on 18th/19th August, 1988.
This Court further directed as follows: "The issue of 2 .96,70,000, 12.5 per secured convertible debentures of Rs.200 each by the petitioner company under the prospectus dated July 27.
1988 filed with the Registrar of Companies Gujarat and with the stock exchanges at Ahmedabad and Bombay to be proceeded with, without let or hindrance, notwithstanding any proceedings instituted or that may be instituted in or before any Court or tribunal or other authority.
Any order direction or injunction of any Court, tribunal or authority in any proceeding already passed or which may be passed will by operation of this order be and remain suspended till further orders of this Court.
In substance the order was that the issue be proceeded with "without let or hindrance".
notwithstanding any proceedings instituted or that may be instituted in or before any Court or tribunal or other authority.
This Court vacated all orders of injuction in respect of the said issue.
It was asserted on behalf of the petitioner that this Court must have been prima facie satisfied that there was no legal infirmity which should stand in the way of the public PG NO 220 issue of the said debentures going through and further, in any event, must have been satisfied that there should not be any let or hindrance to the said public issue.
The petitioner had drawn our attention to an article published on 25th August, 1988, under the heading "Infractions of Law has Unique Features RPL Debentures".
It is not necessary for the present purpose to set out the said article.
It was claimed in the said article that the Controller of Capital Issues had not acted properly and legally in granting the sanction to the issue for various reasons stated therein.
It was further stated that the issue was not a prudent or a reliable venture.
It was contended that by this article the respondents have commented on a matter which is sub judice and was intended to undermine the effect of the interim order passed by this Court and the ultimate decision of the Court and they threatened to publish such articles unless restrained by this Court.
It was contended that trial by newspapers on issues which are sub judice is one of the grossest modes of interference with the due administration of justice and any threat of that interference should be prevented by both punitive action of contempt and preventive order of injunction of wrong anticipated to be committed by the delinquent.
The publication threatened or expected expected to be published would cause very grave interference with the due administration of justice, and should, therefore, be prohibited.
On that application being moved on 25th August, 1988, this Court directed that cognizance of contempt would only be considered after the necessary sanction from the Attorney General is obtained.
This Court on the facts of the alleged contempt declined to take cognizance on that application without the views of the Attorney General.
This Court, however, issued an order of injunction restraining all the six respondents mentioned therein from publishing any article, comment, report or editorial in any of the issues of the Indian Express of their related publications questioning the legality or validity of any of the consents, approvals or permissions to which the petitioners in the Transfer Petitions Nos.
192 193 of 1988 have made reference in the Prospectus dated 27th July, 1988 for the issue of 12.5% Secured Full Convertible Debentures.
Notice of that application was made returnable on 9th September, 1988 and the same was to come up with other related matters.
The respondents were further given liberty to move this Court for variation or vacation of the order upon notice to the petitioner.
Upon that the six respondents had filed an affidavit in opposition on 26th August, 1988 the very next day asking for variation or vacation of the interim order passed by this Court on 25th August, 1988.
Attention of the Court was drawn to an article proposed to be published in PG NO 221 the Indian Express which was Annexure 'B ' to the said affidavit.
Submissions were made on the validity or the propriety of the interim order.
Upon hearing learned counsel for both the parties, this Court observed that it was sufficient to say that the article proposed to be published and forming part of Annexure 'B ' did not violate the order of injunction passed by this Court on 25th August, 1988.
In other words, this Court was of the view that the article in question which was intended to be published and shown to this Court on 26th August, 1988 did not question the legality or the validity of the order which was in issue in the proceedings in this Court.
In those circumstances no question of variation or vacation of the said interim order arose.
The said article proposed at that time has since been published before 31st August, 1988.
It was stated in the affidavit as well as in the submissions made from the Bar that the shares have been over subscribed but the day of allotment, of course, has not yet expired and before the allotment the subscribers, it was submitted, could withdraw their subscriptions.
In those circumstances, this Court was invited to consider the question whether there was any necessity for the continuance of the order of injunction granted by this Court on 25th August, 1988.
On behalf of the petitioner it was submitted that the danger still persists and the injunction should continue.
On the other hand on behalf of the respondents it was submitted that the injunction should be vacated.
Elaborate arguments were advanced by counsel for both sides.
It was contended that there was no contempt of Courts involved herein and furthermore, it was contended that pre stoppage of newspaper article or publication on matters of public importance was uncalled for and contrary to freedom of Press enshrined in our Constitution and in our laws.
The publication was on a public matter so public debate cannot and should not be stopped.
On the other hand, it was submitted that due administration of justice must be unimpaired.
We have to balance in the words of Lord Scarman in the House of Lords in Attorney General vs British Broadcasting Corporation, [ at page 354 between the two interests of great public importance, freedom of speech and administration of justice.
A balance, in our opinion, has to be struck between the requirements of free Press and fair trail in the words of the Justice Black in Harry Bridges vs State of California, at page 260.
Therefore, in considering the question posed before us whether there should be continuance of the order of injunction we have to bear in mind and apply the basic principles of law to the facts and circumstances of this PG NO 222 case.
The point at issue has been canvassed very ably and vehemently on behalf of the petitioner by Sh.
M.H. Baig, assisted as he was by Sh.
S.S. Shroff and Smt.
P.S. Shroff.
They submit that the danger still persists and the publication of any article which would jeopardise the allotment of those debentures, should be prevented.
On the other hand, Sh.
Ram Jethmalani and Sh.
Anil B. Diwan, senior counsel assisted as they were by Sh.
R.F. Nariman and Sh.
C.R. Karanjawalla, urged before us that the injunction should no longer continue.
In view of the delicacy of the problem in the question posed before us, it is well to remember the legal background.
We may refer to our constitutional provisions in Article l9(1) & (2) which provides as follows: 19.
Protection of certain rights regarding freedom of speech, etc. (l) All citizens shall have the right (a) to freedom of speech and expression; (b) to assemble peaceably and without arms; (c) to form association or unions: [d] to move freely throughout the territory of India; (e) to reside and settle in any part of the territory of India; (f) [Omitted by ibid.
Sub cl.
[f] read to acquire, hold and dispose of property; and ) [g] to practise any profession, or to carry on any occupation, trade or business.
(2) Nothing in sub clause (a) of clause (I) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of (the sovereignty and integrity of India,) the security of the State, friendly relations with foreign States, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence.
" The effect of Article 19 on the freedom of Press, was analysed in the decision of this Court in Express Newspapers PG NO 223 (Pvt) Ltd. & Anr.
vs The Union of India & Ors., , where at page 120 onwards of the report Bhagwati J. referring to the decision of this Court in Ramesh Thapar vs The State of Madras, [ 19501 SCR 594 at 597, referred to the observations of Justice Patanjali Sastri, and further referred to the decision of this Court in Brij Bhushan & Anr.
vs 7he State of Delhi; , Referring to these two decisions, Bhagwati J. expressed his view that these were the only two decisions which evolved the interpretation of Article 19(1)(a) of the Constitution and they only laid down that the freedom of speech and expression included freedom of propagation of ideas which freedom was ensured by the freedom of circulation and that the liberty of the press consisted in allowing no previous restraint upon publication.
Referring to the fact that there is a considerable body of authority to he found in the decisions of the Supreme Court of America bearing on this concept of the freedom of speech and expression, Justice Bhagwati observed that it was trite knowledge that the fundamental right to the freedom of speech and expression enshrined in our Constitution was based on the provisions in the First Amendment to the Constitution of the U.S.A. and, hence, it would be legitimate and proper to refer to those decisions of the Supreme Court of the U.S.A., in order to appreciate the true nature, scope and extent of this right in spite of the warning administered by this Court against the use of American and other cases, in State of Travancore CochIn and Ors.
vs Bombay Co. Ltd., ; and State of Bombay vs R. M. D. Chamarbaugwala, ; at 918.
Our Constitution is not absolute with respect to freedom of speech and expression and enshrined by the first Amendment to the American Constitution.
Our attention was drawn to the decision of this Court in Re: P.C. Sen. ; where this Court upheld the order of conviction against the Chief Minister of West Bengal for broadcasting a speech justifying an order, the validity of which was challenged in proceedings pending before the Court.
The West Bengal Govt. had issued an order under Rule 125 of the Defence of India Rules, placing certain restrictions upon the right of persons carrying on business in milk products.
The validity of this order was challenged by a writ petition.
After the Rule nisi had been issued on the petition and served on the State Govt.
the State Chief Minister broadcast a speech seeking to justify the propriety of the order.
The High Court a Rule requiring the Chief Minister to show cause why he should may be committed for contempt of Court.
The High Court found him guilty of contempt and fined him.
The matter came up before this Court PG NO 224 and the conviction was upheld.
It was held that the speech was ex facie calculated to interfere with the administration of justice.
This Court reiterated that in all cases of comment on pending proceedings, the question is not whether the publication did interfere, but whether it tended to interfere, with the due course of justice.
The question is not so much of the intention of the contemnor as whether it is calculated to interfere with the administration of justice.
But for the instant case this decision cannot be of much assistance.
Firstly, the contents of the speech of the Chief Minister were entirely different.
The Chief Minister in his speech had characterised the preparation of any food with milk product as amounting to a crime.
There was a tendency in the speech of the Chief Minister of intimidating the litigants or the potential litigants in respect of the issue pending in the Court.
In the instant case we are, however, not concerned directly with the question of whether the respondents have in fact committed contempt of Court by interfering with the due administration of justice.
The question whether comments on an issue, directly or indirectly, in Court amount to pre judging of an issue and transferring a trial by the Court to the trial by the newspapers, is another matter which will be decided when the contempt application will be taken up.
At the moment, we are concerned with the short but difficult question i.e. whether there is need for preventing publication of an article on a matter of public interest but on an issue which is sub judice.
In this case, as at this stage we are not dealing with the question of punitive action of committal for contempt of Court for publication pending trial of an issue in Court, the decision of this Court in P.C. Sen 's case (supra) in view of the facts involved, is not of much aid to us.
The case of gross contempt was discussed by this Court in C.K. Daphtary & Ors.
vs O.P. Gupta & Ors., However, in view of the facts involved therein, that decision cannot give us much guidance at present.
The law on this aspect has been adverted to in the decision of this Court in Indian Express Newspapers (Bombay) Pvt. Ltd. & Ors.
vs Union of India & Ors.
, ; , where at page 659 of the report, Justice Venkataramiah referred to the importance of freedom of Press in a democratic society and the role of Courts.
Though the Indian Constitution does not use the expression 'freedom of press ' in Article 19 but it is included as one of the guarantees in Article 19 [1] [a].
The freedom of Press, as noted by Venkataramiah J., is one of the around which the greatest and the bitterest of constitutional struggles have been PG NO 225 waged in all countries where liberal constitutions prevail.
Article 19 of the Universal Declaration of Human Rights, 1948 declares the freedom of Press and so does Article 19 of the International Covenant on Civil and Political Rights, 1966.
Article 10 of the European Convention on Human Rights, provides as follows: "Article 10 (1) Everyone has the right to freedom of expression.
This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.
This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprise.
(2) The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.
" The First Amendment to the Constitution of the U.S.A provided as follows: "Amendment 1 Congress shall made nO law respecting an establishment of religion, or prohibiting the tree exercise thereof; or abridging the freedom of speech or of the press; or the right of the people peaceably to assemble.
and to petition the Government for a redress of grievances." Keeping the constitutional requirements of the Indian law in the background, it would be appropriate to refer to certain American decisions to which our attention was drawn.
We have mentioned the observations of Justice Black in the case of Harry Bridges vs State of California (supra).
There, Justice Black observed that free speech and fair trial are the two most cherished values of our civilisation and it would be a trying task, and if we may say so, a difficult one to choose between them.
But in case of need a choice has to be made.
He that a public utterance or publication is not to be denied the constitutional protection of freedom of PG NO 226 speech and Press merely because it concerns a judicial proceeding still pending in the Courts, upon the theory that in such a case it must necessarily tend to obstruct the orderly and fair administration of justice.
In America, in view of the absolute terms of the First Amendment, unlike the conditional right of freedom of speech under Article 19(1)(a] of our Constitution, it would be worthwhile to bear in mind the "present and imminent danger" theory.
Justice Black quoted from the observations of Justice Holmes in Abrams vs United States, at 1180, where the latter had observed that to justify suppression of free speech there must be reasonable ground to fear that serious evil will result if free speech is practiced.
There must be reasonable ground to believe that the danger apprehended is imminent.
Justice Black concluded that there must be clear and present danager and that would provide a workable principle in preventing publication consistent with the First Amendment.
But in our case Mr. Baig submitted that our article 19(1)(a) as it is termed anything that interferes with the due administration of justice, should be prevented if it is a threat to the due administration of justice.
His submission was that the Article published or proposed to be published herein, undermines the effect or pre empts the effect of the order of injunction which was to help or boost up the chances of the debentures being subscribed.
Mr. Baig drew our attention to page 282 of the said report where Justice Frankfurter had observed that free speech was not so absolute or irrational a conception as to imply paralysis of the means for effective protection of all the freedoms secured by the Bill of Rights.
The administration of justice by an impartial judiciary has been basic to the conception of freedom ever since Magna Carta.
Justice Frankfurter further reiterated that the dependence of society upon an unswered judiciary is such a common place in the history of freedom that the means by which it is maintained are too frequently taken for granted without heed to the conditions which alone make it possible.
( Emphasis supplied).
The role of Courts of justice in our society has been the theme of statesmen and historians and constitution makers, and best illustrated in the Massachusetts Declaration of Rights as the right of every citizen to be tried by Judge as free, impartial and independent as the lot of humanity will admit.
Justice Frankfurter dissenting in his Judgment with whom Justice Stone, Justice Roberts and Justice Byrnes agreed, reiterated at page 284 of the report that the Constitution PG NO 227 is an instrument of Government and is not conceived as a doctrinaire document, nor was the Bill of Rights intended as a collection of popular slogans.
It is well to remember that Justice Frankturter recognised that we cannot read into the 14th Amendment the freedom of speech and of the Press protected by the 1st Amendment and at the same time leave out the age old means employed by States for securing the calm course of justice.
He emphasised that the 14th Amendment does not forbid a State to continue the historic process of prohibiting expressions calculated to subvert a specific exercise of judicial power.
So to assure the impartial accomplishment of justice is not an abridgement of freedom of speech or Press, as these phases of liberty have heretobefore been conceived even by the stoutest libertarians.
Actually, these liberties themselves depend "upon an untrammeled judiciary whose passions are not even unconsciously aroused and whose minds are not distorted by extrajudicial considerations.
" The test of imminent and present danger as the basis of Justice Holmes 's ideas has been referred to by this Court in P.N. Duda vs P. Shiv Shanker & Ors., ; This question again cropped up in John D Pennekamp vs Slate of Florida, and Justice Frankfurter reiterated that the 'clear and present danger ' conception was never used by Mr. Justice Holmes to express a technical legal doctrine or to convey a formula for adjudicating cases.
It was a literary phrase not to be distorted by being taken from its context.
He reiterated that the judiciary could not function properly if what the Press does is reasonably calculated to disturb the judicial judgment in its duty and capacity to act solely on the basis of what is before the Court.
A judiciary is not independent unless courts of justice are enabled to administer law by absence of pressure from without, whether exerted through the blandishments of reward or the mance of disfavour.
A free Press is vital to a democratic society for its freedom gives it power .
In 1976, in Nebraska Press Association vs Hugh Stuart, 49 L.Edn.
683, where the facts of the case were entirely different to the present ones, Chief Justice Burger delivered the opinion of the Court saying that to the extent that the order prohibited the reporting of evidence adduced at the open preliminary hearing in a murder trial was bad.
Chief Justice Burger reiterated that a responsible Press has always as the handmaiden of effective judicial administration, the criminal field.
The observations of Learned Hand referred to at page 683 indicate "the gravity PG NO 228 of the evil, discounted by its improbability, justifies such invasion of free speech as is necessary to avoid the danger", as the test.
Hence, we must examine the gravity of the evil.
In other words, a balance of convenience in the conventional phrase of Anglo Saxon Common Law Jurisprudence would, perhaps be the proper test to follow.
In this background it would be appropriate to refer to some of the English decisions to which our attention was drawn.
Mr. Jethmalani relied on the observations of Lord Denning in the Court of Appeal in Attorney General vs British Broadcasting Corpn.
, , where the Master of Rolls Lord Denning characterised some of these similar type of injunctions as "gagging injunctions".
Mr. Baig, however, protested that in view of the terms in which the injunction was issued in the instant case, the order did not "gag" anything that was legitimate.
The House of Lords, however, did not approve the observations of Lord Denning.
We may refer to the observations of the House of Lords in Attorney General vs B.B.C., , wherein the Attorney General brought proceedings for an injunction to restrain the defendants from broadcasting a programme dealing with matters which related to an appeal pending before a local valuation court on the ground that the broadcast would be a contempt of court.
The Divisional Court of the Queen 's Bench Division, on the single issue before it, held that a local valuation court was a court for the purposes of the powers of the High Court relating to contempt.
On appeal, the Court of Appeal, by a majority, affirmed that decision.
The House of Lords, however, allowed the appeal and held that the jurisdiction of the Divisional Court in relation to contempt did not extend to a local valuation court because it was a court which discharged administrative functions and was not a court of law and the Divisional Court 's jurisdiction only extended to courts of law and when it referred to 'Inferior courts ' must be taken as inferior courts of law and though the local valuation court has some of the attributes of the long established 'Inferior Courts ' public policy required in the interests of freedom of speech and freedom of the press that the principles relating to contempt of court should not apply to it or to the host of other modern tribunals which might be regarded as 'inferior courts '.
There, however, Lord Scarman emphasised that the due administration of justice should not, at all, be hampered.
Lord in the Court of Appeal referred to Borrie & Lowe, The Law of Contempt (1973) and mentioned that professionally trained Judges are not easily influenced by publications.
PG NO 229 'This is a point which was emphasised before us also.
Lord Denning referred to the question whether there was contempt of court by the B.B.C.
He emphasised whether there was no accused.
The House of Lords, however, in appeal held that valuation court is not a court where the concept of contempt of court would apply.
But it did make observations that such broadcasting or publication might affect a Judge.
Viscount Dilhorne at page 335 of the report observed as follows: "It is sometimes asserted that no judge will be influenced in his judgment by anything said by the media and consequently that the need to prevent the publication of matter prejudicial to the hearing of a case only exists where the decision rests with laymen.
This claim to judicial superiority over human frailty is one that I find some difficulty in accepting.
Every holder of a judicial office does his utmost not to let his mind be affected by what he has seen or heard of read outside the court and he will not knowingly let himself be influenced in any way by the media, nor in my view will any layman experienced in the discharge of judicial duties.
Nevertheless it should, I think, be recognised that a man may not be able to put that which he has seen, heard or read entirely out of his mind and that he may be subconsciously affected by it.
As Lord Denning M.R. said the stream of justice must be kept clean and pure.
It is the law, and it remains the law until it is changed by Parliament that the publication of matter likely to prejudice the hearing of a case before a court of law will constitute a contempt of court punishable by fine or imprisonment or both.
In this appeal we do not have to pronounce on whether the proposed broadcast would have prejudicially affected the hearing before the local valuation court.
Although it clearly was likely to have aroused hostility to the Exclusive Brethern, it by no means follows that it would have prejudiced their claim to relief from rates.
The mere assertion in the course of the broadcast that they were not entitled to that relief was in my view unlikely to have affected in any way a decision on whether their meeting room was a place of Public religious worship coming within section 39." Lord Edmund Davies at page 354 of the report emphasised that only a very short question arose, namely, whether the local valuation court comes within the jurisdiction of the PG NO 230 High Court or not.
Before that Lord Scarman had occasion to refer to the observations of the European Court of Human Rights which criticised the judgment of the House of Lords in Attorney General vs Times Newspapers Ltd., l and emphasised that neither the Convention nor the European Court 's decision, as part of the English law, which related to Article B 10(2) of the Convention for the Protection of Human Rights and Fundamental Freedoms.
In Attorney General vs Times Newspapers Ltd., (supra), between 1959 61 a company made and marketed under licence a drug containing thalidomide about 450 children were born with gross deformities to mothers who had taken that drug during pregnancy.
In 1968, 62 actions against the company begun within 3 years of the births of the children were compromised by lump sum payments conditional on the allegations of negligence against the company being withdrawn.
Thereafter leave to issue writs out of time was granted ex parle in 261 cases, but apart from a statement of claim in one case and a defence delivered in 1969 no further steps had been taken in those actions.
A further 123 claims had been notified in correspondence.
In 1971 negotiations began on the company 's proposal to set up a 3 1/4 million charitable trust fund for those children outside the 1968 settlement conditional on all the parents accepting the proposal.
Five parents refused.
An application to replace those parents by the Official? Solicitor as next friend was refused by the Court of Appeal in April 1972.
Negotiations for the proposed settlement were resumed.
On September 24, 1972, a national Sunday newspaper published the first of a series of articles to draw attention to the plight of the thalidomide children.
The company complained to the Attorney General that the article was a contempt of court because litigation against them by the parents of some of the children was still pending.
The editor of the newspaper justified the article and at the same time sent to the Attorney General and to the company for comment an article in draft, for which he claimed complete factual accuracy, on the testing, manufacture and marketing of the drug.
On the Attorney General 's motion, the Divisional Court of the Queen 's Bench Division granted an injunction restraining publication on the ground that it would be a contempt of court.
After the grant of the injunction on November 17, 1972, and while the newspaper 's appeal was pending, the thalidomide tragedy was on November 29 debated in Parliament and speeches were made and reported which expressed opinions and stated facts similar to those in the banned article.
Thereafter, there was a national campaign in the press and among the general public directed to bringing pressure on PG NO 231 the company to make a better offer for the children and their parents; and the company in fact made a substantially increased offer.
The Court of Appeal having discharged the injunction.
the Attorney General appealed to the House of Lords.
It was held that the contempt of court to publish material which prejudged the issue of pending litigation or was likely to cause public prejudgement of that issue, and accordingly the publication of this article, which in effect charged the company with negligence, would constitute a contempt, since negligence was one of the issues in the litigation.
The House of Lords granted injunction prohibiting the Times Newspaper from publishing the proposed publication.
Reference was made to Oswald 's Contempt of Court, 3rd Edn.
( 1910), where it was emphasised that the contempt of court involves 3 objects, namely, (i) to enable the parties to come to the courts without interference; (ii) to enable the courts to try cases without interference; and (iii) to ensure that the authority and administration of the law is maintained.
There was no room for the balancing suggested by the respondents between the public interest in free discussion of matters of public concern and the public interest that judicial proceedings should not be interfered with .
(Emphasised by Mr. Baig).
Lord Reid referred to the observations of the Chief Justice Jordan in Ex Parte Bread Manufacturers Ltd., ; to the following effect: "It is of extreme public interest that no conduct should he permitted which is likely to prevent a litigant in a court of justice from having his case tried free from all matter of prejudice.
But the administration of justice, important though it undoubtedly is, is not the only matter in which the public is vitally interested; and if in the course of the ventilation of a question of public concern matter is published which may prejudice a party in the conduct of a law suit, it does not follow that a contempt has been committed.
The case may be one in which as between competing matters of public interest the possibility of prejudice to a litigant may be required to yield to other and superior considerations.
The discussion of public affairs and the denunciation of public abuses, actual or supposed, cannot be required to be suspended merely because the discussion or the denunciation may, as an incidental but not intended by product, cause some likelihood of prejudice PG NO 232 to a person who happens at the time to be a litigant.
It is well settled that a person cannot be prevented by process of contempt from continuing to discuss publicly a matter which may fairly be regarded as one of public interest, by reason merely of the fact that the matter in question has become the subject of litigation, or that a person whose conduct is being publicly criticised has become a party to litigation either as plaintiff or as defendant, and whether in relation to the matter which is under discussion or with respect to some other matter." Lord Reid made certain observation upon which Mr. Baig relied, i.e. at page 300 which is as follows: "I think that anything in the nature of prejudgment of particular case or of specific issues in it is objectionable, not only because of its side effects on that particular case but also because of its side effects which may be far reaching.
Responsible "mass media" will do their best to be fair, but there will also be ill informed, slapdash or prejudiced attempts to influence the public.
If people are led to think that it is easy to find the truth, disrespect for the processes of the law could follow, and, if mass media are allowed to judge, unpopular people and unpopular causes will fare very badly.
Most cases of prejudging of issues fall within the existing authorities on contempt.
I do not think that the freedom of the press would suffer; and I think that the law would be clearer and easier to apply in practice if it is made a general rule that it is not permissible to prejudge issues in pending cases.
" (Emphasis supplied) Lord Diplock stated at page 309 of the report that the due administration of justice requires first that all citizens should have unhindered access to the constitutionally established courts of criminal or civil jurisdiction for the determination of disputes as to their legal rights and liabilities; secondly, that they should be able to rely upon obtaining in the courts the arbitrament of a tribunal which is free from bias against any party and whose decision will be based upon those facts only that have been proved in evidence adduced before it in accordance with the procedure adopted in courts of law; and thirdly that, once the dispute has been submitted to a court of, law, they should be able to rely upon their being no usurpation by any other person of the function of that court PG NO 233 to decide it according to law.
Lord Simon of Glaisdale at page 315 emphasised as follows: "The first public interest involved is that of freedom of discussion in democratic society.
People cannot adequately influence the decisions which affect their lives unless they can be adequately informed on facts and arguments relevant to the decisions.
Much of such fact finding and argumentation necessarily has to be conducted vicariously, the public press being a principal instrument.
This is the justification for investigative and campaign journalism.
Of course it can be abused but so may anything of value.
The law provides some safeguards against abuse; though important ones (such as professional propriety and responsibility) lie outside the law. " (EmPhasis supplied) Lord Cross of Chelsea at page 322 of the report observed as follows: "Contempt of Court" means an interference with the administration of justice and it is unfortunate that the offence should continue to be known by a name which suggests to the modern mind that its essence is a supposed affront to the dignity of the court.
Nowadays when sympathy is readily accorded to anyone who defies constituted authority the very name of the offence predisposes many people in favour of the alleged offender.
Yet the due administration of justice is something which all citizens, whether on the left or the right or in the center, should be anxious to safeguard.
When the alleged contempt consists in giving utterance either publicly or privately to opinions with regard to or connected with legal proceedings, whether civil or criminal, the law of contempt constitutes an interference with freedom of speech, and I agree with my noble and learned friend that we should maintain the rule that any "prejudging" of issues, whether of fact or of law, in pending proceedings whether civil or criminal is in principle an interference with the administration of justice although in any particular case the offence may be so trifling that to bring it to the notice of the court would be unjustifiable.
" PG NO 234 Mr. Baig emphasised that there is an inherent jurisdiction to restrain by injunction any publication that interferes with a fair trial or a pending case or with the administration of justice in general.
He further urged that trial of newspaper in sub judice matter is wrong.
Publication is permissible provided it does not amount to prejudgment or prejudice of a matter in Court.
Liberty or freedom of Press must subserve the due administration of justice.
He submitted that there is need to continue the injunction because contribution to the debentures could be withdrawn as the final allotment has not yet been made.
On the other hand, Mr. Diwan submitted that there is no jury trial involved here and no likelihood of the trial being prejudiced because trial is by professionally trained Judges.
Public have a right to know about this issue of debentures which is a matter of public concern.
It affects the public interest, so public have a right to know and the newspapers have an obligation to inform.
We must see whether there is a present and imminent danger for the continuance of the injunction.
It is difficult to lay down a fixed standard to judge as to how clear, remote or imminent the danger is.
The order passed on l9th August, 1988 as reiterated on 25th August, 1988 stated that there must be no legal impediment in the issue of the debentures or in the progress of the debentures, taking into account the overall balance and convenience and having due regard to the sums Of money involved and the progress already made.
It is necessary to reiterate that the continuance of this injunction would amount to interference with the freedom of Press in the form of preventive injunction and it must, therefore, be based on reasonable grounds for the sole purpose of keeping the administration of justice unimpaired.
In the words of Mr. Justice Brandeis of the American Supreme Court concurring in Charlotte Anita Whitney .
People of the State of California, 71 L. Edn. 109S at 1106, there must be reasonable round to believe that the danger apprehended is real and imminent.
This test we accept on the basis of balance of convenience.
This Court has not yet found or laid down any formula or test to determine how the balance of convenience in a situation of this type, or how the real and imminent danger should be judged in case of prevention by injunction of Publication of an article in a pending matter.
In the context of the facts of this case we must judge whether there is such an imminent danger which calls for continuance of the injunction.
Incidentally, it may be mentioned that the so called informed Press may misrepresent the Court proceedings.
We must remember that the people at large have a right to know in order to be able to take part in a participatory development in the PG NO 235 industrial life and democracy.
Right to Know is a basic right which citizens of a free country aspire in the broader horizon of the right to live in this age in our land under Article 21 of our Constitution.
That right has reached new dimensions and urgency.
That right puts greater responsibility upon those who take upon the responsibility to inform.
The question of contempt must be judged in a particular situation.
The process of due course of administration of justice must remain unimpaired.
Public interest demands that there should be no interference with judicial process and the effect of the judicial decision should not be pre empted or circumvented by public agitation or publications.
It has to be remembered that even at turbulent times through which the developing countries are passing, contempt of court means interference with the due administration of justice.
In the peculiar facts of this case now that the subscription to debentures has closed and, indeed, the debentures have been over subscribed, we are inclined to think that there is no such imminent danger of the subscription being withdrawn before the allotment and as to make the issue vulnerable by any publication of article.
On a balance of convenience, we are of the opinion that continuance of injunction is no longer necessary.
In this peculiar situation our task has been difficult and complex.
The task of a modern Judge, as has been said, is increasingly becoming complex.
Furthermore, the lot of a democratic Judge is heavier and thus nobler.
We cannot escape the burden of individual responsibilities in a particular situation in view of the peculiar facts and circumstances of the case.
There is no escape in absolute.
Having regard however, to different aspects of law and the ratio of the several decisions, by which though we are not bound, except the decisions of this Court referred to hereinbefore, about which we have mentioned, there is no decision dealing with this particular problem, we are of the opinion that as the Issue is not going to affect the ,general public or public life nor any injury is involved, it would be proper and legal, on an appraisal of the balance of convenience between the risk which will be caused by the publication of the article and the damage to the fundamental right of freedom of knowledge of the people concerned and the obligation of Press to keep people informed, that the injunction should not continue any further.
In the aforesaid view of the matter, we direct that there is no further need for the continuance of the injunction.
PG NO 236 Publications, if any, however, would be subject to the decision of the Court on the question of the contempt of court, namely, prejudging the issue and thereby interfering with the due administration of justice.
Preventive remedy in the form of an injunction is no longer necessary.
Whether punitive remedy will be available or not.
will depend upon tacts and the decision of the matter after ascertaining the consent or refusal of the Attorney General.
The application for the present purpose is, therefore.
disposed of with the direction that the injunction against publication in the order dated 25th August, 1988, need not further continue.
RANGANATHAN, J. I agree.
I would, however, like to add a few words, having regard to the range of the arguments addressed before us.
The principal ground urged in support of the prayer for the continuance of the injunction already granted is that it was very restricted in terms and injuncted only the publication of articles, comments and reports on the validity or legality of the various consents, approvals and permissions obtained by Reliance in relation to the debenture issue.
This is precisely the subject matter of the writ petitions and suit withdrawn to this Court in the Transfer Petitions.
It is urged, strongly relying on the speeches of the various Law Lords in the Thalidomide case Attorney General vs Times Newspapers Limited, 11974] A.C. 273 the observations of this Court in Re: P. C. Sen, [ ; and the provision contained in section 2(c)(iii) of the , that any such publication would tend to interfere with the fair administration of justice and so constitute criminal contempt and would be liable not merely to punitive action after publication but also to stoppage by a preventive order before publication.
On the other hand, for the respondents, it is contended that, in the decisions relied upon for the petitioners, the publications alleged to constitute contempt were of such a nature that they were seen to affect the course of actions actually pending in courts, that even otherwise the decision of ; the House of Lords has been widely criticised and should not be followed and that the views expressed by Lord Denning, M.R. in Attorney General vs BBC, though reversed by the House of Lords in by the American Courts in Bridges vs State of California, and in John D. Pennekamp vs Stale of Florida, ; should be preferred as more appropriate to present day conditions, particularly in the context of the PG NO 237 freedom of press guaranteed under Act 19(1)(a) of the Constitution of India, and also incorporated in Article 19 of the Universal Declaration of Human Rights, 1948, article 10 of the European Convention of Human Rights and article 19 of the International Convention on Civil and Political Rights, 1966.
I do not think we are called upon to decide this wider question at this stage.
As already pointed out, the contempt petition filed by the petitioners in respect of the article published by the respondents on 25.8.88 has not been taken cognisance of by us in the absence of the consent of the Learned Attorney General.
At the moment we have to assess whether any article that may be published by the respondents, even assuming that it touches on the issues of validity or legality of the approvals, consents and permissions referred to in our order of 19.8.88, will so clearly and obviously prejudice or tend to prejudice the course of the proceedings, now pending in this Court, that such publication should be injuncted by, what the respondents describe as, a "gagging order".
I agree with my learned brother that there is no such imminent danger or apprehension in the circumstances present here, as calls for such an extreme step curtailing the freedom of a newspaper.
It is sufficient, I think, to clarify, if at all any such clarification were needed, that should any newspaper publish any such matter, it will be doing so at its own risk and subject to its liability for being proceeded against by the petitioner or others for defamation, contempt of court or otherwise.
A somewhat narrower ground, as I understand it, put forward for the petitioner was that the grant of ex parte injunction by us on 19.8.88 and 25.8.88 was the result of our prima facie conclusion that consents, approvals or permissions from the concerned authorities for the debenture issue had been duly and validly obtained by the petitioner and that any article, liberty for the publication of which is sought for by the vacation of the interim order, would contain views contrary to or inconsistent with the prima facie view of this Court.
Persons reading the newspaper might be taken in by and believe in the statements made by the respondents in such articles and, if they start acting upon such beliefs, then the effect of the order of this Court, upholding, prima facie, the validity of the debenture issue on the above aspects would stand undermined.
In my view this contention is untenable.
I do not think that the contention proceeds on a correct analysis of the ratio of our order dated 25.8.88 or the earlier order dated 19.8.88.
It should be remembered that the proceedings, which gave rise to the transfer applications, were writ petitions and a suit filed in various courts challenging inter alia, the validity or regularity Of the debenture issue of the petitioner company.
If these matters had been heard by the PG NO 238 various High Courts or other subordinate courts, there was a possibility that one or more of the courts, satisfied with the prima facie tenability of the contentions of the petitioners therein might issue an order staying the debenture issue pending disposal of the suit or writ petition.
In fact, also, it seems that interim orders of this nature had been obtained.
The petitioner was apprehensive that, if any such interim order was passed, all the time, labour and money expended in floating the debenture issue might be nullified at the last moment.
The petitioner, therefore, moved for the transfer of all the various proceedings to this Court and for an interim order permitting it to issue the debentures as planned without let or hindrance and without being hampered by any interim stay order from any court.
I do not think it would be correct to say that, when we passed the order dated C 19.8.88, we formed any prima facie opinion on the question whether the debenture issue had been validly approved or consented to by the various authorities.
Though it is true that there were averments in the transfer petitions stating that all the legal formalities had been properly complied with, what predominantly influenced us to pass the order dated 19.8.88 was that, even assuming, prima facie, as contended in the various writ petitions and suits, that there could be some doubt regarding the validity or otherwise of the consent orders etc.
, the restraint by any court or tribunal on the issue of debentures at a late stage might prove catastrophic, and cause irreparable loss or damage, to the petitioner.
We were also of the opinion that.
pending adjudication on the issue of validity raised in the various suits, the balance of convenience required that there should be no order of any court or tribunal staying the debenture issue.
Now, 1 shall turn to the circumstances in which the order dated 25.8.88 were passed.
Subscriptions to the debenture issue were open between 22nd August, 88 and 31st August, 88.
It was during this interim period that the first article was published by the respondent newspaper attacking the validity of the consent granted by the Controller of Capital Issues to the issue of the debentures.
I do not go into the merits of the article.
But, when it was pointed out to us that this article had been published at a very crucial time when the subscription to the issue had started flowing in, we saw that it would have the indirect effect of achieving exactly what this Court wanted to prevent by its order dated 19.8.88.
Though this Court.
in view of the allegations raised in the transfer petitions, referred in its order only to stay orders from courts restraining the progress of the debenture issue, it was the intention of this Court that the debenture issue should go ahead without any obstacles placed in the way of the collection of PG NO 239 subscriptions therefor on the grounds on which stay orders had been sought to be obtained from courts.
The article published by the respondents, though not violative of the terms of the injunction granted by this Court, could have the effect of circumventing the order of this Court and rendering it ineffective.
It had, prima facie, a tendency to affect the efficacy of, and defeat the object with which this Court had passed the interim order dated 19.8.88.
This is the reason why we passed the second order dated 25.8.88 and also declined to modify or vary it at 1he request of the counsel for the newspapers on the next day.
I am of opinion that the said order was rightly passed and that the contention of learned counsel for the respondent that no such injunction ought to have been granted at all is not acceptable.
The position today, however, has radically changed.
We are told that the issue has been over subscribed.
In my opinion, this stage having been completed, there is no necessity to continue the interim order passed by us on the 25th of August, 1988.
Counsel for the petitioner, however, vehemently contended that there has been no material change in the situation.
He submitted that many lakhs of people have subscribed to the debentures and, within a strict time schedule laid down by the statute, the petitioner is bound to scrutinise all the applications, decide on the issue of allotment and send out allotment letters or refund the application moneys received.
It is submitted that even at this stage there is a potential danger that continued publication of articles by the respondents attacking the validity of the debenture issue will have the effect of causing a large number of applicants for the debentures to panic and to seek refund of the application moneys already paid by them.
In fact, it is said, a writ petition of that nature has already been filed in the Allahabad High Court.
Counsel submitted that, in a sensitive matter like issue of debentures, even the request for return of money by any one person could trigger off several applications of the same type and that the danger, that the petitioner company might be asked to refund moneys sent in respect of subscriptions already made on the basis of the allegations in such articles as the one already published, is real and imminent.
He submitted that it is therefore as much necessary today to continue the injunction as it was when it was granted on the 25th of August, 1988.
I have given careful thought to this contention urged on behalf of the petitioner company.
It is of course difficult in the absence of any reliable data for any person to come to a conclusion as to how exactly the publication of PG NO 240 articles of the type published by the respondents would cause prejudice in the manner contended for by the petitioner.
It seems to me, however, that the danger apprehended by the petitioner company is not so real or substantial as to warrant the continuance of the injunction order passed by us on the 25th of August, 88.
Even if, for the purpose of argument, one were to assume that such claims for refund will be made, they cannot straightaway harm the interests of the petitioner company.
There is no possibility that, pending determination of the issues raised, any court will order interim relief to such applicants by way of grant of such refunds.
The petitioner will be liable to make any such refund only if it is ultimately decided by this court or any other court that the issue of debentures is invalid and that the application moneys have to be refunded.
That of course the company will have to do in any event.
There is, however, no immediate cause for apprehension on the part of the petitioner that the publication of any such article could abort the debenture issue in the manner it could have done before 31.8.88.
I, therefore, agree that there is no justification for the continuance of the interim order dated 25.8.88 any longer.
| The respondents are the owners of two houses adjacent to each other and also to the property of the appellants.
From the roof of the appellants 'structure three morries (narrow outlets) opened towards the property of the respondents.
Subsequently, the appellants raised the height of their existing structure and constructed two additional storeys on it.
At the same time, the appellants after blocking the three original morries opened nine new morries, three on each floor.
The appellants also opened new windows.
The respondents however blocked these windows by raising the height of their walls.
The respondents filed suits praying for a permanent injunction restraining the appellants from using the new morries and from removing the obstruction to the windows.
The Sub Judge granted the injunction.
The appellants ' appeals before the District Judge and the High Court failed.
Before this Court the appellants contended that (1) that the owner of an easement was entitled to alter the mode and place of enjoying the easement and (2) no customary right of privacy had been pleaded or proved by the respondents.
Dismissing the appeal, it was, HELD: (1) Section 23 of the Indian Easement Act, 1882 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 servient heritage.
In this case the burden of easement had been increased by the action of the appellants.
[739E G] [Harvey vs Walters, , distinguished.] PG NO 736 PG NO 737 (2) The conduct of the defendants in opening nine morries in the place of three morries and thereby damaging the properties of the respondents is such that no discretion need be exercised in their favour by allowing them to raise the issue for the first time that the three morries on the first storey merely constitute a change in the mode or place of enjoyment of the easement.
[740B C; 739G H] (3) The appellants cannot be restrained from opening new windows, as no customary right of privacy appears to have been pleaded or proved.
At the same time, the respondents are fully entitled to block the same and the appellants are not entitled to remove the obstruction.
[740G H]
|
tition Nos. 434 435 of 1980.
(Under Article 32 of the Constitution) Ramjethmalani, H. Jagtiani, S.K. Dhingra and L.P. Daulat for the Petitioner.
M.N. Phadke and M.N. Shroff for the Respondent (State).
Abdul Kedar and Miss A. Subhashini for the Respondent (Union of India).
The Judgment of the Court was delivered by: SARKARIA, J.
This judgment deals with two writ petitions for the issue of a writ of habeas corpus, which were allowed by us by a short Order, dated April 23, 1980.
In Writ Petition 434 of 1980, the detenu is one Indru 's Ramchand Bharvani; while in Writ Petition 435 of 1980, the detenu is Indru 's father, Ram Chand Bharvani.
The two detenus Indru 's and Ram Chand, along with others, are carrying on business in diamonds and precious stones in partnership under the style of "M/s. Gems Impex Corporation".
35, New Marine Lines, Bombay, since 1971.
On November 16, 1979, the Customs Officers at Bombay raided the premises of the said firm and in the course of the raid, seized diamonds and pearls worth about Rs. 55 lakhs and, also, some jewellery and Rs. 1,40,000 in Indian currency and two gold sovereign coins.
On the following day, the Customs raided the residential premises of the son, Indru 's, and seized two cameras and three wrist watches worth about Rs. 1.50 lakhs.
The detenus were arrested on November 23, 1979 and interrogated.
During interrogation, the detenus claimed that the gems and other articles seized were not smuggled goods but were local materials, locally acquired.
They also gave the names of four persons from whom these gems had been acquired.
Both the father and the son were arrested and were produced before a Magistrate.
They were released on heavy bail subject to the condition that they 346 would attend daily before the Customs Officers and cooperate in the investigation.
This condition was later on related.
On February 16, 1980, an order of detention, dated February 15, 1980, purporting to have been made under Section 3(1) of the (for short called COFEPOSA) by the State Government was served on the detenus.
This order was authenticated by the Under Secretary to the State Government.
The grounds of detention were also served on the detenus alongwith the order of detention on February 16, 1980.
On February 18, 1980, the wife of the detenu, Ram Chand, addressed a letter to the first respondent (Under Secretary to the Government of Maharashtra), requesting him to furnish the detenus with the material relied upon by the detaining authority in the grounds of detention.
On March 25, 1980, detenu received a letter, dated March 14, 1980 from the State Government, declining the request for supply of copies to the detenu.
Prior to that on March 12, 1980, the detenus moved this Court by petitions under Article 32 of the Constitution, for the issue of a writ of habeas corpus.
On March 11, 1980, the detenu had also sent a petition through the Central Government, complaining of the non supply of copies of the necessary documents.
They also made, by that petition, such representations) as they could, praying for revocation of the order of their detention.
On April 3, 1980, the Central Government wrote to the detenus that their request for revocation had been rejected.
The Central Government, however, advised the State Government to furnish the detenus with the copies of the required documents.
As a result, on April 3, 1980 copies were received by the detenus from the State Government under their covering letter, dated March 31, 1980.
On March 24, 1980, the detenu also made a representation to the State Government which, according to the information furnished at the Bar by Mr. Phadke appearing for respondent 1, was declined.
Shri Ram Jethmalani, appearing for the detenus, challenges the detention mainly on these grounds: (1) The order of detention, purporting to have been signed by Shri Salvi, Secretary in the Home Department, to the Government of Maharashtra, is void because the concerned Minister of the State Government never, in fact, passed any such order and under the rules of business framed by the Governor under Article 166 of the 347 Constitution, Shri Salvi had no authority to pass the order of detention.
(2) The detaining authority never applied its mind to the earlier statements of four persons from whom the detenus claimed to have acquired the gems in question, and in which they had on the basis of documentary evidence supported the contention of the detenus.
Further, there was no evidence of smuggling in this case at all and the detaining authority committed illegality inasmuch as it relied on presumption under Section 123 of the Customs Act.
The use of this presumption was not available to the detaining authority in the exercise of its jurisdiction under COFEPOSA.
This shows that there was total non application of mind on the part of the detaining authority.
(3) The detenus made a written request to the detaining authority on February 18, 1980 for supply of the copies of the statements and documents relied upon in the grounds of detention, to enable them to make an effective representation.
The detaining authority, however, callously and deliberately refused to supply the copies and conveyed rejection of this request by a letter, dated February 14, 1980, which, in fact, was received by the detenus on March 25, 1980.
It was on the direction of the Central Government that the State Government supplied the copies of some of the statements to the detenus on April 3, 1980.
The detenu had a constitutional right to be afforded a fair and full opportunity of making an effective representation against his detention.
The refusal and the belated supply of these copies had violated that right of the detenu.
Even how, copies of the earliest statements of the four persons, as is apparent from their statements, have not been supplied to the detenus.
On account of this delay, the detention is vitiated.
(4) The detenu 's representation, dated March 11, 1980, made to the Central Government for revocation of the detention under Section 11 of the COFEPOSA has been wrongly rejected by an unauthorised person.
Under the Rules of Business, only the Revenue Minister of the Union Government was authorised to deal with and reject that representation.
But it seems that the representation was never put up before the Minister.
(5) The representation, dated March 24, 1980, made by the detenus to the detaining authority is now reported to have been rejected on April 8, 1980.
But the question still remains as to who passed the order of rejection.
If this representation was rejected by a person other than the Minister who alone was competent to do so, under the Maharashtra Rules of Business framed under Article 166 of the Constitution, then such rejection would be illegal.
348 As regards (1), Shri Phadke, appearing for the respondent State, has submitted for the perusal of the Court the original record from which it is apparent that the matter was put up by the Secretary.
Shri P.G. Salvi to the Minister concerned and the order of detention was in fact, passed by the Minister.
The first contention is therefore, devoid of merit.
Similarly, it is clear from the police records that the representation, dated March 24, 1980, of the detenus was considered by the Adviser to the Governor of Maharashtra, the State then being under President 's rule.
The Adviser was competent under the Rules of Business framed under Article 166 to deal with and reject such representation.
We therefore, do not find any force in Contention (5), either.
Indeed, Shri Jethmalani has concentrated mainly on Contention (3).
In reply to this contention, Shri Phadke submits that the grounds of detention were as elaborate as possible, that the substance of the statements, of which copies were asked for by the detenus, had been incorporated in those 'grounds ' which were served on the detenus, that in such a situation, the 'grounds ' served on the detenu, were more than sufficient to enable him to make an effective representation.
It is contended that under the Constitution, the detenu has got a right to be furnished only with the grounds of detention, that is, conclusions drawn from facts and not matters of detail or any other matter which is not referred to or relied upon in the grounds of detention.
This, according to Shri Phadke, was one of the reasons that impelled the State Government to refuse the supply of the copies to the detenu.
The second reason, according to the counsel was that the supply of the further information would have exposed the informants to bodily harm at the hands of the agents of the detenus, that the matter being still under investigation, the disclosure at that stage of the information would have adversely affected the investigation and harmed public interest.
Let us at the outset be very clear about the precise factual position.
The request for copies was made by the detenus on February 18, 1980.
After a delay of more than three weeks, this request was rejected by the State Government and that rejection was communicated to the detenu, by letter dated March 14, 1980.
This letter was received by the detenu only on March 25, 1980.
This delay in transit, also, was unusual and inordinate.
On March 27, 1980, the Central Government advised the State Government to supply the copies.
Thereupon, it seems, that within three days the copies 349 were put in a course of communication to the detenus by the State Government under their covering letter, dated March 31, 1980, and were actually received by the detenus on April 3, 1980.
The very fact that soon after the directions of the Central Government copies were ready and despatched to the detenus within three days thereof, shows that there was no physical difficulty in preparing and supplying the copies to the detenus, with due promptitude.
To justify the refusal to supply the copies the stand taken by the State Government in the affidavit filed on their behalf by Shri P.G. Salvi, Secretary to the Government, Home Department, is as follows: "(a) Looking at the exhaustive grounds furnished to the detenu and also the fact that the four persons named therein had denied before the Customs Officers that they sold the diamonds in question or gave them on 'jhangad ' basis was communicated to the detenu it was not necessary to furnish any copies of statements and documents to the detenu to enable him to make an effective representation against his detention.
(b) After the application on behalf of the detenu dated 18th February 1980 was received, a communication dated 27th February 1980 was received from the Collector of Customs (Preventive), Bombay.
This letter clearly suggested that copies should not be given Annexure "A".
" Annexure "A" to the affidavit is a letter, dated February 27, 1980, from the Collector of Customs, Bombay, addressed to the Secretary to the Government of Maharashtra, Home Department, in reply to the latter 's letter, dated February 19.
In para 2 of this letter, the Collector has stated: "In the case in which the captioned detenus are involved, investigation to unearth the conspiracy and find out the other persons involved in it, are in progress.
It appears from the material under seizure that the case has wide ramifications, which need to be investigated from various angles.
Hence, furnishing copies of the statements and documents at this stage would be detrimental to the investigation in progress from prosecution point of view and might even endanger the life of such of those witnesses who have either deposed against the detenus or provided clues.
Under these circumstances, furnishing of copies of statements and documents relied upon in the grounds for detaining the aforesaid accused at this stage, would not be in public interest.
However, we have no objection for furnishing copies of the panchanamas.
" 350 In this affidavit, Shri Salvi has not stated that he had personally applied his mind to what the Collector had said in his letter, dated February 27, 1980, nor has he affirmed that he had intimated to the detenu that the copies had been refused in exercise of the discretion under Article 22(6) of the Constitution, on the ground that the disclosure of that information was, in the opinion, of the Government, not in the public interest.
It is well settled that "the constitutional imperatives enacted in Article 22(5) of the Constitution are two fold: (i) the detaining authority must, as soon as may be, that is, as soon as practicable after the detention, communicate to the detenu the grounds on which the order has been made; and (ii) the detaining authority must afford the detenu the earliest opportunity of making a representation against the detention order.
In the context, 'grounds ' does not merely mean a recital or reproduction of a ground of satisfaction of the authority in the language of Section 3; nor is its connotation restricted to a bare statement of conclusion of fact.
"Nothing less than all the basic facts and materials which influenced the detaining authority in making the order of detention must be communicated to the detenu".
This is the ratio of the decision in Khudiram Das vs The State of West Bengal & Ors., to which one of us (Sarkaria, J.) was a party.
This principle was enunciated after an exhaustive survey of the authorities by Bhagwati, J. who delivered the opinion of the Court.
It is, therefore, not necessary to burden this judgment by noticing all the other decisions which were examined in that case.
The mere fact that the grounds of detention served on the detenu are elaborate, does not absolve the detaining authority from its constitutional responsibility to supply all the basic facts and materials relied upon in the grounds to the detenu.
In the instant case, the grounds contain only the substance of the statements, while the detenu had asked for copies of the full text of those statements.
It is submitted by the learned counsel for the petitioner that in the absence of the full texts of these statements which had been referred to and relied upon in the 'grounds ' of detention, the detenus could not make an effective representation and there is disobedience of the second constitutional imperative pointed out in Khudiram 's case.
There is merit in this submission.
The second reason for non supply of the copies given by Shri Salvi, it may be recalled, is that the Collector had said that the supply of the copies at that stage would be detrimental to the investigation and public interest.
This "so called" reason also was unsustainable 351 in law.
Shri Salvi does not appear to have applied his mind to the question whether or not the supply of these copies would be injurious to public interest.
He appears to have mechanically endorsed what had been written to him by the Collector in his letter, dated February 27, 1980.
The detenu had asked for copies of three kinds of documents: (a) His own statements which according to the grounds of detention, were in consistent and contradictory to each other, (b) Copies of the statements of his father, who is the detenu in Writ Petition No. 435/80.
These statements.
also, according to the grounds of detention, were mutually inconsistent.
(c) The full texts of the statements made by the four persons, whose names, particulars and substance of their statements were mentioned in the grounds of detention.
As regards the first two categories of statements the substance of which was already in the knowledge of the deponents, no question of their disclosure being harmful to the public interest could arise.
Nor could the supply of the full text of those statements, by any stretch of imagination, be said to be such that it might endanger the lives of the deponents.
Regarding category (c), the substance of the statements of the four persons mentioned in the grounds of detention had already been disclosed to the detenus.
It was therefore, not reasonably possible to say that the disclosure of the full texts of their statements would endanger their safety or harm public interest.
In the copies of the statements of those persons which was ultimately supplied to the detenus after undue delay on the direction of the Central Government, there is a reference to the earlier statements of these four persons in which they had, on the basis of some account books and documents, supported the contention of the detenus that the latter had acquired the gems in question from those persons.
The statements supplied to the detenus are their subsequent statements in which they have completely resiled from their earlier statements.
It is obvious that the supply of the earlier statements which were entirely in favour of the detenus and the full texts of which have been with held, could not, by any reckoning, expose those persons to any alarm or danger at the hands of the agents or partisans of the detenus.
Be that as it may, if any part of the statements of those witnesses had to be withheld in public interest, the appropriate authority could, after due application of its own mind, make an order under clause (6) of Article 22 of the Constitution withholding the supply of those portions of statements after satisfying itself that their disclosure would be against the public interest.
In the instant case, the detaining authority, without applying its mind to the nature of the documents, the copies of which were asked for by the detenus, mechanically 352 refused as desired by the Collector, to supply the copies of all the documents.
Indeed, it was on receiving a direction from the Central Government that the copies were supplied.
On account of this chill indifference and arbitrary refusal, the detenu, who had applied for copies on February 18, 1980, could get the same only on March 27, 1980, i.e., after more than one month.
Thus, there was unreasonable delay of more than a month in supplying the copies to the detenus, of the material that had been relied upon or referred to in the "grounds" of detention.
There was thus an infraction of the constitutional imperative that in addition to the supply of the grounds of detention, all the basic material relied upon or referred to in those "grounds" must be supplied to the detenu with reasonable expedition to enable him to make a full and effective representation at the earliest.
Of course, what is "reasonable expedition" is a question of fact depending upon the circumstances of the particular case.
In the peculiar facts of the instant case, we are of opinion that the delay of more than a month, in supplying the copies of the basic materials and documents to the detenus has vitiated the detention.
It was on this short ground, we, by our order, dated April 23.
had allowed the writ petitions and directed the release of the detention.
N.K.A. Petition allowed.
| Minerva Mills Ltd. is a limited company dealing in textiles.
On August 20, 1970 the Central Government appointed a committee under section IS of the Industries (Development Regulation) Act, 1951 to make a full and complete investigation of the affairs of the Minerva Mills Ltd as it was of the opinion that there had been or was likely to be substantial fall in the volume of production.
The said Committee submitted its report to the Central Government in January 1971, on the basis of which the Central Government passed an order dated October 19, 1971 under section 18A of the 1951 Act, authorising the National Textile Corporation Ltd., to take over the management of the Mills on the ground that its affairs are being managed in a manner highly detrimental to public interest.
This undertaking was nationalised and taken over by the Central Government under the provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974.
The petitioners challenged the constitutional validity of certain provisions of the Sick Textile Undertakings (Nationalisation) Act, 1974 and of the order dated October 19, 1971, the constitutionality of the Constitution (Thirty Ninth Amendment) Act which inserted the impugned Nationalisation Act as Entry 105 in the Ninth Schedule to the Constitution, the validity of Article 31B of the Constitution and finally the constitutionality of sections 4 and 55 of the Constitution (Forty Second Amendment) Act, 1976 on the ratio of the majority judgment in Kesavananda Bharati 's case, namely, though by Article 368 of the Constitution Parliament is given the power to amend the Constitution, that power cannot be exercised so as to damage the basic features of the Constitution or so as to destroy its basic structure.
Opining that sections 4 and 55 of the Constitution (Forty Second Amendment) Act are void and beyond the amending power of the Parliament, the Court by majority (Per Chandrachud.
C.J., on behalf of himself, A. Gupta.
N.L. Untwalia & P.S. Kailasam, JJ.) ^ HELD: (1) The newly introduced clause S of Article 368 transgresses the limitations on the amending power of Parliament and is hence unconstitutional.
It demolishes the very pillars on which the preamble rests by empowering the Parliament to exercise its constituent power without any "limitation whatever".
No constituent power can conceivably go higher than the sky high power conferred by clause (5), for it even empowers the Parliament to "repeal the provisions of this Constitution", that is to say, to abrogate the democracy.
207 and substitute for it a totally antithetical form of Government.
That can most effectively be achieved, without calling a democracy by any other name, by a total denial of social, economic and political justice to the people, by emasculating liberty of thought, expression, belief, faith and worship and by abjuring commitment to the magnificent ideal of a society of equals.
The power to destroy is not a power to amend.
[240C E] Since the Constitution had conferred a limited amending power on the Parliament, the Parliament cannot under the exercise of that limited power enlarge that very power into an absolute power.
Indeed, a limited amending power is one of the basic features of Indian Constitution and therefore, the limitations on that power cannot be destroyed.
In other words, Parliament cannot, under Article 368, expand its amending power so as to acquire for itself the right to repeal or abrogate the Constitution or to destroy its basic and essential features.
The donee of a limited power cannot by the exercise of that power convert the limited power into an unlimited one.
[240E G] Smt.
Indira Nehru Gandhi vs Raj Narain, , followed.
(2) The newly introduced clause (4) of Article 368 is equally unconstitutional and void because clauses (4) and (5) are inter linked.
While clause (5) purports to remove all limitations on the amending power, clause (4) deprives the courts of their power to call in question any amendment of the Constitution.
[241E F] Indian Constitution is founded on a nice balance of power among the three wings of the State namely, the Executive, the Legislature and the Judiciary.
It is the function of the Judges, may their duty, to pronounce upon the validity of laws.
If courts are totally deprived of that power, the fundamental rights conferred upon the people will become a mere adornment because rights without remedies are as writ in water.
A controlled Constitution will then become uncontrolled.
Clause (4) of Article 368 totally deprives the citizens of one of the most valuable modes of redress which is guaranteed by Article 32.
The conferment of the right to destroy the identity of the Constitution coupled with the provision that no court of law shall pronounce upon the validity of such destruction is a transparent case of transgression of the limitations on the amending power.
[241H, 242A] If a constitutional amendment cannot be pronounced to be invalid even if it destroys the basic structure of the Constitution, a law passed in pursuance of such an amendment will be beyond the pale of judicial review because it will receive the protection of the constitutional amendment which the courts will be powerless to strike down.
Article 13 of Constitution will then become a dead letter because even ordinary laws will escape the scrutiny of the courts on the ground that they are passed on the strength of a constitutional amendment which is not open to challenge.
[242A C] (3) Though it is the settled practice of the Supreme Court not to decide academic questions and the Court has consistently taken the view that it will not formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied, it is difficult to uphold the preliminary objection to the consideration of the question raised by the petitioners as regards the validity of sections 4 and 55 of the Forty second Amendment.
In the instant case, the question raised as regards the constitutionality of sections 4 and 55 of the Forty Second Amendment is not an academic or a hypothetical question.
Further an order has been passed against the petitioners under section 18A of the Industries (Development and Regulation) Act, 1951, by which the petitioners are aggrieved.
[248C, E G] 208 Besides, there is no constitutional or statutory inhibition against the decision of questions before they actually arise for consideration.
Here, in view of the importance of the question raised and in view of the fact that the question has been raised in many a petition, it is expedient in the interest of Justice to settle the true position.
Secondly, what the court is dealing with is not an ordinary law which may or may not be passed so that it could be said that the court 's jurisdiction is being invoked on the hypothetical consideration that a law may be passed in future which will injure the rights of the petitioners.
What the court is dealing with is a constitutional amendment which has been brought into operation and which, of its own force, permits the violation of certain freedoms through laws passed for certain purposes.
[248G, 249A B] Commonwealth of Massachusetts vs Andrew W. Mellon, 67 Lawyers ' Edition, 1078, 1084; George Ashwander vs Tennessee Valley Authority, 80 Lawyers ' Edition, 688, 711, quoted with approval.
(4) The answer to the question whether in view of the majority decision in Kesavananda Bharati it is permissible to the Parliament to so amend the Constitution as to give a position of precedence to directive principles over the fundamental rights, must necessarily depend upon whether Articles 14 and 19, which must now give way to laws passed in order to effectuate the policy of the State towards securing all or any of the principles of Directive Policy, are essential features of the basic structure of the Constitution.
It is only if the rights conferred by these two articles are not a part of the basic structure of the Constitution that they can be allowed to be abrogated by a constitutional amendment.
If they are a part of the basic structure, they cannot be obliterated.
out of existence in relation tn a category of laws described in Article 31C or, for the matter of that, in relation to laws of any description whatsoever, passed in order to achieve any object or policy whatsoever.
This will serve to bring out the point that a total emasculation of the essential features of the Constitution is, by the ratio in Keshavananda Bharati, not permissible to the Parliament.
[249E H] (5) The importance of Directive Principles in the scheme of our Constitution cannot ever be over emphasized.
Those principles project the high ideal which the Constitution aims to achieve.
In fact Directive Principles of State Policy are fundamental in governance of the country and there is no sphere of public life where delay can defeat justice with more telling effect than the one in which the common man seeks the realisation of his aspirations.
But to destroy the guarantees given by Part III in order purportedly to achieve the goals of Part IV is plainly to subvert the Constitution by destroying its basic structure.
Fundamental rights occupy a unique place in the lives.
of civilized societies and have been variously described as "transcendental", "inalienable" and "primordial" and as said in Kesavananda Bharati they constitute the ark of the Constitution.
[250B C, 254H, 255A] The significance of the perception that Parts III and IV together constitute the core of commitment to social revolution and they, together, are the conscience of the Constitution is to be traced to a deep understanding of the scheme of the Indian Constitution.
Parts III and IV are like two wheels of a chariot, one no less important than the other.
Snap one and the other will lose its efficacy.
They are like a twin formula for achieving the social revolution which is the ideal which the visionary founders of the Constitution set 209 before themselves.
In other words, the Indian Constitution is founded on the bed rock of the balance between Parts III and IV.
To give absolute primacy to one over the other is to disturb the harmony of the Constitution.
This harmony and balance between fundamental rights and directive principles is an essential feature of the basic structure of the Constitution.
[255B D] The edifice of Indian Constitution is built upon the concepts crystallized in the Preamble.
Having resolved to constitute ourselves into a Socialist State which carried with it the obligation to secure to our people justice social, economic and political, Part IV has been put into our Constitution containing directive principles of State Policy which specify the socialistic goal to be achieved.
Having promised the people a democratic polity which carries with it the obligation of securing to the people liberty of thought, expression, belief, faith and worship, equality of status and of opportunity and the assurance that the dignity of the individual will at all costs be preserved, Part III has been put in our Constitution, conferring those rights on the people.
Those rights are not an end in themselves but are the means to an end.
The end is specified in Part IV.
Therefore, the rights conferred by Part III are subject to reasonable restrictions and the Constitution provides that enforcement of some of them may, in stated uncommon circumstances, be suspended.
But just as the rights conferred by Part III would be without a radar and a compass if they were not geared to an ideal, in the same manner the attainment of the ideals set out in Part IV would become a pretence for tyranny if tho price to be paid for achieving that ideal is human freedoms.
One of the faiths of our founding fathers was the purity of means.
The goals set out in Part IV have, therefore, to be achieved without the abrogation of the means provided for by Part III.
It is in this sense that Parts III and IV together constitute the core of our Constitution and combine to form its conscience.
Anything that destroys the balance between the two parts will ipso facto destroy an essential element of the basic structure of our Constitution.
[253D H, 256A B] (5A) on any reasonable interpretation, there can be no doubt that by the amendment introduced by section 4 of the Forty Second Amendment, Articles 14 and 19 stand abrogated at least in regard to the category of laws described in Article 31C. The startling consequence which the amendment has produced is that even if a law is in total defiance of the mandate of Article 13 read with Articles 14 and 19, its validity will not be open to question so long as its object is to secure a directive principle of State Policy.
[256D E] (6) No doubt, it is possible to conceive of laws which will not attract Article 31C, since they may not bear direct and reasonable nexus with the provisions of Part IV.
However, a large majority of laws, the bulk of them, can at any rate be easily justified as having been passed for the purpose of giving effect to the policy of the State towards securing some principle or the other laid down in Part IV.
In respect of all such laws, which will cover an extensive gamut of the relevant legislative activity, the protection of Articles 14 and 19 will stand wholly withdrawn.
It is then no answer to say, while determining whether the basic structure of the Constitution is altered, that at least some laws will fall outside the scope of Article 31C. [256E H] (7) A total deprivation of fundamental rights, even in a limited area, can amount to abrogation of a fundamental right just as partial deprivation in every area can.
The fact, therefore that some laws may fall outside the scope of Article 31C is no answer to the contention that the withdrawal of protection of Articles 14 and 19 from a large number of laws destroys the basic structure of the Constitution.
[256H, 257A B] 210 (8) Article 38 provides that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
It is not correct that all the Directive Principles of State Policy contained in Part TV eventually verge upon Article 38.
Article 38 undoubtedly contains a broad guideline, but the other Directive Principles are not mere illustrations of the principle contained in Article 38.
Secondly, if it be true that no law passed for the purpose of giving effect to the Directive principle in Article 38 can damage or destroy the basic structure of the Constitution, there was no necessity and more so the justification, for providing by a Constitutional amendment that no law which is passed for giving effect to the policy of the State towards securing any principle laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges the rights conferred by Articles 14 and 19.
[257C F] The object and purpose of the amendment of Article 31C is really to save laws which cannot be saved under Article 19(2) to (6).
Laws which fall under those provisions are in the nature of reasonable restrictions on the fundamental rights in public interest and therefore they abridge but do not abrogate the fundamental rights.
It was in order to deal with laws which do not get the protection of Article 19(2) to (6) that Article 31C was amended to say that the provisions of Article 19, inter alia cannot be invoked for voiding the laws of the description mentioned in Article 31C. [257F G] (9) Articles 14 and 19 do not confer any fanciful rights.
They confer rights which are elementary for the proper and effective functioning of a democracy They are universally so regarded, as is evident from the Universal Declaration of Human Rights.
If Articles 14 and 19 are put out of operation in regard to the bulk of laws which the legislatures are empowered to pass Article 32 will be drained of its life blood.
[257G H, 258A] Section 4 of the Forty Second Amendment found an easy way to circumvent Article 32(4) by withdrawing totally the protection of Articles 14 and 19 in respect of a large category of laws, so that there will be no violation to complain of in regard to which redress can be sought under Article 32.
The power to take away the protection of Article 14 is the power to discriminate without a valid basis for classification.
By a long series of decisions the Supreme Court has held that Article 14 forbids class legislation but it does not forbid classification.
The purpose of withdrawing the protection of Article 14, therefore, can only be to acquire the power to enact class legislation.
Then again, regional chauvinism will have a field day if Article 19(1)(d) is not available to the citizens.
Already, there are disturbing trends on a part of the Indian horizon.
Those trends will receive strength and encouragement if laws can be passed with immunity, preventing the citizens from exercising their right to move freely throughout the territory of India.
The nature and quality of the amendment introduced by section 4 of the Forty Second Amendment is, therefore, such that it virtually tears away the heart of basic fundamental freedoms.
[258B E] Article 31C speaks of laws giving effect to the policy of the "State".
Article 12 which governs the interpretation of Article 31C provides that the word "State" in Part III includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other 211 authorities within the territory of India or under the control of the Government of India.
Wide as the language of Article 31C is, the definition of the word "State" in Article 12 gives to Article 31C an operation of the widest amplitude.
Even if a State Legislature passes a law for the purpose of giving effect to the policy by a local authority towards securing a directive principle, the law will enjoy immunity from the provisions of Articles 14 and 19.
The State Legislatures are thus given an almost unfettered discretion to deprive the people of their civil liberties.
[258E G] (10) The principles enunciated in Part IV are not the proclaimed monopoly of democracies alone.
They are common to all polities, democratic or authoritarian.
Every State is goal oriented and claims to strive for securing the welfare of its people.
The distinction between the different forms of Government consists in that a real democracy will endeavour to achieve its objectives through the discipline of fundamental freedoms like those conferred by Articles 14 and 19.
Those are the most elementary freedoms without which a free democracy is impossible and which must, therefore, be preserved at all costs.
If the discipline of Article 14 is withdrawn and if immunity from the operation of that article is conferred, not only on laws passed by the Parliament but on laws passed by the State Legislatures also, the political pressures exercised by numerically large groups can tear the country asunder by leaving it to the legislature to pick and choose favoured areas and favourite classes for preferential treatment.
[259A D] (11) The device of reading down the provisions of a law for the purpose of saving it from a constitutional challenge is not to be resorted to in order to save the susceptibilities of the law makers, nor indeed to imagine a law of one 's liking to have been passed.
Article 31C cannot be read down so as to save it from the challenge of unconstitutionality because to do so will involve a gross distortion of the principle of reading down depriving that doctrine of its only or true rationale when words of width are used inadvertently one must at least take the Parliament at its word when, especially, it undertakes a constitutional amendment.
[259E G] If the Parliament has manifested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited.
The principle of reading down cannot be invoked or applied in opposition to the clear intention of the legislature.
In the history of the constitutional law, no constitutional amendment has ever been read down to mean the exact opposite of what it says and intends.
In fact, reading down Article 31C so as to make it conform to the ratio of the majority decision in Kesavananda Bharati is to destroy the avowed purpose of Article 31C as indicated by the very heading "Saving of certain laws" under which Articles 31A, 31B and 31C are grouped.
Since the amendment to Article 31C was unquestionably made with a view to empowering the legislatures to pass laws of a particular description even if those laws violate the discipline of Articles 14 and 19, it is impossible to hold that the court should still save Article 31C from the challenge of unconstitutionality by reading into that Article words which destroy the rationale of that Article and an intendment which is plainly contrary to its proclaimed purpose.
[259H, 280A C] (12) Reading the existence of an extensive judicial review into Article 31C is really to permit the distortion of the very purpose of that Article.
It provides expressly that no law of a particular description shall be deemed to be void on the ground that it violates Article 14 or Article 19.
It would be sheer 212 adventurism of a most extraordinary nature to undertake such a kind of judicial enquiry.
[260F G] (13) In the very nature of things it is difficult for a court to determine whether a particular law gives effect to a particular policy.
Whether a law is adequate enough to give effect to the policy of the State towards securing a directive principle is always a debatable question and the courts cannot set aside the law as invalid merely because, in their opinion, tho law is not adequate enough to give effect to a certain policy.
The power to enquire into the question whether there is a direct and reasonable nexus between the provisions of a law and a Directive Principle cannot confer upon the Courts the power to sit in Judgment over the policy itself of the State.
At the highest, courts can, under Article 31C, satisfy themselves as to the identity of the law in the sense whether it bears direct and reasonable nexus with a Directive Principle.
If the court is satisfied as to the existence of such nexus, the inevitable consequence provided for by Article 31C must follow.
Indeed, if there is one topic on which all the 13 Judges in Kesavananda Bharti were agreed, it is this: that the only question open to judicial review under tho unamended Article 31C was whether there is a direct and reasonable nexus.
between the impugned law and tho provisions of Articles 39(b) and (c).
Reasonableness is evidently regarding the nexus and not regarding the law.
The. attempt therefore to drape Article 31C into a democratic outfit under which an extensive judicial review would be permissible must fail.
[260H, 261A E] (14) The avowed purpose of clauses (4) and (5) of Article 368 is to confer power upon the Parliament to amend the Constitution without any "limitation whatever".
Provisions of this nature cannot be saved by reading into them words and intendment of a diametrically opposite meaning and content.
[261F G] (15) Article 31A(1) can be looked upon as a contemporaneous practical exposition of the intendment of the Constitution, but the same cannot be said of Article 31C.
Besides there is a significant qualitative difference between the two Articles.
Article 31A, the validity of which has been recognised over the years, excludes the challenge under Articles 14 and 19 in regard to a specified category of laws.
If by a constitutional amendment, the application of Articles 14 and 19 is withdrawn from a defined field of legislative activity, which is reasonable in public interest, the basic framework of the constitution may remain unimpaired.
If the protection of those articles is withdrawn in respect of an uncatalogued variety of laws, fundamental freedoms will become a 'parchment in a glass case ' to be viewed as a matter of historical curiosity [262A C] (16) There is no merit in the contention that since article 31A was also upheld on the ground of state decisis.
article 31C can be upheld on the same ground.
The five matters which are specified in Article 31A are of such quality, nature, content and character that at least a debate can reasonably arise whether abrogation of fundamental rights in respect of those matters will damage or destroy the basic structure of the Constitution.
Article 31C does not deal with specific subjects.
The directive principles are couched in broad and ' general terms for the simple reason that they specify the goals to be achieved.
The principle of state decisis cannot be treated as a fruitful source of perpetuating curtailment of human freedoms.
No court has upheld the validity of Article 31A on the ground that it does not violate the basic structure of the Constitution.
There is no decision on the validity of Article 31A which can be looked upon as a measuring rod of the extent of the amending power.
To 213 hark back to Article 31A every time that a new constitutional amendment is challenged is the surest means of ensuring a drastic erosion of the Fundamental Rights conferred by Part III.
Such a process will insidiously undermine the efficacy of the ratio of the majority judgment in Kesavananda Bharati regarding the inviolability of the basic structure.
That ratio requires that the validity of each new constitutional amendment must be judged on its own merits.
[262C G] (17) It is not correct to say that when Article 31A was upheld on the ground of state decisis, what was upheld was a constitutional device by which a class of subject oriented laws was considered to be valid.
The simple ground on which Article 31A was upheld, apart from the ground of contemporaneous practical exposition, was that its validity was accepted and recognised over the years and, therefore, it was not permissible to challenge its constitutionality.
The principle of stare decisis does not imply the approval of the device.
Or mechanism which is employed for the purpose of framing a legal or constitutional provision.
[262G H, 263A B] (18) Under clauses (2) to (6) of Article 19, restrictions can be imposed only if they are reasonable and then again, they can be imposed in the interest of a stated class of subjects only.
It is for the courts to decide whether restrictions are reasonable and whether they are in the interest of the particular subject.
Apart from other basic dissimilarities, Article 31C takes away the power of judicial review to an extent which destroys even the semblance of a comparison between its provisions and those of clauses (2) to (6) of Article 19.
Human ingenuity, limitless though it may be, has yet not devised a system by which the liberty of the people can be protected except through the intervention of courts of law.
[263B D] Three Articles of the Indian Constitution and only three stand between the heaven of freedom into which Tagore wanted his country to awake and the abyss of unrestrained power.
They are Articles 14, 19 and 21.
Article 31C has removed two sides of that golden triangle which affords to the people of this country an assurance that the promise held forth by the Preamble will be performed by ushering an egalitarian era through the discipline of fundamental rights, that is, without emasculation of the rights to liberty and equality which alone can help preserve the dignity of the individual.
[263D E] Per Bhagwati, J. (concurring) (1) Since the question in regard to the constitutional validity of the amendment made in Article 31C did not arise in the writ petitions and the counter affidavits, it was wholly academic and superfluous to decide it.
Once it is conceded that Articles 31A, 31B and the unamended Article 31C are constitutionally valid it became wholly unnecessary to rely on the unamended Article 31 in support of the validity of Sick Textiles Undertaking (Nationalisation) Act, 1974 because Article 31B would, in any event, save it from invalidation on the ground of infraction of any of the fundamental rights.
[268F H] (2) Now either the Nationalisation Act was really and truly a law for giving effect to the Directive Principles set out in Article 39 clause (b) as declared in section 39 of the Act or it was not such a law and the legislative declaration contained in section 39 was a colourable device If it was the 214 former then the unamended Article 31C would be sufficient to protect the Nationalisation Act from attack on the ground of violation of Articles 14, 19 and 31 and it would be unnecessary to involve the amended Article 31C and if it was the latter, then neither the unamended nor the amended Article 31C would have any application.
Thus in either event, the amended Article 31C would have no relevance at all in adjudicating upon the constitutional validity of the Nationalisation Act.
In these circumstances, the court could not be called upon to examine the constitutionality of the amendment made in Article 31C. [269B E] Dattatraya Govind Mahajan v State of Maharashtra, ; , followed.
(3) Clause (4) of Article 368 of the Constitution is unconstitutional and void as damaging the basic structure of the Constitution.
[288E] The words "on any ground" in clause (4) of Article 368 are of the widest amplitude and they would obviously cover even a ground that the procedure prescribed in clause (2) and its proviso has not been followed.
The result is that even if an amendment is purported to have been made without complying with the procedure prescribed in sub clause (2) including its proviso, and is therefore unconstitutional, it would still be immune from challenge.
[284F F] As per Kesavananda Bharati 's case any amendment of the Constitution which did not conform to the procedure prescribed by sub clause (2) and its proviso was no amendment at all and a court would declare it invalid.
Thus if an amendment was passed by a simple majority in the House of the People and the Council of States and the President assented to the amendment, it would, in law, be no amendment at all because the requirement of clause (2) is that it should be passed by a majority of each of the Houses separately and by not less than two third of the Members present and voting.
But if clause (4) was valid it would become difficult to challenge the validity of such an amendment and it would prevail though made in defiance of a mandatory constitutional requirement.
Clause (2) including its proviso would be rendered completely superfluous and meaningless and its prescription would become merely a paper requirement.
Moreover, apart from nullifying the requirements of clause (2) and its proviso, clause (4) has also the effect of rendering an amendment immune from challenge even if it damages or destroys the basic structure of the Constitution and is, therefore, outside the amending power of Parliament.
So long as clause (4) stands, an amendment of the Constitution, though unconstitutional and void as transgressing the limitation on the amending power of Parliament as laid down in Kesavananda Bharati 's case, would be unchallengeable in a court of law.
The consequence of this exclusion of the power of judicial review would be that, in effect and substance, the limitation on the amending power of Parliament would, from a practical point of view, become non existent and it would not be incorrect to say, for covertly and indirectly by the exclusion of judicial review the amending power of Parliament would stand enlarged contrary to the decision of this Court in Kesavananda Bharati 's case.
This would, undoubtedly, damage the basic structure of the Constitution because there are two essential features of the basic structure which would be violated, namely, the limited amending power of the Parliament and the power of judicial review with a view to examining whether any authority under the Constitution has exceeded the limits of its powers.
[284F H, 285A D] Our Constitution is a controlled constitution which confers powers on the various authorities created and recognised by it and defines the limits of those 215 powers.
The Constitution is suprema lex, the paramount law of the land and there is no authority, no department or branch of the State which is above or beyond the Constitution or has powers unfettered and unrestricted by the Constitution.
The Constitution has devised a structure of power relationship which checks and balances and limits are placed on the powers of every authority of instrumentality under the Constitution.
Every organ of the State, be it the Executive or the Legislature or the Judiciary, derives its authority from the Constitution and it has to act within the limits of such authority.
Parliament too is a creature of the Constitution and it can only have such powers as are given to it under the Constitution.
It has no inherent power of amendment of the Constitution and being an authority created by the Constitution, it cannot have such inherent power but the power of amendment is conferred upon it by the Constitution and it is a limited power which is so conferred.
Parliament cannot in exercise of this power so amend the Constitution as to alter its basic structure or to change its identity.
Now, if by constitutional amendment, Parliament was granted unlimited power of amendment, it would cease to be an authority under the Constitution, but would become supreme over it because it would have power to alter the entire Constitution including its basic structure and even to put an end to it by totally changing its identity.
Therefore, the limited amending power of Parliament is itself an essential feature of the Constitution, a part of its basic structure, for if the limited power of amendment was enlarged into an unlimited power the entire character of the Constitution would be changed.
It must follow as a necessary corollary that any amendment of the Constitution which seeks, directly or indirectly, to enlarge the amending power of Parliament by freeing it from the limitation of unamendability of the basic structure would be violative of the basic structure and, hence, outside the amendatory power of Parliament.
[285E H, 286A C] It is a fundamental principle of our Constitution that every organ of the State, every authority under the Constitution derives its powers from the Constitution and has to act within the limits of such power.
The three main departments of the State amongst which the powers of Government are divided are: the Executive, the Legislature and the Judiciary.
Under our Constitution there is no rigid separation of powers but there is a broad demarcation though, having regard to the complex nature of governmental functions, certain degree of overlapping is inevitable.
The Constitution has created an independent machinery, namely, the judiciary which is vested with the power of judicial review to determine the legality of executive action and the validity of legislation passed by the Legislature.
It is a solemn duty of the judiciary under the Constitution to keep the different organs of the State, such as the Executive and the Legislature, within the limits of the power conferred upon them by the Constitution.
This power of judicial review is conferred on the judiciary by Articles 32 and 226 of the Constitution.
[286D, E, 287B C].
It is a cardinal principle of our Constitution that no one, howsoever highly placed and no authority however lofty, can claim to be the sole judge of its power under the Constitution or whether its actions are within the confines of such power laid down by the Constitution.
The judiciary is the interpreter of the Constitution and the judiciary is assigned the delicate task to determine what is the power conferred on each branch of Government, whether it is limited, and if so, what are the limits and whether any action of that branch transgresses such limits.
It is for the judiciary to uphold the constitutional values and to enforce the constitutional limitations.
That is the essence of the rule of law, which inter alia requires that "the exercise of powers by 216 the Government whether it be the legislature or the executive or any other authority, be conditioned by the Constitution and the law".
The power of the judicial review is an integral part of our constitutional system and without it, there will be no Government of Laws and the rule of law would become a teasing illusion and a promise of unreality.
If there is one feature of our Constitution which, more than any other, is basic and fundamental to the maintenance of democracy and the rule of law, it is the power of judicial review and it is unquestionably a part of the basic structure of the Constitution.
However, effective alternative institutional mechanism arrangements for judicial review cannot be made by Parliament.
Judicial review is a vital principle of our Constitution and it cannot be abrogated without affecting the basic structure of the Constitution.
If by a constitutional amendment, the power of judicial review is taken away and it is provided that the validity of any law made by the legislature shall not be liable to be called in question on any ground, even if it is outside the legislative competence of the legislature or is violative of any fundamental rights, it would be nothing short of subversion of the Constitution, for it would make a mockery of the distribution of legislative powers between the Union and the States and render the fundamental rights meaningless and futile.
So also if a constitutional amendment is made which has the effect of taking away the power of judicial review and providing that no amendment made in the Constitution shall be liable to be questioned on any ground, even if such amendment is violative of the basic structure and, therefore, outside the amendatory power of Parliament, it would be making Parliament sole judge of the constitutional validity of what it has done and that would, in effect and substance, nullify the limitation on the amending power of Parliament and effect the basic constructure of the Constitution.
[287F H, 288A E] (4) Clause (5) of Article 368 of the Constitution is unconstitutional and void.
[289E F] After the decisions of Kesavananda Bharati 's case and Smt.
Indira Gandhi 's case there was no doubt at all that the amendatory power of Parliament was limited and it was not competent to Parliament to alter the basic structure of the Constitution and clause (5) could not remove the doubt which did not exist.
What clause (5) really sought to do was to remove the limitation on the amending power of Parliament and correct it from a limited power into an unlimited one.
This was clearly and indubitably a futile exercise on the part of the Parliament.
[288G H, 289A] The Constitution has conferred only a limited amending power on Parliament, so that it cannot damage or destroy the basic structure of the Constitution and Parliament by exercise of that limited amending power convert that very power into an absolute and unlimited power.
If it were permissible to Parliament to enlarge the limited amending power conferred upon it into an absolute power of amendment, then it was meaningless to place a limitation on the original power of amendment.
Parliament having a limited power of amendment cannot get rid of the limitation of exercising that very power and convert it into an absolute power.
Clause (5) of Article 368 which sought to remove the limitation on the amending power of Parliament by making it absolute, therefore, is outside the amending power of Parliament.
However, clause (5) seeks to convert a controlled Constitution into an uncontrolled one by removing the limitation on the amending power of Parliament which is itself an essential feature of the Constitution and it is, therefore, violative of the basic structure.
[289B E] 217 Per contra: (5) Section 4 of the Constitution (Forty second Amendment) Act, 1976 making amendments in Article 31C and giving primacy to Directive Principles over Fundamental Rights, in case of conflict between them, does not damage or destroy the basic structure of the Constitution and is within the amending power of Parliament and therefore amended Article 31C is constitutional and valid.
[342E F].
(i) It is not correct to say that Fundamental Rights alone are based on Human Rights while Directive Principles fall in some category other than Human Rights.
Fundamental Rights and Directive Principles cannot be fitted in two distinct and strictly defined categories.
Broadly stated, Fundamental Rights represent civil and political rights, while Directive Principles embody social and economic rights.
Both are clearly part of broad spectrum of human rights.
Even, the universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 10th December, 1948 contains not only rights protecting individual freedom (Articles 1 to 21) but also social and economic rights intended to ensure socio economic justice to every one (Articles 22 to 29).
The two other International Covenants adopted by the General Assembly for securing human rights, namely, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights are also to the same effect.
The socio economic rights embodied in the Directive Principles are as much a part of human rights as the Fundamental Rights.
Together, they are intended to carry out the objectives set out in the preamble of the Constitution and to establish an egalitarian social order informed with political, social and economic justice and ensuring dignity of the individual not only to a few privileged persons but to the entire people of the country including the have nots and the handicapped, the lowliest and the lost.
[320C H] Kesavananda Bharati vs State of Kerala, [1973] Supp.
SCR, referred to.
(ii) Although Fundamental Rights and Directive Principles appear in the Constitution as distinct entities, there was no such demarcation made between them during the period prior to the framing of the Constitution.
From the point of view of importance and significance, no distinction was drawn between justiciable and non justiciable rights by the Fathers of the Constitution and both were treated as forming part of the rubric of Fundamental Rights, the only difference being that whereas the Fundamental Rights were enforceable in Courts of Law, the Directive Principles of social policy were not to be enforceable.
[321A B, 322C D] (iii) To limit the potential of Fundamental Rights on the ground that they are merely negative obligations requiring the State to abstain as distinct from taking positive action is impermissible.
[323D C] No doubt, it is said that the Fundamental Rights deal with negative obligations of the State not to encroach on individual freedom, while the Directive principles impose positive obligations on the State to take certain kind of actions.
Though the latter part may be true that the Directive Principles require positive action to be taken by the State, it is not wholly correct that the Fundamental Rights impose only negative obligations on the State.
There are a few Fundamental Rights which have also a positive content, with the result that new dimensions of the Fundamental Rights are being opened up by the Supreme Court and the entire jurisprudence of Fundamental Rights is in a 218 stage of resurgent evaluation.
Moreover, there are three Articles, namely, Article 15(2), Article 17 and Article 23 within the category of Fundamental Rights which are designed to protect the individual against the action of other private citizens and seem to impose positive obligations on the State to ensure this protection to the individual.
[322 F H, 323 A B].
Hussainara Khatoon vs State of Bihar, ; Madhav Hayawadanrao Hoskot vs State of Maharashtra, ; and Sunil Batra etc.
vs Delhi Administration & Ors.
; , , followed.
(iv) The only distinguishing feature between Fundamental Rights and Directive Principles of State Policy is that whereas the former are made enforceable in a Court of Law the latter are not.
They are not justiciable be cause the social and economic rights and other matters dealt with in the Directive Principles are by their very nature incapable of judicial enforcement and moreover, the implementation of many of those rights would depend on the.
state of economic development in the country, the availability.
Of necessary finances and the government 's assessment of priority of objectives and values.
