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iminal Appeal No. 38 of 1965.
141 Appeal by special leave from the judgment and order dated July 28, 1964 of the Punjab High Court (Circuit Bench) in Criminal Appeal No. 40 D of 1963.
section N. Prasad, for the appellant.
H. R. Khanna and section P. Nayyar, for the respondent.
The Judgment of the Court was delivered by Bachawat, J.
The Additional Sessions Judge, Delhi, convicted the appellant under sec.
302 of the Indian Penal Code and sentenced him to undergo imprisonment for life.
The Judge also convicted the appellant under sec.
324 of the Indian Penal Code, sentenced him to undergo six months rigorous imprisonment and directed that the two sentences would run concurrently.
An appeal was filed in the High Court of Punjab.
The High Court dismissed the appeal.
The appellant has filed this appeal after obtaining special leave.
The appellant lives at Sat Nagar in Delhi.
On November 25, 1961 at 1.45 p.m. he entered the house of his neighbour Somawati and stabbed her daughter Leela aged 1 1/2 years with a knife.
He inflicted five stab wounds, one on the back trunk, one on the right gluteal region, two on the right thigh and one on the chest.
The injury on the back of trunk, proved fatal.
Leela died in the hospital at 4 p.m.
The appellant then returned to his house and bolted the front door.
A crowd collected near the front door and raised an alarm.
After some time the appellant went out by the back door and stabbed another neighbour Parbati and then Raghubir who tried to intervene on her behalf.
The injuries were simple incised wounds Rabhubir and others tried to apprehend him.
He then ran back to his house, bolted the door and started throwing brickbats from the roof.
He was later arrested by the police.
All these facts are proved by unimpeachable evidence.
One Dhani Ram was the father of Leela.
Dhani Ram, his wife Somawati, his daughter Leela and his brother Baburam lived together in the same house.
Indra is the appellant 's sister.
The, appellant and his father suspected that Baburam was prone to making illicit approaches to Indra.
On this account, the appellant had a long standing grudge against Baburam.
This enmity is said to be the motive of the attack by the appellant on Leela, a member of the family of Baburam.
The motive for the attack on Parbati is not clear.
Raghubir was attacked because he tried to intervene.
The defence plea was of insanity.
The Additional Sessions Judge and the High Court concurrently rejected this defence.
142 We may briefly notice the evidence bearing on the plea of insanity.
Since 1958 the appellant was an employee in the Stores Branch of the Northern Railway Headquarters in Baroda House, New Delhi.
In 1958 and 1959 he had altercations with other clerks in the office.
On May 20, 1959 his superior officer observed that he was prone to, lose temper in no time.
In his moments of excitement he became dangerous and used to hit his colleagues with anything that he could lay his hands on.
But at the time of his greatest excitement he could distinguish between right and wrong.
After May 1959 he worked at his desk as a normal man.
In March 1960 he again quarrelled with another clerk.
He was suspended and sent for medical examination.
At this stage he was suffering from mental illness.
On October 12.
1960 he was examined by a psychiatrist who found that he exhibited symptoms of acute schizophrenia and showed disorder of thought, emotion and perception of external realities.
The psychiatrist said that he was harbouring certain delusions.
The nature of the delusions is not stated.
It is not proved that the appellant suffered from any particular delusion or hallucination.
The appellant was put on a drug named largactil and was given convulsive electrotherapy treatment.
On January 12, 1961 he was cured of his illness and was advised to join his duties.
On resuming his duties the appellant worked in the office in the normal manner.
There is some evidence that on the morning of November 25. 1961 and the preceding night, the appellant complained that he was unwell and took medicine.
But on the morning of November 25, he went to his office as usual.
He was late in attendance and was marked absent.
He applied in writing for one day 's casual leave stating that he had an urgent piece of work at home.
Nobody noticed any symptoms of mental disorder at that time.
He left the office at about 11.30 a.m. and returned home alone.
At 1.45 p.m. he stabbed Leela, Parbati and Raghubir with a knife.
He concealed the knife and a search for it has proved fruitless.
At 2.45 p.m. the investigating officer arrived on the spot, arrested the appellant and interrogated him.
He was then found normal and gave intelligent answers.
On the same date he was produced before a Magistrate.
His brother was then present but the Magistrate was not informed that he was insane.
On November 27, he was interrogated by an Inspector.
It does not appear that he was then insane.
On November 30, the appellant 's brother filed an application before the committing magistrate stating that the appellant was insane at the time of the occurrence.
The appellant was later remanded to judicial custody.
On receipt of another application from his brother he was kept under medical observation from December 16 to December 23.
On December 19 the medical 143 officer noted that the appellant was indifferent to his surroundings and personal cleanliness, preoccupied in his thoughts muttering to himself, making meaningless gestures, losing track of conversations, given to delayed and repetitive answers and unable to give detailed account of incidents leading to his arrest.
On Decemher 23, he was declared to be a lunatic though not violent.
The psychiatrist noted that the appellant had a relapse of schizophrenia and was suffering from disorder of thought, emotion and loss of contact with realities.
From his attitude and manner of talk he was found to be aggressive.
On September 6, 1962 the psychiatrist reported that the appellant was cured and was in a position to understand proceedings in court.
The commitment order was made on January 4, 1963.
The trial started in February 1963.
The appellant was sane at the time of the trial.
The group of ailments dubbed schizophrenia is discussed in James D. Page 's Abnormal Psychology, Ch.
XI, pages 236 to 261 and Modi 's Medical Jurisprudence and Toxicology, 14th ed., pages 349 to 401.
Schizophrenia is a general term referring to a group of severe mental disorders marked by a splitting or disintegration, of the personality.
The most striking clinical features include general psychological disharmony, emotional impoverishment, dilapidation of thought processes, absence of social rapport, delusions, hallucinations and peculiarities of conduct.
The question is whether the appellant is criminally responsible for the acts done on November 25, 1961.
Section 84 of the Indian Penal Code says : "Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable of knowing the nature of the act, or that he is doing what is either wrong or contrary to law." To establish that the acts done are not offences under sec.
84 it must be proved clearly that at the time of the commission of the act the appellant by reason of unsoundness of mind was incapable of either knowing that the acts were either morally wrong or contrary to law.
The question is whether the appellant was suffering from such incapacity at the time of the commission of the acts.
On this question, the state of his mind before and after the crucial time is relevant.
There is evidence of a medical character that between October 12, 1960 and January 12, 1961 he was suffering from schizophrenia.
He was completely cured of this disease, on January 12, 1961 when he resumed his normal duties.
He had another attack of this disease in the middle of December 1961.
The attack lasted till September 1962 when he was found to be normal again.
But it is to be observed that the defence witnesses do not say that even during these two periods the appellant was incapable of discriminating between right and 144 wrong or of knowing the physical nature of the acts done by him.
After the appellant was cured of the disease on January 12, 1961 he was found to be normal.
He had a highly strung tem perament and was easily excitable.
But there is positive evidence that even at the moment of his greatest excitement he could distinguish between right and wrong.
From January 12, upto November 24, 1961 he attended his office and discharged his duties in a normal manner.
On the morning of November 25, 1961 his mind was normal.
He went to and from his office all alone.
He wrote a sensible application asking for casual leave for one day.
At 1.45 p.m. he stabbed and killed a child and soon thereafter he stabbed two other persons.
On his arrest soon after 2.45 p.m. he gave normal and intelligent answers to the investigating officers.
Nothing abnormal in him was noticed till December 16, 1961.
The thing in favour of the appellant is that though he had a motive for attacking Baburam, no clear motive for attacking the child Leela or Parbati is discernible.
But there is clear evidence to show that he knew that his act of stabbing and killing was wrong and contrary to law.
He concealed the weapon of offence.
The knife could not be recovered in spite of searches.
He bolted the front door of his house to prevent arrest.
He then tried to run away by the back door.
When an attempt was made to apprehend him he ran back to his house and bolted the door.
He then tried to disperse the crowd by throwing brickbats from the, roof.
His conduct immediately after the occurrence displays consciousness of his guilt.
He knew the physical nature of stabbing.
He knew that the stabbing would kill and maim his victims.
On a comprehensive review of the entire evidence the two courts below concurrently found that the defence of insanity under sec.
84 was not made out.
We are unable to say that the verdict of the courts below is erroneous.
If a person by reason of unsoundness of mind is incapable of knowing the nature of the act or that he is doing what is either wrong or contrary to law he cannot be guilty of any criminal intent.
Such a person lacks the requisite mens rea and is entitled to an acquittal.
But it is not established in the present case that the appellant was suffering from this incapacity.
The general burden is on the prosecution to prove beyond reasonable doubt not only the actus reus but also the mens rea.
The prosecution satisfactorily discharged this burden.
The appellant was not insane at the time of the killing and stabbing and he knew the consequences of those acts.
We must hold that he is criminally responsible for the acts.
In the result, the appeal is dismissed.
R.K.P.S. Appeal dismissed.
| From 1958 the, appellant was a Railway employee and often lost his temper and had altercations with other clerks in the office.
In October 1960 he was found to be suffering from a mental illness as he exhibited symptom of acute schizophrenia and showed disorder of thought, emotion and perception of external realities.
He was treated for and was cured of this illness by July 1961 when he resumed his duties.
On the morning of November 25, he went to office as usual but as he was late in attendance, he was marked absent. 'He applied in writing for one day 's casual leave and returned home.
No one noticed any symptoms of any mental disorder at that time.
Just after 1 o 'clock he entered his neighbour 's house and stabbed and killed a girl 1 1/2 year old and later also stabbed and injured two other persons with a knife.
He was thereafter arrested and interrogated on the same day when he gave normal and intelligent answers.
After his arrest and upon a medical examination, the appellant was declared to be lunatic though not violent and the psychiatrist found that he had had a relapse of schizophrenia.
On September 6, 1962, he was ,reported as cured and was thereafter committed for trial ,in February 1963.
The trial court convicted him under sections 302 ' and 324 of the Indian Penal Code and sentenced him to life imprisonment.
During the trial and in the subsequent appeal to the High Court, the ,defence plea was one of insanity which was concurrently rejected by both Courts.
On appeal to this Court by special leave.
HELD: dismissing the appeal: The appellant was not insane at the time of the killing and stabbing and knew the consequences of his acts.
He must therefore be held ,criminally responsible for his acts.[144 H] To establish that the acts done were not offences under section 84 it must be proved clearly that at the time of the commission of the acts the appellant, by reason of unsoundness of mind, was incapable of knowing that the acts were either morally wrong or contrary to law.
There was clear evidence that on the morning of November 25 the appellant 's mind was normal and also that he knew that his act of stabbing and killing was contrary to law.
He concealed the weapon of offence.
He bolted the front door of his house to prevent arrest.
He then tried to run away by the back door.
When an atttempt was made to apprehend him he an back to his house and bloted the door.
He then tried to disperse the crowd by throwing brickbats from the roof.
His conduct immediately after he occurrence displaced consciousness of his guilt.
|
Appeal No. 153 of 1956.
Appeal from the judgment and order dated November 3, 1954, of the Punjab High Court in Civil Writ No. 253 D of 1954.
Veda Vyasa, section K. Kapur, K. K. Jain and Ganpat Rai, for the appellant.
H. N. Sanyal, Additional Solicitor General of India, H. R. Khanna and T. M. Sen, for the respondents.
935 1960.
October 3.
The Judgment of the Court was delivered by SUBBA RAO J.
This appeal by certificate is directed against the order of the High Court of Judicature of the State of Punjab dismissing the petition filed by the appellant under article 226 of the Constitution.
The facts giving rise to this appeal may be briefly stated.
The appellant is at present a resident of Barmer in the State of Rajasthan.
But before 1947 he was living in a place which is now in Pakistan.
On June 22, 1951, the Deputy Superintendent, Land Castoms Station, Barmer, conducted a search of the appellant 's house and recovered therefrom the following ten articles : Articles seized.
Weight Estimated value.
Rs. 1.
Silver slab.
2600 tolas 5,200/ 2. 29 Sovereigns 2,262/ (King Ed. VII).
3. 9 pieces of gold bullion 201 tolas and 9 mashas.
22,193/ 4.
4 pieces of silver bullion 114 tolas.
230/ 5.
Uncurrent silver coins numbering 575.
865/ 6.
Gold bars.
49 tolas and 9 mashas 5,475/ 7.
255 Phials of liquid gold.
9,875/ 8.
Torches 23. 9.
Playing cards 3 Dozens 400/ 10.Glass beads 48 packets.
Total. 46,500/ On July 14, 1951 the Assistant Collector, Ajmer, gave notice ' to the appellant to show cause and explain why the goods seized from him should not be confiscated under section 167(8) of the Sea Customs Act and section 7 of the .
The appellant in his reply 936 stated that items to 5 supra were brought by him from Pakistan after the partition of the country in 1947 and that items 6 to 10 were purchased by him bonafide for value in Barmer.
On October 27, 1951, the appellant appeared before the Collector of Central Excise, who made an enquiry, and admitted before him that items 6 to 10 were smuggled goods from Pakistan, but in regard to the other items be reitera ted his plea that he originally brought them from Pakistan in the year 1947.
The Collector of Central Excise held that the appellant bad failed to establish that items 1 to 5 had been brought by him to India in the year 1947 and he also did not accept the plea of the appellant in regard to items 6 to 10 that he was a bonafide purchaser of them.
In the result he held that all the goods were imported into India in contravention of, (i) section 3 of the Import Export Control Act read with sections 19 and 167(8) of the Sea Customs Act, (ii) sections 4 and 5 of the read with section 7 thereof.
He made an order of confiscation of the said articles under section 167(8) of the Sea Customs Act and section 7 of the ; but under section 183 of the Sea Customs Act he gave him an option to redeem the confiscated goods within four months of the date of the order on payment of a sum of Rs. 25,000.
In addition he imposed a penalty of Rs. 1,000 and directed the payment of import duty leviable on all the items together with other charges before the goods were taken out of customs control.
Aggrieved by the said order, the appellant preferred an appeal to the Central Board of Revenue.
The Central Board of Revenue agreed with the Collector of Central Excise that the onus of proving the import of the goods in question was on the appellant.
In regard to items 1 to 5, it rejected the plea of the appellant mainly on the basis of a statement alleged to have been made by him at the time of seizure of the said articles.
In the result the appeal was dismissed.
The revision filed by the appellant to the Central Government was also dismissed on August 28, 1953.
Thereafter the appellant filed a writ petition under article 226 of the Constitution in the High Court 937 of Punjab but it was dismissed by a division bench of the High Court on November 3, 1954.
Hence this appeal.
It would be convenient to deal with this appeal in two parts one in regard to items 1 to 5 and the other in regard to items 6 to 10.
The decision in regard to items 1 to 5 turns purely on the question of onus.
The Collector of Central Excise as well as the Central Board of Revenue held that the onus of proving the import of the goods lay on the appellant.
There is no evidence adduced by the customs authorities to establish the offence of the appellant, namely, that the goods were smuggled into India after the raising of the customs barrier against Pakistan in March 1948.
So too, on the part of the appellant, except his statement made at the time of seizure of the goods and also at the time of the inquiry that he brought them with him into India in 1947, no other acceptable evidence has been adduced.
In the circumstances, the question of onus of proof becomes very important and the decision turns upon the question on whom the burden of proof lies.
This Court has held that a customs officer is not a judicial tribunal and that a proceeding before him is not a prosecution.
But it cannot be denied that this relevant provisions of the Sea Customs Act and the are penal in character.
The appropriate customs authority is empowered to make an inquiry in respect of an offence alleged to have been committed by a person under the said Acts, summon and examine witnesses, decide whether an offence is committed, make an order of confiscation of the goods in respect of which the offence is committed and impose penalty on the person concerned ; see sections 168 and 171A of the Sea Customs Act and sections 5 and 7 of the .
To such a situation, though the provisions of the Code of Criminal Procedure or the Evidence Act may not apply except in so far as they are statutorily made applicable, the fundamental principles of criminal jurisprudence and of natural justice must necessarily apply.
If so, the burden of proof is on the customs authorities and they have to 938 bring home the guilt to the person alleged to have committed a particular offence under the said Acts by adducing satisfactory evidence.
In the present case no such evidence is forthcoming; indeed there is no tittle of evidence to prove the case of the customs authorities.
But it is said that the onus shifted to the appellant for three reasons, namely, (i) by reason of the provisions of section 178A of the Sea Customs Act; (ii) by reason of section 5 of the ; and (iii) by reason of section 106 of the Evidence Act.
Section 178A of the Sea Customs Act does not govern the present case, for that section was inserted in that Act by Act No. XXI of 1955 whereas the order of confiscation of the goods in question was made on January 18, 1952.
The section is prospective in operation and cannot govern the said order.
Nor does section 5 of the apply to the present case.
Under section 5(1) of the said Act, "Every person desiring to pass any goods by land, out of or into any foreign territory shall apply in writing for a permit for the passage thereof, to the Land Customs Officer incharge of a land customs Station By sub section
(2) of section 5 of the said Act, if the requisite duty has been paid or the goods have been found by the Land Customs Officer to be free of duty, the Land Customs Officer is empowered to grant a permit.
Under sub section
(3) thereof, " Any Land Customs Officer, duly empowered by the Chief Customs authority in this behalf, may require any person in charge of any goods which such Officer has reason to believe to have been imported, or to be about to be exported, by land from, or to, any foreign territory to produce the permit granted for such goods; and any such goods which are dutiable and which are unaccompanied by a permit or do not correspond with the specification contained in the permit produced, shall be detained and shall be liable to confiscation." This section has no bearing on the question of onus of proof.
This section obviously applies to a case where a permit is required for importing goods by land from a foreign country into India and it empowers the Land Customs Officer, who has reason to believe that any 939 goods have been imported by land from any foreign territory, to demand the permit and to verify whether the goods so imported correspond with the specification contained in the permit.
If there was no permit or if the goods did Dot correspond with the specification contained in the permit, the said goods would be liable to be detained and confiscated.
The application of this section is conditioned by the legal requirement to obtain a permit.
If no permit is necessary to import goods into India, the provisions of the section cannot be attracted.
In the present case the customs barrier was established only in March, 1948, that is, after the said items of goods are stated by the appel lant to have been brought into India.
We cannot also accept the contention that by reason of the provisions of section 106 of the Evidence Act the onus lies on the appellant to prove that he brought the said items of goods into India in 1947.
Section 106 of the Evidence Act in terms does not apply to a proceeding under the said Acts.
But it may be assumed that the principle underlying the said section is of universal application.
Under that section, when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him.
This Court in Shambu Nath Mehra vs The State of Ajmer (1), after considering the earlier Privy Council decisions on the interpretation of section 106 of the Evidence Act, observed at p. 204 thus: "The section cannot be used to undermine the well established rule of law that, save in a very exceptional class of case, the burden is on the prosecution and never shifts." If section 106 of the Evidence Act is applied, then, by analogy, the fundamental principles of criminal jurisprudence must equally be invoked.
If so, it follows that the onus to prove the case against the appellant is on the customs authorities and they failed to discharge that burden in respect of items 1 to 5.
The order of confiscation relating to items 1 to 5 is set aside.
Before closing this aspect of the case, some observations have to be made in respect of the manner in (1) ; 940 which the statement given by the appellant when the goods were seized was used against him by the customs authorities.
It would be seen from the order of the Collector of Central Excise as well as that of the Central Board of Revenue that they had relied upon the statement alleged to have been made by him at the time the search was made in his house in order to reject his case that he brought some of the items of goods into India in the year 1947.
The appellant in his reply to the show cause notice complained that his statement was taken in English, that he did not know what was recorded and that his application for inspection and for the grant of a copy of his statement was not granted to him.
It does not appear from the records that he was given a copy of the statement or that he was allowed to inspect the same.
In the circumstances we must point out that the customs authorities were not justified to rely upon certain, alleged discrepancies in that statement to reject the appellant 's subsequent version.
If they wanted to rely upon it they should have given an, opportunity to the appellant to inspect it and, at any rate, should have supplied him a copy thereof.
Coming to items 6 to 10, we have no reason to reject, as we have been asked to do, the statement made in the order of the Collector of Central Excise dated October 27, 1951, that the appellant accepted that items 6 to 10 were smuggled goods from Pakistan.
It would have been better if the customs authorities had taken that admission in writing from the appellant, for that would prevent the retraction of the concession on second thoughts.
That apart, it is more satisfactory if a body entrusted with functions such as the customs authorities are entrusted with takes that precaution when its decision is mainly to depend upon such admission.
But in this case, having regard to the circumstances under, and the manner in, which the said concession was made, we have no reason to doubt the correctness of the statements of fact in regard to this matter made in the orders of the customs authorities.
If so, it follows that the finding of the customs authorities that the appellant purchased the said items, which were smuggled goods, should 941 prevail.
The order of confiscation of these five items will, therefore, stand.
Even so, it is contended by the learned counsel for the appellant that the customs authorities went wrong in imposing a penalty on him under section 167(8) of the Sea Customs Act.
The said section reads: " If any goods, the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction. . such goods shall be liable to con fiscation; and any person concerned in any such offence shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding one thousand rupees." The appellant 's argument is that though he purchased the said smuggled goods he is not concerned with the importation of the goods contrary to the prohibition or restriction imposed by or under Ch.
IV of the Sea Customs Act.
The 'offence consists in importing the goods contrary to the prohibition and, therefore, the argument proceeds, a person, who has purchased them only after they were imported, is not hit by the said section.
There is some force in this argument, but we do not propose to express our final view on the matter as the appellant is liable to the penalty under section 7(1)(c) of the .
The said section reads: " Section 7 (1): Any person who (c)aids in so passing or conveying any goods, or, knowing that any goods have been so passed or conveyed, keeps or conceals such goods, or permits or procures them to be kept or concealed, shall be liable to a penalty not exceeding, where the goods are not dutiable, fifty or, where the goods or any of them are dutiable, one thousand rupees, and any dutiable goods in respect of which the offence has been committed shall be liable to confiscation.
" In this case the finding is that the appellant with the 120 942 knowledge that the goods had been smuggled into India kept the goods, and, therefore, he was liable to penalty under that section.
We hold that the penalty was rightly imposed on him.
It is then contended that the Collector of Central Excise had no jurisdiction to impose conditions for the release of the confiscated goods.
The Collector of Central Excise in his order says, " In addition the import duty leviable on all these items together with other charges, if any payable, should be paid and necessary formalities gone through before the goods can be passed out of Customs Control ".
In Shew.
pujanrai Indrasanrai Ltd. vs The Collector of Customs (1), a similar question arose for consideration of this Court.
There by an impugned order the Collector of Customs imposed two conditions for the release of the confiscated goods, namely, (1) the production of a permit from the Reserve Bank of India in respect of the gold within four months from the date of despatch of the impugned order, and (2) the pay ment of proper customs duties and other charges leviable in respect of the gold within the same period of four months.
This Court held, agreeing with the High Court, that the Collector of Customs had no jurisdiction to impose the said two conditions.
The learned Additional Solicitor General concedes that the said decision applies to the present case.
We do not, therefore, express any view whether that decision can be distinguished in its application to the facts of the present case.
On the basis of the concession we hold that the conditions extracted above, being severable from the rest of the order, should be deleted from the said order of the Collector of Central Excise.
Learned counsel for the appellant then argues that the option given in the said order to the appellant to redeem the confiscated goods for home consumption within four months of the order on payment of Rs. 25,000 was based upon the validity of the confiscation of all the ten items and, as this Court now holds that confiscation was bad in respect of items 1 (1) ; 943 to 5, the amount of the penalty of Rs. 25,000 should proportionately be reduced.
There is justification for this contention.
But we cannot reduce the amount, as under section 183 of the Sea Customs Act the amount has to be fixed by the concerned officer as he thinks fit.
But as the basis of the order partially disappears, we give liberty to the appellant to apply to the customs authorities for giving him an option to redeem the confiscated goods on payment of a lesser amount, having regard to the changed circumstances.
In the result, the appeal is allowed in part and the order of the Collector of Central Excise is accordingly modified in terms of the finding given by us.
As the parties succeeded and failed in part, they are directed to bear their own costs.
Appeal partly allowed.
| The respondent a firm carrying on business in Singapore filed a plaint in the firm name against the appellants for the breach of contract.
The plaint had been signed and verified on behalf of the firm by one 'D ' on a power of attorney executed by one of the partners only.
After about, 6 years the respondents made an application for the amendment of the plaint.
The amendment sought was to the effect that the name of the firm as plaintiff be struck off, as it was a misdescription and in its place and stead the names of five partners of the firm should be brought on record in order to bring the controversy between the proper parties into clear relief.
The amendment petition was rejected, inter alia, on the grounds that the original plaint was no plaint in law and it was not a case of misnomer or misdescription, nor a case of a nonexistent firm or a non existent person, but a legal bar, as the plaint was a nullity.
The proper course when there is such a mistake is not to amend disregarding the condition of 0.
i r. 10 of the Code of Civil Procedure but to seek the Court 's permission to withdraw the suit with liberty to file a fresh suit under 0.
23 r. i of the Civil Procedure Code on the ground of formal defect and which should be done before limitation.
In appeal the High Court came to the conclusion that the description of a plaintiff by a firm name in a case where the Code of Civil Procedure does not permit a suit to be brought in the firm name should properly be considered a case of description of the individual partners of the business and as such a misdescription, which in law can be corrected and should not be considered to amount to a description of non existent person.
It also rejected the contention that the power of attorney in favour of D was insufficient.
983 Held, that the word, ' firm" or the "firm name " in section 4 Of the Indian Partnership Act is merely a compendious description of all the partners collectively.
Where a suit is filed in the name of a firm it is still a suit by all the partners of the firm unless it is proved that all the partners had not authorised the suit.
The provision of 0.
XXX r. 1 & 2 of the Code of Civil Pro cedure are enabling provisions to permit several firms who are doing business as partners to sue or be sued in the name of the firm and do not prevent the partners of a firm from suing or being sued in their individual names, nor do they prohibit the partners of a firm suing in India in their names individually although they may be doing business outside India; since a firm is not a legal entity the privilege of suing in the name of a firm is permissible only to those persons, who as partners are doing business in India.
Such privilege is not extended to persons who are doing business as partners outside India.
In their case they still have to sue in their individual names.
If however, under some misapprehension, persons doing business as partners outside India do file a plaint in the name of their firm they are misdescribing themselves, as the suit instituted is by them, they being known collectively as a firm.
A plaint filed in a court in India in the name of a firm doing business outside India is not by itself a nullity.
It is a plaint by all the partners of the firm with a defective description of themselves for the purpose of the Code of Civil Procedure.
A civil court could permit under provisions of section 153 of the Code an amendment of the plaint to enable a proper description of the plaintiffs to appear in it in order to assist the court in determining the real question or issue between the parties.
Neither r. 10(i) nor r. 10(2) of Order I have any application to a case of this kind, as the suit had been from its very inception a suit by the partners of the firm and no question of adding or substituting any person arises, the partners collectively being described as a firm with a particular name.
Held, further, that it is not necessary that the power of attorney should be signed by all the partners of the firm.
A partner is an agent of the firm and there is no prohibition to a partner executing a power of attorney in favour of an individual authorising him to institute a suit on behalf of the firm.
Vyankatesh Oil Mill Co. vs Velamahomed, A.I.R. 1928 Bom.
191, disapproved.
Amulakchand Mewaram vs Babulal Kanalal, A.I.R. 1933 Bom.
304, Sadler vs Whiteman, , Mura Mohideen vs V.O.A. Mohomed, A.I.R. 1955 Mad.
294 and Kasturchand Bahiravdas vs Sagarmal Shriyam, Bom.
413, discussed.
Hajee Sattar Hajee Peer Mohomad vs Khusiram Benarsilal, I.L.R. , referred to. 984
|
Criminal Appeal No. 5 of 1951.
Appeal from the Judgment and Order dated 18th August, '1950, of the High Court of Judicature for Rajasthan at Jaipur (Nawal Kishore C.J. and Dave J.) in Criminal Reference No. 229 of Sambat 2005.
H. J. Umrigar for the appellant.
G. C. Mathur for the respondent.
111 1951.
September 24.
The Judgment of the Court was delivered by Bose J.
The appellant was convicted under section 7 of the Jaipur Opium Act and fined Rs. 50.
The case as such is trivial but the High Court of Rajasthan in Jaipur granted special leave to appeal as an important point touching the vires of the Act arises.
We will state the facts chronolog ically.
It is conceded that the Rulers of Jaipur had full powers of government including those of legislation.
On the 7th of September, 1922, the late Maharaja died and at the time of his death his successor, the present Maharaja, was a minor.
Accordingly, the Crown Representative appointed a Council of Ministers to look after the government and administration of the State during the Maharaja 's minority On the 11th of December, 1923, this Council passed a Resolution which purported to enact the Jaipur Opium Act, and the only question is whether the mere passing of the Resolution without promulgation or publication in the Ga zette, or other means to make the Act known to the public, was sufficient to make it law.
We are of opinion that it was not.
But before giving our reasons for so holding, we will refer to some further facts.
About the same time (that is to say, in the year 1923 we have not been given the exact date) the same Council enacted the Jaipur Laws Act, 1923.
Section 3(b) of this Act provided as follows : "3.
Subject to the prerogative of the Ruler the law to be administered by the Court of Jaipur State shall be as follows: (b) All the regulations now in force within the said territories, and the enactments and regulations that may hereafter be passed from time to time by the State and published in the Official Gazette.
" This law came into force on the 1st of November, 1924.
It is admitted that the Jaipur Opium Act was never published in the Gazette either before or after the 1st of November, 1924.
But it is contended that was 112 not necessary because it was a "regulation" already in force on that date.
The only other fact of consequence is that on the 19th of May, 1938, section 1 of the Jaipur Opium Act was amended by the addition of sub section (c) which ran as follows: "(c) It shall come into force from the 1st of September, 1924.
" The offence for which the appellant was convicted took place on the 8th of October, 1948.
Dealing first with the last of these Acts, namely the one of the 19th of May, 1938, we can put that on one side at once because, unless the Opium Act was valid when made, the mere addition of a clause fourteen years later stating that it shall come into force at a date fourteen years earlier would be useless.
In the year 1938 there was a law which required all enactments after the 1st of November, 1924, to be published in the Gazette.
Therefore, if the Opium Act was not a valid Act at that date, it could not be validated by the publication of only one section of it in the Gazette fourteen years later.
The Jaipur Laws Act of 1923 required the whole of the enactment to be published; therefore publi cation of only one section would not validate it if it was not already valid.
We need not consider whether a law could be made retroactive so as to take effect from 1924 by publi cation in 1938, though that point was argued.
That throws us back to the position in 1923 and raises the question whether a law could be brought into operation by a mere resolution of the Jaipur Council.
We do not know what laws were operative in Jaipur re garding the coming into force of an enactment in that State.
We were not shown any, nor was our attention drawn to any custom which could be said to govern the matter.
In the absence of any special law or custom, we are of opinion that it would be against the principles of natural justice to permit the subjects of a State to be punished or penalised by laws of which they had no knowledge and of which they could not even with the exercise of reasonable diligence have acquired any knowledge.
Natural justice requires that 113 before a law can become operative it must be promulgated or published.
It must be broadcast in some recognisable way so that all men may know what it is; or, at the very least, there must be some special rule or regulation or customary channel by or through which such knowledge can be acquired with the exercise of due and reasonable diligence.
The thought that a decision reached in the secret recesses of a chamber to which the public have no access and to which even their accredited representatives have no access and of which they can normally know nothing, can nevertheless affect their lives, liberty and property by the mere passing of a Resolution without anything more is abhorrent to civilised man.
It shocks his conscience.
In the absence therefore of any law, rule, regulation or custom, we hold that a law cannot come into being in this way.
Promulgation or publica tion of some reasonable sort is essential.
In England the rule is that Acts of Parliament become law from the first moment of the day on which they receive the Royal assent, but Royal Proclamations only when actually published in the official Gazette.
See footnote (a) to paragraph 776.
page 601, of Halsbury 's Laws of England (Hailsham edition), Volume VI and 32 Halsbury 's Laws of England (Hailsham edition), page 150 note (r).
But even there it was necessary to enact a special Act of Parliament to enable such proclamations to become law by publication in the Gazette though a Royal Proclamation is the highest kind of law, other than an Act of Parliament, known to the Brit ish Constitution; and even the publication in the London Gazette will not make the proclamation valid in Scotland nor will publication in the Edinburgh Gazette make it valid for England.
It is clear therefore that the mere enacting or signing of a Royal Proclamation is not enough.
There must be publication before it can become law, and in England the nature of the publication has to be prescribed by an Act of Parliament.
The Act of Parliament regulating this matter is the Crown Office Act of 1877 ' (40 and 41 Victoria Ch. 41).
That Act, in addition to making provision for publication in certain official Gazettes, also provides for the 114 making of rules by Order in Council for the best means of making Proclamations known to the public.
The British Par liament has therefore insisted in the Crown Office Act that not only must there be publication in the Gazette but in addition there must be other modes of publication,if an Order in Council so directs, so that the people at large may know what these special laws are.
The Crown Office Act directs His Majesty in Council carefully to consider the best mode of making these laws known to the public and empowers that body to draw up rules for the same and embody them in an Order in Council.
We take it that if these Proc lamations are not published strictly in accordance with the rules so drawn up, they will not be valid law.
The principle underlying this question has been judi cially considered in England.
For example, on a somewhat lower plane, it was held in Johnson vs Sargant (1) that an Order of the Food Controller under the Beans, Peas and Pulse (Requisition) Order, 1917 does not become operative until it is made known to the public, and the difference between an Order of that kind and an Act of the British Parliament is Stressed.
The difference is obvious.
Acts of the British Parliament are publicly enacted.
The debates are open to the public and the Acts are passed by the accredited representa tives of the people who in theory can be trusted to see that their constituents know what has been done.
They also re ceive wide publicity in papers and, now, over the wireless.
Not so Royal Proclamations and Orders of a Food Controller and so forth.
There must therefore be promulgation and publication in their cases.
The mode of publication can vary; what is a good method in one country may not neces sarily be the best in another.
But reasonable publication of some sort there must be.
Nor is the principle peculiar to England.
It was ap plied to France by the Code Napoleon, the first Article of which states that the laws are executory "by virtue of the promulgation thereof" and that they shall come into effect "from the moment at which their (1) ; 115 promulgation can have been known." So also it has been applied in India in, for instance, matters arising under Rule 119 of the Defence of India Rules.
See, for example, Crown vs Manghumal Tekuml(1), Shakoor vs King Emperor (2) and Babulal vs King Emperor (3).
It is true none of these cases is analogous to the one before us but they are only particular applications of a deeper rule which is rounded on natural justice.
The Council of Ministers which passed the Jaipur Opium Act was not a sovereign body nor did it function of its own right.
It was brought into being by the Crown Representa tive, and the Jaipur Gazette Notification dated the 11th August, 1923, defined and limited its powers.
We are enti tled therefore to import into this matter consideration of the principles and notions of natural justice which underlie the British Constitution, for it is inconceivable that a representative of His Britannic Majesty could have contem plated the creation of a body which could wield powers so abhorrent to the fundamental principles of natural justice which all freedom loving peoples share.
We hold that, in the absence of some specific law or custom to the contrary, a mere resolution of a Council of Ministers in the Jaipur State without further publication or promulgation would not be sufficient to make a law operative.
It is necessary to consider another point.
It was urged that section 3(b) of the Jaipur Laws Act of 1923 saved all regulations then in force from the necessity of publication in the Gazette.
That may be so, but the Act only saved laws which were valid at the time and not resolutions which had never acquired the force of law.
The appeal succeeds.
The conviction and sentence are set aside.
The fine, if paid, will be refunded.
Appeal allowed.
Agent for the re spondent: P.A. Mehta.
(1) I.L.R. 1944 Karachi Nag. 762.
| The appellant as the proprietor of Nada un Jagir sued to establish his title to chil (pine) trees standing on lands within the Jagir but belonging to the respondents, on the ground that the trees belonged to him as ala malik (superior landlords and not to the respondents who were only adna maliks (inferior landlords).
The Jagir originally formed part of the territory belonging to the rulers of Kangra who were Sovereigns entitled to the chil trees.
In 1827.
28 Maharaja Ranjit Singh conquered the territory and granted Nadaun as Jagir to Raja Jodhbir Chand who was the illegitimate son of Raja Sansar Chand, the last independent ruler of Kangra.
In 1846 as a result of the first Sikh War the territory came under the dominion of the British,.
who granted a Sanad in favour of Raja Jodhbir Chand in recognition of his services.
After the second Sikh War, the British granted a fresh Sanad in respect of the Jagir of Nadaun in 1848.
Subsequent to the grant, there were settlements in 1892 93 (O 'Brien 's Settlement), 1899 1900 (Anderson 's Settlement) and 1910 1915 (Settlement of Messrs Middleton and Shuttleworth), and there were some entries in the Wajib ul arz supporting the title of the Raja to the chil trees.
The appellant who is a direct lineal descendant of Raja Jodhbir Chand claimed title to the trees, firstly, as the representative of the independent Kangra rulers, secondly, on the basis of the grant given by the British Government and, thirdly,on the strength of the entries in the Wajib ul arz.
Held:(1) The Sovereign right of the independent Kangra rulers Lo chil trees passed by conquest to the Sikh rulers and subsequently to the British; Raja Jodhbir Chand was only a Jagirdar under the Sikhs and the British, and the appellant could not therefore lay claim to the chil trees on the basis of the Sovereign right of the in.
dependent rulers.
(2)The grant of 1848 on its true construction was primarily an assignment of land revenue and whatever other rights might have been included, the right to all chil trees on the proprietary and cultivated lands of the respondents was not within the grant.
890 It is well settled that the general rule is that grants made by the Sovereign are to be construed most favourably for the Sovereign; but if the intention is obvious, a fair and liberal interpretation must be given to the grant to enable it to take effect, and the operative part, if plainly expressed, must take effect notwithstanding qualifications in the recitals.
In cases where the grant is for valuable consideration it is construed in favour of the grantee, for the honour of the Sovereign, and where two constructions are possible, one valid and the other void, that which is valid ought to be preferred, for, the honour of the Sovereign ought to be more regarded than the Sovereign 's profit.
(3)Wajib ul arz or village administration paper is a record of existing rights not expressly provided for by law and of customs and usage regarding the rights and liabilities in the estate, and though under section 44 of the Punjab Land Revenue Act, 1887, it is presumed to be true, it is not to be used for the creation of new rights and liabilities.
Entries in the wajib ul arz with regard to the right of the Raja in respect of chil trees standing on the cultivated and proprietary lands of the adna maliks, did not show any existing custom or usage, of the village, the right being a Sovereign right, and the appellant could not rely on the said entries as evidence of a grant or surrender or relinquishment of a Sovereign right by Government in his favour.
The expressions "ala malik" and "adna malik" explained in the context of the Settlement reports relating to Nadaun Jagir.
Venkata Narasimha Appa Bow Bahadur vs Rajah Narayya Appa Bow Bahadur ([1879] L.R. 7 I.A. 38), Dakas Khan vs Ghulam Kasim Khan (A.I.R. and Gurbakhsh Singh vs Mst.
Partapo ([1921] I.L.R. , referred to.
|
minal Appeal No. 808 of 1973.
From the judgment and order dated the 30th March, 1973 of the Punjab & Haryana High Court in Election Petition No. 14 of 1972.
R. K. Garg, section C. Agarwala, V. J. Francis add R. C. K. Kaushik, for the appellant.
T. section Krishnamurthi Iyer, K. C. Agarwala, M. M. L. Srivastavta and E. C. Agrwala, for respondent No. 1.
A. T. M. Sampath, for respondent No. 2.
The Judgment of the Court was delivered by BEG, J.
Pritam Singh, the appellant before us under Section 116A of the Representation of the People Act, 1951 (hereinafter referred to as 'the Act '), was elected at an election held on 11 3 1972 for the Haryana State Legislative Assembly, the result of which was declared 47OSCI/75 586 on 12 3 1972.
The Respondent Balbir Singh questioned this election by, means of an election petition alleging that the, election was void as the appellant had committed corrupt practices hit by section 123, sub.
s.4, 5 and 6 of the Act.
The petition was allowed by a learned Judge of the, High Court of Punjab & Haryana, solely on the ground that the corrupt practice, provided for as follows, in Section 123(5) of the Act, was committed by the appellant: " 123(5).
The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person with the consent of a candidate or his election agent, or the use of such vehicle or vessel for the free conveyance of any elector (other than the candidate himself, the members of his family or his agent) to or from any polling station provided under section 25 or a place fixed under sub section (1) of section 29 for the poll : Provided that the hiring of a vehicle or vessel by an elector or by several electors at their joint costs for the purposes of conveying him or them to and from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause if the vehicle or vessel sp hired is a vehicle or vessel not propelled by mechanical power Provided further that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost, for the purpose of going to or coming from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause".
The appellant assails the judgment of the High Court on the following main grounds with which we will deal seriatim : 1.
That, the High Court erred in relying upon legally unproved entries in what is called a Pukar book or register showing both the hiring out and then payments for the use of certain trucks on 11 31972, the date of election, for purposes of election.
That, the Register itself is inadmissible in evidence under any provision of the Evidence Act.
That, the entries in the Pukar Register are suspicious indicating that the Register itself, or, atleast, the entries involved were not contemporaneous but fabricated after the election was over.
That, the High Court erred in relying upon the evidence of challans by the police on 11 3 1972 of drivers of trucks said to have been used by the appellant when the best evidence in the possession of the police relating to these challans was not forthcoming so that the challans appeared to have been maneuvered for the purpose of supporting a false case.
That, the High Court erred in relying upon merely uncorroborated oral testimony of Motor truck drivers in accepting the respondent 's case which was not really corroborated as the alleged corroborative evidence was not evidence at all in the eye of law, 587 6.
That, the High Court overlooked the well established principle that the charge of a corrupt practice in the course of an election must be treated as quasi criminal in character which has to be proved beyond reasonable doubt.
We will deal with these objections, in the reverse order, starting with the last mentioned ground of attack on the High Court 's judgment.
The judgment rests largely on appreciation of oral evidence.
It could not, therefore, be easily disturbed us as has been repeatedly pointed out by this Court even in first appeals on facts in election cases.
If the High Court overlooks serious infirmities in the evidence adduced to support the case accepted by it or misreads evidence or ignores the principle that a charge of corrupt practice, in the course of an election, is a grave one which, if established, casts a serious reflection and imposes a disability upon the candidate held guilty of it, so that the Court must be satisfied beyond reasonable doubt about its veracity, this Court will not hesitate to interfere.
Learned.
Counsel for the appellant has relied upon the decision of this Court in Rahim Khan vs Khurshid Ahmed & Ors.,(1) where Krishna Iyer, J., speaking for this Court, said (at p. 666) : "An election once held is not to be treated in a lighthearted manner and defeated candidates or disgruntled electors should not get away with it by Ming election petitions on unsubstantial grounds and irresponsible evidence, thereby introducing a serious element of uncertainty in the verdict already rendered by the electorate.
An election is a politically sacred public act, not of one person or _of one official, but of the collective will of the whole constituency.
Courts naturally must respect this public expression secretly written and show extreme reluctance to act aside or declare, void an election which has already been held unless clear and cogent testimony compelling the Court to uphold the corrupt practice alleged against the returned candidate is adduced.
Indeed, election petitions where corrupt practices are imputed must be regarded as proceedings of a quasi criminal nature wherein strict proof is necessary.
The burden is therefore heavy on him who assails an election which has been concluded".
In Rahim Khan 's case (supra) our learned brother Krishna lyre also warned us in the word of Sydney Harris (at p. 666) "Once we assuage our conscience by calling something a necessary evil ', it begins to look more and more necessary and less and less evil".
He then proceeded to observe (at p. 666) "For this very reason the Court has to be stern so as induce in the candidates, the parties and workers that temper and truthfulness so appropriate to the process. (1) 1974 2 SCC p. 660 @ P. 666.
588 After pointing out the difficulty of laying down any past iron or rigid rules for testing the veracity of witnesses, this Court said (at p. 672) there "We regard it as extremely unsafe, in the present climate of kilkenny cat election competitions and partisan witnesses wear ingrobes of veracity, to upturn a hard won electoral victory merely becauselip service to a corrupt practice has been rendered by somesanctimonious witnesses.
The Court must look for seriousassurance, undying circumstances, or unimpeachabledocuments to uphold grave charges of corrupt practice whichmight not merely cancel the election result, but extinguish many a man 's public life".
In that case, this Court found the charge of a corrupt practice to be established upon oral and documentary evidence given to support it.
In the case before us, we find that the High Court accepted the evidence of Uggar Sain, P.W. 24, because, inter alia, it was supported by a "Pukar Register_" kept by the Union of truck drivers of trucks hired in the order said to be determined by their places in the Register.
It relied on this evidence despite certain serious objections to the entries in the Register showing payments for the trucks said to have been used by the appellant.
The High Court, however, held that the testimony of Uggar Sain found sufficient corroboration not only from the entries in Pukar Register but also from the testimony of Khandu Ram, P.W. 25, Harish Lal, P.W. 26, Jai Gopal, P.W. 27, Chokha Namad, P.W. 28, Gurbachan Singh, P.W. 37 and Rajinder Singh, P.W 38, each of whom had deposed that he was paid a sum of Rs. 150/ on 10 3 1972 for performing election duty for the appellant for carrying voters on 11 3 1972.
The learned Judge observed about these drivers : "None of them is shown to be interested in the petitioner or against the returned candidate nor was the deposition of any one of them shaken in cross examination and I do ,act see any good reason for discarding their sworn word.
As would be seen later, they actually plied their trucks for the returned candidate on the 11th of March, 1972. a fact which clinches the matter against him".
The denial of the returned candidate were rejected by the learned Judge on the ground that threw were made by a highly interested party.
After having been taken through the judgment we are not satisfied that the learned Judge did anything more than to rather mechanically accept the oral and documentary evidence given to support the charge.
We certainly do not find there any consideration or discussion of a number of infirmities which have been placed before us both in the oral and documentary evidence adduced to support the, charge.
We think that this is so because the learned Judge seems to have held the view that a mere consideration of probabilities, without applying a strict standard of proof beyond reasonable doubt to a charge of corrupt practice was enough here.
589 After going through the evidence relating to the use of each truck, and repeating, rather mechanically, that this evidence on behalf of the petitioner was acceptable in each instance given, the learned Judge concluded "As a result of the discussion of the evidence under this issue, I hold that the returned candidate hired and used trucks Nos.
HRR 5155, HRR 5161, HRR 5077, HRR 5013, and HRR 597, for the free conveyance of electors to various polling stations and thus committed the corrupt practice defined in clause (5) of section 123 of the Act".
We find no indication anywhere in the judgment that the stricter standard of proof, which is applicable to such charges, was kept in view by the learned Judge.
The fifth ground of objection set out above seems to proceed on the erroneous assumption that oral testimony cannot be accepted when a corrupt practice is set up to assail an election unless it is corroborated by other kinds of evidence in material particulars.
We are not aware of any such general inflexible rule of law or practice which could justify a wholesale condemnation or rejection of a species of evidence which is legally admissible and can be acted upon under the provisions of Evidence Act in every type of case if it is, after proper scrutiny found to be reliable or worthy of acceptance.
There is no presumption, either in this country or anywhere else, that a witness, deposing on oath in the witless box, is untruthful unless he is shown to be, indubitably, speaking the truth.
On the other hand, the ordinary presumption is that a witness deposing solemnly on oath before a judicial.tribunal is a witness of truth unless the contrary is shown.
It is not required by our law of evidence that a witness must be proved to be a perjurer before his evidence is discarded.
It may be enough if his evidence appears to be quite improbable or to spring from such tainted or biased or dubious a source as to be unsafe to be acted upon without corroboration from evidence other than that of the witness himself.
The evidence of every witness in an election case cannot be dubbed as intrinsically suspect or defective.
It cannot be ,equated with that of an accomplice in a criminal case whose testimony has, according to a rule of practice, though not of law, to be corroborated in material particulars before it is relied upon.
This Court pointed out in Rahim Khan 's case (supra) that there are no golden rules for appraising human testimony.
In assessing its worth Judges can err honestly just as witness can make honestly mistaken statements under oath.
The extraction of what should constitute the credible foundation of judicially sound judgment is an art which nothing except sound common sense and prudence combined with experience can teach.
A sound judgment must disclose a fair attempt to "separate the grain from the chaff" as it has often been said.
Section 3 of the Evidence Act lays down: "A fact is said to be proved when after considering the matters before it, the Court either believes it to exist or con 590 siders 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 it has sometimes been argued that the same standard of proof applies to all types of cases.
Such a contention seems plausible.
But, what has to be borne in mind is that, in judging the evidence of a grave charge, prudence dictates that the belief in its correctness should form the basis of a judicial verdict of guilt only if that belief reaches a conviction beyond reasonable doubt.
If prudence is the real test, it prescribes differing standards of proof in differing circumstances.
Its requirements preclude any Procrustean a bed of uniformly rigid rules for each type of case.
The circumstances under which reasonable doubt may or may not exist in a case cannot possibly be exhaustively cataloged.
All that one can say is that in deciding whether the stricter standard of proof is satisfied in a case of alleged corrupt practice, resting upon oral evidence only, the Courts should be particularly astute and not omit to examine fairly the effect of every existing substantial ground which could introduce a reasonable doubt in a case.
In doing so, the Court has also to beware of bare suspicion, based on popular prejudices or belief sought to be introduced merely to bias the Court against a witness or a partly of a particular type.
In the case before us, we find that the learned Counsel for the appellant has repeatedly referred to the fact that the respondent, whose election petition succeeded before the learned Judge, was a defeated former Minister of the ruling Congress party.
Learned Counsel wanted us to infer that, because, the respondent had been welcomed and garlanded by the President of the Motor Truck Drivers ' Union of Ganaur,.
the evidence of motor drivers was easily available to him.
In other words, we were asked to assume that the motor drivers would be prepared to commit perjury, at the instance of the President of the Motor Truck Drivers ' Union, only to please a former defeated Minister.
We do not think that it is reasonable to carry such a suspicion to the extent of attributing to every witness appearing in support of the respondent 's case a tendency or desire to commit perjury.
The law does not discriminate against or frown upon a former Minister, belonging to any party, whether in or out of power, so that it must view every witness produced by him with suspicion simply because he had been a Minister.
On the other hand, we think that it would not be unreasonable to believe that a person who has occupied the responsible position of a Minister will be less inclined to suborn witnesses or conspire to produce perjured evidence just because he is defeated in an election which is not the only test of a person 's worth or respectability in society.
We think that a person who has held a responsible office will be acting imprudently if he spoils his public image by deliberately producing perjured evidence.
We are not prepared to uphold the 5th contention of the appellant that, either as a general rule.
in election cases, or on the facts of this particular case, the evidence of the motordrivers must be necessarily rejected simply because it is oral testimony of drivers of trucks who had formed a Union which had once invited 591 and garlanded the respondent.
We, however, think that the evidence had to be more carefully scrutinized than the High Court was disposed to do it.
As was Pointed out in Rahim Khan 's case (supra), evidence considered unsafe to be acted upon by a judicial Tribunal need not be necessarily false.
Turning to the 4th ground of objection, relating the prosecutions of truck drivers by the Police for alleged offenses said to have taken place on 11.3.1972, we find that the High Court accepted the allegation that the ' drivers were challenge on 11.3.
1972 without commenting on some conflicting evidence as to the date on which the motor drivers were challenge.
In reply, it has been contended that witnesses who could have given more, evidence on this question were not only given up by the petitioner respondent but also by the appellant as the date of challans was accepted or not questioned on behalf of the appellant.
Our attention is invited to Miscellaneous application No. 216 E/72 dated 19 10.1972 where learned Counsel for the appellant not merely stated that he did not want to examine either the Mohrir Constable of Police Station Ganaur or a Clerk of the office of the Superintendent of Police, Rohtak, but prayed that "the above two witnesses may kindly be informed telegraphically not to appear on 23.10.72".
It is, therefore, argued, not without force, that the date of the challans was not seriously disputed by the appellant before the High Court so that this question should not be allowed to be argued before us.
It was also contended on behalf of the respondent that there had been some tampering with the record in the Magistrate 's Court which explained the contrary evidence given by Subash Chander, P.W.11, the Ahalmad of a Magistrate 's Court, showing that the challan was dated 17 3 1972.
It was orally prayed that we should summon and examine, at this stage, the original record from the Court of the Magistrate, concerned.
However, as no argument appears to have been addressed on this question in the High Court we think that this as a matter which the High Court can and should itself examine after summoning the record from the Magistrate 's Court as we propose to send the case back to it for reconsideration after taking some further evidence.
It has been argued on behalf of the respondent that there is enough evidence of the motor truck drivers and of the voters carried as well as documentary evidence, including a log book of a driver, to show that the truck used on behalf of the respondent were carrying voters to the election booth, and were, therefore, challaned on 11 3 1972 because carrying of passengers in truck was not permitted.
It was admitted that no entry was made in the general diary of Ganaur Police Station, according to the rules, but this, it was contended for the respondent, is not conclusive as relevant entries relating to some 'petty offences are often missing.
These are, however, some of the matters which the High Court can and should consider.
It appears to us that a number of Points, on the worth of various tems of evidence, which have been raised for the 1st time to question 592 the authenticity.
of the evidence relating to the prosecution of drivers of trucks, said to have been carrying voters for the appellant were not advanced before the High Court.
We think that we ought to have the benefit of scrutiny of the whole evidence on this question by the High Court and its findings thereon.
We are not prepared to proceed on the assumption that the respondent could easily get evidence fabricated as he had been a minister.
We may now deal with the first three grounds of objection, all relating to what is called the Pukar Register.
It is true that Uggar Sain, P.W. 24, who was called to prove the Pukar Register, did not actually depose in %*hose handwriting the entries in it were made, or what could or could not be property entered here.
The trend of cross examination, however, shows that it proceeded on the assumption that Uggar Sain, P.W. 24, was actually making entries in it.
But, neither this fact was proved in the examination in chief nor was the course of business, according to which entries could be made in the Register, including entries of alleged payments by the respondent, proved.
A number of question raised before us,( throwing some suspicion on the authenticity of the entries in this Pukar Register and the dates on which they could be or were made seem to us to be entirely new.
They were not suggested to P.W. 24, Uggar Sain, who might have had some explanations for these suspicious features.
Nor do all these defects seem to have been mentioned in the course of arguments before the High Court.
For example, the truck numbers of trucks said to have been sent to the appellant do not appear against the name of the appellant but seem inserted afterwards above the place where they would be expected to be found.
The exact meaning or effect of such a feature could only have been brought out by cross examination of Uggar Sain, P.W. 24 on behalf of the appellant.
As regards the admissibility of the Pukar Register and evidence of prosecution of the truck drivers, we are unable to accept the submission that these are inadmissible under the Evidence Act.
Even though the course of business under which the Pukar Register was kept was not proved, we think that documents, such as the Pukar Register and those relating to the prosecutions of the drivers, who were said to be carrying voters on 11.
3. 1972, could be proved under section 11 of the Evidence Act.
We think that, in view of the importance of the evidence Uggar Sain, P.W. 24 both his examination in chief and his cross examination are must unsatisfactory.
We may here observe that the election Tribunal is not powerless in such cases in the performance of its duty to ascertain the truth.
There is not only Section 165 of the Evidence Act which enables the Court to put any question it likes to a witness,.
but there are also the provisions of order XVI, Rule 14, Civil Procedure Code which Jay down : "Subject to the provisions of this Code as to attendance and appearance and to any law for the time being in force, 593 where the Court at any time thinks it necessary to examine any person other than a party to the suit and not called as a witness by a party to the suit, the Court may, of its own motion, cause such person to be summoned as a witness to give evidence, or to produce any document in his possession, on a day to be appointed, and may examine him as a witness or require him to produce such document".
We think that the ascertainment of a number of essential facts relating to the charge was neither regular nor sufficiently detailed in the case now before us.
We find that the High Court proceeded on the assumption that facts which ought to have been technically proved had been sufficiently proved.
It too readily accepted the evidence, both oral and documentary, without examining all the defects of it which have been sought to be placed before us.
We are left with an unavoidable impression that important aspects of the case were neither satisfactorily brought out clearly by the evidence in the case nor examined by the High Court despite the voluminous evidence led by the parties and the lengthy judgment delivered by the Tribunal.
We also find that the Court adopted a standard of proof which is not strict enough in appraising the worth of evidence produced to support a charge of corrupt practice.
As it is not the practice of this Court to reassess evidence or to perform the duties of the Trial Court, even in election first appeals, unless no other course is left open to it, we think that this is a fit case in which we should send back the case for reconsideration by the High Court after recalling such witnesses as may be considered necessary by it, and, in particular, Uggar Sain, P.W. 24, so that at least the Pukar Register, assumed to have been duly proved, may be proved in accordance with law.
We think that the objections to the proof of this document, and of entries in it do not go beyond objections to the mode of proof.
The entries in it could be accepted as sufficiently reliable only after a much more rigorous examination of their maker than the parties or the Court subjected him to.
We think that we should not give a finding upon the reliability of these entries before the allegedly suspicious features have been specifically put to P.W. 24, Uggar Sain, who was assumed to have made the entries without even asking him whether he did make them.
In the result, we set aside the judgment and order of the High Court and we remand the case to it for disposal in accordance with law after abduction of such further evidence as may be necessary in the interests of justice.
In view of our order remanding the case to the High Court it is unnecessary to consider the three Civil Miscel 594 laneous Petitions for urging addition grounds, for condonation of delay in filing the application for urging additional grounds, and for permission to file a certified copy of the summary register for 21 3 1972 and 22 3 1972 of the Court 'of Judicial Magistrate 1st Class, Sonepat.
These applications are, therefore, dismissed.
Partics may, however, make appropriate applications in the High Court.
The costs of this litigation in the High Court as well as in this Court will abide the result.
The appellant will continue to function as an elected member subject to the result of the Election Petition.
P. B. R. Appeal allowed.
| The appellant.
an excise contractor secured the privilege of vending arrack in retail in certain taluks in the State of Karnataka for a period of 18 months beginning from 28 12 1967 and ending on 30 6 69.
He purchased attack from the Government at a price of 17 paise per litre and the Government collected besides the sale price of arrack.
excise duty.
health cess and education cess. 'rho Government also collected sales tax on the sale price of attacks on excise duty.
on health cess and on education cess for the period from 28 12 1967 to 31 1 1968 and made similar demands for the month of February.
1968 also.
The appellant and other excise contractors filed writ petitions in the High Court at Karnataka challenging the validity of the levy and collection of excise duty, education cess.
health cess and sales tax.
The High Court accepted some of the contentions of the appellant, granted him reliefs on that basis but rejected the other prayers.
The appellant has filed these appeals on the basis of certificates granted by the High Court against the order.
It was contended for the appellant (i) that no excise duty can be levied on a licensee in respect of the quantity of arrack purchased by him from Government depots, (ii) that the. power to fix the rate of excise duty conferred under section 22 of the Mysore Excise Act of 1965 on the Government was bad for the reason that it was an abdication by the state legislature of its essential legislative function and (iii) that no sales tax could be levied on the price for sale of arrack since section 19 of the Mysore Sales Tax Act, 1957 under which the tax was levied was beyond the legislative competence of the state legislature.
Rejecting the contentions and dismissing the appeals, HELD : (i) It is clear from the return filed before the High Court that the Government purchases arrack from the distillers and keeps it in the warehouses established or licensed under section 16 and that any removal of arrack after the purchase of the same will attract the liability to pay excise duty.
Section 23 provides that excise duty shall be levied on the excisable article issued from a warehouse also.
It cannot be said that a warehouse established or licensed under section 16(e) is not warehouse within the meaning of that expression in section 23.
[609G 610A] (ii) The High Court held that the preamble of the Act would serve as a guidance to fix the rates of excise duty.
It cannot be said with certainty that the preamble of the Act gives any guidance for fixing the rate of excise duty.
But that does not mean that the legislature here has no control over the delegate.
In this case, a. 71 of the Act which provides for the rule making power imposes the necessary check upon) the wide power given to the Government to fix the rate.
The laying of rules before the legislature provides control over delegated legislation.
Again the legislature may also retain its control over its delegate by exercising its power of repeal the power to fix the rate of excise duty conferred on the Government by section 22 is valid.
[ 6140E F; 614 E F] 608 Corporation of Calcutta & Anr.
vs Liberty Cinema, [1965] 2.
S.C R 477, Batwrsi Das vs State of Madhya Pradesh, ; , Municipal Board, Hapur vs Raghuvendra Kripal , Devi Dass Gopal Krishan vs State of Punjab, [1967] 3 S.C.R 557, Municipal Corporation of Delhi vs Birla Cotton Spinding and Weaving Mills, [1968] 3 S.C.R. 251, Sita Ram Bisliambhar Dayal vs State of U.P. ; , Minister of Health vs The King, , Institute of Patent Agents vs Joseph Lockwood, [1894] A.C. 347 and Cobb & Co. vs Kropp, , referred to.
(iii) Section 19 of the Karnataka Sales Tax Act.
makes it clear that notwithstanding anything contained in this Act of 1957, the Government shall in respect of any sale of goods effected by it be entitled to collect by way of tax any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under the Act.
The section is clear that the Government could collect the tax on the sale made by it as if it were a registered dealer, notwithstanding anything contained in section 2 or & 5.
The section itself creates a right in the State to recover and an obligation on the purchaser from the State to pay the amount.
Any imposition of liability or obligation in respect of sale or purchase of goods will be covered by Entry 54 of List II of the Seventh Schedule of the Constitution.
Section 19 is therefore, not ultra vires the powers of the legislature.
[615A C]
|
Civil Appeal No. 2231 of 1985.
From the Judgment and Order dated 8.3.1983 of the Madhya Pradesh High Court in Misc.
Petition No. 1124 of 1982.
R. Satish for the Appellants.
S.K. Mehta for the Respondents.
The Judgment of the Court was delivered by DESAI, J.
Special leave granted.
A trivial dispute disposed of by an eminently just and legally correct order by the Labour Court was unnecessarily interfered with by the Industrial Court, Madhya Pradesh which has forced employees working in a comparatively lower grade to knock at the doors of this Court.
Urban Family Planning Clinic ( 'Clinic ' for short) was set up at Bhilai for implementation of family welfare schemes of the Government of India in accordance with approved pattern set out in the letter of Ministry of Health dated May 16, 1963.
The Chief Medical Officer of the Bhilai Steel Plant was to be the administrative officer for the Clinic The entire expenditure of the Clinic was met by the Government of India by giving 100% grant though it was stated as a fact that this amount was not brought into the bank account of Bhilai Steel Plant but was deposited in a separate bank account in the State Bank of India under the name and style of Bhilai Steel Plant Urban Family Planning Clinic Grant in aid Account.
Subsequently on the recommendation of Bureau of Public Enterprises, the Clinic was treated as an integral part of the 1052 administration of Bhilai Steel Plant and the employees working in the Clinic were absorbed as employees of the Bhilai Steel Plant effective from February 4, 1976.
Usha Rani Datta and 11 others who were serving as Aaya/Attendants etc.
(presumably Class IV employees) moved an application before the Labour Court for a relief that they are being wrongly treated as fresh employees from the date of absorption and that their services since the commencement of employment somewhere in 1964 be treated as continuous for the purpose of gratuity, retrenchment and leave etc.
The application was moved in the Labour Court, Durg but it came to be transferred to Labour Court at Raipur.
The management of the Bhilai Steel Plant contested the application contending that the Clinic was an independent unit set up by the Government of India and that it was not an integral part of the administration of Bhilai Steel Plant and therefore the services rendered prior to the absorption on February 4, 1976 could not be treated as service under the Bhilai Steel Plant and therefore the application deserves to be dismissed.
The learned Presiding Officer of the Labour Court after hearing both sides and taking into consideration the evidence produced before it held that the Clinic had hardly any independent existence and that the employees of the Clinic were in reality and for all practical purposes the employees of the Steel Plant.
Accordingly the application was allowed and the necessary relief was given.
Two revision petitions came to be filed before the Industrial Court at Madhya Pradesh set up under the Madhya Pradesh Industrial Relations Act.
One Revision Petition being No. 10/MPlR/81 was filed by the Executive Director, Bhilai Steel Plant questioning the correctness of the decision of the Labour Court.
Original applicants before the Labour Court Smt.
Usha Rani Datta and others filed a Revision Petition being No. 2/MPIR/81 praying for relief not granted by the Labour Court.
` Both the revision petitions were disposed of by a learned Member of the Industrial Court by a common judgement.
Taking up the revision petition of the management it was held 1053 family planning centres were run by different public undertakings and it was started as part of the general policy of the Government of India and even though the entire expenditure of the Centre was reimbursed by the Government of India, the clinic of the centre could not be said to be an industry within the meaning of the expression in the Act nor could it be said to be incidental to the main business of the Bhilai Steel Plant.
The learned Member further held that the prayer in the application before the Labour Court was that the petitioners before the Labour Court who were formerly employed in the Family Planning Clinic should be given additional and better wages and service conditions and this subject was beyond the competence of the Labour Court, and for these reasons the application was not maintainable.
Accordingly the revision petition filed by the management was allowed and the revision petition of the original petitioners was dismissed with a further direction that the application before the Labour Court was liable to be dismissed.
After an unsuccessful writ petition No. 1124/82 in the High Court of Madhya Pradesh at Jabalpur, theoriginal applicants have filed this appeal by special leave.
The findings of facts as recorded by the Labour Court and which have neither been departed from nor questioned by the High Court clearly point to the inescapable conclusion that the Clinic had no independent existence of its own and that for all practical purposes it was under the administrative control of the Bhilai Steel Plant.
Let us recapitulate those findings, of facts.
The Clinic was set up at Bhilai somewhere in 1964 according to the approved pattern set out in the letter of the Ministry of Health dated May 16, 1963.
This letter was annexed as Annexure R l to the writ petition, in the High Court.
Bhilai Steel Plant is an wholly owned Government of India undertaking.
It received grant to meet the entire expenditure of the Clinic.
After the independent existence on paper from 1964 to 1976, the pretence was removed and the reality accepted in that all the employees of the Clinic were absorbed as employees of the Bhilai Steel Plant.
This becomes clear from the letter of the Senior Personnel Manager, Bhilai Steel Plant dated February 4, 1976.
It provides that the General Manager has approved absorption of Family Planning staff as regular employees of the Bhilai Steel Plant under Chief Medical Officer with imme 1054 diate effect, against posts and scales set out in the letter.
It was further stated that the posts, designations and scales are personal to the existing incumbents and on finalisation of standard manning & designations, the absorbed personnel would be suitably adjusted, to the extent feasible.
Therefore till the absorption, the pretence was that the Clinic even though it wholly under the administrative control of the Chief Medical Officer, Bhilai Steel Plant who was none other than a full time employee of the Bhilai Steel Plant, was treated independent.
Absorption erased the pretence.
These facts are not in dispute and were not controverted before us.
The learned Member of the Industrial Court with whom High Court appears to have agreed, was of the opinion that when the Clinic had its separate existence it was not covered in the expression 'industry ' and that even though Bhilai Steel Plant is an industry, the Clinic could not be styled as industry.
In our opinion this distinction drawn is entirely meaningless.
If Bhilai Steel Plant is an industry and if under the decision of this Court in Bangalore Water Supply & Sewerage Board etc.
v R. Rajappa & others (1) an hospital is an industry, this distinction drawn between two branches of administration of Bhilai Steel Plant attaches importance to a shadow without substance and substance without significance The Clinic had no independent existence In fact it was an euphimism to call it an independent undertaking.
lt was part and parcel of Bhilai Steel Plant administrative set up.
May be for purpose of accounting 100% grant received from the Government of India was kept in a separate account but that does not clothe the Clinic with any independent existence.
lt was nowhere suggested that the employees of the Clinic were employees of the Government of India This aspect did agitate the mind of the High Court when it observed that: 'it is a moot question whether the employees in the Clinic were employees of the Government of India or of the Plant.
The undisputed fact is that the Clinic was managed by Chief Medical Officer of Bhilai Steel Plant with a designation of Administrative Officer of the Clinic and was accountable for the money received from the Government of India as grant to the Undertaking called Bhilai Steel Plant and if it was never contended that the employees of the Clinic were the employees of the Government of India, indisputably the Labour Court was perfectly justified in holding that the employees of the Clinic were the employees of the Bhilai Steel (l) ; 1055 Plant working in a department called Clinic under the administrative control of Chief Medical Officer who was under the overall administrative control of the management of Bhilai Steel Plant.
In our opinion, therefore the Labour Court was perfectly justified in holding that since the inception of the Clinic the employees were the employees of the Bhilai Steel Plant and that the absorption was an acceptance of reality avoiding the pretence.
The learned Member of the Industrial Court was in error in concluding that whether the application as made was not maintainable.
The reasons which appealed to the Labour Court for holding that the application was maintainable are indisputably unquestionable and the view to the contrary does not commend to us.
Lastly we may refer to one observation of the High Court which may create confusion in future and therefore requires to be properly understood.
Says the High Court that the Clinic was not a canteen or a hospital run for the welfare of the employees in the main industry and it was not opened as an operation incidental to the main industry The High Court concluded that for this reason the employees working in the Clinic, could not be taken to be the employees employed i`n the Iron and Steel Industry carried on by the Plant.
Unfortunately the High Court overlooked that family planning scheme has to be implemented in larger national interest.
Public, Sector undertakings owned by the Government of India may be directed to carry out this scheme.
Probably imbued with this idea, the Clinic was set up under the administrative control of the Chief Medical Officer of the Plant.
If a hospital can be said to be run for the welfare of the employees of the plant as observed by the High Court one fails to understand, how a clinic which could also be described as a hospital for giving advice in family planning could be differentiated from a hospital modern hospital can as well have a family planning clinic.
The distinction drawn by the High Court lacks logic.
Therefore also one can safely conclude that the clinic was an integral department of the, Plant and had hardly any independent existence.
The independent paper existence was found unworkable in the long run and therefore the Public Enterprises Committee directed public enterprise to absorb the employees of the Clinic in the establishment of the Plant.
Accordingly no other view is possible than the one taken by the Labour Court.
1056 Accordingly this appeal is allowed and the decision of the learned Member of the Industrial Tribunal as well as the judgment of the High Court are set aside and the one given by the Labour Court is restored with costs throughout.
The total costs is quantified at Rs. 5,000 A.P.J. Appeal allowed.
| Urban Family Clinic was set up by a Steel Plant for implementation of family welfare schemes.
The Chief Medical Officer of The Plant was the administrative officer for the Clinic.
The financial expenditure of the Clinic was borne by the Government of India.
Subsequently the Clinic was treated as an integral part of the administration of the Plant and its employees were absorbed with effect from February 4, 1976.
The appellants who were serving as Aaya/Attendants moved an application before the Labour Court for a relief that they are being wrongly treated as fresh employees from the date of absorption and that their services since the commencement of employment be treated as continuous for the purpose of gratuity, retrenchment and leave etc.
The management of the Plant contested the application contending that the Clinic was an independent unit set up by the Government of India and that it was not an integral part of the administration and, therefore, the services rendered prior to the absorption could not be treated as service under the Plant and, therefore, the application deserves to be dismissed.
The Labour Court allowing the application held that the Clinic had hardly any independent existence and that the employees of the Clinic were in reality and for all practical purposes the employees of the Plant.
Two revision petitions were filed before the Industrial Court one on behalf of the Plant, and the other on behalf of the appellants.
The Industrial Court dismissed the revision petition of the appellants with a further direction 1050 that the application before the Labour Court was liable to be dismissed.
While allowing The revision petition of the management, the Industrial Court held that family planning centers were run by different public undertakings and it was started as part of the general policy of the Government of India and even though the expenditure of the centre was reimbursed by the Government, the Clinic of the centre could not be said to be an industry within the meaning of expression in the Act nor could it be said to be incidental to the main business of the Plant.
The prayer in the application before the Labour Court that the appellants should be given additional and better wages and service conditions was beyond the competence of the Labour Court and consequently the application was not maintainable.
The writ petition filed by the appellants was dismissed by the High Court, Allowing the Appeal, ^ HELD: 1.
The findings of facts as recorded by the Labour Court and which have neither been departed from nor questioned by the High Court clearly point to the inescapable conclusion that the Clinic had no independent existence of its own and that for all practical purposes it was under the administrative control of the Plant.
[1053 F] 2.
The Clinic had no independent existence.
In fact it was an euphemism to call it an independent undertaking.
It was part and parcel of the administrative set up.
The Clinic was managed by tho Chief Medical Officer of the Plant with a designation of Administrative Officer, and was accountable for the money received from the Government of India.
The labour Court was perfectly justified in holding that the employees of the Clinic were the employees of the Plant working in a department under the administrative control of Chief Medical Officer who was under the overall administrative control of the management of the Plant.
The Labour Court was perfectly justified in holding that since the inception of the Clinic the employees were the employees of the Plant and that the absorption was an acceptance of reality avoiding the pretence.
[1054 E; G H; 1055 A B] 3.
The Industrial Court was in error in concluding that whether the application as made was not maintainable.
The reasons which appealed to the Labour Court for holding that the application was maintainable are indisputably unquestionable and the view to the contrary is untenable.
[1055 C] 4.
The High Court has overlooked that Family Planning Scheme has to be implemented in larger national interest.
Public sector undertakings owned by the Government of India may be directed to carry out the scheme.
For this purpose the Clinic was set up under the administrative control of the Chief Medical Officer of the Plant.
If a hospital can be said to be run for the welfare of the employees of the Plant how the Clinic which would also be described as a hospital for giving advice in family planning could be differentiated from a hospital.
A modern hospital can as well have a family planning clinic.
The distinction drawn by the High Court lacks logic.
The Clinic was an integral 1051 department of the Plant and had hardly any independent existence.
The independent paper existence was found unworkable in the long run and therefore the Public Enterprises Committee directed to absorb the employees of the Clinic in the establishment of the Plant.
Accordingly no other view is possible than the on taken by the Labour Court.
[1055 E H] Bangalore water Supply &.
Sewerage Board etc.
vs R. Rajappa & others, 11978] 3 SCR 207, referred to.
|
iminal Appeal No. 69 of 1966.
Appeal by special leave from the judgment and order dated December 9, 1965 of the Madras High Court in Criminal Revision Case No. 1261 of 1964 and Criminal Revision Petition No. 1235 of 1964.
R. Thiagarajan, for the appellants.
Purshottam Trikamdas and T. V. R. Tatachari, for the respondent.
374 The Judgment of the Court was delivered by Ramaswami, J.
The 2nd petitioner Kuppuswami lodged a a complaint with Yercaud Police on October 12, 1963 alleging that the respondent, M. section P. Rajesh and other persons had formed an unlawful assembly and committed offences of house trespass, mischief and causing hurt at 10 p.m. on October 11, 1963.
The complaint was the subject matter of investigation by the police who did not present a charge sheet against respondent, M. section P. Rajesh but filed a charge sheet against 4 other persons under sections 323, 325 and 448, Indian Penal Code in C.C. No. 3097/1963 in the Court of Sub Magistrat 3, Salem.
The case was tried by the Sub Magistrate who ultimately acquitted all the accused by his judgment dated December 13, 1963.
In the course of evidence, at that trial the 1st petitioner was examined as P.W. 1 and 2nd petitioner as P.W. 2 and it is alleged by the respondent that the petitioner gave false evidence to the effect that the respondent was also among the trespassers and assailants and that he was armed with a gun which another accused took from him.
After the conclusion of the trial the respondent filed a petition in the court of the Magistrate under section 476(1), Criminal Procedure Code alleging that on October 11, 1962 he along with certain other Directors had attended a meeting of the Board of Directors of Chembra Peak Estate Ltd. from 4.30 p.m. to 5.15 p.m. at Bangalore and that he was not at Yercaud on October 11, 1963, and prayed for the prosecution of the petitioners for giving false evidence under section 193, Indian Penal Code.
The respondent produced a, copy of the Draft Minutes of the Board meeting and also cited certain witnesses in support of his case.
After considering the matter, the Sub Magistrate of Salem held that he was satisfied that the respondent could not have been present at the alleged occurrence on October 11, 1963 at Yercaud and that P.W.s 1 and 2 deliberately committed perjury and implicated Mr. Rajesh as among the assailants.
The Sub Magistrate thought that in the interest of justice the petitioners should be prosecuted under section 193, Indian Penal Code and accordingly filed a complaint against the petitioners under section 193, Indian Penal Code in the Court of District Magistrate (Judicial), Salem.
The petitioners contended, that the complaint was not maintainable in law because the trying Magistrate had not followed the procedure under section 479 A, Criminal Procedure Code and it was therefore not open to the Magistrate to take recourse to the provisions of section 476, Criminal Procedure Code.
By his order dated February 10, 1964 the District Magistrate discharged the petitioners holding that the complaint was not sustainable in view of the decision of this Court in Shafer Hussain Bholu vs State of Maharashtra(1).
Thereupon the respondent filed Criminal.
R.C. No. 1261 of 1964 in the Madras High Court against the order of the District Magistrate (Judicial), Salem.
By his 375 judgment dated December 9, 1965 Anantanarayanan, J. set aside the orders of the District Magistrate (Judicial) and directed that the case should be taken up by the District Magistrate and the trial proceeded with in accordance with law.
This appeal is brought, by special leave, from the order of the Madras High Court dated December 9, 1965 in Crl.
R.C. No. 1261 of 1964.
The question of law arising in this case is what is the true meaning and scope of section 476, Criminal Procedure Code in the context of section 479 A(1) and (6), Criminal Procedure Code with regard to a prosecution authorised by a Court in respect of an offence of prejury committed before it in the course of the trial? Chapter XXXV of the Code of Criminal Procedure prescribes the procedure to be followed for prosecution of offenders in case of certain offences affecting the administration of justice.
Section 4/6 sets out the procedure for prosecution of offenders for offences enumerated in section 195(1)(b) and (c) of the Code of Criminal Procedure.
If a Civil, Revenue or Criminal Court is of opinion, that it is expedient in.
the interests of justice that an enquiry 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 in that Court, such Court may, after such preliminary inquiry, if any, as it thinks necessary, record a finding to that effect and make a complaint thereof in writing and forward the same to a Magistrate of the first class having jurisdiction.
Section 476 A authorises a superior Court to make a complaint where a Subordinate Court has omitted to do so in respect of offences and in the circumstances mentioned in section 476(1).
Section 476 B provides for a right of appeal against the order making or refusing to make a, complaint.
Sections, 478 and 479 deal with the procedure which may be followed in certain grave cases.
Section 479 A which was added by the Code of Criminal Procedure (Amendment) Act 26 of 1955 by the first sub section (in so far as it is material) provides as follows.
"479 A. (1) Notwithstanding anything contained in sections 476 to 479 inclusive, when any Civil, Revenue or Criminal Court is of opinion that any person appearing before it as a witness has intentionally given false evidence in any stage of the judicial proceeding or has intentionally fabricated false evidence for the purpose of being used in any stage of the judicial proceeding, and that, for the eradication of the evils of perjury and fabrication of false evidence and in the interests of justice, it is expedient that such witness should be prosecuted for the offence which appears to have been committed by him, the Court shall, at the time of the delivery of the judgment or final order disposing of such proceeding, record a finding to that effect stating its reasons therefor and 37 6 may, if it so thinks fit, after giving the witness an opportunity of being heard, make a complaint thereof in writing signed by the presiding officer of the Court setting forth the evidence which, in the opinion of the Court, is false or fabricated and forward the same to a, Magistrate of the first class having jurisdiction, and may. . . . " Sub section (6) of this section enacts as follows: "(6) No proceedings shall be taken under sections 476 to 479 inclusive for the prosecution of a person for giving or fabricating false evidence, if in respect of such a person proceedings may be taken under this section.
The scheme of section 479 A is to enact a special procedure for the more expeditious and effective manner of dealing with certain cases of perjury and fabrication of false evidence by witnesses in the course of judicial proceedings.
There is, however, a necessary condition for the application of section 479 A, Criminal Procedure Code.
The condition is that the Court before it delivers its judgment or at any rate at the time of delivering the judgment must form an opinion that a particular witness or witnesses, is, or, are giving false evidence, if the court could not form any opinion about the falsity of the evidence of the witness appearing before it, then certainly the court cannot at the time of delivering its judgment, record any finding about the same.
It is manifest that a court can come to a conclusion that a witness is false only when there are materials placed before it to justify that opinion.
If no materials are placed before the court to enable the court to form an opinion that a witness is giving false evidence, then certainly it could not form that opinion.
In the present case, the respondent produced material before the trial court on December 23, 1963 after the conclusion of the trial that the petitioners had given false evidence in the case and the respondent produced the necessary documents along with an application for proceeding against the petitioners under section 476, Criminal Procedure Code.
Till those documents were produced there was no opportunity or occasion for the magistrate to form an opinion about the falsity of the evidence adduced by the petitioners.
It is, therefore, manifest that at the time when the judgment was delivered the magistrate had no material before him to form an opinion that the petitioners had given false evidence.
It is only after the respondent had made his application on December 23, 1963 and brought the necessary material to the notice of the court that the falsity of the evidence of the petitioners became apparent and the magistrate was in a position to form an opinion about the falsity of the evidence given by the petitioners.
It is, therefore, clear that section 479 A will not be applicable on the facts of this case, and if the provisions of section 479 A will not apply on the facts of this case it follows that the bar contemplated by cl.
(6) of that section will not be applicable.
The reason is that cl.
(6) can be invoked only in cases in which 377 s.479 A(1) will be applicable.
The crucial words of cl.
(6) are "if in respect of such a person proceedings may be taken under this section".
It is clear that the bar under section 479 A (6) refers not to the legal character of the offence per se but to the possibility of action under section 479 A upon the facts and circumstances of the particular case.
If, for instance, material is made available to the court after the judgment had been pronounced, rendering it clearly beyond doubt that a person had committed perjury during the trial and that material was simply unavailable to the Court before or at the time of judgment, it is very difficult to see how the court could have acted under section 479 A, Criminal Procedure Code at all.
It cannot be supposed that the legislature contemplated that such a case of perjury, however, gross should go unpunished in such circumstances.
It appears to us that the true interpre tation of the language of cl.
(6) of section 479 A is that it does not operate as a bar to the prosecution for perjury in a case of this description.
Take, for instance, the trial of 'A ' for the murder of 'B ' in the Sessions Court where 'C ', 'D ' and 'E ' gave evidence that they actually saw 'A ' committing the murder of 'B '.
Suppose at the conclusion of the trial and after delivery of judgment by the Sessions Court 'B ' is found alive and there is incontestable evidence to show that 'A ' was falsely charged for the murder of 'B '.
Is it to be contemplated that in such a case there is no re medy available to the Court to prosecute C, D, and E for perjury under the provisions of section 476, Criminal Procedure Code, though action cannot be taken, in the circumstances of the case, under section 479 A, Criminal Procedure Code? In our opinion, such a startling consequence was not contemplated by Parliament and the bar of cl.
(6) of section 479 A was intended only to apply to cases of perjury and fabrication of false evidence in which the trying Magistrate could have acted under section 479 A(1).
In other words, the bar of cl.
(6) will not apply to a, case where perjury is detected not merely with reference to the evidence adduced at the trial but with reference to the evidence adduced in some other distinct proceeding, not then brought before the court or because there is some other material subsequently produced after the conclusion of the trial and delivery of judgment which renders the prosecution for perjury essential in the interests of justice.
Applying the principle in the present case we are of opinion that the prosecution of the petitioners under the provisions of section 476, Criminal Procedure Code by the Magistrate after the conclusion of the trial is legally valid and is not affected by the bar of cl.
(6) of section 479 A, Criminal Procedure Code.
On behalf of the appellants Mr. Thiagarajan referred to the decision of this Court in Shabir Hussein Bholu vs State of Maharashtra(1).
But the Principle of that decision does not afford any assistance to the appellants in this case.
It appears that the (1) [1963] Supp. 1 S.C.R. 501.
378 appellant in that care appeared as a witness in a jury trial for murder.
Before the Court he, gave a statement contradictory to the ,one he had given before the committing court.
After the conclusion of the trial and delivery of judgment the Sessions Judge passed a separate order for prosecution of the appellant for intentionally giving false evidence under section 193, Indian Penal Code.
It was held by this Court that the provisions of section 479 A had not been complied with and.
no cognizance could be taken of the offence.
Two conditions were laid down for the exercise of the powers under section 479 A, (i) the court must form an opinion that the person has committed one of the two categories of offences referred to in section 479 A, and (ii) the Court must come to the conclusion that for the eradication of the evils of perjury etc.
and in the interests of justice it is expedient that the person be prosecuted.
This opinion and conclusion must be arrived at the time of the delivery of the judgment or final order in the trial , the court cannot later on resort to section 476 and make a complaint against the witnesses.
The provisions of section 479 A were held applicable to the case and the fact that the trial was with the aid of a jury did not preclude the Sessions Judge from recording the findings required by section 479 A.
While considering whether action should be taken under section 479 A it was open to the Sessions Judge to say whether the evidence tendered at the trial was true or false.
It is manifest that the material in that case was produced before the Sessions Court for coming to the conclusion that the appellant had committed perjury and so the procedure contemplated In section 479 A(1) was applicable and since the Sessions Judge did not proceed under that section, though he could have done so, the bar contemplated by cl.
(6) of section 479 A operated and no action could have been taken under section 476, Criminal Procedure Code.
The ratio of that decision is not applicable to the present case because the material facts are different.
It is necessary to add that in Shabir Hussein Bholu vs State of Maharashtra(1) this Court observed that if the Judge is unable to come to a conclusion that the statement made at the trial is false then provisions of section 479 A (1) would not be applicable.
At page 512 of the Report it was observed by this Court as follows: "But, for considering the applicability of section 479 A(1) what hag to be borne in mind is that in a jury trial it is possible for the Judge to come a conclusion that the statement made at the trial is false.
If he comes to that conclusion then, as rightly observed in Badullah 's case (A.I.R. 1961 All. 397), he has no option but to proceed under section 479 A(1`), Cr.
P.C. The question then is whether he could act under this provision if he is unable to form an opinion one way or the other as to whether the evidence tendered at the trial is false or the evidence before the committing Magistrate is false.
What would be the position in such a case? If the proceed [1963] Supp. 1. S.O.R. 501.
379 ings before the committing Magistrate must be held to be entirely separate proceedings then we agree with the Allahabad High Court that section 479 A.(1) would not apply.
" There is divergence of opinion among the various High Courts on the question of law presented for determination in this case.
In Jai Bir Singh vs Malkhan Singh and another(1), it was held by Sahai, J. that the bar of section 479 A(6) applies to all cases of perjury, viz., (1) those where the perjury or the fabrication of false evidence has been detected by the court when the judgment is pronounced, and (2) cases where the perjury or fabrication of false evidence does not come to light till after the judgment has been pronounced and it was not open to the Court to proceed under section 476, Criminal Procedure Code for prosecution in the latter class of cases.
The same view has been taken by the Punjab High Court in Parshotam Lal L. Vir Bhan vs Madan Lal Bishambar Das(2) and the Rajasthan High Court in Amolak vs State(1).
A contrary view has been expressed by the Madras High Court in C. P. Kasi Thevar vs Chinniah Konar(4) and In re. Gnanainuthu(5).
For the reasons already expressed we are of opinion that the decision of the Madras Court in C.P. Kasi Thevar vs Chinniah Konar(4) and In re. Gnanamuthu(5) represents the correct law on the point.
For these reasons we hold that there is no merit in this appeal which is accordingly dismissed.
Appeal dismissed.
A.I.R. 1958 All.
(2) A.I.R. 1959 Punjab 145.
(3) A.I.R. (1) A.I.R. 1960 Mad. 77.
(5) A.I.R. 1964 Mad.
| At a trial, the appellants gave evidence against the respondent.
After the Conclusion of the trial the respondent filed a petition in the court of the Magistrate under section 476(1) Criminal Procedure Code, praying for the prosecution of the appellants for giving false evidence under section 193 Indian Penal Code, and adduced evidence in sup port of his contention.
The Magistrate thought that in the interest of justice the, appellants should be prosecuted and accordingly filed a complaint.
The appellants contended that the complaint was not maintainable because the trying Magistrate had not followed the procedure under section 479 A, Criminal Procedure Code and it was therefore not open to the Magistrate to take recourse to the provisions of section 476.
HELD: The prosecution of the appellants under the provisions of section 476 Criminal Procedure Code by the Magistrate after the conclusion of the trial was legally valid and wag not affected by the bar of cl.
(6) of section 479 A. Criminal Procedure Code.
[377G] The bar of cl.
(6) will not apply to a case where perjury is detected not merely with reference to the evidence adduced at the trial but with reference to the evidence adduced in some other distinct proceeding not then brought before the court or because there is some other material subsequently produced after the conclusion of the trial and delivery of judgment which renders the prosecution for perjury essential in the interests of justice.
[377 F] Shabir Hussein Bholu, vs State of Maharashtra, [1963] Supp.
I S.C.R. 501, explained and distinguished.
C.P. Kasi Thevar vs Chinniah Konar, A.I.R. 1960 'Mad. 77 and In re Gnanamuthu A.I.R. 1964 Mad.
446, approved.
Jai Bir Singh vs Malkhan Singh.
A.I.R. 1958 All.
364, Parsotam Lal Vir Bhan vs Madan Lal Bashambar Das, A.I.R. 1959 Punj.
145 and Amolak vs State.
A.I.R. 1961 Rai. 220, disapproved.
|
306 of 1954.
Under Article 32 of the Constitution for the enforcement of Fundamental Rights.
Kundan Lal Mehta and B.R.L. Iyengar, for the petitioner.
C.K. Daphtary, Solicitor General of India (Porus A. Mehta and R. H. Dhebar, with him) for the respondent.
October 28.
The Judgment of the Court was delivered by JAGANNADHADAS J.
This is an application under article 32 of the Constitution which arises under the following circumstances.
The petitioner, Sadhu Ram, purchased from one Imam ud Din, a muslim evacuee, 43 Bighas 14 Biswas of agricultural land comprised in Khasra Nos.
2135 to 2139, 2158, 2159, 21715 2204 and 2206 with Shamlat rights in village Kaithal, District Karnal, Punjab.
The sale deed was executed on the 6th September, 1947, and registered on the 9th September, 1947, before Imam ud Din left for Pakistan.
The consideration therefor was Rs. 3,000 and as much as Rs. 2,700 thereof appears to have been paid by the petitioner to the vendor before the Sub Registrar.
Possession also was transferred on the execution of the sale deed.
Mutation was made by the revenue authorities on the 23rd January, 1948.
East Punjab 1115 Evacuees ' (Administration of Property) Act, 1947 (East Punjab Act XIV of 1947) came into force on the 12th of December, 1947.
It was amended by East Punjab Evacuees ' (Administration of Property) (Amendment) Ordinance, 1948 (East Punjab Ordinance No. II of 1948) which came into force on the 16th January, 1948.
This gave place to East Punjab Evacuees '(Administration of Property) (Amendment) ' Act, 1948 (East Punjab Act XXVI of 1948) which came into force on the 11th April, 1948.
By these amendments a new section, section 5 A, was inserted in the East Punjab Act XIV of 1947.
It will be seen that these amendments were subsequent to the date of the execution and registration of the sale deed and the transfer of possession thereof.
Section 5 A, so far as it is relevant for our present purpose, is in the following terms: "5 A. (1) No sale, mortgage, pledge, lease, exchange or other transfer of any interest or right in or over any property made by an evacuee or by any person in anticipation of his becoming an evacuee, or by the agent, assign or attorney of the evacuee or such person on or after the fifteenth day of August, 1947, shall be, effective so as to confer any rights or remedies on the parties to such transfer or on any person claiming under them unless it is confirmed by the Custodian.
(2)An application for confirming such transfer may be made by any person claiming thereunder or by any person lawfully authorised by him".
This section purports to be retrospective.
Hence an application for confirmation was made by the petitioner on the 23rd March, 1948.
The Assistant Custodian, Karnal, on being satisfied about the genuineness of the transaction, recommended confirmation.
But the Additional Custodian, Jullundur, by his order dated the 11th February, 1953, rejected the application for confirmation acting on the Custodian General 's circular dated the 9th March, 1950, under which a policy of not confirming transactions relating to agricultural property was enunciated.
This was 1116 affirmed by the Assistant Custodian General on an application to him for revision.
Learned counsel for the petitioner relies on the fact that his transaction which, on enquiry, was held to be genuine, was entered into.
before the East Punjab Act XIV of 1947 was enacted and before the amendment thereof by insertion of section 5 A came into operation.
He contends that the retrospective operation of section 5 A in such circumstances amounts to deprivation of his property, without any compensation and is, therefore, hit by article 31 of the Constitution.
Whatever may have been the position if this matter had to be dealt with much earlier, it seems doubtful whether any such contention can be raised by the petitioner before us, on this date, in view of the recent Constitution (Fourth Amendment) Act, 1955, which has come into force on the 27th April, 1955.
It is unnecessary, however, to base our decision on this ground.
It appears to us clear that section 5 A cannot be read as a legislative provision depriving the owner of his property.
There can be no doubt that so far as transactions subsequent to the date of amendment are concerned, if is nothing more than a restriction on the transfer of property by the owner thereof.
Any transferee in such a situation takes the property subject to the requirement of confirmation.
The case would then, be one which falls under article 19 of the Constitution and not under article 31.
There can be no doubt that having regard to the purpose and policy underlying the law relating to Evacuee Property and the abnormal conditions which arose from and after the 15th August, 1947, the requirement of confirmation with reference to transactions affecting Evacuee Property cannot but be considered a reasonable restriction.
If this requirement was in essence not a deprivation but a restriction in respect of future transactions, there is no reason for treating it as deprivation by virtue of its having been given retrospective effect, such retrospectivity being within the competence of the appropriate legislature.
The retrospectivity commencing from the 15th August, 1947, is 1117 also not only reasonable but called for in the circum stances, which occasioned the Evacuee Property laws.
In this case the petitioner is deprived of his bargain and incurs consequential loss, Dot by virtue of any unconstitutional law but by reason of the quasi judicial order of the Custodian declining to confirm the transaction.
The contention of the learned counsel for the petitioner that any fundamental right of his has been violated must, therefore, be rejected.
Learned counsel next urges that the action of the Custodian in basing his decision on some circular of the Custodian General is illegal and that it is not relevant material under section 5 A.
It is enough to say that even if this contention be correct, this does not raise any question of violation of fundamental rights.
If this is the sole ground, this application is misconceived.
This petition accordingly fails and is dismissed but in the circumstances without costs.
| Section 94(1), Cr. P.C., 1898, which deals with summons to produce any document, authorises the court to issue a sum mons to the person in whose, possession or power such docu ment is believed to be, requiring him to attend and produce it.
or to produce it at the time and place stated in the summons.
According to sub s.(2) a person required merely to produce a document shall be deemed to have complied with the requisition if he causes such document to be produced in stead of attending personally to produce it.
In the present case, during a criminal trial, the complain ant flied art application under section 94, for a direction to the accused to produce a document.
The accused stated that the document was not in their possession.
The complainant then made another application under the section praying that the appellant may be directed to produce the document.
The appellant was not a party to the case and no reason .whatso ever was given by the complainant in the application why the document was likely to be in appellant 's possession or power.
The Magistrate then passed an order summoning the appellant with the document.
The appellant, in her reply, professed ignorance of the document and stated that as she was a "pardanashin" lady she may not be sumoned to court.
The Magistrate thereupon passed another order directing her to attend the Court so that if she made a 'statement on oath ' that she was not in possession of the document, the Court may get a chance to put her a few questions for satis fying itself regarding the whereabouts of the document.
The appellant 's revision petitions against the order to the District Court and High Court were dismissed.
Allowing the appeal to this Court, HELD: (1) There is nothing in the Criminal.
Procedure Code providing that the person who appears in Court, in pursuance of a summons under section 94(1), becomes a witness and can be examined and cross examined even though he has not been cited as a witness.
Section 139, Evidence Act, also pro vides that if a person produces the document for which a summons has been issued to him, he does not thereby become a witness and that he cannot be cross examined until he is called as a witness.
All that the Magistrate could do was to issue search warrants under section 96(1) or section 98 if the, requirements of those sections were satisfied.
The Court could not therefore record the appellant 's statement on oath on her inability to produce the document, or put her a few questions for satisfying itself regarding its whereabouts.
[163C E] (2) The order, which was thus not according to law adversely affected the appellant who was not a party to the enquiry or trial.
Obviously she could have no opportunity to challenge it at the end of the trial, and such belated challenge would also be purposeless.
Therefore, the order could not be said to be an interlocutory order and the revisional courts erred in raising the bar of section 397(3), Cr.
P.C. 1974.
[164C D] Mohan Lal Magan Lal Thacker vs State of Gujarat ; , followed.
|
ition No. 3050 of 1980.
(Under Article 32 of the Constitution) A. section Sohal and M. C. Dhingra for the Petitioner.
M. M. Abdul Khader, N. Nettar and M. N. Shroff for the Respondents.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Who will police the police ? Is freedom of movement unreasonably fettered if policemen are given power of externment for public peace? These twin problems of disturbing import, thrown up by this bizarre case, deserve serious examination.
The former is as important as the latter, especially when we view it in the strange police setting painted by the petitioner.
The constitutional question, which we will state presently and discuss briefly, has become largely otiose so far as the present petitioner is concerned because counsel for the State has assured the court that they will drop police surveillance or any action by way of externment as proposed earlier.
The police methodology, with sinister potential to human liberty described by the petitioner, if true, deserves strong disapproval and constitutional counter action by this Court.
But before committing ourselves to any course, we must set out the factual matrix from which the present case springs.
The statutory starting point of the criminal saga of Shri Prem Chand Paniwala, the petitioner, now threatened with externment proceedings, is the .
Sections 47 and 50 of the said Act clothe the Commissioner of Police with externment powers necessary for keeping the capital city crime free.
One such power relates to the removal of persons about to commit offences.
The procedural prescriptions and substantive directions, in this behalf, are laid down in the above provisions.
The Deputy Commissioner of Police (the DCP for short) in exercise of the said power, 1264 initiated proceedings against the petitioner and directed him to show cause why he should not be externed from the Union Territory of Delhi.
Paniwala who, from humble beginning as vendor of aerated water near a cinema theatre, had spiralled up into a prosperous dealer in Vasant Vihar, when confronted by this Police notice, decided upon a constitutional show down and came to this Court challenging the vires of the externment proceedings as arbitrary and unreasonable restrictions of his freedom of movement and, therefore, contrary to articles 14 and 19 and 21 of the Constitution.
The validity of the action, assuming the vires of the Act, involves also a consideration of the mala fides imputed by the petitioner to the DCP.
The blow of deportation may fall heavy on his fundamental rights admits of no doubt.
A flourishing businessman, happy with his wife and children, and settled in a comfortable locality in Delhi, if transported traumatically outside the Union Territory would surely suffer not merely financial mayhem, but also social, domestic and physical deprivation virtually amounting to economic harakiri an psychic distress.
Nevertheless, the Act permits externment, provided the action is bona fide.
All power, including police power, must be informed by fairness if it is to survive judicial scrutiny.
Cases are legion which leave one ill no doubt that mala fides is fatal, if it is made out.
From this angle, Prem Chand Paniwala has turned the focus on police malpractice vis a vis his own career; and even if a fragment of what he has said be true, the higher officers of the Delhi Police will need to look into the goings on at the lower level.
Here comes the relevance of autobiographical revelations made by the petitioner in more than one affidavit.
Certain facts emerge as fairly probable from the affidavits of both sides.
Prem Chand made a living as a paniwala or vendor of soft drinks near Delite Cinema even as a teenager, which shows that he had very poor beginnings.
How did he fall into the thraldom of the local police? He explains it in his affidavit: "He had a few mobile carts which were used for refrigerating water.
These carts used to be parked by the petitioner on the road side due to the indulgence of the police.
He was in his teens when he started his avocation and continued for a very long time.
Thus, he acquired an alias i.e. Prem Chand Paniwala.
Due to close association with Police and their connivance and indulgence, the petitioner thrived.
In this process, the petitioner became a prey and pawn in the hands of the police.
He was persuaded to be their perpetual stooge and stock witness.
1265 The Petitioner in the year 1965, when he was 25 years old was involved in a gambling case by the police and to mould him a permanent stock witness and lest he should be militant to defy them.
Despite his hesitation and unwillingness he was forced to become a permanent pawn of the police.
This is how, the petitioner landed himself in the web of the police; he had no alternative than to be like that as his livelihood was dependent upon the mercy and indulgence of the police".
The version of the petitioner is that once he yielded to the pressure of the Police to give false testimony disclosing a rubberised conscience and unveracious readiness to forswear himself, there was escalation of demands upon him and he became a regular pedlar of perjury "on police service".
Indeed, counsel for the petitioner argued that his client was a 'stock witness ' because he had to keep the Police in good humour and obliged them with tailored testimony in around 3,000 cases because the alternative was police wrath.
We were flabbergasted at this bizarre confession but to lend credence to his assertion counsel produced a Few hundred summonses where the petitioner was cited as a witness.
Were he not omnipresent how could he testify in so many cases save by a versatile genius for loyal unveracity? For sure, the consternation of the community at this flood of perjury will shake its faith in the veracity of Police investigation and the validity of the judicial verdict.
We have no doubt that the petitioner, who has given particulars of a large number of cases where he had been cited as witness, is speaking the truth even assuming that 3,000 cases may be an exaggeration.
In Justice, Justices and Justicing and likewise in the Police and Policing, the peril to the judicial process is best left to imagination if professional perjurers like the self confessed Paniwala are kept captive by the Police, to P be pressed into service for proving "cases".
Courts, trusting the Police may act on apparently veracious testimony and sentence people into prison.
The community, satisfied with such convictions, may well believe that all is well with law and order.
We condemn, in the strongest terms, the systematic pollution of the judicial process and the consequent threat to human rights of innocent persons.
We hope that the higher authorities in the Department who, apparently, are not aware of the nefarious goings on at the lesser levels will immediately take measures to stamp out this unscrupulous menace.
The reason why the petitioner has divulged his role as professional perjurer for the Police is simple and credible, at this price, the favours of the Police who allowed him to carry on his soft drinks business on the public street near a cinema house, not otherwise 1266 permissible under the law.
The Police blinked at the breach, the petitioner made good profits and by this mutual benefit pact, the prosecution got readymade evidence and Paniwala joined the nouveu riche.
He became respectable when he became rich and when he became respectable he became reluctant to play 'stock witness '.
For "the more things a man is ashamed of the more respectable he is" (Bernard Shaw).
Whenever he resisted the demand for giving false evidence the Police implicated him in some case or other and when he yielded, the case was allowed to lapse.
Indeed, it is surprising that the petitioner himself admits that he was "dubbed as a stock witness and often disbelieved by the courts.
Despite severe strictures passed by the courts, the Police did not give him up.
" Various details are furnished by the petitioner about his deposing on prosecutions for the survival of his business.
In the bargain, the petitioner acquired two houses in important localities and built up a lucrative fruit juice business.
There are more uncomplimentary revelations made in the petition but we do not think it necessary to set them out.
However, the crisis came when he declined to oblige with perjury since he felt his wealthy station in life and the character building stage of his children warranted giving up the profession of stock witness.
The Police avenged themselves by initiating externment which would inflict mortal economic injury, if carried out.
This version of the petitioner has been, in a way, denied.
It is also true that the Assistant Commissioner, in his affidavit in reply, has indicated that witnesses have been examined in support and in opposition of the allegations justifying externment and a final order has been made by the DCP directing the petitioner "to show good conduct for a period of three months only".
It is also stated that the witnesses were examined in camera, that the DCP had consideration for the materials placed before him "including education of his children etc.
and the assurance given by him".
An intelligent reading of the affidavit of the Assistant Commissioner, along with the vagueness in his denials regarding material particulars in the petitioner 's affidavits, leave us in grave doubt about the validity of the Police proceedings.
It is significant to notice that among the allegations against the petitioner are such vague statements as your activities in the area of Police Station Connaught Place and other area adjoining to the Police Station Connaught Place are causing and are calculated to cause harm, alarm and danger to the residents of the said localities and areas.
While we do not delve into details, it is useful to mention that the Police allegations are again vague in respect of the remaining imputations namely: 1267 "That you keep knife with you for unlawful purpose and threaten the persons residing in the area with dire consequences and further deter them from making report to police.
That you have engaged yourself in commission of offences against person and property attended with force and violence for which the following cases were registered against you by the Police. ".
The petitioner 's reply affidavit makes startling disclosures about the police methods of implicating innocent people.
However, the version of the petitioner can hardly be swallowed since he is a self confessed perjurer.
Nevertheless, it is not too much to ask Government to take effective measures to prevent Police methods straying into vice.
We hopefully remind the State about what Justice Brandieis once observed : "Crime is contagious.
If the government becomes a law breaker, it breeds contempt for law." . "TO declare that in the administration of the criminal law the end justifies the means to declare that the government may commit crimes in order to secure the conviction of a private criminal would bring terrible retribution.
Against that pernicious doctrine this court must resolutely set its face.
" In the same American decision we have just mentioned Justice Holmes observed; "We have to choose, and for my part I think it a less evil that some criminals should escape than that the Government should play an ignoble part.
" The provisions of the statute ostensibly have a benign purpose and in the context of escalation of crime, may be restrictions which, in normal times might appear unreasonable, may have to be clamped down on individuals.
We are conscious of the difficulties of detection and proof and the strain on the police in tracking down criminals.
But fundamental rights are fundamental and personal liberty cannot be put at the mercy of the Police.
Therefore, Ss. 47 and 50 have to be read strictly.
Any police apprehension is not enough.
Some ground or other is not adequate.
There must be a clear and present danger based upon credible material which makes the movements and acts of the person in question alarming or dangerous or fraught with violence.
Likewise, there must be sufficient reason to believe that the person proceeded against is so desperate and dangerous that his mere presence in Delhi or any part thereof is hazardous to the community and its safety.
We are clear that the easy possibility 1268 of abuse of this power to the detriment of the fundamental freedoms of the citizen persuades us to insist that a stringent test must be applied.
We are further clear that natural justice must be fairly complied with and vague allegations and secret hearings are gross violations of article 14, 19 and 21 of the Constitution as expounded by this Court in Maneka Gandhi.
We do not go deep into this question for two reasons: there is another petition where the constitutionality of these identical provisions is in issue.
Secondly, the counsel for the State has fairly conceded that no action will now be taken even by way of surveillance against the petitioner.
In an age when electronic surveillance and mid night rappings at the door of ordinary citizens remind us of despotic omens, we have to look at the problem as fraught with peril to constitutional values and not with lexical Laxity or literal liberality.
Having made these observations, we leave the question of vires open for final investigation, if necessary, in other cases pending before this Court.
We think counsel for the State was right in representing that no further action would be taken against the petitioner.
We dispose of the petition as calling no longer for directions but emphasise the need of the State to issue clear orders to the Police Department to free the processes of investigation and prosecution from the contamination of concoction through the expediency of stockpiling of stock witnesses.
To police persons who get rich quick by methods not easily or licitly understandable, is perhaps a social service.
Among the list of wanted persons must be not only the poor suspects but the dubious rich.
To keep an eye on their activities without close shadowing and surveillance may, perhaps, lead to criminal discoveries, if they are not too influential for the police.
By this judgment what we mean is not to tell the Police to fold up their hands and remain inactive when anti social elements suddenly grow in wealth but to be activist and intelligent enough to track down those who hold the nation 's health, wealth, peace and security in jeopardy.
The only insistence is that the means must also be as good as the ends.
P.B.R. Petition allowed.
| Dismissing the appeals, the Court ^ HELD : (1) Prevention of crime is one of the prime purposes of the constitution of a police force.
In connection with the duties spoken of in section 23 of the , it will be necessary to keep discreet Surveillance over reputed bad characters, habitual offenders and other potential offenders.
Organised crime cannot be successfully fought without close watch of suspects.
But surveillance may be intrusive and it may so seriously encroach on the privacy of a citizen as to infringe his fundamental right to personal liberty guaranteed by Article 21 of the Constitution and the freedom of movement guaranteed by article 19(1)(d).
That such a thing cannot be permitted is recognised by the Punjab Police Rules themselves.
[316G, 317A B] Rule 23.7 which prescribes the mode of surveillance permits close watch over the movements of the person under surveillance but without any illegal interference.
Permissible surveillance is only to the extent of a close watch over the movements of the persons under surveillance and no more.
So long as surveillance is for the purpose of preventing crime and is confined to the limits prescribed by Rule 23.7 a person whose name is included in the surveillance registered cannot have a genuine cause for complaint.
Interference in accordance with law and for the prevention of disorder and crime is an exception recognised even by the European Convention of Human Rights to the right to respect for a person 's private and family life (Article 8).
[317B D] 2.
Discreet surveillance of suspects, habitual and potential offenders, may be necessary and so the maintenance of history sheet and surveillance a register may be necessary too, for the purpose of prevention of crime.
History sheets and surveillance registers have to be and are confidential documents.
Neither the persons whose name is entered in the register nor any other member of the public can have access to the surveillance register, the exception being that the District Magistrate and the Ilaqa Magistrate are entitled to examine the records in accordance with Rules 1.15 and 1.21.
The nature and character of the function involved in the making of an entry in the surveillance register 312 being utterly administrative and non judicial the rule of audi altrem partem is not applicable.
In fact observance of the principles of natural justice may defeat the very object of the rule providing for surveillance.
There is every possibility of the ends of justice being defeated instead of being served.
[317G H, 318A B] Further the entry in the surveillance register is to be made on the basis of the material provided by the history sheet whose contents, by their very nature have to be confidential.
It would be contrary to the public interest to reveal the information in the history sheet, particularly the source of information.
Revelation of the source of information may put the informant in jeopardy.
The observance of the principle of natural justice, apart from not serving the ends of justice may thus lend to undesirable results.
The rule audi altrem partem is, therefore, not attracted.
[318C E] Re vs K (Infants), & 238, quoted with approval.
The intention behind Rule 23 is not to give the police a licence to enter the names of whoever they like (dislike ?) in the surveillance register; nor can the surveillance be such as to squeeze the fundamental freedom guaranteed to all citizens or to obstruct the free exercise and enjoyment of those freedoms; nor can the surveillance so intrude as to offend the dignity of the individual.
Surveillance of persons who do not fall within the categories mentioned in Rule 23.4 or for reasons unconnected with the prevention of crime, or excessive surveillance falling beyond the limits prescribed by the rules, will entitle a citizen to the Court protection which the court will not hesitate to give.
The very rules which prescribe the conditions for making entries in the surveillance register recognises the caution and care with which the police officers are required to proceed.
The note following Rule 23.4 enjoins a duty upon the police officer to construe the rule strictly and confine the entries in the surveillance register to the class of persons mentioned in the rule.
Similarly Rule 23.7 demands that there should be no illegal interference in the guise of surveillance.
Surveillance, therefore, has to be unobtrusive and within bounds.
[318E H, 319A] While it may not be necessary to supply the grounds of belief to the persons whose names are entered in the surveillance register it may become necessary in some cases to satisfy the Court when an entry is challenged on the ground that there are grounds to entertain such reasonable belief.
[319C D]
|
Special Leave Petition No. 1900 of 1981 etc.
From the Judgment and order dated 3.2.1981 of the Allahabad High Court in C.M.W.P. No. 1924 of 1981.
P.P. Rao, Ambrish Kumar, Mrs. Rani Chhabra, M. Qamaruddin, Mrs. Qamaruddin, A.K. Srivastava, B.B. Tawakley, Mrs. Subhadra, S.N. Singh, C.K. Ratnaparkhi, S.K. Gupta, Uma Dutt, C.P. Lal, M.K. Garg, and Lokesh Kumar for the Petitioners.
Anil Dev Singh, O.P. Rana, B.P. Maheshwari, Mrs. section Dikshit, P.K. Pillai, R. Ramachandran, A.K. Srivastava, S.C. Birla, section Wasim, A. Qadri, N.N. Sharma, Shakeel Ahmad and K.K. Gupta for the Respondents.
| The Hindustan Commercial Bank, the Bank of Cochin Ltd. and Lakshmi Commercial Bank were amalgamated with Punjab National Bank, Canara Bank, State Bank of India respectively in terms of separate schemes drawn under the Banking Regulation Act, 1949, and pursuant thereto 125 employees of these banks were excluded from employment, and their services were not taken over by the respective transferee banks.
Some of these excluded employees filed writ petitions before the High Court which granted partial relief, but on appeal by the transferee Bank the Writ Petitions were dismissed by the Division Bench.
Against this, appeals by Special Leave were filed before this Court.
Some of the excluded employees filed writ petitions before this Court directly.
It was contended on behalf of the excluded employees that the draft schemes did not include any name of employees intended to be excluded; that no opportunity of being heard as afforded to them before exclusion was ordered, and the authorities concerned had not acted fairly; that none of them was responsible for ficticious, improper or 189 on business like advances of loan to parties thereby bringing conditions nearabout bankruptcy for the appropriate banking companies, that many other employees against whom there were definite charges already pending enquiry or even orders of dismissal had been proposed had been taken over and retained in service of the transferee banks while these excluded employees, without justification, had been called upon to face this unfortunate situation.
The transferee banks, the Reserve Bank of India and the Union of India filed affidavits in opposition.
It was contended on behalf of the Union of India that the scheme in respect of each of the amalgamated banks had been approved by it as required under the Act and since finality was attached to such schemes, the schemes could not be challenged, particularly in view of the provisions contained in Article 31 A of the Constitution.
It was contended on behalf of the Reserve Bank of India that law did not require that the draft scheme should contain the names of the employees to be excluded, that the incorporation of the names finalised on the basis of scrutiny of the records before the schemes were placed before the RBI was sufficient compliance of the requirements of the law; that the provisions of the Act did not confer any right on the employees of being heard; that the scheme making process was legislative in character and, therefore, did not come within the ambit of natural justice, and the action, not being judicial or quasijudicial and, at the most, being administrative or executive was also not open to challenge on allegations of violation of rules of natural justice; that moratorium under the statutory provisions could not be beyond six months and in view of the fact that the entire operation had to be finalised within a brief time frame, the requirement of an enquiry by notice to all the officers to be excluded could not have been intended to be implanted into the provisions of section 45 and that provision of compensation had been made for those who were excluded from the respective schemes.
Allowing the writ petitions and appeals, this Court, ^ HELD: 1.
Rules of natural justice apply to administrative action and the decision to exclude a section of the employees without complying with requirements of natural justice was bad.
[206H] 2.1 Fair play is part of public policy and a guarantee for justice to citizens.
In our system of Rule of Law, every social agency conferred with power is required to act fairly so that social action would be just, and there would be furtherance of the well being of citizens.
[207E] 190 2.2 The rules of natural justice have developed with the growth of A civilization and the content thereof is often considered as a proper measure of the level of civilization and Rule of Law prevailing in the community.
[207E F] 2.3 Natural justice generally requires that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed so that they may be in a position (a) to make representation on their own behalf; (b) or to appear at a hearing or enquiry (if one is held); and (c) effectively to prepare their own case and to answer the case (if any) they had to meet.
Even when a State agency acts administratively, rules of natural justice would apply.[206C D] 3.1 Section 45 of the Banking Regulations Act provides a legislative scheme and the different steps required to be taken have been put one after the other.
On a simple construction of sub sections (5) and (6) and on the basis of the sequence pattern adopted in section 45, it is clear that the Act contemplates the employees to be excluded to be specifically named in the draft scheme.
Since it is a draft scheme prepared by RBI and right to object or to make suggestions is extended to both the banking company as also the transferee bank, and in view of the fact that clause (i) of sub section (5) specifies this item to be a matter which may be included in the scheme, it must follow that the legislative intention is that the scheme would incorporate the names of such employees as are intended to be excluded in accordance with the scheme.
Once it is incorporated in the scheme, the banking company as also the transferee bank would be entitled to suggest/object to the inclusion of names of employees.
[199E F; H; 200A B] 3.2 In case some employees of the banking company are intended to be excluded, their names have to be specifically mentioned in the scheme at the draft stage.
The requirement of specific mention is significant and the legislature must be taken to have intended compliance of the requirement at that stage.
The excluded employees in the instant case, were in employment under the contract in the banking companies which were private banks.
They have been excluded from service under the transferee banks and the contracts had been terminated as a result of inclusion of their names in the schemes.
This exclusion has adversely affected this category of employees and has brought about prejudice and adverse civil consequences to them.
[200D E] 4.1 Natural justice cannot be employed in the exercise of legisla 191 tive power.
Power has been conferred on the RBI in certain situations to A take steps for applying to the Central Government for an order of moratorium and during the period of moratorium to propose either reconstruction or amalgamation of the banking company.
A scheme for the purposes contemplated has to be framed by RBI and placed before the Central Government for sanction.
Power has been vested in the Central Government in terms of what is ordinarily known as a Henery 8 clause for making orders for removal of difficulties.
[201H; 202A B] 4.2 Section 45(11) requires that copies of the scheme as also such orders made by the Central Government are to be placed before both Houses of Parliament.
This requirement does not make the exercise in regard to schemes a legislative process.
Framing of the scheme under section 45 does not involve a legislative process, and as such, rules of natural justice are applicable to the instant case.
[202C] 4.3 The fact that orders made by the Central Government for removing difficulties as contemplated under sub clause (10) were also to be placed before the two Houses of Parliament makes it abundantly clear that the placing of the scheme before the two Houses is not a relevant test for making the scheme framing process legislative.
[203B] 5.1 RBI which monitored the three amalgamations was required to act fairly in the facts of the case.
The situation necessitated a participatory enquiry in regard to the excluded employees.
If an opportunity to know the allegations and to have their say had been afforded, they could have no grievance on this score.
The action deprives them of their livelihood and brings adverse civil consequences and could obviously not be taken on the ipse dixit of RBI owners without verification of facts.
In view of the time frame, a detailed enquiry may not be possible but keeping the legislative scheme in view, perhaps, a simpler enquiry could be afforded.
[206E F] 5.2 In the facts of the case, there is no justification to hold that rules of natural justice have been ousted by necessary implication on account of the time frame.
On the other hand, the time limited by statute provides scope for an opportunity to be extended to the intended excluded employees before the scheme is finalised so that a hearing commensurate to the situation is afforded before a section of the employees is thrown out of employment.
[207F G] 5.3 There is no justification to think of a post decisional hearing.
H 192 on the other hand, the normal rule should apply.
The excluded employees have already been thrown out of employment and having been deprived of livelihood they must be facing serious difficulties.
There is no justification to throw them out of employment and then given them an opportunity of representation when the requirement is that they should have the opportunity as a condition precedent to action.
It is common experience that once a decision has been taken, there is a tendency to uphold it and a representation may not really yield any fruitful purpose.
[208A C] 6.
Protection of the umbrella of conclusive evidence is not attached to a situation as in the instant case, so as to bar the question regarding the requirements of the procedure laid down under the Act and the opportunity afforded to the excluded employees from being examined.
There is, therefore, nothing in sub section (7A) of section 45 to preclude examination of the question.
[208G] [Each of the three transferee banks should take over the excluded employees on the same terms and conditions of employment under the respective banking companies prior to amalgamation.
The employees would be entitled to the benefit of continuity of service for all purposes including salary and perks throughout the period.
It is open to the transferee banks to take such action as they consider proper against these employees in accordance with law.
There is no justification to penalise some of the excluded employees who have not come to the Court.
They too shall be entitled to the same benefits as the petitioners.] [208H; 209A B] Union of India & Anr.
vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720; Perre Brothers vs Citrus organisation Committee, ; Re (H) K (an infant), ; State of Orissa vs Dr. (Miss) Binapani Dei & Ors., ; ; A.K Kraipak & ors., vs Union of India & Ors., ; Chandra Bhavan Boarding and Lodging, Bangalore vs The State of Mysore & Anr., 11970] 2 SCR 600; Swadeshi Cotton Mills vs Union of India, ; and Smt.
Somavanti & Ors.
vs State of Punjab & Ors., , referred to.
|
Civil Appeal No. 504 (N) of 1971.
Appeal from the Judgment and order dated the 24th April 1970 of the Madhya Pradesh High Court in Misc.
Petition No. 246 of 1967.
545 R.P. Bhatt, Ashok Mehta, J.B. Dadachanji and D.N. Misra for the appellant.
Gopal Subramanium and section A. Shroff for the respondents.
The Judgment of the Court was delivered by B TULZAPURKAR, J.
Two questions were raised for our determination in this appeal by a certificate: (a) Whether the Sugarcane Development Council, Sehore (respondent No. 2) can charge commission under section 21 (1) of the Madhya Pradesh Sugar Cane (Regulation of Supply & Purchase) Act, 1958 on purchases of sugarcane made by the appellant company from outside the "reserved area" ? and (b) Whether the Sugar Cane Growers Development Co operative Union Ltd., Sehore (respondent No. 3: the concerned Cane Growers Co operative Society) can charge commission under section 21 (l) (a) of the Act in respect of the purchases of sugarcane made by the appellant through the Union when there is no quid pro quo by way of rendering any services by Union to the appellant company ? The short facts giving rise to the above questions may be stated: The appellant company crushes sugarcane in its factory at Sehore in Madhya Pradesh.
For its business it purchases sugarcane from "reserved area" as well as from outside both directly from the cane growers as well as through respondent No. 3, a Cane growers Co operative Society, Sehore.
Section 21 of the Act imposes an obligation upon the appellant company to pay commission on all its purchases of cane at prescribed rates and it has to pay such commission in respect of purchases made through the Society to the Society and the Development Council and in respect of purchases made directly from the cane growers to the Development Council.
According to the appellant company judicial decisions rendered by Madhya Pradesh High Court as well as this Court have settled the position that the commission chargeable under section 21 of the Act is in the nature of a fee the imposition of which is supported on the basis of quid pro quo in the shape of services rendered by the Development 546 Council to a factory (vide: Jaora Sugar Mills (P) Ltd. vs State of Madhya Pradesh and others.
It appears that during the seasons 1960 61 to 1964 65 the appellant company purchased cane directly from the cultivators of "reserved area" as well as from the cultivators of "non reserved area" and respondent No. 2 (Development Council, Sehore) made a demand of commission from the appellant company in respect of such purchases both from "reserved area" as well as from "non reserved area.
" Similarly, during the crushing seasons 1963 64 to 1966 67 the appellant company made purchases of cane from or through respondent No. 3 (Co operative Society) in respect whereof a demand of commission was made by respondent No. 3 from the appellant company.
By a writ petition (being Misc.
Petition No. 246 of 1967) filed in the Madhya Pradesh High Court at Jabalpur the appellant company challenged the validity of the demand made by respondent No. 2 insofar as it related to purchases made from non reserved area on the ground that it (Council) was established for the reserved area of the appellant company 's factory and its functions were confined to that area and as such no commission (fee) could be recovered by it in respect of purchases made by appellant company from non reserved area; similarly, the demand made by respondent No. 3 (Co operative Society) was challenged on the ground that no services of any kind whatsoever were rendered by it to the appellant company, and the charge would be invalid in the absence of any quid pro quo.
The High Court negatived both the contentions and dismissed the petition.
It is this decision of the High Court that is challenged before us in the appeal and counsel for the appellant company raised the two questions mentioned at the commencement of the judgment.
Section 21, which deals with commission on.
purchase of cane, runs thus: "(1) There shall be paid by the occupier a commission for every one maund of cane purchased by the factory (a) where the purchase is made through a Cane growers ' Co operative Society, the commission shall be payable to the Cane growers ' Cooperative 547 Society and the Council in such proportion as the State Government may declare; and (b) where the purchase is made directly from the cane grower, the commission shall be payable to the Council.
(2) The Commission payable under clauses (a) and (b) of sub section (1) shall be at such rates as may be prescribed provided, however, that the rate fixed under clause (b) shall not exceed the rate at which the com mission may be payable to the Council under clause (a).
" Section 30 confers power on the State Government to make rules for the purpose of carrying into effect the provisions of the Act and under cl.
(j) of sub section
(2) such Rules may provide for "the rate at which and the manner in which commission shall be paid to the Cane growers ' Co operative Society on the supply of cane by them.
" Under the aforesaid provisions certain rules called the Madhya Pradesh Sugar Cane (Regulation of Supply and Purchase) Rules, 1959 have been framed by the State Government.
Rules 45 and 46 occurring in Chapter X of the Rules are material and they are as follows: "45.
The occupier of factory shall pay a commission for the cane purchased at the following rates namely: (i) Where the purchase is made through a Cane growers ' Co operative Society, at the rate of 5 Naya Paise per maund out of which 2 Naya Paise shall be payable to the Society and 3 Naya Paise to the Council; (ii) Where the purchase is made directly from the cane growers, at the rate of 3 Naya Paise per maund, payable to the Council.
In determining the proportion to which payments out of commission shall be made to the Council and the Cane growers ' Co operative Society of an are the State Government may take into consideration the 548 financial resources and the working requirements of the Council and the Cane growers ' Co operative Society.
" It is thus clear from the aforesaid statutory provisions that every factory is under an obligation to pay commission on all its purchases of cane at the prescribed rates and it has to pay such commission at the rate of 2 Naya Paise per maund to the Society and 3 Naya Paise to the Council in respect of purchases made through a Cane growers ' Co operative Society and at the rate of 3 Naya Paise per maund to the Council where the purchases are made directly from the cultivators or cane growers.
It cannot be and was not disputed by Counsel on behalf of the respondents that the levy under section 21 of the Act though called "commission" is really in the nature of a fee, the imposition of which is supportable only on the basis of quid pro quo in the shape of rendition of services to the factory in the matter of cane purchased by it and Counsel accepted this position as emerging from this Court 's decision in Jaora Sugar Mills ' case (supra).
Now, turning to the first question raised before us Counsel for the appellant company contended that respondent No. 2 Council has been established for the "reserved area" of the appellant 's factory so declared under section 15 of the Act, that respondent No. 2 Council is required to discharge its statutory functions and duties under section 6 of the Act confined to the "reserved area" meant for the appellant 's factory and as such the demand for commission (fee) in respect of purchases of cane made by the appellant factory from non reserved areas (which it is entitled to make along with its purchases from the "reserved area") would be illegal and without any authority of law because in respect of such purchases there is no quid pro quo in the shape of rendering of services by respondent No. 2 to the appellant factory.
It is not possible to accept this contention for more than one reason.
In the first place there are no qualifying words to be found in section 21 of the Act which limit the imposition of commission (fee) to purchases of cane made by a factory from reserved area only; the imposition is on every maund of cane purchased by factory irrespective of the area from where such purchases may have been made.
Secondly, and this is important, if the relevant provisions of sections 5 and 6 of the Act are carefully examined it will appear that the functions and duties of the Development Council are not confined to the "reserved area" of a factory as 549 urged by the Counsel for the appellant company.
Under section 5 "there shall be established, by notification, for the reserved area of a factory a Cane Development Council which shall be a body cooperate provided that where the Cane Commissioner so directs, the Council may be established for a larger or smaller area "than the reserved area of a factory" and sub section
(2) provides that "the area for which a council is established shall be called a Zone".
In other words, the Zone area of operation) of a Council could be larger than the "reserved area" of a factory i.e. would, include area outside the reserved area of the factory.
Further, the functions and duties of the Council are indicated seriatim in cls.
(a) to (g) of sub section
(1) of section 6 and these include functions like considering and approving development programmes for the Zone, devising ways and means for execution of development plan in all its essentials such as cane varieties, cane seed, sowing programme, fertilizers and manures, taking steps for the prevention of diseases and pests and rendering all help in soil extension work, etc.
and it will be noticed that some of these functions under cl.
(b), (d) and (e) are of general character and not confined even to the Zone of the Council.
In other words, the functions and duties of the Council which are in the nature of rendering services in the matter of better cane production, distribution and supply thereof to the factory are not confined to the "reserved area" so declared for a factory under sec.
15 of the Act.
If that be so it is difficult to accept the contention that in the matter of cane purchases made by the appellant 's factory from non reserved areas no services are rendered by the respondent No. 2 Council to the appellant 's factory.
The quid pro quo being there the imposition of a fee on such purchases from non reserved areas would be proper and justified.
As regards the demand and recovery of commission (fee) by respondent No. 3 under section 21(1)(a) in respect of purchases of sugarcane made by the appellant 's factory through it, the contention of Counsel for the appellant company has been that respondent No. 3 is the concerned Cane growers ' Co operative Society in the area, one of the objects of which is to sell cane grown by its members to the appellant 's factory, that the said Society does not render any services to the appellant 's factory under the Act or otherwise and hence is not entitled to recover any fee from the appellant company.
It is pointed out that respondent No. 3 is meant for helping its members and in fact renders various types of services to its cultivator members 550 so that they are not exploited.
In fact in the matter of supplies of cane made through the respondent No. 3 it is the Society which deals with its members who receive their price from the Society.