But merely because the Directive Principles are non justiciable, it does not follow that they are in any way subservient or inferior to the Fundamental Rights.
[323 B C, E F].
(v) The Indian Constitution is first and foremost a social document.
The majority of its provisions are either directly aimed at furthering the goals cf the socio economic revolution or attempt to foster this revolution by establishing the conditions necessary for its achievement.
The Fundamental Rights are no doubt important and valuable in a democracy, but there can be no real democracy without social and economic justice to the common man and to create socio economic conditions in which there can be social and economic justice to everyone, is the theme of the Directive Principles.
It is the Directive Principles which nourish the roots of a democracy, provide strength and vigour to it and attempt to make it a real participatory democracy which does not remain merely a political democracy but also becomes a social and economic democracy with Fundamental Rights available to all irrespective of their power, position or wealth.
The dynamic provisions of the Directive Principles fertilise the static provisions of the Fundamental Rights.
The object of the Fundamental Rights is to protect individual liberty, but individual liberty cannot be considered in isolation from the socio economic structure in which it is to operate.
There is a real connection between individual liberty and the shape and form of the social and economic structure of the society.
There cannot be any individual liberty at all for the large masses of people who are suffering from want and privation and who are cheated out of their individual rights by the exploitative economic system.
Their individual liberty would come in conflict with the liberty of the socially and economically more powerful class and in the process get mutilated or destroyed.
The real controversies in the present day society are not between power and freedom but between one form of liberty and another.
Under the present socio economic system, it is the liberty of the few which is in conflict with the liberty of the many.
The Directive Principles, therefore, impose an obligation on the State to take positive action for creating socio economic conditions in which there will be an egalitarian social order with social and economic justice to all so that individual liberty will become a cherished value and the dignity of the individual a living reality, not only for a few privileged persons but for the entire people of the 219 country.
Thus, the Directive Principles enjoy a very high place in the constitutional scheme and it is only in the framework of the socio economic structure envisaged in the Directive Principles that the Fundamental Rights are intended to operate, for it is only then they can become meaningful and significant for the millions of our poor and deprived people, who do not have even the bare necessities of life and who are living below the poverty level.
[323F G, 324C H, 325A B].
(vi) Article 37 of the Constitution is an Article of crucial importance unlike the Irish Constitution which provided the inspiration for introducing Directive Principles in our Constitution.
Article 37 says that the Directive Principles shall not be enforceable by any court, makes the Directive Principles fundamental in the governance of the country and enacts that it shall be the duty of the State to apply the Directive Principles in making laws.
The changes made by the framers of the Constitution are vital and they have the effect of bringing about a total transformation or metamorphosis of this provision, fundamentally altering the significance and efficacy.
The Directive Principle are not excluded from the cognizance of the court, as under the Irish Constitution; they are merely made non enforceable by a court of law.
Merely because the Directive Principles are not enforceable in a court of law, it does not mean that they are of subordinate importance to any part of the Constitution or that they cannot create obligations or duties binding on the State.
The crucial test which has to be applied is whether the Directive Principles impose any obligations or duties on the State, if they do, the State would be bound by a constitutional mandate to carry out such obligations or duties, even though no corresponding right is created in any one which can be enforced in a court of law.
On this question Article 37 is emphatic and make the point in no uncertain terms There could not have been more explicit language used by the Constitution makers to make the Directive Principles binding on the State and there can be no doubt that the State is under a constitutional obligation to carry out this mandate contained in Article 37.
In fact, non compliance with the Directive Principles would be unconstitutional on the part of the State and it would not only constitute a breach of faith with the people who imposed this constitutional obligation on the State but it would also render a vital part of the Constitution meaningless and futile.
For the purpose of the Directive Principles, the "State" has the same, meaning as given to it under Article 13 for the purpose of the Fundamental Rights.
This would mean that the same State which is injuncted from taking any action in infringement of the Fundamental Rights is told in no uncertain terms that it must regard the Directive Principles as fundamental in the governance of the country and is positively mandated to apply them in making laws.
This gives rise to a paradoxical situation and its implications are far reaching.
The State is on the one hand prohibited by the constitutional injunction in Article 13 from making any law or taking any executive action which would infringe any Fundamental Right and at the same time it is directed by the constitutional mandate in Article 37 to apply the Directive Principles in the governance of the country and to make laws for giving effect to the Directive Principles.
Both are constitutional obligations of the State.
When the State makes a law for giving effect to a Directive Principle, it is carrying out a constitutional obligation under Article 37 and if it were to be said that the State cannot make such a law because it comes into conflict with a Fundamental Right, it can only be on the basis that Fundamental Rights stand on a higher pedestal and have precedence over Directive Principles.
But it is not correct to say that under 220 our constitutional scheme Fundamental Rights are superior to Directive Principles or that Directive Principles must yield to Fundamental Rights.
Both are in fact equally fundamental and the courts have, therefore, tried to harmonise them by importing the Directive Principles in the construction of the Fundamental Rights.
For the purpose of determining the reasonableness of the restriction imposed on Fundamental Rights the court may legitimately take into account the Directive Principles and where executive action is taken or legislation enacted for the purpose of giving effect to a Directive Principle, the restriction imposed by it on a Fundamental Right may be presumed to be reasonable.
[325C, E H, 326A D, 327H, 328A H, 329A B].
State of Bihar vs Kameshwar Singh, ; Pathumma vs State of Kerala, ; ; M/s. Kasturi Lal Lakshmi Reddy etc.
vs The State of Jammu & Kashmir & Anr., [1980] 3 SCR p. 1338, applied.
State of Madras vs Champkam Dorairajan, dissented from.
In Re Kerala Education Bill, [1959] SCR 995, Referred to.
(vii) If a law is enacted for the purpose of giving effect to a Directive Principle and it imposes a restriction on a Fundamental Right, it would be difficult to condemn such restriction as unreasonable or not in public interest.
So also where a law is enacted for giving effect to a Directive Principle in furtherance of the constitutional goal of social and economic justice it may conflict with a formalistic and doctrinaire view of equality before the law, but it would almost always conform to the principle of equality before the law in its total magnitude and dimension, because the equality clause in the Constitution does not speak of mere formal equality before the law but embodies the concept of real and substantive equality which strikes at inequalities arising on account of vast social and economic differentials and is consequently an essential ingredient of social and economic justice.
The dynamic principle of egalitarianism fertilises the concept of social and economic justice; it is one of its essential elements and there can be no real social and economic justice where there is a breach of the egalitarian principle.
If, therefore, there is a law enacted by the legislature which is really and genuinely for giving effect to a Directive Principle with a view to promoting social and economic justice, such law does not violate the principle of egalitarianism and is in accord with the principle of equality before the law as understood not in its strict and formalistic sense, but in its dynamic and activist magnitude.
In the circumstances, the Court would not be unjustified in making the presumption that a law enacted really and genuinely for giving effect to a Directive Principle in furtherance of the cause of social and economic justice, would not infringe any Fundamental Right under Article 14 or 19.
This being the correct interpretation of the constitutional provisions, the amended Article 31C does no more than codify the existing position under the constitutional scheme by providing immunity to a law enacted really and genuinely for giving effect to a Directive Principle, so that needlessly futile and time consuming controversy whether such law contravenes Article 14 or 19 is eliminated.
The amended Article 31C cannot in the circumstances be regarded as violative of the basic structure of the Constitution.
[329F H, 330A F].
(viia) A law enacted really and genuinely for giving effect to a Directive Principle, in discharge of the constitutional obligation laid down upon the State under Article 37, would not be invalid, because it infringes a fundamental right.
If the Court takes the view that it is invalid, it would be placing Fundamental Rights above Directive Principles, a position not supported at all by 221 the history of their enactment as also by the constitutional scheme.
The two A constitutional obligations, one in regard to Fundamental Rights and the other in regard to Directive Principles, are of equal strength and merit and there is no reason why, in case of conflict, the former should be given precedence over the latter.
Whether or not a particular mandate of the Constitution is justiciable has no bearing at all on its importance and significance and justiciability by itself can never be a ground for placing one constitutional mandate on a higher pedestal than the other.
The effect of giving greater weightage to the constitutional mandate in regard to Fundamental Rights would be to relegate the Directive Principles to a secondary position and emasculate the constitutional command that the Directive Principles shall be fundamental in the governance of the country and it shall be the duty of the State to apply them in making laws.
It would amount to refusal to give effect to the words fundamental in the governance of the country" and a constitutional command which has been declared by the Constitution to be fundamental would be rendered non fundamental.
The result would be that a positive mandate of the constitution commanding the State to make a law would be defeated by a negative constitutional obligation not to encroach upon a Fundamental Right and the law made by the legislature pursuant to a positive constitutional command would be delegitimised and declared unconstitutional.
This plainly would be contrary to the constitutional scheme because the Constitution does not accord higher place to the constitutional obligation in regard to Fundamental Rights over the constitutional obligation in regard to Directive Principles and does not say that the implementation of the Directive Principles shall only be within the permissible limits laid down in the Chapter on Fundamental Rights.
[330A, 331A F].
Karimbil Kunhikoman vs State of Kerala, [1962] I SCR 319 (supra) referred to.
(viii) It is not correct to say that consequent to the amendment of Article 31C the Constitution is now made to stand 'on its head and not on its legs. ' Prior to the amendments, Fundamental Rights had a superior or a higher position in the constitutional scheme than Directive Principles and there is accordingly no question at all of any subversion of the constitutional structure by the amendment.
There can be no doubt that the intention of the Constitution makers was that the Fundamental Rights should operate within the socioeconomic structure or a wider continuum envisaged by the Directive Principle, for then only would the Fundamental Rights become exercisable by all and a proper balance and harmony between Fundamental Rights and Directive Principles secured.
The Constitution makers, therefore, never contemplated that a conflict would arise between the constitutional obligation in regard to Fundamental Rights and the constitutional mandate in regard to Directive Principles.
But if a conflict does arise between these two constitutional mandates of equal fundamental character, since the Constitution did not provide any answer and perhaps for the reason that such a situation was not anticipated, the problem had to be solved by Parliament and some modus operandi had to be evolved in order to eliminate the possibility of conflict howsoever remote it might be.
[331G H, 332A D].
Parliament took the view that the constitutional obligation in regard to Directive Principles should have precedence over the constitutional obligation in regard to the Fundamental Rights in Articles 14 and 19, because Fundamental Rights though precious and valuable for maintaining the democratic way of life, have absolutely no meaning for the poor, down trodden and economically 222 backward classes of people who unfortunately constitute the bulk of the people of India and the only way in which Fundamental Rights can be made meaningful for them is by implementing the Directive Principles, for the Directive Principles are intended to bring about a socio economic revolution and to create a new socio economic order where there will be social and economic justice for all and every one, not only a fortunate few but the teeming millions of India, would be able to participate in the fruits of freedom and development and exercise the Fundamental Rights.
Parliament, therefore, amended Article 31C with a view to providing that in case of conflict Directive Principles shall have precedence over the Fundamental Rights in Articles 14 and 19 and the latter shall yield place to the former.
The positive constitutional command to make laws for giving effect to the Directive Principles shall prevail over the negative constitutional obligation not to encroach on the Fundamental Rights embodied in Articles 14 and 19.
[333C F].
Parliament made the amendment in Article 31C because it realised that "if the State fails to create conditions in which the fundamental freedoms could be enjoyed by all, the freedom of the few will be at the mercy of the man and then all freedoms will vanish" and "in order, therefore, to preserve their freedom, the privileged few must part with a portion of it." Therefore, it cannot at all be said that the basic structure af the Constitution is affected when for evolving a modus vivandi for resolving a possible remote conflict between two constitutional mandates of equally fundamental character, Parliament decides by way of amendment of Article 31C that in case of such conflict the constitutional mandate in regard to Directive Principles shall prevail over the constitutional mandate in regard to the Fundamental Rights under Articles 14 and 19.
The amendment in Article 31C far from damaging the basic structure of the Constitution strengthens and re enforces it by giving fundamental importance to the rights of the members of the community as against the rights of a few individuals and furthering the objective of the Constitution to build an egalitarian social order where there will be social and economic justice for all, every one including the low visibility areas of humanity in the country will be able to exercise Fundamental Rights and the dignity of the individual and the worth of the human person which are cherished values will not remain merely the exclusive privileges of a few but become a living reality for the many [334H, 335A D].
(ix) The principle of egalitarianism is an essential element of social and economic justice and, therefore, where a law is enacted for giving effect to a Directive Principle with a view to promoting social and economic justice, it would not run counter to the egalitarian principle and would not therefore be violative of the basic structure, even if it infringes equality before the law in its narrow and formalistic sense.
No law which is really and genuinely for giving effect to a Directive Principle can be inconsistent with the egalitarian principle and therefore the protection granted to it under the amended Article 31C against violation of Article 14 cannot have the effect of damaging the basic structure.
Therefore, there is no violation of the basic structure involved in the amendment of Article 31C.
In fact, one it is accepted that the unamended Article 31C was constitutionally valid, it could only be on the basis that it did not damage or destroy the basic structure of the Constitution, it cannot be said that the amended Article 31C is violative of the basic structure.
If the exclusion of the Fundamental Rights embodied in Articles 14 and 19 could be legitimately made for giving effect to the Directive Principles set out in clauses (b) and (e) of Article 39 without affecting the basic structure.
these 223 Fundamental Rights cannot be excluded for giving effect to the other Directive Principles.
If the constitutional obligation in regard to the Directive Principles set out in clauses (b) and (c) of Article 39 could be given precedence over the constitutional obligation in regard to the Fundamental Rights under Articles 14 and 19, there is no reason in principles why such precedence cannot be given to the constitutional obligation in regard to the other Directive Principles which stand on the same footing.
It would be incongruous to hold tho amended Article 31C invalid when the unamended Article 31C has been held to be valid by the majority decision in Kesavananda Bharati 's and by the order, in Waman Rao 's case, dated 9th May, 1980.
[335E H, 336A C].
(x) It is clear from the language of the amended Article 31C that the law which is protected from challenge under Articles 14 and 19 is law giving effect to the policy of the State towards securing or any of the Directive Principles.
Whenever, therefore, any protection is claimed for a law under the amended Article 31C, it is necessary for the Court to examine whether the law has been enacted for giving effect to the policy of the State towards securing any one or more of the Directive Principles and it is only if the court is so satisfied as a result of judicial scrutiny that the court would accord the protection of the amended Article 31C to such law.
Now it is undoubtedly true that the words used in the amended Article are "law giving effect to the policy of the State" but the policy of the State which is contemplated there is the policy towards securing one or more of the Directive Principles it is the constitutional obligation of the State to secure the Directive Principles and that is the policy which the State is required to adopt and when a law is enacted in pursuance of this policy of implementing the Directive Principles and it seeks to give effect to a Directive Principle, it would both from the point of grammar and language, be correct to say that it is made for giving effect to the policy of the State towards securing such Directive Principle.
The words "law giving effect to the policy of the State" are not so wide but in the context and collocation in which they occur, they are intended to refer only to a law enacted for the purpose of implementing or giving effect to one or more of the Directive Principles.
[337A F].
(xi) The Court before which protection for a particular law is claimed under the amended Article 31C would, therefore, have to examine whether such law is enacted for giving effect to a Directive Principle, for genuinely it would have the protection of the amended Article 31C.
A claim that a particular law is enacted for giving effect to Directive Principles put forward by the State would have no meaning or value; it is the court which would have to determine the question.
Again it is not enough that there may be some connection between a provision of the law and a Directive Principle.
The connection has to be between the law and the Directive Principle and it must G be a real and substantial connection.
To determine whether a law satisfies this test, the court would have to examine the pith and substance, the true nature and character of the law as also its design and the subject matter dealt with by it together with its object and scope.
If on such examination, the court finds that the dominant object of the law is to give effect to the Directive Principle, it would accord protection to the law under the amended Article 31C.
But if the court finds that the law though passed seemingly for giving effect to a Directive Principle, is, in pith and substance, one for accomplishing an unauthorised purpose unauthorised in the sense of not being covered by any Directive Principle such law would not have the protection of the amended Article 31C.
The amended Article 31C does not give protection to 224 a law which has merely some remote or tenuous connection with a Directive.
Principle.
What is necessary is that there must be a real and substantial connection and the dominant object of the law must be to give effect to the Directive Principle, and that is a matter which the court would have to decide before any claim for protection under the amended Article 31C can be allowed.
[337F H, 338A B, F G].
The words used in the amended Article 31C are: "law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV" and these words on a plain natural construction do not include all the provisions of law but only those which give effect to the Directive Principle.
Therefore, it is not every provision of a statute which has been enacted with the dominant ' object of giving effect to a Directive Principle that is entitled to protection but only those provisions of the statute which are basically and essentially necessary for giving effect to the Directive Principles are protected under the amended Article 31C. If there are any other provisions in the statute which do not fall within this category, they would not be entitled to protection and their validity would have to be judged by reference to Articles 14 and 19.
Where, therefore, protection is claimed in respect of a statute under the amended Article 31C, the court would have first to determine whether there is real and substantial connection between the law and a Directive Principle and the predominant object of the law is to give effect to such Directive Principle and if the answer to this question is in the affirmative, the court would then have to consider which are the provisions of the law basically and essentially necessary for giving effect to the Directive Principle and give protection of the amended Article 31C only to those provisions.
The question whether any particular provision of the law is basically and essentially necessary for giving effect to the Directive Principle, would depend, to a large extent, on how closely and integrally such provision is connected with the implementation of the Directive Principle.
If the court finds that a particular provision is subsidiary or incidental or not essentially and integrally connected with the implementation of the Directive Principle or is of such a nature that though seemingly a part of the general design of the main provisions of the statute, the dominant object is to achieve an unauthorised purpose, it would not enjoy the protection of amended Article 31C and would be liable to be struck down as invalid if it violates Article 14 or 19.
[338 G H, 339A, D H, 340A D] Akadasi Padhan vs State of Orissa, [1963] 2 Supp.
SCR 691; Rashbihari Panda etc.
vs State of orissa; , ; M/s. Vrailal Manilal & Co. & ors.
vs State of Madhya Pradesh & Ors.
, ; and R. C. Cooper vs Union of India, ; , followed.
(xii) If the Court finds that even in a statute enacted for giving effect to a Directive Principle, there is a provision which is not essentially and integrally connected with the implementation of the Directive Principle or the dominant object of which is to achieve an unauthorised purpose it would be outside the protection of the amended Article 31C and would have to meet the challenge of Articles 14 and 19.
[340F H] (xiii) Articles 39 to 51 contain Directive Principles referring to certain specific objectives and in order that a law should be for giving effect to one of those Directive Principles, there would be a real and substantial connection between the law and the specific objective set out in such Directive Principle.
Obviously, the objectives set out in these Directive Principles being specific and limited, every law made by a legislature in the country cannot possibly have a real and substantial connection with one or the other of these specific 225 objectives.
It is only a limited number of laws which would have a real A and substantial connection with one or the other of the specific objectives contained in these Directive Principles and any and every law would not come within this category.
[341A C].
(xiv) Article 38 is a general article which stresses the obligation of the State to establish a social order in which justice social, economic and political shall inform all the institutions of national life.
It no doubt talks of the duty of the State to promote the welfare of the people and there can be no doubt that standing by itself this might cover a fairly wide area but the objective set out in the Article is not merely promotion of the welfare of the people? but there is a further requirement that the welfare of the people is to be promoted by the State, not in any manner it likes, not according to its whim and fancy, but for securing and protecting a particular type of social order and that social order should be such as would ensure social, economic and political justice for all.
Social, economic and political justice is the objective set out in the Directive Principle in Article 38 and it is this objective which is made fundamental in the governance of the country and which the State is laid under an obligation to realise.
This Directive Principle forms the base on which the entire structure of the Directive Principles is reared and social, economic and political justice is the signature tune of the other Directive Principles.
The Directive Principles set out in the subsequent Articles following upon Article 38 merely particularise and set out facets and aspects of the ideal of social, economic and political justice articulated in Article 38.
[341C G].
(xv) The concept of social and economic justice may not be very easy of definition but its broad contours are to be found in some of the provisions of the Fundamental Rights and in the Directive Principles and whenever a question arises whether a legislation is for giving effect to social and economic justice, it is with reference to these provisions that the question would have to be determined.
There is nothing so vague or indefinite about the concept of social or economic justice that almost any kind of legislation could be justified under it.
Moreover, where a claim for protection is made in respect of a legislation on the ground that it is enacted for giving effect to a Directive Principle, the Directive Principle to which it is claimed to be related would not ordinarily be the general Directive Principle set out in Article 38, but could be one of the specific Directive Principles set out in the succeeding Articles because these latter particularise the concept of social and economic justice referred to in Article 38.
Therefore, it is not correct to say that if the amendment in Article 31C were held valid, it would have the effect of protecting every possible legislation under the sun and that would in effect and substance wipe out Articles 14 and 19 from the Constitution.
This is a tall and extreme argument, not justified in the provisions of the Constitution.
[341H, 342A D].
HELD further (concurring with the majority): 6. Clause (a) of Article 31A is constitutionally valid even on the application of the basic structure test.
[290D].
Where any law is enacted for giving effect to a Directive Principle with the view to furthering the constitutional goal of social and economic justice, there would be no violation of the basic structure, even if it infringes formal equality before the law under Article 14 or any fundamental right under Article 19.
Here, clause (a) of Article 31A protects a law of agrarian reform which is clearly in the context of the socio economic conditions prevailing in 226 India, a basic requirement of social and economic justice and 15 covered by the Directive Principals set out in clause (b) and (c) of Article 39 and it cannot be regarded as violating the basic structure of the Constitution.
On the contrary, agrarian reforms leading to social and economic justice to the . rural population is an objective which strengthens the basic structure of the Constitution.
[290B D].
Even on the basis of the doctrine of stare decisions the whole of Article 31A is constitutionally valid.
The view that Article 31A is constitutionally valid has been fallen in atleast three decisions of the Supreme Court, namely, Shankri Prasad 's case, Sajjan Singh 's case and Golaknath 's case and it has hold the field for over 28 years and on the faith of its correctness millions of acres of agricultural land have changed hands and now agrarian relations have come into being transferring the entire rural economy.
Even though the constitutional .
validity of Article 31A was not tested in these decisions by reference to the basic structure doctrine, the court would not be justified in allowing the earlier decisions to be reconsidered and the question of constitutional validity of Article 31A re opened.
These decisions have given a quietus to the constitutional challenge against the validity of Article 31A and this quietus should not now be allowed to be disturbed.
[290E, 292D, 294G H 295A].
Shankri Prasad vs Union of India, [19621 2 SCR 89; Sajjan Singh vs State of Rajasthan, [1965] I SCR 933; I.C. Golaknath vs Union of India, ; ; Ambika Prasad Mishra vs State of U.P. and Ors., [1980] 3 SCR .
followed It is no doubt true that the Supreme Court has power to review its earlier decisions or even depart from them and the doctrine of stare decisions cannot be permitted to perpetuate erroneous decisions of the court to the detriment of the general welfare of the public.
Certainty and continuity are essential ingredients of rule of law.
Certainty and applicability of law would be considerably eroded and suffer a serious set back if the highest court in the land were ready to overrule the views expressed by it in! earlier decisions even though that view has held the field for a number of years.
It is obvious that when constitutional problems are brought before the Supreme Court for its decision, complete and difficult questions are bound to arise and since the decision of many of such questions may depend upon choice between competing values, two views may be possible depending upon the value judgment or the choice of values made by the individual judge.
Therefore.
if one view has been taken by the court after mature deliberation the fact that another Bench is inclined to take another view would not justify the court in reconsidering the earlier decision and overrule it.
The law laid down by the Supreme Court is binding on all the courts in the country and numerous questions all over the country are decided in accordance with the view taken by the Supreme Court.
Many people arrange their affairs and large number of transactions also take place on the faith of the correctness of the decision given by the Supreme Court.
It would create uncertainty, unstability and confusion if the law propounded by the Supreme Court on the face of which numerous cases have been decided and many transactions have taken place is held to be not the correct law after a number of years.
The doctrine of stare decisions is evolved from the maxim "stare decisions et non quita movere" meaning "adhere to the decision and not unsettle things which are established" and it is a useful doctrine intended to bring about certainty and uniformity in the law.
But the doctrine of stare decisions cannot be regarded as a rigid 227 and inevitable doctrine which must be applied at the cost of justice There may be cases where it may be necessary to rid the doctrine of its petrifying rigidity.
The court may in an appropriate case overrule a previous decision taken by it, but that should be done only for substantial and compelling reasons.
The power of review must be exercised with due care and caution and only for advancing the public well being and not merely because it may appear that the previous decision was based on an erroneous view of the law.
It is only where the perpetuation of the earlier decision would be productive of mischief or inconvenience or would have the effect of deflecting the nation from the course which has been set by the Constitution makers or "where national crisis of great moment to the life, liberty and safety of this country and its millions are at stake or the basic direction of the nation itself is in peril of a shake up", that the court would be justified in reconsidering its earlier decision and departing from it.
It is fundamental that the nation 's constitution should not be kept in constant uncertainty by judicial review every now and then, because otherwise it would paralyse by perennial suspense all legislative and administrative action on vital issues.
The court should not indulge in judicial stabilisation of State action and a view which has been accepted for a long period of time in a series of decisions and on tho faith of which millions of people have acted and a large number of transactions have been effected should not be disturbed.
[292G H, 293A H, 294A D].
Ambika Prasad Mishra vs State of U.P. and Anr., [1980] 3 SCR p. 1159.
followed.
(7) Article 31B was conceived together with Article 31A as part of the same design adopted to give protection to legislation providing for acquisition of an estate or extinguishment or modification of any rights in an estate.
[295E F].
The Ninth Schedule of Article 31B was not intended to include laws other than those covered by Article 31A. Articles 31A and 31B were thus intended to serve the same purpose of protecting the legislation falling within a certain category.
It was a double barreled protection which was intended to be provided to this category of legislation, since it was designed to carry out agrarian reform which was so essential for bringing about a revolution in the socio economic structure of the country: [295F, H, 296A] Since all the earlier constitutional amendments were held valid on the basis of unlimited amending power of Parliament recognised in Shankri Prasad 's case and Sajjan Singh 's case and were accepted as valid in Golakhnath 's case and the Twenty Ninth Amendment Act was also held valid in Kesavananda Bharati 's case, though not on the application of the basic structure test and these constitutional amendments have been recognised as valid over a number of years and moreover, the statutes intended to be protected by them are all falling within Article 31A with the possible exception of only four Acts, it would not be justified in re opening the question of validity of these constitutional amendment and hence these amendments are valid.
[297F H].
But all constitutional amendments made after the decision in Kesavananda Bharati 's case would have to be decided by reference to the basic structure doctrine, for Parliament would then have no excuse for saying that it did not known the limitation on its amending power.
Now out of the statutes which are or may in future be included in the Ninth Schedule by subsequent constitutional amendments, if there are any which fall within a category covered 228 by Article 31A or 31C, they would be protected from challenge under Articles 14 and 19 and it would not be necessary to consider whether their inclusion.
in the Ninth Schedule is constitutionally valid, except in those rare cases where protection may be claimed for them against violation of any other.
fundamental rights.
This question would primarily arise only in regard to statutes not covered by Article 31A or 31C and in case of such statutes, the Court would have to consider whether the constitutional amendments including such statutes in the Ninth Schedule violate the basic structure of the Constitution in granting them immunity from challenge of the fundamental rights.
It is possible that in a given case even an abridgement of a fundamental right may involve violation of the basic structure.
It would all depend on the nature of the nature of the fundamental right, the extent and depth of the infringement, the purpose for which the infringement is made and its impact on the basic values of the Constitution.
For example, right to life and personal liberty enshrined in Article 21, stands on an altogether different footing from other fundamental rights.
If this fundamental right is violated by any legislation, it may be difficult to sustain a constitutional amendment which seeks to protect such legislation against challenge under Article 21.
So also where a legislation which has nothing to do with agrarian reform or any Directive Principles infringes the equality clause contained in Article 14 and such legislation is sought to be protected by a constitutional amendment by including it in the Ninth Schedule, it may be possible to contend that such constitutional amendment is violative of the egalitarian principle which forms part of the basic structure.
However, other situations may arise where infarction of a fundamental right by a statute, is sought to be constitutionally protected might effect the basic structure of the Constitution.
In every case, therefore, where a constitutional amendment includes a statute or statutes in the.
Ninth Schedule, its constitutional validity would have to be considered by E. reference to the basic structured doctrine and such constitutional amendment would be liable to be declared invalid to the extent to which it damages or destroys the basic structure of the Constitution by according protection against violation of any particular fundamental right.
[297H, 298C H, 299A B].
(8) Even on principle, the first part of the unamended Article 31C is constitutionally valid.
In view of the fact that the first part of the unamended Article 31C was held to be constitutionally valid by the majority decision in Keshavananda Bharati 's case, the question of its constitutional validity cannot be again reopened.
It is true, that the ratio decidendi of Keshavananda Bharati 's case was that the amending power of Parliament is limited and Parliament cannot in exercise of the power m f amendment alter the basic structure of the Constitution and the validity of every constitutional amendment has, therefore, to be judged by applying the test whether or not it alters the basic structure of the Constitution and this test was not applied by the six learned Judges, though their conclusion regarding constitutionality of the first part of the unamended Article 31C is valid.
Irrespective of the reasons which weighed with each one of the Judges who upheld the validity of the first part of the unamended Article 31C, the reasons for reaching the said conclusion would certainly have a bearing on the determination of the ratio decidendi of the case and the ratio decidendi would certainly be important for the decision of future cases where the validity of the first part or the unamended Article 31C is concerned, it was in so many terms determined by the majority decision in Keshavananda Bharati 's case, and that decision binds.
[300E H, 301A D, 302C] 229 What the first part of the unamended Article 31C does is merely to abridge the fundamental rights in Articles 14 and 19 by excluding the applicability to legislation giving effect to the policy towards securing the principles specified in clauses (b) and (c) of Article 39.
The first part of the unamended Article 31C is basically of the same genre as Article 31A with only this difference that whereas Article 31A protects laws relating to certain subjects, the first part of the unamended Article 31C deals with laws having certain objectives.
There is no qualitative difference between Article 31A and the first part of the unamended Article 31C in so far as the exclusion of Articles 14 and 19 is concerned.
The fact that the provisions to the first part of the unamended Article 31C are more comprehensive and have greater width compared to those of Article 31A does not make any difference in principle.
If Article 31A is constitutionally valid, the first part of the unamended Article cannot be held to be unconstitutional.
The first part of the unamended Article 31C, in fact, stands on a more secure footing because it accords protection against infraction of Articles 14 and 19 to legislation enacted for giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39.
The legislature in enacting such legislation acts upon the constitutional mandate contained in Article 37 according to which the Directive Principles are fundamental in the governance of the country and it is the duty of the State to apply those principles in making laws.
It is for the purpose of giving effect to the Directive Principles set out in clauses (b) and (c) of Article 39 in discharge of the constitutional obligation laid upon the State under Article 37 that fundamental rights in Articles 14 and 19 are allowed to be abridged.
A constitutional amendment, therefore, making such a provision cannot be condemned as violative of the basic structure of the Constitution.
[301E H, 302A C].
(9) Even if the Constitution (Fortieth Amendment Act, 1976 is unconstitutional and void and the Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act, 1972 (Act 11 of 1975), the .
Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act, 1975, (Act XLVII of 1945) and the Maharashtra Lands (Ceiling on holdings) Amendment Act, 1975, (Act II of 1976) have not been validly included in the Ninth Schedule so as to earn the protection of Article 31B, they are still saved from invalidation by Article 31A and so far as the Constitution (Forty Second Amendment) Act, 1976, is concerned, it is outside the constituent power of Parliament in so far as it seeks to include clauses (4) and (S) in Article 368.
[302C D, G H].
It is clear on a plain natural construction of its language that under the proviso to Article 83(2) the duration of the Lok Sabha could be extended only during the operation of a proclamation of emergency and if, therefore, no proclamation of emergency was in operation at the relevant time, the House of People (Extension of Duration) Act, 1976 would be outside the competence of Parliament under the proviso to Article 83(2).
Again the language of Article 352 (1) makes it clear that the President can take action under this clause only if he satisfies that a grave emergency exists whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance.
The satisfaction of the President "that a grave emergency exists whereby the security of India. is threatened whether by war or external aggression or internal disturbance" is a condition precedent which must be fulfilled before the President can issue a proclamation under Article 352 clause (1).
When this condition precedent is satisfied, the President may exercise the power under clause (1) of Article 352 and issue a proclamation of emergency.
The constitutional implications of a 230 declaration of emergency.
under Article 352 clause (1) are vast and they are provided in Articles 83(2), 250, 353, 358 and 359.
The emergency being an exceptional situation arising out of a national crisis certain wide and sweeping powers have been conferred on the Central Government and Parliament with a view to combat the situation and restore normal conditions.
One such power is that given by Article 83(2) which provides that while a proclamation of emergency is in operation, Parliament may by law extend its duration for a period not exceeding one year at a time.
Further several drastic consequences ensue upon the making of a declaration of emergency.
The issue of a proclamation of emergency makes serious inroads into the principle of federalism and emasculates the operation and efficacy of the Fundamental Rights.
The power of declaring an emergency is, therefore, a power fraught with grave consequences and it has the effect of disturbing the entire power structure under the Constitution.
But it is a necessary power given to the Central Government with a view to arming it adequately to meet an exceptional situation arising out of threat to the security of the country on account of war or external aggression or internal disturbance or imminent danger of any such calamity.
It is, therefore, a power which has to be exercised with the greatest care and caution and utmost responsibility [303A B 306E H, 307E G].
(10) There is no bar to the judicial review of the validity of a proclamation of emergency issued by the President under Article 352 clause (1).
[308B C].
If a question brought before the court is purely a political question not involving determination of any legal or constitutional right or obligation, the court would not entertain it, since the court is concerned only with adjudication of legal rights and liabilities.
Merely because a question has a political colour the court cannot fold its hands in despair and declare "judicial hands off".
So long as the question is whether an authority under the Constitution has acted within the limits of its power or exceeded it, it can certainly be decided by the court.
Indeed it would be its constitutional obligation to do so.
The court is the ultimate interpreter of the Constitution and when there is manifestly unauthorised exercise of power under the Constitution, it is the duty of the court to intervene.
In fact, to this Court as much as to other Branches of Government is committed the conservation and furtherance of constitutional values.
The Court 's task is to identify those values in the constitutional plan and to work them into life in the cases that reach the Court.
"Tact and wise restraint ought to temper any power but courage and the acceptance of responsibility have their place too '.
The Court cannot and should not shirk this responsibility because it has sworn the oath of allegiance to the Constitution and is also accountable to the people of this country.
It would not, therefore, be right for the Court to decline to examine whether in a given case there is any constitutional violation involved in the President issuing a proclamation of emergency under clause (1) of Article 352.
The constitutional jurisdiction of this Court does not extend further than saying whether the limits on the power conferred by the Constitution on the President have been observed or there is transgression of such limits.
The only limit on the power of the President under Article 352 clause (1) is that the President should be satisfied that a grave emergency exists whereby the security of India or any part thereof is threatened whether by war or external aggression or internal disturbance.
The satisfaction of the President is a subjective one and cannot be decided by reference to any objective tests.
It is deliberately and advisedly subjective because the matter in respect ' to 231 which he is to be satisfied is of such a nature that its decision must necessarily be left to the Executive Branch of Government.
There may be a wide range of situations which may arise and their political implications and consequences may have to .
be evaluated in order to decide whether there is a situation of grave emergency by reason of the security of the country being threatened by war or external aggression or internal disturbance.
It would largely be a political judgment based on assessment of diverse and varied factors, fast changing situations, potential consequences and a host of other imponderables.
It cannot, therefore, by its very nature, be a fit subject matter for adjudication by judicial methods and materials and hence it is left to the subjective satisfaction of the Central Government which is best in a position to decide it.
The Court cannot go into the question of correctness or adequacy of the facts and circumstances on which the satisfaction of the Central Government is based.
That would ba a dangerous exercise for the Court, both because it is not a fit instrument for determining a question of this land and also because the Court would.
thereby usurp the function of the executive and in doing so enter the "political thicket" which it must avoid if it is to retain its legitimacy with the people.
But, if the satisfaction is mala fide or is based on wholly extraneous and irrelevant ground, the Court would have jurisdiction to examine it because in that case there would be no satisfaction of the President in regard to the matter on which he is required to be satisfied The satisfaction of the President is a condition precedent to the exercise of power under Article 352 clause (1) and if it can be shown that there is no satisfaction of the President at all, the exercise of the power would be constitutionally invalid.
[309C H, 310A B].
It is true that by reason of clause (5)(a) of Article 352, the satisfaction of the President is made final and conclusive and cannot be assailed on any ground, but, the power of judicial review is a part of the basic structure of the Constitution and hence this provision debarring judicial review would be open to attack on the ground that it is unconstitutional and void as damaging or destroying the basic structure.
This attack against constitutionality can, however, be averted by reading the provision to mean that the immunity from challenge granted by it does not apply whore the challenge is not that the satisfaction is improper or unjustified but that there is no satisfaction at all.
In such a case it is not the satisfaction arrived at by the President which is challenged but the existence of the satisfaction itself.
Where, therefore, the satisfaction is absurd or perverse or mala fide or based on a wholly extraneous and irrelevant ground it would be no satisfaction at all and it would be liable to be challenged before a court notwithstanding clause (5)(a) of Article 352.
No doubt, in most cases it would be difficult if not impossible to challenge the exercise of ' power under Article 352 clause (1) even on this limited ground because the facts and circumstances on which the satisfaction is based would not be known, but where it is possible the existence of the satisfaction can always be challenged on the ground that it is mala fide or based on a wholly extraneous or irrelevant ground.
[310C F].
Gormallion vs Lightfoot, ; ; Backer vs Carr; , , quoted with approval.
State of Rajasthan vs Union of India, ; , followed.
Gulam Sarwant vs Union of India, ; ; Bhutnath Mato vs State of West Bengal, ; , explained.
232 (11) on a plain natural interpreation of the language of sub clauses (a) to (c) of clause (2) that so long as the proclamation of emergency is not revoked by another proclamation under sub clause (2)(a), it would continue to be in operation irrespective of change of circumstances.
[312C].
Lakhan Pal vs Union of India, [1966] Supp.
SCR 209, applied.
It is true that the power to revoke a proclamation of emergency is vested only in the Central Government and it is possible that the Central Government may abuse this power by refusing to revoke a Proclamation of Emergency even though the circumstances justifying the issue of Proclamation have ceased to exist and thus prolong baselessly the state of emergency obliterating the Fundamental Rights and this may encourage totalitarian trend.
But the primary and real safeguard of the citizen against such abuse of power lies in "the good sense of the people and in the system of representative and responsible Government" which is provided in the Constitution.
Additionally, it may be possible for the citizen in a given case to move the court for issuing a writ of mandamus for revoking Proclamation of Emergency, if he is able to show by placing clear and cogent material before the court that there is no justification at all for the continuance of the Proclamation of Emergency.
But this would be a very heavy onus because it would be entirely for the Executive Government to be satisfied whether a situation has arisen where the Proclamation of Emergency can be revoked.
There would be so many facts and circumstances and such diverse considerations to be taken into account by the Executive Government before it can be satisfied that there is no longer any grave Emergency whereby the security of India is threatened by war or external aggression or internal disturbance.
This is not a matter which is fit for judicial determination and the court would not interfere with the satisfaction of the Executive Government in this regard unless it is clear on the material on record that there is absolutely no justification for the continuance of the Proclamation of Emergency and the Proclamation is being continued mala fide or for a collateral purpose.
The court may in such a case, if satisfied, beyond doubt grant a writ of mandamus directing the Central Government to revoke the Proclamation of Emergency.
But until that is done the Proclamation of Emergency would continue in operation and it cannot be said that though not revoked by another Proclamation it has still ceased to be in force.
In the present case, it was common ground that the first Proclamation of Emergency issued on 3rd December, 1971 was not revoked by another Proclamation under clause (2)(a) of Article 352 until 21st March, 1977 and hence at the material lime when the House of People (Extension of Duration) Act, 1976, was passed the first Proclamation of Emergency was in operation.
[312F H, 313A F.].
If the first Proclamation of Emergency was in operation at the relevant time it would be sufficient compliance with the requirement of the proviso to clause (2) of Article 83 and it would be unnecessary to consider whether the second Proclamation of Emergency was validly issued by the President.
[313E F].
(12) The House of People (Extension of Duration) Act, 1976, was enacted under the proviso to clause (2) of Article 83 for the purpose of extending the duration of the Lok Sabha and it was a condition precedent to the exercise of this power by Parliament that there should be a Proclamation of Emergency in operation at the date when the Act was enacted.
The words "while the Proclamation of Emergency issued on the 3rd day of December, 1971 233 and on the 25th day of June, 1975 are both in operation" were introduced , merely by way of recital of the satisfaction of the condition precedent for justifying the exercise of the power under the proviso to clause (2) of Article 83 and they were not intended to lay down a condition for the operation of section 2 of the Act.
Section 2 clearly and in so many terms extended the duration of the Lok Sabha for a period of one year and extension was not made dependent on both the Proclamations of Emergency being in operation at the date of the enactment of the Act.
It was for a definite period of one year that the extension was effected and it was not co extensive with the operation of both the Proclamations of Emergency.
The extension for a period of one year was made once for all by the enactment of section 2 and the reference to both the Proclamations of Emergency being in operation was merely for the purpose of indicating that both the Proclamations of Emergency being in operation, Parliament had competence to make the extension.
It was, therefore, not at all necessary for the efficacy of the extension that both the Proclamations of Emergency should be in operation at the date of enactment of the Act.
Even if one Proclamation of Emergency was in operation at the material date it would be sufficient to attract the power of Parliament under the proviso to Article 83 clause (2) to enact the Act extending the duration of the Lok Sabha.
No doubt, Parliament proceeded on the assumption that both the Proclamations of Emergency were in force at the relevant date and they invested Parliament with power to enact the Act.
but even if this legislative assumption were unfounded it would not make any difference to the validity of the exercise of the power so long as there was one Proclamation of Emergency in operation which authorised Parliament to extend the duration of the Lok Sabha under the proviso to clause (2) of Article 83.
It is true that the proviso to section 2 enacted that if both or either of the Proclamations of Emergency cease or ceases to operate before the expiration of the extended period of one year, the Lok Sabha shall continue until six months after the ceaser of operation of the said Proclamations or Proclamation, not going beyond the period of one year, but the opening part of this proviso can have application only in relation to a Proclamation of Emergency which was in operation at the date of enactment of the Act.
If such a Proclamation of Emergency which was in operation at the material date ceased to operate before the expiration of the extended period of one year, then the term of the Lok Sabha would not immediately come to an end, but it would continue for a further period of six months but not so to exceed the extended period of one year.
This provision obviously could have no application in relation to the second Proclamation of Emergency if it was void when issued.
In such a case, the second Proclamation not being valid at all at the date of issue would not be in operation at all and it would not cease to operate after the date of.
enactment of the Act.
The proviso would in that event have to be read as relating only to the first Proclamation of Emergency, and since the Proclamation of Emergency continued until it was revoked on 21st March, 1977, the duration of the Lok Sabha was validly extended for a period of one year from 18th March, 1976 and hence there was a validly constituted Lok Sabha on the dates when the Constitution (Fortieth Amendment) Act, 1976 and the Constitution (Forty second Amendment) Act, 1976, were.
passed by Parliament.
(314G H, 315A H, 316A C].
(In view of the settled practice of the Supreme Court not to say any more than is necessary to get a safe resting place for the decision, His Lordship did not consider whether the second Proclamation of Emergency was validly issued.)
|
Appeal No. 1357 of 1970.
From, the Judgment & Order dated the 10th February, 1969 of the Calcutta High Court in l. T.Ref.
No. 164 of 1963.
630 D. Pal, T. A. Ramanchandran and D. N. Gupta, for the appellant B. Sen and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by KHANNA, J.
This appeal on certificate is directed against the Judgment of the Calcutta High Court whereby that court answered the following question referred to it under section 66(1) of the Indian Income tax Act, 1922 against the assessee appellant and in favour of the revenue "Whether, on the facts and in the circumstances 'of the case, the sum of Rs. 7,14,398/ was liable to be included in the total income of the assessee under the Indian Income tax Act, 1922 ?" The matter relates to the assessment year 1953 54, the corresponding accounting period for which ended on June 30, 1952.
The assessee is.
a limited company with its head office at Calcutta.
One ,of its activities was the purchase and sale of jute in the State of Orissa and for this purpose the assessee was a registered dealer under the Orissa Sales Tax Act, 1947.
During.
the accounting year the assessee sold jute to M/s. McLeed & Co. Ltd. for being used in two jute miffs situated in Andhra Pradesh under the management of the purchaser company.
The assessee used to charge from the purchaser sales tax on the purchase of goods at the rate of one anna per rupee of the value of the goods.
The sales tax was charged under a separate head in the bill.
The words used in the bill in this respect were "Sales tax buyers ' account. . at the rate of /1/ per rupee to be paid to Orissa Government".
The total amount shown as "Liabilities for expenses" in the balance sheet as on June 30, 1952 included a sum of Rs 16,54 455 on account of sales tax.
The said sum was, however, not paid to the State Government as the sale by the assessee to the purchaser company were stated to be inter State sale.
The assessee contended before the income tax officer that the sales tax realised from the purchaser did not form part of the sale price of the jute and as such did not constitute receipt in jute business.
The contention was rejected by the income tax officer who held that the sales tax formed a part of, the consideration for the sales and, therefore, the accumulation on that account represented the assessee 's income.
The income tax officer accordingly added the aforesaid sum of Rs. 16,54,455 to the assessee 's total income.
On appeal by the assessee the Appellate Assistant Commissioner found that the actual amount received as sales tax during the relevant period amounted to only Rs. 7,41,962, out of which Rs. 27,564 had been paid to the Orissa Government.
He, therefore, held that the amount which was to be added to the assessee 's total income was Rs. 7,14,398.
The contention of the assessee that the sales tax realised was not part of the taxable receipt of the assessee was rejected.
The assessee preferred second appeal before the Tribunal and submitted that the purchaser paid the sales tax and the price of goods to the assessee on the understanding that if ultimately no sales tax 631 was exigible on those sales, the amount collected as sales tax would be refunded to the purchaser.
The amount collected as sales tax, according to the assessee company, could not belong to it but belonged to the purchaser and as such could not be treated as income of the assessee.
The Tribunal held that where a dealer collects sales tax under the provisions of section 9B of the Orissa Sales Tax Act, the amount of the tax does not form part of the sale price and the dealer doe:; not acquire any beneficial interest in that amount.
According to the Tribunal, if at the time of the collection the amount was collected as sales tax the subsequent failure of the assessee to deposit the amount in the Orissa Treasury could not transform the character of that amount.
The Tribunal consequently came to the conclusion that the Appellate Assistant Commissioner had erred.
in treating Rs. 7,14,398 as part of the total income of the assessee.
On the application of the Commissioner of Income tax the Tribunal referred the question reproduced above to the High Court.
The High Court held that if tax, which is validly exigible, is realised by a trader from his customer, and, is then utilised in his business, the tax so realised.
cannot but form part of the sales price.
According to the High Court, the tax would be included in the trading receipt of the dealer and would become part of his income as the money realised from the purchaser on account of tax was employed by the dealer for the purpose of making profit and was not separated from price simpliciter.
The High Court in this context referred to the fact that the assessee did not earmark the amount realised as sales tax and did not put it in a different account or deposit it with the Government.
It was further found that the assessee had treated the amount of sales tax as his own money.
Reference was made in the High Court to subsection (3) of section 9B of the Orissa Sales Tax Act which reads as under : "(3) The amount realised by any person as tax, on sale of any goods, shall, notwithstanding anything contained in any other provision of this Act, be deposited by him in a Government treasury within such period as may be pres cribed, if the amount so realised exceeds the amount payable as tax in respect of that sale or if no tax is payable in respect thereof.
" The High Court in the above context observed ; "There is no finding that the trader did not use that money for his trading purpose, and because of the fact that money was not deposited in terms of section 9B(3).
In such circumstances simply because the trader had a duty to refund, we cannot say it would not constitute trading receipt.
If a trader received money as trading receipt and employs that money as his own fund and is then called upon to refund the money even then it is trading receipt of the trader but when he pays back that money the amount refunded may be considered for deduction at the time when it is refunded." 632 In appeal before us, Dr. Pal on behalf of the assessee appellant has contended that the amount received as sales tax retained its character ,as such and could not be considered to be a part of trading receipt.
As against the above, Mr. Sen on behalf of the revenue submits that the amount in question constituted trading receipt.
According to Mr. Sen, the matter is concluded by a decision of this Court in the case of Chowringhee Sales Bureau P. Ltd. vs Commissioner of Income tax West Bengal.(1) The submission of Mr. Sen, in our opinion is well founded.
In the case of Chowringhee Sales Bureau P. Ltd. the appellant company was a dealer in furniture and also acted as an auctioneer.
In respect of sales effected by the appellant as auctioneer, it realised during the year in question in addition to the commission, Rs. 32,986 as sales tax.
This amount was credited separately in its account books under the head "sales tax collection account".
The appellant did not pay the amount of sales tax to the actual owner of the goods nor did it deposit the amount realised by it as sales tax in the State exchequer because it took the position that statutory provision creating that liability upon it was not valid.
The appellant also did not refund the amount to persons from whom it had been collected.
In the cash memos issued by the appellant to the purchasers in the auction sales the appellant was shown as the seller.
This Court held that the sum of Rs. 32,986 realised as sales tax by the appellant company in its character as an auctioneer formed part of the trading or business receipts.
The fact that the appellant credited the amount received as sales tax under the head "sales tax collection account" did not make any material difference.
According to this Court, it is the true nature and quality of the receipt and not the head under which it is entered in the account books as would prove decisive.
If a receipt is a trading receipt the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating it as trading receipt.
The Court further observed that the appellant company would be entitled to claim deduction of the amount as and when it paid it to the State Government.
The above decision, in our opinion, fully applies to this case and in view of it, there is no escape from the conclusion that the amount of Rs. 7,14,398 should be treated as trading receipt.
Dr. Pal has tried to distinguish the decision of this Court in the case of Chowringhee Sales Bureau P. Ltd. on the ground that there was no provision in the Bengal Finance (Sales Tax) Act, 1941 under which the sales tax was realised by the appellant in that case corresponding to sub section (3) of section 9B of the Orissa Sales Tax Act, 1947.
This circumstance, in our opinion, hardly constitutes a suffi cient ground for not applying the dictum laid down in the case of Chowringhee Sales Bureau P. Ltd. to the present case.
The provisions of sub section (3) of section 9B of the Orissa Sales Tax Act have already been reproduced above.
It is not necessary for the purpose of the present case to express an opinion on the point as to whether in view of the decisions of this Court in the cases of R. Abdul Qyader & Co. vs Sales Tax Officer, Second Circle, Hyderabad, (2) (1) (2) [1964] 15 S.T.C. 403.
633 Ashoka Marketing Ltd. vs State of Bihar Anr.(1) and State of U.P. & Anr.
vs Annapurna Biscuit Manufacturing Co. (2) the State legislature was competent to enact that provision and whether the same was constitutionally valid.
Assuming that the said provision is valid, that fact would not prevent the applicability of the dictum laid down in Chowringhee Sales Bureau P. Ltd. The aforesaid decision did take into account the possibility of the appellant in that case being com pelled to deposit the amount of sales tax in the State exchequer.
It was accordingly observed that the appellant company would be entitled to claim deduction of the amount as and when it paid the amount to the State Government.
Likewise, we would like to make it clear in the present case that if any when the appellant pays the sum of Rs. 7,14,398 or any part.
thereof either to the State Government or to the purchaser, the appellant would be entitled to claim deduction of the sum so paid.
Dr. Pal points out that the appellant may have to refund the amount realised by it as sales tax to the purchaser.
So far as this aspect is concerned, we have already mentioned above that if and when the appellant refunds any part of the amount of sales tax to the, purchaser, the appellant would be entitled to claim deduction on that account.
Lastly, reference has been made by Dr. Pal to the case of Morley (H. M. Inspector of Taxes) vs Messrs. Tattersall,(3) and it is submitted that once an amount was received as sales tax by the appellant it could never be treated as trading receipt.
We find it difficult to, accede to the above submission because the case of Chowringhee Sales Bureau P. Ltd. is a direct authority, for; the proposition that an amount even though realised as sales tax can in a case like the present be, treated as trading receipt.
It would be pertinent in this context to refer to the finding ' of the High Court that the assessee appellant in the present case did not separately earmark the amount realised as sales tax, or put it in a different account.
The assessee also did not deposit the amount with the Government as and when realised nor did ' the assessee refund it to the purchaser from whom the amount had been realised.
The High Court has further found that the assessee company mixed up the amount of sales tax with its own funds and treated the same as its own money.
Nothing cogent has been brought to our notice to justify interference with the above findings.
the case of Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors.
(4) the Constitution Bench of this Court held that the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954 was not bad on the ground of legislative incompetence.
In that context this Court observed that when the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entire consideration and the distinction between the two amounts tax and price loses all significance.
This Court in that case relied upon the following observation of Lawrence J. in Paprika Ltd. & Anr.
vs Board of Trade.(5) (1) [1970] 26 S.T.C. 254.
(2) [1973] 32 S.T.C. 1.
(3) (4) [1961] 12 STC 476 (5) 634 "Whenever a sale attracts purchase tax, that tax presumably affects the price which the seller who is liable to pay the tax demands but it does not cease to be the price which the buyer has to pay even if the price is expressed as X plus purchase tax.
" Reliance was also placed upon the following observation of Goddard, L. J. in Love vs Norman Wright (Builders) Ltd.(1) "Where an article is taxed, whether by purchase tax, customs duty, or excise duty, the tax becomes part of the price which ordinarily the buyer will have to pay.
The price of an ounce of tobacco is what it is because of the rate of tax, but on a sale there is only one consideration though made up of cost plus profit plus tax.
So, if a seller offers goods for sale, it is for him to quote a price which includes the tax if be desires to pass it on to the buyer.
If the buyer agrees to the price, it is not for him to consider 'how it is made up or whether the seller has included tax or not.
" After referring to these observations section K. Das J. speaking for the Constitution Bench of this Court observed "We think that these observations are apposite even in the context of the provisions of the Acts we are considering now, and there is nothing in those provisions which would indicate that when the dealer collects any amount by way of tax, that cannot be part of the sale price.
So far as the purchaser is concerned, he pays for the goods what the seller demands viz., X price even though it may includes tax.
That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turnover.
" We are, therefore, of the view that the submission which has been made by Dr. Pal that the sales tax should not be treated to be a part of the price realised by the assessee from the purchaser is not well founded.
The case of Tattersall can be of no help to the appellant because the amount with which the court was concerned in that case was ,never received by the assessee as income or trading receipt.
In any case, as already observed, the question with which we are concerned ' stands concluded by the case of Chowringhee Sales Bureau P. Ltd. As a result of the above, we dismiss the appeal with cost.
P.B.R. Appeal dismissed.
| The assessee collected sales tax from the purchaser but did not pay the collections to the State Government alleging that the sale was interstate sale.
The Income Tax Officer treated the sales tax as income of the assessee.
The assessee claimed that the sales tax realised from the purchaser did not form part of the sale price of the goods and as such did not constitute taxable receipt.
The Income tax Officer held that the sales tax formed part of the consideration for the sales and, therefore, the accumulation on that account represented the assessee 's income.
The Appellate Assistant Commissioner also rejected the contention of the assessee that the sales tax realised was not part of the taxable receipt of the assessee.
The Appellate Tribunal held that where a dealer collected sales tax under the provisions of the Orissa Sales tax Act the amount of tax did not form part of the sale price and the dealer did not acquire any beneficial interest in that amount and that the failure of the assessee to deposit the amount with the Government could not transform the character of that amount.
The High Court held that if a validly eligible tax was realised by a trader which had been utilised in his business the tax so realised could not form part of the sale price and that the tax would be included in the trading receipt of the dealer and would become part of his income as the money realised from the purchaser on account of tax was employed by the dealer ' for the purpose of making profit and was not separated from price simpliciter.
On appeal to this Court it was contended that the amount received as sales tax retained its character as such and could not be considered to be a part of trading receipt.
Dismissing the appeal,, HELD : It is 'the true nature and quality of the receipt and not the head under which it is entered in the account books as would prove decisive.
If a receipt is a trading receipt the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating it as trading receipt.
If and when the appellant paid the sum or any part thereof either to the State Government or to the purchaser it would be entitled to claim deduction of the sum so paid.
In the instant case there is no escape from the conclusion that the amount should be treated as a trade receipt.
[632B F; 633C] Chowringhee Sales Bureau P. Ltd. vs Commissioner of Income tax West Bengal followed.
The purchaser pays what the seller demands, that is, the price, even though it may include tax.
That is the whole consideration for the sale and there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turn over.
[634F] Messrs George Oakes (Private) Ltd. vs The State of Madras & Ors.
(1961) 12 S.T.C. 476 followed, Morley (H. M. Inspector of Taxes) vs Messrs. Tattersall REFERRED TO, Paprika Ltd. & Anr.
vs Board of Trade and Love vs Narman Wright (Builders) Ltd. [1944] 1 All E.R. 618, held inapplicable.
|
Civil Appeal No. 1997 of 1980.
From the Judgment and order the 25th April 1980 of the Calcutta High Court in C.R. No. 1529 of 1979.
518 Shanker Ghose, Sobhan Tagore and P.K. Mukherjee for the Appellant.
L.N. Sinha, Attorney General, V. Subba Rao and R.S. Poddar for the Respondent.
R.B. Mehrotra for the Substituted Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
This appeal by certificate from the Calcutta High Court raises the question whether a decree for permanent alimony passed under section 37 of the (hereinafter referred to as 'the Act '), is wiped out with the death of the husband judgment debtor.
Respondent Dorothea and one Prafulla Kumar Mitra were married under the Special Marriage Act, 1872, in January 1952.
Respondent asked for divorce in 1961 and obtained a decree on May 2, 1962, to the effect: "The petitioner 's (Dorothea Mitra 's) marriage with the respondent Prafulla Kumar Mitra be dissolved by a decree of divorce.
The petitioner do get Rs. 300 p.m. as maintenance from the respondent to be paid by the 1st week of each month following for which it is due until she re marries . ." Respondent levied execution of the decree and the same was compromised and payment of the arrears was undertaken to be made in instalments.
Prafulla Kumar Mitra executed a Will on March 31, 1965, but made no provision therein for satisfaction of the maintence decree.
He died on April, 3, 1965, and the appellant who was the executrix under the Will got it duly probated.
There is no dispute that the executrix paid the maintenance in December 1975 for a period after the death of Prafulla Kumar Mitra.
But since no payment was made thereafter, respondent levied execution in Matrimonial Case No. 1/77 claiming recovery of arrears of Rs. 19,500.
Appellant objected to the claim under section 47 of the Code of Civil Procedure by pleading that the order of alimony not being charged, the death of Parfulla Kumar Mitra has extinguished the claim of the purported decree holder.
The executing court overruled the objection whereupon the appellant invoked the revisional jurisdiction of the High Court.
A Division Bench agreed with the executing Court but while dismissing the revision application, granted certificate of appeal to this Court.
519 The sole controversy is whether the order for alimony got extinguished with the death of Prafulla Kumar Mitra.
Admittedly, the order was made in exercise of powers under section 37 of the Act.
lt provides: "37.
Permanent alimony and maintence (1) Any Court exercising jurisdiction under Chapter V or Chapter VI may, at the time of passing any decree or at any time subsequent to the decree, on application made to it for the purpose, order that the husband shall secure to the wife for her maintenance and support, if necessary, by a charge on the husband 's property, such gross sum or such monthly or periodical payment of money for a term not exceeding her life, as having regard to her own property, if any her husband 's property and ability and the conduct of the parties, it may seem to the Court to be just; (2) If the District Court is satisfied that there is a change in the circumstances of either party at any time after it has made an order under sub section (1), it may, at the instance of either party, vary, modify or rescind any such order in such manner as it may seem to the Court to be just (3) If the District Court is satisfied that the wife in whose favour an order has been made under this section has remarried or is not leading a chaste life, it shall rescind the order.
" The language of the section does not warrant the conclusion that there is extinguishment of the decree for alimony upon the death of the judgment debtor husband.
We have been told at the Bar that there is no decision on the point and, therefore, English decisions should be considered for deciding the matter.
Section 37 of the Act more or less corresponds to the provisions of sections 19, 20 and 22 of the English Matrimonial Causes Act, 1950, except that there is nn corresponding provision in the English Act for sub section
(3) of the Indian Act.
A close look at sub sections
(2) and (3) of section 19 of the English Act will indicate that maintenance can be required to be paid for a term not exceeding the life of the 520 wife or during the joint lives of the husband and tho wife.
These two sub sections of the English Act read thus: "(2).
On any petition for divorce or nullity of marriage the Court may, if it thinks fit, order that the husband shall, to the satisfaction of the Court, secure to the wife such gross sum of money or annual sum for any term not exceeding her life, as having regard to her fortune, if any, to the ability of the husband and to the conduct of the parties, the court may deem to be reasonable.
On any decree for divorce or nullity of marriage, the court may, if it thinks fit, by order direct the husband to pay to the wife, during their joint lives, such monthly or weekly sum for maintenance and support of the wife as the court may think reasonable, and any such order may either be in addition to or be instead of an order made under the last foregoing sub section.
" We have also been referred to some other English statutes where this distinction has been manintained.
In case of a direction for payment during the joint lives, there can be no dispute that on the death of one of the spouses the obligation under the decree ceases.
English Courts have taken the view that even where a direction is for payment during the life of the wife, it abates with the death of the husband.
In paragraph 891, Vol. 13, Halsbsury ' Laws of England, 4th Edn., it has been said that "in the absence of an order directing security for periodical payments the court has no jurisdiction to order a man 's personal representatives to make payments for his children after his death." The decision in Sugden vs Sugden,(1) of the Court of Appeal has been relied upon for this view.
Lord Denning in the leading judgment said: "There is no difficulty in an ordinary action in determining when the right or liability accrued due; but there is more difficulty in proceedings in the Divorce Court.
In that court there is no right to maintenance, or to a secured provision, or the life, until the court R makes an order directing it.
There is therefore no cause of action for such matters until an order is made.
In 521 order that the cause of action should subsist at the death, the right under the order must itself have accrued at the time of death.
Thus a cause of action subsists against a husband for arrears of maintenance due at his death, but not for later payments.
" This view of proceedings in the Divorce Court is supported by the decision of Hodson, J. in Dipple vs Dipple,(1) where he pointed out that "all that the wife had was the hope that the court would in its discretion order a secured provision .
In the present case, there was no right or liability subsisting against the father at the time of his death.
He had paid everything up to that time.
If there had been any arrears of maintence payable by him at that time, then no doubt they would be payable by his estate after his death under section 1 (1) of the Act of 1934; but there were no arrears.
There was nothing, therefore, to come within the Act of 1934 at all.
The right to maintenance after his death must come from the terms of the order itself or not at all." Under the order in Sugden 's case the maintenance of 1s.
a year for the wife was payable by the husband during their joint lives.
On the terms of the order, therefore, the liability was to come to an end upon the death of the husband.
We have no difficulty in accepting the submission of Mr. Ghosh for the appellant that matrimonial proceedings abate on the death of either party and legal representatives cannot be brought on record and the proceedings cannot be continued any further.
Bowen, L.J. in Stanhope vs Stanhope,(1) very appropriately said: "A man can no more be divorced after his death, than he can after his death be married or sentenced to death.
Marriage is a union of husband and wife for their joint lives, unless it be dissolved sooner, and the court cannot dissolve a union which has already been determined.
No person can dissolve a marriage which is dissolved by act of God.
If a decree nisi is made, and the husband dies before it is made absolute, he dies while he is still at law a husband, and his wife becomes his widow.
Thus how can a decree be made which would displace a dissolution of the marriage by death, and untie a knot that no longer exists ? How can a woman, once a widow, 522 be converted into a divorcee, unless there is some enactment enabling the court such a retrospective order" The question to ask at this stage is, while a matrimonial proceeding comes to an end with the death of either spouse, where the proceeding has terminated and a decree has emerged, would the decree also abate.
There can be no manner of doubt and it has also been fairly conceded before us that where maintenance has been made a charge on the husband 's estate, the death of the husband would not at all affect the decree and notwithstanding such death, the estate can be proceeded against for realisation of the maintenance dues for post death period.
Mr. Ghosh had to concede that if there be a decree arising out of a civil action death would not result in wiping out the decree.
If decree arising not out of a matrimonial dispute would not abate and the estate of the judgment debtor would be liable for its satisfaction and a decree for alimony or maintenance would not abate when the same is charged upon the husband 's estate, we asked Mr. Ghosh to indicate the justification for his contention that a decree for maintenance or alimony not charged upon the husband 's estate would abate with the death of the husband.
Apart from relying on the English decisions, Mr. Ghosh was not able to indicate any independent reason.
We have not been able to find any legal principle in the cases placed before us except that the view taken in the English Courts appears to be based on precedents.
There is no rationality in the contention that a decree for maintenance or alimony gets extinguished with the death of the husband when any other decree even though not charged on the husband 's property would not get so extinguished.
A decree against the husband is executable against the estate of the husband in the hands of the heirs and there is no personal liability.
In law a maintenance decree would not make any difference.
The decree indicates that maintenance was payable during the life time of the widow.
To make such a decree contingent upon the life of the husband is contrary to the terms and the spirit of the decree and the appellant has taken a stand that though the widow is alive, the decree obtained by her would become ineffective with the passing away of the husband.
523 The Special Marriage Act is a statute of 1954 made by the Indian Parliament after independence.
For the interpreation of a provision of this statute there is no warrant to be guided by English decisions.
There is no ambiguity in section 37 for the interpretation of which it is necessary to go beyond the provision itself.
It is one of the settled principles of interpretation that the Court should lean in favour of sustaining a decree and should not permit the benefits under a decree to be lost unless there be any special reason for it.
In incorporating a provision like section 37 in the Act, Parliament intended to protect the wife at the time of divorce by providing for payment of maintenance.
If the husband has left behind an estate at the time of his death there can be no justification for the view that the decree is wiped out and the heirs would succeed to the property without the liability of satisfying the decree.
We are incline(1 to agree with the view of the Calcutta High Court that the decree in the instant case was not extinguished with the death of Prafulla Kumar Mitra and the assets left behind by him are liable to be proceeded against in the hands of his legal heirs for satisfaction of the decree for maintenance.
Before the Calcutta High Court it had been contended that the phrase 'at the instance of either party ' occurring in sub section
(2) of section 37 would cover the husband and the wife and no one else and on this meaning given to the phrase, support was sought for the contention that the order of maintenance was intended to continue only during the life of the husband.
This question was left open by the High Court.
We, however, see no justification for the view that the phrase should be confined to the spouses.
There is no dispute that the order for maintenance can be varied or rescinded with change of circumstances.
Sub section (3) clearly provides that on remarriage or on a finding that the wife is not leading a chaste life, the order of maintenance can be rescinded.
Upon the husband 's death his estate passes on to his legal heirs and the intention of the Legislature being clear that upon remarriage or non leading of a chaste life, the benefit conferred by the statute should empire and the estate should become free from the liability of satisfying the decree for maintenance, the application for varying, modifying or rescinding the order for maintenance can be made even by those who have succeeded to the husband 's estate and the estate can be freed from the liability.
There is nothing in the provision to support the view that the words 'either party ' should be confined to the 524 spouses.
Examining the scheme of the statute and the purpose for which such a provision has been made, we are inclined to agree with the learned counsel for the respondent that the words 'either party ' would also cover the legal heirs who have stepped into the shoes of the spouses under the law and such persons would also be competent to ask for variation, modification or rescission of the order for maintenance.
That term would also include the holders of the estate with lawful title for the time being.
Once such a meaning is given to the phrase, the support which Mr. Ghosh wanted to draw by restricting the phrase to spouses and contending that it indicated the legislative intention that the order of maintenance should survive only until the life time of the husband, loses force.
We accordingly dismiss the appeal and confirm the order of Calcutta High Court.
The respondent shall be entitled to her costs throughout.
| The appellants were charged under section 302134 I.P.C. for murdering the husband of P.W. 2 when he was Lying on a cot inside a hut and the P.W. 2 was sitting outside.
The trial court disbelieved the case of prosecution that P.W. 2 was an eye witness of the occurrence.
The trial court held that the details of the incident given by P.W. 2 were imaginary or improbable and, therefore, unbelievable; there was several contradictions in her evidence which could not be accepted without any further corroboration and the evidence of certain other prosecution witnesses could not be safely relied an as furnishing corroboration to the statement of P.W. 2 in view of the several instances narrated in its judgment.
The evidence of the doctor who conducted postmortem examination of the body of the deceased was that the death of the deceased could not have taken place soon after the dinner as he did not find any food particles in the stomach and small intestines of the deceased The trial court observed that the evidence of P.W. 2 that she had served food for the deceased at about 8.30 P.M. could not be accepted as probable as the fatal assault had taken place at about 9 P.M.
There was a delay of nearly 24 hours in giving the information to the police out post.
The evidence for motive also was found to be discrepant .
Accordingly the trial court acquitted the appellants.
On appeal the High Court reversed the judgment of acquittal, convicted the appellants and sentenced them to undergo rigorous imprisonment for life.
The High Court severely criticised the evidence of the doctor observing that, "our impression is that he hardly knows what he Is talking about and what is extraordinary is that the less he knows the more assertive he is, No reliance what so ever can be placed on such evidence and no conclusion can be drawn either adverse or in favour of the prosecution from the opinion evidence of such a poorly qualified medical witness".
Allowing the appeal, 269 ^ HELD: There is no doubt that even where there is only a sole eye witness of a crime, a conviction may be recorded against the accused concerned A provided the Court which hears such witness regards him as honest and truthful.
But prudence requires that some corroboration should be sought from the other prosecution evidence in support of the testimony of a solitary witness particularly where such witness also happens to be closely related to the deceased and the accused are those against whom some motive or ill will is suggested.
[276 G H] In the instant case a careful analysis of the evidence relating to the inordinate delay involved in the giving of the first information to the police and the other inherent inconsistencies in the evidence of the sole eye witness shows that her evidence cannot be considered as sufficient to find the accused guilty.
The first information (Exh. P. 10) itself appears to be one prepared after some deliberation.
The motive suggested by the prosecution does not appear to be strong enough for the accused joining together to commit the murder of the deceased [276 H, 277 A, 275 C] While there is no doubt that the jurisdiction of an appellate court is coextensive with that of the trial court, in the case of an appeal against a judgment of acquittal it cannot totally brush aside the appreciation of the evidence by the trial court.
The reasons for reversing a judgment of acquittal D should be cogent and if two views are reasonably possible, the appellate court should be slow in interfering with the judgment of the trial court, even if it is possible for it to take a different view after a process of laborious reasoning.
[277 G H, 278 A] In the instant case the High Court has not bestowed due care or, the principles governing its jurisdiction.
There is no proper discussion ill the judgment of the High Court about the various versions in the prosecution evidence about the giving of the first information to the police in their true perspective.
The High Court has over simplified this issue and has observed.
"In this case, bearing in mind the place where the incident occurred, we find no unreasonable delay in reporting the incident to the police out post at Molgi and subsequently in giving the complaint at the Dhadgaon Police Station".
It may be noted that the distance between Molgi and the village of the deceased was hardly three miles but the 'khabar ' reached the Molgi police out post, according to the prosecution nearly 24 hours after the incident.
The reason given by the prosecution for this inordinate delay, that P.W. 2 did not want the information to be lodged with the police until the arrival of her son P.W. I, is hardly convincing since there are several different versions about the lodging of the information with the police out post and the earlier versions of the crime said to have been given by P.W. 2 which were in writing appear to have been suppressed.
This important aspect of the case has been overlooked by the High Court.
It would be unsafe to act upon the evidence of P.W. 2 and convict the appellants.
[277 G, 278 A C, 274 F G, 279 A] The comment by the High Court on the evidence of the doctor appears to be more severe than what it should have been particularly when his opinion that 'it was possible that the death in this particular case was instantaneous, is not seriously challenged.
[278 G Hl 270
|
vil Appeal Nos.
93794 1 of 1980.
From the JUdgment and Order dated 22.2.1980 of the Madras High Court in C.R.P. Nos.
934/78, 602/77, 110/78 and 111/78 and dated 29.2.1980 in C.R.P. No. 601 of 1977.
A.V. Rangam for the Appellant.
section Srinivasan for the RespOndents.
The following Order of the Court was delivered: These are five Civil Appeals by Special Leave against identical orders of a learned Single Judge of the Madras High Court.
In relation to Civil Appeal No. 937 of 1980 the Regional Transport Authority, out of two permits, granted one permit on the route Salem to Poolambadi to the appellant State Transport Undertaking and the other to the first respondent, Safe Service Ltd. In Civil Appeal No. 938 of 1980 there was only one permit for the route Salem to Pallipatti which was granted to the State Transport Undertaking.
1n other words, it was denied to the Second respondent, R.P. David.
In Civil Appeal No. 939 of 1980, on the route Salem to Poolambadi, out of two permits, one permit was granted to the State Transport Undertaking and the other to another private operator, Suganeswara Motor Service denying the permit to R.P. David respondent herein.
In Civil Appeal No. 940 of 1980, on the route Salem to Erode, the objection of the State Transport Undertaking on the renewal sought by Parsu raman Pillai respondent was sustained and the permit was granted to the State Transport Undertaking, leaving the private operator aggrieved.
In Civil Appeal No. 94 1 of 1980, on the route Salem to Tiruchangode, the renewal appli cation of K. Ramaswamy respondent operator was declined on objection by the State Transport Undertaking, who in turn, on its application, was granted the permit leaving the private operator K. Ramaswamy respondent aggrieved.
All the aggrieved parties preferred appeals before the State Trans port Appellate Tribunal.
The Tribunal identically in all these Cases took the view that since a draft scheme under Section 68C of the had been pub lished by the ' State Government and was under 711 consideration at the time when the matter was pending in appeal, sub section 1 D of Section 68 F of the Act stood in the way for any relief 'being granted to the private opera tors and thus dismissed the appeals.
That provision forbids permits being granted or renewed during the period interven ing between the date of publication of any draft scheme under Section 68 C of the Act, and the date of publication of the approved or modified scheme, in favour of any person, or for any class of road transport service, in relation to an area, or route, or portion thereof, covered by such scheme.
However, the proviso thereto permits that where the period of operation of a permit in relation to any area, route or portion thereof specified in the scheme published under Section 68 C expires after such publication, such permit may be renewed for a limited period, but the permit so renewed shall cease to be effective on the publication of the scheme under sub section (3) of Section 68 D of the Act.
As is evident, the Appellate Authority applied sub section(1 D) of Section 68F to all the five cases and not the proviso.
The High Court on revision preferred by the private operators upset the orders of the Appellate Authori ty directing the Regional Transport Authority to re consider the matter on merit.
While doing so it relied on a judgment of the Madras High Court in K.A. Natarajan vs
M. Naina Mo hammed & Anr., AIR 1978 Madras 280 to the effect that appeal before the Appellate Authority was maintainable even though a draft scheme within the terms of Section 68C of the Act had appeared on the scene.
The State Transport Undertaking being aggrieved is before us by Special Leave.
We have heard learned counsel on both sides.
So far as Civil Appeal Nos. 937 939/80 are concerned, these are cases of non grant of permits to the aggrieved private operators.
To their cases sub section (D) of Section 68F of the Act was clearly attracted.
No permit could be granted on their asking in the presence of the draft scheme.
And when none could be granted the exercise of consideration of the claim of the aggrieved.
private operators on merit, was itself a futility.
When the law forbade the grant of a permit in the aforesaid duration, merits of grant stood nowhere.
In this view of the matter, we are inclined to take the view that the High Court was in error in accepting the related revi sion petitions of the private operators and remitting their cases to the Appellate Authority for reconsideration on merits.
And as a consequence it was further in error in ordering that till such orders were passed by the Appellate Authority, both the State Transport Under 712 taking and private operators could be allowed to run, in view of the facts which glare out on the record.
So far as Civil Appeal Nos.
940 941 of 1980 are con cerned, the respective private operators were functioning and had sought renewal of their existing permits on the routes in question and, on denial of the same, and corre sponding grant thereof to the State Transport Undertaking, grievance arose to those private operators to take the matter in appeal.
Theirs were cases which could perhaps fall within the proviso to sub section (1 D) to Section 68F of the Act.
Their permits were capable of being renewed for a limited period provided they had expired after the publica tion of the draft scheme under Section 68C of the Act.
The controverted plea of the State Undertaking however is cate goric that the renewal application was rejected on 30th August, 1974 in one case and on 19th October, 1974 in the other, and on such rejection both the permits were granted to the State Transport Undertaking, and when the matter was in appeal before the Appellate Tribunal, the draft scheme was, much later, published on 4.6.1976.
Mr. section Srinivasan, learned counsel appearing for the private operators in Civil Appeal NOs.
940 941 of 1980 contends that when an appeal was taken to the Appellate Authority, the provisions of subsection (1 A) of Section 134 of the Act were invoked and orders were obtained, notwith standing the expiration of the term of the permit, so as to continue the permit to be valid until the appeals before the Appellate Authority were disposed of.
On that basis it is contended that the proviso to sub section (1 D) of Section 68F of the Act comes to his rescue, on the strength of orders in terms of sub section (1 A) of Section 134 of the Act, as valid permits were continuing and were capable of being renewed for a limited period, so as to cease being effective on the publication of the final scheme under sub section (3) of Section 68D of.the Act.
It may not require examining the contention because it is fractionally factual.
The necessary factual data has not been placed before us in the form of a counter or the suggestive orders as such.
We are thus left in the dark.
Still, lest we cause any injus tice to Mr. section Srinivasan 's clients, we are goaded to take the view that even though these two appeals shall also meet the same fate as that of Civil Appeal Nos.
937 939 of 1980 they shall remain subjected to an alternate that in the event of orders under sub section (1 A) of Section 134 being existent, the Appellate Authority shall examine the question and pass such orders in relation to the appeals of these private operators in accordance with law; but in case there were no such 713 orders earlier, the view of the Appellate Authority dismiss ing the appeals shall stand affirm,ed.
In view of what has been said above, we allow Civil Appeal Nos.
937 939 of 1980 unqualifedly and Civil Appeal Nos.
940 941 of 1980 qualifiedly in the terms above stated.
Parties shall bear their own costs in all these appeals.
V.P.R. Appeals al lowed.
| In Civil Appeal No. 937 of 1980 the Regional Transport Authority, out of two permits, Wanted one permit an the route Salem to Poolambadi to the appellant State Transport Undertaking and tie other to the first respondent.
In Civil Appeal No. 938 of 1980 them was only one permit for the route Salem to Pallipatti, which was Wanted to the State Transport Undertaking, denying the second respondent.
In Civil Appeal No. 939 of 1980, on the route Salem to Poolambadi, ant of two permits, one permit was granted to the State Transport Undertaking and the other to another private operator, denying the permit to the respondent therein.
In Civil Appeal No. 940 of 1980, on the route Salem to Erode, the objection of the State Transport Undertaking on the renewal sought by the respondent was sustained and the permit was granted to the State Transport Undertaking.
In Civil Appeal No. 941 of 1980, an the route Salem to Tiruchangode, the renewal application of the respondent was declined on objection by the State Transport Undertaking, who in turn, an its cation, was granted the permit.
All the aggrieved parties preferred appeals before the State Transport Appellate Tribunal, which dismissed the appeals, holding that since a draft scheme under Section 68C of the had been published by the State Government and was under consideration at the time when the matter was pending in appeal, subsection (1 D) of Section 68 F of the Act stood in the way for any relief being granted to the private operators.
709 The High.
Court allowing the revision preferred by the private operators, upset the orders of the Appellate Author ity, directing the Regional Transport Authority to re con sider the matters on merit against which the State Transport Undertaking approached this Court by Special Leave.
The appellants the private operators in C.A. Nos.
940 941 of 1980 contendeed that Section 68(F)(1 D), proviso of the was applicable to their cases on the strength of orders in terms of Section 134(1 A), as valid permits were continuing and were capable of being renewed for a limited period, so as to cease being effective on the publication of the final scheme under .section 68D(3).
Allowing C.A. Nos.
937 939 of 1980 unqualifiedly and C.A. Nos.
940 941 of 1980 qualifiedly, this Court, HELD 1.
To the cases of non grant of permits to the ag grieved private operates, sub section (1 D) of Section 68F of the Act was clearly attracted .No permit could be granted on their asking in the presence of the draft scheme.
And when none could be granted the exercise of consideration of the claim of the private operators on merit, was itself a futlifty.
When the law forbade the grant of a permit, merits of grant stood nowhere.
[711F G] 2.
The private operators in C.A. Nos. 940 941 of 1980 were functioning and had sought renewal of their existing permits on the routes in question and, on denial of the same, and corresponding grant thereof to the State Transport Undertaking, grievance arose to those private operators to take the matter in appeal.
Their cases fail within the proviso to sub section (1 D) to Section 68F of the Act.
Their permits were capaable of being renewed for a limited period provided they had exlpired after the publication of the draft scheme under Section 68C of the Act, [712B C] 3.
Even though the two appeals in C.A. Nos. 940 941 of 1980 shall also meet the same fate as that of C.A. Nos. 937 939 of 1980, they shall remain subjected to an alternate that in the event of orders under sub section (1 A) of Section 134 being existent the Appellate Authority shah examine the question and pass such orders in relation to the appeals of these private operators in accordance with law; but in case there were no such orders earlier, the view of the Appellate Authority dismissing the appeals shall stand affirmed.
[712G 713A] 710 K.A. Natarajan vs
M. Naina Mohammed & Ant., AIR 1978 Madras 28O, referred to.
|
Appeal No. 158 of 1964.
Appeal by special leave from the judgment and decree dated August 30, and September 2, 1963 of the Calcutta High Court in appeal from Original decision No. 125 of 1960.
862 section K. Hazara and P. K. Mukherjee, for the appellant.
G. section Chatterjee and section C. Mazumdar, for the respondent.
The Judgment of P. B. GAJENDRAGADKAR C.J. and J. C. SHAH J. was delivered by SHAH J., AYYANGAR J. delivered a separate Judgment.
Shah J.
An action instituted by Phanindra Mohan Majumdar hereinafter called 'the plaintiff ' on the original side of the High Court of Calcutta for a declaration that he "is the sole proprietor ,of and absolutely entitled to a boarding house business carried on in the name and style of International Home at 42, Harrison Road, Calcutta and for an order for delivery of possession of the boarding house business" was decreed by a single Judge of the High Court, and the decree was confirmed in appeal under cl. 15 of the Letters Patent by a Division Bench of the High Court.
Surasaibalini Debi a trustee appointed under a deed of settlement dated August 23, 1952 executed by the defendant Prabhendra Mohan Gupta her father, was impleaded as a party on ' the death of the defendant has appealed to this Court with special leave.
The case of the plaintiff set out in his plaint was that in or ,about the year 1941 he took a lease of No. 42, Harrison Road, ,Calcutta and had started a boarding house business in the premises under the name and style of International Home, that he conducted the business with his own funds which belonged.
to him absolutely from the date of its inception, that he was personally managing the business and utilising the profits thereof for his own purposes, that when he started the business he was in the employment of the Court of Wards and by the service rules governing the said employment he was not permitted to start or carry on any trade or business of his own and on that account it was ,arranged with the defendant Prabhendra Mohan Gupta herein after called 'Gupta ' that the latter be held out as the nominal owner of the said business and pursuant to that arrangement the lease of the premises for the business was taken in the name of Gupta and licences from the police and the municipal authorities were also taken in the name of Gupta, that from the very inception he was in possession and management of the business and exercised all rights of ownership over the same being absolutely entitled thereto, that Gupta had never made a claim to title in the business, that towards the end of the year 1948 he the plaintiff suffered a serious illness and was advised to leave Calcutta temporarily, that on or about December 8, 1948 he entrusted the management 863 of the business of the boarding house to Gupta with all its assets on the understanding that upon his return to Calcutta, Gupta would hand over to him possession and management of the said business and of all papers, documents and books of account relating thereto and render accounts of the receipts and disbursements during the period of his management, that in or about December 1949 he returned to Calcutta and occupied one of the rooms in the boarding house and called upon Gupta to hand over possession and management of the business, and to return all papers, documents, books of account relating thereto and to render accounts of the management of the business by Gupta during his absence but the latter wrongfully and in breach of the trust and confidence reposed in him refused to hand over possession and management of the business and moreover wrongfully denied the plaintiff 's right, title and interest in the premises and in the business.
Gupta by his written statement submitted that the business was started by him with his own funds in premises obtained on lease by him and that he had appointed the plaintiff as his manager or agent in respect of the business.
He asserted that he was the real owner of the business, and denied that the management of the business was entrusted to him by the plaintiff when the latter left Calcutta an account of his illness on December 8, 1948 or at any time.
He also denied that there was any understanding that Gupta would hand 'over the management or possession of the business to the plaintiff as alleged.
On these pleadings the only substantial issue raised by the Trial Court was about the plaintiff 's title to the Boarding House known as International Home.
A subsidiary issue about a claim for accounts of the business from Gupta was given up at the trial and need not be considered.
On a review of the evidence the Trial Judge held that the plaintiff had started the business of International Home with his own funds and that the defendant Gupta was held out as an ostensible owner of that business.
In coming to that conclusion the learned Trial Judge relied upon the following circumstances.
The plaintiff Majumdar was carrying on business as owner of "Sunny lodge" a boarding house business between the years 1938 41, and that business was closed in or about February 1941 because the landlord of the premises in which it was conducted obtained a decree in ejectment against the plaintiff and compelled him to 864 vacate the premises.
Thereafter tenancy was obtained of 42, Harrison Road on May 1, 1941 and in July the International Home was started and the furniture and utensils which were used in the Sunny Lodge were used in the new business.
The case of Gupta that he had purchased the furniture and the utensils from the plaintiff for a sum of Rs. 900 and had started the business for himself 'Was disbelieved for the reason that Gupta was always in straitened circumstances and had often to borrow small surns of money from the plaintiff who was at all material times gainfully employed.
At the commencement of the business, for diverse purposes such as deposit with the landlord towards rent, provision for furniture, utensils and other things for the boarding house Rs. ' 4,000 were needed and this Gupta who was in impecunious circumstances could not have procured.
The defendant 's sons Dwipendrla and Samaren were boarders in the boarding house and had to pay charges to the boarding house for service rendered to them, whereas the members of the plaintiff 's family boarded and lived in the boarding house and no charges were levied from them.
The plaintiff was till December 1948 managing the boarding house ,exclusively and all the earnings were taken by him.
The defendant 's story that payments were made to him by the plaintiff when he visited Calcutta was unreliable.
There were between the years 1941 and 1948 no letters from the defendant to the plaintiff which supported his case.
that he was the owner or that he was claiming either to receive the profits of the business or even asking for accounts.
The defendant was in the year 1941 a man of about 70 years of age and he had no means to start a business.
The books of accounts of the business which admittedly were maintained bad been removed by the defendant and he had failed to produce the same before the Trial Court.
The letters written by the defen dant after December 8, 1948 when the plaintiff was away from Calcutta due to his illness gave detailed information to him about the business and its progress.
From time to time the defendant had written letters asking the plaintiff to return to Calcutta and take over the management of the business.
The Trial Court recognised that the lease of the premises in which the business was carried on stood in the name of Gupta, that the licences from the police and municipal authorities for conducting the business were also in the name of Gupta, that in the staff register of the business the plaintiffs name was shown as manager, ,that the plaintiff submitted the returns for the purposes of income tax of the profits of the business in the name of Gupta and he dealt with the authorities as if he was the manager and not the 865 owner of the business.
But these circumstances were, in the view of the Trial Judge, consistent with Gupta being a nominal owner of the business, whereas the other circumstances were consistent with the plaintiff alone being the owner of the business of International Home.
In his view the motive for holding out Gupta as owner was the existence of the service rules which governed the plaintiff when he was employed with the Court of Wards between the years 1941 and 1944 and by virtue of which he was not permitted to conduct any business of his own.
The appellate Court agreed with the view of the Trial Court.
In this appeal with special leave this Court normally does not seek to re appreciate the evidence, and Concurrent findings of the Courts below are not allowed to be re opened unless there are special circumstances justifying a departure from that course.
Counsel appearing on behalf of the appellant has not seriously attempted to challenge the finding of the Courts below on the first issue.
But counsel submitted that assuming that on the evidence it was established that the real owner of the business was the plaintiff, his suit must still fail, for the plaintiff had with a view to circumvent the service rules of the Court of Wards, entered into an unlawful agreement with Gupta and had held out the latter as owner of the business, it being settled law that the Court will not countenance the claim of the plaintiff who was on his own admission guilty of an act prohibited by law and assist him in obtaining possession of the business.
In addition, counsel submitted that the arrangement for holding out Gupta as a nominal owner was made between the plaintiff and Gupta to evade liability to pay income tax and thereby to defeat the provisions of the.
Income tax Act and on that account also the agreement under which the business was to be held by Gupta as a nominal owner was invalid and the plaintiff was not entitled to claim possession of the business relying upon his own unlawful conduct.
Before the Trial Court neither of these two pleas was raised.
In appeal the High Court pointed out that the object of the arrangement whereby Gupta was held out as the owner was to avoid the service rules of the Court of Wards, but there was no evidence to prove that the service rules which prohibited an employee of the Court of Wards from carrying on business belonging to himself were statutory rules.
Disregard of the rules did not therefore necessarily taint the arrangement with immorality or illegality and that the plaintiff in suing to recover possession of his business was not seeking to enforce an illegal arrangement.
In the view of 866 the High Court evasion of income tax was again not the object or the consideration for the arrangement.
The service rules were not tendered in evidence.
It is not disputed however that the service rules did not prohibit an employee of the Court of Wards from carrying on a business as a manager or agent of another.
What was prohibited was carrying on business as an owner.
An arrangement which facilitated conduct of a business, contrary to the rules, by holding out a third person as a nominal owner of the business, was in the view of the High Court not illegal, and no argument has been advanced before us challenging that view.
But the legality of the arrangement between the plaintiff and Gupta was challenged on the ground that it was intended or designed to circumvent the provisions of the Income tax Act.
In support of this plea, there was no pleading, no issue was raised about it, and this part of the appellant 's case was not even relied upon before the Trial Court.
In this appeal Mr. Hazara for the appellants submitted that on the admissions made by plaintiff in his evidence the Court was bound to non suit him.
In his evidence before the Court the plaintiff admitted that he had submitted returns of income earned in the business for the years 1943, 1944, 1945 and 1946 and assessment of tax was made in the year 1947 and on demand by the Income tax Officer he had filed an affidavit stating that he was a manager of the business.
Plaintiff also admitted that when called upon he had submitted a separate personal return for the salary earned by him, but that income was not taxed and tax was assessed on the business income as if it belonged to Gupta.
The plaintiff also admitted that his object in filing the affidavit was to get rid of tax liability on his personal income.
By the device of making an untrue statement the plaintiff has undoubtedly evaded tax.
The plaintiff was earning salary as an employee of the Court of Wards and had presumably some other income which in the aggregate amounted to Rs. 1,800 per annum.
If the business of International Home was disclosed as belonging to the plaintiff, the aggregate of the personal and business income was liable to be charged to tax under the Income tax Act, 1922.
By the expedient of holding out the defendant as an ostensible owner of the business the plaintiff evaded liability for payment of tax on his personal income and even tax on the business income was charged at a lower rate.
But on that account we are unable to hold, disagreeing with the High Court, that the object in entering into the arrangement for holding out Gupta as owner of the business was to evade payment of income tax.
867 As found by the Courts below the purpose of the arrangement was to circumvent the service rules.
It is true that having started the business in the name of the defendant, the plaintiff was able to evade payment of tax, which if the true state of affairs was known, he would have been liable to pay.
The plaintiff might have incurred penalties by failing to disclose the true state of affairs, he may also be liable for that conduct to be proceeded against under the provisions of the Income tax Act or under the Indian Penal Code.
We are, however, unable to hold that from the inception the object of the arrangement was to enter into an unlawful arrangement.
The plaintiff 's case was that he was in management and possession of the business as owner till December 1948 when he left Calcutta after entrusting the management of the business to Gupta, subject to the understanding that the possession and management of the business was to be restored to the plaintiff when he returned to Calcutta and sought to resume management.
There is nothing illegal in such a contract.
The plaintiff 's cause of action as set out in the plaint was that he sought to obtain possession of the business which belonged to him, and which he had entrusted to his agent or trustee.
Gupta denied that he was an agent or trustee of the plaintiff, and set up title to the business and claimed that he was not liable to return the business.
Once the plea of Gupta that he was the owner of the business failed, there was no other defence which could be held out against the plaintiff 's claim.
It is true that if the plaintiff seeks the assistance of the Court to effectuate an unlawful transaction, the Courts will refuse to assist him.
Where, however, the plaintiff is seeking to enforce his title to property and it is not an integral part of his pleading which her must prove to entitle him to relief that there was between him and the defendant an unlawful transaction or arrangement which he seeks to enforce, the plaintiff will be entitled to the assistance of the Court, even if the initial title of the plaintiff is rooted in an illegal transaction.
On the finding of the High Court the proved object for the arrangement to hold out Gupta as owner of the business, is not shown to be in fraud of the public administration, and the alternative object suggested by counsel for the appellant is not proved.
It is unnecessary therefore to enter upon a discussion of the authorities which make a distinction between claims in which a party to an action has to rely essentially upon a conspiracy to effectuate an illegal or fraudulent purpose, to support his claim to the property transferred to or held out in the other party 's name, 2 Sup./65 12 868 and claims in which the unlawful or unworthy object is fulfilled, the property is owned by the claimant, and the claimant, seeks the assistance of the Court not to effectuate his unlawful purpose, but in substance to enforce his title by a plea in detinue under a transaction which is not tainted by illegality.
A.R.P.L. Palanianna Chettiar vs P.L.A.R.
Arunasalam Chettiar(1) illustrates the former principle.
In that case the Judicial Committee declined to assist the enforcement of a claim in fraud of the public administration in Malaya, because the plaintiff had of necessity to disclose before he could obtain a decree for restoration of his property transferred to the defendant that he had practised deceit on the public administration.
Sajan Singh vs Sardara Ali (2 ) illustrates ,the other principle.
In that case the Court 's assistance was given to the plaintiff to restore to him his property of which he was wrongfully dispossessed by the defendant, even though title to the property was acquired by the plaintiff by an unlawful transaction, between the defendant and the plaintiff.
In the present case as we have already observed, it was not the object of the parties at the time when the transaction which is called in the High Court benami was entered into to circumvent or to defeat the provisions of the Income tax Act by taking advantage of the fact that the business stood in the name of Gupta.
It is true that the plaintiff obtained benefit of a lower rate of tax for the business income and his personal income escaped taxation.
But it cannot on that account be held that the transaction on which he founded his claim was unlawful.
In claiming a decree for possession from the defendant the plaintiff did not plead any invalidity of the transaction under which possession of the business was entrusted to Gupta.
He merely pleaded his title to the business, entrustment thereof to Gupta and refusal on the part of the latter to deliver possession when demanded.
On the findings recorded by the Trial Court as well as by the High Court the plaintiff 's title is proved.
Entrustment of the business when the plaintiff left Calcutta in 1948 is also established by the evidence, and Gupta has admittedly refused to deliver possession when demanded.
The plaintiff as the owner of the business was in the circumstances not prevented from enforcing that title against Gupta, there being no taint attaching to the entrustment.
The appeal therefore fails and is dismissed.
Having regard to the circumstances of the case, we make no order as to costs.
(1) ; (2) 869 Ayyangar J. I agree with the order proposed by my learned brother Shah J. that the appeal fails and should be dismissed as also in regard to the order for costs.
As, however, I am unable to agree with certain of the findings recorded by my learned brother propose shortly to state my reasons for the decision.
The facts of the case have all been set out in the judgment just now pronounced and it is needless for me to repeat them.
The main point in controversy in the suit was as to whether Phanindra Mohan Majumdar the respondent, who was the plaintiff in the suit out of which this appeal arises, had established that he was the proprietor of the Boarding House carried on in the name and style of "International Home" at 42, Harrison Road, Calcutta.
That property admittedly stood under the registered conveyance in the name of his father in law, defendant Gupta and that business was also conducted by the defendant.
The case set up by the respon dent was that the purchase of the property was with his funds and that the defendant Gupta was merely a benamidar.
The evidence on this point was examined elaborately by the learned Single Judge at the trial and by the Division Bench on appeal and they concurrently found that the defendant Gupta was merely a benamidar for the respondent and that the purchase of the property in the name of the defendant and the carrying on of the hotel business by the defendant was really on behalf of the respondent.
That finding was not challenged before this Court and does not, therefore, require any examination.
Accepting that finding, however, two questions were raised by the learned Counsel for the appellant.
One was that the purpose for which this benami transaction was entered into by the respondent was, on his own case, to circumvent the Service Rules of the Court of Wards of which he was an employee.
Though no argument based upon the effect of this admission was urged before the learned trial Judge, the question whether the respondent was entitled to maintain the suit for the recovery of possession from the defendant having regard to this object of the benami transaction viz., to evade the Service Rules of the Court of Wards and in view of the circumstance that object had been achieved, was raised before the Division Bench.
The learned Judges, however, rejected the contention by pointing out that those Rules were not shown to be statutory and, in fact, the Rules themselves were not before the Court.
In those circumstances, they considered that a breach of the rule or an attempt to evade it would not necessarily make the transaction unlawful so as to preclude the respondent from recovering the property title to which he had established.
Learned Counsel 870 for the appellant repeated this argument before us but I agree that it is not tenable having regard to the state of the evidence and to the fact that the Rules were not statutory.
There was, however, another illegality which came out in the course of the evidence of the respondent and which, it was submitted, was another object for which the property was purchased in the name of the defendant Gupta which requires more serious attention.
This relates to the claim of the appellant that it had been established that the object of putting the property benami in the name of the defendant Gupta was to evade income tax and that as a matter of fact, the tax liability for certain of the years of assessment had thereby been successfully evaded by the respondent.
The evidence in relation to this matter was this : The suit property was purchased and the Boarding House business was started in 1941, so that from the calendar year 1942 onwards i.e., from the assessment years 1943 44 onwards the respondent if the beneficial owner would have been liable to income tax on the income derived from the hotel business.
During this period the respondent was also employed in the Court of Wards, so that he would have been liable to income tax on the aggregate of the incomes he was receiving from these two sources.
In respect of the assessment years 1943 46 he received in 1947 a notice calling upon him to submit returns on the basis that he was the real owner of the International Home, 42, Harrison Road, The respondent then asserted that the property and the business did not belong to him, but to the defendant Gupta and that he was merely a manager under Gupta.
In connection with this assertion to the Income tax department he swore two affidavits one in December 1947 and the other in January 1948, before the Presidency Magistrate, Calcutta which contained these representations.
In his cross examination respondent 's attention was drawn to the affidavits and to their contents and his answer was this : A. "Then I was charged with the amounts as I was asked by the Income tax Officer to file an affidavit.
Then I made the first affidavit which is here in the file.
I showed him my first affidavit whereupon the Income tax Officer told me something.
Pursuant to that I told him, 'I rejected the first affidavit and made a second affidavit which was accepted by them '. (In the second affidavit dated January 31, 1948 he stated: 'I am an employee under Gupta proprietor of International 'Home, 42, 871 Harrison Road, Calcutta.
I have been working there as manager since July 1941 and my monthly salary varied from Rs. 25 to Rs. 150 from my last appointment to this date). .
Then I stated that my money was not taxable because it amounted only to Rs. 1,800 and I asked them to exempt me and accordingly I was exempted from paying the income tax.
Court Question : Do I understand that in 1947 and 1948 your object of filing this affidavit was to get rid of the income tax liability if possible so far as you are personally concerned ? A : That is so.
" On the basis of this clear admission it was urged before the learned Judges of the Division Bench that the respondent made the purchase in the name of the defendant Gupta really to evade income tax which he would have been liable to pay if the property and business had stood in his own name and that as he had successfully evaded the payment of income tax and had thus achieved his unlawful object, the Court would not permit him to assert title to the suit property and would not lend its aid to enable him to recover possession of his property.
The learned Judges, however, rejected this submission for two reasons : (1) that the defendant had not pleaded this illegality in the written statement and was not therefore entitled to urge this as a ground for non suiting the plaintiff; (2) That the evidence and the admission I have extracted, did not establish that the object of the respondent in effecting this purchase benami in the name of the defendant was, at its inception, to evade income tax.
In other words, the learned Judges considered that it had not been proved that at the inception of the purchase the object was to evade income tax, but that the respondent merely availed himself of the opportunity afforded by the benami purchase to evade tax when the same was sought to be livid on him some 5 or 6 years after the date of the original purchase.
Learned counsel for the appellant challenged this reasoning and submitted that the learned Judges had not approached the question correctly.
First as to the point that in the absence of a pleading the defendant was not entitled to rely on the taint of illegality in the transaction for persuading the Court to refuse relief to the plaintiff; I see force in the submission of learned Counsel for the appellant an this question.
The law on this point as to pleading is quite 872 clear and has been stated in decisions of the highest authority on several occasions and it is sufficient to summarise the underlying principles.
Where a contract or transaction ex facie is illegal there need be no pleading of the parties raising the issue of illegality and the Court is bound to take judicial notice of the nature of the contract or transaction and mould its relief according to the circum stances.
The case before us is, not however, of that type.
Even where the contract is not ex facie legal "if the facts given in evidence clearly disclose the illegality the Court is bound to take notice of this fact even if not pleaded by the defendant" (Per Lindley L.J. in Scott vs Brown(1).
The enunciation of the law on this point by Devlin J. in Edler vs Auerbach (2) though more elaborate and summarising the principles formulated by the House of Lords in North Western Salt Company Ltd. vs Electrolytic Alkali Company Ltd. (3) does not contradict the statement by Lindley L.J.
In the case on hand there is a clear admission by the respondent himself of the facts on which illegality is sought to be made out.
The affidavits which he swore for.
the purpose of evading the liability to tax are before the Court and in the circumstances I consider that it is clearly established that the object of the respondent was to evade the payment of income tax.
The other ground on which the learned Judges rejected this plea of illegality was that there was no proof that the object which the respondent sought to achieve by the benami was not proved to have been the evasion of income tax.
Counsel for the appellant contended that the approach of learned Judges of the High Court to this question was not realistic and that their finding was not correct.
I see considerable force in this submission also.
It was really an accident that the notice in respect of income tax as regards the income from this property and business came to be issued to the respondent in 1947 or thereabouts.
Unless one proceeded on the assumption that the respondent was not aware that income tax was payable on income from property or business, he could obviously have acted only on the footing that the defendant Gupta as the apparent owner of the property would alone be made, liable for the payment of the tax.
In these circumstances it appears to me to be clear that the object of the transaction of benami was even in its inception to ensure that there was no aggregation of the income from the property and the hotel business (1) at 729.
(2) (1950] 1 K.B. 359, at P. 371.
(3) 873 with the salary or other remuneration which he was getting from the Court of Wards.
The question next to be considered is the effect of the object of the benami being to evade the provisions of a revenue law like the Income Tax Act.
Now section 23 of the Indian Contract Act enacts that the consideration or object of an agreement is lawful "unless it is forbidden by law or is of such a nature that if permitted, it would defeat the provisions of any law".
On what I have stated earlier, the object of the agreement being to defeat the provisions: of the Indian Income Tax Act would certainly not be lawful.
In this connection I might briefly refer to the decision in Emery vs Emery(1).
It was an action by the husband seeking to recover from the wife one half of certain securities which the husband had purchased in the name of the wife.
The finding was that the bonds, a moiety of which was sought to be recovered were held in the name of the wife as trustee for the wife and husband in equal shares so far as the beneficial interest was concerned.
Wynn Parry J. considered the evidence as to why the securities were purchased in the name of the wife and why there was a complete absence in the documents of any reference to the husband having any beneficial interest in those securities.
The evidence led before the Court disclosed that under the law of the United States, where the dividends on the bonds were payable if the payment was to a non resident alien the recipient would be liable to a withholding tax.
The husband was a non resident alien and if his beneficial interest was disclosed the dividend payable in respect of this investment would have protanto suffered the deduction of tax, while the wife being an American would not have been so liable.
The question that was raised before the learned Judge was whether in those circumstances the husband could assert his title to the moiety of the securities to which he claimed beneficial interest.
The learned Judge dismissed the action holding that as the securities were put in the name of the wife in order to evade the law the husband who did not come before the Court with clean hands could not claim his title and that the property should lie where it was.
The main argument raised was that a breach of a Revenue law of a foreign country stood on a footing different from an attempt to evade a law of the United Kingdom and this was negatived.
We are not, however, concerned with that problem, because here what was intended to be circumvented by means of this device was the Indian Income Tax Act.
That (1) [19591] Ch.
410. 874 an agreement to defraud Revenue is manifestly illegal is beyond dispute but if authority were needed I might refer to Milkr vs Karlinski(1) and Alexander vs Rayson (2) (see Cheshire and Fifoot on Contract, 5th ed. 286).
No doubt, for the purpose of deciding whether property could be recovered by the assertion of a real title there is a clear distinction between cases where only an attempt to evade a statute or to commit a fraud has taken place and cases where the evasion or the fraud has succeeded and the impermissible object has beep achieved.
The leading decision upon this point is that of ' the Privy, Council in Petherpermal: Chetty, vs Muniandi Servai(3) where Lord Atkinson dealing with the effect of benami conveyances which are motivated by the design to achieve an illegal or fraudu lent purpose, quoted from Mayne 's Hindu Law (7th ed.
p. 595, para 466) the following as correctly setting out the law : "Where a transaction is once made out to be a mere benami it is evident that the benamidar absolutely disappears from the title.
His name is simply an alias for that of the person beneficially interested.
The fact that A has assumed the name of B in order to cheat X can be no reason whatever why a Court should assist or permit B to cheat A.
But if A requires the help of the Court to get the estate back into his own possession, or to get the title into his own name, it may be very material to consider whether A has actually cheated X or not.
If he has done so by means of his alias, then it has ceased to be a mere mask, and has become a reality.
It may be very proper for a Court to say that it will not allow him to resume the individuality which he has once cast off in order to defraud others.
If, however, he has not defrauded any one, there can be no reason why the Court should punish his intention by giving his estate away to B, whose roguery is even more complicated than his own.
For instance, persons have been allowed to recover property which they had assigned away.
. where they had intended to defraud creditors, who, in fact were never injured.
But where the fraudulent or illegal purpose has actually been effected by means of the colourable grant, then the maxim applies, 'In pari delicto potior est conditio possidentis '.
The (1) (3) [1908] L.R. 35 1.
A. 98.
(2) 875 Court will help neither party. 'Let the estate lie where it falls '.
" I might point out that later decisions both of the Indian High Courts and of the Privy, Council have all proceeded on the acceptance of the principles which Lord Atkinson formulated in Petherpermals case.
(1) Pausing here, it might be pointed out that exactly the same conclusion has been reached by the Courts in England where a benami transaction was entered into.
for the purpose of de frauding creditors.
It is hardly necessary to add that the position in England under which a resulting trust is deemed to arise when a purchase is made in the name of another with one 's own money and without an intention of conferring on him a beneficial title is identical with the law as to benami in India.
In Gascoigne vs Gascoigne (2 ) a husband took a lease of lands in his wife 's name and built a house upon it with his own money.
The reason why he entered into this type of transaction was that he was in debt and was desirous of protecting his property from his creditors.
He then brought an action against the wife for a declaration that she held the property as trustee for him.
The husband succeeded in the County Court.
On appeal to the Divisional Court, Lush J. allowing the appeal stated that it was proved that the plaintiff was guilty of a fraud upon the law to evade and disappoint the provision of the legislation and he could not come in equity to be relieved against his own act, though the defence also was dishonest, and in the circumstances, the Court would say, "Let the estate lie where it falls".
Learned Counsel for the respondent submitted that the English decision just now referred to as well as Emery vs Emery(3) proceeded upon the peculiarity of the English law in which there is a presumption of an 'advancement but that as there was no such presumption in India the position would be different where the Court has to deal with the effect of benami transactions brought about in order to effectuate a fraud or to evade the provisions of a statute.
I do not.
however, think that could make any material difference.
We start with the position that the Court will presume an ostensible title to be the real title unless a plaintiff who seeks to assert the contrary pleads and proves that the ostensible owner is not the real owner.
In other words, the onus is on the person who alleges a transaction to be benami to make (1) [1908] L. R. 35 I.A. 98.
(2) (3) 876 it out.
Of course, the source of the funds from which the purchase is made coupled with the manner of its enjoyment would be a very material factor for establishing the case of benami but the mere proof of the source of the purchase money would not finally establish the benami nature of the defendant 's title.
Even where the plaintiff purchases property with his own funds in the name of 'B ' the surrounding circumstances, the mode of enjoyment might still indicate that it was intended to be a gift to 'B ' and it would then not be a case of benami notwithstanding that the purchase money did not proceed from the defendant.
There fore as observed in Mayne 's Hindu Law (Eleventh Edn.1) page 876.
"While the source from which the money came is undoubtedly a valuable test, it cannot be considered to be the sole or conclusive criterion.
For, the question whether a particular transaction is benami or not, is one of intention and there may be other circumstances to negative the prima facie inference from the fact that the purchase money was supplied by or belonged to another.
The position of the parties, their relation to one another, the motives which could govern their actions and their subsequent conduct may well rebut the presumption." Even where the benami is established effect will not be given to the real title if the result of doing so would be to violate the provisions of a statute or to work a fraud upon innocent persons Gur Narayan vs Sheo Lal Singh(1).
On this reasoning it would prima facie appear to follow that the respondent having adopted this device of purchasing the property benami in the name of his father in law for the purpose of evading the provisions of the Indian Income Tax Act would not be entitled to recover the property on the basis of his title.
Two points were made by the learned counsel for the respondent for avoiding this result.
In the first place, he submitted that the respondent had instituted the suit and was seeking relief on the basis of his proprietary interest in the property and that as he did not, in fact, plead nor was it necessary for him to plead the illegality of the transaction in order to sustain his title to the property, he was not precluded by reason of the illegality established from succeeding in the suit.
For this purpose learned Counsel relied upon the principle laid down by the Court of (1) [1918] L.R. 46 I.A.I. 877 Appeal in Bowmakers vs Barnet Instruments(1) and of the Privy Council in Sajan Singh vs Sardara Ali(2).
It is not necessary to narrate the facts of Bowmakers ' case(3) in detail and it would be sufficient to extract the head note for the purpose of understanding the ratio of the decision: "No claim founded on an illegal contract will be enforced by the court but as a general rule a man 's right to possession of his own chattels will be enforced against one who without any claim of right, is detaining them, or has converted them to his own use, even though it may appear from the pleadings, or in the course of the trial, that the chattels in question came into the defendant 's possession by reason of an illegal contract between himself and the plaintiff, provided that the plaintiff does not seek, and is not forced, either to found his claim on the illegal contract, or to plead its illegality in order to support his claim.
" It is perhaps not irrelevant to notice that the illegality which was there pleaded as a defence to the claim for damages for conversion of certain machine tools which was the property of the plaintiffs was the contravention of an executive order under the Defence Regulations regarding the maximum price that might be charged.
There was besides a finding that neither the plaintiffs nor the defendants had any knowledge of the order, so that if they erred ' the error was involuntary.
These form the background in which the decision has to be appreciated.
The defendant, however, contended that the ignorance was immaterial and that as the order of the Minister rendered any violation of its, provisions criminal the parties must be deemed to have been engaged in a criminal conspiracy and that the defendants were therefore entitled to retain the machine tools which were with them on hire without returning them to the bailor.
Du Parcq L.J. who delivered the judgment of the Court, after quoting the maxim "In pari delicto" on which the defence was based, observed: "The Latin maxim must not be understood as meaning that where a transaction is vitiated by illegality the person left in possession of goods after its completion is always and of necessity entitled to keep them.
Its true meaning is that, where the circumstances are such that the Court will refuse to assist either party, the (1) (2) 878 consequence must, in fact, follow that the party in possession will not be disturbed.
As Lord Mansfield said, the defendant then obtains an advantage 'contrary to the real justice ', and, so to say, 'by accident '," and finally added : "We are satisfied that no rule of law, and no considerations of public policy, compel the court to dismiss the plaintiff 's claim in the case before us.
and to do so would be, in our opinion, a manifest injustice.
" In view of these observations, I am unable to hold that the decision is authority for the position that a suit for ion on the basis of title could never be dismissed even if the object for which the transfer was effected was illegal and that object has been achieved.
The maxim ex turpi causa non oritur actio is still a rule of law and property transferred under a contract which is illegal or to achieve an illegal object where the object has, been achieved cannot be recovered for the reasons that the court will not lend its aid to such a plaintiff.
In other words, I do not read the decision in Bowmaker 's case(1) as contradicting what was stated by Lord Atkinson in Petherpermal 's case(2) extracted earlier.
There is one feature regarding the facts in Bowmaker 's(1) case to which attention might be drawn.
The plaintiff there had delivered the machine tools to the defendants under three hire purchase agreements which were illegal.
The defendants had sold the tools delivered under two of the agreements and refused to redeliver those under the third which were still in their So far as the claim related to those covered by the two agreements wherein the defendants had parted with the goods Cheshire & Fifoot on the Law of Contract* explain the decision thus : "The significant feature of the wrongful sales was that they constituted an act of conversion that ipso facto terminated the bailment.
The plaintiffs might therefore argue that, unlike the case of pledge in Taylor vs Chester which was still in existence at the time of the action, there was here no longer any existing contract upon which the defendants could found a possessory right.
The right to immediate possession had automatically revested in the plaintiffs.
Could it not thus be said, as in the case of an illegal but expired lease, that owing to the termination of the bailment the plaintiffs had an (1) (2) [1908] L.R. 35 1.
A. 98.
879 independent cause of action in virtue of their admitted ownership?. .
It was completely irrelevant that the chattels had originally come into the possession of the defendants by virtue of the illegal contract.
That contract was now defunct.
It formed no part of the cause of action.
Thus, with the disappearance of the only transaction that could restrict their rights, the plaintiffs could base their claim to possession solely upon their ownership of the chattels.
" As regards the other agreement where the goods were still with the defendant the same authors say: "In the case of this agreement the cause of action was the refusal of the defendants to comply with the demand for the return of the chattels.
Since effective possession had passed to the defendants by virtue of the contract, the sole justification for this demand was their failure to pay the agreed installments.
The plaintiffs, therefore, were inevitably driven back to the contract in order to prove the amounts of the installments, the dates at which they were due and the agreed effect of their non payment.
This part of the case would therefore seem to be on as fours with the action by a lessor to enforce the forfeiture of the lease for condition broken.
This difficult decision turned upon the effect of a bail ment.
It would seem, however, that if the ownership of a chattel, as distinguished from a mere possessory right, were to be transferred under an illegal contract, it would remain perpetually irrecoverable.
In such a case the transferor would have no title irrespective of the illegal transaction.
His only mode of obtaining relief would be to terminate the contract under which he purported to transfer title to the defendant, and he could not take proceedings for this purpose without showing that he was particeps criminis.
" I consider these remarks correctly set out the difficulties created by the decision and its true ratio.
Sajan Singh 's case(1) was concerned with the right of the plaintiff who was a lorry driver who could not, under the then existing regulations of Malaya, obtain a lorry.
The defendant, (1) 880 on the other hand, was one who was qualified to purchase a lorry and accordingly an arrangement was entered into between the plaintiff and the defendant under which a lorry was to be acquired by the plaintiff to be registered in the name of the defendant with a permit in his own name but the intention being that it should belong to the plaintiff and to be used by him on his own account.
The result was that the lorry belonged to the plaintiff but was operated in the name of the defendant.
After the parties fell out and correspondence was passing between them, the defendant, one day, entered the plaintiff 's house when the latter was absent and took away the lorry which he refused to return claiming that it belonged to him.
The plaintiff then brought the suit out of which the appeal before the Privy Council arose, for a declaration that he was the owner and for return of the lorry and for damages etc.
The claim, thus, before the Court was in retinue and Lord Denning who spoke for the Board emphasised this aspect observing : "In detinue their Lordships think he succeeded.
Although the transaction between the plaintiff and the defendant was illegal, nevertheless it was fully executed and carried out: and on that account it was effective to pass the property in the lorry to the plaintiff. .
Me plaintiff had actual possession of the lorry at the moment when the defendant seized it.
Despite the illegality of the contract, the property had passed to him by the sale and delivery of the lorry.
When he commenced this action, he had the right to immediate possession.
Their Lordships think that in these, circumstances he had a claim in detinue.
" It would thus be seen that besides the claim based on his title to the lorry, the plaintiff had also established that while the chattel was in his possession, the defendant had unlawfully taken it away, without his consent.
Insofar as his claim was based on this deprivation of possession, it was really an independent cause of action wholly separated from the original purchase of the lorry which was to circumvent the law, and as to this claim in detinue there was no question of its being tainted with any illegality.
Besides this, Lord Denning himself pointed out that there were many cases which showed that where a transfer of property was effected in order to achieve an illegal purpose and that purpose was achieved, the plaintiff was disabled from recovering the property for the reason that the Court will not assist him in that endeavour.
881 Pausing here, I need only add that there is no question here of the legislation whose avoidance or contravention stamps the transaction as illegal being one enacted for the protection of persons like the plaintiff.
Such was the case of Amar Singh vs Kulubya(1) where the principle explained in Kearley vs Thomson (2) by Fry L.J. "In these cases of oppressor and oppressed, or of a class protected by statute, the one may recover from the other, notwithstanding that both have been parties to the illegal contract.
" as an exception to the rule in pari delicto potior est canditio possidentis was applied.
Two questions thus arise which have to be separately con sidered: (1) If nothing more had happened in this case than that the respondent had purchased the property benami in the name of the defendant Gupta can the respondent lay claim to possession of the suit property based upon the fact that the purchase money came from him notwithstanding the illegal and unlawful purpose which he sought to accomplish by that transaction and which he succeeded in achieving; (2) Whether the respondent can rest his claim to recover possession of the property on a title wholly independent of the benami purchase which is tainted with illegality.
The answer to the first question would depend upon whether he can assert title to the property, decors the illegal object which he achieved by purchasing the property benami in the name of the defendant Gupta.
Prima facie the answer would appear to be in the negative on the principle laid down by Lord Atkin son Petherpermal vs Muniandi(3) already cited.
Learned Counsel for the respondent, however, submitted that under the Indian law though the onus of establishing that a transaction is benami is on the person who so asserts it and that unless this is strictly made out the ostensible title would prevail, but when once the plaintiff establishes that the consideration proceeded from him, the onus shifts to the defendant to establish that the transaction was not benami and that a beneficial interest was intended to pass to him.
I do not consider it necessary to finally decide this point on which turns the question as to whether the respondent is entitled to succeed on the basis of his title notwith standing the illegality attending the transaction, though it must be pointed out that if the object which the parties have in view (1) (3) [1908] I R. 35 1. A. 98.
(2) 882 cannot be carried out unless a real title passed to the defendant the presumption arising out of the consideration proceeding from the plaintiff would be over borne.
I say it is not necessary to pronounce upon this difficult question because in the present ' case the respondent 's claim to possession is based not merely on the basis of his title emerging from the source of purchase money for the acquisition of property but also on an alternative ground and this is the second of the grounds on which the respondent rested his claim to recover possession, and that was as follows.
While the respondent himself was in phvsical Possession of the property he had to leave Calcutta on medical advice in or about December 8, 1948 and at that date he put the defendant Gupta into possession on the understanding that on the respondent 's return to Calcutta the defendant would hand over to the plaintiff possession of the premises and the management of the business.
The respondent further stated that he returned to Calcutta in or about December, 1949 and occupied one of the rooms of the suit property and made demands on the defendant to hand over possession and management which he failed to do.
This case of the respondent has been concurrently found to be true by both the Courts.
It would be seen that the basis of the respondent 's claim to possession is independent of and wholly dissociated from the illegal transaction of the original benami purchase and falls into line with Sajan Singh 's case(1).
Not being tainted with illegality, the respondent 's claim on this footing is not open to objection and as it has been upheld by both the Courts I agree that the appeal should stand dismissed and also to the order for costs proposed by my learned brother.
Appeal dismissed.
| The respondent firm, which ran a factory manufacturing brass utensils, filed a Writ Petition for the issue of a mandamus, restraining the appellant from recovering contributions alleged to be due under section 1(3), read with Schedule 1, of the Employees Provident Fund Act, 1952, contending, inter alia, that the manufacture of brass utensils did not fall within the relevant entry in Schedule 1, i.e. it was not an industry engaged in the manufacture of 'electrical, mechanical or general engineering products '.
The learned Single Judge, who heard the petition, rejected the respondent 's contention, holding that brass utensils were, in substance, 'drums and containers ' i.e. they fell within item (24) and cl.
(a) of the Explanation to Schedule 1, and that therefore their manufacture was covered by Schedule 1.
On appeal, however, the Division Bench reversed this finding and issued a writ as prayed for.
it was contended on behalf of the respondent that the products to which the entry referred were products which were useful in, or meant for, electrical engineering, mechanical engineering, or general engineering.
On the other hand, it was the appellant 's contention, that the entry would take in every industry which was engaged in the manufacture of products that were manufactured by an electrical, mechanical or general engineering process.
HELD : In construing the relevant entry in Schedule 1, it was necessary to bear in mind that this entry occurred in an Act which was intended to serve a beneficent purpose.
If the words used in the entry were capable of a narrow or broad construction, each construction being reasonably possible, and if it appeared that the broad construction would help the furtherance of the object, then it would be necessary to prefer that construction.
[78 C F] The nature of the items included in the Explanation to Schedule 1 clearly showed that some of the items could not reasonably be included within the restricted interpretation canvassed by the respondent; on the other hand, the mention of several of items would be redundant if the wide interpretation advocated by the appellant was to be accepted.
[81 B H; 82 A F] The content of the entry 'electrical, mechanical and general engineering products ' was that all products which were generally known as electrical engineering products or mechanical engineering products or general engineering products were intended to be covered by the entry, and the object of Schedule 1 was to include within the scope of the Act every industry which was engaged in the manufacture of electrical engineering products mechanical engineering products or general engineering products.
It was the character of the products that helped to determine the content of the entry.
[82 G H; 83A] 73 Thus considered the manufacture of brass utensils must be regarded as an activity the object of which was the manufacture of general engineering products.
[83 F] Case law reviewed.
|
No. 10 of 1950.
Appeal from a Judgment of the High Court of Judicature at Bombay (Chagla C.J. and Tendolkar J.) dated 29th March, 1950, in Suit No. 24 of 1950.
December 20.
The Court delivered Judgment as follows: FAZL ALI J.
I have read the judgment prepared by my brother, Mahajan J., and generally agree with his conclu sions and reasonings, but, having regard to 54 the importance of the points raised, I wish to add a short judgment of my own.
There are really three questions to be decided in this appeal, and they are as follows : (1) Whether the Bombay City Civil Court Act, 1948 (Act XL of 1948), is ultra vires the Legislature of the State of Bombay; (2) Whether in any event section 4 of the above Act is ultra vires the State Legislature; and (3) Whether the Bombay High Court has jurisdicion to try the suit.
The first and the third questions have been answered by the High Court in favour of the appellant and the second question has been answered in favour of the respondents.
In this Court, the appellant attacked the judgment of the High Court in so far as it concerns the second question, whereas the first respondent attacked it in so far as it concerns the first and the third questions.
The Bombay City Civil Court Act purports to create in additional civil court for Greater Bombay having jurisdic tion to try, receive and dispose of all suits and other proceedings of a civil nature not exceeding a certain value, subject to certain exceptions which need not be referred to here.
It was contended on behalf of the respondents that the Act is ultra vires the Legislature of the State of Bombay, because it confers jurisdiction on the new court not only in respect of maters which the Provincial Legislature is compe tent to legislate upon under List II of the 7th Schedule to the Government of India Act, 1935, but also in regard to matters in respect of which only the Central or Federal Legislature can legislate under List I (such as, for in stance, promissory notes, which is one of the subjects mentioned in entry 28 of List I).
To understand this argu ment, it is necessary to refer to entry 53 of List , entries 1 and 2 of List II and also entry 15 of List II.
These entries run as follows : Entry 53, List I : 55 "Jurisdiction and powers of all courts except the Feder al Court, with respect to any of the matters in this List . ." Entries 1 and 2, List II : "1 . the administration of justice;constitution and organisation of all courts except the Federal Court . " "2. Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this List . " Entry 15, List III : "Jurisdiction and powers of all courts except the Feder al Court, with respect to any of the matters in this List.
" The respondents ' contention may appear at the first sight to be a plausible one, but, in my opinion, it is not well founded in law.
For the purpose of correctly deciding the question raised, we must first try to understand the meaning of the following items in entry 1 of List II, "administration of justice, constitution and organization of all courts except the Federal Court.
" A reference to the three Legislative Lists shows that "administration of jus tice" is entirely a provincial subject on which only the Provincial Legislature can legislate.
The same remark ap plies to "constitution and organization of all courts except the Federal Court.
" The expression "administration of jus tice" has a wide meaning, and includes administration of civil as well as criminal justice, and in my opinion entry 1 in List II, which I have quoted, is a complete and self contained entry.
In this entry, no reference is made to the jurisdiction and powers of courts, because the expressions "administration of justice" and "constitution and organi zation of courts", which have been used therein without any qualification or limitation, are wide enough to include the 'power and jurisdiction of courts, for how can justice be administered if courts have no power and jurisdiction to administer it, and how can courts function without any power or jurisdiction.
Once this fact is clearly 56 grasped, it follows that, by virtue of the words used in entry 1 of List II, the Provincial Legislature can invest the courts constituted by it with power and jurisdiction to try every cause or matter that can be dealt with by a court of civil or criminal jurisdiction,and that the expression "administration of justice" must necessarily include the power to try suits and proceedings of a civil as well as criminal nature, irrespective of who the parties to the suit or proceeding or what its subject matter may be.
This power must necessarily include the power of defining, enlarging, altering, amending and diminishing the jurisdiction of the courts and defining their jurisdiction territorially and pecuniarily.
The question then arises as to the exact meaning of entry 2 of List II and entry 53 of List I, which are said to militate against the above construction.
These entries, in my opinion, confer special powers on Provincial and Central Legislatures, as opposed to the general power conferred on the Provincial Legislature by entry 1 of List II, the spe cial powers being the logical consequence or concomitant of the power of the two Legislatures to legislate with regard to the matters included in their respective Legislative Lists.
The effect of these entries is that while legislating with regard to the matters in their respective Legislative Lists, the two Legislatures are competent also to make provisions in the several Acts enacted by them, concerning the jurisdiction and powers of courts in regard to the subject matter of the Acts, because otherwise the legisla tion may not be quite complete or effective.
The words used in entry 2 of List II and entry 53 of List I are wide enough to empower the two Legislatures to legislate negatively as well as affirmatively with regard to the jurisdiction of the courts in respect of the matters within their respective legislative ambits.
In other words, they can exclude or bar the jurisdiction of the courts in regard to those matters, and they can also confer special jurisdiction on certain courts.
They can also, apart from the general power which the courts usually exercise, confer power on the courts to 57 pass certain special orders, instances of which I shall give later.
In this connection, reference may be made to section 9 of the Code of Civil Procedure, which provides that "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.
" This section obviously postulates among other things the barring of the jurisdiction of the civil courts by Legislatures with respect to particular classes of suits of a civil nature, and the statute book abounds in instances in which the jurisdiction of the civil courts is barred under Acts passed by the Central and Provincial Legislatures.
There are also many Acts providing that any suit or proceed ing concerning the subjects matters of those Acts shall be triable by the court or courts specified therein.
Such provisions are to be found in a number of Acts enacted both prior to and after the enactment of the Government of India Act, 1935, and there can be no doubt that the British Par liament while enacting that Act was fully aware of the existing legislative practice obtaining in this country as well as of the fact that the provisions in question were sometimes necessary and therefore it empowered the Central and Provincial Legislatures to make them under entry 53 of List I and entry 2 of List II, respectively.
This, in my opinion, is the true meaning of these entries, and it also explains why a separate entry was necessary enabling the two Legislatures to legislate with regard to the power and jurisdiction of the courts in respect of the subject matters mentioned in the three Legislative Lists.
But for an express provision like that made in the entries referred to above, the two Legislatures might not have been able to confer special jurisdiction on the courts in regard to the matters set out in the Legislative Lists, nor could they have been able to bar the jurisdiction of the ordinary courts in regard to them, however necessary or desirable such a course might have appeared to them.
8 58 It should be noted that the words used in these entries are: "jurisdiction and power".
"Power" is a comprehensive word, which includes all the procedural and substantive powers which may be exercised by a court, but the full significance of the use of the word in the context can be grasped only by reading a large number of local and special Acts in which power has been given to Courts to pass certain special and unusual orders.
For example, section 13 of the Indian , provides that " where any person is convicted of an offence punishable under any rule made under clauses . the Court by which he is convicted may direct that the aircraft or arti cle or substance, as the case may be, in respect of which the offence has been committed, shall be forfeited to His Majesty.
" Reference may also be made to section 24 of the Indian Arms Act, 1878, which provides that "when any person is convicted of an offence punishable under this Act, committed by him in respect of any arms, ammunition or military stores, it shall be in the discretion of the convicting Court or Magistrate further to direct that the whole or any portion of such arms, ammunition or mili tary stores, and any vessel . . . shall be confiscated." (See also section 10 of the [Act I of 1944], and section 13 of the Food Adul teration Act, 1919 [Bengal Act VI of 1919], which are in similar terms, and the various Acts relating to money lend ers and money lending which confer special power on the courts of reopening several kinds of transactions for the relief of debtors.) It seems to me that the word "power" was added to the word "jurisdiction", in entry 53 of List I, entry 2 of List II, and entry 15 of List III, in order to enable the two Legislatures to grant special powers like those I have mentioned to the courts which are to deal with the subject matter of any special legislation.
A reference to the Acts passed after the enactment of the Government of India Act, 1935, will show that 59 special provisions with regard to the jurisdiction of courts have been made even after the passing of that Act, in a large number of Central and local Acts.
Confining ourselves to the Acts passed by the Bombay Legislature, since we are concerned here with one of such Acts, we find that in The Bombay Probation of Offenders Act, 1938 (Bombay Act No. XIX of 1938), section a empowers the following courts "to exer cise powers under the Act, (a) the High Court, (b) a Court of Session, (c) a District Magistrate, (d) a Sub Divisional Magistrate, (e) a salaried Magistrate . " Similarly, in the Bombay Agricultural Produce Markets Act, 1939, sec tion 23 provides that "no offence under this Act . shall be tried by a Court other than that of a Presidency Magistrate, or a Magistrate of the First Class or a Magis trate of the Second Class specially empowered in this be half.
" Section 11 of the Bombay Cotton Control Act, 1942, provides that "no criminal court inferior to that of a Presidency Magistrate or a Magistrate of the Second Class shall try any offence under this Act".
Section 19 of the Bombay Sales of Motor Spirit Taxation Act, 1946, and section 5 of the Bombay Harijan Temple Entry Act, 1947, are provi sions which exclude the jurisdiction of courts under certain circumstances.
Similar instances may be multiplied from the Acts of the Central Legislature and other Provincial Legis latures, but, in my opinion, the instances I have quoted are sufficient to show (1) that the practice which prevailed before the Government of India Act has continued even after its enactment, and (2) that the words "jurisdiction and powers" have been consistently construed to bear the meaning which I have attributed to them.
The interpretation which is sought to be put on the entries by the respondent is in my opinion open to the following objections : (1).It involves the curtailment of the meaning of the expression "administration of justice" in such a way as to rob it of its primary content the jurisdiction and powers of the court, without which justice cannot be administered.
60 (2) It makes it necessary to read entry 2 of List II as part of entry 1 of the same List, though it has been sepa rately numbered as an independent entry.
This is opposed to the scheme followed in the three Legislative Lists, which seems to be that each particular entry should relate to a separate subject or group of cognate subjects, each subject or group of subjects being independent of the others (subject only to incidental overlapping).
The construction suggested by the respondents makes it necessary to assume that though according to their line of reasoning the words "jurisdiction and powers of courts, etc.
" occurring in entry 2 of List II should have been put in entry 1 of the same List, being intimately connected with the subject of "admin istration of justice and the constitution and organization of courts", it was without any apparent reason numbered separately and made an independent entry.
(3) The suggested construction would exclude from the jurisdiction of the Provincial Courts a large number of matters which normally come before courts exercising civil or criminal jurisdiction and, if it is accepted, the courts will not be able to function in the fullest sense unless both the Provincial and Central Legislatures have by piece meal legislation or otherwise exhausted their power of legislating on all the subjects comprised in Lists II and I respectively.
Even after they have exhausted such power, the courts will not be able to deal with important matters, such as contracts, transfer of property, arbitration, wills and succession, criminal law, etc., which are subjects mentioned in List III, until one of the two Legislatures has legislated in regard to those subjects, which raises two important questions: (1) Which of the two Legislatures has to do it first; and (2) How is the conflict to be avoided ? That the construction put by the respondents will lead to anomalous results which could not have been within the contemplation of the British Parliament while enacting the Government of India Act, 1935, may be illustrated by one or two examples.
Reference 61 might here be made to entry 26 of List I, which deals with "carriage of passengers and goods by sea or by b air.
" It should be supposed that if any of the goods carried by air are lost and a suit is instituted in regard to them, the suit will be triable by the court having jurisdiction over the matter under the Civil Procedure Code, subject to any special legislation on the subject by the Central Legisla ture, in spite of the fact that the carriage of goods and passengers by sea or by air is a subject mentioned in List I.
But, on the view propounded before us by the respondent, the Provincial civil courts will not be competent to try such a suit, unless they are empowered to do so by the Central Legislature.
In order to show to what absurd result this doctrine may be pushed, and in order to avoid the criticism of taking for granted what is in controversy, we may take a very extreme example, because the soundness of the respondents ' contention can be tested only by trying to find out what would happen if we were to stretch it to the utmost limit to which it can be stretched.
Entry 13 in List I is: "the Banaras Hindu University and the Aligarh Muslim University." Under entry 53 of List I, the Central Legisla ture has power to legislate in regard to the jurisdiction and powers of courts in respect of the subject matter of entry 13.
It may therefore be supposed, having regard to the wide language used in entry 13, that it is open to the Central Legislature to enact that suits in which these Universities are concerned as plaintiff or as defendant, will be triable only by the particular court mentioned in the enactment concerned and that no other court shall have jurisdiction in regard to such suits, It is difficult to think that until such a legislation is made, a court which would otherwise be the proper court, has no jurisdiction to try any suit in which one of these Universities is a party, no matter what the subject matter of the suit may be.
I am certain that the framers of the Government of India Act did not contemplate such a result.
We all know that at the date when the Government of India Act, 1935, was passed, there were in existence 62 in the different Provinces a large number of courts of law and the administration of justice throughout the Provinces was in the hands of these provincial courts.
The civil courts in the Province used to try all suits and proceedings of a civil nature which are triable under section 9 of the Civil Procedure Code, and the criminal courts used to try all criminal cases which are triable under the Code of Criminal Procedure.
The jurisdiction and power of the courts were not confined to cases in regard to the subjects stated in List II, nor were they debarred from dealing with cases relating to matters which have been assigned to List I.
The jurisdiction of the courts depended in civil cases on a "cause of action" giving rise to a civil liability, and in criminal cases on the commission of an offence, and on the provisions made in the two Codes of Procedure as to the venue of the trial and other relevant matters.
It seems to me that the Government of India Act, 1935, did not contem plate any drastic change in the existing system of adminis tration of justice, but what it contemplated was that that system should continue subject to future legislation by the proper Legislature; Central or Provincial, barring the jurisdiction of courts or conferring jurisdiction or power on special courts with regard to the matters included in the appropriate Legislative Lists, should there be any occasion for such special legislation.
Under the Govern ment of India Act, 1935, every Province became more or less an autonomous unit with a complete machinery for administer ing justice to the fullest extent.
In my opinion, there is nothing in the Act of 1935 to show that there was any inten tion on the part of its framers to affect the machinery so drastically as to confine it to the administration of a mere partial or truncated kind of justice relating only to mat ters specified in List II.
Mr. Setalvad, the ]earned Attorney Genera], who ap peared on behalf of the appellant, in supporting the im pugned Act, argued before us that for the purpose of decid ing this appeal, we might also refer to entry 4 List III.
His contention was that the impugned 63 Act having had the assent of the Governor General, it would be permissible to see what powers the Provincial Legislature could exercise under Lists II and III taken together.
If the course which he suggests is adopted, then the subjects on which the Provincial Legislature can legislate would be: (1) administration of justice; (2)constitution and organiza tion of courts; and (3) civil procedure, including all matters included in the Code of Civil Procedure at the date of the passing of the Government of India Act, 1935.
One of the matters included in the Civil Procedure Code is the jurisdiction of courts, Section 9 of the Code provides, as I have already stated, that the courts shall have jurisdic tion to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.
There are are also provisions in the Code dealing with the territorial and pecuniary jurisdiction of the courts.
The three entries will thus cover exactly the field which is covered by item 14 of section 92 of the Canadian Constitution which comprises the following matters: "administration of justice in the Provinces, including constitution, maintenance and organization of provincial courts both of civil and criminal jurisdiction including procedure in civil matters in those courts.
" It has been held in Canada that the words referred to above include the power and jurisdiction of courts, and, under that item, the provincial Legislature can confer the widest power on the courts.
It seems to me that the approach suggested by the learned Attorney General is useful for testing whether entry 2 of List II was intended to be treated as the sole and only basis of the power of the Provincial Legislature to confer jurisdiction on the provincial courts and whether it was really the intention of the British Parliament to empower the Provincial Legislature to confer jurisdiction of only such a limited character as can be conferred on the provin cial courts under entry 2 of List II, if that entry is treated as a self sufficient entry.
In my opinion, the correct view is to hold that it is not necessary to call into aid either entry 4 of List III or any of the 64 provisions of the Canadian Constitution in this case, and that the words "administration of justice; constitution and organization of courts" are by themselves sufficient to empower the Provincial Legislature to invest a new court with all the power which has been conferred upon it by the impugned Act.
It is of course open to the Central Legisla ture to bar the jurisdiction of the new court by a special enactment with regard to any of the matters in List I, but so long as such jurisdiction is not barred, the court will have jurisdiction try all suits and proceedings of a civil nature as enacted in the Act in question.
I think that if the Provincial Legislature had merely enhanced the pecuniary jurisdiction of any of the existing civil courts there could have been no objection to that course.
Why then should there, be any objection when, instead of investing one of the existing courts with power to try suits and proceedings of a civil nature not exceeding a certain amount, the Legis lature has created a new court and invested it with the same power.
Perhaps, it will be simpler to deal at this stage with the third question, namely, whether the Bombay City Civil Court has jurisdiction to try a suit based on a promissory note.
So far as this point is concerned, the respondent bases his contention on entries 28 and 33 of List I. Entry 28 relates to "cheques, bills of exchange, promissory notes and other like instruments".
Entry 53, as already stated, relates to "jurisdiction and powers of courts with respect to any of the matters in List I." It is contended on behalf of the respondent that the effect of these two entries, when they are read together, is that no court can try a suit relating to a promissory note, unless it is invested with the jurisdiction to try such a suit by the Central Legisla ture by virtue of the power given by entry 53 of List I. The question so raised is covered by the answer to the first question, and I shall only add that the answer already given to that question finds some support in the case of Prafulla Kumar Mukherjee and Others vs Bank of Commerce Limited Khulnal (1), in which the arguments of the (1) [1947] F.C.R.28.
65 respondents before the Privy Council proceeded on the same lines as the arguments of the respondents before us.
The question raised in that case was as to the validity of the Bengal Money lenders ' Act, 1940, which limited the amount recoverable by a money lender on his loans and interests on them, and prohibited the payments of sums larger than those permitted by the Act.
The validity of the Act was questioned by the respondent Bank in certain suits brought by them to recover loans and interests alleged to be due on promisso ry notes executed by the appellants borrowers as well as in suits brought by the debtors claiming relief under the Act.
The argument put forward on behalf of the Bank was that the Bengal Legislature by the impugned Act had attempted to legislate on subjects expressly forbidden to it and expressly and exclusively reserved for the Federal Legislature, that is to say, in relation to promissory notes and banking, which are reserved for the Federal Legislature exclusively, under entries 28 and 38 respectively of List I.
On the other hand, the arguments put forward on behalf of the appellants was that the impugned Act was in pith and substance legislation dealing with money lending and that in so far as it dealt with promissory notes or banking that was only incidental or ancillary to the effective use of the admitted legislative powers of the Provincial Legislature to deal with money lending. 'This argument of the appellants was substantially accepted by the Privy Council.
The second point raised on behalf of the respondent relates to the validity of section 4 of the Act, which runs as follows : "Subject to the exceptions specified in section 3, the Provincial Government, may by notification in the Official Gazette, invest the City Civil Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature, arising within the Greater Bombay and of such value not exceeding Rs. 25,000 as may be specified in the notification.
" 9 66 It is contended that this section is invalid, because the Provincial Legislature has thereby delegated its legis lative powers to the Provincial Government which it cannot do.
This contention does not appear to me to be sound.
The section itself shows that the provincial Legislature having exercised its judgment and determined that the new Court should be invested with jurisdiction to try suits and pro ceedings of a civil nature of a value not exceeding Rs. 25,000, left it to the Provincial Government to determine when the Court should be invested with this larger jurisdic tion, for which the limit had been fixed.
It is clear that if and when the new court has to be invested with the larger jurisdiction, that jurisdiction would be due to no other authority than the Provincial Legislature itself and the court would exercise that jurisdiction by virtue of the Act itself.
As several of my learned colleagues have pointed out, the case of Queen vs Burah (1), the authority of which was not questioned before us, fully covers the contention raised, and the impugned provision is an instance of what the Privy Council has designated as conditional legislation, and does not really delegate any legislative power but merely prescribes as to how effect is to be given to what the Legislature has already decided.
As the Privy Council has pointed out, legislation conditional on the use of particular powers or on the exercise of a limited discretion entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing, and in many instances it may be highly convenient and desirable.
Examples of such legislation abound in England, America and other countries.
As some of the American Judges have remarked, "there are many things upon which wise and useful legislation must depend which cannot be known to the law making power and must therefore be the subject of enquiry and determination outside the halls of legislation (Field vs Clark (2).
Mr. Setalvad, the learned Attorney General who appeared on behalf of the appellant, contended that in this country even delegated legislation is (1) 3 A.C. 889.
(2) ; , 67 permissible, but I do not consider it necessary to go into that question, because the principle enunciated in Queen vs BUrah(1) is sufficient to dispose of the contention raised here.
I think that the present case stands well outside what was laid down by the Federal Court in Jitendranath Gupta vs The Province of Bihar,(2) as two of my colleagues who were parties to the majority decision in that case have pointed out.
In the result, this appeal is allowed.
PATANJALI SASTRI J.
This appeal raises the important ques tion of the constitutional validity of the Bombay City Civil Court Act, 1948 (hereinafter referred to as the Act) and though I concur in the conclusion reached by the majority of my learned brothers I wish to state precisely the reasons which lead me to that conclusion.
The first respondent brought the suit in the High Court at Bombay on its orginal side for recovery of Rs. 11,704 from the second respondent on promissory notes.
Notwithstanding that the jurisdiction of the High Court to try suits cog nisable by the City Civil Court was barred under section 12 of the Act and the pecuniary limit of the jurisdiction of the latter court had been enhanced from Rs. 10,000 to Rs. 25,000 by a notification issued by the Provincial Government under section 4 of the Act, it was stated in the plaint that the High Court had jurisdiction to try the suit because the Act as well as the said notification was ultra vires and void.
In view of the constitutional issues thus raised, the State of Bombay, the appellant herein was on its own motion, made a party defendant.
The High Court (Chagla C.J. and Tendolkar J.) held (1) the Act was intra vires, but (2) that section 4 which autho rised the Provincial Government to enhance the jurisdiction of the City Court up to the limit of Rs. 25,000 amounted to a delegation of legislative power, and as such, was void and inoperative, with the result that the suit, which ex ceeded Rs. 10,000 in (1)5 I.A. 178.
(2) 68 value and was not cognisable by the City Court apart from the impeached notification, was held to have been property laid in the High Court.
Both these findings have been challenged before us as erroneous, the first by the first respondent and the second by the appellant.
On the first point, learned counsel for the first re spondent urged that section 100 of the Government of india Act, 1935, read with entries 53 of List I, 2 of List II and 15 of List III, the relevant parts of which are in identical terms, namely, "jurisdiction and powers of all courts except the Federal Court with respect to any of the matters in this List", conferred power on Legislatures in British India to make laws with respect to jurisdiction of courts only in relation to matters falling within their respec tive legislative fields, and that, therefore, the expres sions "administration of justice" and "constitution and organisation of courts" in entry 1 of List II, although they might be wide enough, if that entry stood alone, to include the topic of "jurisdiction and powers of courts", should not be construed in that comprehensive sense as such construc tion would give no effect to the limiting words in entry 2 which would then become meaningless indeed if those expres sions in entry 1 included the power to legislate with re spect to jurisdiction also, there would be no need for entry 2, while, on the other hand, without including such power, they would still have ample content, as various other mat ters relating to administration of justice and constitu tion of courts would have to be provided for, The scheme disclosed by the three separate entries in identical terms in the three lists was said to be this: The, Provincial Legislatures were to have the power of constituting courts and providing for administration of justice, but the power to invest the courts with jurisdiction was to rest with the Federal Legislature in respect of the matters mentioned in List I and with the Provincial Legislature in respect of the matters mentioned in List Ii, while both the Federal and the Provincial Legislatures were to have such power with respect to 69 the matters mentioned in List III subject to the provisions of section 107.
It was, therefore, submitted that the Act, in so far as it purported to provide by section 3 that the City Civil Court established thereunder "shall have juris diction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding Rs. 10,000 in value and arising within Greater Bombay" (with certain exceptions not material here) was ultra vires the Provincial Legislature, constituting as it did a direct invasion of the Federal field marked out by entry 53 of List I.
As all the three entries dealt with the same topic of jurisdiction and powers of courts, there was no room, it was said, for the application of the doctrine of incidental enroachment.
The argument is not without force.
The Bombay High Court in Mulchand vs Raman (1), which was followed by the learned Judges in the present case, and the Attorney General who adopted the same line before us, invoked the doctrine of pith and substance in answer to the argument on behalf of the respondent.
But that doctrine, while it often furnishes the key to the solution of problems arising out of the distribution of overlapping legislative powers in a Federal system, is not of much assistance in meeting the difficulty in finding any usefulness in entry 2 if under entry 1 the Provincial Legislature were intended to have the power to legislate generally with respect to the jurisdiction and powers of courts.
The greater power must include the less.
A similar difficulty in construing entry 4 of List III and entry 2 of List II arose in Stewart vs Brojendra Kishore (2) and led a Division Bench of the Calcutta High Court to construe the expression "civil procedure" occurring in the former entry in a "limited sense" as excluding jurisdiction and powers of courts.
After referring to the decision of the Judicial Committee in In re Marriage Reference(3) where "marriage ,and divorce" in the Dominion List was construed as excluding matters relating to the "solemnisation of marriage (1) 51 B.L.R. 86.
(3) 628 (2) A.I.R. 1939 Cal.
628 70 in the province" because the latter topic was specifically included in the Provincial List, the learned Judges ob served: "The position is similar here. 'Civil procedure ' in the Concurrent Legislative List must be held to exclude matters relating to jurisdiction and powers of courts since special provision is made for those matters elsewhere in the lists." "To hold otherwise", they pointed out, "would be completely to wipe out the second entry in the Provincial Legislative List." Learned counsel for the first respondent strongly relied on that decision and suggested that, if it had been brought to the notice of the learned Judges in Mulchand vs Raman (1), their decision might well have been the other way.
On the other hand, the Attorney General submitted that there could be no question of conflict between two entries in the same list and that the natural meaning of one should not be restricted simply because of the presence of the other.
He placed reliance on the following observations of Gwyer C.J. in Aliqa Begum 's case (4) "It would be practi cally impossible for example to define each item in the Provincial List in such a way as to make it exclusive of every item in that list and Parliament seems to have been content to take a number of comprehensive categories and to describe each of them by words of broad and general import.
I think, however, that none of the items in the lists is to be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it.
" These observations were, however, made to support the conclusion that the power to legislate with respect to" collection of rents" under entry 21 of List II includes the power to legislate with respect to any limitation on the power of a landlord to collect rents, that is to say, with respect to the remission of rents as well, and that, therefore, the United Provinces Regularisation of Remissions Act, 1933, was intra vires.
General observations made in such context (4) ,134 71 do not answer the objection that the wider construction of entry 1 would deprive entry 2 of all its content and reduce it to useless lumber.
I am therefore, of opinion that the words" ' administration of justice" and "constitution and organisation of courts" occurring in entry 1 must be under stood in a restricted sense excluding from their scope "jurisdiction and powers of courts" dealt with specifically in entry 2.
This does not, however, compel the conclusion that it is beyond the competence of the Provincial Legislature to confer general jurisdiction on courts constituted by it, for, if entry 1 does not by itself enable the legislature to do so, entry 2 certainly does when read with entry 1.
It should be remembered and this is what the argument for restricting the legislative power of provinces in regard to jurisdiction overlooks that "administration of justice" is one of the matters mentioned in List II itself.
The Provin cial Legislature, therefore, is competent under entry 2 to legislate conferring jurisdiction on courts with respect to administration of justice, that is to say, general juris diction to administer justice by adjudicating on all matters brought before them, except, of course, matters excluded expressly or by implication either by an existing law con tinued in force or by a statute passed by the appropriate legislature under the entries in the three Lists relating to jurisdiction and powers of courts.
In other words, though "administration of justice" in entry 1 does not authorise legislation with respect to jurisdiction and powers of courts, the legislative power under entry 2 in regard to the tatter topic, which can be legitimately exercised" with respect to any of the matters in this List," can be exer cised with respect to administration of justice, one of the matters comprised in that List, with the result that the subject of general jurisdiction is brought within the autho rised area of provincial legislation.
This view thus leaves a field in which entry 2 could apply.
When once the Provincial Legislature is found competent to make a law with respect to the general jurisdiction of courts, the apparent conflict with the 72 central legislative power under entry 53 of List I can be resolved in a given case by invoking the doctrine of pith and substance and incidental encroachment.
For, that rule, though not of much assistance in construing entries 1 and 2 which occur in the same List II, has its legitimate applica tion in ascertaining the true character of an enactment and attributing it to the appropriate list where the Federal and the Provincial Lists happen to overlap.
Accordingly, if the Legislature of Bombay was, in conferring jurisdiction on the City Civil Court to hear and determine all suits of a civil nature, really legislating on a subject which was within the ambit of its legislative power, and if in doing so, it encroached on the forbidden field marked off by entry 53 of List 1, the encroachment should be taken to be only inciden tal.
It may be that such encroachment extends to the whole of that field, but that is immaterial, as pointed out by the Judicial Committee in the Khulna Bank case(1).
One of the questions their Lordships put to themselves in that case was "Once it is determined that the pith and substance is money lending, is the extent to which the federal field is invaded a material matter?" Answering the question in the negative their Lordships observed: "No doubt it is an important matter, not, as their Lordships think, because the validity of an Act can be determined by discriminating between de grees of invasion, but for the purpose of determining what is the pith and substance of the impugned Act.
Its provi sions may advance so far into the federal territory as to show that its true nature is not concerned with provincial matters, but the question is not, has its trespassed, more or less, but is the trespass, whatever it be, such as to show that the pith and substance of the impugned Act is not money lending but promissory notes or banking ? Once that question is determined, the Act falls on one or the other side of the line and can be seen as valid or invalid accord ing to its true content".
In answering the objection that that view does not give sufficient effect to the words of precedence used in section 100 of the Government of (1) [1947] F.C.R.28.
73 India Act as between the three Lists, their Lordships went on to say "No doubt where they come in conflict List I has priority over Lists III and II, and List III has priority over List II; but the question still remains priority in what respect? Does the priority ' of the Federal Legislature prevent the Provincial Legislature from dealing with any matter which may incidentally affect any item in its list or in each case has one to consider what the substance of an Act is and whatever its ancillary effect, attribute it to the appropriate list according to its true character ? In their Lordships ' opinion the latter is the true view.
" The test for determining whether in pith and substance a particular enactment falls within one list or another is further elucidated in a passage quoted with approval from Lefroy 's Treatise on Canadian Constitutional Law in the judgment of the Federal Court in the Bank of Commerce case(1).
"It seems quite possible" says the learned writer, summarising the effect of the Privy Council decisions on the point "that a particular Act regarded from one aspect might be intra vires of a Provincial Legislature and yet regarded from another aspect might also be intra vires of the Domin ion Parliament.
In other words, what is properly to be called the subject matter of an Act may depend upon what is the true aspect of the Act.
The cases which illustrated this principle show.
by 'aspect ' here must be understood the aspect or point of view of the legislator in legislating the object, purpose and scope of the legisla tion.
The word is used subjectively of the legislator rather than objectively of the matter legislated upon.
" Applying that test there can be little doubt that the im pugned Act must, in its pith and substance, be attributed to List II.
as the legislators of Bombay were certainly not conferring on the new court, which they were constituting under the Act, jurisdiction with ' respect to any of the matters in List I. They were, as section 3 clearly indi cates constituting a new court, the Bombay City Civil Court, and investing it with the (1) [1944] F.C.R.126,139. 10 74 general jurisdiction to try all suits of a civil nature within certain.
pecuniary and territorial limits, and if they were acting, as I have endeavoured to show, within the scope of the legislative power conferred on them under entry 2 read with entry 1 of List II, it seems immaterial that the enactment, so far as one aspect of jurisdiction, namely, its conferment, is concerned, encroaches practically on the whole of the federal field marked out by entry 53 of List I. The encroachment, however, would still leave ample room for the exercise by the Centre of its legislative power under entry 53 in regard to other aspects of jurisdiction and powers of courts.
This view is strongly reinforced by a consideration of the legislative practice prevailing in this country prior to the passing of the Government of India Act, 1935.
That it is legitimate to have regard to legislative practice in deter mining the scope of legislative powers has been recognised in decisions of high authority (e.g., Croft vs Dunphy) (1), It had long been the practice in this country to constitute and organise courts with general jurisdiction over all persons and matters subject only to certain pecuniary and territorial limitations, and to confer special jurisdiction limited to certain specified cases or matters either on the ordinary courts in addition to their general jurisdiction or on tribunals set up to deal with such matters exclusively.
The various Provincial Civil Court Acts as well as the provisions of the Civil and Criminal Procedure Codes invest the courts, both civil and criminal, with general jurisdic tion, that is to say, power to adjudicate in respect of all persons and all matters except those that are specifically excluded or brought within the cognisance of tribunals with special or limited jurisdiction extending only to those matters.
The grading of the courts too in their heirarchy has reference to the pecuniary and territorial limits rather than to the nature and kind of the subject matter which they are empowered to deal with.
It is reasonable to presume that this system of organisation of courts in (1) ,165 75 British India was known to the framers of the Government of India Act, 1935, and it cannot be readily supposed that they wanted to introduce a radical change by which the power of constituting courts and providing for administration of justice is to be vested in the Provincial Legislatures, while jurisdiction has to be conferred by piecemeal legisla tion by the Federal and Provincial Legislatures with respect to specific matters falling within their respective legisla tive fields which are by no means capable of c]ear demarca tion.
The constitutional puzzles which such a system is likely to pose to the legislatures no less than to the courts and the litigant public in the country whenever a new court is constituted in finding out by searching through the legislative lists, whether jurisdiction to deal with a particular matter or power to make a particular order is validly conferred by the appropriate legislature must make one pause and examine the relevant provisions of the Govern ment of India Act to see if there is anything in them to compel the acceptance of so novel a system.
After giving the matter my careful consideration, I am convinced that both the language of the provisions and the antecedent legislative practice support the conclusion that the Provin cial Legislatures which have the exclusive power of consti tuting and organising courts and of providing for the admin istration of justice in their respective provinces, have also the power of investing the courts with general juris diction.
On the question whether section 4 of the Act operates as a delegation of legislative power, I entirely agree with the reasoning and conclusion of my learned brother Das who has said all I wish to say in his judgment which I have had the advantage of reading, and, like him, I reserve the larger question raised by the Attorney General as to how far it is open to the legislatures in this country, while acting within their authorised areas, to delegate their legislative powers to other agencies.
I find it no more necessary in the present case to decide that point than in Jatindranath 76 Gupta 's case(I) where I preferred to rest my decision on a narrower ground.
It follows that the High Court has no jurisdiction :0 hear and determine the first respondent 's suit and I agree that the appeal should be allowed.
MAHAJAN J. This is an appeal from the judgment of the High Court of Judicature at Bombay dated the 29th March, 1950, in Suit No. 240 of 1950, holding that section 4 of the Bombay City Civil Court Act (Bombay Act XL of 1948) is ultra vires the Provincial Legislature.
The facts are that on the 6th February, 1950, the first respondent presented a plaint to the Prothonotary and Senior Master of the High Court for filing a summary suit against the second respondent to recover a sum of Rs. 11,704 24 alleged to be due under promissory notes.
This suit was instituted in the High Court, in contravention of a notifi cation dated the 20th January, 1950, issued under section 4 of the City Civil Court Act, under which suits up to the pecuniary limit of Rs. 25,000 could be heard only by the City Civil Court, and not by the High Court.
As the question of jurisdiction was of importance, the matter was referred to the sitting Judge in Chambers.
On 23rd February, 1950, the learned Judge admitted the plaint holding that section 4 of the Act was ultra vires the Provincial Legislature and the notification issued under it was consequently inopera tive and that the High Court had jurisdiction to hear the suit.
The first respondent thereupon took out summons for judgment against the second respondent.
On the application of the AdvocateGeneral, the State of Bombay was impleaded as defendant at this stage and the proceedings were trans ferred to a Division Bench of the High Court.
The Division Bench upheld the view of the Judge in Chambers and returned the cause to him for disposal on the merits.
The State of Bombay, dissatisfied with this decision, has preferred the present appeal.
(1) 77 Two questions have been canvassed in this appeal: (1) whether the City Civil Court Act is ultra vires the legisla ture of the Province of Bombay in so far as it deals with the jurisdiction and powers of the High Court and City Civil Court with respect to matters in List I of the Seventh Schedule of the Government of India Act, 1935; and (2) whether section 4 of the Act is void as it purports to delegate to the Provincial Government legislative authority in the matter of investing the City Civil Court with ex tended jurisdiction.
Bombay Act of 1948 came into force on 10th May, 1948.
It was considered expedient to establish an additional civil court for Greater Bombay presumably with the object of relieving congestion of work on the original side of the Bombay High Court.
Sections 3, 4 and 12 of the Act are in these terms : "3.
The State Government may, by notification in the Official Gazette, establish for the Greater Bombay a court, to be called the Bombay City Civil Court.
Notwithstanding anything contained in any law, such court shall have juris diction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding ten thousand rupees in value, and arising within the Greater Bombay, except suits or proceedings which are cognisable (a) by the High Court as a Court of Admiralty or Vice Admiralty or as a Colonial Court of Admiralty, or as a Court having testamentary, intestate or matrimonial jurisdiction, or (b) by the High Court for the relief of insolvent debt ors, or (c) by the High Court under any special law other than the Letters Patent, or (d) by the Small Cause Court: Provided that the State Government may, from time to time, after consultation with the High Court, by a like notifica tion extend the jurisdiction of the City Court to any suits or proceedings which are cognisable by the High Court as a court having testamentary or 78 ntestate jurisdiction or for the relief of insolvent debt ors.
Subject to the exceptions specified in section a the State Government may by notification in the Official Ga zette, invest the City Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature arising within the Greater Bombay and of such value not exceeding twenty five thousand rupees as may be specified in the notification.
Notwithstanding anything contained in any law, the High Court shall not have jurisdiction to try suits and proceedings cognisable by the City Court: Provided that the High Court may, for any special rea son, and at any stage remove for trial by itself any suit or proceeding from the City Court.
" On the second question the High Court held that section 4 of the Act was inoperative as it purported to delegate the law making powers of the legislature to an outside authority and hence the notification issued in pursuance of it had no effect whatsoever and did not take away the jurisdiction of the High Court to try the present suit.
On the first ques tion the High Court placed reliance on its own earlier decision in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1), and held that the Act was intra vires the Bombay Legislature.
The appellant assails the correctness of the decision of the High Court on the second point and supports the decision on the first point.
The first respondent, on the other hand, while supporting the decision of the High Court on the second question, challenges its correctness in regard to the first question.
The learned Attorney General contends that the High Court placed an erroneous construc tion on sections 3 and 4 of the Act; that reading the two sections together the effect is that the legislature has set up the City Civil Court with an initial jurisdiction of Rs. 10,000 and has placed an outside limit of Rs. 25,000 on its pecuniary jurisdiction and that it (1) 79 has left to the discretion of the Provincial Government the determination of the circumstances under which this exten sion of the pecuniary jurisdiction between Rs. 10,000 to Rs. 25,000 is to take place.
It was said that section 4 is in the nature of a conditional legislation and that under it no legislative function has been delegated to the Provincial Government.
The learned Chief Justice in the court below disposed of this contention with the following,observations: "I am also conscious of the fact that an Act must be construed in a manner which would reconcile its differ ent sections but with the best of intention in the world I do not see how it is possible to read sections 3 and 4 together so as to come to the conclusion for which the AdvocateGeneral contends.
To my mind it is patent that the Legislature never applied its mind to the question as to whether the new court which it was setting up should have a jurisdiction higher than that of Rs. 10,000.
It never passed any judgment on that question.
It never laid down any policy with regard to that question and section 4 is not a section which merely directs the Provincial Government to carry out the policy laid down by the legislature . but it is a section which confers upon the Provincial Gov ernment the power to confer jurisdiction upon the Court, or in other words, it is a section which entitled the Provin cial Government to lay down its policy as to whether the new Court should have the increased jurisdiction up to twenty five thousand rupees.
" I find it difficult to accept this view.
Without apply ing its mind to the question as to whether the new Court which it was setting up should have a jurisdiction higher than Rs. 10,000, how could the legislature possibly enact in section 4 that the pecuniary jurisdiction of the new court would not exceed Rs. 25,000.
The fixation of the maximum limit of the court 's pecuniary jurisdiction is the result of exercise of legislative will, as without arriving at this judgment it would not have been able to determine the out side limit of the pecuniary jurisdiction of the new 80 court.
The policy of the legislature in regard to the pecuniary jurisdiction of the court that was being set up was settled by sections 3 and 4 of the Act and it was to the effect that initially its pecuniary jurisdiction will be limited to Rs. 10,000 and that in future if circumstances make it desirable and this was left to the determination of the Provincial Government it could be given jurisdiction to hear cases up to the value of Rs. 25,000.
It was also determined that the extension of the pecuniary jurisdiction of the new court will be subject to the provisions contained in the exceptions to section 3.
I am therefore of the opinion that the learned Chief Justice was not right in saying that the legislative mind was never applied as to the conditions subject to which and as to the amount up to which the new court could have pecuniary jurisdiction.
All that was left to the discretion of the Provincial Government was the determination of the circumstances under which the new court would be clothed with enhanced pecuniary jurisdiction.
The vital matters of policy having been determined, the actual execution of that policy was left to the Provincial Government and to such conditional legislation no exception could be taken.
The section does not empower the Provincial Government to enact a law as regards the pecuniary jurisdic tion of the new court and it can in no sense be held to be legislation conferring legislative power on the Provincial Government.
In Queen vs Burah(1), section 9 of Act XXII of 1869, which was a piece of legislation analogous to section 4 of the City Civil Court Act, was held intra vires by their Lordships of the Privy Council.
By the 9th section power was conferred on the Lieutenant Governor of Bengal to deter mine whether the Act or any part of it should be applied to certain districts.
In other words, authority to extend the territorial limits of the operation of the statute was conferred on the Lieutenant Governor and such extension had the result of depriving the High Court of its jurisdiction in those areas and of conferring jurisdiction in respect to them (1) 5 I.A. 178.
81 on the commissioner.
Objection was taken as to the validity of section 9 on the ground that it was legislation delegat ing legislative power and was therefore void, Their Lord ships negatived this contention and held that section 9 was intra vires the Governor General 's power to make laws and was a piece of conditional legislation.
That was a case of an extension of territorial limits within which an Act of the Legislature was to be in force, whereas the present is a case of extension of pecuniary limits of a court 's jurisdic tion.
In principle, there seems no difference between the two cases and the present case is therefore within the rule of the decision in Queen vs Burah(1).
Their Lordships in holding section9 intra vires made the following observations : "Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the Lieutenant Governor (large as they undoubtedly are) as if, when they were exer cised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Gover nor, General in Council.
Their whole operation is, directly and immediately, under and by virtue of this Act (XXII of 1869) itself.
The proper Legislature has exercised its judgment as to place, person, laws, powers, and the result of that judgment has been to legislate conditionally as to all these things.
The conditions having been fulfilled, the legislation is now absolute.
Where plenary powers of legis lation exist as to particular subjects, whether in an Impe rial or in a Provincial Legislature, they may (in their Lordships ' judgment) be well exercised, either absolutely or conditionally.
Legislation, conditional on the use of particular powers, or on the exercise of a limited discre tion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing; and, in many cir cumstances.
it may be highly convenient.
The British Stat ute Book abounds with examples of it; and it cannot be supposed that the Imperial Parliament did not, when consti tuting the (1) 5 I A. 178, 11 82 Indian Legislature, contemplate this kind of conditional legislation as within the scrape of the legislative powers which it from time to time conferred.
certainly used no words to exclude it.
" These observations appositely apply to the legislative provision contained in section 4 of the impugned Act.
The true distinction is between the delegation of power to make the law which necessarily involves a discretion as to what it shall be and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law.
Objection may be taken to the former but not to the latter.
Reference in this connection may also be made to the decision of the Supreme Court of America in Field vs Clark(1) wherein referring to Locke 's case(2) the following observations were made : "To assert that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the public wel fare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know.
" The proper distinction the court said was this: "The Legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends make, its own action depend.
To deny this would be to stop the wheels of government.
There are many things upon which wise and useful legislation must depend which cannot be known to the law making power, and, must there fore, be a subject of inquiry and determination outside of the halls of legislation.
" The High Court in support of its view placed considera ble reliance on the decision of the Federal Court in Jatin dra Nath Gupta vs The Province of Bihar(3) and it was con sidered that the present case fell1 within the ambit of the rule therein laid down.
It seems to me that the decision in the Bihar case has no application to the case in hand.
The Federal Court there was (1) 143 U.S.649.
(3) [1949] F.C.R.595.
(2) 72 Pa.491.
83 dealing with an Act which contained the following provisions in section 1, sub section (3) : "The Act shall remain in force for a period of one year from the date of its commencement: Provided that the Provincial Government may, by notifi cation, on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council, direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification.
" In connection with this proviso I said in my judgment in that case that the power conferred therein was much larger than was conferred on the Lieutenant Governor in Queen vs Burah(1) inasmuch as it authorised the Provincial Government to modify the Act and also to re enact it.
It was pointed out that "distinction between delegation of power to make the law which necessarily involves a discretion as to what it shall be, and conferring discretion or authority as to its execution to be exercised Under and in pursuance of the law is a true one and has to be made in all cases where such a question is raised.
" The following observations made by me there pointedly bring out the distinction between the two cases : "The proviso which has been assailed in this case.
judged on the above test, comes within the ambit of delegat ed legislation, and is thus an improper piece of legislation and is void.
To my mind, it not only amounts to abdication of legislative authority by the Provincial Legislature, it goes further and amounts to setting up a parallel Legisla ture for enacting a modified Bihar Maintenance of Public Order Act and for enacting a provision in it that that Act has to be enacted for a further period of one year.
A careful analysis of the proviso bears out the above conclu sion.
It may be asked what does the proviso purport to do in terms and in substance ? The answer is that it empowers the Provincial Government to issue a notification saying (1) 5 I.A. 178.
84 that the Provincial Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification .
Modification of statute amounts to re enacting it partially.
It involves the power to say that certain parts of it are no longer parts of the statute and that a statute with X sections is now enact ed with Y sections.
In the act of modification is involved a legislative power as a discretion has to be exercised wheth er certain parts of the statute are to remain law in future or not or have to be deleted from it.
The power to modify may even involve a power to repeal parts of it.
A modified statute is not the same original statute.
It is a new Act and logically speaking, it amounts to enacting a new law.
" I have not been able to follow how these observations concerning the Bihar statute could be relied upon by the High Court in support of its decision in respect 10 the invalidity of section 4 of the Bombay City Civil Court Act.
The two provisions are not analogous in any manner whatsoev er and that being so, no support can be derived by the respondent from this decision.
In the concluding portion of his judgment under appeal the learned Chief Justice observed as follows: " Now applying once more these tests to the City Civil Court Act, we find that the Legislature in the exercise of its legislative power has set up a Civil Court with a limit ed jurisdiction under section 5 of the Act.
It has not set up a court with jurisdiction higher than ten thousand rupees.
Having set up a court of limited jurisdiction it has given to the Provincial Government under section 4 the power to center upon that court a higher jurisdiction up to twen ty five thousand rupees.
Now this power which is conferred upon the Provincial Government is a power which could only have been exercised by the Legislature itself.
" It seems to me that the above observations are based on a construction of sections 3 and 4 of the Act which these sections cannot legitimately bear.
As already observed.
the Legislature set up a Civil Court for Greater 85 Bombay and decided that, to start with, it will have pecuni ary jurisdiction up to Rs. 10,000.
It also decided at the same time that it would also have jurisdiction up to Rs. 25,000 as soon as circumstances, necessitate it the Provin cial Government was constituted the judge of those circum stances.
What the limit of that jurisdiction was to be was in unmistakeable terms enacted in section 4 of the Act.
It was not left to the will of the Provincial Government to confer on that court any pecuniary jurisdiction that it liked to confer upon it.
It would be by force of the legis lative power of section 4 that the City Civil Court will be vested with enhanced jurisdiction but that vesting cannot take place till a notification is issued by the Provincial Government.
It is conditional on that event only.
For the reasons given above, in my judgment, the High Court was in error in holding that section 4 of the City Civil Court Act was void and ultra vires the Provincial legislature.
In this view the notification issued under section 4 must be held to be effective.
That being so, it is unnecessary to go into the question raised by the learned Attorney General that assuming that section 4 of the Act was delegation of legislative power, it was still valid.
The next question to decide is whether the Act is ultra vires the Bombay Legislature.
In order to appreciate Mr. Seervai 's contention on this point it is necessary to set out some of the provisions of the Government of India Act, 1935.
relevant to the enquiry.
These are contained in sec tion 100.
and in the Seventh Schedule in entries 28 and 53 of List I, entries 1 and 2 of List II, and entries 4 and 15 of List III.
They are in these terms: Sec.
(1) Notwithstanding anything in the two next succeeding sub sections, the Federal Legislature, has, and a Provincial Legislature has not power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to this Act (hereinafter called the "Feder al Legislative List.") 86 (2) Notwithstanding anything in the next succeeding sub section, the Federal Legislature, and, subject to the pre ceding subsection, a Provincial Legislature also, have power to make laws with respect to any of the matters enumerated in List III in the said Schedule (hereinafter called the "Concurrent Legislative List.") (3) Subject to the two preceding sub sections, the Provin cial Legislature has, and the Federal Legislature has not, power to make laws for a Province or any part thereof with respect 10 any of the matters enumerated in List II in the said Schedule (hereinafter called the" Provincial Legis lative List.") (4) The Federal Legislature has power to make laws with respect to matters enumerated in the Provincial Legislative List except for a Province or any part thereof.
List I. 23.
Cheques, bills of exchange, promissory notes and other like instruments.
Jurisdiction and powers of all courts, except the Federal Court, with respect to any of the matters in this list and, to such extent as is expressly authorized by Part IX of this Act, the enlargement of the appellate jurisdic tion of the Federal Court, and the conferring thereon of supplemental powers.
List II.
Public order (but not including the use of His Majesty 's naval, military or air forces in aid of the civil power); the administration of justice; constitu tion and organization of all courts, except the Federal Court, and fees taken therein; preventive detention for reasons connected with the maintenance of public order; persons subject to such detention.
Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list; procedure in Rent and Revenue Courts.
List III.4.
Civil Procedure, including the Law of Limitation and all matters included in the Code of Civil Procedure at the date of the passing of this Act; the recovery in a Governor 's Province or a Chief 87 Commissioner 's Province of claims in respect of taxes and other public demands, including arrears of land revenue and sums recoverable as such, arising outside that Province.
Jurisdiction and powers of all courts except the Federal Court, with respect to any of the matters in this list.
Mr. Seervat contends that section 3 of the impugned Act is void because it directly trenches on the exclusive legis lative powers of the Centre conferred on it by List I of the Seventh Schedule inasmuch as 'it confers jurisdiction on the new court in respect to all cases of a civil nature.
The expression "all cases of a civil nature" presumably brings within the ambit of the Act suits in respect to subjects contained in List I.
He urged that the three simi lar entries in the three is, name]y, entry 53 in List I, entry 2 in List II and entry 15 in List III indicated that in respect to the subjects covered by the three fields of legislation demarcated for the two Legislatures the Parlia ment empowered each of them respectively to make laws in respect to jurisdiction and power of courts and that in view of the provisions of section 100 of the Constitution Act the Provincial Legislature had no power to make any law confer ring jurisdiction on courts in respect to subjects covered by List I.
In other words, the Federal Legislature alone could legislate on the jurisdiction and powers of a court in regard to the subjects in List I. Similarly in respect of subjects contained in the Provincial List, jurisdiction and power of courts could only be determined by a law enacted by the Provincial Legislature and that in respect of items contained in List III, both Legislatures could make laws on the subject of jurisdiction and powers of courts.
It was said that the exceptions and the proviso to section 3 of the City Civil Court Act in dear terms disclosed that jurisdic tion in respect to the subjects on which the Provincial Legislature had no competence to legislate was also con ferred on the new court.
Section '12 of the Act by which the High Court was deprived of all jurisdiction on matters that fell 88 within the jurisdiction of the City Civil Court was assailed on similar grounds.
In regard to the legislative power conferred under entry I of List 11 on the Provincial Legis lature it was contended that this wide power stood limited by the three entries above mentioned and that under it legislation could only be made to the extent of establishing and organizing courts but no legislation under it was per missible in respect to the powers of those courts.
The learned Attorney General, on the other hand, con tends that the Act is intra vires the Bombay Legislature under entry 1 of List II and under entries 4 ' and 15 of List III, it having received the assent of the Governor General.
It was urged that the Provincial Legislature had exclusive legislative power on the subject of administration of jus tice and constitution and organization of all courts and that this power necessarily included the power to make a law in respect to the jurisdiction of courts established and constituted by it and that the impugned legislation in pith and substance being on the subject of administration of justice, it could not be held ultra vires even if it trenched on the field of legislation of the Federal Legisla ture.
In regard to entry 53 of List I, entry 2 of List II and entry 15 of List II of the Schedule, it was said that these conferred legislative power on the respective Legisla tures to confer special jurisdiction on established courts in respect of particular subjects only if it was considered necessary to do so.
In other words the argument was that the Provincial Government could create a court of general jurisdiction legislating under entry 1 of List II and that it was then open to both the Central and the Provincial Legislatures to confer special jurisdiction on courts in respect to particular matters that were covered by the respective lists.