Counsel pointed out that even in the return filed by respondent No. 3 to the writ petition, respondent No. 3 enumerated four types of services which it claimed was rendering to the appellant 's factory, namely, (a) it made arrangements for lump sum cane supply on lump sum demand from the factory; apart from convenience this resulted in economy to the factory as it had to maintain less staff; (b) it undertook equitable distribution of quota and the factory had not to undertake this function; (c) it undertook the maintenance of the records of individual growers for cane supplies and the factory had not to undertake this function and (d) it made payment to the suppliers though the factory is required to make payments for supplies effected immediately and in actual practice mostly the factory made payments late at its convenience but the Society made payments to the suppliers regularly according to the programme drawn by it; the appellant 's factory thus benefited by the existence of this Society.
But according to Counsel for the appellant company none of these items referred to above really amounts to rendering any service to the appellant 's factory by way of conferring on it some special benefit having a direct, close or reasonable correlation to its transactions of purchase of cane and, if at all, all these items referred to in the Return are really for the benefit of cultivator members of the Society and in this behalf, Counsel relied upon a decision of this Court in Kewal Krishan Puri 's case where in the context of enhanced market fee levied under Punjab Agricultural Produce Market Act, 1961 this Court has observed that the quid pro quo by way of rendering services must result in the conferral of some special benefits to the persons charged which have a direct, close and reasonable correlation between such persons and their transactions and that any indirect or remote benefit to them would in no sense be such benefit.
Counsel for the appellant company, therefore, urged that since in everything that is being done by it respondent No. 3 is rendering services to its own members and no services resulting in any special benefit to the appellant 's factory are rendered, no charge by way of any fee would be legally recoverable by respondent No. 3 from the appellant 's factory.
551 In our view having regard to the scheme of the Act and the activities which respondent No. 3 has been undertaking in the discharge of its normal functions it will be difficult to accept the contention urged by Counsel for the appellant 's factory that no services of any kind whatsoever resulting in conferral of special benefits on the appellant 's factory in regard to its transactions of purchases of cane are rendered by respondent No. 3 to the appellant 's factory.
The scheme of the Act is that under sections 15 and 16 a declaration of reserved and assigned areas for purchase and supply of sugarcane is made by the Cane Commissioner for every factory after consulting in the manner prescribed the occupier of the factory and the Cane growers ' Co operative Society, if any, in that area and upon declaration of such areas an obligation is cast upon the occupier of the factory, in the case of "reserved area", to purchase all cane grown in such area which is offered for sale and in respect of "assigned area" to purchase such quantity of cane grown therein and offered for sale for the factory as may be determined by the Cane Commissioner.
Further, under section 19 the State Government can by order regulate the distribution, sale and purchase of cane within any "reserved and assigned area" as also from areas other than "reserved and assigned areas" and under cl.
(b) of sub sec.
(2) such order made by the State Government may provide for the manner in which cane grown in the "reserved area" or the "assigned area" shall be purchased by the factory and the cane grown by a cane grower shall not be purchased except through a Cane growers ' Co operative Society.
In other words the scheme of Act contemplates situations where the appellant 's factory may have to purchase cane from within reserved or assigned areas only through the respondent No. 3 Society.
Moreover in its Return the respondent No. 3 has averred that under its bye laws the Society is established to develop scientific methods of sugar cane growing and calls on its members to introduce modern means of implements for cultivating sugarcane which unquestionably makes for assured bulk supply of uniformly good quality cane through its members to the appellant 's factory.
In other words this function undertaken by respondent No. 3 is of a nature or kind similar to that undertaken by the council and therefore it cannot be said that no services conferring special benefit on the appellant 's factory in the matter of its purchases of cane are rendered by respondent No; 3 to the appellant 's factory.
Having regard to the aforesaid position it is not possible to accept the contention that in respect of purchases of cane made through the respondent No. 3 Society there is no 552 element of quid pro quo in the shape of rendering services by respondent No. 3 to the appellant 's factory.
In the result both the questions are answered against the appellant company and the appeal is dismissed with costs.
H.L.C. Appeal dismissed.
| Section 21 (1) of the Madhya Pradesh Sugar Cane (Regulation of Supply & Purchase) Act, 1958, imposes an obligation upon an occupier of a factory to pay commission at prescribed rates on all its purchases of sugarcane.
While in respect of purchases made through a Cane growers ' Cooperative Society the commission is payable to that Society and the Cane Development Council under section 21 (1) (a), in respect of purchases made directly from the cane growers the commission is payable to the Cane Development Council under section 21 (1) (b).
The appellant, a company which crushes sugar cane in its factory, purchased cane directly from the cultivators of 'reserved area ' as well as of 'non reserved area '.
Respondent No. 2, the Cane Development Council, demanded commission in respect of purchases made from both 'reserved ' as well as 'non reserved ' areas.
The appellant also purchased cane from or through respondent No. 3, a Cane growers ' Cooperative Society and in respect of those purchases, the demand for commission was made by that Society.
The demands for payment of commission were challenged by the appellant by a petition under article 226 which was dismissed by the High Court.
In appeal to this Court it was contended on behalf of the appellant that since the Cane Development Council had been established for the 'reserved area ' of the appellant 's factory so declared under section 15 of the Act and its statutory functions and duties were confined to that area under section 6 of the Act, its demand for commission on purchases made from 'non reserved area ' was illegal, there being no quid pro quo in the shape of rendering services in respect of purchases made from 'non reserved area '.
As Regards the demand of the Cane growers ' Cooperative Society for commission in respect of purchases made through it, the contention was that in everything being done by it, the Society was rendering services to its own members and since no services resulting in any special benefit to the appellant were being rendered by it in terms of the decision of this Court in Kewal Krishan Puri 's case; , , there was no quid pro quo and therefore no commission was legally recoverable by tho Society.
544 Dismissing the appeal, ^ HELD: 1.
The levy under section 21 of the Act though called 'commission ' is really in the nature of a fee and its imposition is supportable only on the basis of quid pro quo in the shape of rendition of services to a factory in the matter of cane purchased by it.
[548 C D] Jaora Sugar Mills (P) Ltd. vs State of Madhya Pradesh and Ors. , referred to.
The imposition of commission by the Cane Development Council on purchases of cane from 'non reserved area ' was proper and justified as there was quid pro quo in the form of rendering services in the matter of better cane production, distribution and supply thereof.
The area of operation or the 'zone ' of the Council could include areas outside the 'reserved area ' of the factory as a Council could be established for a larger or smaller area "than the reserved area of a factory" under section S of the Act, and its functions and duties under cls.
(a) to (g) of section 6(1) included functions like considering and approving development programmes for the zone, devising ways and means for execution of development plan in all its essentials such as cane varieties, cane seed, sowing programme, fertilizers and manures, taking steps for prevention of diseases and pests and rendering all help in soil extension work, etc.
Some of these functions mentioned in cls.
(b), (d) and (e) of section 6(1) are of general character and not confined to even the zone of the Council.
Further, section 21 of the Act does not contain any qualifying words limiting the imposition of commission to purchases of cane made by a factory from 'reserved area ' only; the imposition is on every maund of cane purchased by a factory irrespective of the area from where such purchases might have been made.
[549 A P] 3.
The contention that in respect of purchases of cane made through the Cane growers ' Cooperative Society there was no element of quid pro quo cannot be accepted having regard to the scheme of the Act and the activities undertaken by the Society in the discharge of its normal functions.
The scheme of the Act, particularly in sections 15, 16 and 19, contemplated situations where the appellant 's factory might have had to purchase cane from within reserved or assigned areas, only through the Society.
The Society had been established to develop scientific methods of sugar cane growing and it had called upon its members to introduce modern means of implements for cultivating sugarcane which unquestionably made for assured bulk supply of uniformly good quality cane through its members to the appellant 's factory.
It could not, therefore, be said that no services conferring special benefit on the appellant 's factory in the matter of purchases of cane were being rendered by the Society to the appellant 's factory.
[551 A H; 552 A]
|
N: Criminal Appeal No. 287 of 1979.
Appeal by special leave from the Judgment and Order dated 12 10 1967 of the Delhi High Court in Criminal Revision No. 117 of 1977.
WITH SPECIAL LEAVE PETITION (CRIMINAL) No. 3115 of 1979.
From the Judgment and Order dated 21 9 1979 of the Chief Judicial Magistrate Bhiwani in Case No. 1861 of 1978.
987 AND CRIMINAL MISCELLANEOUS PETITION No. 3890 of 1979.
An Application for direction under section 15 of the and Rule 3(b) of the Rules to regulate proceedings for contempt of Supreme Court, 1975.
Lal Narain Sinha Att.
Genl., M. K. Banerjee, Addl.
Miss A. Subhashini and R. B. Datar for the Petitioner in Crl.
Petition No. 3890/79.
U. D. Gour Adv.
Haryana and M. N. Shroff for the Respondent in Crl.
Petition No. 3890/1979.
P. H. Parekh, Hemant Sharma, Rajan Karanjawala and C. B. Singh for the Petitioner in SLP 3115/79.
M. C. Bhandare, Mrs. Sunanda Bhandare and T. Sridharan for Respondent No. 1 in SLP 3115/79.
A. N. Kharkhanis for Respondent No. 4 in SLP 3115/79.
U. D. Gour Adv.
Haryana and M. N. Shroff for Respondents 26 27 in SLP 3115/79.
Lal Narain Sinha, Att.
Genl., Miss A. Subhashini and R. B. Datar for Respondent No. 30 in SLP 3115/79.
Ram Panjwani, Raj Panjwani, Vijay Panjwani and section K. Bagga for the Petitioner in Crl.
A. 287/79.
Lal Narain Sinha Att.
and M. K. Banerjee Addl.
and Miss. A. Subhashini for Respondent No. 1 in Crl.
A. 297/79.
Ram Jethmalani, Mrs. Sushma Swaraj, A. K. Pande and Mrs. Hemanlika Wahi for Respondent No. 2 in Crl.
A 297/79.
V. M. Tarkunde, T. U. Mehta, P. H. Parekh and Miss Vineeta Caprihan for Respondent No. 5 in Crl.
A. No. 297 of 1979.
Ram Jethmalani and Ranjan Dwivedi for Respondent Nos. 2, 11, 12, and 13 in Crl.
A. 287/79.
Ram Jethmalani, A. G. Noorani, Miss Rani Jethmalani and Mrs. Kamini Jaiswal for Respondent Nos. 3, 15 and 16 in Crl.
A. 287/79.
Ram Jethmalani and A. G. Noorani and Miss Rani Jethmalani for Respondent No. 21 in Crl.
A. 287/79.
Sushil Chandra Bhatnagar in person (Respondent No. 14 in Crl.
A. 287/79).
988 The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
A cocktail of law and politics, reason and extravagance is the only way we can describe the submissions made to us in these two cases.
Well known personalities are involved, in one case an Ex Central Minister, the present Governor of a State and some leading journalists, and in the other an ex Central Minister, and a host of Government officials.
Perhaps that was responsible for the passion and the tension which appeared to characterise and sometimes mar the arguments in the two cases.
We will first take up for consideration Criminal Appeal No. 287 of 1979.
In exercise of the powers conferred by section 196(1) (a) of the Code of Criminal Procedure 1973, and section 7 of the , the Government of India by its order dated September 6, 1976 accorded sanction for the prosecution of George Mathew Fernandes alias George Fernandes and 24 others for alleged offences under Ss.
121 A Indian Penal Code, 120 B Indian Penal Code read with Ss. 4, 5 and 6 of , and section 5(3)(b) and section 12 of the Indian .
The first paragraph of the order according sanction set out the subject of the conspiracy in the following words: "Whereas, it is alleged that after the issue of the proclamation of Emergency on 25th June, 1975 by the President of India in exercise of the powers conferred by clause (1) of Article 352 of the Constitution, George Mathew Fernandes alias George Fernandes, Chairman of Socialist Party of India and Chairman of All India Railwaymen 's Federation sought to arouse resistance against the said emergency by declaring that the said emergency had been "clamped" on the country by the "despotic rule" of Smt.
Indira Gandhi, Prime Minister of India and to entertain an idea that a conspiracy be hatched with the help of the persons of his confidence, to over awe the Government and in pursuance of the conspiracy do such acts which might result in the destruction of public property and vital installations in the country".
Thereafter the order set out the various acts committed by the several accused persons in pursuance of the objects of the conspiracy.
On September 24, 1976 the Deputy Superintendent of Police, Special Police Establishment Central Bureau of Investigation, Central Investi 989 gation Unit (A), New Delhi, filed a charge sheet in the Court of the Chief Metropolitan Magistrate, Delhi, against the said accused persons for the offences mentioned in the order sanctioning the prosecution.
Two of the accused persons had been tendered pardon.
They had, therefore, to be examined as witnesses in the Court of the Magistrate taking cognizance of the offences notwithstanding the fact that the case was exclusively triable by the Court of Session.
The evidence of the approvers was recorded on March 22, 1977 and the case was adjourned to March 26, 1977 for further proceedings.
At that stage, on March 26, 1977, N. section Mathur, Special Public Prosecutor filed an application under section 321 of the Criminal Procedure Code 1973, for permission to withdraw from the prosecution.
The application was as follows: "It is submitted on behalf of the State as under: 1.
That on 24 9 76 the Special Police Establishment after necessary investigation had filed a charge sheet in this Hon 'ble Court against Shri George Mathew Fernandes and 24 others for offences section 121 A IPC, 120B IPC r/w sections 4, 5 and 6 of the and Section 5(3) (b) and 12 of the Indian as well as the substantive offences.
That besides the accused who were sent up for trial two accused namely Shri Bharat C. Patel and Rewati Kant Sinha were granted pardon by the Hon 'ble Court and were examined as approver section 306(4) Cr.
P.C. 3.
That out of 25 accused sent up for trial cited in the charge sheet, 2 accused namely Ladli Mohan Nigam and Atul Patel were declared proclaimed offenders by the Hon 'ble Court.
That in public interest and changed circumstances, the Central Government has desired to withdraw from the prosecutions of all the accused.
It is therefore prayed that this Hon 'ble Court may accord consent to withdraw from 26th March 1977.
Sd/ (N. section Mathur) Special Public Prosecutor for the State, New Delhi". 990 On the same day the learned Chief Metropolitan Magistrate, expressing the opinion that it was "expedient to accord consent to withdraw from the prosecution", granted his consent for withdrawal from the prosecution.
One Dr. Rajender Kumar Jain, and Advocate, filed a petition in the High Court of Delhi, under section 397 of the Criminal Procedure Code for revision of the order of the learned Chief Metropolitan Magistrate giving his consent to the Special Public Prosecutor to withdraw from the prosecution.
Several grounds were raised all of which were negatived by the High Court.
It was also held by the High Court that the applicant had no locus standi.
The Revision Petition was dismissed.
Dr. Rajender Kumar Jain has filed this appeal after obtaining special leave from this Court.
Shri Ram Panjwani, learned counsel for the appellant made the following submissions: (1) The offences for which the accused persons were to be tried were exclusively triable by a Court of Session and, therefore, the Committing Magistrate had no jurisdiction to give consent to the Public Prosecutor to withdraw from the prosecution, (2) The Public Prosecutor had abdicated his function and had filed the application at the behest of the Central Government without applying his mind.
(3) The Magistrate was in error in giving consent on the ground that it was expedient to do so.
Expedience was never for the judiciary.
(4) section N. Mathur who had filed the application for withdrawal from the prosecution was not the Public Prosecutor incharge of the case and the application was therefore, incompetent.
The submissions of Shri Ram Panjwani were controverted by Shri Ram Jethmalani and Shri V. M. Tarkunde, learned counsel for the respondents.
They also submitted that the offences with which the accused persons were charged were of a political nature and if the Government of the day thought that the Public Prosecutor should withdraw from the prosecution on grounds of public policy and advised the Public Prosecutor to do so, it could not be said that the Public Prosecutor abdicated his function merely because the proposal to withdraw from the prosecution emanated from the Government and he acted upon such proposal.
It was also submitted that so far as the fifth respondent was concerned no prosecution could be launched or continued against him under article 361 (2) as he was the Governor of a State.
Shri Panjwani in his reply submitted that political offences were unknown to the Municipal law of the land and that in the instant case the withdrawal from the prosecution was for a purely political purpose and not in the public interest at all.
It was said that the case was withdrawn in order that Shri George Fernandes could be appointed as a Minister in the Central Cabinet.
991 section 321 of the Criminal Procedure Code of 1973 which corresponds to section 494 of the Code of Criminal Procedure of 1898 is as follows: "Withdrawal from prosecution.
The Public Prosecutor or Assistant Public Prosecutor in charge of a case may, with the consent of the Court, at any time before the judgment is pronounced, withdraw from the prosecution of any person either generally or in respect of any one or more of the offences for which he is tried; and, upon such withdrawal, (a) if it is made before a charge has been framed, the accused shall be discharged in respect of such offence or offences; (b) if it is made after a charge has been framed, or when under this Code no charge is required, he shall be acquitted in respect of such offence or offences".
We have not extracted the proviso as it is not necessary for the purposes of these cases.
Under section 494 of the Criminal Procedure Code 1898, it was held by this Court in State of Bihar vs Ram Naresh Pandey, that the Court of the Committing Magistrate before whom a committal proceeding was pending was "the Court" within the meaning of section 494 which was competent to give its consent even in the case of offences exclusively triable by the Court of Session.
But, it was contended that after the enactment of the Criminal Procedure Code of 1973, the situation had changed since under the new Code the Court of the Committing Magistrate had no judicial function to perform in relation to the case which he was required to commit to the Court of Session.
The submission was that the Court contemplated by section 494 was the Court capable of pronouncing a judgment, ending the proceeding by an order of acquittal or discharge and, since the Court of the Committing Magistrate under the new Code was not invested with the power of acquitting or discharging the accused it was not the Court which could grant its consent to withdraw from the prosecution.
In the first place there is no warrant for thinking that only the Court competent to discharge or acquit the accused under some other provision of the Code can exercise the power under section 321 Criminal Procedure Code.
The power conferred by section 321 is itself a special power conferred on the Court before whom a prosecution is pending and the exercise of the power is not made dependent upon the power 992 of the Court to acquit or discharge the accused under some other provision of the Code.
The power to discharge or acquit the accused under section 321 is a special power founded on section 321 itself, to be exercised by the Court independently of its power of enquiry into the offence or try the accused.
Again, the expression 'judgment ' in the context may be understood to mean the judgment which may be ultimately pronounced if the case were to be committed to a Court of Session.
That was the view expressed in the State of Bihar vs Ram Naresh Pandey, (supra) where the Court observed: "In any view, even if 'judgment ' in this context is to be understood in a limited sense it does not follow that an application during preliminary enquiry which is necessarily prior to judgment in the trial is excluded".
In the second place it may not be accurate to say that the Committing Magistrate has no judicial function to perform under the 1973 Code of Criminal Procedure.
section 209 of the Criminal Procedure Code 1973 obliges the Magistrate to commit the case to the Court of Session when it appears to the Magistrate that the offence is triable exclusively by the Court of Session.
Therefore, the Magistrate has to be satisfied that an offence is prima facie disclosed and the offence so disclosed is triable exclusively by the Court of Session.
If no offence is disclosed the Magistrate may refuse to take cognizance of the case or if the offence disclosed is one not triable exclusively by the Court of Session he may proceed to deal with it under the other provisions of the Code.
To that extent the Court of the Committing Magistrate does discharge a judicial function.
We therefore, over rule the first submission of Shri Ram Panjwani.
We do not agree with the view taken by the High Court of Andhra Pradesh in A. Venkataramana vs Mudem Sanjeeva Ragudu & Ors., that the court of the Committing Magistrate is not competent to give consent to the Public Prosecutor to withdraw from the prosecution.
The fourth submission of Shri Ram Panjwani does not appeal to us.
The notification dated June 17, 1966 of the Ministry of Home Affairs, Government of India, shows that the Senior Public Prosecutor, Public Prosecutor and Assistant Public Prosecutor of the Delhi Special Police Establishment attached to the Delhi office of the Special Police Establishment were appointed as Public Prosecutors under section 492(1) of the Criminal Procedure Code 1898 to conduct the cases of the Special Police Establishment before the Courts of Magistrates, Special Judges, and Sessions Judges, in the Union Territory of Delhi.
993 All notifications issued under the old Code are deemed to have been made under the corresponding provisions of the new Code.
It appears that Shri N. section Mathur is a Public Prosecutor attached to the Special Police Establishment at Delhi and has been functioning right through as Public Prosecutor in the Union Territory of Delhi.
The High Court has also pointed out on a scrutiny of the proceedings of the Magistrate that it was Shri N. section Mathur who was incharge of the case practically throughout.
The second and third submissions of Shri Panjwani may be considered together.
Decisions of this Court have made clear the functional dichotomy of the Public Prosecutor and the Court.
In the State of Bihar vs Ram Naresh Pandey, (supra) the Court while considering section 494 of the old Code explained: "The section is an enabling one and vests in the Public Prosecutor the discretion to apply to the Court for its consent to withdraw from the prosecution of any person. .
The function of the Court, therefore, in granting its consent may well be taken to be a judicial function.
It follows that in granting the consent the Court must exercise a judicial discretion.
But it does not follow that the discretion is to be exercised only with reference to material gathered by the judicial method.
Otherwise the apparently wide language of section 494 would become considerably narrowed down in its application.
In understanding and applying the section two main features thereof have to be kept in mind.
The initiative is that of the Public Prosecutor and what the Court has to do is only to give its consent and not to determine any matter judicially.
The judicial function. implicit in the exercise of the judicial discretion for granting the consent would normally mean that the Court has to satisfy itself that the executive function of the Public Prosecutor has not been improperly exercised, or that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes.
In the context it is right to remember that the Public Prosecutor (though an executive Officer . ) is, in a larger sense, also an officer of the Court and that he is bound to assist the Court with the fairly considered view and the Court is entitled to have the benefit of the fair exercise of his functions".
The Court also appreciated that in this Country the scheme of the administration of Criminal Justice places the prime responsibility 994 of prosecuting serious offences on the executive authorities.
The investigation, including collection of the requisite evidence, and the prosecution for the offence with reference to such evidence were the functions of the executive, and in that particular segment the power of the Magistrate was limited and intended only to prevent abuse.
In M. N. Sankaranarayanan Nair vs P. V. Balakrishnan & Ors.
the Court while reiterating decision that the Court granting permission for withdrawal should satisfy itself that the executive function of the Public Prosecutor has not been improperly exercised and that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes, observed that the wide and general powers conferred on the Public Prosecutor to withdraw from the prosecution have to be exercised by him "in furtherance of, rather than as a hindrance to the object of the law" and that the Court while considering the request to grant permission should not do so as "a necessary formality the grant of it for the mere asking".
In State of Orissa vs Chandrika Mohapatra & Ors.
the Court said: "We cannot forget that ultimately every offence has a social or economic cause behind it and if the State feels that the elimination or eradication of the social or economic cause of the crime would be better served by not proceeding with the prosecution, the State should clearly be at liberty to withdraw from the prosecution".
In Balwant Singh & Ors.
vs State of Bihar, the independent role of the Public Prosecutor in making an application for withdrawal from a prosecution was emphasised.
It was pointed out that statutory responsibility for deciding upon withdrawal vested in the Public Prosecutor and the sole consideration which should guide the Public Prosecutor was the larger factor of the administration of justice and neither political favour nor party pressure or the like.
Nor should he allow himself to be dictated to by his administrative superiors to withdraw from the prosecution.
The Court also indicated some instance where withdrawal from prosecution might be resorted to independently of the merits of the case: "Of course, the interests of public justice being the paramount consideration they may transcend and overflow 995 the legal justice of the particular litigation.
For instance, communal feuds which may have been amicably settled should not re erupt on account of one or two prosecutions pending.
Labour disputes which, might have given rise to criminal cases, when settled, might probably be another instance where the interests of public justice in the broader connotation may perhaps warrant withdrawal from the prosecution.
Other instance also may be given".
In Subhash Chander vs The State (Chandigarh Admn.) & Ors.
the Court once again emphasised the independence of the Public Prosecutor in the matter of seeking to withdraw from the prosecution.
It was observed "Any authority who coerces or orders or pressures a functionary like the Public Prosecutor, in the exclusive province of his discretionary powers, violates the rule of law, and any Public Prosecutor who bends before such command betrays the authority of his office".
However, it was indicated: "Maybe, Government or the District Magistrate will consider that a prosecution or class of prosecutions deserves to be withdrawn on grounds of policy or reasons of public interest relevant to law and justice in their larger connotation and request the Public Prosecutor to consider whether the case or cases may not be withdrawn.
Thereupon, the Prosecutor will give due weight to the material placed, the policy behind the recommendation and the responsible position of Government which, in the last analysis, has to maintain public order and promote public justice.
But the decision to withdraw must be his.
A reference was made to some considerations which may justify withdrawal from prosecution.
It was said: "The fact that broader considerations of public peace, larger considerations of public justice and even deeper considerations of promotion of long lasting security in a locality, of order in a disorderly situation or harmony in a faction milieu, or halting a false and vexatious prosecution in a court, persuades the Executive, pro bono publico, sacrifice a pending case for a wider benefit, is not ruled out although the power must be sparingly exercised and the statutory agency to be satisfied is the public prosecutor, not the District Magistrate or Minister.
The concurrence of the 996 court is necessary.
The subsequent discovery of a hoax behind the prosecution or false basis for the criminal proceeding as is alleged in this case, may well be a relevant ground for withdrawal.
For the court should not be misused to continue a case conclusively proved to be a counterfeit.
This statement of the law is not exhaustive but is enough for the present purpose and indeed, is well grounded on precedents".
Thus, from the precedents of this Court; we gather, 1.
Under the scheme of the Code prosecution of an offender for a serious offence is primarily the responsibility of the Executive.
The withdrawal from the prosecution is an executive function of the Public Prosecutor.
The discretion to withdraw from the prosecution is that of the Public Prosecutor and none else, and so, he cannot surrender that discretion to someone else.
The Government may suggest to the Public Prosecutor that he may withdraw from the prosecution but none can compel him to do so. 5.
The Public Prosecutor may withdraw from the prosecution not merely on the ground of paucity of evidence but on other relevant grounds as well in order to further the broad ends of public justice, public order and peace.
The broad ends of public justice will certainly include appropriate social, economic and, we add, political purposes Sans Tammany Hall enterprise.
The Public Prosecutor is an officer of the Court and responsible to the Court.
The Court performs a supervisory function in granting its consent to the withdrawal.
The Court 's duty is not to reappreciate the grounds which led the Public Prosecutor to request withdrawal from the prosecution but to consider whether the Public Prosecutor applied his mind as a free agent, uninfluenced by irrelevant and extraneous considerations.
The Court has a special duty in this regard as it is the ultimate repository of legislative confidence in granting or withholding its consent to withdrawal from the prosecution.
We may add it shall be the duty of the Public Prosecutor to inform the Court and it shall be the duty of the Court to appraise itself of the 997 reasons which prompt the Public Prosecutor to withdraw from the prosecution.
The Court has a responsibility and a stake in the administration of criminal justice and so has the Public Prosecutor, its 'Minister of Justice '.
Both have a duty to protect the administration of criminal justice against possible abuse or misuse by the Executive by resort to the provisions of section 361 Criminal Procedure Code.
The independence of the judiciary requires that once the case has travelled to the Court, the Court and its officers alone must have control over the case and decide what is to be done in each case.
We have referred to the precedents of this Court where it has been said that paucity of evidence is not the only ground on which the Public Prosecutor may withdraw from the prosecution.
In the past we have often known how expedient and necessary it is in the public interest for the Public Prosecutor to withdraw from prosecutions arising out of mass agitations, communal riots, regional disputes, industrial conflicts, student unrest etc.
Wherever issues involve the emotions and there is a surcharge of violence in the atmosphere it has often been found necessary to withdraw from prosecutions in order to restore peace, to free the atmosphere from the surcharge of violence, to bring about a peaceful settlement of issues and to preserve the calm which may follow the storm.
To persist with prosecutions where emotive issues are involved in the name of vindicating the law may even be utterly counter productive.
An elected Government, sensitive and responsive to the feelings and emotions of the people, will be amply justified if for the purpose of creating an atmosphere of goodwill or for the purpose of not disturbing a calm which has descended it decides not to prosecute the offenders involved or not to proceed further with prosecutions already launched.
In such matters who but the Government, can and should decide in the first instance, whether it should be baneful or beneficial to launch or continue prosecutions.
If the Government decides that it would be in the public interest to withdraw from prosecutions, how is the Government to go about this task ? Under the Code of Criminal Procedure it is the Public Prosecutor that has to withdraw from the prosecution and it is the Court that has to give its consent to such withdrawal.
Rightly too, because the independence of the judiciary so requires it, as we have already mentioned.
Now, the Public Prosecutor is an Officer of the Court.
He sets the criminal law in motion in the Court.
He conducts the prosecution in the Court for the people.
So it is he that is entrusted with the task of initiating the proceeding for withdrawal from the prosecution.
But, where such large and sensitive issues of public policy are involved, he 998 must, if he is right minded, seek advice and guidance from the policy makers.
His sources of information and resources are of a very limited nature unlike those of the policy makers.
If the policy makers themselves move in the matter in the first instance, as indeed it is proper that they should where matters of momentus public policy are involved, and if they advise the Public Prosecutor to withdraw from the prosecution, it is not for the Court to say that the initiative came from the Government and therefore the Public Prosecutor cannot be said to have exercised a free mind.
Nor can there be any quibbling over words.
If ill informed but well meaning bureaucrats choose to use expressions like "the Public Prosecutor is directed" or "the Public Prosecutor is instructed", the Court will not on that ground alone stultify the larger issue of Public Policy by refusing its consent on the ground that the Public Prosecutor did not act as a free agent when he sought withdrawal from the prosecution.
What is at stake is not the language of the letter or the prestige of the Public Prosecutor but a wider question of policy.
The Court, in such a situation is to make an effort to elicit the reasons for withdrawal and satisfy itself, that the Public Prosecutor too was satisfied that he should withdraw, from the prosecution for good and relevant reasons.
We, however, issue a note of warning.
The bureaucrat too should be careful not to use peremptory language when addressing the Public Prosecutor since it may give rise to an impression that he is coercing the Public Prosecutor to move in the matter.
He must remember that in addressing the Public Prosecutor he is addressing an Officer of the Court and there should be no suspicion of unwholesome pressure on the Public Prosecutor.
Any suspicion of such pressure on the Public Prosecutor may lead the Court to withhold its consent.
We may now consider Shri Ram Panjwani 's argument that the Criminal law of India does not recognise 'political offences ' and so there can not be withdrawal from a prosecution on the ground that the offences involved are 'political offences '.
It is true that the Indian Penal Code and the Code of Criminal Procedure do not recognise offences of a political nature, as a category of offences.
They cannot, in the ordinary course of things.
That does not mean that offences of a political character are unknown to jurisprudence or that judges must exhibit such a naivette as to feign ignorance about them.
Offences of a political character are well known in International Law and the Law of Extradition.
The Indian Extradition Act also refers to offences of a political character.
For our present purpose it is really unnecessary to enter into a discussion as to what are political offences except in a sketchy way.
It is sufficient to say that politics 999 are about Government and therefore, a political offence is one committed with the object of changing the Government of a State or inducing it to change its policy.
Mahatma Gandhi, the father of the Nation, was convicted and jailed for offences against the Municipal laws; so was his spiritual son and the first Prime Minister of our country; so was the present Prime Minister and so were the first President and the present President of India.
No one would hesitate to say that the offences of which they were convicted were political.
Even as we are writing this judgment we read in the morning 's newspapers that King Birendra of Nepal has declared a "general amnesty to all Nepalese accused of political changes".
The expression 'political offence ' is thus commonly used and understood though perhaps 'political offence ' may escape easy identification.
Earlier in the judgment we set out the alleged object of the conspiracy as recited in the order sanctioning the prosecution.
It was to overawe the Government by committing various acts of destruction of public property and vital installations and the motive attributed was that the accused wanted to change the Government led by Shrimati Gandhi.
One need not agree with the ends or the means genuine revolutions have never yet been made by acts of senseless terrorism or wanton destruction, putting innocent lives and public property in jeopardy but, it is clear that the very order sanctioning the prosecution imputes to the offences alleged to have been committed by the accused the character of 'political offences '.
To say that an offence is of a political character is not to absolve the offender of the offence.
But the question is, is it a valid ground for the Government to advise the Public Prosecutor to withdraw from the prosecution ? We mentioned earlier that the Public Prosecutor may withdraw from the prosecution of a case not merely on the ground of paucity of evidence but also in order to further the broad ends of public justice and that such broad ends of public justice may well include appropriate social, economic and political purposes.
It is now a matter of history that the motivating force of the party which was formed to fight the elections in 1977 was the same as the motivating force of the criminal conspiracy as alleged in the order sanctioning the prosecution; only the means were different.
The party which came to power as a result of 1977 elections chose to interpret the result of the elections as a mandate of the people against the politics and the policy of the party led by Shrimati Gandhi.
Subsequent events leading upto the 1980 elections which reversed the result of the 1977 elections may cast a doubt whether such interpretation was correct; only history can tell.
But, if the Government of the day 1000 interpreted the result of the 1977 elections as a mandate of the people and on the basis of that interpretation the Government advised the Public Prosecutor to withdraw from the prosecution, one cannot say that the Public Prosecutor was activated by any improper motive in withdrawing from the prosecution nor can one say that the Magistrate failed to exercise the supervisory function vested in him in giving his consent.
We are unable to say that the High Court misdirected itself in affirming the order of the Magistrate.
We also notice that the learned Attorney General who disassociated himself from the legal submissions made by the parties did not withdraw the counter affidavit filed earlier on behalf of the State.
No fresh counter affidavit disclosing a change of attitude on the part of the new Government which took office in January this year was filed.
Apparently the new Government did not do so as a gesture of grace and goodwill and to prevent rancor and bitterness.
That we appreciate, Criminal Appeal No. 287 of 1979 is therefore, dismissed.
Special Leave Petition (Criminal) No. 3115 of 1979 has been filed by one Manohar Lal, against the order of the Chief Judicial Magistrate, Bhiwani, permitting the Public Prosecutor to withdraw from the prosecution in case No. 186 1 filed by the State against Chaudhury Bansi Lal, ex Defence Minister, his son Surinder Singh, ex M.L.A., R. section Verma, exhibit Deputy Commissioner, Bhiwani and several other officials and non officials for a host of offences.
The applicant has come straight to this Court under article 136 of the Constitution without going to the High Court in the first instance.
On that ground alone the petition is liable to be dismissed as we do not ordinarily entertain such petitions.
We refrain from doing so as the matter has been fully argued before us.
On July 13, 1977, Manohar Lal, laid information with the Station House Officer, Police Station, Bhiwani City, against the several accused persons.
The charge sheet was filed by the Bhiwani Police on July 21, 1978 on the basis of information laid with them by Manohar Lal.
The gravamen of the allegation against the accused persons was that Chaudhury Bansi Lal was annoyed with Manohar Lal and his sons as they failed to transfer two plots of land to his son and a relative.
Chaudhury Bansi Lal, therefore, induced the Bhiwani Town Improvement Trust to include in its successive schemes land belonging to Manohar Lal and his sons, in Bhiwani Town, on which stood some buildings including two temples.
As Manohar Lal apprehended that his buildings might be demolished, he filed a Writ Petition in the Supreme Court and obtained an order of stay of demolition.
However, the stay 1001 was vacated on December 1, 1976 and on the same day, on the instructions, by telephone or wireless, of Chaudhury Bansi Lal, R. section Verma, the Deputy Commissioner instructed his officers to demolish the buildings standing on the land.
The Land Acquisition Collector made his Award of compensation and deposited the amount in a bank.
All this was done in the course of a few hours and the demolition of the building was started forthwith and completed by December 4, 1976.
The chargesheet, as we said, was filed on July 21, 1978.
Chaudhury Bansi Lal filed a petition in this Court for transfer of the case to a Court outside the States of Punjab and Haryana.
This Court issued notice on the petition for transfer and granted stay of further proceedings in the case before the Chief Judicial Magistrate, Bhiwani.
The order of stay continued.
On September 20, 1979 on the basis of a letter addressed to him by the District Magistrate, the Public Prosecutor filed an application before the Chief Judicial Magistrate for permission to withdraw from the prosecution.
On September 21, 1979 the Court granted its consent to the withdrawal of the Public Prosecutor from the prosecution.
It is this order that is questioned in the Special Leave Petition.
Shri Parekh, learned counsel for the petitioner urged that the public Prosecutor filed the application at the behest of Shri Bhajan Lal, the Chief Minister of Haryana and that he never applied his mind to the facts of the case.
According to Shri Parekh Shri Bhajan Lal ordered the withdrawal of the public Prosecutor from the prosecution because his Ministry would not survive without the help of Chaudhury Bansi Lal.
A motion of no confidence was imminent against Shri Bhajan Lal and was to be considered on September 24, 1979; so he ordered withdrawal of the cases against Chaudhury Bansi Lal on September 20, 1979, in order to secure the support of his group.
It was said that the withdrawal from the prosecution was not based on any ground of public policy.
Shri Parekh, drew our attention to the wireless message which was sent by the Government to the District Magistrate, Bhiwani informing him that the Government had decided to withdraw the four cases mentioned in the message, pending in the Court of Bhiwani and that four cases should be withdrawn immediately from the concerned Courts and the Government informed accordingly.
The District Magistrate Bhiwani forwarded a copy of the wireless message to the District Attorney, Bhiwani for necessary action directing him to withdraw the four cases from the concerned courts as desired by the Government and to report compliance to this office.
The District Attorney there after filed an application for permission to withdraw from the prosecution.
On September 21, 1979, he made a statement before the Chief 1002 Judicial Magistrate that he had made the application on the orders of District Magistrate, Bhiwani and that the reasons were given in the application.
In answer it was contended by the advocate General of Haryana who appeared for the State of Haryana and M. C. Bhandare who appeared for Chaudhury Bansi Lal, that Surinder Singh, son of Chaudhury Bansi Lal had petitioned to the Chief Minister of Haryana alleging that he, his father and their associates were being harassed by numerous cases being filed against them without any justification.
He requested the Chief Minister to stop needless harassment.
The Minister constituted a Sub Committee consisting of himself, the Finance Minister and the Irrigation and Power Minister to look into the question.
The Sub Committee examined the cases in detail and decided that four out of twenty five cases filed against Chaudhury Bansi Lal should be withdrawn as the evidence available was meagre and, in particular, in the case based on Manohar Lal 's information the complainant had also been suitably and profitably compensated.
The decision of the Government was communicated to the District Magistrate who in turn asked the Public prosecutor to move the Court for consent to withdraw from the prosecution.
The Chief Minister and his colleagues on the Sub Committee have filed before us affidavits regarding the constitution of the Sub Committee and the decision to withdraw from the prosecution.
They have also denied the allegation that the case had been withdrawn with a view to gain the support of Chaudhury Bansi Lal against a no confidence motion which the petitioner alleged was to be moved against the Chief Minister.
It was pointed out in the affidavits that no no confidence motion was ever tabled against Chief Minister Bhajan Lal and that on the very figures given by the petitioner regarding the party position in the Haryana Assembly the support of Chaudhary Bansi Lal and his group would not matter.
It was also brought out in the counter affidavits filed on behalf of some of the respondents that the petitioner had himself admitted in the agreement which he had entered into with the Bhiwani Town Planning Trust on May 6, 1977, that his land and plots had been duly acquired under various development schemes, that he desired to withdraw all the petitions etc.
filed by him in various courts and that he would not claim any damages against the Trust.
The Town Planning Trust agreed to release the lands to him with a view to enable him to reconstruct the buildings.
It was expressly recited in the agreement that the Bhiwani Town Improvement Trust agreed to the terms of the agreement as it was thought to be "in the best interest of the parties concerned as well as in the good of the residents of the Bhiwani Town to settle the matter amicably and mutually".
The Government of Haryana also.
it was so recited in the agreement, had accorded its approval to the 1003 terms of the settlement.
It has been mentioned in the counter affidavits that the agreement between Manohar Lal and the Bhiwani Town Improvement Trust in which Manohar Lal admitted the title of the Bhiwani Town Improvement Trust to the land and buildings was never placed before the Jaganmohan Reddy Commission.
In fact it is one of the complaints of Chaudhury Bansi Lal that those that were in charge of producing evidence before the Jaganmohan Reddy Commission took care to see that nothing in his favour was placed before the Commission.
Chaudhury Bansi Lal filed a counter affidavit in which he has stated that the allegation that his son and relative wanted to purchase the land of Manohar Lal was an allegation which Manohar Lal never made in any of the objections filed by him against the schemes proposed by the Town Improvement Trust.
It has also been pointed out that in the several writ Petitions filed by Manohar Lal against the schemes no allegations of malafides were made against Bansi Lal.
In one Writ Petition an attempt was made to introduce such an allegation by way of amendment but the High Court held that the allegation was a mere 'after thought '.
The District Attorney has filed a counter affidavit in which he has stated that the evidence in the case was of a meagre nature and he was of the view that it might not be possible to obtain a conviction in the case.
He had brought it to the notice of the District Magistrate earlier but as important personalities were involved it was not thought proper and prudent to make an application for withdrawal from the prosecution.
The occurrence which was the subject matter of the case was said to have taken place at 10 p.m.
A large number of accused had been named.
There were reasons to believe that most of the names of the accused were included on mere suspicion.
In fact two advocates who had been implicated as accused led unimpeachable evidence that they were not in Bhiwani at all that night.
After he received advice from the District Magistrate he was convinced that an application should be filed for withdrawal from the prosecution and so he filed the same.
Sri Bhaskar Chatterji, the District Magistrate has also filed an affidavit in which he has stated that the District Attorney had informed him that some of the cases filed against Chaudhury Bansi Lal and his family members were weak in nature.
He did not however, take any action at that time as important personalities were involved and as there were no directions from the Government in that regard.
Later he received a wireless message which he forwarded to the District Attorney for action, Shri Kataria Secretary to Government of Haryana, Department of Administration of Justice has also tiled a counter affidavit in which he has mentioned the detailed of the proceedings of the Cabinet Sub Committee which took the decision to withdraw the case on September 20, 1979.
1004 On a perusal of the allegations and counter allegations, the facts which emerge from the record as beyond dispute are: (1) The land of Manohar Lal and his sons on which there were certain buildings was included in the Bhiwani Town Improvement Scheme.
(2) The allegation that Bansilal 's son and relative wanted to purchase the land originally was not made by Manohar Lal in the original objections and writ Petitions filed by Manohar Lal.
(3) The Supreme Court first granted stay of the demolition of buildings but later vacated the stay on December 1, 1976.
(4) As soon as stay was vacated, without any loss of time, the demolition work started and completed.
Dynamite and bull dozers were used and the buildings were demolished.
(5) On May 6, 1977, Manohar Lal and his sons entered into an agreement with the Bhiwani Town Improvement Trust agreeing to withdraw all the cases filed by them against the improvement Trust and accepting the title of the trust to the land acquired under the Town Improvement schemes.
In return the Improvement Trust agreed to release the lands to Manohar Lal and his sons for the purpose of reconstructing the buildings and to receive the compensation assessed for the demolished buildings.
It was recited in the agreement that the Town Improvement Trust had agreed to this course as it was thought to be "in the best interest of the parties concerned as well as in the good of the residents of the Bhiwani Town".
(6) On July 13, 1977 Manohar Lal lodged a First Information Report with the Police.
(7) On July 21, 1978 the police filed a charge sheet in the Court of the Chief Judicial Magistrate, Bhiwani.
(8) The District Attorney had informed the District Magistrate that the evidence was of a weak nature as most of the accused appeared to have been implicated on mere suspicion and some of the accused were not even present in the town on the night of the occurrence.
(9) Surinder Singh, son of Bansi Lal made a representation to the Government that they were being harassed by innumerable cases being filed against them.
1005 (10) On September 20, 1979, the Cabinet Sub Committee decided that four out of twenty five cases filed against Bansi Lal and others should be withdrawn.
A wireless message was sent by the Government to the District Magistrate asking him to withdraw the four cases and to report compliance.
The letter was forwarded to the District Attorney.
The District Attorney filed an application for withdrawal from the prosecution on the same day.
(11) Neither before nor after the Cabinet Sub Committee took its decision was there a no confidence motion tabled against Chief Minister Bhajanlal.
(12) On September 21, 1979, the Court granted its consent to the withdrawal of the public Prosecutor (the District Attorney) from the case.
It is on this material we have to determine whether the withdrawal from the prosecution could be said to be malafide, that is for irrelevant or extraneous reasons.
We are not satisfied that there is sufficient basis to come to such a conclusion particularly in view of two outstanding circumstances namely that only four out of twenty five cases have been withdrawn and the complainant himself had acknowledged the title of the Town Improvement Trust to the lands and the Trust had not only returned the lands to the complainant but also paid him compensation for the demolished buildings in the interest of all parties in Bhiwani town.
We, therefore, dismiss the Special Leave Petition.
Before bidding farewell to these cases it may be appropriate for us to say that Criminal justice is not a plaything and a Criminal Court is not a play ground for politicking.
Political fervour should not convert prosecution into persecution, nor political favour reward wrongdoer by withdrawal from prosecution.
If political fortunes are allowed to be reflected in the processes of the Court very soon the credibility of the rule of law will be lost.
So we insist that Courts when moved for permission for withdrawal from prosecution must be vigilant and inform themselves fully before granting consent.
While it would be obnoxious and objectionable for a Public Prosecutor to allow himself to be ordered about, he should appraise himself from the Government and thereafter appraise the Court the host of factors relevant to the question of withdrawal from the cases.
But under no circumstances should be allow himself to become anyone 's stooge.
No arguments were advanced in Criminal Miscellaneous Petition No. 3890 of 1979.
It is, therefore, dismissed.
S.R. Appeal and Petitions dismissed.
| One V. Krishna Reddy filed an election petition against Veera Reddy, respondent No. 1, a returned candidate in the elections held for the Andhra Pradesh Legislative Assembly in February, 1978 on the ground that the returned candidate was disqualified to be chosen to fill the post under Section 9A of the Representation of People Act, 1951 inasmuch as he has subsisting contracts with the Government of Andhra Pradesh.
The appellant, Thammarna was impleaded as original respondent No. 5 though he is not a necessary party.
He did not file any written statement.
Neither did he lead any evidence nor did he cross examine the witnesses produced by respondent No. 1 and the election petitioner.
In fact, he did not even participate in the arguments before the High Court.
In the appeal filed by Thammanna against the Judgment dated April 24, 1979 of the High Court of Andhra Pradesh dismissing the election petition filed by Krishna Reddy, a preliminary objection was raised as to whether the appellant had the locus standi to maintain the appeal.
Dismissing the appeal, the Court, ^ HELD: (1) The appellant cannot, by any reckoning, be said to be a 'person aggrieved ' by the decision of the High Court, dismissing the Election Petition.
[84C] (2) Before a person is entitled to maintain an appeal under Section 116C of the Representation of the People Act, 1951 which is analogous to Section 96(1) of the Civil Procedure Code, all the following three conditions must be satisfied: (1) that the subject matter of the appeal is a conclusive determination by the High Court of the rights with regard to all or any of the matters in controversy, between the parties in the election petition.
(2) that the person seeking to appeal has been a party in the election petition, and (3) that he is a "person aggrieved", that is a party who has been adversely affected by the determination.
In the present case, these conditions, particularly Nos. (1) and (3) have not been fulfilled.
[79B D] 74 (3) Just as the term "decree" in Section 96(1) of the Civil Procedure Code means an adjudication which "conclusively determines all or any of the matter in controversy in the suit", the expression "any final order" as used in Section 116C of the Representation of the People Act contemplates a conclusive determination of all or any of the matters in controversy in the election petition between the parties.
[78F G] (4) The appellant was not a necessary party to be impleaded as there was no allegations or claims in the election petition which would attract section 82 of the Representation of the People Act.
In this case, the question of the Court joining him as a party respondent under Section 86(4) of the Act also did not arise, as he was impleaded before the High Court as respondent No. 5 though it was not obligatory for the Election Petitioner to do so.
Even so, respondent No. 5 did not join the controversy.
He neither joined issue with the contesting respondent No. 1 nor did he do anything tangible to show that he had made a common cause with the Election Petitioner against respondent No. 1.
In fact, the only parties between whom the matters in controversy, were at issue, were the Election Petitioner and Respondent No. 1.
[79F H] (5) Although the meaning of the expression "person aggrieved" may vary according to the context of the statute and the facts of the case, nevertheless, normally a 'person aggrieved ' must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something.
[80A B] Bar Council of Maharashtra vs M. V. Dabholkar, [1975] 2.S.C.C. 703 and J. N. Desai vs Roshan Kumar A.I.R. 1976 S.C. 576 at p. 534 referred to.
(6) The principle that election petition is a representative action on behalf of the whole body of electors in the constituency has a very limited application to the extent it has been incorporated in Sections 109 to 116 of the Representation of the People Act and its application cannot be extended to appeals under the Act.
Firstly, these provisions are to be found in Chapter IV, under the main caption: 'WITHDRAWAL AND ABATEMENT OF ELECTION PETITIONS '.
Then, the provisions of these sections, also repeatedly refer to the withdrawal or abatement of 'election petitions ' and also to procedure in respect thereof before the 'High Court '.
The provision relating to Appeals in Sections 116A, 116B and 116C, have been included separately, in Chapter 'IV A ', captioned "APPEALS".
[81E G, 83G H, 84A] Secondly, Section 116C, enjoins upon the Supreme Court to hear and determine every appeal under this Act in accordance with the provisions of the Code of Civil Procedure and the Rules of the Court.
No doubt this is, "subject to the provisions of the Act and the rules if any, made thereunder".
But this clause only means that the provisions of the Code and the Rules of the Court in hearing an appeal to this Court will apply except to the extent their application has been excluded expressly or by necessary implication by any provision of the Act.
There is no provision in Chapter IV A of the Act, analogous to Sections 109 to 116 of the Act, which curtails, restricts or fetters an appellants ' right to withdraw an appeal.
Nor is there any such provision in the Code or the Rules of this Court which does so.
If the intention of the Legislature was that the provision of Sections 109 to 116 which apply to the withdrawal of election petition, should also govern the withdrawal of appeals, there was no difficulty in inserting similar provisions in Section 116C or elsewhere in Chapter IV A. [81G H, 82A C] 75 Bijayananda Patnaik vs Satrughna Sahu, [1964] 2 S.C.R. 538 at p. 545, followed.
|
Civil Appeal No. 2190 of 1987.
From the Judgment and Order dated 29th August, 1986 of the Calcutta High Court in Appeal No. 204 of 1986.
Amal Dutta, D.K. Sinha and J.R. Das for the Appellant.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
This is an appeal challenging the decision of the High Court of Calcutta upholding the decision of the learned Single Judge of that Court whereby the award of the arbitrator was set aside and new arbitrator was appointed.
In order to appreciate the position it is necessary to state that in the year 1964 the Executive Engineer had invited competitive sealed tenders in respect of "Silt Clearance of River Peali from Utterbhag Canning Road Bridge upto Hobon Sluice".
Shri D.P. Chatterjee entered upon the reference soon thereafter and the award was made in November, 1966.
It appears that thereafter the respondent asked for the award amount in full and final settlement which the Executive Engineer turned down.
The respondent herein was paid by the appellant a sum of Rs.32,525.62 in terms of the award and which sum was received and acknowledged by the respondent No. 1.
Then the true copy of the award was forwarded to the Court by the Chief Executive Engineer and the application was 71 filed by the respondent No. 1 in 1981 in the High Court of Calcutta under Sections 14, 15, 16 & 30 of the for setting aside the award dated the 19th November, 1966.
The High Court after hearing the parties dismissed that application on 10th May, 1982.
The High Court was thereafter pleased to pass judgment in terms of the award.
The respondent herein preferred an appeal against the judgment dated 10.5.82.
The Division Bench allowed the appeal of the appellant.
The appellant 's advocate did not notice that the matter appeared in the daily list dated 26th April, 1985 of the learned Single Judge for judgment and as such he did not know the result of the judgment.
Thereafter the matter again appeared in the list of the learned Single Judge and the respondent had made an application before the learned Single Judge for setting aside the previous order.
The learned Single Judge on 18th March, 1986 rejected the application of the appellant and allowed the application of the respondent herein under Section S, 11 and 12 of the and appointed a retired Judge of the High Court as the arbitrator and thereafter revoked the authority of the said arbitrator from acting as the arbitrator and appointed a lawyer of the High Court as the arbitrator.
The appellant preferred an appeal against the said order dated the 3rd December, 1985 before the Division Bench of the High Court of Calcutta.
Two points were raised before the learned Single Judge, firstly that the award was beyond time and secondly, the learned arbitrator had not signed the award.
The Division Bench found that as there was an extension of time in making the award and the award having been filed within the extended time, expressed the view that there was no force in the first point.
The Division Bench, however, was unable to accept unsigned award being made the rule of the Court.
It is true that an unsigned award cannot be made the rule of the Court.
But it is only a formal defect.
It appears that the award was handed over to the parties and a letter was sent to the parties concerned and award bore no signature of the arbitrator.
The parties had acted upon the award.
It is true that under the law the mandatory rule is that the award should be signed by the arbitrator.
But law must subserve justice and endeavour to serve the purpose of law.
The Court can in such circumstances extend time for making the award and direct curing of the formal defect in the award.
So much time and effort should not be allowed to go waste.
In the situation of this nature the proper order in the interest of H 72 justice would be to remit the award under Section 16 of the for enabling the arbitrator named therein for signing the award and for that purpose if it is necessary under Section 28 of the , the Court has the power to extend the time to the arbitrator for making the award final.
We did so.
We extend the time by four months from today and direct the award be remitted to the arbitrator for signature.
The appeal is disposed of accordingly.
N.P.V. Appeal disposed of.
| % In the election to the Uttar Pradesh State Legislative Assembly from constituency No. 41 held in early March, 1985, 16 candidates contested.
Respondent No. 1 was declared elected having secured 23,006 votes.
Respondent No. 2 secured 20,735 votes being the next highest.
The difference of votes secured by them was in the order of 2,271 votes.
Respondent No. 8 who was working as a teacher in a college and who was one of the candidates secured 3,606 votes which were more than the difference between the votes secured by respondent No. 1 and 2.
The appellant who was an elector at the said election filed an election petition contending that respondent No. 8 was holding an 'office of profit ' under the State Government as he was working as a teacher in a college and therefore, the acceptance of his nomination by the returning officer was illegal, that since respondent No. 8 secured 3,606 votes which were higher than the difference between the votes secured by respondent No. 1 and respondent No. 2, the election of respondent No. 1 should be considered as having been materially affected by the wrongful acceptance of the nomination paper of respondent No. 8, and the election of the respondent No. 1 was, therefore, liable to be set aside.
Respondent No.1 contested the election petition pleading that the acceptance of the nomination paper of respondent No. 8 was not illegal since he was not holding an office of profit under the State Government, and that even if the acceptance was illegal the election could not be set aside since the result of the election was not materially affected thereby.
Dismissing the petition, the High Court held that the acceptance of the nomination paper of respondent No. 8 was not illegal as he was not holding an office of profit under the State Government and that 631 even if the acceptance of the nomination paper was illegal, the appellant had not established that the result of the election of respondent No. 1 had been materially affected on the facts and in the circumstances of the case.
In the appeal to this Court on the question: whether the appellant had established that the result of the election of respondent No. 1 had been materially affected by the wrongful acceptance of the nomination paper of respondent No. 8.
Dismissing the appeal to this Court, ^ HELD: The appellant has not discharged the burden which clearly lay on him of proving that the result of the election had been materially affected, even assuming that the nomination of respondent No. 8 had been improperly accepted.
[640E] Section 100 of the Representation of the People Act makes a distinction between the effect of improper rejection of any nomination, and the effect of the improper acceptance of any nomination on the election.
If a nomination of any person at an election had been improperly rejected the election of the returned candidate is liable to be set aside without any further proof because it is difficult to visualise the number of votes which the person whose nomination has been rejected would have secured at the election and there is every likelihood of the returned candidate not securing the highest number of votes.
[634E G] Clause (c) of sub section (1) states that if the High Court is of the opinion that any nomination has been improperly rejected it shall declare the election of the returned candidate to be void.
[634Gl Sub clause (i) of clause (d) of sub section (1) requires a petitioner in an election petition to establish two grounds in order to get the election of the returned candidate set aside.
namely (i) that there has been improper acceptance of any nomination and (ii) that by reason of entry of the candidate whose nomination has been improperly accepted into the contest the result of the election insofar as the returned candidate is concerned has been materially affected.
[635A B] Having regard to the facts of the instant case it is not possible to hold that the appellant has established that the result of the election of the returned candidate had been materially affected because the dif 632 ference between the votes secured by respondent No. 1, the returned candidate and respondent No. 2, the candidate who secured next highest votes was 2,271 votes.
Respondent No. 8, the validity of whose nomination was questioned, had secured only about 1/7th of the number of votes polled by respondent No. 1 and there were 15 candidates (excluding respondent No. 8) contesting the election.
It is not possible to reach a finding in this case by making a judicial guess that all the 3606 voters who had voted in favour of respondent No. 8 would have cast their votes in favour of respondent No. 2 alone.
Even if about 1350 of them had cast their votes in favour of any of the other 14 candidates (including the returned candidate) respondent No. 2 could not have become the candidate who had secured the highest number of votes at the election.
[639C E] The High Court was, therefore, right in taking the view that the appellant or any other party had not placed any satisfactory evidence to reach the conclusion that all or sufficient number of wasted votes which had been cast in favour of respondent No. 8 would have gone in favour of respondent No. 2, had respondent No. 8 not been one of the candidates at the election, that in the context particularly of the poll being heavy and the contestants being large in number, 16 in all It was unreasonable to guess that if the respondent No. 8 were excluded from the arena of contest the wasted votes would have gone to the respondent No. 2 thereby enabling him to succeed, and that the burden Iying upon the petitioner remained clearly undischarged and the speculative possibility did not attain the level of proof.
[640B D] Vashist Narain Sharma vs Dev Chandra and others, ]1955] 1 S.C.R. 509; Samant N. Balakrishna etc.
vs George Fernandez and Ors.
; , and Chhedi Ram vs Jhilmit Ram and others, p ] , referred to.
|
tion (Criminal) No. 669 of 1986.
(Under Article 32 of the Constitution of India).
R.K. Jain, R.P. Singh and Rakesh Khanna for the petitioners.
S.C. Mahanto, C.V.S. Rao and Mahabir Singh for the Respondents.
The Judgment of the Court was delivered by B.C. RAY, J.
The petitioners who are life convicts in this writ petition have assailed a D.O. Letter No. 4665/1983 GI/G4/R.10 84 dated 24.4.1985 issued by the re spondent No. 3, Inspector General of Prisons, Haryana, Chandigarh intimating to the Superintendent of Jail that convicts who are on bail and whose sentences are suspended, are excluded from the remissions systems in view of the provisions of Section 637 of the Punjab Jail Manual on the ground that the aforesaid letter purports to deprive the petitioners from the benefit of remissions of 19 months and 12 days granted to them during the period they were on bail, while counting the total period of sentence including remis sions undergone by them in order to consider their cases of pre mature release from imprisonment.
1110 The petitioner No. 1, Jai Prakash was convicted by the District and Sessions Judge, Bhiwani, on December 4, 1975 under Section 302 of the Indian Penal Code and he was award ed life imprisonment.
Against this judgment and order of the Sessions Judge he preferred an appeal before the High Court of Punjab and Haryana and he was granted bail on 12.1.1976.
This appeal, however, was dismissed on 28.9.1978 and he was arrested on 29.1.1979 while he was going to the Court to surrender himself to serve out the remaining part of the sentence as stated by him.
The petitioner has stated that during the period he was on bail he earned remission of 19 months and 12 days.
Similarly, the petitioner Nos. 2 to 5 were also convict ed by the District and Sessions Judge, Bhiwani, on 23.3. 1976 in a case under Section 302 of the Indian Penal Code and they were awarded life imprisonment.
Petitioner Nos. 2 to 5 were directed to be released on bail by the High Court of Punjab and Haryana during the pendency of their appeal by order dated 7.4.1976.
The appeal was however dismissed by the High Court on 8.12.
1978 and they surrendered themselves before the Magistrate on 16.2.
1979 for serving out their remaining part of sentence.
The petitioner Nos. 2 to 5 were also given remissions of 19 months and 12 days during the period they remained on bail.
It has been stated that though all the petitioners were given remissions of 19 months and 12 days and they were under the impression that the period of remission earned by them would be taken into consideration under para 637 of Punjab Jail Manual while computing their sentence under Para 516 B of the Punjab Jail Manual.
They have now been informed by the respondent No. 3 as per his letter dated 24.4.1985 addressed to the Superintendent, District Jail, Bhiwani, respondent No. 2, that the convicts who were on bail and whose sentences were suspended would be excluded from the remissions purported to be earned by them while they were on bail.
The petitioners have submitted that a number of pris oners to whom remissions were given during the period when they were on bail were also released by the State Government after taking into consideration the remissions granted to them during the period when they were on bail or that their sentence had been suspended.
Names of six persons were mentioned in the petition who were pre maturely released.
It has been submitted on behalf of the petitioners that they are entitled to have their period of remissions earned by them during the period they were on bail, to be taken into account for consideration of their pre mature release under para 637 of the Punjab Jail Manual.
It has been further submitted that the aforesaid letter issued by the respondent No. 3 laying 1111 down guidelines and instructions to respondent No. 2, that is, Superintendent of District Jail, Bhiwani, is contrary to the provisions contained in para 637 of Punjab Jail Manual.
The petitioners have also stated that since they surrendered themselves before the jail authority after dismissal of their appeals by the High Court they are entitled to have the period of remissions earned by them to be counted while considering the total period of sentence undergone for their premature release.
A counter affidavit affirmed by the Superintendent of District Jail, Bhiwani has been filed.
It has been stated therein that no remission of period of sentence is permissi ble under paragraph 637 or any other provision of the Punjab Jail Manual (as applicable in Haryana) for the period that the convict remains on bail or his sentence is otherwise under suspension.
Even the benefit of special remissions allowed to convicts under State Government orders on visits of the Hon 'ble Minister for Jail (though such orders did result in anomalous situations and on the basis of experi ence the Government is inclined to restrict such orders) cannot be available to the petitioners.
It has been further averted that a perusal of the relevant orders of 1977 would show that the orders were applicable to prisoners who had been convicted before the date of visit of the Hon 'ble Minister in 1977, were released on bail subsequently and surrendered in the jail for undergoing the unexpired portion of the sentence.
The petitioners are not entitled to the benefit claimed as they had not surrendered in the jail for undergoing the remaining period of the sentence.
The appeal of petitioner No. 1 had been dismissed on 28.9.1978 but he did not surrender for several months.
Ultimately, warrants for his arrest were issued by the Chief Judicial Magistrate on 24.1.
1979 and he was arrested and sent to jail on 29.1.
According to the petitioners ' own averments in para 2 of the petition, the other four writ petitioners remained out of jail for more than two months after the dismissal of their appeal.
It is evident that they had not surrendered in the jail for undergoing the remaining period of sentence immediately after dismissal of their appeals.
It has been further averted that even if any remission had been ordered inadvertently against relevant rules, it is in the interest of administration of justice that the mistake is rectified and not perpetuated by taking further action on its basis.
It has also been stated that similar cases of remission earned during the period of bail came up before the High Court of Punjab and Haryana and it was held by the High Court that special remissions were not available to the convicts who had not surrendered voluntarily on the expiry of the bail period.
It has been stated further that non surrender of the convict for 1112 several months after dismissal of appeal by itself showed that the surrender was not voluntary and such a convict did not merit the remission and an interpretation different from that would defeat the administration of justice.
It has been averred that petitioners could not avail of the remissions ordered erroneously and inadvertently not in accordance with the relevant rules.
As regards the six specific cases men tioned, it has been stated that the benefit was given to Tuhi Ram and Dig Ram only but not in the cases of the other four convicts referred to in the petition.
They were denied the benefit as it is being done to the petitioners.
Para 637 of the Punjab Jail Manual which is relevant for consideration of the question raised, is set out herein: "MANUAL FOR THE SUPERINTENDENCE AND MANAGEMENT OF JAILS IN THE PUNJAB 637.
Subject to the provisions of paragraph 634 remission under paragraph 635 shall be calculated from the first day of the calendar month next following the date of the prison er 's sentence: any prisoner who, after having been released on bail or because his sentence has been temporarily suspended is afterwards re admitted in the jail, shall be brought under the remission system on the first day of the calendar month next following his re admission, but shall be credited on his return on jail with any remission which he may have earned previous to his release on bail or the suspension of his sentence.
Remission under paragraph 636 shall be calculated from the first day of the next calendar month following the appointment of the prisoner as convict warder, convict overseer or convict night watchman.
" On a reading of the aforesaid provision it is manifest that a prisoner who has been released on bail or whose sentence has been temporarily suspended and has afterwards been re admitted in jail will be brought under remission system on the first day of the calendar month next following his re admission.
In other words, a prisoner is not eligible for remission of sentence during the period he is on bail or his sentence is temporarily suspended.
The submission that the petitioners who were temporarily released on bail are entitled to get the remission earned during the period they were under bail, is not at all sustainable.
As such the remissions that were inadvertently given to these petition ers cannot be taken into account in considering the total 1113 period of sentence undergone by them while considering their premature release from imprisonment under paragraph 637 of the Punjab Jail Manual.
It also appears from the order of the Governor of Haryana dated 14th August, 1977 annexed as Annexure 'R1 ' to the writ petition that the special remis sion was granted by the Governor of Haryana to only those prisoners who were in confinement on 14th August, 1977 on the occasion of the first visit of the Chief Minister of Haryana to jail and who had been subsequently released on bail.
It is pertinent to set out paragraph 2 of the said order: "All those prisoners who have been convicted before the 14th August, 1977 but subsequently released on bail shall be enti tled to the remission only if they surrender in the jail for undergoing the unexpired portion of their sentence.
" The petitioners though convicted prior to 14th August, 1977 that is the date of visit of the Hon 'ble Minister to the Jail were granted bail before the said date.
As such they are not entitled to the said remission in accordance with the order of Governor of Haryana.
Secondly, all these petitioners did not surrender in the jail for undergoing the unexpired portion of their sentences immediately after their appeals were dismissed by the High Court.
On the other hand, the petitioner No. 1 whose appeal was dismissed on 28.9.
1978 did not surrender either to the jail or to the Magis trate for serving out the remaining part of sentence till he was arrested on 29.1.
1979 in pursuance of the warrant issued by the court.
The petitioner Nos. 2 to 5 who were released on bail by the High Court during the pendency of their appeal did not surrender in the jail immediately after their appeal was dismissed on 8.12.
They surrendered themselves to the Magistrate only on 16.2.
1979 to serve out the remaining part of their sentence.
As such, it cannot be said that they have surrendered in jail for undergoing their unexpired period of sentence immediately after their appeals were dismissed and so they are not eligible for remissions as envisaged in the said Government order dated 14.8.
1977 referred to hereinbefore.
It appears that the respondent No. 3.
the Inspector General of Police, Haryana, Chandigarh issued a letter being D.O. No. 4665/ 1983 GI/G4/R. 10 84 dated 24.4.
1985 to all Superintendents of Jails including the Superintendent of District Jail, Bhiwani, drawing their attention to paragraph 2 of the letter dated 11/14 1 1985 from the State Government to the Jail Department which is to the following effect: 1114 "Attention of all Superintendents of Jails is drawn to para 4 of the Government letter under which Government have affirmed that convicts who are on bail and whose sentences have been suspended are excluded from the remissions systems in.
view of the provisions of para 637 of the Punjab Jail Manual.
" This D.O. letter has been annexed as Annexure 'A ' to the writ petition.
The letter dated 11/14 January, 1985 issued by the Gover nor of Haryana to the respondent No. 3 is an nexed as Annexure 'R5 ' to the writ petition.
The relevant excerpt of it is set out herein below: "It has been decided that such remissions will be granted only in the following cases: (i) All the convicts, convicted by the civil courts with criminal jurisdiction in the Haryana State and were present in the jails on the date and time of the visit of the Jail Minister or other high dignitaries.
(ii) All the convicts who were on parole/furlough from that jail on the date and time of the visit of the Jail Minister subject to the condition that they surrender at the Jail on the due date after the expiry of parole/furlough period for undergoing the unexpired portions of their sentences.
. . . 4.
Your attention is also invited to para 637 of the Punjab Jail Manual which provides that convicts who are on bail and whose sentence has been suspended are excluded from the remission system.
" It is clear and evident from this letter that convicts who were on parole from jail on the date and time of the visit of the Chief Minister to the Jail will be granted remissions on condition that they surrender at the jail on the due date after expiry of parole period for undergoing the unexpired period of their sentence.
This means that a convict in order to get the benefit of remission as directed by the said order issued under Article 16 1 of the Constitu tion of India has to surrender voluntarily at the Jail after expiry of bail.
In the instant case, petitioner No. 1 did not surrender in jail or before the Magistrate after his appeal was dismissed by the High Court and the petitioner No. 1 had been 1115 arrested under warrant of arrest as he did not surrender in jail after his appeal was dismissed.
Petitioners who were on bail also did not surrender immediately after dismissal of their appeal but they surrendered themselves after two months of dismissal of their appeal.
In such circumstances, it cannot be said that the petitioners are entitled to the remissions as envisaged in the said Government order dated 11/14 January, 1985.
The letter of the respondent No. 3 the Inspector General of Prisons, Haryana, Chandigarh i.e.D.O.
Letter No. 4665/1983 GI/G4/R10 84 dated 24.4.1985 is quite in accordance with the Government order made on 11/14 Janu ary, 1985 and the respondent No. 3 in fact quoted paragraph 2 of the said letter which contains the necessary requisite for grant of remissions from sentence.
The said D.O. letter of the respondent No. 3 cannot therefore be challenged as in violation of paragraph 637 of the Punjab Jail Manual nor it is contrary to the directions contained in the aforesaid order.
In the premises aforesaid, this writ petition is dis missed.
There will be no order as to costs.
N.P.V. Petition dis missed.
| Upon the respondent tenant committing default in payment of rent from June, 1984, the appellant landlady, after serving a notice determining the tenancy with effect from 31st January, 1985 and calling upon him to deliver posses sion of the premises in question, filed a suit in the High Court for recovery of possession, arrears of rent at the rate of Rs. 1,400 per month and mesne profits/damages at the rate of Rs.7,800 per month from the date of termination of the tenancy.
The respondent filed an application praying that the plaint be taken off from the file of the High Court and returned to the appellant for filing the same in the proper Court.
The High Court, accepting the plea of the respondent that under the provisions of the West Bengal Premises Tenancy Act, 1956, the expression 'tenant ' included a person continuing in possession of the accommodation even after the termination of his contractual tenancy and on such termination the possession of a tenant did not become wrong ful, held that the appellant was not entitled to claim mesne profits/damages aggregating to Rs.78,000 and therefore, the suit should have been valued at Rs.42,000 and, since no suit the value of which was less than Rupees one lakh could have been filed in the High Court, directed that the plaint be returned to the appellant for presentation to the proper Court.
Allowing the appeal and directing the High Court to proceed with the hearing of the suit.
HELD: On the facts and in the circumstances of the case the High Court was in error in prejudging the issue relating to the right of the appellant to claim mesne profits/damages and in directing that the plaint should be returned for presentation to the proper Court.
[797C D] (i) The principles which regulate the pecuniary jurisdiction of 793 civil courts are well settled.
Ordinarily, the valuation of a suit depends upon the reliefs claimed therein and the plaintiff 's valuation in his plaint determines the Court in which it can be presented.
Under section 15, C.P.C., every plaint should be instituted in the Court of the lowest grade compe tent to try it.
The Court always has the jurisdiction to prevent the abuse of the process of law and the plaintiff cannot invoke the jurisdiction of a Court by either grossly over valuing or grossly under valuing a suit.
Under r. 10 of 0.7, C.P.C., the plaint can be returned at any stage of the suit for presentation to the Court in which the suit should have been instituted.
[796A C] (ii) In the instant case the appellant has claimed a decree for Rs.78,000 for the period between 1st February, 1985 and 30th November, 1985 on the footing that the re spondent 's possession was unauthorised or illegal and he was liable to pay mesne profits or damages.
The question whether the appellant would be entitled to a decree for mesne prof its/damages at the rate of Rs.7,800 per month or at any other rate after the termination of the tenancy is a matter which has to be decided in the suit and it could not have been disposed of at a preliminary stage even before the trial had commenced.
That question has to be decided at the conclusion of the trial along with other issues arising in the suit.
Having regard to some of the decisions on which reliance is placed by the appellant in the course of the appeal, the matter is not free from doubt and the claim for mesne profits/damages is neither palpably absurd nor imagi nary.
It needs judicial consideration.
[796D G] (iii) The acceptance of the view put forward by the respondent may lead to encouraging a tenant who has forfeit ed his right to the tenancy to carry on a dilatory litiga tion without compensating the landlord suitably for the loss suffered by him on account of the unreasonable deprivation of the possession of his premises over a long period until he is able to get possession of the premises through the Court.
It cannot, therefore, be stated at this stage that the claim for mesne profits/ damages had been made without good faith and with the sole object of instituting the said suit before the High Court even though it had no jurisdic tion to try it.
[796G H; 797A]
|
Appeals Nos. 114 and 115 of 1965.
Appeals from the judgment and decree dated May 7, 1958 of the Allahabad High Court in Special Appeals Nos. 46 and 48 of 1952.
N.D. Karkhanis and J.P. Aggarwal, for the appellants (in both the appealS).
Shanti Bhushan and B.P. Maheshwari, for the respondents (in both the appeals).
The Judgment of the Court was delivered by Shah, J.
The Grain Chamber Ltd,, Muzaffarnagar, a Company registered under the Indian Companies Act, 1913 with a share capital of Rs. 1,00,000 divided into 1,000 shares of Rs. 100 each, was formed for the purpose of carrying on business of an exchange in grains, cotton, sugar, gut, pulses and other commodities.
By article 5 of its Articles of Association nO person or firm could remain a member of the Company who was found not to be doing any transaction or business through the Company for a continuous period of six months.
By article 46 it was provided that a member of the Company who owned 10 shares of the Company in his own name or in the name of the firm of which he was a proprietor or partner may be elected a director of the Company.
By article 51, until otherwise fixed, the quorum in the meetings of directors was to be four.
In the years 1949 and 1950 the Company was carrying on business principally in "futures" in gut.
The method of carrying on business in "futures" was explained as follows by the parties to the dispute in an agreed statement submitted before the Company Judge.
The transactions for sale and purchase of gut have to be in the units called 'Bijaks ' of 100 maunds.
The buyer and the seller who are members of the Company negotiate transactions of sale and purchase in gut through their respective brokers and then approach the Company.
The Company enters into.
two independent contracts whereby the Company is the purchaser from one and is the seller to the other at rates agreed upon between the seller and the buyer.
The seller has therefore to sell to the Company a specified quantity and the buyer agrees to purchase the same quantity from the Company under an independent contract.
For the due performance of their contracts, the buyer and the seller deposit with the Company rupee one per maund as Sai and annas eight per maund as Chook 'margin '.
If there is a rise in the price, the Company calls upon the seller to pay the difference, and if he fails to deposit the difference demanded.
the Company enters into a reverse transaction with a purchaser 255 at the current rate of the day and squares up the transaction of sale.
purchaser is also entitled to withdraw from the Company the profits he has made consequent On the rise in price.
If the seller is adjudged an insolvent or for any other reason is incapable of performing his obligations, the buyer remains unaffected, Even if the Company is unable to recover anything from the seller, it has still to pay to the buyer the profits earned by him.
Similarly if there is a fall in the price, the buyer has to make good the difference.
If on the day fixed for delivery of goods the parties intend to settle the transaction by paying and receiving the difference, the Company fixes the rate at which the transaction is to be settled and the transaction is settled at the rate fixed by the Company.
Both the buyer and the seller send bills known as "Dailies" setting out the amounts paid and received according to the rates fixed.
On March 14, 1949, the Board of Directors of the Company passed a resolution sanctioning transaction of business in "futures" in gur for Phagun Sudi 15 Samvat 2006 (March 4, 1950) settlement.
On August 9, 1949, Seth Mohan Lal and Company purchased one share of the Company and qualified for membership.
They commenced dealing with the Company in "futures" in gur.
By December 1949 Seth Mohan Lal and Company who will hereinafter be called 'the appellants ' had entered into transactions with the Company which aggregated to 1136 Bijaks of sale of gur for the Paush Sudi 15, 2006 delivery.
The appellants also claimed that they had entered into sale transactions in 2137 Bijaks in the benami names of five other members.
In January 1950 there were large fluctuations in the prices of gur ', and in order to stabilise the prices, the directors of the Company passed a resolution in a meeting held on January 7, 1950, declaring that the Company will not accept any settlement of transaction in excess of Rs. 17/8/ per maund.
The sellers were required to deposit margin money between the prices prevailing on that date and the maximum rate fixed by the Company.
The appellants deposited in respect of their transactions Rs. 5,26,996/ '14/ as margin money.
They claimed also to have deposited amounts totaling Rs. 7 lakhs odd in respect of their benami transactions.
In exercise of the powers conferred by section 3 of the Essential Supplies (Temporary Powers) Act 24 of 1946, the Government of India issued a notification on February 15, 1950, amending the sugar (Futures & Options) Prohibition Order, 1949, and made it applicable to "futures" and options in gur.
By that Order entry into transactions in "futures" after the appointed day was prohibited.
On the same day the Board of Directors of the Company held a meeting and resolved that the rates of gur which prevailed at the close of the market on February 14, 1950, viz., 256 Rs. 17/6/ per maund be fixed for settlement of the contracts of Phagun delivery.
It was recited in the resolution that five persons including Lala Mohan Lal, partner of the appellants, were present at the meeting on special invitation.
In cl. 2 of the resolution it was recited that as the Government had banned all forward contracts in gur it was resolved to take the prevailing market rate on the closing day of.
February 14, 1950, which was.
Rs. 17/6/per maund for Phagun delivery and to have all Outstanding transactions of Phagun delivery settled at that rate '.
Entries were posted in the books of account of the Company on the footing that a11 outstanding transactions in futures in gur were settled on February 15, 1950.
In the account of Mohan Lal & Company an amount of Rs 5,26,996/14/ stood to the credit of the appellants.
Against that amount Rs. 5,15,769/.5/were debited as "loss adjusted", and on February 15, 1950, an amount of Rs. 11,227/9/ stood to their credit.
Similar entries were posted in the.
accounts of other persons who had outstanding transactions in gur.
On February 22, 1950, the appellants and their partner Mohan Lal filed a petition in the High Court of Judicature at Allahabad for an order winding up the Company.
Diverse grounds were set up in the petition.
The principal grounds were that the Company was unable to pay its debts, that it was just and equitable to wind up the Company, because the directors and the officers of the Company were guilty of fraudulent acts resulting in misappropriation of large 'funds, and that the substratum of the Company had disappeared, the business of the Company having been completely destroyed.
On February 23, 1951, another petition was filed by the appellants and their partner Mohan Lal for an order winding up the Company.
It purported to raise certain grounds which it was, submitted had not been raised in the first petition and which had arisen since the first petition was instituted.
In the second petition it was averted that by virtue of the notification issued by the Government, the forward contracts in gur had become void and the appellants were entitled to be repaid all the amounts deposited by them, that the outstanding ' contracts.
stood.
rescinded, and the Company having paid out large sums to its directors and other shareholders was not in a position to meet its liability to the appellants.
Brij Mohan Lal, J., held that the Company was not unable to pay its debts and that it was not just and equitable to wind ' up the Company on the grounds set out in the petition.
Orders passed by Brij Mohan.
Lal, J. ', dismissing. the petitions were confirmed by the ' High ' Court 'of Allahabad in its appellate jurisdic 257 tion.
With certificates granted by the High Court, these two appeals have been preferred by the appellant 's and their partner Mohan Lal.
The High Court held that by the notification dated February 15, 1950, the outstanding transactions of "futures" in gur did not become void; that in.
fixing the rate of settlement by resolution dated February 15, 1950, and settling the transactions with the other contracting parties at that rate the directors acted prudently and in the interests of the Company and of the shareholders, and in making payments to the parties on the basis of a settlement at that rate the directors did not commit any fraudulent act or misapply the funds.of the Company; that the case of the appellants that apart from the transactions entered into by them in their firm name, they had entered into other transactions benami in the names of other firms, and that the Company had mala fide settled those transactions with those other firms was not proved; and that the Board of Directors was and remained properly constituted at all material times and no provision of the Companies Act was violated by the directors trading with the Company.
Counsel for the appellants contended (a) that by virtue of the Notification issued by the Central Government on February 15, 1950, all outstanding "futures" in gur became void; (b) that the resolution dated March 14, 1949, was void because there was no quorum at the meeting of the Company; (c ) that their solution dated February 15, 1950 by the Board of Directors was not passed in the interests of the Company but to serve private interests of the directors; (d) that the Company having.
repudiated the outstanding contracts, it was bound to refund the deposits received from the members; and (e) that in any event, the substratum of the Company ceased to exist, and the Company could not after the Government Notification carry on business in gur.
In support of his contention that by the order isued by the Central Government on, February 15,1950, the outstanding transactions in futures in gut became void, counsel for the appellants relied ' upon a press note issued by the Government of India relating to the amendments made in the Sugar (Futures and Options) Prohibition Order, 1949.
In the press note apparently it was stated that all transactions in ,futures" in sugar, gur, gur shakkar, and rab made before the commencement of the order or remaining to be fulfilled ' shall be void and not enforceable by law.
The interpretation of the order depends not upon how the draftsman of the press note understood the notification, but upon the words used therein.
The relevant clauses of the Order, after the amendment, ,read as follows: " 2 ' (d) Futures in sugar and gur mean any agreement relating to the purchase or sale of sugar or gur on 258 a forward basis and providing for delivery at some future date and payment of margin on such date or dates, as may be expressly or impliedly agreed upon by the parties.
2(e) 'margin ' means the difference between the price specified in an agreement relating to the purchase of or sale of sugar and gur and the prevailing market price for the same quality and quantity of sugar or gut on a particular day.
2(f) 'Option in sugar or gur ' means an agreement for the purchase or sale of a right to buy or a right to sell or a right to buy and sell, any sugar or gut in future and includes a teji mandi and teji mandi in any sugar.
On or after the appointed day no person shall (a) save with the permission of the Central Government in this behalf or of an officer authorised by the Central Government in this behalf, enter into any futures in sugar or gur, or pay or receive or agree to pay or receive any margin in connection with any such futures.
(b) enter into any option in sugar or gur.
Any option in sugar or gur entered into before, the appointed day and remaining to be performed.
whether wholly or in part shall be void within the meaning of the,Indian Contract Act, 1872, and shall not be enforceable by law.
" By cl. 3(a) all persons are prohibited, save with the permission of the Central Government in that behalf from entering into "futures" in sugar or gut: the clause also prohibits receipt or payment of, or agreement to pay or receive any margin in connection with any such futures.
The clause in terms operates prospectively.
Clause 3(b) prohibits options in gut and sugar, and el. 4 expressly invalidates options in sugar and gut entered into before the appointed day and remaining to be performed whether wholly or in part.
The contrast between the provisions relating to "futures" and "options" is striking.
While imposing a prohibition on options, the Central Government has also expressly provided that all outstanding options shall be void.
No such provision is made in respect of outstanding "futures".
Counsel for the appellants however commended that when the Central Government imposed a prohibition against payment or receipt or agreement to pay or receive, any margin in connection with the outstanding "futures," the "futures" were also prohibited.
But the prohibition imposed against payment or receipt, or ' agreement to 259 or receive margin is made in connection with such futures,pay and the expression such futures means "futures" of the like or similar kind previously mentioned,i e transactions in "futures" to be entered into on or after February 15, 1950.
If it was intended by the Central Government to declare void outstanding transactions in "futures", the Central Government would.
specifically have imposed a prohibition against payment or receipt of,or agreement to pay or receive, margin in connection with.
all"futures".
A transaction in "future" in gur may be settled by payment of margin or by actual delivery, and the Order does not prohibit the settlement of the transaction by specific delivery of goods.
If the plea for the appellants be accepted, the Central Government may be attributed a somewhat singular intention of permitting outstanding futures in gur to be carried out by giving and taking actual delivery of goods contracted for, but not by payment and receipt of margin.if it was intended to invalidate transactions in futures which were outstanding on February 15,1950, an express provision to that effect could have been made.
No such provision has been made, and there are clear indications in the terms of the notification which show a contrary intention.
Prohibition against payment or receipt of margin money under, transactions entered into after February 15,1950 is not redundant: it was enacted presumably with a view to maintain control over the transactions made with the sanction of the Central Government.
But, said counsel for the appellants, the resolution dated March 14, 1949, which permitted the Company to enter into transactions in "futures" in gut was invalid, because the directors who took part in the meeting were disqualified under sections 861(1) (h) and 9lB of the Indian Companies Act, 1913, and the Company could not retain money paid in pursuance of unauthorised transactions, It was resolved unanimously in the meeting of the Board of Directors convened on March 14, 1949, that forward transactions in gut for Phagun Sudi 15, Samvat 2006, i.e., March 4, 1950 "may be started according to the rules" laid down therein.
It was said that the resolution which authorised transactions of "futures" in gur in the manner in which the Company was carrying on its business entailed disqualification of the Directors and as the Directors were disqualified there was no quorum and no proper resolution and therefore all transactions entered into and any payment made pursuant to that resolution were invalid and the Company was bound to refund the amounts paid by the appellants from time to time.
The Company had 11 directors: out of these 9 directors were carrying on business with the Company.
It appears that at the meeting dated March 14, 1949 all the directors present were those who carried on business in "futures" in gur with the Company, and did after March 14, 1949, 260 carry on that business.
Under the Indian Companies Act, 1913, as originally enacted, there was no prohibition against a director entering into transactions with the Company, and on that footing the scheme of the Company 's business was devised.
Under the Articles. of Association no person could remain a member of the Company who was found not to ' be doing any transaction or business :through the Company continuously for six months, and a person could be elected a director if he held 10 shares in his own name or in the name of the firm of which he was a proprietor or a partner.
A director of the Company had therefore to hold ten shares and had to carry on business with the Company.
If he ceased to do business for a period of six months he ceased to be a member of the Company, and on that account ceased also to be a director of the Company.
The Articles of Association prescribed diverse contingencies in which a director was to vacate his office, but carrying on business with the Company was not made a ground of disqualification The Company had started business in the year 1931.
In 1936, several important amendments were made in the Indian Companies Act 1913.
By section 86F which was incorporated by Act 22 of 1936, it was provided: "Except with the consent of the directors, a director of the company, or the firm of which.
he is a partner or any partner of such firm, or the private company of which he is a member or director, shall not enter into any contracts for the sale, purchase or supply of goods and 'materials with the company, Section 861 enumerated the Conditions or situations in which the office of ' director was vacated.
Insofar as the section is material it provides: "(1) The office of a director 'shall be vacated if__ (h) he acts in contravention of section 86F.
Section 91B which was inserted by Act 11 of 1914 as modified by Act 22 of 1936 by the first sub section provided: "No director shall, as a director, vote on any contract or arrangement in which he is either directly or 'indirectly concerned or interested nor shall his presence 'count for the purpose of forming a quorum at the time of any such vote;and if he does so vote his vote shall not be counted :" 261 After the amendment of the Indian Companies Act by Act 22 of 936, the Rules of the Company were not modified and the Company apparently carried on business in the same manner in which it was originally carrying on its business.
It appears that the directors were oblivious of the requirements of section 86F and of the provisions of section 861 and section 91B, and the modus operandi of the business continued to remain the same as it was previously.
On the terms of section 86F(1) all directors of the Company were prohibited, unless the directors consented thereto, from entering into contracts for the sale, purchase or supply of goods and materials with the Company.
On behalf of the Company it was urged that by the resolution dated March 14, 1949, the directors resolved generally to sanction all transactions of the directors for the sale and purchase in commodities in which the Company carried on business, and on that account notwithstanding the prohibition contained in section 86F, the directors did not vacate their office.
Counsel for the appellants urged that the consent of the directors contemPlated by section 86F is consent in respect of each specific contract to be entered into and no general consent can be given by the directors authorising a director or directors of the Company to sell, purchase or supply goods and materials to the Company.
Such a general resolution without considering the merits of each individual contract would, it was urged, amount to repealing the provisions of section 86F.
Strong reliance was placed upon the judgment of the Bombay High Court in Walchandnagar Industries Ltd. and others vs Ratanchand Khimchand Motishaw(1).
It is not necessary for the purpose of this case to decide whether in any given set of circumstances a general consent may be given by the Board of Directors, to a director or directors to enter into contracts for sale or purchase or supply of goods and materials with the Company so as to avoid the prohibition contained in section 86F of the Indian Companies Act, for, in our view, the resolution dated March 14, 1949, cannot be challenged in view of Regulation 94 of Table A which, for reasons to be presently mentioned must be deemed to be incorporated in the Articles of Association of the Company.
Regulation 94 of Table A in the First Schedule is not one of the obligatory regulations which is to be deemed by section 17(2) of the Indian Companies Act 1913 to be incorporated in the Articles of Association.
Section 18 provides: "In the case of a company limited by shares and registered after the commencement of this Act, if articles are not registered, or, if articles are registered, insofar as the articles do not exclude or modify the regulations (1) I.I.R. , 262 in Table A in the First Schedule those regulations shall, so far as applicable, be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles.
" The respondent Company is limited by shares and was registered after the commencement of the Indian Companies Act, 1913: the Company has adopted special Articles of Association, but there is no Article which excludes or modifies Regulation 94 of Table A, and by the operation of section 18 of the Act that Regulation must be deemed to apply in the same manner and to the same extent as if it was contained in the registered articles of the Company.
We are unable to hold that because the Company has not incorporated regulation 94 of Table A in its Articles of Association, an intention to exclude the applicability of the regulation to the Company may be inferred.
Regulation 94 of Table A is not expressly excluded by the Articles of the Company that is common ground.
It is not excluded by implication for it is not inconsistent with any other express provision in the Memorandum of the Articles of Association.
It, therefore.
follows that Regulation 94 must be deemed to be incorporated in the Articles of Association of the Company.
That Regulation provided: "All acts done by any meeting of the directors or of a committee of directors, or by any person acting as a director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such directors or persons acting as aforesaid.
or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a director.
" There is no evidence that the directors were aware of the disqualification which would be incurred by entering into contracts of sale or purchase or supply of goods with the Company without the express sanction of the directors.
By the subsequent discovery that they had incurred disqualification, because they had entered into contracts with the Company for sale or purchase or supply of goods,the resolution passed by them is not rendered invalid.
It is in the view we have taken, unnecessary to decide whether section 86 of the Indian Companies Act 1913 also grants protection to acts done by directors who are subsequently discovered to be disqualified.
Section 91B imposes a prohibition against a director voting on any contract or arrangement in which he is either directly or indirectly concerned or interested.
But the directors of the Company are not shown to have voted on any existing contract or 263 arrangement.
At the meeting dated March 14, 1949, they resolved that the Company shall commence business in "futures" in gur according to the rules set forth in the resolution.
Thereby the directors were not voting on a contract or arrangement in which they were directly or indirectly concerned or interested.
It must then be considered whether the resolution of February 15, 1950, was passed by the Board of Directors with a view dishonestly to make profit for themselves and for others who were purchasers, and to cause loss to the appellants.
In the light of the situation prevailing on February 15, 1950, in our judgment, the Board of Directors acted, in passing the resolution, as prudent businessmen for the protection of the interests of, the Company and the members.
Since the promulgation of the sugar and Gur (Futures and Options) Prohibition Order, 1950, if any member of the Company failed to pay the margin, the Company could not enter into a reverse transaction.
That was prohibited.
Whereas the outstanding transactions were valid, a very important sanction which the Company could impose against the member who failed to pay the margin became ineffective.
It was therefore necessary in the interest of the Company to devise an effective scheme for settlement of those transactions.
Again in view of the imposition of severe restrictions by the Government on transport of gut by rail or by mechanised transport, it was well nigh impossible for the members to give or take delivery of gut.
It was therefore resolved that all outstanding contracts shall be settled at the rate prevailing on the evening of February 14, 1950.
It may be recalled that on January 7, 1950, the Board of Directors had resolved, because the prices of gur were spiraling that all outstanding transactions in gut will be settled at the rate of Rs. 17/8/ ' per maund whatever may be the price ruling at the date of settlement.
The appellants had sold 1,123 Bijaks of gut at an average rate of Rs. 12/13/9 per maund, and those transactions in "futures" were not invalidated by the notification issued by the Government.
But since No. reverse transaction to protect the Company against loss, if a member failed to pay margin, was possible, the only practical way out was to provide for settling the outstanding transactions.
This the Board of Directors did by taking the rate which was prevailing in the evening of February 14, 1950, as the rate of settlement of all the outstanding transactions.
The resolution, however, did not put an end to the outstanding contracts as on February 15, 1950: the resolution merely fixed the rate at which the transactions were to be settled on the due date, the possibility of any fresh transactions in futures so long as the Order remained in force being completely ruled out.
It may, be noticed that the appellants ' representative, was present at the meeting, and he was apparently heard.
Whether or not he agreed to the passing of the resolution iS immaterial.
But we are unable to hold that the resolution was passed with a view 264 to benefit the directors: it appears that the resolution was passed with a view to protect the interests of the Company and its members.
But it was urged that simultaneously large amounts were tended to be paid to the members who had purchase contracts outstanding, and for that purpose it was resolved to borrow money from the Allahahad Bank and the Central Bank of India Ltd. This, it was urged, disclosed anxiety on the pan of the directors to appropriate to themselves the liquid funds and to deprive the appellants of the benefit of any fall in the prices after February 15, 1950.
It is true that in the books of account of the Company the transactions were shown to have been settled as on February 14, 1950.
But we agree with the High Court that the entries in the books of account of the Company were not in accordance with the resolution, and no intimation was given to any of the members of the Company 'that the transactions were so closed.
There is no clear evidence about the dates on which payments were made to the purchasers in respect of their out.
standing transactions.
But that in our judgment is not material.
It appears from the agreed statement flied before the Company Judge that if the seller made a deposit to cover the rise in prices, the purchaser was entitled to withdraw from the Company the profit which he had made under his cross transaction.
even before the date of settlement.
It was clearly contemplated that when a seller deposited the difference between the price at which he had agreed to sell gut, for future delivery the ruling rate being higher than the rate at which he had agreed to sell, it was open to the purchaser to approach the Company and to call upon it to pay him the profit.
Whether or not this right was strictly enforced is irrelevant.
It appears from Ext.
D 10 that as many as 133 persons having sale transactions had made deposits of diverse amounts with the Company aggregating to Rs. 36,38,932/2/9.
The purchasers under the corresponding transactions were entitled to withdraw the profits.
earned by them out of the deposits so made.
By allowing the purchasers to withdraw the amounts which they were entitled to under the business rules of the Company after the contracts were frozen, the directors of the Company acted according to the rules and not contrary thereto.
The attitude of the appellants in respect of the outstanding contracts since February 15, 1950, has also an important bearing.
On February 23, 1950, the management of the Company addressed a letter informing the appellants that in the interests and for the benefit of the trade, the Board of Directors had passed a resolution on February 15, 1950, to settle the outstanding, transactions at the rate prevailing in the market on February 14, 1950; That resolution, it was stated, was for the benefit of the appellants, 265 but if the appellants wanted to deliver the goods, they should intimate the date and place on which they were prepared to give delivery of goods according to the outstanding contracts on Phagun Sudi 15, Sam vat 2006 in terms of the rules and bye laws of the Company.
The appellants denied having received this letter. ' But we are unable to accept that denial.
On March 1, 1950, the appellants wrote a letter stating that because of the notification issued by the ' Central Government the performance of the contracts had become impossible, and that the Company was liable to refund all the amounts deposited with interest thereon, and that the illegal settlement dated February 15, 1950, amounted to repudiation of the contracts by the Company and those contracts stood rescinded.
The appellants apparently insisted that the transactions became impossible of performance in view of the prohibition contained in the notification published by the Central Government, and contended that the resolution amounted to repudiation of the contracts by the Company.
But by the resolution, in our judgment, there was no repudiation of the contracts by the Company.
The contracts, if they were to be settled by payment of differences, could be settled on the due date at the rates fixed: it was however open to the appellants to deliver goods under the contracts if they desired to do so.
The plea that there was frustration of the contracts, and on that account the Company was liable to refund all the amounts which it had received, has no substance.
As we have already held, the outstanding contracts were not at all affected by the Government Order.
Imposition by the Central Government of a prohibition by its notification dated March 1, 1950 restraining persons from offering and the Railway Administration from accepting for transportation by rail any g.r, except with the permit of the Central Government from any station outside the State of Uttar Pradesh which was situated within a radius of thirty miles from the border of Uttar Pradesh does not lead to frustration ' of the contracts.
Fresh contracts were prohibited but settlement of the outstanding contracts by payment of differences was not prohibited, nor was delivery of gut in pursuance of the contract and acceptance thereof at the due date by the Company prohibited.
The difficulty arising by the Government orders in transporting the goods needed to meet the contract was not an impossibility contemplated by section 56 of the Contract Act leading to frustration of the contracts.
Finally, it was urged that by reason of the notification issued by the Central Government, the substratum of the Company was destroyed and no business could be carried on by the Company thereafter.
11 was said that all the liquid assets of the Company were disposed of and there was no reasonable prospect of the Company commencing or carrying on business thereafter.
266 The Company was carrying on extensive business in "futures" in gut, but the Company was formed not with the object of carrying on business in "futures ' in gut alone, but in several other commodities as well.
The Company had immovable property and liquid assets of the total value of Rs. 2,54,000.
There is no ' evidence that the Company was unable to pay its debts.
Under section 162 of the Indian Companies Act, the Court may make an order for winding up a Company if the Court is of the opinion that it is just and equitable that the Company be wound up.
In making an order for winding up on the ground that it is just and equitable that a Company should be wound up, the Court will consider the interests of the shareholders as well as of the creditors.
Substratum of the Company is said to have disappeared when the object for which it was incorporated has substantially failed, or when it is impossible to carry on the business of the Company except at a loss, or the existing and possible assets are insufficient to meet the existing liabilities.
In the present case the object for which the Company was incorporated has not substantially failed, and it cannot be said that the Company could not carry on its 'business except at a loss, nor that its assets were insufficient to meet its liabilities.
On the view we have taken, there were no creditors to whom debts were payable by the Company.
The appellants had, it is true, filed suits against the Company in respect of certain gur transactions on the footing that they had entered into transactions in the names.
of other persons.
But those suits were dismissed.
The business organisation of the Company cannot be said to have been destroyed, merely because the brokers who were acting as mediators in carrying out the business between the members had been discharged and their accounts settled.
The services of the brokers could again be secured.
The Company could always restart the business with the assets it possessed, and prosecute the objects for which it was incorporated.
It is true that because of this long drawn out litigation, the Company 's business has come to a stand still.
But we cannot on that ground direct that the Company be wound up.
Primarily, the circumstances existing as at the date of the petition must be taken into consideration for determining whether a case is made out for holding that it is just and equitable that the Company should be wound up, and we agree with the High Court that no such case is made out.
The appeals fail and are dismissed with costs.
One hearing fee.
| The Madhya Bharat Municipalities Act 1954 came into force January 26, 1954.
The Indore City Municipal Act, 1909 which had till then governed the Indore Municipality was thereby repealed.
Under the repealed Act the Indore Municipality used to levy and collect house tax at the rate of 7% of the gross annual letting value.
Under section 73(2) of the 1954 Act house tax was to be assessed on the basis of the gross annual letting value less 10% statutory allowance for repairs etc.
However, even for the period after the passing of the new Act, the Municipal Corporation, purporting to act under section 79 '(1) of the 1954 Act.
adopted ,the latest assessment list prepared under the old Act and levied house tax at the old rate of 7% of the gross.
annual letting value.
The respondents who were trustees of certain house property filed a suit challenging the levy on the basis of the gross annual letting value when section 73(2) of the 1954 Act required the tax to be assessed on the net value after deduction of the statutory allowance.
The suit was decreed by the 'Trial Court and the appeals filed by the Corporation before the District judge and the High Court were dismissed.
The Corporation by special leave, came to this Court and urged: (i) that the levy at 7% of the gross annual letting value prescribed under the rules of the Indore Act was saved by section 2(c) of the 1954 Act; (ii) that under section 79(1) the Corporation was required to prepare a fresh assessment list only once in four years, that it was therefore entitled to adopt for the years in question the latest assessment list prepared under the old Act.
and the said assessment list having been so adopted was conclusive evidence as to the annual rental value of houses and the house tax imposed thereon.
HELD: (i) While section 2(c) saves the rules and taxes.
imposed under the old Act it saves them only to the extent that they are consistent with the new Act.
The saving and deeming provisions of section 2(c) can only apply if the tax is assessed in the manner consistent with the provisions of section 73, that is, if it is assessed on the net and not the gross annual letting value after deducting 10% statutory allowance.
The Corporation could not be allowed to go on imposing the tax on the basis of the gross annual letting value for ever despite the express provision in section 73.
The tax imposed by the Corporation at the rate of 7% of the gross annual letting value was not therefore saved by section 2(c).
[129E H] (ii) Ordinarily the Municipal Corporation has to prepare a fresh assessment list every year.
The legislature has however by section 79(1) empowered the Corporation to adopt the valuation and assessment contained in the assessment list prepared in an earlier year provided, however, that it prepares a fresh list once in every 4 years.
But sub section
(2) 126 of section 79 provides expressly that when such a previous list is adopted for a particular official year it can be done subject to the provisions sections 75 and 76.
The list so adopted has therefore to be published, has to invite objections and has to be authenticated in the manner prescribed by section 76(6) after disposing of the objections if any and it is then only that it becomes conclusive evidence of the valuation and the tax assessed thereon for that particular official year.
If it were otherwise a house owner would have no opportunity to object to the assessment for four years even though the value of his house may have decreased for some reason or the other.
Section 79 has therefore to be construed to mean that though a Municipality need not prepare a fresh assessment list every year and need prepare such list once in every 4 ),ears and can adopt an earlier assessment list such an adopted list becomes the assessment list for that particular year as if it was a new list and to which sections 75 and 76 apply.
[130E 131C] Accordingly, the Corporation was entitled to adopt for the official years in question the latest list prepared under the old Act, and under section 79 that list would become the assessment list for the said years provided that the provisions of sections 75 and 76 are followed.
Even then the appellant Corporation would not be.
entitled to impose house tax on the basis of the gross annual letting value as such imposition would be inconsistent with section 73 under which the annual letting value would be the gross annual letting value less 10% statutory allowance.
[131D] Even on the footing that the resolution passed by the Indore Municipality to levy the tax at 7% of the gross annual letting value and on the basis of which the last list under the ,old Act was prepared was saved and was deemed to have been made under the 1954 Act it could be deemed to have been so made in so far as it was consistent with the provisions of the Act.
Therefore to the extent that it was inconsistent with section 73 it was neither saved nor deemed to have been made under the Act and had to be adjusted in the light of the provisions of section 73(2).
[131G H]
|
: Special Leave Petition (Crl.) No. 1383 of 1978.
From the Judgment and Order dated 3 1 1978 of the Punjab and Haryana High Court in Crl.
A. No. 1039/74.
K. L. Jogga and L. N. Gupta for the Petitioner.
Hardev Singh for the Respondent.
The Order of the Court was delivered by SHINGHAL, J. We have heard learned counsel for the parties at length.
Accused Bachan Singh, Gurnam Singh and Chanan Singh were convicted by the Sessions Judge of Gurdaspur of an offence under section 304 Part I read with section 149 I.P.C. and were sentenced to rigorous imprisonment for 10 years and a fine of Rs. 1000/ .
They were also convicted of an offence under section 148 I.P.C. and sentenced to rigorous imprisonment for 2 years.
The remaining two accused Ravail Singh and Vir Singh were convicted of an offence under section 304 Part I read with section 149 I.P.C., but they were sentenced to rigorous imprisonment for 5 years and a fine of Rs. 500/ .
Further, they were convicted of an offence under section 147 I.P.C. and were sentenced to rigorous imprisonment for 1 year.
An appeal was filed by the accused against their conviction and sentence; and the State filed an appeal for their conviction and sentence under section 302 I.P.C. A revision petition was filed under 647 section 401 Crl.
P.C. for enhancement of the sentence of imprisonment and fine "to meet the ends of justice".
The High Court of Punjab and Haryana made an express order on December 9, 1974 that the revision petition would be heard alongwith the criminal appeal (No. 1039 of 1974) filed by the accused.
By its impugned Judgment dated January 3, 1978, the High Court dismissed the appeal which was filed by the accused, but enhanced the sentence of Bachan Singh, Gurnam Singh and Chanan Singh accused under section 304 Part I read with section 149 I.P.C. to rigorous imprisonment for life and of accused Ravail Singh and Vir Singh under the same section to rigorous imprisonment for 10 years.
While making that order, the High Court observed that the State appeal "for enhancement of punishment" was "partly accepted".
That is why all the five accused have applied to this Court for special leave under article 136 of the Constitution.
It has been argued by learned counsel for the accused that the High Court committed an error of law in enhancing the sentence of the accused without giving them a reasonable opportunity of showing cause against such enhancement and without allowing them to plead for their acquittal or for reduction of the sentence as contemplated by sub section (3) of section 377 of the Code of Criminal Procedure.
It appears to us, however, that as the State Government did not file an appeal against the sentence under sub section (1) of section 377 Cr.P.C, and as it is not disputed before us that its appeal was directed against the acquittal of the accused for the offence under section 302 I.P.C., there is no justification for the argument that the High Court committed an illegality in not complying with the requirement of sub section (3) of that section for giving the opportunity to the accused of showing cause against the enhancement of the sentence or of pleading for their acquittal or for reduction of the sentence.
As has been stated, a petition was filed under section 401 Cr.
P.C. for enhancement of the sentence, and it was clearly maintainable as it was not permissible for the revision petitioner to file an appeal under section 377.
It will be recalled that the High Court made an express order on December 9, 1974, for the hearing of the revision petition alongwith the appeal which had been filed by the accused.
The fact therefore remains that the High Court had before it the above mentioned appeals which had been filed by the accused and the State, and the revision petition under section 401 Cr.
P.C. for enhancement of the sentence.
While that court dismissed the appeal of the 648 accused, and allowed the appeal of the State in part, it forgot to make a reference to the revision petition while drawing up the operative part of its order.
That was an inadvertent mistake for, after reading the impugned judgment of the High Court, we have no doubt that it effectively disposed of both the appeals and the revision petition even though the wordings of the judgment in that respect were not quite appropriate.
But, even otherwise, there is no merit in the grievance of the accused that they were not given the opportunity of showing cause against the enhancement of the sentence or to plead for their acquittal or for reduction of the sentence.
The opportunity for pleading for acquittal was amply furnished at the hearing of their own appeal against their conviction, and the same appeal furnished them the necessary opportunity for pleading for the reduction of the sentence.
That in fact was the subject matter of their appeal.
It is not disputed before us that the High Court heard the State appeal against the acquittal of the accused, alongwith the appeal which was filed by the accused, and that furnished further opportunity to the accused to plead for their acquittal, or reduction of sentence, or to show cause against the enhancement of the sentence.
There is thus no force in the argument to the contrary.
It has to be appreciated that in respect of the petition which was filed under section 401 Cr.P.C. for the exercise of the High Court 's powers of revision, it was permissible for it to exercise the power of a Court of Appeal under section 386 for enhancement of the sentence, and if that had been done, there is no justification for the argument that the enhancement was illegal.
There is another reason for this view.
It was permissible for the High Court under section 397 Cr.
P.C. to call for and examine the record of the proceeding before the trial court for the purpose of satisfying itself as to the correctness, legality or "propriety" of any finding, "sentence" or order, recorded or passed by that inferior court.
The High Court 's power of revision in the case of any proceeding the record of which has been called for by it or which otherwise comes to its knowledge, has been stated in section 401 Cr.
P.C. to which reference has been made above.
That includes the power conferred on a Court of Appeal under section 386 to enhance or reduce the sentence.
So when the record of the case was before the High Court in connection with the two appeals and the revision petition referred to above, there was nothing to prevent the High Court from invoking its powers under section 397 read with section 401 Cr.
P.C. and to make an order for the enhancement of the sentence.
649 There is thus no force in the argument to the contrary.
All the same, we gave an opportunity to the learned counsel for the accused to advance his arguments on question of sentence and all that he was able to argue was that as the accused had undergone a portion of the sentence and, as the offence was committed in 1972, the High Court was not justified in enhancing the sentence.
As is obvious, both these arguments are untenable and inconsequential because of the concurrent findings of the trial court and the High Court that the accused emerged from the house of accused Bachan Singh as soon as Sarup Singh (deceased) reached the place of occurrence, shouted that he should be taught a lesson for getting liquor recovered from them and beat him with their respective weapons.
It has been found further that while accused Vir Singh caught hold of the hair of the deceased and Ravail Singh caught hold of his legs and felled him on the ground, Gurnam Singh, who was armed with a datar, dealt belows on his right knee while Chanan Singh gave a kirpan blow on his left hand, and then accused Gurnam Singh gave a blow on his right knee while Chanan Singh gave a kirpan blow on his left hand and he, Gurnam Singh and Bachan Singh dealt further blows on his left leg near the knee, as a result of which the left leg was completely severed from the body.
It has also been concurrently found that the accused took away the chopped off leg of the deceased after wrapping it in his turban, and that he succumbed to the injuries soon after.
The facts and the circumstances which have thus been established by the evidence of Pal Singh P.W.4, and Nishan Singh P.W.5, on which reliance has been placed by both the courts, justify the view taken by the High Court that the accused deserved the sentence awarded to them by it.
Learned counsel for the accused tried to argue that the conviction of the accused was not justified on the merits, and took us through the finding in regard to the motive for the offence, the nature of the medical evidence, the plea of self defence taken by accused Bachan Singh and the relationship of eye witnesses Pal Singh P.W.4 and Nishan Singh P.W.5 with the deceased.
Apart from the fact that there was no occasion for us to consider those arguments, we have no hesitation in saying that they are without merit.
In the view we have taken, the petition for special leave is dismissed.
V.D.K. Petition dismissed.
| The respondent in the two appeals was compulsorily retired by an order dated 20 4 74 under Rule 16(3) of the All India Services (Death cum Retirement) Rules, 1958.
The respondent challenged the said order by filing a Writ Petition before the Andhra Pradesh High Court.
A single Judge of that Court allowed the petition.
The said decision was affirmed by the Division Bench in appeal.
Allowing the appeals by certificate the Court, ^ HELD: 1.
An analysis of Rule 16(3) of the All India Services (Death cum Retirement) Rules, 1958 clearly shows that the following essential ingredients of the Rule must be satisfied before an order of compulsory retiring a Government servant is passed: (i) that the member or the service must have completed 30 years of qualifying service or the age of SO years (as modified by notification dated 16 7 1969); (ii) that the Government has an absolute right to retire the Government servant concerned because the word "require" confers an unqualified right on the Central Government servant; (iii) that the order must be passed in public interest; and (iv) that three months ' previous notice in writing shall be given to the Government servant concerned before the order is passed.
[742 G H. 713 A B] .
The provision gives an absolute right to the Government and not merely a discretion, and, therefore implied it excludes the rules of natural justice.
[743 B] 2.
Compulsory retirement after the employee has put in a sufficient number of years of service having qualified for full pension is neither a punishment nor a stigma so as to attract the provisions of Article 311(2) of the Constitution.
In fact, after an employee has served for 25 or 30 years and is retired on full pensionary benefits, it cannot be said that he suffered any real prejudice.
[743 C D] 3.
The object of Rule 16(3) is to weed out the dead wood in order to maintain a high standard of efficiency and initiative in the State service.
It is not necessary that a good officer may continue to be efficient for all times to come.
It may be that there may be some officers who may possess a better initiative and higher standard of efficiency and if given chance the work of the Government might show marked improvement.
In such a case compulsory retirement of an officer who fulfils the conditions of Rule 16(3) is undoubtedly in public interest and is not passed by way of punishment.
Similarly, there may be cases of officers who are corrupt or of doubtful integrity and who may be considered fit for being compulsorily retired in public interest.
Since 737 they have almost reached the fag end of their career and their retirement would A not cast any aspersion, nor does it entail any civil consequences.
Of course, it may be said that if such officers were allowed to continue they would have drawn their salary until the usual date of retirement.
But, this is not an absolute right which can be claimed by an officer who has put in 30 years of service or attained the age of 50 years.
Rule 16(3) does nothing of the sort of attaching stigma.
[743 D H] 4.
The jurisprudential philosophy of Rule 16(3) and other similarly worded provisions like F.R. 56(j) and other rules relating to Government servants is noteworthy.
Rule 16(3) as it stands is one of the facets of the doctrine of pleasure incorporated in Article 310 of the Constitution and is controlled only by those contingencies which are expressly mentioned in Article 311.
If the order of retirement under Rule 16(3) does not attract Article 311(2), it is manifest that no stigma of punishment is involved.
The order is passed by the highest authority, namely, the Central Government in the name of the President and expressly excludes the application of rules of natural justice.
[744A C] The safety valve of public interest is the most powerful and the strongest safeguard against any abuse or colourable exercise of power under this Rule.
Moreover, when the Court is satisfied that the exercise of power under the rule amounts to a colourable exercise of jurisdiction or is arbitrary or malafide, it can always be struck down.
While examining this aspect of the matter the Court would have to act only on the affidavits, documents annexures, notifications and other papers produced before it by the parties.
It cannot delve deep into the confidential or secret records of the Government to fish out materials to prove that the order is arbitrary or malafide.
The court, has, however, the undoubted power subject to any privilege or claim that may be made by the State.
to send for the relevant.
confidential personal file of the Government servant and peruse it for its own satisfaction without using it as evidence.
[744 C E] The main object of Rule 16(3) is to instil a spirit of dedication and dynamism in the working of the State Services so as to ensure purity and cleanliness in the administration which is the paramount need of the hour as the services are one of the pillars of our great democracy.
Any element or constituent of the service which is found to be lax or corrupt, inefficient or not up to the work or has outlived his utility has to be weeded out.
Rule 16(3) provides the methodology for achieving the object.
[744 E G; Before the Central Government invokes the power under Rule 16(3), it must take particular care that the rule is not used as a ruse for victimisation by getting rid of honest and unobliging officers in order to make way for incompetent favourites of the Government which is bound to lead to serious demoralisation in the service and defeat the laudable object which the rule seeks to sub serve.
If any such case comes to the notice of the Government the officer responsible for advising the Government must be strictly dealt with.
[744 G H] Compulsory retirement contemplated by Rule 16(3) is designed to infuse the administration with initiative and activism so that it is made poignant and piquant, specious and subtle so as to meet the expanding needs of the nation which require explanation of "fields and pastures now".
Such a retirement 738 involves no stain or stigma nor does it entail any penalty or civil consequences.
In fact the rule merely seeks to strike a just balance between the termination of the completed career of a tired employee and maintenance of top efficiency in the diverse activities of the administration.
[745 A B] An order of compulsory retirement on one had causes no prejudice to the Government servant who is made to lead a restful life enjoying full pensionary and other benefits and on the other gives a new animation and equanimity to the services The employees should try to understand the true spirit behind the rule which is not to penalise them but amounts just to a fruitful incident of the service made in the larger interest of the country.
Even, if the employee feels that he has suffered, he should derive sufficient solace and consolation from the fact that this is his small contribution to the country for every good cause claims its martyr.
[745 B D] Shyam Lal vs State of U.P., ; ; T. G. Shivcharan Singh and Ors.
vs The State of Haryana A.I.R. ; Union of India vs Col. J. N. Sinha and Anr., [1971] 1 SCR 791; M. V. Puttabhatta vs The State of Mysore and Anr., ; ; State of Assam & Anr. etc.
vs Prasanta Kumar Das etc.
[19731 3 S.C.R. 158 & 167; Tara Singh etc.
vs State of Rajasthan and Ors. ; ; Mayenghaon Rahamohan Singh vs The Commissioner (Admn.) Manipur and Ors., ; ; applied.
Before passing an order under Rule 16(3), it is not an entry here or an entry there which has to be taken into consideration by the Government but the overall picture of the officer during the long years of his service that he put in has to be considered from the point cf view of achieving higher standards of efficiency and dedication so as to be retained even after the officer has put in the requisite number of years of service.
[750 C D] Under the various rules on the subject, it is not every adverse entry or remark that has to be communicated to the officer concerned.
The superior officer may make certain remarks while assessing the work and conduct of the subordinate officer based on his personal supervision or contact.
Some of these remarks may be purely innocuous or may be connected with general reputation of honesty or integrity that a particular officer enjoys.
It will indeed be difficult if not possible to prove by positive evidence that a particular officer is dishonest but those who have had the opportunity to watch the performance of the said officer from close quarters are in a position to know the nature and character, not only of his performance but also of the reputation he enjoys.
Therefore on the ground of non communication of adverse remarks, the impugned orders cannot be set aside.
[748? G H, 749 A] R. L. Butail vs Union of India and ors., and union of India vs Col. J. N. Sinha and Anr., [1971] 1 SCR 791; applied.
State of Uttar Pradesh vs Chandra Mohan Nigam & Ors., ; referred to.
Madan Mohan Prasad vs State of Bihar and Ors., ; distinguished.
All that is necessary is that the Government of India, before passing an order under Rule 16(3) should consider the report of the Review Committee 739 which is based on full and complete analysis of the history of the service of A the employee concerned.
[753 F G] In the instant case, it was clearly pleaded by the appellants ill the High Court that the report of the Review Committee was in fact considered by the Government of India before passing the impugned order.
An examination of the confidential file also confirms this.
[753 G H 754 A] State of U.P. vs Chandra Mohan Nigam and Ors. and section R. Venkataraman vs Union of India and Anr., [19,9] 2 SCR 202; distinguished.
Chief Security officer, Eastern Railway & Anr.
vs Ajay Chandra Bagchi ; overruled.
In the instant case (a) there is no legal error in the impugned order passed by the Government of India, retiring Mr. Reddy.
The order is not arbitrary as could be seen from the material of the record.
The Government of India acted on the orders passed by the Home Minister concerned who had considered the report of the Review Committee in its various aspects.
There is nothing to show that Reddy was victimised in any way.
On the other hand, the history Of his service shows that he was always given his due.
He was taken by the I.P.S. and allotted the year 1952.
He was promoted to the selection grade also at the proper time.
The order of suspension was withdrawn and the department enquiry was dropped and the officer was reinstated and later promoted as D.I.G. These facts completely militate against the concept of victimisation.
[756 F H, 757 A] (b) The impugned order is a bonafide order and does not suffer from any legal infirmity.
[757 G]
|
XXXVII of 1950.
Application under article 32 of the Constitution of India for a writ of certiorari and prohibition.
The facts are set out in the judgment.
B. Banerji for the petitioner.
M.C. Setalvad, Attorney General for India (Gyan Chand, with him) for the opposite party.
522 1950.
May 26.
The following judgments were delivered: KANIA C.J. This is an application for a writ of 'certiorari and prohibition under article 32 of the Constitution of India.
The petitioner who is the President of the All India Hindu Mahasabha since December, 1949, was served with an order of externment dated the gist of March, 1950, that night.
By that order he is directed by the District Magis trate, Delhi, not to remain in the Delhi District, and immediately to remove himself from the Delhi District and not to return to the District.
The order was to continue in force for three months.
By another order of the Madhya Bharat Government he was directed to reside in Nagpur.
That order has been recently cancelled.
The petitioner disputes the validity of the first order on the ground that the East Punjab Public Safety Act, 1949, under which the order was made, is an infringement of his fundamental right given under article 19 (1) (d) of the Constitution of India.
He further contends that the grounds of the order served on him are vague, insufficient and incomplete.
According to him the object of the externment order passed by the District Magistrate, Delhi, was to suppress political opposition to the policy of the Government in respect of Pakistan and the Muslim League.
It is alleged that because the petitioner and the Hindu Mahasabha are against the Government policy of appeasement this order is served on him.
It is therefore mala fide and illegal.
In support of his contention about the invalidity of the East Punjab Public Safety Act and its provisions as regards externment, counsel for the petitioner relied on the recent unreported judgments of the Patna High Court in Miscellaneous Judicial Case No. 29 of 1950, Brij nandan vs The State of Bihar, and of the High Court of Bombay in Criminal Application No. 114 of 1950, re Jai singhbhai Ishwarlal Modi.
It is necessary first to ascertain the true meaning of article 19 (1) (d) read with clause (5) of the same article.
There is no doubt that by the order of extern 523 ment the right of the petitioner to freedom of movement throughout the territory of India is abridged.
The only question is whether the limits of permissible legislation under clause (5) are exceeded.
That clause provides as follows: "19.
(5) Nothing in subclauses (d), (e) and (f) of the said clause shall affect the operation of any exist ing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe.
" It is clear that the clause permits imposition of reasonable restrictions on the exercise of the right conferred by sub clause (d)in the interests of the general public.
The rest of the provision of clause (5) is not material and neither side relies on it.
Two interpretations of the clause are put before the Court.
It is argued that grammatically understood the only question before the Court is whether the impugned legislation imposes reasonable restrictions on the exercise of the right.
To put it in other words, the only justiciable issue to be decided by the Court is whether the restrictions imposed by the legislation on the exercise of the right are reasonable.
If those restrictions on the exercise of the right are reasonable, the Court has not to consider whether the law imposing the restrictions is rea sonable.
The other interpretation is that while the Consti tution permits a law laying down reasonable restrictions on the exercise of the rights mentioned in sub clause 19 (1) (d), the reasonableness has to be of the law also.
It is submitted that in deciding whether the restrictions, on the exercise of the right are reasonable, the Court has to decide not only on the extent and nature of the restric tions on the exercise of the right but also as to whether the conditions under which the right is restricted are reasonable.
The majority judgments of the Patna and the Bombay High Courts, although the impugned Acts of the State Legislatures before them were materially different on cer tain important points, have given clause (5) of article 19 the latter meaning.
524 In my opinion, clause (5) must be given its full mean ing.
The question which the Court has to consider is wheth er the restrictions put by the impugned legislation on the exercise of the right are reasonable or not.
The question whether the provisions of the Act provide reasonable safe guards against the abuse of the power given to the executive authority tO administer the law is not relevant for the true interpretation of the 'clause.
The Court, on either inter pretation, will be entitled to consider whether the re strictions on the right to move throughout India, i.e,, both as regards the territory and the duration, are reasonable or not.
The law providing reasonable restrictions on the exercise of the right conferred by article 19 may contain substantive provisions as well as procedural provisions.
While the reasonableness of the restrictions has to be considered with regard to the exercise of the right, it does not necessarily exclude from the consideration of the Court the question of reasonableness of the procedural part of the law.
It is obvious that if the law prescribes five years externment or ten years externment, the question whether such period of externment is reasonable, being the substan tive part, is necessarily for the consideration of the Court under clause (5).
Similarly, if the law provides the proce dure under which the exercise of the right may be restrict ed, the same is also for the consideration of the Court, as it has to determine if the exercise of the right has been reasonably restricted.
I do not think by this interpretation the scope and ambit of the word "reasonable" as applied to restrictions on the exercise of the right, is in any way unjustifiably enlarged.
it seems that the narrow construc tion sought to be put on the expression, to restrict the Court 's power to consider only the substantive law on the point, is not correct.
In my opinion this aspect of the construction of article 19 (5) has escaped the minority judgment in the two matters mentioned above.
I am not con cerned with the conclusions of the two Courts about the invalidity of the provisions of the Acts they were asked to consider.
To the extent they help in the interpretation of article 19 (5) only they are helpful.
525 The next question is whether the impugned Act contains reasonable restrictions on the exercise of the right given under article 19 (1)(d)or (e).
It was argued on behalf of the petitioner that under section 4 the power to make the order of externment was given to the Provincial Government or the District Magistrate, whose satisfaction was final.
That decision was not open to review by the Court.
On that ground it was contended that there was an unreasonable restriction on the exercise of the citizen 's right.
In my opinion, this argument is unsound.
This is not legislative delegation.
The desirability of passing an individual order of externment against a citizen has to be left to an offi cer.
In the Act such a provision cannot be made.
The satisfaction of the officer thus does not impose an unrea sonable restriction on the exercise of the citizen 's right.
So far as the Bombay High Court is concerned Chagla C.J. appears to have decided this point against the contention of the petitioner.
It was next urged that under section 4 (3) the order made by the District Magistrate shall not, unless the Pro vincial Government by special order otherwise direct, remain in force for more than three months.
It was argued that the period of three months itself was unreasonable as the ex ternee had no remedy during that time.
It was contended that when the Provincial Government directed the renewal of the order no limit of time was prescribed by the legislature for the duration of the order.
The order therefore can be in operation for an indefinite period.
This was argued to be an unreasonable restriction on the exercise of a citi zen 's right.
In this connection it may be pointed out that in respect of preventive detention, which is a more severe restriction on the right of the citizen, the Constitution itself under article 22 (4) to (7) permits preventive deten tion for three months without any remedy.
The period of three months therefore prima facie does not appear unreason able.
Under the proviso to section 4 (5) the Provincial Government is not permitted to direct the exclusion or removal from the Province of a person ordinarily residing in the Province, and similarly 526 the District Magistrate is not permitted to order the exclu sion or removal of a person ordinarily resident in his district from that district.
This is a great safeguard provided under the East Punjab Public Safety Act.
The further extension of the externment order beyond three months may be for an indefinite period, but in that connec tion the fact that the whole Act is to remain in force only up to the 14th August, 1951, cannot be overlooked.
More over, this whole argument is based on the assumption that the Provincial Government when making the order will not perform its duty and may abuse the provisions of the sec tion.
In my opinion, it is improper to start with such an assumption and decide the legality of an Act on that basis.
Abuse of the power given by a law sometimes occurs; but the validity of the law cannot be contested because of such an apprehension.
In my opinion, therefore, this contention of the petitioner cannot be accepted.
was next argued that there is no provision in the Act for furnishing grounds of externment to the citizen.
Section 4 (6) provides that when an externment order has been made its grounds may be communicated to the externee by the authority making the order and in any case when the order is to be enforced for more than three months he shall have a right of making a representation which shall be referred to the advisory tribunal constituted under section 3 (4).
While the word "may" ordinarily conveys the idea of a discretion and not compulsion, reading it with the last part of the clause it seems that when an externment order has to be enforced for more than three months an absolute right is given to the cxternee to make a representation.
He cannot make a representation unless he has been furnished grounds for the order.
In no other part of the Act a right to obtain the grouuds for the order in such a case is given to him.
Therefore, that right has to be read as given under the first part of section 4 (6).
That can be done only by reading the word "may" for that purpose as having the mean ing of "shall" If the word "may" has to be so read for that purpose, it appears to be against the well recognised canons of construction to 527 read the same "may" as having a different meaning when the order is to be in force for less than three months.
I do not think in putting the meaning of "shall" on "may" in the clause, I am unduly straining the language used in the clause.
So read this argument must fail.
It was next argued that there is no provision in the Act showing what the advisory board has to do when it receives a representation.
A reference to the advisory board neces sarily implies a consideration of the case by such board.
The absence of an express statement to that effect in the impugned Act does not invalidate the Act.
It was finally contended on behalf of the petitioner that the grounds for the externment order supplied to him are vague, insufficient and incomplete.
The grounds are stated as follows : "Your activities generally and particularly since the recent trouble in East and West Bengal have been of a communal nature tending to excite hatred between communities and whereas in the present composition of the population of Delhi and the recent communal disturbances of Delhi feelings are roused between the majority and minority communities, your presence and activities in Delhi are likely to prove prejudicial to the maintenance of law and order, it is considered necessary to order you to leave Delhi.
" These grounds cannot be described as vague, insufficient or incomplete.
It is expressly stated that the activities of the petitioner, who is the President of the Hindu Maha sabha, since the recent disturbances between two communities in the East and West Bengal have particularly been of a communal nature which excites hatred between the communi ties.
It is further stated that having regard to the recent disturbance in Delhi, the population of which is composed of both these communities, the excitement of such,hatred is likely to be dangerous to the peace and maintenance of law and order.
Apart from being vague, I think that these grounds are specific and if honestly be lieved can support the order.
The argument that the order 528 was served to stifle opposition to the Government policy of appeasement has little bearing because the District Magis trate of Delhi is not concerned with the policy of the Government of appeasement or otherwise.
The order is made because the activities of the petitioner are likely to prove prejudicial to the maintenance of law and order and the grounds specified have a direct bearing on that conclusion of the District Magistrate.
I therefore think that this contention of the petitioner must be rejected.
The result is that the petition fails and is dismissed.
FAZL ALI J.
I agree.
PATANJALI SASTRI J.
I agree that this application must fail.
As I share the views expressed by my Lord in.the judgment just delivered by him on the reasonableness of the restrictions imposed by the impugned legislation whichever construction of article 19 (5) of the Constitution is adopt ed, I consider it unnecessary to express any opinion on the true scope of the judicial review permitted under that article, and I hold myself free to deal with that point when it becomes necessary to do so.