In my opinion, the contention of the learned Attorney General that the Act is intra vires the Bombay Legislature under entry 1 of List If is sound and I am in respectful agreement with the view expressed by the Chief Justice of Bombay on this point in Mulchand Kundanmal Jagtiani vs Raman Hiralal 89 Shah (1).
The learned Chief Justice when dealing with this point said as follows: "If, therefore, the Act deals with administration of justice and constitutes a court for that purpose and confers ordi nary civil jurisdiction upon it, in my opinion, the legis lation clearly falls within the legislative competence of the Provincial Legislature and is covered by item 1 of List 11 of Schedule 7.
That item expressly confers upon the Provincial Legislature the power to legislate with regard to the administration of justice and the constitution and organization of all courts except the Federal Court.
It is difficult to imagine how a court can be constituted without any jurisdiction, and if Parliament has made the adminis tration of justice exclusively upon the Provincial Legisla ture the power to constitute and organize all courts, it must follow, that the power is given to the Provincial Legislature to confer the ordinary civil jurisdiction upon the courts to carry on with their work.
Item 2 of List II deals with jurisdiction and power of all courts except the Federal Court with respect to any of the matters in this list, and Mr. Mistree 's argument is that item 1 is limited and conditioned by item 2 and what he contends is that the only power that the Provincial Legislature has is undoubted ly to create courts, but to confer upon them only such jurisdiction as relates to items comprised in List II.
I am unable to accept that contention or that interpretation of List 11 in Schedule 7.
Each item in List 11 is an independ ent item, supplementary of each other, and not limited by each other in any way.
Item 1 having given the general power to the Provincial Legislature with regard to all matters of administration of justice and with regard to the constitution and organization of all courts, further gives the power to the Legislature to confer special juris diction, if needs be, and special power, if needs be, to these courts with regard to any of the items mentioned in List 11.
It is impossible to read item 2 as curtailing (1) 12 90 and restricting the very wide power with regard to adminis tration of justice given to the Provincial "Legislature under item 1.
Similarly in List I the Federal Legislature has been given the power under item 53 to confer jurisdic tion and power upon any court with regard to matters falling under any of the items in that list, and, therefore, it would be competent to the Federal Legislature to confer any special jurisdiction or power which it thought proper upon any court with regard to suits on promissory notes or mat ters arising under the Negotiable Instruments Act. ".
It seems to me that the legislative power conferred on the Provincial legislature by item 1 of List II has been con ferred by use Of language which is of the widest amplitude (administration of justice and constitution and organization of all courts).
It was not denied that the phrase employed would include within its ambit legislative power in respect to jurisdiction and power of courts established for the purpose of administration of justice.
Moreover, the words appear to be sufficient to confer upon the Provincial Legis lature the right to regulate and provide for the whole machinery connected with the administration of justice in the PrOvince.
Legislation on the subject administra tion of justice and constitution of courts of justice would be ineffective and incomplete unless and until the courts established under it were clothed with the jurisdiction and power to hear and decide causes.
It is difficult to visua lise a statute dealing with administration of justice and the subject of constitution and organization of courts without a definition of the jurisdiction and powers of those courts, as without such definition such a statute would be like a body without a soul.
To enact it would be an idle formality.
By its own force it would not have power to clothe a court with any power or jurisdiction whatsoever.
It would have to look to an outside authority and to another statute to become effective.
Such an enactment is, so far as I know, unknown to legislative practice and history.
The Parliament by making administration of justice a provin cial subject 91 could not be considered to have conferred power of legisla tion on the Provincial Legislature of an ineffective and useless nature.
Following the line of argument taken by Mr. Mistree before the High Court of Bombay, Mr. Seervai stren uously contended that the only legislative power conferred on the Provincial Legislature by entry 1 of List II was in respect to the establishment of a court and its constitution and that no legislative power was given to it to make a law in respect to jurisdiction and power of the court estab lished by it.
The argument, logically analysed, comes to this: that a statute will contain the name of the court, the number of its judges, the method of their appointment, the salaries to be drawn by them and it will then stop short at that stage and will not include any provision defining the powers of the tribunal or its other jurisdiction and that the court so constituted could acquire jurisdiction only when a law was made relating to its jurisdiction and powers by the Federal Legislature under entry 53 of List I, by the Provincial Legislature under entry 2 of List II and by either Legisla ture under entry 15 of List III.
The learned counsel con tended that this peculiar result was the natural consequence of a federal constitution with divided powers, and that entries 53, 2 and 15 of the three respective lists limit and curtail the wide power conferred on the Provincial Legisla ture by item 1 of List II.
It is difficult to accede to this contention because it would amount to holding that though the Provincial Legislature under item 2 of List II has been given the widest power of legislation in the matter of administration of justice and constitution and Organiza tion of courts and though that field has been demarcated for it as its exclusive field of legislation, yet all that it can do, acting within that field, is merely to establish a court without any competency to function and that in can only become an effective instrument for administering jus tice by laws enacted elsewere or under powers conferred under other items of the different lists.
I am unable to read items 53, 2 and 15 of the three respective 92 lists as imposing limitations on legislative power con ferred on the Province by item 1 of List II.
Such a con struction of the Act would not only do violence to the plain language of item 1 of List II but would be contrary to its scheme under which administration of justice was made a provincial subject.
It is significant that no other Legis lature has been given the power to bring into existence a court.
A court without powers and jurisdiction would be an anomaly as it would not be able to discharge the func tion of administration of justice and the statute estab lishing such a court could not be said to be a law on the subject of administration of justice.
It is a fundamental principle of the construction of a constitution that every thing necessary for the exercise of powers is included in the grant of power.
Everything necessary for the effective execution of power of legislation must therefore be taken to be conferred by the constitution with that power.
It may be observed that in exercise of legislative power under item 1 of List 11 a provincial Legislature can alter the constitu tion of the existing courts, can abolish them, reorganize them and can establish new courts.
If the construction contended for by Mr. Seervai is accepted, then the existing courts re established or re organised by the provincial Legislature would not be able to function till legislation under item 53 of List I, under item 2 of List II or item 15 of List III also simultaneously was made.
I do not think that such a result was in the contemplation of parliament.
Mr. Seervai with some force argued that it full effect is given to the comprehensive phraseology employed in item 1 of List II, then it would result in making the provisions of item 2 of List II, of item 53 of List I and item 15 of List III nugatory.
in other words, if the provincial Legislature could bring into existence a court of general jurisdiction which could hear all causes on subjects concerning which legislative power was divided in the three lists, then the conferment of legislative power on the Federal Legislature under item 53 of List 1, on the provincial Legislature under item 2 in List II and on both the Legislatures under 93 item 15 of List III was purposeless.
In my opinion, this argument is not a valid one and the premises on which it is based are not sound.
The three lists of subjects contained in Schedule 7 have not been drawn up with any scientific precision and the various items in them overlap.
The point kept in view in drawing up the lists was to see that all possible power of legislation was included ,within their ambit.
By making administration of justice a provincial subject and by conferring on the Provincial Legislature power to legislate on this subject and also on the subject of constitution and organization of courts, Parliament conferred on that Legislature an effective power which included within its ambit the law making power on the sub ject of jurisdiction of courts.
The Provincial Legislature could therefore bring into existence a court with general jurisdiction to administer justice on all matters coming before it within certain territorial and pecuniary limits, subject of course to the condition that such general juris diction may be expressly or impliedly taken away by the provisions of other laws.
The Parliament having divided the field of legislation between the two Legislatures, naturally thought that as a corollary or a necessary consequence of this division of legislative power it was necessary to provide by way of a complementary provision a legislative power specifically on the two Legislatures in respect to the jurisdiction and powers of courts on subjects which were within their exclusive legislative field.
If a Legislature could exclusively legislate in respect to particular sub jects, as a necessary consequence it should also have the power to legislate in respect to jurisdiction and power of the court dealing with that subject.
It is this power that has been conferred by entries 53, 2 and 15 above mentioned on the two Legislatures.
Entries 42 and 99 of List I, entries 37 and 42 of List II and entries 25 and 36 of List III are of a similar consequential character.
The respective Legislatures are therefore competent to confer special powers on courts and can create special jurisdic tions acting under those powers in respect to 94 their divided fields of legislation.
Instances of confer ment of powers and jurisdiction on courts to hear cases on particular subjects were well known to Parliament.
Such powers had been conferred on different courts in respect of testamentary and intestate jurisdiction, admiralty jurisdic tion, under the Indian Companies Act, under the Succession Act, Guardians and Wards Act and under the various.
Rent Acts and Acts dealing with relief of indebtedness.
In view of the division of powers in respect to different subjects, power was given under item 53 of List I, item 2 of last II and item 15 of List III to the different Legislatures when dealing with those subjects also to legislate on the ques tion of jurisdiction and powers of the courts.
This confer ment of legislative power to create special jurisdiction in respect to particular subjects does not in any way curtail the legislative power conferred on the Provincial Legisla ture under item 1 of List II.
As soon as special legisla tive power under item 53 of List I, under item 2 of List II and item 15 of List III is exercised, the causes that arise in respect to those subjects would then only be heard in jurisdictions created by those statutes and not in the courts of general jurisdiction entrusted with the normal administration of justice.
In the language of section 9 of the Code of Civil Procedure, jurisdiction of the general courts will then become barred by those statutes.
I am therefore of the opinion that under item 1 of List II the Provincial Legislature has complete competence not only to establish courts for the administration of justice but to confer on them jurisdiction to hear all causes of a civil nature, and that this power is not curtailed or limit ed by power of legislation conferred on the two Legislatures under items 53, 2 and 15 of the three lists.
On the other hand, these three items confer on the respective Legisla tures power to legislate when dealing with particular sub jects within their exclusive legislative field to make laws in respect of jurisdiction and powers of courts that will be competent to hear causes relating to those subjects; in other words, this is a power of creating special 95 jurisdictions only.
This interpretation of the entries in the lists is not only in accordance with the scheme of the statute but it harmonizes the different entries in the lists and does not make any of them nugatory and in effective.
The interpretation contended for by Mr. Seervai would reduce the power of the Provincial Legislature under item 1 to almost nothingness.
The crux of the case is whether item 1 of List 11 should be given a limited construction which makes it nugatory or whether a limited construction is to be placed on items 53, 2 and 15 of the three lists.
I have no hesitation in holding that both in the light of principles of construction of statutes and principles of legislation, the course to adopt is the one that I have indicated above.
Finally, it was contended that section 12 of the Act in any case was a void piece of legislation as it deprived the High Court of its jurisdiction even in respect to subjects contained in List I of the Seventh Schedule.
In view of the construction that I have placed on item 1 of List II this argument has no force.
If the Legislature has power to bring into existence a court and confer jurisdiction and power on it, a fortiori it has power to take away the jurisdic tion and power that already exist in other courts.
More over, the Bombay City Civil Court Act in section a has excepted from the jurisdiction of the new court all cases which the High Court can hear under any special law.
Spe cial law has been defined as a law applicable to a particu lar subject.
If under List 1 of the Seventh Schedule the Federal Legislature by any law determines that a case has to be heard by the High Court, section 5 will not affect the jurisdiction of that court in any manner whatsoever.
The result, therefore, is that the Bombay City Civil Court Act is a statute which is wholly within the legisla tive field of the Province under item 1 of List II and its validity cannot be affected even if it incidentally trenches on other fields of legislation.
It is not a statute dealing with any of the subjects mentioned in List I and therefore it cannot be said that the 96 Provincial Legislature has in any way usurped the power demarcated for the Centre.
In view of this conclusion I think it unnecessary to pronounce any opinion on the other points raised by the learned Attorney General.
For the reasons given above I allow the appeal preferred by the Government of Bombay and set aside the decision of the High Court holding that section 4 of the City Civil Court Act (XL of 1948) is void.
In the circumstances of the case I leave the parties t9 bear their own costs of the appeal.
MUKHERJEA J.
In my opinion this appeal should be allowed and I concur substantially in the line of reasoning adopted by my learned brother Mahajan J. in his judgment.
Having regard to the constitutional importance of the questions raised in this case, I would desire to add some observations of mine own.
There are really two questions which require considera tion in this appeal.
The first is whether section 4 of the Bombay City Civil Court Act, 1948, is void and inoperative by reason of its amounting to a delegation of legisltive powers by the Provincial Legislature to the Provincial Government of Bombay.
The Bombay High Court has answered this question in the affirmative and it is entirely upon this ground that the judgment appealed against is based.
The propriety of this decision has been challenged by the learned Attorney General who appeared on behalf of the State of Bombay in support of this appeal.
On the other hand, Mr. Seervai, appearing on behalf of the respondents, has not only attempted to repel the contention ad vanced by the learned Attorney General, but has sought to support the judgment appealed against on another and a more comprehensive ground which, if accepted, would make the entire Bombay City Civil Court Act a void piece of legisla tion, as being an encroachment by the Provincial Legislature upon the field of legislation reserved for the Centre under List I of Schedule 7 to the Government of India Act, 1935.
97 As regards the first point, I agree that the contention of the appellant is sound and must prevail.
I have no hesi tation in holding that the Legislature in empowering the Provincial Government to invest the City Court, by notifica tion, with jurisdiction of such value not exceeding Rs. 25,000 as may be specified in the Notification, has not delegated its legislative authority to the Provincial Gov ernment.
The provision relates only to the enforcement of the policy which the Legislature itself has laid down.
The law was full and complete when it left the legislative chamber permitting the Provincial Government to increase the pecuniary jurisdiction of the City Court up to a certain amount which was specified in the Statute itself.
What the Provincial Government is to do is not to make any law; it has to execute the will of the Legislature by determining the time at which and the extent to which, within the limits fixed by the Legislature, the jurisdiction of the court should be extended.
This is a species of conditional legis lation which comes directly within the principle enunciated by the Judicial Committee in The Queen vs Burah(1), where the taking effect of a particular provision of law is made to depend upon determination of certain facts and conditions by an outside authority.
The learned Judges of the Bombay High Court in coming to their decision on the point seem to have been influenced to some extent by the pronouncement of the Federal Court in Jatindranath Gupta vs Province of Bihar(2), and the learned.
Counsel for the respondents naturally placed reliance upon it.
I was myself a party to the majority decision in that case and expressed my views in a separate judgment.
I do not think that there is anything in my judgment which lends support to the contention which the respondents have put forward.
I stated expressly in course of, my Judgment on the authority of the well known American decision in Locke 's appeal(3) that a legislature may not (1) 5 I.A. 178.
(3) 13 American Reports 716.
13 98 delegate its powers to make law but "it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend "; and that the inhibition against delegation does not extend to legislation which is complete in itself, though its operation is made to depend upon contingencies the ascertainment of which is left to an external body.
The subject matter of dispute in the Bihar case was the validity of a proviso engrafted upon section 1, subsection (3) of the Bihar Maintenance of Public Order Act.
The sub section laid down that the Act would remain in force for a period of one year from the date of its commencement.
The proviso then added "that the Provincial Government may, by notification on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification." Mr. Seervai would have been probably right in invoking the decision in that case as an authority in his favour if the proviso simply empowered the Provincial Government, upon compliance with the condi tions prescribed therein, to extend the duration of the Act for a further period of one year, the maximum period being fixed by the Legislature itself.
The proviso, however, went further and authorised the Provincial Government to decide at the end of the year not merely whether the Act should be continued for another year but whether the Act itself was to be modified in any way or not.
It was conceded by the learned Counsel appearing for the Province of Bihar that to authorise another body to modify a statute amounts to in vesting that body with legislative powers.
What the learned Counsel contended for, was that the power of modification was severable from the power of extending the duration of the statute and the invalidity of one part of the proviso should not affect its other part.
To this contention my answer was that the two provisions were inter related in such a manner in the statute that one could not be severed from the other.
99 Obvious]y, the facts of this case are quite different, and all that I need say with regard to my pronouncement in Jatindranath Gupta 's case is that the principle upon which that case was decided is not applicable and cannot be at tracted, to the present case.
I may state here that a question in the broad form as to whether a Provincial Legislature exercising its legislative powers within the limits prescribed by the Imperial Parlia ment in the Government of India Act, 1935, could delegate its legislative functions in any manner to an outside au thority as it thought proper, was neither raised nor decided in Jatindranath Gupta 's case.
The learned Attorney General has not very properly invited any final decision on that point in the present case and I would refrain from express ing any opinion upon it. ' The second point appears to be of some complexity and it was decided by the Bombay High Court adversely to the re spondents on the basis of an earlier pronouncement of the same Court in Mulchand vs Raman(1).
The arguments of Mr. Seervai are really directed at assailing the correctness of this earlier decision which the learned Judges held to be binding on them in the present case.
The contention of Mr. Seervai, in substance, is, that the Bombay City Civil Court Act, which is a piece of provincial legislation, is ultra vires the legislature inasmuch as it purports to endow the City Court, which it brings into existence, with jurisdic tion to receive, try and dispose of "all suits and other proceedings of a civil nature" with certain exceptions that are specified in the different sub sections of section 8.
What is said is that the expression "all suits of a civil nature" is wide enough to include suits in respect to mat ters specified in List I of the Seventh Schedule of the Constitution Act with regard to which the Central Legisla ture alone is competent to confer jurisdiction on courts under entry 53 of the said List.
It is argued that so far as the Provincial Legislature is concerned, it may empower all courts (except the Federal Court) with jurisdiction in respect to any of the matters in the Provincial List.
(1) 100 and it may also be capable of exercising like powers in regard to subjects enumerated in the Concurrent List as provided for in article 15 of List III, subject to the conditions laid down in section 107 of the Act.
But as the scope of section 3 of the Bombay City Civil Court Act is not limited to matters in Lists II and III only and its language can embrace subjects coming under List I as well, and fur thermore as the different subjects both within and outside the provincial and concurrent fields dealt with by section 3 are inextricably, intertwined and not capable of severance or demarcation, the whole Act must be held to be ultra vires.
In answer to this, it has been urged by the learned Attorney General that amongst the subjects included in Item 1 of the Provincial List are "the administration of justice and constitution and organization of all courts except the Federal Court", and these expressions obviously include within their ambit the conferring of general jurisdiction to hear and decide cases upon courts which are set up by the Provincial Legislature, and without which they cannot func tion as courts at all. 'It is said that Item 2 of the Provincial List which mentions "jurisdiction and powers of all courts except the Federal Court with respect to any of the matters in this List" does not in any way limit or curtail the ordinary connotation of the ,expressions "admin istration of justice and constitution of courts" as used in Item I of the said List referred to above.
It cannot be disputed that the words "administration of justice" occuring in Item 1 of the Provincial List, unless they are limited in any way, are of sufficient amplitude to confer upon the Provincial Legislature the right to regulate and provide for the whole machinery connected with the administration of justice.
Section 92, of the North America Act deals with the exclusive powers of the Provincial Legis latures and clause (14) of the section speaks of "the admin istration of justice in the Provinces" as including "the constitution, maintenance and organization of Provincial Courts.
" In interpreting this provision of the constitution it has been held in North America that the words 101 "constitution, maintenance and organization of courts" plainly include the power to define the jurisdiction of such courts territorially as well as in other respects(2).
Mr. Seervai argues that this might be the normal meaning of the words if they stood alone.
But if Items 1 and 2 of the Provincial List are read together, the conclusion cannot be avoided that the expressions "administration of justice and constitution of courts" do not include "jurisdiction and powers of courts" which are separately dealt with under Item 2.
To find out, therefore, the extent of powers of the Provincial Legislature in respect conferring jurisdic tion upon courts, the relevant item to be looked to is not Item 1 but Item 2 of the Provincial List.
The contention in this form seems to me to be plainly unacceptable.
I agree with Mr. Setalvad that the different topics in the same Legislative List should not be read as exclusive of one another.
As was observed by Sir Maurice Gwyer in The United Provinces vs Atiqa Begum(1), "the sub jects dealt with in the three Legislative Lists are not always set out with scientific definition.
It would be practically impossible for example to define each item in the Provincial List in such a way as to make it exclusive of every other item in that List, and Parliament seems to have been content to take a number of comprehensive categories and to describe each of them by a word of broad and general import .
I think that none of the items in the List is to be read in a narrow or restricted sense, and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it.
" As there can be no question of conflict between two items in the same List, there is no warrant for restricting the natural meaning of one for the simple reason that the same subject might in some aspect come within the purview of the other.
The difficulty, however, arises when we come to entry 53 of List I.
Under this entry, it is the Central (1) Re County Courts of British, Columbia 21 S.C.R. 446.
(2) at p. 134. 102 Legislature that has been given the power of legislating in regard to jurisdiction and powers of all courts except the Federal Court in respect to any of the matters in List L The difficulty that one is confronted with, is that if Item 1 of the Provincial List is taken to empower the Provincial Legislature to invest a court with jurisdiction with respect to all subjects no matter in whichever List it might occur, a clear conflict is bound to arise between Item 1 of the Provincial List and Item 53 of the Central List; and a Provincial legislation trespassing upon the exclusive field of the Centre would be void and inoperative under section 100 of the Constitution Act.
This being the posi tion, a way would have to be found out to avoid the conflict.
As the Privy Council observed in the case of the Citizens Insurance Company of Canada vs Parsons(2) "it could not have been the intention that a conflict should exist and in order to prevent such a result the two sections must be read together and the language of the one interpreted and where necessary modified by the other." Mr. Seervai suggests that the proper way of reconciling this apparent conflict would be to read the words "adminis tration of justice and constitution of courts" occurring in entry 1 of the Provincial List as exclusive of any matter relating to jurisdiction of courts.
The Provincial Legisla ture can only set up or constitute courts but their juris diction or power of deciding cases must be derived from the Central or the Provincial Legislature or, from either of them in accordance with the subjects to which such juris diction relates.
The Provincial Legislature can endow the court with jurisdiction in respect to any matter in List II and the Central Legislature can do the same with regard to subjects specified in List I. So far as matters in the Concurrent List are concerned, either of the Legislatures can make provisions in respect of them subject to the condi tions laid down in section 107 the Constitution Act.
(2).A.C. ,96 at p. 109.
103 This argument, though apparently plausible, cannot, in my opinion, be accepted as sound.
It is to be noted that the right to set up courts and to provide for the whole machinery of administration of justice has been given exclu sively to the Provincial Legislature.
Under section 101 of the North America Act, the Parliament of Canada has a re serve of power to create additional courts for better admin istration of the laws of Canada but the Indian Constitution Act of 1935 does not give any such power to the Central Legislature.
Courts are to be established by the Provincial Legislature alone.
The word 'court ' certainly means a place where justice is judicially administered, The appointment of Judges and officers or the mere setting apart of a place where the Judges are to meet, are not sufficient to consti tute a court.
A court cannot administer justice unless it is vested with jurisdiction to decide cases and "the consti tution of a court necessarily includes its jurisdiction.
"(1) If Mr. Seervai 's contention is accepted, the result will be that when a Provincial Legislature estab lishes a civil court, it can only be invested with jurisdic tion to decide cases in respect to matters coming within the Provincial List.
Such court can have no power to decide cases relating to any matter which is enumerated in List I so long as the appropriate Legislature does not confer upon it the requisite authority.
Thus an ordinary Provincial Court established to decide civil suits would be entitled to entertain all money claims but not a claim on a promissory note; nor could it entertain a suit for recovery of corpora tion tax, for Negotiable Instruments and corporation tax are subjects of the Central List.
This certainly was not the scheme of the Constitution Act.
In my opinion, the proper way to avoid a conflict would be to read entry 1 of the Provincial List, which contains the only provision relating to constitution of courts and administration of justice, along with the group of three entries, viz., entry 53 of List I, entry 2 of List II and entry 15 of List III with which it is supposed to be in conflict, (1) Vide Clement 's Canadian Consitution, 3rd Edn., p. 527, 104 and to interpret the language of one by that of the other.
Entry 1 of List II uses the expressions "administration of justice and constitution of all courts" in a perfectly general manner.
No particular subject is specified to which the administration of justice might relate or for which a court might be constituted.
It can, therefore, be legitimately interpreted to refer to a general jurisdiction to decide cases not limited to any particular subject.
The other three items on the other hand relate to particular matters appearing in the three Lists and what they contem plate is the vesting of jurisdiction in courts with regard to such specific items only.
In one case the jurisdiction is 'general ' as is implied in the expression "administration of justice", while in the other three the jurisdiction is 'particular ' as limited to particular matters and hence exclusive.
I agree with my learned brother Patanjali Sastri J. that one approved way of determining the scope of a legislative topic is to have regard to what has been ordi narily treated as embraced within that topic in the legisla tive practice of the country(2); and if that test is ap plied, the interpretation suggested above would appear to be perfectly legitimate.
The distinction between general and particular jurisdiction has always been recognised in the legislative practice of this country prior to the passing of the Constitution Act of 1935 and also after that.
There have been always in this country civil courts of certain classes and categories graded in a certain manner according to their pecuniary jurisdiction and empowered to entertain and decide all suits of a civil nature within particular localities.
Particular jurisdiction again have been conferred on some one or the other of these courts to try cases relating to certain specified matters.
Thus there have been special jurisdictions created for insolvency, probate or guardianship proceedings, for deciding disputes relating to compulsory acquisition of land and for dealing with cases arising under the Rent Acts or the different legislations passed in recent years (2) vide Croft vs Dunphy.
105 for scaling down exorbitant rates of interest or giving relief to rural debtors.
Similar instances may be cited with regard to conferring of special jurisdiction in criminal cases.
There will be no difficulty in interpreting in a proper manner the different entries in the Legislative Lists re ferred to above if this distinction between general and special jurisdiction is kept in view.
The entire scheme of the Constitution Act of 1935 is to vest the power of estab lishing courts upon the Provincial Legislature.
The Provin cial Legislature can endow the courts which it sets up with general jurisdiction to decide all cases which, according to the law of the land, are triable in a court of law, and all these powers can be exercised under entry I of List II.
If the Central Legislature or the Provincial Legislature chooses to confer special jurisdiction on certain courts in respect to matters enumerated in their appropriate legisla tive lists, they can exercise such powers under the three entries specified above.
But the exercise of any such powers by the Central Government would not m any way conflict with the powers exercisable by the Provincial Legislature under entry 1 of List II.
The expression 'general ' must always be understood as being opposed to what is 'special ' or exclu sive.
If the Central Legislature vests any particular juris diction upon a court in respect to a Central matter, that matter would cease to be a general matter and consequently the court having general jurisdiction would no longer deal with that, but the general jurisdiction of such courts would not be affected thereby.
The contents of general jurisdic tion are always indeterminate and are not susceptible of any specific enumeration.
In this view, I do not think that it would be at all necessary to invoke 'the pith and substance ' doctrine in avoiding the possibility of incidental encroach ment by the Provincial Legislature upon Central subjects in regard to conferring jurisdiction upon courts.
If the expression 'jurisdiction ' in entry 53 of List I means and refers to special jurisdiction only, there cannot be even an incidental encroachment upon such special jurisdiction 14 106 by reason of the conferring of general jurisdiction upon courts by the Provincial Legislature under entry 1 of List II.
As I have said already what is 'special ' or made so, will automatically cease to be in the category of what is 'general ' and no question of a conflict would at all arise.
It may be pointed out in this connection that in the Canadian Constitution also, the general scheme is to carry on administration of justice throughout Canada through the medium of provincial courts.
Subject to the residuary power reserved to the Dominion Parliament under section 101 of the North America Act, the Constitution has assigned to the provinces the exclusive power in relation to administration of justice including the maintenance, constitution and organization of courts.
There is no limitation in any provincial court along the line of division that exists between matters within the legislative competence of the Dominion Parliament and of the Provincial Legislative Assemblies (1).
There is indeed no such thing as Entry 53 in List I of the Indian Act in the Canadian Constitution, but there are judicial pronouncements to the effect that the Dominion Parliament can impose jurisdiction on provincial courts over Dominion subjects (2).
It may be that the British Parliament in framing the legislative topics in the Government of India Act of 1935 in regard to administration of justice and jurisdiction of courts wanted to adopt the Canadian model with such modifications as they considered necessary.
It is, however, immaterial to speculate on these matters.
For the reasons given above, I am of the opinion that the decision of the Bombay High Court in Mulchand vs Raman(3) is correct, and the contention of Mr. Seervai should fail.
In the result, the appeal is allowed and the judgment of the High Court is set aside.
DAS J: I agree that this appeal should be allowed.
In view of the importance of the questions raised in (1) Vide Clement 's Canadian Constitution p. 526.
(2) Vide Lefroy 's Canada 's Federal system p. 541, (3) 107 this appeal, I consider it right to state 'my reasons for coming to that conclusion.
The salient facts, as to which there is no dispute, are as follows: On May 10, 1948, the Provincial Legislature of Bombay passed Act No. XL of 1948, called the Bombay City Civil Court Act, 1948.
It was passed with a view "to estab lish an additional Civil Court for Greater Bombay.
" The provisions of that Act which will be relevant for the pur poses of the present appeal may now be set out: "1.
(2) It shall come into force on such date as the Provincial Government may, by notification in the Official Gazette, appoint in this behalf.
The Provincial Government may, by notification in the Official Gazette, establish for the Greater Bombay a Court, to be called the Bombay City Civil Court.
Notwith standing anything contained in any law, such Court shall have jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding ten thousand rupees in value, and arising within the Greater Bombay, except suits or proceedings which are cognizable (a) by the High Court as a Court of Admiralty or Vice Admiralty or as a Colonial Court of Admiralty, or as a Court having testamentary, intestate or matrimonial jurisdiction, or (b) by the High Court for the relief of insolvent debt ors, or (c) by the High Court under any special law other than the Letters Patent, or (d) by the Small Cause Court: Provided that the Provincial Government may, from time to time, after consultation with the High Court, by a like notification extend the jurisdiction of the City Court to any suits or proceedings of the nature specified in Clauses (a) and (b).
Subject to the exceptions specified in section 3, the Provincial Government may, by notification in the Offi cial Gazette, invest the City Court with jurisdiction to receive, try and dispose of all suits and 108 other proceedings of a civil nature arising within the Greater Bombay and of such value not exceeding twenty five thousand rupees as may be specified in the notification.
Notwithstanding anything contained in any law, the High Court shall not have jurisdiction to try suits and proceedings cognizable by the City Court: Provided that the High Court may, for any special rea son, and at any stage, remove for trial by itself any suit or proceeding from the City Court.
" The Act received the assent of the Governor General about the same time.
It came into force on August 16, 1948, by a notification issued by the Provincial Government and published in the Official Gazette.
Simultaneously with the passing of the above Act the Bombay Legislature also enacted Act (XLI of 1948) called the Bombay High Court Letters Patent Amendment Act, 1948.
By section3 of that Act Clause 12 of the Letters Patent was amended by adding the following words: "Except that the said High Court shall not have such Original jurisdiction in cases falling within the jurisdic tion of the Small Cause Court at Bombay or the Bombay City Civil Court.
" Shortly after the passing of the above Acts, the validi ty of the Bombay City Civil Court Act (XL of 1948) was challenged in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1), a suit on promissory notes filed in the Original side of the High Court.
A Division Bench of the Bombay High Court (Chagla C.J. and Bhagwati J.), on September 2, 1948, held that the Act was well within the legislative competence of the Provincial Legislature and was not ultra vires.
Leave was given to the plaintiff in that suit under section 205 of the Government of India Act, 1935, to appeal to the Federal Court but no such appeal appears to have been filed.
On January 20, 1950, the Provincial Government of Bombay issued the following notification No. 2346/5 in the Official Gazette: (1) A,I.R. 1949 Bom.
197; 109 "In exercise of the powers conferred by section 4 of the Bombay City Civil Court Act, 1948 (Bombay, Act XL of 1948), the Government of Bombay is pleased to invest, with effect from and on the date of this notification, the City Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature not exceeding twen ty five thousand rupees in value, and arising within the Greater Bombay subject, however, to the exceptions specified in section a of the said Act.
" On February 6, 1950, the first respondent Narothamdas Jethabhai presented a plaint before the Prothonotary of the Bombay High Court for recovery of Rs. 11,704 5 4 with further interest due by the second respondent Aloysious Pinto Phillips upon three several promissory notes.
In paragraph 4 of this plaint it was expressly pleaded that the High Court had jurisdiction to receive, try and dispose of that suit because (1)the Bombay City Civil Court Act, 1048, was ultra vires and (2) at least section 4 of that Act and the notification issued thereunder were ultra vires.
Having some doubts as to whether in view of the notification issued 1 by the Provincial Government under section 4 of the Act the plaint could be admitted in the High Court, the Prothon otary placed the matter under the rules of the Court before Bhagwati J. who was then the Judge in Chambers.
By his judgment delivered on February 23, 1950, Bhagwati J. held that section 4 of the Act and the notification issued there under were ultra vires and void and that the High Court, therefore, had jurisdiction to entertain the suit.
The plaint was accordingly received and admitted.
The first respondent thereupon took out a summons under the rules of the Court for leave to sign judgment against the second respondent.
The State of Bombay was, on its own application, added as a party to the suit.
The matter was put up before a Division Bench (Chagla C.J. and Tendolkar J.) for trial of the following issues: 110 "(1) Whether Act XL of 1948 is ultra vires of the Legis lature of the State of Bombay.
(2) Whether,Section 4 of Act XL of 1948 is in any event ultra rites of the Legislature of the State of Bombay.
(3) Whether the Government of Bombay Notification 'No. 2346/5 dated 20th January, i1950, is ultra vires, void and inoperative in law.
(4) Whether this Court has jurisdiction to try the suit.
The larger point involved in issue No. 1 having been concluded by the earlier decision of the Division Bench in Mulchand Kundanmal Jagtiani vs Raman Hiralal Shah(1) that issue was answered in the negative without any argument but leave was reserved to the first respondent to contest the correctness of that earlier decision in this Court.
The Division Bench in agreement with Bhagwati J. held that by section 4 of the Act the Provincial Legislature did not itself legislate but delegated the power of legislation to the Provincial Government which it had no power to do and, therefore, section 4 and along with it the notification No. 2346/5 issued thereunder were ultra vires, void and inoperative.
Accordingly they answered issues Nos.
(2), (3) and (4)in the affirmative and sent the summons for judgment back to the learned Judge taking miscellaneous matters to dispose it of on merits.
The State of Bombay has now come up before us in appeal from this decision of the High Court.
The Advocate General of Madras has intervened in support of this appeal and for maintaining the validity of the Madras City Civil Court Act (VII of 1892) section 3A of which inserted in 1935 by way of amendment is in identical terms with section 4 of the Bombay Act except that the amount of the value was fixed at Rs. 10,000 in section 3A of the Madras Act instead of Rs. 25,000 fixed in section 4 of the Bombay Act.
The distinction between conditional legislation and delegation of legislative power has been well known (1) 51 Bom L R.86 111 ever since the decision of the Privy Council in R.v. Burah(1) and the other Privy Council cases cited in the judgments of the High Court.
It is firmly established that conditional legislation is not only permissible but is indeed in many cases convenient and necessary.
The difficul ty which confronts the Courts is in ascertaining whether a particular provision of a Statute constitutes a conditional legislation as explained in the decisions of the Privy Council.
In the present case the High Court, on a construc tion of section 4 of the Bombay City Civil Court Act, came to the conclusion that it was not an instance of conditional legislation at all.
The use of the word "invest" in section 4 was considered by the High Court to be very significant and the difference between the language in section 3 and that in section 4 appeared to them to be very marked and striking.
According to the High Court while by section a the Legislature itself set up a Court with a particular pecuniary jurisdiction, under section 4 the Legislature itself did not invest the Court with any higher jurisdiction but left it to the Provincial Government to exercise the function which the Government of India Act laid down should be exercised by the Provincial Legislature.
The learned Chief Justice expressed the view that the Legislature never applied its mind to the question as to whether the new Court which it was setting up should have a jurisdiction higher than that of Rs. 10,000, and that section 4 was not a sec tion which merely directed the Provincial Government to carry out the policy laid down by the Legislature, but that it was a section which conferred upon the Provincial Govern ment the power to confer jurisdiction upon the Court.
Then, after referring to R.V. Baruha(1) and several other cases and purporting to apply the tests laid down in the decisions to the Act the learned Chief Justice concluded that the Legislature in the exercise of its legislative power had set up a Civil Court with a limited jurisdiction under section a of the Act, that it had not set up a Court with a jurisdiction higher than ten thousand rupees and (1) L.R 5 I. A. 178.
112 that, having set up a Court of, limited jurisdiction, it had given to the Provincial Government under section 4 the power to confer upon that Court a higher jurisdiction up to twenty five thousand rupees.
This power, which was con ferred upon the Provincial Government was according to the Chief Justice, a power which could only have been exercised by the Legislature itself.
I am unable to accept the afore mentioned construction of sections 3 and 4 of the Act.
As I have already said, the High Court rounded their conclusions principally on the observations of their Lord ships of the Privy Council in R.v. Burah(1) and certain other Privy Council cases.
It will be useful, therefore, to analyse the Privy Council decision in R.v. Burah(1).
In 1869 the Indian Legislature passed an Act (No. XXII of 1869) purporting, first, to remove a district called Garo Hills from the jurisdiction of the Courts of civil and criminal jurisdiction and from the law prescribed for such Courts by Regulations and Acts and, secondly, to vest the administra tion of civil and criminal justice, within the same territo ry, in such officers as the Lieutenant Governor of Bengal might, for the purpose of tribunals of first instance, or of reference and appeal, from time to time appoint.
The Act was to come into operation on such day as the Lieutenant Governor of Bengal should, by notification in the Calcutta Gazette, direct.
The 8th section authorised the Lieuten ant Governor of Bengal by notification in the Calcutta Gazette to extend to the said territory, any law or any portion of any law then in force in other territories sub ject to his government or which may thereafter be enacted by the Council of the Governor General or of himself.
The 9th section of that Act provided: "The said Lieutenant Governor may from time to time, by notification in the Calcutta Gazette, extend mutatis mutan dis all or any of the provisions contained in the other sections of this Act to the Jaintia Hills, the Naga Hills, and to such portion of the Khasi Hills, as for the time being forms part of British India, (1) L.R. 5 I.A. 178.
113 Every such notification shall specify the boundaries of the territories to which it applies.
" On October 14, 1871, the Lieutenant Governor of Bengal issued a notification in exercise of the powers conferred on him by section 9 extending the provisions of that Act to the territory known as the Khasi and Jaintia Hills and excluded therefrom the jurisdiction of the Courts of civil and crimi nal justice.
The respondent Burah and another person having been convicted by the Deputy Commissioner of the Khasi and Jaintia Hills of murder and sentenced to death, which was later on commuted to transportation for life, they from jail sent a petition of appeal against their conviction.
The provisions of Act XXII of 1869 having been extended, by notification under section 9, to the Khasi and Jaintia Hills, the High Court would have no jurisdiction to enter tain the appeal, unless section 9 and the notification were ultra rites and void.
The majority of the Judges of the Full Bench constituted for considering the question took the view that section 9 was really not legislation but was an in stance of delegation of legislative power.
The Crown ob tained special leave to appeal to the Privy Council.
In summarising the effect of the provisions of sections 1 to 8 of that Act on Garo Hills Lord Selborne who delivered the judgment of the Privy Council observed at page 194 that the Governor General in council had determined, in the due and ordinary course of legislation, to remove a particular district from the jurisdiction of the ordinary Courts and offices, and to place it under new Courts and offices, to be appointed by and responsible to the Lieutenant Governor of Bengal leaving it to the Lieutenant Governor to say at what time that change should take place, that the Legisla ture had determined that, so far, a certain change should,take place, but that it was expedient to leave the time, and the manner, of carrying it into effect to the discretion of the Lieutenant Governor and also, that the laws which were or might be in force in the other territo ries subject to the same Government were such as it might be fit and proper to apply to this 15 114 district also, but that, as it was not certain that all those laws, and every part of them, could with equal conven ience be so applied, it was expedient, on that point also, to entrust a discretion to the LieutenantGovernor.
His Lordship then proceeded to state the true meaning and effect of the provisions of section 9: "This having been done as to the Garo Hills, what was done as to the Khasi and Jaintia Hills? The Legislature decided that it was fit and proper that the adjoining dis trict of the Khasi and Jaintia Hills should also be removed from the jurisdiction of the existing Courts, and brought under the same provisions with the Garo Hills, not neces sarily and at all events, but if and when the Lieutenant Governor should think it desirable to do so; and that it was also possible that it might be expedient that not all, but some only, of those provisions should be applied to that adjoining district.
And accordingly the Legislature en trusted for these purposes also, a discretionary power to the Lieutenant Governor.
" Finally, his Lordship concluded at p. 195: "Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the LieutenantGovernor (large as they undoubtedly are) as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor General in Council.
Their whole operation is, directly and immediately, under and by virtue of this Act XXII of 1869 itself.
The proper Legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things.
The conditions having been fulfilled, the legisla tion is now absolute.
Where plenary powers of legislation exist as to particular subjects, whether in an imperial or in a provinciall Legislature, they may, in their Lordships ' judgment be well exercised, either absolutely or condition ally.
Legislation, conditional on the use of particular powers, or on the exercise of a limited discretion, entrust ed by the Legislature to persons in whom it places confi dence, 115 is no uncommon thing; and, in many circumstances, it may be highly convenient.
" If the reasonings underlying the observations of the ' Bombay High Court were correct then on those very reasonings it could be held in Burah 's case(1) that while in enacting sections 1 to 8 the Legislature had applied its mind and laid down its policy as to the exclusion of the Garo Hills from the jurisdiction of the Courts the Legislature did not apply its mind and did not lay down any policy as to the exclusion of the Khasi and Jaintia Hills rom the jurisdic tion of the Courts but had left it to the Lieutenant Gover nor to do what it alone could do.
This construction quite clearly did not find favour with the Privy Council.
The Privy Council by construction spelt out of the very language section 9 that the Legislature itself had decided that it was fit and proper that the Khasi and Jaintia Hills should also be removed from the jurisdiction of the existing Courts and brought under the same provisions as applied to the Garo Hills, not necessarily and at all events but if and when the LieutenantGovernor should think it desirable to do so and accordingly entrusted a discretionary power to the Lieutenant Governor.
Adopting the same method of construc tion and adopting the language of Lord Selborne it may well be said that in enacting section 3 the Legislature itself has determined, in the due and ordinary course of legisla tion, to establish an additional Court of civil jurisdiction with jurisdiction to entertain suits and other proceedings arising within the Greater Bombay of the value up to Rs. 10,000 leaving it, by section 1 (2), to the Provincial Government to say at what time that change should take place.
Likewise, it may be said that in enacting section 4 the Legislature itself has decided that it is fit, and proper to extend the pecuniary jurisdiction of the new Court, not necessarily and at all events or all at once but if and when the Provincial Government should think it de sirable to do so and accordingly entrusted a discretionary power to the Provincial Government.
It is entirely wrong to say that the (1) L.R. 5 I.A. 178.
116 Legislature has not applied its mind or laid down any poli cy.
Indeed, the very fact that the extension of pecuniary jurisdiction should not exceed twenty five thousand rupees, that the extension should be subject to the exceptions specified in section 3 clearly indicate that the Legislature itself has decided that the extension of the pecuniary jurisdiction of the new Court should be made, not necessarily or at all events or all at any one time but when the Provincial Government may consider.
it desirable to do so and while entrusting a discretionary power with the Provincial Government to determine the time for investing such extended jurisdiction on the new Court, the Legislature itself has also prescribed the limits of such extension.
The efficacy of the Act of extension of jurisdiction is, there fore, not due to any other legislative authority than that of the Legislature itself.
The expression "invest" does not appear to me to have any special significance.
It only implies or indicates the result of the fulfilment of the condition which the Legislature itself laid down.
To use the language of Lord Selborne the extension of jurisdiction is directly and immediately under and by virtue of this very Act itself.
Here there is no effacement of the Legislature, no abdication of the legislative power.
On the contrary, the proper Legislature has exercised its judgment as to the possible necessity for the extension of the pecuniary juris diction of the new Court and the result of that judgment has been to legislate conditionally as to such extension and that the condition having been fulfilled by the issue of the notification by the Provincial Government the legislation has now become absolute.
In my judgment the construction put upon sections 3 and 4 by the High Court was erroneous and cannot be supported either on principle or on authority.
When properly construed in the light of the observations and decision of the Privy CounCil in R.v. Burah(1) as indi cated above section 4 does not amount to a delegation of legislative power at all but constitutes what is known as conditional legislation.
(1) L.R. 5 I.A 178.
117 Reliance was placed by the High Court on the decision of the Federal Court of India in Jatindra Nath Gupta vs Prov ince of Bihar (1) in support of their conclusions.
That case was concerned with the question of the validity of the proviso to section 1 (3)of the Bihar Maintenance of Public Order Act (V of 1947).
Section 1 (a) provided that the Act should remain in force for a period of one year from the date of its commencement.
The relevant part of the proviso was in the following terms: "Provided that the Provincial Government may, by notifi cation, on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council, direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification.
" Three of the learned Judges held that the proviso and the notification thereunder were ultra vires and void They laid particular emphasis on the power given to the Provin cial Government to make any modification in the Act when extending its life as indicating that it was a delegation of legislative power.
Another learned Judge did not decide this point but agreed to set aside the order of detention on another ground not material for our present purpose and the remaining learned Judge took a different view of the effect of the proviso and held that it was a conditional legisla tion within the meaning of the decision in R., vs Burah(2).
I do not find it necessary, for the purposes of the present appeal, to express any view as to the correctness of the decision of the Federal Court in that case.
Assuming, but without deciding, that the entrustment with the Provincial Government of the power to extend the life of an Act with such modifications as the Provincial Government in its unfettered discretion thought fit to make was nothing but a delegation of legislative powers, there is no such power of modification given to the Provincial Government by section 4 of the Bombay City Civil Court (1) A.I.R. 1949 F.C. 175, (.2) L.R. 5 I.A. 178.
and, therefore, that decision of the Federal Court can have no application to the case before us.
The learned Attorney General wants to go further and contend that under the Government of India Act, 1935, it was permissible for the Legislatures, Central or Provincial, while acting within their respective legislative fields, to delegate their legislative powers.
In the view I have ex pressed above, namely, that section 4 of the Bombay City Civil Court Act, 1948, does not involve any delegation of legislative power, I do not consider it necessary, on this occasion, to go into that question and I reserve my right to consider and decide that question including the question of the correctness of the decision of the Federal Court in Jatindra Nath Gupta 's case(1) on that point as and when occasion may arise in future.
Learned counsel for the first respondent then raises before us the larger question as to whether the Bombay City Civil Court Act, 1948, as a whole was or was not within the legislative competence of the Provincial Legislature of Bombay.
Legislative powers were by section 100 of the Gov ernment of India Act, 1935, distributed amongst the Federal and the Provincial Legislatures.
Under that section the Federal Legislature had, and the Provincial Legislature had not, power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule to that Act.
Likewise, the Provincial Legislature had, and the Federal Legislature had not, power to make laws the Province with respect to my of the matters enumerated in List II in that Schedule.
It will be noticed that 'the section, while af firmatively giving legislative power with respect to certain matters to one Legislature, expressly excluded the legisla tive power of the other Legislature with respect to those matters.
Lastly, section 100 gave concurrent power of legis lation to the Federal as well as to the Provincial Legisla ture with respect to matters enumerated in List III in that Schedule.
Section 107 of that Act made provision for resolv ing the inconsistency, if any, between a Provincial law and a Federal law or the existing Indian (1) A.I.R. 1949 F.C. 175 119 law with respect to any of the matters in the Concurrent List (i.e., List III).
Turning now to the three lists we find several entries relating to Courts, the relevant por tions of which are as follows : List I. Entry 53: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list .
List II.
Entry 1: . . the administration of justice, constitution and organisation of all Courts, except the Federal Court, and fees taken therein; .
Entry 2: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list; procedure in Rent and Revenue Courts.
List III.
PART 1.
Entry 2: Criminal Procedure, including all matters included in the Code of the Criminal Procedure at the date of the passing of this Act.
Entry 4: Civil Procedure, including the law of Limita tion and all matters included in the Code of Civil Procedure at the date of the passing of this Entry 15: Jurisdiction and powers of all Courts, except the Federal Court, with respect to any of the matters in this list.
Learned Attorney General urges that entry 1 in List II clearly indicates that administration of justice had been expressly made a provincial subject and that it was only the Provincial Legislature which could make laws with respect to administration of justice.
The next steps in the argument are that there could be no administration of justice unless Courts were constituted and organised, that the constitution and organisation of Courts would be meaningless enterprises for the Provincial Legislatures to indulge in, unless the Courts so constituted and organised were 120 vitalised by being invested with jurisdiction and powers to receive, try and determine suits and other proceedings.
The argument, therefore, is that entry 1 in List II by itself gave power to the Provincial Legislature not only to consti tute and organise Courts but also to confer jurisdiction and powers on them.
The learned Attorney General relies on Jagtiani 's case(1) and points out that under entry 1 admin istration of justice was entirely a provincial responsibili ty and the Provincial Legislature was authorised to make laws with respect to administration of justice.
Administra tion of justice, so the argument ' proceeds, is inseparable from Courts and Courts without jurisdiction is an incompre hensible notion.
The conclusion sought to be established.
therefore, is that under entry 1 alone of List II the Provincial Legislature had power to make a law not merely constituting a new Court but, investing such new Court with general jurisdiction and powers to receive, try and deter mine all suits and other proceedings.
If entry 1 in List II stood alone and entry 53 in List I, entry 2 in List II and entry 15 in List HI were not in the Seventh Schedule, the argument would have been unanswerable.
In Section 92 of the British North America Act, 1867, there was no separate provision authorising the making of laws with respect to jurisdiction and powers of Courts and, therefore, the au thority to make laws with respect to the jurisdiction and powers of Courts had of necessity to be found in and spelt out of the words ' 'administration of justice" occurring in section 92 (14) of that Act.
There is, however, no such pressing or compelling necessity for giving such wide and all embracing meaning to the words "administration of jus tice" in entry 1 of List 11.
The expression "administration of justice" may be an expression of wide import and may ordinarily, and in the absence of anything indicating any contrary intention, cover and include within its ambit several things as component parts of it, namely, the consti tution and organisation of Courts, jurisdiction and powers of the Courts and the laws to be administered by the Courts.
But the legislative (1) 51 Bom.
L.B. 86.
121 practice in England as well as in India has been to deal With these topics separately in legislative enactments: see for example Indian High Courts Act 1861.
(24 and 25 Vic., c. 104) sections 2 and 19; Government of India Act, 1935, sections 220 and 223, the Letters i Patent of the Bombay High Court, 1865, and also the different Civil Courts Acts.
Of these, one topic, namely, "constitution and organisa tion of Courts" had been expressly included in entry 1 of List II in addition to "administration of justice", a fact of some significance which must be noted although I do not say that the inclusion of the words "constitution and organ isation of all Courts" in entry 1 of List II by itself and in the absence of anything else cut down the generality of the meaning of the expression "administration of justice" which preceded those words, for such a construction may militate against the principle laid down by the Privy Coun cil in Meghraj vs Allah Rakhia(1).
Further, entry 2 in List II would have been wholly unnecessary if the expression "administration of justice" in entry 1 in List II were to be given the wide meaning contended for by the learned Attor neyGeneral, for if under entry 1 ' in List II the Provincial Legislature had plenary powers to make laws conferring on, or taking away from, Courts, existing or newly constituted, 0jurisdiction and powers of the widest description, such power would also include the lesser power of conferring jurisdiction and powers with respect to any of the matters enumerated in List II, such as is contemplated by entry 2 in List II.
The greater power would certainly have included the lesser.
I do not say that the presence of entry 2 in List II by itself cut down the ambit of the expression "administration of justice" in entry 1, for if there were only entries 1 and 2 in List II and there were no entries like entry 53 in List I and entry 15 in List III, it might have been argued with some plausibility that in framing the two entries in the same list not much care was bestowed by the draftsman to prevent overlapping and that as (1) L.R. 74 I.A. 12, at p.20 16 16 122 both the entries in one and the same list gave legislative power to the same Legislature the overlapping caused no confusion or inconvenience and that it was not necessary, therefore, to construe entry 1 of List II as cut down by entry 2 in the same List.
The important thing to notice is that the topic of "jUrisdiction and powers of Courts" had not been included in entry 1 in List II along with the topic of "constitUtion and organization of Courts", but the legislative powers with respect to the topic of "jurisdic tion and powers of the Courts" had been distributed between the Federal and the Provincial Legislatures in the manner set forth in entry 53 in List I, entry 2 in List II and entry 15 in List III.
The inclusion of "constitution and organisation of Courts" as a separate item in entry 1 in List II, the omission of the topic of "jurisdiction and powers of Courts" from entry 1 and the deliberate distribu tion of powers to make laws with respect to jurisdiction and powers of Courts with respect to the several matters speci fied in the three lists clearly indicate to my mind that the intention of Parliament was not, by entry 1 in List II by itself, to authorise the Provincial Legislature to make any law with respect to the jurisdiction and powers of Courts.
In my judgment, entry 1 in List II cannot be read as at all giving any power to the Provincial Legislature to confer any jurisdiction or power on any Court it might constitute or organise under that entry and that the expressions "admin istration of justice" and "constitution and organisation of Courts" occurring in entry 1 in List II should be read as exclusive of "the jurisdiction and powers of Courts" the powers of legislation with respect to which were distributed under entry 53 in List I, entry 2 in List II and entry 15 in List III.
Such a construction will be consonant with the principle of construction laid down by, the Privy Council in the case of In re Marriage Legislation in Canada(1).
It is next said that entry 1 in List II gave general powers to the Provincial Legislature to make laws (1) 123 conferring general jurisdiction and powers on Courts consti tuted by it under that entry while entry 53 in List I, entry 2 in List II and entry 15 in List III conferred special powers on the Federal and Provincial Legislatures to make laws conferring special jurisdiction and powers with respect to matters specified in their respective Lists.
As I have already pointed out, if entry 1 in List II conferred plenary powers on the Provincial Legislature to make laws with respect to jurisdiction and powers of Courts in widest terms, entry 2 in List II would be wholly redundant, for the wider power itself would include the lesser power.
Further,the very concession that entry 53 in List 1, entry 2 in List II and entry 15 in List III gave special powers to the Legislature to confer special jurisdiction and powers necessarily amounts to an admission that the powers conferred on the Provincial Legislature by entry 1 in List II were exclusive of the powers conferred under entry 53 in List I, entry 2 in List II and entry 15 in List III, for if entry 1 in List II gave power to the Provincial Legislature to make laws conferring general jurisdiction of the widest kind which included jurisdiction and powers with respect to all matters specified in all the Lists, then the utility of entry 53 in List I, entry 2 in List II and entry 15 in List III as giving special powers to make laws conferring special jurisdiction would vanish altogether.
Special power to confer special jurisdiction would be meaningless if it were included in the general power also.
This circumstance by itself should be sufficient to induce the Court to assign a limited scope and ambit to the power conferred on the Pro vincial Legislature under entry 1 in List II.
We, there fore, come back to the same conclusion that entry 1 in List II should be construed and read as conferring on the Provin cial Legislature all powers with respect to administration of justice and constitution and organisation of Courts minus the power to make laws with respect to the jurisdiction and powers of Courts.
It is pointed out that under entry 1 in List II it was only the Provincial Legislature which alone could 124 constitute and organise a new Court and if that entry did not empower the Provincial Legislature to vest in such new Court the general jurisdiction and power to re ceive, try and dispose of all kinds of suits and other proceedings, then no new Court of general jurisdiction could be established at all.
As will be seen hereafter, the Provincial Legislature has, under entry 2 in List II, power to make laws conferring wide general jurisdiction and powers on a newly constituted Court and consequently a forced construction need not be placed on entry 1 in List II.
It is said that if the Provincial Legislature could not, under entry 1 in List II, confer jurisdiction on a new Court set up by under that entry, the result would have been that the Provincial Legislature would have had to set up a new Court by one law made under entry 1 of List II without conferring on it any jurisdiction whatever and would have had to make another law with respect to ' the jurisdic tion and powers of such Court.
I see no force in this, for the Provincial Legislature could by one and the same law have set up a Court under entry 1 in List II and vested in the Court jurisdiction and powers with respect to any of the matters specified in List II and, subject to section 107 of the Act, with respect to any of the matters enumerated in List III.
It is wrong to assume that the Provincial Legisla ture could not make one law under both entry 1 and entry 2 in List II and entry 15 in List III at one and the same time.
A good deal of argument was advanced before us as to the applicability of the doctrine of pith and substance and, indeed, the decision of the Bombay High Court in Jagtiani 's case was practically rounded on that doctrine.
Shortly put, the argument, as advanced, is that under entry 1 in List II the Provincial Legislature had power to make laws with respect to administration of justice; that, therefore, the Provincial Legislature had power, under entry 1 itself, to make laws conferring general jurisdiction and powers on Courts constituted and organised by it under that entry; that if in making such law 125 the Provincial Legislature incidentally enroached upon the legislative field assigned to the Federal Legislature under entry 58 in List I with respect to the jurisdiction and powers of Court with respect to any of the matters specified in List I, such incidental encrochment did not invalidate the law, as in pith and substance it was a law within the legislative powers.
In my judgment, this argu ment really begs the question.
The doctrine of pith and substance postulates, for its application, that the impugned law is substantially within the legislative competence of the particular Legislature that made it, but only inciden tally encroached upon the legislative field of another Legislature.
The doctrine saves this incidental en croachment if only the law is in pith and substance within the legislative field of the particular Legislature which made it.
Therefore, if the Provincial Legislature under entry 1 had power to vest general jurisdiction on a newly constituted Court, then if the law made by it incidentally gave jurisdiction to the Court with respect to matters specified in List I the question of the applicability of the doctrine of pith and substance might have arisen.
I have already pointed out that, on a proper construction, entry 1 of List II did not empower the Provincial Legislature to confer any jurisdiction or power on the Court and the ex pression "administration of justice" had to be read as covering matters relating to administration of justice other than jurisdiction and powers of Court and, if that were so, the discussion of the doctrine of pith and substance does not arise at all.
I find it difficult to support the rea sonings adopted by the Bombay High Court in Jagtiani 's case.
The argument as to the applicability of the doctrine of pith and substance to the impugned Act can, however, be well maintained in the following modified form: Under entry 2 in List II the Provincial Legislature had power to make laws with respect to the jurisdiction and powers of Courts with respect to any of the matters enumerated in List II; that "administration of justice" in entry 1 is one of the matters in 126 List II; that, therefore, the Provincial Legislature had power to confer the widest general jurisdiction on any new Court or take away the entire jurisdiction from any existing Court and there being this power, the doctrine of pith and substance applies.
It is suggested that this argument cannot be formulated in view of the language used in entry 2 in List II.
It is pointed out that entry 2 treats "any of the matters in this List" as subject matter "with respect to" which, i.e., "over" which the Court may be authorised to exercise jurisdiction and power.
This construction of entry 2 is obviously fallacious, because jurisdiction and powers of the Court "over" administration of justice as a subject matter is meaningless and entry 2 can never be read with entry 1.
This circumstance alone shows that the words ' 'with respect to" occurring in entry 2 in List 11 when applied to entry 1 did not mean "over" but really meant "relating to" or "touching" or "concerning" or "for" admin istration of justice, and so read and understood, entry 2, read with entry 1 in List 11, clearly authorised the Provin cial Legislature to make a law conferring on or taking away from a Court general jurisdiction and powers relating to or touching or concerning or for administration of justice.
This line of reasoning has been so very fully and lucidly dealt with by my brother Sastri J. that I have nothing to add thereto and I respectfully adopt his reasonings and conclusion on the point.
This argument, in my opinion, resolves all difficulties by vesting power in the Provincial Legislature to confer general jurisdiction on Courts consti tuted and organised by it for effective administration of justice which was made its special responsibility.
Any argument as to deliberate encroachment that might have been rounded on the Proviso to section 3 of the Act which ena bled the Provincial Government to give to the City Court even Admiralty jurisdiction which was a matter in List I has been set at rest by the amendment of the Proviso by Bombay Act XXVI of 1950.
The impugned Bombay Act may, in my judg ment, be well supported as a law made by the Provincial Legislature under 127 entry 2 read with entry 1 in List II and I hold accordingly.
I, therefore, concur in the order that this appeal be al lowed.
In the view I have taken, it is not necessary to discuss the contention of the learned Attorney General that the Bombay City Civil Court Act may be supported as a piece of legislation made by the Provincial Legislature of Bombay under entry 4 read with entry 15 in Part I of List III and I express no opinion on that point.
Appeal allowed.
| The appellant, a practising lawyer engaged by.
the respondent to investigate title in respect of a property when the latter wanted to purchase, was prosecuted by him on a charge under a. 409 & the Indian Penal Code for misappro printing a sum of Rs. 50001 entrusted to him for that purpose.
The prosecution mainly depended on a letter written by the appellant which would show that a sum of Rs. 4200/ out of the said amount of Rs. 5000/ had been asked for by the appellant.
This letter was challenged as a forgery by the 565 appellant.
The respondent did not call a hand writing expert nor was he denied an opportunity to do so.
The trial Magistrate held that the prosecution case had not been proved and acquitted the appellant.
The High Court on appeal by the respondent set aside the order of acquittal on the ground that the appellant was a practicing lawyer in fiduciary relationship with his client and directed that the appellant be retried, by smother Magistrate with opportunity to the respondent to examine a hand writing expert in order to establish the genuineness of the said letter.
It held that since the case was one not between ordinary litigants but between a lawyer and his client, involving a fiduciary relationship, no steps should be spared to ensure complete justice between the parties and the case must be sent back even though the prosecution did not avail of the opportunity of proving its own case.
Held, that the order of the High Court were entirely erroneous and must, be set aside.
There was no ground for directing a retrial and the appellant could not be put to a second trial for the same offence simply because of the failure of the complainant to adduce all the evidence that should and could, have been adduced.
The fact that the appellant was a lawyer could make no difference and the same rules of criminal, jurisprudence that applied to all must apply to him.
Further, the High Court was not exercising disciplinary jurisdiction and no relationship of lawyer and client was involved in the criminal case.
|
Petition Nos.
528 529, 1645, 288,293, 362,363, 374, 388, 404 406, 510, 512 14, 644 46, 647, 663 65, 707, 710, 720 to 722, 745,793,1037 of 1979,341 43,344 47, 5257,519,5293, 3531 35, 4322 of 1980, 4824, 4825, 5246, 3236, 2963,3472 74,3415 17, 3420, 1363 65, 1327 28, 1337 41, 4101 2, 5326,4949 50 of 1981 and 311 of 1982.
(Under Article 32 of the Constitution of India) G.L. Sanghi, Dr. L.M. Singhvi, S.N. Kacker, Yogeshwar Prasad, Ashok Grover, V.N. Koura, S.C. Budhwar, L.K. Pandey, Ravindra Narain, D.N. Mishra, P. Krishna Rao, K.R. Nagaraja, Miss Kamini Jaiswal and Mrs. Rani Chhabra for the appearing Petitioners.
L,N. Sinha, Attorney General, S.C. Maheshwari, Additional Advocate General, O.P. Malhotra, G. N. Dikshit, H.R. Bhardwaj, B.P. Maheshwari, Suresh Sethi, Miss Asha Rani Jain, and Pravir Choudhary for the appearing Respondents.
The Judgment of the Court was delivered by TULZAPURKAR, J.
There is no substance in this group of writ petitions filed under article 32 of the Constitution whereby the petitioners, who carry on business, inter alia, of the wholesale vend of beer and Indian Made Foreign Liquor at various places in the State of U.P. on the strength of licences granted to them in Form FL 2 under the U.P. Excise Act, 1910, have challenged the constitutional validity of sections 1(2), 3 and (5) of U.P. Excise (Amendment) ordinance No. 4 of 1979 as also the constitutional validity of sections 1(2), 3 and 5 of U.P. Excise (Amendment) Act No. 13 of 1979 (which replaced the said ordinance No. 4 of 1979) as being violative of their fundamental rights under articles 14, 19 and 31 of the Constitution; the petitioners have also sought a declaration that section 30(2), proviso to cl.
(c) of section 41 and Explanations I and II to cl.
(c) of section 41 of the U.P. Excise Act 1910 as amended by sections 3 and 5 of the said ordinance No. 4 of 1979 as well as by sections 3 and 5 of the said Act No. 13 of 1979 and the provisions of sub section
(2) of section 1 of the said ordinance (No. 4 of 1979) as well as of the said Act (No. 13 of 1979) are ultra vires the Constitution and have prayed for the issuance of an appropriate writ, order or direction restraining the respondents (the State of U.P., the Excise Commissioner and other officers) either directly or through their agents, servants or otherwise from giving effect to the amended provision.
759 It may be stated that the aforesaid challenge to the U.P. Ordinance No. 4 of 1979, the U.P. Act No. 13 of 1979 and the concerned amended provisions of the U.P. Excise Act, 1910 has been made solely with a view to avoid the payment of the "assessed fee" which the respondents are seeking to recover from the petitioners in addition to the "fixed fee" (auction money) as and by way of consideration for the grant of licences in Form FL 2 for the wholesale vend of beer and Indian Made Foreign Liquor.
However, as it became clear during the hearing that even without the amendments affected in the U.P. Excise Act, 1910 (being the Principal Act) by the said ordinance No. 4 of 1979 and by the said Act No. 13 of 1979 the "assessed fee" in addition to the "fixed fee" (auction money) could be and was being recovered under the Principal Act of 1910 as amended by the U.P, Amending (Reenactment and Validation) Act 5 of 1976 and the Rules framed thereunder, the aforesaid challenge was given up and no arguments in support thereof were at all advanced by any of the counsel for the petitioners and the contentions centered round the question whether such "assessed fee" in addition to the "fixed fee" (auction money) could be levied and recovered under the Principal Act of 1910 as amended by the Act 5 of 1976.
It was not disputed before us that the grant of exclusive privilege of manufacture, supply or sale by wholesale or by retail of liquor was always governed by the provisions of the Principal Act of 1910 and the Rules framed thereunder and that licences for wholesale vend of beer and Indian Made Foreign Liquor were granted in Form FL 2 which contained the terms and conditions on which sales by wholesale of the said commodities could be effected by the grantees thereof.
It appears that prior to April 1976 these FL 2 licences were not settled under any auction system but were renewable from year to year and the licence fee was based on the quantity of beer and Indian Made Foreign Liquor actually sold from the concerned shop and was assessed and charged at the rate of Rs. 5 per quart bottle on spirits and 60 p. per quart bottle on beers.
But from April 1976 auction system was introduced whereunder FL 2 licences were auctioned under the provisions of paragraph 373 of the U.P. excise Manual Vol.
I and "fixed free".
being the highest bid (auction money) accepted at such auction came to be charged for the grant of FL 2 licences and this system was introduced on the strength of the amendments that were made in the Principal Act of 1910 by the Amending (Re enactment and 760 Validation) Act 5 of 1976.
Three or four amendments made by Act 5 of 1976 are material and we shall refer to these presently: A new section 24A dealing with the grant of exclusive or other privilege in respect of foreign liquor was introduced in the Principal Act, which reads as under: "24 A. Grant of exclusive or other privilege in respect of foreign liquor.
(1) Subject to the provisions of Section 31, the Excise Commissioner may grant to any person a licence or licences for the exclusive or other privilege: (a) of manufacturing or of supply by wholesale, or of both; or (b) of manufacturing or of supplying by wholesale, or of both and selling by retail; or (c) of selling by wholesale (to wholesale or retail vendors); or (d) of selling by retail at shops (for consumption 'off ' the premises); any foreign liquor in any locality.
(2) The grant of licence or licences under clause (d) of sub section (1) in relation to any locality shall be without prejudice to the grant of licences for the retail sale of foreign liquor in the same locality in hotels and restaurants for consumption in their premises.
(3) Where more licences than one are proposed to be granted under clause (d) of sub section (1) in relation to any locality for the same period, advance intimation of the proposal shall be given to the prospective applicants for every such licence.
(4) The provisions of Section 25, and proviso to Section 39 shall apply in relation to grant of a licence for an exclusive or other privilege under this section as they apply in respect of the grant of a licence for an exclusive privilege under Section 24," 761 Section 24 B which was also introduced by Act 5 of 1976 in the Principal Act reads thus: "24 B. Removal of doubts For the removal of doubts, it is hereby declared (a) that the State Government has an exclusive right or privilege of manufacture and sale of country liquor and foreign liquor; (b) that the amount described as licence fee in clause (c) of Section 41 is in its essence the rental or consideration for the grant of such right or privilege by the State Government; (c) that the Excise Commissioner as the head of the Excise Department of the State shall be deemed, while determining or realising such fee, to act for and on behalf of the State Government.
" By the same Act section 30 of the Principal Act was amended and the amended section 30 read thus: "30.
(1) Instead of or in addition to any duty leviable under the Chapter the State Government or on its behalf the Excise Commissioner may accept payment of a sum in consideration of the grant of licence for any exclusive or other privilege under section 24 or Section 24 A. (2) The sum payable under sub section (1) may be determined either by auction or by calling tenders or otherwise.
" Section 41 of the Principal Act which confers power on the Excise Commissioner to make Rules subject to the previous sanction of the State Government touching the matters or topics specified therein was amended by Act 5 of 1976 by substituting cl.
(c) thereby conferring power on the Excise Commissioner to frame Rules on the substituted matter or topic and the amended cl.
(c) runs thus: "(C) Prescribing the scale of fees or manner of fixing the fees payable for any licence, permit or pass including 762 any consideration for the grant of any exclusive or other privilege granted under Section 24 or Section 24 A or for storing of any intoxicant.
" In exercise of the power so conferred upon him under the amended cl.
(c) of section 41, the Excise Commissioner with the previous sanction of the State Government framed Rules called the U.P. Excise (Wholesale and Retail Vend of Foreign Liquor) (2nd Amendment) Rules, 1976 by issuing the Notification No. 27/Licence 3 dated 14th April, 1976, which were brought into force with effect from the date of publication in the Gazette, namely, 14th April, 1976, by this Notification the existing Rules 639, 641 and 642 as appearing in Excise Manual Vol.
I (1962 End.) were amended; Rule 639(2) as amended provides that "licences in form FL 2 shall be settled by public auction" while Rule 641 as amended provides that "the fee for a licence in Form FL 2 shall be the amount of money accepted at the auction of the licence as 'fixed fee ' together with an 'assessed fee ' charged on the basis of the scales of surcharge fee prescribed in the next paragraph following" and Rule 642 as amended runs thus: "642.
The scales of licence fee applicable to whole scale licences for the vend of foreign liquor shall be as follows: (i) For a licence in Form FL.1. (ii) For a licence in Form FL 2 The fixed fee obtained for the licence at the auction in addition to the assessed fees according to the following scales: (a) Spirits, Rs. 5.00 per wines, liquors reputed quart etc.
of all bottle on sale kinds.
to licensed vendors.
(b) Beer, Stout and Rs. 0.60 per other fermented reputed quart liquors.
bottle on sale to licensed vendors.
Note: The fixed fee in respect of licence FL 2: one fourth of the licence fee as obtained in the auction 763 shall be payable in advance immediately on the acceptance of the bid and the balance by such instalments as may be specified in the licence to be granted.
" By the very notification dated 14th of April, 1976 the Excise Commissioner added one more condition in the form of a proviso to the terms and conditions of FL 2 Licence and the said addition made after condition No. 1 (c), runs thus: "Provided that the assessment fee on the sales made on the licence in the prescribed manner at such scales of surcharge fee as may be prescribed by the Government and announced at the time of the auction, shall also be payable by the licencee." Obviously relying upon the aforesaid amendments made in the Principal Act of 1910, by Act 5 of 1976 (some of which were given retrospective effect from the date of the commencement of the Principal Act and others from 16th August 1972) and the said amended Rules 639, 641 and 642 and the insertion of the new condition in the FL 2 Licence (all of which came into force from 14th April, 1976), the respondents introduced the auction system for the grant of licences in Form FL 2 for wholesale vend of beer and Indian Made Foreign Liquor and started levying and recovering the "assessed fee" in addition to the "fixed fee" (auction money) from the grantees of the licences.
Question raised is whether such levy and recovery are legal and valid ? Before we deal with the question it will be desirable to set out the facts giving rise to it that lie in a narrow compass and it will suffice if the facts obtaining in Writ Petition No. 528 of 1979, being typically representative of the group, are stated.
The petitioners in that petition are liquor dealers and carry on business inter alia of wholesale vend of beer and Indian Made Foreign Liquor and for that purpose have wholesale depots in various districts in the State of U.P.
For the financial years 1976 77 and 1977 78 they acquired by auction bids wholesale vending rights in respect of Indian Made Foreign Liquor at Agra, Meerut, Varanasi, Kanpur, Bareilly and Dehradun; for the financial year 1978 79 they similarly acquired wholesale vending rights in Indian Made Foreign Liquor at Agra, Meerut and Varanasi and for the financial year 1979 80 they acquired by auction similar rights at Agra, Meerut, Ghaziabad 764 and Pilibhit.
In other words being the highest bidder at these places for these years licences for the wholesale vend of Indian Made Foreign Liquor in Form FL 2 were granted to them.
At the time of acceptance of their bids at these auctions the petitioners deposited the entire auction money called the "fixed fee" in respect of each of the said years with the respondents.
The petitioners ' case is that thereafter the respondents are seeking to levy and recover from them the "assessed fee" at the rate of Rs. 5 per quart bottle on spirits and 60 p. per quart bottle on beers actually sold during each of the financial years by their concerned shops or depots in addition the "fixed fee".
Such levy and recovery of the "assessed fee" by the respondents is challenged on two or three grounds indicated hereunder.
In the first place Counsel for the petitioners have contended that under section 30(2) of the Principal Act of 1910 prior to its amendment by U.P. Ordinance No. 4 of 1979 and U.P. Act 13 of 1979 it was open to the respondents to adopt either one or the other method of granting FL 2 licences and determine the licence fee payable by the grantee accordingly, that is to say the respondents could grant the licence "either by auction or by calling tenders" and once a particular mode was adopted it was incumbent upon them to apply the same for the purpose of determining the sum payable by the grantee; in other words the contention has been that it was not open to them to adopt a combination of two or more methods and claim "assessed fee" in addition to "fixed fee" and therefore the instant attempt on the part of the respondents to levy and recover the "assessed fee" in addition to "fixed fee" would be illegal and without authority of law.
According to the petitioners a combination of two or more methods became available to the respondents only under sec.
30(2) as amended by U.P. ordinance No. 4 of 1979 and by U.P. Act 13 of 1979.
Secondly, the petitioners have averred that at the time of the said auctions held for each of the said financial years the bidders were not informed that any "assessed fee" had been fixed by the State Government which would be payable by the successful bidder and therefore the persons who gave their bids including the petitioners whose highest bids were accepted were led to believe that no fee over and above the auction money would be charged and that the successful bidder would be granted FL 2 licence merely on payment of the auction money.
Counsel for the petitioners have therefore contended that the respondents ' attempt to levy and recover the "assessed fee" over 765 and above the "fixed fee" (auction money) is unwarranted and illegal in as much as the respondents cannot enhance the petitioners ' contractual liability which was limited to the payment of the auction money.
Yet another contention raised by Counsel for the petitioners has been that as per the newly inserted condition in FL 2 licence the "assessed fee" was required to be "prescribed by Government and announced at the time of auction" but in the instant case such "assessed fee" has been prescribed by the Excise Commissioner and not by the State Government and was not announced at the time of the auction and for this reason also the same would not be recoverable.
As will be shown presently none of these contentions has any merit and each one is liable to be rejected.
As regards the first contention a plain reading of section 30(2) prior to its amendment by U.P. Ordinance No. 4 of 1979 and by U.P. Act No. 13 of 1979 will show that there is no substance in it.
The said provision ran thus: "2.
The sum payable under sub sec.
(1) may by determined either by auction or by calling tenders or otherwise.
" In other words, the consideration for the grant of FL 2 licence could be determined either by auction or by calling tenders or otherwise.
The phrase "or otherwise" was sufficiently wide and conferred on its plain grammatical construction power on the State Government or the Excise Commissioner to grant the licence either by auction or by tenders or partly by auction and partly by tenders or even by adopting yet other methods than by auction or by inviting tenders.
In other words, the phrase "or otherwise" enabled the State Government or the Excise Commissioner to adopt a combination of one or more methods for granting the FL 2 licence and determine the licence fee accordingly.
Having regard to the phrase "or otherwise" occurring in the provision it is impossible to accept the contention that only one method to the exclusion of the others could be adopted by the respondents for granting the licence or that one type of fee appropriate to that method could alone be charged.
It is true that sub sec.
(2) of section 30 as amended by U.P. Ordinance No. 4 of 1979 or by U.P. Act No. 13 of 1979 runs thus: "2.
The sum payable under sub sec.
(1) may either be fixed by auction or inviting tenders or otherwise or be assessed on the basis of the sales made or quota lifted 766 under the licence or partly fixed and partly assessed in the aforesaid manner.
" But in our view it is manifestly clear that the aforesaid amended provision is clarificatory of the legal position which obtained under sec.
30(2) that was operative prior to the said amendment.
In this view of the matter the first contention has to be rejected.
The second contention has been that since at the time of holding the concerned auctions the bidders were not informed that any "assessed fee" had been prescribed by the State Government which would be payable by the successful bidder and since bids were offered on the representation that the successful bidder would be granted FL 2 licence merely on payment of the "fixed fee" (auction money) the respondents ' attempt to levy and recover the "assessed fee" over and above the "fixed fee" would be unwarranted and illegal because the respondents cannot enhance the contractual liability of the successful bidder which was limited to payment of the auction money.
There are two answers to this contention.
In the first place it was not disputed before us that to the knowledge of all the bidders these auctions for the grant of FL 2 licences were held under the provisions of the Principal Act of 1910 as amended by Act 5 of 1976 and the Rules framed thereunder which were then in force.
We have already referred to the provisions of the amended Rules 639(2), 641 and 642 which were published in the Gazette and brought into force with effect from 14th of April, 1976 and admittedly all auctions for the financial year 1976 77 were held subsequent to that date.
Under the amended Rule 641 it was clearly provided that the fee for the FL 2 licence shall be the amount of money accepted at the auction of the licence as "fixed fee" together with the "assessed fee" charged on the basis of the scales of Surcharge fee prescribed in the next following Rule and the amended Rule 642 prescribed the scales at which the "assessed fee" would be so charged.
In other words, the bidders who gave their bids must be deemed to have knowledge of the provisions of the aforesaid Rules subject to which the auctions were held and therefore it is difficult to accept the contention that the bidders including the successful bidder whose highest bid was accepted offered their bids believing that only "fixed fee" would be charged.
Secondly, the averment of the petitioners that at the time of these auctions the bidders were not informed that any "assessed fee" had been fixed or prescribed which would be payable by the successful bidder is not quite correct.
It has been admitted by the petitioners that at the time of these 767 auctions the new condition that was inserted by the Excise Commissioner in the FL 2 licence by his Notification dated 14th April, 1976 was read out and this newly inserted condition runs thus: "Provided that the assessment fee on the sales made on the licence in the prescribed manner at such scales of surcharge fee as may be prescribed by the Government and announced at the time of the auction, shall also be payable by licensee".
If admittedly the aforesaid condition inserted in FL 2 licence was read out at the time of the auction then it is clear that the fact that "assessed fee" on the sales made on the licence was also payable by the licensee was announced at the time of the auction.
The only grievance made by the petitioners has been that the prescribed scales of surcharge fee (under Rule 642) were not announced but that is neither here nor there, for, if once it was announced at the time of the auction that "assessed fee" on sales effected on the licence at the prescribed scales shall also be payable by the licensee then obviously the bidders were put on enquiry to find out what scales of surcharge fee had been prescribed under the relevant Rule.
In other words the bidders present at these auctions had full knowledge that "assessed fee" at prescribed rates will also be charged and it was with full knowledge of this position that they gave their bids.
If that be so, there is no question of the respondents ' attempting to enhance the contractual liability of the successful bidder.
It will be interesting to mention in this context that the respondents have stated in their counter affidavit that not only did the bidders know that "assessed fee" would be charged over and above the "fixed fee" (auction money) but many of the successful bidders to whom FL 2 licences were granted have actually passed on the "assessed fee" at the prescribed rates to and recovered the same from the retailers to whom they have effected sales of beer and Indian Made Foreign Liquor.
At least in the case of those petitioners before us who have done so the aforesaid plea put forward on their behalf cannot be regarded as honest.
The second contention therefore fails and is rejected.
The last contention is merely required to be stated to be rejected.
In support of that contention reliance was placed on the newly inserted condition in FL 2 licence which states that the assessed fee "at such scales of surcharge fee as may be prescribed by the Government" shall also be payable by the licensee while 768 actually the scales of surcharge fee have been prescribed by the Excise Commissioner by framing the amended Rule 642 in exercise of the powers conferred upon him by cl.
(c) of 41 of the Principal Act.
Counsel urged that scales of surcharge fee ought to have been prescribed by the Government.
In this connection we might refer to sec.
24B(c) which expressly declares that "the Excise Commissioner as the head of the Excise Department of the State shall be deemed, while determining or realising such fee, to act for and on behalf of the State Government".
It is thus clear that the Excise Commissioner has been statutorily declared to be the agent of the State Government and "while determining such fee" by framing the amended Rule 642 he acted for and on behalf of the State Government.
In other words, scales of "assessed fee" under Rule 642 must be deemed to have been prescribed by the State Government.
As regards the alleged non announcement at the time of the auctions we have already dealt with that aspect of the matter while dealing with and disposing of the second contention.
No other point was raised.
It is therefore clear that the levy and recovery of the "assessed fee" over and above the "fixed fee" by the respondents for granting FL 2 licences to all the petitioners would be legal and valid under the U.P. Excise Principal Act of 1910 as amended by Act 5 of 1976 and the amended Rules framed there under and all the petitions are liable to be dismissed.
We accordingly dismiss all the writ petitions with costs and quantify the costs payable by each of the petitioners separately at Rs. 5000.
S.R. Petitions dismissed.
| In exercise of the power conferred upon him under the amended clause (c) of section 41, the Excise Commissioner with the previous sanction of the State Government framed Rules Called the U.P. Excise (Wholesale and Retail Vend of Foreign Liquor (2nd Amendment) Rules, 1976 by issuing the Notification No. 27/Licence 3 dated 14th April 1976, which were brought into force with effect from the date of publication in the Gazette, namely, 14th April 1976; by this Notification the existing Rules 639, 641 and 642 as appearing in Excise Manual Vol.
(1962 Edn.) were amended; Rule 639(2) as amended provides that "Licences in form FL 2 shall be settled by the public auction" while Rule 641 as amended provides that "the fee for a licence in form FL 2 shall be the amount of money accepted at the auction of the licence as 'fixed fee ' together with an "assessed fee" charged on the basics of the scales of surcharge fee prescribed in Rule 642.
By the very notification dated 14th of April, 1976 the Excise Commissioner added one more condition in the form of a proviso to the terms and conditions of FL 2 Licence and the said addition made after condition No. 1(c), runs thus: "Provided that the assessment fee on the sales made on the licence in the prescribed manner at such scales of surcharge fee as may be prescribed by the Government and announced at the time of the auction, shall also be payable by the licencee." Relying upon the amendments made in the U.P. Excise Act, 1910 by Act 5 of 1976 and the amended Rules 639, 641 and 642 and the insertion of the new condition in FL 2 licence, the respondents introduced the auction system for the grant of licence in form FL 2 for wholesale vend of beer and Indian Made 756 Foreign Liquor and started levying and recovering the "assessed fee" in addition to the "fixed fee" (auction money) from the grantees of the licences.
The Petitioners who were successful bidders and who had acquired vending rights in Indian Made Foreign Liquor for the financial years 1976 77, 1977 78, 1978 79 and 1979 80 challenged the levy of "assessed fee", in addition to the "fixed fee" on the following grounds: (i) Under Section 30(2) of the Principal Act of 1910 prior to its amendment by U.P. Ordinance No. 4 of 1979 and U.P. Act 13 of 1979 it was open to the respondents to adopt either one or the other method of granting FL 2 licences and determine the licence fee payable by the grantee accordingly, that is to say, the respondents could grant the licence "either by auction or by calling tenders" and once a particular mode was adopted it was incumbent upon them to apply the same for the purpose of determining the sum payable by the grantee; in other words it was not opens them to adopt a combination of two or more methods and claim "assessed fee" in addition to "fixed fee" and this would be illegal and without authority of law.
A combination of two or more methods became available to the respondents only under Section 30(2) as amended by U.P. Ordinance No. 4 of 1979 and by U.P. Act 13 of 1979; (ii) In as much as the petitioners were not informed that any "assessed fee" had been fixed by the State Government, which would be payable by the successful bidder, the respondent 's attempt to levy and recover the "assessed fee" over and above the "fixed fee" (auction money) was unwarranted and illegal in as much as the respondents could not enhance the petitioners ' contractual liability which was limited to the payment of auction money and (iii) as per the newly inserted conditions in FL 2 Licence the "assessed fee" was required to be "prescribed by the Government and announced at the time of auction" but in the instant case such "assessed fee" had been prescribed by the Excise Commissioner and not by the State Government and was not announced at the time of the auction and for this reason also the same would not be recoverable.
Dismissing the petitions the Court, ^ HELD: 1.
The levy and recovery of the "assessed fee" over and above the "fixed fee" by the respondents for granting FL 2 licences to all the petitioners would be legal and valid under the U.P. Excise Act of 1910 as amended by Act 5 of 1976 and the amended rules framed thereunder.
[768 D E] 2:1.
A plain reading of Section 30(2) of the Uttar Pradesh Excise Act 1910 prior to its amendment by U.P. Ordinance No. 4 of 1979 and by U.P. Act No. 13 of 1973 makes it clear that the consideration for the grant of FL 2 licence could be determined either by auction or by calling tenders or otherwise.
[765 C E] 2:2.
The phrase "or otherwise" was sufficiently wide and conferred on its plain grammatical construction, power on the State Government or the Excise Commissioner to grant the licence either by auction or by tenders or partly by auction and partly by tenders or even by adopting yet other methods than by auction or by inviting tenders.
In other words, the phrase "or otherwise" 757 enabled the State Government or the Excise Commissioner to adopt a combination of one or more methods for granting the FL 2 licence and determine the licence fee accordingly.
Having regard to the phrase "or otherwise" occurring in the provision it can not be said that only one method to the exclusion of the others could be adopted for granting the licence or that one type of fee appropriate to that method could alone be charged.
[765 E G] 2:3.
Sub section (2) of Section 3 as amended by U.P. Ordinance 4 of 1979 or U.P. Act 13 of 1979 is clarificatory of the legal position which obtained under Sec.
30(2) that was operative prior to the said amendment.
[765G, 766A B] 3:1.
The bidders who gave their bids must be deemed to have knowledge of the provisions of the relevant Rules subject to which the auctions were held and therefore, the bidders including the successful bidders whose highest bid was accepted did not offer their bids believing that only "fixed fee" would be charged, since it was to their knowledge that the auctions for the grant of FL 2 licence were held under the amended provisions of the Act of 1910 by the Amendment of 1976 and that Rule 641 of Excise Manual clearly provided that the fee for the FL 2 licence shall be the amount of money accepted at the auction of the licence as "fixed fee" together with the "assessed fee" charged on the scales of surcharge fees prescribed in Rule 642.
Further even according to the petitioners, the new condition inserted by the Excise Commissioner in the said licence was read out.
If admittedly the said condition inserted in FL 2 licence was read out at the time of auction then it is clear that the fact that "assessed fee" on the sales made on the licence was also payable by the licensee was announced at the time of auction.
[766 D H. 767 B C] 3:2.
If once it was announced at the time of the auction that "assessed fee" on the sales affected on the licence at the prescribed scales shall also be payable by the Licensee, then the bidders were put on enquiry to find out what scales of surcharge fees had been prescribed under the relevant Rule.
In other words the bidders presented at these auctions had full knowledge that "assessed fee" at prescribed rates will also be charged and it was with full knowledge of this position that they gave their bids.