MAHAJAN J. I concur in the judgment which my brother Mukh erjea is delivering and for the reasons given by him I allow the petition and quash the order of externment.
MUKHERJEA J. This is an application under article 32 of the Constitution, praying for quashing of an externment order made by the District Magistrate of Delhi, against the petitioner Dr. N.B. Khare, on 31st March, 1950, by which the latter was directed to remove himself immediately from the Delhi District and not to return to that District so long as the order remained in force.
The order is for three months at present.
Complaint was also made in the petition in respect of another and a subsequent order passed by the Government of Madhya Bharat which was served on the peti tioner on his way to Nagpur and which 529 directed him to reside within the limits of the Nagpur Municipality and not to leave that area without the permis sion of the District Magistrate of that place.
This order of the Government of Madhya Bharat, we are told, has since been withdrawn and we are not concerned with that order or the Act under which it was passed in the present proceeding.
The substantial contention raised on behalf of the petitioner is that the particular provision of the East Punjab Public Safety Act, 1949, under which the District Magistrate of Delhi purported to make the externment order, became void and ceased to be operative after the new Consti tution came into force, by reason of these provisions being inconsistent with the fundamental rights guaranteed under article 19 (1) (d) of the Constitution read with clause (5) of the same article.
The argument is that any order passed under such void legislative provisions must necessarily be void and of no effect in law.
In order to appreciate the merits of this contention, it may be convenient to advert to the material provisions of the East Punjab Public Safety Act which are alleged to have become void as well as to the articles of the Constitution, upon which reliance has been placed by the learned counsel for the petitioner.
The East Punjab Public Safety Act came into force on 29th March, 1949, and its object, as stated in the preamble, is to provide for special measures to ensure public safety and maintenance of public order.
Section 4 (1) of the Act provides: "The Provincial Government or the District Magistrate, if satisfied with respect to any particular person that with a view to preventing him from acting in any manner prejudi cial to the public safety or the maintenance of public order it is necessary so to do, may, by order in writing, give anyone or more of the following directions, namely that such person . . . . . . . . . (c) shall remove himself from, and shall not return to, any area that may be specified in the order." , 530 Sub section (3) of the section lays down that "An order under sub section (1) made by the District Magistrate shall not, unless the Provincial Government by special order otherwise directs, remain in force for more than three months from the making thereof." The contention of the petitioner is that the restrictive provisions mentioned above, under which a person could be removed from a particular area or prohibited from returning to it are inconsistent with the fundamental right guaranteed by article 19 (1) (d) of the Constitution under which all citizens shall have the right "to move freely throughout the territory of India.
" This right indeed is not absolute and the extent to which it could be curtailed by legislation is laid down in clause.(5)of article 19 which runs as follows: "Nothing in sub clauses (d), (e) and (f) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe." Thus the primary question which requires consideration is, whether the impugned legislation which apparently seems to be in conflict with the fundamental right enunciated in article 19 (1) (d) of the Consitution is protected by clause (5) of the article, under which a law would be valid if it imposes reasonable restrictions on the exercise of the right in the interests of the general public.
It is not disputed that the question of reasonableness is a justiciable matter which has to be determined by the Court.
If the Courts 'hold the restrictions imposed by the law to be reasonable, the petitioner would certainly have no remedy.
If, on the other hand, they are held to be unreasonable, article 13 (1)of the Constitution imposes a duty upon the Court to pronounce the law to be invalid to the extent that it is inconsistent with the fundamental rights guaranteed under Part III of the Constitution.
531 It has been urged, though somewhat faintly, by the learned Attorney General that the right of free movement throughout the Indian territory as enunciated in article 19 (1) (d) of the Constitution contemplates nothing else but absence of inter State restrictions, which might prevent citizens of the Indian Union from moving from one State to another.
A law which does not impose barriers of this kind, it is said, cannot be inconsistent with the fundamental right secured by this clause.
Such a restricted interpreta tion is, in my opinion, not at all warranted by the language of the sub clause.
What article 19 (1) (d) of the Constitu tion guarantees is the free right of all citizens to go wherever they like in the Indian territory without any kind of restriction whatsoever.
They can move not merely from one State to another but from one place to another within the same State and what the Constitution lays stress upon is that the entire Indian territory is one unit so far as the citizens are concerned.
Clause (c) of section 4 (1) of the East Punjab Public Safety Act, 1949, authorises the Provin cial Government or the District Magistrate to direct any person to remove himself from any area and prohibit him from entering the same.
On the face of it such provision repre sents an interference with the.
fundamental right guaran teed by article 19 (1) (d) of the Constitution.
The contro versy, therefore, narrows down to this, whether the impugned legislation is saved by reason of its being within the permissible limits prescribed by clause (5) of article 19.
With regard to clause (5), the learned AttorneyGeneral points out at the outset that the word "reasonable" occur ring in the clause qualifies "restrictions" and not "law '".
It is argued that in applying the clause, all that we have to see is whether the restrictions that are imposed upon the exercise of the right by law are reasonable or not and we have not to enquire into the reasonableness or otherwise of the law itself.
The reasonableness of the restrictions can be judged, ' according to the learned Attorney General, from the nature of the restrictions themselves and not from the manner in which or the authorities by which they are 532 imposed.
The question whether the operation of the law produces hardship in individual cases is also a matter which is quite irrelevant to our enquiry.
I do agree that in clause (5) the adjective 'reasonable ' is predicated of the restrictions that are imposed by law and not of the law itself; but that does not mean that in deciding the reasonableness or otherwise of the restric tions, we have to confine ourselves to an examination of the restrictions in the abstract with reference merely to their duration or territorial extent, and that it is beyond our province to look up to the circumstances under which or the manner in which the restrictions have been imposed.
It is not possible to formulate an effective test which would enable us to pronounce any particular restriction to be reasonable or unreasonable per se.
All the attendant cir cumstances must be taken into consideration and one cannot dissociate the actual contents of the restrictions from the manner of their imposition or the mode of putting them into practice.
The question of reasonableness of the restric tions imposed by a law may arise as much from the substan tive part of the law as from its procedural portion.
Thus, although I agree with the learned Attorney General that the word "reasonable" in clause (5) of article 19 goes with "restrictions" and not with "law," I cannot accept his suggestion as regards the proper way of determining the reasonableness of the restrictions which a legislation might impose upon the exercise of the right of free movement.
Coming now to the provisions of the impugned Act, Mr. Baner jee 's main contention is that section 4 (1) (c)of the East Punjab Public Safety Act, which provides for passing of orders removing a person from a particular area, on the satisfaction of the Provincial Government or the District Magistrate, cannot be a reasonable piece of legislation inasmuch as the only pre requisite for imposition of the restrictions is the personal satisfaction of certain indi viduals or authorities, the propriety or reasonableness of which cannot be tested by the application of any external rule or standard.
It is said that any law which places the liberty 533 of a subject at the mercy of an executive officer, however high placed he might be and whose action cannot be reviewed by a judicial tribunal, is an arbitrary and not a reasonable exercise of legislative powers.
The contention requires careful examination.
It is not disputed that under clause (5) of article 19, the reasonableness of a challenged legislation has to be determined by a Court and the Court decides such matters by applying some objective standard which is said to be the standard of an average prudent man.
Judged by such standard which is sometimes described as an external yard stick, the vesting of authority in particular officers to take prompt action under emergent circumstances, entirely on their own responsibility or personal satisfaction, is not necessarily unreasonable.
One has to take into account the whole scheme of the legislation and the circumstances under which the restrictive orders could be made.
The object of the East Punjab Public Safety Act is to pro vide for special measures to ensure public safety and maintenance of public order.
Under section 4 (1) (c) of the Act, the Provincial Govern ment or the District Magistrate may make an order directing the removal of a certain person from a particular area, if they are satisfied that such order is necessary to prevent such person from acting in any way prejudicial to public safety or maintenance of public order.
Preventive orders by their very nature cannot be made after any judicial enquiry or trial.
If emergent steps have got to be taken to prevent apprehended acts which are likely to jeopardise the inter ests or safety of the public, somebody must be given the power of taking the initial steps on his own responsibility; and no reasonable objection could be taken if the authority, who is given the power, is also entrusted with the responsi bility of maintaining order and public peace in any particu lar district or province.
The preventive provisions of the Criminal Procedure Code are based on similar principle.
In my opinion, therefore, the provision of section 4 (1) (c) of the East Punjab Public Safety Act cannot be pronounced to be unreasonable, simply because the order could be passed by the Provincial Government 534 or the District Magistrate on their own personal satisfac tion and not on materials which satisfy certain objective tests.
But though certain authorities can be invested with powers to make the initial orders on their own satisfaction in cases of this description, the position would certainly be different if the order thus made is allowed to continue for any indefinite period of time without giving the ag grieved person an opportunity to say what he has got to say against the order.
I have already set out the provisions of sub section (3) of section 4 which deals with duration of the orders made under the various clauses of sub section (1).
It will be seen from this sub section that there is absolutely no limit as to the period of time during which an externment order would remain in force if the order is made by the Provincial Government.
The Provincial Government has been given unlimited authority in this respect and they can keep the order in force as long as they chose to do so.
As regards orders made by a District Magistrate, the period indeed has been fixed at three months, but even here the Provincial Government is competent to extend it to any length of time by means of a special order.
The law does not fix any maximum period beyond which the order cannot continue; and the fact that the Act itself would expire in August, 1951, is, in my opinion, not a relevant matter for consideration in this connection at all.
I have no hesi tation in holding that the provision of sub section (3) of section 4 is manifestly unreasonable and cannot be supported on any just ground.
One could understand that the exigen cies of circumstances might justify the vesting of plenary powers on certain authorities which could pass orders on their ' own personal satisfaction temporarily and for a short period of time; but if these orders are to continue indefi nitely, it is only fair that an opportunity should be given to the person against whom such order is made to say what he has to say in answer to the allegations made against him.
There may not be an investigation by a regular Court but it is necessary that the aggrieved person should be given a fair hearing and that by an 535 impartial tribunal.
The provision of the impugned Act which has bearing on this point is contained in sub section (6) of section 4 and it runs as follows: "When an order has been made in respect of any person under any of the clauses under section 4, sub section (1), or sub section (2) the grounds of it may be communicated to him by the authority making the order and in any case, when the order is to be in force for more than three months, he shall have a right of making a representation which shall be referred to the Advisory Tribunal, constituted under section 3, sub section (4).
" It will be noted that the first part of the subsection makes it entirely optional with the authorities to communi cate the grounds, upon which the order is made, to the person affected by it.
The grounds need not be communicated at all if the authorities so desire.
As regards the right of representation the latter part of the sub section seems to imply that when the order is to remain in force for more than three months, the right of representation should be given to the aggrieved person and the representation shall be referred for consideration to the advisory tribunal constituted under section 3, sub section (4), of the Act.
The right, however, is purely illusory as would appear from the fact that even in cases where the order is to be opera tive for more than three months, there is no obligation on the part of the authorities to communicate to the person the grounds upon which the order was made.
The aggrieved person consequently may not at all be apprised of the allegations made against him and it will be impossible for him to make any adequate or proper representation, if he is not told on what grounds the order was passed.
In my opinion, this is an equally unreasonable provision and neither sub section (3) nor sub section (6) of section 4 of the Act can be said to have imposed restrictions which are reasonable in the inter ests of the general public.
My conclusion, therefore, is that under article 13 (1) of the Indian Constitution, these provisions of the Act became void and inoperative after the Constitution came into 536 force, and consequently the order made by the District Magistrate in the present case cannot stand.
I would, therefore, allow the application and quash the externment order that has been passed against the petition er.
Petition dismissed.
Agent for the petitioner: Ganpat Rai.
Agent for the opposite party: P.A. Mehta.
| The assessee was a public limited company.
, Under article 37 of its.
Articles of Association the Directors could at any time in their discretion and without assigning any reason decline to register any proposed transfer of shares.
The question in income tax proceedings relating to the assess ment years 1952 53 and 1954 55 was whether on a true interpretation of article 37 the assessee company could be regarded as one in which the public were substantially interested within the meaning of the third proviso to section 23A(1) of the Income tax Act, 1922.
In reference the High Court answered the question in favour of the revenue on the view that the shares of the company were not freely transferable and therefore it was not a company in which the public were substantially interested.
In the assessee 's appeal by special leave, HELD : Article 37 could not by any stretch of reasoning be regarded by itself to be a restriction on the transfer of shares by one shareholder to another.
Free transferability of shares is a normal and common feature ,of limited companies.
Indeed there would hardly be any public company in the memorandum of articles of which an article similar to article 37.
will not be found.
This article appears even in the standard Articles of Association prescribed under the Companies Act itself.
The purpose is ,only to give power to the Directors for declining to register the transfer of a share when the paramount interest of the company so require.
There may be cases where it can be shown that the Directors have been exercising the power very freely and have virtually eliminated the element of free transferability.
In such cases it may be possible to hold that in fact the shares were not freely transferable.
But in the present case there was no evidence of the Directors having acted in the aforesaid manner nor was there any restriction in the other Articles of Association interfering with the free transfer of shares by one shareholder to another.
, The High Court was therefore in error in holding that the mere existence of an article like article 37 would affect the free transferability of the shares within the meaning of the Explanation (1) to section 23A(9) of the Act.
[372 C F] East India Corporation Ltd. vs Commissioner of income tax, Mad? as, and Raghuvanshi Mills Ltd. vs Commissioner of Income tax, Bombay, , approved.
Commissioner of Income tax, West Bengal vs Tona litte Co. Ltd. 48 I.T.R. 902, disapproved.
|
Civil Appeal Nos.
740 to 743 of 1975.
From the Judgment and Order dated 30.8.1974 of the High Court of Madhya Pradesh in Miscellaneous Civil Case No. 352 of 1971.
B.B. Ahuja, Ms. A. Subhashini and K.C. Dua for the Appellant.
T.A. Ramachandran, Vinek Gambhir, Sanjay Sareen and S.K. Gambhir for the Respondents.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
These appeals, by special leave, by the Commissioner of Wealth tax, Bhopal, arise out of the opinion rendered by the High Court of Madhya Pradesh, Bhopal, in fourconsolidated wealth tax references under Section 27(1) of the .
They raise a short but interesting question touching the 230 incidents of what is described as the 'Quaraza e Hasana ' said to be a transaction known in and peculiar to the personal law of the muslims.
The matters arise out of the proceedings concerning the assessment to wealth tax of the respondent, Abdul Hussain Mulla Mohammad Ali ( 'the assessee ') for the four assessment years 1957 58 to 1960 61.
In the original returns for the assessment year 1957 58 relevant to the valuation date 31.3.1957, the assessee filed a return of net wealth of Rs.8,57,910 which included a sum of Rs.4,00,000 representing the principal value of the loan advanced by the assessee to a certain Faizullabhai Mandlawala, Sidhpur.
Both the assessee and the said Faizullabhai Mandlawala were partners of a firm carrying on business under the name and style 'Rising Sun Flour & Oil Mills ' at Ujjain.
The borrower had employed this sum as part of his capital in the firm.
In the revised return, filed by him, the assessee, however, sought to have the value of that loan excluded from his wealth, on the claim that this loan was what was known to Muslim Law as 'Quaraza e Hasana ' a debt of good faith and goodwill carrying with it no legal obligation on the part of the debtor to repay and correspondingly, no right on the part of the assessee to expect, much less enforce a repayment.
The claim for the non inclusion of this asset in the wealth of the assessee was sought to be supported by the declaration dated 26.3.1965 furnished by the debtor that the sum was received by him 'without any obligation and without any rate of interest and without any consideration '.
Reliance was also placed on some extracts of the Quran said to relate to this transaction.
Both the Wealth tax Officer and the Appellate Assistant Commissioner in the appeal found it difficult to accept this claim and, accordingly, brought this sum of Rs.4,00,000 to tax on the respective valuation dates.
However, the Income tax Appellate Tribunal, Indore Bench, accepting the assessee 's appeals held that the loan partook of the character of 'Quaraza e Hasana ' with its special incidents as known to Muslim Law; that the transaction was one of good faith and goodwill and lacked the concomitants of a legally enforceable claim for repayment and that, therefore, the amount was not a debt due to the assessee.
The High Court before which the Tribunal, at the instance of 231 the Revenue, stated a case and referred two questions of law for opinion upheld the view that had commended itself to the Tribunal and answered the questions against the Revenue.
The two questions so referred were: (1) "Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Rs.4 lakhs cannot be included in the total assets of the assessee?" (2) "Whether on the facts and in the circumstances of the case the Tribunal was justified in accepting that the amount of Rs.4 lakhs was in the nature of 'Quaraza e Hasana ' particularly when Rs.1,21,500 out of Rs.4 lakhs has been repaid?" 4.
Shri B.B. Ahuja, learned counsel for the Revenue, contended that the Tribunal as well as the High Court fell into a serious error in their acceptance of the hypothetical incidents of a supposedly peculiar institution of the personal law of the muslims, respecting which nothing tangible by way of evidence as to the existence of such rule or tenet of muslim law was forthcoming.
Learned counsel invited our particular attention to the following observations of the Tribunal: "The learned counsel for the assessee, Mr. Chitale, has also stated before us that he has not come across any judicial decision defining or describing the exact characteristics of the expression 'Quaraza e Hasana ' nor has become across any discussion on this matter in any of the treaties on Mohammedan Law.
We are, therefore, satisfied that on the facts and circumstances of this case, the amount of Rs.4 lakhs cannot be treated as a debt due to the assessee and the same cannot be included in the total asset of the assessee." Learned counsel submitted that the inference drawn does not only not flow from the premise but would clearly be antithetical.
If the concept of 'Quaraza e Hasana ' and the peculiar incidents attributed to it are not established, the plea that there is a debt but yet there is no obligation to repay becomes mutually contradictory.
In regard to the subsidiary or supporting reasons for the acceptance by the Tribunal to hold that there was no debt which could be said to be due and owing to the assessee, the learned counsel invited our attention to the following reasoning of the Tribunal: 232 ". .Faizullabhai in a declaration dated 26.3.1965 has stated that this amount was received by him without any obligation and without any rate of interest and without any consideration.
Therefore, the question that arises for consideration is whether under this peculiar circumstance it can be said that this sum of Rs.4 lakhs which was given by the assessee to Faizullabhai prior to 1950 for which there is no document and for which there is no obligation to repay can be treated as a debt due to the assessee. .
Learned counsel submitted that neither the circumstance that the loan was advanced prior to 1950 nor the self serving declaration by the borrower; nor even that no repayment had been made during the accounting years or earlier would, by themselves, detract from the existence and incidents of a debt which was, otherwise, admitted.
Learned counsel pointed out that, admittedly, on 24.7.1961, a sum of Rs.1,21,821 had been repaid by the borrower to the assessee.
Learned counsel said that both the Tribunal and the High Court, while rightly noticing that the special incidents of what was called 'Quaraza e Hasana ' had not been established, however, by excluding the sum from the wealth, gave the benefit of this doubt as to the very existence of this institution of 'Quaraza e Hasana ' to the assessee.
Referring to the reliance by the High Court on the incidents 'Hiba ba shart ul evaz ' learned counsel submitted that the reasoning of the High Court based on this form of a mussalman gift was destructive of the assessee 's case inasmuch as the kind of gift envisaged by 'Hiba ba Shart Ul Evaz ' expressly stipulated contemporaneous liability for a return.
Shri Ramachandran, learned counsel for the assessee, sought to support the conlusion of the High Court also another independent ground that, at all events, by entering into this transaction the parties did not intend to create a legal obligations between them and that, therefore, the debt remained a debt of honour.
We will presently refer to the possibilities of this contention in the facts of this case.
No authoritative texts nor any principle or precedent recognised in Muslim Law was cited before the High Court to show that a transaction of this nature and incidents is known to and recognised by the personal law of the Muslims.
As no material was placed before the High Court, or before us, to establish the content and incidents of this 233 idea of what is referred to 'Quaraza e Husana ' it is not possible to say, one way or the other, whether Courts can recognise and act upon such a rule of Muslim Law much less afford relief to the proponent of that rule.
Indeed literature on the Principles of Islamic Banking "Unlawful gain and legitimate profit in Islamic Law" (Nibil A. Saleh, Cambridge University Press, 1986) does not appear though we do not want to be understood to have pronounced on the subject finally to support the particular incidents of the non existence of the element of repayability attributed to this kind of loans.
Learned author says that Sharia distinguishes between two types of loans: one the 'Ariya ' the 'loan for use ' which transfers the usufruct of the property temporarily and gratuitously while ownership of the loaned object remains with the lender; and the second, the 'qard '.
In regard to this second type of loan, the 'qard ' the author says (at pages 35 and 36): "The second type of loan recognished by Sharia is the qard, which 'involves the loan of fungible commodities; that is, goods which may be estimated and replaced according to weight, measure or number.
In this case, the borrower undertakes to return the equivalent or likes of that he has received but without any premium on the property, which would, of course, be construed as interest.
The most likely object of a qard loan would be currency or other standard means of exchage." (emphasis supplied) On the question whether the lender of 'Qard ' is entitled to derive any advantage from it, the learned author refers to the views of the different schools namely, Hanafia, Hanbalis, Malikis, Shafi and Ibadis.
(See pages 41 to 43).
Again, the learned author refers to 'Qard Hasan ' as interest free loan.
Explaining its incidents the author says: "Qard Hasan means an interest free loan, which is the only loan permitted by Sharia principles.
We have seen previously that not only can interest not be charged on the lent capital, but no advantage whatsoever should be derived by the lender from the loan.
Of course, each school of law has its own interpretation of what constitutes 'advantage ' and that we have already seen in detail . .
One may wonder how lending could be a business 234 proposition once interest is abolished . . " (emphasis supplied) (see page 89) The learned author also proceeds to enumerate the circumstances in which the Islamic Financial Institutions are advised to make use of 'Qard Hasan '.
From what is gatherable from the author 's observations of course, if the concept of 'Qard Hasan ' is the same as that 'Quaraza e Hasana ' the obligation on the part of the debtor of the loan to repay nor the right of the creditor to repayment are excluded.
The only incident appears to be that it is 'interest free '.
However, we do not want to be understood to have pronounced on this question finally as neither side has produced nor relied upon any literature of Islamic Law on the point.
The extracts of the Quran relied upon merely calls some loan a beatific loan which blesses the giver.
The incidents of the transactions are not found in the passages.
Nor does the reliance by the High Court on the well recognised institution in Muslim Law, of Hiba ba Shart ul Iwaz ' advance the case of the assessee any further.
In Principles of Mohammadan Law (Mulla, 16th Edition page 165) this kind of gift is explained: "Where a gift is made with a stipulation (shart) for a return, it is called hibaba shart ul iwaz . .
The main distinction between Hiba bil Iwaz as defined by older jurists and Hiba ba shart ul Iwaz is that in the former iwaz proceeds voluntarily from the donee of the gift while in the latter it is expressly stipulated for between the parties.
" Referring to what distinguishes Hiba bil Iwaz from Hiba ba shart ul Iwaz, the learned author, Syed Ameer Ali, in 'Mahommadan Law ' (4th Edition), Vol.
I, p. 158 excerpting from Fatawai Alamgiri, says: Iwaz or consideration was of two kinds: one which was subsequent to the contract (of gift), the other which was conditioned in it." "In the other kind, the consideration was expressly stipu 235 lated in the contract, and when once it was received the transaction acquired the legal character of a sale.
The modern hiba ba shart ul iwaz has unquestionably sprung from the above.
" Then, in the last analysis what follows as a logical consequence is that the debt, though a 'passive debt ' would require to be treated as due and payable to the assessee.
It was not the assessee 's case that the debt was a bad and irrecoverable debt.
The declaration of the debtor itself establishes its existence.
But, then, Shri Ramachandran, anticipating the inherent infirmity of the claim based on 'Quaraza e Hasana ' sought to treat us to a resourceful argument that the conclusion of the High Court is, at all events, supportable on an independent ground that an agreement will not, by itself, yield legal obligations unless it is one which can reasonably be regarded as having been made between the parties in contemplation of legal consequences and that in the present case the parties had excluded the contemplation of legal consequence flowing from the transactions.
This proposition is stated in 'Chitty on Contracts ' (25th Edn.
Volume I para 123) thus: "An agreement, even though it is supported by consideration, is not binding as a contract if it was made without any intention of creating legal relations.
Of course, in the case of ordinary commercial transactions it is not normally necessary to prove that the parties in fact intended to create legal relations." (emphasis supplied) Learned counsel cited certain cases to illustrate the point.
In Rose and Frank Co. vs J.R. Crompton and Bros. Ltd., [1923] 2 K.B. 261 Sccutton, LJ, said: ". .
Now it is quite possible for parties to come to an agreement by accepting a proposal with the result that the agreement concluded does not give rise to legal relations.
The reason of this is that the parties do not intend that their agreement shall give rise to legal relations.
This intention may be implied from the subject matter of the agreement, but it may also be expressed by the parties.
In social and family relations such an intention is readily implied, while 236 in business matters the opposite result would ordinarily follow . " At page 293, Atkin, LJ, said: ". .
To create a contract there must be a common intention of the parties to enter into legal obligations, mutually communicated expressly or impliedly." The novelty of the clause in the contract relied upon in that case did not miss the learned Judge 's notice.
He observed: ".
I have never seen such a clause before, but I see nothing necessarily absurd in business men seeking to regulate their business relations by mutual promises which fall short of legal obligations, and rest on obligations of either honour or self interest, or perhaps both . " This contention of Shri Ramachandran was not, in this form, urged before the High Court.
It was not the case of the parties that, apart altogether from the Rule of Muslim Law relied upon, they had agreed otherwise also that no legal obligation should arise.
The contention has, no doubt, its possibilities.
But where, as here, the tax implications of large financial obligations are sought to be put an end to, the burden is heavy on the assessee to establish that what would otherwise be the incidents of the transaction were excluded from contemplation by the parties.
Here, one partner has lent a large sum to the other to be utilised as capital in the partnership venture.
The transaction is in the context of a commercial venture.
The presumption is that legal obligations are intended.
The onus is on the parties asserting the absence of legal obligations and the test is not subjective to the parties; but is an objective one.
Chitty says (para 123, supra): ". .
The onus of proving that there was no such intention 'is on the party who asserts that no legal effect is intended, and the onus is a heavy one.
Where such evidence is adduced, the Courts normally apply an objective test." (emphasis supplied) The observations of Atkin, LJ in the case cited by counsel are also worth recalling: 237 ". .
Such an intention ordinarily will be inferred when parties enter into an agreement which in other respects conforms to the rules of law as to the formation of contracts.
It may be negatived impliedly by the nature of the agreed promise or promises, as in the case of offer and acceptance of hospitality, or of some agreements made in the course of family life between members of a family as in Balfour vs Balfour, . ." In Edwards vs Skyways, at 355 Megaw J said: "In the present case, the subject matter of the agreement is business relations, not social or domestic matters.
There was a meeting of minds an intention to agree.
There was, admittedly, consideration for the company 's promise.
I accept the propositions of counsel for the plaintiff that in a case of this nature the onus is on the party who asserts that no legal effect was intended, and the onus is a heavy one.
" Again, in Bahamas Oil Refining Co. vs Kristiansands Tankrederie A/S and Others and Shell International Marine Ltd., [1978] Lloyds Law Reports 211 it was said: ".
In deciding whether or not there was any animus contrabendi in relation to a certain transaction, or whether or not sufficient notice of a certain term was given, the law applies an objective and not a subjective test . " ".
In the absence of such evidence, how can the Court assume, even if it might be relevant in law, that the master did not intend to enter into a contract . " 11.
The arguments of learned counsel proceeds on the general proposition that in addition to the existence of an agreement and the presence of consideration there is also a third contractual element in the form of intention of the parties to create legal relations.
This proposition, though accepted in English Law, has not passed unchallenged.
In Cheshire and Fifoot 's Law of Contract, 10th Edn., it is said: ". the criticism of it made by Professor Williston demands attention, not only as emanating from a distinguished American jurist, but as illuminating the whole subject now under discussion.
In his opinion, the separate 238 element of intention is foreign to the common law, imported from the Continent by academic influences in the nineteenth century and useful only in systems which lack the test of consideration to enable them to determine the boundaries of contract . " (at page 97) Be that as it may, the point, however, to note and emphasise is that this intention not to create legal obligation is not inferable from the application of any objective text.
The non enforceability of debt was pleaded not as a part of what is permissible in law of contracts, but specifically as some inexorable incident of a particular tenet peculiar to and characteristic of the personal law of the Muslims.
That not having been established, no appeal, in our opinion, could be made to the principle of permissibility of exclusion of legal obligations in the law of contracts.
We are afraid both the Tribunal and the High Court accepted, somewhat liberally perhaps, what was at best an argument of hypothetical probabilities.
The admitted existence of a debt implies an obligation to repay.
No legal bar of the remedy is pleaded.
What was set up, and unsubstantiated, was the non existence of the remedy itself.
Accordingly, the appeals are allowed and, in reversal of the view taken by the High Court, the questions referred for opinion, are answered in the negative and in favour of the Revenue, with the attendant implication that the loan would become includible in the wealth of the assessee for the relevant assessment years.
In the circumstances of the case, we make no order as to costs.
R.S.S. Appeals allowed.
| This was an appeal on a certificate of fitness granted by the High Court against its judgment on a reference made under Section 66(1) of the Indian Income tax Act ("the said Act").
The appellant/assessee owned some agricultural land, which the assessee developed into building sites.
The assessee leased out the building sites to various parties.
The leases were for 99 years.
The assessee received amounts of 'salami ' or premium for the said leases.
Question arose whether the assessee was liable to pay capital gains tax on the amounts of 'salami ' or premium received.
The assessee contended before the Income tax Officer that no capital gains tax could be levied on the said leases as the land was agricultural and that Section 12 B of the said Act did not come into play as only lease hold rights had been conveyed by the assessee to the lessees under the leases in question.
Both these contentions were rejected by the Income tax Officer, the Appellate Assistant Commissioner and the Income tax Appellate Tribunal.
Arising from the decision of the Tribunal, two questions were referred to the High Court, viz. (1) Whether the land sold by the assessee constituted a capital asset within the meaning of Section 12 B of the said Act or was agricultural land as defined in Section 2(4A) of the Act, and (2) Whether the transaction of lease effected by the assessee amounted to a transfer within the meaning of Section 12 B of the said Act so as to attract liability for capital gains tax.
The High Court answered both the questions in the affirmative and against the assessee.
Leave was granted by the High Court to the assessee to appeal to this Court only in respect of the second question.
990 The appellant assessee had contended that Section 12 B of the said Act could have no application as the land in question was Inam land which must have been granted as a pure gift., to the ancestor of the assessee, and that Section 12 B was applicable only in the case of assets where there was a cost of acquisition.
The respondent had urged that the assessee could not raise this contention as it did not arise out of the decision of the Tribunal and was not reflected in the questions referred by the Tribunal particularly in the question in respect of which the certificate of appeal had been granted.
The Court dismissed the appeal upholding the submissions of the respondent.
It was, ^ HELD:that the question in respect of which certificate of fitness had been granted, clearly related to one controversy, namely, whether the provisions of Section 12 B could be brought into play in this case as the transfer was of lease hold interest in immovable property for 99 years and not an outright sale or transfer of the complete interest of the transferor in the immovable property.
The question as to whether Section 12 B could be brought into play where the property sold had not cost anything to acquire as it was gifted, had not been urged before the income tax authorities, the Tribunal or the High Court and was not covered by the decision of the Tribunal or the High Court.
This case fell within the category of cases where the question of law concerned is neither raised before the Tribunal nor considered by it, and in such a case the question would not be a question arising out of the order of the Tribunal notwithstanding that it may arise on the findings given by it, as held by this Court in Commissioner of Income Tax, Bombay vs Scindia Steam Navigation Co. Ltd., ; Merely because a question of law might arise on the facts found by the Tribunal, this would not render it a question arising out of the decision of the Tribunal.
[995B C,G] As regards the question whether the provisions of Section 12 B could be brought into play, although what was transferred was only lease hold interest in the lands in question, it was significant that the leases were for a long period of 99 years and in all the transactions of lease, premium had been charged by the assessee for the grant of the lease concerned.
Under the leases, the assessee had parted with an asset of an enduring nature, namely, the rights to possession and enjoyment to the properties leased for 99 years subject to certain conditions regarding termination of the leases.
It could not be said that the provisions of Section 12 B of the said Act could not be brought into play.
The grant of the leases amounted to a transfer of capital assets as contemplated under Section 12 B of the said Act.
[996G H;997A B] 991 C.I.T. vs Srinivasa & Setty, ; ; Commissioner of Income Tax, Bombay vs Scindia Steam Navigation Co. Ltd., [1961] 42 ITR p. 589 and Traders and Miners Ltd. vs Commissioner of Income Tax, Bihar and Orissa, , referred to.
|
ivil Appeal No. 1351 of 1976.
From the Judgment and Order dated 24.11.
1975 of the Andhra Pradesh High Court in A.S. No. 691 of 1972.
T.V.S.N. Chari for the Appellant.
A. Subba Rao and A.D.N. Rao for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
This appeal by special leave arises against the Division Bench judgment dated November 24, 1975 in A.S. No. 691 of 1972 of the A.P. High Court fixing the market value @ Rs. I0 per square yard.
The facts lie in a short compass are stated thereunder.
By notification under section 4(1) of the Land Acquisition Act 1894 (in short 'the Act ') was published in the State Gazette on November 21, 1963 to acquire 5 acres 589 1/3 sq. yards in T.S. No. 981, Block No. 34 of Waitair Ward, Vishakapatnam for a housing scheme.
The Collector 475 awarded at Rs. 1.58 per sq. yard and on reference, the Civil Court enhanced the compensation to Rs. 10 per sq. yard with solatium at 15 per cent and interest at 4 per cent.
The respondent claimed @ Rs. 12 per sq. yard.
On appeal and cross appeals the High Court confirmed the award and dis missed the appeal as well as cross objections for enhance ment to Rs. 12 per sq. yard.
Two contentions have been raised by Shri Narsimahachari, the learned counsel for the appellant.
Under exhibit B. 6 dated August 3, 1961; under exhibit B 7 dated Sept. 5, 1961 and exhibit B 8, dated Sept. 8, 1961 the respondent purchased one acre 1936 sq.
yards in each docu ments in the same T.S. No. 981 @ 0.42 p. per sq. yard.
He sold on January 24, 1963 in an extent of one acre under exhibit B. 10 @ Rs.5 per sq. yard.
Therefore, ' the aforesaid sale deeds, exhibit B. 6, B. 7, B. 8 and B. 10 will reflect the prevailing market value of the land in question.
The Trial Court and the High Court committed grievous error in placing reliance on a decision of the High Court in A.S. No. 191 of 1967 dated November 11, 1970 awarding @ Rs. 10 per sq. yard in respect of 6,209 sq. yards in T.S. No. 1008, Block No. 39, Waitair Beach Road which was acquired under a notifica tion dated March 19, 1961 for the purpose of Caltex Oil Refinery.
The price fixed therein does not reflect the correct market value while the bona fide sale deed of pur chase and sale by the respondents relating to the acquired land are available on records and form correct basis.
The courts below committed grave error of law in completely excluding those sale transactions and relying upon that judgment.
We find force in the contention, though Shri Subba Rao, learned counsel for the respondent vehemently resisted, it.
It is settled law by catena of decisions that the market value postulated in section 23(1) of the Act designed to award just and fair compensation for the lands acquired.
The word "market value" would postulate price of the land prevailing on the date of the publication of the notification under section 4(1).
This Court repeatedly laid the acid test that in determining the market value of the land, the price which a willing vendor might reasonably expect to obtain from a willing purchaser would form the basis to fix the market value.
For ascertaining the market rate, the Court can rely upon such transactions which would offer a reasonable basis to fix the price.
The price paid in sale or purchase of the land acquired within a reasonable time from the date of the acquisition of the land in question would be the best piece of evidence.
In its absence the price paid for a land pos sessing similar advantages to the land in the neighbourhood of the land acquired in or about the time of the notifica tion would supply the data to assess the market value.
It is not necessary to cite all the decisions suffice to state that in a recent judgment in Periya & Pareekanni Rubbers Ltd. vs State of Kerala, [1990] Supp. 1 SCR 476 362 a bench of this Court, to which one of us K.R.S., J., was a member surveyed all the relevant precedents touching the points.
In the light of the settled legal position let us consider whether the High Court and the Civil Court are justified in excluding the sale deeds completely and to place reliance on another judgment of the Division Bench of the High Court of A.P.
Admittedly, the claimant is a vendee in exhibit B. 6 to B. 8 @ 0.42 paise.
In a span of one year and four months, they sold @ Rs.5 per sq. yard; It is common knowledge that proposal for acquisition would be known to everyone in the neighbourhood, in particular, to the owners of the property and it is not uncommon that sale transac tions would be brought into existence before the publication of section 4(1) notification so as to form the basis to lay higher claim for compensation.
We do assume that exhibit B. 10 is a genuine and bona fide sale transaction.
In respect of one acre of the land in the self same land when sold at Rs.5 per sq. yard, would it fetch in a short period of nine months, double the market value, namely. @ Rs. 10 per sq. yard.
We have no doubt that it would not get that price for 5 acres and odd area.
It is undoubted that in respect of a notification of 1961 in which another T.S. number in the locality, namely, T.S. No. 1008, ultimately, the High Court awarded @ Rs. 10 per sq. yard.
Perhaps had there been no bona fide or genuine sale transaction relating to the self same land, the reliance placed on that judgment may be justified but exclusion of bona fide and genuine sale trans actions in respect of the same land under acquisition and to place reliance on the award of some other land is obviously illegal.
When the claimants themselves sold as a willing seller of an acre of land @ Rs.5 per sq.
yard large extent of five acres and odd under acquisition, if it is offered to be sold as a block, it would not fetch higher rate but surely be negotiated for a lesser rate if not the same market value @ Rs.5 due to time lag of nine months.
No attempt was made by the respondent to explain under what circumstances they came to sell their lands @ Rs.5 per sq. yard when they expect higher value @ Rs. 10 per sq. yard.
May be the payment of Rs. 10 per sq. yard, be wind fall to the owner of the land in T.S. No. 1008 Taking the totality of the facts and circumstance, we hold that the High Court committed grave error to completely ignore the sale transac tions of the lands under acquisition.
In view of the time lag we have no hesitation to conclude that the prevailing market value of the land as on the date of the notification would be Rs.6 per sq. yard.
It is next contended by Shri Narsimahachari that when a large extent of land was acquired for a housing scheme, at least 1/3 of the land should be deducted towards laying the roads, setting up parks, 477 drainage and other amenities.
The High Court committed manifest error in omitting to deduct 1/3 of the land.
Shri Subba Rao, the learned counsel for the respondent contended that the High Court had noted this contention of the appellant and considered that the market value of the land would be Rs. 12 per sq. yard and after giving the deduction of 1/3 it would come to Rs. 10.
The reasoning of the High Court is proper and warrants no interference.
In support thereof he placed reliance in Spl.
Tehsildar, Visha kapatnam vs Rednam Dharma Rao & Ors., C.A. No 4187 of 1982, dated July 17, 1990 wherein this Court had upheld the deduc tion of 1/5 from the market value towards developmental charges.
It is settled law that the High Court and the Reference court when made wrong application of a principle or important points effecting valuation has been over looked or misapplied, this Court would under article 136 correct the same, vide The Spl.
Land Acquisition Officer, Bangalore vs
T. Adinarayan Setty, [1959] Suppl.
1 S.C.R. 404; Dattatrayaya Shankarbhat Ambalgi and Ors.
vs The Collector of Sholapur and Anr., AiR 3 S.C.C. 431; The Dollar Co., Madras vs Collector of Madras, [1975] Supp.
SCC 403 and Padma Uppal Etc.
vs State of Punjab & Ors.
, ; In Tribeni Devi & Ors.
vs Collector of Ranchi, ; at 2 13, this Court held that "in order to devel op that area at least the value of 1/3 of the land will have to be deducted for roads, drainage and other amenities".
On this basis the value of the land at Rs.2,08,135.70 per acre would, after the deduction of 1/3 come to Rs. 1,38,757 per acre.
In Smt.
Kaushalya Devi Bogre & Ors.
vs The Land Acquisition Officer, Aurangabad; , this Court held that deduction of 1/3 was held to be reasonable.
In Vijay Kumar Motilal vs State of Maharashtra, 19 i/3rd was deducted towards developmental charges in undeveloped area.
In Vijaysingh Liladhar vs Special Land Acquisition Officer, the deduction of i/4th by the High Court which was not challenged in this court was upehld.
In Spl.
Land Acquisition Officer, Bangalore vs T. Adinarayan Setty, supra, deduction of 25 per cent was held to be reasonable.
It is to be noted that in building Regula tions, setting apart the lands for development of roads, drainage and other amenties like electricity etc.
are condi tion precedent to approve lay out for building colonies.
Therefore, based upon the situation of the land and the need for development the deduction shall be made.
Where acquired land is in the midst of already developed land with ameni ties of roads, drainage, electricity etc.
then deduction of 1/3 would not be justified.
In the 478 rural areas housing schemes relating to weaker sections deduction 1/4 may be justified.
On that basis, this court in R. Dharma Rao 's case upheld deduction of 1/5 because the owner while obtaining the lay out had already set apart lands for road and drainage.
Therefore, deduction of 1/3 would be reasonable.
In fact in The Tehsildar, Land Acquisi tion, Vishakapatnam vs
P. Narasing Rao & Ors., , a Division Bench of the High Court surveyed judgments of the High Court relating to housing schemes of Vishakapatnam upholding deduction of 1/3 to be reasonable.
Accordingly we hold that 1/3 of the market value should be deducted for development of the lands.
The High Court com mitted greivous error in giving a curious reasoning of valuing at Rs. 12 and upholding Rs. I0 to be the market value after deduction, though *.he market value was deter mined at Rs. 10.
Accordingly the appeal is allowed.
The market value is determined at Rs.6 per sq. yard and after deducting 1/3 the market value is Rs.4 per sq. yard.
The respondents are entitled to 15 per cent Solatium on market value and 4 per cent interest thereon from the date of dispossession.
But in the circumstances parties are directed to pay and receive their own costs.
N.P.V. Appeal al lowed.
| Rule 2 of the Bombay Prohibition (Manufacture of Spirit) (Gujarat) Rules, 1963, framed by the State Government in exercise of powers conferred under Section 58A of the Bombay Prohibition Act, dealt with grant of licence for working of distillery for the manufacture of spirit.
One of the conditions for grant of licence was that the cost of maintenance of staff, viz. payment of salary and allowances, was to be paid to the Government by the licensees.
This was challenged by the appellant and the High Court upheld the levy as being within the legislative competence of the State.
Aggrieved against the High Court 's order, the appellant has preferred the present appeal.
The appellants contended that since the judgement appealed against proceeded on privilege theory, it cannot withstand the principle laid down in Synthetic & Chemicals, case; and that levy as a fee under Entry 8 of list II of Seventh Schedule or excise duty under Entry 51 is different than the cost of supervision charged under Section 58A of the Bombay Prohibition Act.
Dismissing the appeal, this Court, 392 HELD: 1.1 Even though the power to levy tax or duty on industrial alcohol is vested in the Central Government, the State was till left with power to lay down regulations to ensure that non potable alcohol, that is, industrial alcohol, was not diverted and misused as substitute for potable alcohol.
This is enough to justify a provision like 58A of the Bombay Prohibition Act.
[394 D] 1.2 Principle of occupied field precluded State from trenching on any power which was already covered by Central legislation.
But in absence of any provision in Industries (Development & Regulation) Act touching upon regulation or ensuring that industrial alcohol was not divered, the State was competent to legislate on it under Entry 33 list III of VII Schedule.
[394 F G] 1.3 Trade and commerce and supply and distribution of goods are exclusive state subject under entries 26 and 27 of List II of VII Schedule.
But both are subject to entry 33 of List III.
What is covered in entry 33 is excluded from List II.
And the power to legislate in respect of what is covered by List III is enjoyed both by Central and State legislatures subject to Article 246 of the Constitution.
Since section 58A can be traced to regulatory power of the State exercisable under entry 33 of List III the challenge to its validity is liable to fail.
Thus, Section 58A of the Bomaby Prohibition Act is valid and is not violative of any constitutional provision.
[395 B C].
1.4 It cannot be said that no cost for supervision could be demanded unless the power to issue licence for production was found to exist in State.
[395 d] Synthetics & Chemicals Ltd. & Ors., vs State of U.P & Ors. ; , followed.
|
il Appeal No. 1870 of 1968.
(From the Judgment and Decree dated 6 3 1967 of the Bombay High Court (Nagpur Bench) in Appeal No. 101/59.) I. N. Shroff and H.S. Parihar, for the appellant.
S.B. Wad and M.N. Shroff, for respondent No. 1.
556 A. section Bobde, G.L. Sanghi, V.K. Sanghi, Miss Rama Gupta and M.S. Gupta, for respondent No. 2.
The Judgment of the Court was delivered by C.J.
This appeal is by certificate from the judgment dated 6 March, 1967 of the High Court of Bombay.
The appellant is the State of Madhya Pradesh.
The first respondent is the State of Maharashtra.
The second respondent is the plaintiff decree holder.
They will be referred to, for short, as Madhya Pradesh, Maharashtra and the plaintiff.
, The trial court passed a decree in favour of the plain tiff.
It was declared that the order dated 9 January, 1954 of the suspension of the plaintiff as well as the.
order of removal of the plaintiff from service passed on 2 February 1956 is illegal, void and inoperative.
The further declara tion was that the: plaintiff shall be deemed to be continu ing in service from 16 September, 1943.
A sum of Rs. 64, 588 2 0 was decreed in favour of the plaintiff and Bombay the predecessor of Maharashtra was ordered to.
pay the same with interest.
Both Madhya Pradesh and Maharashtra were ordered to pay costs to the plaintiff.
Maharashtra preferred an appeal against the decree.
Madhya Pradesh preferred objections against the order of costs.
The High Court confirmed the decree and the declara tions.
The High Court however modified the decree and held Madhya Pradesh liable.
The claim of the plaintiff against Maharashtra was dismissed.
The plaintiff was appointed Assistant Medical Officer in 1938.
In 1939 he was appointed officiating Assistant Surgeon.
He was posted at Elichpur (now Achalpur).
In 1942 he was transferred to Hoshangabad.
In 1943 he ap plied for medical leave for four months.
The Civil Surgeon recommended leave for six weeks.
The plaintiff again ap plied for leave in the month of August, 1943.
The leave was sanctioned by the Civil Surgeon.
The plaintiff then requested the Civil Surgeon in anticipation of sanction of leave by the Government for relief because he was not keep ing good health.
The Civil Surgeon then reported to the Government that the plaintiff absented himself from duty from 10 August, 1943 without leave.
The Government sanc tioned leave for six weeks.
On 28 September, 1943 the plaintiff was suspended by an order with effect from 16 September, 1943.
The plaintiff was served with a notice dated 30 September, 1943 to show cause why he: should not be dismissed from service.
Four charges Were levelled against the plaintiff.
First, that he refused to come to duty at the time of epi demic in August, 1943; Second, that he left his station without permission.
Third, that he refused to attend the Departmental enquiry when ordered to do so.
Fourth, that he wilfully and deliberately acted in total disregard of orders and absented himself from duty though he was declared to be fit to.
resume duty.
557 The Enquiry Officer by report dated 22 February, 1945 gave his findings that the first charge was not proved; that the second charge was proved but mitigated and the third and the fourth charges were technically proved.
On 21 June, 1945 the plaintiff was asked to show cause why he.
should not be dismissed or reduced in rank.
On 18 August, 1945 the Government of Central Provinces and Berar intimated to the plaintiff that the Government accepted the report of the Enquiry Officer and proposed to remove the plaintiff from service with effect from the date of the passing of the final order.
By order dated 7 November, 1945 the Provincial Government passed an order removing the plaintiff from service with effect from that date.
On 10 May, 1945 the plaintiff filed an appeal to the Governor but it was dismissed.
On 6 January, 1949 the plaintiff filed a suit in the court of the Second Additional District Judge, Nagpur.
By judgment dated 31 August, 1953 the District Judge held that the suspension order and the order of dismissal were illegal and declared the plaintiff to.
be deemed to.
continue in service.
The plaintiff was thereafter reinstated in service aS Assistant Surgeon on 12 December, 1953.
He was posted at Rays Hospital, Nagpur on 15 September, 1953.
On 13 January, 1954 the plaintiff was again suspended from service under order dated 9 January, 1954.
The plain tiff handed over charge on 13 January, 1954.
On 1 February 1954 the plaintiff was served with a notice dated 29 Janu ary, 1954 to show cause why he should not be removed from service.
The former report of the Enquiry Officer dated 22 February, 1945 was also given to the plaintiff.
On 2 February, 1956 the plaintiff was removed from service.
He appealed to the Governor.
The appeal was dismissed.
On 6 October, 1956 the plaintiff filed this suit in the court of the Joint Civil Judge, Nagpur against Madhya Pra desh and Maharashtra.
The plaintiff asked for a declaration that the order dated 9 January, 1954 suspending the plain tiff as well as the order dated 2 February, 1956 is illegal.
The plaintiff asked for a declaration that he is deemed to continue in service.
He claimed recovery of Rs. 64,588 2 0 as arrears of salary.
The plaintiff in his suit alleged that both Maharashtra and Madhya Pradesh are "liable to make good the plaintiff 's claim the liability for which is not exclusive but joint and several".
The alternative case.
of the plaintiff in the suit was that "if it will be held that the State of Maha rashtra and not the State of Madhya Pradesh is liable or viceversa the plaintiff will claim the decree ' against such State as would be liable".
The Civil Judge passed the.
decree on 25 April 1959 ' declaring: the order dated 9 January, 1954 suspending the plaintiff as well as the order dated 2 February, 1956 remov ing the plaintiff from service as illegal, void and inopera tive.
The decree further stated that the 558 plaintiff was deemed to continue in service from 16 Septem ber, 1943.
The Civil Judge passed a decree against the State of Bombay with the direction to pay Rs. 64,588 2 0 with 'interest at 6 per cent.
Both Maharashtra and Madhya Pradesh went up in appeal.
The Division Bench of the Bombay High Court placed the matter before a larger Bench and referred these two ques tions for the decision of the Larger Bench.
(1) Whether in the events that have happened which of these two States of Maharashtra and Madhya Pradesh can be compelled to take the plaintiff in service.
(2) Whether both or only one of the two States can be made liable for the payment of ar rears of salary of the plaintiff, if so, which State is liable.
The larger Bench of the Bombay High Court said that the State of Madhya Pradesh is constituted after the States Reorganisation Act referred to as the Act came into.
force on 1 November, 1956 is the principal successor State of the former State of Madhya Pradesh.
The High Court further said that the State of Maharashtra is the successor State of the former Madhya Pradesh inasmuch as certain territo ries, namely, Vidharbha which formed part of the former St. ate of Madhya Pradesh became: a part of the new State of Maharashtra.
The High Court then referred to.
clause (B) of section 88 of the Act and said that Maharashtra would be liable for the claim of the plaintiff only if the cause of action has arisen in its entirety within the territories which formed part of Maharashtra, otherwise initial liabil ity for the plaintiff 's claim will be on the principal successor State Madhya Pradesh under section 88(c) of the Act.
The larger Bench therefore referred the matter to the Division Bench to consider the question whether the cause of action for the plaintiff 's claim arose in its entirety within the territories which formed part of the Maharashtra.
The High Court held that under section 88(c) of the Act Madhya Pradesh is responsible for the claim of the plain tiff.
The High Court further held that the plaintiff was appointed under conditions of service Prescribed for him and accepted by him, and, therefore, the plaintiffs claim for arrears of salary would be governed by section 87 of the Act and not by section 88 of the Act.
The High Court said that the plaintiffs claim for arrears of salary and allowance was based on contract, either express or implied, on the basis of the terms.
of appointment and the conditions of service prescribed by the Government and accepted by the plaintiff.
The High Court also said that at the time of the plaintiff 's appointment in 1939 the plaintiff 's services were available for the then entire Province of Central Provinces and Berar and not only for those districts which formed part of Madhya Pradesh.
Therefore, the High Court said that section 87(b) of the Act would not apply.
Under the residuary clause of section 87(c) of the Act Madhya Pradesh would be liable as the principal successor State because the purpose of the contract were as from the appointed day not exclusively purposes of any of the two successor States.
Madhya Pradesh raised three contentions.
First, the plaintiff did not claim salary and allowances for the period subsequent to 15 September, 1943 in the.
suit filed by the. plaintiff in 1949 and was 559 therefore by reason of the provisions contained in Order 2 Rule 2 of the Code of Civil Procedure precluded from claim ing the salary and allowances for the period of 16 Septem ber, 1943 to 31 August, 1953 in the second suit which was filed on 6 October, 1956.
Second, the plaintiff 's claim in the second suit for salary and allowances prior to 6 October 1953 would be barred by the reason of Article 102 of the Limitation Act 1908.
Third, the liability, if any, would be under section 88(b) of the Act of Maharashtra which succeeded the State of Madhya Pradesh on 1 November, 1956 in so far as Nagpur District of the then existing State of Madhya Pradesh was concerned.
Reference was made to section 8(1) (c) of the Act for the purpose.
Further it is said by the appellant that on or after 1 November, 1956 the plain tiff could continue the suit only against the State of Bombay later known as State of Maharashtra and not against the State of Madhya Pradesh as constituted on or after 1 November, 1956.
Maharashtra contended that the liability was of Madhya Pradesh because of the provisions contained in section 88(c) of the Act.
It was said on behalf of Maharashtra that the plaintiff had been appointed to service in Central Prov inces and Berar which became the principal successor State of Madhya Pradesh.
The order of removal was also by the existing State which became the principal successor State of Madhya Pradesh.
In order to appreciate the rival contentions reference is necessary to two sections of the Act.
Section 87 speaks of liability in the case of contracts. 'Broadly stated, the provisions of section 87 of the Act are that where before the appointed day "1 November 1956" an existing State has made any contract in the exercise of 'its executive power for any purposes of the State, that contract shah be deemed to have been made in the exercise of the executive power (a) if there be only one successor States of the State; and (b) if there be two or more successor States and the purposes of the contract are,as from the appointed day, exclusively purposes of any one of them of that State; and (c) if there be two or more successor States and the purposes of the contract are,contract are, as from that day, not exclusively purposes of any one of them. of the principal successor State: and all rights and liabilities which have accrued or may accrue, under any such contract shall, to the extent to which they would have been rights or liabilities of the existing State be rights or liabilities of the successor State or the principal succes sor State.
The proviso to section 87 of the Act is that where the liability attaches under clause (c) the initial allocation of rights and liabilities made by this sub section shall be subject to such financial adjustment as may be agreed upon between all the successor States concerned, or in default of such agreement, as the central Government may by order direct.
Section 88 of the Act provides that where before the appointed day, an existing State is subject to any liability in respect of an actionable wrong other than breach of contract, that liability shall (a) if there be only one successor State, be a liability of that State; (b) if 560 there be two or more successor ' States and the cause of action arose wholly within the territories which as from that day are the territories of one of them, be a liability of that successor State, and (c) in any other case, be initially a liability of the principal successor State, but subject to such financial adjustment as may be agreed upon between 'all the successor States concerned, of in default of such agreement, as the Central Government may by order direct.
The claim for declaration that the order of suspension as welt as the order of dismissal was void is in respect of an actionable wrong other than breach of contract.
In order to.
determine as to which of the two States would be liable e under section 88 of the '.
1956 Act it has to be found out whether the cause of action arose wholly within the territories of one of the States or arose partly in the territories of one State and partly in the territo ries of the1 other.
The departmental enquiry which was alleged to be illegal was held at Hoshangabad which has all along been a part of the State of Madhya Pradesh only.
final orders which were challenged in the suit were passed at Nagpur which became part of the State of Bombay and later on known as Maharashtra.
The plaintiff 's cause of action comprises of every fact which is necessary to be proved.
The plaintiff based his claim with regard to de partmental enquiry which was held at Hoshangabad and also with regard to impugned order passed at Nagpur.
The appel lant State is the principal successor State of the former State of Madhya Pradesh.
Maharashtra was one of the succes sor States, like Madhya Pradesh.
Section 88(a) of the 1956 Act in the present case has no .application because it speaks of only one successor State.
Section 88(b) of the 1956 Act refers to the State.
where the cause of action wholly arose within the territories of either of the.
successor States.
In the present case, it cannot be said that the cause of action arose wholly within the successor State of Maharashtra.
Therefore, the residuary 'provision contained in section 88(c) of the 1956 Act applies and the liability is of the principal successor State, namely, Madhya Pradesh.
The High Court was right in arriving at the conclusion that Madhya Pradesh is liable.
The plaintiff 's suit in 1949 was only for setting aside the impugned orders.
The plaintiff did not ask for relief for arrears of salary for the obvious reason that the plain tiff in the 1949 suit asked fox ' setting aside of the im pugned orders and an order that the plaintiff was deemed to be continuing in service.
The plaintiff proceeded on the existing law as it stood by reason of the decision in High Commissioner for India vs 1.
M. Lall(1).
The Judicial Committee in that case held that a civil servant was not entitled to.
sue the State for recovering arrears of salary and pay.
Counsel for Madhya Pradesh relied on the decision in Province of Punjab vs Pandit Tara Chand (2) which held that a public servant had a right to bring a suit for ar rears .of pay.
The decision of the Judicial Committee in Lall 's case (supra) takes a contrary view to the decision of the Federal Court in Pandit (1) 75 I.A. 225.
(2) 561 Tara Chand 's case (supra).
It it true that the decision of the Federal Court in Pandit Tara Chand 's case (supra) was not brought to the notice of the Privy Council.
Under section 208 of the Government of India Act 1935 the law declared by the Judgment of the Privy Council had to be followed by all the Courts including the Federal Court.
Therefore, the earlier decision of the Federal Court though not expressly overruled by the Judicial Committee must be deemed to have overruled by implication by the decision of the Judicial Committee in Lall 's case (supra).
This Court in State of Bihar vs Abdul Majid(1) stated that a Government servant could ask for arrears of salary.
Counsel for Madhya Pradesh said that the decision of this Court in Abdul Majid 's case (supra) declared what the exist ing law has been, and, therefore, the plaintiff could not contend that it was not open to him to ask for arrears of salary in the 1949 suit.
It is in that background that Madhya Pradesh contends that the plaintiff not having asked for relief under Order 2 Rule 2 of the Code of Civil Proce dure would not be entitled to claim salary in the 1956 suit.
The contention of Madhya Pradesh cannot be accepted.
The plaintiff will be barred under Order 2 Rule 2 of the Code of Civil Procedure only when he omits to sue for or relinquishes the claim in a suit with knowledge that he has a right to.
sue for that relief.
It will not be correct to say that while the decision of the Judicial Committee in Lall 's case (supra) was holding the field the plaintiff could be said to know that he was yet entitled to make a claim for arrears of salary.
On the contrary, it will be correct to say that he knew that he was not entitled to make such a claim.
If at the date of the former suit the plain tiff is not aware of the right on which he insists in the latter suit the plaintiff cannot be said to be disentitled to the relief in the latter suit.
The reason is that at the date of the former suit the plaintiff is not aware of the right on which he insists in the subsequent suit.
A right which a litigant does not know that he possesses or a right which is not in existence at the time of the first suit can hardly be regarded as a "portion of his claim" within the meaning of Order 2 Rule 2 of the Code of Civil Procedure.
See Amant Bibi vs Imdad Husain(2).
The crux of the matter is presence or lack of awareness of the right at the time of first suit.
This Court in Om Prakash Gupta vs State of Uttar Pradesh(2) considered the prayer for refund of court fees on a claim which was abandoned.
The plaintiff in that case asked for a declaration that the order of dismissal was void and also asked for arrears of salary or in the alternative damages for wrongful dismissal.
In view of the decision in Lall 's case (supra) the plaint in that casewas amended by deleting the claim for arrears of salary and also for damages.
The plaintiff thereupon praved for refund of the court fees which had been paid on arrears of salary for damages.
Both the trial Court (1) (2) 15 I.A. 106, 112.
(3) ; 562 and the High Court rejected the claim for refund of court fees.
This Court also upheld the same view.
The reason given by this Court was that at the time the suit was insti tuted the law as it then stood permitted such a claim to be made.
The decision of the Privy Council made it clear that no such claim could be made.
The decision of the Privy Council clarifying the position was held by this Court not to be a ground for refund of court fee which was paid in accordance with law as it then stood.
The appellant Madhya Pradesh is, therefore, not right in contending that the plaintiff is barred by provisions con tained in Order 2 Rule 2 of the Code of Civil Procedure from asking for arrears of salary in the 1956 suit.
The plain tiff could not have asked for " arrears of salary on the law as it then stood.
The plaintiff did not know of or possess any such right.
The plaintiff, therefore, cannot be said to have omitted to sue for any right.
Another reason why the bar under Order 2 Rule 2 of the Code of Civil Procedure cannot operate is that the plain tiff 's cause of action in the 1956 suit is totally different from the cause of action in the 1949 suit.
See Pavana Reena Saminathan vs Palaniappa(1).
This Court in Jai Chand Sawhney vs Union of India (2) held that in a suit for setting aside the order of dismissal and for arrears of salary a claim for salary for the period prior to three years of the suit would be barred.
The reason given is that when the order of dismissal is set aside the Government servant is deemed to be in service throughout the period during which the order of dismissal remains operative.
Once an order of dismissal is declared bad it is held to be bad from the date of dismissal and salary would be due from the date when the dismissal order was bad.
The same view has been taken by this Court in Sakal Dean Sahai Srivastava vs Union of India(3).
In that case the plaintiff filed a suit on 27 November, 1962 for a declara tion that from 1 July, 1949 the date of illegal reversion up to 30 September, 1959 the date of his retirement he was a railway employee.
Relying on the decision of this Court in Jai Chand Sawhney 's case and Sakal Deep 's case (supra) counsel for Madhya Pradesh contended that the plaintiff would not be entitled to more than three years ' salary.
The present case is not one of setting aside an order of dismissal simpliciter.
When the plaintiff filed a suit in 1949 he could not ask for arrears of salary.
Pursuant to the decree dated 30 August, 1953 in his favour he was reinstated on 12 December, 1953.
Three features are to be borne in mind in appreciating the plaintiff 's case from the point of view of limitation.
First the plaintiff became entitled to salary for the period 16 September, 1943 up to the date of rein statement on 12 December, 1953, only when pursuant to the decree dated 30 August, 1953 there was actual reinstatement of the plaintiff on 12 December, 1953.
Second, the plain tiff was (1) I.A. 142.
(2) (3) ; 563 again suspended on 19 January, 1954 and was dismissed on 23 February 1956.
The Madhya Pradesh Government on 5 March, 1954 decided that during the period of first suspension till his reinstatement on 12 December, 1953 he was not entitled to salary.
Again on 29 January, 1956 the Madhya Pradesh Government decided under Fundamental Rule 54(iii) that during the period of suspension from 16 September 1943 to 12 December 1953 and again from 19 January 1954 to 23 February 1956 he would not be entitled to any payment of allowances.
On these facts two consequences arise in the present appeal.
First, since the plaintiff was under suspension from 16 September, 1943 till 12 December, 1953 when he was rein stated and again suspended from 19 January, 1954 till 23 February, 1956 when he was dismissed, his suit on 6 October, 1956 is within a period of three years from the date of his reinstatement on 12 December, 1953.
Second, during the period of suspension he was not entitled to salary under Fundamental Rule 53.
Further decision to that effect was taken by the Madhya Pradesh Government on 28 January, 1956 under Fundamental Rule 54.
Therefore, the plaintiff 's cause of action for salary for the period of suspension did not accrue until he was reinstated on 12 December, 1953.
The plaintiff 's salary accrued only when he was reinstated as a result of the decree setting aside the orders of sus pension and of dismissal.
The rulings of this Court in Jai Chand Sawhney 's case (supra) and Sakal Deep 's case (supra) do.
not apply to the present appeal because there was no aspect of any suspen sion order remaining operative until the fact of rein statement pursuant to the decree.
The plaintiff 's cause of action for arrears of salary is this.
When the plaintiff was reinstated on 12 December, 1953 pursuant to the decree dated 30 August, 1953 the plain tiff became entitled to salary which was suspended during the period of suspension.
_ The plaintiff was again suspend ed from 19 January, 1954 and he was dismissed from service on 23 February, 1956.
Therefore, when the plaintiff filed the suit on 6 October, 1956 his entire claim for salary is founded first on his reinstatement on 12 December, 1953 pursuant to the decree and second on the order of suspen sion dated 19 January, 1954 and the order of dismissal on 23 February 1956 which the plaintiff challenged as illegal.
The original order of suspension on 16 September, 1943 as welt as the original dismissal dated 7 November, 1945 was declared to be illegal by the decree dated 30 August, 1953.
Therefore, when the plaintiff was reinstated on 12 December, 1953 it is then that the plaintiff 's claim for salary accrued due.
This salary was again suspended from 19 January, 1954.
Dismissal on 23 February, 1956 was at a time when the plaintiff was still under suspension.
The order of suspension does not put an end to his service.
Suspension merely suspends the claim to salary.
During suspension there is suspension allowance.
See Khem Chand vs Union of 2 112 SCI/77 564 India(1) where this Court said that the real effect of the order of suspension is that though he continues to be a member of the service he is not permitted to work and is paid only subsistence allowance which is less than his salary.
Under Fundamental Rule 52 'the pay and allowance of a Government servant who is dismissed or removed from service, cease from the date.
of his dismissal or remov al.
Therefore, there would be no question of salary accruing or accruing due so long as orders of suspension and dismiss al stand.
The High Court was correct in the conclusion that the plaintiff 's claim for salary accrued due only on the order of dismissal dated 23 February, 1956 being set aside.
For the foregoing reasons the appeal is dismissed.
There will be costs only to the plaintiff respondent to be paid by the State of Madhya Pradesh.
M .R. Appeal dismissed.
| Dismissing the appeal, the Court, HELD: (1) A litigant will be barred under Order 2 Rule 2 of the C.P.C. only when he omits to sue for or relinquishes the claim in a suit with knowledge that he has a right to sue for that relief.
A right which he does not know that he possesses or a right which is not in existence at the time of the first suit is not a "portion of his claim" within the meaning of Order 2 Rule 2 of the C.P.C. The crux of the matter is presence or lack of awareness of the right at the time of first suit.
[561D E, 562 B] Amant Bibi vs Imdad Hussain 15 I.A. 106 at 112, applied.
Om Prakash Gupta vs State of Uttar Pradesh ; , distinguished.
High Commissioner for India vs I. M. Lall 75 I.A. 225; Province of Punjab vs Pandit Tara Chand ; State of Bihar vs Abdul Majid , referred to.
The bar under Order 2 Rule 2 of the C P.C. cannot oper ate when the litigant 's cause of action in an earlier suit is totally different from the cause.
of action in a later suit.
[562 C] Pawana Reena Saminathan vs Palaniappa 41 I.A.142, applied.
(2) During the period of suspension the plaintiff was not entitled to salary under Fundamental Rule 53.
The cause of action for his salary for such period did not accrue until he was reinstated as a result of the decree setting aside the orders of suspension and of dismissal.
[563C D] Jai Chand Sawhney vs Union of India, and Sakal Dean Sahai Srivastava vs Union of India, ; , distinguished.
(3) Under Fundamental Rule 52 the pay and allowance of a Government servant who is dismissed or removed from service, cease from the date of his dismissal or removal.
Therefore, there would be no question of salary accruing or accruing due so long as orders of suspension and dismissal stand.
[564 B C] Khem Chand vs Union of India, [1963] Supp 1 S.C.R. 229, followed.
|
Civil Appeal No. 1130 of 1976.
Appeal by Special Leave from the Judgment and Order dated 24 3 1972 of the Allahabad High Court in Misc.
Writ No. 8069/72.
AND CIVIL APPEAL NOS 2248/78, 2191 2198/78 AND 2284/78.
Appeals by Special Leave from the Judgment and Order dated 6 10 1978 of the Allahabad High Court in Special Appeal Nos. 356, 352 355, 357 359/75.
533 AND CIVIL APPEAL NO. 245 of 1979.
Appeal by Special Leave from the Judgment and Order dated 17 10 1978 of the Allahabad High Court in Civil Misc.
Writ No. 11702/77.
AND CIVIL APPEAL NO.
626 of 1979.
Appeal by Special Leave from the Judgment and Order dated 17 10 1978 of the High Court of Judicature of Allahabad in Civil Misc.
Writ (Tax) No. 824/75.
AND WRIT PETITION NOS.
4663 4664 of 1978 & 4501 of 1978.
Under Article 32 of the Constitution.
AND SPECIAL LEAVE PETITION (CIVIL) NOS.
6526 28/78, 125 126, 201 and 2533 of 1979.
From the Judgment and Order dated 6 11 1978 and 17 10 78 and 16 11 1978 and 17 10 78 of the Allahabad High Court in Civil Misc.
Writ Nos.
89/77, 3822/73, 540/75 and 4129 30 of 1976 and C.W. No. 703/76 and C. Misc.
Writ No. 41/76.
Rishi Ram, Advocate General for the State of U.P., G. N. Dikshit, O.P. Verma, section C. Verma and Mrs. Sadhna Ramchandran, for the Appellant in CA No. 1130/76 and respondents in all the matters.
F. section Nariman, Dr. L. M. Singhvi, B. G. Murdeshwar, P. C. Murdeshwar, P. C. Bhartari, section P. Nayar, L. K. Pandeya, N. R. Khairan, Praveen Kumar, Miss Beena Gupta, Anip Satchthey and Mrs. Baby Krishnan for the Appellants and Petitioners in all other matters and respondents in CA 1130/76.
F. section Nariman, Talat Ansari, R. Narain and section P. Nayar for the Interveners (M/s J.
K. Synthetics and Agarwal Spirit Supply Co.) The Judgment of the Court was delivered by KAILASAM, J.
These batches of Civil Appeals, Writ Petitions and Special Leave Petitions raise the same question and can be disposed of by a common judgment.
C.A. No. 1130/76 is by the State.
The other Appeals, Writ Petitions and Special Leave Petitions are by the aggrieved parties.
534 For the sake of convenience appellants in Civil Appeals by Special Leave except the State would be referred as the appellants in this judgment.
Similarly the petitioners in Writ Petitions and Special Leave Petitions will be referred to as petitioners.
The appellants in Civil Appeals by Special Leave filed writ petitions before the High Court of Allahabad praying for quashing the Excise Commissioner 's order dated 18th September, 1974 whereby it was provided that the vend fee be continued to be charged for the wholesale licence dealer of denatured spirit.
They also prayed for a direction to the Excise Commissioner to refund the vend fee actually paid by the appellants for a period of three years prior to the institution of the writ petitions.
The appellants have licenses for the wholesale vend of denatured spirit.
It was contended that the State was providing no service to the trade of the denatured spirit and, therefore, the levy of fee is not justified.
The State, it was submitted, was not competent to authorise a levy of excise duty or tax as it was within the jurisdiction of the Parliament.
On behalf of the State it was contended that in law the State had exclusive privilege to deal with intoxicating liquor which included denatured spirit and the levy of a licence fee and vend fee constituted consideration for permitting the appellants to carry on wholesale trade of the denatured spirit.
The main point that was considered by the High Court was whether the imposition of vend fee on denatured spirit for grant of license for wholesale vend of denatured spirit is within the competence of State Government.
This Court in Nashirwar vs State of Madhya Pradesh and Har Shankar vs The Deputy Excise and Taxation Commissioner, held that the State has exclusive privilege to deal in intoxicating liquor and, therefore, the State can auction the right to vend by retail or wholesale foreign liquor.
It also found that intoxicating liquor included denatured spirit and the validity of the levy of the vend fee by the State cannot be questioned.
Following this view the High Court dismissed the Writ Petitions.
Against the decision, the appeals have been preferred by special leave.
A batch of Writ Petitions have been filed in this Court under article 32 of the Constitution of India challenging the validity of the levy of vend fee.
Apart from the grounds taken in the Civil Appeals, the Constitutional validity of U.P. Excise (Amendment) Act 5 of 1976 has been challenged as unconstitutional and beyond the legislative competence of the State.
It is further pleaded that the provisions of the 535 Industries (Development and Regulation) Act, 1951 has taken control of fermentation industry and as such a right to legislate by the State with regard to denatured spirit and industrial alcohol is beyond the competence of the State Legislature.
U.P. Excise Act was enacted in the year 1910.
It empowers the State to prohibit the import and export, transport manufacture sale and possession of liquor and all intoxicating drugs in the United Provinces.
The vend fee was first imposed by the Government of U.P. on 18 3 1937 on denatured spirit.
In 1972 the State Legislature enacted the U.P. Excise Amendment Act 13 of 1972.
By a notification dt. 3 11 72 the Government was authorised to sell by auction the right of retail or wholesale vend of foreign liquor.
New Rules were framed, the effect of which was that a vend fee of Rs. 1.10 p. per bulk litre was imposed payable in advance on denatured spirit issued for industrial purposes.
The legality of the levy was challenged in the High Court of Allahabad and a Bench of that Court on 24th March, 1973 held the notification was ultra vires.
After the decision of the Allahabad High Court holding that the levy was illegal, this Court in two decisions Nashirwar vs State of Madhya Pradesh (supra) and Har Shankar vs The Deputy Excise and Taxation Commissioner, (supra) held that the State under its regulatory powers can prohibit every form of activity in relation to intoxicants, its manufacture, storage, export, import and sale.
The State 's power to auction the right to vend by retail or wholesale foreign liquor was upheld.
Relying on the two decisions of this Court, the U.P. State Legislature repealed and re enacted the U.P. Excise (Amendment) Act No. 30 of 1972 by the U.P. Excise (Amendment) (Re enactment and Validation) Act, 1976.
The validity of the amendment Act 1976 was again challenged in the Allahabad High Court in V. P. Anand and Sons vs State of U.P. A Full Bench of the Court held that the State has exclusive privilege of auctioning the right of wholesale or retail vend of intoxicating liquor and upheld the validity of the Act.
Mr. Nariman learned counsel raised several contentions.
The first main contention of the learned counsel was that the levy of vend fee (under rule 17 para 680 of the Excise Manual page 200 201) on the denatured spirit is without legislative competence as it does not fall within Entry 8 of List II of the Seventh Schedule.
Even if it is held that the exclusive right of the State to grant privilege for the manufacture and sale of intoxicating liquor, it was submitted that the right did 536 not extend to denatured spirit used for industrial purposes as it is confined only to potable liquor.
The second important contention raised by the learned counsel was that after the enactment of Industries (Development and Regulation) Act, 1951 under Entry 52 of List 1 by Parliament, the Union had taken under its control in public interest the industries including the fermentation of industrial alcohol and as such the Central Government alone is empowered to provide for regulating by licence/permit or otherwise the distribution, transport, disposal, acquisition, possession, use or consumption of any article relatable to a schedule industry as for example denatured spirit or industrial alcohol.
In State of Bombay and Anr.
vs F. N. Balsara & Ors.
the Constitutional validity of the Bombay Prohibition Act (XXV of 1949) in so far as it restricted the possession and sale of foreign liquor was impugned on the ground that it was an encroachment on the field assigned to the Dominion Legislature under Entry 19 of List I. Under Entry 31, List II to the Seventh Schedule of the Government of India Act, 1935, the Provincial Legislature had the power to make laws in respect of intoxicating liquor that is to say the production, manufacture, possession, transport, purchase and sale of intoxicating liquors.
The corresponding entry in the Constitution of India is List II Entry 8 which is in identical terms.
The plea that was taken was that List I, Entry 19 conferred the power on the Dominion Legislature to make laws with respect to import, export across customs frontiers and as such the State Law restricting possession and sale of foreign liquor encroached upon the field of Dominion Legislature.
This Court held that the words 'possession and sale ' occurring in Entry 31 List II must be read without any qualification.
In considering the meaning of the words 'intoxicating liquor ' set out in entry 31 of List II, Gwyer C.J., in Bhola Prasad vs The King Emperor, stated as follows: "A power to legislate with respect to intoxicating liquors could not well be expressed in wider terms." Again the Learned Chief Justice observed: "It is difficult to conceive of legislation with respect to intoxicating liquors and narcotic drugs which did not deal in some way or other with their production, manufacture, possession, transport, purchase or sale; and these words seem apt to cover the whole field of possible legislation on the subject.
" 537 The above observations were affirmed by this Court in Balsara 's case (supra).
Dealing with the meaning of word 'liquor ', the Court referred to the various Abkari cases in several provinces and found that all the Provincial Acts of this country have consistently included liquor containing alcohol in the definition of 'liquor ' and 'intoxicating liquor ' and, therefore, the framers of the Government of India Act, 1935, could not have been entirely ignorant of the accepted sense in which the word 'liquor ' has been used in the various excise Acts of this country and concluded that the word 'liquor ' covers not only those alcoholic liquids which are generally used for beverage purposes and produce intoxication, but also all liquids containing alcohol.
By adopting another method of approach, the Court observed that the object of the Prohibition Act was not merely to levy excise duties but also to prohibit the use, consumption, possession and sale of intoxicating liquor and to enforce the prohibition effectively, the wider definition of the word 'liquor ' would have to be adopted so as to include all alcoholic liquids which may be used as substitution of intoxicating drinks to the detriment of the health.
In Nashirwar vs The State of Madhya Pradesh (supra), Chief Justice Ray held that the State Legislature is authorised to make a provision for public auction by reason of power contained in Entry B of List II of the Constitution.
The decision negatived the concept of inherent right of citizen to do business in liquor.
This Court gave three principal reasons to hold that there is no fundamental right of citizen to carry on trade or to do business in liquor.
First, there is the police power of the State to enforce public morality to prohibit trades in noxious or dangerous goods.
Second, there is power of the State to enforce an absolute prohibition of manufacture or sale of intoxicating liquor.
Article 47 states that the State shall endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and of drugs which are injurious to health.
Third, the history of excise laws shows that the State has the exclusive right or privilege of manufacture or sale of liquor.
After pointing out the three principal reasons, the Court followed the decision in State of Bombay and Anr.
vs F. N. Balsara holding that absolute prohibition of manufacture or sale of liquor is permissible and the only exception can be for medicinal preparations.
In the context it is clear that the decisions proceeded on the basis that the word 'intoxicating liquor ' is not confined to potable liquor alone but would include all liquor which contain alcohol.
Mr. Nariman, the learned counsel, submitted that the two cases Balsara 's case (supra) and the Nashirwar 's case (supra) cannot be 538 read as to include alcohol manufactured for the purpose of industries such as industrial alcohol.
It was submitted that in both the cases the Court was concerned only with legislation relating to prohibition and the decisions should be restricted to liquor which may contain alcohol which is likely to be misused as potable liquor.
In support of his contention, the learned counsel referred to two decisions A. Nageshwara Rao vs State of Madras and Malitlal Chandra vs Emperor and submitted that if the State can exercise any control over intoxicating liquor, it can only be restricted for the purpose of preventing subversion of its use for defeating the prohibition policy.
We are unable to accept this contention for in Balsara 's case after explicitly approving of the definition of word 'liquor ' in various Abkari Acts in the Provinces of India, the Court held that liquor would not only cover alcoholic liquor which is generally used for beverage purposes and produce intoxication but would also include liquids containing alcohol.
We will now briefly refer to the decisions of the Supreme Court which the learned counsel submitted were confined only to potable liquor.
Cooverjee B. Bharucha vs The Excise Commissioner and Chief Commissioner, Ajmer & Anr.
related to an auction sale of liquor shop under the Excise Regulation Act, 1915.
In Bharucha 's case it was held that licence may be restricted, that the restriction must be in regard to the sale of liquor and that there may be absolute prohibition of the sale of liquor.
The Court also took into account the public expediency and public morality and police power of State to regulate business and mitigate evils.
In M/s. Guruswamy & Co. etc.
vs State of Mysore & Ors.
the auction related to exclusive privilege of selling toddy from certain shops.
The Court held that the auction enabled the licensee to sell the toddy and the licensee paid what he considered to be the equivalent value of the right.
State of Orissa & Ors.
vs Harinarayan Jaiswal & Ors.
related to sale by public auction of the exclusive privilege of selling country liquor in retail shops.
Amar Chandra Chakraborty vs Collector of Excise, Government of Tripura and Ors, also related to the cancellation of the licence by the Excise Collector 539 to establish warehouse for the storage in bond and wholesale vend of country spirit by import and for supply to the excise vendors in the territory of Tripura.
The next case that was referred to by the learned counsel was Har Shankar & Ors.
vs The Dy.
Excise & Taxation Commissioner & Ors.
Chandrachud, J. as he then was, speaking for the Court stated: "In our opinion the true position governing dealings in intoxicants is as stated and reflected in the Constitution Bench decision of this Court in the state of Bombay and Anr.
vs F. N. Balsara [1951] SCR. 682, Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer and Ors. [1954] SCR. 875, State of Assam vs A. M. Kidwai, Commissioner of Hills Division and Appeals, Shillong [1957] SCR. 295, Nagendra Nath Bora and Anr.
vs The Commissioner of Hills Division and Appeals, Assam and Ors. [1958] SCR. 1240, Amar Chandra Chakraborty vs Collector of Excise, Government of Tripura & Ors. [1973] 1 S.C.R. 633 and State of Bombay vs R.M.D. Chamarbaugwala [1957] SCR. 874 as interpreted in State of Orissa and Ors.
vs Harinarayan Jaiswal and Ors [1972] 3 SCR. 784 and Nashirwar Etc.
vs State of Madhya Pradesh and Ors.
Civil Appeals Nos. 1711 1721 and 1723 of 1974 decided on November 27, 1974.
There is no fundamental right to do trade or business in intoxicants.
The State under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants its manufacture, storage, export, import, sale and possession".
Though most of the cases dealt with the right of the State Government as regard auction of country liquor, in Balsara 's case, Nashirwar 's case and Har Shankar 's case, the Court was concerned with the right of the State Government over foreign liquor.
After considering all the decisions of five Constitutional Benches, Chandrachud, J. as he then was summed up the position at page 274 as follows: "These unanimous decisions of five Constitutional Benches uniformly emphasised after a careful consideration of the problem involved that the State has the power to prohibit trades which are injurious to the health and welfare of the public is inherent in the nature of liquor business, 540 that no person has an absolute right to deal in liquor and that all forms of dealings in liquor have, from their inherent nature, been treated as a class by themselves by all civilised communities." Har Shankar 's case related to licensing of retail sale of foreign liquor for consumption on the premises of the licensees.
The grant of license for sale of country spirit, foreign liquor, beer were subject to the provisions of the Punjab Act 1 of 1914.
The demand by the Government for payment of large sums of money from hoteliers or barkeepers who supply foreign liquor for consumption were challenged as arbitrary, without authority and illegal.
The provisions in the Act which provided for a levy on retail vend of foreign liquor was held to be valid.
The decisions referred to above make it clear that the power to legislate under List II Entry 8 relating to intoxicating Liquor comprises of liquor which contains alcohol whether it is potable or not.
The plea of the State is that the levy is for parting with the exclusive right of the State with regard to intoxicating liquor and the levy was for the purpose of conferring a right on the licensees.
That the State has the exclusive right of manufacture or sale of intoxicating liquor which includes liquor containing alcohol has been recognised.
The second most important contention raised by Mr. Nariman is that after passing of the Industries (Development and Regulation) Act, 1951, the claim by the State to monopoly with regard to production and manufacture and the sale of the denatured spirit or industrial alcohol is unsustainable.
In order to appreciate this contention it is necessary to refer to the relevant entries in Lists I and II of the Seventh Schedule of the Constitution.
List I Entry 52 runs as follows: "Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest".
In List II the entry relating to industries is Entry 24 which is as follows: "Industries subject to the provisions of (entries 7 and 52 of List 1)".
Entry 7 in List I relates to industries to be declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war.
In this case we are not concerned with Entry 7.
A reading of Entry 52 in List I and Entry 24 in List II makes it clear 541 that the Parliament will have exclusive jurisdiction to legislate regarding industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.
Connected with these two entries is entry 33 in List III Concurrent List which provides: "Trade and commerce in, and the production, supply and distribution of (a) the products of any industry where the control or such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products: (b) x x x (c) x x x (d) x x x (e) x x x" The subject of trade and commerce in, and the production supply and distribution of the products of any industry which has been declared by Parliament under Item 1 Entry 52 is in the Concurrent List on which both Parliament and State can legislate.
The Industries (Development and Regulation) Act, 1951 was enacted by Parliament to provide for development and regulation of certain industries.
Section 2 declares that it is expedient in the public interest that the Union shall take in its control industries specified in First Schedule.
Item 26 in the First Schedule is fermentation industries (i) Alcohol (ii) other products and fermentation industries.
Chapter II of the Act provides for establishment of Central Advisory Council and Development Council.
Chapter III deals with regulation of scheduled industries.
Section 10 requires registration of existing industrial undertakings.
Section 11 deals with the licensing of new industrial undertakings.
Section 12 deals with revocation and amendment of licenses in certain cases.
Section 14 deals with the procedure for the grant of license or permission.
Section 15 confers power of investigation to be made into scheduled industries and industrial undertakings.
Section 18(b) confers power on the Central Government to control, supply, distribution, price, etc.
of certain articles.
As considerable reliance was placed on Section 18(G) for the contention that the Central Government has the exclusive power with regard to notified industries to control supply distribution, fixation of price etc.
it is necessary to set out the material part of the Section in full.
Section 18 (G) (1) runs as follows: "The Central Government, so far as it appears to it to be necessary or expedient for securing the equitable distri 542 bution and availability at fair prices of any article or class of articles relatable to any scheduled industry, may, notwithstanding anything contained in any other provision of this Act, by notified order, provide for regulating the supply and distribution thereof and trade and commerce therein.
" Sub section 2 of Section 18(G) confers certain powers without prejudice to the generality of the powers conferred by sub section (1) by a notified order to provide for matters enumerated in it (a) to (h) of the sub section.
These powers include amongst others the right to control the price.
The powers conferred under section 18(G)(1) is exercisable by the Central Government in so far as it considers it to be necessary or expedient.
The plea of the learned counsel is that the notification made by the Central Government excludes the power of the State Government to fix the price of denatured spirit and rectified spirit as it has been placed beyond the powers of the State to regulate the distribution of licences, permits etc.
The notification that is relied on is the Ethyl Alcohol (Price Control) Amendment Order, 1975 dated 31st October, 1975.
The order reads as follows: "In exercise of the powers conferred by section 18(G) of the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Central Government hereby makes the following order further to amend the Ethyl Alcohol (Price Control) order, 1971 namely: 1.
(1) This order may be called the Ethyl Alcohol (Price Control) Amendment order, 1975.
(2) It shall come into force on the date of its publication in the official gazette.
In the Ethyl Alcohol (Price Control) order, 1971 (hereinafter referred to as the said order), in clause 2, for the Table the following Table shall be substituted, namely: ____________________________________________________________ (1) (2) ____________________________________________________________ 1 Absolute Alcohol Conforming to ISI Six hundred and Standard No. 321 1952.
, names for sixty eight equivalent volume at 100 per cent rupees and v/v strength; forty one paise per kilo litre.
2 Rectified spirit conforming to ISI Six hundred standard No. 323 1959 named for and twenty equivalent volume at 100 per cent two rupees v/v strength.
and twenty paise for kilo litre.
3 Rectified spirit conforming to ISI Five hundred standard No. 323 1959 named for and eighty nine 94.68 per cent v/v strength.
rupees and ten paise per kilo litre.
____________________________________________________________ 543 The table prescribes the price of various types of alcohol and rectified spirit.
The price of ethyl alcohol is fixed under the powers conferred on the Central Government under section 18(G) (1) for securing the equitable distribution and availability at fair price.
The Ethyl Alcohol (Price Control) order, 1961 which was made by the Central Government in exercise of the powers conferred on it under section 18(G) of the Industries (Development and Regulation) Act, 1951 fixed the maximum ex distillery price for industrial alcohol and rectified spirit under cl. 1 and 2 of the Order.
3 permitted certain additional charges in certain cases of alcohol supplied after denaturation with general or special denaturants, the cost of such denaturation being allowed to be charged.
Ethyl Alcohol (Price Control) order, 1964 while fixing the maximum ex distillery price of ethyl alcohol under cl. 3 permitted additional charges to be levied in certain cases such as for covering costs incurred for transport of molasses to the distillery and any octroi duty paid or payable on molasses and when alcohol is supplied after denaturation, to include actual cost of such denaturants plus some octroi charges as specified in the clauses.
3(a) empowered the Excise Commissioner of the State to determine the additional charges leviable under cl. 3 in case of any doubt or distillery price of ethyl alcohol provided for fixation of the price after taking into account various factors enumerated in cl.
2(2) (a to h).
Reading various Ethyl Alcohol (Price Control) orders passed by the Government from time to time, it is clear that the order permitted the adding of the expenses incurred for transportation, payment of octroi duty etc.
to the price fixed.
We are unable to read the Ethyl Alcohol (Price Control) orders as explicitly or impliedly taking away the power of the State to regulate the distribution of intoxicating liquor by collecting a levy for parting with its exclusive rights.
If the powers of Parliament and the State Legislature were confined to entry 52 in List I and entry 24 in List II, Parliament would have had exclusive power to legislate in respect of industries notified by Parliament.
The power of the State under Entry 24, List II is subject to the provisions of Entry 52 in List I.
But we have to take into account Entry 26 in List II and Entry 33 in List III for determining the scope of legislative power of the Parliament and the State.
Entry 26 in List II is as follows: "Trade and Commerce within the State subject to the provisions of entry 33 of List III.
" Under Entry 33 List III the Parliament and the State have concurrent powers to legislate regarding the production, supply and 544 distribution of the products of industries notified by the Parliament.
Furthermore it has to be noted that the exclusive power of the State to provide for manufacture, distribution, sale and possession etc.
of intoxicating liquor is vested with the State.
The power of the State Government to levy a fee for parting with its exclusive right regarding intoxicating liquor has also been recognised as is seen from the various State Acts regulating manufacture, sale.
of intoxicating liquor.
A fair scrutiny of the relevant entries makes it clear that the power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as List II Entry 33 in the concurrent list enables a law to be made regarding production, supply, distribution of products of a notified industry.
In Ch.
Tika Ramji and ors.
vs The State of Uttar Pradesh and Ors.
a question arose whether Sugarcane regulation, supply and purchase Act passed by the State Legislature and the notification issued therein by the State Government were repugnant to the notifications made under the Industries (Development and Regulation) Act of 1951.
Two notifications were issued by the State Government under the U.P. Sugarcane Regulations, supply and purchase Act 1953 prohibiting the occupier of the factory to which area is assigned from entering into an agreement to purchase cane except through a cane growers Cooperative Society under certain circumstances and assigning different sugarcane factories specified to certain purchase centre for supply to them sugarcane for the crushing season were challenged as ultravires.
The plea was that the subject matter of the legislation fell within the exclusive jurisdiction of Parliament and the impugned notifications were repugnant to the notifications made under the Industries (Development and Regulation) Act, 1951.
On 31st October, 1951, Parliament enacted the Industries (Development and Regulation) Act, 1951 to provide for development and regulation of certain industries.
By section 2 of the Act it was declared that it was expedient in public interest that the Union should take in its control the industries specified in the First Schedule which included in Item 8 thereof, the industries engaged in the manufacture or production of sugarcane.
Industries (Development and Regulation) Act, 1951 was amended by Act 26 of 1953 by adding Chapter IIIA entrusting Central Government with power so far as it appears necessary or expedient for securing the equitable distribution and availability at fair price of any article relatable to scheduled industry to provide by notified order for regulation, supply and distribution and trade and commerce thereof.
The impugned notification which required the factories to purchase 545 their sugarcane from the cooperative societies and assigned certain areas as cane purchasing centre for the factories was stated to be ultra vires as they were beyond the State 's competence and covered by the notification under the Industries (Development and Regulation) Act.
Justice Bhagwati observed at page 411: "When, however, it came to the products of the controlled industries comprised in Entry 52 of List I, trade and commerce in, and production, supply and distribution of, these goods became the subject matter of Entry 33 of List III and both Parliament and the State Legislatures had jurisdiction to legislate in regard thereto.
" The learned Judge proceeded to observe: "That sugarcane being goods which fell directly under entry 27 of List II was within the exclusive jurisdiction of the State Legislature and it was competent to legislate with regard to it and as such the impugned Act was intra vires of the state Legislature.
The power to legislate regarding production, supply and distribution of goods is subject to provisions entry 33 List III which deals with products and industries notified by Parliament.
Entry 33 being in the concurrent List, legislative power of the State regarding production, supply and distribution of goods cannot be denied.
" The Court on the facts of the case found that even assuming that sugarcane was an article or class of articles relating to the notified industries within the meaning of Section 18(G) of Act 65 of 1951, no order was issued by the Central Government in exercise of its powers vested in it and, therefore, no question of repugnancy arose.
In the case before us it cannot be discerned from the Ethyl Alcohol Control order that the power of the State Government to prescribe a levy for parting with its exclusive rights relating to intoxicating liquor had been taken away.
In Baijnath Kedvai vs State of Bihar & Ors.
a question arose as to whether the Bihar Legislature had jurisdiction to enact the second proviso to section 10(2) of the Bihar Land Reforms Act, 1950 by which the terms and conditions of the lease of mines and minerals could be substituted for the terms and conditions laid down in the Bihar Mines and Minerals Concession Rules.
On the strength of the amended section 10(2) of the Reforms Act and amended Rules 20 the Bihar Government demanded from the appellant rent contrary to 546 the terms of his lease.
It was held that Entry 54 in Union List speaks of requirements of mines and minerals development and Entry 23 in List II is subject to entry 54.
Once a declaration was made under entry 54 specifying the extent of vesting the competency was only with Parliament.
The attempt of the learned counsel to trace the power to enact the second proviso to section 10 of the Act to Entry 18 of List II was rejected.
The plea of the learned counsel was that the modification of the existing lease was a separate topic and not covered by section 15 of Act 67 of 1957.
The Court rejected the plea on the ground that the entire legislative field in relation to mines and minerals had been withdrawn from the State Legislature.
The decision does not help the appellants for on the facts it is clear that the entire field relating to mines and minerals had been occupied and taken away from the Legislature and as such it was beyond the competence of the State to legislate on mines and minerals.
In the case before us the position is different because the power of the State Legislature to legislate in respect of the intoxicating liquor and its exclusive right regarding intoxicating liquor cannot be questioned.
The third contention of Mr. Nariman, is that the vend fee levied by the State is not and was never treated by the State as charge or rental as the consideration for granting exclusive privilege.
On the other hand the levy is excise duty or a fee which the State is not entitled to collect.
The submission of the learned counsel was that even though it is found that the State is entitled to make laws regarding intoxicating liquor under List II, Entry 8, it has no power to impose any tax.
The power to tax by the State is confined only to Entry 51, List II which empowers the State to levy duty on alcoholic liquors for human consumption and as denatured spirit is not alcoholic liquor for human consumption, a levy of excise duty is not permissible by the State.
It was contended that the levy of a fee was also not permissible unless it had some relation to the expenses incurred for that purpose.
According to the Solicitor General, Mr. Kakkar, the levy was not a tax or a fee but a levy for parting with the exclusive right of the State in respect of intoxicating liquor.
In view of the stand taken by the State, it is unnecessary for us to go into the question as to whether the levy is a tax or a fee.
For dealing with the contention of Mr. Nariman that the levy was never collected in lieu of the State parting with its rights, it is necessary to refer to the relevant provisions of the Act.
The United Provinces Excise Act, 1910 (Act 4 of 1910) was passed in 1910.
Subsequently, it was adapted and modified by the Government of India (Adaptation 547 of Indian Laws) order, 1927 and Adaptation of Laws order, 1950 Chapter IV of the Act deals with manufacture, possession and sale while Chapter V deals with duties and fees.
The Act refers to Excise Revenue, Duty, fee, tax, fine and payment as condition for the grant of licence for any exclusive privilege.
section 3(1) defines Excise Revenue as meaning revenue derived or derivable from any duty, fee, tax, fine or confiscation imposed or ordered under the Provisions of the Act or of any law in force relating to alcohol or intoxicating drug.
Excise Duty, and Countervailing duty is defined under section 3 and 3(a) as meaning such excise duty or countervailing duty, as the case may be, as mentioned in entry 51 of List II of the Seventh Schedule of the Constitution.
Chapter II relates to establishment and control of the Excise Department.
Chapter III prohibits import of intoxicants.
Intoxicant means any liquor which in turn includes any liquids containing alcohol.
section 12 prohibits import unless permission is obtained and conditions imposed by the State Government are satisfied and any duty imposed under section 28 is paid.
section 28 refers to duties and fee and provides that an excise duty or countervailing duty, as the case may be, directed by the State Government may be imposed on any exciseable article.
Under this section, a duty on import, export, transport, manufacture is levied in accordance with the provisions of section 12(1), 13, 17 and 18.
The stand taken by the State before us is that the levy which is being collected, is not in the nature of an excise duty or counter veiling duty.
Though a duty under section 28, Proviso II on denatured spirit was levied after Proviso II to section 28 was omitted by the Government (Adaptation of Indian Law) order, 1937, no excise duty on denatured spirit was levied.
Apart from the duty that is leviable, the Excise Commissioner is empowered under section 30 instead of or in addition to any duty to accept payment of a sum in consideration of the grant of licence of any exclusive privilege under section 24.
Section 24 provides that subject to the provisions of section 31, the Excise Commissioner may grant any person a licence for exclusive privilege of manufacturing or supplying or selling wholesale or retail, any country liquor or intoxicating drug within any local area.
Reading section 30 and 24 together, it is clear that the Excise Commissioner may accept payment in consideration for the grant of the licence for any exclusive privilege.
The exclusive privilege under section 24 was confined only to country liquor within a local area.
Before examining the impact of amended section 24A by U.P. Act 30 of 1972, it may be mentioned that Chapter VI empowers the collection of fees for licence or permits granted under the Act.
A licence fee was only collected under notification dated 22 5 1930 for licence for wholesale vend of denatured spirit.
The Excise Department on 23 1 1937 548 introduced rule 17(2) under section 40(2)(d) imposing vend fee of Annas 7 per bulk gallon for the issue from the distillery.
This fee was not collected regarding denatured spirit issued to industries engaged in the manufacture of synthetic rubber.
By notification dated 3rd November, 1972 the U.P. Government amended the Excise Rules and substituted rule 17(2).
The rule is purported to have been issued under section 40(2) (d) in exercise of the powers conferred on the Government under section 40(1).
By the notification on the issue of denatured spirit from a distillery a vend fee of Rs. 1.10p.
per litre was made payable in advance except regarding the issue to institutions exempted under the rule.
The Learned Counsel strenuously contended that this levy does not purport to be in consideration of the grant of licence for any exclusive privilege.
On the other hand, the learned Counsel pointed out that section 40(2)(d) refers to the rule making power of the Government for regulating the import, export, transport or possession of the intoxicants.
The power, if any, is conferred on the Excise Commissioner under section 41 enabling him to make rules prescribing the scale of fees in respect of licence, permits or pass or storing any intoxicants.
In 1972 U.P. Act 30/1972 added section 24A which provides that subject to provisions of section 31, the Excise Commissioner may grant to any person a licence or licences for the exclusive privilege of selling by retail at shops (for consumption both on and off the licensed premises, or for consumption off the licensed premises only) any foreign liquor in any locality.
After the introduction of section 24A, the Excise Commissioner is empowered to grant any person a licence for the exclusive privilege of selling foreign liquor.
Before the amendment, section 24 was restricted to country liquor or intoxicating drug.
By the amended Sec.
24A the Excise Commissioner may accept payment of a sum in consideration for the grant of the licence for any exclusive privilege for selling foreign liquor.
section 31 to which section 24A is subject, relates to grant of licences and it does not in any way restrict the power thus conferred by section 24A.
The plea put forward by the learned counsel is that the word 'foreign liquor ' cannot be understood as including denatured spirit as the Section would itself indicate that the licence is for selling for consumption which would indicate that foreign liquor is meant for human consumption.
We are unable to give the words 'foreign liquor ' such a restricted meaning for the word consumption cannot be confined to consumption of beverage alone.
When liquor is put to any use such as manufacture of other articles, the liquor is all the same consumed.
Further, section 4(2) provides that the State may declare what shall be deemed to be country liquor or foreign liquor.
The State had under 549 rule 12 issued notification dated 30th December, 1960 defining foreign liquor as meaning all rectified, perfumed, medicated and denatured spirit, wherever made.
The plea that the Excise Commissioner had no right to accept payment in consideration for the grant of the licence for the exclusive privilege for selling wholesale or retail foreign liquor which includes denatured spirit, cannot, therefore be accepted.
Rule 17(2) no doubt purports to have been issued under the rule making powers conferred on the Government under section 40(2)(d) which enables the Government to make rules for regulating the import, export, transport for possession of any intoxicants.
It may be noted that when the amended rule 17(2) was introduced on 3 11 1972, section 24A had been amended by U.P. Act, 30/1972 and the power of the Excise Commissioner to accept payment for grant of licence for exclusive privilege cannot be denied.
The validity of Act 30/1972 which authorised the Excise Commissioner to collect a vend fee for the retail or wholesale vend of foreign liquor was challenged.
The Allahabad High Court upheld the challenge holding that the State did not have the exclusive privilege to collect the vend fee.
This view was not accepted by the Supreme Court in Nashirwar 's case (supra) and Harishankar 's case (supra) which held that under the regulatory power, the State had power to auction the right to vend by retail or wholesale foreign liquor.
As Act 30 of 1972 was struck down by the Allahabad High Court the State came forward to validate Act 30 of 1972 as it stood when it was passed by introducing the U.P. Excise (Amendment) (Reenactment and Validation) Act, 1976 (U.P. Act 5 of 1976).
The preamble refers to the passing of U.P. Amendment Act, it being struck down by the Allahabad High Court and the subsequent decision of the Supreme Court in Nashirwar 's case, and states that it had become necessary to enact the (Amendment) (Re enactment and Validation) Act.
In the main Act, after section 1, sub section
(2) was introduced providing that it shall be deemed to have been in force ever since the commencement of the United Provinces Excise Act, 1910.
After section 24 of the principal Act, section 24A was introduced.
section 24A(1) re enacts section 24A(1) added by U.P. Act 30 of 1972.
section 24B was introduced for removal of doubts which declared (1) that the State Government has exclusive privilege for manufacture and sale of country and foreign liquor; (2) that the amount described as licence fee in cl.
(c) of section 41 is in its essence rental or consideration for the grant of such right or privilege by the State Government and (3) 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 550 behalf of the State Government.
section 30 was substituted which specifically mentioned that the Excise Commissioner may accept payment of a sum in consideration of the grant of privilege for any exclusive or other privilege under section 24A. section 24A was not specifically mentioned in section 30 as it stood before the re enactment.
After the introduction of section 24A, the Excise Commissioner had a right to grant the privilege of selling of foreign liquor.
The fact that section 30 did not specifically mention section 24A might not have made any difference.
But in order to remove all doubts, the new Section 30 had been introduced.
section 41, cl.
(3) was re enacted to enable the fixation of fee payable for the grant of exclusive or other privilege under section 24 and 24A. section 40 was also amended so as to give retrospective effect.
section 4 of the Act 5 of 1976 also provides that the U.P. Excise (Amendment) Act, 1972 shall be deemed to be and always to have been as valid as if the provisions of this Act were in force at all material times.
In short the purpose of introduction of Act 5 of 1976 was to make it clear that U.P. Excise (Amendment) Act, 1972 shall be deemed to and always to have been valid.
In view of our findings that U.P. Excise (Amendment) Act, 1972 was valid, the effect of U.P. Act 5 of 1976 is to remove all doubts and to give retrospective effect.
It was next contended that foreign liquor which is defined under rule 12, as including denatured spirit, cannot apply to specially denatured spirit.
Foreign liquor was defined as including specially denatured spirit.
By a notification the Excise Commissioner of U.P. on 3 5 1976 framed U.P. Licences for the possession of denatured spirit and specially denatured spirit Rules, 1976.
In the preamble to the rules, it is stated that the Excise Commissioner with the previous sanction of the State Government was making the rules relating to licence for possession of denatured spirit including specially denatured spirit for industrial purposes.
Rule 1 (iii) provides that specially denatured spirit means rendered unfit for human consumption in such manner as may be prescribed by the Excise Commissioner by notification in this behalf and does not include ordinary denatured spirit for general use.
Rule 2 provides that licences for the possession of the denatured spirit including specially denatured spirit for industrial purpose shall be of three kinds.
The learned counsel contended that though foreign liquor is defined as including denatured spirit, it cannot be held to include specially denatured spirit.
Denatured spirit mentioned in the rules is treated as including specially denatured spirit for industrial purpose.
Denatured spirit has ethyl alcohol as one of its constituents.
The specially denatured spirit for industrial purpose is different from denatured spirit only because of the difference in the 551 quantity and quality of the denaturants.
Specially denatured spirit and ordinary denatured spirit are classified according to their use and denaturants used.
We are unable to accept the contention of the learned counsel that specially denatured spirit for industrial purpose is different from the ordinary denatured spirit.
The definition of alcohol under rule 12 includes both ordinary as well as specially denatured spirit.
It was next contended that if the levy of Re. 1.10p per bulk gallon of denatured spirit as vend fee, is upheld it would result in violating the appellants/petitioners fundamental right to carry on their trade and business under article 19(1)(g) of the Constitution.
According to the learned counsel, the price fixed per gallon of ethyl alcohol under the Ethyl Alcohol (Price Control) order is 59 paise, per gallon.
If the levy is not considered as a tax and could not be passed on to the consumer as price fixed under the Ethyl Alcohol Amendment order, is only 59 p., it would be confiscatory in nature.
It is seen that the right of the State Government to accept payment of a sum for the grant of its exclusive privilege cannot be questioned.
The price fixed for ethyl alcohol is ex distillery price and we see no impediment for the addition of Re. 1.10 as vend fee by the State Government Dr. L. N. Singhvi, who appeared as intervener in Civil Appeal Nos.
2191 to 2198 of 1978 for the appellants and for petitioners in Special Leave Petitions Nos. 125 to 126/79 while adopting the contentions of Mr. Nariman submitted that the stand taken by the U.P. Government in earlier proceedings in the High Court was that the levy was in the nature of Excise Duty or a fee while the present stand is that it is neither a duty nor fee but only a levy for the conferment of the exclusive privilege.
It is true that the stand taken by the Government in the earlier proceedings was different but that would not make any difference so long as the Government had a right to impose the levy.
It has been found that after the addition of section 24A by Act 30 of 1972, the Commissioner was entitled to accept payment for conferring the privilege which the State owned exclusively.
The learned counsel submitted that so far as his clients M/s. Rallis Chemicals, Kanpur and M/s. Rallis India, petitioners in Special Leave Petitions Nos. 125 to 126 of 1979 are concerned they are only holders of licences for possession and are not licencees under F.L. 16.
In the same class fall the appellants in Civil Appeal No. 2248 of 1978, M/s. Synthetic and Chemicals who are only purchasers of denatured spirit.
It was submitted that for this class of persons if the vend fee is 552 for the grant of exclusive privilege of the State for sale of liquor, it cannot be recovered from the purchasers.
Rule 17(1) relates to vend of denatured spirit.
It empowers the Collector (1) to grant to a distiller a licence for manufacture of denatured spirit (2) to grant to approved dealers of denatured spirit a licence in form F.L. 16 for the wholesale vend of denatured spirit.
Scale of fee is given in the rule which prescribes that for sales not exceeding 10,000 litres per annum a fee will be of Rs. 100/ and for sales exceeding 10,000 litres, the fee shall be increased by Rs. 500/ for every 5000 litres or fraction thereof.
Subrule (2) provides that in case of issue from a distillery, a vend fee of rupee one and ten paise per bulk gallon will be payable before the spirit is issued.
The fee charged is very different from the one in Rule 17(1) which provides that the distillery or an approved dealer for wholesale vend of denatured spirit may be given a licence in Form F.L. 16.
The distiller and the approved dealer is to pay a licence fee for the sales at the rate prescribed.
But rule (2) speaks of levy of vend fee in case of issued from the distillery which is payable in advance before the spirit is issued.
It is admitted that the petitioners and the appellants who claim as purchasers do not have a licence under F.L. 16.
Therefore, sub section
(1) has no application.
The levy on persons who are purchasers is for the possession of denatured spirit in excess of the prescribed limit.
The permission granted in their favour and the allotment orders of the specially denatured spirit prescribes the terms and conditions under which the allotment is made.
The licences are granted to them under form F.L. 39 and they have to abide by those conditions.
The notification of the Excise Commissioner of U.P. dated 3 5 1976 provides that the licence for the possession of denatured spirit including the specially denatured spirit of industrial purpose shall be of three kinds.
We are concerned with the licences for the possession for use in industries in which alcohol is destroyed or converted chemically in the process into other products and the product does not contain alcohol such as, Ethel, Styrene, Butadiene, Acetone and Polythene etc.
The licence granted for this purpose is in form F.L. 39.
Rule 3(a) provides that the fee for the licence in Form F.L. 39 shall be at a rate prescribed for industry to industry by the Excise Commissioner per litre, payable on the quantity of specially denatured spirit obtained from any distillery in Uttar Pradesh and that fee shall be realised by the Excise Inspector incharge Distillery from the licensee before issue of the specially denatured spirit from the distillery.
The conditions relating to grant of a licence for issue of denatured spirit for industrial purpose are laid down in rule 4.
Special conditions regarding licence in form F.L. 39, 40 and 41 are prescribed in rule 5.
The appellants/petitioners having applied 553 for and obtained licences in form F.L. 39 are bound to comply with the conditions.
Lastly, it was contended that the provisions of Uttar Pradesh Excise (Amendment) (Re enactment and Validation) Act, 1976 is invalid and confiscatory as its retrospective operation imposes an unbearable burden on the appellants/petitioners.
It was stated that the licence under F.L. 39 was issued only in the year 1979 and no levy could be made regarding denatured spirit that was supplied before that date.
The answer of the State is that the levy was imposed for permission granted in their favour and allotment orders of denatured spirit issued to them from the various distilleries.
The parties after having paid the fee had taken possession of the denatured spirit from the distillery.
Act 5 of 1976 has been given retrospective effect as the levy imposed under Act 30 of 1972 was found to be illegal and unsustainable by the Allahabad High Court which was reversed by this Court by giving retrospective effect, the State has only restored the status quo enabling the collection of the levy validly made by Act 30 of 1972.
Reliance was placed on the decision of this Court in A. B. Abdul Kadir & ors etc.
vs State of Kerala for the contention that retrospective operation of an Act when it harshly operates is liable to be held as invalid.
At page 706 this Court observed that the power to make a valid law ' would enable providing for prospective and retrospective operation of the provisions.
It was observed that in judging the reasonableness of the retrospective operation of law, the test of length of time covered by the retrospective operation could not by itself be treated as decisive.
On the facts of the case there could be no complaint because what is sought to be collected is levy which was legally made.
The result is, all the contentions raised by the learned counsel for the appellants/petitioners fail and appeals and the petitions are dismissed with costs one set of hearing fee.
The State Appeal C.A. No. 1130/76 is allowed but there will be no order as to costs.
P.B.R. State appeals allowed.
| The respondents who were licensees for the whole sale vend of denatured spirit in their writ petitions before the High Court contended that levy of fees on denatured spirit was not justified because (i) the State was not providing any service to the trade and (ii) since it is the Parliament which has the power to levy excise duty or tax on denatured spirit, the State was incompetent to levy the fees.
Rejecting the contentions, the High Court held that the State had exclusive privilege to deal with any intoxicating liquor which included denatured spirit, that it had the right to vend liquor either in retail or wholesale and that therefore its power to levy fees cannot be questioned.
In appeal to this Court it was contended on behalf of the licensees that (1) levy of vend fee on denatured spirit by the State was without legislative competence (2) with the enactment of Industrial (Development and Regulation) Act, 1951 the Union had taken under its control industries including fermentation of industrial alcohol and, therefore, it is only the Union which could levy the fees on denatured spirit or industrial alcohol.
Allowing the State 's appeal, ^ HELD: The levy of vend fee is for parting with the exclusive right of the State with regard to intoxicating liquors and for conferring a right on the licensees to sell such liquors.
A conspectus of the decisions of this Court establishes (i) that there is no fundamental right of a citizen to carry on trade or to do business in liquor because under its police power, the State can enforce public morality, prohibit trade in noxious or dangerous goods (ii) the State has power to enforce an absolute prohibition on manufacture or sale of intoxicating liquors pursuant to Article 47 of the Constitution and (iii) the history of excise laws in the country shows that the State has the exclusive right or privilege to manufacture or sell liquors.
[549 F H] State of Bombay and Anr.
vs F. N. Balsara [1951] S.C.R. 682 referred to.
(iv) The terms "intoxicating liquor" is not confined to potable liquor alone but would include alliquors which contain alcohol.
[537 G] Nashirwar vs State of Madhya Pradesh [1975] 2 S.C.R. 861; Har Shankar vs The Deputy Excise and Taxation Commissioner ; ; State of Bombay and Anr.
vs F. N. Balsara & Ors. ; ; Bhola Prasad vs The King Emperor at p. 25 referred to.
(v) The term "liquor" used in Abkari Acts not only covers alcoholic liquor which is generally used for beverage purposes and which produces intoxication but would also include liquids containing alcohols.
[537 B C] 532 Cooverjee B. Bharucha vs The Excise Commissioner and Chief Commissioner, Ajmer & Anr. ; ; M/s. Guruswamy & Co. etc.
vs State of Mysore & Ors.
; State of Orissa & Ors.
vs Harinarayan Jaiswal & Ors.
; ; Amar Chandra Chakraborty vs Collector of Excise, Government of Tripura and Ors. ; ; Har Shankar & Ors.
vs The Dy.
Excise & Taxation Commissioner & Ors. ; referred to. 2(a) The power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as Entry 33 in the Concurrent List enables a law to be made regarding production, supply and distribution of products of notified industries.
The exclusive power of the State to provide for manufacture, distribution, sale and possession of intoxicating liquors is vested in the State.
The power of the State Government to levy a fee for parting with its exclusive right regarding intoxicating liquors has been recognized as could be seen from the various State Acts regulating the manufacture, sale, etc.
of intoxicating liquors.
[544 C, A B] Ch.
Tika Ramji and Ors.
vs The State of Uttar Pradesh and Ors. ; ; Baijnath Kedai vs State of Bihar & Ors.
; distinguished.
(b) The term "foreign liquor" cannot be given a restricted meaning because the word consumption cannot be confined to consumption of beverages only.
When liquor is put to any use such as manufacture of other articles, the liquor is all the same consumed.
The State is empowered to declare what shall be deemed to be country liquor or foreign liquor.
"Foreign liquor" is defined as meaning all rectified, perfumed, medicated and denatured spirit wherever made.
Therefore, the plea that the Excise Commissioner had no right to accept payment in consideration for the grant of licence for the exclusive privilege for selling in wholesale or retail, foreign liquor which includes denatured spirit cannot be accepted.
[548 H, 549 A B] (c) The definition of "alcohol" includes both ordinary as well as specially denatured spirit.
The specially denatured spirit for industrial purposes is different from denatured spirit only because of the difference in the quantity and quality of the denaturants.
Specially denatured spirit and ordinary denatured spirit are classified according to their use and denaturants used.
Therefore, the contention that specially denatured spirit for industrial purposes is different from the ordinary denatured spirit has no force.
[551 B, 550 H 551 A]
|
Appeal No. 38 of 1967.
Appeal from the judgment and order dated December 1, 1966, of the Assam and Nagaland High Court in Civil Rule No. 145 of 1964.
section V. Gupte, Solicitor General and Naunit Lal, for the appellants.
612 Ram Labhaya Obhrai, I. M. Obhrai, S.K. Mehta and K. L. Mehta, for the respondent.
The Judgment of the Court was delivered by Subbarao C.J.
This appeal by certificate is directed against the order of the High Court of Assam declaring that the Assam Motor Vehicles Taxation (Amendment) Acts of 1963 and 1966 were repugnant to the Assam Motor Vehicles Taxation Act, 1936 (Assam Act 9 of 1936), hereinafter called the Principal Act, and, therefore, void as they were made in contravention of the provisions of article 254(2) of the Constitution.
The facts are in a small compass and they are as follows The Principal Act came into force on March 1, 1937.
The assent of the Governor General in Council was given under section 35 of the Government of India Act, 1935.
This Act imposes tax on motor vehicles in the Province of Assam.
In 1955 the Principal Act was amended by Assam Act IV of 1956 and it had received the assent of the President.
Subsequently the Principal Act was amended by Act 15 of 1963, but the Bill was introduced in the Assam State Assembly with the previous sanction of the President and it came into force on April 1, 1963.
Subsequent to the filing of the petition, out of which the present appeal has arisen, the Principal Act was again amended in the year 1966 and it came into force on April 1, 1966.
The tax on the stage carriage motor vehicles was gradually raised under each amendment and under the last of the amendments a sum of Rs. 56/ was imposed per seat.
Under the last amendment Act the petitioner respondent had to pay a sum of Rs. 1680/ as tax for the stage carriage she was plying.
The respondent filed a petition under article 226 of the Constitution in the High Court for declaring the amending Acts void and for other reliefs.
The petition was heard by a Division Bench of the High Court and the learned Judges delivered two separate but concurrent judgments.
They held that the Amending Acts of 1963 and 1966 were void and gave the petitioner respondent the reliefs :asked for.
Hence the present appeal.
The main question in the appeal is whether the said Amending Acts increasing the rate of tax are void for constitution incompetence.
The High Court in effect held that the provisions of the said Amending Acts were inconsistent with those of the existing law, namely, the Principal Act and, therefore, as they had not received the assent of the President, were void under article 254 of the Constitution.
This conclusion was arrived at on the ground that the Amending Acts were made in respect of the matter contained in entry 35 of the Concurrent List.
613 To appreciate the contentions it will be convenient to read at the outset the relevant Articles of the Constitution.
Entry 57 of List II of the Seventh Schedule to the Constitu tion : Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of List 111.
Entry 35 of List III Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied.
article 254 (1) If any provision of law made by the Legislature of a State is repugnant. . to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2). . the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State. article 366(10) Existing law means any law, ordi nance or bye law, rule or regulation passed or made before the commencement of the Constitution by any Legislature, authority or person having power to make such a law, ordinance or bye law, rule or regulation.
The application of the said provisions to the subject matter of the present appeal leads to the following result.
The Principal Act was an existing law.
If the Amending Acts were made under entry 35 of the Concurrent List and if they were in conflict with any of the provisions of the existing law, to the extent of the inconsistency the said amendments would he void.
But, on the other hand, if the Amending Acts were passed under entry 57 of List 11 of the Seventh Schedule, they would fall outside the scope of article 254 of the Constitution, as article 254 would apply only to a conflict between the provisions of an "existing law" and those or the post constitution law in respect of matters enumerated in any of the entries of the Concurrent List.
The learned Solicitor General raised before us two points, namely, (i) article 254 of the Constitution posits the existence of 614 two.
parallel laws One an "existing law" and the other a post Constitutional law in respect of any one of the entries in the Concurrent List and the provisions thereof are in conflict with each other; but it has no application to a case where the State Legislature, within the scope of its legislative competency, amends an existing law so as to extinguish a part of it.
(2) The amending Acts were only made under entry 57 of List 11 and, therefore, there is no scope for invoking the provisions of article 254 of the Constitution.
Learned counsel for the respondent, on the other hand, con tended that there was no distinction between an amending Act and a new Act in the matter of.
application of article 254 of the Constitution, as in either case the provisions of the said Acts would be inconsistent with the existing law.
He further argued that the Amending Acts introduced new principles of taxation and, therefore, fell squarely within the scope of entry 35 of the Concurrent List.
As we are holding in favour of the appellant on the second point, it is not necessary to express our view on the first.
The short question, therefore, is whether any of the provisions of the Amending Acts is repugnant to any of the provisions of the existing law with respect to any of the matters enumerated in the Concurrent List.
Under the existing law, i.e., Act 9 of 1936, no motor vehicle could be used in the Assam Province unless the owner thereof had paid in respect of it a tax at the appropriate rate specified in the Schedule to the Act and, save as therein specified, such tax should thereafter be payable annually notwithstanding that the motor vehicle might from time to time cease to be used (see section 4).
As aforesaid, the Schedule annexed to the Principal.
Act was amended from time to time by different amending Acts and the rate was increased.
Under the 1963 amending Act, apart from other provisions which do not relate to any principles of taxation, a new Schedule has been substituted.
Neither the amending Act nor the Schedule laid down any principles of taxation in respect of motor vehicles.
So too, the amending Act ,of 1966 substituted the Schedule of the Act by another Schedule.
A persual of the aforesaid Schedule only disclose that different rates were fixed; that is to say, the amended Schedule does not lay down any principles on which taxes on motor vehicles are to be levied within the meaning of entry 35 of the Concurrent List; it is solely concerned with taxes on vehicles within the meaning entry 57 of List 11.
The two entries deal With two different matters though allied ones one deals with taxes on vehicles and the other with the principles on which such taxes are to be levied.
When two entries in the Constitution, whether in the same List or different Lists, deal with two subjects, if possible, an attempt 615 shall be made to harmonize them rather than to bring them into conflict.
Taxes on vehicles in their ordinary meaning connote the liability to pay taxes at the rates at which the taxes are to be levied.
On the other hand, the expression "principles of taxation" denotes rules of guidance in the matter of taxation.
We, therefore, hold that the Amending Acts do not come into conflict with the existing law in respect of any principles of taxation, 'but only deal with a subject matter which is exclusively within the legislative competence, of the State Legislature.
In this view, there is no scope for the application of article 254 of the Constitution.
Even so, learned counsel for the respondent contended that the amending Acts offend the provisions of article 301 of the Constitution.
Article 301 reads "Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free,.
" The scope of this Article has been authoritatively defined by this Court in The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan(1).
There the majority held that regulatory Measures or measures imposing compensatory taxes for the use of trading facilities did not hamper trade, commerce or interCourse but rather facilitate them, and, therefore, were not hit by the freedom declared by article 301.
There, by virtue of section 4 of the Rajasthan Motor Vehicles Taxation Act, 1951, read with the Schedules, no one could use or keep a motor vehicle in Rajasthan without paying an appropriate tax for it and, if he did so, be was made liable to the penalties imposed under section 11 of that Act.
This Court by majority held that such taxes were com pensatory and regulatory taxes which did not hinder the freedom of trade.
In the present case the respondent in her petition questioned the validity of the provisions, of the amending Acts on the following grounds : (i) The Act abolished the permit fee previously payable on such motor vehicles.
She alleges that as a result of the rationalisation of tax and the introduction of a single point levy, the tax fixed irrespective of road condition.
distance travelled, region catered for imposes crushing burden oil the petitioner and the other stage carriage permit bolders plying their vehicles in the short distance route and gives discriminatory weightage in favour of the State Carriage, Inter State public carriers and other vehicles plying in longer distance routes.
It will be seen that the averments are general and vague.
On the other hand, the State has filed a detailed affidavit.
The following figures show the expenditure incurred on new roads and maintenance of old roads and the income from motor vehicles for (1) [1963] 1 S.C.R.491.
616 some years.
In 1962 63 the expenditure was Rs. 671.60 lakhs and the income was Rs. 75.58 lakhs.
In 1965 66 the expend ture was Rs. 1499.77 lakhs and the income was Rs. 137.96 lakhs.
From the said figures it is clear that the State is charging from the users of motor vehicles some thing in the neighbourhood of II% and IO % respectively for the said two years of the cost it has to, incur in maintaining and making roads.
From Annexure D to the said affidavit it appears that in some cases tax under the 1963 Act had been increased by 50% under the 1966 Act and in some cases the tax under 1963 Act has been increased by 40% under 1966 Act.
It is obvious that comparatively small proportion of the general expenditure is realised through the impugned taxation.
In the circumstances, we must hold that the said Acts were only regulatory measures imposing _compensatory taxes for facilitating trade, commerce and intercourse.
The Acts are, therefore, not hit by article 301 of the Constitution.
in the result the order of the High Court is set aside and the appeal is allowed.
The petition filed by the respondent in the High Court is dismissed with costs here and in the court below.
| Under the Assam Motor Vehicles Taxation Act, 1936, no motor vehicle could be used in the Assam Province unless the owner thereof had paid in respect of it a tax at the appropriate rate specified in the Schedule to the Act.
The Schedule was amended from time to time by the substitution of new Schedules and as a result of such amendments in 1963 and 1966, the tax on stage carriage motor vehicles was gradually raised.
In a writ petition, filed by the respondent, challenging the validity of the Amending Acts of 1963 and 1966, the High Court held that the Amending, Acts were made in respect of the matter contained in Entry 35 of the Concurrent List, namely principles of taxation of motor vehicles, and, as the provisions of the Amending Acts were inconsistent with those of the existing law, namely, the 1936 Act, the Amending Acts were ,void, because, the assent of the President as required by article 254 was not received.
In appeal to this Court, HELD : (i) Taxes on vehicles connote the liability to pay taxes at &he rates at which the taxes are to be levied, while, the expression "principles of taxation" denotes rules of guidance in the matter of taxation.
The Amending Acts do not come into conflict with the existing law in respect of any principles of taxation within the meaning of Entry 35 of the Concurrent List, but only deal with a subject matter , namely, taxes on vehicles within the meaning of Entry 57 of the State List, which is exclusively within the legislative competence of the State Legislature; and as such.
there is no scope for invoking article 254.
[615A C] (ii) It is only a comparatively small proportion of the general expenditure incurred on new roads and the maintenance of the ,)Id roads that was realised through the impugned taxation.
Therefore, the Amending Acts are only regulatory measures imposing compensatory taxes for faci litating trade, commerce and intercourse.
The Acts are, hence, not hit by article 301 of the Constitution.
[616C] The Automobile Transport (Raiasthan) Ltd. vs The State of Rajasthan, [1963] 1 S.C.R. 491, followed.
|
Appeal No. 1240 of 1993.
From the Judgment and Order dated 27.2.1992 of the Delhi High Court in C.W.P. No. 877 of 1991.
Arun Jaitley, Ms. Ayesha Khatri and Ms. Indu Malhotra (NP) for the Appellant.
P.P. Khurana and Arun K. Sinha for the Respondent.
The Judgment of the Court was delivered by VERMA, J.
The respondent, H.C. Khurana, was employed as Execu 1037 tive Engineer in the Delhi Development Authority (D.D.A.).
A preliminary memo was served on the respondent on 6.11.1985, alleging some irregularities by him in the construction works, and they were being investigated.
A chargesheet was framed on 11.7.1990 against the respondent on the basis of irregularities in the constructions made in a housing colony.
On 13.7.1990, the chargesheet was despatched for being served on the respondent.
However, the respondent proceeded on two months ' medical leave and, therefore, on 17.7.1990 another Executive Engineer R.K. Sood, working in the same Wing as the respondent, received it and gave the intimation that the respondent was on leave, adding that the same would be handed over to the respondent on his return from leave.
On 28.11.1990, the Departmental Promotion Committee (D.P.C.) met, and in view of the earlier decision to initiate disciplinary proceedings against the respondent, it followed the 'sealed cover procedure ' in the case of respondent.
It appears, that the effort to effect personal service of the chargesheet on the respondent on account of his non availability continued, and the same could be served personally on the respondent only on 25.1.1991.
As a result of the selection made by the D.P.C., certain persons were promoted to the post of Superintending Engineer, while the respondent 's matter was kept in obeyance to await the outcome of the disciplinary proceedings.
In these circumstances, the respondent filed Writ Petition No. 877 of 1991 in the Delhi High Court claiming a mandamus directing the D.D.A. to promote him as Superintending Engineer with effect from the date on which his juniors had been promoted to the post of Superintending Engineer, on the basis of selection made by the D.P.C.
The High Court has allowed that writ petition taking the view, that 'the framing of charge would carry with it the duty to issue and serve the same on the employee, there was no justification for the respondent to follow the sealed cover procedure in this case on 28.11.1991 when the Departmental Promotion Committee met ', since actual service of the chargesheet on the respondent was made only after the date on which the D.P.C. met.
According to the High Court, issuance of the chargesheet to the employee means its actual service on him, and this should be complete before following the sealed cover procedure.
The High Court has read Union of India and Others vs
K.V Jankiraman and Others, ; , to this effect, for taking the view, that on these facts, the disciplinary proceedings cannot be said to have been initiated prior to 29.11.1990, when the D.P.C. followed the sealed cover procedure.
Accordingly, the High Court has directed the D.D.A. to 1038 open the sealed cover; to promote the respondent as Superintending Engineer, if he has been otherwise found suitable by the D.P.C.; and, in that event, lo give him seniority with all consequential benefits from the date on which his juniors were so promoted.
The judgment of the High Court is challenged by special leave, in this appeal.