If that be so, there was no question of the respondents ' attempting to enhance the contractual liability of the successful bidder.
Further admittedly, not only did the bidders know that "assessed fee" would be charged over and above the "fixed fee" (auction money) but many of them actually passed on the "assessed fee" at the prescribed rates to and recovered the same from the retailers to whom they effected sales of beer and Indian Made Foreign Liquor.
[767 C F] 4.
Section 24B(c) which expressly declares that "the Excise Commissioner as the head of Excise Department of the State shall be deemed, while determining or realising such fee, to act for and on behalf of the State Government, makes it clear that the Excise Commissioner has been statutorily declared to be the agent of the State Government and "while determining" such fees by framing the amended Rules 642 he acted for and on behalf of the State Government, in other words, scales of "assessed fee" under Rule 642 must be deemed to have been prescribed by the State Government.
[768 B C] 758
|
ivil Appeal No. 1821 of 1991.
From the Judgment and Order dated 17 4.
1990 of the Central Administrative Tribunal, Delhi in R.A. No. 117/88 in T.A. No. 351 of 1986.
O.P. Saxena and Mukul Gupta for the Appellant.
J.D. Jain, Kailash Vasudev, Ms. Sushma Suri and S.N. Terdal for the Respondents.
332 The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
This appeal is from an order of the Central Administrative Tribunal, New Delhi and concerns with the scope of Rule 10(4) of the Central Civil Service (CCA) Rules, 1965 ( 'the Rules ') The facts leading to the appeal are these: The appellant was a cash clerk in the establishment of Delhi Milk Scheme, New Delhi.
There was some criminal case connected with the forgery of a cheque in which the appellant was arrayed as an accused.
Pending investigation of the criminal case, he was placed under suspension.
The order of suspension was made on March 27, 1976 under Rule 10(2) of the Rules.
On January 10, 1976 his services were terminated under Rule 5(1) of the Central Civil Services (Temporary Service) Rules, 1965.
On March 7, 1980, the appellant was acquitted in the criminal case.
On January 5, 1981 the appellant filed a civil suit in the District Court, New Delhi, challenging the order of termination of his services.
The suit was transferred to the Central Administrative Tribunal for disposal.
The Tribunal has, by its judgment dated September 5, 1988 set aside the termination order with the following conditions: "(i) The impugned order of termination dated 10.1.1978 is quashed.
Consequently, status quo ante as in regard to applicant being under suspension will continue from 10.1.1978.
(ii) It will be open to the competent authori ty to take a final decision on the continuance or otherwise of the suspension in the light of the judgment of Chief Judicial Magistrate dated 7.3.80 in case No. 57/2.
It will be open to the competent authority to revoke the order of suspension and reinstate the plaintiff into service as cash clerk.
In that event, the pay and allowances of the plaintiff during the period of his actual suspension from 27.3. 1976 to 10.1.78 and deemed suspension thereaf ter shall be regulated in accordance with the provisions of F.R. 54 B. Necessary adjust ments, if any, should be made or in regard to the subsistence allowance already paid to him.
The defendants shall also consider and decide whether the period of actual and deemed sus pension shall be treated as a period spent on duty or not.
333 (iii) It will also be open to the competent authority, if so advised, to continue the plaintiff on suspension if it is decided to initiate disciplinary proceedings against him based on his conduct which led to his prosecu tion before the criminal court.
The discipli nary proceedings if initiated should be com pleted within a period of six months from the date of communication of this order.
(iv) The competent authority shall take appro priate decision as regards (ii) and (iii) above within a period of two months from the date of communication of this order.
" Pursuant to the decision of the Tribunal management made an order dated November 10, 1988 under Rule 10(4) of the Rules placing the petitioner under suspension w.e.f. January 10, 1978.
The appellant shall be deemed to have been sus pended from the date of the original order of termination.
The management also directed that there should be further enquiry ' against the appellant.
The relevant portion of the order dated November 10, 1988 reads: "AND whereas the undersigned on a considera tion of the circumstances of the case, has also decided that a further enquiry should be held under the provision of CCS(CCA) Rules, 1965 against the said Shri Mohinder Singh, exhibit Cash Clerk on the allegation which led to his termination of service.
NOW THEREFORE the undersigned hereby: (i) set aside the order of termination of services of Shri Mohinder Singh, exhibit Cash Clerk (ii) directs that further enquiry should be held under the provisions of CCS(CCA) Rules, 1965 against Shri Mohinder Singh on the alle gations of misappropriation of Govt.
Money which led to the termination of service.
(iii) directs that the said Shri Mohinder Singh, exhibit Cash Clerk shall under sub rule 4 of Rule 10 of the CCS(CCA) Rules, 1965 be deemed to have been placed under suspension w.e.f. 10.1.
1978 and shall continue to remain under suspension until further orders.
(Baldev Chand) Disciplinary Authority Dy.
General Manager (A)" 334 After holding the enquiry the appellant was again dis missed from service.
That order was made on December 1, 1989.
It is said that the dismissal has been challenged by the appellant before the Tribunal.
From the above narration of facts it will be seen that the Tribunal while setting aside the termination order has directed that the appellant shall continue in suspension from January 10, 1978.
The management while deciding to hold further enquiry has also directed that the appellant shall be deemed to have been placed under suspension w.e.f.
Janu ary 10, 1978.
The management made this order under Rule 10(4) which reads as follows: "Where a penalty of dismissal, removal or compulsory retirement from service imposed upon a Government servant is set aside or declared or rendered void in consequence of or by a decision of a court of law and the disci plinary authority on a consideration of the circumstances of the case, decides to hold a further inquiry against him on the allegations on which the penalty of dismissal, removal or compulsory retirement was originally imposed, the Government servant shall be deemed to have been placed under suspension by the Appointing Authority from the date of the original order of dismissal, removal or compulsory retirement and shall continue to remain under suspension until further orders: Provided that no such further inquiry shall be ordered unless it is intended to meet a situation where the Court has passed an order purely on technical grounds without going into the merits of the case.
" There are three requirements for the application of Rule 10(4); (i) The Government servant is dismissed, removed or compulsorily retired as a measure of penalty; (ii) the penalty of dismissal, removal or compulsory retirement is set aside or declared or rendered void by a decision of a Court of Law; (iii) The disciplinary authority decides to hold a further inquiry against the Government servant on the allegations on which the original order of penalty was imposed.
If these three requirements are satisfied then the Government servant ,shall be deemed to have been placed under suspension by the appointing authority from the date of original order of penalty of dismissal, removal or com pulsory retirements and he shall continue to remain under suspension until further orders.
335 The order of the Tribunal and the management as to the retrospective suspension of the appellant cannot be sus tained under Rule 10(4) of the Rules.
It may be relevant to remember that the original order of termination was not passed against the appellant as a measure of punishment.
It was a 'simpliciter termination ' of the appellants ' service under Rule 5(1) of the CCS (Temporary Service) Rules 1965.
The Tribunal has set aside that order on the ground that it amounts to punishment and the order of punishment could not have been made without holding an inquiry against the appel lant.
But that is not the same thing to state that the management made an order terminating the services of the appellant by way of penalty.
The management treated the said order as a simpliciter discharge.
Rule 10(4) therefore, has no application to the case of the appellant.
Secondly, it would be misnomer to call it a further inquiry as contemplated under Rule 10(4).
There was no question of the management deciding to hold a further in quiry since there was no earlier inquiry against the appel lant.
The power to place delinquent officer under suspension from the date of the original order of dismissal, removal or compulsory retirement from service would be available pro vided if the original order of dismissal, removal or compul sory retirement from service was made by way of penalty and that order has been set aside by a Court of law.
Since there was no inquiry leading to the removal of the appellant in the first instance, the decision to hold fresh inquiry does not attract Rule 10(4).
The retrospective suspension of the appellant is therefore, unjustified and without authority of law.
However, it may be stated that the order of suspension dated November 10, 1988 would operate prospectively and the appellant would be entitled to reinstatement with all back wages till that day since the original order of termination has been set aside by the Tribunal.
The appeal is accordingly allowed modifying the impugned order.
In the circumstances of the case, however, we make no order as to costs.
N.P.V. Appeal allowed.
| The appellant company was ordered to be wound up in 1949.
In the course of its winding up the liquidator sold certain assets of the company and invested the sale proceeds thereof in fixed deposits with certain banks.
The liquidator incurred certain expenditures on salaries, legal fees, travelling expenses, postage and stationery.
The assessee company claimed a deduction of the said expenses from the interest income.
The I.T.O. did not allow it, and assessed the entire interest income as taxable u/s 56 of the Income Tax Act, 1961 under the head "Income from other sources".
The assessment orders were confirmed by the Appellate As sistant Commissioner and by the Income Tax Appellate Tribu nal in appeal.
On a reference by the Tribunal the High Court held that the income from fixed deposit was income from other sources; and it disallowed deduction of the expenditure section 57(iii) on the ground that the expenses claimed were not related to the earning of the interest income.
Aggrieved the assessee companY preferred appeal by special leave to this Court.
On the questions whether: (1) in effecting the sale and realisation of the assets of the Company in liquidation and investing the same in fixed deposits the liquidator was engaged in the business of the company and the interest income was a business income taxable u/s 28 of the Act and not under section 56 under the head "Income from other sources", and (2) the expenses incurred by the liquidator were in curred solely for the 384 purpose of earning the interest income so as to claim deduc tion section 57(iii).
Dismissing the appeal, this Court, HELD: 1.
The Liquidator in merely realising the assets of the Company could not be considered as carrying on any business of the Company.
[387G] 2.
In the instant case, the company before its liquida tion was engaged in the manufacture of sugar.
The records did not disclose that the liquidator was carrying on the business of manufacture of sugar or ' any trading activity for the purpose of facilitating the winding up.
The only accepted fact was that the interest income was derived from fixed deposits purchased out of the proceeds of sale of assets during winding up.
The assessee, could not be said to have carried on any business to bring the interest income within the meaning of section 28 of the Act and, therefore, the interest income was liable to be assessed only under the head "Income from other sources".
The Tribunal was, there fore, right in holding that the interest income in the instant case was not governed by section 28 but fell to be con sidered under section 56.
[387F; 388B C; 389A B] Vijay Laxmi Sugar Mills Ltd. vs Commissioner of Income Tax, Delhi Central, All., affirmed.
Morvi Mercantile Bank Ltd. vs Commissioner of Income Tax, Gujarat., Guj., approved.
3.1 In computing the income chargeable under the head "Income from other sources", requirement under section 57(iii) of the Act is that the expenditure should have been incurred "for the purpose of making or earning such income" and the deduction is to be made in respect of expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income.
[389C D & G] 3.2 It is true that the connection between the expendi ture and the earning of income need not be direct and it may be indirect.
But since the expenditure must have been in curred for purpose of earning that income, there should be some nexus between the expenditure and the earning of the income.
[389D E] 3.3 The interest accrues sui generis.
The interest is payable by the bank whether it is claimed or not and whether there is any establishment or not.
[389E F] 385 3.4 In the instant case there could be no doubt that the expendidure incurred by the liquidator can by no stretch be said to have been incurred with the object or for the pur pose of earning the interest income.
It could not be said that the expenditure incurred was to preserve or acquire the asset.
Nor could it be said that the expenses were incurred, for the purpose of maintenance of the source.
The Tribunal was, therefore, right in holding that the expenses claimed were not related to the interest income and was not a de ductable expenditure under section 57.
[390A B; 389G]
|
Civil Appeal No. 383(N) of 1973.
From the Judgment and Order dated 7.3.1972 of the High Court of Kerala in S.A. No. 549 of 1971.
G. Viswanath Iyer and Narayan Nettar for the Appellants.
T.S. Krishnamurthy Iyer, Vijay Kumar Verma and Madhu Moolchandani for the Respondent.
The Judgment of the Court was delivered by KHALID, J.
The appellants are the defendant in O.S. 55 of 1952 in the Sub Court, Mangalore.
Their father had ob tained sale of the property involved in this appeal by a document dated 28 4 1939, executed by the widowed mother of the respondent plaintiff who was a minor, aged six years, she acting as his guardian.
After he attained majority, he filed a suit for a declaration that the said sale deed was invalid and was not binding upon him and for recovery of possession thereof.
The Trial Court dismissed the suit.
In appeal, the appellate court confirmed the decree and Judg ment of the Trial Court.
In second appeal, the High Court of Kerala, by its Judgment, dated 27 11 1969, set aside the Judgments of the Courts below, allowed the appeal and de creed the suit.
The decree directed recovery of possession of the properties on payment of the sum of Rs.4,700 being the sale consideration and a sum of Rs.4,164 being the compensation for improvements.
On 15 9 1970, the decree holder, respondent herein, filed R.E.P. 68/70 in the Sub Court, Kasargod, depositing the amount due under the decree of the High Court and pray ing for delivery of the properties from the possession of the Judgment debtors, the appel 703 lants.
Execution was resisted by the appellants on the ground that no delivery could be ordered without payment of the value of improvements effected by them subsequent to the year 1952.
They also filed R.E.A. No. 146/70 for the issue of a commission to re value the improvements, claiming that they had effected improvements to the tune of Rs.80,000.
The respondent contested this application, denied that the appellants had made any improvements and contended that the question of improvements had been concluded by the Judgment of the High Court in the second appeal.
The executing Court dismissed this petition.
Aggrieved by this order, the appel lants filed an appeal before the District Judge, Tellicher ry, who allowed the appeal by his Judgment dated 12th April, 1971 and set aside the order of the executing Court.
The matter was taken to the High Court by way of Execution Second Appeal.
A Division Bench of the Kerala High Court, on a reference from a learned Single Judge, set aside the Judgment of the District Judge by its Judgment dated 7 3 1972 and restored the order of the Subordinate Judge and directed recovery of the property.
The appellants, moved the High Court for grant of certificate of fitness, which prayer was declined and hence have filed this appeal, by special leave.
The suit was filed by the plaintiff within three years 'of his attaining majority alleging that the assignee took advantage of the ignorance and helpless condition of the plaintiff 's mother, who was a young widow and that there was neither legal necessity nor pressure from the estate for effecting the sale.
He averred in the plaint that there was a partition decree in his favour in which he had been allot ted these properties with outstanding amounting to Rs.5,300 and mesne profits to the extent of Rs.1,549 which were sufficient to discharge the debts due by the estate.
The entire immovable properties belonging to the plaintiff, including the family residential house, were alienated.
The High Court in second appeal on the trial side held that the alienation was not something which a man of ordinary pru dence would have effected, had the properties been owned by him and thus held it not binding on the plaintiff.
The learned Judges of the Division Bench then considered the question of the defendant 's right for compensation for improvements, if any, effected.
This claim was denied.
In the written statement filed by the defendant, as noted by the High Court, all that was claimed was that improvements had been effected to the tune of Rs.4,000.
But no specific claim was made for compensation in the event of eviction.
The High Court also noted that the averment regarding im provements was itself made in the context of denying that the property would have fetched Rs.11,000 at the time of sale.
In the 704 additional written statement filed by the defendant a claim was made that improvements to the value of Rs.11,168 had been effected after the sale date and that under any circum stances, the defendants were entitled to just and adequate compensation for them.
The Division Bench adverting to this aspect of the case held against the appellants with the following observation: "The basis of the claim has not been stated anywhere, and no averments of fact necessary for attracting section 51 of the Transfer of Property Act or Section 4 of the Kerala Com pensation for Tenants ' Improvements Act, 1958, have been made.
Hence, the claim for value of improvements would appear to be unsustainable.
However, no objection has been taken by the appellant in the lower appellate court or in this Court to the finding of the trial court that in case of eviction, the defendants would be entitled to Rs.4,164.8.0 as compensation for improvements.
" It was with these observations regarding improvements that the appeal was allowed and the suit for recovery decreed.
When the matter reached the High Court in second appeal on the execution side the matter was heard by another Divi sion Bench of the Kerala High Court.
The Division Bench relied upon the following observation in the Judgment of the Division Bench on the original side and declined relief of value of improvements to the appellants, with the following observation: The Division Bench considered the question of value of improvements in paragraph 9 of the Judgments and Unnikrishna Kurup, J. who spoke for the Division Bench has stated in unequivocal terms: "Hence, the claim for value of improvements would appear to be unsustainable.
However, no objection has been taken by the appellant in the lower appellate court or in this Court to the finding of the trial court that in case of eviction, the defendants would be entitled to Rs.4,164,8.0.
as compensation for improve ments.
" We may in passing on also observe that the appellant had filed an application for special leave against the first Judgment in second appeal.
which was dismissed.
The claim of value of improvements was 705 rejected by the Division Bench with the following observa tion: "The sum of Rs.4,164.8.0 was directed to be paid, we repeat, not because the respondents were entitled to it, but because the appellant agreed to pay it.
" It is with these materials that the present claim of the appellants for value of improvements has to be considered.
We may indicate at this stage itself that the Commissioner appointed at the instance of this Court, assessed the value of improvements at Rs.1,00,031.40, by his report dated 12 10 1972.
The learned counsel for the appellant made a forceful plea that the Judgment of the High Court was wrong and that the conclusion arrived at by the High Court was as a result of a confusion regarding the pleadings in the case and the question of law involved.
He stated that at the trial stage an issue was struck as issue No. 8 regarding the value of improvements.
This question was adjudicated and the value of improvements was adjudged after due consideration of this issue.
His further submission is that the appellants were tenants within the meaning of Section 2(d) of the Kerala Compensation for Tenants Improvements Act, 1958 (Act 29 of 1958), and that the claim for value of improvements was made on the strength of Section 5 of the Act.
He relied upon a Division Bench ruling in Veerasikku Gounder vs Kuri an, 1 in support of his contention that the appellants were tenants and were entitled to the value of improvements.
The property is situated in the old South Kerala Dis trict which formed part of the then Madras Presidency.
At the time the suit was filed, there was no enactment in force in that area, enabling persons in possession of property belonging to another to claim value improvements in a suit for recovery of possession.
The area, where the property in dispute is situated, became part of Kerala when the said State was formed.
When Act 29 of 1958 was enacted, there were two enactments in existence, applicable to the Travan core Cochin and the Malbar Area, regarding the claims for improvements for tenants in possession.
They are the Travan core Cochin Compensation for Tenants Improvements Act, 1956 and the Malbar Compensation for Tenants Improvements Act, 1899.
Both these Acts were repealed when Act 29 of 1958 was enacted.
Section 2(d) of the new Act defines 'tenant ', the relevant portion of which reads as follows: "2(d) 'tenant ' with its grammatical variations and cognate 706 expression includes (i) . . . (ii) . . (iii) a person who comes into possession of land belonging to another person and makes improvements thereon in the bona fide belief that he is entitled to make such improvements.
" The appellants contention is that they satisfy this defini tion and that, therefore, they are entitled to the benefit of this Act.
Section 4 deals with the entitlement to compen sation for improvements for tenants for the improvements made by them, or their predecessor in interest on eviction.
Section 5 states that when in a suit for eviction instituted against the tenant the plaintiff succeeds and the defendant establishes a claim for compensation due under Section 4 for improvements, the Court shall ascertain the amount of com pensation and shall pass a decree for payment of the amount so found due to the tenants.
Subsection 3 of this section gives an additional right to such tenants for value of improvements effected after the decree by evaluation.
We read the section for a correct understanding of the same: "5(3) The amount of compensation for improve ments made subsequent to the date upto which compensation for improvements has been ad judged in the decree and the re valuation of an improvement, for which compensation has been so adjudged, when and in so far as such revaluation may be necessary when reference to the condition of such improvements at the time of eviction as well as any sum of money accru ing due to the plaintiff subsequent to the said date for rent, or otherwise, in respect of the tenancy, shall be determined by order of the court executing the decree and the decree shall be varied in accordance with such order.
" It is basing on this Section that the claim is made for value of improvements by the appellants.
The suit was filed in 1952.
At the time there was no enactment available for the defendant to claim value of improvements.
Neither in the original written statement nor in the additional written statement 707 dated 15 11 1954, did the defendants claim the value of improvements under the Act.
It is true that at the execution stage a plea was raised under Section 5 of Act 29 of 1958.
But it is necessary to remember that in the Judgment in the Second Appeal No. 464 of 1964, the Division Bench decided on 27 11 1969, that no claim for .improvements was made either under Section 51 of the Transfer of Property Act or under Section 4 of Act 29 of 1958.
Moreover, the High Court also found that no objection was taken by the appellants in the lower appellate court or before the High Court to the find ing that in case of eviction the defendant would be entitled to Rs.4,164.8.0 as compensation.
This Judgment was rendered when Act 29 of 1958 had already come into force.
Against this Judgment this Court was moved by filing a special leave petition and that was dismissed.
Thus, there is a concluded finding against the appellants that they were not entitled to anything more than the value of improvements decreed by the trial Court.
In the Judgment under appeal also the High Court has reiterated the fact that the appellants were being paid the amount mentioned above not because they were entitled to it, but because the appellant agreed to pay it.
The learned counsel for the appellants Shri G. Vishwanatha Iyer tries to over come the finality of this Judgment with the contention that the value of improvements has to be ascertained under the Act on the execution side and his claim cannot be de feated by flourishing the Judgment of the High Court and the dismissal of the S.L.P.
We find it difficult to accept the appellant 's case.
Section 5 comes into operation only when a defendant against whom a suit for eviction is instituted establishes a claim for compensation under the Act.
The Judgment of the High Court rendered in 1969 has clearly held that the value of improvement awarded was not under Section 4 of the Act but was an amount agreed by the plaintiff.
The appellants cannot succeed and have not succeeded in satisfy ing us that they ever made a claim for compensation under Section 4 of the Act and succeeded in such a claim.
There fore their further claim for getting the improvements reval ued cannot be accepted.
We do not wish to pronounce upon the question whether a person like the appellants who came into possession of the properties of a minor through his young widowed mother could be brought within the definition of tenant in Section 2(d)(iii).
This matter will have to be considered in an appropriate case and the correctness of the decision of the Kerala High Court brought to our notice by the appellant 's counsel tested then.
The appeal has only, therefore, to be dismissed.
708 However, we feel that some equity has to be worked out in this case.
This Court issued notice in the S.L.P. on 20 6 1972.
On 1 9 1972 stay of operation of decree was granted, and an opportunity was given to enable the parties to come to a compromise.
On 18 9 1972, this Court directed a Commissioner to be appointed to assess the value of improve ments which were made subsequent to the date upto which the compensation for improvements had already been adjudged.
It was pursuant to this direction that a report was submitted showing the value of improvements at more than a lakh of rupees.
On 23 2 1973, this Court granted special leave and stayed the operation of the decree on condition that the appellants deposit a sum of Rs.5,000 each year in the Trial Court and permitting the respondents to withdraw the same on furnishing security.
On April 1, 1980, this Court passed an order as follows: "Counsel on both sides, after arguments were heard in substantial measure, agreed with us that this was a case pre eminently fit for settlement.
The question of law raised is a ticklish one and the consequences will be 'all or nothing '.
The suggestion which appears to be acceptable to counsel on both sides is one of two alternatives, the option to choose being left to the respondent, since he has won in the High Court.
The alternatives are: (a) the appellant is to pay a sum of Rs.50,000 to the respondent in addition to the respondent being entitled to withdraw an amount of Rs.30,000 plus Rs.8,000 and odd lying in deposit to the credit of the suit.
In this event the appeal will stand allowed and the property will be kept by the appellant as owners of the property; (b) alternatively, the respondent will pay to the appellant a sum of Rs.50,000 and the appellant will be further entitled to withdraw a sum of Rs.30,000 plus Rs.8,000 now lying in deposit to the credit of the suit.
Thereupon the appellant will surrender posses sion forthwith to the respondent.
The property be kept in the same condition as it is now.
Post the matter on Tuesday i.e. 8 4 80.
" When the matter came before us for hearing, we asked the counsel whether a compromise was possible.
We found that the parties were not agreeable for a compromise.
The appellants have been in 709 possession of the properties ever since 1934 and have been enjoying the income therefrom.
It is true that they have effected improvements to the property.
That being so, we feel that the appellants should not be left without any compensation for the improvements effected.
We make this observation purely on an equitable basis.
We direct the respondents to pay to the appellants a sum of Rs.30,000 in addition to the amount decreed.
On such payment the appel lants shall deliver the property to the respondents.
The respondents will be at liberty to withdraw the amounts deposited by the appellants in the Trial Court pursuant to the orders of this Court if not already withdrawn.
A.P.J. Appeal dis missed.
| The appellants ' father had obtained sale of the property in question during the minority of the respondent through his widowed mother, who was acting as his guardian.
The respondent, on attaining majority, filed a suit for declara tion that the said sale deed was invalid and not binding upon him and for recovery of possession of the property.
The judgment and decree of the trial Court dismissing the suit was affirmed by the Appellate Court.
In Second Appeal, the High Court set aside the judgments of the Court below, allowed the appeal and decreed the suit, directing recovery of possession of properties on payment of Rs.4,700 being the sale consideration and a sum of Rs.4,164 being the compensa tion for improvement.
The Special Leave Petition filed by the appellants was dismissed.
The respondent filed execution, which was resisted by the appellants on the ground that the properties could not be ordered to be delivered without payment of the value of improvements effected by them subsequent to the year 1952.
They also filed an application for the issue of a commission to revalue the improvements, claiming that they had effected improvements to the tune of Rs.gO,O00.
The respondent con tested this application denying that the appellants had made any improvements and contended that the question of improve ments had been concluded by the judgment of the High Court in the Second Appeal.
The executing Court dismissed this petition.
The District Judge allowed the appeal filed by the appellants and set aside the order of the executing Court.
The High Court set aside the judgment of the District Judge and restored the order of the executing Court and directed recovery of the property.
The High Court observed that "the sum of Rs.4,164.8.0 was directed to be paid not because the respondents were entitled to it, but because the appellant agreed to pay it. ' ' In the appeal to this Court, on behalf of the appellants it was 701 contended: (1) that the judgment of the High Court was wrong and that the conclusion arrived at by the High Court was as a result of confusion regarding the pleadings in the case and the question of law involved; (2) that at the trial stage an issue was struck as issue No. 8 regarding the value of improvements which was adjudicated and the value of improvements was adjudged; (3) that the appellants were tenants within the meaning of section 2(d) of the Kerala Compen sation for Tenants Improvements Act, 1958 (Act 29 of 1958) and that their claim for value of improvements was made on the strength of section 5 of the Act and, therefore, they are entitled to the value of improvements; and (4) that the value of improvements has to be ascertained under the Act on the execution side and their claim cannot be defeated by flourishing the judgment of the High Court and the dismissal of the S.L.P. Dismissing the Appeal, HELD: 1.
The suit was filed in 1952.
At that time there was no enactment available for the defendant to claim value of improvements.
Neither in the original written statement nor in the additional written statement dated 15.11.1954, did the defendants claim the value of improvements under the Act.
Though at the execution stage a plea was raised under section 5 of Act 29 of 1958, but in the Judgment in the Second Appeal No. 464 of 1964 dated 27.11.1969, the Division Bench decided that no claim for improvements was made either under section 51 of the Transfer of Property Act or under section 4 of Act 29 of 1958.
Moreover, the High Court also found that no objection was taken by the appellants in the lower Appellate Court or before the High Court to the finding that in case of eviction the defendant would be entitled to Rs.4,164.8.0.
as compensation.
This judgment was rendered when Act 29 of 1958 had already come into force.
Against this judgment a special leave petition was filed and dismissed.
Thus, there is a concluded finding against the appellants that they were not entitled to anything more than the value of improvements decreed by the trial Court.
[706H; 707A C] 2.
Section 5 comes into operation only when a defendant against whom a suit for eviction is instituted establishes a claim for compensation under the Act.
The Judgment of the High Court rendered in 1969 has clearly held that the value of improvement awarded was not under section 4 of the Act but was an amount agreed by the plaintiff.
The appellants cannot succeed and have not succeeded in satisfying this Court that they ever made a claim for compensation under section 4 of the Act and succeeded in such a claim.
Therefore, their further claim for getting the improvements revalued cannot be ac cepted.
[707E G] 702 3.
The question whether a person who came into posses sion of the properties of a minor could be brought within the definition of 'tenant ' in section 2(d)(iii) will have to be considered in an appropriate case.
[707G H] 4.
Purely on an equitable basis, the respondent shall pay to the appellants a sum of Rs.30,000 in addition to the amount decreed.
On such payment the appellants shall deliver the property to the respondent.
The respondent shall be at liberty to withdraw the amounts deposited by the appellants in the trial court pursuant to the order of this Court, if not already withdrawn.
[709B C]
|
Civil Appeal No. 404 of 1984.
Appeal by Special leave from the Judgment and Order dated the 11th July, 1983 of the Patna High Court in C.W.J.C. No. 623 of 1983.
Dr. L.M. Singhvi, Mrs. Lakshmi Kant Pande & S.K. Sinha, for the Appellant.
D. Goverdhan & B.B. Singh for the Respondents.
The following Judgments were delivered FAZAL ALI, J.
The most difficult and delicate task of our founding fathers while framing the Constitution of the largest democracy in the world was to protect, preserve and safeguard the interests of the minorities and the backward classes in order to retain the secular nature of our Constitution.
Perhaps they feared that a time may come when the overwhelming majority may overshadow or dominate, devour of destroy the educational, cultural and social rights of the minorities and wreck their individuality and personality.
It was this central theme that runs through the entire Constitution which has provided sufficient safeguards to protect and preserve the minority educational institutions which is the most important and vocal medium through which this section of the society can speak and seek to redress its grievances.
In this appeal we are merely concerned with the rights and obligations of the State for the protection of minority institutions and for this avowed purpose article 30 was enshrined in our Constitution so that they may not suffer from a sense of inferiority complex and are able to through themselves into the main stream of the economic and political life of the country so as to march forward with the temper of the times and the needs of the nation Although article 30 is not included in Part II of the Indian Constitution, which guarantee certain fundamental rights.
yet this Court starting from the Kerala Education Eill 's case.
Which is the locus classicus on the point in issue, right up to the case of The Ahmedabad St. Xaviers College Society & Anr, etc.
vs State of Gujarat & Anr.
and ending with All Sainis High School, Hyderabad & Ors.
vs Government of 415 Andhra Pradesh & Ors. has clearly recognised that running of minority institutions is also as fundamental and important as the rights conferred on the other citizens of the country.
Perhaps the only difference is that the rights contained in article 30 have an independent sphere of their own.
A close scrutiny and study of the various decisions of this Court reveal that the freedoms guaranteed by article 30 are also elevated to the status of a full fledged fundamental right within the field in which they operate.
In other words, any State action which in any way destroys, curbs or interferes with such rights would be violative of article 30.
In the instant case we are mainly concerned with the rights, privileges and status of minority institutions.
In dwelling on these matters four important aspects or facets have been considered by this Court, viz.: (1) right of the minority institutions to get aid from the Government, (2) right to get affiliation from the Universities, (3) nature and extent of the autonomy which such institutions enjoy in their internal discipline and administration, and (4) right to be protected from undue or repeated interference in the independence of the institutions in the garb of achieving excellence in the standard of education.
The first question to be determined is whether the minority institutions have a fundamental right to get aid from the Government or affiliation from the Universities as a matter of course.
In other words, the question posed is whether the right to affiliation or to not so as to violate article 30.
Technically speaking the answer to this question is in the negatives but it must be stressed that the refusal to give aid or affiliation by the statutory authorities without just and sufficient grounds amounts to violation of the fundamental freedoms enshrined in Art 30 of the Constitution.
If the Government withholds giving aid or a university refuses to grant affiliation, the direct consequence would be to destroy the very existence of the Institution itself because there may be a number of minority institutions which may not exist without the Government aid and a large 416 number of students admitted to these institutions, in the absence of affiliation, will be deprived of acquiring higher academic status which will not only be a loss to the institution but a loss to the nation itself.
It is for this purpose that Art, 30 was inserted in the Constitution.
In the present case, we would like to confine our judgment only to the question of refusal of affiliation to a minority institution by the State and the University.
To begin with, in Kerala Education Bill 's case (supra), Das, C.J. speaking for the majority (Venkatarama Aiyar, J. having given his separate judgment) observed thus; "The minorities evidently desire that education should be imparted to the children of their community in an atmosphere congenial to the growth of their culture.
Our Constitution makers recognised the validity of their claim and to allay their fears conferred on them the fundamental rights referred to above .
They also desire that scholars of their educational institutions should go out in the world well and sufficiently equipped with the qualifications necessary for a useful career in life.
But. . the scholars of unrecognised schools are not permitted to avail themselves of the opportunities for higher education in the University and are not eligible for entering the public services.
Without recognition, therefore, the educational institutions established or to be established by the minority communities cannot fulfil the real objects of their choice and the rights under Art, 30 (1) cannot be effectively exercised.
The right to establish educational institutions of their choice must, therefore, mean the right to establish real institutions which will effectively serve the needs of their community and the scholars who resort to their educational institutions.
There is, no doubt, no such thing as fundamental right to recognition by the State but to deny recognition to the Educational institutions except upon terms tantamount to the surrender of their constitutional right of administration of the educational institutions of their choice is in truth and in effect to deprive them of their rights under article 30(1).
We repeat that the legislative power is subject to the fundamental rights and the legislature cannot indirectly take away or abridge the fundamental rights which it could not do directly and yet that will be the result if the said Bill containing any offending clause becomes law." (Emphasis ours) The observations and the ratio of this case were fully affirmed 417 and expounded by this Court in a 9 Judge Bench decision in St. Xaviers College case (supra) where all the Judges speaking in the same strain held that withholding of aid or affiliation in such a manner as to destroy or efface the autonomy and individuality of a minority institution violates article 30.
In this connection, the Judges by separate judgements made the following observations: "The consistent view of this Court has been that there is no fundamental right of a minority institution to affiliation.
An explanation has been put upon that statement of law.
It is that affiliation must be a real and meaningful exercise for minority institutions in the matter of imparting secular education.
Any law which provides for affiliation on terms which will involve abridgement of the right of linguistic and religious minorities to administer and establish educational institutions.
of their choice will offend Article 30 (1).
The educational institutions set up by minorities will be robbed of their utility if boys and girls cannot be trained in such institutions for University degrees.
Minorities will virtually lose their right to equip their children for ordinary careers if affiliation be on terms which would make them surrender and lose their rights to establish and administer educational institutions of their choice under Article 30. .
The establishment of a minority institution is not only ineffective but also unreal unless such institution is affiliated to a University for the purpose of conferment of degrees on students.
. . . . . . Affiliation of minority institutions is intended to ensure the growth and excellence of their children and other students in the academic field.
Affiliation mainly pertains to the academic and educational character of the institution." (Ray, C.J.) "We agree with the judgment of Hon 'ble the Chief Justice just pronounced and with his conclusions that sections 40, 41, 33A(1) (a), 33A(1)(b), 51A and 52A of the Act violate the fundamental rights of minorities and cannot, therefore, apply to the institutions established and administered by them. . . . . .
The right under article 30 cannot be exercised in vacuo.
Nor 418 would it be right to refer to affiliation or recognition as privileges granted by the State.
In a democratic system of Government with emphasis on education and enlightenment of its citizens, there must be elements which give protection to them.
The meaningful exercise of the right under article 30(1) would and must necessarily involve recognition of the secular education imparted by the minority institutions without which the right will be a mere husk.
This Court has so far consistently struck down all attempts to make affiliation or recognition on terms tantamount to surrender of its rights under article 30(1) as abridging or taking away those rights.
Again as without affiliation there can be no meaningful exercise of the right under article 30(1), the affiliation to be given should be consistent with that right.
nor can it indirectly try to achieve what it cannot directly do." (Jaganmohan Reddy, J.) I am of the view that it is permissible for the State to prescribe reasonable regulations like the one to which I have referred earlier and make it a condition precedent to the according of recognition or affiliation to a minority institution.
It is not, however, permissible to prescribe conditions for recognition or affiliation which have the effect of impairing the right of the minority to establish and administer their educational institutions.
Affiliation and recognition are, no doubt, not mentioned in article 30(1) position all the same remains that refusal to recognize or affiliate minority institutions unless they (the minorities) surrender the right to administer those institutions would have the effect of rendering the right guaranteed by article 30(1) to be wholly illusory and indeed a testing illusion. . . . . . .
What is said above with regard to aid or recognition applies equally to affiliation of a college to the University because but for such affiliation the student will not be able to obtain a University degree which is recognized as a passport to several professions and future employment in Public Service. . . . . .
If the conversion of affiliated colleges of the minorities 419 into constituent colleges contravenes article 30(1), the fact that such conversion is in pursuance of a scheme which permits the grant of autonomy to an individual college would not prevent the striking down of the impugned provision." (Emphasis ours) (Khanna, J.) "Over the year, this Court has held that without recognition or affiliation, there can be no real or meaningful exercise of the right to establish and administer educational institutions under Article 30(1).
. . . . . The heart of the matter is that no educational institution established by a religious or linguistic minority can claim total immunity from regulations by the legislature or the university if it wants affiliation or recognition; but the character of the permissible regulations must depend upon their purpose.
As we said, such regulations will be permissible if they are relevant to the purpose of securing or promoting the object of recognition or affiliation." (Mathew, J.) "It is true that, if the object of an enactment is to compel a minority Institution, even indirectly, to give up the exercise of its fundamental rights, the provisions which have this effect will be void or inoperative against the minority Institution, The price of affiliation cannot be a total abandonment of the right to establish and administer a minority Institution conferred by Art, 30(1) of the Constitution.
This aspect of the matter, therefore, raises the question whether any of the provisions of the Act are intended to have that effect upon a minority Institution.
Even if that intention is not manifest from the express terms of statutory provisions, the provisions may be vitiated if that is their necessary consequence or effect." (Beg, J.) "However, in case of an affiliating University affiliation cannot be denied to a minority institution on the sole ground that it is managed by a minority whether based on religion or language or on arbitrary or irrational basis.
Such a denial would be violative of articles 14 and 15(1) and will be struck 420 down by courts.
Again, Art, 13(2) prohibits the State from taking away or abridging the right under Art, 30(1).
Since the State cannot directly take away or abridge a right conferred under article 30(1), the State cannot also indirectly take away or abridge that right by subjecting the grant affiliation to conditions which would entail the forbidden result." (Diwedi, J.) On a careful and detailed review of the cases cited above, the following position emerges; (1) that while Art, 30 undoubtedly seeks to preserve the religious freedom, autonomy and its individuality; there is no fundamental right under which an institution can claim either aid or affiliation as a matter of right.
It is permissible for the State or the University, as the case may be, to lay down reasonable conditions to maintain the excellence of standard of education but in the garb of doing so, refusal to grant affiliation cannot be made a ruse or pretext for destroying the individuality and personality of the said institution.
If this is done, then apart from being wholly arbitrary and unreasonable it would amount to a clear infraction of the provisions of Art, 30 because what cannot be done directly is done indirectly.
(2) While the State or a University has got an absolute right to insist on certain courses of study to be followed by institutions before they could be considered for affiliation but these conditions should not in any way take away the freedom of management or administration of the institution so as to reduce it to a satellite of the University or the State.
This is wholly impermissible because such a course of action directly violates article 30 of the Constitution.
(3) While imposing conditions before granting affiliation, as indicated above, the State or the University cannot kill or annihilate the individuality or personality of the institution in question by insisting on following a particular kind of syllabus or a course of study which may be directly opposed to the aims, objects and ideals sought to be achieved by the institutions.
421 (4) There is a very thin line of distinction between withholding of affiliation for a particular purpose on extraneous grounds so as to subject the institution to rigorous orders, edicts or resolutions which may run counter to the dominant purpose for which the institution has been founded, and insisting on genuine and reasonable conditions to be imposed in the larger interest of education.
Thus, all the authorities mentioned above clearly laid down that (while affiliation itself may not be a fundamental right but refusal of affiliation on terms and conditions or situations which practically denies the progress and autonomy of the institution is impermissible as being violative of article 30 of the Constitution.) It is not necessary for us to dwell on the other aspects of the matter because we are not concerned with them in this particular case.
We now proceed to discuss the facts of the present case which, we are constrained to observe, reveal a most distressing and disturbing attitude exhibited by the University and the Government of Bihar as well.
In fact, the reason and the motive for refusing affiliation to the Milli Talimi Mission Bihar, Ranchi are so obvious and manifest that even the Standing Counsel for the State of Bihar, despite his best efforts, found himself unable to support the action of the University.
We are indeed amazed how the respondents have behaved in filing their affidavits in the highest court of the land and have violated the express orders of this Court with impunity.
In order to buttress what we have said, it may be necessary to give a short history of the Institution in question.
The Institution in dispute, Milli Talimi Mission Bihar, Ranchi, was started as a Teachers Training College under a Society which was established as for back as 1972, though the College itself was established and started in July 1977.
On 22.9.1977 the Institution made an application to the Government for grant of affiliation or recognition of the same in response to which a most extraordinary order was passed by the Government directing the Universities for refusing affiliation on the strange ground that all proposals for affiliation by the Non Government Teachers Training Colleges be rejected and that no student be allowed to appear as a private candidate.
However, in the case of minority institutions the State Government in sub para (3) of paragraph (1) stated thus: 422 "(3) The above decision as described vide decision nos.
(1) and (2) above shall not be applicable in cases of colleges run by the minority community.
Government decision in this regard to their cases shall be intimated separately.
" In view of the above, it was incumbent on an institution to prove that it was a minority institution before it could be granted affiliation.
Thereafter, on 24.2.1978 the appellants filed an application before the Ranchi University for grant of affiliation.
This was followed by issue of Bihar non Government Teachers Training College Ordinance on June 5, 1978.
On June 15, 1978 the Government wrote to the Ranchi University for inspection of the appellant 's College.
On 13.8.1979 the Government notified that the decision regarding affiliation would be governed by its circular dated 1.10.1973 (Annexure B), which laid down certain conditions for grant of affiliation, and that with regard to the minority institutions a final decision would be taken later.
Thereafter, a writ was filed in the Patna High Court where it was decided that section 2 of the Ordinance, referred to above, would not apply to minority training colleges.
On 6.2.1980 Joint Secretary to the Government of Bihar sent letters to the Ranchi University and the Deputy Commissioner, Ranchi for inspection of the appellants ' college.
It would appear that although the Institution applied for affiliation in 1977 and claimed to be a minority institution, which was never disputed at any point of time, yet it took three years for the Government to take a decision about affiliation of the appellant 's college.
On 5.3.1980, the University authorities inspected the appellants ' college and recommended its affiliation which was followed by a report by the District Development Officer, Ranchi on 30.6.1980 recommending affiliation.
But, despite these facts no final decision was taken by the Government as a result of which the appellants had to move the High Court again for directing the Government to grant affiliation and the High Court gave a direction to the Government to decide recognition and affiliation of the appellants ' college within a specified time.
On 3.11.80, the Government granted recognition and approval for affiliation for three sessions only, i.e., 1977 78, 1978 79 and 1979 80.
On 10.11.1980, the University wrote to the Government recommending grant of affiliation to the appellants ' college.
On 22.11.1980, the appellants applied for grant of permanent affiliation.
But, somehow or the other, on 27.11.80, for undisclosed reasons, 423 the Government passed a strange order cancelling the recognition and approval for affiliation granted to the appellants ' college vide its letter dated 3.11.80.
This order was challenged before the High Court which quashed the same on 18.5.81.
Thereafter, on 17.8.81 the State of Bihar filed a special leave petition before this Court which was dismissed on 30.11.81.
However, on 7.9.81 three minority colleges, alongwith the appellants ' college, were granted recognition and affiliation by the Government.
Ultimately, the High Court had to be moved again which directed the State Government to dispose of the application of the appellants for permanent recognition which was filed by them on 22.11.80.
On 16.9.82, the Education Commissioner, Bihar again, made a recommendation for grant of affiliation to the appellants ' college, which may be extracted thus: "In this connection the notings of the Joint Secretary may kindly be seen at pages 62 64.
Also the Judgment of the High Court be seen at page 137 according to which the restrictions of the Ordinance is not applicable to Minorities Institutions.
In addition to this, this institution has also been got inspected in which the local authorities were present.
There is unanimous recommendation that this training institution be affiliated.
The recommendation of the University may kindly be seen at p. 150.
Accordingly, this college be temporarily granted recognition and affiliation for the sessions 1980 81 to 1982 83 for the present.
" A perusal of the above recommendation shows that the Institution in question was inspected in the presence of the local authorities as also the University authorities who unanimously recommended that the Institution was a minority institution and should be granted affiliation and recognition at least for the session 1980 81 to 1982 83 Despite this, nothing tangible seems to have happened which compelled the appellants to file another writ petition in the High Court on 3.5.1983 for examination of the students of the appellants ' college who had passed the 1982 83 session.
But the writ petition was dismissed by the High Court in limine.
Hence, this appeal by special leave to this Court.
After leave was granted we directed the respondents to produce exhibit J. (Education Commissioner 's recommendation) and the data on 424 the basis of which the concerned authorities had recommended that affiliation should be granted to the appellants college but till today no attempt has been made to produce those documents and the learned counsel for the State of Bihar was unable to give any explanation for this most extraordinary action on the part of the State Government.
The State has filed an affidavit raising all sorts of pleas which could not be supported by the counsel for the State.
It would appear that practically no reasons were given by the State as to why despite the recommendations of several authorities, which were made after a full and proper inspection, the affiliation was refused.
In paragraph 7 of one of the affidavits filed by the respondents it is mentioned that before grant of affiliation, the following conditions must be fulfilled by an institution: (a) that there must be full time qualified Principal and Lecturers in proportion of 1: 15; (b) the institution must have a recognised High School attached to it; (c) it must have sufficient land of its own to provide adequate accommodation for classrooms, hostels, play grounds, residences of lecturers, gymnasium, canteen, etc., and the college must run during the day time like the schools; (d) the admission registers, attendance registers to be properly maintained; (e) that in no case it will charge capitation fee or any tuition fee from students.
(f) that there should be residential accommodation for at least one fourth of the staff.
(g) that hostel accommodation to at least one fifth of the students is provided; (h) that there should be a stable source of income to run the college.
" It is manifest that if these conditions were fulfilled then affiliation could be granted as a matter of course on the findings and decision taken by the Government itself.
In reply to the affidavit filed by the 425 appellants, the defence of the State was that after inspection of the Institution it was found by a team of Inspectors that the Institute suffered from the following infirmities: "(i) There were no full time qualified Principal or Lecturers.
(ii) That there was no recognised school attached to it.
(iii) The college runs during evening hours which makes impracticable for practice classes in schools which run during day time.
(iv) The college had no building of its own.
(v) The library and laboratory were not properly maintained.
" It is rather strange that while a previous expert Committee after inspecting the said Institute found it in order but subsequently the Government without referring to the data submitted by the expert Committee, which was the basis of exhibit J. seems to have suddenly given a go bye to the same and taken the defence that in view of the defects and non fulfilment of the conditions it was not possible to grant affiliation without even mentioning in what manner and to what extent the recommendation of Education Commissioner and the materials on which it was based was wrong and why the five new conditions were sought to be imposed.
Despite repeated orders of this Court to the respondents to produce the report of the Education Commissioner and the details thereof, the same was not done and a belated attempt was made to show that there were certain defects in the Institution.
In view of the non production of the most important and decisive material we are unable to accept the subsequent affidavit of the respondents which is nothing but an afterthought.
The State Government in its counter affidavit has stated that it was prepared to grant affiliation to the appellants ' college on fulfilling certain conditions.
We are however, satisfied that this is nothing but a pretext or a smoke screen to cloud the real issue.
Indeed, if the Government meant business it should have the courage to produce the report on which exhibit J. was based, which has been deliberately suppressed despite our orders to produce the same.
We are, therefore, compelled to draw an adverse inference against the State 426 Government to the effect that if the materials on which the report was based had been produced it would have exploded the case of the Government and disclosed the real state of affairs, viz, that the appellants Institute does fulfil all the conditions imposed by the State.
Thus, the position is that the State has refused to grant affiliation on purely illusory grounds which do not exist and failed to consider the recommendation of the Education Commissioner which was made after full inspection for grant of affiliation.
In other words, the affiliation was refused without giving any sufficient reasons and such a refusal contravenes the provisions of article 30 of the Constitution.
For the reasons given above, we find that this is a fit case where this Court should step in to strike down the Government action which is violative of article 30 of the Constitution and which does not fall within the guidelines indicated in the various authorities cited in our judgment.
The heart of the matter is that as the Government did not like the recommendation of the Education Commissioner and was not prepared to grant affiliation for undisclosed reasons, the act of the Government was a colourable exercise of jurisdiction which deprived the appellants ' Institution of its constitutional rights.
Normally, this Court does not grant costs in such cases but having regard to the manner in which the State Government has behaved and exhibited its reluctance to perform a constitutional duty and has also tried to disobey our orders for production of certain documents, we must impose a heavy cost on the State.
We, therefore, allow this appeal with costs quantified at Rs. 5,000 (Rupees five thousand only) to be paid to the appellants within three months from today, set aside the Order of the High Court dismissing the writ petition in limine as also the Order of the Government refusing affiliation and peremptorily direct the Government to grant affiliation to the appellants ' college and allow its students of the 1980 81.1981 82 and 1982 83 sessions to sit in the examination, both written and practical, as the case may be.
We would, however, like to add that if there are cogent reasons and sufficient material before the State or the University to show that the appellants ' Institute has not fulfilled the conditions which may be imposed hereafter, it is open to it to withdraw the affiliation provided the conditions imposed are reasonable and justifiable.
427 SABYASACHI MUKHARJI, J.
I agree with the order proposed by my learned brother Justice Fazal Ali.
For the purpose of disposing of this appeal, it is sufficient to state that on the 5th March, 1980 the university authorities inspected the appellants ' college and recommended its affiliation which was followed by a report by the Government on 30 June.
1980 recommending affiliation.
But despite these, no final decision was taken by the Government as a result of which the appellants had to move the High Court for directing the Government to decide recognition and affiliation of appellants ' college within a specified time.
On 3rd November, 1980 the Government granted recognition and approval for affiliation for three sessions namely 1977 78, 1978 79 and 1979 80.
On the 10th November, 1980, the University wrote to the Government recommending grant of affiliation.
On 22nd November, 1980, the appellants applied for grant of permanent affiliation.
But the Government on 27th November, 1980 passed an order cancelling the recognition and approval for affiliation granted to the appellants ' college vide its letter dated 3rd November, 1980.
This order was challenged before the High Court.
The High Court quashed the said order dated 27th November, 1980 on 18th May, 1981.
On the 17th August, 1981, the State of Bihar filed a special leave petition before this Court which was dismissed on 30th November, 1981.
The High Court was moved again for directing the State Government to dispose of the application of the appellants for permanent recognition which was filed by them on 22nd November, 1980.
On the 16th September, 1982 the Education Commissioner Bihar again made a recommendation for grant of affiliation to the appellants ' college the extract from which has been set out in the judgment of my learned brother.
In the recommendation, the education Commissioner recommended that the college be temporarily granted recognition and affiliation for the sessions 1981 82 and 1982 83 for the present.
Another writ petition thereafter was filed and nothing happened for the examination of the students of the appellants ' college who had passed the 1982 83 session.
But this writ petition was dismissed by the High Court in limine.
This appeal arises out of the said order.
There were certain data which were gathered by the expert committee and were the basis of exhibit J.
There was a previous order for the production of exhibit J. That has not been produced and no explanation has been given.
I agree with my learned brother that from the affidavits it is clear that practically no reasons have been given by the State as to why despite the recommendations of several authorities which were made after a full and proper inspections, the 428 affiliation was refused.
The government had stated that if certain conditions were fulfilled then there was no objection to the granting of affiliation.
It is not clear from the records produced and also from the inferences drawn from the non production of the records i.e., from exhibit J. that these conditions have not been substantially fulfilled.
It appears, therefore, and I agree respectfully with my learned brother that no cogent or proper reasons have been placed before us to indicate why appellants have not been placed before us to indicate why appellants have not been granted affiliation and why the recommendations and reasons of the Education Commissioner for grant of affiliation to this college were not properly considered.
It is manifest from paragraph 7 of the affidavits filed by the respondents that before grant of affiliation, certain conditions were required to be fulfilled by the institution.
These conditions have been mentioned in the judgment of my learned brother.
It further appears from the affidavits filed by the appellants that the defence of the State was that five conditions were found not fulfilled after Inspection by a team of inspectors.
I agree that it is strange that while previous Expert Committee after inspecting the institute found it to be in order but subsequently the government, without referring to the data submitted by the Expert Committee, appears to have taken this view about non fulfilment of certain conditions.
No cogent materials or reliable evidence were produced before us that there was any proper inspection and as a fact the five alleged defects were there.
I agree that in the context of the facts of this case and further in the context of non production of exhibit J., the alleged plea of non fulfilment of certain conditions was a pretext.
In the premises, the government action in not granting affiliation in the background of the facts and circumstances of this case is action based without reason and is an act of arbitrariness.
On this ground alone I agree with the order proposed by my learned brother.
As I find the action of the respondents is arbitrary and unreasonable, it is not necessary for me to express my views on Article 30 of the Constitutions it this case.
Article 30 was engrafted for the High and Nobel purpose of safeguarding and protecting the rights of minorities to establish and administer educational institutions.
In this case I do not find that in not granting affiliation to the appellants ' college there was any discrimination as such against any educational institution on the ground that it was under the management of any minority whether based on religion or language.
It was inaction or an act of arbitrariness on the part of the authorities.
From such unreasonable and arbitrary actions or inactions, institutions 429 educational or otherwise, belonging both to the majority or minority communities often suffer and in appropriate cases, courts should grant relief without aid or recourse to the articles of the Constitution protecting the freedom and rights of the minorities.
I do not find in this case any evidence or even any serious allegation that affiliation was being denied to the appellants ' institution on the ground that it was a minority institution.
I agree with great respect with the order proposed by my learned brother, Fazil Ali, J. S.R. Appeal allowed.
| By cl. 3 of the Kutch (Application of Laws) Order, 1949, the Bombay Prevention of Gambling Act (Bom.
IV of 1887) was made applicable to Kutch.
Clause 4 of the Order provided that the Acts applied to Kutch by the Order " shall be construed " as if (1) vs Chester, Mayor, etc.) 96 746 references therein to the authorities and territories were references to the authorities and territories of Kutch as set out in that clause.
The words "shall be construed as " mean "shall be read as" and: consequently wherever in the Bombay Act the words " Provincial Government " or " Government " are used, they have to be read as " Chief Commissioner of Kutch and the words ,Province or the Presidency of Bombay " as Kutch or any part thereof ".
So understood, section 1 of the Bombay Act as applied to Kutch provided that all or any of the provisions of that Act may be extended from time to time by the Chief Commissioner of Kutch by an order published in the Official Gazette to any, local area in Kutch or any part thereof.
The contention that the Bombay Act had been validly extended to and was in force in the whole of Kutch because of the Kutch (Application of Laws) Order, 1949, is not sound.
The true position is that the whole of the Act including amended section 1 became applicable to Kutch and, therefore, a notification was necessary before it could be brought into force in any part of Kutch.
The Chief Commissioner issued a notification on November 28, 195o, bringing all the provisions of the Bombay Act into force throughout the whole of Kutch with immediate effect.
The Chief Commissioner of Kutch under section 1 of the Bombay Act, had powers to issue the notification making that Act operative in Kutch or in any part of Kutch and those powers were not affected by article 239 Of the Constitution.
The notification was valid and the Act came into force in the parts of the State to which the notification made it applicable.
|
Appeal Nos.
173031/1993.
From the Judgment and Order dated 30.6.1992 and 2.9.1992 of the Jammu and Kashmir High Court in L.P.A. No 161/90.
and C.W. P. No. 1352/88.
D.D. Thakur, M.H. Baig.
Rajendra Mal Tatia, Indra Makwana and K. K. Gupta (for Suresh A. Shroff & Co.) for the Appellants.
V.R. Reddy, Addl.
Solicitor General and Ashok Mathur for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
Heard counsel for the parties.
Leave granted in S.L.Ps. 12608/92 and 16418/92.
The appeals are directed against the judgment of the Division Bench of the Jammu and Kashmir High Court allowing a special appeal preferred by the State of Jammu and Kashmir against the judgement of the learned Single Judge.
The learned Single Judge had allowed the writ petition filed by the appellants herein.
The matter pertains to approval and publication of the select list of District Munsifs prepared by the Jammu and Kashmir Public Service Commission.
On May, 28. 1984 the High court intimated the Government of ten vacancies in the category of munsifs and requested the Government to initiate appropriate steps for selection of candidates.
The government wrote to the public service commission and the latter issued the notification and put the process in motion.
Written test was held in the year 1985.
viva voce was also held.
At that stage, the High Court requested the government (with a copy forwarded to the public service commission) to select twenty candidates in the place of ten.
This was done on December 10, 1985.
The government, in turn, requested the public service commission on December 27, 1985 to select twenty 100 candidates.
On March 11, 1986 the Public Service Commission sent three select lists,.
one containing twenty candidates, the other containing three scheduled castes candidates and a waiting list of ten candidates.
From the record placed before us by the learned counsel for the State of Jammu and Kashmir, it appears that the government received several complaints against the selection process.
The government appears to have been satisfied prima facie with some of those complaints and was toying with the idea of scrapping the entire list and asking for a fresh selection.
The select list sent by the commission was kept pending without being approved as required by Rule 39 of the Jammu and Kashmir Civil Service,, (.Judicial) Recruitment Rules, 1967.
Meanwhile, the High Court had been pressing for approval of the names in view of a number of vacancies and the consequent accumulation of work.
Number of courts were without presiding officers.
In particular, the High Court said, there was urgent need for at least thirteen Munsifs.
In the circumstances, the government approved, on December 23, 1986.
tile names of thirteen persons out of the list recommended by the public service commission and Published the same.
They were appointed on December 30, 1986.
Meanwhile, a writ petition had been tiled in the High Court for a direction to the Government to approve and publish the list recommended by the public Service commission.
On December 30, 1986.
the Advocate General for the State stated before the court that the Government has already approved thirteen entries and that the question of approval of the remaining, persons in the list was under the active consideration of the Government.
Recording the said statement, the writ petition was dismissed as settled.
The Government however, did not approve any of the other names in the lists.
evidently in view of the very same reasons for which they were disinclined initially to approve the said lists.
Meanwhile, the candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list.
The High Court was also addressing the government from time to time to approve the list in view of certain vacancies arising since the appointment of the thirteen Munsifs aforementioned.
Since no further names were being approved by the Government, the writ petition, from which these appeals arise, was filed on September 14, 1988.
The writ petition was allowed on July 11,1990 by a learned Single Judge and a direction was issued to the State Government to approve and publish the list of 101 the remaining candidates submitted by the public service commission to it for appointment as munsifs immediately in accordance with the Rules of 1967 and to consider the appointment of such candidates (including the writ petitioners) as munsifs in the vacancies existing or likely to exist in accordance with the recommendations to be made by the High Court.
On appeal, the Division Bench disagreed with the learned Single Judge.
The Bench held that approval and publication of the select list by the Government under Rule 39 is not a mere ministerial act but a meaningful one.
It is open to the government to examine the select list carefully and to reach its own conclusion regarding the suitability and merits of the candidates and publish the names of only those candidates who are found suitable.
While approving the list, the Division Bench held, the State Government cannot alter or temper with the order of merit determined by the commission but it is certainly open to the government to stop at a particular point where it feels that a particular candidate is not meritorious and not to approve the remaining list.
The government is not bound to fill up the existing vacancies within a particular time frame.
The mere inclusion in the select list also does not confer upon the candidates any indefeasible right to appointment.
The recommendations of the commission are not binding upon the State Government held the Division Bench.
In the facts and circumstances of the case, it must be held that the remaining seven names in the select list have been disapproved by the government.
The writ petition also suffers from leaches.
The persons who had meanwhile become eligible and qualified to apply for the said post should also be given a chance.
A list prepared as far back as 1985 86 cannot be directed to be approved in the year 1992.
In these appeals, it is submitted by the learned counsel for the appellants that once the public service commission prepares and recommends a select list, the government has no power to sit in judgment over it.
It is bound to approve the list as recommended.
The function of the government under Rule 39 of the 1967 Rules is merely ministerial and formal.
Even otherwise, the government has not disclosed any reasons for not approving the seven names while approving the first thirteen.
The government 's action is arbitrary and capricious.
It is indeed vitiated by inadmissible and extraneous considerations.
The government cannot be allowed an absolute power in the matter.
On the other hand, it is contended by Sri Dipankar Gupta, learned Solicitor General appearing for the State of Jammu and 102 Kashmir that the function of the government under Rule 39 is not merely formal or ministerial.
The government being the appointing authority, is entitled to scrutinise the list prepared by the public service commission.
It is open to the government either to approve or disapprove the list either wholly or in part.
As a matter of fact, a large number of complaints were received by the government against the said selection and many of them were also found to be not without substance.
However, in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration.
The remaining seven names were not approved inasmuch as no vacancies were available at that time.
In all the circumstances of the case, the Hon 'ble Chief Minister took a decision on March 28, 1988 not to approve any further names and to go in for fresh selection.
Inasmuch as the vacancies at the end of the year 1986 were not more than thirteen, the refusal to approve the remaining seven is a valid and bonafide exercise of power and discretion on the part of the government.
The appellants have no legal right to be appointed just because their names have been included in the select list prepared by the public service commission.
The first requisition by the High court was sent in May, 1984.
The written test was held in 1985.
The select list was recommended in March, 1986.
After a lapse of more than seven years, the said list cannot now be directed to be given effect to, the learned Solicitor general submitted.
Such a direction would deprive a large number of persons, who have become qualified and eligible to apply and complete for the said post meanwhile of the opportunity of applying for the said post.
Many of them may even become age barred meanwhile, he submitted.
It is true that the government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the government has an absolute power.
Such an argument does violence to the constitutional scheme.
The Constitution has created a public service commission and assigned it the function of Conducting examinations for appointments to the services of the Union or to the services of the State, as the case may be.
According to Article 320 clause (1) this is the primary function of the commission.
The Government is directed to consult the public service commission on all matters relating to methods of recruitment to civil services and to civil posts and on the principles to be followed in making.
appointment to civil services and posts and on the suitability of candidates for 103 such appointment, among other matters.
An examination of Articles 317 to 320 makes it evident that the constitution Contemplates the commission to he an independent and effective body outside the governmental control.
This is an instance of application of the basic tenet of democratic form of government viz., diffusion of governing power, The idea is not to allow the concentration of governing power in the hands of one person, authority or organ.
It is in the light of this constitutional scheme that one has to construe Rules 39 and 41 of the 1967 Rules.
They read as follows: 39.Final List: The list of selected candidates after it is approved shall be published by the Government Gazette and a copy thereof shall be sent to the court along with the Waiting list, if any, furnished by the commission for record in their office.
Security to the list: The list and the Waiting list of the selected candidates shall remain in operation for a period of one year from the date of its publication in the, Govt.
Gazette or till it is exhausted by appointment of the candidates whichever is earlier, provided that nothing in this Rule shall apply to the list and the waiting list prepared as a result of the examination held in 1981 which will in operation till the list or the waiting list is exhausted.
" Construed in the above light, Rule 39, in our opinion, does not confer an absolute power upon the government to disapprove or cancel the select list sent by the public service commission.
Where, however, the government is satisfied, after due enquiry that the selection has been vitiated either on account of violation of a fundamental procedural requirement or is vitiated by consideration of corruption, favourtism or nepotism, it can refuse to approve the select list.
In such a case, the government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323.
Indeed, clause (2) of Article 323 obliges the Governor of a State to ray a copy of the annual report received from the 104 commission before the Legislature "together with a memorandum explaining, as respect the cases, if any, where the advice of the commission was not accepted (and) the reasons for such non acceptance.
" Evidently, this is meant as a check upon the power of the government.
This provision too militates against the theory of absolute power in the government to disapprove or reject the recommendations of the commission.
For the same reason, it must be held that the government cannot pick and choose candidates out of the list.
Of course, where in respect of any particular candidate any material is discovered disclosing his involvement in any criminal activity, the government can.
always refuse to appoint such person but this would not be a case touching the select list prepared and recommended by the commission.
It is equally not open to the government to approve a part of the list and disapprove the balance.
In this case, it may be remembered that the government itself had asked for a list of twenty and the commission had sent a list of twenty.
(we are not concerned with the waiting list sent by the commission, at this stage).
It could not have been approved in part and rejected in part.
The number of vacancies available on the date of approval and publication of the list is not material.
By merely approving the list of twenty, there was no obligation upon the government to appoint them forthwith.
Their appointment depended upon the availability of vacancies.
A reading of Rule 41 makes this aspect clear.
The list remains valid for one year from the date of its approval and publication.
If within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared.
In this case, no doubt, a number of complaints appears to have been received by the government about the selection process.
We have seen the note file placed before us.
It refers to certain facts and complaints.
But if the government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded.
Not having done that and having approved the list partly (thirteen out of twenty names) the cannot put forward any ground for not approving the remaining list.
I indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or have disapproved the entire list of twenty.
The objection, the government have pertains to the very process of selection i.e., to the entire list, and not individually to any of the remaining seven candidates.
It is true that mere inclusion in the select list does not confer upon 105 the candidates included therein an indefeasible right to appointment State of Haryana vs Subhash Chandra Marwaha A.I.R. 1 973 S.C.2216; M.S, Jain vs
State of Haryana A.I.R. and State of Kerala vs A. Lakshmikutty A.I.R. but that is only one aspect of the matter.
The other aspect is the obligation of the government to act fairly.
The whole exercise cannot be reduced to a farce.
Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the government the government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment.
We do not think that any government can adopt such a stand with any justification today.
This aspect has been dealt with by a Constitution Bench of this Court in Shankarsan Dash vs Union of India 1991 1 3 S.C.C.47 where the earlier decisions of this court are also noted.
The following observations of the court are apposite: "It is not correct to say that if a number of vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied.
Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post.
Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies.
However, it does not mean that the State has the licence of acting in an arbitrary manner.
The decision not to fill up the vacancies has to he taken bona fide for appropriate reasons.
And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted.
This correct position has been consistently followed by this Court, and we do not find any discordant note in the decisions in State of Hary 106 ana vs Subhash Chander Marwahs, Neelima.
Shangla vs State of Haryana or Jatendra Kumar vs State of Punjab.
" We may reiterate that the principle of Article 323, referred to hereinabove, is equally relevant on the nature of the power of the government in such a matter.
Looked at from the above stand point, it appears that the government 's action in not approving the rest of the seven names in the Select list is unsustainable but there are certain circumstances which induce us not to interfere in this matter.
They are: (i) During the period of one year from the date of approval of ' thirteen names (23.12.1986/30.12.1986) no vacancy bid arisen.
which means that even if the list of twenty had been approved and published on December 23 or December 30.
1986 none of the seven persons would have been appointed.
At the end of one year.
the list lapis and becomes inoperative.
The first letter of the High Court stating that one or two more vacancies have arisen and requesting the Government to approve the remaining names, was sent only on August 13,1988 i.e., long after the expiry of the one year period.
Any direction at this stage to approve the list would be a futile exercise.
The list cannot be operated with respect to the vacancies existing as on today; and (ii) When the government failed to act within a reasonable period from the date of the order December 30, 1986 ) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General ) the petitioners ought to have moved in the matter.
They did not do so.
They waited for more then twenty months and approached the High Court only on September 14.
This delay in our opinion, disentitles the petitioners from any relief in the facts and circumstances of the case.
For the above reasons, the appeals fail and are dismissed.
No costs.
WRIT PETITION (C) NO.
81 OF 1993: 107 The petitioner in this writ petition was included in the waiting list prepared by the public service commission.
Since the appeals preferred by the candidates at serial No. 14 onwards in the main list have themselves failed.
there is no question of giving any relief to this petitioner.
The writ petition accordingly fails and is dismissed.
No costs.
V. P. R. Appeals dismissed.
| The nomination paper of the fourth respondent who was one of the candidates for election to the Legislative Assembly of the State, was rejected by the returning officer on the ground that as he was the Headmaster of a Government aided school he was disqualified under section 7(d) and (e) of the Representation of the People Act, 1951, to be chosen for election.
One of the voters of the constituency filed a petition praying that the election of the appellant be declared void under section 100(1)(c) of the Act on the ground that the rejection of the nomination paper of the fourth respondent was improper because the latter had ceased to be a Headmaster at the time of his nomination and that, further, the institution was a private one.
The appellant, who was the second respondent in the petition, contended that the nomination paper of the fourth respondent was rightly rejected not only on the ground put forward before the returning officer but also for the reasons that he was interested in Government contracts and that he had agreed to serve as a, teacher under the District Board.
The question was whether in an election petition challenging the validity of the rejection of a nomination paper under s: 100(1)(c) of the Act, it was open to the parties to raise grounds 624 of disqualification other 'than those put forward before the returning officer.
It was contended for the respondent that the proceedings before the Election Tribunal were really by way of appeal against the decision of the returning officer and that, therefore, the scope of the enquiry in the election petition must be co extensive with that before the returning officer and must be limited to the grounds taken before him.
Held, that an election petition is an original proceeding instituted by the presentation of a petition under section 81 of the Representation of the People Act, 1951, and that the jurisdiction which a Tribunal exercises in hearing an election petition even when it raises a question under section 100(1)(c) of the Act is not in the nature of an appeal against the decision of the returning officer.
Held, further, that in considering whether a nomination paper was improperly rejected under section 100(1)(c), the real question for decision would be whether the candidate was duly qualified and was not subject to any disqualifications as provided in section 36(2) of the Act.
The Tribunal would, consequently, be competent to entertain grounds of disqualification other than those put forward before the returning officer.
The expression " improperly rejected " in section 100(1)(c) of the Act, explained.
Mengh Raj vs Bhimandas, , Tej Singh vs Election Tribunal, JaiPur, and Dhanraj Deshlehara vs Vishwanath Y. Tamaskar, (1958) 15 E. L. R. 260, approved.
|
N: Criminal Appeal No. 118 of 1972.
Appeal by Special Leave from the Judgment and Order dated 24 4 1972 of the Punjab and Haryana High Court in Criminal Appeal No.303 of 1969.
A. N. Mulla, Harbans Singh and Faqir Chand for the Appellant.
Hardev Singh for the Respondent.
The Judgment of Court was delivered by UNTWALIA, J.
The appellant in this appeal by special leave was convicted by the Additional Sessions Judge, Jullundur under section 304 Part I, Indian Penal Code and sentenced to undergo rigorous imprisonment for seven years and a fine of Rs. 10,000/ in default to two years ' further rigorous imprisonment.
The fine, if recovered, was directed to be paid to the dependants of the deceased in equal shares.
The appellant filed a criminal appeal in the High Court of Punjab and Haryana against his conviction and sentence.
The State 808 also filed an appeal and the widow of the deceased filed a revision in the High Court for convicting the appellant under section 302 of the Penal Code instead of section 304 Part I.
The High Court dismissed both the appeals as also the revision.
The appellant only has preferred this appeal in this Court.
The appellant was running a factory at Jullundur and on account of non availability of raw materials the factory remained closed for a fortnight from the 14th to 28th September, 1967 resulting in lay off of the workmen.
A dispute arose between the management and the workmen in regard to the payment of wages for the period aforesaid.
Ultimately a settlement was arrived at through the intervention of the Labour cum Conciliation Officer, Jullundur and the terms of the settlement were reduced to writing which was marked Ext.
D.A. in the case.
Rightly or wrongly the workers, according to the prosecution case, got the impression that they were to be paid their wages for the period of lay off.
They accordingly went to the appellant on 7th October, 1967 for demanding the wages.
The appellant is said to have told them that the same would be paid on the 11th October.
On this date again they went to the factory and sent P.W. Mota Singh to demand wages from the appellant.
He asked him to go away.
Mota Singh came out and passed on the information to the workers present outside the factory premises, who, amongst others, included Sant Ram, the deceased, Darshan Singh, P.W. 4 and Gurcharan Singh, P.W. 5.
According to the prosecution case the workers then started raising innocuous slogans demanding their wages and did nothing else.
It is said that thereupon the appellant opened the door of his office and fired a shot from his revolver towards the workers who were raising slogans.
The shot hit on the forehead of Sant Ram who fell down and died instantaneously at the spot.
The occurrence took place at 2.00 p.m. on the 11th October, 1967.
A First Information Report was lodged at the Thana at 2.15 p.m., on the written report of Mota Singh, P.W. 2, Shadi Lal, P.W. 13, Sub Inspector of Police reached the place of occurrence at about 2.30 p.m. and started investigation.
After submission of Charge Sheet and commitment the appellant was tried for having committed the offence of murder of Sant Ram punishable under section 302 of the Penal Code.
The defence set up by the appellant was that the Labour Officer had given the decision contained in Ext.
D.A. on the 28th September, 1967 that no wages would be paid for the lay off period but that the workmen would be treated on leave and would be paid as per leave due to each one of them.
He along with his son and driver Bansi 809 Lal was in the office at about 1.50 p.m. on the 11th October when eight or nine labourers of his factory and fifteen or twenty labourers who are outsiders came to his factory.
Some of them entered his office while others stood outside.
They demanded wages not only for the period of lay off but also for the period from 7th October onwards when they had decided not to join the work until their wages were paid.
The factory gates were closed and a big crowd of labourers collected outside.
They became violent.
They shouted very abusive and obnoxious slogans and were saying that they would not leave the owner of the factory alive that day.
They showered brick bats at the factory premises.
His office air conditioner was broken so was the electric globe outside the office.
The brick bats hit the office wall and damaged it and also damaged the table glass on the table inside the office.
Numerous brick bats fell both inside and outside the office.
Apprehending imminent danger to his life and in exercise of the right of private defence of property and person, Bansi Lal, the appellant 's driver fired the shot from the revolver and not he.
The labourers had started breaking the barbed wire fixed on the boundary wall of the factory on the other side of which they were standing.
Some of them including Sant Ram tried to scale the boundary wall.
It was in such a situation that the bullet hit Sant Ram causing his death.
Largely, almost wholly, agreeing with the conclusions arrived at by the Trial Court, the High Court has arrived at the following findings of fact: (1) The version of the labourers that they were entitled to their wages for the lay off period was not countenanced by Ext.
D.A., rather, that of the appellant was borne out by it.
"The demand of the workers made on 7th October, 1967 and 11th October, 1967 for payment of full wages was not in accordance with this agreement and therefore was not legal." (2) "That after the refusal by the accused to pay wages to the workers for the lay off period they raised some slogans and might have hurled some brick bats into the factory premises of the accused and caused damages as observed by Shadi Lal (P.W. 13) Sub Inspector, who arrived at the spot within about half an hour of the occurrence." (3) "The workers did not break the barbed wire affixed on the boundary wall of the factory nor they tried to 810 scale the boundary wall and there is no reliable evidence on the file to show that they were armed with any DANDAS or sticks.
Their purpose was to hold a demonstration against the accused when he refused to consider their demand of wages for the lay off period which was obviously not justified in view of the agreement arrived on 28th September, 1968, copy of which is Exhibit D.A." (4) "Provocative slogans might have also been raised by them at that time, when the accused was sitting in the office." (5) "Admittedly the workers were, at that time, standing outside the factory wall which was 5 1/2 feet high and on which barbed wire is fixed.
The distance between that outer wall and the office of the accused was about 13 feet.
No brick bats hurled by the workers could, therefore, enter the office room of the accused.
The defence version that some brick bats fell inside the office of the accused and broke the glass of his table is false and incorrect." (6) The mob hurled bricks bats on the building and the globe outside his office was broken and some damage was done to the air conditioner and as such the mob was guilty of mischief." (7) "The accused on hearing slogans of the workers came out of his office and stood on the THARI in front of the office and fired the shot towards the workers, who were raising slogans outside the factory and as a result of that shot Sant Ram died instantaneously.
" On the basis of the findings aforesaid the High Court, in agreement with the Trial Court, came to the conclusion that the appellant had the right of private defence of property extending to the voluntary causing of any harm other than death to the workers but not to the causing of death and obviously he exceeded his right of private defence and thus this offence falls under Exception 2 of section 300 of the Indian Penal Code.
The High Court found the appellant in the first instance guilty of culpable homicide amounting to murder within the meaning of clause '4thly ' of section 300.
And since the appellant 's case was found to have been covered by Exception 2 he was convicted under section 304, Part I. 811 Mr. A. N. Mulla appearing for the appellant submitted that he was not challenging the concurrent findings of the courts below that it was the appellant who had fired the shot from his revolver and not his driver.
But then, according to his submission, he was forced to do so apprehending imminent danger to his life or of grievous hurt to him and the shot was fired not only to defend his property.
He was, therefore, in exercise of that right, entitled to and justified in law in using force even to the extent of causing the death of Sant Ram, although he never intended to kill any one.
It was further submitted that the workmen were the aggressors.
They had thrown brick bats even inside the office damaging the office table glass; had collected in large numbers outside the boundary wall; had broken the barbed wire on it and some of them were trying to scale down the wall.
In such a situation the appellant was not expected to act like a coward and run from the place, but he had a right to defend his property and person.
In any view of the matter, counsel submitted, that the case did not come under clause '4thly ' of section 300 or even if it falls within that provision, on the application of Exception 2 he could only be convicted under Part II of section 304 and not Part I. On the facts and in the circumstances of this case, counsel submitted, that the sentence imposed upon him is highly excessive and even if his conviction is maintained justice demands only an imposition of fine on him under section 304 Part II.
Mr. Hardev Singh appearing for the State endeavoured to show that the labourers were justified in demanding their wages for the layoff period; they were very few in number and even if their demand was not warranted on the terms of the settlement embodied in Ext.
D.A. they had a right to peacefully demonstrate and ventilate their grievance.
They did nothing which could give any right of private defence to the appellant either of his property or person.
He could escape from his office for his safety or would have taken recourse to the protection of the public authorities.
Counsel further submitted that the appellant was not at all justified in causing the death of Sant Ram by his revolver and his conviction recorded under section 304 Part I is correct and the sentence is not at all excessive.
After having appreciated all that was placed before us by learned counsel for the parties and on perusal of the relevant pieces of evidence in the case we have come to the conclusion that none of the findings recorded by the Courts below is such or so erroneous that we can justifiably interfere with it either this way or that way.
And this, apart from the fact, that since the State had not come to this Court 812 in appeal it was not open to it to argue that the appellant had no right of private defence at all.
The argument that the appellant had time to escape like a coward for protecting his person leaving his property to any amount of danger of being damaged, to say the least, was an obviously wrong argument and has been stated merely to be rejected.
D.A. clearly shows that the workmen were not entitled to claim down right cash wages for the period of lay off.
Their absence was to be adjusted against their leave.
To start with, therefore, the High Court was right in saying that their demand was not legal.
Yet that, by itself, could not give any right of private defence either of property or of person to the appellant.
We have carefully gone through the evidence of P. Ws. 2, 4 and 5 and also the evidence of Vidya Sagar, D.W. 2 on which great reliance was placed by Mr. Mulla.
We see no ample Justification for us to say that any brick bats thrown by the labourers had entered the office room of the appellant breaking the glass of his office table.
But then, brick bats were thrown; they did hit and damage the office wall, the air conditioner and the globe of the electric light.
It may not be possible to determine with exactitude the number of labourers present outside the boundary wall at the time of the occurrence.
But it does appear to us that they were neither present in very large number of hundred or more nor the number was as meagre as about ten as deposed to by the P.Ws.
The factory of the appellant is situated in an industrial area.
It is reasonable to think that some other workers also must have joined their agitational move.
Be that as it may, the number of the workers present outside the boundary wall is not of any great significant although it has some significance.
They did throw brick bats damaging the appellant 's property and endangering it to further damage.
Hurling of brick bats by the labourers towards the office of the appellant must have caused apprehension of some hurt or injury to him but not necessarily the causing of the grievous hurt as on the facts and in the circumstances of this case it was not possible to draw an inference to that extent.
The High Court would have been well advised to try to record a definite finding on the question of hurling of brick bats instead of saying that the workers "might have hurled some brick bats into the factory premises of the accused.
" Similarly the High Court ought to have come to a definite conclusion as to whether the slogans raised by the workers were merely innocuous as they claimed to be or they were raising provocative slogans also which were not only obnoxious but went to the length of saying that the appellant should be killed and the factory should be burnt.
We are inclined to think that the 813 slogans raised by the workers were more offensive and provocative than claimed by them.
But we are not prepared to accept the contention of the appellant in disagreement with the findings of the courts below that they had broken barbed wire or that some of them tried to scale down the boundary wall.
It may well be that some of them tried to raise their heads to mark the reaction of the appellant on the hearing of their slogans.
The boundary wall was only 51/2 high.
The appellant came out of his office room and stood on the THARI which was about 1 1/2 high from the ground level of the factory and fired the shot.
It is not possible to accept his contention that he did so merely to scare away the crowd of the workers.
He could and did fire the shot so that it could pass over the boundary wall almost grazing it.
Sant Ram was standing at a distance of about 5 ' or 6 ' from the boundary wall.
The bullet which must have passed just over the boundary wall could and did hit Sant Ram.
In such a situation the High Court was right in the first instance in not finding the appellant guilty of having committed culpable homicide amounting to murder within clauses '1stly, 2ndly or 3rdly ' and finding him guilty with the aid of clause '4thly ', where the intention to cause murder is absent but "the person committing the act knows that it is so imminently dangerous that it must, in all probability, cause death or such bodily injury as is likely to cause death".
The clause further says that the person "commits such act without any excuse for incurring the risk of causing death or such injury as aforesaid.
" The appellant must have committed the act with the knowledge that it was imminently dangerous and in all probability must cause death or such bodily injuries as was likely to cause death.
Dehors Exception 2 which we shall presently refer he had no excuse for committing the said act.
The law regarding the right of private defence of property or person is well settled and may be briefly recapitulated here.
The onus is on the accused to establish this right not on the basis of the standard of proving it beyond doubt but on the theory of preponderance of probability.
He might or might not take this plea explicitly or might or might not adduce any evidence in support of it but he can succeed in his plea if he is able to bring out materials in the records of the case on the basis of the evidence of the prosecution witnesses or on other pieces of evidence to show that the apparently criminal act which he committed was justified in exercise of his right of private defence of property or person or both.
But the exercise of this right is subject to the limitations and exceptions provided in section 99 of the Penal Code the last one being "The right of private defence in no case extends to the inflicting of more harm than it is necessary to inflict for 814 the purpose of defence." As to when the right of private defence of the body extends to causing death is provided for in section 100.
The appellant 's case is not covered by it.
In the view which we have expressed above we think that the appellant had not only the right of private defence of his properly but also his body to a limited extent with in the meaning of section 101 subject to the restrictions mentioned in section 99.
This did not extend to the inflicting of so much harm to Sant Ram and causing his death, nor the right of private defence of property available to the appellant extended to causing his death as it was not covered by any of the clauses of section 103.
Mr. Mulla tried to bring it under '4thly ' which says: "Theft, mischief, or house trespass, under such circumstances as may reasonably cause apprehension that death or grievous hurt will be the consequence, if such right of private defence is not exercised.
Mischief was caused to his property but it was not caused under such circumstances as may reasonably cause apprehension in his mind that death or grievous hurt would be the consequence if such right of private defence was not exercised.
A mere claim of such apprehension is not enough.
The Court on objective test and on the facts and circumstances of each case must arrive at the conclusion that the situation was such as was likely to reasonably cause such apprehension.
The right of private defence of property also, therefore, in the appellant 's case extended to causing of any harm other than the death.
Undoubtedly the appellant did exceed this right of private defence and apparently the murder which he committed within the meaning of clause '4thly ' of section 300 squarely fell within Exception 2 thereof.
He exceeded the power given to him by law and caused the death of Sant Ram against whom he was exercising such right of defence.
He did so without premeditation and without any intention of doing more harm than was necessary for the purpose of such defence.
He thought that by indulging in this imminently dangerous act he would be able to scare away the labourers and stop them from continuing their unjustified agitation, the raising of the slogans and the throwing of the brick bats.
But then, although the intention was not to kill or cause such bodily injury as was sufficient in the ordinary course of nature to cause death, yet he must have committed the act knowing that it was so imminently dangerous that it must in all probability cause death or such bodily injury as was likely to cause death of the worker or workers standing on the other side of the boundary wall.
815 A question now arises whether the appellant was guilty under Part I of section 304 or Part II.
If the accused commits an act while exceeding the right of private defence by which the death is caused either with the intention of causing death or with the intention of causing such bodily injury as was likely to cause death then he would be guilty under Part I.
On the other hand if before the application of any of the Exceptions of section 300 it is found that he was guilty of murder within the meaning of clause '4thly ', then no question of such intention arises and only the knowledge is to be fastened on him that he did indulge in an act with the knowledge that it was likely to cause death but without any intention to cause it or without any intention to cause such bodily injuries as was likely to cause death.
There does not seem to be any escape from the position, therefore, that the appellant could be convicted only under Part II of section 304 and not Part I. Even so on the facts and in the circumstances of this case we do not feel persuaded to let off the appellant with an imposition of fine only.
We, however, thought that sentence of three years ' rigorous imprisonment would meet the ends of justice in this case.
We were informed at the Bar and an affidavit sworn by the appellant 's wife was also filed before us to the effect that the appellant was in jail for about nine months as an under trial prisoner and for about four months after conviction.
Thus he has already undergone imprisonment for a period of about a year and a month.
The occurrence took place more than a decade ago.
The appellant had to pass this long ordeal all these years both mentally and financially.
Considering, therefore, the totality of the circumstances while maintaining the imposition of fine of Rs. 10,000/ and in default two years ' further imprisonment, we reduce his substantive term of imprisonment to the period already undergone and maintain the conviction of the appellant not under Part I of section 304 of the Penal Code but under Part II.
In the result the appeal is dismissed but subject to the modification made above in regard to the appellant 's conviction and sentence.
N.V.K. Appeal dismissed.
| There was a dispute between the appellant, a factory owner and his employees in regard to wages, during the period of their lay off.
The prosecution alleged that on the day of the occurrence when the workers gathered outside the factory and raised innocuous slogans demanding their wages, the appellant came out and fired a shot from his revolver, which hit a worker resulting in his death.
The appellant on the other hand alleged that a large number of labourers who collected outside the factory, shouted very abusive slogans, threatening that they would not leave him alive and showered brickbats at the factory premises causing damage to the appellant 's property.
Apprehending imminent danger to his life and property, his driver fired a shot from the revolver which resulted in the death of the deceased.
The trial court, with whose findings the High Court agreed, found that the workers might have hurled brickbats into the factory premises; but they did not break the barbed wire on the boundary wall nor did they try to scale the boundary wall.
that they did not carry any sticks, that no brickbats hurled by the workers could enter the appellant 's office and therefore his version that some brickbats damaged the glass on his office table was incorrect and that it was the appellant and not his driver that fired his revolver which resulted in the death of the deceased.
The High Court, agreeing with the trial court, held that though the appellant had the right of private defence of property it did not go to the extent of causing death and, therefore, he exceeded his right of private defence.
Holding that the offence fell under Exception 2 to section 300 IPC the High Court convicted him under section 304, Part I.
In appeal to this Court it was contended on behalf of the appellant that in the exercise of his right of private defence the appellant was entitled to and justified in law in using force even to the extent of causing death although he never intended to kill the deceased or anyone.
On the facts and circumstances of the case, it did not come within clause 4thly of section 300; or even if it fell within that provision, on the application of exception 2, he could only be convicted under Part II of section 304 and not under Part I. Even if his conviction were maintained, imposition of fine would meet the ends of justice.
Dismissing the appeal in part, ^ HELD: The appellant could be convicted only under Part II of section 304 and not Part I. [813 C].
806 (1) The High Court was right in not finding the appellant guilty of having committed culpable homicide amounting to murder within clauses Firstly, Secondly or Thirdly and finding him guilty with the aid of clause 4thly where the intention to cause murder is absent but "the person committing the act knows that it is so imminently dangerous that it must, in all probability, cause death or such bodily injury as is likely to cause death".
The clause further says that the person "commits such act without any excuse for incurring the risk of causing death or such injury as aforesaid.