The short question for consideration, is: Whether, in the present case, the High Court has correctly applied the decision in Jankiraman? Learned counsel for the appellant contended that Jankiraman cannot be read to hold, in a case like the present, where the disciplinary proceedings had been initiated by framing the chargesheet and despatching the same, that the chargesheet had not been issued; and, therefore, the 'sealed cover procedure ' could not be followed by the D.P.C. on 28.11.1990.
On the other hand, learned counsel for the respondent strenuously urged that Jankiraman holds that without effective service of the chargesheet on the employee, the disciplinary proceedings cannot be said to have been initiated against him.
Learned counsel for the respondent referred to the Office Memorandum No. 22O `11/4/91 Estt.
(A) dated 14.9.1992 of the Department of Personnel & Training, Ministry of Personnel, Public Grievances and Pensions, Government of India, issued in supersession of the earlier.
Office Memorandum No. 220 11/2/86 Estt.
(A) dated 12.1.1988, consequent upon the judgment in Jankiraman, to support his submission that even though mere issuance or despatch of a chargesheet without the further requirement of its actual service on the employee would now be sufficient according to the O.M. dated 14.9.1992 for following the sealed cover procedure, yet the same was not sufficient earlier according to the O.M. dated 12.1.1988, which required actual service and not mere issuance of the chargesheet for initiating the disciplinary proceedings.
Admittedly, the guidelines in the O.M. dated 12.1.1988 were in force, in the present case.
The subject of the two memoranda, containing the guidelines, is the same, as under: "Promotion of Government servants against whom disciplinary/court proceedings are pending or whose Conduct is under investigation Procedure and guidelines to be followed" (emphasis supplied) 1039 Para 2 is the relevant portion in these memoranda.
In 0.M. dated 12.1.1988, para 2 is as under : "Cases of Government Servants, to whom Sealed Cover Procedure will be applicable.
2.At the time of consideration of the cases of Government servants for promotion, details of Government servants in the consideration zone for promotion falling under the following categories should be specifically brought to the notice of the Departmental Promotion Committee : (i) Government servants under suspension; (ii)Government servants in respect of whom disciplinary proceedings are pending or a decision has been taken to initiate disciplinary proceedings; (iii)Government servants in respect of whom prosecution for a criminal charge is pending or sanction for prosecution has been issued or a decision has been taken to accord sanction for prosecution.
(iv)Government servants against whom an investigation on serious allegations of corruption, bribery or similar grave misconduct is in progress either by the CBI.
or any other agency, departmental or otherwise." (emphasis supplied) The substituted clause (ii) in para 2, in O.M. dated 149.1992, is as under : "(ii) Government servants in respect of whom a Chargesheet has been issued and the disciplinary proceedings are pending; and" (emphasis supplied) It is the change made in clause (ii) of para 2 in the O.M. dated 14.9.1992, from which learned counsel for the respondent tried to find 1040 support for his submission.
Before we refer to Jankiraman, we may advert to clause (ii) of para 2 of O.M. dated 12.1.1988 which was the guideline applicable at the material time, in the present case, and is as under : "(a) Government servants in respect of whom disciplinary proceedings are pending or a decision has been taken to initiate disciplinary proceedings," (emphasis supplied) These words clearly indicate that the sealed cover procedure was applicable, in cases where the 'disciplinary proceedings are pending ' in respect of the government servant; or a decision has been taken to initiate disciplinary proceedings '.
Thus, on a decision being taken to initiate disciplinary proceedings, the guidelines attract the sealed cover procedure.
The reason is obvious.
Where a decision has been taken to initiate the disciplinary proceedings against a government servant, his promotion, even if he is found otherwise suitable, would be incongruous, because a government servant under such a cloud should not be promoted till he is cleared of the allegations against him, into which an inquiry has to be made according to the decision taken.
In such a situation, the correctness of the allegation being dependent on the final outcome of the disciplinary proceedings, it would not be fair to exclude him from consideration for promotion till conclusion of the disciplinary proceedings, even though it would be improper to promote him, if found otherwise suitable, unless exonerated.
To reconcile these conflicting interests, of the government servant and public administration, the only fair and just course is, to consider his case for promotion and to determine if he is otherwise suitable for promotion, and keep the result in abeyance in sealed cover to be implemented on conclusion of the disciplinary proceedings; and in case he is exonerated therein, to promote him with all consequential benefits, if found otherwise suitable by the Selection Committee.
On the other hand, giving him promotion after taking the decision to initiate disciplinary proceedings, would be incongruous and against public policy and principles of good administration.
This is the rationale behind the guideline to follow the sealed cover procedure in such cases, to prevent the possibility of any injustice or arbitrariness.
1041 The question now, is: What is the stage, when it can be said, that 'a decision has been taken to initiate disciplinary proceedings '? We have no doubt that the decision to initiate disciplinary proceedings cannot be subsequent to the issuance of the chargesheet, since issue of the chargesheet is a consequence of the decision to initiate disciplinary proceedings.
Framing the chargesheet, is the first step taken for holding the enquiry into the allegations, on the decision taken to initiate disciplinary proceedings.
The chargesheet is framed on the basis of the allegations made against the government servant; the chargesheet is then served on him to enable him to give his explanation; if the explanation is satisfactory, the proceedings are closed, otherwise, an enquiry is held into the charges , if the charges are not proved, the proceedings are closed and the government servant exonerated; but if the charges are proved, the penalty follows.
Thus, the service of the chargesheet on the government servant follows the decision to initiate disciplinary proceedings, and it does not precede or coincide with that decision.
The delay, if any, in service of the chargesheet to the government servant, after it has been framed and despatched, does not have the effect of delaying initiation of the disciplinary proceedings, inasmuch as information to the government servant of the charges framed against him, by service of the chargesheet, is not a part of the decision making process of the authorities for initiating the disciplinary proceedings.
This plain meaning of the expression used in clause (ii) of para 2 of O.M. dated 12.1.1988, also promotes the object of the provision.
The expression refers merely to the decision of the authority, and knowledge of the government servant, thereof, does not form a part of that decision.
The change made in clause (ii) of para 2 in O.M. dated 14.9.1992, merely clarifies this position by using the expression 'chargesheet has been issued ' to indicate that service of chargesheet is not necessary; and issue of the chargesheet by its despatch indicates beyond doubt that the decision to initiate disciplinary proceedings was taken.
In our opinion, Jankiraman takes the same view, and it is not possible to read that decision otherwise, in the manner suggested by learned counsel for the respondent.
The decision in Jankiraman is based, inter alia, on O.M. dated 12.1.1988.
The facts of the cases dealt with in the decision in Jankiraman do not indicate that the Court took the view, that even though the chargesheet against the government servant was framed and direction given to despatch the same to the government servant as a result of the decision to 1042 initiate disciplinary proceedings taken prior to the meeting of the D.P.C., that was not sufficient to attract the sealed cover procedure merely because service of the chargesheet was effected subsequent to the meeting of the D.P.C. Moreover, in Jankiraman itself, it was stated thus : "14.
To bring the record up to date, it may be pointed out that in view of the decision of this Court in Union of India vs Tejinder Singh, , decided on September 26, 1986, the Government of India in the Deptt.
of Personnel and Training issued another Office Memorandum No.22011/2/86.
(A) dated January 12, 1988 in supersession of all the earlier instructions on the subject including the Office Memorandum dated January 30,1982. .
A further guideline contained in this Memorandum is that the same sealed cover procedure is to be applied where a government servant is recommended for promotion by the DPC, but before he is actually promoted, he is either placed under suspension or disciplinary proceedings are taken against him or a decision has been taken to initiate the proceedings or criminal prosecution is launched or sanction for such prosecution has been issued or decision to accord such sanction is taken.
10.These differences in the two Memoranda have no bearing on the questions to be answered.
" (emphasis supplied) (PP.
117 118) Thereafter, in Jankiraman, the conclusions of the Full Bench of the Tribunal, under consideration, were quoted, and then while restating that the conclusions of the Tribunal could be reconciled, it was further stated, thus: '17.
There is no doubt that there is a seeming contradiction between the two conclusions.
But read harmoniously, and that is what the Full Bench has intended, the two conclusions can be reconciled with each other.
The conclusion No.1 should be read to mean that the promotion etc.
cannot be withheld merely because some disciplinary/criminal proceedings are pending against the employee.
To, deny the said benefit, they must be at the relevant time pending at the stage when charge memolcharge sheet has 1043 already been issued to the employee.
Thus read, there is no inconsistency in the two conclusions. ' (emphasis supplied) PP.
119) It will be seen that in Jankiraman also, emphasis is on the stage when a decision has been taken to initiate the disciplinary proceedings ' and it was further said that 'to deny the said benefit (of promotion), they must be at the relevant time pending at the stage when charge memo/charge sheet has already been issued to the employee '.
The word 'issued ' used in this context in Jankiraman it is urged by learned counsel for the respondent, means service on the employee.
We are unable to read Jankiraman in 'this manner.
The context in which the word 'issued ' has been used, merely means that the decision to initiate disciplinary proceedings is taken and translated into action by despatch of the chargesheet leaving no doubt that the decision had been taken.
The contrary view would defeat the object by enabling the government servant, if so inclined, to evade service and thereby frustrate the decision and get promotion in spite of that decision.
Obviously, the contrary view cannot be taken. 'Issue ' of the chargesheet in the context of a decision taken to initiate the disciplinary proceedings must mean, as it does, the framing of the chargesheet and taking of the necessary action to despatch the chargesheet to the employee to inform him of the charges framed against him requiring his explanation; and not also the further fact of service of the chargesheet on the employee.
It is so, because knowledge to the employee of the charges framed against him, on the basis of the decision taken to initiate disciplinary proceedings, does not form a part of the decision making process of the authorities to initiate the disciplinary proceedings, even if framing the charges forms a part of that process in certain situations.
The conclusions of the Tribunal quoted at the end of para 16 of the decision in Jankiraman which have been accepted thereafter in para 17 in the manner indicated above, do use the word 'served ' in conclusion No.(4), but the fact of 'issue ' of the chargesheet to the employee is emphasised in para 17 of the decision.
Conclusion No.(4) of the Tribunal has to be deemed to be accepted in Jankiraman only in this manner.
The meaning of the word 'issued ', on which considerable stress was laid by learned counsel for the respondent, has to be gathered from the 1044 context in which it is used.
Meanings of the 'word issue ' given in the Shorter Oxford English Dictionary include 'to give exit to; to send forth, or allow to pass out; to let out; . to give or send out authoritatively or officially; to send forth or deal out formally or publicly , to emit, put into circulation '.
The issue of a chargesheet, therefore, means its despatch to the government servant, and this act is complete the moment steps are taken for the purpose, by framing the chargesheet and despatching it to the government servant, the further fact of its actual service on the government servant not being a necessary part of its requirement.
This is the sense in which the word 'issue ' was used in the expression 'chargesheet has already been issued to the employee ', in para 17 of the decision in Jankiraman.
In view of the above, we are unable to accept the respondent 's contention, which found favour with the High Court, that the decision in Jankiramnan, on the facts in the present case, supports the view that the decision to initate the disciplinary proceedings had not been taken or the chargesheet had not been issued to the respondent prior to 28.11.1990, when the D.P.C. adopted the sealed cover procedure, merely because service of the chargesheet framed and issued earlier could be effected on the respondent after 28.11.1990, on account of his absence.
Consequently, the appeal is allowed and the judgment of the High Court is set aside, with the result that the writ petition of the respondent stands dismissed.
No costs.
N.V.K. Appeal allowed.
| The prosecution case was that about 20 22 days prior to the occurrence the appellant and his brother removed the fencing over the field of the deceased.
This resulted in a quarrel and created ill feelings between the deceased and the appellant and his brother.
On the date of occurrence, the deceased went to his field.
Later on his wife, P.W.1 and his son, PW2 went to the field carrying meals for the deceased.
The deceased took his meal and at about 12.30 p.m., all the.
three were returning to their village from the field, near at the water course of the village, the appellant, who was coming from the village side, gave a 'lalkara ' to the deceased and he fired a shot from his pistol at the deceased.
The appellant 's brother exhorted him to kill the deceased.
Thereupon the appellant fired three more shots from his pistol.
The deceased fell down and died at the spot.
PW1 accompanied by one Ganpatram went to police station and lodged the first information report at about 3 p.m. and the police investigation was commenced.
The appellant and his brother were sent up for trial, charging the former under section 302 IPC and the latter under section 302/114 IPC.
Both were also charged under section 27 of the Arms Act.
The Trial Court acquitted the appellant and his brother of all the 850 charges, as it found that the prosecution was unable to prove the case against them.
The State 's appeal was partly allowed by the High Court.
The High Court set aside the acquittal of the appellant and convicted him for an offence under section 302 IPC and sentenced him to undergo life imprisonment.
The High Court maintained the acquittal of the appellant 's brother.
Under section 2(a) of the Supreme Court (Enlargement of Appellate Jurisdiction) Act, 1970 the present appeal was riled, contending that the judgment of the Trial Court could neither be styled as perverse nor even as unreasonable and that there was no other substantial and compelling reasons which could justify the setting aside of the order of acquittal and, therefore, the High Court should not have interfered with the order of acquittal; that the presence of undigested food in the stomach of the deceased belied the prosecutions, case and that the Trial Court was right in holding that the deceased could not have taken the meals at the time stated by his wife PW1 and his son, PW2 or murdered at 12.30 p.m., as alleged; that the inordinate delay in sending the empty cartridges to the ballistic expert went to show that the possibility that the same had been substituted by the investigating agency could not be ruled out and therefore the conviction of the appellant by the High Court was not justified.
The State submitted that since it was an appeal under Section 2 of the Supreme Court (Enlargement of Appellate Jurisdiction) Act, 1970, this court could itself appreciate the evidence to determine the guilt or otherwise of the appellant; that the findings recorded by the Trial Court were based on surmises and conjectures and the High Court was perfectly justified in reversing the order of acquittal; that the evidence of PW1 and PW2 conclusively established that the crime had been committed by the appellant by his pistol and their testimony had received ample corroboration not only from the statement of the doctor, PW9, but also from the evidence of PW11l the ballistic expert, who had opined that the four empty cartridges had been fired from the licenced pistol of the appellant and could not have been fired from any other weapon; that being rustic villagers much importance could not be attached to the time given by PW1 and PW2 during their depositions about the exact time when the deceased may have had his meals and therefore it could not be said that the medical 851 evidence had in any way belied the prosecution case.
Dismissing the appeal, this Court, HELD: 1.01.
The process of digestion depends upon the digestive power of an individual and varies from in individual to an individual.
It also depends upon the type and amount of food taken.
The period of digestion is different for different types of food.
Some food articles like mutton, chicken etc.
would take more time for being digested as compared to vegetarian food.
No question at all were asked from the wife of the deceased about the type of food served by her to her husband or the amount of food taken by the deceased.
That apart, the time stated by the witnesses as to when the deceased took his food was only an approximate time as it was not even suggested to PW1 that she had a wrist watch and had actually seen the time when her husband took his food.
Too much play on such slippery factors goes against realism and is not enough to discredit the otherwise reliable testimony of PW1.
[856E F] 1.02.
The doctor opined that digestion begins in 1 or 1 1/2 hours.
From this testimony, what was sought to be made out by the defence was that had the occurrence taken place at 1230 noon, the deceased would have had his meals before 11.00 a.m. as semi digested food was found in the stomach of the deceased.
The emphasis on this aspect of the case by the Trial Court, is misplaced because the medical evidence is only an evidence of opinion and is hardly decisive.
[856 D] 1.03.
The evidence of both the witnesses PW1 and PW2, the widow and son of the deceased, shows that they are consistent in their versions not only about the assailants but also about the manner of assault.
Both the witnesses have given a vivid description of the occurrence.
The statement of PW1 that the deceased took his meals at about 1030 a.m. and that the occurrence had taken at about 12 1230 in the noon cannot be taken to have been contradicted by the medical evidence.
[856 B] 1.04.
The first information report was lodged by PW1 at 3.00 p.m. at a distance of about 13 miles from the place of occurrence and was therefore lodged with great promptitude and the entire version of the occurrence rinds mention in that report.
[857 B] 1.05.
The testimony of the PWs 1 and 2 has impressed the Court and 852 they appear to be truthful witnesses and being the close relations or the deceased would, in the ordinary course of things, be the last person to screen the actual offenders and implicate the appellants falsely.
Their testimony also receives ample corroboration from the medical evidence and the testimony of ballistic expert, PW11.
[857 B C] 1.06.
No suggestion even was made to anyone of the PWs.
6, 7, 8, 10, 12 that the sealed packets had allegedly been tampered with while in their custody.
No such suggestion was even made to PW6 that he had either substituted the carriages sent to the ballistic expert or otherwise tampered with the sealed packets.
There is no possibility of the substitution of the cartridges.
[859 F] 1.07.
Thus there are no suspicious features at all appearing in the evidence which may cast any doubt on the prosecution version that the deceased was shot at with the pistol by the appellant and that he died as a result of the injuries so received.
The prosecution had successfully established the case against the appellant beyond any reasonable doubt.
[858 H, 859 A]
|
DICTION: Writ Petition No. 626 of 1988 etc.
(Under Article 32 of the Constitution of India) G.Ramaswamy, Additional Solicitor General, section Murlidharan, A.D.N. A. Subba Rao and and Krishan Kumar for the Petitioners.
PG NO 520 Kuldip Singh, Additional Solicitor General, K.K. Venugopal, Kapil Sibbal, Lal Chand, C.S. Vaidyanathan, H,S. Phoolka, N.S. Das, Rajiv Khosla, P. Tripathi, Kailash Vasdev, Miss A. Subhashini, Harish Salve and Ravinder Sethi for the Respondents.
The following Order of the Court was delivered: ORDER VENKATARAMIAH, J.
It is unfortunate that this case has arisen between lawyers and police who are both guardians of law and who constitute two important segments of society on whom the stability of the country depends.
It is hoped that cordiality between the two sections will be restored soon.
In order to avoid any further delay in the proceedings before the Committee consisting of Goswamy and Wadhwa, JJ., constituted by Order dated 23rd February, 1988 to enquire into certain incidents which took place on the 15th January, 1988, 2lst January, 1988 and 17th February, 1988, we pass the following order now but we shall give detailed reasons in support of this order in due course.
The order is as under: 1.
This order is passed on the basis of the material available on record, the various steps already taken before the Committee and other peculiar features of the case.
The Delhi Administration has to examine first all its witnesses as required by Rule 5(5)(a) of the Commissions of Inquiry (Central) Rules, 1972 (hereinafter referred to as 'the Rules ') framed under the (hereinafter referred to as "the Act ').
Even those witnesses who may have filed affidavits already may first be examined in chief before they are cross examined, since it is stated that when the affidavits were filed the deponents did not know what the other parties who have also filed affidavits had stated in their affidavits.
The question whether a party has the right of cross examination or not shall be decided by the Committee in accordance with section 8 C of the Act.
In the facts and circumstances of the case to which reference will be made hereafter this direction issued to the Delhi Administration to examine its witnesses first as provided by rule 5(5)(a) of the Rules referred to above does not apply to those witnesses falling under section 8 B of the Act, who have to be examined at the end of the inquiry as opined by the Committee itself.
PG NO 521 3.
We have gone through the several,affidavits and other material placed before the Committee and also the Interim Report dated 9.4.88 passed by the Committee.
In para 13 of the Interim Report the Committee has observed thus: "During the course of the inquiry, we have to examine the conduct of various police officers and others and particularly, as the record .shows, of the D.C.P. (North), Addl.
D.C.P. (North), S.H.O., P.S. Samepur (Badli) and S.I. Incharge Police Post, Tis Hazari and S.I.,Samepur (Badli).
" In para 14 of the Interim report it is observed: "Lawyers have seriously urged that this Committee should send a report recommending suspension of the D.C.P. (North) Ms. Kiran Bedi" Ultimately the Committee recommended the transfer of the petitioners in these cases, namely, Ms. Kiran Bedi, D.C.P. (North) and Jinder Singh S.I. Incharge, 'Police Post, Tis Hazari.
Section 8 B of the Act reads : "8 B. If, at any stage of the inquiry, the Commission (a) considers it necessary to inquire into the conduct of any person ; or (b) is of opinion that the reputation of any person is likely to be prejudicial affected by the inquiry, the Commission shall give to that person a reasonable opportunity of being heard in the inquiry and to produce evidence in his defence : Provided that nothing in this section shall apply where the credit of a witness is being impeached." In its Interim Report the Committee has unequivocally observed that it had to examine the conduct of various police officers, and in particular among others Ms. Kiran Bedi, D.C.P. (North) and Jinder Singh , section I., Incharge Police Post, Tis Hazari.
PG NO 522 Having given our anxious consideration to all the aspects of the case we hold that the petitioners Ms. Kiran Bedi and Jinder Singh are persons who fall under section 8 B of the Act and have to be dealt with accordingly.
According to the Committee 's own opinion formed in the light of the facts and circumstances of the case, all those persons to whom notices under section 8 B of the Act are issued have to be examined at the end of the inquiry.
This is obvious from the order of the Committee passed on 29.6.88 after it was asked by this Court by its order dated June 2, 1988 to reconsider the whole question relating to the order in which the witnesses had to be examined in the case.
In its order dated 29.6.88 the Committee has observed thus: "Without going into the controversy if Rule 5(5) is an independent Rule or is governed by section 8 B and 8 C of the Act, we would direct that in the circumstances of the case three persons namely, the Additional Commissioner of Police (Special Branch), D.C.P. (Traffic) and Mr. Gopal Das Kalra, SI to whom notices under section 13 B of the Act have been issued be examined at the end of the inquiry.
" If three persons referred to above to whom notices under section 8 B have been issued are to be examined even according to the Committee at the end of the inquiry there is no justifiable reason to deny the same treatment to the petitioners Ms. Kiran Bedi and Jinder Singh who are in the same position as those three persons.
The action of the Committee in asking them to be cross examined at the beginning of the inquiry appears to us to be discriminatory.
Mere non issue of notices to them under section 8 B ought not to make any difference if they otherwise satisfy the conditions mentioned in section 8 B.
The issue of such a notice is not contemplated under section 8 B of the Act.
It is enough if at any stage the Commission considers it necessary to inquire into the conduct of any person.
Such person would thereafter be governed by section 8 B of the Act.
The Committee should have considered whether the petitioners were entitled to be treated as persons governed by section 8 B of the Act before asking them to get into the witness box for being cross examined.
If the Committee had found that the petitioners were covered under section 8 B then perhaps they would not have been asked to get into the witness box for being cross examined till the end of the inquiry.
The Committee would have then asked them to give PG NO 523 evidence along with others who were similarly placed at the end of the inquiry.
On behalf of both the petitioners it is submitted that they did not either wish to delay the proceedings or to show disrespect to the Committee but only wanted to protect their own interest by making the submission which they made before the Committee as per legal advice given to them.
This is not a case where the circumstances in which the several incidents that had taken place were not known to anybody else.
The affidavits and other material before the Committee show that there were a large number of persons who were eye witnesses to the incidents and why could give evidence before the Committee.
Taking into consideration all the aspects of the case we feel that the Committee should not have in the circumstances of the case directed the filing of a complaint against either of the petitioners for an offence punishable under section 178 I.P.C.
In view of the foregoing we feel that the orders of the Committee directing the filing of the complaints and the criminal proceedings initiated against the petitioners before the Metropolitan Magistrate pursuant to the complaints filed on behalf of the Committee should be quashed and we accordingly quash the said orders of the Committee and also the criminal proceedings.
A judgment containing the reasons for this order will follow.
Before concluding this order we record the statement made by Shri Kuldip Singh, learned Additional Solicitor General appearing for the Delhi Administration that the Delhi Administration and its police officers will fully cooperate with the Committee so that the Committee may complete its work as early as possible.
We also record the statement made by Shri G. Ramaswamy, learned Additional Solicitor General that he and his clients, the petitioners in this case hold the Committee in great respect and that they never intended to show any kind of discourtsey to the Committee.
He also expresses apology for using one or two strong words against the Committee in the course of the arguments in this Court.
| The mortgagee in possession leased out the shop to the appellant and delivered possession.
His entering of possession became a subject matter of dispute with respondent No. 2 in which the appellant was dispossessed.
In the proceedings initiated under section 145 Cr.
P.C. the,Magistrate found that the appellant was entitled to restoration of possession since he was dispossessed forcibly and wrongfully within the terms of proviso to section 145 (4) Cr.
The respondent filed a suit and obtained temporary injunction against the appellant.
That injunction was vacated by the Additional District Judge who found that the appellant was in possession of the shop on the date of occurrence of incident.
The respondents revision application challenging the final order under s,145(6) Cr.
P.C. was dismissed by the Sessions Judge.
Accepting respondents petition under section 482 Cr.
P.C., for quashing the proceedings under section 145 the High Court, following the judgment in Rum Sumer Puri Mahant vs Srate of U. P., , took the view that since the civil proceedings in respect of the disputed premises were pending before the competent civil court where interim reliefs have been prayed for and obtained, there was no justification for continuing the proceedings under section 145 Cr.
P.C. pending before the SDM.
Allowing the appeal by special leave, HELD: The High Court was in error in quashing the proceedings under section 145 Cr.
P.C. pending before the Sub Divisional Magistrate.
[589F, 587EF] An order made under section 145 Cr.
P.C. deals only with the factum of possession of the party as on a particular day.
It PG NO 584 PG NO 585 confers no title to remain in possession of the disputed property.
The order is subject to decision of the civil court.
The unsuccessful party therefore must get relief only in the civil court.
He may move the civil court with properly constituted suit.
He may file a suit for declaration and prove a better right to possession.
The civil court has jurisdiction to give a finding different from that which the Magistrate has reached.
[589D E] The ratio of the decision in Ram Sumer Puri Mahant vs State of U.P. is that a party should not be permitted to Litigate before the criminal court when the civil suit is pending in respect of the same subject matter.
That does not mean that a concluded order under section 145 Cr.
P.C. made by the Magistrate of competent jurisdiction, as in the instant case, should be set at naught merely because the unsuccessful party has approached the civil court.
[589C D]
|
ION: Civil Appeal No. 870 of 1986 From the Judgment and order dated 7.12.1985 of the Kerala High Court in W.A .
No. 483 of 1985.
F.S. Nariman, T.S. Krishnamurthy Iyer, K.J. John and M. Jha for the Appellants.
G. Viswanatha Iyer and Mrs. Baby Krishnan for Respondent Nos.
I to 3.
522 P.S. Poti, E.M.S. Anam and James Vincent for the Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The three child appellants, Bijoe.
Binu Mol and Bindu Emmanuel, are the faithful of Jehovah 's Witnesses.
They attend school.
Daily, during the morning Assembly, when the National Anthem 'Jana Gana Mana ' is sung, they stand respectfully but they do not sing.
They do not sing because, according to them, it is against the tenets of their religious faith not the words or the thoughts of the Anthem but the singing of it.
This they and before them their elder sisters who attended the same school earlier have done all these several years.
No one bothered, No one worried.
No one thought it disrespectful or unpatriotic.
The children were left in peace and to their beliefs.
That was until July, 1985, when some patriotic gentleman took notice.
The gentleman thought it was unpatriotic of the children not to sing the National Anthem.
He happened to be a Member of the Legislative Assembly.
So, he put a question in the Assembly.
A Commission was appointed to enquire and report.
We do not have the report of the Commission.
We are told that the Commission reported that the children are 'law abiding ' and that they showed no disrespect to the National Anthem.
Indeed it is nobody 's case.
that the children are other than well behaved or that they have ever behaved disrespectfully when the National Anthem was sung.
They have always stood up in respectful silence.
But these matters of conscience, which though better left alone, are sensitive and emotionally evocative.
So, under the instructions of Deputy Inspector of Schools, the Head Mistress expelled the children from the school from July 26, 1985.
The father of the children made representations requesting that his children may be permitted to attend the school pending orders from the Government.
The Head Mistress expressed her helplessness in the matter.
Finally the children filed a Writ Petition in the High Court seeking an order restraining the authorities from preventing them from attending School.
First a learned single judge and then a Division Bench rejected the prayer of the children.
They have now come before us by special leave under article 136 of the Constitution.
We are afraid the High court misdirected itself and went off at a tengent.
They considered, in minute detail, each and every word and thought of the National Anthem and concluded that there was no word 523 or thought in the National Anthem which could offend anyone 's religious susceptibilities.
But that is not the question at all.
The objection of the petitioners is not to the language or the sentiments of the National Anthem: they do not sing the National Anthem wherever, 'Jana Gana Mana ' in India, 'God save the Queen ' in Britain, the Star spangled banna in the United States and so on.
In their words in the Writ Petition they say, "The students who are Witnesses do not sing the Anthem though they stand up on such occasions to show their respect to the National Anthem.
They desist from actual singing only because of their honest belief and conviction that their religion does not permit them to join any rituals except it be in their prayers to Jehovah their God. " That the petitioners truly and conscientiously believe what they say is not in doubt.
They do not hold their beliefs idly and their conduct is not the outcome of any perversity.
The petitioners have not asserted these beliefs for the first time or out of any unpatriotic sentiment.
Jehovah 's Witnesses, as they call themselves, appear to have always expressed and stood up for such beliefs all the world over as we shall presently show.
Jehovah 's Witnesses and their peculiar beliefs though little noticed in this country, have been noticed, we find, in the Encyclopaedia Britannica and have been the subject of judicial pronouncements elsewhere.
In 'The New Encyclopaedia Britannica ' (Macropaedia) Vol.
10 page 538, after mentioning that Jehovah 's Witnesses are "the adherents of the apocalyptic sect organized by Charles Taze Russell in the early 1870", it is further mentioned, ".
They believe that the Watch Tower Bible and Tract Society, their legal agency and publishing arm, exemplifies the will of God and proclaims the truths of the Bible against the evil triumvirate of organized religion, the business world, and the state .
The Witnesses also stand apart from civil society, refusing to vote, run for public office, serve in any armed forces, salute the flag, stand for the National Anthem, or recite the pledge of allegiance.
Their religious stands have brought clashes with various governments, resulting in law suits, mob violence, imprisonment, torture, and death.
At one time more than 6,000 Witnesses were inmates of Nazi concentration camps, Communist and Fascist States usually forbid Watch Tower activities.
In the U.S. the society has taken 45 cases to the Supreme Court and has won significant victories for freedom of religion and speech.
The Witnesses have been less successful in claiming exemptions as ministers from military service 524 and in seeking to withhold blood transfusions from their children.
" Some of the beliefs held by Jehovah 's Witnesses are mentioned in a little detail in the statement of case in Adelaide Company of Jehovah 's Witnesses vs The Commonwealth, ; a case decided by the Australian High Court.
It is stated, "Jehovah 's Witnesses are an association of persons loosely organised throughout Australia and elsewhere who regard the literal interpretation of the Bible as Fundamental to proper religious beliefs." "Jehovah 's Witnesses believe that God, Jehovah, is the Supreme ruler of the universe.
Satan or Lucifer was originally part of God 's organization and the perfect man was placed under him.
He rebelled against God and set up his own organization in challenge to God and through that organization had ruled the world.
He rules and controls the world through material agencies such as organized political, religious, and financial bodies.
Christ, they believe, came to earth to redeem all men who would devote them selves entirely to serving God 's will and purpose and He will come to earth again (His second coming has already begun) and will over throw all the powers of evil." "These beliefs lead Jehovah 's Witnesses to proclaim and teach publicly both orally and by means of printed books and pamphlets that the British Empire and also other organized political bodies are organs of Satan, unrighteously governed and identifiable with the Beast in the thirteenth chapter of the Book of Revelation.
Also that Jehovah 's Witnesses are Christians entirely devoted to the Kingdom of God, which is "The Theocracy" that they have no part in the political affairs of the world and must not interfere in the least manner with war between nations.
They must be entirely neutral and not interfere with the drafting of men of nations they go to war.
And also that wherever there is a conflict between the laws of Almighty God and the Laws of man the Christian must always obey God 's law in preference to man 's law.
All laws of men, however, in harmony with God 's law the Christian obeys.
God 's law is expounded and taught by Jehovah 's Witnes 525 ses.
Accordingly they refuse to take an oath of allegiance to the King or other constituted human authority.
" The case of Adelaide Company of Jehovah 's Witnesses vs The Commonwealth (supra) arose out of an action to restrain the Commonwealth of Australia from enforcing the National Security (Subversive Associations) Regulations to the Jehovah 's Witnesses.
Minersville School District vs Gobitis, 84 Law.
US 1375 and West Virginia State Board of Education vs Barnette, ; are two cases decided by the American Supreme Court in which Jehovah 's witnesses claimed that they could not be compelled to salute the flag of the United States while reciting pledge of allegiance.
In the latter case, Jackson, J. referred to the particular belief of the Witnesses which was the subject matter of that case, as follows: "The Witnesses are an unincorporated body teaching that the obligation imposed by law of God is superior to that of laws enacted by temporal government.
Their religious beliefs include a literal version of Exodus, Chapter XX, verses 4 and 5, which says "Thou shall not make upto the any graven image, or any likeness of anything that is in heaven above, or that is in the earth beneath, or that is in the water under the earth; thou shalt not bow down thyself to them, nor serve them.
" They consider that the flag is an "image" within this command.
For this reason they refuse to salute Donald vs The Board of Education for the City Hamilton 1945 Ontario Reports 518 is a case decided by the Court of Appeals of Ontario where the objection by Jehovah 's Witnesses was to saluting the flag and singing National Anthem.
The Court referred to the following belief of the Jehovah 's Witnesses: "The appellants, father and sons, are affiliated with "Jehovah 's Witnesses" and believe that saluting the flag and joining in the singing of the national anthem are both contrary to and forbidden by command of Scripture the former because they consider the flag an "image" within the literal meaning of Exodus, Chapter XX verses 4 and 5, and the latter because, while they respect the King and the State, the prayer voiced in this anthem is not compatible 526 with the belief and hope which they hold in the early coming of the new world, in the government of which present temporal states can have no part." Sheldon vs Fannin, 221 Federal Supp.
766 a case decided by the United States District Court of Arizona also arose out of the refusal of Jehovah 's Witnesses to stand when the National Anthem was sung.
The Court observed: "This refusal to participate, even to the extent of standing, without singing, is said to have been dictated by their religious beliefs as Jehovah 's Witnesses, requiring their literal acceptance of the Bible as they Word of Almighty God Jehovah.
Both precedent and authority for their refusal to stand is claimed to be found in the refusal of three Hebrew children Shadrach, Meshach and Abednege, to bow down at the sound of musical instruments playing patriotic religious music throughout the land at the order of King Nebuchadnezzar of ancient Babylon. (Daniel 3: 1328) For a similar reason, members of the Jehovah 's Witnesses sect refuse to recite this Pledge of Allegiance to the Flag of the United States viewing this patriotic ceremony to be the worship of a graven image.
(Exodus 20: 4 5).
However, by some process of reasoning we need not tarry to explore, they are willing to stand during the Pledge of Allegiance, out of respect for the Flag as a symbol of the religious freedom they enjoy (See Board of Education vs Barnette, ; (1943).
" It is evident that Jehovah 's Witnesses, wherever they are, do hold religious beliefs which may appear strange or even bizarre to us, but the sincerity of their beliefs is beyond question.
Are they entitled to be protected by the Constitution? Article 19(1)(a) of the Constitution guarantees to all citizens freedom of speech and expression, but Article 19(2) provides that nothing in article 19(1)(a) shall prevent a 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.
article 25(1) guarantees to all persons freedom of conscience and the 527 right freely to profess, practise and propogate religion, subject to order, morality and health and to the other provisions of Part III of the Constitution.
Now, we have to examine whether the ban imposed by the Kerala education authorities against silence when the National Anthem is sung on pain of expulsion from the school is consistent with the rights guaranteed by articles 19(1)(a) and 25 of the Constitution.
We may at once say that there is no provisions of law which obliges anyone to sing the National Anthem nor do we think that it is disrespectful to the National Anthem if a person who stands up respectfully when the National Anthem is sung does not join the singing.
It is true article 51 A(a) of the Constitution enjoins a duty on every citizen of India "to abide by the Constitution and respect its ideals and institutions, the National Flag and the National Anthem.
" Proper respect is shown to the National Anthem by standing up when the National Anthem is sung.
It will not be right to say that disrespect is shown by not joining in the singing.
Parliament has not been unmindful of 'National Honour '.
The Prevention of Insults to National Honour Act was enacted in 1971.
While section 2 deals with insult to the Indian National Flag and the Constitution of India, section 3 deals with the National Anthem and enacts, "Whoever, intentionally prevents the singing of the National Anthem or causes disturbance to any assembly engaged in such singing shall be punished with imprisonment for a term which extend to three years or with find, or with both." Standing up respectfully when the National Anthem is sung but not singing oneself clearly does not either prevent the singing of the National Anthem or cause disturbance to an assembly engaged in such singing so as to constitute the offence mentioned in section 3 of the Prevention of Insults to National Honour Act.
The Kerala Education Act contains no provision of relevance.
Section 36, however, enables the Government to make rules for the purpose of carrying into effect the provisions of the Act and in particular to provide for standards of education and courses of study.
The Kerala Education Rules have been made pursuant to the powers conferred by the Act.
Chapter VIII of the Rules provides for the organisation of instruction and progress of pupils.
Rule 8 of Chapter VIII 528 provides for moral instruction and expressly says "Moral instruction should form a definite programme in every school but it should in no way wound the social or religious susceptibilities of the peoples generally.
" The rule goes on to say that 'the components of a high character ' should be impressed upon the pupils.
One of the components is stated to be 'love of one 's country '.
Chapter IX deals with discipline.
Rule 6 of Chapter IX provides for the censure, suspension or dismissal of a pupil found guility of deliberate in subordination, mischief, fraud, mal practice in examinations, conduct likely to cause unwholesome influence on other pupils etc.
It is not suggested that the present appellants have ever been found guility of misconduct such as that described in Chapter IX, Rule 6.
On the other hand, the report of the Commission, we are told, is to the effect that the children have always been well behaved, law abiding and respectful.
The Kerala Education Authorities rely upon two circulars of September 1961 and February 1970 issued by the Director of Public Instruction, Kerala.
The first of these circulars is said to be a Code of Conduct for Teachers and pupils and stresses the importance of moral and spiritual values.
Several generalisations have been made and under the head patriotism it is mentioned, "Patriotism 1.
Environment should be created in the school to develop the right kind of patriotisms in the children.
Neither religion nor party nor anything of this kind should stand against one 's love of the country.
For national integration, the basis must be the school.
National Anthem.
As a rule, the whole school should participate in the singing of the National Anthem.
" In the second circular also instructions of a general nature are given and para 2 of the circular, with which we are concerned, is as follows: "It is compulsory that all schools shall have the morning Assembly every day before actual instruction begins.
The whole school with all the pupils and teachers shall be gathered for the Assembly.
After the singing of the National Anthem the whole school shall, in one voice, take 529 the National Pledge before marching back to the classes.
" Apart from the fact that the circulars have no legal sanction behind them in the sense that they are not issued under the authority of any statute, we also notice that the circulars do not oblige each and every pupil to join in the singing even if he has any conscientious objection based on his religious faith, nor is any penalty attached to not joining the singing.
On the other hand, one of the circulars (the first one) very rightly emphasise the importance of religious tolerance.
It is said there, "All religions should be equally respected.
" If the two circulars are to be so interpreted as to compel each and every pupil to join in the singing of the National Anthem despite his genuine, conscientious religious objection, then such compulsion would clearly contavene the rights guaranteed by article 19(1)(a) and article 25(1).
We have referred to article 19(1)(a) which guarantees to all citizens freedom of speech and expression and to article 19(2) which provides that nothing in article 19(1)(a) shall prevent a State from making any law, in so far as such law impose reasonable restrictions on the exercise of the right conferred by article 19(1)(a) 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 law is now well settled that any law which may be made under clauses (2) to (6) of article 19 to regulate the exercise of the right to the freedoms guaranteed by article 19(1)(a) to (e) and (g) must be 'a law ' having statutory force and not a mere executive or departmental instruction.
In Kharak Singh vs State of U.P., ; the question arose whether a police regulation which was a mere departmental instruction, having no statutory basis could be said to be a law for the purpose of article 19(2) to (6).
The Constitution Bench answered the question in the negative and said, "Though learned Counsel for the respondent started by attempting such a justification by invoking section 12 of the Indian Police Act he gave this up and conceded that the regulations contained in Ch.
XX had no such statutory basis but were merely executive or departmental instructions framed for the guidance of the police officers.
They would not therefore be "a law" which the State is entitled 530 to make under the relevant cls.
(2) to (6) of article 19 in order to regulate or curtail fundamental rights guaranteed by the several sub clauses of article 19(1), not would the same be "a procedure established by law" within article 21.
The position therefore is that if the action of the police which is the arm of the executive of the State is found to infringe any of the freedoms guaranteed to the petitioner the petitioner would be entitled to the relief of mandamus which he seeks, to restrain the State from taking action under the regulations.
" The two circulars on which the department has placed reliance in the present case have no statutory basis and are mere departmental instructions.
They cannot, therefore, form the foundation of any action aimed at denying to citizen 's Fundamental Right under article 19(1)(a).
Further it is not possible to hold that the two circulars were issued 'in the interest of the sovereignty and integrity of India, the security of the State, friendly relation with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence ' and if not so issued, they cannot again be invoked to deny a citizen 's Fundamental Right under article 19(1)(a).
In Kameshwar Prasad vs The State of Bihar, [1962] SUPP.
SCR 369 a Constitution Bench of the court had to consider the validity of Rule 4A of the Bihar Government Servants ' Conduct Rules which prohibited any form of demonstration even if such demonstration was innocent and incapable of causing a breach of public tranquility.
The court said, "No doubt, if the rule were so framed as to single out those types of demonstration which were likely to lead to a disturbance of public tranquility or which would fall under the other limiting criteria specified in article 19(2) the validity of the rule could have been sustained.
The vice of the rule, in our opinion, consists in this that it lays a ban on every type of demonstration be the same however innocent and however incapable of causing a breach of public tranquility and does not confine itself to those forms of demonstrations which might lead to that result.
" Examining the action of the Education Authorities in the light of Kharak Singh vs State of Uttar Pradesh (supra) and Kameshwar Pradesh vs State of Bihar (supra) we have no option but to hold that the expulsion of the children from the school not joining the singing of 531 the National Anthem though they respectfully stood up in silence when the Anthem was sung was violative of article s19(1)(a).
Turning next to the Fundamental Right guaranteed by article 25, we may usefully set out here that article to the extent relevant: "25(1) Subject to public order, morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practise and propagate religion.
(2) Nothing in this article shall affect the operation of any existing law or prevent the State from making any law (a) regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice; (b) providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus." (Explanations I and II not extracted as unnecessary) Article 25 is an article of faith in the Constitution, incorporated in recognition of the principle that the real test of a true democracy is the ability of even an insignificant minority to find its identity under the country 's Constitution.
This has to be borne in mind in interpreting article 25.
We see that the right to freedom of conscience and freely to profess, practise and propagate religion guaranteed by article 25 is subject to (1) public order, morality and health; (2) other provisions of Part III of the Constitution; (3) any law (a) regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice; or (b) providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus.
Thus while on the one hand, article 25(1) itself expressly subjects the right guaranteed by it to public order, morality and health and to the other provisions of Part III, on the other hand, the State is also given the liberty to make a law to regulate or restrict any economic, financial, political or other secular activity which may be associated with religious practise and to provide for social welfare and reform, even if such regulation, restriction or provision affects the right guaranteed by article 25(1).
Therefore, 532 whenever the Fundamental Right to freedom of conscience and to profess, practise and propagate religion is invoked, the act complained of as offending the Fundamental Right must be examined to discover whether such act is to protect public order, morality and health, whether it is to give effect to the other provisions of Part III of the Constitution or whether it is authorised by a law made to regulate or restrict any economic, financial, political or secular activity which may be associated with religious practice or to provide for social welfare and reform.
It is the duty and function of the Court so to do.
Here again as mentioned in connection with article 19(2) to (6), it must be a law having the force of a statute and not a mere executive or a departmental instruction.
We may refer here to the observations of Latham, CJ.
in Adelaide Company of Jehovah 's Witnesses vs The Commonwealth (supra), a decision of the Australian High Court quoted by Mukherje, J. in the Shrirur Mutt case.
Latham, CJ.
had said: "The Constitution protects religion within a community organized under a Constitution, so that the continuance of such protection necessarily assumes the continuance of the community so organized.
This view makes it possible to reconcile religious freedom with ordered government.
It does not mean that the mere fact that the Commonwealth Parliament passes a law in the belief that it will promote the peace, order and good government of Australia precludes any consideration by a court of the question whether or not such a law infringes religious freedom.
The final determination of that question by Parliament would remove all reality from the Constitutional guarantee.
That guarantee is intended to limit the sphere of action of the legislature.
The interpretation and application of the guarantee cannot, under our Constitution, be left to Parliament, If the guarantee is to have any real significance it must be left to the courts of justice to determine its meaning and to give effect to it by declaring the invalidity of laws which infringes it and by declining to enforce them.
The courts will therefore have the responsibility of determining whether a particular law can fairly be regarded, as a law to protect the existence of the community, or whether, on the other hand, it is a law "for prohibiting the free exercise of any religion.
" The word "for" shows that the purpose of the legislation in question may properly be taken into account in determining whether or not it is a law of the prohibited character.
" 533 What Latham, CJ.
has said about the responsibility of the court accords with what we have said about the function of the court when a claim to the Fundamental Right guaranteed by article 25 is put forward.
The meaning of the expression 'Religion ' in the context of the Fundamental Right to freedom of conscience and the right to profess, practice and propagate religion, guaranteed by article 25 of the Constitution, has been explained in the well known cases of The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, ; Rati Lal Panachand Gandhi vs The State of Bombay & Ors., [1954] SCR 1055 and section P. Mittal Etc.
vs Union of India & Ors, ; It is not necessary for our present purpose to refer to the exposition contained in these judgments except to say that in the first of these cases Mukherjea, J. made a reference to "Jehova 's Witnesses" and appeared to quote with approval the views of Latham, CJ., of the Australian High Court in Adelaide Company vs The Commonwealth (supra) and those of the American Supreme Court in West Virginia State Board of Education vs Barnettee (supra).
In Ratilal 's case we also notice that Mukherjea, J. quoted as appropriate Davar, J. 's following observations In Jarnshedji vs Soonabai, 23 Bomaby ILR 122: "If this is the belief of the Community and it is proved undoubtedly to be the belief of the Zoroastrian community, a secular Judge is bound to accept that belief it is not for him to sit in judgement on that belief, he has no right to interfere with the conscience of a doner who makes a gift in favour of what he believes to be the advancement of his religion and the welfare of his community or mankind.
" We do endorse the view suggested by Davar J 's observation that the question is not whether a particular religious belief or practice appeals to our reason or sentiment but whether the belief is genuinely and conscientiously held as part of the profession or practice of religion.
Our personal views and reactions are irrelevant.
If the belief is genuinely and conscientiously held it attracts the protection of article 25 but subject, of course, to the inhibitions contained therein.
In Minersville School Dist.
vs Gobitis (supra) the question arose whether the requirement of participation by pupils and public schools in the ceremony of saluting the national flag did not infringe the liberty guaranteed by the 14th amendment, in the case of a pupil who re 534 fused to participate upon sincere religious grounds.
Frankfurter, J. great exponent of the theory of judicial restrain that he was speaking for the majority of the United States Supreme Court upheld the requirement regarding participation in the ceremony of flag salutation primarily on the ground, "The wisdom of training children in patriotic impulses by those compulsions which necessarily prevade so much of the educational process is not for our independent judgment . .
For ourselves, we might be tempted to say that the deepest patriotism is best engendered by giving unfettered scope to the most crochety beliefs.
But the courtroom is not the arena for debating issues of educational policy.
It is not our province to choose among competing considerations in the subtle process of securing effective loyalty to the traditional ideals of democracy, while respecting at the same time individual idiosyncracics among a people so diversified in racial origins and religious allegiances so to hold would in effect make us the school board for the country.
That authority has not been giving to this Court.
not should we assume it.
" Frankfurter, J 's view, it is seen, was founded entirely upon his conception of judicial restraint.
In that very case Justice Stone dissented and said, "It (the Government) may suppress religious practices dangerous to morals, and presumably those also which are inimical to public safety, health and good order.
But it is a long step, and one which I am unable to take, to the position that Government may, as a supposed, educational measure and as a means of disciplining young, compel affirmations which violate their religious conscience.
" Stone, J. further observed: "The very essence of the liberty which they guaranteed is the freedom of the individual from compulsion as to what he shall think and what he shall say, at least where the compulsion is to bear false witness to his religion" 535 It was further added: "History teaches us that there have been but few infringements of personal liberty by the State which have not been justified, as they are here, in the name of righteousness and the public good, and few which have not been directed, as they are now, had politically helpless manners.
" We do not think that it is necessary to consider the case of Gobitis at greater length as the decision was overruled very shortly after it was pronounced by the same ' court in West Virginia State Board of Education vs Barnette (supra).
Justices Black and Douglas who had agreed with Justice Frankfurter in the Gobitis 's case retraced their steps and agreed with Justice Jackson who gave the opinion of the court in West Virginia State Board of Education vs Barnette (supra).
Justice Jackson in the course of his opinion observed, It is also to be noted that the compulsory flag salute and pledge requires affirmation of a belief and an attitude of mind.
It is not clear whether the regulation contemplates that pupils forego any contrary convictions of their own and become unwilling converts to the prescribed ceremony or whether it will be acceptable if they simulate assent by words without belief and by a gesture barran of meaning.
It is now a commonplace that censorship or suppression of expression of opinion is tolerated by our Constitution only when the expression presents a dear and present danger of action of a kind the State is empowered to prevent and punish.
It would seem that involuntary affirmation could be commanded only on even more immediate and urgent grounds than silence.
But here the power of compulsion is invoked without any allegation that remaining passive during a flag salute ritual creates a clear and present danger that would justify an effort even to muffle expression.
To sustain the compulsory flag salute we are required to say that a Bill of Rights which guards the individual 's right to speak his own mind, left it open to public authorities to compel him to utter what is not in his mind." Justice Jackson referred to Lincoln 's famour dilemma 'must a government of necessity be too strong for the liberties of its people, or too weak to maintain its own existence ' and added, 536 "It may be doubted whether Mr. Lincoln would have thought that the strength of government to maintain itself would be impressively vindicated by our confirming power of the state to expel a handful of children from school.
Such over simplification, so handy in political debate, often lacks the precision necessary to postulates of judicial reasoning.
If validly applied to this problem, the utterance cited would resolve every issue of power in favour of those in authority and would require us to override every liberty thought to weaken or delay execution of their policies.
Government of limited power need not be anemic government.
Assurance that rights are secure tends to diminish fear and jealousy of strong government, and by making us feel safe to live under it makes for its better support.
Without promise of a limiting Bill of Rights it is doubtful if our Constitution could have mustered enough strength to enable its ratification.
to enforce those rights today is not to choose weak government over strong government.
It is only to adhre as a means of strength to individual freedom of mind in preference to officially disciplined uniformity for which history indicates a disappointing and disastrous end.
" Dealing with the argument that any interference with the authority of the school Board would in effect make the court the School Board for the country as suggested by Justice Frankfurter, Justice Jackson said, "There are village tyrants as well as village Hampdens, but none who acts under color of law is beyond reach of the Constitution .
We cannot, because of modest estimates of our competence in such specialities as public education, withhold the judgment that history authenticates as the function of this court when liberty is infringed." Justice Jackson ended his opinion with the statement "If there is any fixed star in our Constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion or force citizens to confess by word or act their faith therein.
If there are any circumstances which permit an exception, they do not now occur to us.
537 We think the action of the local authorities in compelling the flag salute and pledge transcends constitutional limitations on their power and invades the sphere of intellect and spirit which it is the purpose of the First Amendment to our Constitution to reserve from all official control.
" Sheldon vs Fannin (supra) was a case where the pupils refused even to stand when the National Anthem was sung.
We do not have to consider that situation in the present case since it is the case of the appellants and it is not disputed that they have always stood up and they will always stand up respectfully when the National Anthem is sung.
Donald vs Hamilton Board Education (supra) was again a case of objection by Jehovah 's witnesses to flag salutation and singing the national anthem.
Gillanders, J.A., said: "There is no doubt that the teachers and the school board, in the case now being considered, in good faith prescribed the ceremony of the flag salute only with the thought of inculcating respect for the flag and the Empire or Commonwealth of Nations which events of recent years have given more abundant reason than ever before to love and respect.
If I were permitted to be guided by my personal views, I would find it difficult to understand how any well disposed person could offer objection to joining in such a salute on religious or other grounds.
To me, a command to join the flag salute or the singing of the national anthem would be a command not to join in any enforced religious exercise, but, viewed in proper perspective, to join in an act of respect for a contrary principle, that is, to pay respect to a nation and country which stands for religious freedom, and the principle that people may worship as they please, or not at all." "But, in considering whether or not such exercises may or should, in this case, be considered, as having devotional or religious significance, it would be misleading to proceed on any personal views on what such exercises might include or exclude." After referring to Jackson, J 's opinion in West Virginia State Board of Education vs Barnette (supra) and some other cases, it was further observed, 538 "For the Court to take to itself the right to say that the exercises here in question had no religious or devotional significance might well be for the Court to deny that very religious freedom which the statute is intended to provide. " "It is urged that the refusal of the infant appellants to join in the exercises in question is disturbing and constitutes conduct injurious to the moral tone of the school.
It is not claimed that the appellants themselves engaged in any alleged religious ceremonies or observations, but only that they refrained from joining in the exercises in question . . .
To do just that could not, I think be viewed as conduct injurious to the moral tone of the school or class.
" We are satisfied, in the present case, that the expulsion of the three children from the school for the reason that because of their conscientiously held religious faith, they do not join the singing of the national anthem in the morning assembly though they do stand up respectfully when the anthem is sung, is a violation of their fundamental right to freedom of conscience and freely to profess, practice and propagate religion.
Shri Vishwa Nath Iyer and Shri Potti, who appeared for the respondents suggested that the appellants, who belonged but to a religious denomination could not claim the Fundamental Right guaranteed by article 25(1) of the Constitution.
They purpored to rely upon a sentence in the judgment of this court in Jagdishwaranand vs Police Commissioner, Calcutta, AIR 1984 SC 51.
The question in that case was whether the Ananda Margis had a fundamental right within the meaning of article 25 or Art 26 to perform Tandava dance in public streets and public places.
The Court found that Anand Marga was a Hindu religious denomination and not a separate religion.
The court examined the question whether the Tandava dance was a religious rite or practise essential to the tenets of the Ananda Marga and found that it was not.
On that finding the court concluded that the Ananda Marga had no fundamental right to perform Tandava dance in public streets and public places.
In course of the discussion, at one place, there is found the following sentence: "Mr. Tarkunde, Counsel for the petitioner had claimed 539 protection of article 25 of the Constitution, but in view of our finding that Ananda Marga was not a separate religion.
application of article 25 is not attracted.
" This sentence appears to have crept into the judgment by some slip.
lt is not a sequitur to the reasoning of the court on any of the issues.
In fact, in the subsequent paragraphs, the court has expressly proceeded to consider the claim of the Ananda Marga to perform Tandava dance in public streets pursuant to the right claimed by them under article 25(1).
We, therefore, find that the Fundamental Rights of the appellants under article 19(1)(a) and 25(1) have been infringed and they are entitled to be protected.
We allow the appeal, set aside the judgment of the High Court and direct the respondent authorities to re admit the children into the school, to permit them to pursue their studies without hindrance and to facilitate the pursuit of their studies by giving them the necessary facilities.
We only wish to add: our tradition teaches tolerance; our philosophy preaches tolerance; our constitution practices tolerance; let us not dilute it.
The appellants are entitled to their costs.
M.L.A. Appeal allowed.
| By a Deed of Trust dated May 10, 1950, the Nizam of Hyderabad created a Family Trust.
A corpus of nine crores in Government securities was transferred lo the trustees under that Deed, which was notionally divided into 175 equal units, 5 units to constitute a fund called the 'Reserve Fund ', 31/2 units to constitute the 'Family Trust Expenses Account ' and the remaining 116 1/2 units were allotted to the relatives mentioned in the Schedule in the manner provided therein.
The Trust Deed provided: (1) that the income or corpus of the Reserve Fund shall be applied for any special, unusual, unforeseen or emergency expenses for the benefit of the members of the settlor 's family specified in the Schedule; (2) that if there was a deficit in the Family Trust Expenses Account, a definite proportion of the income or corpus of the Preserve Fund had to be transferred to the Family Trust Expenses Account; (3) that the net income of the Family Trust Expenses Account shall be applied to the charges for the collection of the income of the Trust Fund and the remuneration of the trustees and of the members of the Committee of Management and to other costs, charges, expenses and outgoings relating to the members, (4) that on the death of any of the settlor 's, relatives, a proportionate share of the corpus of the Reserve Fund must be added to the unit or units of the corpus of the Trust Fund allocated to such member, and the amounts so amalgama ted are to be applied in accordance with the terms of the trust deed; and (5) that the corpus of the Family Trust Expenses Account has to be ultimately handed over to the Settlor 's successor to the dignity of Nizam and falling him to his eldest male descendant in the direct male line of succession in accordance with the rule of primogeniture.
974 The income of the two Funds were separately assessed for the assessment years 1960 61 and 1961 62.
Subsequently, the Income tax officer, being of opinion that there was only one settlement under the Trust Deed, reopened the assessments for the assessment years 1960 61 and 1961 62 under clause(a) of section 147 of the Income Tax Act, 1961 and assessed the trustees for each of the assessment years on the combined income of the Reserve Fund and the Family Trust Expenses Account.
Following the same line, separate original assessments for the assessment years 1962 63 to 1965 66 were also made.
On appeal by the asses see, the Appellate Assistant Commissioner cancelled the assessments for all the years.
The Income Tax Appellate Tribunal and the High Court confirmed the order of the Appellate Assistant Commissioner.
In the appeals by the Revenue to this Court, on the question whether the incomes arising from the Reserve Fund and the Expenses Account of the Nizam 's Family Trust Deed can be aggregated in a single assessment for each of the assessment years 1960 61 to 1965 66. ^ HELD: 1.
The High Court was right that the Settlor intended to create separate Trusts in respect of the Reserve Fund and the Family Trust Expenses Account, and that the respective incomes arising from the corpus of those Trusts cannot be aggregated in one single assessment but must be assessed separately.
[979A B] 2.
It is open to a Settlor to constitute two or more distinct trusts by a single document.
[978C] In the instant case, there is no doubt that separate funds were created, even though the division of the original Trust Fund may have been notional.
The objects for which the trustees held the Reserve Fund and the Family Trust Expenses Account are clearly demarcated and there is no overlapping or duplication.
There is also no intermingling of the Funds.
The transfer of a portion from one to the other cannot lead to a confusion in the separate identity of the two Trusts.
[978B E] 3.
Although the corpus of the Trust Fund vested in the same trustees, the trustees nonetheless held distinct and severable portions of the corpus of the Trust Fund under those separate trusts.
That this construction of the document accords with the intention of the Settlor is borne out by the provisions of sub clause (4) of clause 3 of the Trust Deed, which specifically provides that on the death of the Settlor the corpus of the Trust Fund was to be divided or to be created as notionally 975 divided into the 175 equal units mentioned therein for being allocated to the Settlor 's relatives specified in the Schedule.
[977G H; 978A B]
|
: Criminal Appeal No. 208 of 1966.
Appeal by special leave from the judgment and order dated February 22, 1966 of the Patna High Court in Criminal Appeal No. 530 of 1962 and Government Appeal No. 44 of 1962.
A. S.R. Chari, M.K. Ramamurthi, G. Ramamurthy and Vineet Kumar, for the appellant.
B.P. Jha, for the respondent.
695 The Judgment of the Court was 'delivered by Sikri, J.
Fourteen persons were tried by the learned Second Additional Sessions Judge, Bhagalpur, on various charges.
Out of these 14 persons Sheo Prasad Sharma and Ram Prasad Sharma were charged under section 302, i.
P.C. Sheo Prasad Sharma was charged under section 302 for having intentionally caused the death of Qudrat Mian by shooting him down with his gun whereas Ram Prasad Sharma was charged under this section for having shot down with his gun Kaleshwar Yadav and thus having caused the murder of this person.
The Second Additional Sessions Judge, Bhagalpur, convicted Sheo Prasad Sharma under sections 304, 324/34, 201 and 148 and sentenced him to seven years rigorous imprisonment.
The appellant, Ram Prasad Sharma was convicted under sections 326/149, 324/ 34, 201 and 148,/.P.C. and sentenced to four years rigorous imprisonment.
Seven other accused were also convicted but it is not necessary to mention the sections under which they were convicted.
Five of the accused persons were acquitted by the learned Second Additional Sessions Judge.
Two appeals were filed before the High Court, one by the State and the other by the nine convicted persons, including Ram Prasad Sharma.
Both the appeals were heard together.
The High Court accepted the appeal of the State as far as Ram Prasad Sharma was concerned and convicted him under section 304, I.P.C., in connection with the shooting and causing the death of Kaleshwar and sentenced him to rigorous imprisonment for seven years.
The convictions of seven others were altered from under sections 326/149 to one under sections 304/149 but the sentence of four years rigorous imprisonment was maintained.
In other respects the convictions were maintained.
The High Court, however, quashed the convictions under section 201, I.P.C. The nine convicted persons filed petition for special leave to appeal.
This Court by its order dated October 4, 1966 rejected the petition except as regards Ram Prasad Sharma and his appeal is now before us.
The prosecution case as accepted by the High Court was, in brief, as follows.
On August 15, 1960, at about 1.30 or 2 p.m., by the side of a Danr (water channel) known as Chaksafia Danr at village Bindi about five miles away from.
Police Station Banka, a serious occurrence took place.
The Chaksafia Danr runs between village Bindi which is to its east and Banki which is to its west and then goes further north to village Bhadrar and other villages.
Lands of several villages, namely, Bhadrar, Nayadih, Uprama, Basuara, Jitnagar, Majhiara, Banki, etc.
are irrigated from the water of this Danr and there are detailed entries regard LI4Sup.
C.I, 69 15 696 ing the respective rights of the different villages in the Fard Abnashi which was prepared at the time of the last survey.
It appears that the villagers of different villages who enjoy the above rights go in in a body every year during the rainy season for 'clearing tins Danr in order mat there may not be any obstruction in the flow of water therein.
On the date of occurrence, i.e. August 15, 1960, a number of persons of villages Bhadrar, Nayadih, Uprama, Basuara, Jitnagar and Bhatkunki went along with spades to clear this Danr in the .usual course and some of them had lathis also with them.
The total number of persons were estimated to vary from about 150 to 'about 400.
When they reached the brick kiln, which exists in Malmala Tikar they were confronted by a mob of 40 to 50 persons including all the convicted persons.
Sheo Prasad Sharing and Ram Prasad Sharma were armed with guns and Patel Thakur was armed with a pharsa and the remaining accused except Dhanusdhari Mehta were armed with bhalas.
It may be mentioned that in the First Information Report Dhanusdhari Mehta was alleged to have been armed with a pistol but this allegation was subsequently given up.
Dhanusdhari Mehta was a retired inspector of police; his son Ram Prasad Sharma was a practising lawyer at Bhagalpur at the time of the occurrence in question.
On seeing this crowd of villagers, Sheo Prasad Sharma directed them to return and threatened to shoot them if they failed to do so.
There was some exchange of hot words and brick bats were thrown by both sides.
Sheo Prasad Sharma thereafter fired one shot towards the sky but the villagers did not disperse.
Then Dhanusdhari ordered his two sons Ram Prasad Sharma and Sheo Prasad Sharma to open fire on the villagers.
On this both Ram Prasad Sharma and Sheo Prasad Sharma opened fire with their guns on the villagers.
One shot fired by Sheo Prasad Sharma hit one Qudrat Mian and he fell down and died on the spot.
One other villager was alleged to have been shot by Ram Prasad Sharma and he died on the spot.
A number of villagers sustained gun shot injuries and as a result of the firing by Sheo Prasad Sharma and Ram Prasad Sharma, who are estimated to have fired about 12 rounds, the villagers dispersed.
Sobban Mandal, one of the injured persons went to the Police Station with three other injured persons, namely, Chotan Rai, P.W. 5, Jagdeo Choudhary, P.W. 8 and Kishori Prasad Singh, P.W. 12, who had also sustained gun shot injuries.
The learned Additional Sessions Judge had rejected the prosecution story that Kaleshwar Yadav was shot and killed during the occurrence.
He had come to the conclusion that Kaleshwar Yudav had died prior to the date of occurrence.
The High Court has accepted the prosecution version and it is this finding which is 697 being seriously challenged by the learned counsel for Ram Prasad Sharma, appellant.
The learned Additional Sessions Judge had rejected the version of the prosecution regarding the shooting down of Kaleshwar Yadav mainly on the basis of entries in an attested copy of the Chaukidar 's hath chitha (Ext.
D) according to which the death of Kaleshwar took place in Gopalpur mauza on August 12, 1960, that is, three days prior to the occurrence.
The learned Additional Sessions Judge had also relied on the First Information Report in which the name of Kaleshwar Yadav does not find mention.
Two points arise before us, first, whether the hath chitha is admissible in evidence, and secondly, whether on the evidence on record it is otherwise proved that Kaleshwar Yadav was shot down by the appellant Ram Prasad Sharma.
According to the entries in this document, Ext.
D, Kaleshwar Yadav died on August 12, 1960, in Gopalpur Mauza and in the remarks column of this register he is described as "Bahanoi (brother in law) of Asarfi Yadav.
" We looked at the attested copy produced in Court and we were unable to ascertain the date on which the attested copy had been obtained by the defence.
The only dates this document bears are the date of attestation (October ' 15, 1960) by the District Statistical Officer, the date September 22, 1960, next to the signature of one Shukdeo Chowdhary, and the date of admission by the Additional Sessions Judge (June 25, 1962).
As rightly pointed out by the High Court the learned Sessions Judge took this copy on record in an extraordinary manner.
The prosecution evidence closed on June 21, 1962 and on June 25, 1962, this attested copy was admitted in evidence without any proof.
On the same day an order was passed calling for the original.
On the very next day the public prosecutor filed a petition objecting to the admission of this document and alleged, that the document was bogus.
The hearing of the argument thereafter proceeded on July 4, 1962.
The Public Prosecutor again filed a petition that this document be not taken in evidence.
The learned Additional Sessions Judge disposed of this petition with the following order: "Let the petition be placed with the record.
The original has once again been called for.
The matter will be discussed in the judgment.
" It is pointed out by the High Court that there is no further reference to the document in the order sheet.
After the arguments concluded on July 7, 1962, the case was adjourned for judgment.
The judgment of the learned Additional Sessions Judge shows that the original was subsequently received by him with letter dated July 10, 1962, and he observed that he was satisfied about 698 its genuineness.
The High Court rightly pointed out that the Additional Sessions Judge should have dealt with the question of the admissibility of the document.
The High Court, following Sanatan Senanati vs Emperor(1) and Brij Mohan Singh vs Priya Brat Narain Sinha(2), held that the document was inadmissible in evidence.
We agree with the conclusion arrived at by the High Court.
Section 35 of the Evidence Act provides: "An entry in any public or other official book, register or record, stating a fact in issue or relevant fact, and made by a public servant in the discharge of his official duty, or by any other person in performance of a duty specially enjoined by the law of the country in which such book, register or record is kept, is itself a relevant fact." In this case it has not been proved that the entry in question was made by a public servant in the discharge of his official duties.
As observed by this Court in Brij Mohan Singh vs Priya Brat Narain Sinha,(2), "the reason why an entry made by a public servant in a public or other official book, register, or record stating a fact in issue or a relevant fact has been made relevant is that when a public servant makes it ' himself in the discharge of his official duty, the probability of its being truly and correctly recorded is high." No proof has been led in this case as to who made the entry and whether the entry was made in the discharge of any official duty.
In the result we must hold that exhibit D. the hath chitha, was rightly held by the High Court to be inadmissible.
The High Court then dealt with the other evidence on the record and came to the conclusion that Kaleshwar was actually shot down by the appellant, Ram Prasad Sharma.
The learned counsel for the appellant has tried to assail these findings but he has not been able to show in what way the High Court has gone 'wrong in coming to the conclusion.
The High Court states that ten witnesses have named Kaleshwar being the second person who was shot.
Further, Kaleshwar 's son and widow, P.Ws 24 and 34, Chamak Lal Yadav and Karma Devi, deposed that on the day of occurrence Kaleshwar had left his house with a kudal and had gone to Chaksafia Danr alongwith others.
They further deposed that on the next day they learnt from Nandai Lal Singh, P.W. 17, that Kaleshwar had. been killed.
The High Court further accepted the explanation of P.W. 1, who had made the F.I.R., that he had named Gholtan as being the person shot and killed by Ram ' Prasad because he had heard a hulla that Gholtan had been murdered.
It seems to us that the High Court came to a correct (1) A.I.R. 1945 Pat. 489.
(2) [19651 3 S.C.R. 861 ,864.
699 conclusion and was right in accepting the explanation of P.W. 1.
The learned counsel further contends that it was doubtful that 12 rounds would have been fired.
He points out the number of injuries received by the villagers.
But these injuries support the prosecution story.
From the injuries on the various persons examined by Dwarka Nath Prasad, P.W. 41, apart from the .persons who had died and whose bodies had been held to ' have been cremated by unidentified persons, it appears that 20 persons had received gun shot injuries; one of them had as many as ' 14 lacerated wounds and another had 10 lacerated wounds.
Apart from that there is no reason to doubt the oral evidence given in this case that a number of rounds were fired.
In the result the appeal fails and is dismissed.
G.C. Appeal dismissed.
| The respondent was assessed to sales tax in the State of Kerala for the year 1962 63 in March, 1964.
In December, 1965 the Sales Tax Officer issued notice under R. 33 of the Travancore Cochin General Sales Tax Rules, 1950 in force at that time for reopening the original assessment on the ground that certain turnover had escaped assessment.
According to the relevant portion of the said rule the assessing authority "may at any time within three years next succeeding that to which the tax relates determine to the best of his judgment the turnover which has escaped assessment and assess the tax payable on such turnover after issuing a notice to the dealer and after making such enquiry as he considers necessary".
The respondent 's objection to the notice having failed it filed a writ petition in the High Court.
The learned Single Judge who heard the writ petition felt that it was due to the orders of the court that the Sales tax authorities had been prevented from completing the assessment within the time allowed by Rule 33.
While disposing of the writ petition he observed that the Sales Tax Authorities would be at liberty to complete the proceedings initiated by the notice within a further period of 59 days.
The respondent preferred an appeal to the division bench which set aside the direction granting 59 days extension for completing the assessment.
The Revenue appealed.
On behalf of the appellant it was contended that on a true construction of Rule 33 it should be held that the proceedings under that rule: have to commence within three years next succeeding that to which the tax relates and that it is not necessary that the entire proceeding.s relating to the escaped assessment should be completed within that period.
On behalf of the respondent it was urged that the word 'determine ' in Rule 33 meant that the final determination of the turnover which had escaped assessment and the assessment of the tax have to be done within three years.
Allowing the appeal.
HELD: In view of the previous decisions of this Court in which provisions similar to Rule 33, namely, sub clauses (2), (4) and (5) of section 11 of the PUnjab General Sales Tax Act, 1948 came up for consideration, the principle is firmly established that assessment proceedings under the Sales Tax Act must be taken to be pending from the time the proceedings are initiated until they are terminated by a final order of assessment.
In these cases the initiation o.f proceedings within the prescribed period was considered sufficient.
The fact that the word used in Rule 33 is 'determine ' whereas in sections 11(4) and (5) of the Punjab Act the words 'proceed to assess ' are used, cannot, in the context of sales tax legislation lead to a different result.
r862 H 863 C] The words which follow the word 'determine ' in Rule 33 must be accorded their due signification.
The words 'assess the tax payable ' cannot be ignored and it is clearly meant that the assessment has to be made within the period prescribed. 'Assessment" is a comprehensive word and can 860 denote the entirety of proceedings which are taken with regard to it.
It cannot and does not mean a final order of assessment alone unless there is something in the context of a particular provision which compels such a meaning being attributed to it.
Rule 33 must not be so interpreted that it may be defeated by taking certain collateral proceedings and obtaining a stay order as was done in the present case or by unduly delaying assessment proceedings beyond a period of three years.
It must be interpreted like the analogous provisions considered in earlier cases.
This must particularly be so when there is no provision in the Rule in question analogous to.
sub section
(3) of section 34 of the Income tax Act, 1922 by which the Income Tax authorities were debarred from completing the assessment beyond the period prescribed.
[863 D G] The State of Punjab vs Tara Chand Lajpat Rai, 19 S.T.C. 493 and The State of Punjab vs Murlidhar Mahabir Prashad, 21 S.T.C. 29 applied.
Ghanshyam Das vs Regional Assistant Commissioner of Sales Tax, Nagpur, ; , referred to.
|
Appeal No. 1361 of 1966.
Appeal by special leave from the judgment and order dated April 5, 1963 of the Madras High Court in Second Appeal No. 1287 of 1960.
Niren De, Attorney General, V. A. Seyid Muhammad, R.N. Sachthey and S.P. Nayar, for the appellant.
Lily Thomas, for the respondent.
The Judgment of the Court was delivered by Shah, J.
A.V. Narasimhalu hereinafter called "the plaintiff" imported 43 reels of newsprint 131/4" width under a bill of Entry dated July 15, 1954.
The width of the newsprint being less than 15" no import duty was payable under the Open General Licence The Assistant Collector of Customs held that the commodity imported fell within item 44 of the Customs Tariff and levied a duty of 33 3/8% ad valorem.
The plaintiff paid the duty under protest, and applied for refund of the duty relying upon a decision of the High Court o.f Madras in writ petition No. 402 of 1954 in which it was decided that newsprint of width less than 15" was exempt from duty.
This application was rejected.
An appeal to the Collector of Customs and a revision application to the Central Board of Revenue were unsuccessful.
The customs authorities rejected the claim on the ground that the claim not having been made within three months of the date of demand was barred under section 40 of the .
The plaintiff then instituted an action in the City Civil Court for a decree for Rs. 2,669 62 against the Union of India.
The Trial Court decreed the claim holding that the claim was not barred.
In appeal the Principal Judge, City Civil Court held that the City Civil Court had no jurisdiction to entertain the suit.
In so holding he relied upon the judgment of the Judicial Committee in Secretary of State for India vs Mask & Co. (1).
In Second Appeal, the High Court of Madras reversed the judgment of the Principal Judge, City Civil Court, and restored the decree passed by the trial court.
The Union of India has appealed to this Court with special leave.
It is unnecessary to consider whether the claim is barred under section 40 of the , for, in our judgment, the Civil Court had no, jurisdiction to.
entertain the suit.
Section 188 of the , insofar as it is relevant, provides: "Any person deeming himself aggrieved by any decision or order passed b.y an officer of Customs under (1) L.R. 67 I.A. 222.
147 this Act may, within three months from the date of such decision or order, appeal therefrom to the Chief Customs Authority, or in such cases as the Central Government directs, to any officer of Customs not inferior in rank to a Customs Collector and empowered in that behalf by name or in virtue of his office by the Central Government.
Every order passed in appeal under this section shall, subject to the power of revision conferred by section 191, be final".
Section 191 provides: "The Central Government may, on the application of any person aggrieved by any decision or order passed under this Act by any officer of Customs or Chief Customs Authority, and from which no appeal lies, reverse or modify such decision or order".
The Act is a complete code dealing with liability to pay customs duty and for obtaining relief against excessive or erroneous levy and other related matters.
The jurisdiction of the Civil Court to entertain a suit on the ground that the duty was improperly or illegally levied is excluded.
It is true that the decision or order passed under section 188 of the in appeal to the appellate authority is expressly declared final.
But on that account it cannot be held that by refusing to appeal against the decision or by refusing to claim relief in the manner provided by section 188 and section 191 of the , a party aggrieved by the order of a Customs Officer may invest the Civil Court with jurisdiction to entertain a suit.
In Mask & Company 's case(1) a firm of merchants imported a quantity of betelnuts into.
British India.
The Assistant Collector of Customs assessed them for the purposes of duty on a tariff as "boiled", rejecting the contention of the importers, that they Were "raw sliced betel nuts" subject to duty ad valorem.
The importers, appealed from the decision of the Assistant Collector to the: Collector of Customs.
The appeal was dismissed, and in revision to the Government of India the Collector 's decision was affirmed.
A suit was then filed by the importers to recover the excess amount collected from them, by levying duty upon a tariff and not ad valorem.
Before the Judicial Committee it was contended that the decision or order passed by the officer of Customs could only be challenged by an appeal under section 188 of the and jurisdiction of the Civil Court was excluded.
(1) L.R. 67 I.A. 222.
148 Alternatively it was contended that the right of appeal conferred by section 188 constituted a procedure which was alternative to procedure in the civil courts, and since the importers in that option had chosen to proceed under section 188, they were bound by that election, and were thus excluded from resort to the civil courts.
The Judicial Committee observed that adjudication as to confiscations, increased rates of duty or penalties made under the power conferred by section 182 were decisions or orders within the meaning of section 188, and that the decision of the Collector under section 188 was final and excluded the jurisdiction of the Civil Court.
The Judicial Committee did not express any opinion on the question whether prior to taking an appeal under section 188 the porters would have been entitled to resort to the civil courts.
But in our judgment it would not be open in all situations where a party who had right to appeal to refuse to resort to the procedure prescribed by the statute and to file a suit.
The express declaration in section 188 of the that the order of the Collector in appeal shall be final does not imply that a suit will lie against the decision or order of the original authority.
In a recent judgment of this Court Dhulabhai etc.
vs State Madhya Pradesh and Anr.(1) this Court set out certain principles relating to the exclusion of the jurisdiction of the Civil Court.
The propositions (1), (2), (5), (6) & (7) are relevant.
It may be observed that it was not the case that the Assistant Collector of Customs had not acted in conformity with the fundamental principles of judicial procedure, nor was it the case that the provisions of the Act were ultra vires or unconstitutional.
The Act in terms, creates a special liability and provides for determination of the right of the State to recover duty and the liability of the importer to pay duty and by the clearest implication it is provided that it shall be determined by the Tribunal so constituted.
The High Court in the judgment under appeal observed: " . the: question in these.
appeals is different, namely, whether the Collector could be said to be acting within his jurisdiction, if he, in direct disregard of the provisions of the Act and the Rules made thereunder, levied a duty upon the goods which were not liable to duty and compelled by duress as it were the importer to pay the same before taking delivery of the goods.
The result of his action was that the respective appellants had to part with certain sums of money which were collected from them under the colour of statutory power.
In such a case, a suit will undoubtedly (1) ; 149 be maintainable in a civil court by showing that the Customs authorities had excessively charged duty; it will really be a common law right to property being interfered with.
It may be that the remedy provided under section 188 of the would be available to the aggrieved importer to challenge the levy on the ground that it was either improperly made or that the duty was collected under a mistake or under duress.
But in all such cases, there will also exist a remedy under the common law in a civil Court, for the simple reason that these categories of cases will amount to a levy beyond the jurisdiction of the authority, or one made under duress, or paid by mistake.
" But an erroneous decision of the Customs Authority cannot be said to be reached without jurisdiction merely because it may be shown in some collateral proceeding to be wrong.
Normally an action of an administrative authority interfering with the right to property may be challanged by resort to a civil court, Yet in the case of a right which depends upon a statute, the jurisdiction of the civil court to grant relief may by express provision or by clear implication of the statute be excluded.
Where a statute re enacts a right or a liability existing at common law, and the statute provides a special form of remedy, exclusion of the jurisdiction of the civil court to grant relief in the absence of an express provision, will not be readily inferred.
Where, however a statute creates a new right or liability and it provides a complete machinery for obtaining redress against erroneous exercise of authority, jurisdiction of the civil court to grant relief is barred, Liability to pay a duty of custom is not a common law liability: it arises by virtue of the : in respect of any grievance arising in consequence of enforcement of that liability machinery has been provided by the Act.
Having regard to the complicated nature of the questions which arise in the determination of liability to pay duty of customs the Legislature has invested the power of determining liability and the manner of enforcement thereof upon a specially authorised hierarchy of tribunals.
An appeal lies against the order of the Assistant Collector of Customs against an order imposing duty as well as an order refusing to refund duty, and the grievance may be carried to the Central Board of Revenue.
In our judgment, the jurisdiction of the civil court is by clear implication of the statute excluded.
We, however, deem it necessary to observe that the civil courts have jurisdiction to examine cases in which the Customs Authority has not complied with the provisions of the statute or the officer of customs has not acted in conformity with the fundamental principles of judicial procedure or the Authority has acted 150 in violation of the fundamental principles of judicial procedure or he has made an order which is not within his competence or the statute which imposes liability is unconstitutional, or where the order is alleged to be mala fide.
A civil suit will lie for obtaining appropriate relief in these cases.
But the exclusion of the jurisdiction of the civil court to entertain a suit does not exclude the jurisdiction of the High Court to issue high prerogative writs against illegal exercise of authority by administrative or quasi judicial tribunals.
The finality which may be declared by the statute qua certain liability either by express exclusion of the jurisdiction of the civil court or by clever implication does not affect the jurisdiction of the High Court to issue high prerogative writs.
The jurisdiction of the civil court to entertain a suit challenging the validity of the imposition of the duty of customs being excluded, the plaintiff 's suit must fail.
But it must be observed that the present is a fair illustration of the administration not making a serious attempt to avoid futile litigation for small claims.
There was a judgment of the High Court of Madras on the identical question which fell to be determined.
If the plaintiff had moved the High Court in exercise of its jurisdiction under Article 226 the Union had practically no defence.
The Union could without loss of face accede to the request of the plaintiff to refund the amount collected.
The learned Attorney General stated that the Union desired to obtain a decision of this Court on the extent of the jurisdiction of the Civil Court to entertain a suit challenging the decision of the Customs Authorities, because in the view of the Law Advisers the High Court had fallen into error in enunciating the principles.
But the High Court recorded the judgment under appeal after the claim was resisted by the Union.
We are glad to record the assurance given by the Attorney General that whatever may be the decision in the appeal, the Union of India will refund the amount of tax unauthorised recovered by the Assistant Collector of Customs.
This was essentially a case in which when notice was served the Central Government should instead of relying upon technicalities have refunded the amount collected.
We trust that the Administrative authorities will act in a manner consistent not with technicalities, but with a broader concept of justice if a feeling is to be nurtured in the minds of the citizens that the Government is by and for the people.
The appeal is allowed.
The suit is ordered to be dismissed.
The order of costs passed by the High Court is however maintained.
There will be no order as to costs in this appeal.
Y.P. Appeal allowed.
| Section 188 of the , provides for an appeal against any order of an officer of customs and the order passed in the appeal is made final subject to the. revision under section 191 of the Act.
The respondent claimed refund of customs duty paid by him under protest.
The claim was rejected.
An appeal to the Collector of Customs and a revision to the Central Board of Revenue= were unsuccessful.
The respondent instituted an action in the Civil Court for refund of the amount.
The trial court decreed the suit but the first appellate court held that the civil court had No. jurisdiction to entertain the suit.
The High Court, in further appeal, restored the decree of the trial court.
Allowing the appeal, this Court, HELD: The civil court had no jurisdiction to entertain the suit.
[146 G H] Where a statute creates a new right or liability and it provides a complete machinery for obtaining redress against erroneous exercise of authority, jurisdiction of the Civil Court.
to grant relief is barred.
Where however a statute reenacts a right or liability existing at common law, and the statute provides a special form of remedy, exclusion of the jurisdiction of the Civil Court to grant relief in the absence of an express provision will not be readily inferred.
[149 ' D F] Liability to pay duty of customs is not a common law liability; it arises by virtue of the .
In respect of any grievance arising in consequence of enforcement of that liability, machinery has been provided by the Act.
Having regard to the complicated nature of the questions which arise in the determination of liability to.
pay duty of customs, the legislature has invested the power of determining liability and the manner of enforcement thereof upon a specially authorised hierarchy of tribunals.
[149 ' F G] (ii) A civil suit will lie for obtaining appropriate relief in cases where the customs authority has not complied with the provisions of the statute, or the officer of customs has not acted in conformity with the fundamental principles of judicial procedure or the authority has acted in violation of the fundamental principles of judicial procedure or has made an order which is not within his competence or the statute which imposes liability is unconstitutional or the order is alleged to.
be mala fide.
[149 F G] (iii) The exclusion of the jurisdiction of the Civil Court to entertain a suit does not exclude the jurisdiction of the High Court to issue high prerogative writs against illegal exercise of authority by administrative or quasi judicial tribunals.
[150] Dhulabhai etc.
vs State of Madras Pradesh & Anr.
A.I.R. , followed.
Secretary of State for India vs Mask & Co. L.R. 67 I.A. 222, referred to. 146
|
Appeals Nos. 55, 888 and 889 of 1962 and 518 to 520, 722, 724, 725, 727 to 729 & 732 to 735 of 1963.
Appeals from the judgment dated August 19, 1958, of the Madras High Court in Referred Case No. 52, R. C. No. 90, 43 and 82, 33, 58 to 60, 64 and 65 of 1955 and 97, 98, 102, 112, 113 and 115 of 1956, respectively.
C. K. Daphtary, Attorney General, section V. Gupte, Solicitor General, Gopal Singh, R. H. Dhebar and R. N. Sachtliey, for the appellant (in C. A. No. 55 of 1962).
C. K. Daphtary, Attorney General, section V. Gupte, Solicitor General, N. D. Karkhanis, R. H. Dhebar and R. N. Sachthey, for the appellant (in C. As.
888 889 of 1962 and 722, 724, 725, 728 to 729 and 732 to 735 of 1963) and for the respondents (in C. As.
Nos. 415 of 1962, 518 to 520 of 1963).
R. Ganapathy Iyer, for the appellants (in C. A. Nos.
518 to 520 of 1963) and for the respondents (in C. As.
55 of 1962, 888 to 889 of 1962 and 729, 732 and 735 of 1963).
K. Srinivasan and R. Gopalakrishnan, for the respondent (in C.A. Nos. 733 to 734 of 1963).
K. R. Chaudhuri, for the respondent (in C.A. No. 724 of 1963).
A. V. Viswanatha Sastri, K. Parasaran, K. Rajendra Chaudhuri and K. R. Chaudhuri, for the respondent (in C.A. No. 722 of 1963).
section Swaminathan and M. section Narasimhan, for the respondents ,(in C.A. Nos. 725 and 728 of 1963).
817 The Judgment of the Court was delivered by Subba Rao J.
These 16 appeals are filed against the Judg ment of the High Court of Judicature at Madras and raise the question of the effect of the Debtor and Creditor (Occupation Period) Ordinance No. XLII of 1948 of Malaya, hereinafter called the Ordinance, on the liability of the assessee to pay income tax in respect of pre occupation debts revived thereunder.
During the last World War Japan occupied Malaya.
During the period of their occupancy i.e., from February 1942 to September 1945, they introduced their own currency in dollars.
During that period both the currencies were in vogue though there was a progressive depreciation of Japanese currency in its relation to Malayan currency.
On September 5, 1945, the British Government re occupied Malaya and introduced the Malayan currency as legal tender in place of Japanese currency.
The Indian nationals, who were carrying on business in Malaya during the; period of Japanese occupation, were hit adversely and suffered losses.
The Government of India came to their rescue and by Notification dated August 14, 1947, they propounded a scheme to give them relief by allowing them to set off the losses incurred by them during the 5 years relevant to the assessment years 1942 43 to 1946 47 against the profits of the assessment years 1942 43 and 1941 42.
We shall consider the scheme in some detail at a later stage of the judgment.
On December 16, 1948, the Malayan Legislature passed the Ordinance declaring that payments made in Japanese currency by debtors to their creditors in respect of debts incurred prior to and during the Japanese occupation were to be valued and scaled down in accordance with the schedule appended to the Ordinance.
We shall deal with Ordinance in some detail at the appropriate place but the broad effect of the Ordinance was that though a debt had been discharged fully by paying the amount due in Japanese currency, the debt was revived in proportion to the depreciation of Japanese currency in relation to the Malayan currency as laid down by the schedule.
The creditor 's right to recover the debt to the said extent and the liability of the debtor to pay the same revived.
As the question raised is one of law and does not depend upon the peculiar facts of each case, we think it is enough if we 818 state briefly the facts of two cases, one illustrating the claim of an assessee against the imposition of income tax in respect of the income he realized by the revival of the debts and the other illustrating that of an assessee to an allowance on the ground that he paid the scaled down debts over again.
The respondent in Civil Appeal No. 722 to 735 of 1963 is a firm carrying on business of money lending in Kampar in Federated Malaya State.
It applied for relief under the special scheme.
It incurred loss for the aforesaid four years of Rs. 1,33,125.
For the years 1941 42 and 1942 43 it had a profit of Rs. 53,010 and Rs. 35,753 respectively.
The said profits were set off against the losses and the taxes paid by it for the years 1941 42 and 1942 43 were refunded to it.
After the Ordinance was passed, in terms of that Ordinance the respondent recovered 6,437 dollars during the previous year ending April 12, 1952 corresponding to the assessment year 1952 53.
Civil Appeals Nos.
518 to 520 of 1963 deal with the converse case.
The appellant therein is a Hindu undivided family carrying on, inter alia, a money lending business in its own village in Kaula Kubbu Bharu and Parit Buntar in the Federated Malaya States.
In the course of its business it had taken moneys as deposits from various persons before April 12, 1942.
During the period of occupation it discharged its liability to various creditors but after the publication of the Ordinance it had to pay again to creditors 6,214.58 dollars in the previous year ending April 12, 1950; 28,586 dollars for the previous year ending April 12, 1951; and 11,547 dollars for the previous year ending April 12, 1952.
The aforesaid amounts were claimed by the appellant as deductions respectively for the assessment years 1950 51, 1951 52 and 1952 53.
The following tabular form at a glance gives the claims of the assessees as creditors or debtors, as the case may be 819 1.
civil Appeal No. 2.
R.C. No. 3.
appellant 4.
Respondent 5.
Assessment year 6.
Claim 7.
Issue for determination 1.
722 t0 735 of 1963 & 55 of 1962 2.
33 of 1955 3.
of I.T., Madras 4. O. RM SP.
5. 1951 52 6.
$ 57395 69 7.
Creditor claims that the receipt is capital and not revenue.
Nil 2. 52 of 1955 3. do 4.
V. MR.
Firm Muar 5.
1951 52 6.
$39,851 7.
Nil 2. 58 of 1955 3.
VP.AL.
Chidambaram chettiar 5.
1951 52 6.
$9889 7.
Nil 2.
59 of 1955 3. do 4.
P. Alagappa Chettiar 5.
1951 52 6.
$355000 7.
Nil 2. 60 of 1955 3.
M. RM.
V. Venkatachalam Chettiar 5.
1951 52 6.
$9006 7.
Nil 2. 64 of 1955 3 do 4.
P. Alagappa Chettiar.
5. 1951 52 6.
$$35500 7.
Nil 2. 65 of 1955 3.
M. RM.
Swaminathan Chettiar 5.
1951 52 6.
$ 9006 7.
Nil 2.
97 of 1956 3.
M/s A.L.A. Firm 5. 1951 52 6.
$8388 7.
nil 2. 98 of 1956 3.
M. M. Firm 5.
1951 52 6. 6770 7.
Nil 2. 102 of 1956 3.
S.M. RM.
Meyyappa Chettiar & sons 5.
1950 51, 1951 52 6.
$1119, $3214 7.
Nil 2. 112 of 1956 3.
M. M. Firm (Penang) AR.
M. M. Arunachalam 5.
1953 54 6.
$2445 7 do 1.
Nil 2. 113 of 1956 3.
P. section R. M. Annamalai Subramaniam Chettiar 5.
1951 52 6.
$ 12004 7.
Nil 2. 115 of 1956 3.
M/s L. AR.
Firm 5.
1951 52 6.
$1979.62 7.
518 to 520 of 1963 2. 115 of 1956 3. O. V. R. SV.
Arunachalam Chettiar 4.
Commissioner of Income tax, madras 5.
1951 52, 1952 53 6.
$ 28, 586 $11, 574 7.
Debtor claims deduction , On account of this payment 1. 888 & 889 of 1962 2. 90 of 1955 3.
Commissioner of Income Tax, madras 4.
O. R. M. O. M. A. M. Chidambaram Chettiar 5.
1951 52 & 1952 53 6.
$ 6, 746 $664 7.
Creditor claims that the receipt is capital and not revenue.
Supp/64 9 820 The Income tax Officers held that during the period of Japanese occupation the debts were discharged and that the receipt of additional amounts under the Ordinance was in fact assessable to tax.
They also held that in the case of an assessee who was a debtor no deduction was permissible on the ground that the amounts paid represented only repayment of capital and not business expenditure.
On appeal the Appellate Assistant Commissioner held that the receipts by the assessee in respect of the revived debts were only realization of the original amounts lent and, therefore, could not be regarded as income.
In the case of the claim for deduction, he agreed with the view of the Income tax Officer.
On further appeal to the Tribunal, in the case of receipts it held that the assessee by claiming benefits under the scheme and in including all its cash and Bank balances in the Malayan business as part of the losses incurred therein in effect indirectly wrote off the debts due to them and, therefore, the recoveries under the Ordin ance were only a subsequent realization of the written off bad debts and, therefore, assessable to income tax.
In those appeals relating to deductions, the Tribunal confirmed the orders of the Appellate Assistant Commissioner.
The High Court answered the questions referred to it as follows: (1) Where an assessee has received repayments, he will not be liable to tax in respect of amounts he has received as or towards principal, but he will be so liable in respect of moneys which he has received as or towards interest.
Where only part of the debt has been recovered, the assesse will be at liberty, subject to the law relating to appropriation of payments, to appropriate the money he has received either towards principal or interest.
The assessment in respect of such receipts will proceed on this basis, that is to say, if the payment has been lawfully appropriated towards interest, will be liable to pay tax thereon.
But if he has lawfully appropriated it towards principal, he will not be liable to pay tax on it.
(2) Where an assessee has made payments, he will be entitled to deduct them from his income and claim exemption from tax for only such amounts as he has paid on account of interest.
He will not be entitled to deduct any payments on account of principal.
821 The Tribunal was directed to review the assessment in the light of the said directions.
The main reason given by the High Court for giving the said answers was that the result of the Ordinance was to revive the old debts and the question of the exigibility of the said income to tax can only be decided on the provisions of the Income tax Act and not by the terms of the scheme of the Ordinance.
Hence the appeals.
The learned Solicitor General, appearing for the Revenue, raised before us the following three points: (1) Sub section
(2) of section 4 of the Ordinance on which reliance was placed by the High Court applies only to pre occupation capital debts and the debts with which the appeals are concerned are not pre occupation capital debts and, therefore, they are not revived thereunder.
(2) The assessees having taken benefit under the scheme propounded by the Government of India which contained a condition that if any recoveries subsequently made would be taken as income,, they are now precluded from contending that the, amounts realized towards the revived debts are not taxable on the principle of approbate and reprobate.
And (3) on a reasonable construction of the relevant sections of the Ordinance it should be held that there was no revival of the debts but only that the State had provided for compensation for the losses incurred during the occupation period by the assessees.
The first question had not been raised at any stage of the proceedings before the Tribunal and the High Court.
Nor does it find a place in the statement of case.
We cannot, therefore, allow the learned Counsel to raise it for the first time before us.
Nor has the second question been raised in the High Court in the form in which it is presented before us.
The scheme propounded by the Government of India, inter alia, contains the following provisions : (i) No assessee was under any obligation to accept the scheme.
If he desired to opt for the scheme be was required to give option with one month after he was informed of the scheme.
(ii) An assessee was permitted to include in his expenses certain items which would be inadmissible under the Indian Income tax Act.
(iii) The losses suffered by an assessee during the five years relevant to the assessment years 1942 43 to 1946 47 were to be aggregated.
822 (iv) An assessee was permitted to carry the aggregated loss backward and set it off against his profits for the assessment year 1942 43.
(v) Any loss still unabsorbed could be carried backward to the year 1941 42.
(vi) Any excess tax found to have been paid after recomputing the income of an assessee by carrying his loss backward could be refunded to him.
(vii) The loss could not be carried forward.
The Central Board of Revenue issued further instructions on the above scheme by its letter dated December 1, 1947.
One of the instructions was that debts due to the assessee if paid in Japanese currency would be taken to have been satisfied to that extent and excluded from the asset side in the balance sheet, provided that if any recovery was subsequently made, it was to be taken as income.
Briefly stated, under the scheme the losses suffered by an assessee during the assessment years 1942 43 to 1946 47 were set off against his profits for the assessment years 1942 43 and 1941 42 and any unabsorbed loss could not be carried forward.
The debts discharged in Japanese currency were excluded from the assets side in the balance sheet but the authority reserved for itself the right to treat any recoveries subsequently made as income.
The contention is that the assessees having opted to accept the scheme, derived benefit thereunder, and agreed to have their discharged debts excluded from the asset side in the balance sheet subject to the condition that subsequent recoveries by them would be taxable income, they are now precluded, on the principle of "approbate and reprobate", from pleading that the income they derived subsequently by realization of the revived debts is not taxable income.
The doctrine of "approbate and reprobate" is only a species of estoppel; it applies only to the conduct of parties.
As in the case of estoppel, it cannot operate against the provisions of a statute.
If a particular income is not taxable under the Income tax Act, it cannot be taxed on the basis of estoppel or any other equitable doctrine.
Equity is out of place in tax law; a particular income is either exigible to tax under the taxing statute or it is not.
If it is not the Income tax Officer has no power to impose tax on the said income.
The decision in Amarendra Narayan Roy vs Commissioner of Income tax, West Bengal(1) has no bearing on the question raised (1) A.I.R. 1954 Cal.
271. 823 before us.
There the concessional scheme tempted the assessee to disclose voluntarily all his concealed income and he agreed to pay the proper tax upon it.
The agreement there related to the quantification of taxable income but in the present case what is, sought to be taxed is not a taxable income.
The assessee in such a case can certainly raise the plea that his income is not taxable under the Act.
We, therefore, reject this plea.
To appreciate the third argument it is necessary to notice the relevant terms of the Ordinance.
The Ordinance was issued by the Malayan Government to regulate the relationship between the debtor and creditor in respect of debts incurred prior to and during the period of the enemy occupation of the territories comprising the federation of Malaya.
The relevant sections of the Ordinance read: Section 4.
Discharge during occupation period of preoccupation debts : (1) Subject to the provisions of sub section
(2) of this section, where any payment was made during the occupation period in Malayan currency or occupation currency by a debtor or by his agent or by the Custodian or a liquidation officer purporting to act on behalf of such debtor, to a creditor, or to his agent or to the Custodian or a Liquidation Officer purporting to act on behalf of such creditor, and such payment shall be a valid discharge of such pre occupation debt to the extent of the face value of such payment.
(2) In any case (a) where the acceptance of such payment in occupation currency was caused by duress or coercion; or (b) where such payment was made after the thirtyfirst day of December 1943, in occupation currency in respect of a pre occupation capital debt, exceeding two hundred and fifty dollars in amount, which (i) was not due at the time of such payment; or (ii) if due, was not demanded by the creditor or by his agent on his behalf and was not payable within the occupation period under a time essence contract; 824 (iii) if due and demanded as aforesaid was not paid within three months of demand or within such extended period as was mutually agreed between the creditor or his agent and the debtor or his agent; or (c). . such payment shall be revalued in accordance with the scale set out in the Schedule to this Ordinance and shall be a valid discharge of such debt only to the extent of such revaluation.
THE SCHEDULE 1.
(a) : Where any such payment as it mentioned in sub section (2) of section 4 of this Ordinance was made in occupation currency during any month or on any day mentioned in the first column of the scale set out in paragraph 3 of this Schedule, such payment shall be revalued by taking the number of dollars in occupation currency set out opposite such month or day in the second column of the said scale as equivalent to one hundred dollars Malayan currency, and so in proportion for any portion of such payment amounting when revalued, to less than one hundred dollars Malayan currency.
(b) Where any such payment was made in occupation currency on or after the thirteenth day of August 1945, the value of such payment shall be taken to be nil.
(a) : In the case of an unsatisfied occupation debt or part thereof which falls to be revalued under section 6 of this Ordinance such debt or part thereof shall be revalued at the appropriate date as provided in the said section or sub section by taking the number of dollars in occupation currency mentioned opposite such month or day in the second column of the scale set out in paragraph 3 of this Schedule as equivalent to one hundred dollars Malayan currency, and so in proportion for any portion of such debt amounting, when revalued to less than one hundred dollars Malayan currency.
(b)When any such debt or part of a debt fell due for payment on or after the thirteenth day of August 1945,its value shall be taken to be nil.
Sliding scale of the value of occupation currency 1942 45.
We have not allowed the Solicitor General to contend that sub section
(2) of section 4 of the Ordinance does not apply to the debts in 825 question as throughout the proceedings of this case it was assumed that it applies to the said debts.
During the Japanese Occupation both the Japanese currency and the Malayan currency were in vogue.
In January 1943 the Japanese currency began to depreciate and by August 13, 1945, it ceased to be of any value.
During that process of devaluation debts were paid off and received in Japanese currency which resulted in loss to the creditors.
To regulate the relationship between creditors and debtors.
during that period the said Ordinance was passed by the Malayan Legislature on December 16, 1948.
Under the said Ordinance payments in Japanese currency were to be valued and scaled down in accordance with the Schedule appended to the Ordinance.
If a debtor had paid his debt in depreciated Japanese currency, he was required to pay over again a certain amount to be ascertained by the application of the provisions of the Schedule.
In terms sub section
(2) says that the payment in Japanese currency shall be a valid discharge of such debt only to the extent of such revaluation.
When the payments made towards debts were scaled down, the debts were revived in regard to the balance of the debt.
After the making of the Ordinance, the creditor could enforce his debt to the extent not discharged and the debtor had the obligation to discharge the same.
On the express terms of the Ordinance it is impossible to accept the contention that the State provided for compensation for the losses incurred bY the assessees.
indeed the State did not pay any compensation at all.
The legal relationship of the creditor and debtor was not created by the Ordinance but it was regulated on the basis of the pre existing relationship.
We, therefore, hold, agreeing with the High Court, that under the Ordinance the discharged debts became enforceable to the extent of the balance of the amount due after the scaling down of the payments.
If so, the Income tax Officer could only impose tax on the income recovered by the assessees thereafter towards their debts if such income was taxable under the provisions of the Act.
So too, in regard to the payment made by the assessees towards such debts they could claim relief by way of deductions only if such deductions were permissible under the Act.
The High Court held that the assessees who had received repayments would not be liable to tax in respect of amounts they had received towards principal but they would be so liable in respect of moneys which they had received towards interest.
It further held that those assessees who had made payments towards the 826 debts would be entitled to deduct from their income and claim exemption from tax only such amounts as they had paid on account of interest but they would not be entitled to deduct any payment made on account of principal.
The High Court also gave a direction that in the case of open payments the respective amounts paid towards principal or interest should be ascertained in accordance with the law of appropriation of payments.
Neither the learned Solicitor General, who appeared for the Revenue, nor the learned counsel, who appeared for the assessees, questioned the correctness of the said directions if the construction we placed on the Ordinance was correct.
The directions given by the High Court will, therefore, stand.
In our view, the High Court gave correct answers to the questions referred to it.
In the result the appeals are dismissed with costs.
One hearing fee.
| The Japanese currency introduced into Malaya during the Japanese occupation began to depreciate after January 1963, so that debts paid off and received in that currency resulted in loss to the creditors.
The Government of India, by a notification issued in 1947, propounded a scheme to give relief to Indian nationals carrying on business in Malaya, and the Central Board of Revenue issued further instructions on the scheme.
One of the instructions was that if any creditors opted to accept the scheme, a recovery subsequently made by them, with respect to the debt due to them was to be taken as their income.
In 1948, the Debtor and Creditor (Occupation Period) Ordinance No. XLII of 1948, of Malaya was passed by the Malaya Legislature.
Under that Ordinance, payments made in Japanese currency were to be valued and scaled down in accordance with its Schedule, so that a payment in Japanese currency would be a valid discharge of a debt only to the extent of such revaluation.
A creditor could enforce his debt to the extent not discharged and the debtor was under an obligation to discharge it to that extent.
On the questions as to (i) whether amounts, recovered by creditors who had accepted the scheme, from their debtors, in terms of the Ordinance, were liable to income tax; and (ii) whether the debtors could claim the payments made by them as deductions, the High Court held, (i) that the assessees who had received payments would not he liable to tax in respect of amounts they had received towards principal, but they would be so liable in respect of moneys which they had received towards interest; and (ii) that those assessees who had made payments towards the debts, would be entitled to deduct from their income, and claim exemption from tax only such amounts as they had paid on account of interest, but they would not be entitled to deduct any payment made on account of principal.
The High Court also gave directions that open payments should be appropriated according to the law of appropriation of payments.
The Commissioner and a debtor assessee appealed to the Supreme Court.
HELD : The appeals should be dismissed.
(i) The creditor assessees were not ' precluded on the principle of "approbate and reprobate" from pleading that the income they derived subsequently, by realisation of the revived debts, was not taxable income.
The doctrine was only a species of estoppel and cannot operate against the statute.
If a particular income is not taxable under the Income tax Act, it cannot be taxed on the basis of estoppel or any other equitable doctrine.
[822 F H] (ii) Under the Ordinance, the discharged debts became enforceable to the extent of the balance of the amount due after the scaling down of the 816 payments, and the contention of the Revenue that the State provided for compensation for the loss incurred by the creditor assessees could not be accepted.
[825 B E] (iii) The Income tax Officer could only impose income tax on the income recovered by the assessees thereafter towards their debts if such income was taxable under the provisions of the Act.
So too in regard to the payments made by the Assessees towards such debts, they could claim relief by way of deduction only if such deductions were permissible under the Act.
[825 F G]
|
ivil Appeal No. 1252 of 1976.
Appeal by special Leave from the Judgment and Order dated 13 8 1975 of the Allahabad High Court in Second Appeal No. 179/ 75.
K. Gupta, for the Appellant.
S.T. Desai and R.B. Datar for the Respondent.
SHINGHAL, J.
This appeal, by special leave, is directed against the summary dismissal of defendant Piarey Lal 's second appeal on August 13, 1975.
As the leave has been limited to the question of interpretation of clauses (a) and (b) of section 30 of the U.P. Consolidation of Holdings Act, 1953, (hereinafter referred to as the Act), "for the pur pose of deciding whether the liability of the petitioner to specifically perform the contract of sale of the old hold ing was transferred to the new 'chak ' allotted to him on consolidation," it will be enough to state the facts which bear on it.
916 Respondent Hori Lal raised the suit for specific per formance of an agreement dated March 6, 1966, for the sale of six plote of land measuring nine high and six biswas in village Hathiawali, Tehsil Gannaur.
It was alleged in the plaint that Rs. 3000/ were paid by the plaintiff Hori Lal in advance, and the balance of Rs. 2000/was to be paid at the time of the execution of the sale deed, within one year of the agreement.
It was also pleaded that as defendant Piarey Lal refused to execute the ' sale deed, the plaintiff was driven to the necessity of filing the suit for specific performance of the agreement for sale and, in the alterna tive, for the recovery of Rs. 3000/which had been paid as advance.
Defendant Piarey Lal denied the execution of the agreement for sale and the receipt of Rs. 3,000/ , and pleaded that as new plots had been allotted as a result of the consolidation of his holding under the Act, he could not perform the agreement for sale.
The trial court framed issues, inter alia, on questions relating to the execution of the agreement for sale, payment of Rs. 3000/ to the defendant, and the inability of the defendant to perform the contract.
That court held that the plaintiff had proved the agreement for sale and the payment of Rs. 3000/ ' .
It also held that the agreement for sale could be "enforced for plots allotted to the defendant in lieu of plot mentioned in the agreement in consolidation.
" It therefore decreed the suit for specific performance by its judgment dated August 23, 1973.
The Second Additional District Judge, Badaun, upheld the decree, and as the High Court has dismissed the second appeal as aforesaid, defendant Piarey Lal has come to this Court for a redress of his grievance by special leave.
As has been stated, the limited question for considera tion in this Court is whether the defendant was liable to specifically perform the contract for sale of his old hold ing even after its consolidation and the allotment of a 'chak ' ?
It appears that there was controversy in the Allahabad High Court on the question whether an agreement for sale, in the circumstances of a case like this, was rendered void under section 56 of the Contract Act because of the order of consolidation allotting new plots for the earlier plots in respect of which the agreement for sale had been executed.
A Single Judge of that Court took the view in Sugna and another vs Kali Ram and others(1) that the agreement became void and impossible of performance, and was not saved by section 30 of the Act.
A different view was however taken by another Single Judge in Chetan Singh and others vs Hira Singh and others(1).
The matter was re ferred to a Division Bench in Shanti Prasad vs Akhtar and another.(2) One of the Judges in the Division Bench was the Judge who had given the decision in Chetan Singh 's case.
The Bench held that the duty of the seller to execute the conveyance of the property agreed to be sold, was a liabil ity recognised by law and was enforceable as the liability "relates to the land mentioned in the agreement" and was "transferred to the new 'chak '" under section 30(b) of the Act.
The decision in Shanti Prasad 's case formed the basis of the decision of the first appellate (1) (2) (3) 917 court in this case, and that appears to be the reason why the High Court has dismissed the second appeal summarily.
The controversy therefore turns on the proper interpretation of section 30 of the Act which deals with the consequences which ensue on exchange of possession as a result of the allotment of a 'chak ' to the tenure holder.
Clauses (a) and (b) of section 30 of the Act provide as follows, "30.Consequences which shall ensue on exchange of possession.
With effect from the date on which a tenure holder enters, or is deemed to have entered into possession of the chak allotted to him, in accordance with the provi sions of this Act, the following consequences shall ensue (a) the rights, title, interests and liabili ties (i) of the tensure holder entering, or deemed to have entered, into possession, and (ii) of the former tenure holder of the plots comprising the chak, in their respective original holdings shall cease; and (b) the tenure holder entering into pos session, or deemed to have entered into pos session, shall have in his chak the same rights, title, interests and liabilities as he had in the original holdings together with such other benefits of irrigation from a private source, till such source exists, as the former tenure holder of the plots compris ing the chak had in regard to them.
" It would thus appear that while clause (a) deals with the rights, title, interests and liabilities of the tenure holder entering into possession of the 'chak ', as well as of the former tenure holder of the plots comprising the 'chak ', in their respective original holdings, and provides that those rights, title, interests and liabilities shall "cease", clause (b) provides that the tenure holder entering into possession of the 'chak ' shall have, in that 'chak ', the same rights, title, interests and liabilities "as he had in the original holdings.
" The expression 'chak ' has been defined in section 3(1 A) of the Act to mean "the parcel of land allotted to a tenure holder on consolidation."
The two clauses therefore are quite simple and clear, and ' do not raise any real problems of interpretation, but the question is whether there is justification for the argument, in the facts and circumstances of this case, that the expression "liabilities" would cover the liability of the seller (i.e. the defendant), under the aforesaid agreement for the sale of his original holding ?
As is obvious, clause (a) of section 30 does not bear on the question in controversy because it only provides for the cessation of the rights, title, interests and liabilities both of the tenure holder to whom the 'chak ' has been allot ted, and of the former tenure holder 918 of the plots comprising the 'chak ' in their respective original holdings".
There is no controversy that this was so in the present case.
It is also no body 's case that the rights, title, and interests of the tenure holder entering into possession of his 'chak ' have any bearing on the con troversy relating to the specified performance of the agree ment for sale, for all that has been urged before us is that the defendant, as the tenure holder of the new holding or 'chak ' had the same "liabilities" in that 'chak ' as he had in the original holding.
What therefore remains for consider ation is whether, on the defendant 's entering into posses sion of his new land or 'chak ', there was the same liability "in" the new land as "in" the original holding.
It there fore to be examined whether, by virtue of the agreement for sale, any liability accrued "in" the original holding ? A cross reference to section 54 of the Transfer of Property Act shows that a contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It has however been specifically provided in ' the section that such a contract "does not, of itself, create any interest in or charge on such property.
" It would therefore follow that the agreement for Sale in the present case did not give rise to any interest "in" the original holding of the defendant as the tenure holder.
That being so, there could be no occasion for the transfer of any such "liability in" the new land or 'chak ' of the defendant so aS to attract clause (b) of section 30 of the Act.
In fact what the defendant, was bound to do under section 55(1)(d) of the Transfer ' of Property Act was to execute a proper conveyance of "the property" which was the subject matter of the contract for sale, and not of any other property.
So when he lost that property as a result of the scheme of consolidation and his rights, title, interests ceased in that property by virtue of clause (a) of section 30 of the Act, the agreement for sale became void within the meaning of section 56 of the Contract Act, and it is futile to urge that they were saved by clause (a) or clause (b) of section 30 of the Act.
We have gone through the decision in Shanti Prasad 's case (supra), but we find that while the High Court took note of the fact that the right 's, title, interests and liabilities of the tenure holder "in" his original holdings ceased, and he acquired the same rights, title, interests and liabilities "in" the 'chak ' allotted to him, it lost sight of the significance of the word "in", and the afore said provisions of section 54 of the Transfer of Property Act, and disposed of the controversy before it by raising the other question whether "the tenureholder" was subject to any liability "in respect of" his old holding.
That was why it fell into the error of holding that a liability was created in the original holding of the defendant, and was transferred his 'chak ' on his entering into its possession.
As has been shown, that was an erroneous view which has to be rectified.
It may be mentioned that counsel for the respondent tried to argue that the defendant was bound to execute a proper conveyance of his original holding, which was the subject matter of the agreement of sale, because, that holding had been substituted" by the 'chak '.
919 He also tried to argue that the 'chak ' allotted to the defendant by way of consolidation of his holding was the same as his original holding so that there was no occasion to invoke section 30 of the Act.
Counsel could not however support his argument by reference to the law, or the facts of the case.
Moreover he was unable to show how he could raise any such argument when the special leave had been limited to the interpretation of clauses (a) and (b) of section 30 of the Act.
It would thus appear that the plaintiff respondent 's suit for specific performance of the agreement for sale was liable to dismissal, and the High Court as well as the courts below erred in taking a contrary view.
Counsel for the appellant has however frankly stated at the bar that the appellant would be willing to refund the sum of Rs. 3000/ along with interest at 6 per cent per annum from the date of payment.
The appeal is allowed with costs, the impugned judgment of the High Court is set aside, and the suit of plaintiff respondent Hori Lal is dismissed in so far as it relates to specific performance of the agreement for sale.
It is however ordered that the defendant shall repay Rs. 3000/ to the plaintiff, along with interest at 6 per cent per annum from the date of payment, within three months from today.
M.R. Appeal allowed.
| An application was filed by the first respondent under section 162 clauses (v) and (vi) of the Indian Companies Act for the winding up of the Company on the grounds, inter alia, that the affairs of the Company were being mismanaged and that the directors had misappropriated the funds of the Company.
In the alternative it was prayed that action might be taken under section 153 C and appropriate orders be passed to protect the interests of the shareholders.
The High Court held (i) that the charges set out in the application bad been substantially proved and that it was a fit case for an order for winding up being made under section 162(vi) and (ii) that under the circumstances action could be taken under section 153 C and accordingly it appointed two administrators with all the powers of directors to look after the affairs of the Company.
On appeal by special leave to the Supreme Court by the Company it was contended that the 1067 application under section 153 C was not maintainable inasmuch as there was no proof that the applicant had obtained the consent of requisite number of shareholders as provided in sub clause (3)(a)(i) to section 153 C, that clause providing that a member applying for relief must obtain the consent in writing of not less than one hundred members of the Company or not less than one tenth of the members of the Company whichever is less.
It was alleged that thirteen members who had given their consent to the filing of the application had subsequently withdrawn their consent.
Held that 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 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.
The withdrawal of consent by thirteen of the members, even if true, could not affect either the right of the applicant to proceed with the application or the juris diction of the court to dispose of it on its own merits.
Held further 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 and where therefore the facts proved do not make out a case for winding up under section 162, no order can be passed under section 153 C.
The words "just and equitable" in section 162(vi) are not to be construed ejusdem generis with the matters mentioned in clauses (i) to (v) of the section.
If there is merely a misconduct of the directors in misappropriating the funds of the Company an order for winding up would not be just and equitable 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, section 162(vi) would be no bar to the jurisdiction of the court to make such an order.
The order for winding up was just and equitable in the cir cumstances of the present case.
In re Anglo Greek Steam Company ([1866] L.R. 2 Eq. 1), In re Diamond Fuel Company ([1879] , Spackman 's Case ([1849] 1 M. & G. 170), Be Suburban Hotel Company ([1867] , Be European Life Assurance Society ([1869] I,.
R. , In re Amalgamated Syndicate ([1897] 2 Ch.
600) and Loch vs John Blackwood Ltd. ([1924] A. C. 783, 790), referred to.
|
Writ Petition (Crl.) No. 359 of 1988.
(Under Article 32 of the Constitution of India. ) R.K. Jain, R.K. Khanna and A.S. Pundir for the Petitioner.
Yogeshwar Prasad, Mrs. Rachna Gupta, Mrs. Rachna Joshi, Dalveer Bhandari, Ms. C.K. Sucharita and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by NATARAJAN, J.
This petition under Article 32 of the Constitution of India has been filed by the petitioner to seek the issue of appropriate writs for quashing an order of detention passed against 261 him under Section 3(2) of. the (here inafter the 'Act ') by the State of Uttar Pradesh and for his release from custody.
On April 5, 1988 an order of detention was passed against the petitioner under Section 3(2) of the Act but the petitioner could not be served the order of detention and taken into preventive custody as he was ab sconding.
Consequently he was treated an absconder and resort was had to Section 7(2) of the Act and a proclamation was obtained against him under Sections 82 and 83 of the Criminal Procedure Code on May 4, 1988 and the said order was executed on May 4, 1988.
Thereafter the petitioner surrendered himself in Court on July 4, 1988 and he was sent to the District Jail at Meerut where he was served the detention order and the grounds of detention on July 5, 1988.
In the grounds of detention three grounds were set out for the detention of the petitioner and they read as fol lows: 1.
On 8.7.87 at about 9.30 P.M. in the night at Kasba Sardhana, Police Station Sard hana (Meerut) you alongwith your other compan ions went to the garden of Lala Om Prakash Jain which is in the possession of Yusuf S/o Ismail on contract.
You said to Yusuf etc.
who were present there that they do not pay the (CHAUTH) fee for GUNDAGARDI of the Mango, therefore, you using abusive language said "Kill the Salas, so they may vanish for ever and you people with an intention to kill Yusuf etc.
assaulted them.
On the information of Shri Yusuf a case has been registered against you as Crime No. 211 under Sections 307, 323 I.P.C., which is under consideration of the Court.
Due to your aforesaid misdeed terror in Sardhana and in District Meerut terrorism has spread and in this way you have acted in such manner which is against the Maintenance of Public Law and order situation.
On 11 2 88 at about 11.00 A.M. in the day at the Binauli Road in Kasba and Police Station Sardhana you alongwith your companion Vinay Kumar went to the Shop of Shri Ashok Kumar and you threatened Shri Ashok Kumar that he should pay Rs. 10,000 (Ten thousand) by tomorrow or day after tomorrow otherwise he will be killed.
On the basis of information of Shri Ashok Kumar Crime No. 48 under Section 506 I.P.C. has been diarised which is under consideration.
Due to your aforesaid indecent terror in Kasba Sardhana and in the District of Meerut terrorism has prevailed and in this way you have acted in such manner which is against the maintenance of the Public Law and Order situation.
262 3.
On 3.3.88 in the Kasba of Sardhana, Police Station Sardhana, District Meerut, you taking a Revolver in your hand in the market of Sardhana said to the Shopkeepers that who so ever will not pay money (CHAUTH), he cannot open the shop in the market, due to which the shops were closed in the market.
H.C. Khajan Singh with the help of other employ ees when tried to arrest you then you ran away on the Motor Cycle alongwith your companion while firing in the air.
Information to this effect has been got diarised by HC.
Khajan Singh at Police Station in G.D. No. 14 at 10~10 hours and investigation to this effect has been done by the Inves tigation Inspector Shri R.C. Verma and on investigation the aforesaid incidents were found correct and entry to this effect has been carried out at G.D. No. 33.
By your afore said indecent activity in Sardhana and in District Meerut terrorism has prevailed and in this way you have acted in such manner which is against the provisions of Maintenance of Public law and Order situation.
The grounds of detention also set out the following: (1) The petitioner if he so desires could make repre sentation under Section 8 of the Act to the Home Secretary, Ministry of Home, State Government through the Superintend ent of Jail at the earliest possible; (2) That the papers relating to the petitioner 's detention would be submitted under Section 10 of the Act to the Advisory Board within three weeks from the date of detention and that if the representation is received late it would not be considered by the Advisory Board; (3) That if the petitioner so desired he could also make representation to the Government of India by addressing the representation to the Secretary, Government of India, Ministry of Home (Internal Security Department), North Block, New Delhi through the Superintendent of the Jail, and (4) That if under the provisions of Section 11(1) the petitioner desired to have a personal hearing by the Adviso ry Board he should specifically make mention of it in his representation or he should inform the State Government of his desire through the Jail Superintendent.
263 It is common ground that the petitioner made a represen tation to the Government against his detention and the order passed therefore.
Therein he had set out that he wished to have the services of a friend at the time of the meeting of the Advisory Board to make representations on his behalf.
The representation was received by the District Magistrate, Meerut on July 15, 1988.
After receipt of the comments of the SSP, Meerut the representation along with the comments of the District Magistrate were sent to the State Government on July 21, 1988.
Even prior to it the copies of the repre sentation were forwarded to the State Government and the Advisory Board on July 19, 1988.
The representation was considered and rejected by the State Government on July 28, 1988 and the petitioner was informed of the same through the Jail Superintendent, Meerut.
The meeting of the Advisory Board to consider the case of the petitioner was fixed on August 2, 1988 and a Radio gram was sent by the State Government to the District Magis trate and the Superintendent District Jail, Meerut informing the date of the meeting of the Advisory Board.
The Radio gram further set out as follows: "Board further directs that either District Magistrate or Superintendent of Police to appear before the Board on the date of hearing with.all relevant records and on request of the detenu his best friend (non advocate) may also be allowed to appear with him." A copy of the Radio gram was sent to the Jail Superintendent and it was shown to the petitioner and his acknowledgement was obtained.
The Adviso ry Board considered the written and oral representations of the petitioner and gave a report that there was sufficient cause for the detention of the petitioner.
The State Govern ment accepted the report of the Advisory Board and passed a further order on August 17/18, 1988 confirming the detention of the petitioner.
Thereafter the petitioner has come for ward with this petition under Article 32 of the Constitu tion.
In his petition, the petitioner has raised several grounds to assail his detention, one of them being the non furnishing of the investigation report of Shri R.C. Verma, Inspector of Police who had verified the truth and correct ness of the report of HC 1057 Khajan Singh about the inci dent which took place on March 3, 1988.
However, during the hearing of the writ petition no arguments were advanced in respect of this ground of objection.
Mr. Jain, learned counsel for the petitioner assailed the order of detention on the following grounds: 264 (1) All the three grounds set out in the grounds of detention even if true, are not incidents which would affect the maintenance of public order and at best they can be con strued only as offences committed against individuals or incidents which are likely to affect the law and order situation.
(2) The third ground is a concocted incident in order to give credibility to the detention order by making it appear that the petitioner was indulging in anti social acts which affected the maintenance of public order.
(3) The petitioner was denied opportu nity to have the assistance of a friend when he appeared before the Advisory Board on August 2, 1988.
Besides these contentions Mr. Jain also raised a fourth contention that under Section 3(5) of the Act the State Government is enjoined to send a report within seven days to the Centre Government, of the detention of any detenu under the Act together with the grounds on which the order had been made and on receipt of such a report the Central Gov ernment is bound to consider the matter and either approve the detention or revoke the same in exercise of its powers under Section 14 of the Act.
In this case there was no material to show that the Central Government had performed its duty under the Act.
Since this contention was not raised in the petition and since the Central Government had not been impleaded a party respondent, the petitioner 's counsel filed a petition and sought leave of Court for raising an additional ground and for impleading the Central Government as a party respondent.
These prayers were acceded and on notice being issued to the Central Government, the Central Government made its repre sentation through counsel.
The contentions of the petitioner in his petition have been refuted by the respondents in their counter affidavits, one by the second respondent, District Magistrate, Meerut and the other filed by Shri P.N. Tripathi, Upper Division Assistant, Confidential Section 8 of U.P. (Civil), Secre tariat, Lucknow on behalf of the first respondent, the State of U.P.
We will now examine the merits of the contentions of the petitioner in seriatum.
The first contention is that the three grounds 265 mentioned in the grounds of detention could by no stretch of imagination be construed as acts which would affect the maintenance of public order or the even tempo of life of the community.
Mr. Jain, learned counsel for the petitioner referred to Gulab Mehra vs State of U.P., [1987] IV SCC 302 and urged that the first ground of detention in that case also pertained to the detenu therein threatening to shoot the shopkeepers of Khalasi Line locality if they failed to give money to him and the shopkeepers becoming terror stricken and closing their shops.
This Court had construed the ground as only affecting law and order and not the maintenance of public order.
Mr. Jain argued that grounds 1 and 2 were threats meted out to individual persons regarding which criminal cases have been registered and the 3rd ground was identical to the one noticed by this Court in Gulab Mehra 's case.
Consequently, it was argued that we should also hold, as was done in Gulab Mehra 's case that the grounds set out against the petitioner would at best affect only the law and order situation and would not pose a threat to the maintenance of public order.
We have given the matter our careful consideration but we find ourselves unable to agree with the contention of Mr. Jain.
In ground No. 1, the petitioner had gone with his associates and threatened one Yusuf, the contractor of a mango grove that fees for goonda gardi (Chauth) should be paid to him and the petitioner and his associates assaulted Yusuf saying that they will "Kill the salas".
On Yusuf reporting the matter to the police a case was registered under Sections 307 & 323 I.P.C. against the petitioner and his associates.
The demand for chauth from the contractor and the attack launched on him would show that it was not a case of singling out a particular contractor for payment of chauth but a demand expected to be complied with by all owners or contractors of mango groves in the locality.
In such circumstances the demand made and the attack launched would undoubtedly cause fear and panic in the minds of all the owners and contractors of mango groves in that area and this would have affected the even tempo of life of the community.
Similarly, the second ground pertains to the petitioner going to the shop of one Ashok Kumar and making a demand of Rs. 10,000 and threatening him that unless the money was paid on the following day or the day after the shopkeeper would be killed.
The shopkeeper had reported the matter to the police authorities and a case has been registered against the petitioner u/s 506 I.P.C.
This incident must also be viewed in the same manner in which the first incident has been construed.
It is not as if the demand and the threat following it were made against Ashok Kumar in an insolated manner.
On the other hand, the demand had been made as part of a scheme to extort money from all the shopkeepers under a threat that their continuance of business and even 266 their lives would be in danger if chauth was not paid.
The demand made on Ashok Kumar would have certainly made all the shopkeepers in that locality feel apprehensive that they too would be forced to make payments to the petitioner and that otherwise they would not be allowed to run their shops.
It so far as the 3rd incident is concerned, it is seen that the petitioner had taken a revolver with him and threatened all the shopkeepers in the market of Sardhana that if anyone failed to pay "chauth" he would not be al lowed to open his shop and he would have to face the conse quences.
On account of this threat the shop owners downed the shutters of their shops and at that point of time H.C. Khajan Singh happened to reach the market.
Seeing what was happening H.C. Khajan Singh attempted to apprehend the petitioner but he managed to escape on his motor cycle after firing several shots in the air with his revolver.
H.C. Khajan Singh had at once returned to the station and made an entry in the general diary about this incident.
This incident cannot be considered as merely causing disturbance to the law and order situation but must be viewed as one affecting the even tempo of fife in the mar ket.
The shopkeepers had closed their shops and they as well as the public in the market area would have felt terrified when they saw the petitioner moving with a revolver and demanding 'chauth ' payment by the shopkeepers.
Whether an act would amount to a breach of law and order or a breach of public order has been considered by this Court in a number of decisions and we may only refer to some of them viz.
Dr. Ram Manohar Lohia vs State of Bihar, ; ; Arun Ghosh vs State of West Bengal, ; Nagendra Nath Mondlal vs State of West Bengal, ; and Nandlal Roy vs State of West Bengal, In Gulab Mehra 's case (supra) after noticing all these decisions, it was set out as follows: "Thus from these observations it is evident that an act whether amounts to a breach of law and order or a breach of public order solely depends on its extent and reach to the socie ty.
If the act is restricted to particular individuals or a group of individuals it breaches the law and order problem but if the effect and reach and potentiality of the act is so deep as to affect the community at large and/or the even tempo of the community then it becomes a breach of the public order.