" The appellant must have committed the act with the knowledge that it was imminently dangerous and in all probability must cause death or such bodily injury as was likely to cause death.
Dehors Exception 2, he had no excuse for committing the said act.
[813 D E] In the present case the workers ' demand for wages was not legal.
The workers raised provocative slogans and did throw brickbats damaging the appellant 's property and endangering it to further damage.
But that by itself could not give any right of private defence of person to the appellant.
There is no evidence to show that the workers had broken the barbed wire or that some of them tried to scale the boundary wall.
It may well be that some of them tried to raise their heads above the boundary wall.
The appellant came out of his office and fired the shot, which could not be merely to scare away the crowd of workers.
He could and did fire the shot so that it could pass over the boundary wall almost grazing it.
The bullet which must have passed just over the boundary wall could and did hit the deceased killing him instantaneously.
[812C 813C] 2.
(a) In the matter of exercise of the right or private defence of property or person the onus is on the accused to establish this right not on the basis of the standard of proving it beyond doubt but on the theory of preponderance of probability.
He might or might not take this plea explicitly or might or might not adduce any evidence in support of it but he can succeed in his plea if he is able to bring out materials on the record on the basis of evidence of the prosecution witnesses or on other pieces of evidence to show that the apparently criminal act which he committed was justified in exercise of his right of private defence of person or property or both.
But the exercise of this right is subject to the limitation and exceptions provided in section 99 of the Code.
As to when the right of private defence of the body extends to causing death is provided for in section 100.
[813 F 814 A] (b) The appellant had not only the right of private defence of his property but also his body to a limited extent within the meaning of section 101 subject to the restrictions mentioned in section 99.
This did not extend to the inflicting of so much harm to the deceased and causing his death, nor does the right of private defence of property available to an accused extend to causing death, unless it is covered by any of the clause of section 103.
[814 B] (c) When mischief is caused to property it must be shown that it was caused under such circumstances as may reasonably cause apprehension that death or grievous hurt would be the consequence if such right of private defence was not exercised.
A mere claim of such apprehension is not enough.
The court on objective tests and on the facts and circumstances of each case must arrive at the conclusion that the situation was such as was likely to reasonably cause such apprehension.
[814 D E] 807 (d) The right of private defence of property in the appellant 's case extended to causing of any harm other than death.
The appellant did exceed this right of private defence and the murder which he committed was within the meaning of clause '4thly ' of section 300 squarely and fell within Exception 2 thereof.
[814 F] (e) The appellant exceeded the right given to him by law and caused the death of the deceased against whom he was exercising such right of defence.
He did so without premeditation and without any intention of doing more harm than was necessary for the purpose of such defence.
He thought that by indulging in this imminently dangerous act he would be able to scare away the labourers and stop them from continuing their unjustified agitation, the raising of the slogans and the throwing of brickbats.
But then, although the intention was not to kill or cause such bodily injury as was sufficient in the ordinary course of nature to cause death, yet he must have committed the act knowing that it was so imminently dangerous that it must in all probability cause death of the worker or workers standing on the other side of the boundary wall.
[814 G H] 3.
If the accused commits an act while exercising the right of private defence by which death is caused either with the intention of causing death or with the intention of causing such bodily injury as is likely to cause death then he would be guilty under Part I.
On the other hand if before the application of any of the Exception of section 300 it is found that he was guilty of murder within the meaning of clause "4thly" then no question of such intention arises and only the knowledge is to be fastened on him that he did indulge in an act with the knowledge that it was likely to cause death but without any intention to cause it or without any intention to cause such bodily injury as was likely to cause death.
In the instant case the appellant could be convicted only under Part II of section 304 and not Part I. [815A C]
|
iminal Appeals Nos. 81 and 82 of 1958.
Appeals by special leave from the judgment and order dated February 28, 1958, of the Allahabad High Court in Criminal Appeal No. 1809 of 1957 and Referred No. 138 of 1957 arising out of the judgment and order dated November 28, 1957, of the Court of Sessions at Farrukhabad in Sessions Trial No. 61 of 1957.
Jai Gopal Sethi and B. C. Misra, for the appellants.
G. C. Mathur, and C. P. Lal for the respondent.
942 1958.
December 18.
The Judgment of the Court was delivered by KAPUR, J.
These are two appeals which arise out of the same judgment and order of the High Court at Allahabad and involve a common question of law.
Appellants Tej Singh and Mizaji are father and son, Subedar is a nephew of Tej Singh, Machal is Tej Singh 's cousin and Maiku was a servant of Tej Singh.
They were all convicted under section 302 read with section 149 of the Indian Penal Code and except Mizaji who was sentenced to death, they were all sentenced to imprisonment for life.
They were also convicted of the offence of rioting and because Tej Singh and Mizaji were armed with a spear and a pistol respectively, they were convicted under section 148 of the Indian Penal Code and sentenced to three years ' rigorous imprisonment and the rest who were armed with lathis were convicted under section 147 of the Indian Penal Code and sentenced to two years ' rigorous imprisonment.
All the sentences were to run concurrently but Mizaji 's term of imprisonment was to come to an end after " he is hanged ".
Against this order of conviction the appellants took an appeal to the High Court and both their convictions and sentences were confirmed.
The offence for which the appellants were convicted was committed on July 27, 1957, at about sunrise and the facts leading to the occurrence were that field No. 1096 known as Sukhna field was recorded in the revenue papers in the name of Banwari who was recorded as in possession as tenant in chief Sometime in 1949 he mortgaged this plot of land to one Lakhan Singh.
In 1952 this field was shown as being under the cultivation of Rameshwar, the deceased and four others persons, Ram Sarup who was the uncle of Rameshwar, Jailal his brother, Sita Ram and Saddon.
The record does not show as to the title under which these persons were holding possession.
The mortgage was redeemed sometime in 1953.
The defence plea was that in the years 1954, 1955, 1956 possession was shown as that of Banwari.
But if there were any such entries, they were corrected in 1956 and possession was shown in the revenue papers as that of 943 Rameshwar, and four others abovenamed.
These entries showing cultivating possession of the deceased and four others were continued in 1957.
On April 18, 1957, Banwari sold the field No. 1096 to Tej Singh appellant who made an application for mutation in his favour but this was opposed by the deceased and four other persons whose names were shown as being in possession.
In the early hours of July 27, 1957, the five appellants came armed as above stated.
Mizaji 's pistol is stated to have been in the fold (phent) of his dhoti.
A plough and plank known as patela and bullocks were also brought.
The disputed field had three portions, in one sugarcane crop was growing, in the other Jowar had been sown and the rest had not been cultivated.
Maiku started ploughing the Jowar field and overturned the Jowar sown therein while Tej Singh with his spear kept watch.
Bateshwar P. W. 7 seeing what was happening gave information of this to Ram Sarup who accompanied by Rameshwar, Jailal and Israel came to the Sukhna field but unarmed.
Ram Sarup inquired of Tej Singh as to why he was damaging his field and Tej Singh replied that he had pur chased the field and therefore would do " what he was doing " which led to an altercation.
Thereupon, the four persons cutting the sugarcane crop i.e. Mizaji, Subedar, Machal and Maiku came to the place where Tej Singh was and upon the instigation of Tej Singh, Mizaji took out the pistol and fired which hit Rameshwar, who fell down and died I hour later.
The accused, after Rameshwar fell down, fled from the place.
Ram Sarup, Jailal and Israel then went to the police station Nawabgunj and Ram Sarup there made the first information report at about 7 30 a. m., in which all the five accused were named.
When the police searched for the accused they could not be found and proceedings were taken under sections 87 and 88 of the Code of Criminal Procedure, but before any process was issued Subedar, Tej Singh and Machal and Maiku appeared in court on August 3, 1957, and Mizaji on August 14, 1957, and they were taken into custody.
The prosecution relied upon the evidence of the eyewitnesses and also of Bateshwar who carried the 944 information to the party of complainant as to the coming of Tej Singh and others.
The defence of the accused was a total denial of having participated in the occurence and as a matter of fact suggested that Rameshwar was killed in a dacoity which took place at the house of Ram Sarup.
The learned Sessions Judge accepted the story of the prosecution and found Ram Sarup to be in possession of the field; he also found that the appellants formed an unlawful assembly " the common object of which was to take forcible possession of the field and to meet every eventuality even to the extent of causing death if they are interfered with in their taking possession of the field " and it was in prosecution of the common object of that assembly that Mizaji had fired the pistol and therefore all were guilty of the offence of rioting and of the offence under section 302 read with section 149, Indian Penal Code.
The High Court on appeal held that the appellants were members of an unlawful assembly and had gone to the Sukhna field with the object of taking forcible possession and " there is also no doubt that the accused had gone there fully prepared to meet any eventuality even to commit murder if it was necessary for the accomplishment of their common object of obtaining possession over the field.
There is also no doubt that considering the various weapons with which the accused had gone armed they must have known that there was likelihood of a murder being committed in prosecution of their common object ".
The High Court also found that all the appellants had gone together to take forcible possession and were armed with different weapons and taking their relationship into consideration it was unlikely that they did not know that Mizaji was armed with a pistol and even if the common object of the assembly was not to commit the murder of Rameshwar or any other member of the party of the complainants II there can be no doubt that the accused fully knew, considering 'the nature of weapons with which they were armed, namely, pistol and lathis, that murder was likely to be committed in their attempt to take forcible possession over the disputed land ".
The High Court further 945 found that the accused had gone prepared if necessary to commit the murder in prosecution of their common object of taking forcible possession.
They accepted the testimony of Matadin and Hansram who stated that all the accused had asked Ram Sarup and his companions to go away, otherwise they would finish all of them and when they resisted Mizaji accused fired the pistol at them and thus in view of the nature of the weapons with which they had gone to the disputed piece of land, " they knew that murder was likely to be committed in prosecution of their object ".
Another finding given by the High Court was that the appellants wanted to forcibly dispossess the complainants and with that object in view they went to the disputed field to take forcible possession and that the complainant 's party on coming to know of it went to the field and resisted.
Mizaji fired the pistol and thus caused the death of Rameshwar.
The High Court also held : " We are also of the opinion that the act of the accused was premeditated and well designed and that the accused considering the circumstances of the case and the weapons with which they were armed, knew that murder was likely to be committed in accomplishment of their common object.
" For the appellants it was contended that the High Court was not justified in drawing the inference that other members of the party of the appellants had knowledge of the existence of the pistol.
There is no doubt that on the evidence the father Tej Singh must have known that the son, Mizaji, had a pistol.
And in the circumstances of this case the High Court cannot be said to have erroneously inferred as to the knowledge of the rest as to the possession of pistol by Mizaji.
The question for decision is as to what was the common object of the unlawful assembly and whether the offence of murder was committed in prosecution of the common object or was such an offence as the members of the unlawful assembly knew was likely to be committed in prosecution of the common object.
It was argued on behalf of the appellants that the 119 946 common object was to take forcible possession and that murder was committed neither in prosecution of the common object of the unlawful assembly nor was it such as the members of that assembly knew to be ,.likely to be committed.
That the common object of the unlawful assembly was to take forcible possession of the Sukhana field cannot be doubted.
Can it be said in the circumstances of this case that in prosecution of the common object the members of the unlawful assembly were prepared to go to the extent of committing murder or they knew that it was likely to be committed ? One of the members of the assembly Tej Singh was armed with a spear.
His son Mizaji was armed with a pistol and others were carrying lathis.
The extent to which the members of the unlawful assembly were prepared to go is indicated by the weapons carried by the appellants and by their conduct, their collecting where Tej Singh was and also the language they used at the time towards the complainant 's party.
The High Court has found that the appellants " had gone prepared to commit murder if necessary in the prosecution of their common object of taking forcible possession of the land ", which it based on the testimony of Matadin and Hansraj who deposed that when the complainant 's party arrived and objected to what the appellants were doing they (the appellants) " collected at once " and asked Ram Sarup and his companions to go away otherwise they would finish all of them and when the latter refused to go away, the pistol was fired.
That finding would indicate the extent to which the appellants were prepared to go in the prosecution of their common object which was to take forcible possession of the Sukhana field.
The High Court also found that in any event the case fell under the second part of section 149, Indian Penal Code in view of the weapons with which the members of the unlawful assembly were armed and their conduct which showed the extent to which they were prepared to go to accomplish their common object.
Counsel for the appellants relied on Queen vs Sabid Ali (1), and argued that section 149 was inapplicable.
There (1) Cr. 947 the learned Judges constituting the full bench gave differing opinions as to the interpretation to be put on section 149, Indian Penal Code.
That was a case where the members of an unlawful assembly went to take forcible possession of a piece of land.
The view of the majority.
of the Judges was that finding unexpected opposition by one member of the party of the complainants and also finding that they were being over.
powered by him, one of the members of the unlawful assembly whose exact time of joining the unlawful assembly was not proved fired a gun killing one of the occupants of the land who were resisting forcible dis possession.
It was also held that the act had not been done with a view to accomplish the common object of driving the complainants out of the land, but it was in consequence of an unexpected counter attack.
Ainslie, J., was of the opinion that the common object of the assembly was not only to forcibly eject the occupants but to do so with show of force and that common object was compounded both of the use of the means and attainment of the end and that it extended to the committing of murder.
Phear, J., said that the offence committed must be immediately connected with that common object by virtue of the nature of the object.
The members of the unlawful assembly must be prepared and intend to accomplish that object at all costs.
The test was, did they intend to attain the common object by means of murder if necessary ? If events were of sudden origin, as the majority of the learned Judges held them to be in that case, then the responsibility was entirely personal.
In regard to the second part he was of the opinion that for its applica tion it was necessary that members of the assembly must have been aware that it was likely that one of the members of the assembly would do an act which was likely to cause death.
Couch, C. J., was of the opinion that firing was not in prosecution of the common object of the assembly and that there was not much difference between the first and the second part of section 149.
He said : " At first there does not seem to be much difference between the two parts of the section and I think the 948 cases which would be within the first, offences committed in prosecution of the common object, would be, generally, if not always, within the second, namely, offences which the parties knew to be likely to be committed in the prosecution of the common object.
But I think there may be cases which would come within the second part and not within the first.
" Jackson, J., held in the circumstances of that case that the assembly did not intend to commit nor knew it likely that murder would be committed.
Pontifex, J., interpreted the section to mean that the offence committed must directly flow from the common object or it must so probably flow from the prosecution of the common object that each member might antecedently expect it to happen.
In the second part "know" meant to know that some members of the assembly had previous knowledge that murder was likely to be committed.
This section has been the subject matter of interpretation in the various High Court of India, but every case has to be decided on its own facts.
The first part of the section means that the offence committed in prosecution of the common object must be one which is committed with a view to accomplish the common object.
It is not necessary that there should be a preconcert in the sense of a meeting of the members of the unlawful assembly as to the common object; it is enough if it is adopted by all the members and is shared by all of them.
In order that the case may fall under the first part the offence committed must be connected immediately with the common object of the unlawful assembly of which the accused were members.
Even if the offence committed is not in direct prosecution of the common object of the assembly, it may yet fall under section 149 if it can be held that the offence was such as the members knew was likely to be committed.
The expression I know ' does not mean a mere possibility, such as might or might not happen.
For instance, it is a. matter of common knowledge that when in a village a body of heavily armed men set out to take a woman by force, someone is likely to be killed and all the members of the unlawful assembly must be aware of that likelihood and would be guilty 949 under the second part 'of section 149.
Similarly, if a body of persons go armed to take forcible possession of the land, it would be equally right to say that they have the knowledge that murder is likely to be committed if the circumstances as to the weapons carried and other conduct of the members of the unlawful assembly clearly point to such knowledge on the part of them all.
There is a great deal to be said for the opinion of Couch, C. J., in Sabid Ali 's case (1) that when an offence is committed in prosecution of the common object, it would generally be an offence which the members of the unlawful assembly knew was likely to be committed in prosecution of the common object.
That, however, does not make the converse proposition true; there may be cases which would come within the second part, but not within the first.
The distinction between the two parts of section 149, Indian Penal Code cannot be ignored or obliterated.
In every case it would be an issue to be determined whether the offence committed falls within the first part of section 149 as explained above or it was an offence such as the members of the assembly know to be likely to be committed in prosecution of the common object and falls within the second part.
Counsel for the appellants also relied on Chikkarange Gowde vs State of Mysore (2).
In that case there were special circumstances which were sufficient to dispose of it.
The charge was a composite one mixing up common intention and common object under sections 34 and 149, Indian Penal Code and this Court took the view that it really was one under section 149, Indian Penal Code.
The charge did not specify that three of the members had a separate common intention of killing the deceased, different from that of the other members of the unlawful assembly.
The High Court held that the common object was merely to chastise the deceased, and it did not hold that the members of the unlawful assembly knew that the deceased was likely to be killed in prosecution of that common object.
The person who was alleged to have caused the fatal injury was acquitted.
This Court held that on the findings (1) Cr.
(2) A.I.R. 1956 S.C. 731.
950 of the High Court there was no liability under section 34 and further the charge did not give proper notice nor a reasonable opportunity to those accused to meet that charge.
On these findings it was held that conviction under section 302 read with section 149 was not justified in law nor a conviction under section 34.
It was next argued that the appellants went to take possession in the absence of the complainants who were in possession and therefore the common object was not to take forcible possession but to quietly take possession of land which the appellants believed was theirs by right.
In the first place there were proceedings in the Revenue Department going on about the land and the complainants were opposing the claim of the appellants and then when people go armed with lethal weapons to take possession of land which is in possession of others, they must have the knowledge that there would be opposition and the extent to which they were prepared to go to accomplish their common object would depend on their conduct as a whole.
The finding of the High Court as we have pointed out was that the appellants had gone with the common object of getting forcible possession of the land.
They divided themselves into three parties, Maiku appellant was in the field where jowar was sown and he was ploughing it, Mizaji, Subedar and Machal were in the sugar field and cutting the crop.
Tej Singh was keeping watch.
When the party of the complainants on being told of what the appellants were doing came, they protested to Tej Singh.
Thereupon, all the members of Tej Singh 's party gathered at the place where Tej Singh was and asked the complainants " to go away otherwise they would be finished ", but they refused to go.
Thereupon Tej Singh asked Mizaji to fire at them and Mizaji fired the pistol which he was carrying in the fold of his dhoti as a result of which Rameshwar was injured, fell down and died I hour later.
It was argued on behalf of the appellants that in these circumstances it cannot be said that the offence was committed in prosecution of the common object of the assembly which was clear from the fact 951 that the party had divided itself into three parts and only Mizaji used his pistol and the other appellants did not use any weapon and just went away.
Both the Courts below have found that the pistol was fired by Mizaji and thus he was responsible for causing the death of Rameshwar which would be murder and also there is no doubt that Tej Singh would be guilty of abetment of that offence.
But the question is whether section 149 is applicable in this case and would cover the case of all the appellants ? This has to be concluded from the weapons carried and the conduct of the appellants.
Two of them were armed one with a spear and the other with a pistol.
The rest were armed with lathis.
The evidence is that when the complainants ' party objected to what the appellants did, they all collected together and used threats towards the complainants ' party telling them to go away otherwise they would be finished and this evidence was accepted by the High Court.
From this conduct it appears that members of the unlawful assembly were prepared to take forcible possession at any cost and the murder must be held to be immediately connected with the common object and therefore the case falls under section 149, Indian Penal Code and they are all guilty of murder.
This evidence of Hansram and Matadin which relates to a point of time immediately before the firing of the pistol shows that the members of the assembly at least knew that the offence of murder was likely to be committed to accomplish the common object of forcible possession.
It was then contended that Mizaji did not want to fire the pistol and was hesitating to do so till be was asked by his father to fire and therefore penalty of death should not have been imposed on him.
Mizaji carried the pistol from his house and was a member of the party which wanted to take forcible possession of the land which was in possession of the other party and about which proceedings were going on before the Revenue Officer.
He fully shared the common object of the unlawful assembly and must be taken to have carried the pistol in order to use it in the prosecution of the common object of the assembly and he did use 952 it.
Merely because a son uses a pistol and causes the death of another at the instance of his father is no mitigating circumstance which the courts would take into consideration.
In our opinion the courts below have rightly imposed the sentence of death on Mizaji.
Other appellants being equally guilty under section 149, Indian Penal Code, have been rightly sentenced to imprisonment for life.
The appeals Must therefore be dismissed.
Appeals dismissed.
| Early one morning the five appellants, Tej Singh armed with a spear, his son Mizaji armed with a pistol which he carried in the folds of his dhoti, his nephew Subedar, his cousin Machal and his servant Maiku armed with lathis went to take forcible possession of a field which was in the cultivatory possession of Rameshwar and others.
While Tej Singh stood guard, Maiku started ploughing and overturning the jowar that had been sown in one portion of the field and the others started cutting the sugarcane which stood in another portion.
When Rameshwar and others arrived they protested to Tej Singh, whereupon all the accused gathered near Tej Singh and asked the complainants to go away otherwise they would be finished.
On their refusal to go, Tej Singh asked Mizaji to fire at them and Mizaji shot Rameshwar dead.
The Courts below found that the common object of the unlawful assembly was to take forcible possession of the field and to meet every eventuality even to the extent of causing death if interfered with.
It accordingly convicted the appellants under section 302 read with section 149, Indian Penal Code, and sentenced Mizaji to death and the others to imprisonment for life.
The appellants contended that the other appellants could not have the knowledge that Mizaji carried a pistol in the folds 941 of his dhoti, that the murder was not committed in prosecution of the common object to take forcible possession nor did the other appellants know that murder was likely to be committed in furtherance of the common object.
Held, that the appellants had been rightly convicted and sentenced under section 302 read with section 149 Indian Penal Code.
The extent to which the members of the unlawful assembly were prepared to go in prosecution of the common object, is indicated by the weapons carried by them and their conduct.
The circumstances show that the appellants must have known that Mizaji was carrying a pistol.
The appellants were prepared to take forcible possession at any cost and the murder was immediately connected with the common object.
Under the first part Of section I49 the offence committed in prosecution of the common object must be one which was committed with a view to accomplish the common object and must be connected immediately with the common object of the unlawful assembly of which the accused were members.
Even if the offence committed was not in direct prosecution of the common object of the assembly, it would yet fall under section I49 if it could be shown that the offence was such as the members knew was likely to be committed.
The expression 'know ' does not mean a mere possibility, such as might or might not happen.
Queen vs Sabid Ali, Cr., Chikkarange Gowde vs State of Mysore, A.I.R. (1956) S.C. 731, referred to.
The fact that the appellants went to take possession in the absence of the complainants did not show that the common object was not to take forcible possession as proceedings were going on between the parties in the Revenue Court for possession over the field and the appellants had gone armed with lethal weapons prepared to overcome the opposition which they knew they would meet.
Mizaji was rightly given the sentence of death.
He shared the common object of the unlawful assembly and carried the pistol from his house to use it in prosecution of the object and did use it.
The fact that he used the pistol at the instance of his father was not a mitigating circumstance.
|
67 of 1953.
Petition under article 32 of the Constitution of India for a writ in the nature of habeas corpus.
Veda Vyas (V. N. Sethi and section K. Kapur, with him) for the petitioner.
M. C. Setalvad, Attorney General for India (G. N. Joshi, with him) for the respondents.
709 1953.
April 16.
The Judgment of the Court was delivered by PATANJALI SASTRI C.J.
This is a petition under article 32 of the Constitution for the issue of a writ in the nature of habeas corpus directing the release of the petitioner Dr. Ram Krishan Bhardwaj who is a medical practitioner in Delhi and is now said to be under unlawful detention.
The petitioner was arrested on the 10th March, 1953, under an order of the District Magistrate of Delhi made under section 3 of the Preventive Detention Act as amended.
The grounds of detention were communicated to the petitioner on the 15th March, 1953.
The first paragraph of that communi cation states that " the Jan Sangh, the Hindu Mahasabha and the Ram Rajya Parishad have started an unlawful campaign in sympathy with the Praja Parishad movement of Kashmir for defiance of the law, involving violence and threat to the maintenance of public order " as evidenced by the sub paragraphs which follow.
The incidents referred to in sub paragraphs (a) to (1) are said to have ranged from the 4th to the 10th March, 1953, the date on which the petitioner was arrested, but they do not directly implicate the petitioner.
They merely give particulars of the alleged unlawful activities of the three political organizations referred to above.
Subparagraph (m) is important, as, on it is founded the first contention of Mr. Veda Vyas, the learned counsel for the petitioner.
It runs as follows: "(m) On the evening of 11th March, 1953, there was very heavy brick batting indulged in by or at the instance of Jan Sangh and Mahasabha workers in Sabzimandi when the police dispersed a Jan Sangh and Hindu Mahasabha procession and several persons including policemen, journalists and other non officials were injured.
An assault was made on Miss Mridula Sarabhai and Sri Dan Dayal one of her associates received a stab injury.
" 710 It will be noticed that the incidents related in the sub paragraph are alleged to have taken place on the 11th March, the day after the petitioner was arrested and detained.
Mr. Veda Vyas relies upon it as showing that the District Magistrate did not apply his mind to the alleged necessity for the detention of the petitioner as, if he had done so, he could not possibly have referred to what happened on the 11th March as a ground of justification for what he did on the 10th The so called grounds on which the detention is said to have been based must, it was suggested, have been prepared by some clerk or subordinate in the District Magistrate 's office and mechanically signed by him.
The learned Attorney General explained that the incidents of the 11th March were referred to not as a ground for the arrest and detention of the petitioner, but merely as evidencing the unlawful activities of the movement organized by the Jan Sangh and the other political bodies of which the petitioner was an active member.
The explanation is hardly convincing and we cannot but regard this lapse in chronology as a mark of carelessness.
Notwithstanding repeated admonition by this Court that due care and attention must be bestowed upon matters involving the liberty of the individual, it is distressing to find that such matters are dealt with in a careless and casual manner.
In view, however, of the statements in the affidavit filed by the District Magistrate before us that he carefully perused and considered the reports.
and materials placed before him by responsible Intelligence Officers and that he was fully satisfied that the petitioner was assisting the movement and agitation started by the Jan Sangh, etc.
, we are not prepared to hold that the District Magistrate failed to apply his mind to the relevant considerations before he made the detention order as suggested for the petitioner.
The second contention raised by Mr. Veda Vyas is more formidable.
As already stated, the first paragraph of the statement.
of grounds, while it sets out the unlawful activities of the, three political bodies, 711 does not directly implicate the 'petitioner in any of them.
The second paragraph shows how the petitioner was concerned in those activities.
It begins by stating " The following facts show that you are personally helping and actively participating in the above mentioned movement which has resulted in violence and threat to maintenance of public order".
Then follow four sub paragraphs (a) to (d) which refer to private meetings of the Working Committee of the Jan Sangh in January and February, 1953, where, it is alleged, it was decided to launch and intensify the campaign and the petitioner made inflammatory speeches.
Sub paragraph (e) on which this contention is based runs thus : "(e) You have been organising the movement by enrolling volunteers among the refugees in your capacity as President of the Refugee Association of the Bara Hindu Rao," a local are& in Delhi.
It is argued by Mr. Veda Vyas that this ground is extremely vague and gives no particulars to enable the petitioner to make an adequate representation against the order of detention and thus infringes the constitutional safeguard provided in article 22 (5).
Learned counsel relies on the decision in Atma Ram Vaidya 's case(1) where this Court held by a majority that the person detained is entitled, in addition to the right to have the grounds of his detention communicated to him, to a further right to have particulars " as full and adequate as the circumstances permit " furnished to him so as to enable him to make a representation against the order of detention.
It was further held that the sufficiency of the particulars conveyed in the " second communication " is a justiciable issue, the test being whether it is sufficient to enable the detained person to make a representation " which, on being considered, may give relief to the detained person".
On this interpretation of article 22 (6) two questions arise for consideration : first, whether the ground mentioned in subparagraph (e) is so vague (i) 712 as to render it difficult, if not impossible, for the peti tioner to make an adequate representation to the appropriate authorities, and second, if it is vague, whether on vague ground among others, which are clear and definite, would infringe the constitutional safeguard provided in article 22(5).
On the first question, the Attorney General argued that the grounds must be read as a whole and so read, the ground mentioned in sub paragraph (e) could reasonably be taken to mean, that the petitioner was organizing the movement by enrolling volunteers from the 4th to 10th March in the area known as Bara Hindu Rao.
This interpretation is plausible, but the petitioner, who is a layman not experienced in the interpretation of documents, can hardly be expected without legal aid, which is denied to him, to interpret the ground in the sense explained by the AttorneyGeneral.
Surely, it is up to the detaining authority to make his meaning clear beyond doubt, without leaving the person detained to his own resource for interpreting the grounds.
We must, therefore, hold that the the ground mentioned in sub paragraph (e) of paragraph 2 is vague in the sense explained above.
On the second question, there is no considered pronouncement by this Court, though in some cases it would appear to have been assumed, in the absence of any argument, that one or two vague grounds could not affect the validity of the detention where there are other sufficiently clear and definite grounds to support the detention.
Mr. Veda Vyas now argues that even though the petitioner might succeed in rebutting the other grounds to the satisfaction of the Advisory Board, his representation might fail to carry conviction so far as the ground mentioned in sub paragraph (e) was concerned in the absence of particulars which he could rebut and the Advisory Board might, therefore, recommend the continuance of his detention.
The argument is not without force, as the possibility suggested cannot altogether be ruled out.
The Attorney General drew attention to the recent amendment of section 10 of the Preventive Detention 713 Act as a result of which the petitioner would be entitled to be heard in person before the Advisory Board if he so desires and, it was said that he would thus have the opportunity of getting the necessary particulars through the Board who could call upon the appropriate Government to furnish particulars if the Board thought that the demand for them was in the circumstances just and reasonable.
The petitioner would thus suffer no hardship or prejudice by reason of sufficient particulars not having been already furnished to him.
The question however is not whether the petitioner will in fact be prejudicially affected in the matter of securing his release by his representation, but whether his constitutional safeguard has been infringed.
Preventive detention is a serious invasion of personal liberty and such meagre safeguards as the Constitution has provided against the improper exercise of the power must be jealously watched and enforced by the Court.
In this case, the petitioner has the right, under article 22(5), as interpreted by this Court by a majority, to be furnished with particulars of the grounds of his detention "sufficient to enable him to make a representation which on being considered may give relief to him.
" We are of opinion that this constitutional requirement must be satisfied with respect to each of the grounds communicated to the person detained, subject of course to a claim of privilege under clause (6) of article 22.
That not having been done in regard to the ground mentioned in sub paragraph (e) of paragraph 2 of the statement of grounds, the petitioner 's detention cannot be held to be in accordance with the procedure established by law within the meaning of article 21.
The petitioner is therefore entitled to be released and we accordingly direct him to be set at liberty forthwith.
Petition allowed.
Agent for the petitioner : Ganpat Rai.
Agent for the respondent : G. H. Rajadhyaksha.
| Under article 21 (5) as interpreted by an earlier decision of this court a person detained under the Preventive Detention Act is entitled, in addition to the right to have the ground of his detention communicated to him, to a further right to have particulars as full and adequate as the circumstances permit furnished to him as to enable him to make a representation against the order of detention and the sufficiency of particulars conveyed in the second communication is a justiciable issue, the test being whether they are sufficient to enable the detained person to make a representation which on being considered may give him relief.
The constitutional requirement that the grounds must not be vague must be satisfied with respect to each of the grounds communicated to the person detained subject to the claim of privilege under el.
(6) of article 22 of the Constitution.
Where one of the grounds mentioned was "you have been organising the movement (Praja Parishad Movement) by enrolling volunteers among the refugees in your capacity as President of the Refugee Association of Bara Hindu Rao": Held, that this ground was vague and even though the other grounds were not vague the detention was not in accordance with the procedure established by law and was therefore illegal.
Dictum: Preventive detention is a serious invasion of personal liberty and such meagre safeguards as the Constitution has provided against the improper exercise of the power must be jealously watched and enforced by the Court.
|
Appeal No. 2860(NT) of 1979.
From the Judgment and Order dated 8.3.1979 of the, Patna High Court in Civil writ jurisdiction case No.2909 of 1978.
V.A. Babde, R.F. Nariman and Ms. Kamakshi (For Gagrat & Co.) for the appellant.
Dr. section Narayan P. Parmeshwaran and Manoj Prasad for the Respondents.
The Judgment of the Court was delivered by, VENKATACHALA, J.
The short, question which needs our decision in this appeal by special leave is whether a person who credits to the account of or pays to a contractor any sum payable by any of the organisations specified in section 194C(1) of Income Tax Act, 1961 'the Act ' for carrying out any work including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the specified organisation is liable to deduct two per cent of such sum as income tax as required under that sub section.
The facts 'which, have lad to the need for our decision on the said question are briefly these.
The Associated Cement Company Ltd. the appellant, issued a letter dated 5th November, 1973 to Mr.
S.P Nag contractor Jhiakpani Containing the terms and conditions of a contract of leading packed cement bags,from its Packing Plants.
Nos.1 & 2 into wagons or trucks.
Under clause.
12 of those terms and conditions, there 541 was a stipulation that the contractor shall be paid a sum for his work at a flat rate of 41 paise for such tonne of cement handled in Packing Plant No.1.
and 30 paise for each, tonne o f cement handled in Packing Plant No.2.
Clause 13 thereof, which contained a recital that the rate of loading in clause 12 had been worked out on the basis of daily basic wages of Rs.2.35 paise, D.A. of Rs. 1.21 paise and H.R.A. of Rs.0.50 paise, per day per worker stipulated a term of reimbursement by the appellant to the contract of the difference in D.A. over the amount of Rs.1.21 paise and annual increment etc.
payable from month to month to every worker by him as per the Second Wage Board Recommendation.
As the contractor carried out his work according to the terms and conditions in the contract during the years 1973 74 and 1974 75, the appellant made payments of the sums payable to him under clause 12 of the contract and the sums reimbursable to him under clause 13 thereof But the deductions made 'under section 194C(1) of the Act by the appellant out of the sums paid or reimbursed to the contractor fell short of the deductions required to be made thereunder.
As the appellant took the stand that it was not liable to deduct any amount under section 194(1), out of the sums paid on its behalf to the contractor as per clauses 12 & 13 of the contract, the Income Tax Officer, Jamshedpur, served on the principal officer of the appellant a notice dated 30th March, 1978 to show cause as to why action should not be taken against the appellant under sections 276B(1), 281 and 221 of the Act in respect of assessment years 1973 74 and 1974 75 for short deductions out of the sums paid to contractor without observing the requirement of section 194C(1) of the Act.
Another notice dated 8th May, 1978.relating to the assessment years 1974 75 to 1977 78 of a similar nature, was also served on the principal officer of the appellant.
The appellant, although impugned both the said notices in a Writ Petition filed under Articles 226 and 227 of the Constitution before the High Court of Judicature at Patna, that Writ Petition was dismissed by the High Court by its order dated 8th March, 1979.
The appellant has, therefore, filed this appeal by special leave before this Court seeking the quashing of the notices which it had unsuccessfully impugned before the High Court, in its Writ Petition.
It was argued by Mr. V.A. Bobde, the learned senior counsel appearing for the appellant, that the amount deductible under section 194C(1) out of the sums credited to the account of or paid to a contractor would arise only when such sums are paid, on account of a contractor executing a works contract, that is, a contract which produces a tangible property.
542 According to him, the 'work ' for the the carrying of which the sum is required to be credited to the account of or paid to a contractor under section 194C(1) of the Act is only a 'works contract ' and hence deduction under that sub section could arise only to the extent where the sum credited to the account of or paid to a contractor for executing such 'works contract ' is comprised of the element of income (profit) of the contractor, as held by this Court in Brij Bhushan Lal Parduman Kumar etc.
vs Commissioner of Income Tax Haryana, Himachal Pradesh and New Delhi III, [1979] 2 SCR 16 and not otherwise.
It was also his argument that the words in the sub section 'on income comprised therein ', appearing immediately after the words 'deduct an amount equal to two per cent of such sum as income tax ' found in the concluding part of that sub section, must be taken to mean the percentage amount deductible on the income received by the contractor under the contract and not on the sum credited to the account of or paid to the contractor in pursuance of the contract.
These arguments were, however, strongly refuted by Dr. section Narayan, the learned counsel for the Revenue.
It is how, the question mentioned at the outset needs our decision.
Section 194C(1) of the Income Tax Act on the proper construction of which the decision on the aforesaid question should necessarily rest, runs thus: '194C(1).
Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and (a) the Central Government or any State Government; or (b) any local authority; or (c) any corporation established by or under a Central, State or Provincial Act; or (d) any company , or (e) any co operative society , or (f) any authority, constituted in India by or under any law, 543 engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or (g) any society registered under the (21 of 1860) or under any law corresponding to that Act in force in any part of India; or (h) any trust; or (i) any University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the (3 of 1956 , shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to two per cent of such sum as income tax on income comprised therein.
" No ambiguity is found in the language employed in the subsection.
What is contained in the sub section, as appears from its plain reading and analysis admit of the following formulations: (1) A contract may be entered into between the contractor and any of the organisations specified in the sub section.
(2) Contract in Formulation 1 could not only be for carrying out any work but also for supply of labour for carrying out any work.
(3) Any person responsible for paying any sum to a contractor in pursuance of the contract in Formulations 1 and 2, could credit that sum to his account or make its payment to him in any other manner.
(4) But, when the person referred to in Formulation 3 either credits the sum referred to therein to the account 544 of or pays it to the contractor, he shall deduct out of that sum an amount equal to two per cent as income tax on income comprised therein.
Thus, when the percentage amount required to be deducted under the sub section as income tax is on the sum credited to the account of or paid to a contractor in pursuance of a contract for carrying out a work or supplying labour for carrying out a work, of any of the organisations specified therein, there is nothing in the sub section which could make us hold that the contract to carry out a work or the contract to supply labour to carry out a work should be confined to 'works contract ' as was argued on behalf of the appellant.
We see no reason to curtail or to cut down the meaning of plain words used in the Section.
"Any work" means any work and not a 'works contract", which has a special connotation in the tax law.
Indeed, in the sub section, the 'work ' referred to therein expressly includes supply of labour to carry out a work.
It is a clear indication of legislature that the 'work ' in sub section is not intended to be confined to or restricted to 'works contract '. 'Work ' envisaged in the sub section, therefore, has wide import and covers 'any work ' which one or the other of the organisations specified in the sub section can get carried out through a contractor under a contract and further it includes obtaining by any of such organisations supply of labour under a contract with a contractor for carrying out its work which, would have fallen outside the 'work ', but for its specific inclusion in the sub section.
In Brij Bhushan (supra) this Court was concerned with the question whether the cost of materials supplied by the Government for being used in execution of works is liable to be taken into consideration while estimating the income or profits of a contractor.
That question was answered by this Court, thus: "It is true that ordinarily when a works contract is put through or completed by a contractor the income or profits derived by the contractor from such contract is determined on the value of the contract as a whole and cannot be determined by considering several items that go to form such value of the contract but in our view where certain stores/material is supplied at fixed rates by the Department to the Contractor solely for being used or 545 fixed or incorporated in the works undertaken on terms and conditions mentioned above, the real total value of the entire contract would be the value minus the cost of such stores/material so supplied.
Therefore, since no element of profit was involved in the turnover represented by the cost of stores/material supplied by the M.E.S. to the assessee firms, the income or profits derived by the assessee firms from such contracts will have to be determined on the basis of the value of the contracts represented by the cash payments received by the assessee firms from the M.E.S. Department exclusive to the cost of the material '/stores received for being used, fixed or incorporated in the works undertaken by them.
" The above decision cannot be of any help to the appellant for it does not lay down that the percentage amount deductible under section 194C(1) should be out of the income of the contractor from the sum or sums credited to the account of or paid to him.
The words in the sub section 'on income comprised therein ' appearing immediately after the words deduct an amount equal to two per cent of such sum as income tax ' from their purport, cannot be understood as the percentage amount deductible from the income of the contractor out of the sum credited to his account or paid to him in pursuance of the contract.
Moreover, the concluding part of the sub section requiring deduction of an amount equal to two per cent of such sum as income tax, by use of the words 'on income comprised therein ' makes it obvious that the amount equal to two per cent of the sum required to be deducted is a deduction at source.
Indeed, it is neither possible nor permissible to the payer to determine what part of the amount paid by him to the contractor constitutes the income of the latter.
It is not also possible to think that the Parliamer ' could have intended to cast such impossible burden upon the payer nor could it be attributed with the intention of enacting such an impractical and unworkable provision.
Hence, on the express language employed in the sub section, it is impossible to hold that the amount of two per cent required to be deducted by the payer out of the sum credited to the account of or paid to the contractor has to be confined to his income component, out of that sum.
There is also nothing in the language of the sub section which permits exclusion of an amount paid on behalf of the Organisation to the contractor according to clause 13 of the terms and conditions of the contract in reimbursement of the amount 546 paid by him to workers, from the sum envisaged therein, as was suggested on behalf of the appellant.
For the foregoing reasons, our decision on the question under consideration, is held in the affirmative and in favour of the Revenue.
In the result, this appeal fails and is dismissed directing the appellant to pay the costs of the respondent the Revenue in this appeal.
Advocate 's fee is fixed at Rs 3000.
T.N.A. Appeal dismissed.
| The appellant Company issued a letter to its Contractor containing the terms and conditions of a contract of loading packed cement bags from its Packing Plants Into wagons or trucks.
Under Clause 12 there was a stipulation that the Contractor shall be paid a sum for his work at a flat rate of 41 paise for each tonne of cement handled In Packing Plant No.1 and 30 paise for each tonne of cement handled in Packing Plant No.2 Clause 13 thereof, which contained a recital that the rate of loading in Clause 12 had been worked out on the basis of daily basic wages of Rs.2.35 paise, DA of Rs.1.21 paise and H.R.A of Rs.0.50 paise per day per worker, stipulated a terms of reimbursement by the appellant to the Contractor of the difference in DA over the amount of Rs.1.21 paise and annual increment etc.
payable from mouth to month to every worker by him.
The Contractor carried out his work and the appellant made payments of the sums payable to him under the contract.
But no deductions of tax were made under Section 194C(1) of the Income Tax Act, 1961.
The Income Tax Officer served two notices One in respect of assessment years 1973 74 and 1974 75 and the other for 1974 75 to 1977 78 on the principal officer of the appellant Company to show cause as to why action should not be taken against the appellant for non compliance with Section 194C(1).The appellant filed a Writ Petition before the High Court of Patna seeking the quashing of the notices but the same was dismissed.
In appeal to this Court it was contended on behalf of the appellant 538 539 that (1) the 'work ' for the carrying of which the sum is required to be credited to the account of or paid to a Contractor under Section 194C(1) of, the Act ' is only a 'works contract ' and hence deduction "under that sub section could arise only to the extent where the sum credited to the account of or paid to a Contractor for, executing such works contract ' is comprised of the element of Income of the Contractor, (2) that the words 'on income.
comprised therein ',appearing immediately after the words ' deduct an amount equal to two per cent of such sum as income tax in the concluding part of the sub section must be taken to mean the percentage amount deductible on the Income received by the Contractor under the contract and not on the sum credited 'to the account of 'or paid to the Contractor.
Dismissing the appeal, this Court, HELD. 1.
Them is nothing fit sub section (1) of Section 194C to show that the contract to carry out a work or the contract to supply labour to carry out a work should be confined to 'works contract '.There is no mason to curtail or to cut down the meaning of plain words used in the Section.
.Any work ' means any work and not &."works contract ', which has a special connotation in the tax law. 'Work ' envisaged In the sub section, therefore has.
a wide import and covers 'any work ' which one or the other of the organisations specified in the sub section can get carried out through a Contractor under a contract and further It includes obtaining by any of such organisations supply of labour under a contract with a Contractor for carrying out its work which, would have fallen outside the 'work ', but forks specific inclusion in the sub section.
[544 B E] Brij Bhushan Lal Parduman Kumar etc.
vs C.I. T., Haryana, Himachal Pradesh and New Delhi [1979] 2 S.C.R. 16, distinguished.
The words in the sub section 'on income comprised therein ' appearing Immediately after the words 'deduct an amount equal to two per cent of such sum as income tax ' from their purport, cannot be understood as the percentage amount deductible from the income of the Contractor out of the sum credited to his account or paid to him in pursuance of the co Moreover the concluding part of the sub section requiring deduction of an amount equal to two per cent of such sum as income tax by, use of the words 'on income comprised therein ' makes It obvious that the amount equal to two per cent of the sum required to be deducted Is a 540 deducts at source.
Hence on the express language employed in the sub section, it, is impossible to hold that the amount of the two per cent required to be deducted by the prayer out of the sum credited to the account of or paid to the Contractor has to be confined to his income component out of that sum, [545 D G] 2.1.
There is also nothing in the language of the sub section which permits exclusion of, an amount paid on behalf of the organisaiton to the Contractor according to, the termsand conditions ofthe contract in reimbursement, of.
the amount paidby to workers,from, the sum envisaged therein.
[545 G H, 546 A]
|
Civil Appeal No. 2150 of 1968.
(Appeal by Special Leave from the Judgment and Order dated 5.9.1968 of the Punjab & Haryana High Court in L.P.A. No. 458/68).
V.C. Mahajan, Hardev Singh and R.S. Sodhi, for the appel lant.
O.P. Sharma, for the respondents 1 and 2.
K.R. Nagaraja and P.N. Puri, for respondent No. 3.
The Judgment of the Court was delivered by BEG, C.J.
This appeal under Article 136 of the Consti tution is directed against a very detailed Judgment of the Punjab & Haryana High Court on a Writ Petition No. 1875 of 1965 filed under Articles 226 and 227 of the Constitution, assailing an order of the Additional Director, Consolidation of Holdings, passed on 8 June, 1965.
A perusal of that order, together with the earlier order of 4 May, 1965, and the application for restoration dated 15 May, 1965, filed by Gurdev Singh, respondent No. 3, shows: Gurdev Singh, who had 370 some complaint against the Consolidation Scheme, was not present so that his petition was ordered to be filed by the Additional Director, Consolidation on 4 May, 1965.
Gurdev Singh, soon thereafter i.e. on 15 May, 1965, filed an appli cation for restoration supported by an affidavit, attribut ing his absence on 4 May, 1965, to his illness.
The. order dated 8 June, 1965, of the Additional Director, shows that the applicant Gurdev Singh 's assertion that he could not attend due to illness, over which he had no control, was accepted by the Additional Director, who proceeded to exer cise his powers under section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (hereinafter referred to as the Act) and to set right the grievance of the applicant, Gurdev Singh, after going into all the relevant records.
The learned Judge of the High Court, who heard the petition also went through the records very carefully, came to the conclusion that an assertion of rights by the petitioner/ appellant, a member of the Sanjam Group, merely because of some report contained in the "Fard Badar," could not take away the effect of entries in the revenue records.
The learned Judge held that no injustice was caused to the petitioner/appellant also, there was no ground for interference under Article 226 of the Constitu tion.
The learned counsel for the appellant has relied upon the case of Harbhajan Singh vs Karam Singh& Ors.
reported in ; , where this Court held that the Addl.
Director exercising the powers of the State Government has no jurisdiction under section 42 of the Act to review his previous order.
Section 42 of the Act runs as follows: "The State Government may at any time for the purpose of satisfying itself as to the legality or propriety of any order passed, scheme prepared or confirmed or repartition made by any officer under this Act, call for and examine the record of any case pending before or disposed of by such officer and may pass such order in reference thereto.
as it thinks fit: Provided that no order or scheme or repar tition shall be varied or reserved without giving the parties interested notice to appear and opportunity to.
be heard except in case where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration.
" The proviso to Section 42 lays down that notice to interested parties to appear and opportunity to be heard are conditions precedent to passing of an order under Section 42.
The fact that the Additional Director was satisfied that the respondent, Gurdev Singh, did not have an opportu nity of being ,heard due to his illness, seems to us to amount to a finding that the proviso.
could not be complied with so that the previous order could not be held to be an order duly passed under Section 42 of the Act.
It could be ignored as "non est.
" The view taken in Harbhajan Singh 's case (supra) would not apply to the 371 instant case although Section 42 of the Act does not contain a power of review.
Orders which are 'non est ' can be ignored at any stage.
On the facts and circumstances of this case, we think that this is not a fit case for interference under Article 136 of the Constitution.
The appellant, if he has acquired any rights by reason of long possession, can assert them whenever any proceedings are taken before a competent au thority to dispossess him.
What we have held here or whatever has been held by the High Court will not affect such other rights, if any, as the Appellant may have ac quired by reason of possession.
We do not know and refrain from deciding who is actually in possession and for how long and in what capacity.
This appeal is dismissed.
Parties will bear their own costs.
_ P.H.P. Appeal dismissed.
| Section 6(1) of the Bengal Finance (Sales Tax) Act 1941 exempts from tax liability "vegetables, green or dried commonly known as subji, tarkari or sak" when not sold in sealed containers.
The Sales Tax Authorities levied sales tax on "green ginger" sold by the respondents, taking the view that inasmuch as green ginger is.
used to add flavour and taste to food.
it is not "vegetable commonly known as subji, tarkari or sak".
A writ petition challenging the validity of the orders of assessment was allowed by the Calcutta High Court which held that green ginger is vegeta ble within the meaning of that expression as used in Item 6 of the First Schedule to the Bengal Finance (Sales Tax) Act, 1941.
Dismissing the State appeals by Special Leave the Court, HELD: (1) Green ginger is included.
within the meaning of the words "vegetables commonly known as subji, tarkari or sak" in Item 6 of Schedule I and its sales are exempt from tax under section 6 of the Bengal Finance (Sales Tax) Act, 1941.
[152 D] (2) The word "vegetable" though not defined in the Act, being a word of every day use, must be construed not in any technical sense, nor from any botanical point of view but as understood m common parlance i.e. denoting class of vegeta bles which are grown in a kitchen garden or in a farm and are used for the table.
The word "vegetable" in Item 6 of Schedule I to the Act, so construed, by giving its popular sense meaning, "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it" denotes those classes of vegetables which are grown in a kitchen garden or in a farm and are used for the table.
Green ginger obviously is a vegetable grown in a kitchen garden or in a farm and it is used for the table.
It may not be used as a principal item of the meal, but it certainly forms part of the meal as a subsidiary item.
Green ginger is generally regarded as included within the meaning of the word "vegetable" as understood in common parlance.
1[150 F H, 151 G H, 152 A] Ramavatar Badhaiprasad vs Assistant Sales Tax Officer Akola, ; ; M/s. Motipur Zamindary Co. Ltd. vs State of Bihar ; , applied.
Madhya Pradesh Pan Merchants ' Association, Santra Mar ket, Nagpur vs State of Madhya Pradesh 7 S.T. Cases 99 at 102, referred to.
Grenfell vs I.R.C. at 248; Planters Nut and Chocolate Co. Ltd. vs The King ; 200 Chests of Tea (1824) 9 Wheaton (U.S.) 430, at 438 quoted with approval.
|
Appeal No. 2544 of 1993.
From the judgment and Order dated 7.5.
1992 of the Calcutta High Court in Appeal No. Nil of 1992 in Matter No. 21 of 1991.
P.S, Poti, and S.K. Nandy for the Appellant.
K. Parasaran, A.K. Ganouli, G.K. Banerjee and.
Som Mandal for the Respondent.
R.M. SAHAI, J.
The short and the only question of law that arises for consideration in this appeal is if an appeal was maintainable against an order passed by the Learned Single Judge under Section 39(1) of the either under Section 39(2) of the Act or under the Letters patent jurisdiction.
Facts are not in dispute.
Since the State did not appoint any arbitrator as provided for in clause 25 of the agreement despite letters by the respondent to the Chief Engineer, Public Works Department (P.W.D) and the Secretary P.W.D. the respondent approached the High Court and a Learned Single Judge by order dated 6th September, 1991 revoked the authority of the Chief Engineer to act as an arbitrator and directed one Shri D.K. Roy Chowdhury to act as the sole arbitrator as suggested by the respondent.
Against this order State filed an appeal which has been dismissed by the Division Bench upholding the objection of the respondent as not maintainable.
It has been held that the appeal was not maintainable either under Section 39(2) or under Letters Patent.
It is the correctness of this view that has been assailed in this appeal.
Section 39 of the came up for consideration in Union of India vs Mohindra Supply Company [19621 3 S.C.R. 497.
The Court after going into detail and examining various authorities given by different High [Courts held that no, second appeal lay under Section 39 (2) against a decision given by a Learned Single Judge under Section 39(1).
In respect of the jurisdiction under Letters Patent the Court observed that since was a consolidating and amending act relating to arbitration it must be construed without any assumption that it was not intended to alter the law relating to appeals.
The Court held that in view of bar created by sub section (2) of Section 3 9 debarring an, second appeal from an order passed in appeal under sub section (1) the 'conclusion was 643 inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39 '.
Therefore, so far the second part is concerned, namely, the maintainability of the appeal under Letters Patent it stands concluded by this decision.
The Learned counsel for the appellant vehemently argued that since the decision by the Supreme Court was in respect of an appeal directed against an order passed by a Learned Single Judge in exercise of appellate jurisdiction no second appeal lay but that principle could not be applied where the order of Learned Single Judge was passed not in exercise of appellate jurisdiction but original jurisdiction.
The argument appears to be without any substance as Sub section (1) of Section 39 which is extracted below "(1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order: An order (i) superseding an arbitration; (ii) on an award stated in form of a special case; (iii) modifying or correcting an award; (iv) filing or refusing to file an arbitration agreement; (v) staying or refusing to stay legal proceedings where there is an arbitratio n agreement; (vi) setting aside or refusing to set aside an award Provided that the provisions of this section shall not apply to any order passed by Small Cause Court.
(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.
" 644 provides that an appeal could lie only from the orders mentioned in the subsection itself Since the order passed by Learned Singe Judge revoking the authority of the Chief Engineer on his failure to act as an arbitrator was not covered in either of the six clauses mentioned in Section 39 it is obvious that no appeal could be filed against the order of the Learned Single Judge.] Reliance was placed on certain orders passed by this Court and it was urged that settlement of dispute under clause 25 of the agreement being in exclusive domain of the Chief Engineer the High Court was not empowered to appoint anyone else.
The submission is devoid of any merit.
It is not made out from the agreement.
Rather clause 25 itself permits appointment of another arbitrator if the Chief Engineer fails or omits to act as such.
Relevant portion of the agreement is extracted below "Should the Chief Engineer be for any reason unwiling or unable to act as such Arbitrator such questions and disputes shall be referred to an Arbitrator to be appointed by the Arbitrator shall be final, conclusive and binding on all the parties to this contract.
" In one of the decisions given by this Court the order of the High Court was set aside as the dispute being technical in nature the appointment of anon technical arbitrator was not justified.
Here in this the High Court has appointed a retired Chief Engineer and not a non technical man.
No allegation has been made against him.
Therefore, the order of the learned Single Judge also does not suffer from any infirmity.
In the Circumstances the view taken by the Division Bench dismissing the appeal as not maintainable appears to be well founded.
The appeal accordingly fails and is dismissed with costs.
S.K. Appeal dismissed.
| Despite several letters by the respondent to the Chief Engineer Public works Department the State did not appoint any Arbitrator as provided in Clause 25 of the agreement.
Shri D.K. Roy Choudhry who was appointed as a sole Arbitrator by the learned Single Judge revoking the authority of the Chief Engineer to act as an Arbitrator under the agreement.
On appeal by the State under Section 39(2) of the Act or under Letters Patent.
The High Court dismissed the appeal as not maintainable.
This appeal is against the judgment of the High Court.
Appeal dismissed, HELD: 1.Section 39 of the came upon for consideration in U.O.I vs Mohindra Supply Company [1962]3 SCC 497 and the Court held that no Second Appeal lay under section 39(2) against a decision given by a learned Single Judge under Section 39(1).
is a consolidating and amending act relating to arbitration, it must be construed without any assumption that it was not intended to alter the law relating to appeals.
The Court held that in view of bar created by sub section (2) of Section 39 debarring a second appeal from an order passed in appeal under sub section (1) that the 'conclusion was inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39 '.
Therefore the maintainability of the appeal under Letters Patent it stands concluded by this 641 decision.
(642 G H) 2.
Sub section (1) of Section 39 of the is extracted below: "(1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decisions of the Court passing the order.
An order (1) superseding an arbitration; (ii) on an award stated in the form of a special case; (iii) modifying or correcting an award; (IV) filing or refusing to file an arbitration agreement; (v) staying or refusing to stay legal proceedings where there is an arbitration agreement; (vi) setting aside or refusing to set aside an award; Provided that the provisions of this Section shall not apply to any order passed by a Small Causes Court.
_ (2) No second appeal shall lie from an order passed in appeal under this Section, but nothing in this Section shall affect or take away any right to appeal to the Supreme Court".
(643 D E GH) provides that an appeal could lie only from the orders mentioned in the sub Section itself.
Since the order passed by learned Single Judge revoking the authority of the Chief Engineer on his failure to act as an Arbitrator was not covered in either of the six clauses mentioned in Section 39 it is obvious that no appeal could be filed against the order of the learned Single Judge.
(644 642
|
Appeal No. 53 of 1958.
Appeal by special leave from the Decision dated February 28, 1957, of the Labour Appellate Tribunal, Bombay, in Appeal No. 111 160 of 1956.
section P. Varma, for the appellants.
360 L. K. Jha, Janardan Sharma, R. C. Prasad and Maqbool Ahmad Khan, for the respondents.
November 14.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave arises from an industrial dispute between the appellant Messrs. Swadeshi Cotton Mills and the respondents, its employees, and the short preliminary question which is raised for our decision is whether an order should not be passed in this appeal in terms of the compromise agreement alleged to have been reached between the appellant and the respondents.
It appears that on December 28, 1955, an industrial dispute between the parties was referred by the Government of Uttar Pradesh to the Industrial Tribunal, U. P., Allahabad, for adjudication under sections 3, 4 and 8 of the U. P. (U.P. Act XXVIII of 1947) and in pursuance of the provisions of cl. 11 of G. O. No. U 464(LL)/XXXVI B 257 (LL)/1954 issued on July 14, 1954.
The dispute thus referred was whether the existing rates of wages of jobbers mentioned in the annexure employed in the weaving department of the appellant need any revision; if so, with what details and from what date ? The Tribunal tried this issue and came to the conclusion that no case for revision had been made out by the respondents.
Against this decision of the Tribunal the respondents preferred an appeal before the Labour Appellate Tribunal.
Their appeal succeeded and the Appellate Tribunal directed that the award of the original Tribunal should be set aside, and that the appellant " shall introduce from the date of reference a uniform rate of two annas in both the old and new sheds irrespective of the number of looms assigned to the line jobbers ".
It would be noticed that as a result of this decision the existing rates have been revised and the revision has been ordered to take effect retrospectively from the date of reference.
It is against this decision of the Labour Appellate Tribunal that the appellant has preferred the present appeal by special leave.
361 Pending this appeal in this Court the appellant purported to enter into a compromise with the respondents and the terms of the compromise were reduced to writing, and in pursuance of the said compromise an application was made to this Court on February 26,1958, signed by Mr. Bagla, on behalf of the appellant in his capacity as a Director of the appellant, and Mr. Maqbool Ahmad Khan, for the respondents, in his capacity as the General Secretary of the Suti Mill Mazdoor Sabha, Kanpur.
This application set out the material terms of the compromise.
One of the terms of the compromise is that the revised rate should take effect not from December 28, 1955, which is the date of reference but from July 1, 1957.
Certain other modifications have also been made in the decision under appeal.
Before the appeal could be placed on the Board for passing orders in terms of this compromise an application was made on behalf of some of the respondents alleging that the General Secretary Mr. Khan had no authority or power to enter into any compromise as a representative of the respondents, and that the compromise alleged to have been entered into by him with the appellant was not acceptable to the respondents.
In support of this case the application referred to a resolution passed by the General Council of the Mazdoor Sabha whereby it was declared that no office bearer could conclude an agreement with an employer about an industrial dispute without the consent of the General Council, and reliance was also placed on the relevant provisions in the constitution of the Mazdoor Sabha.
Thereafter the petition for compromise was placed before this Court for hearing on April 10, 1960, and the Court directed that the application for recording compromise as well as the appeal itself should both be placed together for hearing before the Court as soon as the parties file their respective statements of the case.
After the statements were filed the appeal and the petition were placed before this Court on May 5, 1960, and the Court by an interlocutory judgment 46 362 sent two issues to the Tribunal with a direction that the Tribunal should hear the parties on those issues and make its findings thereon.
The two issues were: (1) Has the compromise set up by the appellant taken place between the parties; (2) If yes, is the compromise valid ? In pursuance of this order the Tribunal has recorded evidence, heard the parties and made its findings.
It has found that the compromise in fact has taken place as alleged in the petition made before this Court in that behalf, and that the said compromise is valid.
In dealing with the first question of fact the Tribunal has considered the evidence exhaustively in the light of the background of the dispute between the parties; it has found that negotiations went on between the parties for a fairly long time during which period the parties discussed the pros and cons of the compromise, that during these negotiations Mr. Khan was watchful of the interests of the respondents, that the compromise had been approved by the workmen concerned, that on the whole it is to their advantage and does not at all militate against the accepted principles of industrial adjudication, and what is more it has been acted upon and has not remained a mere paper transaction.
It has explained that the opposition to the compromise proceeded sub stantially from the dispute between Mr. Khan, the Secretary, and Mr. Bajpai, the President, and the Tribunal felt no doubt that the compromise was the result of bona fide attempt on the part of both the parties to settle the dispute amicably in order to create goodwill and co operation amongst the employer and the employees.
On the question of law raised by the second issue the Tribunal has held that the compromise is perfectly valid.
It has considered the relevant provisions of the constitution of this Sabha, the practice prevailing in regard to such compromises and to several agreements of compromise entered into consistently with the said practice.
It was urged before the Tribunal that the compromise is invalid under section 6 B of the U.P. , as well as section 2(vi).
(c) of the (Act 4 of 1936).
363 These contentions have been rejected by the Tribunal.
In the result the findings recorded on both the issues are in favour of the compromise.
After these findings were received in this Court, the ' appeal and the compromise petition have now come before us for final disposal.
The finding of fact recorded by the Tribunal on the first issue has not been and cannot be challenged before us.
It must( therefore be taken to have been established that at the relevant time Mr. Khan was the General Secretary of the respondents Sabha, and as such was entitled to represent them and did represent them during the course of the present adjudication proceedings, and that the compromise reached between him and the appellant is the result of mutual discussions carried on for some time and its terms on the whole are beneficial to the respondents.
The practice prevailing in this Sabha and a large number of precedents which are consistent with the said practice indicate clearly that the Secretary of the Union who represents the workmen in industrial disputes has always been authorised and has exercised his authority to settle such disputes when it was thought reasonable and proper to do so.
As we have often indicated it is always desirable that industrial disputes should be amicably settled because such settlement conduces to happy industrial relationship and encourages co operation between the parties.
That is why when industrial disputes are brought before this Court under article 136 of the Constitution this Court generally appreciates attempts made to settle disputes amicably, and in proper cases encourages such settlements.
Mr. Jha, for the respondents, however, contends that though amicable settlement of industrial disputes may otherwise be desirable, in law such settlement or compromise is illegal.
If we come to the conclusion that compromise of industrial disputes pending an appeal is prohibited by law, or is otherwise inconsistent with such provisions it may be necessary to hold that the present compromise is bad in law however much amicable settlement of industrial disputes may otherwise be desirable.
Therefore the question which arises for our 364 decision on the present compromise petition is: Is the contention raised by Mr. Jha correct that the compromise is invalid in law ? The first point urged by Mr. Jha in support of this argument is that the present compromise is prohibited by a. 23 of the .
This Act has been passed to regulate the payment of wages to certain classes of persons employed in industry, and there is no doubt that the wages as revised by the Labour Appellate Tribunal in the present case would constitute wages under section 2 (vi) of this Act.
Section 23 provides that any contract or agreement, whether made before or after the commencement of this Act, whereby an employed person relinquishes any right conferred by this Act shall be null and void in so far as it purports to deprive him of such right.
The relevant provisions of this Act require the fixation of wage periods, provide for the time of payment of wages, authorises certain deductions, and permits the imposition of fines only subject to the conditions specified in that behalf.
Section 15 of the Act provides for the determination of claims arising out of deduction of wages or delay in payment of wages and penalty for malicious or vexatious claims.
Section 16 prescribes for the making of an application in which such claims can be set up; and a. 18 provides for the powers for the authorities appointed under the Act.
Mr. Jha contends that the revised wage structure directed by the Labour Appellate Tribunal entitles the respondents to claim the respective amounts there indicated as their wages, and the effect of the impugned compromise is that the respondents are relinquishing a part of their right in that behalf.
Mr. Jha con.
tends that in giving up their claim for the retrospec tive operation of the decision of the Labour Appellate Tribunal for a substantial part of the period the res pondents are required to contract themselves out of their legal rights conferred by the award and there.
fore referable to this Act, and that makes the compromise invalid.
This argument is misconceived because it fallaciously assumes that the decision under appeal has become final and that the rights accruing under 365 the said decision would not be and cannot be affected by any compromise.
The most significant fact to remember in this connection is that the decision on( which the alleged rights are based is itself subject to an appeal before this Court, and in that sense it is not a final decision at all; it is liable to be reversed or modified, and that being so the rights claimable under the said decision are also liable to be defeated, or materially affected.
In such a case the industrial ' dispute would undoubtedly be pending before this Court, and it would be idle for Mr. Jha to contend that an attempt to settle such a dispute and not to invite a decision of this Court contravenes the provisions of a. 23 of this Act.
Just as an industrial dispute could have been settled between the parties either before it was referred for adjudication to the Industrial Tribunal, or after it was referred and before the award was pronounced by the Tribunal, so would it be open to the parties to settle the dispute so long as it was pending either before the Labour Appellate Tribunal or before this Court.
The provisions of section 23 of this Act postulate certain definite rights which are not likely or liable to be modified or reversed in any pending judicial proceedings, and since this factor is absent in cases where an appeal is pending before this Court it would not be reasonable to rely on the said provisions and contend that they in substance prevent or prohibit amicable settlement of disputes.
The other argument urged against the validity of the compromise is based on the provisions of section 6 C of the U. P.
This section corresponds substantially to section 19 of the XIV of 1947.
It provides, inter alia, that an award shall in the first instance remain in operation for the period of one year or such shorter period as may be specified therein, and gives the State Government power to extend the period of operation from time to time if it thinks fit.
It also provides that the State Government, either on its own motion or on the application of any party bound by the award, shorten the period of its operation, if it is shown that there has been a material change in the circumstances 366 on which the award was based.
The argument is that any modification in the award can only be made by adopting the procedure prescribed by section 6 C.
In our opinion there is no substance in this argument.
Section 6 C undoubtedly confers upon the State Government certain powers to fix the duration of the operation of the award, but there can be no doubt that the section can have no bearing on the powers of this Court in dealing with an industrial dispute brought before it under article 136 of the Constitution.
The award to which section 6 C refers is an award which has become final in the sense that it is no longer subject to consideration by any Tribunal or Court.
So long as an award is pending before a Tribunal or a Court the jurisdiction of the Tribunal or the Court to deal with it in accordance with law is not affected by section 6 C, and the competence of the parties to settle their dispute pending before the Tribunal or the Court is also not affected or impaired by the said section.
In other words, what we have said about the argument based on the provisions of section 23 of the applies with equal force to the present argument as well.
Then it is contended that the impugned compromise is a settlement within the meaning of section 2(t) of the U. P. Act and as such it can be executed only in the manner prescribed by the Act.
Section 2(t) defines a settlement as one which is arrived at in the course of conciliation proceedings and as including a written agreement between the employer and the workmen arrived at otherwise than in the course of conciliation proceedings when such an agreement has been signed between the parties thereto in such manner as may be prescribed and a copy thereof has been sent to the State Government and the conciliation officer.
Rule 5(1) of the U. P. Industrial Disputes Rules, 1957, prescribes the procedure for recording a settlement as defined by section 2(t).
It is true that this procedure has not been followed, but it is difficult to understand how section 2(t) or the procedure prescribed by r. 5(1) can have any application to a compromise agreement which has been entered into between the parties pending the 367 appeal in this Court.
The compromise in question is intended to be filed in this Court for the purpose of enabling the parties to request this Court to pass an, order in terms of the said compromise.
The procedure for obtaining such an order which has to be followed is the procedure prescribed by the rules of this Court, just as if a compromise was reached before the Tribunal the procedure to be followed before it would be, the procedure prescribed by its rules.
Therefore we have no doubt that the compromise in question cannot attract the procedure prescribed by r. 5(1).
The result is that the finding recorded by the Tribunal that the compromise in question is valid is obviously right and must be confirmed.
Since it is found that the compromise in fact has taken place and is otherwise valid, we have no hesitation in directing that an order should be drawn in terms of the said compromise in the present appeal.
Order accordingly.
| The appellant was the Ruler of the State of Baster which was later integrated with the State of Madhya Pradesh.
He was recognised by the President as a Ruler under article 366(22) of the Constitution.
The respondent resumed certain lands belonging to the appellant under the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950.
The appellant contended that he was still a Ruler and not an ex Ruler and as such did not come within the definition of "proprietor" given in the Act.
Held, that the appellant was an ex Ruler for the purposes of the Act and was within the class of persons who were by name included in the definition of 'proprietor ' and was within the scope of the Act.
Factually the appellant was an ex Ruler.
He was a Ruler for the purposes of the privy purse guaranteed to him.
There was nothing in article 366(22) which required a court to treat such a person as a Ruler for purposes outside the Constitution.
Further, the appellant was also a maufidar in respect of the lands acquired which were exempt from the payment of rent or tax.
The expression "maufidar" was not necessarily confined to a grantee from a State or a Ruler of a State; he could be the holder of land which was exempted from payment of rent or tax.
|
Civil Appeal Nos.
149 1 1501 of 1974.
From the Judgment and Order dated 21.12.1973 of the High Court of Delhi in C.W. Nos 954/71, 211 to 218 and 249 and 251 of 1972.
F.S. Nariman, U.S. Prasad, S.K. Mehta, M.K. Dua, S.M. Sarin, Aman Vachhar and R. Jagannath for the appellants.
Anil Dev Singh, Miss Halida Khatoon.
P. Parmeswaran for the Respondents.
The judgment of the Court was delivered by RANGANATH MISRA, J.
These appeals are by certificate under Article 132 and involve the determination of the amplitude contained and nature of the power conferred on the President by clause (c) of the second proviso of Article 311(2) of the Constitution.
18 policemen Sardari Lal and two others being Sub Inspectors and the remaining being either Head Constables or Constables of the Delhi Armed Police Force were dismissed from service by separate but similar orders dated 14th April, 1967, by way of punishment.
They challenged those orders before the Delhi High Court mainly contend 707 ing that the exercise of power under clause (c) of the second proviso to Article 311(2) was not upon President 's personal satisfaction and as there had been no inquiry as mandated by Article 311(2), the dismissals were bad.
The High Court did not accept the contention and rejected the writ petitions.
The dismissed policemen carried appeals to this Court and by judgment dated 2 1st January, 1971 in Sardari Lal vs Union of India & Ors., ; a Constitution Bench of this Court set aside the judgment of the High Court in each of the writ petitions and quashed the several orders of dismissal on the ground that each of them was illegal, ultra vires and void.
This Court held: "On the principles which have been enunciated by this Court, the function in clause (c) of the proviso to Article 311(2) cannot be dele gated by the President to any one else in the case of a civil servant of the Union.
In other words, he has to be satisfied personally that in the interest of the security of the State, it is not expedient to hold the inquiry pre scribed by clause (2).
In the first place, the general consensus has been that executive functions of the nature entrusted by the Articles, some of which have been mentioned before and in particular those Articles in which the President has to be satisfied him self about the existence of certain fact or state of affairs cannot be delegated by him to any one else.
Secondly even with regard to clause (c) of the proviso, there is a specific observation in the passage extracted above from the case of Jayantilal Amrit Lal Shodban [1964] 5 SCR 294 that the powers of the President under that provision cannot be delegated.
Thirdly, the dichotomy which has been specifically introduced between the authority mentioned in clause (b) and the President mentioned in clause (c) of the proviso cannot be without significance.
The Constitution makers apparently felt that a matter in which the interest of the security of the State had to be considered should receive the personal attention of the Presi dent or the head of the State and he should be himself satisfied that an inquiry under the substantive part of clause (2) of Article 311 was not expedient for the reasons stated in clause (c) of the proviso in the case of a particular servant." Following the judgment of this Court, the dismissed police men were reinstated in service with effect from 16th April, 1971.
On 5th of June, 1971, fresh orders of dismissal were served on these policemen again 708 invoking the power under clause (c) of the second proviso to Article 311(2) for dispensing with the inquiry.
One of the representative orders is extracted below: "Whereas you, Shri Sardari Lal, sub Inspector being No. D 331 (present No. D 1177) of Delhi Police, held your office during the pleasure of the President." "And whereas the President, after considering all the facts and circumstances of your case, is satisfied under sub clause (c) of the proviso to clause (2) of Article 311 of the Constitution, that in the interest of the security of the State it is not expedient to hold, in relation to you, such inquiry as is referred to in clause (2) of the said Article 311 of the Constitution." "Now, therefore, the President is pleased to dismiss you from service with immediate effect." Several writ applications were again flied before the High Court.
It was inter alia contended that the order of dismissal without an inquiry aS envisaged in Article 311(2) was vitiated as the power under sub clause (c) of the second proviso to Article 311(2) had not been made upon personal satisfaction of the President.
In the returns made to the Rule to two separate affida vits one by the Inspector General of Police and the other by a Joint Secretary to the Union Government in the Ministry of Home Affairs it was maintained that the President had personally considered 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 original orders of the President along with the connected papers were placed before the High Court and the High Court held: "The contention, therefore, that the President himself did not pass the impugned orders is rejected.
The question for decision then is whether the court can scrutinize and examine the facts and circumstances that led the President to arrive at the satisfaction that it was not expedient in the interest of the security of the State to hold the inquiry envisaged in Article ,311(2) against the petitioners, and if so, to what extent." 709 While examining this aspect of the matter, the High Court relied on the ratio of the decision of this Court in Sardari Lal 's case (supra) and examining the second aspect of the contention, the High Court held: "The result, therefore, is that the exercise of power by the President under clause (c) to the proviso to Article 311(2) is fully covered by clause (1) of Article 361 and the President is 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 has jurisdiction 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.
" The plea of mala fides is based upon the alleged factual situation that the respective impugned orders had already been taken by the Government and the President simply en dorsed them was not entertained by the High Court and ulti mately each of the writ petitions was dismissed.
Mr. Nariman, learned counsel appearing on behalf of the appellants has advanced three contentions in support of these appeals: (1) the impugned order of dismissal in 1971 which is claimed to have been passed on the personal satisfaction of the President is vitiated in view of the rule in the case of Shamsher Singh & Anr.
vs State of Punjab, ; (2) appellants having been reinstated in service in terms of the judgment of this Court, without leave of the Court, no second order of dismissal on the same material could have been passed; and (3) the High Court was wrong in holding that the suffi ciency of satisfaction of the President was not justiciable.
The first aspect argued by Mr. Nariman is on the basis of the reversal of the view expressed by this Court in Sardari Lal 's case (supra) by a later larger Bench judgment of this Court.
The ratio in Sadari Lal 's case came to be considered in Shamsher Singh 's case (supra) by a seven Judge Bench.
Ray, CJ., who spoke for five members of the bench and with whom by a separate judgment, the remain ing two learned Judges agreed spoke thus: 710 "The decision in Sardari Lal 's case that the President has to be satisfied personally in exercise of executive power or function and that the functions of the President cannot be delegated is with respect not the correct statement of law and is against the estab lished and uniform view of this Court as embodied in several decisions to which refer ence has already been made.
These decisions are from the year 1955 up to the years 1971.
The decisions are Rai Saheb Ramjawaya Kapur vs State of Punjab, ; A. Sanjeevi Naidu vs State of Madras, ; and U.N.R. Rao vs Smt.
Indira Gandhi, These decisions neither re ferred to nor considered in Sardari Lal 's case." "The President as well as the Governor is the Constitutional or formal head.
The President as well as the Governor exercises his powers and functions conferred on him by or under the Constitution on the aid and advice of his Council of Ministers, save in spheres where the Governor is required by or under the Constitution to exercise his functions in his discretion.
Whoever the Constitution requires the satisfaction of the President or the Governor for the exercise by the President or the Governor of any power or function, the satisfaction required by the Constitution is not the personal satisfaction of the President or the Governor but the satisfaction of the President or Governor in the Constitution al sense in the cabinet system of Government, that is, satisfaction of his Council of Minis ters on whose aid and advice the President or the Governor generally exercise all his powers and functions.
The decision of any minister or officer under rules of business made under any of these two Articles 77(3) and 166(3) is the decision of the President or the Governor respectively.
These Articles did not provide for any delegation.
Therefore, the decision of Minister or Officer under the rules of busi ness is the decision of the President or the Governor.
" In their writ petitions, each of the appellants had contend ed before the High Court, following the ratio of Sadari Lal 's case which was then the law, that the President had not been personally satisfied before exercise of the power under the proviso to dispense with the inquiry and the respondents had taken pains to establish by pleading and producing the original records that the President had satis fied himself person 771 ally before be made the order dispensing with the inquiry.
To reduce the argument on this aspect and to have an exact impression of how the impugned orders were made, we directed learned counsel appearing for the Union of India to produce the original record and the same has been put before this Court.
It transpires therefrom that the papers were placed by the Ministry of Home Affairs for the consideration of the President by the Joint Secretary of the Union Territory of Delhi on 22nd of March, 1971, and were returned with a note of 20th of April, 1971, to the effect that the President would like to have the advice of the Council of Ministers in the matter.
A draft note for the Cabinet was prepared relat ing to the matter and as the record indicates it got through the Cabinet and the Prime Minister recorded her approval.
Thereafter, it was again placed before the President along with a note prepared on 25th May, 1971.
The note clearly indicated: "President 's Secretariat may kindly see their note extracted at pre page 7/n.
As desired by the President, the matter was placed before the Council of Ministers.
A copy of the Note submitted to the Cabinet may kindly be seen at flag 'H '.
The Cabinet has approved the propos al contained in paragraph 6 thereof.
Minutes of the Cabinet meeting may be seen at flag `I '." "It is requested that the matter may now be placed before the President for consideration.
" On 2nd June, 1971, the President made the following order: "I have considered the cases of the eighteen Police officers, whose names are given in the list appended to this order.
I have also considered all the facts and circumstances of their cases stated in the notes of the Minis try of Home Affairs, dated March 22, 1971, and May 25,1971." "I am satisfied, under paragraph (c) of the proviso to clause (2) of Article 311 of the Constitution, that in the interest of the security of the State it is not expedient to hold an inquiry into the case of any one of these Police Officers.
I accordingly order that these eighteen Police Officers be dis missed from service with immediate effect.
" It is clear from what has been extracted above that the order of the President was not on the basis of his personal satisfaction as required 712 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.
In view of this factual position, learned counsel for the appellants fairly stated that there was no force in his first contention.
We see no force in the second point canvassed by Mr. Nariman.
This Court quashed the orders of dismissal on account of noncompliance of the requirements of the 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 this Court was necessary for making a fresh order in exercise of the disciplinary jurisdiction after removing the defects.
Now coming to the third contention of Mr. Nariman, the matter appears to have been concluded by the judgment of this Court in the case of Union of India & Anr.
vs Tulsirara Patel & Ors., ; Those were also cases of striking railwaymen against whom orders of dismissal had been made after dispensing with the inquiry by exercise of powers under the same proviso.
Four learned Judges repre senting the majority spoke through Madon, J. and this Court held that 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.
The Court further stated that communi cation of the resaon to the aggrieved Government servant was not obligatory but perhaps advisable.
The record of the case produced before us clearly indicates that the reason has been recorded though not communicated.
That would satisfy the requirements of the law as indicated in Tulsiram Patel 's case.
The plea of mala fides as had been contended before the High Court and casually reiterated before us arises out of the fact that typed orders dated 3rd of June, 1971, were already on record in the file when the papers were placed before the President; such a contention is without any substance.
The President 's order is dated 2nd of June and the typed orders of dismissal bear the date of the following day.
In this setting, there is no scope to suggest that typed orders representing Government 's decision were avail able on the record by the time the matter was placed before the President.
All the legal contentions have failed.
Ordinarily in such a situation, the appeals have to be dismissed.
Mr. Nariman, however, has placed before us for consideration a statement made by the Home Minister before the Lok Sabha on 18th of December, 1978.
Therein he had stated: 713 " . . . 18 persons who have been dismissed by invoking clause (c) of the provi so to Article 311(2) will be considered for grant of compassionate allowances.
" This statement was also reiterated in the papers placed before the President.
Obviously the Government intended to pay them compassionate allowances.
We have no sympathy for indiscipline.
In fact, in an orderly force like the Police, indiscipline is bound to give rise to serious problems of administration.
It is, however, unnecessary to go into that aspect of the matter as the Government had made it known that they intended to treat even these 18 policemen liberal ly by giving them compassionate allowances.
The matter has been sufficiently protracted, the first order of dismissal was made a little more than 20 years back and in the mean time some of the policemen out of this group of 18 have died.
In such circumstances to leave this matter for a future date for fixing compassionate allowance would not be just and proper.
We had suggested to the learned counsel appearing for the Union of India to have instructions and give us an indication of what was in view of the Government when compassionate allowance was thought of.
There has been no response yet.
We are not prepared to detain delivery of the judgment on that ground.
In our opinion, the situation would be met in a just way if instead of paying a recurring allowance, a lump sum amount is paid to the policemen who are alive or their legal representatives in the case of the policemen who are dead.
We accordingly direct that in the case of Sub Inspectors who were dismissed, a lump sum amount of Rs.60,000 (Rupees Sixty Thousand only), in the case of Head Constables who were dismissed a sum of Rs.50,000 (Rupees Fifty Thousand only) and in the case of Constables a lump sum of Rs.40.000 (Rupees Forty Thousand only) should be paid within one month from today.
The appeals are dismissed subject to the direction for payment of the lump sum amounts indicated above in lieu of compassionate allowance.
There would be no orders for costs.
N.P.V. Appeals dis missed.
| Sections 306 and 307 of the Code of Criminal Procedure, read together clearly indicate that where the Sessions judge disagrees with the verdict of the jury and is of the opinion that the case should be submitted to the High Court, he must submit the whole case against the accused, not a part of it.
If the jury returns a verdict of guilty in respect of some charges and notguilty in 961 respect of others he cannot record his judgment of acquittal in respect of the latter charges in agreement with the jury in contravention of the mandatory provision Of section 307(2) of the Code.
Such recording must have the effect of preventing the High Court from considering the entire evidence against the accused and exercising its jurisdiction under section 307(3).
Hazari Lal 's case, (1932) 1.
L. R.//Pat. 395 and Ramjanam Tewari, , approved.
Emperor vs jagmohan, 1.
L. R. (1947) Allahabad 240, and Emperor vs Muktar, , disapproved.
The Emperor vs Bishnu Chandra Das, , King Emperor vs Ananda Charan Ray, , and Emperor vs Nawal Behari, , considered.
Consequently, in a case where eight persons were put up for trial in the Court of Session charged under sections I47 and 304/I49 Of the Indian Penal Code and four of them were further charged under section 201 of the Indian Penal Code and the jury returned a unanimous verdict of not guilty under section 304/I49 and guilty under sections 147 and 201 and the Judge accepting the former recorded a judgment of acquittal in the case of each accused but disagreeing with the latter referred the matter to the High Court, the reference was incompetent and the High Court was in error in acting upon it and its judgment must be set aside.
Held further, that although the proper order in such a case should be to remit the case to the trial court for disposal according to law, in view of the long lapse of time and peculiar circumstances of this case the reference must be rejected.
|
: Criminal Appeals Nos. 18 and 19 of 1969.
Appeal from the judgment and order dated October 16, 1968 ' of the Madras High Court in Criminal Misc.
Petition No. 980 of 1968.
642 A.K. Sen, N.C. Raghavachari, W.S. Sitaram and R. Gopalakrishnan, for the appellants.
S.T. Desai, B.D. Sharma and section P. Nayar., for the respondent.
P.R. Gokulakrishnan, Advocate General, Tamil Nadu and V. Rangam, for the intervener.
Bhargava, J.
These appeals, by certificate, challenge a .common Order of the High Court of Madras dismissing applications under section 561A of the Code of Criminal Procedure presented by the appellants in the two appeals for quashing proceedings being taken against them in the Court of the Chief Presidency Magistrate, Madras, on the basis of a complaint filed on 17th March; 1968 by the respondent, the Director of Enforcement, New Delhi.
The Rayala Corporation Private Ltd., appellant in Criminal Appeal No. 18 of 1969, was accused No. 1 in the complaint, while one M.R. Pratap, Managing Director of .accused No. 1, appellant in Criminal Appeal No. 19/1969 was accused No. 2.
The circumstances under which the complaint was filed may be briefly stated.
The premises of accused No. 1 were raided by the Enforcement Directorate on the 20th and 21st December, 1966 and certain records were seized from the control of the Manager.
Some enquiries were made subsequently and, thereafter, on the 25th August, 1967, a notice was issued by the respondent to the two accused to show cause why adjudication proceedings should not be instituted against them for violation of sections 4 and 9 of the Foreign Exchange Regulation Act VII of 1947 (hereinafter referred to as "the Act") on the allegation that a total sum of 2,44,713.70 Swedish Kronars had been deposited in a Bank account in Sweden in the name of accused No. 2 at the instance of accused No. 1 which had acquired the foreign exchange and had failed to surrender it to.
an authorised dealer as required under the provisions of the Act.
They were called upon to show cause in writing within 14 days of the receipt of the notice.
Thereafter, some correspondence went on between the respondent and the two accused and, later, on 4th November, 1967, another notice was issued by the respondent addressed to accused No. 2 alone stating that accused No. 2 had acquired a sum of Sw.
88,913.09 during the. period 1963 to 1965 in Stockholm, was holding that sum in a bank account, and did not offer or cause it to be offered to the Reserve Bank of India on behalf of the Central Government, so that he had contravened the provisions of section 4(1) and section 9 of the Act, and affording to him.
an opportunity under section 23(3) of the Act of showing, within 15 days from the receipt of the notice, that he had permission or special exemp 643 tion from the Reserve Bank of India in his favour for acquiring this amount of foreign exchange ,and for not surrendering the amount in accordance with law.
A similar show cause notice was issued to accused No. 1 in respect of the same amount on 20th January, 1968, mentioning the deposit in favour of accused No. 2 and failure of accused No. 1 to surrender the amount, and giving an opportunity to accused No. 1 to produce the permission or special exemption from the Reserve Bank of India.
On the 16th March, 1968, another notice was issued addressed to both the accused to show cause in writing.
within 14 days of the receipt of the notice why adjudication proceedings as contemplated in section 23 D of the Act should not be held against them in respect of a sum of Sw.
1,55,801.41 which were held in a bank account in Stockholm in the name of accused No. 2 and in respect of which both the accused had contravened the provisions of sections 4( 3 ), 4( 1 ), 5(1)(e) and 9 of the Act.
The notice mentioned that it was being issued in supersession of the first show cause notice dated 25th August, 1967, ,and added that it had since been decided to launch a prosecution in respect of Sw.
88,913.09.
The latter amount was the amount in respect of which the two notices of 4th November, 1967 and 20th January, 1968 were issued to the two accused, while this notice of 16th March, 1968 for adjudication proceedings related to the balance of the amount arrived at by deducting this sum from the original total sum of Sw.
2,44,71 3.70.
The next day, on 17th March, 1968, a complaint was filed against both the accused in the Court of the Chief PresidenCy Magistrate, Madras, for contravention of the provisions of sections 4( 1 ), 5( 1 ) (e) and 9 of the Act punishable under section 23 (1 ) (b) of the Act.
In addition, the complaint also charged both the accused with violation of Rule 132 A(2) of the Defence of India.
Rules (hereinafter referred to as "the D.I. Rs.") Which was punishable under Rule 132 A(4) of the said Rules.
Thereupon, both the accused moved the High Court for quashing the proceedings sought to be taken against them on the basis of this complaint.
Those applications having been dismissed, the appellants have come up in these appeals challenging the order of the High Court dismissing their applications and praying for quashing of the proceedings being taken on the basis of that complaint.
In these appeals.
Mr. A.K. Sen, appearing on behalf of the appellants, has raised three points.
In respect of the prosecution for violation of sections 4(1), 5(1)(e) and 9. of the Act punishable under section 23 (1 ) (b) of the Act, the principal ground raised is that section 23(1)(b) of the Act is ultra rites Article 14 of the Constitution inasmuch as it provides for a punishment heavier and severer than the punishment or penalty provided for the same acts under section 23(1)(a) of the Act.
In the alternative, the second point taken is that, even if section 23 ( 1 ) (b) is not void, the complaint in 644 respect of the offences punishable under that section has not been filed properly in accordance with the proviso to section 23 D (1 ) of the Act, so that proceedings cannot be competently taken on the basis of that complaint.
The third point raised relates to the charge of violation of R. 132 A(2) of the D.I. Rs. punishable under R. 132 A(4) of those Rules and is to the effect that R. 132 A of the D.I. Rs. was omitted by a notification of the Ministry of Home Affairs dated 30th March, 1965 and, consequently, a prosecution in respect of an offence punishable under that Rule could not be instituted on 17th March, 1968 when that Rule had ceased to exist.
On these three grounds, the order quashing the proceedings being taken on the complaint in respect of all the offences mentioned in it has been sought in these appeals.
To appreciate the first point raised before us and to.
deal with it properly, we may reproduce below the provisions of section 23 and section 23 D(1) of the Act : "23.
Penalty and procedure. (1) If any person contravenes the provisions of section 4, section 5, section 9, section 10, sub section.
(2) of section 12, section 18, section 18A or section 18B or of any rule, direction or order made thereunder, he shall (a) be liable to such penalty not exceeding three .times the value of the foreign exchange in respect of which the contravention has taken place, or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement in the manner hereinafter provided, or (b) upon conviction by a Court, be punishable with imprisonment for a term which may extend to two years, or with fine, or with both.
(IA) If any person contravenes any of the provisions of this Act, or of any rule, direction or order made thereunder, for the contravention of which no penalty is expressly provided, he shall, upon conviction by a court be punishable with imprisonment for a term which may extend to two years, or with fine, or with both.
(lB) Any Court trying a contravention under sub section (1) or sub section (IA) and the authority adjudging any contravention under clause (a) of sub section (1 ) may, if it thinks fit, and in addition to any sentence or penalty which it may impose for such contravention, direct that any currency, security, gold or silver, or goods or any other money or property, In respect of which the contravention has taken place, 645 shall be confiscated to the Central Government and further direct that the foreign exchange holdings, if any, of the person committing the contravention or any part thereof shall be brought back into India or shall be retained outside India in accordance with the directions made in this behalf.
Explanation.
For the purposes of this sub section, property in respect of which contravention has taken place shall include deposits in a bank, where the said property is converted into such deposits.
(2) Notwithstanding anything, contained in section 32 of the Code of Criminal Procedure, 1898 (Act 5 of 1898), it shall be lawful for any magistrate of the first class, specially empowered in this behalf by the State Government, and for.
any presidency magistrate to pass a sentence of fine exceeding two thousand rupees on any person convicted of an offence punishable under this section.
(3) No Court shall take cognizance (a) of any offence punishable under sub section (1) except upon complaint in writing made by the Director of Enforcement, or (aa) of any offence punishable under sub section (2) of section 191, (i) where the offence is alleged to have been committed by an officer of Enforcement not lower in rank than an Assistant Director of Enforcement, except with the previous sanction of the Central Government; (ii) Where the offence is alleged to have been committed by a Officer of Enforcement lower in rank than an Assistant Director of Enforcement, except with the previous sanction of the Director of Enforcement, or; (b) of any offence punishable under sub section (IA) of this section or section 23F, except upon complaint in writing made by the Director of Enforcement or any officer authorised in this behalf by the Central Government or the Reserve Bank by a general or special order; Provided that where any such offence is the contravention of any of the provisions of this Act or any rule, direction or order made thereunder which prohibits the doing of an act without permission, no such complaint shall be made unless the person accused of the offence has been given an opportunity of showing that he had such permission.
646 (4) Nothing in the first proviso to section 188 of the Code of Criminal Procedure, 1898 (Act 5 of 1898), shall apply to any offence punishable under this section." 23D. Power to adjudicate. (1) For the purpose of adjudging under ' clause (a) of sub section (1) of section 23 whether any person has committed 'a contravention, the Director of Enforcement shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity of being heard and if, on such inquiry, he is satisfied that the "person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of the said section 23: Provided that if, at any stage of the inquiry, the Director of Enforcement is of opinion.
that having regard to the circumstances of the case, the penalty which he is.
empowered to impose would not be adequate, he shall, instead of imposing any penalty himself, make a complaint in writing to the Court.
" A plain reading of section 23 (1 ) of the Act shows that under this sub section provision is made for action being taken against any per son who contravenes the provisions.
of sections 4, 5, 9, 10, 12(2), 18,18A or 18B or of any rule, direction or order made thereunder;and cls.
(a) and (b) indicate the two different proceedings that can be taken for such contravention.
Under cl.
(a), the person is liable to a penalty only, and that penalty cannot exceed three times the value of the foreign exchange in respect of which the contravention has taken place, or Rs. 5,000/ , whichever is more.
This penalty can be imposed by an adjudication made by the Director of Enforcement in the manner provided in section 23D of the Act.
The alternative punishment that is provided in cl.
(b) is to be imposed upon conviction by a Court when the Court can sentence the person to imprisonment for a term which may extend to two years, or with fine, or with both.
Clearly, the punishment provided under section 23 (1)(b) is severer and heavier than the penalty to which the person is made liable if proceedings are taken under section 23(1)(a) instead of prosecuting him in a Court under section 23 (1)(b).
The argument of Mr. Sen is that this section lays down no principles at all, for determining when the per son concerned should be proceeded 'against under section 23(1)(a) and when under section 23(1)(b), and it would appear that it is left to the arbitrary discretion of the Director of Enforcement to decide which proceedings should be taken.
The liability of a person for more or less severe punishment for the same act at the sole discretion and arbitrary choice of the Director of Enforcement, 647 it is urged, denies equality before law guaranteed under article 14 of the Constitution.
The submission made would have carried great force with us but for our view that the effect of section 23D of the Act is that the choice in respect of the proceeding to be taken under section 23(1)(a) or s,.
23(1)(b) has not been left to the unguided and arbitrary discretion of the Director of Enforcement, but is governed by principles indicated by that section,.
In this connection, it is pertinent to note that section 23 (1) of the Act 'as origin.ally enacted in 1947 did not provide for alternative punishment for the same contravention and contained only one single provision under which any person contravening any of the provisions of the Act or of any rule, direction or order made thereunder was punishable with imprisonment for a term which could extend to two, years or with fine or with bOth, with the additional clause that any Court trying any such contravention might, if it thought fit and in addition to any sentence which it might impose for such contravention, direct that any currency, security, gold or silver, or goods or other property in respect of which the contravention has taken place shall be confiscated.
No question of the applicability of article 14 of the Constitution could, therefore, 'arise while the provision stood as originally enacted.
Parliament, by Foreign Exchange Regulation (Amendment) Act XXXIX of 1957, amended section 23(1) and, at the same time, also introduced section 23D in the Act.
It was by this amendment that two alternative proceedings for the same contravention were provided in section 23 (1 ).
In thus introducing two different proceedings, Parliament put in the forefront proceedings for penalty to be taken by the Director of Enforcement by taking up adjudication, while the punishment to be awarded by the Court upon conviction, was mentioned as the second type of proceeding that could be resorted to.
Section 23D(1) is also divisible into two parts.
The first part lays down what the Director of Enforcement has to do in order to adjudge penalty under section 23 ( 1 ) (a), and the second part, contained in the proviso, gives the power to the Director of Enforcement to file a complaint instead of imposing a penalty himself.
In our opinion, these two sections 23(D and 23D(1) must be read together, so that the procedure laid down in section 23D(1) is to be followed in all cases in which proceedings are intended to be taken under section 23 (1).
The effect of this interpretation is that, whenever there is any contravention of any section or rule mentioned in section 23( 1 ), the Director of Enforcement must first proceed trader the principal clause of section 23D(1) and initiate proceedings for adjudication of penalty.
He cannot, at that stage, at his discretion, choose to file a complaint in a Court for prosecution of the person concerned for the offence under section 23( 1 )(b).
The Director of Enforcement can only file a complaint by acting Ll4Sup./69 12 648 in accordance with the proviso to section 23D(1), which clearly lays down that the complaint is only to be filed in those cases where, at any stage of the inquiry, the Director of Enforcement comes to the opinion that, having regard to the circumstances of the case, the penalty which he is empowered to impose would not be adequate.
Until this requirement is satisfied, he cannot make a complaint to the Court for prosecution of the person concerned under section 23 (1) (b).
The choice of the proceeding to be taken against the person, who is liable for action for contravention under section 23 (1), is, thus, not left entirely to the discretion of the Director of Enforcement, but the criterion for making the choice is laid down in the proviso to section 23D(1).
It cannot possibly be contended, and no attempt was made by Mr. Sen to contend, that, if we accept this interpretation that the right of the Director of Enforcement to make a complaint to the Court for the offence under section 23 (1) (b) can be exercised only in those cases where in accordance with the proviso, he comes to the opinion that the penalty which he is empowered to impose would not be adequate, the validity of section 23 (1) (b) of the Act can still be challenged.
In this connection, it was urged before us that the language of the principal clause of section 23D(1) taken together with the language of the proviso does not justify an interpretation that a complaint for an offence under section 23 (1) (b) cannot be made by the Director of Enforcement except in accordance with the proviso, particularly because the principal clause of section 23D(1) merely lays down the procedure that has to be adopted by the Director Of Enforcement when proceeding under section 23 (1) (a), and contains No. words indicating that such a proceeding must invariably be resorted to by him whenever he gets information of a contravention mentioned in section 23(1).
The language does not contain any ,words creating a bar to his proceeding to file a complaint straightaway instead of taking proceedings for adjudication under section 23D(1).
It is true that neither in section 23(1) itself nor in section 23D(1) has the Legislature used specific words excluding the filing of a complaint before proceedings for adjudication are taken under section 23D(1).
If any such words had been used, no such controversy could have been raised as has been put forward before us in these appeals.
We have, however, to gather the intention of the Legislature from the enactment as a whole.
In this connection, significance attaches to the fact that section 23D(1) was introduced simultaneously with the provision made for alternative proceedings under section 23 (1) in its two cls.
(a) and (b).
It appears to be obvious that the Legislature adopted this course so as to ensure that all proceedings under section 23(1) are taken in the manner laid down in section 23D(1).
Parliament must be credited with the knowledge that, if provision is made for two alternative punishments for the same act one differing from the other without any limitations, such a provision would be void under article 14 of 649 the Constitution; and that is the reason why Parliament simultaneously introduced the procedure to be adopted under section 23D(1) in the course of which the Director of Enforcement is ' to decide whether a complaint is to be made in Court and under what circumstances he can do so.
We have also to keep in view the general principle of interpretation that, if a particular interpretation will enure to the validity of a law, that interpretation must be preferred.
In these circumstances, we have no hesitation in holding that, whenever there is a contravention by .any person which is made punishable under either cl.
(a)or cl.
(b) of section 23(1), the Director of Enforcement must first initiate proceedings under the principal clause of section 23D( 1 ) and he is empowered to file a complaint in Court only when he finds that he is required to do so in accordance with the proviso.
It is by resorting to the proviso only that he can place that person in greater jeopardy of being liable to a more severe punishment under section 23(1)(b) of the Act.
The view we have taken is in line with the decision of this Court in Shanti Prasad Jain vs The Director of Enforcement(1), where this Court considered the validity of section 23(1)(a) and section 23D which were challenged on the ground of two alternative procedures being applicable for awarding punishment for the same act.
The Court noticed the position in the following words : "It will be seen that when there is a contravention of section 4 (1 ), action with respect to it is to be taken in the first instance by the Director of Enforcement.
He may either adjudge the matter himself in accordance with section 23(1)(a), or he may send it on to a Court if he considers that a more severe penalty than he can impose is called for.
Now, the contention of the appellant is that when the case is.
transferred to a Court, it will be tried in accordance with the procedure prescribed by the Criminal Procedure Code, but that when the Director himself tries it, he will follow the procedure prescribed therefor under the Rules framed under the Act, and that when the law provides for the same offence being tried under two procedures, which are substantially different, and it is left to the discretion of an executive officer whether the trial should take place under the one or the other of them, there is clear ' discrimination, and article 14 is contravened.
Therefore, section 23(1)(a) must, it is argued, be struck down as unconstitutional and the imposition of fine on the appellant under that section set aside as illegal." (1)" ; 650 The Court then distinguished the provisions of the Act with the law considered in the case of State of West Bengal vs Anwar A1i(1) and held . "Section 23D confers authority on the very officer who has power to try and dispose of a case to send it on for trial to a Court, and that too only when he considers that a more severe punishment than what he is authorised to impose should be awarded.
" On this view about the effect of section 23D, the Court gave the decision that the power conferred on the Director of Enforcement under section 23D to transfer cases to a Court is not unguided and arbitrary, and does not offend article 14 of the Constitution; and section 23 (1) (a) cannot be assailed as unconstitutional.
In that case, the argument was that section 23(1)(a) should be struck down, because the procedure prescribed by it permitted proceedings to be taken by the Director of Enforcement himself which procedure did not confer the same rights on the defence as the procedure prescribed for trial if the Director of Enforcement filed a complaint for the offence under section 23 (1) (b).
In the case before us, it is section 23(1)(b) which is challenged and on a slightly different ground that it provides for a higher punishment than that provided by section 23 (1) (a).
The answer to both the questions is found in the view taken by us in the present case as well as by this Court in the case of Shanti Prasad Jain(2) that the Director of Enforcement, though he has power to try the case under section 23 (1) (a), can only send the case to the Court if he considers that a severer punishment than what he is authorised to impose should be awarded.
The Court in that case also thus accepted the principle that section 23D limits entirely the procedure the Director of Enforcement has to observe when deciding whether the punishment should be under section 23 (1) (a) or under section 23 (1) (b).
However, we consider that, in this case, there is considerable force in the second point urged by Mr. Sen on behalf of the appellants that the respondent, in filing the complaint on 17th March, 1968, did not act in accordance with the requirements of the proviso to section 23D(1).
We have held above that the proviso to section 23D(1) lays down the only manner in which the Director of Enforcement can make a complaint and this provision has been laid down as a safeguard to ensure that a person, who is being proceeded against for a contravention under section 23(1), is not put in danger of higher and severer punishment at the choice and sweet will of the Director of Enforcement.
When such a safeguard is provided by legislature, it is necessary that the authority, which takes the step of instituting against that person proceedings in which a severer punishment can be awarded, complies strictly (1) ; (2) [19631 2 S.C.R. 297. 651 with all the conditions laid down by law to be satisfied by him before instituting that proceeding.
in the present case, therefore, we have to see whether the requirements of the proviso to section 23D(1) were satisfied at the stage when the respondent filed the impugned complaint on 17th March, 1968.
The proviso 'to section 23D(1) lays down that the complaint may be made at any stage of the enquiry but only if, having regard to the circumstances, of the case, the Director of Enforcement finds that the penalty which he is empowered to impose would not be adequate.
It was urged by Mr. Sen that, in this case, the complaint was not filed as a result of the enquiry under the principal clause of section 23D(1) at all and, in any case, there was no material before the respondent on which he could have formed the opinion that the penalty which he was empowered to impose would not be adequate in respect of the stun of Sw.
88,913.09 which, it was alleged, had been acquired by the two accused during the period 1963 to 1965 and kept in deposit against law.
Arguments at some length were advanced before us on the question as to what should be the stage of the enquiry at which the Director of Enforcement should form his opinion and will be entitled to file the complaint in Court.
It appears to us that it is not necessary in this case to go into that question.
It is true that the enquiry in this case under section 23D( 1 ) had been instituted by the issue of the show cause notice dated 25th August, 1967, that being the notice mentioned in Rule 3 (1 ) of the Adjudication Proceedings and Appeal Rules, 1957.
On the record, however, does not appear that, even after the issue of that notice, any such material came before the respondent which could be relevant for forming an opinion that the penalty which he was empowered to impose for the contravention in respect of the sum of Sw.
88,913.09 would not be adequate.
The respondent, in the case of accused No. 2, appears to have formed 'a prima.
facie opinion that a complaint should be made against him in Court when he issued the notice on 4th November, 1967 under the proviso to section 23(3) of the Act, and a similar opinion in respect of accused No. 1 when he issued the notice on 20th January, 1968 under the same proviso.
There is, however, no information on the record to indicate that, by the time these notices were issued, any material had appeared before the respondent in the course of the enquiry initiated by him through the notice dated 25th August, 1967 which could lead to the opinion being formed by the respondent that he will not be in a position to impose adequate penalty by continuing the ,adjudication proceedings.
Even subsequently, when one of the accused replied to the notice, there does not appear to have been brought before the respondent any such relevant material.
Mr. S.T. Desai on behalf of the respondent drew our attention to para.
3(E) of the petition presented by accused No. 1 for 652 certificate under article 132(1) and article 134(1)(c) of the Constitution in this case which contains the following pleading : "In this case, having issued show cause notice dated 25 8 67 in respect of the subject matter of the pending prosecution and having taken various acts, taking statements, taking recorded statements, investigations, the respondent did not hold an enquiry for the purpose of his forming an opinion that the accused is guilty of violations and that the penalty is not adequate and as such, the prosecution filed in C.C. 8756 of 68 is liable to be quashed on this ground.
" Relying on this pleading, Mr. Desai urged that it amounts to a admission by accused No. 1 that, during enquiry, various statements were taken and recorded and investigations made, so that we should not hold that there was no material on the basis of which the respondent could ' have formed the opinion that it was a fit case for making a complaint.
The pleading does not show that any statements were taken or recorded during the course to the enquiry held under section 23D( 1 ) of the Act in the manner laid down by the Adjudication Proceedings and Appeal Rules, 1953 Under those Rules, after a notice is issued, the Director of Enforcement is required to consider the cause shown by such person in response to the notice and, if he is of the opinion that adjudication proceedings should be held, he has to fix a date for the appearance of that person either personally or through his lawyer or other authorised representative.
Subsequently, he has to explain that the person proceeded against or his lawyer or authorised representative the offence alleged to have been committed by such person indicating the provisions of the Act or of the rules, directions or orders made thereunder in respect of which contravention is alleged to have taken place, and then he has to give an opportunity to such person to produce such documents or evidence a he may consider relevant to the inquiry.
It is on the conclusion of such an inquiry that the Director can impose a penalty under section 23(1)(a).
In the present case, there is no material at all show that any proceedings were taken in the manner indicate by the Rules referred to above.
There does not appear to has been any cause shown by either of the two accused, or consideration of such cause by the respondent to decide whether adjudication proceedings should be held.
It is true that there is some material to indicate that, after the issue of notice dated 25 8 1967, some investigations were carried on by the respondent; but these investigations would not be part of the inquiry which had to be held in accordance with Adjudication Proceedings and Appeal Rules, 1957.
It appears that, at one stage, before the complaint was filed, a writ petition was moved under article 226 of the Constitution in the High Court of Madras praying for the quashing of 653 the notice dated 25th August, 1967.
The order made ' by the High Court on one of the interim applications in connection with that notice shows that, while that writ petition was pending, some investigations were permitted by the Court, but further penal proceedings in pursuance of that notice were restrained.
This clearly indicates that whatever statements were recorded by the respondent as mentioned in the petition of accused No. 1 referred to above must have been in the course of investigation and not in the course of the inquiry under section 23D ( 1 ) of the Act.
The record before us, therefore, does not show that any material at all was available to the respondent in the course of the enquiry under section 23D( 1 ) on the basis of which he could have formed an opinion that it was a fit case for making a complaint on the ground that he would not be able to impose adequate penalty.
The complaint has, therefore, to be held to have been filed without satisfying the requirements and conditions of the proviso to.
section 23D(1) of the Act and is in violation of the safeguard provided by the Legislature for such contingencies.
The complaint, insofar as it related to the contravention by the accused of provisions of sections 4 ( 1 ), 5 ( 1 ) ( e ) and 9 of the Act punishable under section 23(1)(13) is concerned, is invalid and proceedings being taken in pursuance of it must be quashed.
There remains for consideration the question whether proceedings could be validly continued on the complaint in respect of the charge under R. 132A(4) of the D.I.Rs.
against the two accused.
The two relevant clauses of Rule 132A are as follows: "132A. (2) No person other than an authorised dealer shall buy or otherwise acquire or borrow from, of sell or otherwise transfer or lend to, or exchange with, any person not being an authorised dealer, 'any foreign exchange. . . . .
(4) If any person contravenes any of the provisions this rule, he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both; and any court trying such contravention may direct that the foreign exchange in respect of which the court is satisfied that this rule has been contravened, shall be forfeited to the Central Government.
" The charge in the complaint against the two accused was that they had acquired foreign exchange to the extent of Sw.
88,913.09 in violation of the prohibition contained in R. I32A(2) during the period when this Rule was in force, so that they became liable to punishment under R.132A(4).
Rule 132 A as a whole ceased to be in existence as a result of the notification issued by the Ministry 654 of Home Affairs on 30th March, 1955, by which the Defence of India (Amendment) Rules, 1965 were promulgated.
Clause 2 of these Amendment Rules reads as under : "In the Defence of India Rules, 1962, rule 132A (relating to prohibition of dealings in foreign exchange) shall be omitted except as respects things done or omitted to be done under that rule.
" The argument of Mr. Sen was that, even if there was a contravention of R. 132A(2) by the accused when that Rule was in force, the act of contravention cannot be held to be a "thing done or omitted to be done under that rule," so that, after that rule has been omitted, no prosecution in respect of that contravention can be instituted.
He conceded the .possibility that, if a prosecution had ,already been started while R. 132A was in force, that prosecution might have been competently continued.
Once the Rule was omitted altogether, no new proceeding by way of prosecution could be initiated even though it might be in respect of an offence committed earlier during the period that the rule was in force.
We are inclined to agree with the submission of Mr. Sen that the language contained in ' el. 2 of the Defence of India (Amendment) Rules, 1965 can only afford protection to action already taken while the rule was in force, but cannot justify initiation of a new proceeding which will not be a thing done or omitted to be done under the rule but a new act of initiating a proceeding after the rule had ceased to exist.
On this interpretation, the complaint made for the offence under R. 132A(4) of the D.I. Rs., after 1st April, 1965 when the rule was omitted, has to be held invalid.
This view of ours is in line with the general principle enunciated by.
this Court in the case of section Krishnan and Others ' vs The State of Madras(1), relating to .temporary enactments, in, the following words : "The general rule in regard to a temporary statute is that, in the absence of special provision to the contrary, proceedings which are being taken against a person under it will ipso facto terminate as soon as the statute expires." Mention may also be made to a decision of a learned single Judge of the Allahabad High Court in Seth Jugmendar Das and Others vs State(2), where a similar view was taken when considering the effect of the repeal of the Defence of India Act, 1939, and the (1) ; (2) A.I.R. 1951 All. 703.
655 Ordinance No. XII of 1946 which had amended section 1 (4) of that Act.
On the other hand, Mr. Desai on behalf of the respondent relied on a decision of the Privy Council in Wicks vs Director of Public Prosecutions(1).
In that case, the appellant, whose case came up before the Privy Council, was convicted for contravention of Regulation 2A of the Defence (General) Regulations framed under the Emergency Powers (Defence) Act, 1939 as applied to British subjects abroad by section 3 (1 )(b) of the said Act.
It was held that, at the date when the acts, which were the subjectmatter of the charge, were committed, the regulation in question was in force, so that, if the appellant had been prosecuted immediately afterwards, the validity of his conviction could not be open to any challenge at all.
But the Act of 1939 was a temporary Act, and after various extensions it expired on February 24, 1945.
The trial of the accused took place only in May 1946, and he was Convicted and sentenced to four years ' penal servitude on May 28.
In these circumstances, the question raised in the appeal was: "Is a man entitled to be acquitted when he is proved to have broken a Defence Regulation at a time when that regulation was in operation, because his trial and conviction take place after the regulation expired ?" The Privy Council took notice of sub section (3) of section 11 of the Emergency Powers (Defence) Act, 1939 which laid down that "the expiry of this Act shall not affect the operation thereof as respects things previously done or omitted to be done".
It was argued before the Privy Council that the phrase "things previously done" does not cover offences previously committed.
This argument was rejected by Viscount Simon on behalf of the Privy Council and it was held that the appellant in that cane could be convicted in respect of the offence which he had committed when the regulation was in force.
That case, however,is distinguishable from the case before us inasmuch as, in that case, the saving provision laid down that the operation of that Act itself was not to be affected by the expiry as respects things previously done or omitted to be done.
The Act could, therefore, be held to be in operation in respect of acts already committed, so that the conviction could be validly made even after the expiry of the Act in respect of an offence committed before the expiry.
In the case before us, the operation of R. 132A of the D.I. Rs. has not been continued after its omission.
The language used in the notification only affords protection to things already done under the rule, so that it cannot permit further application of that rule by instituting a new prosecution in respect of something already done.
The offence alleged against the accused in the present case is in respect of acts done by them which cannot be held to be acts under that rule.
The difference in the language thus makes (1) [1947] A.C. 362.
656 it clear that the principle enunciated by the Privy Council in the case cited above cannot apply to the notification with which we are concerned.
Reference was next made to a decision of the Madhya Pradesh High Court in State of Madhya Pradesh vs Hiralal Sutwala(1), but, there again, the accused was sought to be prosecuted for 'an offence punishable under an Act on the repeal of which section 6 of the had been made applicable.
In the case before us, section 6 of the cannot obviously apply on the omission of R. 132A of the D.I.Rs.
for the two obvious reasons that section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a Rule.
If section 6 of the had been applied no doubt this complaint 'against the two accused for the offence punishable under R. 132A of the D.I.Rs.
could have been instituted even after the repeal of that rule.
The last case relied upon is 1.
K. Gas Plant Manufacturing Co., (Rampur) Ltd. and Others vs The King Emperor(2).
In that case, the Federal Court had to deal with the effect of sub section
(4) of section 1 of the Defence of India Act, 1939 and the Ordinance No. XII of 1946 which were also considered by the Allahabad High Court in the case of Seth Jugmendar Das & Ors.(2).
After quoting the amended sub section
(4) of section 1 of the Defence of India Act, the Court held : "The express insertion of these saving clauses was no doubt due to a belated realisation that the provisions of section 6 of the (X of 1897) apply only to repealed statutes and not to expiring statutes, and that the general rule in regard to the expiration of a temporary statute is that unless it contains some special provision to the contrary, after a temporary Act has expired, no proceedings can be taken upon it and it ceases to have any further effect.
Therefore, offences committed against temporary Acts must be prosecuted and punished before the Act expires and as soon as the Act expires any proceedings which are being taken against a person will ipso facto terminate.
" The Court cited.
with approval the decision in the case of Wicks vs Director of Public Prosecutions(4), and held that, in view section 1 (4) of the Defence of India Act, 1939, as amended by Ordinance No. XII of 1946, the prosecution for a conviction for an offence committed when the Defence of India Act was in force, was valid even after the Defence of India Act had ceased to be in force.
That case is, however, distinguishable from the case (1) A.I.R. 1959 M.P. 93.
(2) (3) A.I.R. 1951 All. 703.
(4) (1947) A.C. 362.
657 before us in two respects.
In that case, the prosecution had been started before the Defence of India Act ceased to be in force and, secondly, the language introduced in the amended sub section
(4) of section 1 of the Act had the effect of making applicable the principles laid down in section 6 of the , so that a legal proceeding could be instituted even after the repeal of the Act in respect of an offence committed during the time when the Act was in force.
As we have indicated earlier, the notification of the Ministry of Home Affairs omitting R. 132A of the D.I.Rs. did not make any such provision similar to, that contained ms. 6 of the .
Consequently, it is clear that, after the omission of R. 132A of the D.I.Rs., no prosecution could be instituted even in respect of an act which was an offence when that Rule was in force. ' In this connection, Mr. Desai pointed out to us that, simultaneously with the omission of R. 132A of the D.I.Rs., section 4(2) of the Act was amended so as to bring the prohibition contained in R. 132A(2) under section 4(1) of the Act.
He urged that, from this simultaneous action taken, it should be presumed that there was no intention of the Legislature that acts, which were offences punishable under R. 132A of the D.I.Rs., should go unpunished after the omission of that rule.
It, however, appears that when section 4(1) of the Act was amended, the Legislature did not make any provision that an offence previously committed under R. 132A of the D.I.Rs. would continue to remain punishable as an offence of contravention of section 4 ( 1 ) of the Act, nor was any provision made ' permitting operation of R. 132A itself so as to permit institution of prosecutions in respect of such offences.
The consequence is that the present complaint is incompetent even in respect of the offence under R. 132A(4).
This is the reason why we hold that this was an appropriate case where the High Court should have allowed the applications under section 561A of the Code of Criminal Procedure and should have quashed the proceedings on this complaint.
Consequently, as already directed by our short order dated 2nd May, 1969, the appeals are allowed, the order of the High Court rejecting the applications under section 561A of the Code of Criminal Procedure is set aside, and the proceedings for the prosecution of the appellants are quashed.
V.P.S. Appeals allowed.
| Section 8 of the Oudh Estates Act 1 of 1869 provided for the preparation of lists of taluqdars and grantees, and another list of taluqdars whose estates, according to the custom of the family on and before 13th February, 1856, ordinarily devolved upon a single heir.
The taluqdari estate of Tiloi was entered in the second list.
Upon the death of the taluqdar and in the absence of any brother or a male lineal descendant, the estate devolved, in accordance with the provisions of section 22(6) upon the widow of the deceased taluqdar for her life.
Thereafter she adopted a son.
The adopted son by a deed of trust executed in August, 1932, settled certain properties.
By judgment dated April 19, 1968, this Court declared that the deed of trust of August, 1932 did not operate to settle any property being part of the taluqdari estate and governed by the Oudh Estates Act of 1869.
In the present petition for review of the judgment it was contended that even if the settlor had no interest in the taluqdari estate under the ordinary Hindu law, on adoption, the non taluqdari property vested in him and he was competent under the deed of settlement to dispose of the property in the manner directed by that deed.
It was also contended that the widow of a taluqdar was not an "heir" within the definition of the expression in the Act.
HELD : That even in the non taluqdari estate left by the taluqdar which devolved upon the widow, her adopted son, the settlor, had so, long as the widow was alive no interest which he could transfer, alienate or settle.
[433G] it is well settled that where property devolves upon, a single heir of a taluqdar entered in the second list under section 8 of the Act, there is a rebuttable presumption that the non taluqdari estate also devolves upon him.
In the present case there was no reason to depart from that rule.
Prior to the enactment of the Oudh Estates Act 1869 there was no dis tinction between taluqdari and non taluqdari estate and the presumption merely gave effect to family custom.
[432E F] Rani Huzur Ara Begam and Anr.
vs Deputy Commissioner Gonda, L.R. 65 I.A. 397 followed.
Murtaza Husain Khan vs Mahomed Yasin Ali Khan L.R. 43 I.A. 269;Thakur Ishri Singh vs Baldeo Singh, L.R. 11 I.A. 135: referred to.
|
Civil Appeal No. 2199 of 1977.
From the Judgment and Decree dated 29 11 1976 of the Allahabad High Court in Special Appeal No. 378 of 1974.
G. B. Pai and O. P. Rana for the Appellant.
R. K. Garg, V. J. Francis) , Madan Mohan, K.P. Aggarwal and Mrs. Manju Gupta, for Respondents Nos. 1 and 2.
Manoj Swarup and Miss Lalita Kohli for the Intervener.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The case is primarily concerned with the age of retirement of two obscure workmen but it raises question of general importance concerning workmen employed by most statutory bodies and corporations.
It is on such chances that the development of our law depends.
The two workmen were originally employed by Messrs Seth Ram Gopal and Partners who were licensees for the distribution of electricity under the .
There were certified Standing orders for the industrial establishment of M/s. Seth Ram Gopal and partners.
The certified Standing orders did not prescribe any age of superannuation for the employees.
I ht, according to the workmen meant that they could continue to work as long as they were fit and able to discharge their duties.
The electricity undertaking of Ms. Seth Ram Gopal and Partners was purchased br The U.P. State Electricity Board, with effect from 15 12 1964, under The provisions of the .
The employees of Seth Ram Gopal and Partners became the employees of the U.P. the Electricity Board.
The U.P. State Electricity Board which it is no longer disputed is an industrial establishment to which the Industrial Employment (Standing orders) Act, 1946, applies, neither made nor got certified any Standing orders as it was bound so to do under that Act.
But it is evident, though no admitted from two letters, one from the Superintending Engineer in reply to a letter dated 31 12 166 from the Executive Engineer and the other from the Certifying officer for Standing orders and Labour Commissioner to the General Secretary of the Employees ' Union that the Board and the workmen considered the certified Standing orders of the establishment of Seth Ran 359 Gopal and Partners as applicable to them even after the purchase of the undertaking by the Board.
This, however, is not very material.
The Board, as we said earlier, made and not certified no standing orders either in regard to age or superannuation or in regard to any other matter Mentioned in the schedule to the Standing orders Act.
We may mention here that by reason of a notification dated 17 1 1959 "age of superannuation or retirement, rate of pension or ally other facility which the employers may like to extend or may be agreed upon between the parties ' is one of` the matters in respect of which an employer to whom the Standing orders Act applies is bound to make Standing orders and get them certified.
However, on May 28, 1970.
the Governor of Uttar Pradesh notified.
under Section 13 B of the Industrial Employment (Standing orders) Act, 1946.
a regulation made by the U.P. State: Electricity Board under Section 7(c) of the , ]948.
The notification was as Follows. "No. 3822 2/70/XXIII PB 15EH 67 May 28, 1970.
In pursuance of the provision of Section 13 B of the Industrial Employment (Standing Orders) Act, 1948 (Act No. 20 of 1946), the Governor is pleased to notify in the official Gazette that the U.P. State Electricity Board has made the following Regulations under sub section (c) of Section 79 of the ) (Act No. 54 of 1948) ``Notwithstanding any rule if one order or practice hitherto followed, the date of compulsory retirement of an employee of the Board will be the date on which he attains the age of 58 years; provided that (i) in the case of the inferior servants of the Board, whose counterparts under State Government are at present entitled to serve upto the age of 60 years, the age of compulsory retirement will be the date on Which they attain the age of 60 years.
(ii) the Board or its subordinate appointing authority may require an employee to retire after he attains or has attained the age of 55 years on three months ' ' notice or three months ' salary in lieu thereof without assigning any reason".
Acting in pursuance of this regulation as notified by the Governor, the Board sought to retire the two respondents on July 2, 1972 and July 7, 1972 respectively on their attaining the age of 58 years.
The respondents thereupon filed a writ petition in the Allahabad High Court challenging the regulation mad by the Board and its notification by 360 the Governor.
Their contention was that the Board was not competent to make a regulation in respect of a matter covered by the Industrial Employment (Standing orders) Act.
The writ petition as dismissed by a learned Single Judge.
The respondents preferred a special appeal and the Division Bench which heard the Special Appeal in the first instance referred the following three questions tc a Full Bench: " (1) Whether the Industrial Employment (Standing orders) Act, 1946 applies to the Industrial establishments of the State Electricity Board ? (2) Whether the standing orders framed for an Industrial establishment of an electrical undertaking cease to be operative on the purchase of the undertaking by the Board or on the framing of regulations under section 79(c) of the ? (3) Whether section 13 B of the Industrial Employment (Standing orders) Act, 1946, applies only to industrial establishments of the Government or also to other industrial establishments ? The Full Bench answered the questions as follows: "l.
The Industrial Employment (Standing orders) Act 1946 applies to the industrial establishments of the Ste Electricity Board.
The Standing Orders framed in an industrial establishment by an electrical undertaking do not cease to b operative on the purchase of the undertaking by the Board or on framing of the regulations under section 79(c) of the . 3.
Section 13 B of the , applies only to the industrial establishments of the government and to no other establishments".
Following the opinion of the Full Bench, the Division Bench allowed the Special Appeal and issued a Writ quashing the notification dated May 28, 1970 and directing the U.P. State Electricity Board not to enforce the regulation against the appellants before them.
The U.P. State Electricity Board, having obtained a Certificate from the High Court under Article 133(1) of the Constitution, has preferred this appeal.
361 Shri G. B. Pai learned Counsel for the appellant did not canvass A the correctness of the answer of the Full Bench to the first question referred to it.
He confined his attack to the answers to the second and third questions.
Relying upon the decisions of this Court in Sukhdev Singh vs Bhagat Ram(1), and Rajasthan Electricity Board vs Mohan Lal(2), Shri Pai argued that the U.P. State Electricity Board was an authority within the meaning of Article 12 of the Constitution and that the regulations made b the Board under Section 79(c) of the Act had the 'full force and effect of the statute and the force of law" so as to displace, over ride or supersede Standing Orders made and certified under the Industrial Employment (Stanching orders) Act.
which, he submitted wee mere contractual conditions of service subjected to a quasi judicial process and which, therefore, could not take precedence over legislative processed regulations.
The learned Counsel further submitted that Section 79(c) of the Electricity Supply Act was a special law and that it prevailed over the provisions of the Industrial Employment Standing orders Act.
Alternately, he submitted, the notifying of the regulation regarding age of superannuation under Section 13 B of the Industrial Employment Standing orders Act excluded the applicability of that Act in regard to the subject of age of superannuation.
He urged that Section 13 B was no confined in its application to Government undertakings only or to cases where there were comprehensive sets of rules, as was thought by the High Court.
Shri R. K. Garg, for the Workmen contended that the Industrial Employment (Standing orders) Act was an act specially designed to define and secure reasonable conditions of service for workmen in industrial establishments employing one hundred or more workmen and to that end to compel employers to make Standing orders and to et them certified by a quasi judicial authority.
It was, therefore, a special Act with reference to its subject matter.
The Electricity Supply Act, on the other hand, was intended "to provide for the rationalisation of the production and supply of electricity, and generally for taking measures conducive to electrical development. ' ' It was not specially designed to define the conditions of service of employees of Electricity Board or to displace the Standing orders Act.
The power given to an Electricity Board under Section 79(c) to make regulations providing for "the duties of officers and servants of the Board and their salaries, allowances and other conditions of service" was no more than the usual, general power possessed by every (1) ; (2) ; 362 employer.
Shri Garg argued that the Industrial Employment Standing orders Act was a special Act which dealt with the special subject of conditions of employment of workmen in industrial establishments and, therefore, in the matter of conditions of employment of workmen in industrial establishments, it prevailed over the provisions of the Electricity Supply Act.
He urged that under Section 13 B of the Standing orders Act, Government undertakings which had a comprehensive set of rules alone could be excluded from the applicability of the Act.
He submitted that to permit a single rule or regulation made for limited purpose to be notified under Sec.
13 B would have the disastrous effect of excluding the applicability of the whole of the Standing Orders Act.
Before examining the rival contentions, we remind ourselves that the Constitution has expressed a deep concern for the welfare of workers and has provided in Art, 42 that the State shall make provision for securing just and humane conditions of work and in article 43 that the State shall endeavour to secure, by suitable legislation or economic organization or in any other way, to all workers, agricultural or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment or leisure etc.
These are among the "Directive Principles of State Policy".
The mandate of Article 37 of the Constitution is that while the Directive Principles of State Policy shall not be enforceable by any Court, the principles are `nevertheless fundamental in the governance of the country ' and `it shall be the duty of the State to apply these principles in making laws '.
Addressed to Courts, what the injunction means is that while Courts are not free to direct the making of legislation, Courts are bound to evolve, affirm and adopt principles of interpretation which will further and not hinder the goal set out in the Directive Principle of St Policy.
This command or the Constitution must be over present n the minds of judges when interpreting statutes which council them selves directly or indirectly with matters et out in the Directive principles of State Policy Let us now examine the various provisions their proper contact with a view to resolve the problem before us.
l the , 194(.
Before the passing of the Act conditions or service of industrial employees s were invariably ill defined and were hardly over know with even a slight Degree of precision to the employees.
There was no uniformity of conditions of service f(hr employees discharging identical duties in fl the same establishment.
Conditions of service were generally e and the result of oral arrangements which left the employees t Te mercy of the employer.
With the growth of the trade union move 363 ment and the right of collective bargaining, employees started putting A forth their demands to end this sad and confusing state of affairs.
Recognising the rough deal that was being given to workers 1 employers who would not define their conditions of service and he inevitability f industrial strife in such a situation, the legislature intervened and enacted the Industrial Employment Standing Orders Act.
It was stated in the statement of objects and reasons; "Experience has shown that "Standing orders" defining the conditions of recruitment, discharge, disciplinary action, holidays, leave etc., go a long way towards minimising, friction between the management and workers ill industrial undertakings.
Discussion on the subject at the tripartite Indian Labour Conferences revealed a consensus of opinion in favour of legislation.
The Bill accordingly seeks to pr vide for the framing of "Standing orders" in all industrial establishments employing one hundred and more workers".
It was, therefore, considered, as stated in the preamble "expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them".
The scheme or the Act, as amended in 1956 and as it now stands, requires every employer of an industrial establishment as defined in the Act to submit to the Certifying officer draft Standing orders, that is, "Rules relating to matters set out in the schedule", proposed by him for adoption in his industrial establishment.
This is mandatory.
It has to be done within six months after the commencement of the Act. 'Failure to do so is punishable and is further made a continuing offence.
The draft Standing orders are required to cover every matter set out in the schedule.
The schedule enumerates the matters to be provided in the Standing orders and they include classification of workmen, Shift working, attendance and late coming.
Leave and holidays, termination of employment, suspension or dismissal for misconduct, means of redress for wronged workmen etc.
Item No. 11 of the Schedule IS "Any other matter which may be prescribed".
By a notification dated 17 1959 the Government of Uttar Pradesh has prescribed "Age o superannuation or retirement, rate of pension or any other facility which the employer may like to extend or may be agreed upon between the parties" as a matter requiring to be provided in the Standing orders.
On receipt o the draft Standing Orders from the employee, the Certifying officer is required to forward a copy of the same to the trade union concerned or the workmen inviting them to prefer objections, if any.
Thereafter the Certifying officer is required to give a hearing to the employer and the trade union or workmen as the case may be 7 526SCI/78 364 and to decide "whether or not any modification of or addition to the draft submitted by the employer is necessary to render the draft Standing orders certifiable under the Act '.
Standing orders are certifiable under the Act only if provision i made therein for every matter set out in the schedule, if they are in conformity with the provisions of the Act and if the Certifying officer adjudicates them as fair and reason 3 able.
The Certifying officer is invested with the powers of a Civil Court for the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses etc.
The order of the Certifying Officer is subject to an appeal to the prescribed appellate authority.
The Standing orders as finally certified are required to be entered in a Register maintained by the Certifying officer.
The employer is required to prominently post the Certified Standing orders on special boards in.
maintained for that purpose.
This is the broad scheme of the Act.
The Act also provides for exemptions.
About that, later.
The Act, as originally enacted, precluded the Certifying officer from adjudicating upon the fairness or reasonableness of the draft Standing orders submitted by the employer but an amendment introduced in 1956 now casts a duty upon the Certifying officer to adjudicate upon the fairness or reasonableness of the Draft Standing orders.
The Scheme of the Act has ben sufficiently explained by this Court in Associated Cement t Co. LTD.
vs f. D. Vyas(l), Rohtak Hissar District Electricity Supply Co. Ltd '.
vs State of U.P. & Ors.(2), and Western dia Match Co. Ltd. vs Workmen.
The Industrial Employment (Standing orders) Act is thus seen he an Act specially designed to define the terms of employment of workman in industrial establishments, to give the workmen a collective voice in defining the terms of employment and to subject the terms of employment to the scrutiny of quasi judicial authorities by the application of the test of fairness and reasonableness.
It is ar Act giving recognition and form to hard won and precious rights of workman.
We have no hesitation in saying that it is a Special Act expressly and exclusively dealing with the schedule enumerated conditions (hf service of workmen in industrial establishments.
Turning net to the Electricity Supply Act, it is, as its preamble says.
An Act to provide for the rationalisation of the production and supply of electricity, and generally for taking measures conducive to electrical development".
The statement of objects and reasons and a lance at the various provisions of the Act show that the primary object (1) ; (2) ; (3) [1974] I SCR 434 365 Of the Act is to provide for the coordinated, efficient and economic development of electricity in India on a regional basis consistent with the needs of the entire region including semi urban and rural areas.
Chapter II of the Act provides for the constitution of the Central Electricity Authority and Chapter III for the constitution of state Electricity Boards.
Chapter IV prescribes the powers and duties of state Electricity Boards, and Chapter V the Boards ' works and trading procedure.
n Chapter VI deals with the Board 's finance, Accounts and Audit.
Chapter VII (from S, 70 to section 83) which is headed "Miscellaneous" contains various miscellaneous provisions amongst Which are section 78 which empowers the Government to make rules and section 79 which empowers the Board to make regulations in respect of matters specific in clauses (a) to (k) of that Section.
Clause (c) of section 79 is "the duties of officers and servants of the Board, and their salaries, allowances and other conditions of` service".
This, of course is no more than the ordinary general power, with which every employer is invested in the first instance, to regulate the conditions of service of his employees.
It is an ancillary or incidental power of every employer, The Electricity Supply Act does not presume to be an Act to regulate the conditions of service of the employees of state Electricity Boards.
It is an act to regulate the coordinated development of electricity.
It is a special Act in reread to the subject of development of electricity, even as the Industrial Employment (Standing orders) Act is a special Act in regard to the subject of Conditions of Service of workmen in industrial establishments.
If Sec.
79(c) of the Electricity Supply Act generally provides for the making of regulations providing for the conditions of service of tile employees of the Board, it can only be regarded as a general provides which must yield to the special provisions of the Industrial Employment (Standing orders) Act in respect of matters covered by the latter Act.
The maim "Generalia specialibus non derogant" is quite well known.
The rule flowing from the maxim has been explained in Mary Seward vs The owner of the "Vera Cruz"(l) as follows: "Now if anything be certain it is this, that where there are general words in a later Act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general worlds without any indication of a particular intention to do so".
(1) at 68.
366 The question in Seward vs Vera Cruz was whether Sec. 7 of the Admiralty Court Act of 1861, which gave jurisdiction to that Court over "any claim for damage done by any ship" also gave jurisdiction over claims for loss of life which would otherwise come under the Fatal Accidents Act.
It was held that the general words o Sec. 7 of the Admiralty Court Act did not exclude the applicability of the Fatal Accidents Act and therefore, the Admiralty Court had no jurisdiction to entertain a claim for damages for loss of life.
The reason for the rule that a general provision should yield to a specific provision is this: In passing a Special Act, Parliament devotes its entire consideration to a particular subject.
When a General Act is subsequently passed, it is logical to presume that Parliament has not repealed or modified the former Special Act unless it appears that the Special Act again received consideration from Parliament.
Vide London and Blackwall Railway vs Lighthouse District board o Works(l) and Thorpe vs Adams(2).
In J. K. Cotton Spinning & Weaving Mills Co. Ltd. vs state f Uttar Pradesh(3), this Court observed (at p. 1174): "The rule that general provisions should yield to specific provisions is not an arbitrary principle made by lawyers and judges but springs from the common understanding of men and women that when the same person gives two directions one covering a large number of matters in general and an other to only some of them his intention is that these latter directions should prevail as regards these while as regards us the rest the earlier direction should have effect".
We have already shown that the Industrial Employment (Standing orders) Act is a Special Act dealing with a Specific subject, namely the conditions of service, enumerated in the Schedule, of workmen in industrial establishments.
It is impossible to conceive that Parliament sought to abrogate the provisions of the Industrial Employment (Standing orders) Act embodying as they do hard won and precious rights of workmen and prescribing as they do an elaborate procedure, including a quasi judicial determination, by a general, incidental provision like Sec.
79(c) of the Electricity Supply Act.
It is obvious that Parliament did not have before it the Standing orders Act when it passed the Electricity Supply Act and Parliament never meant that the Standing orders Act should stand protanto re pealed by Sec.
79(c) of the Electricity Supply Act.
We are clearly of the view that the provisions of the Standing orders Act must prevail over section 79(c) of the Electricity Supply Act, in regard to matters to which the Standing orders Act applies.
(1) = ; (2) (1871) L. R. (3) A. r. R.
367 Shri G. B. Pai, relying on what was said in the Rajasthan state A Electricity Board case and Sukhdev Singh & Ors 's case argued that the regulations made under Sec.
79(c) of the Electricity Supply Act being statutory in nature stood on so high a pedestal as to override, by their very nature, the Standing orders made under the Standing orders Act.
The observations on which he relied are, in the Rajasthan State Electricity Bard case: "The state, as defined in article 12, is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people.
The State, as constituted by our Constitution, is further specifically empowered under article 298 to carry on any trade or business.
The circumstance that the Board under the Electricity Supply Act is required to carry on some activities of the nature of trade or commerce does not, therefore, give any indication that the Board must be excluded from the scope of the word "state" as used in article 12.
On the other hand, there are provisions in the Electricity Supply Act which clearly Show that the powers conferred on the Board include power to give directions, the disobedience of which is punishable as a criminal offence.
In these circumstances, we do not consider it at all necessary to examine the cases cited by Mr. Desai to urge before us that the Board cannot be held to be an agent or instrument of the Government.
The Board was clearly an authority to which the provisions o Part III of the Constitution were applicable".
and in Sukhdev Singh 's case (at p. 627): "Rules, regulations, schemes, Bye laws, orders made under statutory powers are all comprised in delegated legislation" at p. 628) "Subordinate legislation has, if validly made, the full force and effect of a. statute" and (at p. 684 685) "Rules and Regulations of the oil and Natural Gas Commission, Life Insurance Corporation, Industrial Finance Corporation have the force of law.
The employees of these statutory bodies have a statutory status and they are entitled to a declaration o being in employment when their dismissal or removal is in contravention of statutory provisions.
368 These statutory bodies are authorities within the meaning of article 12 o the Constitution".
The proposition that statutory Bodies are 'authorities ' within the meaning of article 12 of the Constitution, that the employees of these bodies have a statutory status and that regulations made under the statutes creating these bodies have the force of law are not in dispute before us.
The question is not whether the employees and the Board have a statutory status; they undoubtedly have.
The question is not whether the regulations made under Sec.
79 have the force of law; again, they undoubtedly have.
The question is whether Sec.
79(c) of the Electricity Supply Act is a general law and therfore regulations cannot be made under it in respect of matters covered by the Industrial employment (Standing order) Act, a special law.
That question we have answered and the answer to that question makes irrelevant the submissions based on the statutory status of the employees and the statutory force of the regulations.
Next, we turn to the submission based on the notification made under Sec.
13 B of the Standing orders Act.
Section 13 B reads as follows: "13B. Nothing in this Act shall apply to an industrial establishment in so far as the workmen employed therein are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence, Service (Classiffication, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the official Gazette, apply".
The notification made by the Government has already been extracted by us.
Some doubts were expressed whether the U.P. state electricity Board had in fact made the regulation and whether the Government merely notified the relation without applying its mind.
The learned counsel appearing for the Board and the Government placed before us the relevant records and note files and we are satisfied that the Board did make the regulation and the Government did apply its mind.
The High Court expressed the views that the expression any other rules or regulations" should be read ejusdem generis with the expressions "Fundamental and Supplementary Rules", "Civil Services, Control, Classification and Appeal Rules" etc.
So read, it was said, the provisions of Section 13 B could only be applied to industrial establish 369 ments in which the workmen employed could properly be described as Government servants.
We are unable to agree that the application of the ejusdem generis rule leads to any such result.
The true scope of the rule of "ejusdem generis" is that words of a general nature following specific and particular words should be construed as limited to things which are of the same nature as those specified.
But the rule is one which has to be "applied with caution and not pushed too far".
It is a rule which must be confined to narrow bounds so as not to unduly or unnecessarily limit general and comprehensive words.
If a broad based genus could consistently be discovered, there is no warrant to cut down general words to dwarf size.
If giant it cannot be, dwarf it need not be.
It is true that in Sec.
13 B the specie specie spacifically mentioned happen to be Government servants.
But they also possess this common characteristic that they are all public servants enjoying a statutory status, and governed by statutory rules and regulations.
If the legislature intended to confine the applicability of Sec.
13 B to industrial undertakings employing Government servants only nothing was easier than to say so instead of referring to various rules specifically and following it up with a general expression like the one before us.
The words 'rules and regulations ' have come to acquire a special meaning when used in statutes.
They are used to describe subordinate legislation made by authorities to whom the statute delegates that function.
Te words can have no other meaning in Sec.
1 3 B. Therefore, the expression "workmen . t whom. any other rules or regulations that may be notified in this behalf means, in the context of Sec.
13 B, workmen enjoying a statutory status, in respect of whose conditions of, service the relevant statute authorities the making of rules or regulations.
The expression cannot be construed so narrowly as to mean Government servants only; nor can it be construed so broadly as to mean workmen employed by whomsoever including private employers, so long a their conditions of service are notified by the Government under Sec.
13 B. Shri Garg relied on certain observations of the Madras High Court in Raman Nambissan vs State Electricity Board(l), and Thiruvenkataswami vs Coimbatore Municipality().
In Raman Nambissan 's case it was held that the mere fact that the Electricity Board had adopted the rules and regulations if the Government of Madras a its transitory rules and regulations did not bring the workmen employed in industrial establishments under the Board within the mischief of Sec.
1 3 P. Of the Industrial Establishment 's (Standing order) ct.
In Thiru Venkataswami 's '.
ca it was held that rules made by the Government fl (1) [1967] I L.L.J. 252.
(2) [1968] I L.L.J. 361 370 under the District Municipalities Act could not be considered to he rules notified under Se.
13 B of the Standing orders Act merely because the rules were made by the Government and published in the Government Gazette.
We agree with the conclusion in.
both case.
In Thiru Venkataswami case Kailasam J., also observed that the industrial employment (Standing order) Act was a special act relating exclusively to the service conditions of persons employed in industrial establishments, and, therefore, its provisions prevailed over The provisions of the District Municipalities Act.
We entirely agree.
But, the learned judge went on to say "section 13 B cannot be availed of for purposes of framing rules to govern the relationships in an industrial establishment under private management or in a statutory Corporation.
This rule can apply only to industrial establishments in respect of which the Government is authorised to frame rules and regulations relating to the conditions of employment in industrial establishments".
There we disagree.
Our disagreement is only in regard to industrial establishment in statutory Corporations and not those under private management.
Our reasons are mentioned in the previous paragraph.
Shri Garg suggested that the rules, and regulations specific mention of which has been made in Sec.
13 B were all comprehensive sets of rules.
, and, therefore, "any other rules or regulations" that might be notified by the Government should also satisfy the test of eomprehensiveness.
He argued that a single rule or regulation could not be notified under Sec.
13 B as it would be too much to say, he said, that the notifying of a single rule or regulation would exclude the applicability of all the provisions of the Standing orders Act.
We do not think that the notifying of one or many regulations has the effect that Shri Garg apprehends it has.
The words 'Nothing in this Act shall apply ' are not to be interpreted too literally as to lead to absurd results and to what the legislature never intended.
In our view the only reasonable construction that we can put upon the language of Sec.
13 B is that a rule or regulation, if notified by the Government, will exclude the applicability of the Act to the extent that the rule or regulation corse the field.
To that extent and to that extend only 'nothing in the Act shall apply '.
To understand Sec.
13B in by other manner will lead to unjust and uncontemplated results.
For instance, most of the Service Rules and Regulations expressly mentioned in Sec.
13 B do no deal with a large number of the matters enumerated in the schedule such as 'Manner of intimating to workman periods and hour 11 of work, holidays, pay days and wage rates ', 'shift working ', 'Attendance and late coming ', 'conditions o, procedure in applying for, and e authority which may grant leave and holidays '. 'Closing and 371 reopening of Sections of the industrial establishments and temporary stoppages of work and the rights and liabilities of he employer and workman arising therefrom ' etc.
To exclude the applicability of Standing orders relating to all these matters because the Fundamental Rules, the Civil Service Rules or the Civil Services Control, Classification an Appeal Rules provide for a few.
matters like 'Classification of workmen ' or 'suspension or dismissal for misconduct ' would be to reverse the processes of history, apart from leading to unjust and untoward results.
It will place workmen once again at the mercy of the employer be he ever so benign and it will certainly promote industrial strife.
We have indicated what according to us is h proper construction of Sec.
13 B. That is the only construction which gives meaning and sense to Sec.
13 B and that is a construction which can legitimately be said to conform to the Directive Principles of state Policy proclaimed in Articles 42 and 43 of the Constitution.
We, therefore, hold that the Industrial Employment (Standing orders) Act is a special law in regard to the matters enumerated in the schedule and the regulations made by the Electricity Board with respect to any of those matters are of no effect unless such regulations are either notified by the Government under Sec.
13 B or certified by The Certifying officer under Sec.
5 o the Industrial Employment (Standing orders) Act.
In regard to matters in respect of which regulations made by the Board have not been notified by the Governor or in respect o which n regulations have been made by the Board, the Industrial Employment (Standing orders) Act shall continue to apply.
In the present case the regulation made by the Board with regard to age o superannuation having been duly notified by the Government, the regulation shall have effect notwithstanding the fact hat it is a matter which could be the subject matter s) Standing orders under the Industrial Employment (Standing orders) Act.
The respondents were therefore, properly retired when they attained the age of is years.
the appeal is, therefore, allowed.
The Writ Petition field in the Light Court is dismissed.
The appellants will pay the costs of the respondents as directed by this Court on 28 9 1977.
The costs are quantified at Rs. 3,500/ .
S.R. Appeal allowed.
| In the General Election to the Legislative Assembly of Kerala in March 1977 the petitioner and the appellant were the contesting candidates from Malappuram constituency.
The Appellant was declared elected by polling 56,276 votes defeating the petitioner who secured 39,362 votes.
The petitioner filed an election petition alleging that the appellant had committed various corrupt practices falling within the ambit of section 123(3),(3A) and (4) of the Representation of People Act 1951.
The main allegation was that the appellant was the Chief Editor of Malayalam daily paper called 'Chandrika ' which was the official organ of the Muslim League According to the petitioner the paper contained articles, extracts of speeches and cartoons which tended to ask the muslims to vote for the appellant on religious and communal grounds and also promted ill will and hatred between two classes of citizens, namely, the Janasangh and the Muslim League.
At the hearing, the petitioner confined his case only to the corrupt practices alleged by him under section 123(3A).
The petition was contested by the appellant.
He took the stand that he made no speech which offended section 123(3A) of the Act, nor was he aware of any of the offending articles or cartoons published in Chandrika prior to the election.
He denied that he was an editor of Chandrika and admitted that he was the Chief Editor and.
that too.
Only in name.
, He denied that he had to do any thing with the editorial work of Chandrika or the publication of the speeches.
The High Court held that the petition was maintainable.
According to the High Court, the appellant was really the editor of the paper and the presumption under section 7 of the Press and Registration of Books Act 1867 would apply.
Allowing the appeal the Court, ^ HELD: The object of the Press Act is to regulate printing presses and newspapers in order to preserve copies of newspapers and books.
In order to avoid multiplicity of suits and uncertainties of liabilities, it was considered necessary to choose one of the persons from the staff and make him liable for all the articles or matters to be published in the paper so that any person aggrieved may sue only the person so named under the provisions of Press Act and a litigant is relieved from the necessity of making a fishing or roving enquiry.
Under section 1 ( 1 ) the Editor is defined to mean the person who controls the selection of the matter that is to be published in a newspaper.
Section 5(1) requires that every copy of every newspaper shall contain the names of the owner and editor, printed clearly on such copies and also the 665 date of the publication.
Section 8A provides that where any person 's name A has appeared as an editor in a newspaper, although he was not an editor, he shall, within two weeks of his becoming aware that his name has been so published, appear before a magistrate and make a declaration that he has been incorrectly published.
In the present case, the following are the 1.
That the issues of Chandrika shown to us clearly and unmistakably mention the name of Aboobaker as the printer, publisher and editor of Chandrika and does.
not mention the appellant as the Editor of Chandrika.
The appellant is merely shown as the Chief Editor but this is an officer which is not at all contemplated by the Press Act.
That if the appellant was really the editor of the paper then P.W. 2 Aboobaker ought to have resorted to section 8(A) to correct the mistake in the paper where his name was shown as the editor but no such thing has been done.
On the other hand, P.W. 2 Aboobaker tacitly and clearly admits that he is the editor of the paper.
That the petitioner has not at all pleaded in his petition the nature of the duties performed or responsibilities shouldered by the appellant as Chief Editor;.
There is no averment at all in the petition that the appellant controls the selection of matter that is published in the newspaper which alone would make him an editor as defined in section 1(1) of the Press Act.
The word 'Chief Editor ' is clearly absent from the Press Act and in fact foreign to it because the Press Act has selected only one person who as a special status and that is the editor who can be sued if necessary or can sue and against whom alone a presumption under section 7 or the Press Act can be drawn.
While holding that the presumption under section 7 is available the High Court has completely overlooked the aforesaid aspect.
[671 D E, 672 A C673 E H, 674 A C] State of Maharashtra vs Dr. R. B. Chowdhury and ors. ; and D. P. Mishra vs Kamal Narain Sharma and ors.
[1971] 3 S.C.R 257 and Narasingh Charan Mohanty vs Surendra Mohanty [19741 2 S.C.R. 39; relied on.
In the present case, the paper clearly shows the name of Shri Aboobakar as the editor.
There is sufficient evidence both led by the petitioner and the appellant that Aboobaker was incharge of the paper and that he was functioning as the editor.
The Court came to this conclusion on a detailed appreciation of the evidence of witnesses examined by both the sides.
[685 H, 686 A The petitioner failed to prove either that the appellant was an editor of the paper or that he was performing the functions, duties or shouldering the responsibilities of the editor.
The presumption under section 7 of the Press Act could be drawn that only the person concerned was the editor within the meaning of the Press Act.
The High Court had 'no justification to draw a presumption against the appellant under section 7 of the Act.
[686 H, 687 A B] 666 Even if it is assumed that the appellant was the editor the presumption under section 7 is rebuttable and the evidence in the case shows that the presumption has been sufficiently rebutted.
[687 B C] The publication of the material promoting hatred between two classes of citizens is undoubtedly.
a corrupt practice.
It is well settled by long course of decisions of this Court that such practices must be clearly alleged and all the necessary particulars must be proved not by the standard of preponderance of probabilities but beyond reasonable doubt.
Mohan Singh vs Bhanwar Lal and ors.
; , Magrai Patodia vs R. K. Birla and Ors.
[19711 2 S.C.R. 118, Dr Venkata Reddy vs R. Sultan & ors ; Ramanbhai Nagibhai Patel vs Jaswant Singh Udesingh Dabhi and ors A.I.R. 1968 S.C. 1162: relied on.
Neither the writer of the article nor the speaker who delivered the speech, nor the reporter, nor even the manuscript of the speeches, had been produced before the Court.
All these articles and speeches are inconsequential until they are shown, to have been made with the knowledge and consent, of the appellant.
[689 B C] The following facts meaningly emerge: 1.
The petitioner has not mentioned the name of a single person who had actually heard the speech and made a report.
According to the evidence of P. W. 1 he was present at the place where the speech was delivered by the appellant and yet this fact, though a very material particular, does not find mention in the avernment in the petition referred to above.
3.It is not indicated in the petition as to how and in what manner the speech tended to promote feelings of enmity or hatred between two classes of citizens against whom hatred was preached by the speaker has not been mentioned.
[691 C E]` The allegations in the petition are vague.
No evidence was produced by the petitioner to prove whether the extract of the speech was correct and was a reproduction of the very words used by the appellant.
It is well settled that the admission unless it is separable has to be taken as a whole or not at all.
[691 F, G, 692 A] Hanumant vs The State of Madhya Pradesh , Palvinder Kaur.
vs The State of Punjab and Dadarao vs The State of Maharashtra ; relied on.
Even from the extract of the speech it is clear that the speech was not intended to preach hatred or enmity between the two classes of citizens. 'The petitioner has not produced either the reporter who was present at the meeting when the appellant spoke, nor has he called for the script of the speech, the extract of which was given in the newspaper.
It is very difficult to interpret a part of the speech completely torn from its context.
The entire speech was made against political background and for a political purpose.
The petitioner has not examined any independent member of the public belonging to the place where a speech was delivered to show that the speech tended to promote enmity or hatred between different communities.
[694 C, D, F G H, 969 D] 667 The reliance placed on the cartoon in para 11 of the petition is as under: "In Chandrika dated 12 3 1977 on the front page a cartoon is published.
lt is depicting Janasangh as a Pig and Shri E. M. Sankaran Namboodiripad the Marxist Leader, cutting the flesh of the pig and serving, it to the Muslim.
This is an attempt to promote feelings of enmity, and hatred between different classes of citizens of India on grounds of religion, It is well known that to eat pork is pardial ansthma (haram) for true Muslims.
The publication of this cartoon in Chandrika is with the consent and knowledge of the respondent which promoted hatred of the Muslims against the United Front of Marxist Party and Janta party and Muslim League (opposition) of which the petitioner is a candidate from the concerned constituency.
" The petitioner has failed to prove that the cartoon was published with the consent and knowledge of the appellant.
The term consent is a much stronger word than Knowledge because it implies assent.
There is nothing to show that the appellant gave his consent to the publication of the cartoon at any time.
There is no evidence either of consent or knowledge.
On the contrary, there is evidence to negative this fact.
[697 F, H, 698 A C] The Court came to the conclusion that the petitioner has not been able to establish the corrupt practices alleged against the appellant.
There is no legal or satisfactory evidence to prove that the speech made by the appellant promoted or tended to promote a feeling of enmity and hatred between two classes of citizens.
There is no evidence to prove the knowledge or consent of the appellant to the publication of the cartoon.
[699 B C, E G]
|
Appeal No. 515 of 1970.
Appeal by special leave from the judgment and order dated the 19th February, 1970 of the Allahabad High Court (Lucknow) Bench) Lucknow in Second Appeal No. 362 of 1966.
G.L. Sanghi and R.P. Gupta for the Appellant.
G.C. Mathur and C.P. Lal for Respondent Nos. 2 & 3.
The Judgment of Court was delivered by KOSHAL.
J. This is an appeal by special leave against a judgment of a learned Single Judge of the High Court of Allahabad dated 19th February, 1970 reversing in a second appeal the first appellate decree passed on 1st June, 1966 by the District Judge, Rae Bareli in confirmation of the decree of the trial Court.
The prayer made by the plaintiffs in the suit, which was dismissed by the first two Courts, was to the effect that a sale deed executed on 14th February, 1964 (Exhibit A 1) by defendant No. 2 in favour of defendant No. 1 in respect of a portion of a block of houses situated in Rae Bareli, be cancelled, and that possession of that portion be delivered to the plaintiffs who should also be awarded mesne profits.
While accepting the second appeal, the High Court decreed the suit except in regard to mesne profits.
Most of the facts giving rise to this appeal are undisputed and may be briefly stated with reference to the following pedigree table: Sheo Dularey Misra Radhika Devi (Plaintiff No. 1) Parmeshwar Din Mishra (Defendant No. 2) Gajendra Narain Sunil (Plaintiff No. 2) (Plaintiff No. 3) In the years 1916 and 1918 Sheo Dulary Misra (S.D. Mishra for short), who was a leading lawyer at Rae Bareli, purchased a block of Houses in that town by means of two sale deeds (Exhibits 2 and 3), both executed by one Shambhu Dayal.
In the year 1931 S.D.Mishra filed a suit against his father and brothers for a declaration 911 that he was the absolute owner of the Rae Bareli houses above A mentioned as also of a 4 annas and 9 pies share in proprietory Zamindari situated in Mohal Badri Prasad of village Tera Baraula in Pargana and District Rae Bareli.
On the 29th August 1931 a decree based on a compromise (Exhibit 5) was passed in that suit to the effect that S.D. Mishra was the exclusive owner of the Rae Bareli houses and also of a half of the salid 4 annas and 9 pies share in the Zamindari .
On the death of S.D. Misra in l951, his entire property was mutated in the name of defendant No. 2, both in the revenue records as well as in the registers maintained by the Rae Bareli Municipal Committee.
From then onwards till the date of the disputed sale deed (Exhibit A I) defendant No. 2 was in possession of the entire property left by his father and also acted as its exclusive manager.
He received compensation for some of the Zamindari property, a part of which was also sold by him on the 12th January 1959 to one Imam Ali for a consideration of Rs, 800 (vide Exhibit A 19).
In the years 1960 and 1961 defendant No. 2 constructed a one storey building on a plot of land in Khurshid Bagh, Lucknow, where he was employed as a clerk in the Department of Health of the Government of Uttar Pradesh and where he was residing with his wife and children.
The disputed sale deed (Exhibit A 1) was executed by defendant No. 2 on the 14th February 1964 in respect of the western portion of the said block of houses for Rs. 6500 in favour of K.C. Kapoor, defendant No. 1 who is the sole appellant before us.
In that sale deed defendant No. 2 described himself as "exclusive and complete owner" of the Rae Bareli property and claimed that he was "in possession and occupation thereof with powers of transfer of all kinds. ".
The necessity for the sale was thus described by him: "I am constructing a house in Mohalla Khurshed Bagh City Lucknow, the lower portion whereof has already been constructed and for the construction of the upper portion whereof funds are required.
This litigation started on the 17th September 1964 with the institution of a suit by the three plaintiffs.
It was claimed therein that on the death of section D. Misra, plaintiff No. 1 succeded to a half share in his property, being his widow, while the other half 912 was inherited by defendant No.2 so, however, that his sons (plaintiffs Nos. 2 and 3) had an interest therein by birth.
In other words, while half of the property left by S.D. Mishra was claimed to belong exclusively to Radhika Devi, Plaintiff No. 1, in respect of the other half the assertion was that it belonged to a coparcenary consisting of defendant No. 2 and his two sons.
The relief of a possession of the property sold by virtue of sale deed Exhibit A l was prayed for in consequence of the cancellation of that document which was sought to be set aside for the reason that the transaction covered by it was not for any necessity of the said family.
In the written statement the stand taken by defendant No. 1 was that defendant No 2 was the sole owner of the entire block of houses above mentioned and had full power to alienate the same, but that even if it was proved to be coparcenary property as alleged, the sale would still be good as it was made for legal necessity.
In this connection the contents of paragraph 15 of the written statement may be quoted here with advantage: "That defendant No. 2 sold the house in suit for the purpose of building a more profitable and advantageous house at Lucknow and with a view to dispose of a construction which was old and in perilous condition and which was of no persent utility.
Even if the house in suit is proved to be joint family property the transfer is for legal necessity by the Karta and is binding on the joint family and the plaintiffs.
" Two other material pleas were put forward in paragraph 14 and 16 of the written statement and are extracted below: "14.
That defendant No. 2 represented to the answering defendant No. 1 that defendant No. 2 was the sole owner of house, a portion of which is the subject matter of dispute, and in fact he has all along been acting as sole owner of the properties left by his father.
The answering defendant No. I also made diligent and reasonable enquiries about the right, title and interest of defendant No. 2 and his sole power to transfer it, and as such the answering defendant is a transferee in good faith for consideration and without notice." 16.
That defendant No. 2 executed the sale deed in favour of the answering defendant with the active consent and 913 approval of plaintiff No. I and plaintiff No. 1 is estopped from asserting her right against it.
" Statements of counsel for parties were recorded by the trial court on the 27th April, 1965 when it framed 8 issues, of which issues nos.
I to 3, S and 7 were: "1.
Whether plaintiffs and defendant No. 2 formed a joint family ? If so, who was the Karta of the family ? 2.
Whether plaintiffs Nos. 2 and 3 have interest in the house in suit by birth ? 3.
Whether defendant No. 2 had a legal necessity to sell the house ? If so, its effect ? 5.
Whether defendant No. I is a transferee for value in good faith and is entitled to protection of Section 41 of the Transfer of Property Act ? 7.
Whether the suit by plaintiff No. 1 is barred by estoppel ?" Statements of learned counsel for the parties were again re corded on 28th May 1965 and 31st May, 1965.
On behalf of defendant No. 1 a part of his case was stated like this: E "Defendant is a purchaser for value in good faith and without notice.
In any view of the case the disputed portion is not more than the share of Parmeshwar Din and the .
alienation is valid and can not be impeached by the plain tiffs.
Disputed portion was sold with the active consent and approval of plaintiff No. l and she is estopped from challenging the transaction," 5.
In its jugment the trial court held that all the three plaintiffs and defendant No. 2 formed a joint Hindu family of which defendant No. 2 was the Karta and that plaintiffs Nos. 2 and 3 acquired an interest by birth in the property left by their grand father.
In deciding issue No. 3 the trial court took note of the following facts: (a) The joint Hindu family consisting of the three plaintiffs and defendant No. 2 received Compensation for the Zamindari, 914 (b) The family had income from the Zamindari.
(c) The family derived rent from the said block of houses.
(d) S.D. Misra was a successful lawyer, which circums tance made it probable that he had left behind some cash in addition to other property.
(e) on 12th January 1959 defendant No. 2 received Rs. 800 as consideration for the sale covered by Exhibit A 19.
(f) Sanction for plan of the building of the Lucknow house (Exhibit A 21) was accorded by the Lucknow Municipality on 28th June 1960 and the building was completed in 1961.
(g) There is no evidence to show that defendant No. 2 had income of his own from which he could save enough money to be spent on the said building (h) Plalntiff No. 1, who was actively conducting the case on behalf of the plaintiffs, and defendant No. 2, had both stayed away from the witness box.
Taking all these facts into consideration the trial court concluded that the Lucknow house was the property of the said joint Hindu family.
It went on to point out that the disputed sale was an act of good management in view of the following circumstances: (i) The portion of the block of houses sold through exhibit A I was in a dilapidated condition and on 14th July 1964, i.e., less than 5 months after the sale, the municipal authorities isssued a notice to defendant No.l pointing out that the building purchased by him was in a dangerous condition and requiring him to demolish it within 3 days, so that defendant No. 2 was under & an obligation to pull down the building and either leave the site underneath un built (which would have meant a loss of some income to the family) or to construct a new building thereon.
(ii) Construction of a building in Lucknow would have been more rewarding income wise than erecting one at Rae Bareli.
915 (iii)Defendant No. 2 was employed at Lucknow and it was A in the interest of the family to put on a second storey in the house there The trial court concluded that the sale was, in the circumtances above mentioned, for the benefit of the family and, therefore, for legal necessity.
13 Issue No. 5 was decided by the trial court against defendant No. I for the following reasons: (a) Defendant No. I knew that the property sold to him had descended from S.D. Misra who had left behind a widow and a son, so that defendant No. I could not be regarded as a purchaser without notice of the fact that the plaintiffs had an interest in the house.
(b) Defendant No. 1 did not consult any lawyer to make sure that defendant No. 2 was the sole owner of the property sold as asserted by the latter.
The trial court, therefore, held that defendant No. I was not entitled to any protection under section 41 of the Transfer of Property Act.
In relation to issue No. 7 the trial court remarked that it was the duty of defendant No. I to give the details of the mis representation constituting estoppel in the written statement, which was not done so that the evidence on the point could not be looked into Issue No. 7 was thus decided against defendant No. 1.
Legal necessity for the disputed sale having been found by the trial court to be established, it dismissed the suit with costs.
It is also necessary to recount at some length the findings arrived at by the learned District Judge in appeal.
The conclusions reached by the trial court that the plaintiffs and defendant No. 2 (; formed a joint Hindu family and that the said block of houses belonged to that family were not challenged before him and the main contest in the course of the first appeal embraced points of legal necessity and estoppel as also the applicability of section 41 of the Transfer of Property Act to the facts of the case.
Taking up the last point first, the learned District Judge decided it against defendant No. I for the following two reasons; 916 (a) Defendant No. I had had notice that the building in dispute originally belonged to S.D. Misra and that the latter died leaving behind a widow, a son and a grand son.
Thus defendant No. 2 was posted with the know ledge that at the time of the sale in his favour persons other than defendant No. 2 had interest in the property in dispute.
(b) Plaintiffs Nos.
2 and 3 were minors on the date of the sale and even at the time of the institution of the suit and could not, by reason of their minority, be deemed to have consented to the ostensible ownership of the property vesting in their father.
On the question of sextuple, the learned District Judge discussed in detail the evidence produced before the trial court and concluded that on 22nd January, 1964, when a sum of Rs. 1000 was paid by defendant No. I to defendant No. 2 as earnest money through receipts Exhibit A. 26, plaintiff No. I gave her consent to her transaction of sale in the presence of defendant No. I as well as that of Radha Krishan D.W. S and Gopal Nath Chopra, D.W. 6, both of whom were attesting witnesses to that receipt.
He went on to hold that the trial court was in error when it refused to look into the evidence on the point with the observation that the particulars of the consent of plaintiff No. I were not given in the pleadings.
The learned District Judge was firmly of the opinion that the statement in para 16 of the written statement to the effect that the sale had taken place with the active consent and approval of plaintiff No. I was enough to raise the question of estoppel and that it was not necessary for defendant No. I to further mention in his peladings the particulars of such consent or the details of the evidence by which the same was to be proved.
The learned District Judge concluded that by reason of the consent given by plaintiff No. I to the sale, she was estopped from attacking disputed sale deed.
On the question of legal necessity, the District Judge took note of all those facts which the trial court had taken into consideration, as also of the following additional circumstances: (a) Defendant No. 2 was the only adult male member of the family at the time of the sale.
He had throughout 917 been managing the property of his father and was the Karta of the joint Hindu family aforesaid.
(b) The sale had come about with the consent of plaintiff No. 1 who was the only other adult member of the family.
B In the result, the learned District Judge upheld the finding of the trial court that the Lucknow house belonged to the joint Hindu family.
He further held, for more or less the same reasons as had weighed with the trial court in that behalf, that the sale was an act of prudence on the part of defendant No. 2 who had wisely sold a dilapidated building, and instead of pulling it down and incurring expense over its re construction, had raised money for the purpose of building the first floor of the new house at Lucknow which was a big city as compared to the "small and sleepy town" of Rae Bareli.
On the above findings, the first appeal was dismissed with costs.
Before the High Court it was conceded on behalf of defendant No. I that the widow of S.D. Misra had inherited half of his property by reason of the provisions of section 3 of the Hindu Women 's Right to Property Act, 1937 (for short the 1937 Act), that she had become the full owner of that half share on the commencement of the Hindu Succession Act in 1956 (hereinafter referred to as the 1956 Act) and that she was, therefore, not bound by any sale of her share effected by her son unless she was estopped from challenging it.
The learned Single Judge, therefore, at once took up the question of estoppel, reliance in support of which was placed on behalf of defendant No. l on a portion of his own testimony as W 3 which when freely translated, would read thus: "Parmeshwar Din told his mother that a portion of the Rae Bareli house was in ruins and yielded low rent, that the family (ham log) were residing at Lucknow and that he wanted to sell a portion of the Rae Bareli house and make the Lucknow house two storeyed which would result in a better rent yield and would also provide comfort for residence (of the family).
Then Parmeshwar Din 's mother said: 'It is your thing; do as you wish.
" 918 The learned Single Judge was of the opinion that this statement could not estop plaintiff No. I from challenging the sale in so far as her share in the disputed house was concerned.
His reasons were: "The above cited statement of respondent No. 1 (defendant No. I) does not indicate if the portion which was being actually sold was then specified to appellant No. I (plaintiff No. 1) by respondent No. 2 (defendant No. 2).
So if in these circumstances she did not resist the proposal saying that Parmeshwar Din was at liberty to do as he chose since it was his property, it can by no means be construed to mean that she thereby readily agreed even for the sale of her share by her son.
" The question of legal necessity was also determined by the learned Single Judge against defendant No. 1 with the following findings: (a) There was no pleading by defendant No. 1 in his written statement to the effect that the house at Lucknow was the property of the said joint Hindu family.
Besides, in his deposition as DW 3, defendant No. 1 had himself stated that to his knowledge Parmeshwar Din was the sole owner of that house.
(b) Merely because S.D. Misra possessed property and cash at the time of his death and that property continued to yield some income thereafter did not furnish reasons enough for the Court to presume that the Lucknow house belonged to the joint Hindu family.
A presumption to that effect could only be raised if it was shown that there was sufficient nucleus for the acquisition of that house.
In view of the above findings the learned Single Judge cancelled sale deed Exhibit A l and, accepting the appeal, passed a decree for possession of the disputed property in favour of the plaintiffs.
After hearing learned counsel for the parties at great length we have no hesitation in recording our disagreement with the High Court on the findings reached by it in relation to both the 919 points canvassed before it, namely, those of estoppel and legal A necessity, and are fully satisfied that it stepped outside the limits of its jurisdiction when it interfered with the conclusions of the fact arrived at by the learned District Judge on the basis of fully acceptable evidence and a correct appreciation thereof.
Before we proceed to detail our reasons for differing with the view expressed by the High Court we would like to advert to that aspect of the case which concerns the rights of plaintiff No. I in the property inherited by her husband.
The trial Court acted on the assumption that the entire property left by S.D. Misra on his death vested in the joint Hindu family consisting of his widow, son and grand sons.
No challenge to this assumption was made before the learned District Judge and the case proceeded on the basis that it was correct.
B. fore the High Court, however, the assumption was assailed and, as already stated, it was conceded on behalf of defendant No. I that plaintiff No. I succeeded to a life estate in a half share in the property of her husband in pursuance of the provisions of section 3 of the 1937 Act and that such an estate ripened into absolute ownership on the enforcement of the 1956 Act.
This concession, in our opinion, could be said to have been correctly made only on the assumptions (I) that S.D. Misra died intestate or that if he left a will, he devised a half share in the disputed house to plaintiff No. I and (2) that the share to which plaintiff No. I succeeded was not relinquished in favour of defendant No. 2 or otherwise transferred to him by her right up to the time when the disputed sale took place.
We shall now take up the question of estoppel.
Plaintiffs Nos. 2 and 3 being minors that question does not arise in their case and it is only in relation to the half share of plaintiff No. I in the disputed property that it calls for a decision.
In this connection the following facts which are undisputed may be taken note of: (a) on S.D.Misra s death his entire property was mutated in the name of his son (defendant No. 2) to the exclusion of the former 's widow (Plaintiff No. 1).
(b) Right up to the date of the disputed sale that property was managed exclusively by defendant No. 2.
(c) No objection to the exclusion of her name from the records of the revenue department or of the municipal 920 committee or from the management was ever preferred by plaintiff No. 1 who fully acquiesced in such exclusion all through.
(d) Defendant No. 2 alone received compensation for the Zamindari and sold a portion thereof as sole owner (vide exhibit A 19) again without any objection on the part of plaintiff No. 1.
(e) When negotiations for the disputed sale were initiated, defendant No. I enquired from defendant No. 2 as to how the latter had acquired full ownership of the . property in dispute.
The reply of defendant No. 2 as contained in his letter from Lucknow dated 14th January 1964 (exhibit A 25) was: "Regarding our talks about the sale of my house at Station Road, Rae Bareli and regarding your enquiry about the title to the said house, I have to inform you that I am the absolute owner of the portion of house proposed to be sold." "I own all responsibility and give you word of honour that there is absolutely no dispute about my title to the portion proposed to be sold and you should have no hesitation on that score. "Further I may add that I realize the rent of the shops which you can enquire from the tenants." Presumably defendant No. 1 was quite satisfied with this reply and asked defendant No. 2 to furnish copies of the municipal records which were shown to defendant No. 1 on the 22nd January 1964 at the Lucknow residence of defendant No. 2.
(f) According to the testimony of defendant No. 1 as DW 3 and of the two witnesses (Radha Krishan DW 5 and Gopal Nath Chopra DW 6) who attested receipt exhibit A 26, it was at that stage that defendant No I told his mother about the proposed sale and she consented thereto.
In the words of defendant No. 2 921 she declared: "It is your thing; do as you wish." The A evidence of these three witnesses was not challenged during the course of their cross examination.
These facts would conclusively show that by declaring in the presence of defendant No. 1 that the property belonged to the defendant No. 2 and that he was at liberty to deal with it as he wished, plaintiff No. I represented to defendant No. I that her son was the sole owner of the property and that she had nothing to do with it.
Her declaration is, therefore, a clincher on the point of estoppel and we find it impossible to agree with the learned Single Judge when he says that the declaration did not mean that defendant No. 2 had the permission of plaintiff No. I to deal with the latter 's share of the property.
In our opinion the declaration does not suffer from any such ambiguity as the learned Single Judge has read into.
In giving the details of the proposed sale the son had not told the mother that he was selling only his own half share in that part of the block of houses situated in Rae Bareli which was proposed to l? be sold.
He said in clear terms that a portion of the Rae Bareli house was to be sold and his mother declared that he was the sole arbiter in the matter of the disposal of the property.
There was no proposal to sell only defendant No. 2 's undivided half share nor did any question arise of either defendant No. I purchasing it or plaintiff No. I being consulted about it.
In the absence of any qualifying words limiting the proposed sale to such a share, the lady must be taken to have understood the statement made to her by her son as carrying its plain meaning, i.e., that the sale was to be of the entire portion chosen for the purpose and her consent must be construed accordingly.
Learned counsel for the plaintiff vehemently argued that even if the declaration made by plaintiff No. 1 be interpreted as we have done, it would create no estoppel against her inasmuch as defendant No. 1 had not acted on it but had purchased the property on the strength of the representations made to him by defendant No. 1.
G Now it is true that defendant No. I had made enquiries regarding the title of defendant No. 2 to the property in dispute and the latter had made an unequivocal representation that he alone was the owner thereof, but then it was only after the lady had been consulted and had told her son to go ahead with what he thought proper as he was the owner of the property that receipt exhibit A 26 was executed.
Till then defendant No. I was not fully satisfied about 922 the title of defendant No. 2 and had not only raised the question with defendant No. I at Lucknow but even after the assurance given by the latter in communication exhibit A 25 insisted on the municipal records being produced for his inspection.
The inquiry into the title was, therefore, very much in progress when defendant No. 2 consulted his mother in the presence of defendant No. 1.
This was presumably done to ally the lurking suspicion in the mind of defendant No. 2 as to the title to the entire property vesting in defendant No. 2 It was contended on behalf of the plaintiffs that the representation made by the lady could not have been taken at its face value by any prudent purchaser in view of the fact that one half of the property left by S.D. Misra had admittedly devolved on plaintiff No. 1.
This contention suffers from two important infirmities.
Under section 3 of the 1937 Act, plaintiff No. I would have succeeded to a half share only if S.D. Misra had died intestate.
So the question would be whether or not S.D. Misra left a will.
The concession made before the High Court on the point of inheritence of a half share by plaintiff No, I was obviously based not on any facts within the knowledge of defendant No. 1 but on the circumstance that nobody had talked of any will by S.D. Misra.
Whether or not such a will was made was a fact specially within the knowledge of plaintiff No. I and, as stated earlier, that she remained absent from the witness box so that the Court is left in the dark as to what was the actual state of affairs.
The onus of proof of the allegation that she was the owner of a half share in the property at the time of the sale was on her and she was duty bound to depose to facts which would make section 3 aforesaid applicable to her case.
Her failure to depose to the existence thereof must result in a finding that she has failed to prove the issue.
Again, even if it be assumed that plaintiff No. I succeeded to a half share in the property of S.D. Misra, there was no impediment in the way of her relinquishing that share in favour of her son either immediately after her husband 's death or at any other point of time prior to the disputed sale.