" 267 In State of U.P. vs Hari Shankar Tewari, ; referring to S.K. Kedar vs State of West Bengal, and Ashok Kumar vs Delhi Administration, it was held as follows: "Conceptually there is difference between law and order and public order but what in a given situation may be a matter covered by law and order may really turn out to be one of public order.
One has to turn to the facts of each case to ascertain whether the matter relates to the larger circle or the smaller circle.
Thus whether an act relates to law and order or to public order depends upon the impact of the act on the life of the community or in other words the reach and effect and potenti ality of the act if so put as to disturb or dislocate the even tempo of the life of the community, it will be an act which will affect public order.
" Viewed in this perspective, it cannot be said that the demands made and threats given by the petitioner to the contractors and shopkeepers as mentioned in the grounds would have its reach only to the limited extent of affecting the law and order situation and not go so far as to affect the maintenance of public order.
We are therefore, unable to sustain the first contention urged on behalf of the peti tioner.
Learned counsel for the petitioner then contended that no credence should be given to the last mentioned ground because the names of the shopkeepers who had closed their shops out of fear for the petitioner or the names of the witnesses to the incident have not been set out in the grounds.
It was further contended that the 3rd incident has been concocted in order to give a colour of credibility to the detention order.
The counsel argued that in the report made by Inspector R.C. Verma for an order of detention being passed against the petitioner, a number of instances were given but in spite of it the police authorities felt diffi dent about the adequacy of the materials and had therefore concocted the third incident given as ground No. 3.
We do not find any merit in this contention because the records go to show that H.C. Khajan Singh had promptly reported the incident at the police station and the truth of his report had been verified by Inspector R.C. Verma.
268 It is not therefore possible to accept the contention that the 3rd incident referred to in the grounds of detention is a concocted affair.
In Gulab Mehra 's case upon which reliance was placed by Mr. Jain, we find that the facts therein were quite differ ent.
The first ground of detention in that case pertained to the detenu demanding money from the shopkeepers of Khalasi Line but no shopkeeper had come forward to complain about the detenu and only a picket employed at the police station had made a report.
The second ground related to the detenu lobbing a comb at a police party when it tried to effect his arrest.
It was in those circumstances, this Court deemed it appropriate to quash the order of detention.
In the present case, it may be seen that specific reports had been given by Yusuf and Ashok Kumar about the incidents forming grounds 1 and 2 and cases had been registered against the petitioner.
In so far as the 3rd ground is concerned, H.C. Khajan Singh was himself a witness to the threats given by the petitioner to the shopkeepers with a revolver in his hand and the firing of the revolver by the detenu while leaving the place.
The report of H.C. Khajan Singh has been verified by Inspector R.C. Verma and found to be true.
It is thus seen that the facts in the two cases have no similarity whatever.
On the other hand the observation in State of U.P. vs Karnal Kishore Saini, ; at 213 would be of relevance in this case.
It was held in that case that if firing is made in a public street during the day time, the incident would undoubtedly.
affect public order as its reach and impact would disturb public tranquility and it would affect the even tempo of the life of the people in the locality concerned.
Therefore the decision in Gulab Mehra 's case (supra) cannot be of any avail to the petitioner.
In so far as the 3rd contention is concerned, it was urged that in spite of the petitioner having specifically asked for the assistance of a friend at the time he was heard by the Advisory Board, he was denied opportunity to have such assistance.
The petitioner has averred in his petition as follows: "The petitioner orally as well as in writing requested the Chairman of the Advisory Board to allow him to engage a counsel or atleast a person who is acquainted with the law to represent him before the Advisory Board, as the petitioner was illiterate and was not capable of representing his case before the Advisory Board.
Unfortunately, the Advisory Board rejected the request of petitioner and did not allow him to engage a legal counsel or atleast a person 269 who is acquainted with the provisions of the and forced the petition er to appear before the Advisory Board without any defence helper.
This part of the act of the members of the Advisory Board is illegal, unconstitutional and violative of Articles 14, 19, 21 and 22 of the Constitution of India.
" In the counter affidavit of the District Magistrate, this allegation has been refuted as follows: "Averments made in para No. 2 are wrong and denied.
The petitioner was detained on 5.7.88 in Distt.
Jail, Meerut and his detention is absolutely legal and constitutional.
It is wrong to say that the petitioner was not provided an opportunity by the Advisory Board to defend himself.
On the contrary, he was heard by the Advisory Board on 2.8.89 and the detaining authority had no objection to his case being represented by a person who is not an advocate.
The fact that his request was rejected by the Advisory Board is not in the notice of detaining authority.
As per the Tele.
dated 26.7.88 of the Home Deptt.
of Government of U.P., Lucknow, the petitioner was allowed to appear before the Advisory Board through non advocate next friend.
A copy of the said message is annexed hereto and marked as annexure R I.
However the petitioner 's assertion that he is illiterate is wrong because he knows English and has submitted detailed representation.
According to information available, petitioner is an Intermediate.
The ratio of the decision in A.K. Royal vs U.O.I., (reported in AIR 1982 SC 709) has not been contravened in any manner in the instant case.
" In the counter affidavit on behalf of the State of U .P. it has been stated as follows: "But it is evident from the record that the Advisory Board had directed the State Govt.
through its letter dated 2 Ist July, 1988 that since the petitioner Shri Sharad Tyagi had requested to appear alongwith his next friend, he may be informed to attend the Board 's meeting alongwith his next friend (non advo cate) on the date of hearing.
The State Gov ernment complied with the instructions of the Advisory 270 Board and had sent the necessary directions to the District Authorities through its radiogram message dated 26 July, 1988, a copy of which is annexed hereto and marked as Annexure R I".
Besides the specific averment made in the counter affi davit, Shri Yogeshwar Dayal, learned counsel for the State of U.P. also drew our attention to the radiogram sent by the Government to the District Magistrate wherein it has been clearly stated that "on request of detenu his next friend (non advocate) may also be allowed to appear with him." Mr. Yogeshwar Dayal also made available to us the file contain ing the original records relating to the detention of the petitioner.
We find from the records that the radiogram had been served on the petitioner through the Superintendent of the Meerut District Jail.
The petitioner has affixed his signature in English therein and also written the word "date" but he has not filled up the date.
(It is stated in the counter affidavit that the petitioner is not an illiter ate but has studied upto Intermediate).
This would falsify the averment in the rejoinder affidavit filed by the peti tioner 's wife Smt.
Shobha Tyagi "that the copy of the tele gram annexed to the counter affidavit of the respondent No. 2 was not served upon the detenu; the detenu was never informed that he was entitled to be represented by a friend who is not an advocate." Mr. Jain 's contention was that even if the radiogram had been shown to the petitioner, it must have been done belatedly and there would not have been time for the petitioner to contract anyone and make arrangements for a non advocate friend appearing alongwith him at the meeting of the Advisory Board.
We are unable to countenance this argument because of several factors.
In the first place, the petitioner has not raised such a plea in his petition.
His specific contention was that he had requested the Chairman of the Advisory Board in writing as well as orally to permit him to have the services of a counsel or a person acquainted with the law to represent his case before the Advisory Board but the Advisory Board rejected his request.
It was not therefore his case that he was shown the radiogram belatedly and he did not have time to make ar rangements for anyone to appear alongwith him before the Advisory Board.
Another circumstance which militates the contention of Mr. Jain is that there is no material to show that the petitioner had orally represented to the Chairman of the Advisory Board that he wanted the services of a friend and that he had been shown the radiogram very late.
The respondents have filed a copy of the letter sent by the Additional Registrar of the High Court to confirm that the Advisory Board had accorded permission to the petitioner to appear before the Board 271 alongwith a non advocate friend but in spite of it no one appeared along with the petitioner on the date of hearing, and hence no mention was made in the report of the Advisory Board about the non appearance of a friend on behalf of the petitioner.
Mr. Jain argued that in a number of decisions commencing from A.K. Roy vs Union of India, ; 1 it has been consistently held that even though a detenu will not be entitled to have legal assistance, he does have a right to have the assistance of a friend at the time his case is considered by the Advisory Board and hence denial of opportunity to have the assistance of a friend would vitiate the detention.
This principle is undoubtedly a well stated one.
It has however to be noticed that though the Advisory Board had permitted the detenu to appear alongwith a friend the detenu had failed to take a friend with him.
He did not also represent to the Advisory Board that he did not have adequate time to get the services of a friend and that he required time to have the services of a friend.
Such being the case, he cannot take advantage of his own lapses and raise a contention that the detention order is illegal because he was not represented by a friend at the meeting of the Advisory Board.
This position is a settled one and we may only refer to the observation of this Court in Vijay Kumar vs Union of India, AIR '1988 SC 934 at 939: "It appears from the observation made by the High Court that the appellant, without making any prayer before the Advisory Board for the examination of his witnesses or for giving him assistance of his friend, started arguing his own case, which in all probability, had given an impression to the members of the Advisory Board that the appellant would not examine any witness.
The appellant should have made a spe cific prayer before the Advisory Board that he would examine witnesses, who were standing outside.
The appellant, however, did not make any such request to the Advisory Board.
There is no reason for not accepting the statement of the detaining authority that the appellant was permitted by the Advisory Board to have the assistance of an advocate or friend at the time of hearing, but the appellant did not avail himself of the same.
In the circum stances, we do not think that there is any substance in the contention made on behalf of the appellant that the Advisory Board acted illegally and in violation of the principles of natural justice in not examining the wit nesses produced by the appellant at the meet ing of the Advisory Board and in not giving permission to the appellant to have the as sistance of his friend.
" 272 From the materials on record, we are satisfied that the appellant was accorded permission to have the services of a friend and the radiogram sent by the Government was duly communicated to him but for some reason he had not availed the services of a friend.
He did not also choose to repre sent to the Advisory Board that he was not given sufficient time to secure the services of a friend.
Consequently, the third contention also fails.
We are only left with the fourth and last contention.
No grievance was made in the petition that the Central Govern ment had not considered the petitioner 's case when the State Government sent a report under Section 3(5) of the Act and the non application of mind by the Central Government viti ates the detention of the petitioner.
This ground of objec tion was raised only during the arguments and consequently the Central Government was permitted to be impleaded as a party respondent.
Learned counsel appearing for the Central Government has stated that the Central Government had infact considered the report sent by the State Government and saw no reason to revoke the order in exercise of its powers upon Section 14.
There is no reason to doubt the correctness of this statement.
One other argument advanced before us was that even though the order of detention had been passed on April 5, 1988, no steps were taken to take the petitioner into custo dy till he surrendered himself in Court on July 4, 1988.
This contention is on the face of it devoid of merit because it has been specifically stated in the counter affidavits that the petitioner was absconding and hence proclamations were made under Sections 82 and 83 Cr.
P.C. and it was only thereafter the petitioner had surrendered himself in Court.
It is not therefore a case where the petitioner was freely moving about but no arrest was effected because his being at large was not considered a hazard to the maintenance of public order.
In the result we do not find any ground for quashing the order of detention passed against the petitioner.
The writ petition is accordingly dismissed.
N.V.K. Petition dismissed.
| On April 5, 1988 an order of detention was passed against the petitioner in the writ petition under section 3(2) of the .
He could not be served with this order and taken into preventive custody as he was abscond ing.
He was treated as an absconder and resort was had to section 7(2) of the Act.
A proclamation was obtained against him under Sections 82 and 83 of the Criminal Procedure Code 1973 and was executed on May 5, 1988.
He surrendered thereafter in Court on July 4, 1988 and was sent to the District Jail where he was served the detention order and the grounds of detention on July 5, 1988.
In the grounds of detention three incidents were enumer ated indicating that the petitioner had acted in a manner which was against the maintenance of public law and order situation.
The incidents were: (1) On July 8, 1987 the petitioner had gone along with his associates and threatened the contractor of a mango garden that fees for goondagardi (Chauth) should be paid to him and assaulted the contractor.
The matter was reported to the police who registered a case under Sections 301 and 323 I.P.C. (2) On February 11, 1988 the petitioner threatened a shopkeeper that he should pay Rs. 10,000 immediately falling which he would killed.
The shopkeeper reported the matter to the police who had 258 registered a case under section 506 I.P.C. (3) On March 3, 1988 the petitioner taking a Revolver in his hand moved in the market area and, threatened the shop keepers if they do not pay 'Chauth ' they could not open their shops.
On account of this threat the entire market was closed.
The grounds of detention also informed the petitioner that he could make a representation under section 3 of the Act and that the matter would be submitted under section 10 to the Advisory Board, and that he could make any representation for the consideration of the Board.
The meeting of the Advisory Board was fixed on August 2, 1988.
The Board considered the written and oral representa tions of the petitioner and gave a report that there was sufficient cause for the detention of the petitioner.
The State Government accepted the report of the Advisory Board and passed a further order on August 17/18, 1988 confirming the detention of the petitioner.
In the writ petition to this Court the detention order was assailed on the following grounds: (1) The three grounds set out in the grounds of deten tion are not incidents which would affect the maintenance of public order or the even tempo of the life of the community.
(2) the third incident has been concocted in order to give credibility to the detention order.
(3) The petitioner was denied the opportunity to have the assistance of a friend when he appeared before the Advisory Board, and (4) That the Central Government had not considered the petitioner 's case when the State Government sent a report under section 3(5) of the Act and the nonapplication of mind by the Central Government vitiates the detention of the petitioner.
Dismissing the writ petition, HELD: 1 .(a) The demand for chauth from the contractor and the attack launched on him would show that it was not a case of singling out a particular contractor for payment of chauth but a demand expected to be complied with by all owners or contractors of mango groves in the locality.
In such circumstances the demand made and the attack launched would undoubtedly cause fear and panic in the minds of all the owners and contractors of mango groves in that area, and this would have affected the even tempo of life of the community.
[265E F] 259 l.(b) The incident in the second ground must also be viewed in the same manner in which the first incident has been construed as indicated above.
It is not as if the demand and the threat following it were made against Ashok Kumar in an isolated manner.
On the other hand, the demand had been made as part of a scheme to extort money from all the shopkeepers under a threat that their continuance of business and even their lives would be in danger if chauth was not paid.
This demand would have certainly made all the shopkeepers in that locality feel apprehensive that they too would be forced to make payments to the petitioner.
and that otherwise they would not be allowed to run their shops.
[265G H; 266A B] l.(c) In so far as the incident in the third ground is concerned, the petitioner is stated to have taken a revolver with him and threatened all the shopkeepers in the market, that if anyone failed to pay 'chauth ' he would not be al lowed to open his shop and he would have to face the conse quences.
This incident cannot be considered as merely caus ing disturbance to the law and order situation but must be viewed as affecting the even tempo of life in the market.
[266B D] l.(d) Whether an act relates to law and order or to public order depends upon the impact of the act on the life of the community.
In other words if the reach and effect and potentiality of the act disturb or dislocate the even tempo of the life of the community, it will be an act which will affect public order.
[266E, G] In the instant case, it cannot be said that the demands made and threats given by the petitioner to the contractors and shopkeepers as mentioned in the three grounds would have its reach only to the limited extent of affecting the law and order situation, and not go so far as to affect the maintenance of public order.
[267E] Dr. Ram Manohar Lohia vs State of Bihar, ; ; Arun Ghosh vs State of West Bengal, ; Nagendra Nath Mondal vs State of West Bengal, ; ; Nandial Roy vs State of West Bengal, referred to and Gulab Mehra vs State of U.P., [1987] IV SCC 302, distinguished.
It is not possible to accept the contention that third incident referred to in the grounds of detention is a concocted altair.
The records go to show that H.C. Khajan Singh had promptly reported the incident at the police station and the truth of his report had been verified by Inspector R.C. Verma.
[267H; 268A] 260 State of U.P. vs Kamal Kishore Saini, ; at 213 referred to.
Though the Advisory Board had permitted the detenu to appear along with a friend the detenu had failed to take a friend with him.
He did not also represent to the Advisory Board that he did not have adequate time to get the services of a friend and that he required time to have the services of a friend.
Such being the case, he cannot take advantage of his own lapses and raise a contention that the detention order is illegal because he was not represented by a friend at the meeting of the Advisory Board.
He did not also choose to represent to the Advisory Board that he was not given sufficient time to secure the service of a friend.
[271C D; 272B] 4.(a) The Central Government had in fact considered the report sent by the State Government under section 3(5) of the Act, and saw no reason to revoke the detention order in exercise of its powers under section 14.
[272D] 4.(b) The petitioner was absconding and proclamations were made under sections 82 and 83 Cr.
P.C. and it was only thereafter the petitioner had surrendered himself in Court.
The challenge to the detention order on ground of delay in arrest is not sustainable.
This is not a case where the petitioner was freely moving about but no arrest was effect ed because his being at large was not considered a hazard to the maintenance of public order.
[272F]
|
N: Criminal Appeal No. 329 of 1979.
850 Appeal by Special Leave from the Judgment and order dated 2 9 1976 of the Bombay High Court in Crl.
Rev. Appln.
No. 310/75.
V. N. Ganpule for the appellant.
N.N. Keshwani and Ramesh N. Keshwani for the Respondents 1 2.
M. C. Bhandare and M. N. Shroff for Respondent No. 3.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against a judgment of the Bombay High Court acquitting the respondents of the charge under section 16(1) (a) (i) of the Prevention of Food Adulteration Act.
The respondents were convicted under section 16(1)(a)(i) of the Prevention of Food Adulteration Act and sentenced to 6 months ' R.I. and fined Rs. 2000/ as modified by the Sessions Judge in appeal.
The High Court accepted all the facts proved in the case and found that the confectionary drops sold by the accused to the Food Inspector by way of sample contained coal tar dye.
The High Court however, ac quitted the respondents only on the ground that under Rule 22 as it stood before the amendment required that the minimum quantity of 500 gms.
of the sample seized should be sent for analysis.
This rule was subsequently amended by Rule 22B.
In fact as pointed by this Court in the case of State of Kerala etc.
vs Alassary Mohammed etc.
the amendment by Rule 22B was not really an amendment in the strict sense of the term but merely a clarification of what was really intended by the original Rule 22.
The High Court how ever, on the basis of the decision of this Court in the case of Rajal Das Guru Namal Pamanani vs State of Maharashtra held that as the quantity of the sample sent to the Public Analyst was below 500 gms.
, therefore, the respondents were entitled to an acquittal on this ground alone.
The High Court accordingly allowed the revision and acquitted the respondents.
Thereafter the appellant obtained special leave of this Court and hence this appeal.
A few admitted facts may be mentioned here.
In the first place the decision of this Court in Rajal Das Guru Namal Pamanani vs State of Maharashtra, (supra) was reconsidered by a larger bench of 5 Judges who over ruled the aforesaid decision in the case of State of Kerala etc.
vs Allassary Mohammed etc.
(supra) and held that Rule 22 was purely directory and must always be construed to have been so.
It was further held that it was for the Public Analyst to say whether the quantity of the sample sent to him was sufficient or not for making necessary analysis.
In view of the law laid down by the latest decision of this Court referred 851 to above, it is obvious that the acquittal by the High Court was legally erroneous.
Learned counsel appearing for the respondents raised three points before us.
In the first place he submitted that as at the time when the respondents were acquitted the previous decision of the Court in Rajal Das Guru Namal Pamanani 's case held the field, it is not a fit case where we should exercise our discretionary power under article 136 to set aside the order of acquittal particularly when the case was launched against the respondents as far back as 1971.
Secondly it was contended that even though the previous decision of this Court was over ruled by this Court in the case of State of Kerala vs Alassary Mohammed (supra), yet the previous decision was the law laid down by this Court under article 141 of the Constitution and, therefore, the judgment of the High Court was correct.
As regards the first point we think that there is absolutely no substance in it.
The later decision of this Court in State of Kerala vs Alassary Mohammed (supra) has clearly decided the point of law against the view taken by the High Court and as a logical consequence thereof the acquittal of the respondents was wrong on a point of law.
This appeal therefore is clearly concluded by the aforesaid decision and the question of our exercising discretion particularly in cases of economic offenders does not arise.
This first argument is, therefore, over ruled.
Secondly it was argued that even if the decision in Alassary Mohammed case (supra) holding that Rule 22 was directory and the mere fact that the quantity of sample fell below the quantity required by the Rules did not vitiate the conviction yet this Court refused to interfere in that case and on a parity of the reasons given in that case we should also not interfere.
Reading the decision as a whole we find that while declaring the law this Court refused to interfere on special ground peculiar to the cases before them.
In the first place the case before them was really a test case and the majority of the counsel appearing for the State clearly conceded that they were not at all serious in challenging the acquittal of the respondents but were more concerned with the interpretation to be given to Rule 22.
It is true that in some of the cases from Bombay the counsel showed some anxiety for obtaining conviction but having regard to the peculiar facts of that case this Court considered that it was not necessary to interfere.
This will be clear from the observations made by this Court which may be extracted thus: "In three Kerala cases Mr. section V. Gupte appearing with Mr. K. R. Nambiar and Mr. Sudhakran stated before us 852 that the State was interested more in the correct enunciation of the law than in seeing that the respondents in these .
appeals are convicted.
They were not anxious to prose cute these matters to obtain ultimate conviction of the respondents.
A large number of the other appeals are by the Municipal Corporation of Delhi for whom the Attorney General appeared assisted by Mr. B. P. Maheshwari.
Although a categorical stand was not taken on behalf of the appellants in these appeals as the one taken in the Kerala cases, eventually, the learned Attorney General did not seriously object to the course indicated by us.
In the few t Bombay appeals M/s. V. section Desai and M. N. Shroff showed their anxiety for obtaining ultimate convictions of the offenders, but we do not find sufficient reason for passing a different kind of order in the Bombay appeals.
In similar situations in the case of the State of Bihar vs Hiralal Kejriwal and Anr.
this Court refused to exercise its discretionary jurisdiction under article 136 of the Constitution and did not order the continuance of the criminal proceeding any further.
In Food Inspector, Calicut Corp. vs Cherukattil Gopalan & Anr.
this Court said at page 730: "But in view of the fact that the appellant has argued the appeal only as a test case and does not challenge the acquittal of the respondents, we merely set aside the order and judgment of the High Court.
But we may make it clear that apart from holding the respondents technically guilty, we are not setting aside the order of acquittal passed in their favour.
" Thus the above observations clearly show that this Court was not interfering in those cases mainly on two grounds: Firstly, that the cases were really test cases which only invited a final decision of this Court on the interpretation of Rule 22.
Secondly, that most of the counsel appearing for the prosecution did not challenge the order of acquittal passed by the High Court.
That is why this Court took care to rely on an earlier decision of this Court reported in Cherukattil Gopalan 's case (supra) where this Court while laying down the law on test cases refused to set aside the order on the ground that the acquittal was not challenged by the prosecution.
Neither of the two grounds are applicable to the present case.
It is not a test case 853 at all.
A large number of cases had already been decided in accordance with the decision given by this Court in Alassary Mohammed 's case (supra).
Secondly the appellant has vehemently challenged the acquittal of the respondents and urged before us that the acquittal of the respondents should be set aside and the respondents should be convicted.
Thus the second point raised by counsel for the appellant also does not appear to be tenable.
Lastly it was argued that under article 141 since the earlier case decided by this Court in Pamanani 's case (supra) held the field, it must be held that it was the law laid down by this Court under article 141 of the Constitution.
It is well settled that whenever a previous decision is over ruled by a larger bench the previous decision is completely wiped out and article 141 will have no application to the decision which has already been over ruled, and the court would have to decide the case according to law laid down by the latest decision of this Court and not by the decision which has been expressed overruled.
This contention also therefore, must fail.
Thus for the reasons given above we hold that the judgment of the High Court is vitiated by clear error of law and cannot be sustained.
The next question that remains for determination is as to what is the sentence which would be imposed on the respondents if their acquittal is reversed.
In the instant case we find that the respondents were prosecuted in the year 1971 and ultimately acquitted by the High Court in 1976.
After the acquittal remained in force for three years the matter has come up before us.
In these circumstances, therefore, the ends of justice do not require that the respondents should be sent back to jail.
Mr. Ganpule pointed out that so far as respondent No. 1 Sada Nand was concerned he had a previous conviction to his credit and so he deserved jail sentence.
As the previous conviction was 7 years old and today it will be about 15 years old, we do not think that we should take these facts into consideration while imposing the sentence on the respondent.
For the reasons, therefore, we would allow this appeal and set aside the order of the High Court and convict the respondents under Sec.
16(1)(a)(i) of the Prevention of Food Adulteration Act and sentence the respondents to fine of Rs. 2,000/ each, in default 6 months ' R.I.
In view of the undertaking given by the counsel for the respondents that they will be careful in future we do not choose to pass the consequential order under Sec.
16(1) (d).
P.B.R. Appeal allowed.
| The petitioner, a driver, of a heavy automobile, was sentenced to two years rigorous imprisonment under section 304A IPC for having killed a scooterist by his rash and negligent driving of the vehicle.
The petitioners plea that someone else was responsible for the accident was rejected by the trial and appellate courts.
on the question whether the sentence was excessive, ^ HELD: Rashness and negligence are relative concepts, not absolute abstractions.
The law under section 304A IPC and under the rubric of negligence, must have regard to the fatal frequency of rash driving of heavy duty vehicles and of speeding menaces.
It is fair, therefore, to apply the role of res ipsa loquitur with care.
When a life has been lost And the circumstances of driving are harsh, no compassion can be shown.
[848 A B, D] The petitioner deserves no consideration on the question of conviction and sentence.
[848 C] [(a) Sentencing must have a policy of correction.
When the punishment is for driving offences, the State should attach a course for better driving together with a livelier sense of responsibility and in the case of men with poor families, the State may consider occasional parole and reformatory course.
[848 E F] (b) Victim reparation is still the vanishing point of criminal law.
The victims of the crime, and the distress of dependents of the prisoner, do not attract the attention of the law.
This deficiency in the system must be rectified by the Legislature [848 G]
|
Civil, Appeal No. 2272 of 1966, Appeal from the judgment and order dated January 6, 1966 of Calcutta High Court in Income tax Reference No. 211 of 1961.
section Mitra, A. section Nambiar, R. N. Sachthey and B. D. Sharma, for the appellant.
M. C. Chagla and P. K. Chatterjee, for the respondents 309 The Judgment of the Court was delivered by Hegde, J.
This is, an appeal by certificate, granted by the High Court of Calcutta under section 66A(2) of the Indian Income Tax Act, 1922 (to be hereinafter referred to as the Act) against the decision of that Court in a reference under section 66 (1) of that Act.
The two questions of law referred to the High Court by the tribunal are : (1) Whether section 16(3) of the Act was ultra vires the Central Legislature and (2) Whether on the facts and in the circumstances of the case, the income arising to the three minor sons of the assessee by virtue of their admission to the benefits of the partnership of Messrs. Ajitmal Kanhaiyalal was rightly included in the total income of the assessee under section 16 (3) (a) (iv) of the Act.
The assessee at whose instance those question were referred did not press for an answer in respect of question No. 1.
Therefore that question was not dealt with by the High Court.
Hence we need not go into that question.
The High Court answered the second question in favour of the assessee.
The facts necessary for the purpose of deciding the point in dispute as set out in the statement of the case submitted by the tribunal are as follows : The assessee Shri Ajitmal Parekh was a partner of the firma M/s. Ajitmal Kanhaiyalal having annas share therein.
He continued to be a partner of that firm till July 1, 1954 which was the last date of the accounting year of the firm, relevant for the, assessment year 1955 56.
On July 1, 1954, the assessee retired from the firm.
Thereafter he gifted to each of his four sons Rs., 75,000/ .
Out of his four sons, three were minors at that time.
There was a reconstitution of the firm with effect from July 2, 19.54 as evidenced by the partnership deed dated July 5, 1954.
The major son of the assessee became a partner of the reconstituted firm and his minor sons were admitted to the benefits of that partnership in the reconstituted firm.
The major son had 2 annas share.
His three minor brothers were admitted to the benefits of the partnership, each one of them having 2 annas share.
In the assessment year 1956 57, the Income tax Officer held that the income arising to the minors by virtue of their admission to the benefits of the partnership came within the purview of section 16(3) (a) (iv) of the Act.
He included that income in the total income of the assessee for that year.
In appeal the Appellate Assistant Commissioner substantially upheld the order of assessment made by the Income tax Officer but he held that the 2Supe Cl/7C 6 310 minors were entitled to only 1 9 pies share in the firm.
The assessee took up the matter in appeal to the Income tax Appellate 'Tribunal.
The tribunal upheld the decision of the Appellate Assistant Commissioner.
On the facts found by the tribunal, the High Court came to the conclusion that answer to question No. 2 should be in the negative and in favour of the assessee.
The tribunal found that the capital invested by the minors in the firm came from the gift made in their favour by their father, the assessee.
That finding was not open to question before the High Court nor did the High Court depart from that finding.
But on an interpretation of section 16(3) (a) (iv) the High Court opined that the answer to the question must be in favour of the assessee.
Section 16(3) (a) (iv) reads "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.
(iv) from assets transferred directly or indirectly to the minor child, not being a married daughter by such individual otherwise than for adequate consideration.
" Before any income of a minor child can be brought within the scope of section 16(3) (iv), it must be established that the said income arose directly or indirectly from assets transferred directly or indirectly by its father.
There is no dispute that the assessee had transferred to each of his minor sons, a sum of Rs. 75,000,/ .
It may also be that the amount contributed by those minors as their share in the firm came from those amounts.
But the question still remains whether it can be said that the income with which we are concerned in this case arises directly or indirectly from the assets transferred by the assessee to those minors.
The connection between the gifts mentioned earlier and the income in question is a remote one.
The income of the minors arose as a result of their admission to the benefits of the partnership.
It is true that they were admitted to the benefits of the partnership because of he contribution made by them.
But there is no nexus between the transfer of the assets and the income in question.
it cannot be said that that income arose directly or indirectly from the transfer of the assets referred to earlier.
Section 16(3) of the Act created an artificial income.
That section must receive strict construction as observed by this Court in Commissioner of Income Tax, Gujarat vs Keshavlal Lallubhai Patel(1).
In our (1) 311 judgment before an income can be held to come within the ambit of section 16(3), it must be proved to have arisen directly or indirectly from a transfer of assets made by the assessee in favour of his wife or minor children.
The connection between the transfer of assets and the income must be proximate.
The income in question must arise as a result of the transfer and not in some manner connected with it.
V.P.S. Appeal dismissed.
| The assessee was a partner in a firm.
On the last day of the accounting year of the firm, namely, 1st July 1954 he retired from the firm and gifted 'to each of his four sons Rs. 75,000.
The firm was reconstituted and the first son, who was a major, became a partner in the firm.
The other sons who were minors, became entitled to the benefits of the partnership because, they invested in the firm the amounts received by them as gifts from their father.
In the assessment year 1956 57 the Income tax Officer held that the income arising to the minors by virtue of their admission to the benefits of the partnership, came within the purview of section 16(3) (a) (iv) of the Income tax Act, 1922, and included that income in the total income of the assessee.
The order was confirmed by the Appellate Assistant Commissioner and the Tribunal, but the High Court on a reference, held in favour of the assessee.
In appeal to this Court, HELD : The section creates an artificial income and must be construed strictly, that is.
before an income can be held to come within the ambit of section 16(3) it must be proved to have arisen directly or indirectly from a transfer of assets made by the assessee in favour of the minor children.
The connection between the transfer and the income must be proximate.
It must arise as a result of the transfer and not in some manner connected with it.
[310 H; 311 A E] In the present case, the income of the minors arose as a result of their admission to the benefits, of partnershiip and there is no proximate nexus between the transfer and the income.
[310 G] C.I.T., Gujarat vs Keshavlal Lallubhai Patel, followed.
|
ivil Appeal No. 1484 of 1974.
From the Judgment and Decree dated 26.4.1974 of the Jammu & Kashmir High Court in Civil Second Appeal No. 4 of 1973.
A.K. Sen, E.C. Agrawala, Ms. Purnima Bhat, Atul Sharma and A. V. Palli for the Appellant.
S.K. Bhattacharya (NP) for the Respondent.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Hazrat Baba Ibrahim, a Saint, lived in the area called Rakhbahu in the city of Jammu.
After his demise in the year 1872 his grave became a place of worship for those who had faith in him.
The place was called Ziarat Hazrat Baba Ibrahim (hereinafter called "the Ziarat").
The Ziarat was managed by Sain Ladha, a nephew of Baba Hazrat Ibrahim After Sain Ladha 's death his son Mian Lal Din succeeded him.
At present the Ziarat is being managed by the sons of Mian Lal Din who died in the year 1963.
The Jammu & Kashmir Muslim Wakf Act came into force in the year 1959 (hereinafter called "the Act") whereunder a committee of muslim Wakf (hereinafter called "the Committee") has been incorporated.
The Committee filed a suit against Anayatullah and eight others (sons of Mian Lal Din) restraining them from alienating, raising construction or recovering the rent from the Wakf land in dispute vested in the Ziarat.
According to the plaintiff, the Government of Jammu & Kashmir vide two orders dated September, 22, 1955 and November, 29, 1958 granted land measuring 3 acres and 6 acres 2 kanals 6 Marlas respectively to the Ziarat.
It was alleged that the defendants were treating the property to be their personal property.
They were mismanaging and also alienating the same.
The defendants in their written statement resisted the suit on a number of grounds and 256 stated that the land in dispute was transferred by the Government in favour of their father in lieu of his possessory right over about 400/500 Kanals of land which was taken over by the Government.
It was further claimed that the land was the absolute property of their father and the same has devolved upon the defendants by succession.
It was further claimed that notwithstanding the word "Ziarat" in the Government Orders the grants were in favour of the defendants father in his personal capacity.
The transfer of the land was not in the form of any dedication and as such was not a property of the Ziarat.
The defendants claimed the right to deal with the property in any manner they liked on the ground that the same belonged to them.
The Trial Court by its Judgment dated August 6, 1970 came to the conclusion that the two grants by the State Government were in fact made in favour of Mian Lal Din and not in favour of the Ziarat.
The suit of the committee was dismissed with costs.
The District Judge, Jammu by his Judgment dated February 28, 1973 upheld the findings of the Trial Court and dismissed the appeal of the committee.
The committee went up in second appeal before the Jammu & Kashmir High Court.
Murtaza Fazal Ali, C.J. (as the learned Judge then was) by his judgment dated April 26, 1974 set aside the judgments of the courts below and allowed the appeal of the committee.
The Learned Chief Justice decreed the plaintiff 's suit for injunction as prayed for.
This appeal via Special Leave Petition is against the judgment of the High Court.
Mr. Ashok Sen, learned counsel appearing for the appellant has taken us through the judgment of the Trial Court and that of the Lower Appellate Court.
According to him, the High Court has erred in upsetting the findings of the courts below based on appreciation of evidence.
Mr. Sen contended that the appellant 's ancestors were in possession of ' more than 140 Kanals of land for a very long period and had established possessory title over the said land.
According to him, the Government took over the said land from the father of defendants and in lieu of that two grants in the years 1955 and 1958 were given to Mian Lal Din in his personal capacity.
It was contended that on appreciation of the evidence produced before the Trial Court the courts below found as a fact that the defendants were the owners of the property subject matter of the Government grants and as such the High Court acted illegally in upsetting the same.
The learned counsel relied upon the following findings of the Lower Appellate Court in support of his contention: 257 "As discussed above, the possession of the defendants and their father and grand father and Hazrat Baba Ibrahim over 40 kanals of land as Arak and about 100 kanals of land under cultivation is proved, and it is further proved from the Government order Ext.
D.A./4 refusing the recommendation of the Financial Commissioner that the basis for the grant of proprietary rights in respect of 74 kanals of land was the personal possession of the father of the defendants and his predecessors and it was in lieu of the possession of that chunk of land that the Government parted with 74 kanals of land.
The counsel for the plaintiff has further argued that because the Government orders of 1955 and 1958 mentions the word "Ziarat" as the grantee it is not permissible for the Civil Court to hold that the grant was in favour of the father of the defendants.
Keeping in view the back ground as discussed above, I am unable to agree with the contention of the learned counsel for the plaintiff.
The mere fact that Mian Lal Din was associated with the Ziarat as a descendant of Hazrat Baba Ibrahim Sahib and the mere fact that the word "Ziarat" was used in the Government orders of 1955 and 1958 would not preclude this Court from holding that the grant was not in favour of the Ziarat but was in fact in favour of the father of the defendants.
The contents of the Government orders of 1955 and 1958 referred to above are to be considered with the facts that Mian Lal Din and his ancestor possessed the land in their individual capacity; that the Government repelled the claim of Mian Lal Din for additional grant of land on the simple ground that the land already granted to him was costlier than the land which he held in possession; that there was no intention on the part of the Government to dedicate the land to the Ziarat out of any pious intention; that it was a sort of bargain between Mian Lal Din, the father of the Defendants and the Government where under the land measuring 74 kanals was parted within the proprietary rights by the Government in consideration of Lal Din 's having abandoned possession of over 400 kanals Of land; the fact that the Committee plaintiff also treated the grant in favour of Lal Din as is evident from Ext.
PD also supports my view.
The fact that the defendants and their father leased out a part of the property on a long lease to third parties, the fact that the defendants got compensation for a portion of the land acquired by the Government; the fact that there was no claim laid to the land by the Wakf 258 Committee upto the year 1966 even when the Government orders were passed in 1955 and 1958, the fact that no demand was ever made from Lal Din to render accounts in respect of the income specially derived by him from the suitland, the fact that a large number of shops, khokhas and buildings have been constructed by the defendants (assuming that one room was constructed by the Wakf Committee) also is determinative of the fact that the transfer was infact made in favour of Lal Din and not in favour of the Ziarat as such.
" It is not disputed that the property which is subject matter of the dispute was granted by the State Government under the two orders dated September 22, 1955 and November, 29, 1958.
The respondent plaintiff claims that the grant was in favour of the Ziarat whereas the appellant defendants claim that the property was given to the father of the defendants absolutely and in his personal capacity.
The two documents of title by which the grant was made may now be referred to.
The Government order dated September 22, 1955 is as under: "It is ordered that 3 acres of land of Rakhbahu of the Rakhs and Farms Deptt.
surrounding the Ziarat Shareef of Baba ibrahim Shah be granted to the said Ziarat e Shareef permanently.
By order of the Cabinet.
Sd/ (G.M. Bakshi) Prime Minister".
The Government order dated November, 1958 runs thus; "(1) The confirmation of the action taken by the Prime Minister in granting land measuring 6 acres 2 kanals and 6 marlas to Ziarat Shareef Baba Ibrahim Shah Sahib at Ghandi Nagar Jammu and (2) The grant of compensation amounting to Rs. 12,500 by debit to Housing grant in favour of the said Ziarat for 12.5 kanals of land @ Rs. 1000 per kanal, taken over by the Public Works Department for development of Gandhi Nagar out of the area of 3 acres sanctioned vide Cabinet Order No. 1418 C dated 20.9.55.
By order of the Jammu and Kashmir Government Sd/ Noor Mohd Secretary to Government" 259 The above quoted orders of the Government are absolutely clear and unambiguous and can admit one and only one interpretation that the Government intended to grant the land to Ziarat alone and not to the appellant defendants in their personal capacity.
In fact the names of the appellants defendants or their ancestors are not even mentioned in the two orders.
The High Court interpreted the above quoted two orders as under: " The order of 1955 specifically stated that the lands in Rakhbahu surrounding the Ziarat Shared of Baba Ibrahim Shah be granted to the said Ziarat permanently.
The later order of 1958 also says the same thing.
It is nowhere mentioned in any of these orders that the land was given not to the Ziarat but to the defendant who was Mujawar of the Ziarat either in his personal capacity or in lieu of compensation for his personal lands acquired by the Government.
Since the recitals in the documents are absolutely clear and are expressed in unmistakable terms, there is no room for adducing evidence adduced to contradict the recitals of these two documents.
Thus the evidence adduced by the defendants to show that the grant was made not to the Ziarat but to them is clearly hit by sections 91 and 92 of the Evidence Act and is, therefore, inadmissible.
Further more the grant was made in 1955 and 1958, that is to say several years before and the Government has not come forward after such a long lapse of time to support the stand of the defendants that the grant was intended for them in their personal capacity and not for the Ziarat.
I fail to understand how in face of such clear recitals in the documents the courts below have by a process of evisceration and interpolation construed the documents to means as if it was a grant in favour of the defendants.
The courts below appear to have been influenced by the fact that when the defendants represented to the Government that the lands in their cultivating possession had been taken over by the Government without paying compensation, some Government Officers replied that a substantial grant of land had been made to the Ziarat.
This obviously was a wrong stand taken by the Government Officers and could not clothe the defendants with the right of wiping out the legal validity of the grant made year before the officers gave this reply.
Indeed the remedy of the defendants was to sue for damages or for compensation for, the land unlawfully acquired by the Government.
There was no justification for the 260 defendants to cast their covetous eyes on the property of the Ziarat, taking advantage of their possession over the same which was an managers or trustees and asset a hostile title to it.
The law on the subject is absolutely clear that a manager or a trustee in possession of a religious shrine cannot be allowed to asset a hostile title unless he formally surrenders possession to the lawful authority.
Before going into this point of law at some length it may be necessary to refer to certain proved facts in the case: (1) It is not disputed that the present Ziarat existed since a long time and became a Wakf by long public user.
(2) That the first defendant was the Sajadanashin or caretaker of the Ziarat.
(3) That the land belonged to the Government originally.
(4) That the Government granted the land in dispute to the Ziarat and not to the defendants.
(5) That the defendants were admittedly in possession of the Ziarat as also the properties appurtenant thereto.
In these circumstances it is clear that even if the defendants were in possession of the lands, their possession would have to be referable to a lawful title and cannot be treated to be adverse to the Ziarat.
In other words the possession of the defendants would be for the benefit of the Ziarat.
We agree with the above quoted findings of ' the High Court and approve the same.
We do not agree with the argument of Mr. Ashok Sen that the High Court was in error in upsetting the findings of the courts below.
The question before the High Court was the interpretation of two government orders which was essentially a question of law.
The High Court was justified in observing that in the face of clear and unambiguous terms of the Government orders it was not permissible for the appellant defendants to adduce evidence to show that the grant was made to them and not to the Ziarat.
No other point was raised before us.
We, therefore, dismiss the appeal.
The respondent plaintiff shall be entitled to costs throughout which we quantify as Rs. 15,000.
N. P. V. Appeal dismissed.
| The Ziarat Shareef of Hazrat Baba Ibrahim, a holy place of worship, in the Rakhbahu area of Jammu City was granted certain land to the Ziarat by the State Government vide two orders dated September 22, 1955 and November 29, 1958.
The Ziarat was being managed by the 1st appellant and his brothers, since the death of their father in 1963.
The Committee of Muslim Wakf, incorporated under the Jammu and Kashmir Muslim Wakf Act, which came into force in 1959, file a suit for restraining them from alienating, raising construction or recovering the rent from the Wakf land in dispute vested in the Ziarat, on the allegation that the appellants defendants were treating the lands granted to the Ziarat, as their personal property and mismanaging and also alienating the same.
Resisting the suit, the appellants, defendants contended, inter alia, that notwithstanding the use of the word "Ziarat" in the two Government orders the transfer of the land in dispute was in their father 's favour in his personal capacity, in lieu of his possessory right over about 400/500 kanals of land which was taken over by the Government, and not in the form of any dedication, and as such the land was not the property of the Ziarat but their father 's absolute property, and had devolved upon them by succession and, therefore, they had the right to deal with the property in any manner they liked.
The trial court dismissed the suit, holding that the two grants were in fact made in favour of defendants ' father and not the Ziarat.
254 The first appellate court upheld the trial court 's findings.
However, in second appeal, the High Court held that from the recitals of the two orders of the Government of 1955 and 1958 it was clear that the two grants were in favour of the Ziarat.
Hence, the appellants defendants filed the appeal, by special leave before this Court contending that the High Court had erred in upsetting the findings of the courts below, based on appreciation of the evidence that, as a fact, the appellants defendants were the owners of the property, the subject matter of the Government grants.
Dismissing the appeal, the Court, HELD: 1.1 The two orders of the Government dated September 22, 1955 and November 29, 1958 are absolutely clear and unambiguous and can admit one and only one interpretation that the Government intended to grant the land to the Ziarat alone and not to the appellants defendants in their personal capacity.
In fact the names of the appellants defendants or their ancestors are not even mentioned in the two orders.
The order of 1955 specifically stated that the lands in Rakhbahu surrounding the Ziarat Shareef of Baba Ibrahim Shah be granted to the said Ziarat permanently.
The later order of 1958 also says the same thing.
It is nowhere mentioned in any of those orders that the land was given not to the Ziarat but to the father of the appellants defendants, who was Majawar of the Ziarat, either in his personal capacity or in lieu of compensation for his personal lands acquired by the Government.
[259A, B C] 1.2 A manager or a trustee in possession of a religious shrine cannot be allowed to assert a hostile title unless he formally surrenders possession to the lawful authority.
[260B] In the instant case, there was no justification for the appellants defendants to cast their covetous eyes on the property of the Ziarat, taking advantage of their possession over the same, which was as managers or trustees and assert a hostile title to it.
Even if they were in possession of the lands, it would have to be referable to a lawful title and cannot be treated to be adverse to the Ziarat.
In other words, the possession would be for.
the benefit of the Ziarat.
[259H, 260A, E] 1.3 In the face of clear and unambiguous terms of the Government orders, it was not permissible for the appellants defendants to adduce evidence to show that the grant was made to them and not to the 255 Ziarat.
The question was of interpretation of two Government orders, which was essentially a question of law.
[260G] In the circumstances, the High Court was not in error in upsetting the findings of the courts below.
[260F]
|
vil Appeal No. 10030 of 1983.
From the Judgment and Order dated 6.9.1983 of the Madhya Pradesh High Court in S.A. No. 475 of 1977.
A.B. Rohtagi and S.K. Gambhir for the Appellant.
V.M. Tarkunde and S.V. Deshpandey for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal is directed against the decree of the Madhya Pradesh High Court for eviction of the appellant from a house after holding him to be the respondents ' ten ant.
The appellant denied the title of the plaintiffs and their case that he has been in possession of the property as their tenant.
The trial court accepted the plaintiffs ' case and passed a decree in their favour, which was set aside on appeal by the first appellate court.
The decision was re versed by the High Court in second appeal by the impugned judgment.
Admittedly the house which was in possession of the defendant 's father Misri Lal as a tenant belonged to one Smt.
Raj Rani who sold the same on 11.8.1952 to the plain tiffs ' predecessor ininterest, Navinchand Dalchand.
In 1959 a suit for his eviction was filed by Navinchand, which was resisted on the ground that Smt.
Raj Rani had earlier trans ferred the house to a trust and she, therefore, could not later convey any title to Navinchand.
The trial court re jected the defence and passed a decree against which Misri Lal filed an appeal.
During the pendency of the appeal the parties resolved their dispute amicably.
Misri Lal accepted the title of Navinchand and a deed, Ext.
P. 20, creating a fresh lease in favour of Misri Lal under Navinchand as lessor, was executed with effect from 1.12.1962.
The appeal was disposed of by recording this fact and stating further that the arrears of rent had been paid off.
The compromise petition and the decree have been marked in the present suit as Ext.
P 21 and Ext.
Misri Lal continued to occupy the house till he died in 1972 leaving behind his son, the present appellant, as his heir and legal representative.
Navinchand sold the suit property to the plaintiffs respond ents on 4.1.1973, who sent a notice to the appellant on 14.3.1973.
Since the 538 appellant refused to recognise them as owners of the house, another notice terminating the tenancy was served in January 1976 and the present suit was filed in June of the same year.
The appellant resisted the claim in the plaint on the same old plea which his father Misri Lal had unsuccessfully taken in the earlier suit, namely, that Smt.
Raj Rani having transferred the disputed house to a trust in 1936 was not competent to re transfer it to Navinchand Dalchand, the vendor of the plaintiffs respondents.
The trial court disbe lieved the defence version holding that although Smt.
Raj Rani had executed a trust deed in 1936, but the same was not acted upon and the trust does not appear to have come into existence.
On appeal the first appellate court reversed the finding and further held that the defendant could not be estopped from challenging the title of the plaintiffs.
It has been the case of the appellant that the con sent of Misri Lal to the compromise in the earlier suit was obtained by force, but the plea was not substantiated by any evidence, and it has been pointed out by the High Court that the appellant admitted in his deposition that to his knowl edge no force had been used against Misri Lal.
The High Court further rightly rejected the argument that the decree, Ext.
P. 22, would not bind the parties since it was founded on a compromise and not on an adjudication by the court on the question of title.
The court also observed that the statements made in the compromise petition, Ext.
P. 21, in the earlier suit support the case of the plaintiffs inde pendently of the compromise decree, and further, the defence plea has to be rejected in view of the deed, Ext.
P. 20, creating a fresh lease.
These findings were sufficient for the disposal of the appeal but the High Court proceeded to consider the question whether Smt.
Raj Rani had in fact transferred the suit house in favour of a trust, and decided the issue against the appellant.
The grievance of Mr. Rohatagi, the learned counsel for the appellant, that in view of the limited scope of a second appeal under section 100 of the Code of Civil Procedure, the High Court was not justified in setting aside the find ing of the first appellate court on the question as to whether the property had been alienated in 1936 in favour of the trust or not is well founded.
After the court reached a conclusion against the defendant on the basis of the lease deed, Ext.
P. 20, the compromise petition, Ext.
P. 21, and the compromise decree, Ext.
P. 22, it should not have pro ceeded to decide the dispute relating to title on merits on the basis of the evidence.
However, this error cannot help 539 the appellant unless he is able to successfully meet the effect of Ext.
P. 20, Ext.
P. 21 and Ext.
P. 22.
It has been strenuously contended by Mr. Rohatagi that the principle that a tenant is estopped from challeng ing the title of his landlord is not available to the land lord 's transferee in absence of attornment by the tenant.
Reliance was placed on Kumar Krishna Prosad Lal Singha Deo vs Baraboni Coal Concern Ltd., and Others, A.I.R. 1937 P.C. 252; Mangat Ram and Another vs Sardar Meharban Singh and Others, ; D. Satyanarayana vs P. Jagdish, [ ; and Tej Bhan Madan vs 11 Addl.
District Judge and Others, ; , and a passage from Halsbury 's Laws of England 4th Edn.
16, Paragraph 1628.
The learned counsel strenuously contended that the appellant tenant cannot be estopped from challenging the derivative title of the plaintiffs as he was not inducted into the house by them.
He relied upon the comments of Sarkar on section 116 in his book on the . 7.
It is true that the doctrine of estoppel ordinarily applies where the tenant has been let into possession by the plaintiff.
Where the landlord has not himself inducted the tenant in the disputed property and his right, are founded on a derivative title, for example, as an assignee, donee, vendee, heir, etc., the position is a little different.
A tenant already in possession can challenge the plaintiff 's claim of derivative title showing that the real owner is somebody else, but this is subject to the rule enunciated by section 116 of the Evidence Act.
The section does not permit the tenant, during the continuance of the tenancy, to deny that his landlord had at the beginning of the tenancy a title to the property.
The rule is not confined in its application to cases where the original landlord brings an action for eviction.
A transferee from such a landlord also can claim the benefit, but that will be limited to the question of the title of the original landlord at the time when the tenant was let in.
So far claim of having derived a good title from the original landlord is concerned, the same does not come under the protection of the doctrine of estoppel, and is vulnerable to a challenge.
The tenant is entitled to show that the plaintiff has not as a matter of fact secured a transfer from the original landlord or that the alleged transfer is ineffective for some other valid reason, which renders the transfer to be non existent in the eye of law.
By way of an illustration one may refer to a case where the original landlord had the fight of possession and was, therefore, entitled to induct a tenant in the property but did not have any power of disposition.
the tenant in such a case can attack the derivative title of the transferee plaintiff but not on 540 the ground that the transferor landlord who had initially inducted him in possession did not have the right to do so.
Further since the impediment in the way of a tenant to challenge the right of the landlord is confined to the stage when the tenancy commenced, he is forbidden to plead that subsequently the landlord lost this right.
These exceptions, however, do not relieve the tenant of his duty to respect the title of the original landlord at the time of the begin ning of the tenancy.
Coming to the facts of the present case, it may be recalled that fresh tenancy had been created in favour of Misri Lal, father of the present appellant, under Navinchand by deed Ext.
P. 20, and this fact was fully established by the decree, Ext.
P. 22.
The appellant, in the shoes of his father, is as much bound by these documents as Misri Lal was, and he cannot be allowed to deny the relationship of landlord and tenant between Navinchand and himself.
It has not been the case of the appellant that Navinchand later lost the title or that he had transferred the same to anoth er person, nor does the appellant say that there has been any defect in the sale deed executed in favour of the present plaintiffs.
In other words, the acquisition of title by the plaintiffs from Navinchand, if he be presumed to be the rightful owner, is not impugned, that is, the derivative title of the plaintiffs is not under challenge.
What the appellant wants is to deny their title by challenging the title of their vendor Navinchand which is not entitled to do.
None of the decisions relied upon by Mr. Rohtagi assists him.
On the other hand, the judgments in Kumar Krishna Prosad Lal Singha Deo vs Baraboni Coal Concern Ltd. and Others, AIR 1937 PC 25 1 and Tej Bhan Madan vs Addl.
District Judge and Others, ; , demonstrate that the plea of estoppel of the plaintiffs is well founded.
The Privy Council Case arose out of a suit for realisation of royalties due on Coal raised by the lessee defendant company.
The original lease was granted by the father of the plaintiff, the Raja of Panchkote, in favour of one Radha Ballav Mukherjee.
The defendant was sued as assignee.
The original lease contained a clause giving the lessor a charge for royalties upon the collieries and its plant which was sought to be enforced.
Since there was some dispute about the ownership of the colliery, the defendant company by way of abundant caution obtained a second assignment from anoth er source, being the Official Assignee.
The plaintiff 's claim was denied by the company on the grounds that (i) his father the Raja was not the owner of the colliery and the company was in possession of the colliery as a lessee on the strength of the other assignment from the Official Assignee, 541 and (ii) the company, being merely a transferee from the original lessee Radha Ballav Mukherjee and not being itself the original lessee, could not be estopped from challenging the Raja 's or his son 's title.
While rejecting the defend ant 's stand the Privy Council observed thus: "What all such persons are precluded from denying is that the lessor had a title at the date of the lease and there is no exception even for the case where the lease itself dis closes the defect of title.
The principle does not apply to disentitle a tenant to dispute the derivative title of one who claims to have since become entitled to the reversion, though in such cases there may be other grounds of estoppel, e.g., by attornment, acceptance of rent, etc.
In this sense it is true enough that the principle only applies to the title of the landlord who "let the tenant in" 'as distinct from any other person claiming to be reversioner.
Nor does the principle apply to prevent a tenant from pleading that the title of the original lessor has since come to an end.
" The expression "derivative title" was referrable to the plaintiff, and the Privy Council concluded by observing that the case did not raise any difficulty as there was "no dispute as to the plaintiff 's derivative title".
While rejecting the argument on the basis that the company was not the original lessee and being merely an assignee was free to challenge the lessor 's title, it was said that "the tenancy under section 116 does not begin afresh every time the interest of the tenant or of the landlord devolves upon a new indi vidual by succession or assignment.
" The circumstances in the case before us are similar.
The appellant does not contend that Navinchand had subsequently lost his title or that there is any defect in the derivative title of the plaintiffs.
His defence is that Navinchand did not own the property at all at any point of time, and this he cannot be allowed to do.
He cannot be permitted to question his title at the time of the commencement of the tenancy created by Ext.
P. 20. 10.
In Tej Bhan Madan vs 11 Addl.
District Judge and Others, ; , the question was whether there was a disclaimer of the landlord 's title on the part of the appellant tenant so as to incur forfeiture of the tenancy.
The premises in question originally belonged to one Shamb hoolal Jain, who died leaving behind his wife, two sons and a daughter by the name of Mainawati.
The property was sold in execution of a money decree and was purchased by Maina wati in 1956.
Mainawati conveyed the property to one Gopi nath Agarwal and the 542 appellant who was in possession as tenant attorned the tenancy in his favour.
Subsequently Gopinath sold the same in favour of the third respondent, Chhaya Gupta, and both Gopinath and Chhaya Gupta asked the appellant to attorn the tenancy in favour of Chhaya Gupta.
The appellant declined to do so and challenged not only the title of Chhaya Gupta but also the validity of the sale in favour of Gopinath.
This led to the filing of the case for his eviction on the ground of disclaimer.
It is significant to note that the foundation of the proceeding for ejectment was the appellant 's denial of the title of Gopinath in whose favour he had earlier attorned the tenancy, and not the challenge of the deriva tive title of the third respondent.
Overruling the objec tions of the appellant, a decree for eviction was passed against him and his writ petition before the High Court was dismissed.
In this background he came to this Court and made an argument similar to the one pressed in the case before us.
Rejecting the appellant 's point, this Court observed thus: "The stance of the appellant against the third respondent 's title was not on the ground of any infirmity or defect in the flow of title from Gopinath, but on the ground that the latter 's vendor Mainawati herself had no title.
The derivative title of the third respondent is not denied on any ground other than the one that the vendor, Gopinath to whom appellant had attorned had himself no title, the implication of which is that if appellant could not have denied Gopinath 's title by virtue of the inhibitions of the attornment, he could not question third re spondent 's title either.
Appellant did himself no service by this stand.
" The case is clearly against the appellant.
The above passage as also the last sentence in paragraph 4 of the judgment which is mentioned below also indicates as to what can be termed as a derivative title which a tenant may be free to challenge: "But the appellant tenant declined to do so and assailed not only the derivative title of the third respondent to the property but also the validity of the sale in favour of Gopinath himself.
In D. Satyanarayana vs P. Jagdish, ; , the Court was dealing with one of the exceptions to the rule of estoppel which permitted a sub tenent: 543 "to show that since the date of the 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.
The facts were that the appellant was a sub tenant of the tenantrespondent and the landlord served a notice on him terminating the tenancy of the tenant respondent on the ground of unlawful subletting.
The appellant thereupon attorned in favour of the paramount title holder and started paying the rent directly to him.
The tenantrespondent, thereafter, commenced the eviction proceeding and a decree was passed which was challenged before this Court by the appellant tenant.
After enunciating the general rule of estoppel under section 116 of the Evidence Act the Court pointed out the exception where a tenant is evicted by the paramount title holder and is thereafter reinducted by him under a fresh lease.
Extending this exception to the tenant 's ap peal, it was held that the rule applied where the tenant can show: "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.
" The decision is patently not applicable to the case before us.
In Mangat Ram and Another vs Sardar Meharban Singh and Others, , the principle decided was stated in the following words: "The estoppel contemplated by section 116 is re stricted to the denial of title at the com mencement of the tenancy and by implication it follows that a tenant is not estopped from contending that the title to the lessor had since come to an end.
" The Lahore case is also clearly distinguishable.
After the death of the lessor her daughters claimed rent from the tenants.
The tenants disputed their derivative title and the court held that though the tenants would not dispute the title of the mother at the commencement of the lease, they were entitled to challenge the derivative title of the plaintiffs and that the daughters had to prove that the property was Sridhan of their mother which they inherited under the Hindu Law.
The principle was correctly enunciated there, but that does not help 544 the appellant at all.
To the same effect are the following observations in Halsbury 's Laws of England 4th Edn., Vol.
16, paragraph 1628 relied upon by Mr. Rohatgi: "Thus although an assignee of the lessor is to all intents and purposes in the same situation as the lessor, and takes the benefit of and is bound by a lease by estoppel, the lessee is not estopped from showing that the lessor had no such title as he could pass to the assign ee, or that the person claiming to be the assignee is not in fact the true assignee." (emphasis supplied) The significance of the words which have been underlined above has to be appreciated for correctly understanding the principle enunciated.
For the reasons mentioned above, we hold that the appeal has no merit and is accordingly dismissed with costs.
N.V.K. Appeal dis missed.
| Respondent No. 2, a scheduled caste, filed a case for restoration of lands sold to respondent Nos. 1, 3 and 4, non scheduled castes, on the ground that the sale was in viola tion of section 22 of the Orissa Land Reforms Act, 1960 as the requisite permission of the Revenue Officer was not obtained.
In the sale deed the transferor Respondent was described as 'Rajaka ' while in the caste certificate he was mentioned as ' Dhoba '.
The Revenue Officer rejected the ease.
Respondent No. 2 filed an appeal which was allowed by the Additional District Magistrate.
Against the order of Additional District Magistrate a revision was preferred by respondent No. 1 which was dismissed by the Special Officer, Land Reforms by holding that merely because the word 'Raja ka ' does not find mention in the Scheduled Caste Order, 1950 does not exclude it from the purview of such an order.
In the connected appeal respondent No. 5 filed a case for restoration of land sold to respondent No. 1 which was allowed by the Revenue Officer.
The appeal filed by respond ent No. 1 was dismissed by the Additional District Magis trate.
A Revision preferred by Respondent No. 1 was also dismissed by the Special Officer Land Reforms.
Respondent No. 1 filed writ petitions in the High Court which quashed the orders made by the Special Officer, hold ing that the Revenue Authorities committed a serious error of law in holding that 89 'Rajaka ' caste was included within the notified caste/commu nity of Dhoba '.
In these appeals it was contended on behalf of transfer ee respondents that the Caste 'Rajaka ' mentioned in the sale deeds cannot be taken to be synonym of caste 'Dhoba ' men tioned in Item 26 of the List in Scheduled Castes Order, 1950.
Allowing the appeals, this Court, HELD: 1.
Though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ' there is no such caste mentioned in the Consti tution (Scheduled Castes) Order, 1950.
In such circum stances, it is necessary and also incumbent on the Court to consider as to what caste they belong to.
[96B] B. Basavalingappa vs D. Munichinnappa, [1965] 1 S.C.R. 316, followed.
2. 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Purna Chandra Oriya Bhasakosh a which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman.
Therefore the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable.
[96A] 3.
In the record of rights as well as the various cer tificates issued by the revenue authorities and the local M.L.As the transferors have been described as belonging to 'Dhoba ' community.
The irresistible conclusion that follows is that the respondent transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa.
[96H, 97A] 3.1 Therefore the transfers made by respondent Nos. 2 and 5 in favour of respondent No. 1, who admittedly belongs to Brahmin caste, are hit by the provisions of Section 22 of the Orissa Land Reforms Act, 1960 in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers.
[95C] [The transferee respondents directed to restore the lands in question to the possession of the transferor respondents forthwith.] [97C]
|
l Appeals Nos. 1239 to 1241 of 1966.
Appeals by special leave from the Award dated October 1, 1965 of the Industrial Tribunal, Maharashtra, Bombay in Reference (I.T.) Nos. 84, 112 and 121 of 1959.
K. T. Sule, M. G. Phadnis and Vineet Kumar, for the appel lants (in all the appeals).
G. B. Pai, P. N. Tiwari and P. K. Rele, for the respondents (in all the appeals).
3 7 5 P. Jaganmohan Reddy, J.
These three Appeals are by the P. Jaganmohan Reddy,J.
These three appeals are by the Workmen of the three Respondent Companies respectively Civil Appeal No. 1239 of 1966 is against Greaves Cotton & Co. Ltd., Civil Appeal No. 1240 of 1966 is against Greaves Cotton & Crompton Parkinson Pvt. Ltd., (later amalgamated in 1966 and a new Company formed as Crompton Greaves Ltd.), and Civil Appeal No. 1241 of 1966 is against Kenyon Greaves Pvt. Ltd. On the 29th April 1958 a charter of demands was presented by the Workmen through their Trade Union Greaves Cotton and Allied Companies Employees Union to the Respondents in the above three Appeals and to Russian & Hornby India Pvt.
Ltd. These demands were in respect of the wage scale, dearness allowance, leave gratuity etc.
After the conciliation proceedings under sub section (4) of Section 12 of the (hereinafter called the 'Act ').
had failed, the disputes in respect of the aforesaid matters were ultimately referred by the Maharashtra Government to Shri P. D. Sawarkar for adjudication under Section 10 (1) (d) read with 12 (5 ) of the Act.
In respect of demands made against Greaves Cotton & Co. Ltd., the reference was made on 8 4 59 and 24 12 59; against Greaves Cotton & Crompton Parkinson Pvt. Ltd. on 30 5 59 and 24 12 59 and that against Kenyon Greaves Pvt. Ltd., on 8 6 59 and 9 1 60 respectively.
We are here not concerned with the other references.
By an Award dated 3rd June, 15th and 16th June 1960 the Sawarkar Tribunal revised the wage scales and dearness allowance of all workmen employed by those Companies.
Ruston & Hornby India Pvt. Ltd. appealed against the Awards to this Court which by a common Judgment dated 14th November 1963 held that the wage scale and dearness allowance fixed by the Industrial Tribunal for the clerical and subordinate staff did not require any interference and to that extent dismissed the Appeal.
It however set aside the wage scale and dearness allowance fixed for factory workmen and remanded the matter to the Tribunal for fresh fixation of wage scale and dearness allowance with these observations : "We allow the Appeal with respect to the factory workmen and send the case back to the Tribunal for fixing the wage structure including basic wages and dearness allowance and for granting adjustments in the light of the observations by us.
The new Award pur suant to this Award will come into force from the same date namely April 1, 1959".
When the references were taken up by the Tribunal on remand the parties agreed that in view of the decision of this Court certain 3 76 references stood finally disposed of namely references dated 24th December, 1959 by the Workmen in Greaves Cotton & Co. Ltd., and in Greaves Cotton & Crompton Parkinson Pvt. Ltd. and that dated 9th January 1960 by the workmen of Kenyon Greaves Pvt.
Ltd. The other three which were also held to be finally disposed of were against the Workmen of Ruston & Hornby India Pvt. Ltd. with which we are not concerned in this Appeal.
The parties however, agreed that only three references dated 8th April, 1959, 30th May 1959 and 8th June, 1959 by workmen against Greaves Cotton & Co. Ltd., Greaves Cotton & Crompton Parkinson Pvt. Ltd., and Kenyon Greaves Pvt. Ltd. survive.
During, the proceedings before the Tribunal two questions were raised (1) Whether the Supreme Court remanded the matter for consideration of the dispute in respect of certain categories of employees including those of the Supervisors; and (2) Whether it was open to the Respondents to claim fixation of service conditions on the basis of individual units.
On behalf of the employees it was contended that the dispute regarding the Foremen or Supervisors who were included in the term subordinate staff was concluded by the Judgment of the Supreme Court inasmuch as it had dismissed the Appeal in respect of Clerical and subordinate staff.
The employers on the other hand contended that the reference was in respect of the six categories of Workmen specified in the Supreme Court Judgment which included Supervisors.
Shri Athalye who was the then Judge of the Industrial Court after hearing the parties made an order on 14th July 1964, inter alia holding : (1) That the Companies were precluded from agitating that wage scales in the different factories should be fixed on the basis of individual units; and (2) that the Sawarkar Award was set aside by this Court in respect of all workmen except those who could be properly classified as office staff.
After this order the Respondents were asked to file statements regarding comparative wage scales of Supervisors, in their concerns as well as in other concerns.
These statements were filed without prejudice to their contention that the Tribunal had no jurisdiction to fix wage scale in respect of Supervisory staff.
The documents filed on behalf of the third Respondent namely Kenyon Greaves Pvt Ltd., showed that it did not employ any staff in the Supervisory grade.
Thereafter the references were heard by Shri Paralkar who had succeeded Shri Athalye as Judge, 377 Industrial Tribunal.
It was contended before him that the Foreman (Supervisors) were not workmen within the definition given in the Act and that no wage scales in respect of the Supervisors in the Respondent Companies should be fixed.
The stand taken by the Appellant was that it was not open to the Respondent Companies to raise the question whether the Supervisors were Workmen within the meaning of the Act as it did not arise on the remand orders made by this Court.
In the alternative it was contended that many Supervisory work men, concerned in the dispute were drawing a total salary below Rs. 500 'and that even if everyone of them was promoted from the category of supervisors or for the sake of argument it was held that Foremen and Supervisory staff were not workmen within the meaning of the Act, the Workmen had a right to raise a dispute regarding wage scale and dearness allowance of the Supervisory staff because they have a communist of interest with them.
The Tribunal therefore had jurisdiction to entertain the depute in respect of wage scales and dearness allowance of the Supervisory staff.
The Appellant also contended on behalf of the Workmen that the only question that was pending before the Tribunal was to fix wages for factory workmen and therefore the Tribunal had no jurisdiction to decide at that stage as to which category the workmen belonged.
The Tribunal by its Award of the 1st October 1965 held after hearing the parties that Supervisors were not workmen within the meaning of the Act and that the claim for revision of wage scale and dearness allowance payable to them was in that view rejected.
Against this Award the above Appeals were filed by Special Leave granted by this Court confined only to the point whether the decision contained in paragraph 15 and 16 of the Award was correct.
At the outset it was conceded by the parties that Civil Appeal No. 1241 of 1966 by the Workmen against the Kenyon Greaves Pvt. Ltd. did not survive because there are no persons working in the Supervisory capacities and drawing less than Rs. 500/being the two conditions requisite under Section 2 (s) (iv) of the Act to be a 'Workman the non fulfilment of which would deprive the Tribunal of its jurisdiction to determine the dispute; and therefore the appeal has to be dismissed.
Even in respect of the other two appeals the learned Advocate for the Respondent submits that there are no workman working in the Supervisory capacities and drawing less than Rs. 500/ in the 3 78 other two Undertakings in respect of which the Appeals have been filed and consequently they should also be dismissed.
We shall, however, deal with this submission later on.
Before us five contentions have been urged by the learned Advocate for the Appellant: First whether the case of Supervisors was at all remanded to the Tribunal for adjudication by the Supreme Court; Secondly whether it was open to the Respondents to agitate when the matter was remanded to the Tribunal, for the first time to challenge the jurisdiction of the Tribunal to fix wage scale and dearness allowance of the Supervisors; Thirdly whether Supervisors getting less than Rs. 500/ per month on the crucial date namely the date of reference can raise a dispute regarding wages which take them beyond Rs. 500/ ; Fourthly whether workmen can raise a dispute about non workmen, as regards terms of employment of non workmen and in what circumstances.
Fifthly whether the Tribunal on remand is right in holding that in December 1964, none of the Supervisors were drawing less than Rs. 500/ .
With respect to the first two contentions the Appellant 's learned Advocate submits that in the Special Leave Petition against the Award passed by Mr. Sawarkar neither the wage scales of Supervisors nor any question about the jurisdiction of the Tribunal was raised nor was such a contention urged before this Court in the Appeals which were partly allowed and remanded by this Court.
Even before the Industrial Tribunal, after the remand, when the Respondent Companies in compliance with its orders dated 15 1 54 submitted statements giving the names of workmen including Supervisors (Foremen) which were covered by the reference and gave their details as called for by the said Tribunal, the comments of the Appellants which were submitted on 27 2 64 were that the category of Supervisors was not covered by the order of remand, and the wage scale and dearness allowance for that category have been confirmed by this Court by its judgment dated the 14th November 63.
This was controverted by the Respondents and by further supplementary written statement dated 16 3 64, each of the Respondent Companies, it is alleged, tried to cover up and reagents the matter which had already been settled by this Court regarding uniform service conditions for the entire Greaves Cotton group of Companies on the basis that Greaves Cotton & Co., was the principal Company.
379 Even in these supplementary written statements it is alleged no question was taken up by the Respondent Companies that the Foremen were not workmen within the meaning of the Act.
The Appellant had on 24 3 64 submitted an application to the Industrial Tribunal stating that the supplementary written statements should not be taken on record since the issue in the said supplementary statements regarding uniformity in the wage scale and dearness allowance was decided by this Court.
It also urged that the issue regarding Drivers, Cleaners and apprentices and Supervisors were categories remanded by the Supreme Court for fixing their wage scale should be decided as a preliminary issue.
As we have already stated the Tribunal gave its decision on the two issues which were raised before it after this Court had remanded the matter.
On the other hand it is contended by the Respondents that it is not open to the Appellants to raise this question because the Special Leave having been confined only to the point whether the decision contained in paragraphs 15 and 16 of the Award is correct, it is open to it to urge that the Supervisors were not workmen.
It was pointed out that from Paragraph 15 and 16 of the Award it is evident that the demand for the revision of the wage scale and dearness allowance of the Supervisors even for the lowest grade on the lowest scale made them non workmen as their emoluments exceed Rs. 500/ , which decision also clearly indicates that the question of fixation of the Supervisors wage scale and dearness allowance was remanded to the Tribunal.
It is further stated that this Court had in its Judgment dated 14th November 1963 allowed the Appeal with respect to the 'factory workers ' and sent the case back top the Tribunal for fixing the wage structure for the 'factory workmen ', that it is implicit in the order of remand that the Tribunal would have jurisdiction to determine whether any employee of the factory was or was not a workman within the meaning of the Act; that if the Appellant 's contention is accepted it would virtually mean that this Court by its Judgment had conferred a jurisdiction on the Tribunal to deal with the case of non workmen which the Tribunal under the Act did not possess; and that the question whether there is community of interest between other workmen of the Respondent and Supervisors who may be non workmen is a mixed question of fact and law, which has not been raised before the Tribunal and ought not be allowed to be raised for the first time before this Court.
It is also contended that the question whether some of the workmen could raise a dispute regarding the grades of the Supervisors as there is a community of interest was not the subject matter of the decision in para 15 and 16 of the Award, and that since the wages including dearness allowance of all supervisors at the date of the Award were in excess of 380 Rs. 500/ the question of considering the claims of the Supervisors who were non workmen at the instance of supervisors workmen ,does not arise.
It is not in our view necessary to go into these several contentions except to examine the scope of the Judgment of this Court in Civil Appeals Nos. 272 280 of 1962 dated 14 11 61 by which the remand was made to the Tribunal.
The order is in the following terms : "We therefore dismiss the Appeal so far as retrospective effect and adjustments as also fixation of wages and dearness allowance with respect to clerical and subordinate staff are concerned.
We allow the appeal with respect to factory workmen and send the cases back to Tribunal for fixing the wage structure including basic wage and dearness allowance and for granting adjustments in the light of the observations made by us. ".
The Award of the Tribunal which this Court was considering in the said appeals dealt with the clerical and subordinate staff separately from the factory workmen.
It is in respect of the portion of the Award relating to Clerks and subordinate staff that the appeal was dismissed and that dealing with the factory workmen was remanded.
Factory workmen had been divided into six categories and the employees of the Respondents had been directed to be fixed with separate wages for each category.
These six categories were: (i) Unskilled.
(ii) Semi skilled I. (iii) Semi skilled II.
(iv) Skilled I. (v) Skilled II, and (vi) Skilled III.
Apart from this the Sawarkar Tribunal in para 58 said, in those references it was concerned with the factory work men of only the three Respondent Companies; that different scales of wages prevail for different classes of workmen but which categories should be placed in which class is not prescribed.
It referred to the wage scale of different classes of workmen prescribed by Shri Divatia in which apart from the above six categories, three categories of Supervisors grade I, II & III were also given.
The Tribunal, however, while retaining these six categories introduced a seventh category of higher unskilled, which as this Court observed was not justified because there cannot be degrees of want of skill among unskilled class.
Apart from this the main attack was on the wages fixed for these six categories on the ground that 381 the Tribunal completely overlooked the wages prevalent for these categories in concerns which it had considered comparable.
Court observed "but the way in which the Tribunal has dealt with the matter shows that it paid scant regard to the exemplars.
filed before it and did not care to make the comparison for factory.
workmen in the same way in which it had made comparison for clerical and subordinate staff.
In this circumstances wagescales fixed for factory workmen must be set aside and the matter remanded to the Tribunal to fix wage scales for factory workmen dividing them into six categories as at present and then fixing wage after taking into account wages prevalent in comparable concerns.
The parties will be at liberty to lead further ' evidence in this connection".
It is clear from this judgment that the subordinates and factory workmen were, treated separately and we cannot accept the contention of the learned Advocate for he Appellant that in dismissing the appeal this Court had rejected the contentions of the Respondents relating to the Supervisors who according to it were included in the category of subordinate: staff.
Earlier the Sawarkar Award had after noticing that there are 3 sub divisions in the category of Supervisors laid down the scales which were higher having regard to its desire to prescribe the same scales for the three sub divisions as those for skilled sub division 1.
It is also apparent from the statements ' filed that the Foremen or Supervisors were divided into 3 categories according to their pay scales.
The pay of the Grade I was Rs. 360 20 500, of Grade Rs. 300 15 360 and of Grade III Rs.
250 10 300.
The Appellants themselves referred to these Supervisors as Foreman.
Work men under Section 2 (s) (iv) of the Act means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual supervisory or technical work, "but does not include any such person who being employed in a supervisory capacity, draws wages exceeding Rs. 500/ per mensem or exercise either by the nature of the duties attached to the office or by reasons of the powers vested in him, functions mainly of a managerial nature".
This Court in remanding the case of the factory workmen had under contemplation all those workmen who on the date of the reference were employed in a Supervisory capacity and drawing less than Rs. 500/ as these were included in six categories of workmen as classified by the Tribunal.
We do not think there is anything in the remand order to warrant the submission that the case of Supervisors was included among the category of subordinate staff or that it was not remanded.
After the remand the Tribunal was justified in holding that this Court had set aside 'the Award of the previous Tribunal in respect of all those workers who could not be properly classified as office staff in which the Foremen or Supervisors could not be Am L 1340 Sup CI/71 382 included.
It is also not the case of the Appellants that workers who were working in a Supervisory capacity were classified as ,office staff.
In our view it was open to both the parties to raise all the contentions that were open to them because on remand the wage structure of the factory workers including basic wage and their dearness allowance had to be considered afresh.
This conclusion is supported by the fact that parties were given liberty to adduce further evidence in respect thereto.
A reference to para 15 and 16 of the Award to which special leave is confined makes it clear that both parties were proceeding on the basis that the Tribunal has jurisdiction to deal with those supervisors who under the Act are workmen.
The only controversy was whether the Tribunal could fix a wage scale, for them which will ultimately give them a total wage together with basic pay and dearness allowance of over Rs. 500/ p.m. or fix scale which has an initial starting salary with dearness allowance in excess of Rs. 500/ p.m. which makes them non workmen and thus deprive it of jurisdiction to deal with the dispute.
It may be of interest to notice the arguments addressed before the Tribunal on behalf of the parties.
The contention by the Companies was that though the Supervisors may be in the category of workmen at the time of the reference the Tribunal would have no jurisdiction to revise their wages and grant to them at any stage, a total emoluments exceeding Rs. 500/as that would convert them into non workmen.
On the other band on behalf of the employees the submission was that the Companies had not raised this question in appeal before the Supreme ,Court and in any case it was 'not open to them to contend that the 'Tribunal had no jurisdiction to revise the wage scales of this class as Shri Athalye in ' his order of 14 7 64 had on a consideration of the Judgment of this Court held that the question of revision of the wages and dearness allowance of the Supervisors class was to be considered by that Tribunal.
In our view therefore, the ,dispute relating to the Supervisors wage structure and dearness allowance could, certainly on the plea of both employers and employees, be determined by the Tribunal.
The only question that could be raised and has been raised was whether the Tribunal has jurisdiction to fix wage scales to go beyond Rs. 500/ and whether as a matter of fact there were any workmen at the time of the dispute who were working in a supervisory capacity drawing a wage not exceeding Rs. 500/ .
The Tribunal noted that Shri Phadke for the Companies did not urge that the persons for whom revision was sought are engaged in managerial functions or at the time the dispute arose were all non workmen so is to dis,entitle them to raise the dispute and to exclude the jurisdiction of the Tribunal altogether.
If it were so, the Tribunal observed, the question must be deemed to have been impliedly concluded by the decision of the Supreme Court and the interpretation put 383 there were persons employed in a Supervisory capacity drawing a wage not exceeding Rs. 500/ and who as workmen within the amended definition of that expression were interested in demanding scales which take them beyond Rs. 500/ .
But it was contended by the Companies that even if the employees are entitled to raise the demand the Tribunal would have no jurisdiction to grant it in a manner so as to convert them into non workmen.
On these contentions the Tribunal held that although 'the Supervisors drawing a wage not exceeding Rs. 500/ may be entitled to raise the demand and ask for a scale which would take them beyond Rs. 500/ they would not be justified in making a claim for a scale which at the very commencement would provide them with a wage in excess of Rs. 500/ .
A claim for Rs. 300/as basic wage for the last grade of Supervisors together with a claim for dearness allowance would come to an amount in excess of Rs. 500/ and thus convert the Supervisors into non workmen even at the very commencement.
Such a claim, the Tribunal thought would obviously not be tenable because although it may be permissible on the grounds of social justice to revise the wage scale which may be justified by the circumstances in the case it will not be permissible for the Tirbunal to fix it so as to convert a workman into a non workman.
This leads us to the consideration of the third and the fourth point urged before us namely whether the Supervisors getting less than Rs. 500/ per month on the crucial date which is the date of reference can raise the dispute for wages taking them beyond Rs. 500/ and whether workmen can raise a dispute about non workmen.
In our view the Tribunal has jurisdiction to consider revision of wage scale, dearness allowance and other emoluments so long as there is a category of workmen who are employed in a supervisory capacity and drawing less than Rs. 500/ .
Even where the workman in a supervisory capacity ask for a pay structure which takes them beyoned Rs. 500 that by itself does not preclude its jurisdiction to determine what is the proper wage structure, for that class or category of workmen.
The view of the Tribunal was that though it is possible for Supervisors who are workmen on the date of the reference to demand a wage scale beyond Rs. 500/ they would not be justified in making a claim for a scale which at the very commencement would give them a wage in excess of Rs. 500/ so as to take them out of the category of workmen and make them non workmen.
The learned Advocate for the Appellant submits that merely because a claim is made by the Supervisors for an initial wage in excess of Rs. 500/it does not imply that it will be granted or merely for that reason deprive the Tribunal of its jurisdiction to pass an Award in respect of a wage which it considers to be fair and proper.
There 384 is no gain saying the fact that once a Tribunal is vested with the, jurisdiction to entertain the dispute which is validly .
referred, it does not cease to continue that jurisdiction merely because the claim made goes beyond the wage which takes workmen out of that category and make them non workmen.
What has to be seen is whether on the date of the reference there was any dispute in respect of the workmen which could be referred under the Act to the Tribunal.
In any case can workmen raise a dispute about non workmen even if many or all of them have since the reference become non working ? In All India Reserve Bank of India Employees Association vs Reserve Bank of India,(1) this Court had occasion to consider these aspects.
In that case Class 11 and Class III staff of the Reserve Bank of India through their Association and Class IV staff through their Union raised an industrial dispute which was referred 'by the Central Govt.
to the Tribunal.
One of the items referred concerned scales of pay, allowances and sundry matters connected with the conditions of service of the three classes, the most important ones being the demand of Class 11 staff claiming a scale commencing with Rs. 500/ .
The Tribunal held that the Class II staff worked in a Supervisory capacity and this demand for a minimum salary of Rs. 500/ , if conceded, would take the said staff out of the category of 'workman ' as defined in Sec.
2(s) of the Act.
Such an Award, and any Award, carrying wages beyond Rs. 500/ at any stage, was according to the Tribunal beyond its jurisdiction to make.
It also held that other workmen could not raise a dispute which would involve consideration of matters in relation to non workmen and that it would be even beyond the jurisdiction of the Central Govt.
to refer such a dispute under the Act.
The Tribunal therefore made no Award in regard to the Supervisory staff in Class IT.
This Court held that the Tribunal was not justified in holding that if at a future time an incumbent would draw wags in the time scale in excess of Rs. 500/ , the matter must be taken to be withdrawn from the jurisdiction of the Central Govt.
to make a reference in respect of him and the Tribunal to be ousted of the jurisdiction to decide the dispute, if referred Supervisory staff drawing less than Rs. 5001 per month cannot be debarred from claiming that they should draw more than Rs. 500/presently or at some future stage in their service.
They can only be deprived of the benefits, if they are non workmen at the time they seek the protection of the Act.
It was further held that in Sec. 2 (k) of the Act the word person has not been limited to 'workmen ' and must therefore receive a more general (1) ; 3 8 5 meaning.
But it does not mean any person unconnected with the disputants in relation to whom the dispute is not of the kind described.
It could not have been intended that although the dispute does not concern them in the least, workmen are entitled to fight it out on behalf of non workmen.
But if the dispute is regarding employment, non employment, terms of employment, or conditions of labour of non workmen in which workmen are themselves vitally interested the workmen may be able to raise an industrial dispute.
Workmen can for example raise a dispute that a class of employees not within the definition of 'workmen ' should be recruited by promotion from workmen.
When they do so the workmen raise a dispute about the terms of their own employment though incidentally the terms of employment of those who are not workmen is involved.
But workmen cannot take up a dispute in respect of a class of employees who are not workmen and in whose terms of employment those workmen have no direct interest of their own.
What direct interest suffices is a question of fact but it must be a real and positive interest.and not fanciful or remote.
Hidayatullah, J, as he then was, speaking for this Court concluded at page 45 thus : "It follows therefore that the National Tribunal was in error in considering the claim of class 2 employees whether at the instance of members drawing less than Rs. 500/ as wages or at the instance of those lower down in the scale of employment.
The National Tribunal was also in error in thinking that scales of wages in excess of Rs. 500 per month at any stage were not within the jurisdiction of the Tribunal or that Govt.
could not make a reference in such a contingency.
We would have been required to consider the scales applicable to those in Class 11 but for the fact that the Reserve Bank has fixed scales which are admitted to be quite generous".
The case of Workmen of Dimakuchi Tea Estate vs Management Dimakuchi Tea Estate, (q) was referred to with approval.
There the majority section R. Dass, C.J, section K. Das, J. (A. K. Sarkar J, dissenting) had held that the workmen cannot raise a dispute in respect of a non workman one Dr. K. P. Banerjee whose services were terminated by the management by paying him one month salary in lieu of notice.
It was contended that Dr. Banerjee being not a workman his case is not one of an industrial dispute under the Act and is therefore beyond the jurisdiction of the Tribunal to give any relief to him.
The matter had been referred to a Board known as 'the Tripartite (1) ; 386 Appellate Board which recommended that Dr. Banerjee should be reinstated from the date of his discharge.
Later the Govt.
of Assam referred the dispute for adjudication to a Tribunal constituted under Sec. 6 of the Act.
The Tribunal held that it had no jurisdiction to give any relief to him.
The Appeal to the Labour Appellate Tribunal of India, Calcutta was also dismissed.
Special Leave was granted, but was limited to the question whether the dispute in relation to a person who is not a workman falls within the scope of an industrial dispute under Sec.
2(k) of the Act.
The majority held that where the workmen raise a dispute as against their employer the "person regarding whom the dispute is raised must be one in whose employment, non employment, terms of employment or conditions of labour (as the case may be) the parties to the dispute have a direct or substantial interest. .
Where the workmen raise a dispute as against their employer the personregardin g whose employment, non employment, terms ofemployment or conditions of labour the dispute israisedneed not be, strictly speaking, a 'workman ' within the meaning of the Act, but must be one in whose employment, non employment, terms of employment or conditions of labour the workmen as a class have a direct or substantial interest".
Applying these principles the majority came to the conclusion that Dr. Banerjee who belonged to the Medical or Technical staff was not a workman and the Appellants had neither direct nor substantial interest in his employment or non employment and even assuming that he was a member of the same trade Union it cannot be said on the test laid down that the dispute regarding his termination of service was an industrial dispute within the meaning of Sec. 2(k) of the Act.
section K. Das, J, who delivered the judgment of the majority in the above case also spoke for the Court in Workmen vs Dahingeapara Tea Estate.(1) In the Dahingeapara case on the sale of the Tea Estate as a going concern the purchaser continued to employ the labour and some members of the staff of the vendor.
The question was whether the dispute raised by such workmen regarding the employment of the rest of the members of the old staff was an industrial dispute.
It was held that it was.
The reference was against the outgoing management as I well as against the incoming management of the Tea Estate.
It may be noticed that under the agreement of sale an option was given to the purchaser to continue in employment, the members of (1) A.I.R. 1968 S.C. 1026.
387 the staff.
it also made the vendor liable for the claims by the members of the staff not so retained in service by the purchaser.
In these circumstances it was held that as between the vendor and the discharged workmen the latter came within the definition of the workmen as they were discharged during the pendency of conciliation proceedings.
This fact however, did not make them workmen of the purchaser.
Even then they were persons in whose employment or non employment the actual workmen of the Dahingeapara Tea Estate were directly interested.
The ratio of the Western India Automobile Association vs Industrial Tribunal, Bombay,(1) as, also of the later decision in Workmen of Dimakunchi Tea Estate vs Management ( 2 ) was made applicable and the dispute was held to be clearly an in dustrial dispute within the meaning of the Act.
A reference is made to the Standard Vacuum Refining Company of India Ltd., vs Its workmen & Anr., (3) where the question relating to the dispute arising out of the demand for the abolition of the contract system of employing labour for cleaning and maintenance work at the refinery including the premises and plant belonging to it and for absorbing the workmen employed through the contractors into the regular service of the Company was considered.
The Company objected to the reference on the ground that : ( 1 ) it was incompetent inasmuch as there was no dispute between it and the Res pondents, and it was not open to them ,to raise a dispute with respect to the workmen of some other employer namely the contractor; and (2) in any case it was for the Company to decide what was the best method of carrying on its business and the Tribunal could not interfere with function of the management.
The Tribunal held that the reference was competent and that the claim was justified.
Following the Dimakuchi case this Court held that the dispute in the present case was an industrial dispute because (1) the Respondents had a community of interests with the workmen of the contractor; (2) they had also a substantial interest in the subject matter of the dispute in the sense that the class to which they belonged, namely workmen, was substantially affected thereby, and (3) the Company could give relief in the matter.
The conclusion of the Tribunal that the contract system should be abolished was held to be just in the circumstances of the case and should not be interfered with.
It would therefore appear that the consistent view of this Court is that non workmen as well as Workmen can raise a dispute in respect of matters affecting their employment, conditions of service etc., where they have a community of interests, provided they are direct and are not remote.
As stated in the (1) ; (2) A. I. R. 388 Reserve Bank of India 's case(1) "But workmen cannot take up a dispute in respect of a class of employees who are not workmen and in whose terms of employment, those workmen have no direct interest of their own".
At any rate as long as there are persons in the category of workmen in respect of whom a dispute has been referred it cannot be said that the Tribunal has no jurisdiction notwithstanding the fact that some or many of them may become non workmen during the pendency of the dispute.
In these circumstances the Tribunal in our view was wrong in holding that the dispute regarding Supervisors was not maintainable merely because a demand was made for a higher wage scale, which would take them out of the category of workmen.
The Tribunal has jurisdiction to decide these matters because on the crucial date the supervisors were workmen and merely because of the demand the Tribunal does not lose its jurisdiction to prescribe the pay scales and the dearness allowance either by reason :of the fact that the maximum will go beyond Rs. 500/ or that even the initial pay demanded will be more than Rs. 500/ .
Provided that at the time of adjudication there are some at least in the category who are workmen.
But the question is if there are none at all and all of them have become, non workmen either during the pendency or at the time of adjudication, does the dispute survive ? In other words does the dispute remain a dispute between employers and workmen within the meaning of Section 2 (k) of the Act? These questions arise out of the fifth contention urged before us by the learned Advocate for the Respondents namely whether in fact there are now any supervisors working in any of the Companies because as the learned Advocate for the Respondent contends, if, they are none and they are all non workmen, the dispute lapses and at any rate the fixation of a wage scale for non existing workmen would be an exercise in futility.
The learned Advocate for the Appellant contests this proposition on the ground that even if there are no supervisor workmen working in the Companies, the matter should be considered by the Tribunal inasmuch as any pay scale prescribed by it would have retrospective operation as from the 1st of April 59 which what this Court had directed while remanding the case back to the Tribunal in Civil Appeals Nos.
272 280 of 1962.
For this reason it is said that those workmen who have since gone out of the category of workmen ,or have retired or resigned would be entitled to the benefit of the pay structure and could recover arrears.
In the Reserve Bank case(") a similar situation had to be considered.
The reference to the National Tribunal was in 1960 and by the time the matter came to be decided all of them were getting wages in (1)[1966] 1 S.C. 25. 3 8 9 excess of Rs. 500/ per month and were non workmen.
It was held at page 46 "In view of the fact that all of them now receive at the start 'wages ' in excess of Rs. 500/ per month, there is really no issue left concerning them,, once we have held that they are working in a supervisory capacity.
" In the result the Appeal was dismissed with the observation that it would have partly succeeded but for the creation of new scales of pay for Class II employees and acceptance of some of the minor points by the Reserve Bank.
It is however, contended by the learned Advocate for the Appellant that in that case Mr. Chari had acknowledged at page 37 that the scales of pay which were awarded were as generous as the present circumstances of our country permit.
In view of this admission it is said that this Court made no order and therefore that should not be taken into consideration in deciding whether the matter should be remended to the Tribunal for fixing pay scales of the Supervisors.
The learned Advocate however ignored the observation immediately preceding the admission made by Mr. Chari.
It was observed at page 37 "but more than this the minimum total emoluments as envisaged by the definition of wages, even at the commencement of service of each and every member of Class II staff on January 1, 1962 now exceed Rs. 500/ p.m.
This of course was done with a view to withdrawing the whole class from the ambit of the reference, because it is supposed, no member of the class can now come within the definition of 'workman '.
We shall, of course, decide the question whether the resolution has that effect.
If it does, it certainly relieves us of the task of considering scales of pay for these employees for no remit is now possible as no National Tribunal is sitting.
The scales have been accepted as generous, the dispute regarding scales of pay for Class II employees under the reference, really ceases to be a live issue".
The decision, therefore, must be understood in the light of the above observations.
The reason for this conclusion is that if there are no workmen of the category with respect to whom a dispute has been referred the Tribunal cannot be called upon to prescribe a wage structure for non existing workmen, nor does it have the jurisdiction to do so.
The dispute in this sense must be deemed to have lapsed.
The question therefore to be determined in this case is whether as a matter of fact there are any workmen now working in a Supervisory capacity who are drawing more than Rs. 500/ , so that it would be futile for us to direct the Tribunal to fix scales of Day and dearness allowance in respect of a category of employees who are no longer workmen and with respect 3 90 to whom the reference can be said to have been withdrawn as in the case of the Reserve Bank of India.
In 'Support of this contention that there are in fact no supervisors at present who can be termed workmen in the two Companies the learned Advocate for the Respondents asked for permission to file an affidavit which permission we gave with liberty to the Appellant to file a counter.
Accordingly the Appellant, has filed a counter and the Respondents have submitted their rejoinders.
In paragraph 3 of the affidavit filed on behalf of the Respondents it is stated that the Second Respondent Company namely Greaves Cotton & Crompton Parkinson Pvt.
Ltd. (Crompton Greaves Ltd).
, employed 15 employees in the Supervisory cadre as shown in the statement filed in pursuance of the Tribunals order dated 15 1 64 but as on the date of the affidavit only four persons remained in the Supervisory cadre Grade 11.
There are no person employed in other Supervisory grade.
It was.also pointed out that all these 4 employees were in the Supervisory Grade II and drawing a total salary as on July 1971 exceeding Rs. 500/ a month.
In the annexure to the affidavit the reason given was that eachone of the Supervisors at the time when the statement was filedin January 1964 had ceased to be a Super visor.
Out of the15 persons, whose names were given, four resigned.
2 retired, one died two retrenched and two were, promoted as Technical Assistants.
The remaining four of them are all drawing per month a salary of Rs. 545/50 as Grade II Supervisors.
These are S/Shri Deshmukh, Gurbax Singh Kaslay and Pastakia.
In so far as Greaves Cotton & Co. Ltd., is concerned, it was urged that even on 1 1 64 as per exhibit RC. 2 the only three Supervisors who had been working with them were drawing a salary in excess of Rs. 500/ which will take them out of the category of workmen.
These are G. G. Naik, section section Kulkarni, M. D. Gupte, who were on that date drawing a total salary of Rs. 505/ ; Rs. 581/73, and Rs. 545/58 respectively.
This statement was again reiterated in the rejoinder, where it was stated that these were promoted in 1965, the latter two as Assistant Engineers and the former as Superintendent Cone & tube plant.
The counter affidavit by the Appellant sworn to by the General Secretary of the Greaves Cotton & allied Companies Union apart from containing averments which are not germanium to the matter in issue does not traverse the specific statement in respect of each one of the Super visors nor does it say that any of them were still supervisors drawing a salary of less than Rs. 500/ .
It was because of the submission of the learned Advocate on instructions that there are still some Supervisors 3 91 employed by the Respondents who are workmen within the meaning of Sec. 2 (s) of the Act, we had asked him to file a counter giving the name of the person or, persons who are still working in that capacity and their total emoluments; but we find from the counter except for a bare denial no specific averment as aforesaid has been made nor does the counter states categorically who are the persons who are now working as Supervisors and drawing less than Rs. 500/ .
With the counter were annexed two statements Annexure 'A ' & Annexure 'B ', the former showing supervisors working in Greaves Cotton & Crompton Parkinson Ltd., as on 30 5 59 with wage drawn by them on that date, the latter is the statement showing list of Supervisors working in the said Company as on 1st October '65 and the wage drawn by them for the month of September, 1965.
Merely to state that there were Supervisors on 8 4 59 the day on which the Govt.
of Maharashtra made the reference or in 1964 or 1965 or to say that even today there are Supervisors working in that Com pany or that the Industrial Tribunal went into the question and gave its finding against the Company holding that there were Departmental Foremen in the Factories of Greaves Cotton & Co. Ltd., does not advance the case any further than what it was when we permitted the Respondents to file the affidavit.
We cannot therefore accept a mere denial in respect of the crucial point whether today there are Supervisors working in the Respondent Companies who are drawing a basic wage together with dearness allowance of less than Rs. 5001/ as stated in the affidavit and again reiterated in the rejoinder.
The entire argument of the Respondents that any decision given by this Court would be otiose is based upon the existence or non existence of the said fact.
In view of the omission to state specifically in the counter the names of the persons who as of now are still working as Supervisors and drawing less than Rs. 500/ we cannot but hold that the averments made by the Respondents that there are no employees who are working at present in a supervisory capacity and who can be said to be workmen, have been substantiated.
If so, for the reasons given the issue lapses, as such these appeals will be dismissed but in the circumstances without costs.
| The respondent, a clerk of the appellant bank, was entrusted with supervisory work and a general power of Attorney was executed in his favour to endorse Hundies cheques, warranty, Railway receipts, pension bills and other negotiable and mercantile instruments and to prosecute, defend, answer and oppose any suit etc.
on behalf of the appellant bank.
The respondent filed an application before the Labour Court, Rajasthan under section 33C (2) of the , praying for computation of special allowance under the Sastri Award, on the ground that he was discharging supervisory duties.
The Labour Court, allowed supervisory allowance of Rs. 40 p.m. with consequential benefits.
In appeal to this Court the appellant bank ,contended that since the respondent was not called upon to perform the functions enumerated in the power of attorney, he is not entitled to any special allowance.
Dismissing the appeal.
HELD : (i) The payment of a special allowance was called for when an employee discharged duties of a supervisory nature or was accorded the status of a person competent to discharge functions of a supervisory character.
[115d] (ii) Since the Management by the power of Attorney, had placed the respondent in a category of persons with responsibility and entrusted him with functions of a supervisory character and the employee was to discharge that responsibility, he was entitled to supervisory allowance no matter, whether he was actually called upon to discharge such functions or not for a certain period of time.
[1 15F, 11 6B] State Bank of ' Hyderabad vs V. A. Bhinde, [1969] 2 L. L. J. 713, referred to.
|
ivil Appeal No. 729 of 1983.
From the Judgment and order dated 20.11.1987 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. F/A No. 1325/83 D (Order No. 920/87 D).
WITH Civil Appeal No. 2479 of 1987.
From the Judgment and Order dated 28.2.1986 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED(SB) (T) 155/7 I C (Order No. 18 1/1986 C).
A.K. Ganguli, Hemant Sharma and Mrs. Sushma Suri for the Appellant in C.A. No. 729188.
Soli J. Sorabjee for the Appellant in C.A. No. 2479 of 1987.
Harish N. Salve, Ravinder Narain, P.K. Ram, D.N. Misra and section Ganesh for the Respondents.
The Judgment of the Court was delivered by: SABYASACHI MUKHARJI, J.
This is an appeal under section 35 L of the Central Excises & Salt Act, 1944 (hereinafter referred to as 'the Act ') from the order of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as 'CEGAT ').
The respondent M/s Jayant Oil Mills Pvt. Ltd.; Hyderabad, manufactures hydrogenated rice bran oil which was sold to industrial consumers.
The said hydrog enated rice bran oil is used as raw material in the manufac ture of soap.
The respondents, M/s Jayant Oil Mills Pvt. Ltd. filed a classification list dated 20th May, 1981 in respect of the said goods classifying the same under Tariff Item 12 for approval and claimed exemption under notifica tion No. 9/60 dated 20th February, 294 1960.
The Assistant Collector of Central Excise, Hyderabad III Division by an order dated 16th June, 1981 (held that the hydrogenated rice bran oil was classifiable under Tariff Item 68 of the Central Excise Tariff (hereinafter referred to as 'CET '), because hydrogenated rice bran oil is solid at the ordinary temperature and therefore should be considered as fat and not as oil.
The Assistant Collector observed that there was one opinion that the said goods could not fall under Tariff Item 12 as it was unfit for human consumption.
The Assistant Collector observed that the said goods was new product after manufacture, having a distinct name, character and .use and as such it fell under Tariff Item 68 CET.
The respondent on the other hand maintained before the Assistant Collector that the said goods was semi solid and still vegetable non essential oil failing under Tariff Item 12 CET.
Being dissatisfied with the order dated 16th June, 1981, the respondent appealed before the Appellate Collector of Central Excise, Madras.
By an order dated 30th November, 1981, the Appellate Collector held that hydrogenated rice bran oil is classifiable under Tariff Item 12 CET and there fore ordered for consequential relief to the respondent.
The order of the Appellate Collector holding that the said products are classifiable under Item 12 CET had not been reviewed by the Central Government under section 36(2) of the Act.
The appellate Collector was therefore of the view that even after the superhardening or hydrogenation vegetable oil did not cease to be oil even it became solid .
The Central Government, Ministry of Finance, Department of Revenue, being of the view that the order of the Appel late Collector was not proper, legal and correct, issued a show cause notice dated 12th May, 1982 to the respondent.
The Central Government informed the respondents in the show cause notice that it appeared to the Government that the hydrogenation of rice bran oil is a process of manufacture which brings into existence a new product known as hydroge nated rice bran oil in commercial parlance having a distinct name, character and use and this end product would have been classified under Item 13 had it been fit for human consump tion It was further observed in the said show cause notice by the Government that as the melting point of the hydroge nated rice bran oil is more than 45degree C it was of the nature of extra hardened, vegetable product which was unfit for human consumption and since it was distinct from vegeta ble 295 non essential oil it would prima facie be classifiable under the residuary item 68 CET.
The respondents were, therefore, called upon to show cause as to why the order of the Appellate Collector should not be set aside and that of the Assistant Collector re stored.
The matter came up before the CEGAT.
The CEGAT noted in its impugned order that the appeal was concluded by the judgment of the five member Bench of the Tribunal in the case of M/s Tata Oil Mills Co. Ltd. (1986 Vol.
and held that the order dated 30th November, 1981 of the Appellate Collector was correct and dismissed the appeal of the appellant.
It is necessary, therefore, to refer to the order of the CEGAT.
The CEGAT noted that vide order dated 16th June, 1981 the Assistant Collector classified the hydrogenated rice bran oil manufactured by the respondents, M/s Jayant Oil Mills Ltd. under Item 68 CET.
The question, therefore, that was urged before this Court was whether the CEGAT was in error in holding that the hydrogenated rice bran oil was a process of manufacture which brought into existence a new product, i.e., hydrogenated rice bran oil.
Indubitably hydrogenation of rice bran oil is a process.
But all processes need not be manufacture.
It must be such a process which transforms the old articles into a goods and changes the identity, use and the purpose of use of the goods undergone by the process.
By the process which can be considered to be manufacture a new identifiable good, in the sense known in the market as such must come into being.
But that is one part of the view.
It appears, however, that the melting point of the hydrogenated rice bran oil is 45degree C and it is in the nature of extra hardened vegetable proc ess which is unfit for human consumption.
It was taken to be classifiable under Tariff Item 68 CET.
Similar are the facts in Civil Appeal No. 2479 of 1987 before us in the matter of Collector of Central Excise, Madras vs M/s Tara Oil Mills Co. Ltd. There also, the CEGAT allowed the appeal of the respondents and held that the extra hardened rice bran oil continued to remain as oil classifiable under Item 12 CET.
It is necessary to decide in both these matters the nature of the product.
Rice bran oil is extracted out of rice bran by solvent extraction method.
After such extraction, rice bran oil obtained is in liquid form.
296 The parties purchase rice bran oil from the market and process it.
The process is reported to be as follows.
The oil is heated to above 80degree C and the impurities are removed by adding exalic acid and caustic lye.
The purified oil is then bleached by heating it to 85degree C to 100degree C and thereby treating with fullers earth.
The processed oil is then hardened by passing it through hydro gen gas.
During hydrogenation, the oil absorbs two atoms of hydrogen and the unsaturated fatty acid present in the oil becomes saturated.
The oil is then in a semi solid condition and its melting point is raised to 45degree C or more.
In the hardened state, the oil looks like vanaspati (or vegeta ble product, to use the Central Excise terminology) but there is a difference in the degree of hydrogenation of the two.
The melting point of vanaspati, which is commonly used as cooking medium, does not exceed 37degree C while the melting point of hardened rice bran oil in dispute before us is between 45 degree C 52 degreeC. At such high melting point, the oils are no longer edible by human beings.
In order to differentiate between edible hydrogenated oils (vanaspati) and super hydrogenated vegetable oils, the latter are referred to as extra hardened oil or super hard ened oil.
The record before us shows that they are also known as 'vegetable tallow ' or 'hard lump ' or 'hardened technical oil of industrial hard oil ' or just 'hardened oil '.
This hardening of oil is necessary for soap making; otherwise, the soap, on coming into contact with water, is likely to become soggy.
The respondent use the hardened oil for soap making within their factories.
Besides its use in soap making, the extra hardened oil is also put to various other industrial uses, such as for application as grease.
The dispute started when the appellants filed their classification list containing the following entry at section No. 3: "3.
Rice Bran Oil processed In barrels exempted *33/63 CE dated 1.3.1963 as amended (*Rule 56A procedure to be followed for out side despatches).
" The Assistant Collector approved the classification under item 12 CET (Vegetable non essential oils, all sorts) with benefit of full exemption from duty under notification No. 33/63 CE dated 1st March, 1963 as claimed by the appel lants for soap making.
The Collector, however, was tenta tively of the opinion that the Assistant Collector 's order was not correct.
In exercise of his power of revision under the then section 35A of the Act, the Collector called upon the appellant to show cause as to why the hardened oil should not be subjected to two stage duty.
After hearing the appellants, the 297 Collector passed the orders by which he confirmed the two stage duty.
Being aggrieved by the Collector 's order, the appellants filed a revision application before the Central Government which, on transfer of the proceedings to the Tribunal, was transferred to the Tribunal.
The matter was heard by a three member Special Bench.
It was resolved that a larger bench should be constituted and a larger bench had been constituted.
It was noted by the Bench that irrespective of the fact whether extra hardened rice bran oil produced by the parties was classified under Item 12 CET of Item 68 CET, it would remain fully exempt.
On behalf of the parties, the respondents herein, it was argued before the Tribunal that hydrogenation or hardening was a process in the course of manufacture of a soap.
The extra hardened oil came into existence during soap manufacture at an intermediary stage and such oil was not a new product by itself.
Secondly, it was urged that even if the extra hard ened oil was considered as a new product, its character still remained that of oil.
It was the same oil though in a hardened or semi solid form.
The form was not material as it only meant that by application of heat at 45degree C or more, it would again turn into liquid oil.
As such, the oil, even in its hardened form, continued to remain under Item 12 CET as it still was essentially oil only.
The process of hydrogenation was intended to make the oil fit for soap making.
Only that part of hydrogenated oil as was fit for human consumption fell under item 13 (vegetable product); the rest remained under item 12 "vegetable non essential oils, all sorts . . " Reference may be made to the decision of this Court in Tungabhadara Industries Ltd. vs The Commercial Tax Offi cer, Kurnool; , There the appellant purchased groundnuts out of which it had manufactured groundnuts oil.
It also refined the oil and hydrogenated it converting it into Venaspati.
It sold the oil in the three states.
Under the Madras General Sales Tax Act, 1939, and the Turnover and Assessment Rules, for determining the taxable turnover the appellant was entitled to deduct the purchase price of the groundnuts from the proceeds of the sale of all groundnut oil.
The High Court, in that case, held that the appellant was entitled to the deduction in respect of the sales of unrefined and refined groundnut oil but not in respect of the sales of hydrogenated oil on the ground that the vanas pati was not "groundnut oil" but a product of groundnut oil.
This Court, however, held that appellant was entitled to the deduction in respect of the sales of hydrogenated groundnut oil also.
The hydrogenated groundnut oil continued to be "groundnut oil", notwithstanding the processing which was merely for the purpose of rendering the 298 oil more stable.
To be groundnut oil two conditions had to be satisfied: it must be from groundnut and it must be "oil".
The hydrogenated oil was from groundnut and in its essential nature it remained an oil.
It continued to be used for the same purposes as groundnut oil which had not under gone the process.
A liquid state was not an essential char acteristic of a vegetable oil; the mere fact that hydrogena tion made it semi solid did not alter its character as an oil.
In our opinion, the same principle would be applicable to the facts and the problem herein.
In this connection, reference may be made to the obser vations of this Court in Charapaklal vs State of Gujarat, AIR 1980 SC 1889 though it was a criminal case, this Court observed therein that vanaspati was essentially an oil although it was a different kind of oil than that oil (be it rapeseed oil, cotton seed oil, groundnut oil, soyabean oil or any other oil) which forms its basic ingredient.
Oil would remain oil if it retained its essential properties and merely because it had been subjected to certain processes would not convert it into a different substance.
In other words, although certain additions had been made to and operations carried out on oil, it would still be classified as oil unless its essential characteristics had undergone a change so that it would be misnomer to call it oil as under stood in ordinary parlance.
Such change was not supported by the evidence in that law.
The Tribunal found so and it is a question of fact that the hydrogenated rice bran oil still remained oil.
On behalf of the interveners, it was further submitted before the Tribunal that Item 12 CET which dealt with vege table non essential oils, all sorts, was a specific, exhaus tive and all pervasive entry and it continued to cover the extra hardened oil.
Our attention was drawn to the different degree of hydrogenation.
It may be appropriate to refer to the relevant Items in the First Schedule to the Central Excise Tariff.
Item 12 provides as follows: "12.
Vegetable non essential oils, all sorts, in or in relation to the manufac ture of which any process is ordinarily car ried on with the aid of power.
" Item 13 provides as follows: "13.
Vegetable Product: 299 'Vegetable Products ' means any vegetable oil or fat which, whether by itself .or in admix ture with any other substances, has by hydrog enation or by any other process been hardened for human consumption.
" The Tribunal, therefore, in our opinion, was right on a conspectus of the relevant factors in coming to the conclu sion that edible rice bran oil falling under Tariff Item 12 CET would even after extra hardening continue to fall under Tariff Item 12 and not fall under Tariff Item 68 because it would be vegetable non essential oils, all sorts, in or in relation to the manufacture of which any process is ordi narily carried on with the aid of power.
In that view of the matter, it would not come within Tariff Item 68.
The Tribu nal, it appears, to us, has considered the technical side of it, the manner of its production, and in view of the princi ple laid down by Tungbhadara Industries Ltd. 's case (supra) which in our opinion was essentially applicable to the facts of this case.
The Tribunal, in our opinion, came to the correct conclusion.
Justice Pendse of the Bombay High Court in IVP Ltd. and Anr.
vs Union of India & Ors., had occasion to consider some aspects of this problem.
It was held by the learned Judge that the plain reading of Item 13 CET indicated that the vegetable products which fell 'under that item must be one for human consumption.
It was not in dispute in that case that the product manufactured by the petitioners was used only for the industrial purposes and not for human consumption and, therefore, Tariff Item 13 could not be attracted.
Whether Tariff Item 12 or Item 68 would be applicable to the products manufactured by the petitioners, it is well settled that resort could not be had to the residuary item if the product comes within the ambit of any other tariff item.
It is, therefore, necessary to ascertain whether Item 12 is applicable for levy of excise duty in respect of hardened vegetable oil.
Tariff Item No. 12 brings in its sweep "vegetable non essential oils of all sorts" and the expression "all sorts" would bring in its ambit hydrogenated oil.
There is hardly any distinction between vegetable oil in liquid form and the hydrogenated oil which is hardened with a melting point higher than 41 C. Apart from the distinction in the physical appearance, there is no distinction between oil and hydrogenated oil which is well supported by the decision of this Court in Tungbhadra 's case (supra) where this Court held that several oils are viscous fluids but those do harden and .
assume semi solid condition on the lowering of the temperature.
300 Therefore, it is obvious that hydrogenated oil is nothing but hardened vegetable oil which would fall within Item 12 CET for the purpose of central excise duty.
Our attention was drawn to Encyclopaedia Britannica, 1968, Vol.
19 p. 302 where preparation of rice is indicated.
It states as follows: "The Kernel of rice as it leaves the thresher is enclosed by the hull, or husk and is known as paddy or rough rice.
Rough rice is used for seed and feed for livestock, but most of it is milled for human consumption by removing the hulls.
Rice is a good energy food, and is consumed in vast quantities in the Orient.
In the Western Hemisphere, however, rice is not the staple cereal food, except in certain Caribbean islands.
" Our attention was also drawn to certain obserVations of the Tribunal in Vital & Vital Oil Pvt. Ltd. vs Collector of Central Excise, Bombay, where the Tribunal observed that the department advocates assessment of hard ened technical oil under item 68.
This item is only for goods not specified anywhere else.
According to Department, "all other goods not specified elsewhere" is more specific than "vegetable non essential oils, all sorts".
But it has to be borne in mind that the basic rule of construction is that a more specific item should be preferred to one less so.
It does not take much to see whether "goods not speci fied elsewhere" is more specific than "vegetable non essen tial oils" for a product that has an oily nature, is pro duced from an oil has the uses of an oil, and indeed looks like an oil, and is quite commonly accepted and spoken of as an oil and is so related to oil, that it has a little or no chemical.
If hydrogenated oil can harden, so can many oils if subjected to heat loss (in winter or by chilling).
It appears to us, therefore, that Item 12 is more specific than Item 68, for all hardened technical oil not fit for human consumption and such would cover under this category.
In the aforesaid view of the matter, we are of the opinion that the Tribunal particularly emphasised that the hardened technical oil is the same thing as the oil from which it is made.
It is clearly akin to the oil in homo logue, a product of scientific modification but unaltered in its essential character.
Therefore, in our opinion, the Tribunal was right in the conclusion it arrived at.
301 The Tribunal in both the appeals had taken into consid eration all relevant and material factors, and market par lance and borne in mind the correct legal principles.
The decision of the Tribunal, therefore, cannot be assailed.
In the premises, as both the appeals deal with the same facts, these. are dismissed.
There will, however, be no order as to costs.
Y. Lal Appeals dis missed.
| Proceedings were initiated in 1974 under the Orissa Land Reforms Act, 1960 for declaration of surplus land of the appellants.
The appellants filed objections asserting, inter alia, that in view of the partition in their families in the year 1965 the land in the ancestral properties which fell in their share could not be clubbed with those of their father.
This contention was not accepted on the definition of the term "family" contained in section 37(b) of the Act.
Such of the major married sons who as such had separated by parti tion before the 26th day of September, 1970, as contemplated by the definition of the term "family", were allotted sepa rate ceiling units but so far as the appellants were con cerned, their shares were clubbed with those of their fa ther.
The appellants, having failed to get relief in the appeals and revisions filed by them under the Act, chal lenged the orders passed by the various authorities in writ petitions before the High Court of Orissa which were dis missed, relying on its earlier Full Bench decision in Nitya nanda Guru vs State of Orissa, (A.I.R. 1983 Orissa 54).
Before this Court it was contended that (1) the protec tion under Article 31(C) would not be available to section 37(b) of the Act and it would be hit by Article 14 unless it was established that it had nexus with the policy of the State towards securing any of the principles laid down in Part IV of the Constitution; (2) section 37(b) of the Act had to be read in such a manner as to exclude the land which had fallen to the share of the appellants even though they did not fail within the category of a major married son" as contemplated by the definition of the term "family" in that section, by adding the word "or" between the words "major" and "married", (3) the words "as such" qualify only "son" and not "major married son" and are meant to distinguish son from brother or uncle, etc.
Dismissing the appeals, it was, 605 HELD: (1) The Act aims at agrarian reform and Section 37(b) has a clear nexus with the policy of the State towards securing the principle laid down in Article 39(b) of the Constitution occurring in Part IV thereof.
[607E F] Tumati Venkaish etc.
vs State of Andhra Pradesh; , ; Seth Nand Lal & Anr.
vs State of Haryana, ; and Waman Rao & Ors.
vs Union of India, ; referred to.
(2) It is difficult to take recourse to the suggested mode of interpretation of section 37(b), i.e., by adding the word "or" between the words "major" and "married" in view of its plain language.
[608C D] (3) On a plain reading of the definition of the term "family" in section 37(b) of the Act, the said definition as it stands is neither meaningless nor of doubtful meaning.
[608F] British India General Insurance Co. Ltd. vs Captain Itbar Singh Ors., referred to.
(4) Keeping in view the agrarian reform which was con templated by the Act and particularly the provisions of Chapter IV relating to ceiling and disposal of surplus land which were calculated to distribute the surplus land of big tenure holders among the overwhelming havenots of the State.
the Legislature in its wisdom gave an artificial meaning to the term "family".
[608F G] (5) The main provision containing the definition of the term 'family ' is to be found in the first part of section 37(b), namely "family in relation to an individual means the individual, the husband or wife as the case may be of such individual and their children whether major or minor".
The latter part of section 37(b), namely "but does not include a major married son who as such had separated by partition or otherwise before the 26th day of September 1970", does not on the face of its contain a matter which may in substance be treated as a fresh enactment adding something to the main provision but is apparently and unequivocally a proviso containing an exception.
This admits of no doubt in view of the words "but does not include".
[608G H; 609A B] Commissioner of Income Tax, Mysore vs The lndo Mercan tile Bank Limited, [1959] Supp.
2 SCR 256 referred to.
(6) Given its proper meaning, the words "as such" can only be 606 interpreted to mean that it is only such son who would get the benefit of the exception who had separated by partition or otherwise before the 26th day of September, 1970 as "major married son".
[609F]
|
No. 467 of 1972.
Petition Under Article 32 of the Constitution of India.
B. Sen and R. M. Mehta, section K. Dholakia and R. C. Bhatia, for the petitioner.
L. N. Sinha, Solicitor General of India, G. A. Shah and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by UNTWALIA, J.
By this petition under Article 32 of the Constitution of India the petitioner has challenged the constitutional validity ,of the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act, 1972, Gujarat Act No. 12 of 1972 hereinafter referred to as the Act on the around that it violates the fundamental rights of the petitioner granted under articles 14 and 19 of the Constitution.
In the writ petition the petitioner claims that he owns 9559 square yards ,of land situate in District Bulsar, sub district and Taluka Navsari, village Kohilpore.
He intends to sell the said land but is unable to do so because of the prohibition of alienation imposed under the Act.
Mr. B. Sen, learned counsel for the petitioner conceded, and in ID ,our opinion rightly, that since the Proclamation of Emergency is in operation under Article 358 of the Constitution, fundamental right guaranteed under Article 19 is under suspension and therefore the Act could not be assailed for infraction of Article 19 even if there be any.
Counsel, however, submitted that it does violate the guarantee of equal protection of the law and offends Article 14.
In the Act under section 2 is embodied a declaration that the Act is for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Constitution and consequently Article 31C would save the Act from attack on account of the infraction of Article 14.
But it was submitted that the Act is not directly relatable to the object of Article 39(b) and (c) and hence Article 31C cannot protect it.
In our opinion it is not necessary in this case to take recourse to Article 31C for upholding the constitutional validity of the Act as it does not infringe the equal protection of law guaranteed under Article 14 of the Constitution.
Learned counsel for the petitioner endeavoured to make out the following points for attacking the Act as being violative of Article 14.
(1) That the limit of Prohibition in respect of the area of the vacant land is the same irrespective of its situation and value thus putting unequals as equals.
(2) That it does not apply to building lands and building areas have been left out.
(3) That there is discrimination between the permissible limit of alienation on the basis of the irrational consideration of the area forming part of a compact block or not.
66 9 (4) That there is no rational basis for not applying the Act in respect of the alienation of vacant in favour of the State, Govt., the Central Govt.
, Local authorities, Govt.
companies, Govt.
Corporations or the Cooperative House Building Societies.
(5) There is no guideline provided in section 7 of the Art for exercise of the power of exemption.
Learned Solicitor General appearing for the respondent, the State of Gujarat, submitted that none of the points urgea on behalf of the ,petitioners has got any substance and there is no violation of the equal protection of law guaranteed under Article 14 of the Constitution.
We shall first refer to and wherever necessary read some of the relevant provisions of the Act.
The Preamble of the Act indicates that it is an Act to prohibit alienation of certain vacant lands in urban areas in the State of Gujarat.
The object of the Act is to prohibit alienation of the vacant lands so that ultimately the ownership and control of the material resources of the Community may be so distributed as best to sub serve the common good and may prevent the concentration of wealth to the common detriment.
It may be pointed ,out here that the impugned Act is a temporary one.
Originally it was to remain in force for one year but the period is being extended from time to time in order to enable the State Legislature to pass the Urban Property Ceilings Act.
Prohibition of alienation by the Act is a preparatory measure for distribution of the material resources of the community.
The definition section of the Act is section 3.
Clause (b) defines "City" to mean a City as constituted under the Bombay Provincial Municipal Corporations Act, 1949.
The definition of "Collector" includes certain other officers also as mentioned in clause (c).
It is necessary to read clause (d) which defines the "compact block" to mean "any block of vacant land in an urban area exceeding one thousand square metres in extent, (whether owned by one person or jointly by more than one person or owned in contiguous parts separately by one or more members of a family unit) and whether or not divided by a private road, street, lane, footway, passage or drain, natural or artificial.
" Under clause (dd) "family unit" means an indi vidual, his or her spouse and their children.
" Clause (e) defines " 'municipal borough" to mean "a municipal borough as constituted or deemed to be constituted under the Gujarat Municipalities Act, 1963.
" It is necessary to read clauses (i) and (j) of section 3 in full.
(i) "urban area" means (1) any area which is comprised for the time being in a City or a municipal borough and also any such area in the vicinity thereof, within a distance, not exceeding sixteen kilometres from the local limits of the City, or as the case may be, of the municipal borough concerned, as the State Govt.
may, having regard to the extent of and the scope for the urbani 670 sation of that area or other relevant considerations, by a notification in the Official Gazette, specify in this behalf; and (2) any other area which the State Government may, by notification in the Official Gazette declare to be an urban area.
having regard to any project existing in that area on the appointed day or having regard to the possibility in the near future of any project being established in that area where any such project, in the opinion of the State Government, has led to or is likely to lead to urbanisation of that area; (j) "vacant land" means land in an urban area, agricultural or non agricultural, other than land on which any building has been or is being constructed in accordance with any law regulating such construction and the land appurtenant to such, building to the minimum extent required under such law or under the provisions of the Bombay; Town Planning Act, 1954 or any other corresponding law for the time being in force '.
Explanation for the purposes of this clause any land which is vacant on the appointed day shall be 'deemed to be vacant land, notwithstanding that the construction of 2 a building thereon has been commenced on or after the said day.
" Section 4 provides for prohibition of alienation etc.
in these terms (1) No person who owns any vacant land shall, on or after the appointed day, alienate such land by way of sale, gift, exchange (mortgage other than simple.mortgage), lease or otherwise, or effect a partition or create a trust of such land ', and any alienation made, or, partition effected, or trust created in contravention of this section shall be null and void : Provided that nothing in this sub section shall apply to the alienation by any person of any one plot of vacant land owned by him not exceeding one thousand square metres in extent and not forming part of a compact block or to the effecting of a partition or creation of a trust of any such plot.
(2) The provisions of sub section (1) shall apply to any sale, partition or creation of trust, of vacant land of any person in execution of a decree or order of a civil court or of any award or order of any other authority.
Restrictions on registration of documents have been put in section 5.
Section 6(1) says that "Nothing in this Act shall apply to any transfer of vacant land by or in favour of (a) A State Government or the Central Government or local authority;, 671 (b) A Government Company as defined in section 617 of the ; (c) a corporation established by or, under a Central Provincial or State Act, which in controlled or managed by a State Government or the Central Government; (d) such cooperative house building societies established for the purpose of providing housing accommodation to weaker sections of people, as may be approved by the State Government in this behalf.
" Sub section (2) of section 6 makes a distinction in the application of sub section (2) of section: 4 in relation to the execution of a decree or an order of a civil court in favour of the Government or the local authority.
Under subsection (1) of section 7 "the State Government, may, by a general or special order in writing and for reasons to recorded therein, exempt any area or any alienation or other transfer of any vacant land from all or any of The provisions of this Act." Under sub section (2), to avoid any hardship also, the State Government may, if it considers it necessary so to do, exempt, by an order in writing, any alienation or other transfer of any vacant land from all or any of the provisions of this article Subject to any rules that may be made in this behalf or to any general or special orders of the State Government, the Collector has.
been authorised under sub section (3) of section 7 by order in writing, to exempt any alienation or other transfer of any vacant land from the Provisions of this Act in case the land is to be used for ;my educational, scientific, industrial or commercial purpose or for such other purpose as may be prescribed.
"Prescribed" means under clause (g) of the third section "prescribed by rules made under this article ', The State Government has power under section 12 to make the rules.
Sub section (4) enjoins that every order issued by the State Government, under sub sections (1) and (2) and by the Collector under section 3 shall be laid before the State Legislature as soon as possible after its issue.
Alienation etc.
made on or after the 1st July, 1972 but before the appointed day under the Act has also been affected under section 8.
Section 9 gives a right to appeal against the order of the Collector under sub section (3) of section 7 to the State Government within the prescribed period and in the prescribed manner.
The jurisdiction of the Civil Court has been barred under section 10.
A penalty has been provided under section 11.
The act overrides other laws in view of section 13.
It would be noticed that the urban 'area means any area which is comprised in the City or a Municipal Borough.
Surrounding, distance of the City or municipal borough has to,.be fixed by a notification of the State Government 'in the Official Gazette having regard to the relevant considerations.
The maximum distance of such an area cannot exceed sixteen kilometres.
We were informed at the Bar by, the learned Solicitor General that notifications have been issued fixing the maximum limit of 16 kilometres in case of big cities like Ahmedabad, Baroda etc.
but lesser limits of distances have been notified in case of small municipal boroughs.
Under the proviso to sub section (1) of L319SupCI/75 672 section 4 a person is not_ prohibited from alienating one plot of vacant land owned by him not exceeding 1000 sq. metres provided it does not form part of a compact block.
When the limit of the distance outside the City or town area differed from place to place it was not necessary to fix the limit of permissible area of transfer with reference to the value of the land.
It was neither feasible nor expedient to do so.
From the permissible limit of transfer the area forming part of the compact block had to be excluded as it would have led to manipulations and manoeuvrings by persons belonging to the same family unit.
The land belonging jointly to more than one person or owned in contiguous part separately by one or more members of a family unit, which unit is a narrow one as defined in clause (dd) of section 3, comes under the definition of compact block.
Then only the permissible limit of transfer does not apply.
Excluding the land on which any building has been or is being constructed in accordance with any law regulating such construction and only the permissible limit of the vacant land appertaining to it is a reasonable classification distinguishing the vacant land from the building land.
The object of the act is to prevent alienation of certain vacant lands and that being so it is rightly excluded the building lands from its operation.
It is plain that the main object of the act being ultimately to distribute the ownership and control of the material resources of the community as best to subserve the common good and to prevent concentration of wealth, a transfer in favour of the Government, local authorities, Government companies or Corporations had to be excluded as such transfer could not possibly defeat the object of the Act, rather, it would give a fillip to it.
Permitting transfers of vacant lands in favour of Cooperative Housing Building Societies is obviously a step for the fulfilment of the object of the Act.
The Act cannot be held to be discriminatory on such grounds.
The power of the State Government under sub section (1) of section 7 to exempt any area or any alienation or other transfer of vacant land from all or any of the provisions of the Act is a power which is to be exercised for the reasons to be recorded in the general or the special order and in furtherance of the object of the Act.
The guideline is to be found in the object of the act itself.
The power under sub section (2) has to be exercised by the State Government for avoiding any hardship.
There is sufficient guideline for exemption in case of hardship which will depend upon the facts and circumstances of each case.