This aspect of the matter cannot be lost sight of in view of the fact that on section D. Misra 's death all his property was mutated in favour of his son to the exclusion of plaintiff No. 1 and was all along being dealt with by him as its sole and absolute owner without any objection whatsover having been raised by her at any point of time to such exclusion or dealing.
923 In the above situation defendant No. I was fully justified in A accepting her word on the point of ownership, the said section 3 not withstanding.
The above discussion of the evidence has been entered into by us merely to show that the finding given by the learned District Judge on the point of estoppel was eminently reasonable and that the short ground on which the High Court turned the tables on defendant No. I was untenable.
That finding of the District Judge being a finding of fact and being based on good evidence, it was not open to the High Court to interfere with it in a second appeal.
Before parting with the question of estoppel, we may briefly notice another contention put forward on behalf of the plaintiffs whose learned counsel urged that no plea of estoppel could be countenanced for the reason that no proper foundation was laid for it in the pleadings.
A combined reading of paragraphs 14 and 16 of the written statement, hower, furnishes a complete answer to the contention.
The representation said to have been made by plaintiff No. I is set out in paragraph 14 while the plea that she was estopped from contesting the sale is taken in paragraph 16.
It is true that the plea last mentioned is linked with "the active consent and approval of plaintiff No. I ' ' and not in so many words with the said representation.
It can also not be disputed that defendant No. I did not specifically state that he purchased the disputed property in the belief that the representation was true and that he would not have entered into the transaction but for that belief.
Thus undoubtedly the written statement is inartistically drafted and leaves much to be desired, but then pleadings are not to be construed in such a hypertechnical manner and what is to be seen is whether the allegations made in paragraphs 14 and 16 gave sufficient notice to the plaintiffs of what case they had to meet.
In this connection we may refer to the significant fact that no objection to the lack of particulars was taken at the stage when issues were framed or later when statements of parties ' counsel were recorded on a subsequent occasion or during the course of arguments addressed to the trial Court, the District Judge and the High Court.
even though the issue of estoppel was hotly contested before all three of them.
All these circumstances unmistakably indicate that the case put forward by defendant No. I was throughout understood by the plaintiffs to be that it was the belief induced in him by the representation of plaintiff No. l which made him accept the title of defendant No. 2 as bein exclusive.
In this view of the matter it is too late in the day for the plaintiffs 924 to raise the contention under consideration and we have no hesitation in rejecting it as untenable.
We may now attend to the controversy about the legal necessity for the disputed sale.
The contest on the point is restricted to that half share of the property sold which belonged to the coparcenary consisting of the son and grand sons of section D. Misra.
In this connection the High Court observed that not only defendant No. I did not plead in his written statement that the Lucknow house was the property of the coparcenary but that he also stated in the witness box as DW 3 that to his knowledge defendant No. I was the sole owner of that house.
We are clearly of the opinion that the High Court erred in taking either of these circumstances as a minus point for defendant No. 1.
In so far as the written statement is concerned it contains a definite plea in para 15 to the effect that if the disputed property is proved to joint be Hindu family property, its transfer was made by the Karta for legal necessity so that it was binding on the family.
Was it then incumbent on defendant No. I to further plead how he propsed to prove the legal necessity? This question was pointedly posed to learned counsel for the plaintiffs during the course of arguments and although his answer was in the affirmative, he could quote neither law nor precedent in support of the same.
It may also be pointed out that no objection by the plaintiffs was ever taken at any stage of the trial to any lack of particulars of the legal necessity set up by defendant No. I in paragraph 15 of the written statement.
On the other hand they were fully posted about what case they have to meet on the point by reason of the contents of that paragraph itself in which it was specifically asserted that the disputed house was sold by defendant No. 2 "for the purpose of building a more profitable and advantageous house at Lucknow and with a view to dispose of a construction which was old and in perilous condition and which was of no present utility." In view of this averment it was fully open to defendant No. 1 to prove by evidence that putting up a second storey in the Lucknow house constituted legal necessity and, in the process, to establish that the Lucknow house was owned by the said coparcenary.
Again, no objection was taken at the evidence stage to the right of defendant No. I to show that the Lucknow house was so owned and thereby to prove the existence of legal necessity for the sale.
No fault can thus be found with the case of defendant No. l on the ground of his failure to take a specific plea in the written statement abount the ownership of that house vesting in the coparcenary.
925 Nor was the High Court right in putting the construction that A it did on the testimony of defendant No. I as DW 3 to the effect that to his knowledge defendant No. 2 was the sole owner of the Lucknow house.
Obviously all that he meant was that according to such knowledge as he had, the Lucknow house vested in the exclusive ownership of defendant No. 2; and that knowledge, in the circumstances of the case, could be no more than a belief arising from what he was told by defendant No. 2 who had been at pains to stake his claim to the exclusive ownership of all the property under his control, including the property left by his father.
In this connection we cannot lose sight of the fact that defendant No. 1 was a total stranger to the family of the plaintiffs and in the very nature of things could not have had any personal knowledge referable to the actual manner in and the precise source from which either the Lucknow house or, for that matter, the Rae Bareli property was acquired, such manner and source being within the special knowledge of plaintiff No. I and defendant No. 2 only.
That part of the deposition of defendant No. I which the High Court has pressed into service against him, cannot, therefore, form the basis of solution to the question of the ownership of the property.
In the present case both plaintiff No. l and defendant No. 2 have stayed away from the witness box and have thus deprived the Court of the only real evidence which could throw light on the source of the consideration paid for the purchase of the Luck now house.
There may be some force in the argument that no duty was cast upon defendant No. 2 to appear as a witness in as much as he was not a contesting party, but than such an excuse is not open to plaintiff No. 1 who was actively contesting the case in the trial Court on behalf of herself and her two grand children.
It is in the light of this significant circumstance that the Court must decide whether or not defendant No. l has been able to discharge the burden of proving that the Lucknow house was purchased with joint Hindu family funds.
This important aspect of the matter was completely lost on the High Court although it was an unassailable ground when it formulated the proposition that before a presumption could be raised that a property acquired by a member of a joint Hindu family could be regarded as the property of the family, it must be shown that the family owned other property which could be regarded as a nucleus providing a sufficient source for the later acquisition.
Furthermore, in assessing the evidence on that point, the High Court referred only to two facts, namely, that S.D. Misra left immovable property and cash at the time of his death and that 926 property continued to yield some income thereafter, but paid no heed to at least three other important circumstances which had been listed by the trial court in support of the finding that a sufficient nucleus for the purchase had been proved.
Those circumstances are: (a) The family received compensation for the Zamindari.
(b) on 12th January 1959, defendant No. 2 received Rs. 800/ as consideration for the sale covered by exhibit A l9.
(c) No evidence had been produced to show that defendant No. 2 had income of his own from which he could have saved enough money to be spent on the Lucknow building.
We may add that there is definite evidence in the form of exhibit A 99 to the effect that in 1965 the family of defendant No. 2 consisted of nine souls and that he was then holding a subordinate position in the office of the Director of Health Service, U P., at Lucknow with a salary of no more than Rs. 240 per mensem.
It goes without saying that his salary was to meagre to have sufficed for the maintenance of the family and that any savings therefrom were out of question.
Although each of the facts just above taken note of, when considered in isolation, may not enable the Court to raise a presumption of the sufficiency of the requisite nucleus, collectively they constitute a formidable array and practically a clincher in favour of such a presumption, especially in the absence of any attempt on the part of the plaintiffs to produce evidence showing that defendant No. 2 had any source of income of his own other then his salary.
And then the failure (referred to above) of plaintiff No. I to step into the witness box is enough for the Court to raise another presumption, namely, that her deposition would not have supported the plaintiffs ' case.
The onus of proof of the issue on the defendant was, therefore, very light and stood amply discharged by the facts noted in that behalf by the trial court, with whose finding on the point the first appellate court concurred.
No case at all was thus made out for interference by the High Court with that finding.
The High Court did not express any dissent from the conclusion concurrently reached by the trial court and the learned 927 District Judge that the disputed sale constituted an act of prudence A on the part of defendant No. 2 and was on that account for the benefit of the family.
We find ourselves in full agreement with that conclusion which too is based on fully reliable evidence and follows logically therefrom, as also with the reasons given by the two courts in support thereof.
However, we may point to another significant factor which lends strength to that conclusion, the same being that defendant No. 2 was not only the Karta of the family and its sole adult male member at the time of the sale but was also the father of the only other two coparceners for whom he must naturally be having great affection and whose interests he would surely protect and promote, rather than jeopardise, there being no allegation by the plaintiffs that he was a profligate or had other reason to act to their detriment.
The Lucknow house being the property of the joint Hindu family consisting of defendant No. 2 and his sons and the disputed sale being an act of good management, the latter must be held to be justified by legal necessity, which expression, as pointed out in Nagindas Maneklal and others vs Mahomed Yusuf Mitchella,(1) is not to be strictly construed.
In that case the facts were very similar to those obtaining here and may be briefly recapitulated.
The joint Hindu family had serveral houses, one of which was in such a dilapidated condition that the Municipality required it to be pulled down.
The adult coparceners contracted to sell it to a third person.
The joint family was in fairly good circumstances and it was not necessary to sell the house which, however, could not be used by the family for residence and would not have fetched any rent.
In a suit for specific performance of the contract to sell instituted by the purchaser, the minor coparceners contended that the contract did not affect their interest in the absence of "necessity" for the sale.
In repelling the contention, Shah, J., who delivered the leading judgment of the Division Bench, referred to the manner in which the expression kutumbarthe had been construed by Vijnanesvara in the Mitakshara and observed: "The expression used must be interpreted with due regard to the conditions of modern life.
I am not at all sure that Vijnanesvara intended to curtail the scope of the word kutumbarthe while explaining it.
I do not see any reason why a restricted interpretation should be placed upon the word 'necessity ' so as to exclude a case like the present in 928 which defendants Nos.
I and 2, on all the facts proved, properly and wisely decided to get rid of the property which was in such a state as to be a burden to the family.
I think that the facts of the case fairly satisfy the test." Fawcett., J., who agreed with these observations added a separate short note of his own and relied upon the following passage in Hunoomanpersaud Pandey vs Mussumat Babooee Munraj Koonweree,(1) "But where, in the particular instance, the charge is one that a prudent owner would make, in order to benefit the estate, the bona fide lender is No. affected by the precedent mismanagement of the estate.
The actual pressure on the estate, the danger to be averted, or the benefit to be conferred upon it, in the particular instance, is the thing to be rearded." (Emphasis supplied) Although these remarks were made in relation to a charge created on the estate of an infant heir by its manager under the Hindu law, it is well settled that the principles governing an alienation of property property of a joint Hindu family by its Karta are identical.
The perimeters of the expression kutumbarthe, as interpreted in Nagindas 's case (supra) which meets with our unqualified, approval, fully embrace the facts of the present case in so far as legal necessity for the disputed sale is concerned.
In the result, the appeal succeeds and is accepted.
The judgment impuged before us is set aside and that of the District Judge restored.
There will be no order as to costs of the pro ccedings in this Court.
S.R. Appeal allowed.
| Estoppel by conduct and construction or pleadings in the absence of an application under order Xl C.P.C. Sale for legal necessity of joint Hindu family property "Kutumbarthe" explained.
Sheo Dularey Misra, in terms of a compromise decree dated 29th August, 1931 was declared the exclusive owner of a block of houses situated in Rae Bareli and also one half of 4 annas and 9 pies share in a Zamindari.
He died in 1951 leaving his widow, his son Parmeshwar Din Misra and grand sons Gajendra Narain and Sunil.
His entire property was then mutated in the name of his son Parmeshwar Din Misra both in the revenue records as well as in the registers maintained by the Rae Bareli Municipal Committee.
From then onwards, Parmeshwar Din Misra was in possession of the entire property left by his father and also acted as its exclusive manager.
He received compensation for some of the zamindari property, a part of which was also sold by him on 12th January, 1959 for a consideration of Rs. 800.
In the year 1960 and 1961, he constructed a one storey building on a plot of land in Khurshid Bagh, Lucknow, where he was employed and residing with his wife and children.
On 14th February, 1964, he sold the western portion of the block of houses purchased by his late father, to the appellant vide sale deed Exhibit A l.
In that sale deed he described himself, as "exclusive and complete owner" of the Rae Bareli property and claimed that he was "in possession and occupation thereof with powers of transfer of all kinds. ".
The necessity for the sale was thus described by him: "I am constructing a house in Mohalla Khurshed Bagh, City Lucknow, the lower portion whereof has already been constructed and for the construction of the upper portion whereof funds are required.
" On 17 9 1964 his mother (Plaintiff No. 1) and his two sons (Plaintiff Nos. 2 & 3) instituted a suit claiming the share in the said property and to have the 908 sale covered by Exhibit A l set aside on the ground that the transaction was not for any necessity of the family.
The trial court dismissed the suit holding: (i) all the three plaintiffs and defendant No. 2 formed a joint Hindu family of which defendant No. 2 was the karta and his two sons (Plaintiffs 2 & 3) acquired an interest by birth in the property left by their grand father; (ii) the Lucknow house was the property of the said joint Hindu family; (iii) the disputed sale was and act of good management and was in the circumstances for the benefit of the family and, therefore, for legal necessity; (iv) the vendee (appellant) was not entitled to any protection under section 41 of the Transfer of Property Act; and (v) it was the duty of defendant No. I to give the details of misrepresentation constituting estoppel in the written statement, which was not done so that the evidence on the point could not be looked into.
The first appeal before the District Judge failed.
But the High Court, accepting a second appeal cancelled sale deed Exhibit A l and passed a decree for possession of the disputed property in favour of the plaintiffs.
Hence the appeal after obtaining spccial leave.
Allowing the appeal, the Court, ^ HELD :1 :1 The findings given by the first appellate court on the point of estoppel was eminently reasonable and the short ground on which the High Court turned the tables on the appellant was untenable.
That finding being a finding of fact and being based on good evidence, it was not open to the High Court to interfere with it in a second appeal.
[923 B C] 1: 2.
Proper foundation was laid for the plea of estoppel in the pleadings.
A combined reading of paragraphs 14 and 16 of the written statement gave sufficient notice to the plaintiffs of what case they had to meet.
The representation said to have been made by plaintiff No. 1 is set out in paragraph 14, while the plea that she was estopped from contesting the sale is taken in paragraph 16.
Undoubtedly, the written statement is inartistically drafted and leaves much to be desired, but then pleadings are not to be construed in a hypertechnical manner.
In fact, no objection to the lack of particulars was taken at the stage when issues were framed or later when statements of parties ' counsel were recorded on a subsequent occasion or during the course of arguments addressed to the trial court, the District Judge and the High Court, even though the issue of estoppel was hotly contested before all three of them.
All these circumstances unmistakably indicate that the case put forward by defendant No. 1 was throughout understood by the plaintiff to be that it was the belief induced in him by the representation of plaintiff No. I which made him accept the title of defendant No. 2 as being exclusive.
[923 C H] l: 3.
The declaration of plaintiff No. 1, in the presence of the appellant, that the property belonged to her son and that he was at liberty to deal with it as he liked, does not suffer from any ambiguity and makes it clear that she had nothing to do with the property.
[921 A B] 1: 4.
The onus of proof of the allegation that she was the owner of a half share in the property at the time of the sale was on her and she was duty bound to depose to facts which would make section 3 of the Hindu Women 's Right to Property Act, 1937 applicable to her case.
Her failure to depose to the existence thereof must result in a finding that she has failed to prove the issue.
[922 E F] 909 1: 5.
In view of the fact that on Shiv Dularey Misra 's death all his property was mutated in favour of his son to the exclusion of plaintiff No. I and was all along being dealt with by him as its sole and absolute owner without any objection whatsoever having been raised by her at any point of time to such conclusion or dealing leads to the presumption that plaintiff No. I had relinquished her share in favour r of her son either immediately after her husband s death or at any other point of time prior to the disputed sale.
In the above situation the appellant was fully justified in accepting her word on the point of ownership, the said section 3 notwithstanding.
[922 G H, 923 A] 2: 1.
That the disputed sale was for legal necessity is clear from the following: (a) The written statement of the appellant contains a definite plea in para 15 to the effect that if the disputed house is proved to be joint Hindu family property, its transfer was made by the karta for legal necessity so that it was binding on the family, (b) no objection by the plaintiffs was taken at any stage of the trial to any lack of particulars of the legal necessity in the plea so set up; (c) in the said para it was specifically asserted that the disputed house was sold by defendant No. 2, "for the purpose of building a more profitable and advantageous house at Lucknow with a view to dispose of a construction which was old and in perilous condition and which was of no present utility.
" The appellant was, therefore, had the right to let in evidence that putting up a second storey in 1) the Lucknow house constituted legal necessity.
Nor was any on objection taken at the evidence stage to such right; (d) the appellant was a total stranger to the family of the plaintiffs and in the very nature of things could not have had any personal knowledge referable to the actual manner in and the precise source from which either the Lucknow house or, for that matter, the Rae Bareli property was acquired, such manner and source being within the special knowledge of plaintiff No. 1 and her son, defendant No. 2, both of whom had stayed away from the witness box and had thus deprived the Court of the only real evidence which could throw light on the source of the consideration paid for the purchase of Lucknow house; (e) the salary of defendant No, 2 which was no more than Rs. 240 per mensem was too meagre to have sufficed for the maintenance of his family and any savings therefrom were out of question and (f) defendant No. 2 was not only the karta of the family and its sole adult male member at the time of the sale but was also the father of the only other two copartners for whom he must naturally be having great affection and whose interests he would surely protect and promote, rather than jeopardise, there being no allegation by the plaintiffs that he was a profligate or had other reason to act to their detriment.
[924 C H, 925 A E, G H, 926 A, D E, 927 B C] 2: 2.
The Lucknow house being the property of the joint Hindu family consisting of defendant No. 2 and his sons and the disputed sale being an act 'G of good management, the sale is "Kutumbarthe" and justified by legal necessity.
[927 C D] Nagindas Maneklal and others vs Mohomed Yusuf Mitchella, ILR (1922) 46 Bombay 312, approved and applied.
Hunoomanpersaud Pandey vs Mussumat Babooee Munraj Koonweree, (1856) 6 Moo.
I.A. 393, referred to. 910
|
Special Leave Petition No. 416 of 1981.
From the judgment and order dated the 5th September, 1980 of the Punjab and Haryana High Court in Civil Writ Petition No. 1515 of 1980.
L.N. Sinha, Attorney General, K.S. Gurumoorthy & R.N. Poddar for the Petitioner.
The Order of the Court was delivered by PATHAK, J.
This petition for special leave to appeal by the Union of India is directed against the judgment and order of the High Court of Punjab and Haryana holding the respondent, a retired Judge of the High Court, entitled to the payment of the cash equivalent of leave salary in respect of the period of earned leave at his credit on the date of his retirement.
The respondent, Shri Gurnam Singh, was a member of the Superior Judicial Service in the State of Haryana.
On February 24, 1972 he was appointed a Judge of the High Court of Punjab and Haryana and retired on March 18, 1980 on attaining the age of 62 years.
On the date of retirement the respondent had to his credit earned leave which had not been availed of by him.
He claimed that he was entitled to receive the cash equivalent of leave salary in respect of the period of unutilised earned leave.
He also claimed dearness allowance for the period before retirement.
The claim being denied, the respondent applied to the High Court of Punjab and Haryana for relief under Article 226 of the Constitution.
The 702 writ petition was allowed by the High Court by its judgment and order dated September 5, 1980 and a direction was issued to the Union of India to pay the amount claimed.
During the course of the hearing the Union of India conceded the claim to dearness allowance in view of the order dated July 3, 1980 of the Government that the Judges of the High Court were entitled to draw dearness allowance from December 1, 1979.
As to the remaining claim, the High Court held the respondent entitled to the cash equivalent of the leave salary for the period of unutilised earned leave by giving him the benefit of rule 20 B, All India Services (Leave) Rules, 1955 by virtue of rule 2 of the High Court Judges Rules, 1956.
The order of the High Court is assailed before us.
In our opinion, the High Court is plainly right.
Article 221 of the Constitution provides for the payment of salaries and allowances to a Judge of a High Court.
Clause (2) of Article 221 declares: "(2) Every Judge shall be entitled to such allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament and, until so determined, to such allowances and rights as are specified in the Second Schedule: . . " The rights in respect of leave of absence to which a Judge is entitled may be determined by or under law made by Parliament.
Parliament enacted the , and sections 3 to 13 of that Act classify the kinds of leave admissible to a Judge, and provide for the maintenance of a leave account, the aggregate amount of leave which may be granted, the commutation of leave on half allowance into leave on full allowance, the grant of leave not due, special disability leave, extraordinary leave, the rate of leave allowances, allowance for joining time, for combining leave with vacation and the consequences of overstaying leave or vacation, It also specifies the authority competent to grant leave.
The Union of India says that these several provisions constitute a complete code and exhaustively set forth all the benefits relating to leave to which a Judge of a High Court is entitled, and that it is not permissible to proceed beyond those provisions to discover any further right in favour of a Judge.
That submission is inadmissible.
Sub section
(1) of section 24 of the same Act empowers of 703 Central Government to make rules to carry out the purpose of the Act.
And clause (a) of Sub section
(2) of section 24 specifically contemplates rules providing for "leave of absence of a Judge".
In other words, it is open to the Central Government to add to the existing statutory provisions by making rules in relation to leave of absence.
Sub section
(2) of section 24 in fact enables the Central Government to make rules in respect of several other matters, such as the pension payable to a Judge, travelling allowances, use of official residence, facilities for medical treatment and other conditions of service and "any other matter which has to be, or may be prescribed".
Now the Government of India enacted the High Court Judges Rules, 1956 and rule 2 comprehensively declares: "2.
The conditions of services of a Judge of a High Court for which no express provision has been made in the , shall be, and shall from the commencement of the Constitution be deemed to have been, determined by the rules for the time being applicable to a member of the Indian Administrative Service holding the rank of Secretary to the Government of the State in which the principal seat of the High Court is situated.
Provided that, in the case of a Judge of the High Court of Delhi and a Judge of the High Court of Punjab and Haryana the conditions of service shall be determined by the rules for the time being applicable to a member of the Indian Administrative Service on deputation to the Government of India holding the rank of Joint Secretary to the Government of India stationed at New Delhi.
Provided further that in respect of facilities for medical treatment and accommodation in hospitals the provisions of the All India Service (Medical Attendance) Rules, 1954, in their application to a Judge, shall be deemed to have taken effect from the 26th January, 1950.
Provided also that where at the request of the President, any Judge undertakes to discharge any function outside his normal duties in any locality away from of his headquarters, the President may, having regard to the nature of such function and locality, determine the facilities that may be afforded to such judge including accommodation, transport and telephone so long as he continues to dis 704 charge such function, either without any payment or at a concessional rate." Rule 2A sets forth the rights of a Judge who avails of an official residence and Rule 2B provides the scale of its free furnishing.
It is clear from Rule 2 of the High Court Judges Rules, 1956, that the conditions of service of a Judge of the High Court of Punjab and Haryana, where not expressly provided in the must be determined by the rules governing a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi.
The All India Services (Leave) Rules, 1955 contain provision for leave in relation to members of the All India Services, including the Indian Administrative Service.
On the date when the respondent retired those rules included rule 20 B which provides: "20 B. Payment of cash equivalent of leave salary: (1) The Government shall suo moto sanction to a member of the service who retires from the service under sub rule (1) of rule 16 of the All India Services (Death cum Retirement Benefits) Rules, 1958, having attained the age of 58 years on or after the 30th September, 1977 the cash equivalent of leave salary in respect of the period of earned leave at his credit on the date of his retirement, subject to a maximum of 180 days.
(2) The cash equivalent of leave salary payable to a member of the Service under sub rule (1) above shall also include dearness allowance admissible to him on the leave salary at the rates in force on the date of retirement, and it shall be paid in one lump sum, as a one time settlement.
(3) The city compensatory allowance and the house rent allowance shall not be included in calculating the cash equivalent of leave salary under this rule.
(4) From the cash equivalent so worked out no deduction shall be made on account of pension and pensionary equivalent of other retirement benefits.
705 It is not disputed that Rule 20 B applies to a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi.
The rule entitles him on retirement from service to the cash equivalent of leave salary in respect of the period of unutilised earned leave subject to a maximum of 180 days, inclusive of dearness allowance.
It is apparent that by virtue of Rule 2 of the High Court Judges Rules, 1956 this benefit must be read as a condition of service enjoyed by a Judge of the High Court.
It may be observed that although rule 20 B of the All India Services (Leave) Rules, 1955 is a provision of a scheme applicable to members of the All India Services, there is nothing in its nature and content which makes it inapplicable mutatis mutandis to the statutory scheme pertaining to leave enacted in the .
There is also nothing in the constitutional position of a Judge of a High Court which precludes Rule 20 B from inclusion in that scheme.
It is true that Rule 20 B revolves around the concept of earned leave, and the expression "earned leave" has been specifically defined by clause (d) of rule 2 of the All India Services (Leave) Rules, 1955 as "leave earned under rule 10".
But rule 10 merely lays down the rate and amount of earned leave.
The principle in which "earned leave" is rooted must be discovered from rule 4, which provides that "except as otherwise provided in these rules leave shall be earned by duty only".
The performance of duty is the basis of earning leave.
That concept is also embedded in the .
Under that Act, the time spent by a Judge on duty constitutes the primary ingredient in the concept of "actual service",(1) which is the reason for crediting leave in the leave account of a Judge.(2) Although the expression "earned leave" is not employed in the Act, the fundamental premise for the grant of leave to a Judge is that he has earned it.
He has earned it by virtue of the time spent by him on actual service.
That a Judge earns the leave which is credited to his leave account is borne out by the proviso to section 6 of the Act, which declares that the grant under section 6 of leave not due will not be mad "if the Judge is not expected to return to duty at the end of such leave and earn the leave granted" (emphasis provided).
The concept then on which rule 20 B proceeds is familiar to and underlies the statutory scheme relating to leave formulated in the Act.
It bears a logical and reasonable relationship to the essential content of that scheme.
On 706 that, it must be regarded as a provision absorbed by rule 2 of the High Court Judges Rules, 1956 into the statutory structure defining the conditions of service of a Judge of a High Court.
We may observe that even as a right to receive pension, although accruing on retirement, is a condition of service, so also the right to the payment of the cash equivalent of leave salary for the period of unutilised leave accruing on the date of retirement must be considered as a condition of service.
In our judgment, the High Court is right in upholding the claim of the respondent to the payment of the cash equivalent of the leave salary in respect of the period of earned leave at his credit on the date of retirement in accordance with the provisions of rule 20 B of the All India Services (Leave) Rules, 1955 read with rule 2 of the High Court Judges Rules, 1956.
The Special Leave petition is dismissed.
P.B.R. Petition dismissed.
| An identical scale of pay was being enjoyed by both Naiks and Radio operators Grade III (Naik) in the antral Reserve Police Force before the revision of scales of pay of Central Government employees with effect from January 1,1973 consequent upon the recommendations of the Third Pay Commission.
However, Radio operators Grade III (Naik) were entitled to a special pay of Rs. 30.
The Pay Commission recommended the scale of pay of Rs. 225 308 for the post of Naik but did not make any separate recommendation in respect of Radio operator Grade III (Naik).
The petitioners who were Radio operators Grade III (Naik) were initially paid a salary of Rs. 250 with a special pay of Rs. 30 from January 1,1973.
They were subsequently placed in tho revised scale of pay of Rs. 225 308 given to Naiks with a special pay of Rs. 30 and the excess amount paid earlier was sought to be recovered from them.
The petitioners contended: (i) that they were entitled to the scale of pay of Rs. 260 430 as that was the scale of pay prescribed for posts in other departments for which matriculation was the minimum qualification, (ii) that their scale of pay could not be far below the scale of pay of Rs. 330 480 prescribed for the next immediate senior post of Radio operator Grade II and (iii) that they should be paid at par with comparable government employees on the civil side.
In the alternative, the petitioners contended that they were entitled to the pay of Rs. 250 and the special pay of Rs. 30 paid to them before refixation of their salary.
Dismissing the petition, ^ HELD: 1.
The minimum qualification prescribed for the post of Naik as on January 1,1973 was Middle School Examination and it had been raised to Matriculation Examination only from January 24, 1975.
As Naiks and Radio operators Grade III (Naik) had been uniformly treated at par in the matter of that basic qualification, it was not open to the petitioners to base their claim with reference to a qualification which had not existed on January 1, 1973.
[5 E G] 2 2.
It was not for the Court to examine how far below should be the revised scale of pay of Radio operators Grade Ill as compared to that of Radio operators Grade II.
If the Government had prescribed a particular pay scale in respect of them, all that the Court could do was to merely pronounce on the validity of that fixation.
If the prescription was found contrary to law, the Court would strike it down and direct the Government to take a fresh decision in the matter.
This case was very different from one where the Court had sought to prescribe scales of pay in appeals directly preferred from an award of the Labour Court dealing with such a matter.
In the latter case, the Court in its appellate jurisdiction could be regarded as enjoying all the jurisdiction which the Labour Court enjoyed.
[6 A C] 3.
Radio operators Grade Ill (Naik) had to be considered substantially on the same basis as Naiks and it was because of their special qualifications and of the specialised nature of their duties that they had been provided with a special pay in addition.
Ever since 1975 Radio operators Grade III (Naik) had been selected only from the rank of Constables on the General Duty Side.
The revised pay scale of Radio operators of the rank of Head Constable as well as Head Constables on General Duty was Rs. 260 350 with a special pay of Rs. 40 to the former.
As this post was the next immediate higher post above the rank of Naik.
it was apparent that there was no justification for giving to the petitioners, who were junior in rank, the scale of pay of Rs. 260 430.
[6 D F] 4.
The petitioners could not claim to be paid at par with comparable government employees on the civil side as they were entitled to certain benefits which were not available to the latter.
[6 G H; 7 A B] 5.
The revised pay initially paid to the petitioners had been computed in error inasmuch as when fixing the pay in the revised scale the special pay had been wrongly taken into account.
[7 D E]
|
Appeal Nos. 38 and 39 of 1964.
Appeals from the judgment and order dated April 10, 1961 of the Madhya Pradesh High Court in Miscellaneous Civil Case No. 63 of 1961.
C. K. Daphtary, Attorney General, R. Ganapathy Iyer and R. N. Sachthey, for the appellant (for both the appeals).
N. D. Karkhanis, Rameshwar Nath, section N. Andley and P. L. Vohra, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Subba Rao, J.
These two appeals by certificate arise out of the judgment of the High Court of Madhya Pradesh, Jabalpur, in Miscellaneous Case No. 63 of 1961 from a reference under section 66(2) of the Indian Income tax Act, 1922, made by the Income tax Appellate Tribunal, Bombay.
To appreciate the contention of the parties the following genealogy will be useful: Kalooram Todi : : : : Govindram Gangaprasad (d. in January 1943) (d. in 1933) : : : : : Bachhulal : : : : : : Madanlal (predeceased his Nandlal Babulal father) (d. 9 12 1945) (b. 25 1 1935) : : Jankibai Banarsibai : : : : Radheyshyam (predeceased Venkatlal his father) (b. 13 12 1931) : : Shantibai : : Vishwanath (adopted) (b. 13 4 1941) 490 After the death of Kalooram Todi, his two sons by name Govindram and Gangaprasad constituted a joint Hindu family which owned extensive property in Jaora State and a sugar mill called "Seth Govindram Sugar Mills" at Mahidpur Road in Holkar State.
In the year 1942 Bachhulal filed a suit for partition against Govindram and obtained a decree therein.
In due course the property was divided and a final decree was made.
We are concerned in these appeals only with the Sugar Mills at Mahidpur Road.
After the partition Govindram and Bachhulal jointly worked the Sugar Mills at Mahidpur Road.
After the death of Govindram in 1943, Nandlal, the son of Govindram, and Bachhulal, as kartas of their respective joint families, entered into a partnership on September 28, 1943 to carry on the business of the said Sugar Mills.
Nandlal died on December 9, 1945, leaving behind him the members of his branch of the joint family, namely, the three widows and the two minor sons shown in the genealogy.
After the death of Nandlal, Bachhulal carried on the business of the Sugar Mills in the name of "Seth Govindram Sugar Mills".
For the assessment year 1950 51, the said firm applied for registration on the basis of the agreement of partnership dated September 28, 1943.
The Income tax Officer refused to register the partnership on the ground that after the death of Nandlal the partnership was dissolved and thereafter Bachhulal and the minors could be treated only as an association of persons.
On that footing he made another order assessing the income of the business of the firm as that of an association of persons.
Against the said orders, two appeals one being Appeal No. 21 of 1955 56 against the order refusing registration and the other being Appeal No. 24 of 1955 56 against the order of assessment were filed to the Appellate Assistant Commissioner.
The Appellate Assistant Commissioner dismissed both the appeals.
In the appeal against the order of assessment, the Appellate Assistant Commissioner exhaustively considered the question whether there was any partnership between the members of the two families after the death of Nandlal and came to the conclusion that in fact as well as in law such partnership did not exist.
Two separate appeals, being Income tax Appeal No. 8328 of 1957 58 and Income tax Appeal No. 8329 of 1957 58, preferred to the Income tax Appellate Tribunal against the orders of the Appellate Assistant Commissioner were dismissed.
The assessee made two applications to the Tribunal for referring certain questions of law to the High Court, but they were dismissed.
Thereafter, at the instance of the assessee the High Court directed the Tribunal to submit the following two questions for its decision and it accordingly did so: "(1) Whether on the facts and in the circumstances of the case, the status of the assessee, "Seth Govindram Sugar Mills, Mahidpur Road, Proprietor Nandlal Bachhulal, Jaora", is an Association of Persons or a firm within the meaning of Section 16(1)(b) of the Income tax Act.
" 491 "(2) Whether the order of the Appellate Tribunal is illegal on account of the Tribunal having committed an error of record and having omitted to consider the relevant material in the case.
" The High Court, for reasons given in its judgment, held on the first question that in the assessment year 1949 50 the status of the assessee was that of a firm within the meaning of section 16(1),(b) of the Income tax Act and on the second question it held that the Tribunal misdirected itself in law in reaching the conclusion that the parties could not be regarded as partners.
The present two appeals are preferred against the said order.
At the outset we must make it clear that the question of registration could not be agitated in these appeals, as that question was not referred to the High Court.
We shall, therefore, only consider the points raised by the questions referred to the High Court and held by the High Court against the appellant.
Indeed, the only effective question is whether during the assessment year 1950 51 the assesee was a firm or an association of persons.
The first question raised by the learned Attorney General is that on the death of Nandlal the firm of Seth Govindram Sugar Mills was dissolved and thereafter the income of the said business could only be assessed as that of an association of persons.
To appreciate this contention some more necessary facts may be stated.
The deed of partnership dated September 28, 1943, was executed between Nandlal and Bachhulal.
It is not disputed that each of the said two partners entered into that partnership as representing their respect;, joint families.
Under cl.
(3) of the partnership deed, "The death of any of the parties shall not dissolve the partnership and either the legal heir or the nominee of the deceased partner shall take his place in the provisions of the partnership" The question is whether on the death of Nandlal his heirs, i.e., the members of his branch of the family, automatically became to partners of the said firm.
The answer to the question turns upon section 42 of the (Act 9 of 1932).
the material,part of which reads: "Subject to contract between the partners a firm is dissolv ed by the death of a partner.
" While for the appellant the leaned Attorney General contended that section 42 applied only to a partnership consisting of more than two partners, for the respondent Mr. Karkhanis argued that the section did not impose any such limitation and that on its terms it equally applied to a partnership comprising only two partners.
It was argued that the contract mentioned in the over riding clause was a contract between the partners and that, if the parties to the contract agreed that in the event of death of either of them his successor would be inducted in his place, the said contract would be binding 492 on the surviving member.
On the death of one of the partners, it was said, his heir would be automatically inducted into the partnership, though after such entry he might opt to get out of it.
This conclusion the argument proceeded was also supported by section 31 of the Partnership Act.
Section 31 of the Partnership Act reads: "(1) Subject to contract between the partners and to the provisions of section 30, no person shall be introduced as a partner into a firm without the consent of all the existing partners." Converting the negative into positive, under section 31 of the Partnership Act if there as a contract between the partners, a person other than the partners could be introduced as a partner of the firm without the consent of all the existing partners.
A combined reading of sections 42 and 31 of the Partnership Act, according to the learned counsel, would lead to the only conclusion that two partners of a firm could by agreement induct a third person into the partnership after the death of one of them.
There is a fallacy in this argument.
Partnership, under section 4 of the Partnership Act, is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Section 5 of the said Act says that the relation of partnership arises from contract and not from status.
The fundamental principle of partnership, therefore, is that the relation of partnership arises out of contract and not out of status.
To accept the argument of the learned counsel is to, negative the basic principle of law of partnership.
Section 42 can be interpreted without doing violence either to the language used or to the said basic principle.
Section 42(c) of the Partnership Act can appropriately be applied to a ' partnership where there are more than two partners.
If one of them dies, the firm is dissolved; but if there is a contract to the contrary, the surviving partners will continue the firm.
On the other hand, if one of the two partners of a firm dies, the firm automatically comes to an end and, thereafter, there is no partnership for a third party to be introduced therein and, therefore, there is no scope for applying cl.
(c) of section 42 to such a situation.
It may be that pursuant to the wishes of the directions of the deceased partner the surviving partner may enter into a new partnership with the heir of the deceased partner, but that would constitute a new partnership.
In this light section 31 of the Partnership Act falls in line with section 42 thereof.
That section only recognizes the validity of a contract between the partners to introduce a third party without the consent of all the existing partners: it presupposes the subsistence of a partnership; it does not apply to a partnership of two partners which is dissolved by the death of one of them, for in that event there is no partnership at all for any new partner to be inducted into it without the consent of others.
There is a conflict of judicial decisions on this question.
The decision of the Allahabad High Court in Lal Ram Kumar vs 493 Kishori Lal(1) is not of any practical help to decide the present case,.
There.
from the conduct of the surviving partner and the heirs of the deceased partner after the death of the said partner, the contract between the original partners that the partnership should not be dissolved on the death of any of them was inferred.
Though the partnership there was only between two partners, the question of the inapplicability of section 42(c) of the Partnership Act to such a partnership was neither raised nor decided therein.
The same criticism applies to the decision of the Nagpur High Court in Chainkarcin Sidhakaran Oswal v Radhakisan Vishwnath Dixit(2).
This question was directly raised and clearly answered by a Division Bench of the Allahabad High Court in Mt. Sughra vs Babu(3) against the legality of such a term of a contract of partnership consisting of only two partners.
Agarwala, J., neatly stated the principle thus: "In the case of a partnership consisting of only two partners, no partnership remains on the death of one of them and, therefore, it is a contradiction in terms to say that there can be a contract between two partners to the effect that on the death of one of them the partnership will not be dissolved but will continue . .
Partnership is not a matter of status, it is a matter of contract.
No heir can be said to become a partner with another person without his own consent, express or implied.
" This view accords with that expressed by us earlier.
In Narayanan vs Umayal(4).
Ramachandra lyer J., as he then was, said much to the same effect when he observed thus: ". . . if one of the partners died, there will not be any partnership existing to which the legal representatives of the deceased partner could be taken in.
In such a case the partnership would come to an end by the death of one of the two partners, and if the legal representatives of the deceased partner joins in the business later, it should be referable to a new partnership between therein." But Chatterjee J., in Hansraj Manot vs Messrs. Gorak Nath Pandey(5) struck a different note.
His reasons for the contrary view are expressed thus: "Here the contract that has been referred to s the contract between the two partners Gorak Nath and Champalal Therefore, it cannot be said that the contract ceased to have effect because a partner died.
The contract was there.
There was no new contract (1) A.T.R. 1946 All. 259.
(2) A.T.R.1956 nag.
46 (3) A.I.R. 1952 All. 506, 507.
(4) A.I.R, 1959 Mad. 283,284.
(5) , 264.
(N)4SCI 5 494 with the heirs and there was no question of a new contract with the heirs because of the original contract, and by virtue of the original contract the heirs become partners as soon as one of the partners died. . .
As soon as there is the death, the heirs become the partners auto matically without any agreement between the original Partners by virtue of the original agreement between the Partners while they were surviving.
there is no question of interregnums.
As soon as the death occurs the right of somebody else occurs.
The question of interregnums does not arise.
The heirs become partners not because of a contract between the heirs on the one hand and the other partners on the other but because of the contract between the original partners of the firm.
" With great respect to the learned Judge, we find it difficult to appreciate the said reasons.
The learned Judge seems to suggest that by reason of the contract between the original partners, the heirs of the deceased partner enter the field simultaneously with the removal by death of the other partner from the partnership.
This implies that the personality of the deceased partner projects into that of his heirs, with the result that there is a continuity of the partnership without any interregnums.
There is no support either on authority or on principle for such a legal position.
In law and in fact there is an interregnums between the death of one and the succession to him.
We accept the view of the Allahabad and Madras High Courts and reject the view expressed by Nagpur and Calcutta High Courts, The result of the discussion is that the partnership between Nandlal and Bachhulal came to an end on the death of Nandlal on December 9, 1945.
The next question is whether after the death of Nandlal a new partnership was entered into between the representatives of the two branches of the families, i.e., Nandlal 's and Bachhulal 'section Before we consider this question it is as well that we advert to incidental questions of law that were raised.
One is whether the widow of Nandlal could under Hindu law be a karta of the joint Hindu family consisting of three widows and two minors.
There is conflict of view on this question.
The Nagpur High Court held that a widow could be a karta: see Commissioner of Income tax, C. P. & Berar vs Seth Laxmi Narayan Raghunathdas(1); Pandurang Dahke vs Pandurang Gorle(2), The Calcutta High Court expressed the view that where the male members are minors and their natural guardian is the mother, the mother can represent the Hindu undivided family for the purpose of assessment and recovery of taxes under the Income tax Act: see Sushila Devi Rampurla vs Income tax Officer(2); and (3) 495 Sm.
Champa Kumari Singhi vs Additional Member, Board of Revenue, West Bengal(1) The said two decisions did not recognize the widow as a karta of the family, but treated her as the guardian of the minors for the purpose of income tax assessment.
The said.
decisions, therefore, do not touch the question now raised.
The Madras and Orissa High Courts held that coparcenership is a necessary qualification for the managership of a joint Hindu family and as a widow is not admittedly a copartner, she has no legal qualifi cations to become the manager of a joint Hindu family.
The decision of the Orissa High Court in Budhi Jena vs Dhobai Naik(2) followed the decision of the Madras High Court in V.M.N. Radha Ammal vs Commissioner of Income tax, Madras(2) wherein Satyanarayana Rao J., observed: "The right to become a manager depends upon the fundamental fact that the person on whom the right devolved was a copartner of the joint family Further, the right is confined to the male members of the family as the female members were not treated as copartner though they may be members of the joint family.
" Viswanatha Sastri J., said: "The managership of a joint Hindu family is a creature of law and in certain circumstances, could be created by an agreement among the copartner of the joint family.
Coparcenership is a necessary qualification for managership of a joint Hindu family.
" Thereafter, the learned Judge proceeded to state: "It will be revolutionary of all accepted principles of Hindu law to suppose that the senior most female member of a joint Hindu family, even though she has adult sons who are entitled as copartner to the absolute ownership of the property, could be the manager of the family . . . .
She would be the guardian of her minor sons till the eldest of them attains majority but she would not be the manager of the joint family for she is not a copartner.
" The view expressed by the Madras High Court is in accordance with well settled principles of Hindu law, while that expressed by the Nagpur High Court is in direct conflict with them.
We are clearly of the opinion that the Madras view is correct.
Another principle which is also equally well settled may be noticed.
A joint Hindu family as such cannot be a partner in a firm, but it may, through its karta enter into a valid partnership with a stranger or with the karta of another family.
This Court in Kshetra (1) (2) A.I.R. 1956 Orissa 6.
(3) , 230, 232, 233.
496 Mohan Sanyasi Charan Sadhukhan vs C.E.P.T.(1) pointed out that when two kartas of different families constituted a partnership the other members of the families did not become partners, though the karta might be accountable to them.
The question, therefore, is whether after the death of Nandlal the representatives of the two families constituted a new partnership and carried on the business of the Sugar Mills.
Admittedly no fresh partnership deed was executed between Banarsibai, acting as the guardian of the minors in Nandlal 's branch of the family and Bachhulal.
It is not disputed that partnership between the representatives of two families can be inferred from conduct.
Doubtless the accounts produced before the income tax authorities disclosed that Bachhulal was carrying on the business of "Seth Govindram Sugar Mills Ltd." in the same manner as it was conducted before the death of Nandlal.
Therein Kalooram Govindram and Gangaprasad Bachhulal were shown as partners, Govindram having 10 annas share and Bachhulal having 6 annas share.
There were separate current accounts for the two parties.
The Appellate Assistant Commissioner, who examined the accounts with care, gave the following details from the accounts ason November 1, 1948: Joint capital account of Kalooram Govindram and Gangaprasad Bachhulal in the ratio of 10 : 6 Rs. Credit balance 10,78,660 Current Accounts: Gangaprasad Bachhulal Do.
10,46,797 Kalooram Govindram Do.
8,30,348 Profit & Loss Account Debit balance 14,01,669 No profit or loss was adjusted to the current account of the parties.
Thereafter the accounts were closed as on 31 3 1950, when the capital account was squared up by transferring that much loss from the profit and loss account and balance in the profit and loss account was transferred in the ratio of 10:6 to the current accounts of the two parties.
Thus the profit and loss account showed: Net debit balance including current Rs. year 's loss 17,51,992 Loss set off against capital account 10,78,666 . . . .
Rs. 6,73,326 Transferred to partners ' accounts: Messrs. Kalooram Govindram 4,20,829 Messrs. Gangaprasad Bachhulal 2,52,497 6,73,326 . . . .
Balance Nil (1)[1954] S.C.R. 497 The accounts only establish that Bachhulal was doing the business of Govindram Sugar Mills Ltd. But Banarsibai 's name was not found in the accounts.
If she was a partner, her name should have found a place in the accounts.
Not a single document has been produced on behalf of the assessee which supports the assertion that Banarsibai acted as a partner or was treated by the customers of the firm as a partner.
There is not a little of evidence of conduct of Bachhulal, Banarsibai or even of third parties who had dealings with the firm to sustain the plea that Banarsibai was a partner of the firm.
Indeed, the conduct of the parties was inconsistent with any such partnership between Banarsibai and Bachhulal.
After the death of Nandlal, Banarsibai and Shantibai applied to Jaora District Court for the appointment of guardians to look after the properties and the persons of the two minors; and on January 21, 1946, four persons other than these two widows were appointed as guardians of the minors.
If Banarsibai was acting as a guardian of the minors representing the family in the business, she would not have applied for the appointment of others as guardians.
On October 4, 1952, a partnership deed was drawn up between Bachhulal on the one hand and the minors represented by the said four guardians on the other.
If Banarsibai was the representative of the family in the business, this document would not have come into being Banarsibai also had no place in another partnership deed which was executed on March 27, 1953, between Venkatlal represented by the aforesaid guardians and Bachhulal.
The evidence, therefore, demonstrates beyond any reasonable doubt that Banarsibai was nowhere in the picture and that Bachhulal carried on the business of the Sugar mills on behalf of the two families.
Nor is there any evidence to show that from 1943 till the assessment year the guardians of the minors appointed by the District and Sessions Judge, Jaora, in 1946 representing the minors entered into a partnership with Bachhulal.
The partnership deeds of 1952 and 1953 were subsequent to the order of assessment and they contain only self serving statements and they cannot, in the absence of any evidence, sustain the plea of earlier partnership.
Indeed, the guardians were only appointed for the properties situated within the jurisdiction of the District Judge, Jaora, and they could not act as guardians in respect of the properties outside the said jurisdiction.
If they were acting as partners with Bachhulal, their names would have been mentioned either in the accounts or in the relevant documents pertaining to the business.
The conflicting version given by the assessee in regard to person or persons who actually represented the family in the partnership in itself indicates the falsity of the present version.
It must, therefore, be held that the Court guardians did not enter into a partnership with Bachhulal.
But, Venkatlal became a major on December 13, 1949, i.e., during the accounting year 1949 50.
On October 17, 1951, an application for registration was received by the Income tax Officer 498 signed by Venkatlal and Bachulal who are shown as partners representing their respective joint families.
The return of income submitted along with the application for registration was signed by Venkatlal on August 29, 1951.
After Venkatlal became a major, there was no obstacle in his representing his branch of the family, in the partnership.
Indeed, it was conceded in the High Court that there was a partnership from December 13, 1949, when Venkatlal, attained majority.
Having regard to the said circumstances and the concession, we must hold that from December 13, 1949, the business was carried on in partnership between Venkatlal, representing his branch of the family, and Bachhulal, representing his branch of the family.
In the result we set aside that part of the finding of the High Court holding that the partnership business was carried on by the representatives of the two families after the death of Nandlal, but confirm the finding to the extent that such a partnership came into existence only after December 13, 1949.
In this view, we answer the two questions referred to the High Court as under: (1)For the assessment year 1950 51 the status of the, assessee was that of a firm within the meaning of section 16 (1)(b) of the Income tax Act, 1922.
(2)The Tribunal misdirected itself in law in reaching the conclusion that the parties could not be regarded as partners.
In the result the appeals are dismissed.
But as the respondent failed in its main contentions, the parties will bear their own costs in this Court.
Appeals dismissed.
| The respondents were the owners of certain premises in New Delhi.
The lessee a company of these premises assigned the lease to the appellant.
Alleging that the transfer was done without their consent, the respondents filed an application against the lessee and the appellant under section 14(1) proviso (b) of the Delhi Rent Control Act, 1958, for recovery of possession.
Pending the proceedings, the lessee went into liquidation and its name was struck off from the record.
The Controller thereafter, passed an order in favour of the respondents.
Having moved unsuccessfully the Rent Control Tribunal and the High Court, the appellant, appealed to the Supreme Court contending that: (i) the order made against the appellant, after the lessee ceased to be a party, was incompetent, as the only person against whom an order for recovery of possession can be made under the clause, is the tenant who assigned the tenancy, and (ii) the clause in the lease by which the term "lessee" included the lessee 's assignee operated as a consent by the respondents, to assign.
HELD: (i) (Per Sarkar, J.).
The Act contemplates orders for recovery of possession also against persons other than a tenant who has assigned or sub let without the landlord 's consent, so that, where the tenant becomes extinct without leaving any successor, an order can be made against a person who took an assignment of the lease from the tenant before the lease became extinct.
[833C, D E] The proviso expressly states when an order of ejectment can be made and the clauses of the proviso are not intended to indicate the persons against whom an order for recovery of possession could be made, but only the circumstances in which an order for recovery of possession may be made.
[832E G] The expression "the tenant" in cl.
(b) is used only to emphasise that the tenant assigning must be the tenant of the landord seeking eviction.
So read, the effect of the clause is that a land lord can recover possession if his tenant assigns or sub lets without his consent.
[832H, 833A B] Since the object of the proviso is to enable the landlord to recover possession in the specified cases, orders against all "persons in occupation" must have been contemplated so that the landlord might without further trouble recover possession.
Section 18 plainly implies that an order for recovery of possession against a sub tenant is contemplated by the proviso.
Further.
the order for recovery of possession would, under section 25, be binding on the assignee or sub tenant, and therefore, they would be interested in showing that there was the requisite consent, and hence would be entitled to be made parties to the proceedings.
If they are thus entitled to be heard to oppose the order of eviction, such an order could be made against them also.
[833F G, H; 834C, E, H 835A] 830 Per Bachawat J.(i): Both the tenant and the assignee were properly parties to the proceedings for possession and if the tenant company had been dissolved, there is no reason why the proceedings could not continue against the assignee alone.
[839G] It is true that other clauses of the proviso contemplate eviction of the tenant on the ground of some act on the part of the tenant against whom the proceeding for possession is brought, but under cl.
(b), the assignment is a ground of eviction of both the assigning tenant and the assignee and the Controller has jurisdiction to make an order for possession not only against the assigning tenant but also against the assignee.
[839H 840B] Per Mudholkar J. (Dissenting) The right which the respondents possessed to evict the defunct company from the premises, because the company had assigned the tenancy to the appellant without the respondents ' consent could not be availed of by them, and the appellant could therefore continue in possession.
[838B C] The ban against eviction of a tenant in section 14(1) is lifted by the proviso only with respect to the tenant and not to any other person, because, a proviso is subservient to the main provision.
Therefore, the tenant must be a party to the proceeding right up to the date of making of the order of eviction.
Unless an order is obtained against the tenant there would be no occasion for pressing in aid section 25.
Unlike the case of death of or assignment by, a tenant, an anomalous position results where the tenant happening to be a company is dissolved during the pendency of proceedings and cannot be represented by any one, because of a lacuna in the law: But such lacuna cannot be removed by the Courts without assuming a power to legislate.
[836H, 837F H] (ii) Per Sarkar J.: The clause in the lease according to which "the lessee" includes his assignee, does not lead to the conclusion that the lessor consented to the assignment.
Besides, the consent contemplated by the proviso is a direct consent to a contemplated assignment to a particular assignee.
[835F G] Regional Properties Ltd. vs Frankenchwerth, , applied.
Per Bachawat J: The consent contemplated by cl.
(b) may be either general or special, but the clause in the lease would not amount to a consent by the landlord to an assignment either expressly or by necessary implication.
[840D E]
|
Civil Appeal No. 59 of 1961.
Appeal from the judgment and decree dated March 14, 1957, of the Bombay High Court at Nagpur, in first Appeal No. 75 of 1956.
N. section Bindra and R. H. Dhebar, for the appellant Frank Anathony, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent.
December 12.
The Judgment of the Court was delivered by 94 SARKAR, J.
This is an appeal by the State of Maharashtra against the judgment of the High Court at Nagpur confirming the decree of the Additional District Judge, Nagpur, declaring that the order reverting the respondent from the rank of officiating Deputy Superintendent of Police to the rank of Inspector of Police, was illegal and void, and granting certain consequential reliefs.
The judgment of the High Court and the learned Additional District Judge Seem to us to be clearly unsustainable.
The Courts below held that the respondent had been reduced in rank in violation of the terms of section 240(3) of the Government of India Act, 1935, which corresponds to article 311 of the Constitution, inasmuch as he was not given an opportunity to show cause against the order proposed to be made.
It is not in dispute that the opportunity has not been given.
In our view, however, for reasons to be presently stated, the respondent was not entitled to that opportunity.
On June 8, 1948, the respondent was holding the post of Inspector in the Central Provinces and Berar Police.
Service.
He was appointed to officiate as Deputy Superintendent of Police with effect from June 9,1948.
On January 27, 1949, his services were lent to the Hyderabad Government in connection with the police action then being taken there.
On February 5, 1949, he was sent back to the central Provinces and Berar.
On February 19, 1949, the Inspector General of Police, Central Provinces and Berar, passed an order which reads as follows: "Shri F. A. Abraham (respondent) Deputy Superintendent Police, Parbhani, is reverted to rank of Inspector.
" It is this order which was sought to be impugned by the respondent in the suit out of which this appeal arises.
95 After the order of reversion had been made the respondent, on February 23, 1949, asked for the reason for which he was reverted.
On March 3, 1949, the Government refused to communicate the reasons to him.
On May 25, 1949, a confidential memorandum was sent by the District Superintendent of Police, Parbhani, to the Deputy Inspector General of Police, Aurangabad, in which he stated that he had conducted an inquiry into certain allegations of corruption made against the respondent while he was acting in the service of the Hyderabad Government at Parbhani and he thought that those allegations were of substance.
Thereupon, the Deputy Inspector General of Police, Aurangabad, held a departmental inquiry regarding these allegations and found that they had not been proved.
This inquiry had been held behind the back of the respondent.
Notwithstanding this, the order reverting the respondent was maintained.
There is a letter addressed by the Inspector General of Police to the Chief Secretary to the Government of Madhya Pradesh, dated August 19, 1950, written after the departmental inquiry wherein it is stated that the respondents previous record was not satisfactory and that he had been promoted to officiate as Deputy Superintendent of Police as the Government was in need of officers and that he had been given a chance in the expectation that he would turn a new leaf but the complaint made in the confidential memorandum was a clear proof that the officer was habitually dishonest and did not deserve promotion.
The respondent made representations to the Government to revise the order reverting him to the lower rank but the Government expressed its inability to do so.
It may be stated here that on the promulgation of the Constitution the central Provinces and Berar became the State of Madhya Pradesh in the Indian Union.
In the judgment under appeal the High Court followed its earlier decision in M. A. Waheed vs State 96 of Madhya Pradesh (1) in which it had been held that if a person officiating in a higher post is reverted to his original post in the normal course, that is, on account of the cessation of the vacancy or his failure to acquire the required qualification, the reversion does not amount to a reduction in rank but if he is reverted for unsatisfactory work, then the reversion amounts to reduction in rank.
The High Court held that the Government 's plea that the respondent had been promoted as there was dearth of officers was an afterthought and that the fact that the respondent had been given a chance to officiate in the higher post prima facie showed that he was fit to hold that post.
The High Court also held that the Government 's refusal to communicate to the respondent the reasons for his reversion or to give him the report of the inquiry, indicated that the Government was reverting him on the ground that his work was not satisfactory.
It, therefore, came to the conclusion on the authority of M. A. Waheed 's case (1) that the respondent must be held to have reduced in rank and this reduction in rank was illegal as the respondent had not been given an opportunity to show cause against it.
We are unable to agree with the observation in M. A. Waheed 's case(1) that when a person officiating in a post, is reverted for unsatisfactory work, that reversion amounts to a reduction in rank.
A person officiating in a post has no right to hold it for all times.
He may have been given the officiating post because the permanent incumbent was not available, having gone on leave or being away for some other reasons.
When the permanent incumbent comes back, the person officiating is naturally reverted to his original post.
This is no reduction in rank for it was the very term on which he had been given the officiating post.
Again, sometimes a person is given 97 an officiating post to test his suitability to be made permanent in it later.
Here again.
it is an implied term of the officiating appointment that if he is found unsuitable, he would have to go back.
If, therefore, the appropriate authorities find him unsuitable for the higher rank and then revert him back to his original lower rank, the action taken is in accordance with the terms on which the officiating post had been given.
It is in no way a punishment and is not, therefore, a reduction in rank.
It has been held by this Court in Parshotam Lal Dhingra vs Union of India (1) that, "It is, therefore, quite clear that appointment to a permanent post in a Government service, either on probation, or on an officiating basis, from the very nature of such employment, itself of a very transitory character and, in the absence of any special contract or specific rule regulating the conditions of the service, the implied term of such appointment, under the ordinary law of master and servant, is that it is terminable at any time.
In short, in the case of an appointment to a permanent post in a Government service on probation or on an officiating basis, the servant so appointed does not acquire any substantive right to the post and consequently cannot complain, any more than a private servant employed on probation or on an officiating basis can do, if his service is terminated at any time.
" The respondent had of course no right to the post of Deputy Superintendent of Police to which he had been given an officiating appointment and he does not contend to the contrary.
He cannot therefore, without more, complain if he is sent back to his original post.
This is what happened in this case even if it be taken that the respondent 98 had been reverted to his original rank because he was found unsuitable for the higher rank to which he had been given an officiating appointment.
It is however true that even an officiating person may be reverted to his original rank by way of punishment.
It was therefore, observed in Dhingra 's case (1) at p. 863, "Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of promotion, then that circumstances may indicate that although in form the Government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and reality the Government has terminated the employment as and by way of penalty.
" It is quite clear that the circumstances mentioned in this observation have not occurred in the present case.
The reversion has not in any way affected the respondent so far as his condition and prospect of service are concerned.
He of course, lost the benefit of the appointment to the higher rank but that by itself cannot indicate that the reversion was by way of punishment because he had no right to continue in the higher post or to the benefits arising from it.
He had been reverted in exercise of a right which the Government had uncle the terms of the officiating employment.
The High Court seems to us to have been in error in thinking that the Government 's refusal to supply the respondent with the reasons why action has taken against him proved that the reversion was a reduction in rank by way of.
punishment; the refusal cannot prove that.
It may give rise to a suspicion about the motive which led the Government 99 to take the action, but it is now firmly established that if the action is justifiable under the terms of the employment, then the motive inducing the action is irrelevant in deciding the question whether the action had been taken by way of punishment: see Parshotam Lal Dhingra 's case (1) at p. 862.
It does not require to be repeated now that unless the reversion is by way of punishment, section 240 (3) is not attracted.
The High Court seems to have been in error also in drawing an inference from the holding of the departmental inquiry that the respondent must have been reduced in rank by way of punishment.
The departmental inquiry was held long after the order reverting the respondent had been passed and could not have been the occasion for the reversion of the respondent.
The Government had the right to consider the suitability of the respondent to hold the position to which he had been appointed to officiate.
It was entitled for that purpose to make inquiries about his suitability.
This is all that the Government did in this case.
This inquiry cannot show, whatever the findings may have been, that the reversion earlier made was by way of punishment.
Mr. Anthony for the respondent referred us to State of Bihar vs Gopi Kishor Prasad (2) in which it was observed, "But, if instead of terminating such a person 's service without any enquiry, the employer chooses to hold an enquiry into his alleged misconduct, or inefficiency, or for or some similar reason; the termination of service is by way of punishment, because it puts a stigma on his competence and thus affect his future career.
" That case dealt with the discharge of a probationer officer on the ground that he was unsuitable.
The observation there made was considered by this 100 Court in the later case of The State of Orissa vs Ram Narayan Das (1) where it was said, "The third proposition in the latter case refers to an enquiry into allegations of misconduct or inefficiency with a view, if they were found established, to imposing punishment and not to an enquiry whether a probationer should be confirmed.
" We would repeat that in the present case the enquiry was concerned with ascertaining the suitability of the respondent for the higher rank and was not a punishment.
At one stage Mr. Anthony was inclined to argue that the enquiry was really a part of the original order of reversion and that it had been deliberately postponed to as to avoid the applicability of section 240(3) of the Government of India Act, 1935 No such case is made in the plaint.
Neither was it made in the courts below nor can it be based on their findings.
Such a case cannot now be made.
We think, therefore, that the appeal must be allowed with costs throughout and we order accordingly.
Appeal allowed.
| The respondent who held the substantive post of Inspector of Police and had been officiating as the Deputy Superintendent of Police was reverted to his original rank of Inspector without being given any opportunity of being heard in respect of the reversion.
His request to furnish him with reasons of his reversion was refused.
Later a Departmental enquiry was held behind his back in respect of certain allegations of misconduct made against him in a confidential communication from the District Superintendent of police to the Deputy Inspector General of Police but these allegations were not proved at the enquiry.
The Inspector General of Police however thereafter wrote to the Government that the respondent 's previous record was not satisfactory and that he had 93 been promoted to officiate as Deputy Superintendent of Police in the expectation that he would turn a new leaf but the complaint made in the confidential memorandum was a clear proof that the respondent was habitually dishonest and did not deserve promotion.
As the order of reversion was maintained by the Government inspite of the representations made by the respondent.
he filed a suit challenging the order.
The suit was decreed by the Court of first instance and the decree was affirmed by the High Court on appeal.
^ Held, that a person officiating in a post has no right to hold it for all times.
A person who is given an officiating post to test his suitability to be made permanent later, holds it on the implied term that he would have to be reverted if he was found unsuitable.
A reversion in such a case on the ground of unsuitability is an action in accordance with the terms on which the officiating post was being held and is not a reduction in rank by way of punishment to which section 240 of the Government of India Act, 1935, would be attracted.
The observation in M. A. Waheed vs State of Madhya Pradesh, (1954) N. L. J. 305, that when a person officiating in a post is reverted for unsatisfactory work, that reversion amounts to reduction in rank disapproved.
The Government 's refusal to supply the respondent with the reasons for reverting him could not proved that the reversion was by way of punishment.
The departmental enquiry held later in this case does not prove that the respondent was reverted by way of punishment.
The Government had the right to consider the suitability of the respondent to the post to which he had been appointed to officiate.
State of Bihar vs Gopi Kishore Prasad, A. I. R. , referred to.
|
Appeal No. 524 of 1967.
Appeal from the judgment and order dated July 19, 1966 of the Madhya Pradesh High Court in Misc.
Petition No. 33 of 1965.
P. Ram Reddy and section section Khanduja, for the appellant.
I. N. Shroff, for the respondents.
Shyamala Pappu, C. L. Somesekhar and Vineet Kumar, for the intervener.
The Judgment of the Court was delivered by Hidayatullah C.J.
The appellant, who appeals :by certificate granted by the High Court of Madhya Pradesh, was appointed as Assistant Surgeon on probation, for one year by the Board of Directors, Hindustan Steel Ltd.
,Ranchi with effect from October 22, 1959.
After completing his period of probation he was employed on a contract for 5 years.
exhibit P 3 is the Contract of Service which he entered into with the Company.
Under the terms of the contract there.
was a further period of probation.
During the period of probation the Company could terminate his service without notice and without assigning any reason.
On the completion of the period of probation, either side could terminate the contract by 3 months ' notice without assigning any reason.
The Company could also terminate the employment by 'giving in lieu of notice, three months ' salary.
This term was .applicable till three months immediately before the end of the period of 5 years.
If a notice terminating the service was not ven three months before the close of the end of 5 years the contract was automatically extended till the incumbent became superannuated on reaching the age of 55 years.
The appellant passed the probation period and he was en titled to three months ' notice if his services were to be terminated.
The Company maintains certain set, of Rules governing the employment of its workmen, in addition to the Standing.
Orders of.
Company.
exhibit P 4 represents the procedure for imp sing major penalties and for punishment and appeal.
These are .extracts from the Disciplinary and Appeal Rules.
On September 17, 1964 the appellant.
was on duty in the Medical Out Patients Department.
He examined one Mrs. 365 Holey I who complained of cold, headache and weakness.
It appears that Mrs. Holey complained of some misbehaviour on the part of the appellant and her husband reported the matter to the Chief Medical Officer of the Bhilai Steel Plant where the appellant was then posted.
The Chief Medical Officer asked for the explanation of the appellant on September 21, 1964, but the appellant denied the allegation.
Some enquiry was then held.
The appellant in his appeal submits that he was not given a copy of the written complaint received from Mr. and Mrs. Holey.
On October 5, 1964 some witnesses were examined in the presence of the appellant.
Two days previously the statements of Mr. and Mrs. Holey were also recorded.
The enquiry was being held by the Commercial Manager.
The appellant then sent a notice to Mr. and Mrs. Holey charging them with defamation and actually filed a suit on November 17, 1964 demanding damages.
On December 15, 1964 the General Manager ter minated his services with effect from March 15, 1965, that is to say, after the expiry of three months ' notice under the contract.
It was stated in the order that the services were being terminated in terms of his employment.
The appellant thereupon filed a petition under article 226 of the Constitution in the High Court of Madhya Pradesh claiming inter alia that his services were wrongly terminated without giving him the protection granted by article 311 of the Constitution.
He also complained of breach of the principles of natural justice inasmuch as the enquiry was not proper.
His contention was that although the action was ostensibly taken according to the terms of the contract of employment, he was really punished and he was entitled, therefore, to the protection of article 3 1 1 of the Constitution.
The Company resisted the ground by saying that article 311 was not applicable to the appellant inasmuch as he was employed by a Corporation and neither belonged to the civil service of the Union nor held a civil post under the Union.
The High Court in its judgment ruled that the protection of article 311 of the Constitution was not available in the case because the appellant was not entitled to it.
It appears that this was the only point urged in the High Court.
In the appeal before us attempt was made to enlarge the case by arguing other points, namely, that the enquiry was not properly conducted, that the principles of natural justice were violated and that the appellant had no opportunity of defending himself.
None of these points is touched upon in the High: Court 's judgment and it appears that in the High Court only the constitutional question was raised.
Otherwise, one would expect the High.
Court to have said something about it, or the appellant to have said so in the application for certificate or in 366 the proposed grounds filed with that, application.
We decline to allow these fresh grounds to be urged.
The question that arises in this case is : whether the em ployeesof a Corporation such as the Hindustan Steel Ltd., are entitledto the protection of article 31 1 ? This question can only be answered in favour of the appellant if we hold that the appellant held a civil post under the Union.
It was conceded before us that the appellant could not be said to belong to the civil service of the Union or the State.
article 31 1, on which this contention is based, reads as follows : "31 1.
Dismissal, removal or reduction in rank of persons employed in civil capacities under the Union or a State.
(1) No person who is a member of a civil service of the Union or an all India service or a civil service or a State or holds a civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed.
(2)No such person as aforesaid shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him; Provided that this clause shall not apply (a)where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; (b)where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that some reasons, to be recorded by that authority in writing, it is not reasonably practicable to give to that person an opportunity of showing cause; or (c) where the President or Governor, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to give to that person such an opportunity.
(3)If any question arises whether it is reasonably practicable to give to any person an opportunity of showing cause under clause (2), the decision thereon of the Authority empowered to dismiss or remove such person or to reduce him in rank, as the case may be, shall be final." 367 Clause (2) of the article, which gives the protection opens with the words "no such person as aforesaid" and these words take one back to clause (1) which describes the person or persons to whom the protection is intended to go.
Clause (1) speaks of (i) persons who are members of (a) a Civil Service of the Union, or (b) an All India Service or (c) a Civil Service of a State, or (ii) hold a civil post under the Union or a State.
(a), (b) and (c) refer to the standing services which have been created in the Union and the States and which are permanently maintained in strength.
In addition to the standing services there are certain posts which are outside the permanent services.
The last category in article 311(l) therefore speaks of such posts on the civil side as opposed to the military side.
Incumbents of such posts also receive protection.
In the present case the appellant did not belong to any of the permanent services.
He held a post which was not borne on any of the standing services.
It was, however,, a civil post as opposed to a military post.
So far the appellant 's case is clear but the clause speaks further that such posts must be under the Union or a State.
The question thus is whether the servant employed here can be said to have held the post under the Union or a State ? The appellant contends that since Hindustan Steel Limited is entirely financed by the Government and its management is directly the responsibility of the President, the post is.
virtually under the Government of India.
This argument ignores some fundamental concepts in relation to incorporated companies.
In support of the contention that the post must be regarded as one under the Union the appeliant relies on some obiter observations of a single Judge in M. Verghese vs Union of India and others( 1).
In that case the petitioners were drivers working for the Durgapur Project under Hindustan Steel Limited.
The learned Judge considered the question by analysing the set up of Hindustan Steel Limited.
He found that it was a Government company and a private limited company, although it did not include in its name any notice Jr that it was a private company.
He referred in detail to the various provisions in the Articles of Association as also in the Indian Companies Act which rendered the ordinary company law in applicable in certain respects and conferred unlimited powers.
of management on the President of India and his nominees.
He also found that Hindustan Steel Limited was entirely owned by the Union of India.
From this the learned Judge wished to infer that Hindustan Steel Limited was really a department of" the Government but he did not express this opinion and decided 368 the case on another point.
The appellant contends that the conclusion which the learned single Judge did not draw in the Calcutta case is the conclusion to draw in this appeal.
We must, according to him, hold that there is no difference between Hindustan Steel Limited and a Department of the Government and that the service under Hindustan Steel Limited is a service under the Union.
On the other hand, in State of Bihar vs Union of India and Anr.(1) Hindustan Steel Limited was not held to be a "State" for purposes of article 131.
The question whether Hindustan Steel Limited was subject to the jurisdiction of the High Court under articles 226 and 227 was left open.
In dealing with the above conclusion, reference was made to the incorporation of Hindus tan Steel Limited as an independent company and thus a distinct entity.
In Praga Tools Corporation vs C. V. Imanual and Ors.(2) it was pointed out that a company in which 88 % of ,the capital was subscribed by the Union and the State Governments could not be regarded as equivalent to Government because being registered under the Companies Act it had a separate legal existence and could not be said to be either a Government Corporation or an industry run by or under the authority of the Union Government.
Similar views were also expressed in the High Courts.
In Lachmi and Others vs Military Secretary to the Government of Bihar( '), the expression "civil post under the Union or the State" was held to mean that the civil post must be in the control of the State and that it must be open to the State to 'abolish the post or regulate the conditions of .service.
Although the case concerned a Mali employed in Rai Bhavan, it was held that it was not a post under the State even though the funds of the State were made available for paying, his salary.
In a later case Subodh Ranjan Ghosh vs Sindhri Fertilizers and Chemicals Ltd.( ') the employees of the Sindhri Fertilizers were held not entitled to the protection of article 31 1.
Our brother Ramaswami (then Chief Justice) noticed that the corporation was completely owned by the Union Government; that the Directors were to be appointed by the President of India who could also issue directions.
He nevertheless held that in the eye of law the company was a separate entity and had a separate legal existence.
In our judgment the decision in the Patna case is correct.
It has also the support of a decision re ported in Ram Babu Rathaur vs Divisional Manager, Life Insurance Corporation of India(5) and another in Damodar Valley , 'Corporation vs Provat ROY( ').
Our brother Ramaswami relied (1)Civil Appeals Nos.
512 513 etc.
of 1969 decide on 19.9.1969.
(2) Civil Appeal No. 612 of 1966 decided on February 19, 1969.
(3) (4) A.I.R. 1957 Pat.
(5) (6) LX C.W.N. 1023.
369 in particular upon an English case Tamlin vs Hannaford(1).
In that case it was held in relation to a business that although the minister was really incharge, the corporation was different from.
the Crown and the services of the corporation were not civil services.
Justice P. B. Mukherjee of the Calcutta High Court, to.
whose judgment we referred earlier distinguished the English, case by pointing out certain differences between the Corporation in that case and Hindustan Steel Limited.
He pointed out that (a) in the English Corporation no shareholders were required to, subscribe the capital or to have a. voice in the affair, (b) the capital was raised by borrowing and not by issuance of shares, (c) the loss fell upon the consolidated fund and (d) the corpo ration was non profit making.
In our judgment these differences rather accentuate than diminish the applicability of the principle laid down in the English case to our case.
The existence of shareholders, of capital raised by the issuance of shares, the lack of connection between the finances of the corporation and the consolidated fund of the Union rather make out a greater independent existence than that of the corporation in the English case.
We must, therefore, hold that the corporation which is Hindustan Steel Limited in this case is not a department of the Government nor are the servants of it holding posts under the State.
It has its independent existence and by law relating to Corporations it is distinct even from its members.
In these circumstances, the appellant, who was an employee of Hindustan Steel Limited, does not answer the description of a holder of " a civil post under the Union ' as stated in the article.
The appellant was not entitled to the protection of article 311.
The High,, Court was therefore right in not affording him the protection.
The appeal fails and is dismissed but in the circumstances of the,case we make no order about costs.
G.C. Appeal dismissed. , (1) [1950] 1 K.B.D. 18.
| Sub section (2) of section 3 of the Madras Estates Land (Reduction of Rent) Act XXX of 1947 authorises the State Government to fix the rates of rent payable in respect of each class of ryoti land in each village in the estate after considering the recommendations of the special officer and the remarks of the Board of Revenue thereon and by virtue of section 8(1) no order under this subsection is liable to be questioned in a court of law.
The appellants filed a suit questioning the legality of the notification reducing the rates of rent in respect of the delta dry ryoti lands in a village.
They contended that the class of land had been determined to be delta dry land exclusively on the basis of the settlement register which did not contain any entry with respect to the village in question, that the settlement register could not be considered to be conclusive, and that proper factual inquiry was necessary, because, the determination affected the appellant 's proprietary rights.
The trial court decreed the suit.
The High Court held that the civil courts had no jurisdiction to entertain the suit.
Allowing the appeals, HELD : The Special Officer had an obligation, under section 2 of the Reduction of Rent Act, to determine in respect of a village the average rate of cash rent per acre for each class of ryoti land in existence at the time of the commencement of the Act, such as, wet, dry and garden.
had to be determined on the basis of relevant material.
The Special Officer, however, proceeded to found his determination only on the report of the Special Assistant which only took into account the entry in the settlement register with respect to the soil of another village.
This really meant that the determination of the Special Officer was solely based on the settlement register containing no entry in regard to the village in question.
This material is irrelevant and cannot constitute a rational basis for founding thereon the determination of the Special Officer.
His determination must, therefore, be held to be based on no evidence, with the result that it must be held to be in violation of the fundamental principles of judicial procedure.
A fortiori the order of the Government made under section 3(2) exclusively on the basis of the recommendation of the Special Officer must in consequence be held 10 be not in conformity with the provisions of the Reduction of Rent Act and.
therefore, Outside the purview of section 3(2) of that Act.
Section 8(1) would accordingly be inapplicable and the jurisdiction of civil courts cannot be excluded.
[724 F 725 C] Secretary of State vs Mask and Company, (1940) 67 I.A. 222 and O. K. Mitthuswamy Nudaliar & Ors.
vs State of Madras, C.A. Nos.
1011 1017 '65, dt. 31 7 68.
referred to.
Dhujabhai and Ors.
vs State of Madhya Pradesh & Ors.
; , followed.
|
tion No. 320 of 1987.
(Under Article 32 of the Constitution of India.) Jitender Sharma for the Petitioners.
Kepil Sibal, Ms. Tamali Das Gupta, Ms. J. Wad and Mr. R.Venkataramani (NP) for the Respondent.
The Judgement of the Court was delivered by THOMMEN,J.
This petition has been filed by the D.T.C. Workers ' Union and some its members.
The main relief sought by them, as contained in prayer (a), reads: "Issue a Writ of Mandamus or Direction to the respondent the Delhi Transport Corporation to implement w.e.f. 1.1.86 the recommendations of the Fourth Pay Commission as approved by the Government of India to the Central Government employees as per the undertakings gives to its employees vide Office Order NO.PLD IX(465)/83/10589 dated 15.9.1983 and DGM(IR)/84/93 dated 7.2.1984." The petitioners as well as the respondent, the Delhi Transport Corporation, rely heavily upon the Office Order No. DGM(IR)/84/90 dated 7.2.1984 issued by the Deputy General Manager of the respondent Corporation, although they differ in their construction of what it contains.
We shall, therefore, read the whole Order; 986 ". .
Before Interim Relief was announced by the Central Government for its employees to be paid w.e.f. 1.6.83, the Wage Group constituted by the Government of India for considering the demand regarding revision of pay scales of the employees of the Delhi Transport Corporation gave its report recommending revision of pay scales of all the Class III & IV employees as an interim measure pending receipt of Fourth Pay Commission report.
Thus the revised scales themselves were in the shape of an interim relief.
As interim relief was announced by the Government for its employees almost simultaneously some unions approached the Management opposing the introduction of new scales and asking for the interim relief as at the Government rates.
It was explained to them that the revised scales have a greater in built advantage as the benefit in some cases go even over hundred rupees while interim relief for workers was fifty to seventy rupees.
However, an option was given vide circular No.
PLD IX(465)/83/10589 dated 15.9.83 to the employees of the Corporation either to avail the benefit of interim relief and retain the old pay scales or to avail the benefit of the revised pay scales.
In reference to the clarification sought by the Unions, it was made absolutely clear beyond any ambiguity to the employees that (1) there is absolutely no intention to de link the DTC from the Central Government pay structure and DA pattern arbitrarily or unilaterally; (ii) if the Fourth Pay Commission granted any further interim relief or benefit before the final report, such benefit will be available to the DTC employees; (iii) the differential in the head start now given in the pay scales will be maintained even while implementing the scales recommended by the Fourth Pay Commission and (iv) the payscales recommended by the Working Group would be enforceable for a period of four year or the receipt of report of the Commission whichever is earlier.
It has already been made amply clear that differential in "head start" given in the revised pay scales will be maintained even while implementing the scales recommended by the Fourth Pay Commission.
In fixation of pay in the scales to be recommended by the Foruth Pay Commission, the employees coming over to the revised scales of pay will be given due benefit of Central Government Interim Relief so as to ensure that they are not at any disadvantage because of having opted for the revised scales now.
For instance, if the 987 pay of an individual in the pay scale of Rs.260 400 drawing a basic pay of Rs.260 per month who had opted for interim Relief at Central Government rates is fixed at Rs.310 p.m. by adding Rs.50 as Interim Relief a Basic Pay of Rs.260 whereas the pay of an employee who has opted for corresponding revised pay scale of Rs.284 440 and is drawing Basic pay of Rs.284 p.m. will be fixed at Rs.334 p.m. by adding Rs.50 to his Basic Pay of Rs.284.
In this connection our circular NoPLD IX(465) 83 dated 20.9.93 referees.
It has been clearly shown in the above illustrations as to how the revised pay scales will be beneficial to the employees.
It is opted that the employees will not be mislead now by any such interpretation which is being placed on the Ministry of Finance 's O.M. of 28th November ,1983.
" Referring to the concept of "head start" mentioned in the Order, Mr. Jitender Sharma, appearing for the petitioners, submits that it being the intention of the Corporation to protect the interim relief granted to the employees, not withstanding the recommendations of the Fourth Pay Commission, the employees are entitled to the interim relief, referred to as the "head start", in addition to the pay scale recommended by the Fourth Pay Commission, In other words, according to Mr.Sharma, the employees will be entitled not only to the new pay scale recommended by the Fourth Pay Commission, but more in the shape of interim reliefs which they had enjoyed during the period of the interregnum between their original pay scale and the new payscale.
Mr. Kapil Sibal, appearing for the respondent Corporation, submits that all that the Order dated 7.2.1984 has intended to state is that the "head start" in the form of interim relief will not deprive the employees of the full benefits of either the revised interim pay scale, i.e., the scale as revised during the interregnum, or the new pay scale subsequently introduced as per the recommendations of the Fourth Pay Commission.
The employees had the option either to accept the additional payment in the nature of an interim relief in the sum of Rs.50 or Rs.70 as the case may be, or the revised interim pay scale which was itself in the nature of an interim relief, pending adoption of the new scale recommended by the Fourth Pay Commission.
But once the employees are placed on the scale recommended by the Fourth Pay Commission, all the reliefs which they had earlier received would merge into the new scale and they would have no entitlement to any 988 additional payment.
Any payment in addition to what the Fourth Pay Commission recommended would place the employees of the Corporation at an undue advantage in comparison to the employees of the Government in Corresponding grades.
Any such deferential treatment, counsel points out, will be discriminatory and, therefore, unsustainable.
Mr. Sharma, however, refers to the scales of pay relating to the category of conductors, tailors,compositors etc.
Their scale of pay prior to June, 1983 was Rs.260 6 290 EB 6 326 EB 8 390 10 400.
A revised interim scale was introduced on 1.6.1983.
This scale was Rs.284 8 340 10 440.
On 1.1.86, a new scale was introduced on the basis of the recommendations of the Fourth Pay Commission.
That scale is Rs.950 20 1150 EB 25 1500.
This shows that, prior to 1.1.1986, an employee on the scale of Rs.260 400 as on 31.5.1983 had the option either to remain on that scale and draw an additional allowance or be placed on the revised interim scale of Rs.284 440 .
On 1.1.1986 all employees in the category of conductors etc., came on the scale of Rs.950 1500 whether or not, prior to that date, they had, in exercise of their option, remained on the original scale or Rs.260 400 with the additional allowances or been placed on the revised interim scale Rs.284 440.
According to Mr. Sharma, the "head start" promised by the Corporation means the additional allowances or revised scales recieved by the employees during the interregnum, and such benefits have to be super imposed over the new scale of Rs.950 1500.
He further submits, insofar as none of the employees of the Corporation had opted to remain on the original scale with the additional allowances, but had come on the revised interim pay scale, all the employees brought on the new pay scales on 1.1.86 are entitled to be fitted with reference to the total emoluments drawn on the revised interim scale.
A careful reading of the Order dated 7.2.1984 shows that certain interim benefits were granted to the employees preceding the introduction of the new pay scale on the basis of the recommendations of the Fourth Pay commission.
These benefits which were either in the nature of an additional payment or a revised interim pay scale were intended to cover the period preceding the introduction of the regular pay scale which came into effect on 1.1.86.
The Order further shows that the Corporation was to carry the same pay structure and DA pattern as in the case of the Government employees in the corresponding categories.
All benefits granted by the Fourth Pay Commission in the nature of interim reliefs were also to be made available to the 989 Corporation employees.
The interim reliefs granted by the Corporation in the nature of what is imprecisely referred to as "head start" were to be maintained in implementing the scales recommended by the Fourth Pay Commission.
The figures worked out in the penultimate paragraph of the Report indicate that whether the employees were retained on the original pay scale with the additional emoluments by way of interim relief or they had, as in the instant case, opted for the revised interim scale, they should suffer no loss by reason of the option they hadexercised.
But the overriding consideration behind the Other dated 7.2.1984 is that, as in the case of all Government employees, so in the case of the Corporation employees, the new scale recommended by the Fourth Pay Commission should be fully implemented.
What ever may be the amounts actually payable in terms of the interim reliefs, the employees of the Corporation should neither be paid less nor more than the Government employees in the corresponding categories.
This means that all employees, whether retained on the original pay scale or placed on the revised interim pay scale during the period preceding 1.1.86 will be placed on the pay scale adopted as per the recommendations of the Fourth Pay Commission in such a way that they will be fitted exactly in positions corresponding to their positions on the earlier pay scales.
But the corresponding positions in the new pay scales will naturally carry better emoluments, so as to maintain parity with the Government employees in like categories.
In the circumstances, we have no doubt that the recommendations of the Fourth Pay Commission will be fully implemendted in terms thereof.
Mr. Kapil Sibal, appearing for the Corporation, assures us that it will be so done.
Mr. Sibal 's submission is recorded.
In the circumstances, no further order is required.
The writ petition is accordingly disposed of.
No costs.
R.N.J. Pentition disposed of.
| The 4 appellants along with 11 others were tried for murder and for causing injuries.
The learned sessions judge while acquitting all others of all the charges, convicted A 1, A 2, A 5 and A 1 on different counts.
The sentences awarded to them under various charges including the sentence of life imprisonment under section 302 IPC were ordered to run concurrently.
The convicted accused preferred appeal to the High Court against their conviction and sentences and the State appealed against the acquittal of the rest of the accused.
The High Court altered the convection of A 1 and A 2 under section 302 I.P.C. and 302 read with section 34 respectively into one under section 302 read with section 149 I.P.C. and confirmed the sentence for imprisonment for life.
Except for this modification the convictions and sentences in respect of all the four accused were confirmed.
The state appeal against acquittal of all other accused was dismissed.
In this appeal preferred by the four convicted accused namely, A 1, A 2, A 5 and A 11 their counsel confined his arguments against their convictions and sentences under section 302 read with section 149 I.P.C. only as the appellants had either already served or had almost finished serving to their sentences awarded to them under other charges.
876 The argument was that in the absence of a specific finding to the effect that apart from the 4 appellants the prosecution has proved the involvement of other persons, section 149 I.P.C. cannot be invoked for convicting them under section 302 I.P.C. Confirming the convictions and sentences of the appellants under other charges but allowing their appeal against their conviction and sentence under section 302 I.P.C. read with section 149 I.P.C. this Court, HELD: Since the accused who are convicted were only four in number and the prosecution has not proved the involvement of other persons and the court below have acquitted the other accused of all the offences, section 149 cannot be invoked for convicting the four appellants herein.
The learned judges were not correct in stating that A1, A2, A5 and A11 can be held to be the members of an unlawful assembly along with some other unidentified persons on the facts and circumstances of this case.
The charge was not that accused 1,2,5 and 11 "and others" or "and other unidentified persons" formed into an unlawful assembly but it is that "you accused 1 to 15" formed into an unlawful assembly.
It is not the prosecution case that apart from the said 15 persons there were other persons who were involved in the crime.
When the 11 other accused were acquitted it means that their involvement in the offence had not been proved.
It would not also be permissible to assume or conclude that others named or unnamed acted conjointly with the charged accused in the case unless the charge itself specifically said so and there was evidence to conclude that some others also were involved in the commission of the offence conjointly with the charged accused in furtherance of a common object.
[882A D] Amar Singh vs State of Punjab, [1987] 1SCC 679 and Maina Singh vs State of Punjab, [1976]3SCR 651, followed.
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