The order ;if exemption to be made by the Collector can only be in a case where the land is to be used for any educational, scientific, industrial or commercial purposes.
It has not been left open to the Collector to decide for what other purpose he can grant the exemption.
Such other purpose can be only that as may be prescribed by the State Government by rules made under section 12 of the Act.
Sub section (4) of section 7 is a good safety valve.
The State Legislature will act as a Supervisor of the orders of exemption 673 made by the State Government or the Collector.
The exercise of the power of exemption by the Collector is further controlled by providing an appeal to the State Government under section 9 of the Act.
In our opinion, therefore, there is no violation of the equal protection of law guaranteed under article 14 of the Constitution.
Classifications are all reasonable and there is a clear nexus between the object of the act and the classifications.
They have neither put unequals as equals nor has discriminated between equals.
In the result the writ petition fails and is dismissed with costs.
P.H.P. Petition dismissed.
| In a surety bond the sureties bound themselves for payment of Rs. 50,000 "only in case Mr. Ali Khan fails. . to surrender to the Deputy Commissioner of Singhbhum within three, days of the receipt of the notice of the order or judgment of the Judicial Committee if by the said order or judgment the sentence is upheld either partly or wholly".
As a result of the constitutional changes the jurisdiction of the Privy Council came to be transferred to the Federal Court, and eventually Ali Khan 's appeal to the Privy Council was heard and dismissed by the Federal Court.
Thereupon the Deputy Commissioner issued notice to the sureties to produce Ali Khan within three days.
Held, that the proceedings taken against the sureties were entirely misconceived as the penalty stipulated had not been incurred, in view of the terms of the bond set out above.
Provisions in a surety bond which are penal in nature must be very strictly construed and there is no room for the application of a legal fiction that the judgment of the Federal Court must be deemed to be the judgment or order contemplated by the parties to the surety bond.
|
Civil Appeal No. 364 of 1981.
Appeal by special leave from the Award dated the 31st May, 1980 of the Additional Labour Court, Delhi in Industrial I.D. No. 62 of 1976.
V. M. Tarkunde, Hemant Sharma and P. H. Parekh for the Appellant.
section Markendaya for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
The appellant Mohan Lal was employed with the respondent M/s Bharat Electronics Limited as Salesman at its Delhi 521 Sales Depot on a salary of Rs. 520 per month from 8th December, 1973.
His service was abruptly terminated by letter dated 12th October 1974 with effect from 19th October, 1974.
Consequent upon this termination, an industrial dispute was raised and the Delhi Administration, by its order dated 24th April, 1976 referred the following dispute to the Labour Court, Delhi for adjudication: "Whether the termination of services of Shri Mohan Lal is illegal and/or unjustified and if so, to what relief is he entitled and what directions are necessary in this respect?" As the respondent management at one stage failed to participate in the proceedings, the reference was heard ex parte and the Labour Court made an award on 2nd May, 1977 directing reinstatement of the appellant with continuity of service and full back wages at the rate of Rs. 520 per month from the date of termination till reinstatement.
Subsequently, respondent moved for setting aside the ex parte award and seeking permission to participate in the proceedings, which motion was granted.
The respondent inter alia contended that the appellant was a salesman appointed on probation for six months and subsequently on the expiry of the initial period, the period of probation was extended upto 8th Sept., 1974 and on the expiry of this extended period of probation, his service was terminated by letter dated 12th October, 1974, as he was not found suitable for the post to which he was appointed.
The Labour Court, on evaluation of evidence both oral and documentary, held that the termination of the service was in accordance with the standing orders justifying the removal of the employee on unsuccessful probation during the initial or extended period of probation; and therefore the termination in this case, according to the Labour Court, would not constitute retrenchment within the meaning of section 2(oo) read with section 25F of the Industrial Dispute Act.
Accordingly it was held that the termination was neither illegal nor improper nor unjustified and the claim of the appellant was negatived.
Hence, this appeal by special leave.
The only point for determination is whether even in the circumstances, as pleaded by the respondent termination of service of the appellant would amount to retrenchment within the meaning of the expression as defined in section 2(oo) of the Industrial Dispute Act, 1947 (`Act ' for short)? If the answer is in affirmative, the consequential question will have to be answered whether in view of 522 the admitted position that the mandatory pre condition prescribed by section 25F for a valid retrenchment having not been satisfied, the appellant would be entitled to reinstatement with back wages or as contended by Mr. Markandey in the special facts of this case, the Court should not direct reinstatement but award compensation in lieu of reinstatement.
An apparent contradiction which stares in the eye on the stand taken by the respondent is overlooked by the Labour Court which has resulted in the miscarriage of justice.
In this context the facts as alleged by the respondent may be taken as true.
Says the respondent, that the appellant was appointed by order dated July 21, 1973.
The relevant portion of the order of which notice may be taken is paragraph 2.
It reads as under: "This appointment will be temporary in the first instance but is likely to be made permanent.
" Paragraph 4 refers to the consequences of a temporary appointment, namely, that the service would be terminable without notice and without any compensation in lieu of notice on either side.
Paragraph 6 provides that the employment of the appellant shall be governed by rules, regulations and standing orders of the company then in force and which may be amended, altered or extended from time to time and the acceptance of the offer carries with it the necessary agreement to obey all such rules, regulations and standing orders.
There is not even a whisper of any period of probation prescribed for the appointment nor any suggestion that there are some rules which govern appointment of the appellant which would initially be on probation.
Thus, the appointment was temporary in the first instance and there was an inner indication that it was likely to be made permanent.
Even if this promise of likely to be made permanent is ignored, indubitably the appointment was temporary.
The respondent, however, says that note 3 at the foot of the appointment order intimates to the appellant that in the event of his permanent appointment the temporary service put in by him will be counted as part of probationary period of service as required under the rules.
This consequence would follow in the event of permanent appointment being offered and this is clear from the language employed in note 3.
In this case no permanent appointment having been offered, the consequence set out in note 3 could not have emerged.
Assuming, however, that this note incorporates all the necessary rules and regulations in the contract of employment, it was incumbent upon 523 the respondent to show that even when appointment is not shown to be on probation in the order of appointment, in view of the rules governing the contract of employment there shall always be a period of probation for every appointee.
Witness Bawdekar who appeared on behalf of the respondent stated in his evidence that the appellant was appointed as a probationary salesman.
Even according to him prescribed period of probation was six months.
He then stated that by the letter dated July 10, 1974, respondent informed the appellant that his service should have been terminated on the expiry of initial period of probation, i.e. on June 8, 1974.
However, as a special case the probation period was extended upto September 8, 1974.
No rule was pointed out to us enabling the respondent to extend the initial period of probation.
Assuming even then that such was the power of the respondent, on September 9, 1974, the period of probation having not been further extended nor termination of service having been ordered during or at the end of the probationary period on the ground of unsuitability, the consequence in law is that either he would be a temporary employee or a permanent employee as per the rules governing the contract of employment between the appellant and the respondent.
Admittedly his service was terminated by letter dated October 12, 1974, with effect from October 19, 1974.
It is not the case of the respondent that there was any further extension of the probationary period.
Thus, if the initial appointment which was described as temporary is treated on probation, even according to the respondent the period of probation was six months, it expired on June 8, 1974.
Even if by the letter dated July 10, 1974, the period of probation was said to have been extended, on its own terms it expired on September 8, 1974.
The service of the appellant was terminated with effect from October 19, 1974.
What was the nature and character of service of the appellant from September 8, 1974 when the extended period of probation expired and termination of his service on October 19, 1974? He was unquestionably not on probation.
He was either temporary or permanent but not a probationer.
How is it open then to the Labour Court to record a finding that the service of the appellant was terminated during the period of probation on account of his unsatisfactory work which did not improve in spite of repeated warnings? The Labour Court concluded that notwithstanding the fact that the appellant was not shown to have been placed on probation in the initial appointment letter but in view of the subsequent orders there was a period of probation prescribed for the appellant and that his service was terminated during the extended period of 524 probation.
This is gross error apparent on the face of the record which, if not interfered with, would result in miscarriage of justice.
If on October 19,1974, the appellant was not on probation and assuming maximum in favour of the respondent that he was a temporary employee, could termination of his service.
even according to the respondent, not as and by way of punishment but a discharge of a temporary servant, constitute retrenchment within the meaning of section 2(oo), is the core question.
Section 2(oo) reads as under: "2(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill health.
" Niceties and semantics apart, termination by the employer of the service of a workman for any reason whatsoever would constitute retrenchment except in cases excepted in the section itself.
The excepted or excluded cases are where termination is by way of punishment inflicted by way of disciplinary action, voluntary retirement of the workman, retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf, and termination of the service of a workman on the ground of continued ill health.
It is not the case of the respondent that termination in the instant case was a punishment inflicted by way of disciplinary action.
If such a position were adopted, the termination would be ab initio void for violation of principle of natural justice or for not following the procedure prescribed for imposing punishment.
It is not even suggested that this was a case of voluntary retirement or retirement on reaching the age of superannuation or absence on account of continued ill health.
The case does not fall under any of the excepted categories.
There is thus termination of 525 service for a reason other than the excepted category.
It would indisputably be retrenchment within the meaning of the word as defined in the Act.
It is not necessary to dilate on the point nor to refer to the earlier decisions of this Court in view of the later two pronouncements of this Court to both of which one of us was a party.
A passing reference to the earliest judgment which was the sheet anchor till the later pronouncements may not be out of place.
In Hariprasad Shivshankar Shukla vs A.D. Divikar, after referring to Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union, a Constitution Bench of this Court quoted with approval the following passage from the aforementioned case: "But retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplusage and the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment.
" This observation was made in the context of the closure of an undertaking and being conscious of this position, the question of the correct interpretation of the definition of the expression `retrenchment ' in section 2(oo) of the Act was left open.
Reverting to that question, the view was reaffirmed but let it be remembered that the two appeals which were heard together in Shukla 's case were cases of closure, one Barsi Light Railway Company Ltd., and another Shri Dinesh Mills Ltd. Baroda With specific reference to those cases, in State Bank of India vs N. Sundara Money, Krishna Iyer J. speaking for a three judges bench, interpreted the expression `termination. for any reason whatsoever ' as under: "A break down of section 2(oo) unmistakably expands the semantics of retrenchment.
`Termination. for any reason whatsoever ' are the key words.
Whatever the reason, every termination spells retrenchment.
So, the sole question is has the employee 's service been terminated ? Verbal apparel apart, the substance is decisive.
A termination takes place where a term expires either by the active step of the master of the running out of the stipulated term.
To pro 526 tect the weak against the strong this policy of comprehensive definition has been effectuated.
Termination embraces not merely the act of termination by the employer, but the fact of termination howsoever produced.
May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the armour of section 25F and section 2(oo).
Without speculating on possibilities, we may agree that `retrenchment ' is no longer terra incognita but area covered by an expansive definition.
It means `to end, conclude, cease '.
In the present case the employment ceased, concluded, ended on the expiration of nine days automatically may be, but cessation all the same.
That to write into the order of appointment the date of termination confers no moksha from section 25F(b) is inferable from the proviso to section 25F(1).
True, the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract section 25F and automatic extinguishment of service by effluxion of time cannot be sufficient.
" It would be advantageous to refer to the facts of that case to appreciate the interpretation placed by this Court on the relevant section.
State Bank of India appointed the respondent by an order of appointment which incorporated the two relevant terms relied upon by the Bank at the hearing of the case.
They were: (i) the appointment is purely a temporary one for a period of 9 days but may be terminated earlier, without assigning any reason therefor at the Bank 's discretion; (ii) the employment, unless terminated earlier, will automatically cease at the expiry of the period i.e. 18.11.1972.
It is in the context of these facts that the Court held that where the termination was to be automatically effective by a certain date as set out in the order of appointment it would nonetheless be a retrenchment within the meaning section 2(oo) and in the absence of strict compliance with the requirements of section 25F, termination was held to be invalid.
Continuing this line of approach, in Hindustan Steel Ltd. vs The Presiding Officer, Labour Court, Orissa and Ors., a bench of three judges examined the specific contention that the decision in Sundara Money 's case runs counter to the construction placed on that section by a Constitution Bench and, therefore, the decision is 527 per incuriam.
This Court analysed in detail Shukla 's case and Sundara Money 's case and ultimately held that the Court did not find anything in Shukla 's case which is inconsistent with what has been held in Sundara Money 's case.
In reaching this conclusion it was observed that in Shukla 's case the question arose in the context of closure of the whole of the undertaking while in Hindustan Steel 's case and Sundara Money 's case the question was not examined in the context of closure of whole undertaking but individual termination of service of some employees and it was held to constitute retrenchment within the meaning of the expression.
This question again cropped up in Santosh Gupta vs State Bank of Patiala.
Rejecting the contention for reconsideration of Sundara Money 's case on the ground that it conflicted with a Constitution Bench decision in Shukla 's case and adopting the ratio in Hindustan Steel 's case that there was nothing in the two aforementioned decisions which is inconsistent with each other and taking note of the decision in Delhi Cloth and General Mills Ltd. vs Shambu Nath Mukerjee wherein this Court had held that striking off the name of a workman from the rolls by the management was termination of service which was retrenchment within the meaning of section 2(oo), the Court held that discharge of the workman on the ground that she had not passed the test which would enable her to obtain confirmation was retrenchment within the meaning of section 2(oo) and, therefore, the requirements of section 25F had to be complied with.
It was pointed out that since the decision in Shukla 's case, the Parliament stepped in and introduced section 25FF and section 25FFF by providing that compensation shall be payable to workman in case of transfer or closure of the undertaking, as if the workmen had been retrenched.
The effect of the amendment was noticed as that every case of termination of service by act of employer even if such termination was as a consequence of transfer or closure of the undertaking was to be treated as `retrenchment ' for the purposes of notice, compensation, etc.
The Court concluded as under: "Whatever doubts might have existed before Parliament enacted sections 25FF and 25FFF about the width of section 25F there cannot be any doubt that the expression `termination of service for any reason whatsoever ' now covers every kind of termination of service except those not 528 expressly provided for by other provisions of the Act such as sections 25FF and 25FFF." Reverting to the facts of this case, termination of service of the appellant does not fall within any of the excepted, or to be precise, excluded categories.
Undoubtedly therefore the termination would constitute retrenchment and by a catena of decisions it is well settled that where pre requisite for valid retrenchment as laid down in section 25F has not been complied with, retrenchment bringing about termination of service is ab initio void.
In State of Bombay and Ors.
vs The Hospital Mazdoor Sabha and Ors.
, this Court held that failure to comply with the requirement of section 25F which prescribes a condition precedent for a valid retrenchment renders the order of retrenchment invalid and inoperative.
In other words, it does not bring about a cessation of service of the workman and the workman continues to be in service.
This was not even seriously controverted before us.
It was, however, urged that section 25F is not attracted in this case for an entirely different reason.
Mr. Markendaya contended that before section 25F is invoked, the condition of eligibility for a workman to complain of invalid retrenchment must be satisfied.
According to him unless the workman has put in continuous service for not less than one year his case would not be governed by section 25F.
That is substantially correct because the relevant provision of section 25F provides as under: "25F. "No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until: (a) the workman has been given one month 's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service; 529 (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent of fifteen days ' average pay (for every completed year of continuous service) or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government (or such authority as may be specified by the appropriate government by notification in the Official Gazette).
" Before a workman can complain of retrenchment being not in consonance with section 25F, he has to show that he has been in continuous service for not less than one year under that employer who has retrenched him from service.
Section 25B is the dictionary clause for the expression `continuous '.
It reads as under; "25B (1) a workman shall be paid to be in continuous service for a period if he is, for that period in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workman; (2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer (a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than (i) one hundred and ninety days in the case of a workman employed below ground in a mine; and (ii) two hundred and forty days, in any other case; 530 (b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made has actually worked under the employer for not less than (i) ninety five days, in the case of a workman employed below ground in a mine; and (ii) one hundred and twenty days, in any other case.
Explanation For the purposes of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which (i) he has been laid off under an agreement or as permitted by standing orders made under the , or under this Act or under any other law applicable to the industrial establishment; (ii) he has been on leave with full wages, earned in the previous years; (iii)he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and (iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
Mr. Markendaya contended that clauses (I) and (2) of section 25B provide for two different contingencies and that none of the clauses is satisfied by the appellant.
He contended that sub section (I) provides for uninterrupted service and sub section (2) comprehends a case where the workman is not in continuous service.
The language employed in sub sections (1) and (2) does not admit of this dichotomy.
Sub sections (1) and (2) introduce a deeming fiction as to in what circumstances a workman could be said to be in continuous service for the purposes of Chapter VA.
Sub section (1) provides a deeming fiction in that where a workman is in service 531 for a certain period he shall be deemed to be in continuous service for that period even if service is interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal or a lockout or a cessation of work which is not due to any fault on the part of the workman.
Situations such as sickness, authorised leave, an accident, a strike not illegal, a lockout or a cessation of work would ipso facto interrupt a service.
These interruptions have to be ignored to treat the workman in uninterrupted service and such service interrupted on account of the aforementioned causes which would be deemed to be uninterrupted would be continuous service for the period for which the workman has been in service.
In industrial employment or for that matter in any service, sickness, authorised leave, an accident, a strike which is not illegal, a lockout and a cessation of work not due to any fault on the part of the workman, are known hazards and there are bound to be interruptions on that account.
Sub section (I) mandates that interruptions therein indicated are to be ignored meaning thereby that on account of such cessation an interrupted service shall be deemed to be uninterrupted and such uninterrupted service shall for the purposes of Chapter VA be deemed to be continuous service.
That is only one part of the fiction.
Sub section (2) incorporates another deeming fiction for an entirely different situation.
It comprehends a situation where a workman is not in continuous service within the meaning of sub section (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer for a period of one year or six months, as the case may be, if the workman during the period of 12 calendar months just preceding the date with reference to which calculation is to be made, has actually worked under that employer for not less than 240 days.
Sub section (2) specifically comprehends a situation where a workman is not in continuous service as per the deeming fiction indicating in sub section (1) for a period of one year or six months.
In such a case he is deemed to be in continuous service for a period of one year if he satisfies the conditions in clause (a) of sub section (2).
The conditions are that commencing the date with reference to which calculation is to be made, in case of retrenchment the date of retrenchment, if in a period of 12 calendar months just preceding such date the workman has rendered service for a period of 240 days, he shall be deemed to be in continuous service for a period of one year for the purposes of Chapter VA.
It is not necessary for the purposes of sub section (2) (a) that the workman should be in service 532 for a period of one year.
If he is in service for a period of one year and that if that service is continuous service within the meaning of sub section (1) his case would be governed by sub section (1) and his case need not be covered by sub section (2).
Sub section (2) envisages a situation not governed by sub section (1).
And sub section (2) provides for a fiction to treat a workman in continuous service for a period of one year despite the fact that he has not rendered uninterrupted service for a period of one year but he has rendered service for a period of 240 days during the period of 12 calendar months counting backwards and just preceding the relevant date being the date of retrenchment.
In other words, in order to invoke the fiction enacted in sub section 2(a) it is necessary to determine first the relevant date, i.e., the date of termination of service which is complained of as retrenchment.
After that date is ascertained, move backward to a period of 12 months just preceding the date of retrenchment and then ascertain whether within the period of 12 months, the workman has rendered service for a period of 240 days.
If these three facts are affirmatively answered in favour of the workman pursuant to the deeming fiction enacted in sub section 2(a) it will have to be assumed that the workman is in continuous service for a period of one year and he will satisfy the eligibility qualification enacted in section 25F.
On a pure grammatical construction the contention that even for invoking sub section (2) of section 25B the workman must be shown to be in continuous service for a period of one year would render sub section (2) otiose and socially beneficial legislation would receive a set back by this impermissible assumption.
The contention must first be negatived on a pure grammatical construction of sub section (2).
And in any event, even if there be any such thing in favour of the construction, it must be negatived on the ground that it would render sub section (2) otiose.
The language of sub section (2) is so clear and unambiguous that no precedent is necessary to justify the interpretation we have placed on it.
But as Mr. Markandaya referred to some authorities, we will briefly notice them.
In Sur Enamel and Stamping Works (P) Ltd. vs Their Workmen, referring to section 25B as it then stood read with section 2(eee) which defined continuous service, this Court held as under: "The position therefore is that during a period of employment for less than 11 calendar months these two 533 persons worked for more than 240 days.
In our opinion that would not satisfy the requirement of section 25B. Before a workman can be considered to have completed one year of continuous service in an industry it must be shown first that he was employed for a period of not less than 12 calendar months and, next that during those 12 calendar months had worked for not less than 240 days.
Where, as in the present case, the workmen have not at all been employed for a period of 12 calendar months it becomes unnecessary to examine whether the actual days of work numbered 240 days or more.
For, in any case, the requirements of section 25B would not be satisfied by the mere fact of the number of working days being not less than 240 days.
" If section 25B had not been amended, the interpretation which it received in the aforementioned case would be binding on us.
However, section 25B and section 2(eee) have been the subject matter of amendment by the Industrial Disputes (Amendment) Act, 1964.
Section 2(eee) was deleted and section 25B was amended.
Prior to its amendment by the 1964 amendment Act, section 25B read as under: "For the purposes of sections 25C and 25F a workman who during the period of 12 calendar months has actually worked in an industry for not less than 240 days, shall be deemed to have completed one year of continuous service in the industry.
" We have already extracted section 25B since its amendment and the change in language is the legislative exposition of which note must be taken.
In fact, we need not further dilate upon this aspect because in Surendra Kumar Verma and Ors.
vs Central Government Industrial cum Labour Court, New Delhi and Anr., Chinnappa Reddy.
J., after noticing the amendment and referring to the decision in Sur Enamel and Stamping Works (P) Ltd case, held as under: "These changes brought about by Act 36 of 1964 appear to be clearly designed to provide that a workman who has actually worked under the employer for not less 534 than 240 days during a period of twelve months shall be deemed to have been in continuous service for a period of one year whether or not he has in fact been in such continuous service for a period of one year.
It is enough that he has worked for 240 days in a period of 12 months, it is not necessary that he should have been in the service of the employer for one whole year.
" In a concurring judgment Pathak J. agreed with this interpretation of section 25B(2).
Therefore, both on principle and on precedent it must be held that section 25B(2) comprehends a situation where a workman is not in employment for a period of 12 calendar months, but has rendered service for a period of 240 days within the period of 12 calendar months commencing and counting backwards from the relevant date, i.e. the date of retrenchment.
If he has, he would be deemed to be in continuous service for a period of one year for the purpose of section 25B and Chapter VA.
Reverting to the facts of this case, admittedly the appellant was employed and was on duty from December 8, 1973 to October 19, 1974 when his service was terminated.
The relevant date will be the date of termination of service, i.e. October 19, 1974 Commencing from that date and counting backwards, admittedly he had rendered service for a period of 240 days within a period of 12 months and, indisputably, therefore, his case falls within section 25B(2) (a) and he shall be deemed to be in continuous service for a period of one year for the purpose of Chapter VA.
Appellant has thus satisfied both the eligibility qualifications prescribed in section 25F for claiming retrenchment compensation.
He has satisfactorily established that his case is not covered by any of the excepted or excluded categories and he has rendered continuous service for one year.
Therefore, termination of his service would constitute retrenchment.
As pre condition for a valid retrenchment has not been satisfied the termination of service is ab initio void, invalid and inoperative.
He must, therefore, be deemed to be in continuous service.
The last submission was that looking to the record of the appellant this Court should not grant reinstatement but award compensation.
If the termination of service is ab initio void and inoperative, there is no question of granting reinstatement because there is no cessation of service and a mere declaration follows that 535 he continues to be in service with all consequential benefits.
Undoubtedly, in some decisions of this Court such as Ruby General Insurance Co. Ltd vs Chopra (P.P.), and Hindustan Steel Ltd. Rourkela vs A. K. Roy and Others it was held that the Court before granting reinstatement must weigh all the facts and exercise discretion properly whether to grant reinstatement or to award compensation.
But there is a catena of decisions which rule that where the termination is illegal especially where there is an ineffective order of retrenchment, there is neither termination nor cessation of service and a declaration follows that the workman concerned continues to be in service with all consequential benefits.
No case is made out for departure from this normally accepted approach of the Courts in the field of social justice and we do not propose to depart in the case.
Accordingly, this appeal is allowed and the Award of the Labour Court dated May 31, 1980, is set aside.
We hold that the termination of service of the appellant was ab initio void and inoperative and a declaration is made that he continues to be in service with all consequential benefits, namely, back wages in full and other benefits, if any.
However, as the Award is to be made by the Labour Court, we remit the case to the Labour Court to make an appropriate Award in the light of the findings of this Court.
The respondent shall pay the costs of the appellant in this Court quantified at Rs. 2000 within four weeks from the date of this judgment and the costs in the Labour Court have to be quantified by the Labour Court.
S.R. Appeal allowed.
| As part of a measure to mop up unaccounted money on which no income tax had been paid, an incentive scheme was prepared by the Government under which a person disclosing such income was required to pay a specified rate of tax without attracting the penal provisions of the Income Tax Act.
Section 68 of the Finance Act, 1965 provided that a person making voluntary disclosure of his income in accordance with the provisions of the section would be charged income tax at a specified rate notwithstanding anything contained in the Income Tax Act.
The assessee had a large sum of such unaccounted money in his possession.
Without allocating the total sum amongst the different assessment years, he declared that he had a sum of Rs. 7 lakhs in his possession which was earned by him during the assessment years 1957 58 to 1964 65.
Income Tax in respect of this income computed in accordance with section 68 of the Finance Act was paid by him.
In the wealth tax returns filed by him in response to the notice issued by the Wealth Tax officer for re assessment consequent on the disclosure of his wealth the assessee claimed deductions of income tax paid under section 68 of the Finance Act.
But the Wealth Tax officer disallowed the claim holding that since the assessee had not shown the liability to pay income tax in his balance sheets for the respective years the deductions claimed by him could not be allowed in any of the assessment years.
The Appellate Assistant Commissioner dismissed the assessee 's appeal.
The Tribunal, on the other hand, held that the liability constituted a "debt owed" because in truth and substance, it was a liability under the Income Tax Act, 1922 or 1961 and not a new liability created by the Finance Act, 1965.
On reference the High Court held in favour of the Revenue on the ground that section 68 of the Finance Act enacted a new charge of tax on an ad hoc 403 basis on disclosed income and, therefore, it was not a "debt owed" which could be allowed as a deduction under the Wealth Tax Act.
On behalf of the Revenue it was contended that since the tax paid by the assessee under the voluntary disclosure scheme was in discharge of a liability created for the first time by the Finance Act, 1965 it was not an allowable deduction under the Wealth Tax Act.
Allowing the appeal, ^ HELD: The assessee was entitled to claim deduction of income tax paid on the amounts added to his total wealth under section 2 (m) of the Wealth Tax Act in the course of the assessment proceedings.
[418 B] C 1.
Merely because the amounts were disclosed in a declaration under section 68 of the Finance Act, they did not cease to be incomes not already charged to income tax.
Although the Finance Act merely levied a fixed rate of tax in respect of all the income disclosed without allowing deductions, exemptions and such other allowances which are allowable under the Income Tax Acts, its function was no more than that of an annual Finance Act despite the fact that it made certain alterations in regard to the filing of declaration and computation of taxable income.
[414 G H] 2.
The nature of the declaration which was dependent on the volition of the declaring and the fact that the liability to tax the amount was contingent upon the willingness of the declaring to disclose the amount would not make a difference because such voluntary disclosure, even in the absence of section 68, would have exposed the assesseee to assessment or reassessment.
The voluntary character of the declaration cannot alter the character of the tax.
[415 A B] 3.
The true position is that the amount declared has the liability to pay income tax embedded in it on the valuation date but only the ascertainment of that liability is postponed to a future date.
[417 C] In the instant case its determination was allowed to be done in accordance with the provisions of section 68.
Even though this section was a complete code in itself it was only a scheme which provided a method for the liquidation of an already existing income tax liability which was present on the relevant valuation date.
[417 D] 4.
Nor did the absence of allocation of the amount disclosed amongst different assessment years detract the tax from being called a tax on income because such allocation would not achieve any additional purpose in the scheme of section 68 This section is in the nature of a package deal.
The net result achieved was that the declarant was treated as having discharged all his liability in respect of such income under the income tax law.
[415E] 404 5.
The finding of the High Court that section 68 created a fresh charge is incompatible with the foundation of the very reassessment proceedings under section 17 of the Wealth Tax Act.
[415 H] 6.
Moreover section 68, at more than one place stated that what was pay able was income tax which clearly showed that what was payable under the section was income tax.
[412 B C] C.I.T. vs Khalau Makanji Spinning and Weaving Co. Ltd., Madurai District Central Cooperative Bank Ltd. vs Third I.T.O. , distinguished.
C. K. Bahu Naidu vs Wealth Tax Officer, ; C. Ii T vs GirdhariLal, ; C.W.T. vs B.K Sharma, ; C.W.T. vs Bansidhar Poddar.
; D.C. Shah vs C.W.T., ; Bhagwandas Jain vs Addl.
C.W.T. and Bhagwanidas Binani vs C.W.T., , approved.
|
Appeal No. 178 of 1955.
Appeal by special leave from the judgment and decree dated December 3, 1951, of the High Court of Judicature at Madras in Second Appeal No. 766 of 1947 against the decree dated November 19, 1946, of the District Court of Anantapur in Appeal No. 130 of 1945 arising out of the decree dated January 31, 1945, of the Court of Subordinate Judge, Anantapur, in Original Suit No. 10 of 1944.
M. C. Setalvad, Attorney General of India, P. Ram Reddy, K. Sundararajan and M. section K. Aiyangar, for the appellant.
C. K. Daphtary, Solicitor General of India, and K. R. Chaudhury, for the respondent.
December 5.
The Judgment of the Court was delivered by JAGANNADHADAS J.
The plaintiff in the action out of which this appeal arises brought a suit for declaration of his title to a one third share in the suit properties and for partition and recovery of that share.
The suit was dismissed as having been barred by limitation and adverse possession.
On appeal the District Judge reversed the decision and decreed the suit.
High Court maintained the decree of the District Judge on second appeal.
Hence this appeal before us on special 197 leave by the first defendant in the action, who is the appellant before us.
The main question that arises in the appeal is whether the plaintiff has lost his right to a one third, share in the suit property by adverse possession.
The property in suit belonged to one Venkata Reddy.
He died an infant on Augutst 25, 1927.
At that time, the properties were in the possession of the matemal uncles of the father of the deceased Venkata Reddy.
One Hanimi Reddy, an agnatic relation of Venkata Reddy, filed a suit O.S. No. 26 of 1927 for recovery of the properties from 'the said matemal uncles and obtained a decree therein on March 15, 1929.
A Receiver was appointed for the properties in February, 1928, during the pendency of the suit and presumably the properties were in his possession.
This appears from the decree which shows that it directed the Receiver to deliver possession to the successful plaintiff in that suit ' Hanimi Reddy obtained actual possession of these properties on January 20, 1930, and continued in possession till he died on August 16, 1936.
The first defendant in the present action who is the appellant before us is a son of the brother of Hanimi Reddy and came into possession of all the properties as Hanimi Reddy 's heir.
The respondent before us is the plaintiff.
The present suit was brought on the allegation that the plaintiff and the second defendant in the suit, his brother, were agnatic relations of Venkata Reddy, of the same degree as Hanimi Reddy and that all the three were equal co heirs of Venkata Reddy and succeeded to his properties, as such on his death.
It was alleged that though Hanimi Reddy filed the prior suit and obtained possession of the properties thereunder, he did so as one of the do heirs, with the consent of the plaintiff and the second defendant and that he was enjoying the properties jointly with the plaintiff and his brother as tenants in common but that the first defendant, who came into possession on the death of Hanimi Reddy denied the title of the plaintiff and his brother in or about the year 1940.
The plaint in the present action was filed originally in the District Munsif s Court on October 23, 1941, and was ordered 198 to be returned for presentation; to the District Judge 's Court on November 30, 1942.
It was actually re presented in that Court on December 2, 1942.
One of thequestions raised in the suit was that the, suit was, barred by limitation on the ground that it must be taken to have been ingtituted not on October(23, [1941], but on December 2, 1942.
This plea was upheld by the trial Court.
On first appeal the District Judge held that the plaintiff is entitled to the benefit of a. 14 of the Limitation Act and that the suit must be taken as having been instituted on October 23, 19419 and is; therefore, in time.
He accordingly decreed, the suit.
In the High Court the question as to whether the plaintiff was entitled to the benefit of.
14 of the, Limitation Act, though raised, was not finally decided.
It was held that the possession of Hanimi Reddy was not adverse to the plaintiff and that accordingly he was entitled to the decree as prayed for.
The question as to the non availability of the benefit of section 14 of the Limitation Act to the plaintiff in the present suit has not been, urged before us and the finding of the District Judge that the plaint must be taken to have been validly presented on October 23, 1941, stands.
That date must, therefore, be taken to be the commencement of the action for the purposes of this appeal.
It will be noticed that this date is more than fourteen years from the date when the succession opened to the properties of Venkata Reddy on August 25, 1927, but is less than twelve years after Hanimi Reddy obtained actual possession in execution of his decree on January 20, 1930.
The contention of the learned Attomey General for the appellant first defendant is that the possession of Hanimi Reddy was adverse, that the plaintiff as well as the second defendant lost their right by the adverse possession of Hanimi Reddy and his successor, the first defendant, and that for this purpose not only the period from January 20, 1930, up to October 23, 1941, is to be counted but also the prior period during the pendency of Hanimi Reddy 's suit when the Receiver was in possession of the suit properties.
It is the.
validity of 199 these two parts of the argument which has to be considered.
It will be convenient to consider in the first instance whether or not the possession of Hanimi Reddy from January 20, 1930, up to the date of his death in 1936 was adverse to his co heirs.
The :facts relevant for this pur ,pose are the following.
At the date when Venkata Reddy died his properties were in the custody of the two maternal uncles of his father.
Hanimi Reddy filed his suit on the allegation, as already stated above, that he was the nearest agnatic relation alive of the deceased minor Venkata Reddy and as his next rightful heir to succeed to all the estate, movable and immovable, of the said minor, set forth in the schedules thereto.
He appended a genealogical tree to his plaint which showed his relationship io Venkata Reddy through a common ancestor and showed only the two lines of himself and Venkata Reddy.
Plaintiff and the second defendant belong to another line emanating from the same common ancestor but that line was not shown and the plaintiff and second defendant were ignored.
The first defendant in the present suit did not admit the relationship of plaintiff and second defendant in his written statement.
He disputed that the father of the plaintiff and second defendant was descended from the common ancestor either by birth or by adoption, as shown in the genealogical table attached to the present plaint.
It is possible that this may have been the reason for Hanimi Reddy ignoring the plaintiff and the second defendant in his suit.
However this may be, at the trial in this suit it was admitted that the plaintiff and the second defendant are the agnatic relations of Venkata Reddy of the same degree as Hanimi Reddy.
The defendants in the earlier suit who were in possession on that date claimed to retain possession on behalf of an alleged illatom sonin law (of Venkata Reddy 's father) a son of the second defendant therein.
It may be mentioned that in that part of the country (Andhra) an illatom son in law is a boy incorporated into the family with a view to give a daughter in marriage and is customarily recognised as an heir in the absence of a natural born son, This 200 claim appears to have been negatived and the suit was decreed.
During the pendency of the suit a Receiver was appointed in February, 1928.
He presumably took possession though the date of his taking possession is not on the record.
The decree in that suit dated March 15, 1929, is as follows: "This Court doth order and decree that plaintiff do recover possession of immovable property and movables in the possession of the Receiver.
" It is in the evidence of the first defendant himself as D.W. I that the properties, were taken possession of by Hanimi Reddy on January 20, 1930.
The plaintiff examined himself as P.W. 1 to substantiate the case as set out in his plaint that he and the second defendant and Hanimi Reddy were enjoying the properties jointly as tenants in common.
The relevant portion of his evidence is as follows: "Annu Reddy (Hanimi Reddy) uncle of defendant " and myself filed 0.
section No. 26 of 1927, District Court, Anantapur same as O.S. No. 24 of 1928, Sub Court, Anantapur for the properties of the deceased Venkata Reddy.
As Hanimi Reddy was the eldest member, he was attending to the conduct of that suit.
I was also coming to Court along with him.
The suit ended in our favour.
Hanimi Reddy took possession through Court after the decree in the year 1930.
Since then both Hanimi Reddy and myself have been in joint possession and enjoyment of the same.
" In cross examination he said as follows: "I told Hanimi Reddy that I would also join him as a party in O.S. 24 of 1928.
He said there was no need for me to join and that he would give my share to me. . . .
I did nut file any application to be impleaded as a defendant. . . .
I have nothing in writing to show that Hanimi Reddy was giving me any produce from the suit lands.
" The first defendant filed the plaint, judgment and decree in Hanimi Reddy 's suit as also pattas, cist receipts and lease deeds taken by Hanimi Reddy in his time.
With reference to this evidence the trial Court found as follows; 201 "The documents filed on behalf of the first defendant completely establish that Hanimi Reddy filed the suit in his individual capacity and obtained possession thereof.
There is nothing to indicate that either the plaintiff or the second defendant took any interest in those proceedings. . . .
There is no evidence of Hanimi Reddy having given any produce to the plaintiff or to the second defendant. . .
The plaintiff and the second defendant have been excluded from participation of profits to their knowledge since 1930.
" The learned District Judge found on appeal (when the same was remanded to him for a finding by the High Court) as follows: "I have no hesitation in holding that the plaintiff had nothing to do with the institution or conduct of the suit 0.
section No. 24 of 1928 on the file of the Sub Court of Anantapur, and that he never had any actual joint enjoyment of suit properties with the late D. Hanimi Reddy or the first defendant.
" He has not given a finding as to whether the non participation of the profits by the plaintiff and the second defendant was in the nature of exclusion to their knowledge.
But there are some admitted and relevant facts brought out in evidence which are significant.
The present evidence as well 'as the ' plaint in the earlier suit of 1927 show clearly that all the parties including Hanimi Reddy were residents of village Mamuduru.
All the suit properties are situated in that village itself; as appears from,the schedules to the plaint in the earlier suit.
Hanimi Reddy and the plaintiff were fairly closely related as appears from the plaintiff 's admission as follows: "My brother in law who is also the nephew of Hanimi Reddy was staying with Hanimi Reddy.
My father in law and defendant No. 1 's father in law is the same.
" On these facts the question that arises is whether, in law, the possession of Hanimi Reddy from January, 20, 1930, onwards was adverse to the plaintiff and the second defendant.
26 202 Now, the ordinary classical requirement of adverse possession is that it should be nec vi nec clam nec precario.
(See Secretary of State for India vs Debendra Lal Khan(1)).
The possession required must be adequate in continuity, in publicity and in extent to show that it is possession adverse to the competitor.
(Se(,, Radhamoni Debi vs Collector of Khulna(2)).
But it is well settled that in order.
to establish adverse possession of one co heir as against another it is not enough to show that one out of them is in sole possession and enjoyment of the profits of the properties.
Ouster of the non possessing co heir by the co heir in possession, who claims his possession to be.
adverse, should be made out.
The possession of one co heir is considered, in law, as possession of all the co heirs.
When one co heir is found to be in possession of the properties it is presumed to be on the basis of joint title.
The coheir in possession cannot render his possession adverse to the other co heir not in possession merely by any secret hostile animus on his own part in derogation of the other co heir 's title.
(See Corea vs Appuhamy(3)).
It is a settled rule of law that as between co heirs there must be evidence of open assertion of hostile title, coupled with exclusive possession and enjoyment by one of them to the knowledge of the other so as to constitute ouster.
This does not necessarily mean that there must be an express demand by one and denial by the other.
There are cases which have held that adverse possession and ouster can be inferred when one co heir takes and maintains notorious exclusive possession in assertion of hostile title and continues in such possession for a very considerable time and the excluded heir ' takes no steps to vindicate his title.
Whether that line of cases is right or wrong we need not pause to consider.
It is sufficient to notice that the Privy Council in N. Varada Pillai vs Jeevarathnammal(4) q uotes, apparently with approval, a passage from Culley vs Deod Taylerson(5) which indicates that such a situation may Tell lead to an inference of (1) [1933] L.R. 6i I.A. 78, 82.
(2) [1900] L.R. 27 I.A. 136, 140.
(3) (4) A.I.R. 1919 P.C. 44, 47.
(5) 3 P. & D. 539; 52 R.R. 566.
203 ouster "if other circumstances concur".
(See also Govindrao vs Rajabai(1)).
It may be further mentioned that it is well settled that the burden of making out ouster is on the person claiming to displace the lawful title of a co heir by his adverse possession.
In the present case there can be no doubt that Hanimi Reddy obtained sole possession of the suit properties after the death of Venkata Reddy on the basis of an action against third parties in which he claimed to be the sole nearest male agnate having title to all the properties.
After obtaining possession he was in continuous and undisputed possession of the properties till his death enjoying all the profits thereof.
No doubt in an ordinary case such possession and enjoyment has to be attributed to his lawful title, he being one of the co heirs.
But the plaint in the suit of 1927 and the decree therein render it reasonably clear that he filed the suit and obtained possession on the basis of his having exclusive title ignoring his coheirs.
It is urged that knowledge of the assertion of such exclusive title averred in a plaint cannot be imputed to other co heirs who are not parties to the suit.
But in this case it is not difficult on the evidence to ,say that the plaintiff and the second defendant must have been fully aware, at the time, of the nature of the claim made by Hanimi Reddy in the prior litigation and on the basis of which he obtained possession.
That knowledge is implicit in the very case that they have put forward in the present plaint.
Their case is that the prior suit was brought by Hanimi Reddy with the consent of the plaintiff and the second defendant and on their behalf.
No doubt that specific case has been found against them and that finding is yes judicata between the parties.
But there is no reason why the admission as to the knowledge of the nature of the litigation and the contents of the plaint which such a case necessarily implies should not be attributed at least to the present plaintiff.
It appears reasonable to think that the plaintiff being unable to explain his inaction for over fourteen years after the death of Venkata Reddy has been constrained to put (1) A. I. R. 204 forward a false case that the prior suit by Hanimi Reddy was with his consent and on his behalf.
It is significant that the plaintiff has remained silent with out asserting his right during Hanimi Reddy 's lifetime, and comes forward with this suit after his death, rendering it difficult to ascertain whether the fact of Hanimi Reddy completely ignoring the existence of the plaintiff and the second defendant as co heirs was not in denial of their relationship and consequently of their title as co heirs to their knowledge.
The fact that even so late as in the written statement of the first defendant relationship is denied may be indicative as to why Hanimi Reddy ignored the plaintiff and the second defendant and why they remained silent.
The learned Judges of the High Court thought that there was nothing to show that Hanimi Reddy was aware that plaintiff and second defendant had any rights in the properties as co heirs.
This assumption is contrary to the admission of mutual knowledge of each other 's rights implicit in the plaintiff 's case that Hanimi Reddy brought his suit with the consent of the plaintiff.
In such circumstances and especially having regard to the fact that both the plaintiff and Hanimi Reddy were living in the same village and the plaintiff has put forward a false explanation to account for ' his inaction, a Court of fact might well have inferred ouster.
Sitting on an appeal in special leave, however, we do not feel it desirable to decide the case on this ground.
We, therefore, proceed to consider the further question that arises in the case, viz., whether the Receiver 's possession can be tacked on to Hanimi Reddy 's possession, on the assumption that Hanimi Reddy 's possession on and from January 209 1940, was adverse to the plaintiff.
The learned Attorney General urges that prior possession of the Receiver pending the suit must be treated as possession on behalf of Hanimi Reddy with the animus of claming sole and exclusive title disclosed in his plaint.
In support of this contention he relies on the well known legal principle that when a Court takes possession of properties through its Receiver, such Receiver 's possession is that of all the 205 parties to the action according to their titles.
(See Kerr on Receivers, 12th Ed., p. 153).
In Woodroffe on the Law relating to Receivers (4th Ed.) at p. 63 the legal position is stated as follows: " The Receiver being the officer of the Court from which he derives his appointment, his possession is exclusively the possession of the Court, the property being regarded as in the custody of the law, in gremio legis, for the benefit of whoever may be ultimately determined to be entitled thereto.
" But does this doctrine enable a person who was not previously in possession of the suit properties, to claim that the Receiver must be deemed to have taken possession adversely to the true owner, on his behalf, merely because he ultimately succeeds in getting a decree for possession against the defendant therein who was previously in possession without title.
A 'Receiver is an officer of the Court and is not a particular agent of any party to the suit, notwithstanding that in law his possession is ultimately, treated as possession of the successful party on the termination of the suit.
To treat such Receiver as plaintiff 's agent for the purpose of initiating adverse possession by the plaintiff would be to impute wrong doing to the Court and its officers.
The doctrine of Receiver 's possession being that of the successful party cannot, in our opinion, be pushed to the extent of enabling a person who was initially out of possession to claim the tacking on of Receiver 's possession to his subsequent adverse possession.
The position may conceivably be different where the defendant in the suit was previously in adverse possession against the real owner and the Receiver has taken possession from him and restores it back to him on the successful termination of the suit in his favour.
In such a case the question that would arise would be different, viz., whether the interim possession of the Receiver would be a; dis continuance or abandonment of possession or interrupt.
ion of the adverse possession.
We are not concerned with it in this case and express no opinion on it.
The matter may be looked at from another point of view.
It is well settled that limitation cannot begin 206 to run against a person unless at the time that person is legally in a position to vindicate his title by action.
Mitra 's Tagore Law Lectures on Limitation and Prescription (6th Ed.) Vol.1, Lecture VI, at p. 159, quoting from Angell on Limitation, this Principle is stated in the following terms: " An adverse holding is an actual and exclusive appropriation of land commenced and continued under a claim of right, either under an openly avowed claim, or under a constructive claim (arising from the acts and circumstances attending the appropriation), to hold the land against him who was in possession.
(Angell, sections 390 and 398).
It is the intention to claim adversely accompanied by such an invasion of the rights of the opposite party as gives him a cause of action which constitutes adverse possession.
" Consonant with this principle the commencement of adverse possession, in favour of a person, implies that person is in actual possession, at the time, with a notorious hostile claim of exclusive title, to repel which, the true owner would then be in a position to maintain an action.
It would follow that whatever may be the animus or intention of a person wanting to acquire title by adverse possession his adverse possession cannot commence until he obtains actual possession with the requisite animus.
In the leading case of Agency Company vs Short(1) the Privy Council points out that there is discontinuance of adverse possession when possession has been abandoned and gives as the reason therefor, at p. 798, as follows: " There is no one against whom he (the rightful owner) can bring his action.
" It is clearly implied therein that adverse possession cannot commence without actual possession which can furnish cause of action.
This principle has been also.explained in Dwijendra Narain Roy vs Joges Chandra De(2) at p. 609 by Mookerjee J. as follows : The substance of the matter is that time runs when the cause of action accrues, and a. cause of action accrues, when there is in existence a person who can (1) (2) A.I.R. 1924 Cal.
6oo, 207 sue and another who can be sued. .
The cause of action arises when and only when the aggrieved party has the right to apply to the proper tribunals for relief.
The statute (of limitation) does not attach to a claim for which there is as yet no right of action and does not run against a right for which there is no corresponding remedy or for which judgment cannot be obtained.
Consequently the true test to determine when a cause of action has accrued is to ascertain the time when plaintiff could first have maintained his action to a successful result.
" In the present case, the co heirs out of possession such as the plaintiff and the second defendant were not obliged to bring a suit for possession against Hanimi Reddy until such time as Hanimi Reddy obtained actual possession.
Indeed during the time when the Receiver was in possession, obviously, they could not sue him for possession to vindicate their title.
Nor were they obliged during that time to file a futile suit for possession either against Hanimi Reddy or against the defendants in Hanimi Reddy 's suit when neither of them was in possession.
It appears to us, therefore, that the adverse possession of Hanimi Reddy, if any, as against his co heirs could not commence when the Receiver was in possession.
It follows that assuming that the possession of Hanimi Reddy from January 20, 1930, was in fact adverse and amounted to ouster of the co heirs such adverse possession was not adequate in time by October 23, 1941, the date of suit, to displace the title of the plaintiff.
It follows that the plaintiff respondent before us is entitled to the decree which he has obtained and that the decision of the High Court is, in our view, correct, though on different grounds.
It may be mentioned that objection has been raised on behalf of the respondents before us that the question" of tacking on Receiver 's possession was not in issue in the lower Courts and should not be allowed to be raised here.
In the view we have taken it is unnecessary to deal with this objection.
In the result the appeal is dismissed with costs.
Appeal dismissed.
| The prosecution case against the accused respondent was that when the deceased and his wife were returning home from their field, he and the co accused armed with a gun and a country made pistol fired at the deceased causing him injuries, that some passersby, including the two eye witnesses, overpowered the respondent but that he escaped from their hold and ran towards the co accused who then was standing at some distance, snatched the pistol from his hand and fired at the deceased while he was being carried towards the village.
As a result of this shot the deceased was killed instantaneously and one of the witnesses sustained injuries.
The defence version, on the other hand, was that on the date and time of the occurrence when the two accused were going out of the village the deceased, his servant and the injured witness assaulted them and on hearing their cries, the respondent 's father fired at the deceased in self defence and that this had resulted in the death of the deceased and injury to the witness.
The trial court found him guilty of the offence punishable under section 302 I.P.C. and sentenced him to death and the co accused with imprisonment for life.
Before the High Court the argument for the respondent was that since the injuries on the person of the witness were superficial, he could have been fired at only from a long distance and being an aged man of 60 years, he could not have run and caught hold of the respondent before the respondent could reload his gun.
To test the capacity of the witness to run and to assess the time taken in reloading a gun, the High Court conducted an experiment by asking the witness, who was present in the court, to move briskly to a certain distance.
A young lawyer present in the Court was asked to unload and reload a gun exactly of the same make as the gun used by the respondent.
On the basis of this experiment the High Court came to the conclusion that 295 even if the witness, after receiving gun shot injuries had run some distance towards the respondent; he could neither have caught hold of him nor could he have prevented him from reloading his gun.
Disbelieving the prosecution story, the High Court acquitted both the accused.
The State 's Special Leave Petition against the judgment of the High Court was granted only with respect to the respondent.
On the question whether the High Court was correct in conducting the experiment that it did and in coming to the conclusion that the respondent was not guilty of the offence of murder.
Allowing the appeal, ^ HELD: The procedure of conducting an experiment in Court two years after the incident with the aid of a young lawyer (about whose proficiency in handling a gun there is no authentic evidence) who was asked to handle a different gun altogether and using the conclusion based on that experiment to reject the truth of the evidence of the eye witness, was highly irregular.
The High Court has not addressed itself to the degree of efficiency or inefficiency of the respondent in handling a gun.
The time taken by any person to reload a gun depends upon several factors, including the condition of the gun and the surcharged atmosphere created by the firing bout which may have preceded the time of reloading the gun.
[301 F H] Ordinarily, this Court would not interfere with the judgment of acquittal on mere re appreciation of evidence.
But if there are glaring infirmities in the judgment of the High Court resulting in miscarriage of justice it is the duty of this Court to interfere.
[309 F G] In the instant case the High Court was wrong in conducting the experiment carried out by it at the hearing of the appeal.
Having been impressed by its result it first rejected the evidence of the eye witness on trivial omissions which would not affect the credibility of the prosecution version on imaginary grounds.
From the evidence it is obvious that the two accused were armed with fire arms and were the aggressors.
On a careful reading of the evidence, it is clear that the father of the accused respondent, out of love and affection towards his son, tried to shield him.
[306 F G] The plea of self defence cannot be accepted.
A person who was an aggressor and who sought an attack on himself by his own aggressive attack cannot rely upon the right of self defence if in the course of the transaction he deliberately kills another whom he had attacked earlier.
Having regard to the nature of the weapon used, the act by which death was caused by the respondent was done with the intention of causing death and there were no extenuating circumstances which would mitigate the offence committed by him.
[309 C D] State of Punjab vs Jagir Singh & Ors.
[1974] 1 S.C.R. 328; Shivaji Sahebrao Bobade & Anr.
vs State of Maharashtra ; followed.
296 The trial court was right in convicting the respondent.
The acquittal of the co accused did not effect the prosecution case against him.
There is no legal bar for convicting the respondent alone in this case on the facts and circumstances of the case.
The principle of issue estoppel is inapplicable here.
[309 D E]
|
Appeals Nos.
34 to 36 of 1962.
Appeals from the judgment and order dated March 25, 1958, of the Madras High Court in Case Referred No. 12 of 1954.
K. N. Rajagopal Sastri and R. N. Sachthey, for the appellant.
R. Gopalakrishnan, for the respondent.
March 26.
The judgment of the Court was delivered by HIDAYATULLAH J.
The High Court of Madras in a Reference under s.66 (1) of the Indian Income Tax Act, answered in the negative the following question: "Whether there was material for the Appellate Tribunal to hold that the income arising to Mrs. C.M. Kothari and Mrs. D. C. Kothari from the property arose indirectly out of the 533 assests transferred indirectly by their husbands so as to attract the provisions of s.16 (3)(a)(iii).
" In our opinion, these appeals by the Commissioner of Income tax.
, Madras, must be allowed.
Messrs Kothari and Sons is a firm of stock brokers.
In 1947, the firm consisted of C.M. Kothari and his two sons, D. C. Kothari and H. C. Kothari Their respective shares were 6 : 5 : 5.
On October 7, 1947, the firm entered into an agreement for the purchase of a house in Sterling Road, Madras, for Rs.90,000, and the same day paid an advance of s.5,000.
This sum was debited in the books of the firm to the accountsof the three partners as follows: C. M. Kothari Rs.1,800 D. C. Kothari Rs.1,600 H. C. Kothari Rs.1,600 Total.
Rs.5,000 The transaction was completed on October 24, 1947.
The sale deed, however, was taken in the names of Mrs. C.M. Kothari Mrs. D.C. Kothari and H.C. Kothari.
The balance of the consideration was paid to the vendors by the firm.
Each of the two ladies paid to the firm a cheque of Rs.28,333 5 4.
Mrs. C.M. Kothari further paid a cheque of Rs. 1,800, and Mrs. D.C. Kothari paid another cheque of Rs. 1600 Thus the two ladies paid one third share of Rs.85,000 and the amounts which were respectively paid by their husbands as part of the earnest money.
H.C. Kothari was debited with a further sum of Rs.28,333.5 4.
In this way, Mrs. C. M. Kothari pad Rs.200 more than the other two, because her husband had previously paid Rs.200 more than his sons.
The share of the three vendees was however, Shown to be one third each.
534 The ladies issued the cheques on their accounts into which were paid by the firm, certain amounts by cheques.
Into Mrs. C.M. Kothari 's account was paid an amount of Rs.27,000 which was debited on October 24, 1947 to D.C. Kothari.
It was stated to be a birthday gift by him to his mother.
On November 13, 1947, another amount of Rs. 3,000 was paid into Mrs. C. M. Kothari 's account which was debited to the account of D. C. Kothari as a gift by him to his mother for Dewali.
Similarly, on November 13, 1947 Mrs. D. C. Kothari 's account with the bank was credited with a sum of Rs.30,000 by a cheque issued by the firm.
This was debited to the account of C, M. Kothari and was shown as a gift by him to his daughter in law.
In this way both the ladies received from the firm Rs. 30,000 which was the exact one third share of the consideration of Rs.90,000, but the amount was not paid by their respective husbands, but by the son in one case, and the father in law,, in the other.
In the assessment years 1948 49, 1950 51 and 1951 1952, the Income Tax Officer assessed the incomefrom the one third share of the house received by Mrs. C.M.Kothari as the income of her husband.
Similarlyin the four assessment years 1948 49 to 1951 52, the income of Mrs. D. C. Kothari from this house was assessed as the income of her husband.
This was on the ground that because of the interchange of the money in the family, either the purchases were made by the donors benami in the names of the donees, or alternatively, from assets transferred indirectly by the husband to the wife in each case.
The Income Tax Officer pointed out that the birthday of Mrs. C. M. Kothari had taken place earlier in the year and there was no occasion to give a birthday present to her several months later and on a date coinciding with the purchase of this property.
The Income Tax Officer also found that in the past, the father in law bad never given 535 such a big present to his daughter in law on Dewali and this time there was no special circumstance to justify it.
The appeals of the assessee to the appellate Assistant Commissioner failed as also those filed before the Tribunal.
The Tribunal, however, did not hold that the transaction was benami, but confirmed the other finding that the two ladies bad acquired their share in the house out of assets of the husbands indirectly transferred to them.
The Tribunal, how ever, stated a case for the opinion of the High Court, and the High Court answered the question in the negative.
As the question whether the two transactions were benami does not fall to be considered, the only question that survives is whether this case is covered Sy s.16 (3) (a) (iii).
This section reads as follows: "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. of such individual as arises directly or indirectly (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;" The section takes into account not only transference of assets made directly but also made indirectly.
It is impossible to state here what sorts are covered by the word indirectly ', because such transfers may, be made in different ways.
It is argued that the first requisite of the section is that the assets must be those of the husband and 536 that is not the case here.
It is true that the section says that the assets must be those of the husband, but it does not mean that the same assets should reach the wife.
It may be that the assets in the course of being transferred, may be changed deliberately into assets of a like value of another person, as has happened in the present case.
A chain of transfers, if not comprehended by the word "Indirectly ' would easily defeat the object of the law which is to tax the income of the wife in the hands of the husband, if the income of the wife arises to her from assets transferred by the husband.
The present case is an admirable instance of how indirect transfers can be made by substituting the assets of another person who has benefited to the same or nearly the same extent from assests transferred to him by the husband.
It is next contended that even if chain transactions be included, then, unless there is consideration for the transfer by the husband, each transfer must be regarded as independent, and in the present case, the Department has not proved that the transfers by the son to the mother and by the father in law to his daughter in law were made as consideration for each other.
We do not agree.
It is not necessary that there should be consideration in the technical sense.
If the two transfers are inter connected and are parts of the same transaction in such a way that it can be said that the circuitous method has been adopted as a device to evade implications of this section, the case will fall within the section.
In this case, the device is palpable and the two transfers are so intimately connected that they cannot but be regarded as parts of single transaction.
It has not been successfully explained why the father in law made such a big, gift to his daughter in law on the occasion of Diwali and why the son made a belated gift, equally big, to his mother on the occasion of her birthday which took place several months before.
These two gifts match each other as regards the amount, The 537 High Court overlooked the clear implication of these fact as also the Implication of the fact that though the three purchasers were to get one third share each, Mrs. C. M. Kothari paid Rs. 200 more than the other two and that each of the ladies re paid the share of earnest money borne by their respective husbands.
An intimate connection between the two transactions, which were primafacie separate, is thus clearly established and they attract the words of the section, namely, "transferred directly or indirectly to the wife".
In our opinion, the High Court was in error in ignoring these pertinent matters.
The High Court also overlooked the fact that the purchase of the house at first was intended to be in the names of three partners of the firm.
No evidence was tendered why there was a sudden change.
It is difficult to see why the ladies were named as the vendees if they did not have sufficient funds of their own.
They could only buy the property if some one gave them the money.
It is reasonable to infer from the facts that before the respective husbands paid the amounts, they looked up the law and found that the income of the property would still be regarded as their own income if they transferred any assets to their wives.
They hit upon the expedient that the son should transfer the assets to his mother, and the father in law, to the daughterin law, obviously failing to appreciate that the word "indirectly ' is meant to cover such tricks.
The appeals must, therefore, succeed.
The answer of the High Court is vacated, and the question, answered in the affirmative.
The respondent shall bear the costs of these appeals as also the costs in the High Court.
One hearing fee.
| Under the Madras Sales Tax Act, 1939, as it stood before it was amended by the Madras Act XXV of 1947,the mere fact that the contract of sale was entered into within the Province of 88 678 Madras did not make a transaction which was completed in another province where the property in the goods passed, a sale within the Province of Madras and no tax could be legally levied upon such a transaction under the provisions of the Act.
Though a Provincial Legislature could not pass a taxation statute which would be binding on any other part of India it was quite competent for a province to enact a legislation imposing taxes on transactions concluded outside the province provided there was a sufficient and real territorial nexus between such transactions and the taxing province.
The title and preamble, whatever their value might be as aids to the construction of a statute, undoubtedly throw light on the intention and design of the Legislature and indicate the scope and purpose of the legislation itself.
It is a settled rule of construction that to ascertain the legislative intent all the constituent parts of a statute are to be taken together and each word phrase or sentence is to be considered in the light of the general purpose and object of the statute.
Judgment of the Madras High court reversed.
|
ivil Appeal Nos.
993 & 994 of 1976.
378 From the Judgment and Order dated 16.9.1974 of the Allahabad High Court in Spl.
Civil Appeal Nos. 622 & 623 of 1972.
R.K. Virmani for the Appellant.
M.V. Goswami and S.S. Khanduja for the Respondents.
The Judgment of the Court was delivered by M. FATHIMA BEEVI, J.
1.
These two appeals by special leave are filed by the Municipal Board, Bareilly, against the judgment of the Allahabad High Court quashing the Ga zette Notification dated August 27, 1969 amending the octroi schedule of the Bareilly Municipality so as to impose octroi on "mineral oil".
The respondents Bharat Oil Company and others filed writ petitions under Article 226 of the Constitution of India challenging the notification on the ground inter alia that the appellant, the Municipal Board Bareilly (hereinaf ter referred to as 'the Board ') had no authority to impose octroi on mineral oil in view of the proviso to Rule 13 1 of the octroi Rules contained in the U.P. Municipal Account Code, 1925.
This was countered by the appellant stating that the R. 13 1 was superseded by the 1963 rules which govern the imposition of octroi by the appellant Board.
The Single Judge in allowing the Writ Petitions took the view that R.131 restricted the power of the Board to impose the octroi and the subject matter of the rule is not covered by the 1963 rules.
The appeals preferred were dismissed by the Division Bench of the High Court agreeing that the bar under R. 131 'regarding the imposition of octroi duty on mineral oils continued notwithstanding the 1963 rules.
The appellant is a Municipal Board governed by the provisions of the U.P. Municipalities Act, 1916 (hereinafter referred to as 'the Act ').
Section 128 of the Act provides for imposition of taxes by a Municipal Board.
The relevant part of the said section reads as under: "128.
Taxes which may be imposed (1) Subject to any general rules or special orders or ' the State Government in this behalf, the taxes which a board may impose in the whole or any part of a municipality are (i) x x x 379 (viii) an octroi On goods or animals brought without the municipality for consump tion, use or sale therein.
Sections 13 1 to 135 of the Act contain provisions relating to the framing of proposals for the imposition of taxes by the Municipal Board, inviting objections to the said proposal, the approval of the said proposal by the State Government, the framing of rules by the State Govern ment on the basis of such proposals, under Section 296 of the Act and for the issue of a notification about the impo sition of tax from the appointed date.
Section 153 of the Act provides that assessment and collection of taxes and other matters relating to taxes may be regulated by Rules.
Section 296 empowers the State Gov ernment to make rules in respect of matters described in Section 153.
In exercise of the powers under Sections 13 1 to 135 and 296 of the Act, the Government of the United Provinces framed octroi rules which were published vide notification dated the 25th October, 1925.
The said rules are included in the Municipal Account Code (Chapter X Rules 13 1 to 23 1) published by the Government of U.P. 7.
Rule 13 1 provided that subject to the exceptions contained in the proviso octroi may be ordinarily levied on commodities included in the list set out in the said rule.
The proviso to this rule stated that octroi shall not be levied on certain articles which included mineral oil.
Rule 131 was amended vide notification dated the 2nd November, 1953 and for the words "the mineral oil" in the proviso the words "mineral oils classified as motor spirit, kerosene or diesel oil" were substituted.
Separate rules for the assessment and collection of octroi in the Bareilly Municipality were framed by the Government of U.P. in exercise of the powers conferred by Section 296 of the Act.
The draft rules were notified vide notification dated the 16th February, 1963 and published in the U.P. Gazette dated 23rd February, 1963.
The said notifi cation reads as under: "No. 89 B/XI C 129 60.
The following draft of the rules for the assessment and collection of octroi in the Bareilly Municipality, in super session of the existing octroi rules contained in the Municipal Account Code in so far as they apply to the said municipality, which the Governor of Uttar 380 Pradesh proposes to make, in exercise of the powers conferred by Section 296 of the U.P. Municipalities Act, 1916 (U.P. Act No. II of 1916), is published as required by subsection (1) of section 300 of the said Act, for the information of all concerned with a view to invite objections and suggestions in respect thereof".
Final Rules were notified vide notification dated the 7th May, 1963 and published by the Government in the U.P. Gazette dated the 11th May, 1963 as required under section 300 of the Act.
By notification dated the 24th July, 1963 published in the U.P. Gazette dated the August 3, 1963 the appellant Board imposed octroi duty on goods and animals brought within the octroi limits of Bareilly Municipality for con sumption, use and sale at the rates shown in the schedule to the said notification and subject to the exceptions con tained therein.
Item 29 of the exceptions contained in the schedule related to "mineral oils" classified as motor spirit, kerosene and diesel oil.
The said notification came into operation from November 16, 1963.
Thereafter the levy of octroi in the Bareilly Municipality was governed by 1963 rules.
The amendments were made in the octroi schedule both in the rates as well as in the exemption and as a result thereof motor spirit, kerosene and diesel oil were removed from the exemption clause and were subjected to the octroi duty @ 1 paisa per litre vide notification dated August 27, 1969.
The validity of the notification dated the 27th August, 1969 was challenged before the High Court in the Writ Petitions Nos.
1805 and 4696 of 1970 by respondents on the ground that 1925 rules take away the power from all Municipal Boards to impose octroi duty on mineral .oils and until such power is restored under a contrary notification issued under Section 128 of the Act, the Board did not have any justification to assess or collect octroi duty on miner al oils.
The impugned judgment proceeded on the basis that Rules 13 1 to 133 of the 1925 rules have been made by the State Government in exercise of the powers conferred upon it by the opening words of Section 128(1) and they are not rules under section 153 for the assessment and collection of octroi.
It was also held that the subject matter of these rules is not covered by the 1963 rules and, therefore, the 1963 rules cannot supersede R. 13 1 of the 1925 Rules.
A Full Bench of the Allahabad High Court in M/s Central Dis tillery Chemicals Works Ltd. & Another vs State of U.P. & Others, [1980] All L.J. 62 following the 381 decision of this Court in Municipality of Anand vs State of Bombay, ; overruled the impugned decision holding that the special rules which are in relation to a particular tax and a particular Municipal Board will over ride or supersede the general rules framed by State Govern ment under Section 153 read with Section 296.
The appel lant 's learned counsel relied on the Full Bench decision and maintained that the rules framed by the Board prevail over the rules contained in the Municipal Account Code and the notification is, therefore, valid.
In our view the approach made by the Full Bench of the High Court in M/s Central Distillery Chemicals Works Ltd. vs State of U.P., (supra) is correct and has to be approved.
As pointed out by this Court in Municipal Board, Hapur vs Raghuvendra Kripal and Others, ; taxes raised by a local authority are not imposed by it as a legislature but as a delegate of the legislature.
The tax is valid one if it is one of the taxes the local authority can raise and the delegate imposes it in accordance with the conditions laid down by the legislature.
The taxes that can be raised in exercise of delegated power are predetermined and procedure is prescribed by the Municipal Act.
Thus Section 128 of the U.P. Municipalities Act confers on the municipalities in the State the power to levy taxes enumer ated thereunder.
The power conferred is not absolute but is subject to any general rules or special orders of the State Government in this behalf.
Section 128(1) does not confer any independent rule making power.
The general rules re ferred to in that Section can only be the rules in the matter of such levy specified in Section 153 of the Act and framed in exercise of the power under Section 296 of the Act.
The State Government is empowered under Section 296 to make rules consistent with the Act in respect of matters described in Section 153.
Rules framed under Section 153 constitute the exclusive machinery for assessment and col lection of taxes.
The relevant part of Section 153 reads as under: "153.
Rules as to assessment, collection and other matters.
The following matters shall be regulated and governed by rules except in so far as provision therefor is made by this Act, namely: (a) the assessment, collection or composition of taxes, and, in the case of octroi or toll, the determination of octroi or toll limit; 382 (f) any other matter relating to taxes in respect of which this Act makes no provision or insufficient provision and provision, is, in the opinion of the State Government neces sary.
" In prescribing the procedure for the impositon of taxes by the board, Section 13 1 of the Act requires the board while framing the proposal to prepare a draft of the rules which it desires the State Government to make in respect of the matters referred to in Section 153 and publish the same.
When the proposals have been sanctioned the State Government makes the necessary rules in respect of the tax under Sec tion 296.
The rules referred to in Section 128(1) are rules thus framed by the State Government under Section 296 in respect of matters referred to in Section 153.
Section 300(2) expressly provides that any rule or regulation made by the State Government may be general for all municipali ties or may be special for anyone municipality as it di rects.
The Municipal Manual published by the Government contains the general rules made by the Government under the Act and general orders issued in Volume 1.
The second volume contains the Municipal Account Code.
The General Rules and orders are contained in Chapter I to XII of Part I.
The Explanation in Chapter I reads as under: "The Rules in this Manual, which are printed in pica type, together with their explana tions, illustrations and exceptions, have the force of law, having been made by the Govern ment in exercise of the powers conferred by section 296 of the Act, and, except where otherwise stated, are applicable to all munic ipalities.
The notifications in which they were published are referred to on the margins of the pages.
" Part II contains the model rules, bye laws and regulations.
Section A deals with Rules with reference to Section 153 of the Act thus: "The following model rules have been framed by the Government for the assessment and collec tion of taxes other than octroi under section 153 and 296 of the Act.
It is anticipated that they will be found generally applicable to the circum stances of the municipalities of these prov inces, and it is desirable that the model forms 383 should be adhered to unless there are special reasons justifying any divergence from them.
In forwarding proposals for the imposition of additional taxation, boards are reminded that the necessary rules for the assessment and collection of the taxes to be imposed should be forwarded at the same time as the tax proposals, and it will facilitate the disposal of such cases if any deviations from the model forms printed below are specif ically referred to in the proposals submitted.
II contains the Municipal Account Code.
Chapter X deals with octroi and provides in R. 13 1 that subject to the exceptions contained in the proviso octroi shall ordinarily be levied on commodities included in the list.
In Mool Chand vs Municipal Board, Banda, AIR 1926 All 5 17 it was held that the rules contained in the Code have as much force of law as the Act itself.
The octroi rules contained in Chapter X of the Municipal Account Code are general rules framed by the State Government in respect of matters referred to in Section 153 in exercise of power under Section 296 and refer to the levy and govern the assessment, collection etc.
The rules are general for all municipalities.
The 1963 rules are framed for the appellant board expressly superseding the general rules in so far as they apply to the appellant board.
By framing the 1963 rules the government evinced the intention to cover the field which was covered by 1925 rules in so far as the Bareilly Municipality was concerned.
The subject matter dealt within 1963 rules is the same as that dealt with in 1925 rules.
The intention to supersede the earlier rules is clearly expressed.
The rule has the force of law.
Rule 13 1 of 1925 rules has no longer any applica tion in the matter of levying octroi by the appellant board.
That rule stands repealed in so far as the appellant Board is concerned.
The rule cannot, therefore, be read as cur tailing the power under Section 128(1)(viii) of the Act to impose octroi.
Rules do not enlarge or restrict the authori ty to impose tax.
Authority is conferred by the section.
Rules are only regulating the exercise of that power.
The imposition of the tax and the regulation of its assessment and collections are totally different matters and they are clearly distinguished.
In Zaverbhai Amaidas vs The State of Bombay, [1955] 1 SCR 799 this Court reiterated the rule of construction that if a later statute deals with the same subject matter and varies the procedure the earlier statute is repealed by the later statute.
In The Municipality or Anand vs State of Bombay, [1962] 2 Supp.
SCR 366 construing section ,59 of the Bombay District Municipal Act, 1901 which is in pari materia with 384 section 128 of the U.P. Municipalites Act, this Court said the word 'impose ' in section 59 meant the actual levy of the tax after authority to levy it had been acquired by rules duly made and sanctioned and this imposition was subject to the general or special orders of the government.
The opending words of section 128 are capable of similar construction and the imposition has to be understood as the actual levy subject to the general rules and special orders contemplated under the other provisions of the Act.
The rule making power under Section 296 read with Section 300(2) of the Act enables the State Government to except anyone municipality from the operation of the general rule by express provision in that behalf.
When the identical author ity in exercise of its rule making power duly frames the rules in respect of the same matter expressly providing that the new rules shall apply to a particular municipality in supersession of the existing rules, it must be deemed that existing rules are repealed to that extent.
The 1963 rules had been framed under Section 296 of the Act in supersession of the existing rules after publication by the State Govern ment, in the Gazette as provided under Section 300 and therefor Rule 13 1 in the 1925 rules ceased to have any operation in respect of the matters dealt with therein so far as the Bareilly municipality is concerned.
In this view of the matter, we hold that the appel lant Board had authority to levy octroi on mineral oils and challenge against the impugned notification is not sustain able.
The High Court was clearly in error in quashing the same and restraining the Board from assessing and collecting the tax.
We accordingly allow the appeal and set aside the judg ment of the High Court.
In the circumstances of these cases, we, however, make no order as to costs.
| The appellant is a Municipal Board governed by the provisions of the U.P. Municipalities Act, 1916.
Section 128 of the Act provides for imposition of taxes by the Board.
In exercise of the powers under Sections 131 to 135 and 296 of the Act, the Government of the United Provinces framed octroi rules.
The said rules were included in the Municipal Account Code (Chapter X rules 131 to 231).
The proviso to Rule 131 provided that octroi shall not be levied on certain articles which included mineral oil.
The rule was amended vide notification dated the 2nd November 1953 and for the words "the mineral oil" in the proviso, the words "mineral oils classified as motor spirit, kerosene or diesel oil" were substituted.
Separate rules for the assessment and collection of octroi in the Bareily Municipality were framed by the Govt.
of U.P.
The draft rules were notified vide notification dated the 16th February 1963.
Final rules were notified vide notification dated the 7th May 1963 and published in U.P. Gazette dated the 11th May 1963.
By a notification dated the 24th July 1963, published in U.P. Gazette dated the 3rd August, 1963, the appellant Board imposed octroi duty on goods and animals brought within the octroi limits of Barei ly Municipality for consumption, use and sale at the rates shown in the Schedule subject to certain exceptions men tioned therein.
The said notification came into operation from November 16, 1963 and thereafter the levy of octroi in Bareily Municipality was governed by 1963 rules.
The amend ments were made in the octroi schedule both in the rates as well as in the exemption and as a result whereof motor spirit, kerosene and diesel oil were removed from the exemp tion clause and were subjected to the octroi duty @ 1 paisa per liter vide notification dated August 27, 1969.
The respondents challenged the validity of the notification dated 377 the 27th August 1969 by means of a writ petition before the High Court on the ground that 1925 rules took away the power from all Municipal Boards to impose octroi duty on mineral oils and until such power is restored under a contrary notification issued under section 128 of the Act, the Board did not have any justification to assess or collect octroi duty on mineral ohs.
The appellant Board contended that Rule 131 was superseded by the 1963 rules which now governed the imposition of octroi by the appellant Board.
The single Judge of the High Court who heard the petition came to the conclusion that Rule 131 restricted the power of the Board to impose the octroi and the subject matter of the rule was not covered by the 1963 rules.
The appellant 's appeals preferred before the Division Bench were dismissed which took the view that the bar under Rule 131 regarding the imposition of octroi duty on mineral oils continued notwith standing the 1963 Rules.
Hence these appeals by the Munici pal Board.
Allowing the appeals, this Court, HELD: The rule making power under section 296 read with Section 300(2) of the Act enables the State Government to except any one municipality from the operation of the gener al rule by express provision in that behalf.
When the iden tical authority in exercise of its rule making power duly frames the rules in respect of the same matter expressly providing that the new rules shah apply to a particular municipality in supersession of the existing rules, it must be deemed that existing rules are repealed to that extent.
[384C D] The 1963 rules had been framed under Section 296 of the Act in supersession of the existing rules after the publica tion by the State Government, in the Gazette as provided under Section 300 and therefore rule 131 in the 1925 rules ceased to have any operation in respect of the matters dealt with therein so far as the Bareilly municipality is con cerned.
[384D] M/s Central Distillery Chemicals Works Ltd. & Anr.
vs State of U.P. & Ors., [1980] All L.J. 62, approved.
Municipality of Anand vs State of Bombay, ; ; Municipal Board, Hapur vs Raghuvendra Kripal & Ors., ; ; Mool Chand vs Municipal Board, Banda, AIR 1926 All. 517; Zaverbhai Amaidas vs The State of Bombay, [1955] 1 SCR 799 and The Municipality or Anand vs State of Bombay, [1962] 2 Supp.
SCR 366, referred to
|
ition No. 119 of 1979.
(Under Article 32 of the Constitution of India) V.M. Tarkunde, G.L. Sanghi, Mrs. Jayashree Wad, G.D).
Gupta and Miss Anita for the Petitioners.
K. Parasaran, Solicitor General and Miss. A. Subhashini for Respondents 1 2 and 4 7.
Dr. Y.S. Chitale, A.T.M. Sampath and P.N. Ramalingam for the other appearing Respondents.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
In this petition filed under Article 32 of the Constitution, the petitioners 31 in number who are all officers serving in the Aviation Research Centre (for short, the 'ARC ') have challenged the constitutionality of Rules 6 to 8 of the "Aviation Research Centre (Technical) Service Rules, 1976" issued by the President of India under the proviso to Article 309 of the Constitution, as also the legality and validity of the "absorption" of respondents Nos. 8 to 67 in the said Department pursuant to the impugned Rules.
There is a further prayer in the writ petition to declare the Seniority List dated November 6, 1978 (Annexure 'G ') published by the Department as illegal, unconstitutional and void.
Yet another relief claimed by the petitioners is that all the promotions granted to respondents Nos. 8 to 67 in the ARC service from 1968 till 1978 should be declared by this Court as illegal and void, and that a writ of mandamus or any other appropriate writ, order or direction should be issued to respondents Nos. 1 to 7 the Union of India, the Cabinet Secretary, the Director of Department of Personnel, the Director General of Security, the Director of ARC and the Adviser (Technical), A.R.C., respectively to constitute the ARC afresh in accordance with law and to rearrange the seniority in the Service in conformity with law.
The petitioners ' case is that shortly after the formation of the ARC in 1963 the petitioners were directly recruited to the said department on a regular basis during the period between 1963 and 1966 in the category of Assistant Central Intelligence officers Grade II, (which has since been redesignated as Deputy Field officers (Tech.) 881 (for short DFO) under the impugned Rules while respondents Nos. 8 to 67 are officers whose services have been borrowed on deputation to the ARC from some departments of Central Government and from the Police Cadre of State Governments.
The petitioners contend that by virtue of their regular appointments in the ARC, they were, as of right, entitled to be promoted to the higher posts of Assistant Central Intelligence officer, Grade I now called the Field officer (Tech.) Deputy Central Intelligence officer (Tech.)/Assistant Technical officer subject only to the right of the Department to supersede those found unsuitable for such promotions.
However, instead of promoting the petitioners to the vacancies that arose in such higher categories of posts, the Department filled up those vacancies by granting promotions to the deputationists.
thereby illegally denying to the petitioners the opportunities legitimately due to them for promotion in the Department.
It is contended by the petitioners that the deputationists were occupying the posts in the Department only on ad hoc basis and such ad hoc appointees who were having the benefit of lien in their parent departments and were getting promotions in those departments had no claim whatever to seniority or promotions in the borrowing Department, namely, the ARC.
On this basis the petitioners have raised a . challenge in this writ petition against the legality of the various promotions given to respondents Nos. 8 to 67 in the year 1968 and thereafter.
A draft combined seniority list of Assistant Central Intelligence officers Grade II (Tech.) working in the ARC was published in March 1971 (Annexure 'A '), wherein the officers on deputation as well as those who are directly recruited in the ARC had all been included and the seniority of the deputationists had been fixed by taking into account the total length of service put in by them in the rank of ACIO in their parent departments as well as in the ARC.
According to the petitioners, the said list had been prepared in violation of the principle that the same period of service of a Government servant cannot be legally considered twice over for service benefits in two Departments, namely, the parent department and the borrowing department.
G A Writ Petition Civil Writ Petition No. 1020 of 1971 was filed in the Delhi High Court by three of the present petitioners complaining against the promotions given to the deputationists and challenging the validity of the combined seniority list published by the Department in 1971.
During the pendency of that writ petition the impugned seniority list of 1971 was substituted by two separate 882 lists one consisting of the direct recruits and the other consisting of deputationists.
Thereupon.
the writ petition before the Delhi High Court was got amended by the petitioners therein by incorporating objections against the new seniority lists published by the Department.
When the case came up for hearing, counsel appearing on behalf of the Union of India submitted before the High Court that statutory rules governing the service were then under preparation, that the arrangements till then made were all purely on ad hoc basis and the whole question will eventually be finalised after the rules were framed.
In the light of the said submission, the High Court dismissed that writ petition observing that since no rules governing the Service had been framed and the appointments in question had all been made on purely ad hoc basis, the petitioners did not have at that point of time any legitimate grievance and the writ petition was, therefore, premature.
It is submitted by the petitioners that, contrary to the assurance given to the Delhi High Court, the Department did not take early action for framing the rules but instead continued to confer on the deputationists the benefit of further illegal promotions and it was only after all the higher posts were filled by promoting deputationists that the Department ultimately promulgated the impugned statutory Service Rules on April 26, 1976.
Strong reliance has been placed by the petitioners on office Memorandum dated December 22, 1959 issued by the Ministry of Home Affairs (Annexure 'C ') laying down certain general principles for determining seniority of various categories of persons employed in Central Services.
According to the petitioners, in the absence of statutory rules governing the conditions of service of personnel in the ARC, the principles laid down in the aforesaid office Memorandum were applicable to the said Department.
It is urged that under clause (viii) of the said office Memorandum, it was incumbent on the authorities to replace all the deputationists who, according to the petitioners, were holding the posts in the Department only on ad hoc basis, by persons approved for regular appointment by direct recruitment, and until the deputationists were so replaced the deputationists had to be placed in bloc below person directly recruited to the grade.
The petitioners have sought to derive support from Annexure 'D ' which is a letter dated October 15, 1971 addressed by the Department of Personnel, Cabinet Secretariat to the Director General of Security, wherein it is pointed out that persons appointed to a grade on deputation basis are appointed for a specific period, after the expiry of which they are required to revert back to their parent departments and since the said deputationists do not have any locus standi in the borrowing departments, they are not entitled to 883 promotions/confirmations in the borrowing departments.
The letter proceeds to state that the question of fixation of their inter se seniority of such deputationists vis a vis other categories of officers of a particular grade by preparing a combined seniority list does not, therefore, arise.
However, it was also added in the next para.
graph of the letter that though deputationists are not entitled to promotion to a higher grade, yet they can be considered for appointment on deputation to the higher grades, if the Recruitment Rules of the higher grade provide for appointment on deputation basis, and in the absence of the Recruitment Rules, it is for the appointing authority to decide whether a person already serving as a deputationist in the lower grade should be considered for appointment on deputation to the higher posts.
According to the petitioners, on the basis of the principle enunciated in this letter, persons serving on deputation in the ARC should all have been repatriated to their parent departments as soon as direct recruits became available in sufficient number and the action taken by the Department in filling up the vacancies in the higher categories, namely, ACIOs Grade I (Field officers) and Assistant Technical officers by granting promotions to respondents Nos. 8 to 67 was totally illegal.
The petitioners have alleged that some of the deputationists were holding posts in their parent departments which were inferior in rank in comparison with the posts of DFOs.
It is contended by the petitioners that the grant of such promotions to the deputationists amounted to conferment of double benefits on them since they were simultaneously earning promotions in their parent departments.
Some of the petitioners who had joined the ARC in 1963 as DFOs became eligible for promotions in 1968 by completing the five years ' qualifying period, but instead of promoting them to the category of Field officers, the Department filled up the vacancies which became available in 1968 and subsequent years by promoting some of the respondents who were only deputationists.
The petitioners contend that the deputationists were serving in the ARC only on ad hoc basis and hence they were not eligible under the terms of the Memorandum dated December 27, 1959 (Annexure 'C ') for the grant of any promotions in the borrowing department.
It is alleged that while effecting such irregular promotions, the petitioners were not even considered and they were illegally denied the opportunity of competing with the respondents for promotions to the posts of Field officers.
In 1975, a further injustice is said to have been done to the petitioners when twenty of the deputationists functioning as Field officers were promoted as Assistant Technical officers (for short, ATOs).
Writ petitioners Nos. 1 and 4 made representations 884 complaining against those promotions, but those representations were rejected by the Director, ARC by his Memorandum dated September 8, 1975 (Annexure `E ').
On December 1, 1975, seven more deputationists were promoted as ATOs.
The petitioners have raised the plea that the aforesaid promotions of the deputationists were illegal and discriminatory since the Department had fixed an arbitrary date, namely, December 1972 for computing the qualifying period of three years for eligibility to be considered for promotions.
It was only after most of the posts in the higher categories of ATos and FOs had come to be occupied by the deputationists as a consequence of such irregular promotions that the impugned Rules were promulgated by the President of India on April 26,1976.
Through the said Rules, the Department has purported to absorb all the deputationists/respondents Nos. 8 to 67 in the ARC Service as TOs/ATOs/FOs and thereby legalised all the illegal promotions granted to those deputationists.
This, according to the petitioners, has been done with the mala fide intention of giving favoured treatment to a deputationist at the expense of the direct recruits like the petitioners.
The petitioners have put forward the contention that the impugned Rules are arbitrary and discriminatory and are violative of Articles 14 and 16 of the Constitution.
It is their further plea that the wholesale absorption of the deputationists is a colourable and unconstitutional exercise of power and the impugned Rules in so far as they provide for such absorption are in the nature of a fraud on the powers conferred on the President by the proviso to Article 309 of the Constitution.
The petitioners point out that even after the constitution of the Service by the impugned Rules, no seniority list was published for more than two years, but promotions to the posts of FOs were, in the meantime, granted to several of the deputationists.
It is contended by the petitioners that Rule 6 of the impugned Rules confers arbitrary powers on the controlling authority to equate the ad hoc service rendered by the deputationists in the ARC with the 'regular ' service rendered by persons like petitioners who had been directly recruited to the Department on a regular basis and this has resulted in permanently blocking all the future chances of the petitioners in matters of promotion and other service benefits.
According to the petitioners the "initial constitution" of the Service purported to be brought about under the Rules is itself highly arbitrary and it infringes Articles 14 and 16 of the Constitution since it is based on illegal treatment of unequals as equals by equating persons functioning on a mere ad hoc basis with those holding posts in he organisation on a regular basis.
Another ground of attack put forward by 885 the petitioners is that Rule 6(2) confers arbitrary and unfettered powers on the Screening Committee and hence it suffers from the vice of excessive delegation.
It is also urged that the said sub rule is unconstitutional because it enables the controlling authority to retain to itself an arbitrary power to control the decision making of the Screening Committee by means of "general or special instructions ' thereby rendering it impossible for the Screening Committee to function in an independent and objective manner.
According to the petitioners, Rule 6(2) enables the controlling authority to impose its will and whims on the Screening Committee.
The petitioners allege that the controlling authority had imposed its favoured treatment to deputationists and displayed a discriminatory attitude against the regular departmental personnel like the petitioners by treating the ad hoc service of the deputationists in the ARC as regular service and absorbing them in the posts or grades to which they have been granted illegal promotions.
The petitioners have urged that Rule 6(2) in so far as it vaguely uses the words "continuous appointment in the grade" has vested an arbitrary power in the Department to take into consideration the ad hoc service rendered by the deputationists in grades to which they have no right in law and hence the said provision is highly arbitrary and violative of Article 14 of the Constitution.
Alternatively, it is submitted by the petitioners that the aforesaid words "continuous appointment in the grade" should be reasonably construed to mean "continuous appointment on regular basis in the grade" in which event alone the rule can be regarded as free from the vice of arbitrariness.
Rule 6(6) has also been attacked by the petitioners as infringing Articles 14 and 16 of the Constitution on the ground that it enables the Screening Committee to discriminate against the direct recruits by treating them on a par with the deputationists.
It is contended by the petitioners that the said sub rule confers power on the Screening Committee to absorb such of the deputationists in a lower grade who were found to be unsuitable for absorption in a higher grade and thereby completely blocks the chances of persons like the petitioners to get promotions into such lower grades despite their being found suitable for such promotions.
Another point raised by the petitioners is that it was incumbent on the Screening Committee before it took its final decision regarding the absorption of personnel in the various grades to give an opportunity to the petitioners to represent their case, and inasmuch as this procedure was not followed, the decisions taken by the Screening Committee were in clear violation of the principles of natural justice.
The petitioners have also voiced a grievance that 886 even though the Screening Committee had prepared a list of the officers whom it had decided to absorb in the various grades, the Department did not disclose the contents of the said list to personnel working in the ARC but kept the matter secret.
Reiterating their contention that the promotions given to respondents Nos. 8 to 67 during the period from 1968 to 1978 were all illegal on the ground that these promotions had been made without considering the cases of the petitioners, the petitioners have put forward further plea that the publication of the impugned Seniority List was deliberately delayed by the Department till November 6, 1978.
with intent to favour the deputationists, some of whom were promoted as ATOs on November 5, 1978.
On this basis, it is contended that the action taken by the Department in publishing the Seniority List dated November 6, 1978 was mala fide.
Another argument advanced by the petitioners is that Rule 7 in so far as it empowers the Department to reckon the seniority of the deputationists by giving them the benefit of the ad hoc service rendered by them in the ARC as well as the prior service put in by them in their parent departments is arbitrary.
The petitioners con tend that this deviation from the principle uniformly followed for fixing the seniority in all other departments of the Government of India namely those laid down in the Home Ministry 's office Memorandum dated December 22, 1959 was wholly unjustified and as a result thereof the direct recruits in the ARC are subjected to a differential treatment resulting in gross prejudice to them with out there being any rational basis for separate classification.
There is also an allegation that in fixing the seniority of personnel as per the impugned gradation list dated November 6, 1978, even service rendered by the deputationists in non comparable and lower ranks has been wrongly taken into account.
Rule 8(1) has been attacked by the petitioners as empowering the controlling authority to enable the deputationists to consolidate the illegal advantage gained by them at the initial constitution by further promotions/appointments to still higher posts in the ARC.
It is pointed out by the petitioners that while specifying the method of recruitment to the various posts in the Service and fixing a quota as between the vacancies to be filled up by promotions and those to be filled up by direct recruitment/deputation or re employment in Schedule II of the rules the deputationists have been treated on a par with regular departmental personnel, and this involves a clear violation of Articles 14 and 16 of the Constitution.
887 Lastly, it is contended that even if it is to be assumed that the decision taken by respondents I to 7 to retain the deputationists in the Departmental the time of the initial constitution of the ARC was valid, the position of the deputationists would, in law, be only that of persons permanently transferred from the parent departments to the ARC and under Article 26 of the Civil Service Regulations, such persons appointed by transfer shall be ranked below all the direct recruits as well as the promotees already functioning in the Department.
The petitioners contend that since the Seniority List dated November 26, 1978 has been drawn up in contravention of the aforesaid principle laid down in article 26, the said list should be declared to be illegal and void.
Detailed counter affidavits have been filed on behalf of respondent No. 1 and respondents Nos. 13 to 16, 22, 25, 28 and 31.
In the counter affidavit filed on behalf of respondent No. 1, by the Deputy Secretary, Cabinet Secretariat, it is stated that the Aviation Research Centre was initially set up as a Sensitive Security organisation in the year 1963 on a purely temporary basis by way of an extension of the Intelligence Bureau.
In February 1965, the ARC, along with two other schemes, was brought under the control of the Director General of Security.
The Department was continued by the Government on temporary basis from year to year till 1971 when the Government, after reviewing all the relevant factors, took a decision to make the ARC permanent.
The administrative control over the ARC was originally vested in the Ministry of External Affairs and later with the Prime Minister 's Secretariat till 1965 when it was transferred to the Cabinet Secretariat.
There were no Recruitment and Cadre Rules for the ARC during the period when the Department was functioning on a temporary and purely experimental basis and a number of officers, including respondents Nos. 8 to 67, were taken on deputation from other Central and State Government Departments to man the various posts in the organisation.
Some persons, like the petitioners, were also directly recruited as ACIOs II on a purely temporary and ad hoc basis against temporary posts in the ARC.
The contention of the petitioners that they were regularly recruited as DFOs in the ARC is denied by the Government respondents.
It is submitted in the counter affidavit of respondent No. I that the appointments given to the petitioners were merely ' ad hoc in character and this had been clearly specified in the Memos issued to them containing the order of appointment that the appointments were temporary and would not confer on them any right for permanent appointment if and when the posts were made permanent.
It is stated that the Memos issued 888 to all the petitioners were on identical terms and a specimen copy of the Memo issued to the petitioners has been appended to the counter affidavit of respondent No. 1, as Annexure 'R 1 '.
The further submission made in the counter affidavit of the first respondent is that in the ARC there was no regular cadre nor any Recruitment Rules prior to 1976 and as and when posts in the various categories in the grades were sanctioned, they were filled up by getting suitable hands with the requisite qualifications and some experience from other departments on deputation and some vacancies were also filled up by direct recruitment.
Briefly sketching the history of the formation of the ARC, the first respondent has stated that the ARC organisation was set up in the wake of Chinese aggression that took place in the winter of 1962 and its primary role was to collect intelligence by employing the most modern highly sophisticated techniques and to furnish it to other Agencies like the Special Frontier Force and the Special Security Bureau which were in need of such intelligence in order to give better protection to our borders against external aggression.
For manning such an organisation, it was absolutely essential to secure the services of persons possessing the requisite experience, technological skill, special attitude and ability.
Initially, therefore, the various posts in the ARC organisation, which was started on a mere experimental basis, were filled up by taking on deputation officers from the intelligence Bureau and other departments which had the expertise in related fields, such as, the Department of Defence Science, Wireless Planning and Coordination and Directorate General of Civil Aviation.
With the gradual expansion in the activities of the ARC, it was found that the aforesaid Departments could not supply on deputation basis enough hands for meeting the needs of ARC and hence, the direct recruitments from the open market had also to be made.
How ever, all the appointments made by direct recruitment were merely temporary and ad hoc in character.
While the deputationists were persons with rich experience and long years of service, the direct recruits were inexperienced and new to the job.
In the circumstances, the higher posts of FOs, ATOs and Assistant Directors had to be filled up by ad hoc appointments from amongst the deputationists who by virtue of their long experience in the particular type of work were considered suitable for those posts.
As and when direct recruits gained adequate experience, several of them were also given ad hoc appointments to such higher posts.
It is further averred in the counter affidavit that in making such appointments to the higher posts, only considerations of public interest and maintenance of efficiency in the 889 functioning of the Department had weighed with the appointing authority.
The allegation put forward by the petitioners that the direct recruits were discriminated against has been denied by the first respondent as totally unfounded, and it is stated that all such appointments to the various technical posts in the higher categories of FOS, ATOS and Assistant Directors were made by the Department on the recommendations of the duly constituted DPCs/Selection Committees.
Some of the deputationists were also appointed to the higher post when they got promotions to the corresponding ranks in their parent departments.
The Department treated both the direct recruits as well as the deputationists as ad hoc apponintees in the ARC with equal rights, and equal weightage was given to both categories of employees in respect of length of service in a given grade irrespective of whether or not it was rendered wholly in ARC.
As regards the petitioners ' contentions based on the MHA Memorandum dated December 22, 1959, it is pointed out in the counter affidavit that the general principles laid down therein had no application till the matter of filling up of temporary posts in a temporary department.
Stress is laid in the counter affidavit on the fact that simultaneously with the constitution of the ARC as a regular department, the ARC (Technical) Service Rules, 1976 were promulgated by the Government and it has been submitted that the principles laid down in the aforesaid Memorandum did not get attracted to the new service inasmuch as it is clearly specified in the Memo itself that the principles enunciated therein will not be applicable for such Services and posts for which separate principles have been already issued or may be issued thereafter by the Government, The allegation of the petitioners that they had not been considered for promotion at the time when the vacancies in the categories of DFOs were filled up during the year 1968 to 1975 has been denied by the first respondent and it is averred in the counter affidavit that the direct recruits were given promotions in the higher posts when they were found suitable by the DPC for ad hoc promotions to the grades of FOs (Tech.), etc.
Reliance is placed by the first respondent of the observations made by the Delhi High Court in its judgment in Civil Writ Petition No. 1020 of 1971, filed by three of the present petitioners, that no discrimination could be said to have been made against the direct recruits either in drawing up the seniority list of 1971 or in the action taken by the authorities to filling up some of the higher posts by appointing deputationists.
Though a decision was taken by the Government in 1971 to make the ARC a permanent department, and steps to frame rules were also immediately initiated, the draft rules could be finalised after intensive examination by various concerned Ministries only by April 1976 when the Rules were 890 promulgated.
The allegation made by the petitioners that the promulgation of the rules was deliberately delayed in order to confer an undue advantage on the deputationists who were granted promotions to the higher grades in the meantime, has been categorically denied by the first respondent in its counter affidavit.
The delay in promulgation of the rules was due to the fact that because of the special features of the Department and the sensitive nature of the functions to be discharged by it, various circumstances and factors had to be taken into account before the draft rules were finally cleared by the several Ministries concerned.
The first respondent has stated in the counter affidavit that equal treatment had been meted out to the direct recruits and the deputationists in the matter of promotion/appointment from the grade of AClO 1 to that of ATO.
The allegation of the petitioners that the DPC had fixed the crucial date for eligibility for promotion from the category of ACIO I to the grade of ATO in an arbitrary manner so as to exclude the petitioners from consideration, has f) been denied by the first respondent and it is averred that the crucial date was determined by the DPC on each occasion by taking into consideration the number of vacancies likely to be available for promotion/selection and the number of persons who could reasonably be considered for such promotions/selection.
It is pointed out by tile first respondent that when deputationists were selected by the DPC, they were 'appointed ' to the higher posts on deputation and it was not a process of promotion as wrongly contended by the petitioners.
In reply to the challenge made by the petitioners against Rule 6 of the impugned Rules which provides for the initial constitution of the new service to be known as the Aviation Research Centre (Technical) Service it is submitted by the first respondent that there is no principle of law prohibiting the absorption in a newly constituted Department of persons who are functioning on deputation in a temporary organisation which was later constituted into a permanent service.
It is also submitted by the first respondent that the provision in the impugned rules for absorption of the deputationists in the ARC (Technical) Service was Made in public interest since it was found that the continual retention of the deputationists who possessed valuable experience and had long association with the organisation was absolutely necessary for the efficient functioning of the Department.
The first respondent states that the impugned rules extend equal treatment to all categories of employees who were in position on the crucial date, namely, April 25, 1976, in the matter of absorption as 891 well as determination of seniority at the initial constitution, irrespective of whether they were direct recruits or deputationists.
Since the direct recruits were all occupying the posts in the ARC only on a purely cd hoc basis, they had no legal right to be appointed in the new Department and merely by reason of their temporary appointments as ACIO II (Tech.) in the ARC organisation they could not automatically become members of the new ARC (Technical) Service which was constituted for the first time with effect from April 26, 1976.
All persons working in the ARC in various temporary posts as on April 26, 1976, were given the option to express their willingness or otherwise to be absorbed in the new Department.
The petitioners as well as the direct recruits were treated alike in the matter of the assessment of their suitability for absorption by the Screening Committee and on being found suitable, they were absorbed either in the same posts which they were occupying immediately prior to April 26, 1976 or in a lower post, subject to availability of permanent posts.
The Screening Committee prepared the seniority list of the persons found suitable for absorption in accordance with the provisions contained in Rule 6 (2) read with Rule 7 of the impugned Rules.
The counter affidavit of the first respondent goes on to state that the seniority list published on November 6, 1978 had been prepared strictly in accordance with the provisions of the impugned Rules, the names of the officers having been arranged with reference to the dates of their continuous appointment to the concerned grade.
Printing out that the benefit of the ad hoc service rendered in a particular grade has been given not only to the former deputationists but also to the direct recruits in the matter of determining their inter se seniority in the grade of FOs, it is submitted by the first respondent that there is no merit in the petitioner 's contention that the seniority list of November 6, 1978 has been prepared in a discriminatory manner so as to violate Article 16 of the Constitution.
The first respondent has further submitted that the charge of discrimination has been made by the petitioners on the basis of an erroneous assumption that the petitioners were in regular service in the ARC prior to the promulgation of the impugned Rules and that hence they had a superior claim for promotion to a higher post in comparison with the deputationists.
The petitioners had been appointed/promoted to various grades in the ARC only on ad hoc basis prior to April, 26 1979 and the benefit of such ad hoc service rendered by them had been given to the petitioners in the same way and to the same extent as service rendered by the former deputationists on deputation.
The first respondent, therefore, submits that the provisions of Rule 6 892 cannot be said to be 'arbitrary or violative ' of the principle of equality enshrined in Articles 14 and 16 of the Constitution.
Repelling the contention of the petitioners that the principle for fixation of seniority laid down in the impugned Rules is illegal for the reason that it is inconsistent with the guidelines and general principles for determination of seniority in the Central Services enunciated in MHA Memorandum dated December 22, 1959 (Annexure 'C ') the first respondent has submitted in the counter affidavit that there is no substance in this plea since it has been specially stated in the Memorandum (Annexure 'C ') itself that the principles contained therein will not apply to "such services and posts for which separate principles have already been issued or may be hereafter issued by Government".
The allegation made by the petitioners that the framing of the rules and the constitution of.
the ARC (Technical) Service was deliberately delayed with a view to give undue advantage to the deputationists has been denied by the first respondent as baseless and untrue.
Prior to 1971, there were no permanent posts at all in the ARC because the Department was temporary and all the temporary posts were being sanctioned on a year to year basis.
Action to frame the rules was initiated shortly after the decision was taken in 1971 to make the ARC a permanent Department.
The first set of draft rules was prepared and submitted to Government in 1972.
Since it was found to be defective in certain aspects, a revised draft was prepared in 1974.
Since the whole matter had to be subjected to extensive and intensive examination by various Ministries taking into account all relevant factors, the finally approved rules could be promulgated only in April 1976.
The first respondent has submitted that Rule 6 of the impugned Rules provides equal treatment to all the officers in position in the ARC on the crucial date in the matter of absorption and determination of inter se seniority at the time of initial constitution of the service.
The service rendered by the former deputationists in various grades prior to their absorption in the ARC could not be ignored, as their services were required by the Department in public interest.
It is pointed out that if the contention of the petitioners that only persons who are regularly appointed in the ARC could be absorbed in the service is to be accepted, then none of the petitioners could have been permanently appointed in the ARC Technical Service, as the appointments held by the petitioners prior to the constitution of the ARC Service in 1976 were purely temporary and ad hoc in 893 The further plea put forward by the petitioners that Rule 6(2) of the impugned Rules suffers from the vice of excessive delegation of power has been stoutly denied by the first respondent.
The Screening Committee was required to act within the frame work of the scheme of absorption envisaged in the Rules and the Committee had followed proper guidelines which had been approved by the controlling authority, namely, the Secretary, Department of Cabinet Affairs, Cabinet Secretariat.
The provision enabling the controlling authority to issue general instructions was incorporated in the rules for the purpose of ensuring that the rules relating to the initial constitution of the service were applied uniformly and judiciously.
The contention put forward by the petitioners that the said provision renders the functioning of the Screening Committee nugatory, is C refuted by the first respondent as being devoid of any merit.
The allegation made by the petitioners that the deputationists were given illegal promotions from time to time has also been denied in the first respondent 's counter affidavit as totally baseless.
It is admitted that during the period when the ARC was functioning as a temporary Department.
some of the deputationists who were initially appointed as (Tech.) were subsequently appointed to higher posts on deputation basis but the first respondent submits that there could be no valid objection to such appointments, as they had all been made in the public interest and in accordance with the general instructions on the subject.
Referring to the provisions contained in Rule 5(3) of the impugned Rules regarding the exercise of option by officers willing to be absorbed on permanent basis in the ARC, it is submitted in the counter affidavit that the said provision was equally applicable to direct recruits as well as the erstwhile deputationists.
Since the temporary appointments of the direct recruits in the post of ACIO II (Tech.) did not confer on them any right of confirmation and the ARC (Technical) Service was altogether a new service, the first respondent states that the petitioners were rightly asked to exercise their option in terms of Rule 6(3).
Dealing with the attack levelled by the petitioners against the validity of Rule 6(6), it is pointed out in the counter affidavit that the spirit and content of the rule is that persons who were holding higher posts on the crucial date and were considered suitable for permanent appointment in the said posts but could not be appointed substantively to such posts for want of vacancies, may be given permanent posts in the owner grade.
It is pointed out in the counter affidavit that the said rule was applicable to direct recruits as well as to the deputationists and that, as a matter of fact, some of the petitioners got the benefit of this rule inasmuch as they were 894 appointed substantively in the grade of DFO(T) with effect from April 26, 1976, while they are holding posts of Fo(T) on the said date.
The charge of discrimination levelled by the petitioners is, therefore, denied by the first respondent as being devoid of any foundation.
With reference to the grievance put forward by the petitioners that they were denied an opportunity to represent their case before the Screening Committee, it is submitted by the first respondent that under the scheme of the impugned Rules, the Screening Committee was not expected to entertain any representations from any quarter and, in fact, no representations were received.
The Committee had acted strictly in accordance with the provisions contained in the Rules in determining the suitability of the persons concerned for absorption in the new Department and the principles of natural justice have no applicability in such a context.
The allegation of mala fides put forward by the petitioners has been stoutly denied by the first respondent.
After the seniority list was prepared by the Screening Committee in accordance with the provisions contain ed in Rule 6(2) read with Rule 7 of the impugned Rules, certain formalities had to be gone through before orders regarding substantive appointments of the officers to the various grades could be issued.
It was only after the issue of substantive appointment orders to persons who had opted for absorption into the service, that the Department could publish the seniority list.
The formalities aforementioned included obtaining the options from all the employees, getting the approval of the parent departments of the erstwhile deputationists for their permanent absorption in the ARC Service, medical examination of employees, etc.
It was on account of the delay involved for completing the said procedure that the seniority list could be finally published only on November 6, 1978.
The counter affidavit proceeds to state that promotions in the Department were effected in the meantime strictly on the basis of the seniority list of officers recommended for absorption which the Screening Committee had prepared.
It is further pleaded by the first respondent that no illegality whatever was involved in adopting the principle of reckoning the seniority in a particular post on the basis of total length of continuous service put in by the concerned officers in the particular grade in the ARC or in the equivalent grade in the parent department.
The said rule was framed keeping in view the special requirements of the new Department.
If the deputationists had not been given the benefit of the service put in by them in the equivalent grade in their parent departments, they 895 would have all opted for their reversion to their parent departments and that would have resulted incomplete dislocation of the functioning in the ARC.
The first respondent states that lin formulating or applying the seniority rule there has not been any arbitrary discrimination as between direct recruits and deputationists and hence neither the rules nor the seniority list can be said to be violative of Articles 14 and 16 of the Constitution.
B Dealing with the contention put forward by the petitioners on the basis of article 26 of the Civil Service Regulations, it is submitted by the first respondent that the said article, which deals with appointments by transfer "in accordance with a provision in the Recruitment Rules providing for such transfers" had no applicability at all in the matter of taking persons on deputation to the ARC when it was a purely temporary Department which had no Recruitment Rules.
The subsequent absorption of such deputationists and other categories of employees has been done strictly in accordance with the provisions contained in the impugned Rules which are statutory in origin.
In the absence of any Recruitment Rules, there was no legal bar whatever preventing the competent authority from borrowing persons from other departments on deputation basis to man the various posts in the ARC during the period prior to the introduction of the impugned Rules with effect from April 26, 1976.
The former deputationists had occupied a larger percentage of the higher posts during the aforesaid period because they had put in more years of service in different grades and had much greater experience in carrying out the functions which were of a highly specialised nature when compared to the direct recruits whose induction in the ARC started only from 1965.
On the basis of the aforesaid averments contained in his counter affidavit, the first respondent has submitted that the petitioners are not entitled to any relief in this writ petition and that the petition should be dismissed.
In the separate counter affidavit filed on behalf of respondents 13, 16,22 etc., they have put forward more or less the same contentions in defence of the writ petition as have been taken by the first respondent.
From the averments contained in counter affidavit of the first respondent and the documents produced before us, it is seen that . the Aviation Research Centre was a temporary and ad hoc organisation set up late in 1962, on an emergency basis, when the country 896 was threatened with the Chinese aggression for carrying out the work of collecting intelligence by the use of highly sophisticated techniques.
For manning this Task Force, persons with experience in the specialised nature of the work were taken on deputation basis from different sources, such as the intelligence Bureau, the Departments of Defence Science, Wireless Panning and Coordination, the Directorate General of Civil Aviation and the Police of different States and they were grouped together to form the ARC.
Subsequently, to supplement the man power, some persons were also directly recruited to the organisation on a purely ad hoc basis.
The ARC organisation was initially treated as an extension of the intelligence Bureau.
In February 1965, it was brought under the control of the Director General of Security.
The administrative control over the organisation which was originally vested in the Ministry of External Affairs and later with tho Prime Minister 's Secretariat was transferred to the Cabinet Secretariat in 1965.
The sanction for continuance of the temporary organisation was accorded by the Government from year to year till the year 1971 when decision was taken by the Government to make the ARC a permanent Department.
But, the finalisation of the principles to be adopted for constitution of the new permanent Department took considerable time and it was only on April 26, 1976 that the President of India promulgated the Aviation Research Centre (Technical) Service Rules providing for the constitution of a new service to be known as Aviation Research Centre (Technical) Service and laying down the principles regulating the method of recruitment to the various posts in the said Service.
Till 1976, there was no regularly constituted cadre of posts in the temporary ARC organisation and there were also no rules or even executive orders laying down any principles regulating the method of appointment to the various posts in the organisation.
Clause 6 of the impugned Rules deals with the initial constitution of the new ARC permanent Service.
That clause is in the following terms: "6.
Initial Constitution (1) All persons holding, as on the appointed day, any one of the categories of posts specified in rule 4, whether in a permanent or temporary or officiating capacity or on deputation basis, shall be eligible for appointment to the service at the initial constitution thereof.
897 (2) The controlling authority shall constitute a Screening Committee in respect of each grade for adjudging the suitability of persons, who, being eligible to be appoint ed to the service under sub rule (1) were serving in any grade immediately before the initial constitution of the cadre for permanent appointment therein and every committee so constituted shall, subject to such general or special instructions as the controlling authority may give and after following such procedure as the committee may deem fit, prepare lists of persons considered suitable for such appointment in each grade with the names of such persons arranged in the order of seniority based on the date of continuous appointment in the grade in which they are to be absorbed or in an equivalent grade; Provided that if the controlling authority deems it necessary so to do, the same committee may be constituted to function in relation to two or more grades.
D (3) An intimation shall be sent to every person considered suitable for appointment on a permanent basis to a post in any grade giving him an opportunity to express, within thirty days of the receipt of intimation by him his willingness to be so appointed on a permanent basis and the option once exercised shall be final.
(4) Persons who are willing to be appointed on a permanent basis shall be so appointed in the order of seniority against permanent posts available as on the appointed day.
(5) Notwithstanding anything contained in sub rules (2) to (4), every person holding, as on the appointed day, a permanent post in any one of the categories specified in rule 4 in the Aviation Research Centre shall, without prejudice to his being considered for appointment to a permanent post in the higher grade or to his continuance in such higher grade in officiating or temporary capacity, be absorbed in his respective substantive grade against the permanent posts available as on the appointed day.
(6) The Screening Committee may recommend for permanent appointment in a lower grade any person who 898 is serving in a higher grade irrespective of whether he is deputationist or a direct recruit and every appointment made on such recommendation shall be without prejudice to his continuing to serve in the higher grade.
(7) Persons holding posts, as on the appointed day, in any grade of the service who are not found suitable for permanent appointment under sub rules (2) to (6), may be continued in posts in the same grade of the service in a temporary or officiating capacity as the case may be." Rule 7 lays down the principles to be applied for fixation of seniority of those appointed to the various posts in the ARC at the time of its initial constitution.
That rule reads: "7.
Seniority of persons appointed on permanent basis in each grade at the initial constitution of the service shall be in the order in which they are shown in the relevant list prepared in accordance with provisions of rule 6.
" The next rule under challenge by the petitioners is Rule 8 which deals with the topic of filling up of vacancies in various grades remaining unfilled immediately after the initial constitution of the service and all vacancies that may subsequently arise in the Department.
That rule is in the following terms: "8.
Maintenance (1) Subject to the initial Constitution of the various grades in the service, every post remaining unfilled and every vacancy that may arise thereafter shall be filled in accordance with the provisions contained in Schedule II, by appointment on promotion, deputation transfer, re employment after retirement or direct recruitment as the case may be.
(2) For a period not exceeding three years from the date of commencement of these rules, notwithstanding the limits specified in column 7 of Schedule II, the controlling authority may, if it considers it necessary so to do, exceed the percentage specified for filling up of vacancies by deputation and decrease the percentage 899 prescribed for filling up of vacancies by promotion, direct recruitment of re employment after retirement, as it may deem fit.
" The only other rule which requires to be referred to for the purpose of the present case is Rule 12 which states that "in regard to matters not specifically covered by these rules or by orders issued by the Government, members of the service shall be governed by general rules, regulations and orders applicable to persons belonging to the corresponding Central Civil Service".
The petitioners are some amongst the persons recruited directly to the ARC organisation during the period between 1965 and 1971.
The basic premise on which the petitioners have rested their challenge against the validity of the promotions given to respondents Nos. 8 to 67 from the year 1968 onwards as well as of the provisions contained in the impugned Rules is that they (petitioners) had all been regularly appointed to the ARC at the time of their initial appointment itself and that by virtue of such regular appointments, they had acquired vested rights for seniority, promotions etc., in the said organisation.
As already noticed, during the period between 1965 and 1971, the ARC organisation was a purely temporary one, the continuance of which, on an experimental basis, was being sanctioned from year to year.
There was no regular cadre of posts in the organisation nor was there any set of rules regulating the method of appointment to the various posts that had created on a mere temporary and ad hoc basis.
Annexure 'R l ' produced along with the first respondent 's counter affidavit is a copy of the letter issued by the Directorate General of Security to one of the petitioners, communicating the offer of appointment to the temporary post of ACIO II(Tech.).
It was on the basis of the acceptance of that offer by the said petitioner that he was appointed in the Department of ARC.
It is stated in the counter affidavit of the first respondent that the appointments of all the remaining writ petitioners to the cadre of ACIO II (DFO) were made on identical terms and this averment has not been controverted by the petitioners.
It is expressly recited ill exhibit R 1 that what was being offered thereunder was a temporary appointment to a temporary post and that the perm anent appointment of the person concerned to the post, if and when the post was made permanent, would depend upon various factors governing permanent appointment in such posts in force at the time, and that the temporary appointment will not 900 confer on him the title of permanency from the date the post is converted.
It is further stipulated in the letter that the appointment was liable to be terminated at any time by a notice given by either side, namely, the appointee or the appointing authority without assigning any reason.
There is also a further condition that the services of the appointee were liable to be terminated within a period of six months from the date of his appointment without any notice and without any reason being assigned.
Since the petitioners are shown to have been appointed to the cadre of ACIO Il on the aforementioned conditions, it is difficult to see how they can successfully contend that they had been regularly appointed to the ARC with effect from the dates of their initial recruitment.
They were holding merely ad hoc appointments which did not confer on them any entitlement for permanent absorption in the posts if and when the posts were made permanent.
The basic premise on which the petitioners have sought to build up their case of arbitrariness and discriminations, namely, that the petitioners had all been initially recruited directly to the ARC on a regular basis while the deputationists were holding posts only on ad hoc basis, is thus seen to be contrary to facts.
The correct position which obtained as on the date of the promulgation of the impugned Rules was that the petitioners as well as the deputationists were all working in the temporary ARC organisation only on a purely ad hoc basis.
It is against this factual background that we have to examine the contentions put forward by the petitioners in support of the challenge levelled by them against the impugned Rules as well as against the seniority list of 1968 and the various promotions given to respondents Nos. 8 to 67.
At this stage, it will be convenient to first dispose of the contentions urged by the petitioners, against the validity of the promotions given to respondents Nos. 8 to 67 during the period between 1968 and 1975.
In our opinion, the challenge raised by the petitioners against those promotions is liable to be rejected on the preliminary ground that it is most highly belated.
No valid explanation is forthcoming from the petitioners as to why they did not approach this Court within a reasonable time after those promotions were made, in case they really did feel aggrieved by the said action of the Department.
This writ petition has been filed only in the year 1979, and after such a long lapse of time the petitioners cannot be permitted to assail before this Court the promotions that were effected during the years 1968 to 1975.
A party seeking the intervention and aid of this Court under Article 32 of the Constitution for enforcement of his fundamental rights, 901 should exercise due diligence and approach this Court within a reasonable time after the cause of action arises and if there has been undue delay or laches on his part, this Court has the undoubted discretion to deny him relief.
[See Rabindra Nath Bose & Ors vs Union of India & Ors.
In this case before us, many of the impugned promotions had been effected during the year 1968 69 onwards.
Three of the present petitioners had challenged the validity of some of the promotions granted to various deputationists as well as the ranking given to them in a seniority list of ARC personnel published in 1971 by filing Civil Writ Petition No. 1020 of 1971 in the Delhi High Court.
Though the High Court by its judgment dated April 7, 1972 dismissed that writ petition on the ground that it was premature inasmuch as it had been submitted before it by the counsel for the Union of India that all the existing arrangements in the ARC were purely ad hoc and that service rules would be framed shortly, the High Court has recorded clear findings in the judgment that the principle adopted for the preparation of the combined seniority list of 1971 could not be said to have violated Articles 14 to 16 of the Constitution and that it had not been shown by the writ petitioners in that case that the impugned promotions had been effected in violation of any "statutory rules, constitutional or statutory limitations or even administrative instructions" .
If the petitioners were dissatisfied with the aforementioned findings entered by the Delhi High Court, one should have expected then to approach this Court at least soon after that decision was rendered by that High Court in April 1972 we are not suggesting that the findings of the High Court operate as res judicata against the petitioners in these proceedings.
There is no satisfactory explanation forthcoming from the petitioners as to why no action at all was taken by them to challenge the validity of the impugned promotions given to respondents Nos. 8 to 67 from 1968 onwards for a period of nearly seven years subsequent to the aforesaid pronouncement by the Delhi High Court.
Quite apart from what has been stated above on the aspect of 'laches ', on the merits also we do not find any substance in the contentions urged by the petitioners against the legality of the promotions granted to respondents Nos. 8 to 67 during the period between 1968 and 1975.
At that time, as already, noticed, the ARC was a H 902 purely temporary organisation which was being continued on a year to year basis.
There was no regular cadre of posts in the said organisation, nor were there any rules governing the mode of recruitment etc.
All the appointments made in the organisation, whether of direct recruits like the petitioners or of deputationists like respondents Nos. 8 to 67, had been made only on an ad hoc basis.
Since there was no regularly constituted service, the principles contained in the office Memorandum dated December 22, 1959 issued by the Ministry of Home Affairs (Annexure 'C '), on which strong reliance was placed by the petitioners, could have no application at all to the temporary ARC organisation.
It is clear from a reading of the said Memorandum (Annexure 'C ') that its provisions will get attracted only in relation to Government servants appointed to the Central Services.
During the period aforementioned, the ARC was just a Task Force set up on an ad hoc and experimental basis for the purpose of carrying out certain functions of a highly specialised and sensitive nature.
Quite naturally, the personnel required for manning the organisation had to be picked and grouped together in the manner best suited to effectuate the object and purpose underlying the creation of the organisation.
So long as there was no regular cadre and hierarchy of posts and no rules laying down the mode of appointment/promotion to those posts it was perfectly open to the Government to fill up the posts by securing the services of persons who, in its opinion, were, by virtue.
Of their experience and qualifications, best suited for being entrusted with the specialised kinds of functions attached to the various posts.
We have already seen that the petitioners had been appointed as ACIOs II(DFOs) only on a temporary and ad hoc basis.
Such appointments did not confer on them any rights even to the posts of DFos.
It had also been categorically made clear to them in the letters containing the offers of appointment that such appointments will not confer on them any right to the permanently absorbed in the post if and when it was made permanent.
There was also not even any executive order or administrative instruction declaring the post of DFo as the feeder category for appointment to the higher posts.
In such circumstances, it has to be held that the petitioners had no legal right or claim for being appointed by promotion to the higher posts of ACIO I (FO), ATO, etc.
It has been averred in the counter affidavit that as and when vacancies arose in the higher posts of FO.
ATO, etc, in the tem 903 porary ARC organisation in the early years after its formation, deputationists who, by virtue of their greater experience in the particular type of specialised work, were considered suitable for carrying out the duties attached to those posts on deputation basis to the category of FO, ATO, etc.
Subsequently, after the direct recruits had gained sufficient experience, some of them who were found suitable, were also appointed as ACIOs I, ATOs, etc.
No illegality of any kind was involved in the action so taken by the concerned authorities to fill up the vacancies in the higher posts by ad hoc appointments of persons possessing the requisite ability and experience.
We have, therefore, no hesitation to reject the contention put forward by the petitioners that the promotions granted to respondents Nos. 8 to 67 during the period between 1968 and 1975 were illegal and violative of Articles 14 and 16 of the Constitution .
We shall now proceed to deal with the challenge raised by the petitioners against the provisions contained in the impugned rules.
It is under Rule 3 of the Rules that the Aviation Research Centre (Technical) Service was constituted for the first time.
The com position of the service has been described in Rule 4, wherein the designations, classifications and scales of pay of the various posts included in the Service have been set out.
Rule 6 provides for the initial constitution of the Service.
The petitioners have challenged f the validity of sub rule (I) of this Rule which declares that all persons holding, as on the appointed day, any one of the categories of posts specified in Rule 4, whether in a permanent or temporary or officiating capacity or on deputation basis, shall be eligible for appointment to the service at the initial constitution thereof.
When a new service is proposed to be constituted by the Government, it is fully within the competence of the Government to decide as a matter of policy the sources from which the personnel required for manning the Service are to be drawn.
It is in the exercise of the said power vested in the Government, that provision has been made by sub rule (I) that all the persons who, as on the appointed day were already working in the ARC organisation on a temporary and ad hoc basis and had thereby acquired valuable experience in the specialised kinds of work would be eligible for appointment to the new service at the stage of its initial constitution.
The writ petitioners as well as the deputationists, namely, respondents Nos. 8 to 67 were all functioning in the temporary ARC organisation on an ad hoc basis.
Equal opportunity was given to all of them by sub rule (I) of Rule 6 to get permanently appointed in the new ARC 904 (Technical) Service subject to their being found fit by the Screening Committee referred to in the sub rule (2).
We fail to see how the said provision can be said to be violative of Articles 14 and 16 of the Constitution.
The attack levelled by the petitioners against sub rule (1) of Rule 6 is thus manifestly devoid of merit.
The next contention urged by the petitioners is that sub rule (2) of Rule 6 confers arbitrary and uncanalised powers on the Screening Committee and is hence violative of the principles of equality of opportunity enshrined in Article 16 of the Constitution.
Another point urged is that the said sub rule in so far as it provides that the Screening Committee should discharge its functions subject to such general or special instructions as the controlling authority may give, confers an arbitrary and unlimited power on the controlling authority and enables the controlling authority to impose its will and whims on the Screening Committee.
We see no force in either of the aforesaid contentions.
The provision for constitution of a Screening Committee for adjudging the suitability of the persons in the field of eligibility for permanent appointment to the service is absolutely reasonable.
The power conferred on the controlling authority to issue general or special instructions to a Screening Committee is really in the nature of a safeguard for ensuring that the rules relating to the initial constitution of the service were applied fairly and justly.
The 'controlling authority ' is the "Secretary, Department of Cabinet Affairs".
When supervisory powers are entrusted to such a high and responsible official, it is reasonable to assume that they will be exercised fairly and judiciously and not arbitrarily.
We are, therefore, unable to uphold the contention of the petitioners that the provisions of sub rule (2) of Rule 6 suffer from the vice of the arbitrariness or excessive delegation.
The petitioners have also attacked the provisions contained in sub Rule (2) of Rule 6 enjoining the Screening Committee to arrange the names of persons considered suitable for appointment in each grade in the order of seniority based on the date of continuous appointment in the grade in which they were absorbed or in an equivalent grade.
We have already found that the basic assumption on which the petitioners have founded the attack against this provision, namely, that the petitioners were all holding regular appointments as DFOs in the ARC organisation from the dates of their initial recruitment and that the deputationists (respondents Nos. 8 to 67) l were functioning in their respective posts only on an ad hoc basis is incorrect and fallacious.
As on the date of the promulgation of the rules and the initial constitution of the ARC.
(Technical) Service, 905 petitioners as well as respondents Nos. 8 to 67 were all holding the various posts in the ARC organisation only on a temporary and ad hoc basis.
While the petitioners had no substantive lien in respect of or title to any post in any department, the deputationists were having a lien on the posts held by them in their parent departments.
l he petitioners, therefore, formed a different class consisting of persons who were virtually being recruited for the first time into regular Government service, as distinct from the respondents 8 to 67 who had been holding posts in their parent departments for several years on the regular basis who formed a separate class When recruitment to the new Service was being made from two different classes of sources, it was necessary for the Government to evolve a fair and reasonable principle for regulating the inter se seniority of the personnel appointed to a new Department.
What has been done under Rule 6 is to give credit to the full length of continuous service put in by all the appointees in the concerned grade, whether such service was rendered in the temporary ARC organisation or in other departments of the Government.
The criterion applied, namely the quantum of previous experience possessed by the appointees measured in terms of the length of continuous service put in by them in the concerned or equivalent grade is perfectly relevant to the purpose underlying the framing of the rule.
In our opinion, the aforesaid principle laid down hl rule 6(2) for determination of inter se seniority was quite reasonable and fair and it did not involve any arbitrary or unfair discrimination against the petitioners.
The attack levelled by the petitioners against the said provision contained in sub rule (2) will, therefore, stand repelled.
In the light of what we have stated above, the provision contained in rule 7 that the seniority of persons appointed on permanent basis in each grade at the initial constitution of the service shall be in the order in which they are shown in the relevant list prepared by the Screening Committee in accordance with provisions of Rule 6 has also to be upheld as perfectly valid and constitutional.
We see no substance at all in the challenge raised by the petitioners against Rule 8 of the impugned rules and the provisions of Schedule II.
Under the said rule, the appointing authority is empowered to fill up every post remaining unfilled immediately after the initial constitution of the various grades in the service as well as 906 every vacancy that subsequently arises by making appointments on promotion, deputation/transfer, re employment after retirement or direct recruitment, in accordance with the provisions contained in Schedule II.
At the time of constituting a new service and laying down the mode of appointment to the various posts, it was fully within the powers of the President of India to prescribe the methods by which vacancies arising in the different categories of posts in the department should be filled up and this is precisely what has been done as per rule 8 and the provisions of Schedule II.
The petitioners have not been able to make out that the provisions of Rule 8 and Schedule II are tainted by illegality of any kind.
The next point urged by the petitioners is that the Screening Committee had acted in violation of the principles of natural justice in as much as it had not afforded to the petitioners an opportunity to make their representations before the Committee.
The function entrusted to the Committee was to adjudge the suitability of person who were holding posts in the different grades in the temporary ARC organisation for permanent appointment in the newly constituted ARC (Technical) Service on the basis of the records relating to their past performance in ARC organisation, etc.
We do not see how the principles of natural justice can get attracted in such a context.
The law does not cast any obligation on a Committee discharging such a function to invite representations from the persons in the eligible categories and consider those representations while adjudging their suitability for appointment into the new service.
Hence we do not find any substance in the argument advanced on behalf of the petitioners that there was a violation of principles of natural justice by the Screening Committee.
The petitioners have put forward a further plea that the promulgation of the impugned rules was deliberately delayed till April 1976 with a view to confer an unfair advantage on the deputationists, several of whom were granted promotions to higher posts during the v period between 1971 when the decision to make the department permanent was taken and April 26, 1976 when the impugned rules were finally issued.
We find it stated in the counter affidavit filed on behalf of the first respondent that the draft rules were prepared by the Directorate of ARC and submitted to the Government in 1972 itself, but, on a detailed scrutiny being made, it was found that the 907 said draft required substantial modification in several respects.
Revised rules were, therefore, drafted and submitted to the government late in 1974.
The first respondent has submitted that the time taken in finalising the rules was due to the fact that intensive examination of all the relevant aspects had to be done by various concerned Ministries before the draft rules could be finally approved and issued.
We are inclined to accept the explanation offered by the first respondent for the delay in promulgation of the Rules, and we hold that the plea of mala fides put forward by the petitioners is not established.
All the promotions given to the deputationists as well as to the direct recruits during the period between 1968 and 1976 had been effected only on a purely ad hoc basis.
Even though temporary in character, those promotions had been made only on the basis of the recommendations made by the Departmental Promotion Committee which had effected the selections by applying uniform and relevant considerations, such as length of service in the lower grade and over all experience and performance.
It is stated in the counter affidavit that, while making such promotions for appointments to higher posts, no deputationists with lesser years of service vis a vis direct recruits had been given ad hoc appointment to any higher post.
The first respondent has submitted that in making the promotions aforementioned, the authorities concerned were actuated only by considerations of the best interests of the department and the maintenance of a higher standard of efficiency in its function and there was no intention whatever to confer any advantage to the deputationists or to discriminate against the direct recruits.
We do not find any ground for not accepting as correct and true the aforesaid submissions made on behalf of the first respondent.
Accordingly we hold that in granting promotions to the deputationists during the period between 1971 and 1975 respondents 1 to S were not actuated by any intention to confer an unfair advantage on the deputationists.
Another argument advanced on behalf of the petitioners was that at the time of their initial appointment in the ARC, they had been given high expectations regarding their promotional prospects from the post of DFO, and that by bringing in large number of deputationists and fitting them into the higher posts, the Government had illegally gone back on the promise held out to the petitioners.
We see no merit in this contention.
As already noticed, in the letters 908 sent to the petitioners offering appointment to the category of AClO II (DFO), it had been made abundantly clear that their appointments would be purely temporary and ad hoc in nature and would not confer on them any claim for permanent absorption even in the post of DFo.
No subsequent representation is shown to have been made to the petitioners by the Department at any time prior to 1976 holding out any prospects of Department permanent absorption in service or promotions to higher grades.
The petitioners continued to function in the ARC organisation only on ad hoc basis till the rules were promulgated and they were absorbed into the new ARC (Technical) Service at the stage of its initial constitution on the basis of the provisions contained in Rules 3 and 6.
It is significant to note in this context that it was only after the petitioners had seen the impugned rules and had gained full knowledge of the provisions contained therein relating to absorption and seniority in the department, that they opted for absorption in the service in accordance with those rules and it was on the basis of the options so exercised by them that they were appointed in the hew constituted service.
The petitioners have also put forward a case that despite the provision contained in rule 6 (3) there was, as a matter of fact, no adjustment of the suitability of the various officers by the Screening Committee and, instead, there was a wholesale absorption of all the personnel in the posts which they were holding in the ARC organisation as on April 26,1976.
This allegation has been strongly refuted in the counter affidavit filed by the first respondent wherein it has 11 been staled that the Screening Committee has examined individually 9 the cases of all the concerned officers before deciding about their ,, suitability for permanent absorption in the service and prepared ranked lists strictly in accordance with the principle laid down in Rule 6 (2).
The learned Solicitor General, appearing on behalf of the Union of India.
submitted before us that the files containing the minutes of the meetings of the Screening Committee and the ranked select lists prepared by the Committee for the different grades were available with him in Court and he offered to place them before us for our perusal.
In the circumstances, we see no reason not to accept as correct the aforesaid averments contained in the counter affidavit of the first respondent.
It then follows that this contention of the petitioners has also to fail.
Another point urged on behalf of the petitioners was that some of the deputationists were not holding in their parent depart 909 ments posts equivalent in rank to those in which they were appointed on deputation in the ARC organisation and such persons should not have been subsequently absorbed in the new ARC Service In those higher categories.
We are unable to uphold this contention.
At the time when the ARC was a mere temporary organisation without any recruitment rules the posts in that organisation could be filled up by appointing suitable hands possessing the requisite specialised skill and experience drawn from any source in respect of whatever was the position occupied by such appointees in their parent service, if any.
Likewise, at the stage of the initial constitution of the new ARC (Technical) Service the Government had the right and full freedom to decide from what all sources the personnel for the new Department should be drawn and there is no warrant in law for imposing a limitation that in taking persons from other departments the field of choice should be restricted to persons holding any particular ranks in those other departments.
The relevant consideration for appointment of personnel in a department of this nature has necessarily to be the suitability of the person concerned for the specialised type of the work for adjudging which the experience and expertise that he possesses in carrying out such functions would be the most relevant criterion.
Once appointments are made to the various grades in the new service the inter se seniority of the persons appointed in each category or grade is to be fixed under Rule 6 on the basis of the total length of service in the particular or equivalent Grade and this, in our opinion, is a perfectly reasonable principle.
The argument advanced by the petitioners that the seniority of the deputationists who have been absorbed into the ARC (Technical) Service is governed by the provisions of Article 26 (7) (iii) of the Civil Service Regulations is wholly devoid of merit.
Article 26 (7) (iii) applies to cases "where a person is appointed by transfer in accordance with a provision in the recruitment rules providing for such transfer in the event of non availability of candidates by direct recruitment or promotion".
The absorption of the erstwhile deputationists in the ARC (Technical) Service at the time of its initial constitution was not by such transfer and hence the provisions of Article 26 (n (iii) are not attracted.
We do not also see any merit in the argument put forward on behalf of the petitioners that sub rule (6) of Rule 6 of the impugned 910 Rules enables the Screening Committee to absorb in a lower grade such of the deputationists who were found unsuitable to be absorbed in the higher posts which they were holding as on April 26, 1976.
Firstly, this is not a provision applicable only to the erstwhile deputationists.
On the other hand, the sub rule itself makes it very clear that its provisions apply equally to all the persons who are eligible for absorption in the service under sub rule (1) irrespective of whether they are deputationists or direct recruits.
Sub rule (6) comes into operation when a person in the eligible category holding a post in a higher grade on the appointed day, who has been found suitable for permanent appointment in such higher grade cannot, however, be absorbed in the said grade on account of non availability o a vacancy therein.
What the sub rule lays down is that in such eventuality the Screening Committee may recommend such a person for permanent appointment in a lower grade and thereby retain his services in the new Department.
We fail to see how this provision can be said to infringe any of the fundamental rights of the petitioners.
Lastly, it was contended on behalf of the petitioners that in preparing the impugned seniority list dated November 6, 1978, the principles laid down in Rule 6 (3) and Rule 7 have not been correctly observed, and that by reason of the deviation from those principles, the promotional prospects of some of the petitioners have been adversely affected.
No concrete instance of any such deviation from the principles set out in Rule 6 (3) and Rule 7 has been brought to our notice.
All the same, we think it necessary to observe that this Court expects that the provisions of Rule 6 (3) and Rule 7 will be strictly conformed to, both in letter as well as in spirit, by respondents Nos.
I to 7, and that in case it is found on examination that the ranking assigned to any of the petitioners in the impugned seniority list dated November 6, 1978 is not consistent with the principles laid down in the aforementioned rule, necessary action should be immediately taken to rectify the said defect, and if the promotional chances of any of the petitioners have been adversely affected by reason of such defect in the seniority list, such promotions should also be reviewed after following the requisite procedure.
We direct that the petitioners may bring to the notice of the first respondent specific instances, if any, of deviation from the principles enunciated in Rule 6 (3) and Rule 7 resulting in incorrect assignment of seniority and rank to them by submitting representations before the first respondent within a period of six weeks from today.
In 911 case any such representations are received, they will be duly examined by the first respondent and appropriate orders will be passed thereon in the manner indicated above as expeditiously as possible.
Subject to the above observations and directions, we dismiss this writ petition.
The parties will bear their respective costs.
| In the elections to the State Assembly in 1977 the appellant was declared elected.
The election petitioner, who was one of the defeated candidates, alleged in his petition that the appellant had filed a false return of the expenses and thereby committed corrupt practice within the contemplation of section 123(6) of the Representation of the People Act, 1951.
Accepting the allegation the High Court set aside his election.
Allowing the appeal.
^ HELD: (1) The High Court has not made any attempt to determine whether there was any legal and acceptable evidence to prove corrupt practice alleged against the appellant.
It is well settled that a charge under section 123 of the Act must be proved by clear and cogent evidence as a charge for a criminal offence.
It is not open to the Court to hold that a charge of corrupt practice is proved merely on a preponderance of probabilities but it must be satisfied that there is evidence to prove the charge beyond a reasonable doubt.
[635 B D] K.M. Mani vs P.J. Antony & ors. ; referred to.
(i) In the instant case the petitioner himself had no personal knowledge as to the actual expenses in hiring taxies and his source of information was based on what others said.
The evidence led by the petitioner falls far short of the standards required by law.
[636 D, 637E] (ii) The petitioner claimed that he maintained a diary of the electioneering.
Yet he did not produce it in Court from which a natural presumption arises that if he had produced the diary it would have gone against his case.
[637 G H] (2) Corrupt practice being in the nature of a fraud, it is not permissible to plead one kind of fraud or one kind of corrupt practice and prove another though they may be inter connected.
The High Court has rightly found that the petitioner pleaded that it was the appellant who had held a feast at which he invited his voters and exhorted them to vote for him.
But the evidence shows that the appellant had not held the feast but it was hosted by one of his agents at which the appellant was present and, therefore, it could not be proved that the feast was held at the instance of the appellant.
[638 G 639A]
|
Appeal No. 3273 of 1988.
From the Judgment and Order dated 25 11 1987 of the Central Adminstrative Tribunal Jabalpur in Original Application No. 68 of 1986.
P. Parmeshwaran for the Appellants G.L. Sanghi Ashok Singh and S.K Agnihotri for the Respondents.
The short question which arises for consideration in this case is whether by reason of the absence of one of the members of a Departmental Promotion Committee at a meeting convened for the purpose of making recommendations regarding the promotion of officers to higher posts in the services under the Government of India the recommendations made by the Departmental Promotion Committee at the meeting would become invalid.
The 1st respondent Somasundaram Viswanath was one of the PG NO 149 Officers of the Indian Defence Accounts Service who came within the zone of consideration for promotion to the cadre of Controller of Defence Accounts.
In order to make appropriate recommendations in that behalf the Departmental Promotion Committee convened its meeting on 7.8.1986.
One of the members of the said Committee was the Secretary to the Government of India, Ministry of Defence.
Even though he had been informed about the date and time of the meeting, he could not be present at the meeting and in his absence the remaining members of the Committee made recommendations.
The 1st respondent was graded as 'good ' and was not empanelled.
Aggrieved by the decision of the Departmental Promotion Committee the 1st respondent filed a petition being Original Application No. 68 of 1986 before the Central Administrative Tribunal, Jabalpur Bench questioning the validity of the recommendations made by the Departmental Promotion Committee and praying for the issue of an order prohibiting the appellants from promoting his juniors to the higher cadre.
In the course of his petition Respondent No. 1 raised many pleas, but it is not necessary for us to refer to all of them for the purpose of deciding the present case.
One of the contentions urged by the 1st respondent, which requires to be considered is that the proceedings of the Departmental Promotion Committee at its meeting held on 7.8.1986 stood vitiated on account of the absence of the Secretary to the Government of India, Ministry of Defence, who was one of the members of the Committee.
In reply to the above plea the appellants pleaded that the Secretary to the Government of India, Ministry of Defence was not present in the meeting due to the fact that he had to attend Parliament on that day and that the proceedings were protected by the departmental instructions issued by the Government of India with regard to the procedure to be followed by the Departmental Promotion Committees.
In reply thereto the 1st respondent pleaded that the administrative instructions issued by the Government of India could not override the rules made under the proviso to Article 309 of the Constitution of India and had, therefore, to be ignored.
The Central Administrative Tribunal, which heard the case, proceeded to set aside the recommendations made by the Departmental Promotion Committee on the main ground that the Committee had not been properly constituted at the meeting held on 7.8.1986 because of the absence of the Secretary to the Government of India, Ministry of Defence and, therefore, the proceedings of the Departmental Promotion Committee were not valid.
The Tribunal directed that a fresh Departmental Promotion Committee may be convened for reconsidering the agenda which was before the Departmental Promotion Committee on 7 . 8 appellants have filed this appeal by Special Leave.
PG NO 150 Promotions to the posts in Level l and Level II of the Senior Administrative Grade of the Indian Defence Accounts Service are governed by the Indian Defence Accounts Service (Recruitment) Rules, 1958 (as amended from time to time) (hereinafter referred to as 'the Rules ') promulgated under the proviso to Article 309 of the Constitution of India by the President of India.
Under the Rules recruitments by promotion to the administrative posts in the Indian Defence Accounts Service have to be made by selection on merit with due regard to the seniority on the recommendation of a duly constituted Departmental Promotion Committee.
In Appendix II to the Rules the composition of the Departmental Promotion Commit tees for recommending eligible officers for promotion to the various grades of the Service has been set out.
The Departmental Promotion Committee for purposes of promotion to Level l and Level II of the Senior Administrative Grade should consist of (i) the Chairman Member of the Union Public Service Commission as Chairman, (ii) the Secretary, Ministry of Defence, (iii) the Financial Adviser (Defence Services), and (iv) the Controller General of Defence Accounts as members.
The Rules do not contain the details regarding the functions of the Departmental Promotion Committees, the procedure to be followed by them and the requisite quorum at the meetings of the Departmental Promotion Committees.
These details had been laid down in a number of official memoranda issued by the Government of India from time to time in the form of departmental instructions prior to 30th December, 1976.
The Government of India, however, issued an Office Memorandum bearing No. 22011/6/76 Estt(D) on 30.12.1976 consolidating all the prior administrative instructions governing the functioning of and the procedure to be followed by the Departmental Promotion Committees which were required to be constituted under the several rules of recruitment in force in the various departments of the Government of India.
The preamble of the said Office Memorandum reads thus: "OFFICE MEMORANDUM Sub: Procedure for making promotions and functioning of the Departmental Promotion Committee.
The undersigned is directed to state that the Ministry of Home Affairs (now the Department of Personnel and Administrative Reforms) have in the past issued various Office Memoranda on the subject relating to the constitution and functioning of the Departmental Promotion Committees and PG NO 151 the procedure to be followed in making promotions.
With a view to making such instructions, issued from time to time, handy and available at one place, it has now been decided to consolidate all these instructions.
Accordingly the following instructions are hereby issued on the subject for the guidance of all the Ministries /Departments in the Government . " Paragraph VII of the said Office Memorandum, which deals with "the validity of the proceedings of Departmental Promotion Committees when one member is absent", reads thus: "The proceedings of the Departmental Promotion Committee shall be legally valid and can be operated upon notwithstanding the absence of any of its members other than the Chairman provided that the member was duly invited but he absented himself for one reason or the other and there was no deliberate attempt to exclude him from the deliberation of the DPC and provided further that the majority of the members constituting the Departmental Promotion Committee are present in the meeting." According to Paragraph VII of the Office Memorandum, extracted above, it is clear that the absence of any of the members of a Departmental Promotion Committee, other than the Chairman, would E not vitiate the proceedings of the Departmental Promotion Committee provided that the member absent has been duly invited but he absented himself for some reason and that there was no deliberate attempt to exclude him from the deliberation of the Departmental Promotion Committee and that the majority of the members constituting the Departmental Promotion Committee are present in the meeting.
In the instant case the only person who was absent at the meeting of the Departmental Promotion Committee was the Secretary to the Government of India, Ministry of Defence who could not attend the meeting because he had to be present in Parliament at the same time at which the Departmental Promotion Committee had to meet.
Th e Chairman of the Departmental Promotion Committee was present and the Chairman and the other members who were present constituted the majority of the Departmental Promotion Committee.
It was urged on behalf of the 1st respondent that the Office Memorandum dated 30.12.1976 which contained the various administrative instructions regarding the procedure for making promotions and the functions of the Departmental Promotion Committees being merely in the nature of PG NO 152 administrative instructions could not override the Rules which had been promulgated under the proviso to Article 309 of the Constitution of India.
It is well settled that the norms regarding recruitment and promotion of officers belonging to the Civil Services can be laid down either by a law made by the appropriate Legislature or by rules made under the proviso to Article 309 of the Constitution of India or by means of executive instructions issued under Article 73 of the Constitution of India in the case of Civil Services under the Union of India and under Article 162 of the Constitution of India in the case of Civil Services under the State Governments.
If there is a conflict between the executive instructions and the rules made under the proviso to Article 309 of the Constitution of India, the rules made under proviso to Article 309 of the Constitution of India prevail, and if there is conflict between the rules made under the proviso to Article 309 of the Constitution of India and the law made by the appropriate Legislature the law made by the appropriate Legislature prevails.
The question for consideration is whether in the instant case there is any conflict between the Rules and the Office Memorandum dated 30.12.1976, referred to above.
We have already noticed that there are different rules framed under the proviso to Article 309 of the Constitution of India for making recruitments to services in the different departments and provisions have been made in them for the constitution of Departmental Promotion Committees for purposes of making recommendations with regard to promotions of officers from a lower cadre to a higher cadre.
But these rules are to some extent skeletal in character.
No provision has been made in any of them with regard to the procedure to be followed by the Departmental Promotion Committees and their various functions and also to the quorum of the Departmental Promotion Committees.
These details which were necessary for the proper functioning of the Departmental Promotion Committees, as a matter of practice, were laid down prior to 30.12.1976 by the Government of India in the form of Office Memoranda issued from time to time and that on 30.12.1976 a consolidated Office Memorandum was issued containing instructions with regard to such details which were applicable to all Departmental Promotion Committees of the various Ministries/Departments in the Government of lndia.
said Office Memorandum deals with several topics, such as of the Departmental Promotion Committees, frequency at which Departmental Promotion Committees should meet, matters to be put up for consideration by the Departmental Promotion Committees, the procedure to be observed by the Departmental Promotion Committees.
the procedure o be followed in the PG NO 153 case of an officer under suspension whose conduct is under investigation or against whom disciplinary proceedings are initiated or about to be initiated, validity of the proceedings of the Departmental Promotion Committees when a member is absent, the need for consultation with the Union Public Service Commission, the procedure to be followed when the appointing authority does not agree with the recommendations of a Departmental Promotion Committee, implementation of the recommendations of the Departmental Promotion Committees, ad hoc promotions, period of validity of panels etc.
The Office Memorandum dated 30.12.1976, therefore, is in the nature of a complete code with regard to the topics dealt with by it.
Unless there is anything in the Rules made under the proviso to article 309 of the Constitution of India, which is repugnant to the instructions contained in the Office Memorandum, the Office Memorandum which is apparently issued under article 73 of the Constitution of India is entitle to be treated as valid and binding on all concerned.
In the instant case the Rules do not contain any of these details except indicating who are all the persons who constitute the Departmental Promotion Committee.
We do not, therefore, find any repugnance between the Rules and the Office Memorandum.
In the circumstances we feel that the plea raised by the 1st respondent in is additional affidavit dated 13th May, 1988 (page 132 of the Paper Book) that the Office Memorandum is ineffective cannot be upheld.
We do not agree with the decision of the Central Administrative Tribunal that in the instant case the proceedings of the Departmental Promotion Committee on 7.8.1986 have been vitiated " solely on account of this reason viz., that secretary, Ministry of Defence, one of its members was not present".
We hold that the proceedings, of the Departmental Promotion Committee at is meeting held on 7.8.1986 are not invalid for the above reason.
We, therefore, reverse the aforesaid part of the decision of the Tribunal.
The Tribunal has no doubt in the course of its order referred to certain other matters, but we feel that it proceeded to dispose of the case mainly on the ground that the proceedings of the Departmental Promotion Committee dated 7.8.1986 were vitiated on account of the absence of the Secretary to the Government of India, Ministry of Defence at that meeting.
We notice that adequate attention has not been given to the other aspects of the case and according to us those aspects require fresh consideration at the ands of the Tribunal.
We, therefore, set aside the decision of the Tribunal against which this appeal is filed and remand the case to it to dispose it of afresh in the light of the above observations.
The Tribunal is requested to decide the case within three months from the PG NO 154 date of receipt of a copy of this order.
The appeal is accordingly disposed of.
There shall, however, be no order as to costs.
Y. Lal Appeal disposed of.
| The appellants were awarded by the Land Acquisition Officer compensation ranging from Rs.1,320 to 4,000 per acre depending upon the nature of the land acquired in 1977.
The District Judge enhanced the compensation to Rs.85,000 per acre on the ground that compensation @ Rs.85,000 per acre under Award exhibit A.4 and Rs.70,000 under Award exhibit A.5 had already been awarded in respect of acquisition of certain other similar lands situated in Karimnagar.
However, the High Court, in appeal, remanded the matter for fresh disposal and also observed that the District Judge should exclude exhibit A.4 and exhibit A. 5 from consideration as the land concerned in those awards are not comparable lands.
In appeals to this Court by Special Leave, it was contended on behalf of the appellants that the matter should not be remanded to the District Judge, since the claimants being small holders and agriculturists, are hard pressed and unable to fight another round of litigation and that they are prepared to accept any compensation which this Court may think fit to award.
Allowing the appeals, HELD: (1) The Judgments of the High Court and the District Judge e are set aside.
The compensation at the rate of Rs.25,000 per acre regardless of categorisation would be sufficient to meet the ends of justice.
It is needless to state that the claimants are entitled to mandatory solatium at 30% and also statutory interest.
[857G H] 2(i) It is of utmost importance that the award should be made without delay.
The enhanced compensation must be determined without 108s of time.
[857C] PG NO 853 PG NO 854 2(ii) The appellate power of remand at any rate ought not to be exercised lightly.
It shall not be resorted to unless the award is wholly unintelligible.
It shall not be exercised unless there is total lack of evidence.
If remand is imperative, and if the claim for enhanced compensation is tenable, it would be proper for the appellate court to do modest best to mitigate hardships.
The appellate court may direct some interim payment to claimants subject to adjustment in the eventual award.
[857C D] 3.
This is not a case of no evidence.
This is a case of both relevant and irrelevant evidence mixed up together.
Therefore irrelevant and exaggerated claim must be excluded.
[857F] In the instant case, the location of lands will have to be borne in mind while ascertaining the market value.
The Commissioner has stated that the lands are more suitable for house sites than for agriculture.
There is, no reason to discard this evidence and reject exhibit A. 5 altogether.
[856C D]
|
Appeal No. 5086 of 1985.
From the Judgment and Order dated 31.1.1985 of the Punjab and Haryana High Court in Civil Revision No. 1847 of 1984.
A.B. Rohtagi, R.C. Mishra and Dr. Meera Aggarwal for the Appellant.
M.S. Gujaral and R.S. Sodhi for the Respondents.
The Judgment of the Court was delivered by ' VERMA, J.
The appellant, Gulraj Singh Grewal, took the suit premises situate in Ludhiana on monthly rent of Rs. 800 from respondent No. 1, Dr. Harbans Singh, in March 1980.
Respondent No. 2, Dr. Ravinder Singh, is son of respondent No. 1, Dr. Harbans Singh.
Both the respondents are medical practitioners.
The respondents filed a petition for eviction of the appellant tenant on three grounds, namely, personal need of the respondents under Section 13(3) (a) (i) (a), change of user under section 13(2) (ii) (b) and impairment of value and utility of the rented building under section 13(2) (iii) of the East Punjab Urban Rent Restriction Act, 1948.
The appellant contested the petition denying the existence of any of these grounds for eviction.
The Rent Controller dismissed the petition holding that none of the three grounds had been proved.
On appeal by the respondents, the appellate authority held that the personal need of respondent No. 2, Dr. Ravinder Singh, one of the landlords, was proved and the ground of change of user of the rented building by the appellant had also been proved.
The third ground relating to impairment of value and utility of the rented building was rejected.
The appellate authority further held that the building though let out for residential purpose was used by the appellant, a consultant engineer, partly for his profession on account of which it had become 153 a 'scheduled building ' as defined in Section 2(h) of the Act and, therefore, the ground for eviction based on personal need was not available for evicting the tenant from a 'scheduled building.
However, an order of eviction was made on the ground of change of user of the rented building.
The appellant then preferred a revision to the High Court which has been dismissed the findings and order of eviction made by the appellate authority.
Hence, this appeal by special leave.
The submissions of Shri Avadh Behari, learned counsel for the appellant are several.
The first contention is that there was no change of user by the appellant tenant to justify the order of eviction on that ground.
The second submission is that the finding on the question of personal need of the landlord is erroneous.
The last submission is that no order of eviction can be made on the ground of personal need contained in section 13(3) (a) (i) (a) in respect of a 'scheduled building ' since that ground is available for eviction only from a 'residential building ' as defined in section 2(g) of the Act, a 'scheduled building ' defined in section 2(h) of the Act being a different kind of building.
In reply, Shri M.S. Gujral, learned counsel for the respondents submitted that the order of eviction is justified and there is no ground to interfere in this appeal.
His submission is that a 'scheduled building ' defined in section 2(h) continues to be a 'residential building ' as defined in section 2(g), so that the ground for eviction based on personal need contained in section 13(3) (a) (i) (a) is available in the present case.
He also submitted that the finding of fact relating to personal need of the landlord is not open to challenge.
His submission in the alternative is that in case a 'scheduled building ' is not 'residential building ', then the ground of change of user is available since the building was let out for residential purpose and its user has been changed unilaterally by the tenant without the consent of the landlord.
The first question for our decision is: whether learned counsel for the appellant is right in contending that a 'scheduled building ' is not a "residential building ' for the purpose of the ground of eviction contained in section 13(3) (a) (i) (a) ? In case it is held that this ground for eviction of the tenant is available in the present case and the finding of fact on the question of personal need of the landlord is not open to challenge, the order of eviction can be sustained on this ground alone and it is unnecessary to decide the question relating to the ground of change of user contained in section 13(2) (ii) (b) of the Act.
We would, therefore, consider 154 this question first.
Admittedly, the appellant is a consultant engineer and the suit premises, a 'building as defined in section ' '(a) of the Act, was let out to him solely for residential purpose.
He has been using it as his residence while a part thereof is used by him as his professional office without the consent of the landlord.
It is on the basis of use of a part of the building as appellant 's office that the appellant claims it to be a 'scheduled building ' as defined in section 2(h) of the Act.
Apart from the question of change of user which is a separate ground for eviction, the question is whether the suit premises being treated as a 'scheduled building, the ground for eviction contained in section 13(3) (a) (i) (a) is not available, that ground being available only in respect of a 'residential building ' as defined in section 2(g) of the Act.
The contention of learned counsel for the appellant is that the word 'scheduled ' which occurred along with 'residential ' in section 13(3) (a) (i) of the Act having been omitted by the amendment made in the principal Act in 1956, the obvious legislative intent is to exclude a 'scheduled building ' from the scope of that provision with the result that the grounds for eviction contained in section 13(3) (a) (i), of which personal need of the landlord is one, are not available for eviction of a tenant from ,scheduled building ' thereunder after that amendment.
To buttress this argument, learned counsel referred to section 4 of the principal Act and Section 13A, inserted therein by an amendment made in 1985, wherein the expression 'scheduled building ' is expressly used in addition to the expression 'residential building ' and the separate definition of 'scheduled building ' in section 2(h) while defining 'residential building ' in section 2(g) in the principal Act from the very inception.
The question is whether this contention can be accepted.
Before dealing with the above question, it would be appropriate to dispose of the challenge made to the finding of fact of landlord 's personal need, on which this question arises.
The finding on this question of fact recorded by the appellate authority has been affirmed by the High Court.
Can this finding be reopended now? Learned counsel for the appellant submitted that the personal need found proved is only of respondent No. 2, son of respondent No. 1, who did not enter the witness box and, as stated in an affidavit filed in this 155 Court, even he is carrying on his profession at a place about 25 kms, away from Ludhiana.
In our opinion, this finding of fact is unassailable.
The High Court has clearly observed that no meaningful argument could be advanced on behalf of the appellant to challenge this finding of the appellate authority.
Respondent No. 1 who is the father of respondent No. 2, has supported and proved the need of respondent No. 2, who also is a landlord.
The fact that for want of suitable accommodation in the city of Ludhiana, respondent No. 2 is at present carrying on his profession at some distance from Ludhiana is not sufficient to negative the landlord 's need.
In these circumstances, the non examination of respondent No. 2 also, when respondent No. 1 has examined himself and proved the need of the landlord, is immaterial and, at best, a matter relating only to appreciation of evidence, on which ground this finding of fact cannot be reopened.
This is more so when no serious challenge to this finding was made in the High Court.
We must, therefore, proceed on the basis that the personal need of the landlord is proved to make out the ground of eviction contained in section 13(3)(a)(i)(a) of the Act in case that ground of eviction is applicable to the suit premises treating it as a 'scheduled building.
In order to fully appreciate the arguments of learned counsel for the appellant, the legislative history would be useful.
The Punjab Urban Rent Restriction Act, 1941 was enacted to restrict the increase of rents on certain premises situated within the limits of urban areas in the Punjab.
That Act was primarily to control the increase of rents and did not relate to eviction of tenants.
Then came the Punjab Urban Rent Restriction Act, 1947 which was enacted to restrict the increase of rent of certain premises situated within the limits of urban areas and the eviction of tenants therefrom.
Provision was made in Section 4 of the Act for determination of fair rent, for which purpose 'non residential building ', 'residential building ' and 'scheduled building ' were treated as three different categories prescribing different formula for each of these three categories.
For this reason, separate definition of each of them was given in section 2 containing the definitions.
However, for the purpose of eviction, in section 13 (3), a 'residential building or a 'scheduled building ' were clubbed together and treated similarly by providing the same grounds for eviction while a 'non. residential building ' or 'rented land ' were clubbed together and provided for separately.
The scheme of the Act clearly shows that a 'residential building ' and a 'scheduled building ' were treated as different categories only for the determination of fair rent but were treated alike while prescrib 156 ing the grounds for eviction of a tenant therefrom.
The definition of 'scheduled building ' in section 2(h) of that Act also took care to provide that a 'scheduled building ' means a residential building which was being used partly for a specified purpose.
In this manner, the definition of a 'scheduled building ' given in the Act was in consonance with the scheme of the Act treating it differently from a 'residential building ' for the purpose of determination of fair rent and similarly for eviction of the tenant.
Then came the East Punjab Urban Rent Restriction Act, 1948 which repealed the 1947 Act and replaced it.
The same scheme was retained in the 1949 Act which is the principal Act for our purpose.
It is the relevant provisions of this Act, as amended from time to time, which are material for deciding the point raised by the appellant.
The East Punjab Urban Rent Restriction Act, 1948 (East Punjab Act No. 111 of 1948) was amended by the Amendment Acts of 1956, 1957, 1966 and 1985 whereby section 13 of the principal Act was amended and in 1985 the new section 13A was inserted.
It is the amendments made in section 13 at the principal Act providing for eviction of tenants which are material for our purpose.
The material provisions of the Act, including the amendments made in section 13 from time to time are mentioned hereafter.
In the principal Act as originally enacted, the material provisions are as under : '2.
Definitions.
In this Act, unless there is anything repugnant in the subject o r context, (a) 'building ' means any building or part of a building let for any purpose whether being actually used for that purpose or not, including any land, godowns out houses or furniture let therewith, but does not include a room in a hotel, hostel or boarding house; xxx xxx xxx (d) 'non residential building means a building being used solely for the purpose of business or trade; xxx xxx xxx (g) "residential building" means any building which is not a 157 non residential building; (h) "scheduled building means a residential building which is being used by a person engaged in one or more of the professions specified in the Schedule to this Act, partly for his business and partly for his residence; xxx xxx xxx "4.
Determination of fair rent. (1) The Controller shall on application by the tenant or landlord of a building or rented land fix the fair rent for such building or rented land after holding such inquiry as the Controller thinks fit.
(2) In fixing the fair rent under this section, the Controller may first fix a basic rent taking into consideration xxx xxx xxx (3) In fixing the fair rent of a residential building the Controller may allow.
If the basic rent xxx xxx xxx (4) In fixing the fair rent of a scheduled building the Controller may allow, if the basic rent xxx xxx xxx (5) In fixing the fair rent of a non residential building or rented land the Controller may allow, if the basic rent xxx xxx xxx '11.
Conversion of a residential building into a nonresidential building No person shall convert a residential building into a non residential building except with the permission in writing of the Controller." "13.
Eviction of tenants.
(1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement 158 of this Act or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this section.
(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf.
If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied (i). . . (ii)that the tenant has after the commencement of this Act without the written consent of the landlord (a). . . (b) used the building or rented land for a purpose other than that for which it was leased.
or (iii)that the tenant has committed such acts as are likely to impair materially the value or utility of the building or rented land, or the Controller may make an order directing the tenant to put the landlord in possession of the building or rented land and if the Controller is not so satisfied he shall make an order rejecting the application : Provided that the Controller may give the tenant a reasonable time for putting the landlord in possession of the building or rented land and may extend such time so as not to exceed three months in the aggregate.
(3) (a) A landlord may apply to the Controller for an order directing tenant to put the landlord in possession (i) in the case of a residential or a scheduled building if (a) he requires it for his own occupation; 159 (b) he is not occupying another residential or a scheduled building, as the case may be, in the urban area concerned; and (c) he has not vacated such a building without sufficient cause after the commencement of this Act in the said urban area: (ii) in the case of a non residential building or rented land, if (a) he requires it for his own use; (b) he is not occupying in the urban area concerned for the purpose of his business any other such building or rented land, as the case may be, and xxx xxx xxx "19.
Penalties.
(1) If any person contravenes any of the provisions of sub section (2) of section 9, sub section (1) of section 10, section 11 or section 18, he shall be punishable with fine which may extend to one thousand rupees. ' The East Punjab Urban Rent Restriction (Amendment) Act, 1956 (Punjab Act No. 29 of 1956) amended section 13 in the following manner: 2.
Amendment of section 13 of East Punjab Act III of 1949.
In clause (a) of sub section (3) of section 13 of the East Punjab Urban Rent Restriction Act, 1949, hereinafter referred to as the principal Act (i) (a) In sub clause (i), the words 'or a scheduled" shall be omitted.
(b) In sub paragraph (b), the words "or a scheduled" and the words "as the case may be" shall be omitted.
(ii) (a) In sub clause (ii) the words 'a non residential building or ' shall be omitted.
(b) In sub paragaph (b), the words "building or" and the words Was the case may be ' shall be omitted" 160 (c) In sub paragraph (c), the words 'a building or" shall be omitted.
(iii)For sub clause (iii), the following shall be substituted, namely: (iii)In the case of any building or rented land, if he requires it to carry out any building work at the instance of the Govern ment or local authority or any improvement Trust under some improvement of development scheme or if it has become unsafe or unfit for the human habitation. (iv) In sub clause (iv), for the words 'any building", where they first occur, the words 'any residential building shall be sub stituted.
(v) In the second proviso, for the words "a residential a scheduled or non residential building or rented land ', the words "a residential building or rented land" shall be substituted.
Section 13 was again amended by the Punjab Urban Rent Restriction ,Amendment) Act, 1957 (Punjab Act No. 21 of 1957) as under '2.
Amendment of section 13 of the East Punjab Act No. 111 of 1949.
After clause (c) of sub paragraph (i) of paragraph (a) of sub section (3) of section 13 of the East Punjab Urban Rent Restriction Act, 1949, the following shall be added, namely : "(d) it was let to the tenant for use as a residence by reason of his being in the service or employment of the landlord, and the tenant has ceased, whether before or after the commencement of this Act, to be in such service or employment: Provided that where the tenant is a workman who has been discharged or dismissed by the landlord from his service or employment in contravention of the provisions of the Industrial Disputes Ad, 1947, he shall not be liable to be evicted until the competent authority under that Act confirms the order of discharge or made against him by the landlord." 161 Thereafter, the East Punjab Urban Rent Restriction (Amendment) Act, 1966 (Punjab Act No. 6 of 1966) further amended section 13 of the principal Act as under "2.
Amendment of section 13 of punjab Act 3 of 1949.
In section 13 of the East Punjab Urban Rent Restriction Act, 1949, (i) in sub section (3), (a) after sub paragraph (i) of paragraph.(a), the following sub paragraph shall be inserted, namely : "(i a) In the case of a residential building, if the landlord is a member of the armed forces of the Union of India and requires it for the occupation of his family and if he produces a certificate of the prescribed authority, referred to in section 7 of the , that he is serving under special conditions within the meaning of section 3 of that Act.
Explanation.
For the purposes of this sub paragraph (1) the certificate of the prescribed authority shall be conclusive evidence that the landlord is serving under special conditions; and (2) "family ' means such relations of the landlord as ordinarily five with him and are dependent upon him;"; (c) in the first proviso in paragraph (a), for the words "shall not be entitled, the words 'shall not, except under sub paragraph (i a), be entitled ' shall be substituted; and (c) after paragraph (b), the following new paragraph shall be added, namely : '(c) where an application is made under sub paragraph (i a) of paragraph (a), it shall be disposed of, as far as may be, within a period of one month and if the claim of the landlord is accepted, the Controller shall make an order 162 directing the tenant to put the landlord in possession of the building on a date to be specified in the order and such date shall not be later than fifteen days from the date of the order."; and (2)In sub section (4), for the words 'does not himself occupy it or, if possession, the words 'does not himself occupy it or, if possession was obtained by him for his family in pursuance of an order under sub paragraph (i a) of paragraph (a) of sub section (3), his family does not occupy the residential building, or, if possession" shall be substituted." Then the East Punjab Urban Rent Restriction (Amendment) Act, 1985 (Punjab Act No. 2 of 1985) further amended section 13 and inserted new section 13A in the principal Act as under 'Amendment of section 13 of Punjab Act 3 of 1949.
In the principal Act, in section 13, after sub section (4), the following sub section shall be inserted, namely : '(4 A) Where a tenant is evicted from a residential or scheduled building in pursuance of an order made under section 13 A and the specified landlord or, as the case may be, the widow, widower, child, grandchild or widowed daughter in law of such specified landlord : (a) does not occupy it for a continuous period of three months from the date of such eviction; or (b) within a period of three years from the date of such eviction of the tenant, lets out the whole or any part of such building, from which the tenant was evicted, to any person other than the tenant; such evicted tenant may apply to the Controller, for an order directing that the possession of the building shall be restored to him and the Controller shall make an order accordingly. ' Insertion of new section 13 A in Punjab Act 3 of 1949.
In the principal Act, after section 13, the following section shall 163 be inserted, namely: Right to recover immediate possession of residential or scheduled building to accrue to certain persons.
"13 A.
Where a specified landlord at any time, within one year prior to or within one yea after the date of his retirement or after his retirement but within one year of the date of commencement of the East Punjab Urban Rent Restriction (Amendment) Act, 1985, whichever is later, applies to the Controller alongwith a certificate from the authority competent to remove him from service indicating the date of his retirement and his affidavit to the affect that he does not own and possess any other suitable accommodation in the local area in which he intends to reside to recover possession of his residential building or scheduled building, as the case may be, for his own occupation, there shall accrue, on and from the date of such application to such specified landlord, notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force or in any contract (whether expressed or implied), custom or usage to the contrary, a right to recover immediately the on of such residential building or scheduled building or any part or parts of such building if it is let out in part or parts : Provided that in case of death of the specified landlord, the widow or widower of such specified landlord and in the case of death of such widow or widower, a child or a grandchild or a widowed daughter in law who was dependent upon such specified landlord at the time of his death shall be entitled to make an application under this section to the Controller, (a)in the case of death of such specified landlord, before the commencement of the East Punjab Urban Rent Restriction (Amendment) Act, 1985 within one year of such commencement: (b)In this case of death of such specified landlord, after such commencement, but before the date of his retirement, within one yew of the date of his death; 164 (c)in the case of death of such specified landlord, after such commencement and the date of his retirement, within one year of the date of such retirement; and on the date of such application the right to recover the possession of the residential building or scheduled building, as the case may be, which belonged to such specified landlord at the time of his death shall accrue to the applicant: Provided further that nothing in this section shall be so construed a. , conferring a right on any person to recover possession of more than one residential or scheduled building inclusive of any part or parts thereof if it is let out in part or parts: Provided further that the controller may give the tenant a reasonable period for putting the specified landlord or, as the case may be, the widow, widower, child, grandchild or widowed daughter in law in possession of the residential building or scheduled building, as the case may be, and may extend such time so as not to exceed three months in the aggregate.
Explanation.
For the purpose of this section the expression "retirement" means termination of service of a specified landlord otherwise than by resignation." Further by this Amendment Act of 1985, special procedure for disposal of applications under section 13A was prescribed and some other ancillary amendments were also made.
The definitions in clauses (a), (d), (g) and (h) of Section 2 and the material part of section 4 quoted above remain the same in the principal Act as originally enacted even after these amendments, section 13, in so far as it is material for the present case, as it stands amended in the above manner now reads as under: "13.
Eviction of tenants (1) A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act or otherwise and whether before or after the termination of the tenancy, except in accordance with the 165 provisions of this section, or in pursuance of an order made under section 13 of the Punjab Urban Rent Restriction Act, 1947, as subsequently amended.
(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf.
If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied (i). . . (ii) that the tenant has after the commencement of this Act without the written consent of the landlord (a). . . (b) used the building or rented land for a purpose other than that for which it was leased, or (iii) that the tenant has committed such acts as are likely to impair materially the value or utility of the building or rented land, or xxx XXK xxx (3) (a) A landlord may apply to the controller for an order directing the tenant to put the landlord in possession (i) in the case of a residential building if (a) he requires it for his own occupation; (b) he is not occupying an other residential building, in the urban area concerned; and xxx xxx xxx (i a) in the case of a residential building, if the landlord is a member of the armed forces of the Union of India and requires it for the occupation of his family and if he produces a certificate of the prescribed authority, referred to in section 7 of the , that he is serving under 166 special conditions within the meaning of section 3 of that Act.
XXK xxx xxx (ii) in the case of rented land, if (a) he requires it for his own use: (b) he is not occupying in the urban area concerned for the purpose of his business any other such rented land; and (c) he has not vacated such rented land without sufficient cause after the commencement of this Act, in the urban area concerned: xxx xxx xxx (iv) in the case of any residential building, if he requires it for use as an office, or consulting room by his son who intends to start practice as a lawyer or as a "registered practitioner" within the meaning of that expression as used in the Punjab Medical Registration Act, 1916, or for the residence of his son who is married, if (a) his son as aforesaid is not occupying in the urban area concerned any other building for use as office, consulting room or residence, as the case may be; and (b) his son as aforesaid has not vacated such a building without sufficient cause after the commencement of this Act, in the urban area concerned xxx xxx xxx The main argument of learned counsel for the appellant is that omission of the words "or a scheduled ' after the word 'residential ' in section 13(3) (a) (i) by the 1956 Amendment while using those words in addition to the word 'residential in section 13A, subsequently inserted in 1985, is a clear indication that the ground of eviction contained in section 13(3) (A) (i) (a) of _personal need of the landlord.is no longer available to landlords in general after the 1956 Amendment, awn though a more expeditious remedy on that ground has been provided by 13A from 167 1985 to the category of specified landlords alone.
The retention of the separate definition of 'scheduled building ' in section 2(h) and use of that expression elsewhere in the Act, including section 4 and section 13, is referred in support of this submission.
The question is whether this construction is proper.
In section 2 which contains the definitions, clause (a) defines 'building '.
Clause (d) then defines 'non residential building ' to mean a building being used solely for the purpose of business or trade.
Thus, to be a non residential building, it must be used solely for the purpose of business or trade.
Clause (g) defines 'residential building ' to mean any building which is not a non residential building.
These definitions make it clear that all buildings are divided into two categories : 'non residential ' and 'residential '.
Buildings used solely for the purpose of business or trade are 'non residential ' and the remaining buildings are all 'residential '.
Accordingly, no building to which the Act applies is outside the classification of 'non residential ' and 'residential '.
Then comes clause (h) which defines 'scheduled building ' to mean a residential building which is being used partly for a scheduled purpose.
The definition of 'scheduled building ' in clause (h) itself makes it clear that it is a residential building as defined in clause (g) with the qualification that such a residential building is one which is used partly for a specified purpose.
In other words, 'scheduled building ' as defined in clause (h) is merely a kind of 'residential building ' as defined in clause (g), its characteristic being its part user for a scheduled purpose.
The reason to defined 'scheduled building ' separately in clause (h) is also evident from some provisions of the Act itself.
The Act makes a distinction for the purpose of determination of fair rent between a residential building which is being used partly for a scheduled purpose and is, therefore, treated as a 'scheduled building ' and the remaining residential buildings which are not so used.
This is clear from the scheme of section 4 itself providing for determination of fair rent.
This is also clear from the fact that from the definition of 'building ' given in section 2(a), the only category excluded is a 'non residential building ' as defined in section 2(d) for the purpose of section 2(g) and not also 'scheduled building ' defined in section 2(h) and in section 2(h), a 'scheduled building" is defined to mean a residential building used partly for a scheduled purpose.
A separate definition of 'scheduled building ' in clause (h) while making it 168 clear therein that it means a residential building used partly for a specified purpose does not, therefore, indicate that a scheduled building ceases to be a residential building or is a category of building separate from a residential building for the purpose of eviction of tenants in the scheme of section 13 of the Act.
This is the only manner in which a harmonious construction can be made of these provisions.
The question now is of the effect of the 1956 Amendment which omitted the words 'or a scheduled ' in section 13(3) as indicated earlier.
The Statement of Objects and Reasons of the Amendment Act of 1956 clearly says that the provision allowing eviction on the ground of personal need has been misused by certain landlords and according to the Act applicable to Delhi the tenants of industrial and commercial premises cannot be ejected on the ground of personal need, while in the Punjab, such tenants can be evicted therefrom also on the ground of personal need.
To avoid hardship to such tenants, it was considered necessary that the tenants of non residential property in the Punjab should be placed at par with tenants of such property in Delhi.
Thus, the object of this enactment was to equate the Punjab tenants with Delhi tenants and exclude the ground of landlord 's personal need for eviction of tenants of non residential property.
To achieve this object deletion was made of the words other than 'residential ' from section 13(3) providing for eviction of tenants from buildings on the ground of landlord 's personal need.
Obviously, in view of the definition of 'scheduled building ' in section 2(h) being clear to indicate that 'scheduled building ' is a 'residential building, retention of the words ,or a scheduled ' after 'residential ' was considered superfluous while omitting the words 'non residential building ' in other parts of section 13(3) relating to the ground of personal need for eviction of the tenants from buildings.
Subsequently, in section 13A, when inserted by 1985 Amendment, the word 'scheduled ' was also used after 'residential ', may be, in view of the controversy like the present raised on the basis of the 1956 Amendment, to avoid any such controversy therein.
That does not, however, mean that section 13 which must be construed in the manner indicated by us should be read differently for that reason.
In fact, insertion of section 13A further reinforces the view we have taken.
There would be no occasion to provide an expeditious remedy for eviction of tenants of a category of 169 landlords and to also provide for a special summary procedure for them unless the remedy of eviction on the ground of personal need was already available generally to the landlords in section 13.
It is significant that section 13 was also amended by the 1985 Amendment by inserting sub section (4 A) therein as a result of insertion of the new section 13A in the principal Act.
Thus, the 1985 Amendment itself shows that section 13A is not a separate and distinct provision but has to be read along with section 13 of the principal Act forming a part of the general scheme contained in section 13 for eviction of tenants on the ground of personal need from buildings which are not non residential.
The construction we have made of section 13(3)(a)(i), as it stood after the 1956 Amendment, is the only construction which can be made to harmonise with the definitions in section 2 which continue to remain as originally enacted and the other provisions of the Act which have been referred.
The contention of learned counsel for the appellant on this point is, therefore, rejected.
The result of the above discussion is that the respondent landlord 's personal need being found proved, the ground of eviction contained in section 13(3) (a) (i) (a) is available and the order of eviction passed against the appellant can be sustained on this ground alone.
The construction made by the High Court of Section 13(3) (a) (i) that it does not apply to a scheduled building is, therefore, erroneous.
The only surviving question is the availability of the ground of change of user contained in section 13(2) (ii) (b) on which the order of eviction has been passed by the High Court.
In view of the above conclusion reached by us that the ground in section 13(3)(a)(i)(a) is made out, the consideration of this question in the present case appears unnecessary.
We have considered and decided that question in a connected matter Bishamber Das Kohli (Dead) by Lrs.
vs Smt.
Satya Bhalla.
However, a brief reference to the general principle may be apposite.
If the express terms of lease restrict the user solely for purpose of residence, then use of any part thereof for even a scheduled purpose without the written consent of the landlord may amount to use of the building for a purpose other than that for which it was leased.
That, however, is a question of fact in each case.
In that case while the ground of eviction in section 13(3)(a)(i)(a) would remain available to the landlord 170 for eviction of the tanant, in view of the express covenant against user of any part of the residential building even for a scheduled purpose.
It may make available also the ground of change of user under section 13(2) (ii) (b) of the Act.
In the present case, it is unnecessary to go into this further question since the order of eviction can be sustained on the ground contained in section 13(3)(a)(i)(a) alone as already indicated.
Consequently, the appeal is dismissed with costs.
Counsel 's fee Rs. 3,000.
U.R. Appeal dismissed.
| The first respondent, a defeated candidate, riled an election petition before the High Court for a declaration that the election of the appellant was void and that he himself had been duly elected.
Since the notice could not be served on the appellant, and some other respondents in the ordinary course, it was published in a vernacular daily newspaper, as directed by the High Court, fixing the date of appearance of the respondents therein.
The appellant appeared before the High Court on the date of publication of the notice and sought time for filing the written.
statement and after doing so submitted a recrimination notice under Section 97 of the Representation of People Act, 1951.
Along with the recrimination notice he flied an application under Section 5 of the requesting the High Court to condone the delay in filing the same, since the appellant had given notice beyond the period of 14 days from the date of commencement of trial, prescribed under the proviso to Section 97(1).
The High Court held that Section 5 of the was not applicable to a recrimination notice.
Aggrieved, the appellant riled the appeal, by special leave, before this Court.
It was contended that by virtue of Section 29(2) of the , all the provisions contained in sections 4 to 24 (both inclusive) of the Act applied to the proceedings under the Representation of the People Act, 1951, including the recrimination notice under Section 97.
314 Dismissing the appeal, this Court, HELD : 1.1.
There is no provision in the Representation of People act 1951 making all or any of the provisions of the placable to the proceedings under the Act.
[318A] 1.2.
The Act equates a recrimination notice to an election petition.
The language of Section 97 makes the said fact abundantly clear.
It provides that returned candidates or any other party may give evidence to prove that the election of such candidate would have been void If he had been the returned candidate and a petition had been presented calling in question his election.
The proviso to sub section (1) applies the provisions of Sections 117 and 118 to such a recrimination notice.
For non compliance with the requirement of Section 117 an election petition is liable to be dismissed by virtue of sub section (1) of Section 86.
Sub section (2) of Section 97 further provides that the notice referred to in sub section (1) should be accompanied by the statement and particulars as required by Section 83 in the case of an election petition and should be signed and verified in like manner.
[319C E] 1.3.
The proviso to sub section (1) of Section 97 which requires such a notice to be given to the High Court within 14 days of the date fixed for the respondents to appear before the High Court to answer the claim or claims (reading the definition of 'commencement of trial ' into it) has also a particular meaning and object behind it.
The idea is that the recrimination notice, if any, should be filed at the earliest possible time so that both the election petition and the recrimination notice are tried at the same time.
[319F] The recrimination notice is thus comparable to an election petition.
If Section 5 of the does not apply to the filing of an election petition, it does not equally apply to the filing of the recrimination notice.
[319G] H.N Yadav vs L.N. Misra, ; , relied on.
Shukla vs Khubchand Baghel and Ors., [1964] 6 S.C.R. 129, distinguished.
Bhogilal Pandya vs Maharawal Laxman Singh, AIR , Bhakti Bh.
Mondal vs Hhagendra K Bandhopandhya, 1968 Calcutta 315 69, overruled.
|
Appeal No. 208 of 1952.
Appeal by Special Leave from the Judgment and Order dated the 28th day of September 1951 of the Authority under the , Bombay in Application No. 500 of 1951.
M. C. Setalvad, Attorney General for India (G. N. Joshi, PorUs A. Mehta and P. G. Gokhale, with him), for the appellant.
J. B. Dadachanji, M. V. Jayakar and Rajinder Narain, for respondent No. 1. 1955.
March 2.
The Judgment of the Court was delivered by 1347 SINHA J.
This is an appeal by special leave from the orders dated the 28th September 1951 passed by the 2nd respondent, the Authority appointed under section 15(1) of the (IV of 1936), (which hereinafter will be referred to as the Act) allowing the 1st respondent 's claim for house rent allowance as part of his wages.
In this case the facts are not in dispute and may shortly be stated as follows: The 1st respondent is a gangman in the employ of the Central Railway (which previously used to be known as the G.I.P. Rly.), since April 1945.
At that time his wages were Rs. 18 per month plus dearness allowance.
With effect from the 1st November 1947 the Railway Board under the Ministry of Railways of the Government of India introduced a scheme of grant of compensatory (city) allowance and house rent allowance at rates specified in their memorandum No. E47 CPC/14.
This scheme was modified by the Railway Board 's letter No. E47 CPC/14 dated 1st December 1947.
As a result of this scheme certain railway employees stationed at specified headquarters were eligible for the allowance aforesaid at certain specified rates.
The 1st respondent thus became entitled to the allowance of Rs. 10 per month.
This allowance the 1st respondent drew along with his salary until the 18th August 1948 when he was offered by the Government, quarters suitable to his post, but he refused to occupy the same.
On his refusal to occupy the quarters offered by the Government, the house rent allowance was stopped with effect from the 19th August 1948.
On the 8th June 1951 the 1st respondent put in his claim before the Authority for Rs. 290 on the ground that the appellant, the Divisional Engineer, G.I.P. Ry., who was the authority responsible under section 4 of the Act for payment of wages, had stopped payment of house rent allowance to him from the 19th August 1948.
The claim covered the period the 19th August 1948 to the 18th January 1951 at the rate of Rs. 10 per month.
The appellant appeared before the Authority and by his written statement contested the claim on the ground that the house rent allowance which was 1348 the subject matter of the claim was not "wages" within the meaning of section 2(vi) of the Act.
It was, therefore, submitted by the appellant who was the opposite party before the Authority that it had no jurisdiction to entertain the claim which should be dismissed in limine.
It was further pleaded that the claim was inadmissible on the ground that there had been no illegal deduction from the respondent 's wages inasmuch as the respondent had been allotted railway quarters of a suitable type and as he had refused to occupy those quarters he was not entitled under the rules to any house rent allowance.
Alternatively, it was further pleaded by the appellant that so much of the claim as, related to a period preceding six months immediately before the date of the application was time barred under the first proviso to section 15(2) of the Act. ' The Authority condoned the delay and that part of the order condoning the delay is not in controversy before us.
On the issues thus joined between the parties the Authority came to the conclusion that the house rent allowance was "wages" as defined in the Act that as a matter of fact, accommodation was offered to the 1st respondent and he refused it; but that even so, the appellant was not entitled to withhold the house rent allowance.
Accordingly the claim for Rs. 290 was allowed by the Authority.
The short point to be decided in this case is whether the house rent allowance claimed by the 1st respondent came within the purview of the definition of "wages" contained in the Act.
There being no difference on questions of fact between the parties, the answer to the question raised must depend upon the construction to be placed upon the following material portion of the definition of "wages" in section 2(vi) of the Act: 'Wages ' means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed or other 1349 wise, to a person employed in respect of his employment or of work done in such employment, and includes any bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment, but does not include (a)the value of any house accommodation, supply of light, water, medical Attendance or other amenity, or of any service excluded by general or special order of the State Government. . .
Shorn of all verbiage, "wages" are remuneration payable by an employer to his employee for services rendered according to the terms of the contract between them.
The question then arises, what are the terms of the contract between the parties.
When the 1st respondent 's employment under the railway administration represented by the appellant began, admittedly be was not entitled to any such house rent allowance.
As already indicated, the scheme for payment of house rent allowance was introduced with effect from the 1st November 1947 when the rules were framed, admittedly under sub section (2) of section 241 of the Government of India Act, 1935, by the Governor General.
Those rules were amended subsequently.
We are here concerned with the amendment made by the Railway Board by its letter No. E47CPC/ 14 dated the 1st December 1947, particularly rule 3(i) which is in these terms: "The house rent allowance will not be admissible to those who occupy accommodation provided by Government or those to whom accommodation has been offered by Government but who have refused it".
It has been argued on behalf of the appellant that the terms of the contract between the parties include the rule quoted above and that therefore the position in law is that there is no absolute right in the 1st respondent to claim the house rent allowance; in other words, it is contended that there is a condition precedent to the claim for house rent allowance being admissible, namely, that the employee should be posted at one of those places, like Bombay, Calcutta, 1350 Madras ' etc., before the claim for house rent allowance could arise and that there is a condition subsequent, namely, that the employee posted at any one of those places will cease to be entitled to the allowance if either the Government provides accommodation to the employee in question or the employee refuses to occupy the accommodation so offered to him.
On the other hand, it has been argued on behalf of the 1st respondent that the employee 's right to the allowance accrues as soon as he has fulfilled the terms of the contract of employment including regular attendance, good work or conduct and his other behaviour in terms of the definition of "wages" as contained in the Act.
It was also argued on behalf of the 1st respondent that the terms of the definition have to be construed consistently with the provisions of sections 7 and 11 of the Act; that rule 3(i) quoted above is inconsistent with some of the terms of the definition of "wages" and the provisions of sections 7 and 11 and that in any event, if rule 3(i) aforesaid were to be considered as a part of the terms of the contract between the parties, section 23 of the Act prohibits an employee from entering into such a contract as has the effect of depriving him of his vested rights.
It should be noted at the outset that the learned Attorney General appearing on behalf of the appellant has not pressed the argument which appears to have been raised in the written statement of the appellant and also before the Authority as would appear from the orders passed by him, that clause (a) excluding "the value of any house accommodation" clearly showed that house rent allowance was not included in "wages" as defined in section 2(vi) of the Act.
As will presently appear, this argument proceeds on the unwarranted assumption that house rent allowance is synonymous with the value of any house accommodation referred to in the definition of "wages" and in section 7(2)(b) and section 11 of the Act.
The answer to the question whether house rent allowance is "wages" may be in the affirmative if the rules framed by the department relating to the grant of house rent allowance make it compulsory for the 1351 employer to grant house rent allowance without anything more: in other words, if the house rent allowed had been granted without any conditions or with conditions, if any, which were unenforceable in law.
But the statutory rules framed by the Government governing the grant of house rent allowance do not make it unconditional and absolute in terms.
The house rent allowance in the first instance is not admissible to all the employees of a particular class.
It is admissible only to such railway employees as are posted at specified places in order "to compensate railway servants in certain costlier cities for excessive rents paid by them over and above what they might normally be expected to pay"; nor is such an allowance "intended to be a source of profit" or to be "an allowance in lieu of free quarters", as specifically stated in the preamble to the letter No. E47CPC/14, dated 1st December 1947, issued by the Railway Board.
The argument on behalf of the 1st respondent would have been valid if the rules in terms contemplated the grant of house rent allowance to every employee of a particular category but the rules do not make the grant in such absolute terms.
The house rent allowance is admissible only so long as an employee is stationed at one of the specified places and has not been offered Government quarters.
The rules distinctly provide that the allowance will not be ad raissible to those who occupy Government quarters or to those to whom such quarters have been offered but who have refused to take advantage of the offer.
Once an employee of the description given above has been offered suitable house accommodation and he has refused it, he ceases to be entitled to the house rent allowance and that allowance thus ceases to be "wages" within the meaning of the definition in the Act, because it is no more payable under the terms of the contract.
In our opinion, it is clear beyond all reasonable doubt that the rules which must be included in the terms of contract between the employer and the employee contemplate that an employee posted at one 173 1352 of the specified places would be entitled to house rent allowance; but that as soon as he is offered Government quarters for his accommodation, he ceases ' to be so entitled., whether he actually occupies or does not occupy the quarters offered to him.
Hence the grant of house rent allowance does not create an indefeasible right in the employee at all places wherever he may be posted and in all circumstances, irrespective of whether or not he has been offered Government quarters.
But it has been argued on behalf of the respondent that such a conclusion would be inconsistent with the provisions of sections 7 and 1 1 of the Act.
We do not see any such inconsistency.
Section 7 of the Act deals with such deductions as may be made from the wages as defined in the Act, of an employee.
Subsection (2) of section 7 categorically specifies the heads under which deductions may lawfully be made from wages.
Clause (d) of this sub section has reference to "deductions for house accommodation sup plied by the employer", and section 11 provides that such a deduction shall not be made unless the house accommodation has been accepted by the employee and shall not exceed the amount equivalent to the value of such accommodation.
The definition of "wages" in the Act also excludes from its operation the value of house accommodation referred to in sections 7 and II as aforesaid.
The legislature has used the expression "value of any house accommodation" in the definition of "wages" as denoting something which can be deducted from "wages".
The one excludes the other.
It is thus clear that the definition of "wages" under the Act cannot include the value of any house accommodation supplied by the employer to the employee; otherwise it would not be a legally permissible deduction from wages.
It Is equally clear that house rent allowance which may in certain circumstances as aforesaid be included in "wages" is not the same thing as the value of any house accommodation referred to in the Act.
That being so, there is no validity in the argument advanced on behalf of the 1st respondent that rule 3(i) aforesaid is 1353 inconsistent with the provisions of sections 7 and 11 of the Act.
It remains to consider the last argument advanced on behalf of the 1st respondent that section 23 of the Act prohibits an employee from relinquishing such a right as is the subject matter of rule 3(i) quoted above.
This argument proceeds on the assumption that house rent allowance which is a right conferred on the employee is an absolute right.
It has already been held above that the Act read along with the rules which constitute the terms of the contract between the employer and the employee does not create any absolute right in the employee to the house rent allowance.
That being so, there is no question of the employee relinquishing any such right as is contemplated by section 23.
For the reasons aforesaid, the appeal succeeds.
The orders passed by the Authority are set aside.
In the special circumstances of this case there will be no order as to costs.
Appeal allowed.
| The Railway Board under the Ministry of Railways of the Gov ernment of India introduced a scheme with effect from the 1st 1346 November 1947 granting compensatory (city) allowance and house rent allowances at certain rates to certain Railway employees (including the 1st respondent who was a railway employee since 1945) stationed at specified head quarters.
The first respondent drew this ' allowance along with his salary up to the 18th August 1948, when he was offered by the Government, quarters 'suitable to his post, but he refused to occupy the same and the house rent allowance was stopped from the date of his refusal to occupy the quarter offered to him.
Rule 3(i) of the Statutory Rules framed by the Government and put into effect on 1st November 1947 runs as follows: "The house rent allowance will not be admissible to those who occupy accommodation provided by Government or those to whom accommodation has been offered by Government but who have refused".
Held, that the house rent allowance is admissible only so long as an employee is stationed at one of the specified places and has not been offered Government quarters.
The rules distinctly provide that the allowance will not be admissible to those who occupy Government quarters or those to whom such quarters have been offered but who have refused to take advantage of the offer.
Once an employee of the description given above has been offered suitable house accommodation and he has refused it, he ceases to be entitled to the house rent allowance and that allowance ceases to be "wages" within the meaning of the definition in section 2(vi) of the Act because it is no more payable under the terms of the contract.
The grant of house rent allowance does not create an indefeasible right in the employee at all places wherever he may be posted and in all circumstances, irrespective of whether or not he has been offered Government quarters.
|
Civil Appeal NOS.
64 65 of 1969.
(From the Judgment and Decree dated 1 12 61 of the Madhya Pradesh High Court in Misc.
First Appeal No. 43 of 1959).
section K. Gambhir for the appellant in CA 64 and Respondent in CA 65/69.
L. Sanghi, K. John and J. Sinha for the respondent in CA 64 and appellant in CA 65/69.
The Judgment of Jaswant Singh and R. section Pathak, JJ. was delivered by Jaswant Singh, J. A. P. Sen, J. gave a dissenting opinion.
JASWANT SINGH, J.
These two cross appeals by certificates of fitness granted by the High Court of Madhya Pradesh at Jabalpur are directed against the judgment and decree dated December l, 1961 of the said High Court dismissing the Misc.
(First) Appeal No. 42 of 1959 preferred by the appellant from the Award dated December 20, 1958 of the II Additional District Judge, Raigarh in Miscellaneous Judicial Case No. 59 of 1958 being a reference under section 18 of the Land Acquisition Act, made at the instance of the appellant in 13 817SCI/78 186 respect of the Award dated August 23, 1957 of the Land Acquisition officer, Raigarh.
The facts giving rise to these appeals are: on an undertaking given by him to pay full compensation with interest from the date of possession to the date of payment of compensation as provided in the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act ') the District Engineer, South Eastern Railway, Raigarh, took advance possession on January 17, 1957 of five plots of agricultural land admeasuring 3.38 acres and another plot of agricultural land admeasuring 0.14 acres adjoining the railway track situate in village Darogamuda, Tehsil and District Raigarh, a suburb of Raigarh belonging to respondents I and 2 respectively for doubling the railway line between Rourkela and Durg in the South Eastern Railway.
Subsequently Notification dated February 8, 1957 under section 4(1) of the Act for acquisition of the aforesaid plots of land was issued and published in the Government Gazette dated February 15, 1957.
This was followed on March 21, 1957 by a notification under section 6 of the, Act.
Although in the r statements filed by them under section 9(2) of the Act the respondents claimed compensation at the rate of Rs. 32,670/ per acre i.e. at the rate of /12/ per square foot on the ground that the plots of land in question had a great potential value as a building site and Rs. 500/ for improvements and Rs. 100/ as the value of one tree, the Special Land Acuisition officer, Raigarh by his award dated August 23, 1957 awarded compensation at the rate of Rs. 3,327/14/ per acre which roughly worked out at /1/6 per square foot on the basis of the statement of sales furnished by A.S.L.R. (L.A.) prepared by Jujhar Singh N.A.W.I. Not satisfied with the quantum of compensation, the respondents made an application to the Special Land Acquisition officer requesting him to refer the matter to the court under section 18 of the ;1 Act.
According to the request of the respondents, the Special Land .
Acquisition officer made the aforesaid references to the II Additional District Judge, Raigarh, who by his award dated December 20, 1958 enhanced the rate of compensation to /4/ per square foot and awarded Rs. 36,808/4/ and Rs. 1,524/8/ to respondents l and 2 respectively as compensation.
The Additional District Judge also allowed the solatium at the rate of 15% amounting to Rs. 5.521/4/ and Rs. 228/12/ to respondents 1 and 2 respectively.
Aggrieved by the said , Award of the II Additional District Judge, the appellant preferred an appeal to the High Court of Madhya Pradesh at Jabalpur which was registered as Miscellaneous (First) Appeal No. 43 of 1959.
In the said appeal, the respondents filed cross objections claiming enhancement of compensation by Rs. 84,518.39 P.
The High Court by its 187 judgment dated December 1, 1961 dismissed the aforesaid appeal preferred by the appellant but allowed the cross objections filed by the respondents holding the reasonable rate of compensation to be /8/per square foot.
Consequently respondent No. 1 was held entitled to Rs. 73,616 8 O as compensation and Rs. 11,042 8 0 as solatium and respondent No. 2 was held entitled to Rs. 3,049 0 0 as compensation and Rs. 457 8 O as solatium.
It is against this judgment of the High Court that the present appeals are directed.
Appearing for the appellant, Mr. Gambhir while admitting that in an appeal under Article 136 of the Constitution, the Court is only concerned with finding out whether the principles on the basis of which compensation has been computed for acquisition of land under the Act have been rightly applied or not and cannot re appraise the evidence, has urged that the Additional District Judge and the High Court have erred in treating the land in question which was primarily an agricultural land as abadi land overlooking that it had not been declared as such.
Mr. Sanghi has on the other hand urged that even according to the findings of the Additional District Judge, who made the spot inspection, as also of the High Court, it is abundantly clear that the land in question was Abadi land and has been rightly treated as such.
Mr. Sanghi has further urged that the said site has great potentialities as building site.
The question as to whether a land has potential value of a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing, or a prospering town with prospects of development schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof.
the instant case, the fact that the land in question has a great potential value as a building site is evident not only from the observations made by the Special Land Acquisition officer himself in his aforesaid award to the effect that the land has assumed semi abadi site hut also from the following observations made in his judgment dated December 20, 1958 by the Additional District Judge who had the advantage of inspecting the site: "The land abuts Raigarh town.
It is within Municipal limits and the nazul perimeter extends upto it.
To the east of 188 the plot there are some kutcha buildings inhabited by respectable persons.
To the North is a Municipal road leading to the railway quarters to the west.
To the west beyond the railway quarters, there is further habitation` and the locality is called "Banglapara" within Municipal limits.
The plot did have a potential value as a building site and it is further supported by the fact that the plot has been used by the Railway authorities for construction of staff quarters thereon though the land was acquired for doubling the rail way line.
" It is also not disputed that the Special Land Acquisition officer did not lead any evidence worth the name to show the price of the comparable sites in question and remained content with the production only of the sale statement made by Jujhar Singh, N.A.W.I.
Now the sale statement consisted mostly of sales relating to the year 1951 which is not relevant for the question in hand.
Moreover, the sale statement by it self without examining either the vendors or the vendees or the persons attesting the sale deeds is not admissible in evidence and can not be relied upon.
The sale deed dated December 14, 1956 in favour of Dr. Das for 4,800 square feet of land out of contigious Khasra No. 256 in lieu of Rs. 2,000/ i.e., at approximately 6 1/2 annas per square foot (which has been relied upon by the Additional District Judge and the High Court) could be taken as a safe guide for determine nation of the compensation.
From the material adduced in the case, it appears that Raigarh is a growing town, that instead of utilising the land for doubling the railway track, the railway has built staff quarters thereon, that on three sides of the acquired land, there already existed pucca buildings and on the fourth side, there is a metalled road.
It is also in evidence that some lawyers have put up some constructions near the sites in question.
Taking all the facts into consideration.
it cannot be said that the basis on which the Additional District Judge and the High Court proceeded is wrong or that the quantum of compensation awarded by the High Court is in any way excessive or exorbitant.
As neither the interest nor compensation on account of severance was claimed in the High Court either by Dr. Harisingh Thakur or by Tikam Singh Thakur, we do not think they can justifiably put up claims in that behalf.
Mr. Sanghi appearing on their behalf has fairly stated that he would not like to press his cross appeal.
In the result, we do not find any merit in either of the aforesaid appeals.
W. would accordingly dismiss them with costs.
SEN J. I have had the advantage of reading the judgment by my learned brother Jaswant Singh.
Since the appeal involves an important 189 question affecting valuation which has been overlooked by the High Court, I would like to say a few words of my own.
Normally, this Court does not interfere in appeal with the valuation by the High Court in land acquisition cases, unless the judgment cannot be supported, as it stands, either by reason of a wrong application of principles or because some important point in evidence has been overlooked or mis applied: The Special Land Acquisition officer, Bangalore vs Adinarayan Setty(1).
With respect, I venture to say that the judgment of the High Court cannot be supported by reason of a wrong application of principles.
It overlooked the fact that there was no discernible basis on which the Additional District Judge could have changed the mode of valuation adopted by the Special Land Acquisition officer treating the land acquired to be agricultural land and in awarding compensation upon the basis as if it were a building site.
Indeed, there was no atempt on their part to determine the ' 'intrinsic character of the land", namely, whether the land acquired should be classified as agricultural land or not.
In the present case, the High Court obviously fell into an error in overlooking the, fact that the acquired land situate in village Darogamuda, admeasuring 3.52 acres, was, on the 8th February, 1957 i.e. On the date of the issue of the notification under section 4(1) of the Act, agricultural land.
It was recorded as a raiyati land belonging to the two claimants, Dr. Harisingh Thakur and his brother Vikram Singh Thakur who were ex gaontiyas of village Darogamuda.
The land was not recorded as abadi as wrongly assumed by the High Court.
Perhaps it was misled by the mis description of the land as abadi in the reference made by the Collector under section 18(1).
This is an admitted position between the parties.
In response to the notice of admissions and denials of documents served by the claimants, the Collector admitted panchsala khasra for the years 1952 53 to 1953 54 and kistbandi khatouni for the years 1952 53 and 1953 54.
The claimant Dr. Harisingh Thakur, AW1 admits during his crossexamination that till the month of December 1956, the lands were actually under his cultivation and he had reaped the crops before delivering possession of the same on the 17th January, 1957 to the District Engineer, South Eastern Railway.
He further admits that throughout the land was under cultivation i.e. from the time, of his forefathers.
In fact, Jujhar Singh NAW1, Assistant Superintendent Land Records, who was at the relevant time a Revenue Inspector, states that the,. land (1) [1959] Supp.
(1) S.C.R. 404.
190 acquired was a paddy field and was surrounded by agricultural lands.
That being so, the District Judge, was clearly wrong in treating the land to be abadi and calculating compensation on the footing of its being a building site.
In awarding compensation at a flat rate of Rs. 3,327.87 P. per acre, the Special Land Acquisition officer took notice of the fact that the land is situate in village Darogamuda, a suburb of Raigarh, which is a town of great commercial importance, though beyond its nazul perimeter.
He also took notice of the fact that the land abuts the railway track and there were agricultural fields on two sides.
On the other two sides, there existed kutcha hutments of backward classes and a few railway buildings.
The award of compensation at the rate of Rs. 3,327.87 P. per acre was based on average of sales of lands in recent years as prepared by Jujhar Singh, Revenue Inspector NAW 1.
The Special Land Acquisition officer accordingly observed: "The average value based on the above noted sales comes to Rs. 3,327/14/ per acre and in my opinion it truly re presents the average market value of lands in this predominantly agricultural locality which has assumed semi abadi site value due to the constructions of houses mostly by low class people besides a few buildings of Railway Department.
It is for this reason that the average value per acre comes to as much as Rs. 3,327/14/ per acre else the lands in question would have fetched lower price, available in respect of agricultural lands to which class they really belong and stand assessed as such till today.
" While it is no doubt true, as my learned brother Jaswant Singh has rightly observed, that the statement of average of sales, prepared by Jujhar Singh NAW 1, was not admissible in evidence unless the Collector proved the transactions in question, upon which it was based, there is no denying the fact that the acquired land was nothing but agricultural land and the mode of valuation had necessarily to be upon that basis.
Now, if the purpose for which the land was acquired, i.e., for the construction of staff quarters in connection with the doubling of the railway line by the South Eastern Railway, has no bearing on the question of valuation, the future possibilities of the land, which admittedly was agricultural land, lying in the vicinity of Raigarh if applied to the most lucrative use, having regard to its the then condition, was very little as a building site.
The land was lying undeveloped and undiverted.
Unless there was a development scheme, the land could not 191 be valued as a building site.
The land could, however, be put to that use if there was such development scheme.
At the time of the notification under section 4(1), there was no recent building activity near about the land, which was either under cultivation or lying desolate.
But as l have already said, the land could be put to a better use provided it was fully developed as a building site.
The claimants were, therefore, entitled to the evaluation of the land as agricultural land with an additional allowance being made for its future potentiality as a building site.
I just cannot imagine what could be the utility of the acquired land on a building site, looking to its proximity to the railway track.
It would, indeed, be very little.
In a reference under 9. 18 of the Act, the burden of proving that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis.
The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him.
When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him, or when the basis was the application of a 'multiple ' which could not be justified on any rational ground, the burden can be discharged by a slight evidence.
But that is not the case here.
The claimants have led no trustworthy evidence.
It is equally well settled that where the claimant leads no evidence to show that the conclusions reached in the award were inadequate, or, that it offered unsatisfactory compensation, the award has to be confirmed.
Upon a compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition, at the time of expropriation, with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired.
In Vyricharla Narayana Gajapatjiraju vs Revenue Divisional Officer Vizagapatnam(1) the Privy Council state: "For the land is not to be valued merely by reference to the use to which it is being put at the time at which the value has to be determined. but also by reference to the uses to which it is reasonably capable of being put in the future.
It is possibilities of the land and not its realized possibilities that must be taken into consideration.
" The value of the acquired property, with all its possibilities has to be ll adjudged on the material on record.
(1) 66.
I.A. 104.
192 The market price must be fixed with reference to the date of the.
notification under section 4 irrespective of any trend, if any, for an increase in the value thereof.
The basis for determination of the market value of tel land within section 23 (1) (i) of the Act is the value of the land to the owner.
Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the property as at the date of the notification.
That test is clearly not fulfilled in the present case.
Clause fifthly in section 24 interdicts the court from considering any prospective increase in value due to acquisition.
Market value of the land acquired has to be fixed with reference to the date of notification under section 4 (1) .
In Vyricharla Narayana Gajapatiraju vs Revenue Divisional Officer, Vizagapatam (supra) the Privy Council observed that where the owner is a person who could turn the potentiality of the land into account, it is immaterial that the utilization of the same potentiality is also the purpose for which the land is acquired.
The Underlying principle is that a speculative rise in price of land due to acquisition should not be an element which should enter into computation.
Sometimes the prices shown in sale deeds executed subsequent in point of time are not the actual prices paid.
The sales may be.
unreal and may not reflect the true value of the land.
There always elapses a certain interval between the time when the intention to acquire Ea certain land first becomes known and the actual notification under section 4(1) is issued.
Here though the notification under section 4(1) was issued on 8th February, 1957, but the claimants had, in fact, delivered the possession to the District Engineer, South Eastern Railway on the 17th January, 1957, and were indeed, as it appears from the evidence, aware of the fact that the land was being acquired by the South Eastern Railway much earlier, i.e., in December, 1956.
In view of this, the prospective rise in value, if any, has to be kept out of consideration.
the principles to determine the quantum of compensation are contained in section 23(1) of the Act.
The court in fixing the amount has to take into consideration the prevailing market value of the land at The date of the notification under section 4(1) and the said market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from a willing purchaser.
The underlying principle of fixing the market value with reference to comparable sales is to reduce the element of speculation.
In a comparable sale, the features are: (i) it must be within a reasonable time of the date of notification under section 4.(1); (ii) it should be a bona fide transaction; (iii) it should be a sale of the land acquired or of the land adjacent to the acquired; and (iv) it should possess 193 similar advantages.
Before such instances of sales can be considered there must be material evidence either by the production of the sale deeds or by examining the parties to the deeds or persons having knowledge of the sales, to prove that the transactions are genuine.
In the light of these principles, the three sale deeds relied upon by the High Court, Ext.
P 14, Ext.
P 15 and Ext.
P 17, pertaining to the small portions of the acquired land executed by the claimants, could not obviously be the basis for the determination of the market value of the land.
These sale deeds had clearly been brought into existence by the claimants in quick succession, in an attempt to inflate the price of the land, after they became aware of the proposed acquisition.
Of these, the land covered by the sale deed Ext.
P 14, dated 14th December, 1956 executed by Tikam Singh Thakur, i.e., just a month before the delivery of the possession, shows a sale of a plot measuring 4,800 sq.ft.
to Dr. Dhirendra Chandra Das, AW 2, for a price of Rs. 2,000/ .
The rate works out to about 42P per sq.
It evidently could not afford a fair criterion of the value of the property on the date of the notification under section 4(1).
Dr. Das admits that he is in Railway service and when he purchased the land he knew that it was being acquired by the South Eastern Railway.
No doubt Dr. Das is a willing friend of Dr. Harisingh Thakur prepared to lend a helping hand but, by no stretch of imagination, could he be treated to be a willing purchaser.
in the true sense of the term.
Though Dr. Das asserts that he had purchased the land for building a house, he admits that he did not construct upon it because he would have been required to invest considerable money for levelling the land making it fit to be utilised as a building site.
This transaction indubitably does not appear to be a real sale and could not furnish any guide for determination of the true market value.
I am afraid, the other two sale deeds, Ext.
P 15 dated 19th December, 1956 and Ext.
P 17 dated 21st February, 1957 executed by Dr. Harisingh Thakur, by which he sold 300 sq.
Of the acquired land to Jhallu Dani, AW 13 for Rs. 150/ and 280 sq.
ft to Baido, AW 15, for Rs. 200/ were, in fact, fictitious sales effected by him after delivery of possession to the South Eastern Railway.
The transactions speak for themselves.
Indeed, Ext.
P 17 was executed by him after issue of the notification under s.4(1).
The first sale was effected by the claimants to show the price of the land to be 50P per sq.
They were evidently not satisfied by this and, therefore, brought the other sale deed into existence, a few days after the notification, showing the rate to be about 72P per sq.
It is needless to stress that such fictitious and unreal transactions which are but 194 speculative in nature could not be taken into account by the High Court at all.
In Raghubans Narain Singh vs The Uttar Pradesh Government (1) this Court quoted with approval the following passage from one of its earlier decision in N. B. Jeajabhoy vs The District Collector, Thana,(2) where it was said: "the question therefore turns upon the facts of each case.
In the context of building potentiality many questions will have to be asked and answered: whether there is pres sure on the land for building activity, whether the acquired land is suitable for building purpose, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has ex tended and within what time, whether buildings have been put up on the lands purchased for building purposes, what is the distance between the built in land and the land acquired and similar other questions will have to be answered.
It is the overall picture drawn on the said relevant circumstances that affords the solution.
" In Raghubans Narain Singh 's case (supra) there was evidence to the effect that there was a school building near the acquired land, that the land abutted on the road and that some houses had been built on the opposite side of the road.
It was nevertheless held by this Court that all this did not constitute evidence of building potentiality.
It was pointed out that there should be evidence, on the record, 'of building activity of a substantial nature, being carried on in the neighbourhood of the acquired land, at about the time when the notification was issued '.
There is complete absence of such evidence in this case.
It is beyond doubt that the acquired land was agricultural land, and had not been diverted for non agricultural purposes.
Indeed, the claimant, Dr. Harisingh Thakur had himself admitted the land to be agricultural land.
The land is on the outskirts of Raigarh town but that itself does not show that the land had a potential value for building purposes.
It was for the claimants to show that at the relevant time there was a tendency of the town to develop in that direction and that prior to the acquisition new buildings had been constructed in the neighbourhood.
Topography of the acquired land which abuts the railway track is given by Jujhar Singh, NAW 1, the then Revenue Inspector, who states that actually paddy used to be grown on the land.
To the north of this land, there was cultivation.
Beyond it, there was a 10 ft.
(1) [1967] I S.C.R. 489.
(2) C.A. Nos. 313 to 315 of 1965 decided on August 30, 1965.
195 broad pucca road.
About three furlongs way from the land was the house of Ambalal.
About one and a quarter miles away there was a skin godown.
In the east, there were small huts.
Beyond them, in the east, at a distance of about half a furlong, there was the house of Jairamvalji.
In the west, about a furlong away, there was an old bungalow.
At about the same distance, there is the burial ground.
In between and all around, there were agricultural fields.
That is the total evidence of the case.
On this evidence it cannot be said that valuation should be made on the basis of the potentiality of the land as building site.
In the absence of comparable sales, the only other alternative to adopt is the capitalised value.
Compensation in respect of the agricultural land should be allowed on the basis of 20 years ' purchase.
The capitalisation basis cannot, however, be accepted in a case where, as in the instant case there is no evidence of the profits yielded from the land.
I would, therefore, for these reasons allow the appeal of the State of Madhya Pradesh.
It is with reluctance that I have written this separate opinion.
There has never been a public undertaking in this country Governmental, Municipal, city or industrial, but that the land holder has generally secured anything from four to forty times as much for the land as its agricultural price, i.e., many times its real value.
This result unfortunately springs from a general tendency of District Judges in hearing a reference under s.18 of the Land Acquisition Act, 1894, to assume that purely agricultural lands, merely by their proximity to a city or town, become endowed with 'special adaptability ' as a building site.
While it is not suggested that unfairly low value should be offered, on the other hand the temptation to over generosity must be equally resisted.
Such generosity at the public expense reacts against the development and against the prosperity of the country and imposes an unnecessary burden on the taxpayer.
Per Curiam In accordance with the opinion of the majority, the appeals are dismissed with casts.
N.V.K. Appeals dismissed.
| Agricultural land belonging to the respondents was acquired by the railways for doubling the railway line, compensation payable for the acquired land was fixed at Re. 1/6 per sq.
But the respondent claimed Re. /12/ per sq.
On the ground that the land had a great potential value as a building site.
On reference the Additional District Judge enhanced the rate of compensation to Re. /41 per sq.
and allowed solatium at 15%.
On appeal the High Court enhanced the compensation to Re.
/8/ per sq.
on further appeal to this Court it was contended on behalf of the appellants that the courts below had erred in treating the land, which was primarily agricultural land, as abadi land overlooking that it had not been declared as such.
[Per Jaswant Singh & Pathak, J. Sen, J. dissenting] Dismissing the appeals.
^ HELD: (1) Taking all the facts into consideration it cannot be said that the basis on which the Additional District Judge and the High Court proceeded was wrong or that the quantum of compensation awarded by the High Court was in any way excessive or exorbitant.
[188 F] (2) The question as to whether a land has potential value as a building site or not is primarily one of fact depending upon several factors such as its condition and situation, the user to which it is put or is reasonably capable of being put, its suitability for building purposes, its proximity to residential, commercial and industrial areas and educational, cultural or medical institutions, existing amenities like water, electricity and drainage and the possibility of their future extension, whether the nearby town is a developing or a prospering town with prospects of development schemes and the presence or absence of pressure of building activity towards the land acquired or in the neighbourhood thereof.
[ 87F F] (3) In the instant case it was clear from the observations of the Special Land Acquisition officer and the Addl.
District Judge that the land had great potential value as a building site.
Moreover the Spl.
Land Acquisition officer did not lead any evidence worth the name to show the price of comparable sites but remained content with the production only of the sale statement prepared by the Revenue Inspector.
The sale statement consisted mostly of sales relating to the year 1951 which is not relevant to the question on hand.
Without examining the vendors or vendees, the sale statement was not admissible in evidence and could not be relied upon.
From the material on record it was clear that Raigarh was a growing town.
Instead of utilising the land for doubling the railway track 184 the railway had built staff quarters.
On three sides of the land there were pucca buildings and on the fourth side there was a metalled road.
[187G H 188C D. [Per Sen, J.(dissenting)] 1.
Upon compulsory acquisition of property, the owner is entitled to the value of the property in its actual condition at the time of expropriation with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the claim for the purpose for which the property is acquired.
The value of the acquired property with all its possibilities had to be adjudged on the material on record.
[191 F, H] Vyricharla Narayana Gajapatiraju vs Revenue Divisional officer, Vizagapatnam, 66 IA 104, followed.
The market price must be fixed with reference to the date of the notification under section 4 irrespective of any trend, for an increase to the value thereof.
The basis for determination of the market value of the land within section 23(1)(i) of the Act is the value of the land to the owner.
Only such transactions would be relevant which can fairly be said to afford a fair criterion of the value of the ,, property as at the date of the notification.
That test is clearly not fulfilled in l? the present case[192A B] 3.
In a reference under section 18 of the Act the burden of providing that the amount of compensation awarded by the Collector is inadequate lies upon the claimant, and he must show affirmatively that the Collector had proceeded upon a wrong basis.
The nature and the burden of establishing that he was wrong, depend on the nature of the enquiry held by him.
When the proceedings before the Collector disclose that the award was not reasonably supported by the material before him or when the basis was the application of a "multiple" which could not be justified on any rational ground, the burden can be discharged by a slight evidence.
But that is not the case here.
[191C D] 4.
In the present case the High Court fell into an error in overlooking the fact that the acquired land was agricultural land.
It was recorded as a raiyati land.
The land was not recorded as abadi as wrongly assumed by the High Court.
The claimants admitted that the land was actually under cultivation.
The Revenue Inspector stated that the land was a paddy field and was surrounded by agricultural lands.
That being so the District Judge was clearly wrong in treating the land to be abadi and calculating compensation on the footing of its being a building site.
[189E 190A] 5.
Secondly, the land was lying undeveloped and undiverted.
Unless there was a development scheme the land could not be valued as a building site.
At the time of the notification under section 4(1) there was no recent building activity near about the land.
The land could be put to better use provided it was fully developed as a building site.
The claimants were therefore entitled to the valuation of the land as agricultural land with an additional allowance for its future potentiality as a building site.
[190H 191B] 6.
In fixing the amount of compensation the court has to take into consideration the prevailing market value of the land at the date of the notification unders.
4(1) and such market value has to be determined by reference to the price which a willing seller might have reasonably expected for similar property from 1 a willing purchaser.
In a comparable sale the features are: (1) it must be 185 within a reasonable time of the date of notification under section 4(1), (2) it should be a bona fide transaction; (3) it should be a sale of the land acquired or of the land adjacent to the land acquired and (4) it should possess similar advantages.
[92G 193A] 7.
In the instant case the sale deeds relied upon by the High Court could not obviously be the basis for the determination of the market value of the land.
These sale deeds had clearly been brought into existence by the claimants in quick succession in an attempt to inflate.
the price of the land after they became aware of the proposed acquisition.
The transactions which were examined by the High Court were apparently fictitious and unreal and are speculative in nature and could not be taken into account at all.
[193B C, 193H 194A] 8.
On the evidence produced it could not be said that valuation should be made on the basis of potentiality of the land as building site.
There is complete absence of evidence of building activity of a substantial nature being carried on in the neighbourhood of the acquired land at about the time when the notification was issued.
The claimants themselves did admit that the land was agricultural land.
[195B, 194F C] Raghubans Narain Singh vs The U.P. Govt.
, ; N. B. Jeejabhoy vs The District Collector, Thana, C.A. Nos. 313 to 315 of 1965 decided on Aug 1965: referred to.
In the absence of comparable sales, the only other alternative to adopt is the capitalised value.
Compensation in respect of the agricultural land should be allowed on the basis of 20 years ' purchases.
The capitalisation basis cannot, however, be accepted in a case where there is no evidence of the profits yielded from the land.
[195C]
|
Appeal No. 761 of 1957.
Appeal by special leave from the judgment and order dated February 24, 1955, of the former Bombay High Court in I.T.R. 48/X of 1954.
Hardayal Hardy and D. Gupta, for the appellant.
N. A. Palkhivala and I. N. Shroff, for the respondent.
November 17.
The Judgment of the Court was delivered by SHAH, J.
The Income Tax Appellate Tribunal, Bombay Bench "A", referred under section 66(1) of the Indian Income Tax Act, 1922 hereinafter referred to as the Act the following question: "Whether the sum of Rs. 15,608 should have been included in the assessee Company 's "profit" for the purpose of determining whether the payment of a larger dividend than that declared by it would be unreasonable ?" The High Court answered the question in the negative.
Against the order of the High Court, with special leave under article 136 of the Constitution, this appeal is preferred.
M/s. Bipinchandra Maganlal & Co., Ltd. hereinafter referred to as the Company is registered under the Indian Companies Act, The Company is one in 495 which the public are not substantially interested within the meaning of section 23A Explanation of the Act.
Its paid up capital at the material time was Rs. 20,800 made up as follows: 20 shares of Rs. 50 each fully paid up and 1980 shares of Rs. 50 each, Rs. 10 being paid up per share.
In December 1945, the Company purchased certain machinery for Rs. 89,000 and sold it sometime in March, 1947, for the price for which it was originally purchased.
In the books of account of the Company, the written down value of the machinery in the year of account 1946 47 (April 1, 1946 to March 31, 1947) was Rs. 73,392.
The trading profits of the Company as disclosed by its books of account for the year 194647 were Rs. 33,245.
At the General Meeting held on October 21, 1947.
the Company declared a dividend of Rs. 12,000 for the year of account.
In assessing tax for the year of assessment 1947 48, the Income Tax Officer computed the assessable income of the Company for the year of account 1946 47 at Rs. 48,761 after adding back to the profit of Rs. 33,245 returned by the Company, Rs. 15,608 realised in excess of the written down value of the machinery sold in March, 1947.
The Income Tax Officer passed an order under section 23A of the Act that Rs. 15,429 (being the undistributed portion of the assessable income of the Company as reduced by taxes payable) shall be deemed to have been distributed as dividend amongst the shareholders as at the date of the General Meeting, and the proportionate share of each shareholder shall be included in his total income.
Appeals preferred against his order to the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal proved unsuccessful, but the Appellate Tribunal at the instance of the Company referred the question set out hereinbefore to the High Court at Bombay under a. 66(1) of the Act.
Section 23A(1) of the Act as it stood at the relevant time (in so far as it is material) was as follows: "Where the Income Tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company upto the end 496 of the sixth month after its accounts for that previous year are laid before the company in general meeting are less than 60% 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. . .
Clearly, by section 23A, the Income Tax Officer is required to pass an order directing that the undistributed portion of the assessable income of any company (in which the public are not substantially interested) shall be deemed to have been distributed as dividends amongst the shareholders if he is satisfied that (i) the company has not distributed 60% of its assessable income of the previous year reduced by the Income tax and super tax payable, (ii) unless payment of a dividend, or a larger dividend than that declared, having regard to (a) losses incurred by the company in the earlier years or (b) the smallness of the profits made in the previous year, be unreasonable.
The total assessable income of the Company for the year of account was Rs. 48,761 and the tax payable thereon was Rs. 21,332: 60% of Rs. 27,249 (assessable income reduced by the income tax and super tax due) exceeded the dividend declared by Rs. 4,458.
The first condition to the exercise of jurisdiction by the Income Tax Officer under section 23A was therefore indisputably fulfilled.
But the Income Tax Officer had 497 still to be satisfied whether having regard to the smallness of the profit (there is no evidence in this case that loss was incurred by the Company in earlier years), it would be unreasonable to distribute dividend larger than the dividend actually declared.
The Income Tax Officer did not expressly consider this question: he rested his decision on the rejection of the contention raised by the Company that the difference between the price of the machinery realised by sale and the written down value in the year of account could not be taken into account in passing an order under section 23A.
He, it seems, assumed that if that difference be taken into account, distribution of larger dividend was not unreasonable, and the Tribunal proceeded upon the footing that the assumption was correctly made.
Counsel for the Revenue submits in support of the appeal that the expression " smallness of profit " means no more than smallness of the assessable income, and that in any event, in the computation of profits, the amount realised by sale of the machinery in the year of account in excess of its written down value was liable to be included in considering whether the condition relating to "smallness of profit" was fulfilled.
At the material time, section 2(6C) of the Act defined "income" as inclusive amongst others of any sum deemed to be profits under the second proviso to cl.
(vii) of sub section
(2) of section 10.
By section 10, in the computation of profits or gains of an assessee under the head "Profits and gains of business, profession or vocation" carried on by him, the amount by which the written down value of any building, machinery or plant which has been sold, discarded or demolished.
or destroyed exceeds the amount for which the building, machinery or plant is actually sold or its scrap value is to be allowed as a deduction.
This allowance is however subject to an exception prescribed by the second proviso to el.
(vii) sub section
(2) of section 10 that where the amount for which any building, machinery or plant is sold exceeds the written down value, so much of the 63 498 excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profit of the previous year in which the sale took place.
In computing the profits and gains of the Company under section 10 of the Act, for the purpose of assessing the taxable income, the difference between the written down value of the machinery in the year of account and the price at which it was sold (the price not being in excess of the original cost) was to be deemed to be profit in the year of account, and being such profit, it was liable to be included in the assessable income in the year of assessment.
But this is the result of a fiction introduced by the Act.
What in truth is a capital return is by a fiction regarded for the purposes of the Act as income.
Because this difference between the price realized and the written.
down value is made chargeable to income tax, its character is not altered, and it is not converted into the assessee 's business profits.
It does not reach the assessee as his profits: it reaches him as part of the capital invested by him, the fiction created by section 10(2)(vii) second proviso notwithstanding.
The reason for introducing this fiction appears to be this.
Where in the previous years, by the depreciation allowance, the taxable income is reduced for those years and ultimately the asset fetches on sale an amount exceeding the written down value, i.e., the original cost less depreciation allowance, the Revenue is justified in taking back what it had allowed in recoupment against wear and tear, because in fact the depreciation did not result.
But the reason of the rule does not alter the real character of the receipt.
Again, it is the accumulated depreciation over a number of years which is regarded as income of the year in which the asset is sold.
The difference between the written down value of an asset and the price realized by sale thereof though not profit earned in the conduct of the business of the assessee is nationally regarded as profit in the year in which the asset is sold, for the purpose of taking back what had been allowed in the earlier years.
A company normally distributes dividends out of its business profits and not out of its assessable income.
499 There is no definable relation between the assessable income and the profits of a business concern in a commercial sense.
Computation of income for purposes of assessment of income tax is based on a variety of artificial rules and takes into account several fictional receipts, deductions and allowances.
In considering whether a larger distribution of dividend would be unreasonable, the source from which the dividend is to be distributed and not the assessable income has to be taken into account.
The Legislature has not provided in section 23A that in considering whether an order directing that the undistributed profits shall be deemed to be distributed, the smallness of the assessable income shall be taken into account.
The test whether it would be unreasonable to distribute a larger dividend has to be adjudged in the light of the profit of the year in question.
Even though the assessable income of a company may be large, the commercial profits may be so small that compelling distribution of the difference between the balance of the assessable income reduced by the taxes payable and the amount distributed as dividend would require the company to fall back either upon its reserves or upon its capital which in law it cannot do.
For instance, in the case of companies receiving income from property, even though tax is levied under section 9 of the Act on the bona fide annual value of the property, the actual receipts may be considerably less than the annual value and if the test of reasonableness is the extent of the assessable income and not the commercial profit, there may frequently arise cases in which companies may have to sell off their income producing assets.
The Legislature has deliberately used the expression "smallness of profit" and not "smallness of assessable income" and there is nothing in the context in which the expression "smallness of profit" occurs which justifies equation of the expression "profit" with "assessable income".
Smallness of the profit in section 23A has to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional.
This view appears to have been taken by the High Courts in India without any dissentient 500 opinion, see Sir Kasturchand Ltd. vs Commissioner of Income Tax, Bombay City (1), Ezra Proprietary Estates Ltd. vs Commissioner of Income Tax, West Bengal (2) and Commissioner of income Tax, Bombay City vs F. L. Smith & Co., (Bombay) Ltd. (3).
By the fiction in section 10(2)(vii) second proviso, read with section 2(6C), what is really not income is, for the purpose of computation of assessable income, made taxable income: but on that account, it does not become commercial profit, and if it is not commercial profit, it is not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable.
In our judgment, the High Court was right in holding that the amount of Rs. 15,608 was not liable to be taken into account in considering whether having regard to the smallness of the profit made by the Company, it would be unreasonable to declare a larger dividend.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
(1) (1940) XVII I.T.R. 493.
(2) (1950) XVIII I.T.R. 762.
(3) (1959) XXXV I.T.R. 183.
| The respondent who was a District and Sessions Judge in the erstwhile State of Pepsu was removed from service on April 7, 1953 by an order passed by the President of India who was then in charge of the administration of the State.
A representation made by the respondent on May 18, 1955, was considered by the Council of Ministers of the State as in the meantime the President 's rule had come to an end, and its views were expressed in the form of a Resolution dated September 28, 1955; but before taking any action it invited the advice of the Public Service Commission.
On receipt of the report of the Public Service Commission, the Council of Ministers considered the matter again on March 8, 1956, and its views were recorded in the minutes of the proceedings.
On August 11, 1956, the representation made by the respondent was considered over again by the Council and a final conclusion was reached in respect of it.
In accordance with the said conclusion an order was passed which was communicated to the respondent to the effect that he might be re employed on some suitable post.
On May 5, 1958, the respondent instituted a suit against the State of Punjab for a declaration that the removal of his service on April 7, 1953, was illegal, and filed an application under O. 14, r. 4, and O. 11, r. 14, of the Code of Civil Procedure for the production of certain documents, which included the proceedings of the Council of Ministers dated September 28, 1955, March 8, 1956, and August 11, 1956, and the report of the Public Service Commission.
The State objected to the production of the said documents claiming privilege under section 123 of the , and the Chief Secretary of the State filed an affidavit giving reasons in support of the claim.
The question was whether having regard to the true scope and effect of the provisions of sections 123 and 167 of the Act the claim of privilege raised by the State was sustainable.
Held, that the documents dated September 28, 1955, March 8, 1956, and August II, 1956, which embodied the minutes of 372 the meetings of the Council of Ministers indicating the advice which the Council ultimately gave to the Rajpramukh, were expressly saved by article 163(3) of the Constitution of India and fell within the category of documents relating to " affairs of State " within the meaning of section 123 of the .
Accordingly, they were protected under section 123, and as the head of the department, the Chief Secretary, did not give permission for their production, the Court cannot compel the State to produce them.
Held, further (Subba Rao, J., dissenting), that the report of the Public Service Commission being the advice tendered by it, was also protected under section 123 of the Act.
Held, also (Kapur, J., dissenting), that the words "records relating to affairs of State " in section 123 cannot be given a wide meaning so as to take in every document pertaining to the entire business of State, but should be confined only to such documents whose disclosure may cause injury to the public interest.
The second clause of section 162 refers to the objections both as to the production and admissibility of the document and entitles the court to take other evidence in lieu of inspection of the document in dealing with a privilege claimed or an objection raised under section 123, to determine the validity of the objections.
Case law reviewed.
Per Sinha, C. J., Gajendragadkar and Wanchoo, jj.
Though under sections 123 and 162 the Court cannot hold an enquiry into the possible injury to public interest which may result from the disclosure of the document in question, the matter being left for the authority concerned to decide, the Court is competent to hold a preliminary enquiry and determine the validity of the objection to its production and that necessarily involves an enquiry into the question as to whether the document relates to affairs of State under section 123.
Where section 123 confers mide powers on the head of the department to claim privilege on the ground that the disclosure may cause injury to public interest, scrupulous care must be taken to avoid making a claim for such a privilege on the ground that the disclosure of the document may defeat the defence raised by the State.
The apprehension that the disclosure may adversely affect the head of the department or the Minister in charge of the department or even the Government in power, or that it may provoke public criticism or censure in the Legislature, should not weigh in the mind of the head of the department and the sole test which should determine his decision is injury to public interest and nothing else.
The privilege under section 123 should be claimed generally by the Minister in charge who is the political head of the department concerned ; if not, the Secretary of the department should 373 make the claim, and the claim should always be made in the form of an affidavit.
When the affidavit is made by the Secretary, the Court may in a proper case, require an affidavit of the Minister himself.
The affidavit should show that each document in question has been carefully read and considered, and the person making the affidavit is satisfied that its disclosure would lead to public injury.
If there are series of documents included in a file it should appear from the affidavit that each one of the documents, whose disclosure is objected to, has been duly considered by the authority concerned.
The affidavit should also indicate briefly within permissible limits the reason why it is apprehended that their disclosure would lead to injury to public interest.
If the affidavit produced in support of the claim ' for privilege is found to be unsatisfactory a further affidavit may be called, and in a proper case the person making the affidavit whether he is a Minister or the Secretary should be summoned to face cross examination on the relevant points.
The provisions of O. 11, r. 19(2), of the Code of Civil Procedure must be read subject to section 162 of the and where a privilege is claimed at the stage of inspection under O. 11, r. 19(2), of the Code, the Court is precluded from inspecting the privileged document in view of section 162 of the Act.
Per Kapur, J.
The words of section 123 of the Act are very wide and cover all classes of documents which may fall within the phrase " affairs of State ", some noxious and others inno cuous, and may even appear to be unduly restrictive of the rights of the litigant but if that is the law the sense of responsibility of the official concerned and his sense of fair play has to be trusted.
Under that section discretion to produce or not to produce a document is given to the head of the department and the court has not the power to override the ministerial certificate against production.
The words " or take other evidence to enable it to determine on its admissibility" in section 162 on their plain language do not apply to production and the taking of evidence must have reference to admissibility.
The section does not entitle the court to take other evidence i.e., other than the document, to determine the nature of the document or the reasons impelling the head of the department to withhold the production of the document.
It is permissible for the Court to determine the collateral facts whether the official claiming the privilege is the person mentioned in section 123, or to require him to file a proper affidavit or even to cross examine him on such matters which do not fall within the enquiry as to the nature of the document or nature of the injury.
He may also be cross examined as to the existence of the practice of the department to keep documents of the class 374 secret but beyond that the ministerial discretion should be accepted and it should neither be reviewed nor overruled.
Per Subba Rao, J. (1) " Records relating to affairs of State" in section 123 of the Act mean documents of State whose production would endanger the public interest; documents pertaining to public security, defence and foreign relations are documents relating to affairs of State; unpublished documents relating to trading, commercial or contractual activities of the State are not, ordinarily, to be considered as documents relating to affairs of State, but in special circumstances they may partake of that character and it is a question of fact in each case whether they relate to affairs of State or not in the sense that if they are disclosed public interest would suffer.
(2) Under no circumstances can a court inspect such a docu ment or permit giving of secondary evidence of its contents.
(3) Under section 162 the Court has overriding power to disallow a claim of privilege raised by the State, but in its discre tion, the court will exercise its power only in exceptional circumstances when public interest demands.
The said claim shall be made by an affidavit filed by the Minister in charge of the department concerned describing the nature of the document in general and broadly the category of public interest its non disclosure purports to serve.
Ordinarily, the court shall accept the affidavit of a Minister, but in exceptional circumstances, when it has reason to believe that there is more than what meets the eye, it can examine the Minister and take other evidence to decide the question of privilege.
(4) The disclosure of the report of the Public Service Com mission may expose the Government if the latter ignores a good advice, but such an exposure is certainly in public interest and in a conflict between the administration of justice and the claim of privilege by the State, the claim must be overruled.
|
t Petition Nos. 100 and 1078 of 1988.
(Under Article 32 of Constitution of India).
R.D. Upadhyaya, H.N. Salve and Rajiv K. Garg for the petitioners.
R.K. Jain, Ashok Grover and S.C. Paul for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
1.
The two writ petitions raise common questions of fact and law and accordingly they are disposed of by a common judgement.
The petitioners in both the writ petitions are daily rated workers working in the respondent Corporation and they are seeking relief under article 32 of the Constitution for a Writ of Mandamus or other directions to regularise their services in the respective units and to pay them equal wages with initial basic pay, D.A. and other admissible allowances at par with regularly appointed employees of the respondent performing the same or similar duties.
Admittedly, they have been appointed on daily wages between 1983 and 1986 and they have been working eversince.
It is contended by them that despite their continuous service respondent has resorted to unfair labour practice in creating artificial break in service to deprive them of the benefit of continuous serv ice.
As they are not being paid equal wages at par with regular employees, this offends their right to equality of pay under article 14 and such action is contrary to the provi sions of article 39.
The respondent had raised several disputed questions of fact which needed elaborate investigation.
This Court by its order dated January 27, 1989, after heating the counsel on either side, directed the Industrial Tribunal at Delhi to examine the contentions of the petitioners and the stand taken by the respondent, on all issues after providing full opportunity to the parties of hearing including leading of evidence, oral and documentary, and to make a report to the Registry of this Court within six months.
Pursuant to the above direction, the Industrial Tribunal afforded reasonable opportunity to both parties.
It would appear that both parties agreed that oral evidence need not be 516 adduced (though respondent is now disputing that fact), and both the parties filed documentary evidence.
The Tribunal held 12 sittings, heard the counsel, considered the record and submitted its report dated September 15, 1989.
The respondent has filed its objections to the report.
We have heard learned counsel for the petitioners and Shri R.K. Jain, learned counsel for the respondent.
The Tribunal found thus: "After taking into consideration all the facts and circumstances I come to the conclusion that all the petitioners/workmen are performing same or similar duties as are performed by the incumbents of group 'D ' posts of the DSMDC and consequently on the principle of 'equal pay for equal work ' enshrined in article 39(d) read with articles 14 and 16 of the Constitution, all these workmen petitioners are entitled to equal pay for equal work in relation to the regular employees.
" On the question of the nature of the work being discharged by the petitioners, it found that some of the workmen are shown to have been working with designa tions such as Wages Slip, Truck Loading Clerk, Attendance Keeper Clerk, Drill Man, Office Work, Stone Bricks Clerk Fitter Survey Section, Pipe Fitter, Operator, Pump Operator, Creched Check Post Clerk, Permit Clerk etc., which go to suggest that those workmen were performing skilled or semi skilled jobs or work of clerical nature.
1t, therefore, suggested that the workmen with these designations may also be equated with incumbents of group 'D ' posts However, it held that their scale of pay and the entitlement to the wages should be worked out in an inquiry under section 33 C(2) of the Industrial Disputes Act.
It also further found that since the petitioners have been appointed way back between 1983 and 1986, they are to be regularised; first 1/3rd of them immediately in the pay scale of Rs. 196232 or the corresponding revised scale with allowances; another onethird of the petitioners workmen to be regularised by April 1, 1990 and the remaining one third to be regularised by April 1, 1991.
The workmen are entitled to one increment for every two completed years of their service counted from the date of commencement of service under the Management and by ignoring the artificial breaks created by the respondent.
It also held that the dismissal of the workmen without following the rule of last come first go is an unfair labour practice, arbitrary and discriminatory.
It also held that the justification for not regularising the service of the petitioners, namely, unlikelihood of the extension of the mining lease after its expiry was believed by the subsequent advertisement calling applications for filling up the vacan cies.
Accordingly, it held that non regularisation due to uncertainly of the contract is only a pretence and is not valid in law.
It also held that 517 though some of the persons like S/Shri Chander Pal Pawar, Lok Nath Rai and Dinesh Kumar are eligible to hold the post of Assistant Gr.
III and their reversion for lack of requi site educational qualification is discriminatory, arbitrary and is an abuse of power by the Management.
Accordingly, it suggested the framing of a scheme for regularising the services of all the petitioners.
Shri R.K. Jain, learned counsel for the respondent, has vehemently assailed the tenability of all the recommen dations.
It is his further contention that the respondent did not agree to dispense with adducing oral evidence and despite the direction of this Court to submit a preliminary report the Tribunal is wrong in stating that the respondent agreed that the Tribunal would send the final report.
He disputed the findings on merits pointing out various conten tions raised by the respondent in its pleading, objections and the documents filed before the Tribunal.
It is now settled law that the statement of facts recorded by a Court or Quasi Judicial Tribunal in its proceedings as 'regards the matters which transpired during the hearing before it would not be permitted to be assailed as incorrect unless steps are taken before the same forum.
It may be open to a party to bring such statement to the notice of the Court/Tribunal and to have it deleted or amended.
It is not, therefore, open to the parties or the counsel to say that the proceedings recorded by the Tribunal are incorrect.
The further contention that the respondent did not agree to dispense with the adduction of oral evidence and that the report should be the preliminary report cannot be counte nanced.
Accordingly, we hold that it is no longer open to the respondent to say that it has not consented to dispense with adducing oral evidence and to the Tribunal submitting its final report instead of a preliminary one as directed by this Court.
During the pendency of these writ petitions, 16 workmen were retrenched.
Shri R.K. Jain, learned counsel appearing for the respondent, has agreed that if there.is work and any of these sixteen persons reports for duty, work shall be provided.
This Court further directed to pay the petitioners at the rate of Rs.25 per day.
The main controversy centres round the question whether some petitioners are possessed of the requisite qualifications to hold the posts so as to entitle them to be confirmed in the respective posts held by them.
The indis putable facts are that the petitioners were appointed be tween the period 1983 and 1986 and eversince, they have been working and have gained sufficient experience in the actual discharge of duties attached to the posts held by them.
Practical experience would always aid the person to effec tively discharge the 518 duties and is a sure guide to assess the suitability.
The initial minimum educational qualification prescribed for the different posts is undoubtedly a factor to be reckoned with, but it is so at the time of the initial entry into the service.
Once the appointments were made as daily rated workers and they were allowed to work for a considerable length of time, it would be hard and harsh to deny them the confirmation in the respective posts on the ground that they lack the prescribed educational qualifications.
In our view, three years ' experience, ignoring artificial break in serv ice for short period/periods created by the respondent, in the circumstances, would be sufficient for confirmation.
If there is a gap of more than three months between the period of termination and re appointment that period may be exclud ed in the computation of the three years period.
Since the petitioners before us satisfy the requirement of three years ' service as calculated above, we direct that 40 of the senior most workmen should be regularised with immediate effect and the remaining 118 petitioners should be regula rised in a phased manner, before April 1, 1991 and promoted to the next higher post according to the standing orders.
All the petitioners are entitled to equal pay at par with the persons appointed on regular basis to the similar post or discharge similar duties, and are entitled to the scale of pay and all allowances revised from time to time for the said posts.
We further direct that 16 of the petitioners who are ousted from the service pending the writ petition should be reinstated immediately.
Suitable promotional avenues should be created and the respondent should consider the eligible candidates for being promoted to such posts.
The respondent is directed to deposit a sum of Rs. 10,000 in the Registry of this Court within four weeks to meet the remu neration of the Industrial Tribunal.
The writ petitions are accordingly allowed, but without costs.
P.S.S. Petitions allowed.
| The petitioners, daily rated workers of the respondent Corporation appointed between 1983 and 1986, sought a writ of mandamus to regularise their services in the respective units and payment of wages at par with regularly appointed employees of the respondent performing the same or similar duties.
The Industrial Tribunal, which was directed by the Court to examine the matter, found that all the petitioners/work men were performing same or similar duties as were performed by the incumbents of Group 'D ' posts of the respondent Corporation and concluded that on the principle of 'equal pay for equal work ' enshrined in Article 39(d) read with Articles 14 and 16 of the Constitution they were entitled to equal pay for equal work in relation to the regular employ ees.
It further held that non regularisation due to uncer tainty of the contract was only a pretence which was not valid in law, and that reversion of some of the petitioners for lack of requisite educational qualification was discrim inatory, arbitrary and an abuse of power by the management.
The respondent assailed the findings on merits pointing out various contentions raised in its pleading, objections and the documents filed before the Tribunal.
It also con tended that it had not consented to dispense with adducing oral evidence, and that despite the direction of the Court to submit a preliminary report the Tribunal was wrong in 514 stating that the respondent had agreed that the Tribunal would send the final report.
Allowing the writ petitions, the Court, Head l.
The petitioners are entitled to equal pay at par with the persons appointed on regular basis to the similar post or discharge similar duties in the respondent Corpora tion, and are entitled to the scale of pay and allowances revised from time to time for the said posts.
[518D] 2.
The statement of facts recorded by a Court or Quasi judicial Tribunal in its proceedings as regards the matters which transpired during the hearing before it would not be permitted to be assailed as incorrect unless steps are taken before the same forum.
It may be open to a party to bring such statement to the notice of the Court/Tribunal and to have it deleted or amended, It was not, therefore, open to the respondent in the instant case to say that the proceed ings recorded by the Tribunal were incorrect.
[517C D] 3.
Practical experience would always aid a person to effectively discharge the duties and is a sure guide to assess his suitability.
The initial minimum educational qualification prescribed for the different posts is undoubt edly a factor to be reckoned with, but it is so at the time of the initial entry into service.
[517H;518A] In the instant case, the petitioners were appointed between the period 1983 and 1986 and eversince, they have been working and had gained sufficient experience in the actual discharge of duties attached to the posts held by them.
Once the appointments were made and they were allowed to work for a considerable length of time as such, it would be hard and harsh to deny them confirmation in the respec tive posts on the ground that they lack the prescribed educational qualifications.
Three years ' experience ignoring artificial break in service for short period/periods created by the respondent in the circumstances, would be sufficient for confirmation.
Since the petitioners satisfy the require ment of three years ' service so calculated, 40 of the sen ior most of them should be regularised with immediate effect and the remaining 118 should be regularised in a phased manner before April 1, 1991 and promoted to the next higher post according to the standing orders, [517G:518B D] 4.
Those of the petitioners who were ousted from service pending 515 the writ petitions to be reinstated immediately.
[518D E]
|
Civil Appeal No. 2104 of 1969.
Appeal by Special Leave from the Judgment and order dated the 27th February, 1969 of the Industrial Tribunal, Bihar, Patna in reference No. 54 of 1966.
section V. Gupte and U. P. Singh for the Appellant.
E A. K. Nag and D. P. Mukherjee for Respondents.
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
This appeal is by special leave granted by this Court against the award of the Industrial Tribunal, Bihar at Patna in reference No. 54 of 1966 made by the Government of Bihar on 25th November, 1966.
The special leave granted is limited only to the question whether there should be a contributory provident fund scheme on the basis of basic wages or total wages.
It was noted at the time of granting the special leave that the appellant Board is willing to extend that scheme to all the workers except the Government servants who are on deputation and those to whom the Employees Provident Fund Act applies.
Therefore the only item in reference No. 54 of 1966 which is relevant for the purpose of this appeal is the following: "Whether the benefit of the Employees ' Provident Fund Act, 1952 should be extended to any additional categories of workmen ? If so, what should be the terms and conditions and from what date ?" The Employees ' Provident Fund Act applies only to establishments which are factories.
It could be applied to establishments which are not factories if the Central Government by notification in the official 44 Gazette specifies in this behalf.
The industry in question" electricity including the generation, transmission and distribution thereof, is on to which the Act applies.
But as is well known only a small proportion of employees connected with the generation of electricity is in establishment which are factories.
The transmission and distribution is all over the State and the employees concerned with transmission and distribution and the maintenance of those lines of transmission and distribution are spread all over the State and probably far outnumber those working in establishments which are factories.
To them the Employees ' Provident Fund Act does not apply.
The Board maintains a Contributory Provident Fund where the contribution is on the basis of basic wage, the Board and the employees contributing equally.
The workmen claimed that all workmen of the Board should have the same and similar benefits and that therefore there should be no distinction between the Board 's Contributory Provident Fund scheme and the scheme under the Employees Provident Fund Act.
Moreover, the contribution under the Act is 8 per cent whereas under the Board 's scheme it is 6.25 per cent.
The employees also contended that the services of the workmen of the Board are liable to be transferred from one establishment to another both which may not he covered by the same scheme under the Act and therefore it will bring about serious injustice if they are deprived of their benefits under the Act, and such anomalies will be removed by making the benefits under both the schemes similar.
The Board 's contention was that this would impose additional financial liabilities which the Board would not be able to bear.
Therefore, the main question which the Tribunal had to consider was the Board 's financial capacity to implement the Provident Fund scheme as demand: ed by the workmen.
It seems to have been argued on behalf of the workmen that the State Government is the financier of the Board which charges interest now at the rate of 6.25 per cent as against the previous 4 per cent per annum.
It, was also contended that no scheme run by the Board was running at a loss.
Exhibit 17, purported to contain trading results of the Board., was shown to the Tribunal and it was argued that in the year ending March 1969 Board 's gross profits amounted to Rs. 305.12 lakhs and it had been continuously rising from Rs. 59.39 lakhs in 1961.
Exhibit 18 shows the loans which have been received from the Government by the Board and the balance sheet shows a very large amount in the shape of interest payable to the Government.
It was argued on behalf of the Union that this amount should be taken as dividend to be paid to the Government by the Board and should not be taken into consideration while deciding matters regarding benefits to be made available to its employees.
The validity of none of these contentions was considered by the Tribunal.
It referred to an award made by it in 1964 in reference No. 19 of 1960 in which it had held that if the interests realised by the State were excluded from consideration, there would be surplus in favour of the Board.
In that award it had been pointed out that it had not been explained by the management how the depreciation had been calculated.
That award also pointed out that one of the main reasons for the deficits shown was heavy interest on the capital investment, that in an electrical establishment capital investments are heavy in the initial stages, that the Board expected that after the load developed fully the scheme would start giving adequate 45 profits.
The Tribunal thought that the position at present was not worse than what it was earlier and that therefore the Board should extend the benefits of the Contributory Provident Fund to all workmen other than those who are covered by the Act.
It therefore ordered that the contribution should be 6.25 per cent but not on the basic wages but on the total wages.
The Tribunal has treated the whole matter in a very perfunctory manner.
The main question for consideration by the Tribunal was the financial capacity of the Board.
It has made no effort at all to analyse the balance sheet of the Board to show the actual results of its working.
It has made no effort to work out the financial implications of its order.
It has not made it clear what exactly are the total wages.
In Gramophone Co. vs Its Workmen(1) it was held by this Court that: "Before the real profit for each of the relevant years is ascertained amounts to be provided for taxation and for development rebate reserve could not be deducted in order to ascertain the financial capacity of the employer.
In considering the question of provident fund and gratuity which stands more or less on the same footing the industrial tribunal has to look at the profits made without considering provision for taxation in the shape of income tax and for reserves.
The provision for income tax and for reserves must take second place as compared to provision for wage structure and gratuity, which stands on the same footing as provident fund which is also a retiral benefit.
Payment towards, provident fund and gratuity is expense to be met by an employer like any other expense including wages and if the financial position shows that the burden of payment of gratuity and provident fund can be met without undue strain on the financial position of the employer, that burden must be borne by the employer.
It will certainly result in some reduction in profits; but if the industry is in a stable condition and the burden of provident fund and gratuity does not result in loss to the employer that burden will have to be borne by the employer like the burden of wage structure in the interest of social justice.
While on the one hand casting of this burden reduces the margin of profit, on the other hand it will result in the reduction of taxation in the shape of income tax." That case was a case of an ordinary commercial concern.
Even so it was noticed that the stability of the industry as well as the fact that the burden of provident fund and gratuity does not result in loss to the employer are to be taken into consideration.
the actual burden was calculated and it was pointed out that 63 per cent of it would be met by reduction in taxation.
Nothing of the sort has been done by the Tribunal in this case.
It is true that in that case it was said that the amounts to be provided for taxation and for development rebate reserve could not be deducted in order to ascertain the financial capacity of the employer.
Nothing was said there about the depreciation reserve (1) [1964] II L. L. J.131.
46 which is obligatory under section 68 of the the Electricity Board is not an ordinary commercial concern.
It is a public service institution.
It is not expected to make and profit.
It is expected to extend the supply of electricity to unserved areas without reference to considerations of loss that might be incurred as a result of such extension.
The Government makes subventions to the Board for the purposes of the Act.
Section 59 of the Electricity supply Act, 1948 provides that as far as practicable and after taking credit for any subventions from the State Government the Board shall carry on its operations so as not to incur a loss.
Under section 64 the State Government may advance loans to the Board and under section 65 the Board itself has the power to borrow.
Under section 66 the State Government may guarantee the payment of principal and interest of any loan proposed to be raised by the Board.
Under section 67 after meeting its operating maintenance and management expenses and after provision has been made for the payment of taxes on its income and profits the revenues of the Board have to be distributed as far as they are available in the following order, namely: (i) interest on bonds not guaranteed under section 66; (ii) interest on stock not so guaranteed; (iii)credits to depreciation reserve under section 68; (iv) interest on bonds guaranteed under section 66: (v) interest on stock so guaranteed; (vi) interest on sums paid by the State Government under guarantees under section 66; (vii)the write down of amounts paid from capital under the proviso to sections 59; (viii)the write down of amounts in respect of intangible assets to the extent to which they are actually appropriated in any year for the purpose in the books of the Board; (ix) contribution to general reserve of an amount not exceeding one half of one per centum per annum of the original cost of fixed assets employed by the Board so however that the total standing to the credit of such reserve shall not exceed fifteen per centum of the original cost of such fixed assets; (x) interest on loans advanced or deemed to be advanced to the Board under section 64, including arrears of such interest: (xi) the balance to be appropriated to a fund to be called the Development Fund to be utilised for (a) purposes beneficial, in the opinion of the Board, to electrical development in the State; (b) repayment of loans advanced to the Board under section 64 and required to be repaid: 47 Provided that where no such loan is outstanding, one half of the balance aforesaid shall be credited to the Consolidated Fund of the State.
Section 68 lays an obligation on the Board to make a credit to the depreciation reserve in the prescribed manner.
The facile assumption by the Tribunal that the interest should No. be taken into account in working out the profits is not borne out by the provisions of the statute.
Indeed the Tribunal did not look into the Act at all.
Whether in view of the statutory obligations laid on ii under the various sections just now referred to in analysing the capacity of the Board to bear any additional burden in the matter of provident fund or other amenities the same considerations that applied in the case of private commercial concerns could be applied is a rather difficult question.
In fact the decision might very often depend on a close analysis of the financial condition of the Board.
We do not want at present to express one view or the other.
one thing at least is obvious, that the various sums payable under the provisions of section 67 have to be deducted before the profits could he ascertained.
Even with regard to the depreciation reserve the provisions of section 68 may have to be taken into account.
If it is not it would have to be met by loans on which interest will have to be paid and deduction of interest so paid will have to be taken into account in calculating the profits.
The contribution to the depreciation reserve is a statutory obligation and is a definite proportion whereas it is open to an ordinary commercial concern to credit any amount to the depreciation reserve.
These and other matters cannot be properly decided in the absence of a detailed examination of the finances of the Board.
That is why we said that the Tribunal has dealt with the matter in a perfunctory way.
It should.
be directed to dispose of the matter afresh in the light of the observations made in this judgment.
The appeal is accordingly allowed.
There will be no order as to costs.
P.H.P. Appeal allowed.
| Electricity Supply Act, 1948 section 59, 64, 65, 66 67 and 68.
The Employees Provident Fund Act applies only to establishments which are factories.
The industry in question electricity including generation, transmission and distribution thereof, is one to which the Act applies.
But only a small proportion of employees connected with the generation of electricity is establishments which are factories.
To the rest the Act does not apply.
The appellant maintains a contributory provident fund for those employees who are not covered by the Act where the contribution is on the basis of basic wage the appellant and the employees contributing equally.
The contribution under the Act is 8 per cent whereas under the appellant 's scheme it is 6.25 per cent.
The workmen respondents claimed before the Industrial Tribunal in a reference made by the Govt.
Of Bihar (1) that all workmen of the appellant should have the same and the similar benefits and that, therefore.
there should be no distinction between the appellant 's contributory provident fund scheme and the scheme under the Employees Provident Fund Act.
(2) The services of the workmen of the appellant are liable to be transferred from one establishment to another both of which may not be covered by the same scheme and such anomalies can be removed by giving the same benefits to all the workmen; (3) That the State was the financier of the appellant which now charges interest at the rate of 61 per cent as against previous 4 per cent; (4) That no scheme run by the Board was running at a loss; (5) That a large amount was paid to the Government by me appellant in the shape of interest towards the loans received from the Government and that such amounts should be taken as dividends to be paid to the Government by the appellant and should not be taken into consideration while deciding the matters regarding benefits to be made available to its employees.
The appellant contended before the Industrial Tribunal that the demand of the workmen would impose additional financial liabilities which the appellant would not be able to bear The Tribunal did not consider the validity of the above submissions It merely relied on an earlier award in which it was observed that if the interest realised by the Government were excluded from consideration there would be surplus in favour or the appellant.
The Tribunal held that since the position of the appellant was not worse than what it was at the time of the earlier award, the appellant should extend the benefits of the contributory provident fund to all workmen who are not covered by the Act and that the contributions should be 6.25 per cent not on the basic wages but on the total wages.
Allowing the appeal, ^ HELD: (1) The Tribunal has treated the whole matter in a very perfunctory manner.
The main question for consideration by the Tribunal was the financial capacity of the Board.
It has made no effort at all to analyse the balance sheet of the appellant to show the actual results of his working.
It has made no effort to work out the financial implications of its order.
It has not made it clear what exactly are the total wages.
This Court in the case of Gramophone Company.
although it was a case of ordinary commercial concern, calculated the actual burden to protect the stability of the industry and to see that the imposition of the burden does not result in loss to the employer.
43 (2) The appellant is not an ordinary commercial concern.
It is a public service institution.
lt is not expected to make any profits.
It is expected to extend the supply of electricity to unserved areas without reference to considerations of loss that might be incurred is a result of such extension.
Section 59 of the provides that as far as practicable The Board shall carry on its operations so as not to incur loss.
section 64 enables the State Government to advance loans to the Board.
section 65 authorises the Board to borrow.
section 66 authorises the State Government to guarantee loans raised by the Board.
section 67 lays down the manner in which the profits have to be distributed.
section 68 imposes obligation on the Board to make a credit to the depreciation reserve in the prescribed manner.
[46 A C].
The assessment by the Tribunal that the interest should not be taken into account in working out the profits is not borne out by the provisions of the statute.
The Tribunal did not look into the Act at all.
Whether in view of the statutory obligations laid on the appellant under the aforesaid sections whether the same considerations which apply in the case of private commercial concerns could be applied to the Board while analysing the capacity to bear the additional burden is rather a difficult question.
We do not express any view on that question.
However various sums payable under section 67 have to be deducted before the profits could be ascertained and with regard to depreciation reserve, the provision of section 68 may have to be taken into account.
[47 C E].
The matter was remanded back to the Tribunal to be disposed of in the light of the observations made in the judgment.
|
iminal Appeal No. 22 of 1953.
Appeal by special leave from the Judgment and Order dated the 19th November, 1952, of the High Court of Judicature of Punjab at Simla in Criminal Appeal No. 102 of 1952 and Criminal Revision Nos.
423 146 and 499 of 1952 of the Court of the Sessions Judge, Jullundur, in Sessions Case No. 30 of 1951 and Sessions Trial No. 5 of 1951.
Jai Gopal Sethi (R. L. Kohli and Deva Singh, with him) for the appellants.
Gopal Singh for the respondent.
May 15.
The Judgment of the Court was delivered by BosE J.
Four persons appeal against sentences of death passed upon them in convictions for a double murder, the victims being two brothers, Rattan Singh and Bawa Singh.
The learned Sessions Judge convicted three others also but sentenced all, including the four appellants, to transportation for life.
The High Court acquitted three of the seven but sustained the convictions of the four appellants and enhanced their sentences in each case to death.
The prosecution story is simple.
All seven accused belong to the same village and belong to the same faction or "party", as Mst.
Punnan (P.W. 2) calls it.
Of the seven, the appellants Dalip Singh and Battan Singh are brothers.
Jarnail Singh who was acquitted is a son of Battan Singh.
The remaining four, including the appellants Sadhu Singh and Kundan Singh, are not related to the other three and, except for the evidence that they belong to the same party, are not shown to have any common interest with the other three.
The appellants Dalip Singh and Battan Singh are said to have assaulted the two dead men Rattan and Bawa about twenty years before the occurrence.
They were prosecuted and convicted and served short terms of imprisonment.
Dalip Singh and Battan Singh are also said to be dacoits and it is said that they believed that the two dead men used to furnish information against them to the police.
This is said to be the motive for the murders.
Why the others should have joined in, except on the basis that they belong to the same "Party", is not disclosed.
147 The prosecution case is as follows: On 16th June, 1951, Rattan Singh was taking some food out to a well a short distance from his house for himself and his son.
This was about 2 p.m.
Just as he left the house, his wife Mst.
Punnan (P.W. 2) heard cries of alarm and on rushing out with her daughter Mst.
Charni (P.W. 11) saw all seven accused assaulting her husband.
They beat him up till he fell to the ground.
As soon as Rattan Singh fell down, they left him and rushed to his (Rattan Singh 's) Haveli where the other brother Bawa Singh was lying on a cot, shouting that they would also make short work of him.
All seven belaboured him on the cot, then they dragged him out and beat him up some more.
After this they returned to where Rattan Singh was still lying on the ground and gave him some more blows.
Then they ran away.
Bawa Singh died very shortly after the assault.
The other brother survived a little longer but he also died not long after.
According to Mst.
Punnan (P.W. 2) the accused were armed as follows: The appellants Dalip Singh and Sadhu Singh with barchhas; the appellant Battan Singh and two of the accused who have been acquitted with lathis; the appellant Kundan Singh had a takwa a hatchet with along handle, and the accused Kehar Singh, who has been acquitted, had a khunda a hefty stick with a curved iron end.
The medical evidence discloses that Rattan Singh had nineteen injuries on his person.
Of these, only two, on the head, would have been fatal in themselves.
The rest were on non vital parts like the foot, ankle, leg, knee, thigh, buttock, forearm and wrist, but of these six were grievous.
The doctor says death was caused by shook produced by the multiple injuries aided by haemorrhage in the brain due to injury No. 14.
The other brother Bawa had sixteen injuries but except for two the rest were on non vital parts.
One of the two was on the head and the other ruptured the 148 spleen.
The rest were on the ankle, leg, knee, thigh, elbow, thumb and wrist, but eleven of them were grievous.
In his case the doctor put the death down to rupture of the spleen.
In Rattan Singh 's case, only one of the injuries was inflicted by a sharp edged pointed weapon and all the rest by blunt weapons.
The two on the head were inflicted by blunt weapons.
In Bawa Singh 's case, four wounds were caused by a sharp edged or pointed sharp edged weapon.
The others were all inflicted by blunt weapons.
Here again, the fatal injury which ruptured the spleen was caused by a blunt weapon.
This analysis would appear to indicate that neither of the appellants Dalip Singh and Sadhu Singh, who carried spears, nor the appellant Kundan Singh, who carried a hatchet, aimed at any vital part; and of those who had blunt weapons, the appellant Battan Singh who had a lathi has alone been convicted while Indar Singh and Jarnail Singh, who also had lathis, and kehar Singh, who had a khunda, have all been acquitted; and yet Battan Singh alone could hardly have been responsible for eighteen injuries on Rattan Singh and nine on Bawa Singh.
The appellant Dalip Singh was arrested on the 17th June and the other three on the 18th.
Each was wearing blood stained clothes.
The learned Sessions Judge did not attach much importance to the bloodstained clothes, nor did he regard the recovery of certain weapons, some of which were blood stained, as of much consequence.
But he was impressed with the evidence of the two eyewitnesses Mst.
Punnan (P.W. 2) and Mst.
Charni (P. W. 11) and believing them convicted each of the seven accused under section 302 read with section 149, Indian Penal Code.
He said that as the fatal injuries could not be attributed to any one of the accused he refrained from passing the sentence of death.
All the assessors considered all seven accused guilty.
The learned High Court Judges did not attach any importance to the recovery of the weapons because 149 for one thing they were not recovered till the 30th, that is to say, not until fourteen days after the murders, and when found, one set pointed out by Jarnail Singh, who has been acquitted, was found in Dalip Singh 's field and another set, pointed out by Sadhu Singh, was found in Kehar Singh 's field.
But they considered the blood stained clothes an important factor.
They were not prepared to believe the two eye witnesses all the way, partly because they were of opinion that a part of their story was doubtful and seemed to have been introduced at the instance of the police and partly because they considered that when the fate of seven men hangs on the testimony of two women "ordinary prudence" requires corroboration.
They found corroboration in the case of the four appellants because of the blood stained clothes and none in the case of the others.
Accordingly, they convicted the four appellants and acquitted the others.
Now this has led the learned Judges into an inconsistency and it is that which led to the granting of special leave to appeal.
The learned Judges say that their conclusion is that (1) "generally the story related by Mst.
Punnan and Mst.
Charni is true; (2) that certainly not less than five persons took part in the beating of the two deceased; and (3) that the corroboration required by prudence is afforded by the presence of the blood stained clothes found on the persons of the four appellants who have been convicted.
" As regards the three accused whom they acquitted the learned Judges say The other three accused may or may not have taken part in the affair.
" Now it is clear from the above that it is impossible to ascribe any particular injury to any particular person.
Therefore ' it is impossible to convict any one of the accused of murder simpliciter under section 302, 21 150 nor do the learned Judges attempt to do that.
They convict under section 302 read with section 149.
But section 149 requires the presence of five persons who share the common object.
It is true that in one place the learned Judges say that there were certainly not less than five present but in the very next breath they say that the three whom they acquit "may or may not have taken part in the affair".
If those three are eliminated, then we are left with only four and that militates against their previous finding that they were at least five.
Before section 149 can be called in aid, the court must find with certainty that there were at least five persons sharing the common object.
A finding that three of them "may or may not have been there" betrays uncertainty on this vital point and it consequently becomes impossible to allow the conviction to rest on this uncertain foundation.
This is not to say that five persons must always be convicted before section 149 can be applied.
There are cases and cases.
It is possible in some eases for Judges to conclude that though five were unquestionably there the identity of one or more is in doubt.
In that case, a conviction of the rest with the aid of section 149 would be good.
But if that is the conclusion it behoves a court, particularly in a murder case where sentences of transportation in no less than four cases have been enhanced to death, to say so with unerring certainty.
Men cannot be hanged on vacillating and vaguely uncertain conclusions.
In fairness to the learned Judges we have examined the evidence with care to see whether, if that was in their minds, such a conclusion could be reached in this particular case on the evidence here.
That it might be reached in other cases on other facts is undoubted, but we are concerned here with the evidence in this case.
Now mistaken identity has never been suggested.
The accused are all men of the same village and the eye witnesses know them by name.
The murder took 151 place in daylight and within a few feet of the two eye witnesses.
If the witnesses had said, "I know there were five assailants and I am certain of A, P and C.
I am not certain of the other two but think they were D and E", a conviction of A, B and C, provided the witnesses are believed, would be proper, But when the witnesses are in no doubt either about the number or the identity and there is no suggestion about mistaken identity and when further, the circumstances shut out any reasonable possibility of that, then hesitation on the part of the Judge can only be ascribed, not to any doubt about identity but to doubt about the number taking part.
The doubt is not whether D and E have been mistaken for somebody else but whether D and E have been wrongly included to swell the number to five.
Again, it is possible for a witness to say that "A, B, C, D, E and others, some ten or fifteen in number, were the assailants".
In that event, assuming always that the evidence is otherwise accepted, it is possible to drop out D and E and still convict A, B and C with the aid of section 149.
But that again is not the case here.
No one suggests that there were more than seven; no one suggests that the seven, or any of them, were, or could be, other than the seven named.
Nor is it possible in this case to have recourse to section 34 because the appellants have not been charged with that even in the alternative, and the common intention required by section 34 and the common object required by section 149 are far from being the same thing.
In the circumstances, we find ourselves unable to allow the conviction to rest on the insecure foundations laid by the High Court.
We have accordingly reviewed the evidence for ourselves.
Mr. Sethi took us elaborately through it.
In our opinion, the learned Sessions Judge 's conclusions are right.
We are unable to agree with the learned Judges of the High Court that the testimony of the two eyewitnesses requires corroboration.
If the foundation 152 for such an observation is based on the fact that the witnesses are women and that the fate of seven men hangs on their testimony, we know of no such rule.
If it is grounded on the reason that they are closely related to the deceased we are unable to concur.
This is a fallacy common to many criminal cases and one which another Bench of this court endeavoured to dispel in Rameshwar vs The State of Rajasthan(1).
We find, however, that it unfortunately still persists, if not in the judgments of the courts, at any rate in the arguments of counsel.
A witness is normally to be considered independent unless he or she springs from sources which are likely to be tainted and that usually means unless the witness has cause, such as enmity against the accused, to wish to implicate him falsely.
Ordinarily, a close relative would be the last to screen the real culprit and falsely implicate an innocent person.
It is true, when feelings run high and there is personal cause ' for enmity, that there is a tendency to drag in an innocent person against whom a witness has a grudge along with the guilty, but foundation must be laid for such a criticism and the mere fact of relationship far from being a foundation is often a sure guarantee of truth.
However, we are not attempting any sweeping generalisation.
Each case must be judged on its own facts.
Our observations are only made to combat what is so often put forward in cases before us as a general rule of prudence.
There is no such general rule.
Each case must be limited to and be governed by its own facts.
This is not to say that in a given case a Judge for reasons special to that case and to that witness cannot say that he is not prepared to believe the witness because of his general unreliability, or for other reasons, unless he is corroborated.
Of course, that can be done.
But the basis for such a conclusion must rest on facts special to the particular instance and cannot be grounded on a supposedly general rule of prudence enjoined by law as in the case of accomplices.
(1) ; at 390.
153 Now what is the ground for suspecting the testimony of these two witnesses? The only other reason given by the learned High Court Judges is that they have introduced a false element into their story at the instigation of the police in order to save the "face" of the lambardars.
But if that is so, it throws a cloak of, unreliability over the whole of their testimony and, therefore, though it may be safe to accept their story where the corroborative element of the blood stained clothes is to be found, it would be as unsafe to believe, on the strength of their testimony, that at least five persons were present as it would be to accept that the ones who have been acquitted were present; and once we reach that conclusion section 149 drops out of the case.
We have carefully weighed the evidence of these women in the light of the criticisms advanced against them by Mr. Sethi, most of which are to be found in the judgments of the lower courts, and we are impressed by the fact that the learned Sessions Judge who saw them in the witness box was impressed with their demeanour and by the way they stood up to the crossexamination, and also by the fact that the learned High Court Judges appear to believe them to the extent that at least five persons were concerned.
Some of the accused have made general and sweeping statements to the effect that the prosecution witnesses are inimical to them but no one has suggested why.
In the long cross examination of these witnesses not a single question has been addressed to them to indicate any cause of enmity against any of the accused other than the appellants Dalip Singh and Battan Singh.
A general question was asked, and it was suggested that there was some boundary dispute between Mst.
Punnan 's husband and the accused Indar Singh and Kundan Singh but that was not followed up by other evidence and neither Kundan Singh nor Indar Singh suggests that there was any such dispute in their examinations under section 342, Criminal Procedure Code.
Kehar Singh says vaguely that he has inherited land which will pass to the line 154 of Rattan and Bawa if he dies without heirs but lie has made no effort to substantiate this.
The questions put in cross examination therefore remain just shots in the dark and leave the testimony of the two women unimpaired.
The first information report was made by Mst.
Pullnan (P.W. 2) herself.
It was made very promptly though this was attacked by Mr. Sethi.
It was made at 8 30 p.m. within 6 1/2 hours of the occurrence at a place 12 miles from the police station.
The victims did not die at once and it was only natural that Mst.
Punnan 's first thoughts should have been to tend them Next, she had to walk part of the distance and the rest she covered in a lorry, and above all she has not been cross examined regarding delay.
We consider that a report made within 61 hours in such circumstances is prompt.
Now the important thing about this report is that it names the seven accused, no less and no more, and from start to finish Mst.
Punnan has adhered to that story without breaking down in cross examination and without any attempt to embellish it by adding more names; and in this she is supported by Mst.
Charni (P.W. 11).
Next, the bloodstained clothes found on the persons of the four appellants afford strong corroboration as against them, and as two courts have believed the witnesses to that extent all we need do is to concentrate on the other three accused who have been acquitted in order to see whether there were seven persons as Mst.
Punnan says and to see whether the conclusion of the High Court that there were at least five present is sound.
We do not think the discovery of tile weapons can be, lightly excluded.
One set was pointed out by Jarnail Singh.
In itself that might not mean much but it is unquestionable corroboration as against Jarnail Singh unless the fact of discovery is disbelieved or is considered to be a fraud.
But that is not the finding of either court.
The first court, believes the evidence and the High Court does not disbelieve it but 155 considers the incident as of small probative value.
It may be in itself, but it is a corroborative element in the case of two witnesses who do not require corroboration and that makes it all the more safe to accept their testimony.
Next comes the discovery of another set of weapons by Sadhu Singh.
He was already implicated by reason of some blood stained clothes but the importance of the discovery in his case lies in the fact that the weapons were found in the field of Kehar Singh.
It is certainly a circumstance to be taken into consideration that these weapons should be found in the field of a man who was named from the start.
Then comes the fact that Mst.
Punnan (P.W. 2) not only named the various assailants in her first information report but stated exactly what sort of weapon each was carrying.
Here again she is consistent from start to finish except for an unessential difference in the case of Jarnail.
In the first information report she said he had a dang while in her evidence she says he had a lathi, but as a dang is a big lathi that is not a real discrepancy.
This, in our opinion, is impressive consistency, especially as it tallies in general with the postmortem findings.
Now the fact that weapons of this description, four stained with human blood, are discovered at the instance of two persons she has named from the beginning in the fields of others whom she has also named from the start certainly does not tend to weaken her testimony.
The only accused who is not in some way independently linked up with the testimony of these two women is Indar.
But when their stories find corroboration on so many important particulars we see no reason why they should be disbelieved as regards Indar, always remembering that these are not witnesses who require corroboration under the law.
In our opinion, the High Court was unnecessarily cautious in acquitting the other three accused when the learned Judges were convinced that at least five persons were, concerned, 156 We have taken into consideration the fact that the High Court considers that the portion of Mst.
Punnan 's story regarding the lambardars has been falsely introduced by the police, also that both courts have rejected the evidence about the dying declaration.
Despite that, we agree with the learned Sessions Judge that Mst.
Punnan and Mst.
Charni are to be believed regarding the main facts and that they correctly named all seven accused as the assailants.
On that finding the conviction under section 302 read with section 149 can be sustained.
We accordingly uphold these convictions.
The acquittals in the other the cases will of course stand but the mere fact that these persons have, in our opinion, been wrongly acquitted cannot affect the conviction in the other cases.
On the question of sentence, it would have been necessary for us to interfere in any event because a question of principle is involved.
In a case of murder, the death sentence should ordinarily be imposed unless the trying Judge for reasons which should normally be recorded considers it proper to award the lesser penalty.
But the discretion is his and if he gives reasons on which a judicial mind could properly found, an appellate court should not interfere.
The power to enhance a sentence from transportation to death should very rarely be exercised and only for the strongest possible reasons.
It is not enough for an appellate court to say, or think, that if left to itself it would have awarded the greater penalty because the discretion does not belong to the appellate court but to the trial Judge and the only ground on which an appellate court can interfere is that the discretion has been improperly exercised, as for example where no reasons are given and none can be inferred from the circumstances of the case, or where the facts are so gross that no normal judicial mind would have awarded the lesser penalty.
None of these elements is present here.
This is a case in which no one has been convicted for his own act but is being held vicariously responsible for the act of another or others.
In cases where the facts are more 157 fully known and it is possible to determine who inflicted blows which were fatal and who took a lesser part, it is a sound exercise of judicial discretion to discriminate in the matter of punishment.
It is an equally sound exercise of judicial discretion to refrain from sentencing all to death when it is evident that some would not have been if the facts had been more fully known and it had been possible to determine, for example, who hit on the head or who only on a thumb or an ankle; and when there are no means of deter mining who dealt the fatal blow, a judicial mind can legitimately decide to award the lesser penalty in all the cases.
We make it plain that a Judge is not bound to do so, for he has as much right to exercise his discretion one way as the other.
It is impossible to lay down a hard and fast rule for each case must depend on its own facts.
But if a Judge does do so for reasons such as those indicated above, then it is impossible to hold that there has not been a proper exercise of judicial discretion.
Now the High Court do not consider these facts at all.
They give no reasons and dispose of the matter in one sentence as follows: "I would dismiss the appeals of the other four and accepting the revision petitions change their sentences from transportation to death.
" That, in our opinion, is not a proper way to interfere with a judicial discretion when a question of enhancement is concerned.
We are unable to hold that the discretion was improperly exercised by the learned Sessions Judge.
Whether we ourselves would have acted differently had we been the trial court is not the proper criterion.
We accordingly accept the appeals on the question of sentence and reduce the sentence in each case to that of transportation for life.
Except for that, the appeal is dismissed.
Sentence reduced.
Appeal dismissed.
| Before section 149 of the Indian Penal Code can be applied, the court must find with certainty that there were at least live persons sharing the common object.
This does not, however, mean that five persons must always be convicted before section 149 can be applied.
If the judge concludes that five persons were unquestionably present and shared the common object, though the identity of some of them is in doubt, the conviction of the rest would be good; but if this is his conclusion, it behoves him, particularly in a murder case where heavy sentences have been imposed, to say so with certainty.
Rameshwar vs The State of Rajasthan ([1952] S.C.R. 377) referred to.
The power to enhance a sentence from transportation to death should very rarely be exercised and only for the strongest reasons.
It is not enough for the appellate court to say or think that if left to itself it would have awarded the greater penalty because the discretion does not belong to the appellate court but to the trial judge, and the only ground on which the appellate court can interfere is that the discretion has been improperly exercised, as for instance where no reasons have been given and none can be inferred from the circumstances of the case or where the facts are so gross that no normal judicial mind would have awarded the lesser penalty.
|
Civil Appeal No. 105 of 1990.
From the Judgment and Order dated 10.3.
1988 of the Rajasthan High Court in S.B. Civil Second Appeal No. 327 of 1976.
C.M. Lodha, H.M. Singh and R.S. Yadav for the Appellant.
S.K. Ghose, M. Qamaruddin and Mrs. M. Qamaruddin for the Respondent.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Is Estoppel a good defence to 'archaic ', Atam Prakash vs State of Haryana, ; , right of Pre emption which is a 'weak right ', Bishen Singh vs Khazan Singh; , , and can be defeated by any 'legitimate ' method Radha Kishan vs Sridhar, ; Barring High Court of Rajasthan and erstwhile, Mewar State Jethmal vs Sajanumal, [1947] Mewar Law Reports, 36, most of the other high courts, namely, Allahabad, Naunihal Singh vs Ram Ratan, , Oudh, Ram Rathi vs Mr. Dhiraji, [1947] Oudh 81, Ajmer 352 Gopinath vs R.S. Nand Kishore, AIR 1952 Ajmer 26, Bhopal, Abdul Karim vs Babu Lal, AIR 1953 Bhopal, and Lahore Kanshi Ram Sharma & Anr.
vs Lahori Ram & Anr., have answered the issue in the affirmative.
The Privy Coun cil, [1929] PC AIR 259, too, applied this principle to non suit a pre emptor who knew that the property was in the market for long but offered to purchase, only.
one out of many blocs.
It had: "Assuming that the prior completed purchase by the appellant would under other circumstances, have given him the right of pre emption in respect of the blocks in suit, he must be taken by his conduct to have waived this right, and that it would be inequitable to allow him now to re assert it." Even in Muslim Law which is the genesis of this right, as it was unknown to Hindu Law and was brought in wake of Mohamme dan Rule, it is settled that the right of pre emption is lost by estoppel and acquiescence.
Estoppel is a rule of equity flowing out of fairness striking on behaviour deficient in good faith.
It operates as a check on spurious conduct by preventing the inducer from taking advantage and assailing forfeiture already accomplished.
It is invoked and applied to aid the law in administration of justice.
But for it great many injustice may have been perpetrated.
Present case is a glaring example of it.
True no notice was given by the seller but the trial court and appellate court concurred that the pre emptor not only came to know of the sale immediately but he assisted the purchaser appellant in raising construction which went on for five months.
Having thus persuaded, rather misled, the purchaser by his own conduct that he acquiesced in his ownership he somersaulted to grab the property with con structions by staking his own claim and attempting to unset tle the legal effect of his own conduct by taking recourse to law.
To curb and control such unwarranted conduct the courts have extended the broad and paramount considerations of equity, to transactions and assurances, express or im plied to avoid injustice.
Legal approach of the High Court, thus, that no estoppel could arise unless notice under Section 8 of the Rajasthan Pre emption Act (In brevity 'the Act ') was given by the seller and pre emptor should have had occasion to pay or tender price ignores the fallacy that Estoppel need not be specifically provided as it can always be used as a 353 weapon of defence.
In the Privy Council decision, referred earlier, the court was concerned with Oudh Laws Act (18 of 1876) which too had an identical provision for giving notice by seller.
No notice was given but since pre emptor knew that the property was for sale and he had even obtained details of lots he was precluded from basing his claim on pre emption.
Exception, to this universal rule or its non availabili ty, is not due to absence of any provision in the Act ex cluding its operation but welfare of society or social and general well being.
Protection was, consequently, sought not on the rationale adopted by the High Court that in absence of notice under Section 8 of the Act estoppel could not arise but under cover of public policy.
Reliance was placed on Shalimar Tar Products vs H.C. Sharma, ; , a decision on waiver, and Equitable Life Assurance Society of the United States vs Reed, 14 Appeal Cases 587, which laid down that there could be no estoppel against statute.
Equi ty, usually, follows law.
Therefore that which is statutori ly illegal and void cannot be enforced by resorting to the rule of estoppel.
Such extension of rule may be against public policy.
What then is the nature of right conferred by Section 9 of the Act? In Bishen Singh vs Khazan Singh, ; this Court while approving the classic judgment of Mahmood, J. in Gobind Dayal vs Inayatullah, ILR 7 All 775 (FB). 'that the right of pre emption was simply a right of substitution ' observed that, 'courts have not looked upon this right with great favour, presumably, for the reason that it operated as a clog on the right of the owner to alienate his property.
In Radha Kishan vs Shridhar, AIR 1960 SC 1369 this Court again while repelling the claim that the vendor and vendee by accepting price and transferring pos session without registration of sale deed adopted subterfuge to defeat the right of pre emption observed that, 'there were no equities in favour of a pre emptor, whose sole object is to disturb a valid transaction by virtue of the rights created in him by statute.
To defeat the law of pre emption by any legitimate means is not fraud on the part of either the vendor or the vendee and a person is entitled to steer clear of the law of pre emption by all lawful means '.
Such being the nature of right it is harsh to claim that its extinction by conduct would amount to statutory illegality or would be opposed to public policy.
The distinction be tween validity and illegality or the transaction being void is clear and well known.
The former can be waived by express or implied agreement or conduct.
But not the latter.
The provision in the Act requiring a vendor to serve the notice on persons having right of pre emption is condition of validity of transfer, and therefore a pre emptor could waive it.
Failure to serve notice as 354 required under the Act does not render the sale made by vendor in favour of vendee ultra vires.
The test to deter mine the nature of interest, namely, private or public is whether the right which is renunciated is the right of party alone or of the public also in the sense that the general welfare of the society is involved.
If the answer is latter then it may be difficult to put estoppel as a defence.
But if it is right of party alone then it is capable of being abnegated either in writing or by conduct.
The Act does not provide that in case no notice is given the transaction shall be void.
The objective is to intimate the pre emptor who may be interested in getting himself substituted.
The Act does not debar the pre emptor from giving up this right.
Rather in case of its non exercise within two months, may be for the financial reasons.
the right stands extinguished.
It does not pass on to anyone.
No social disturbance is caused.
It settles in purchaser.
Giving up such right.
expressly or impliedly cannot therefore be said to involve any interest of community or public welfare so as to be in mischief of public policy.
Even otherwise on facts found that the respondent knew of the sale deed.
assisted the appellant in raising the construction and after the construction was completed in the month of June he gave the notice in month of July for exer cise of the right and filed the suit in January would itself demonstrate that the conduct of the respondent was inequita ble and the courts in this country which are primarily the courts of equity, justice and good conscience cannot permit the respondent to defeat the right of appellant and invoke a right which has been called a weak and inequitable right.
In the result this appeal succeeds and is allowed.
The order of the High Court is set aside and that of the First Appellate Court is restored.
The appellant shall be entitled to his costs.
G.N. Appeal allowed.
| The appellant purchased certain properties by way of registered sale deeds.
She constructed therein a godown and a two storeyed building with the knowledge and assistance of the respondent, who did not say anything about the common passage and had never expressed his intention to pre empt the sales.
Soon after the construction was over, the respondent sent a notice to the appellant claiming his right to pre empt the sale.
The appellant gave a reply to the notice.
However, respondent filed a suit for preemption in relation to the said properties.
The appellant pleaded that the respondent was estopped from claiming the pre emption.
Principle of waiver was also pleaded.
The Trial Court dis missed the suit of the respondent, and he preferred an appeal before the District Judge which was also dismissed.
Respondent preferred a regular second appeal before the High Court.
The High Court allowed the appeal holding that the principles of estoppel and waiver had no application against the pre emptor to preempt the suit, and set aside the orders of the Courts below.
Aggrieved against the High Court 's order the appellant has preferred this appeal, by special leave.
Allowing the appeal, this Court, HELD: 1.1 Estoppel is a rule of equity flowing out of fairness striking on behaviour deficient in good faith.
It operates as a check on 350 spurious conduct by preventing the inducer from taking advantage and assailing forfeiture already accomplished.
It is invoked and applied to aid the law in administration of justice.
But for it great many injustice may have been perpetrated.
[162D E] 1.2 Legal approach of the High Court, that no estoppel could arise unless notice under Section 8 of the Rajasthan Pre emption Act was given by the seller and pre emptor should have had occassion to pay or tender price ignores the fallacy that Estoppel need not be specifically provided as it can always be used as a weapon of defence.
[162G H] 2.
There can be no estoppel against statute.
Equity usually follows law.
Therefore, that which is illegal cannot be enforced by resorting to rule of estoppel.
Such an exten sion may be against public policy.
The distinction between validity and illegality or the transaction being void is clear and well known.
The former can be waived by express or implied agreement or conduct.
But not the latter.
[163D & F G] Shalimar Tar Products Ltd. vs H.C. Sharma, ; ; Equitable Life Assurance Society of the United States vs Reed, 14 AC 587; Bishan Singh vs Khazan Singh, ; and Radha Kishan vs Shridhar, AIR 1960 SC 1369, referred to.
The provision in the Pre emption Act requiring a vendor to serve notice on persons having right of pre emp tion is condition of validity of transfer, and therefore a pre emptor could waive it.
Failure to serve notice as re quired under the Act does not render the sale made by vendor in favour of vendee ultra vires.
The test to determine the nature of interest, namely, private or public is whether the right which is renunciated is the right of party alone or of the public also in the sense that the general welfare of the society is involved.
If the answer is latter then it may be difficult to put estoppel as a defence.
The Act does not provide that in case no notice is given the transaction shall be void.
The objective is to intimate the pre emptor who may be interested in getting himself substituted.
It does not debar the pre emptor from giving up this right.
Rather in case of its non exercise within two months, may be for financial reasons, the right stands extinguished.
It does not pass on to anyone.
No social disturbance is caused.
It settles in purchaser.
Giving up such right, expressly or impliedly cannot therefore be said to involve any interest of community or public welfare so as to be in mischief of public policy.
[163H; 164A C] Jethmal vs Sajanumal, [1947] Mewar Law Reports 36, over ruled.
351 Atam Prakash vs State of Haryana, ; ; Bishan Singh vs Khazan Singh, ; ; Radha Kishan vs Sridhar, ; ; Naunihal Singh vs Ram Ratan, ILR 39 All. 127; Ram Rathi vs Mt. Dhiraji, [1947] Oudh 81; Gopinath vs R.S. Nand Kishore, AIR 1952 Ajmer 26; Abdul Karim vs Babulal, AIR 1953 Bhopal 26 and Kanshi Ram Sharma vs Lahori Ram, , approved.
Pateshwari Partab Narain Singh vs Sitaram, AIR 1929 PC 259, referred to. 4.
In the instant case, the fact that the respondent knew of the sale deed, assisted the appellant in raising the construction and after the construction was completed in the month of June he gave notice in the month of July for exer cise of the right and filed the suit in January, would itself demonstrate that the conduct of the respondent was inequitable and the courts in this country which are pri marily the courts of equity, justice and good conscience cannot permit the respondent to defeat the right of appel lant and invoke a right which has been called a weak and inequitable right.
[164D E]
|
Civil Appeal No. 87 of 1950.
Appeal from the Judgment and Decree dated 8th Febru ary, 1949, of the High Court of Judicature at Patna (Manohar Lall and Mahabir Prasad JJ .) in Appeal No. 38 of 1946 arising out of decree dated the 18th December, 1945, of the Subordinate Judge of Deoghar in Title Suit No. 1 of 1939.
B.C. Dey (S.C. Ghose, with him) for the appellant.
M.C. Setalvad (Kanhaiyaji, with him) for the respondent.
154 1951.
November 29.
The Judgment of Mehr Chand Mahajan and Vivian Bose JJ.
was delivered by Mahajan J. Fazl Ali J. delivered a separate judgment.
MAHAJAN J.
The question involved in the appeal relates to the right of succession to six Birbhum ghatwalis governed by Regulation XXIX of 1814, annexed to Gaddi Pathrol and lying within Tappasarath in the Santhal Parganas.
the genealogy of the contestants appears from the following pedigree table: .
Digbijoy Singh I Gurohari SinghKanhai Singh Bhairo Singh Balram Singh (Ghatwal) I I Pratar Singh I I I I I Banwari Singh Pitambar Katku Singh Bharat Singh (Died (Ghatwal) issueless) I Kharagdhari Singh (Ghatwal) I Ram Chandra Singh (Ghatwal) I I Brijbehari Singh Sarju Prasad Singh (Ghatwal) (Original plaintiff) I I Krishna Prasad Singh Hargobind Prasad Singh (Ghatwal) (Substituted plaintiff) I I Kali Prasad Singh Durga Prasad (Ghatwal) ( Died issueless) I Phaldani Kumari (Defendant) Tikait Kali Prasad Singh, the last gaddidar of Pathrol, died in the year 1935.
He belonged to the Baisi Chaurasi clan.
On the 29th November, 1935, the 155 Commissioner of Bhagalpur Division recognized Smt.
Phaldani Kumari as the next ghatwal and entitled to be maintained in possession of the ghatwali estate on the 30th November, 1936, sarju Prasad Singh brought the suit out of which this appeal arises in forma pauperis in the court of the Subor dinate Judge of Deoghar for possession of the ghatwalis.
In paragraphs 7, 8 and 10 of the plaint it was alleged that the ghatwalis in suit were joint family property and were im partible by custom; that succession to them was governed by the law of lineal primogeniture; that the females and persons claiming through them were altogether excluded from inheritance.
It was claimed that the late Tikait Kali Prasad Singh and the plaintiff were members of a joint Mitakshara family and that he alone as the eldest member of the eldest surviving line of the descendants of the common ancestor was entitled to succeed to them.
The defendant in her written statement denied this claim and contended that Birbhum ghatwalis governed by Regulation XXIX of 1814 are not and cannot be in the nature of joint family property but that the person who succeeds and holds the tenure as ghatwal is the sole proprietor and owner thereof.
It was pleaded that the properties being the exclusive and separate properties of the ghatwal for the time being, the defendant, his widow, was entitled to suc ceed to them in preference to the plaintiff under the Mitak shara school of Hindu law which admittedly governed the family of the parties.
The pleadings of the parties gave rise to the following issues : 1.
Whether succession to the ghatwalis in question is governed by the customs alleged in para 7 of the plaint ? 2.
Did the ghatwalis in question form joint family property of Kali Prasad Singh, his ancestors in the direct line and of Sarju Prasad Singh and the plaintiff? 3.
Did Kali Prasad die in a state of jointness with Sarju Prasad Singh ? 156 4.
Are the ghatwals the sole proprietors of the ghatwalis for the time being as alleged by the defendant ? 5.
Whether the plaintiff or the defendant is entitled to succeed to the properties in suit ? Issues 2, 3 and 4 were found by the trial Judge in favour of the plaintiff and against the defendant.
It was held that Kali Prasad Singh died in a state of jointness with Sarju Prasad Singh and that the ghatwalis in question were their joint family property and that the plaintiff the eldest surviving copartner in the eldest line of Digbijoy Singh 's descendants was entitled to succeed to them in preference to the widow.
It was common ground between the parties that in case the properties were held to be the separate properties of Kali Prasad Singh, the widow was entitled to succeed to them.
As a result of these findings the plaintiff 's suit was decreed with costs.
On appeal by the widow to the High Court, this.
decree was reversed and the plaintiff 's suit was dismissed with costs.
It was held that the character of the ghatwali tenures in question was such that they could not be regarded as joint property of the plaintiff and the last ghatwal and that being so, the defendant was entitled to succeed to them.
The learned counsel for the appellant based his argu ments on the thesis that the ghatwali estates in question were of the same nature and character as joint family im partible estates governed by the Mitakshara law and that the rule of survive applicable to such estates was also applicable to them.
It was contended that the High Court was in error in holding that the suit properties exclusively belonged to Kali Prasad Singh or that there was anything peculiar in these tenures which differentiated them from other ghatwalis in the Santhai Pargangs or from other im partible estates known to Hindu law and which peculiarity incapacitated them from being included within the definition of coparcenary property.
The plea that females were by custom excluded from inheriting ghatwali tenures in Birbhum was 157 dropped in the two courts below and was ' not raised before us; so also the point of custom set out in para.
7 of the plaint and covered by issue 1 was not seriously urged.
The learned Attorney General, while conceding that succession to these tenures was governed by the Mitakshara law, contended that in no sense could they be regarded as joint family property and that their peculiar characteris tics precluded the acquisition of any right by birth by members of a joint Hindu family in them.
He also urged in the alternative that the widow was 'entitled to succeed to them, assuming them to be joint family property under cus tom.
The courts below have given elaborate judgments in the case and reference has been made to a large number of decid ed cases.
In our opinion, the main point that needs decision is whether the suit ghatwalis were to be regarded as joint family or separate properties of the deceased.
For a solu tion of this problem it is necessary to refer first to the nature and main incidents of a ghatwali tenure.
Its origin is now well known.
In Moghul times grants of land were made to selected persons who were appointed guardians of the mountain passes for protecting the countryside against hill invaders and the office held by these persons bore the designation "ghatwal".
These grants were made in some cases directly by the ruling power and in other cases by the zamindar responsible by custom for the maintenance of secu rity and order within the estate as consideration for the performance of the duties.
By efflux of time these grants assumed the form of an actual estate in land, heritable and perpetual, but conditional upon services certain or services to be demanded.
Reference to some of the decided cases relating to Birbhum ghatwali tenures will sufficiently indicate their nature and character.
In Harlal Singh vs Joravan Singh(1), it was held that a ghatwali estate in Birbhum was not divisible (1) 6 Select.
Rep.204.
21 158 on the death of a ghatwal, amongst his heirs but should devolve entirely on the eldest son or the next ghatwal.
It was said that ghatwali lands are grants for particular pur poses, especially of police, and to divide them into small portions amongst the heirs of the ghatwals would defeat the very ends for which the grants were made.
In Satrukchunder Dey vs Bhagat Bharutchunder Singh(1), a decision of the year 1853, it was stated that the ghatwali tenures in Birbhum were not private property of the ghatwals but lands assigned by the State in remuneration for specific police services and were not alienable or attachable for personal debts.
Kustooree Koomaree vs Monohur Deo(2), Loch J. took the view that succession to ghatwalis is regulated by no rule of kulachar or family custom, nor by the Mitakshara law, but solely by the nature of the ghatwali tenure, which descends undivided to the party who succeeds to and holds the tenure as ghatwal and that a female is not incapable of holding a ghatwali tenure.
It was said that "the party who succeeds to and holds the tenure as ghatwal must be, and has always been, looked upon as sole proprietor thereof, and, therefore, the other members of the family cannot claim to be coparceners and entitled to share in the profits of the property, though they may, by the permission and goodwill of the incumbent, derive their support, either from some portion of the property which he may have assigned to them, or directly from himself." In Binode Ram Sein vs Deputy Commissioner of Santhai Pargangs(3), (on review it was held that the rents of a ghatwali tenure are not liable for the debts of the former deceased holder of the tenure.
The reason for the decision was that the tenure was held for the purpose of public services and those who perform the services are entitled to the whole of the remuneration.
(1) 9 S.D.R. 900.
(3) (2) 1864 W.R. (Gap Nos.) 39.
159 In Tekait Durga Pershad Singh vs Teketnee Durga Kuari(1), it was urged that a female 's right to inherit was inconsistent with a ghatwali estate.
This contention was negatived and reference was made to the fact that many ghatwali estates were held by females and it was observed that it was difficult to hold that a ghatwali estate must necessarily be held by male heirs.
This case further sug gests that in a case where it is held proved that the family was joint, succession to Birbhum ghatwali may be regulated by the same rule of Hindu law as is applicable to the devo lution of impartible estates.
In Ram Narain Singh vs Ramoon Paurey(2), another Birbhum ghatwali case, it was held that the ghatwal for the time being was only entitled to interest on the compensation money obtained for compulsory acquisition of a part of the ghatwali interest but that he could not spend the corpus of it which had to devolve on the next heir intact.
So far as Birbhum ghatwalis are concerned, it is only the above mentioned cases to which our attention was drawn.
Reference in this connection is also necessary to the terms of Regulation XXIX of 1814.
Sections I and II of the Regulation which are material to this enquiry are in these terms : I.
Whereas the lands held by the class of persons denom inated Ghautwauls, in the district of Beerbhoom, form a peculiar tenure to which the provisions of the existing Regulations are not expressly applicable; and whereas every ground exists to believe that, according to the former usages and constitution of the country, this class of per sons are entitled to hold their lands, generation after generation, in perpetuity, subject nevertheless to the payment of a fixed and established rent to the zemindar of Beerbhoom, and to the performance of certain duties for the maintenance of the public peace and support of the police; and whereas the rents payable by those tenants have been (1) (2) 160 recently adjusted, after a full and minute inquiry made by the proper officers in the revenue department; and whereas it is essential to give stability to the arrangements now established among the Ghautwauls, the following rules have been adopted, to be in force from the period of their pro mulgation in the district of Beerbhoom.
A settlement having lately been made on the part of the Government with the Ghautwauls in the district of Beerb hoom, it is hereby declared that they and their descendants in perpetuity shall be maintained in possession of the lands, so long as they shall respectively pay the revenue at present assessed upon them,. " The result of the decided cases and of the provisions of the regulation is that the grantee of the tenure and his descendants have to be maintained in possession of the land from generation to generation conditional upon services to be rendered.
The tenure is however liable to forfeiture for misconduct or misbehavior of the ghatwal for the time being.
The succession to it is determined by the rule of lineal primogeniture.
It is neither partible nor alienable (except in exceptional cases with the consent of the government or the zamindar, as the case may be).
These two characteristics are inherent in its very nature and have not been annexed to it by any rule of custom.
The estate in the hands of the last holder is not liable either to attachment or sale in execution of a decree against him; nor is it liable in the hands of his successor for payment of his debts.
When the succession opens out, the heir determined according to law has to execute a muchilika in favour of the grantor guaranteeing the performance of the duties annexed to the office and stipulating that in case of misconduct or misbehaviour or non fulfilment of the obligations attaching to the office, as to which the tenure is in the nature of a remuneration, government will have the right to resume it.
In view of these peculiar characteristics of a ghatwali tenure in Birbhum which are so different from other inheri tances, we find it difficult to apply to it the 161 law of Mitakshara to the full extent.
The essence of a coparcenary under the Mitakshara law is unity of ownership.
As observed in Katama Natchir vs The Raja of Sivaganga(1), there has to be community of interest and unity of posses sion between all the, members of the family, and upon the death of any one of them the others may well take by survi vorship that in which they had during the deceased 's life time a common interest and a common possession.
The inci dents attaching to a Birbhum ghatwali tenure rule out the existence of any notion of community of interest and unity of possession of the members of the family with the holder for the time being.
He is entitled to be maintained in exclusive possession of the ghatwali lands and the devolu tion of the property is to him in the status of a sole heir.
This view finds support from the observations of Lord Fitz gerald in Kali Pershad vs Anand Roy(2), though made in respect of a zamindari ghatwali, yet also appositely ap plicable to a government ghatwali.
His Lordship observed as follows : "Where, however, the Mitakshara governs, each son imme diately on his birth takes a share equal to his father in the ancestral immoveable estate.
Having regard to the origin and nature of ghatwali tenures and their purposes and inci dents as established by decided cases, most of which have been referred to in the course of the argument, it is admit ted that such a tenure is in some particulars distinct from, and cannot be governed by, either the general objects of Hindu inheritance as above stated, or by the before quoted rule of the Mitakshara.
It is admitted that a ghatwali estate is impartable that is to say, not subject to partition; that the eldest son succeeds to the whole to the exclusion of his brothers.
These are propositions that seem to exclude the application of the Mitakshara rule that the sons on birth each take an equal estate with the father and are entitled to partition.
" Similar opinion was expressed in Chhalraclhari Singh vs Saraswati Kumari(3), by a Bench of the (1) (1861 3) 9 M.I.A. 543.
(3) Cal.
(2) Cal.
471. 162 Calcutta High Court.
The following passage from that a decision may be quoted with advantage : "The learned pleader for the appellant has however con tended before us ,that, although this ghatwali tenure is impartible, yet according to the decision of their Lordships of the Privy Council in Chintaman Singh vs Nowlukho Koon wari(1), it is not necessarily separate property, and that as their Lordships observe 'whether the general status of a Hindu family be joint or undivided, property which is joint will follow one and property which is separate will follow another course of succession. ' The decision referred to is no doubt an authority for the proposition that there may be impartible joint family property, such as a raj or other estate similar to a raj, but whether such property is to be regarded as joint or separate would appear to depend generally upon the character of the property at its incep tion, such as the nature of the grant, etc.
creating it.
Having regard however to the view we have already expressed as to the status of the family in the present case, and as to the ghatwali tenure having been the exclusive property of Ananta Narain, we think it is unnecessary to determine what was originally the character of this tenure, although, if we were called upon to decide the question, we should be disposed to say, with reference to the peculiar character of these tenures as described in Regulation XXIX of 1814, that they were intended to be the exclusive property of the ghatwalforthe time being, and not joint family property in the proper sense of the In Raja Durga Prashad Singh vs Tribeni Singh(2), again it was said as follows : "It was certainly an advantage to the whole family that one of their members should hold the office and the tenure.
He could put other members of the family into minor offices and grant them subordinate interests commonly called jotes, and he could and would generally provide for the family in the manner (1) (2) (1918) 45 I.A. 251. 163 expected of its head.
But this is a long way off making him a trustee for the family or treating the ghatwali estate as possessed by the family and reducing the ghatwali to the position of karta or managing head of the family.
Their Lordships do not find that the incidents of ghatwali tenure are such as to give the family any rights over the property while it is in the hands of the ghatwal, and they find themselves upon this point in full agreement with the courts in India.
" In Narayan Singh vs Niranjan Chakravarti(1), Lord Sumner made an exhaustive review of the decided cases and examined the whole position of ghatwali tenures generally and ob served that where the tenure is hereditary, a recognized right to be appointed ghatwal takes the place of a formal appointment and a recognized right in the superior to dis miss the ghatwal if he is no longer able and willing to render the service required by his tenure, and to appoint another to the office and the tenure of the lands, then readily suffices to maintain in perpetuity the incidents of the tenure.
In these circumstances it is not possible to hold that the Mitakshara rule that when a person inherits property from any one of his three immediate paternal ancestors, his sons, grandsons and great grandsons acquire an interest in it by birth can have any application to the case of these grants which are in the nature of a remuneration for the performance of certain services by the holder of that of fice.
A ghatwali has to be regarded as something connected with an office and as observed by Lord Sumner in the above mentioned case, the office cannot except by special custom, grant or other arrangement, either run with lands or be served from them.
In other words, just as primogeniture and impartibility are handmaids, similarly the ghatwal 's office and the ghatwali tenure are two inseparables and cannot be lodged in separate compartments.
If the office cannot be in the nature of coparcenary property, the tenure must follow the same way.
Thus it is not easy to conceive that an inter est (1) (1924) 51 I.A. 37.
164 can be acquired at the birth of a member of a joint family in a tenure which is annexed to an office, even if it has descended from three immediate paternal ancestors.
In certain eventualities the selection of the next heir depends on the choice of the ruling authority and in case of miscon duct or misbehaviour of the holder for the time being the ruling power can not only dismiss the ghatwal but even resume the tenure.
This is a feature which places this heritable property in a class by itself as distinguished from other inheritances governed by the Mitakshara law.
The view that in Birbhum, ghatwali tenures are in the nature of separate property or the exclusive property of the ghatwal finds support from the fact that in many instances, whenever succession has opened out in respect of them, it has been determined according to the Mitakshara rule ap plicable to the devolution of separate property irrespective of the circumstance whether the deceased died in joint or separate status with the other members of the family.
Thirteen instances of such practice in the past amongst members of the Bais Chaurasi clan were proved in the case, in all of which the widow succeeded in preference to a male heir.
The learned trial Judge held that in some of these instances the female succeeded because the agnate nearest in line was separate from her husband; as regards the others though he reached the conclusion that the evidence of sepa ration was weak, he thought that these did not establish a custom superseding in cases of joint family property the rule of survivorship.
The High Court was of a different opinion.
It rightly remarked that while numerous instances of female succession to the estates held by Baisi Chaurasi gaddidar 's had been proved, not a single instance of a female having been excluded from the appointment of a ghat wal on the ground of an agnate being entitled to come in as a coparcener of the last holder by survivorship had been proved, and that in these circumstances there was force in the contention that even if the tenures in question were ancestral joint family property, succession thereto was 165 governed by the Mitakshara rule applicable to separate property.
For the reasons given above we held that the Mitakshara rule that the property inherited by a person from his imme diate paternal ancestors becomes ancestral in his hands and in it his sons, grandsons and great grandsons acquire a right at the moment of the birth has no apposite application to Birbhum ghatwali tenures.
The learned counsel for the appellant in support of his contention placed reliance on a number of decisions of their Lordships of the Privy Council concerning impartible estates governed by the Mitakshara law, wherein it was held that the succession to an impartible estate which is the ancestral property of a joint Hindu family governed by the Mitakshara law is governed by the rule of survivorship subject to the custom of impartibility; the eldest member of the senior branch of the family succeeding in preference to the direct lineal senior descendants of the common ancestor, if the latter is more remote in degree.
Particular reference was made to the remarks of Turner L. I. in the Sivaganga case(1), and to the observations in Baijnath Prasad Singh vs Tej Bali Singh (2) and in the case of Shiba Prasad Singh vs Rani Prayag Kumari Debi(3).
Therein it was said that in the case of ordinary joint family property the members Of the family have (1) the right of partition, (2) the right to restrain alienations by the head, (3) the right of mainte nance, and (4) the right of survivorship.
The first of these rights cannot exist in the case of an impartible estate, though ancestral, from the very nature of the estate.
The second and third are incompatible with the custom of impart ibility.
To this extent the general law of the Mitakshara has been superseded by custom and the impartible estate, though ancestral, is clothed with the incidents of self acquired and separate property.
But the right of survivor ship is not inconsistent with the custom of impartibility.
This right (1) (1861 3) 9 M.I.A. 543.
(3) A.I.R. 1932 P.C. 216.
(2) All.
22 166 therefore still remains and to this extent the estate still retain.s its character of joint family property and its devolution is governed by the general Mitakshara law applicable to such property and that though the other rights which a coparcener acquires by birth in joint family proper ty no longer exist, the birthright of the senior member to take by survivorship still remains.
In our view, these observations have no application to the tenures in suit.
As already indicated, it is not possi ble to concede in their case that a member of a joint family governed by the Mitakshara law acquires any right by birth in them.
The general law of Mitakshara creating that right seems to have been superseded in their case not only by peculiarities inherent in the nature of these tenures but by encroachments of custom on it.
Moreover, it appears that the remarks relied upon were made in cases where the impartible estates were admittedly joint family property or the grants were of such a character that they are intended for the benefit of the family as such.
The ratio of these decisions was that even though certain incidents attaching to joint family property may cease to exist by custom, some others which are not affected by custom may survive.
This reasoning can have no application to property which at no stage what ever could be clothed or was clothed with any of the inci dents of coparcenary property.
The learned counsel for the appellant placed considera ble reliance on the observations of Sir Dawson Miller C.J. in Fulbati Kumari vs Maheshwari Prasad(1).
The learned Chief Justice therein dissented from the View urged before him that all ghatwali property is the exclusive separate property of the holder for the time being and that it de volves according to the rules affecting separate property subject again to the circumstance of impartibility.
He observed that the fact that a raj is impartible does not in a case governed by the Mitakshara law make it separate or self acquired property, that it may be self acquired (1) A. I. R. 1923 Pat.
167 property or it may be the property of a joint undivided family and that in the latter case succession will be regu lated according to the rule of survivorship.
In our opinion, these observations have no application to the case of Birb hum ghatwalis because in express terms these were excluded from consideration in that case.
In the judgment it was said : "In our opinion, the estate in the present case is in no way comparable to the Birbhum ghatwali tenures and Regula tion XXIX of 1814 does not apply to it." The decision in the case proceeded on the assumption that Birbhum ghatwalis stood apart from other ghatwalis which stood on the same footing as impartible estates gov erned by Mitakshara law.
The learned Attorney General challenged the correctness of these decisions and contended that the decisions of the Privy Council on this subject were not uniform.
He drew our attention to the observations made in Sartaj Kuari 's case(1), in the Second Pittapur case(2), and in Tipperah case(3).
There may be a seeming conflict between the view expressed in those decisions and the view expressed in Baijnath Prasad Singh vs Tej Bali Singh(4), and in Shiba Prasad Singh vs Rani Prayag Kurnari Debi(5).
It seems to us however that these latter cases have settled the law ap plicable to joint family impartible estates governed by Mitakshara law and it is rather late in the day to reopen a controversy settled by a series of decisions of the Privy Council.
The contention that on the death of the last holder a ghatwali tenure in Birbhum reverts to the grantor and that notionally there is a resumption of it in favour of govern ment and a re grant to the next heir does not impress us.
On the express terms of the regulation these tenures are heritable from generation to generation and the theory of resumption and re grant is inconsistent with their heritable character.
Inheritance can never remain in abeyance and on the (1) (4) All.
(2) (1918) 45 I.A. 148.
(5) A.I.R. 1932 P.C. 216.
(3) (1867 9) 12 M.I.A. 523.
168 death of the last holder the estate immediately vests in the next heir.
The circumstance that the government may in certain events have the power to dismiss a ghatwal or to forfeit the tenure cannot lead to the inference that it terminates and is re granted at every death.
The argument of the learned counsel for the appellant that a widow not being a descendant of the grantee under the terms of Regulation XXIX of 1814, is not entitled to inherit to Birbhum ghatwali tenures also does not impress us.
The regulation does not enact any rule of succession to these tenures, and the devolution with respect to them is admit tedly determined by personal law or custom.
The expression "descendants" used in the regulation cannot deprive females, like a widow or a mother, from taking the inheritance where they are legal heirs under Mitakshara law or under custom.
Females have invariably been allowed to succeed to these tenures in the past.
The appellant 's counsel conceded that if the property was the separate property of Kali Prasad Singh, the defendant was entitled to inherit to it.
We think that the expression "descendants" has been loosely employed in the regulation for the word "heirs".
On this point we are in agreement with the observations made by a Bench of the Calcutta High Court in Chhatradhari Singh vs Saraswyati Kumari(1).
It may further be pointed out that even if the conten tion of the learned counsel for the appellant is to be accepted, by no process could the trial court have passed a decree in favour of the plaintiff in respect of items 4, 5 and 6 of the schedule Admittedly these were acquired by Krishna Prasad Singh, father of Kali Prasad Singh by a decree of court passed in his favour against his collateral Katku Singh who also claimed these properties as an heir to the last male owner Banwari Singh (vide Exhibit 4).
These pro perties having devolved upon Krishna Prasad Singh by obstructed heritage, were in the nature of separate property in his hands and could not fall within the (1) Cal.
156. 169 definition of ancestral property given in Mitakshara.
Sarju Prasad Singh, uncle of Krishna Prasad Singh, could acquire no right or roterest in these properties by birth enabling him to claim them by survivorship.
Kali Prasad Singh who inherited them on the death of his father got them as his separate property as he had no son who could acquire any interest in them by birth.
With regard to this property the widow was certainly an heir after the death of her husband ' and plaintiff could have no claim whatsoever in respect of these items of the schedule.
This aspect of the case seems to have been lost sight of in the two courts below.
The result, therefore, is that this appeal fails and is dismissed with costs.
FAZL ALI J.
While agreeing generally with my learned brother Mahajan J., I wish to say a few words to indicate the main ground on which I would dismiss this appeal.
There are a number of authoritative decisions dealing with the special features of ghatwali property, one of which is said to be that if the ghatwal is a member of a joint family, the family has no right over the property while it is in his hands.
[See Durga Prashad Singh vs Tribeni Singh(1)].
The logical corollary from this characteristic of ghatwali property would seem to be that it is more in the nature of exclusive property of the ghatwal than of joint family property.
Nevertheless, in some cases, succession to such property has been determined with reference to the rules of Hindu law regarding joint property, where the ghatwal was found to be a member of the joint family.
As at present advised I am not prepared to say that those cases were wrongly decided, but I think it will not be incorrect to say that custom and usage are also important factors governing succession to ghatwali property, and it is con ceivable that while in some cases custom may develop on the lines of Hindu law relating to succession owing to repeated instances of (1) (1918) 45 I.A. 251. 170 tacit and unquestioned application of the law, in other i.a cases succession to ghatwali property may be governed not entirely by Hindu law but by such law as modified in certain respects by usage and custom.
The question with which we are concerned in this case is whether the widow of a deceased ghatwal, who was a member of a joint family and died leaving no issue or direct male descendants, can succeed to the ghatWali property in prefer ence to the nearest male agnate.
On a reference to the plaint, it would appear that what the plaintiff contended was that the clan to which the parties belong was governed by the Mitakshara school of Hindu law "subject to their clan custom", one of which was said to be that females, viz., widow, daughter or mother, and persons claiming through females could not and did not succeed on the death of the ghatwal.
This allegation was controverted in the written statement, and it was claimed that the family was governed by the Mitakshara system of law and "there was no clan custom governing the estate in suit.
" Upon these pleadings, one of the issues framed by the trial court was "whether succession to the ghatwali is governed by custom, as alleged in paragraph 7 of the plaint." In the course of the trial, the plaintiff tried to prove that females were always excluded as alleged by him.
In this, he did not succeed.
The courts below however found that the question which directly affected the present case was a much narrower one, namely, whether females could succeed even when the family was joint.
So far as this question is con cerned, both the courts below are agreed that females cannot be excluded if the property is the separate property of the ghatwal.
But the question which still remains to be decided is what the true legal position would be if the property is deemed to be joint property.
It appears that evidence was adduced at the trial to show that in 13 instances affecting the Baisi Chaurasi clan to whom the Birbhum ghatwals admit tedly belong, the widow of the last ghatwal succeeded in preference to a male agnate.
171 The trial judge however found that in four of these in stances the nearest agnate who claimed the property was separate from the ghatwal or his widow, but, in the other instances, there was no evidence of separation, or "the evidence was weak", which, I take it, is another way of saying that it could not be safely relied on.
It seems to me that these instances lend some support to the view that Hindu law has been modified ' by custom, so far as the Birb hum ghatwalis are concerned, and that among the ghatwals belonging to this class, where the last ghatwal dies leaving a widow but no issue, then she succeeds in preference to the nearest male agnate, even though the family may be joint.
The Birbhum ghatwals form a class by themselves, and they are also subject to a special Regulation Regulation XXIX of 1814.
That Regulation states among other things that this class of ghatwals shall be entitled to hold the ghatwali property generation after generation and that they and their descendants in perpetuity shall be maintained in possession of such property.
Strictly speaking, neither a widow nor a distant agnate will come within the terms of the Regulation, not being a descendant of the last ghatwal, and therefore custom and usage cannot be ruled out in determining succes sion in such cases.
The strongest case which was relied upon by the appellant is Fulbati Kumari vs Maheshwari Pra sad(1) where it was laid down that on the death of a ghat wal, who was a member of a joint family, the ghatwali property would devolve according to the rules of Hindu law affecting joint property, that iS to say, by the rule of survivorship.
But, in this case, Dawson Miller C.J. who delivered the judgment, took care to observe that the ghat wali estate which was the subject of litigation was not comparable to the Birbhum ghatwali 'tenures, which means that the rule laid down in that case may not apply to Birb hum ghatwals.
In the present case, the Commissioner, who represented the Government and who had special means of knowing the usages affecting the Birbhurn ghatwals.
(1) A.I.R. 1923 Pat.
453. 172 appointed the respondent as the ghatwal, stating that he was "following a well established precedent in the case of these ghatwals by recognizing the widow in the absence of a direct heir.
" In my opinion, whatever evidence there is in this case supports the Commissioner 's view, and there is hardly any cogent evidence to rebut it.
In the circumstances, I agree that this appeal ought to be dis missed with costs.
Appeal dismissed.
ADAMJI UMAR DALAL vs THE STATE OF BOMBAY @ November 26, 1951.
| The appellant who belonged to Scheduled Tribe covered by the Schedule to the Constitution (Dadra and Nagar Haveli) Schedule Tribes Order, 1962, decided to contest the 1984 election from the Dadra and Nagar Haveli Parliamentary Constituency which was a constituency reserved for the members belonging to the Scheduled Tribes.
As he was holding the post of an Investigator as a temporary Government serv ant governed by the Central Civil Services (Temporary Serv ices) Rules, 1965 and also by condition 6 of his appointment order, he wrote a letter on November 21, 1984 to the Collec tor of Dadra and Nagar Haveli, who was his appointing au thority, tendering his resignation and enclosing a demand draft drawn on the State Bank of India for a sum of Rs.1024.05 paise, being one month 's notice pay.
On 24.11.1984 at 10 A.M. he wrote another letter to his immedi ate officer and submitted all the records and files which were with him.
He, thereafter, filed his nomination paper on the same day i.e. two days before the last date for filing the nomination papers.
On 26.11.84, he wrote a letter to the Returning Officer, bringing to his notice each and every fact leading to his resignation and requesting the Returning Officer to note his contention that he ceased to be a gov ernment servant with effect from 21.11.84, while scrutinis ing the nomination paper.
On the same date he received a reply from the office of the Administrator Dadra and Haveli to the effect that his resignation would take effect from 21.12.84 on the expiry of one month 's notice and that 636 his remitting one month 's notice pay was not contemplated under Rule 5(1)(a) of the Central Civil Services (Temporary Services) Rules, 1965, as per the legal opinion obtained.
On 27.11.84, the appellant sent a reply bringing to the Admin istrator 's notice condition No. 6 of his appointment order and also cases of six other officers whose resignations were accepted forthwith accepting one month 's notice pay from them.
The appellant also alleged mala fides and pressure by Respondent No. 1, the then sitting member of the Parliament on the Collector.
In reply to the said letter, the Develop ment and Planning Officer by his letter dated 21.12.84 reiterated the Administrator 's stand and returned the demand draft.
In the meanwhile on 28.11.84, i.e. the date of scrutiny of the nomination papers, the Returning Officer overruled the objection raised by Respondent No. 1 that since the appellant was holding an office of profit under the Govern ment he was disqualified to contest the election.
In the said election, the appellant secured the highest number of votes and he was declared elected.
The election petition filed by Respondent No. 1 was allowed and the appellant 's election was declared null and void.
The appeal preferred by the appellant under section 116 of the Repre sentation of People Act, 1951 was remitted to the High Court for amendment of written statement, framing of fresh issues and further findings of the High Court on them.
All the four additional issues framed were answered against the appellant and thereafter, the said appeal was set for further hearing.
Allowing the appeal, the Court, HELD: 1.
The letter of resignation dated November 21, 1984 cannot be treated as one submitted under Rule 5(1) of the Central Civil Services (Temporary Service) Rules, 1965.
The proviso to Rule 5(1) authorises only the appointing authority to terminate the temporary service of the Govern ment servant forthwith and that on such termination the Government servant becomes entitled to claim a sum equiva lent to the amount of his pay plus allowances for the period of the notice at the same rates at which he was drawing them immediately before the termination of his service, or as the case may be for the period by which such notice fails short of one month.
There is no provision in the CCS Temporary Service Rules which authorises a Government servant to bring about the termination of his temporary service as provided in Rule 5(1) by paying a sum equivalent to the amount of his pay and 637 allowances of the period of notice at the same rates at which he was drawing them immediately before termination of his service or as the case may be for the period by which notice falls short of one month.
If the letter of resigna tion was truly one which had been submitted under Rule 5(1) of the CCS Temporary Service Rules which did not envision tendering of one month 's salary by the employee, there was no necessity to tender a demand draft for Rs.1024.05.
Such payment was contemplated only when the resignation was under condition No. 6 of the letter of appointment issued in favour of the appellant about which the appointing authority could not have been unaware.
If the concerned authority had not realised that it was a resignation pursuant to such conditions the said authority would have returned (instead of retaining) the demand draft at once or at the earliest.
[654D; G H; 655A E] 1.2 The letter of resignation of the appellant was one which was submitted pursuant to Condition No. 6 of his letter of appointment which was one more method adopted and accepted by the Administration to bring about the termina tion of service of a temporary government servant.
The said condition was only supplementary to the modes of termination of temporary service, referred to in Rule 5(1) of the CCS Temporary Service Rules and it was not in any way inconsist ent with the said Rules.
As a matter of fact it was not even suggested or faintly hinted in the High Court that there was any such inconsistency.
[656B C] 1.3.
It is well recognised that a new service condition may be brought into effect by an executive order and such condition would remain in force as long as it is not re pealed either expressly or by necessary implication by another executive order or a rule made under the proviso of Article 309 of the Constitution of India or by a statute.
In the facts and circumstances of the case, the material pro duced in the Court and in the absence of any inconsistency between condition No. 6 and any other order, rule, or law the letter of resignation is one submitted pursuant to condition No. 6 in the letter of appointment issued in the case of the appellant.
[656C E] 2.1 There has been full compliance with condition No. 6 of the letter of appointment as a demand draft was enclosed being a month 's notice pay and allowances.
[656E F] 2.2 The resignation contemplated under Condition No. 6 is not the same as the letter of resignation which may be submitted by a government servant on the acceptance of which he ceases to be a government servant.
In the case of an ordinary resignation which is 638 governed by the Memorandum No. 39/6/57 Ests.
(A) Ministry of Home Affairs dated 6th May, 1958 no question of paying a month 's salary or allowance to the Government would arise.
In the absence of any rule or executive order prescribing the method or manner in which a temporary government servant of the rank of an investigator could be relieved from serv ice under Condition No. 6 of the letter of appointment or any evidence adduced as to what practice had been in vogue as regards relieving such a person, it must be held that it is implicit in such a condition that the nature of his employment is such that he can be relieved forthwith without the need for waiting for a month and that he would be so relieved as was indeed done in the case of others governed by such a condition.
[657A C] 2.3 The appellant should be deemed to have been relieved from his service at 10.00 A.M. on 24.11.1984 and he had ceased to be a Government servant before he submitted his nomination paper on 24.11.1984.
At 10.00 A.M. on 24.11.1984, before the appellant submitted his nomination paper to the Returning Officer, he had handed over all the records, registers, files etc.
which were with him to the head of his office along with a letter, a copy of which was submitted to the Collector, who was the appointing authority.
This cannot be termed as an unilateral act of the appellant.
There was no refusal to accept the records.
There was no order to report for duty and discharge any functions.
The appellant had not, in fact, been paid any salary or allowance for the period subsequent to 20.11.84, that is, the date previous to the date of the letter of resignation.
He had not attended and he was not required to attend his office from 21.11.84 except for handing over the records, files, registers etc.
on 24.11.84.
The appellant was not asked by the Collector to attend the office till 21.12.84 nor grievance was made against him for his absence in the wake of his resignation.
There was no disciplinary proceeding or any other kind of enquiry pending against the appellant which required the appointing authority not to relieve the appellant from his service in the public interest.
And there was no objection raised as a matter of fact on any ground to his being treated as having ceased to be in service eventually till the expiry of one month from the date of his service.
It is not as if for administrative reasons his resignation was not acceptable for any reason.
[657C F] 3.
The Returning Officer had rightly overruled the objection and accepted his nomination paper.
It is not established by the election petitioner on whom the onus rested that the returned candidate held an office of profit on the date of scrutiny or that his nomination paper was Wrongly accepted by the Returning Officer.
He cannot there fore suc 639 cessfully assail the election of the returned candidate, the appellant herein.
[657G H]
|
ition No. 4659 of 1979 (Under Article 32 of the Constitution.) G. section Mann for the Petitioner.
Har Dev Singh for the Respondents.
The Judgment of the Court was delivered by PATHAK, J.
The petitioner applies for relief under Article 32 of the Constitution against the orders of the High Court of Punjab and Haryana withdrawing judicial work assigned to him and thereafter prematurely retiring him from service.
The petitioner, after holding a number of minor posts in the Punjab Government, was appointed to the Punjab Civil Service (Executive Branch) and subsequently in April, 1965 migrated to the Punjab Civil Service (Judicial Branch).
He remained a Judicial officer thereafter.
The petitioner claims that he was entitled to promotion to a Selection Grade post in the Punjab Civil Service (Judicial Branch) and subsequently to a post in the Punjab Superior Judicial Service.
The claim was based in both cases on the footing that a post had been reserved in the two services for a member of the Scheduled Castes.
It was also asserted that the petitioner was entitled to the posts even 509 without reference to such reservation.
The petitioner 's case is that his service record was uniformly good, but as the High Court was actuated by mala fides it refused him promotion.
He cites some instances to support the allegation of mala fides, including the circumstance that having been appointed to the post of Senior Subordinate Judge he was "reverted" as Subordinate Judge.
On 4th November, 1978 the High Court ordered withdrawal of all judicial work from the petitioner and on 8th November, 1978 a Judicial officer was posted in his place.
The petitioner then filed the present writ petition for the quashing of the orders dated 4th November, 1978 and 8th November, 1978, for his reappointment as Senior Subordinate Judge and, thereafter, his promotion to the Selection Grade post of the Punjab Civil Service (Judicial Branch) with effect from 1st November, 1966 and his promotion to the Punjab Superior Judicial Service with effect from 1st November, 1967.
He also claimed an injunction against his premature retirement from service.
This Court entertained the writ petition but declined to grant interim relief.
On 29th December.
1978 the Punjab Government, accepting the recommendation of the High Court, sanctioned the premature retirement of the petitioner from the Punjab Civil Service (Judicial Branch) with effect from 30th December, 1978 on which date the petitioner completed twenty five years qualifying service for the purposes of the Punjab Civil Service (Premature Retirement) Rules, 1965.
In regard to the petitioner 's claim for promotion to the Selection Grade post in the Punjab Civil Service (Judicial Branch) with effect from 1st November, 1966, and to a post in the Punjab Superior Judicial Service with effect from 1st May, 1967 on the basis that a post had been reserved in each of the services for a member of the Scheduled Castes, it seems to us that the claim is grossly belated.
The writ petition was filed in this Court in 1978, about eleven years after the dates from which the promotions are claimed.
There is no valid explanation for the delay.
That the petitioner was making successive representations during this period can hardly justify our overlooking the inordinate delay.
Relief must be refused on that ground.
It is not necessary, in the circumstances, to consider the further submission of the respondents that the provision on which the petitioner relies as the basis of his claim is concerned with the appointment only of members of the Scheduled Castes to posts in the Punjab Superior Judicial Service and not to recruitment by promotion to that service.
The petitioner has also claimed that even without the advantage of reservation he is entitled to promotion to a Selection Grade post in the Punjab Civil Service (Judicial Branch) and to a post in the Punjab 510 Superior Judicial Service, and that the High Court should have promoted him accordingly.
The position taken in reply by the High Court is that the character and quality of the petitioner 's work and conduct, as evidenced by confidential reports pertaining to him, did not justify his promotion having regard to the guidelines laid down by the High Court.
We have personally examined the records in respect of the petitioner, and we are unable to say that the view taken by the High Court is unreasonable or arbitrary.
We may now examine the contention of the petitioner that the order of premature retirement is invalid.
He has assailed the application of the Punjab Civil Service (Premature Retirement) Rules, 1975.
He urges that as a Judicial officer in the Punjab Civil Service (Judicial Branch) he is not governed by these rules.
It is true that originally rule 7 of those Rules provided that they would not apply to persons belonging to any judicial service of the State.
But by notification dated 18th August, 1975, * * * in exercise of the powers under Article 234 of the Constitution besides other provisions, Rule 7 was substituted by another rule which did not exempt members of the judicial service from the operation of the Premature Retirement Rules.
The Premature Retirement Rules were finalised after consultation with the High Court and, therefore, must be regarded as complying with Article 234 of the Constitution.
There is nothing in the Punjab Civil Service (Judicial Branch) Rules which excludes the operation of the Retirement Rules.
We are therefore, not satisfied that the Premature Retirement Rules cannot be applied to the case of the petitioner.
It is urged by the petitioner that the High Court, when it applied the Premature Retirement Rules, did not consider the case of the petitioner on its facts.
We have, however, the affidavit of the Registrar of the High Court which states that the case of the petitioner was considered by the High Court on 26th October, 1978, and having regard to the policy laid down by the High Court it was decided to recommend to the Government that the petitioner should be retired from service in the public interest with effect from 30th December, 1978, the date on which he completed twenty five years of qualifying service.
At the same time it was decided as a matter of policy by the High Court that all the work pending in the court of a Judicial officer, in respect of whom a recommendation for premature retirement had been made to the Government, should be withdrawn immediately pending a decision by the Government on such recommendation.
It was in implementation of that policy that the order directing withdrawal of judicial work from the petitioner was made.
511 It is next contended by the petitioner that the expression "public interest" in the Premature Retirement Rules is vague and the rule is for that reason ultra vires.
In our opinion, the expression in the context of premature retirement has a well settled meaning.
It refers to cases where the interests of public administration require the retirement of a government servant who with the passage of years has prematurely ceased to possess the standard of efficiency, competence and utility called for by the government service to which he belongs.
No stigma or implication of misbehaviour is intended, and punishment is not the objective.
It appears to us to be beyond dispute that the decision of the High Court to recommend the premature retirement of the petitioner in the light of his record of service must be regarded as falling within the scope of the expression "public interest".
The petitioner also asserted that Judicial officers whose record of service was inferior or equivalent to that of the petitioner have not been prematurely retired, and have been retained in service.
The High Court, however, has stated that no such Subordinate Judge has been retained in service.
We see no reason why the High Court should not be believed.
Another point raised by the petitioner is that Article 311 of the Constitution has been violated by the Premature Retirement Rules.
We think that the concept of premature retirement which has found expression in the Rules does not fall within the scope of Article 311.
As we have observed, no element of punishment is involved in premature retirement and it is not possible to say that Article 311 is attracted.
The petitioner has justified the filing of this writ petition under Article 32 of the Constitution on the plea that his fundamental rights under Articles 14, 16, 17 and 46 are violated.
We find no substance at all in that plea.
The petitioner alleges mala fides on the part of the High Court.
It is a reckless allegation, and impossible to countenance.
There is nothing whatever to indicate that the High Court, as a body, was motivated by mala fides against the petitioner.
The instances alleged by the petitioner in support of his allegation of mala fides fail to prove his case.
The High Court has offered a perfectly valid explanation in respect of each instance.
The petitioner points out that the High Court has refused to permit encashment of unutilised earned leave.
On 512 the material before us, we are not satisfied that a case of mala fides has been made out.
These are the only points raised by the petitioner which deserve consideration.
There is no force in them.
The petition fails and is dismissed, but in the circumstances there is no order as to costs.
V.D.K. Petition dismissed.
| On the ground that the tenant had sublet the premises without his consent the landlord sought the tenant 's eviction from the premises under section 11(4)(i) of the Kerala Buildings (Lease and Rent Control) Act, 1965.
The Rent Controller ordered eviction and this order was affirmed by the Subordinate Judge, District Judge and the High Court.
Before this Court it was contended on behalf of the tenant that under section 108(j) of the , it was a term of every lease that the lessee might sublease the whole or any part of his interest in the property and, therefore, unless the lease expressly prohibited the lessee from sub letting the whole or part of the premises, the landlord could not have recourse to section 11(4)(i) of the Act.
Dismissing the appeal, ^ HELD: What section 11(4)(i) of the Act provides is that sub letting shall be a ground for eviction but not if it was by agreement of the landlord.
[142G] 1(a) What section 11(4)(i) means is that a tenant may be evicted on the ground of sub letting unless such sub letting is permitted by a term of the lease itself or by subsequent consent of the landlord.
If the clause "if the lease does not confer on him any right to do so" was not there the position would be unarguable that section 108(j) of the would offer no protection.
But the addition of the clause only clarified that the right to sublet could be conferred on the tenant either at the time of the lease or subsequently but it had to be conferred; it could not be claimed unilaterally by the tenant.
[142B D] (b) Quite obviously the legislature thought that the tenant, whose tenancy was well secured and protected by the rights conferred by the Act should alone be entitled to such security and protection and that the tenant should not be allowed to profit by the protection given to him by subletting the premises and extending the protection to others beside himself unless the landlord by his act agreed to such a course.
[142F] 2.
It is well settled law that not all the rights conferred on the landlord and tenant by section 108 and other provisions of the have been left intact by the various State Rent Acts and that if a State Rent 140 Act makes provision for eviction on certain specified grounds, eviction cannot be resisted on the basis of rights conferred by the .
Section 108(j) stands displaced by section 11(4)(i) of the Act and is no defence to an action for eviction based on this section.
[143G] V. Dhanapal Chettiar vs Yesodai Ammal. ; @ 1747= ; referred to.
|
Civil Appeal No.877 of 1974.
From the Judgment and Decree dated 17.11.1971 of the Allahabad High Court in First Appeal No. 171 of 1966.
D.N. Mukherjee, G.S. Chatterjee and A. Bhattacharjee for the Appellant.
Prithvi Raj and Mrs. Shobha Dikshit for the Respondent.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
This appeal, for enhancement of compensation, by Special leave, arises out of and is directed against the judgment and decree dated 17th November, 1971 of the High Court of Allahabad in First Appeal No. 171 of 1966 affirming the Award and Decree dated 13.12.1965 of the Ist Addl.
District Judge, Varanasi, made in a Reference Under Section 18 of the Land Acquisition Act 1894.
Property known as "Gopal Lal Villa" a sprawling 60 year old building of about 25,000 square feet of plinth area comprising of 35 rooms, halls and other appurtenances, its large 23.66 acre grounds with 431 fruit and 13 Timber trees; 12 Bamboo clumps, situated on the outskirts of the City of Varanasi, originally part of the estate of Raja P.N. Tagore, and now vesting in the Administrator General, West Bengal, was acquired pursuant to the preliminary notification, published in the Gazette, dated, 4.7.1959 for the purposes of the education department of the Government of Uttar Pradesh.
Before the Land Acquisition Officer, Appellant claimed compensation of Rs.8,00,580 (at Rs.352 per decimal) for the land; Rs.3,50,000 for the building and structures; Rs.41,010 for the tree growth; and Rs.5,000 as compensation for change of residence.
The Land Acquisition Officer, however, by his Award dated 4.11.1961 under Section 11 of the Act determined the market value of the land at Rs.3,31,340 valuing it Rs. 140 per decimal (or Rs.14,000 per 1032 acre); of the building and structures at Rs.57,660 and of the treegrowth at Rs.355.83.
Appellant, not having accepted the offer contained in the award, sought for a reference under Section 18 of the Act to the Civil Court in proceedings pursuant to which the District Court enhanced the market value of the land to Rs.4,73,200 (from Rs.140 to Rs.200 per decimal) leaving the valuation of the building and the tree growth undisturbed.
The High Court has affirmed the Award dismissing appellant 's claim for further enhancement before it.
We have heard Shri D.N. Mukherjee, learned counsel in support of the appeal and Shri Prithviraj, learned Senior Advocate for the respondent.
We have been taken through the judgment under appeal and the evidence on record.
On the contentions urged at the hearing, the following points fall for consideration: (a) Whether the estimate of the market value of the acquiredland at Rs.200 per decimal is unreasonably low and is arrived at ignoring the evidence on record and settled principles of valuation? (b) Whether the valuation of the buildings and structures at a mere Rs.57,660 calls for an upward revision? (c) Whether the award made for the tree growth is inadequate and is required to be valued higher? (d) Whether appellant is entitled to the benefit of Sec.
23(2) of the Act as introduced by the U.P. Law Acquisition (Amendment) Act 1972 providing for solatium and, further, to higher rates of solatium and interest under the Central Amending Act (Act No. 68 of 1984) on the ground that proceedings were pending in appeal before this court on the dates these amendments came into force? 4.
Re: Contention (a) The acquired land had the potentiality for building purposes.
Learned District Judge found that: ".
The Land Acquisition Officer himself realised this fact and has observed that "the land under acquisition is 1033 situated within the Corporation limits in Mohalla Orderly Bazar, a thickly populated locality and is near to Kutchery.
It has, therefore, a potential value as building site.
" I may add here that though the acquired land is at a distance of about 3 to 3 1/2 miles from the main markets of Varanasi City, yet every thing of daily need and of day today utility is available in the market which exists in the locality of the acquired land.
It may also be added that the land adjacent to the west of the acquired land known as 'Tagore Nagar ' formerly formed part of this Gopal Lal Villa and both were covered by one boundary.
The land of Tagore Nagar has been divided into small portions and a colony with residential quarters has grown up there.
This was already in existence before the present acquisition . ." The determination of market value of a piece land with potentialities for urban use is an intricate exercise which calls for collection and collation of diverse economic criteria.
The market value of a piece of property, for purposes of Section 23 of the Act, is stated to be the price at which the property changes hands from a willing seller to a willing, but not too anxious a buyer, dealing at arms length.
The determination of market value, as one author put it, is the prediction of an economic event.
viz, the price outcome of a hypothetical sale, expressed in terms of probabilities.
Prices fetched for similar lands with similar advantages and potentialities under bona fide transactions of sale at or about the time of the preliminary notification are the usual, and indeed the best, evidences of market value.
Other methods of valuation are resorted to if the evidence of sale of similar lands is not available.
In the District court, appellant relied upon eight transactions of what, according to him, were sale, of similar lands.
The transactions at Ext.
18, 20, 21 and 22, dated, 25.3.1952, 1.12.1955, 11.8.1953 & 11.7.1957 respectively were rejected by learned District Judge on the ground that they were long enterior in point of time to the acquisition and lacked the element of contemporaneity.
23 dated, 25.10.1958 and Ext.
24 dated, 18.8.1960 were also held not to afford reliable evidence of market value on the ground that while in the former case the property was sold along with a construction thereon without any indication as to the apportionment of the price between the land and the construction, in the latter case the sale was about an year subsequent to the date of the preliminary notification.
1034 What remained were the evidence of sale transactions at Exts.
2 and 19 dated 16.9.1958 and 22.12.1958 respectively indicating a price of Rs.1250 and Rs.900 per biswa respectively.
The District Judge struck an average of the two and fixed the rate at Rs.1075 per biswa which worked out to about Rs.350, or thereabouts, per decimal.
But since Ext. 2 and Ext. 19 related to very small plots, the learned District Judge on some calculations of his own, fixed the rate of Rs.200 per decimal for the acquired land.
Shri Mukharji in support of the appellant 's claim @ Rs.352 per decimal submitted that the High Court, in affirming the valuation of the land at a mere Rs.200 per decimal, overlooked certain settled principles of valuation in that it approved the process adopted by the learned District Judge of striking an average of the valuations reflected in Ext.
2 and Ext.
19, while the higher of the two figures indicated by Ext. 2, should have been adopted.
Learned Counsel submitted that the acquired land, though situate about 3 1/2 miles away from the heart of Varanasi City, had all the potentiality for use for building purposes and that the rejection of the evidence of market value afforded by Ext.
24, the transaction of sale dated 14.7.1960 which indicated a price of Rs.2,000 per biswa on the ground that it was an year later than the preliminary notification was erroneous.
It is trite proposition that prices fetched for small plots can not form safe bases for valuation of large tracts of land as the two are not comparable properties.
(See Collector of Lakhimpur vs B.C. Dutta, AIR 1971 SC 2015; Mirza Nausherwan Khan & Anr.
vs The Collector (Land Acquisition), Hyderabad, [1975] 1 SCR; Padma Uppal etc.
vs State of Punjab & Ors., [1971] 1 SCR; Smt.
Kaushalya Devi Bogra & Ors.
vs The Land Acquisition Officer Aurangabad & Anr., [1984] 2 SCR.
The principle that evidence of market value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its proper perspective.
The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents.
However, if it is shown that the large extent to be valued does admit of and is ripe for use for building purposes; that building lots that could be laid out on the land would be good selling propositions and that valuation on the basis of the method of a hypothetical lay out could with justification be adopted, then in valuing such small, laid out sites the valuation indicated by sale of comparable small sites in the area at or about the time of the notification would be relevant.
In such a case, necessary deductions for the extent of land required for the formation of roads and other civic 1035 amenities; expenses of development of the sites by laying out roads, drains, sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realisation of the price; the profits on the venture etc. are to be made.
In Sahib Singh Kalha & Ors.
vs Amritsar Improvement Trust and Ors., (See , this court indicated that deductions for land required for roads and other developmental expenses can, together, come up to as much as 53%.
But the prices fetched for small plots cannot directly be applied in the case of large areas, for the reason that the former reflects the 'retail ' price of land and the latter the 'wholesale ' price.
The sale transaction at Ext.
24 was an year later.
Such subsequent transactions which are not proximate in point of time to the acquisition can be taken into account for purposes of determining whether as on the date of acquisition there was an upward trend in the prices of land in the area.
Further under certain circumstances where it is shown that the market was stable and there were no fluctuations in the prices between the date of the preliminary notification and the date of such subsequent transaction, the transaction could also be relied upon to ascertain the market value.
This court in State of U.P. vs Maj.
Jitender Kumar, (See observed: ". .
It is true that the sale deed Ext.
21 upon which the High Court has relied is of a date three years later than the Notification under section 4 but no material was produced before the Court to suggest that there was any fluctuation in the market rate at Meerut from 1948 onwards till 1951 and if so to what extent.
In the absence of any material showing any fluctuation in the market rate the High Court thought it fit to rely upon exhibit 21 under which the Housing Society itself had purchased land in the neighbourhood of the land dispute.
On the whole we are not satisified that any error was committed by the High Court in relying upon the sale deed exhibit 21. ." But this principle could be appealed to only where there is evidence to the effect that there was no upward surge in the prices in the interregnum.
The burden of establishing this would be squarely on the party relying on such subsequent transaction.
In the present case appellant did not endeavour to show that between the date of preliminary notification i.e. 4.7.1959 and the date of Ext.
24 i.e. 18.8.1960 there was no appreciation in the value of land in the area.
Therefore, Ext.
24 cannot be relied upon as affording evidence of the market 1036 value as on 4.7.1959.
We cannot accept the argument that the price indicated in Ext.
24 should be accepted after allowing an appropriate deduction for the possible appreciation of the land values during the period of one year.
Apart from other difficulties in this exercise, there is no evidence as to the rate and degree of appreciation in the values of land so that the figure could be jobbed backwards from 14.7.1960 to 4.7.1959.
It appears to us that even if the value at Rs.1,250 as on 27.8.1958 indicated by Ext.
2 is adopted and something is added thereto for the possible appreciation for the period till the preliminary notification, also taking into account the trend of appreciation in the prices in the area as indicated by Ext.
24 and the value of small developed sites is estimated somewhere between Rs.1,400 and Rs.1,600 per biswa or Rs.450 to Rs.500 per decimal, yet, the valuation made in the present case does not call for or justify any upward revision at all.
There is a simple way of cross checking these results.
The value of small plots Rs.500 per decimal as now estimated represents what may be called the "retail" price of the land.
What is to be estimated therefrom is the "wholesale" price of land.
In Bombay Improvement vs Mervanji Manekji Mistry, (See AIR 1926 Bombay 420) Mecleod CJ suggested a simple rule: ". .Valuation cases must be dealt with just as much from the point of view of the hypothetical purchase as of the claimant.
The valuation itself must often be more or less a matter of guesswork.
But it is obviously wrong to fix upon a valuation which, judged by everyday principles, no purchaser would be likely to give . ." ". .I have always been adverse to elaborate hypothetical calculations which are no more likely to lead to a fair conclusion than far simpler methods.
But, in any event, no harm can be done by testing a conclusion arrived at in one way by a conclusion arrived at in another . ." ". .A very simple method of valuing land wholesale from retail prices is to take anything between one and half onethird, according to circumstances of the expected gross valuation, as the wholesale price. ." (emphasis supplied) In the present case, Rs.200 per decimal for the large extent of the 1037 acquired land works out to 40% of the "retail" price even if we take, Rs.500 as the "retail" price.
That apart, in the case of land with potentialities for a more profitable use, it is necessary to acknowledge, and make due allowance for, the possibility that the land might not be applied for the prospective use at all or not so applied within a reasonable time.
There is, therefore, no justification to interfere with the determination of the market value of the land approved by the High Court.
Contention (a) is accordingly answered against the appellant.
Re: Contention (b) The District Court proceeded to value the property on the "Land and Building Method".
The appositeness of this method to the present case was not debated before us.
Usually, land and building thereon constitute one unit.
Land is one kind of property; land and building together constitute an altogether different kind of property.
They must be valued as one unit.
But where, however, the property comprises extensive land and the structures thereon do not indicate a realisation of the full developmental potential of the land, it might not be impermissible to value the property estimating separately the market value of the land with reference to the date of the preliminarynotification and to add to it the value of the structures as at that time.
In this method, building value is estimated on the basis of the primecost or replacement cost less depreciation.
The rate of depreciation is, generally, arrived at by dividing the cost of construction (Less the salvage value at the end of the period of utility) by the number of years of utility of the building.
The factors that prolong the life and utility of the building, such as good maintenance, necessarily influence and bring down the rate of depreciation.
Hari Shanker Misra PW 3 referring to the nature and quality of the building stated: ".
The Northern part of this Villa was double storeyed and rest was single storeyed.
Its plinth was 3 feet high and rooms were 14 feet high.
The building bore 35 rooms and besides this there was a big hall 65 feet x 22 feet.
Its floor was made up of some patent stones.
Some monthly some market and Vkiya were stoned.
The doors were 8 feet x 4 feet and they were made up of Burma teak wood and up ways were double doored.
When Improvement Trust oc 1038 cupied the property of Nejai at that time building was well maintained.
Over and above the main building there were manager quarters.
Kitchen, out house, servant quarters, Chowkidar quarters and a stable.
Now they were in good condition.
Its boundary wall was 7 feet and at some places they were 8 feet high.
This also consists of 2 iron gates.
One is main gate and the other one is by its side of some distance. " Learned District Judge based his valuation almost entirely upon the report of the Chief Engineer, estimating the building at Rs.57,660.
That report itself was not brought on record in the proceedings of reference.
It is not clear from the judgment of the High Court whether this estimate of Rs.57,660 represented the cost of replacement of the structure less depreciation or whether it represented merely the salvage value of the building.
High Court rejected the Valuation Report, Ext.
1 relied upon by the appellant on the ground that it was made with reference to a date which was an year later than the preliminary notification.
The High Court observed: ".
The appellant had examined Narain Chand Das, an Overseer who had assisted the Executive Engineer, in preparing the valuation of the constructions and the well.
The report of the Executive Engineer is Ext.
1 on the record.
It appears from the said report that the valuation was determined on the basis of the rates prevailing in the year 1960 where as the preliminary notification in the instant case was issued in the year 1959.
Moreover, this building appears to be about 60 years old and the market value thereof could not be determined on the basis of the cost of constructions prevailing in the year 1960.
This method of calculating the market value of the property is obviously erroneous and cannot be accepted.
No other evidence was produced by the appellant to determine the value of the constructions and the well.
The evidence produced by him being not satisfactory, the compensation already determined by the Land Acquisition Officer in respect of this item of the property was not liable to be enhanced. ." We are afraid the estimate of the proper market value of the building has not received the requisite attention both before the High Court and the District Court.
It is no doubt true that Ext.
1 was prepared on 20.7.1960, an year after the date of the preliminary notifi 1039 cation in the present case; but the extent of the built area was about 2,500 sq.
1 gives a breakdown of the area of the various parts of the building and sets out the nature of the construction and proceeds to estimate the value in terms of the then current PWD rates less depreciation of 20%.
The rates adopted were not particular to the date of valuation i.e. 20.7.1960.
The PWD rates are operative over a period, generally for an year or so.
The extent or the quality of construction were also not in dispute.
The main building of an area of 18828 sq.
consisted of 35 rooms, and a big hall with 'Marble Flooring ', 'Burma Teak Shutters ', 'Stone Slab Roofing ', a portico with 'Glazed Gracian Pillars ' etc.
In Ext.
1, the main portion was valued at Rs.12 per sq.
Apart from the main building, there were other appurtenances such as the Managers ' quarters, kitchen house, chowkidars ' quarters, out house, stables, pucca wells etc.
The other structures have been valued area wise at much lesser rates, according as the nature of the construction.
The decendants of Raja P.N. Tagore, it was claimed, were residing in the building till a few days before possession was taken.
There is no evidence to suggest that, the rates mentioned and adopted in Ext.
1 were not rates valid for a spread out period.
It appears to us somewhat unreasonable that the extensive building of 25,000 sq.
with big halls and 35 rooms constructed with quality material, marble flooring, burma teak joinery should be valued at a mere Rs.57,660.
No case was made out that the building had lost its utility and that only mode of valuation appropriate to the case was one of awarding merely the salvage value.
The building, according to the evidence, was quite strong though about 60 years old at the time.
Having regard to the circumstances of this case, the appropriate thing to do would have been to set aside the award in so far as the valuation of the building is concerned and remit the matter for a fresh determination of its market value as on 14.7.1959.
But the parties have been at litigation for decades.
The acquisition is of the year 1959.
We, therefore, thought and put to the learned counsel on both sides whether in the interests of justice, it would not be proper to make some rough and ready estimate, drawing such sustenance as the evidence on record could afford and impart a quietus to this vexed litigation.
Learned counsel very fairly submitted that this would be the appropriate course.
In the very nature of things, the exercise that we make, must share the imperfections of the evidence on record.
But then, some element of speculation is inevitable in all valuations.
In the 1040 best of exercises some measure of conjecture and guess work is inherent in the very nature of the exercise.
We may first proceed to estimate the prime cost of the building.
The measurement set out in Ext.
1 is not disputed.
If Ext. 1 is taken as the starting point for the estimate of cost of replacment as on 4.7.1959; the depreciation of 20% allowed in Ext.
1 has to be added back and, further, some deduction towards the possible escalation of costs of construction between the date of preliminary notification and of the period of validity of the rates adopted in Ext.
1 has to be made.
On this basis, the cost of replacement could be estimated at about Rs.4 lakhs.
This works out to Rs.16 sq.
on the average.
Even in respect of 1959, this figure may not be much, having regard to the quality of the construction.
From this sum of Rs.4 lakhs, depreciation for the past life of 60 years of building would have to be deducted.
Depreciation depends upon and is deduced from factors such as the cost of the construction; the expected life span; its salvage value realisable at the end of the period of utility etc.
Rate of depreciation is generally, the prime cost less salvage value divided by the life span.
These, of course, are matters of evidence.
In the present case, if we make a rough and ready estimate of the salvage value at say, 10% of the cost and estimate the period of utility of life span of the building at, say, 90 years, the depreciation which is the annual loss of value due to physical wear and tear works out to about Rs.4,000 per year or roughly 1%.
Without going to the finer details of the calculation of the depreciation on the progressive written down values, we think, an estimate of 50% of the cost of the building may, again on a rough and ready basis, be deducted towards depreciation.
The market value of the building as on the date of the preliminary notification could accordingly be fixed at Rs.2,00,000.
Accordingly, the compensation for the buildings and structures is enhanced from Rs.57,660 to Rs.2,00,000, point (b) is held and answered accordingly.
Re: Contention (c): So far as the tree growth is concerned, it is trite proposition that where land is valued with reference to its potentiality for building purposes and on the basis of prices fetched by small sites in a hypothetical lay out, the tree growth on the land cannot be valued independently on the basis of its horticultural value or with reference to the value of the yield.
But this principle does not 1041 come in the way of awarding the timber value or the salvage value of the tree growth after providing for the cost of cutting and removing.
The evidence shows that there were 471 fruit bearing trees and plants: 13 timber trees and 12 Bamboo clusters.
Though there is some evidence as to the value of the yield, this may not be a relevant factor having regard to the principles of valuation appropriate to the case.
There is no evidence about the timber value and the fuel value of the trees.
Learned District Judge has awarded a sum of Rs.355.85 for the entire tree growth.
Having regard to the large number of trees and to the fact that some of them were timber trees, we think we should award lumpsum of Rs.7,500 under this head.
Accordingly, compensation for the tree growth is enhanced from Rs.355.85 to Rs.7,500. 11.
Re: Contention(d) This leaves us with the question whether the benefit of Section 23(2) introduced by the UP Land Acquisition (Amendment) Act 1972 (Act No. 28 of 1972) providing for a solatium is available to the appellant on the ground that the proceedings in appeal were pending as on the date when that provision was introduced.
It is to be recalled that by U.P. Land Acquisition (Amendment) Act (Act No. 22 of 1954) Section 23(2) had been deleted from the statute.
The preliminary notification was long subsequent to this deletion.
The question is whether the introduction or re introduction of Section 23(2) in 1972 would enure to the benefit of the appellant on the premise that rules of construction appropriate to such remedial measures would require their benefit to be extended to pending proceedings.
Appellant has also claimed the benefit of the further enhancement of the solatium and the rates of interest under Central Amending Act 68 of 1984.
Shri Mukharjee submitted that these amendments, both by the State Law and the Central Law, were remedial legislations and would apply to pending actions.
Shri Prithviraj, on the contrary, submitted that these changes in the law, brought in by the amended provisions are presumptively prospective except to the extent that they are made expressly or by compelling implication retrospective in the extension of their benefits.
Learned Counsel said that application of these provisions even to pending proceedings envisages a principle of retro active application which must expressly be enabled by the statute or is to be inferred as an inevitable implication.
1042 Shri Mukharjee relied upon certain observations of this court in the case of Bhag Singh & Ors.
vs Union Territory of Chandigarh, (See 1985 Suppl.
2 SCR 949).
There are some observations at 958 of the report which tend to lend support to Shri Mukharjee.
But the matter is pending decision at the hands of a larger bench.
In the circumstances, learned counsel on both sides submitted that the appeal be disposed of on the other points leaving it open to the appellant to agitate Contention (d) after a final pronouncement in Bhag Singh 's case, if in the light of the said judgment, this claim or any part of it survives.
We accept this submission and reserve liberty to the appellant accordingly.
Shri Mukharjee sought to raise another point concerning compensation to be awarded for change of residence under Clause 'fifthly ' in Sec.
23(1); but as this point does not appear to have been raised and urged before the High Court.
We think, we should not permit the appellant to re agitate this question over again in this court.
It is also to be observed that no specific ground is taken in this behalf in this appeal either.
In the result, this appeal is allowed in part and while the compensation determined and awarded for the land is left undisturbed, the compensation awarded for the building and tree growth is enhanced from Rs.57,660 to Rs.2,00,000 and from Rs.355.85 to Rs.7,500 respectively.
Appellant shall be entitled to interest at 6% on the enhanced amount of compensation from the date of taking of possession till realisation.
Liberty is reserved to the appellant to seek such additional relief on Contention (d) depending upon the ultimate decision in Bhag Singh 's case.
The appeal is disposed of accordingly.
The appellant shall be entitled to the costs in this appeal.
The advocate 's fee fixed at Rs.2,500.
N.V.K. Appeal allowed.
| % The suit property known as "Gopal Lal Villa" situated on the outskirts of the city of Varanasi was a sprawling 60 years old building, part of the estate of a Raja, and vested in the appellant.
It was acquired pursuant to preliminary Notification dated 4.7.1959 under the Land Acquisition Act 1894 for the purposes of the Education Department of the Government of Uttar Pradesh.
The building was of about 25,000 square feet plinth area comprising 35 rooms, halls and other appurtenances, and the 23.66 acres of ground appurtenant to the building, had 431 fruit and 13 timber trees and 12 bamboo clumps.
The appellant claimed compensation of Rs.8,00,580 for the land valuing it at Rs.352 per decimal.
Rs.3,50,000 for the building and structures; Rs.41,010 for the tree growth and Rs.5,000 as compensation for change of residence.
The Land Acquisition Officer by his Award dated 4.11.1961 1026 under section 11 of the Land Acquisition Act determined the market value of the land at Rs.3,31,340 valuing it at Rs.140 per decimal; of the building and superstructure at Rs.57,660 and of the tree growth at Rs.355.83.
Being aggrieved with the aforesaid determination of compensation the appellant did not accept the offer contained in the Award, and sought for a reference under section 18 of the Act to the Civil Court.
The District Court enhanced the market value of the land to Rs.4,73,200 i.e. from Rs.140 to Rs.200 per decimal and left the valuation of the building and the tree growth undisturbed.
The High Court affirmed the Award of the District Court and dismissed the appellant 's claim for further enhancement.
In the appeal to this Court, it was contended on behalf of the appellant that the claim of Rs.352 per decimal was not accepted and that the High Court in affirming the valuation of the land at a mere Rs.200 per decimal overlooked certain settled principles of valuation.
It adopted the District Judge 's valuation which was the average of the valuation reflected in Ext.
2 and Ext.
19 while the higher of the two figures indicated by Ext.
2 should have been adopted.
It was further contended that the appellant was entitled to solatium and interest at higher rates in view of the re introduction of section 23(2) in 1972 by the U.P. Land Acquisition (Amendment) Act, 1972 and under the Central Amendment Act 68 of 1984.
On behalf of the respondent it was contended that the changes in law brought about by the State Amendment Act No. 28 of 1972 and the Central Amending Act 68 of 1984 are presumptively prospective except to the extent that they are made expressly or by compelling implication retrospective in the extension of their benefits.
On the question whether: (1) ^ HELD: 1.(i) The determination of market value of a piece of land with potentialities for urban use is an intricate exercise which calls for collection and collation of diverse economic criteria.
[1033C D] (ii) The market value of a piece of property for purposes of section 23 of the Land Acquisition Act is stated to be the price at which the property changes hands from a willing seller to a willing, but not too anxious a buyer, dealing at arm 's length.
[1033D] (iii) Prices fetched for similar lands with similar advantages and potentialities under bonafide transactions of sale at or about the time of the preliminary notification are the usual, and indeed the best, evidences of market value.
Other methods of valuation are resorted to if the evidence of sale of similar lands is not available.
[1033E F] (iv) Prices fetched for smaller plots cannot form safe bases valuation of large tracts of land as the two are not comparable properties.
[1034E] Collector of Lakhimpur vs B.C. Dutta, AIR 1971 SC 2015; Mirza Nausherwan Khan & Anr.
vs The Collector (Land Acquisition), Hyderabad, ; ; Padma Uppal etc.
vs State of Punjab & Ors.
, ; and Smt.
Kaushalya Devi Bogra & Ors.v.
The Land Acquisition Officer, Aurangabad & Anr., ; , referred to.
(v) However, if it is shown that the large extent to be valued does admit of and is ripe for use for building purposes; that building plots that could be laid out on the land would be good selling propositions and that valuation on the basis of the method of a hypothetical lay out 1028 could with justification be adopted, then in valuing such small, laid out sites the valuation indicated by sale of comparabe small sites in the area at or about the time of the notification would be relevant.
[1034G H] (vi) In a case such as the above, necessary deduction for the extent of land required for the formation of roads and other civic amenities; expenses of development of the sites by laying out roads, drains, sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realisation of the price; the profits on the venture etc.
are to be made.
[1034H; 1035A B] Sahib Singh Kalha & Ors.
vs Amritsar Improvement Trust and Ors., referred to.
(vii) Prices fetched for small plots cannot directly be applied in the case of large areas, for the reason that the former reflects the 'retail ' price of land and the latter the 'wholesale ' price.
[1035B] (viii) Subsequent transactions which are not proximate in point of time to the acquisition can be taken into account for purposes of determining whether as on the date of acquisition there was an upward trend in the prices of land in the area.
[1035C] (ix) Where it is shown that the market was stable and there were no fluctuations in the prices between the date of the preliminary notification and the date of such subsequent transaction, the transaction could also be relied upon to ascertain the market value.
(a) When there is evidence to the effect that there was no upward surge in the prices in the interregnum.
(b) The burden of establishing this would be squarely on the party relying on such subsequent transaction.
[1035C D,G] State of U.P. vs Major Jitender Kumar, referred to.
In the instant case, the appellant did not endeavour to show that between the date of preliminary notification i.e. 4.7.1959 and the date of Ext.
24 i.e. 18.8.
1960 there was no appreciation in the value of land in the area.
Therefore, Ext.
24 cannot be relied upon as affording evidence of the market value as on 4.7.1959.
[1035G H] (xi) The valuation of land made in the present case does not call for or justify any upward revision at all.
(a) There is no justification to interfere with the determination of the market value of the land approved by the High Court.
[1036C D] 1029 In the instant case Rs.200 per decimal for the large extent of the acquired land works out to 40% of the "retail" price even if Rs.500 is taken as the 'retail ' price.
That apart, in the case of land with potentialities for a more profitable use it is necessary to acknowledge, and make due allowance for, the possibility that the land might not be applied for the prospective use at all or not so applied within a reasonable time.
[1036H; 1037A B] Bombay Improvement vs Mervanji Manekji Mistry, AIR 1926 Bombay 420 referred to.
2.(i) Usually land and building thereon constitute one unit.
Land is one kind of property; land and building together constitute an altogether different kind of property.
The latter must be valued as one unit.
[1037C D] (ii) However, where, the property comprises extensive land and the structures standing do not show that full utilisation potential of the land is realised it might not be impermissible to value the property estimating separately the market value of the land with reference to the date of the preliminary notification and to add to it the value of the structures as at that time.
[1037D E] (iii) By the above method, building value is estimated on the basis of the prime cost or replacement cost less depreciation.
The rate of depreciation is, generally, arrived at by dividing the cost of construction (less the salvage valued at the end of the period of utility) by the number of years of utility of the building.
[1037E F] (iv) The factors that prolong the life and utility of the building, such as good maintenance, influence and bring down the rate of depreciation.
[1037F] In the instant case, the estimate of the proper market value of the building has not received the requisite attention both before the High Court and the District Court.
It is no doubt true that the Valuation Report, Ext.
I, was prepared on 20.7.
1960 one year after the date of the preliminary notification.
But the extent of the built area was about 25,000 sq.
There is no evidence to suggest that the rates mentioned and adopted in Ext.
I were not rates valid for a spread out period.
No case was made out that the building had lost its utility and that the only mode of valuation appropriate to the case was one of awarding merely the salvage value.
The building, according to the evidence was quite 1030 strong though about 60 years old at the time.
The appropriate thing to do would have been to set aside the award in so far as the valuation of the building is concerned and remit the matter for a fresh determination of its market value as on 14.7.1959.
However, in the interest of justice it would be proper to make some ready and rough estimate drawing such sustenance as the evidence on record could afford and impart a quietus to this vexed litigation.
Accordingly, the compensation for the buildings and structures is enhanced from Rs.57,660 to Rs.2,00,000.
[1038G H; 1039D G; 1040G] 3.
Where land is valued with reference to its potentiality for building purposes and on the basis of prices fetched by small sites in a hypothetical lay out the tree growth on the land cannot be valued independently on the basis of its horticultural value or with reference to the value of the yield.
This principle, however, does not come in the way of awarding the timber value or the salvage value of the tree growth after providng for the cost of cutting and removing.
[1040G H; 1041A] In the instant case, the evidence shows that there were 471 fruit bearing trees and plants, 13 timber trees and 12 bamboo clusters.
Though there is some evidence as to the value of the yield, there is no evidence about the timber value and fuel value of the trees.
The District Judge has awarded a sum of Rs.355.85 for the entire tree growth.
Having regard to the large number of trees and to the fact that some of them were timber trees, it would be appropriate to award a lump sum of Rs.7,500 under this head.
The compensation for tree growth is accordingly enhanced from Rs.355.85 to Rs.7,500.
[1041A C] 4.
By the U.P. Land Acquisition (Amendment) Act, 1954, Section 23(2) had been deleted from the statute.
It was re introduced by the U.P. Land Acquisition (Amendment) Act 1972.
The preliminary notification for the acquisition was issued subsequent to the deletion.
Whether re introduction of sub section (2) would enure to the benefit of the person whose land is acquired on the ground that proceedings in appeal were pending on the date of introduction of that provision, and availability for further enhancement of the solatium and rates of interest under the Central Amendment Act 68 of 1984 are left open with consent of counsel to be agitated after final decision in Bhag Singh vs U. T. of Chandigarh, by a larger Bench of this Court.
[1041E F; 1042B] 5.
The point concerning compensation to be awarded for change of residence under clause 'fifthly ' in section 23(1) does not appear to have been raised and urged before the High Court.
No specific ground 1031 has also been taken in this behalf in the appeal before this Court.
The appellant should not, therefore, be permitted to re agitate this question over again in this Court.
[1042D]
|
Appeal No. 343 of 1974.
(Appeal by special leave from the Judgment and Order dated 11 9 1973 of the Allahabad High Court (Lucknow Bench) in Spl.
Appeal No. 118/71).
D. Mukherjee and C.P. Lal for the appellant.
Akhtar Hussain, S.N. Prasad and D.N. Misra, for the respondent The Judgment of the Court was delivered by GUPTA, J.
Colvin Taluqdars ' College in Lucknow, run by a society registered under the Societies Registration Act, imparts education at the following different stages: (i) Pre basic i.e., nursery classes.
(ii) Junior basic, called primary stage, from class I to V. (iii) Senior basic i.e., Junior high school stage from class VI to VIII, and 958 (iv) Higher secondary stage, called high school stage classes IX and X. (b) Intermediate stage Classes XI and XII In the beginning the college had no pre basic or junior basic classes and started with class VI; classes I to V and nursery classes were opened later.
The respondent was appointed an assistant teacher in the basic section of the college in 1961.
Following certain incidents involving her, she was suspended on or about August 20, 1970.
and ultimately her services were terminated by the managing committee of the college some time in October 1970.
She flied a writ petition in the High Court at Allahabad (Luc know Bench) alleging inter alia that the order terminating her services was mala fide and made in violation of the regulations framed under the (U.P.) Intermediate Education Act, 1921.
She asked for a writ of certiorari quashing the order of suspension and the order terminating her services, and a writ of mandamus directing the opposite parties to pay the full salary and emoluments due to her.
The president of the managing committee of the college, the principal, the head mistress of the basic section and the committee of management were impleaded as opposite parties 1, 2, 3, and 4 respectively.
The writ petition was dismissed by a single Judge of the High Court on a preliminary ground that none of the opposite parties was a public authority and the impugned orders suspending her and terminating her services were not made in the exercise of any statutory function.
On appeal a Division Bench of the High Court took the view that the basic section of the college was an integral part of the college and held that the managing committee of the college was a statutory body constituted under the Interme diate Education Act and governed by the regulations framed thereunder.
The Division Bench therefore found the writ petition maintainable and remanded the case to the single Judge to be decided on merits.
The Intermediate Education Act, 1921, as its long title shows, is an Act for the establishment of a Board of High School and Intermediate Education.
The preamble says that it was enacted because it was expedient to establish a Board to take the place of the Allahabad University in regulating and supervising the system of High school and Intermediate education in the United Provinces, and to prescribe courses therefore.
Section 2 of the Act defines, among other terms, Board.
Institution, and Recognition.
Board means the Board of High School and Intermediate Education.
Institution means the whole of an institution or a part thereof, as the case may be.
Recognition means recognition for the purpose of preparing candidates for admission to the Board 's examination.
Admittedly, Colvin Taluqdars ' College is a recognised institution.
Section 7 which defines the powers of the Board, after enumerating certain specific powers, states that the Board will have the power "to do all such other acts and things as may be requi site in order to further the objects of the Board as a body constituted for regulating and supervising High School and Intermediate Education".
The powers mentioned in section 7 all relate to High school and Intermediate classes.
Sec tion 16 A lays down that for every recognised institution there shall be a scheme of administration which must provide, among other matters, for the constitution of a committee of management.
Section 16 B and section 16 C deal with the preparation of the scheme of administration.
Section 16 D authorises the Director of Uttar Pradesh to cause inspection of a recog nized institution from time to time and order the removal of any defect found on inspection.
Sections 16E, 16F and 16G provide for the qualifications and the conditions of service of the teachers Of a recognized institution.
Thus all these sections are confined in their application to recog nized institutions only.
Regulations have been framed under the Act in respect of matters covered by section 16 A to section 16 G. Regulations 31 to 45 in Chapter III of the Regulations deal with the subject of punishment, enquiry and suspension of the employees of a recognized institution.
It is said that the suspension and dismissal of the respond ent was not in accordance with these regulations.
It seems clear from the provisions set out above that they all relate to recognized institutions; recognition is by the Board for the purpose of preparing candidates for admission to the Board 's examination, and Board means the Board of High School and Intermediate Education.
The basic section of a school cannot therefore be part of a recognized institution.
We are unable to agree with the view taken by the Division Bench of the High Court that the basic section is an integral part of the institution and there fore must be governed by the provisions of the Intermediate Education Act, 1921.
A school by extending its operation to fields beyond that covered by the Act cannot extend the ambit of the Act to include in its sweep these new fields of education which are outside its scope.
The case of the appellants on this point appears from the counter affidavit filed by them in answer to the writ petition.
It is said that "the college is running the Basic Section independently and is neither registered by the Government nor affiliated by any local body and neither any grant in aid is being taken by the department to run this section accordingly.
The college has its own rules and regulations to conduct the Basic Section.
" It is not correct to think that since the college has to have a committee of management as required by section 16 A, a managing committee that looks after the affairs of the Basic Section of the college must also be functioning as a statutory body discharging duties under the Intermediate Education Act and governed by the Regulations framed thereunder.
The Division Bench sought support for the view it had taken from some provisions in the Education al Code of Uttar Pradesh but, as pointed by the learned single Judge, the Code is only a compilation of the various administrative rules and orders relating to educational institutions in the State and has no statutory force.
For the reasons stated above, it must be held that the appel lants were not discharging any statutory function in making the impugned orders affecting the respondent.
The appeal is accordingly allowed, the Judgment of the Division Bench is set aside and that of the Single Judge restored.
There will be no order as to costs.
M.R. Appeal al lowed.
| The appellant is an inter State dealer.
In respect of all the eight quarters of the years 1969 70 and 1970 71, the appellant filed returns in time.
In respect of the four quarters of 1969 70 the Assessing Authority did not accept the returns and issued notices under section 11(2) of the Punjab General Sales Tax Act, 1948, requiring the appellant to produce evidence in support of the returns.
Since the question of the appellant 's liability to pay central sales tax for an earlier assessment year (1962 63) was pending before the High Court, the matter was not pursued by the Assessing Authority and was kept pending.
After the High Court gave its decision against the appellant, and while the matter was pending appeal in this Court, the Assessing Authority took up the matter of assessment ' for the year 1969 70 by the issue of notice in September 1975.
The appellant thereupon filed writ petitions in the High Court to quash the proceedings.
In respect of the four quarters of the year 1970 71 notices under section 11(2) were issued by the Assessing Authority on January 30, 1976, and the appel lant filed writ petitions in the High Court for quashing those proceedings also.
All the ' writ petitions were dis missed by the High Court, In appeal to this Court, in view of the decision of this Court in appeal.
the appellant did not agitate the question of its tax liability under the Central Sales ' Tax Act.
but contended that, (i) the Assessing Authority could not assess the tax payable by the appellant on the expiry of the period of 5 years from the end of each quarter in relation to the year 1970 71 the same contention was raised even though notice under section 11(2) was within time apropos the last ' quarter; and (2) the notice under section 11(2) and assessment under section 11(3) had to be completed within a reasonable time.
Dismissing the appeals, HELD: (1) Under section 10 of the Act read along with Rules framed thereunder, the return has to be filed by a dealer for each quarter by the last day of the following month of the quarter and admitted sales tax as per the return has also got to be deposited.
Where a registered dealer has filed the return the Assessing Authority can accept the return as correct and pass the assessment order under section 11(1) If the Assessing Authority does not accept the return he may issue notice under section 11(2) asking the asses see to produce evidence in support of the return.
In such a. case the, Assessing Authority shall hear the evidence produced by the dealer on the day specified in the notice issued under sub section
(2), or adjourn the hearing to some other day and hear the evidence produced by the dealer on the adjourned day. or days.
or may require the dealer to produce further evidence on specified points on the ad journed day, or days.
The Assessing Authority should under section 11 (3), on the day on which the hearing of the evidence is completed or 'as soon afterwards as may be ', assess the amount of tax due from the dealer, that is, pass the order of assessment.
[720 E H] Section 11(4) is attracted in a case.
where a dealer having furnished a return fails to comply with the terms of a notice issued .under section 11 (2).
In such a case, the Assessing Authority has to take some effective steps, such as issuance of a notice to the assessee, within 5 years of the expiry of the period concerned, intimating to him that he is proceeding to assess the tax due from the dealer to the best of his judgment.
Under section 11(5), on failure of a dealer to furnish a return in respect of any period by the prescribed date the Assessing Authority, after giving the dealer a reasonable opportunity of being heard can, within 5 717 years after the expiry of the concerned period proceed to assess to the best of his judgment the amount of tax, if any, due from the dealer.
Sub section (6) is attracted in the case of a dealer who, being liable to pay tax under the Act, had failed to apply for registration.
Similar steps as the ones under sub section
(5) are to be taken under sub section
(6) within a period of 5 years after the expiry of the concerned period.
It is thus seen that for taking action under sub sections (4), (5) and (6) of section 11 a time limit of 5 years has been fixed by the legislature.
The reason is that best judgment assessments in the circumstances mentioned in any of the sub sections
(4), (5) oF (6) are fresh proceedings and could not be allowed to be taken after the expiry of a certain reasonable time which the legislature has fixed at 5 years.
But the legislature advisedly did not fix any period of time for taking steps or the passing of the assessment order under any of the sub sections
(1), (2) or (3).
Where a dealer files a return the proceeding under the Act commences and the issue of a notice under section 11(2) does not initiate any fresh proceedings.
A notice under section 11(2) requiring the dealer to produce evidence can therefore be issued at any time after the filing of the return.
because, when once a return is duly made, the assessment could be made at any time unless the statute prescribes a time limit.
The ex pectancy of taking steps without any undue delay and within a reasonable time is an expectancy of prudence, because, where a notice under sub section
(2) is issued when 5 years are about to expire and the dealer fails to comply with the terms of the notice the Assessing Authority may have to proceed to make the best judgment assessment under sub section
(4) and he may not be able to do so if the period of 5 years had expired by then.
[722 A G] Bisesar House vs State of Bombay & Others.
9 S.T.C. 654, and Rameshwar Lal Sarup Chand vs U.S. Nanrath Excise & Taxation Officer, Assessing Authority, Amritsar and Another 15 S.T.C. 932 overruled.
Ghanshyamdas vs Regional Assistant Commissioner of Sales Tax, Nagpur & Others 14 S.T.C. 976, The State of Panjab & Others vs Tara Chand Lajpat Rai 19 S.T.C. 493, The State of Punjab and another vs Murlidhar Mahabir Prasad 21 S.T.C. 29, Madhya Pradesh Industries Ltd. vs State of Maharashtra and Others 22 S.T.C. 400 and Madan Lal Arora vs The Excise and Taxation Officer, Amritsar 12 S.T.C. 387 followed.
(2) The case of Gurbux Singh vs Union of India is not an authority for the contention of the appel lant that the issue of the notice under section 11(2) and comple tion of assessment under section 11(3) should be within a reason able time.
In that case it was pointed out that since the legislature had not provided any period of limitation within which an order was to be made by an Appellate or Revisional Authority, the period of limitation prescribed in other sections could not be imported for the exercise of such power.
It was not stated in that case that the exercise of the revisional power suo moto could not be made even after an undue long delay.
It was merely found as a fact in that case that there was no undue delay in the exercise of the power.
[727 A D] [Obiter.
The phrase as soon afterwards as may be ' in section 11(3) may suggest that where assessment order under section 11(3) of the Act was passed after under delay after the completion of the hearing of the evidence produced 'by the dealer, the order of assessment may not be valid.
But that question does not arise in the present case.
because, the appellant has not yet produced any evidence].
|
ivil Appeal No. 756 of 1988.
From the Judgment and Order dated 21.7.1987 of the High Court of Allahabad in F.A.F.O. No. 106 of 1984.
F.S. Nariman, M.L. Verma, Jeet Mahajan and Ranjit Kumar for the Appellats.
B. Sen, Gopal Subramanium and Mrs. Shobha Dikshit for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal by special leave is from the judgment and order of he High Court of Allahabad, dated 21st July, 1987.
The High Court has set aside the award of the Umpire.
To appreciate the decision and the contentions urged, a few facts are necessary.
On or about 20th October, 1962 there was a Bulk Supply Agreement entered into between Agra Electric Supply Co. Ltd. and the appellant herein, for supply of electrical energy to the latter 's hotel, inter alia, containing terms of rates, discounts, minimum sum payable and increase in the rates and sums payable once a year on account of increase in cost of production and distribution of electrical energy.
Clause 9 of the said agreement contained terms of the rate of supply and the contingencies in which such rates could be increased.
The said Clause provided as follows: PG NO. 674 "The consumer shall, subject to the provisions hereinafter contained, pay to the Company for all electrical energy supplied and registered or estimated as herein provided at the rate of Rs.0.20 (Rupees zero decimal two zero) per unit per month for all energy so supplied and registered and/or estimated in the case of a defective meter installation in accordance with the proviso to clause 6 thereof.
The charge for all energy shall be subject to the scale of special discounts in accordance with the schedule annexed thereto.
Provided that, (without regard to the quantity of units supplied) if the payment made or to be made for any one English Calendar year ending 31st March in respect of the electricity consumed shall fall short of a minimum sum of Rs. 38640 (Rs. Thirty eight thousand six hundred and forty) the consumer shall nevertheless pay to the Company such amount in addition to the payments already made in respect of the electricity consumed for such Calendar year as will, being the total payment made in this respect to the said minimum of Rs.38640 (Rs. Thirty eight thousand six hundred and forty).
Provided Further that, in the event of the first and last years of this Agreement not being complete calendar year as aforesaid the Company shall make a proportionate reduction on the aforesaid annual Maximum Demand and Minimum charges in respect of the period for which the said first and last year as the case may be shall be less than a complete calendar year.
Provided also that.
if and whenever during the subsistence of this Agreement the Company is satisfied that there has been an increase in the cost of production and distribution of electrical energy it shall be at liberty (but not more than once in any year of accounts) to increase the rates and sums payable by the Consumer under the foregoing provision of this present clause 9 by such amount as it shall in its sole and absolute discretion decide.
" There was a clause providing for arbitration i.e. clause 18 which read as follows: "If any question or difference whatsoever shall arise between the parties to these presents as to the PG NO 675 interpretation or effect of any provision or clause herein contained or the construction thereof or as to any other matter in anyway connected with or arising out of these presents or the operation thereof or the rights, duties or liabilities of either party in connection therewith, when unless the means for deciding any such question or difference is provided for by the or the as the case may be, or by the rules made respectively under the said Acts or by a specific provision of this Agreement, in every such case the matter in difference shall be referred to the Arbitration of two Arbitrators, one to be appointed by each party hereto, and an Umpire to be appointed by the Arbitrators before entering upon the reference and the decision or award of the said Arbitrators or Umpire shall be final and binding on the parties hereto and any reference made under this clause shall be deemed to be a submission to arbitration under the Indian (Act X of 1940) or any statutory modification or re enactment thereof for the time being in force.
The Arbitrators or the Umpire giving their or his decisions shall also decide by which party the cost of the Arbitration and award shall be paid and if by both parties in what proportion.
" On or from 26th September, 1973 the Agra Electric Supply Co. Ltd. increased per unit rate of electricity from 0.20 P to 21.5 P in terms of clause 9 of the said agreement.
Thereafter, the bills were sent @ 21.5 P per unit, after giving discounts and rebates as per the agreement.
On or about 17/18th December, 1973, the respondent herein took over the undertaking of the Agra Electric Supply Co. Ltd. On or about 16th January, 1974, the respondent informed the appellant by a written communication that consequent upon the expiry of licence granted to Agra Electric Supply Co. Ltd. to generate and supply electricity the respondent had taken it over and would supply electric energy to the hotel and that the Bulk Supply Agreement with Agra Electric Supply Co. Ltd. will continue to be in force with the respondent until such time the agreement is determined in accordance with its relevant provisions.
All bills received subsequent to the take over were billed at the agreed rate allowing discounts and rebates.
On or about 23rd November, 1974, the appellant received a communication from the respondent informing that uniform PG NO 676 tariff rates issued under section 49 of the Electricity Supply Act, 1949 will be applicable to the electrical energy supplied to the hotel w.e.f.
12.10.1974.
Section 49 of the (hereinafter called `the Act '), is to the following effect: "49.
Provision for the sale of electricity by the Board to persons other than licensees.
(1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariff.
(2) In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, namely: (a) the nature of supply and the purposes for which it is required: (b) the co ordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee: (c) the simplification and standardisation of methods and rates of charge for such supplies; (d) the extension and cheapening of supplies of electricity to sparsely developed areas.
(3) Nothing in the foregoing provisions of this section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position or any area, the nature of the supply, and purpose for which supply is required and any other relevant factors.
(4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person.
" PG NO.
677 After the said date the bills were sent at the enhanced rate of 0.30 P per unit, adding fuel cost variation charges and without allowing any discount or rebate.
On or about 28th November, 1974, the appellant, however, protested against the unilateral withdrawal of contractual discount and rebates and enhancement in the rates and drew the attention of the respondent to the existing and subsisting bulk supply agreement, but the respondent took no action.
On or about 31st August, 1976, a Circular was issued by the Chief Engineer of the respondent advising all Engineers in charge of the undertakings to bill the consumers having special agreements with the ex licensees as per those agreements and steps be taken to terminate the old agreements with new agreements providing for application of tariff.
On 7th October, 1977, vide written communication the appellant informed the respondent that upon latter 's failure to resolve the disputes and differences arising between them consequent to the illegal increase in the rates and discontinuation of discounts and rebates w.e.f.
12.10.1974, the appellant was referring the disputes for decision by the arbitrator and appointed Justice Manchanda, a retired Judge of the Allahabad High Court, as the arbitrator and the respondent appointed Justice Nigam, another retired Judge of the same High Court, as its arbitrator.
On or about 8th April, 1977, the joint arbitrators appointed Justice V. Bhargava, a retired Judge of this Court, as an Umpire.
Between 3rd November, 1979 and 4th March, 1980, several sittings were held before the arbitrators but the parties were unable to agree and upon their disagreement the disputes were referred to the learned Umpire for decision.
From 4th March, 1980 onwards, proceedings started before the Umpire and there was a plea for de novo hearing of the proceedings before the Umpire, by the respondent.
The learned Umpire started de novo proceedings taking evidence of the parties.
On 21st March, 1980, the respondent filed an application, being Case No. 59 of 1980 under section 33 of the before the District Judge, Lucknow, denying the existence of the agreement dated 20th October, 1962.
The respondent also denied the acceptance and adoption of the agreement consequent upon the take over and sought a declaration from the Court that the arbitration agreement did not exist.
The Vth Addl.
District Judge by his order dated 27.5.1983 held that the agreement was duly executed, accepted and adopted by the respondent and was binding on it and that the arbitration proceedings were pursuant to the arbitration clause and, as such, the application under section 33 of the , was rejected.
PG NO.
678 On 1st June, 1983, the award was made by the learned Umpire holding that in terms of clause 9 the increase in the unit rate was permissible and the fuel cost variation charges which were variable every month was contrary to clause 9 as increase was permitted only once in a year of accounts, and further held that the appellant was entitled to discount of 50% on the charges for electricity; and was also entitled to 0.03 paise per rupee for prompt payment of bills.
The learned Umpire in his award set out the facts and therein recited these as follows: "The main terms of the agreement were that in respect of the bulk electric supply to the petitioner the Hotel was to be charged at the rate of twenty paise per unit per month.
There was also a clause for granting a special discount to the petitioner to the extent of 50% and in addition a cash discount of three paise per whole rupee was to be allowed to the petitioner in case the petitioner paid the bills of the Company within the stipulated period.
The bills for the electric energy supplied by the Supply Company continued on these contractual rates till October 1974, even after the Supply Company was acquired by the opposite party in December 1973, and the bills were accordingly paid.
However, in October 1974, the opposite party under section 49 of the (hereinafter referred to as the Act) unilaterally and according to the petitioner illegally and arbitrarily purported to replace the original terms in the agreement and revised the charges with effect from 12th October, 1974.
The Board, under this notification, increased the rate of electricity supplied to 30 paise per unit and further refused to grant the discount to which the petitioner was entitled under the agreement as well as the cash discount of three paise per rupee.
The opposite party further levied a fuel cost adjustment charges and subsequently the rate was raised to 31 paise per unit with effect from June 1976.
" Thereafter, the learned Umpire set out the history of the negotiations between the parties resulting in the agreement dated 20.10.1962.
After referring to the bulk supply agreement the learned arbitrator set out the terms upon which supply was made to the appellant.
The appellant was to make an initial payment of Rs.35,326 towards service connection for the purpose of supply, though irrespective of PG NO 679 the payment the service connection was to continue to be the property of the Supply Company.
The Supply Company was to make provision in the appellant 's monthly bill granting a rebate of Rs. 147.20 for each month that the agreement remained inforce upto a maximum of 20 years.
Under para 9 of the agreement the appellant was to pay the Company for all electric energy supplied, registered, and estimated at the rate of 20 paise p.m.
The charges for energy consumed were subject to special discount according to the scale in the schedule which permitted a maximum discount of 50% in case a minimum of 41,000 units were consumed in each month.
The consumption as shown by the record was never less than 41,000 units p.m.
In addition, there was a provision under clause (ii) of the agreement for cash discount of 3 paise per whole rupee in case payment was made within the stipulated period.
Under the first proviso to para 9, the appellant had to pay a minimum sum of Rs.38,640 for electricity consumed in any English calendar year.
The provision made was that in addition to the amount paid in accordance with the bills, the appellant was to make payment in such cases so as to make up the said minimum of Rs.38,640.
The second proviso laid down that if and whenever during the subsistence of the agreement the Supply Company was satisfied that there was an increase in the cost of production and distribution of electric energy it shall be at liberty (but not more than once a year) to increase the rates and sums payable by the consumer under the provisions of clause 9 by such amount as the Company shall, in its sole and absolute discretion, decide.
Hence, it was held by the Umpire on the oral and documentary evidence that the payment was made at the enhanced rate under protest.
Challenging the Award, several contentions were raised, namely, (i) that there was no agreement in existence and that neither the Umpire nor the arbitrator had any jurisdiction to make the award.
This contention was rejected and no argument was advanced before us challenging this finding of the Umpire, (ii) that the appellant should prove the terms and conditions upon which the Supply Company was supplying the electricity to the appellant.
This the Umpire held, had been duty proved and there was no challenge to either of the findings of the Umpire.
(iii) it was thirdly contended that the agreement even if in existence, was not binding upon the respondent.
and that while admitting that the respondent under section 49 of the Act, issued Notification under which the tariff was revised w.e.f.
12.10.1974, it was claimed that the opposite party had not, in any way, failed to fulfil its obligations on the alleged agreement and that the opposite party was fully competent under law to fix a uniform tariff and also to levy fuel PG NO 680 adjustment charges.
This is the main and substantial question involved in this matter.
It was then contended that the respondent was entitled even under the agreement and under its second proviso to clause 9 to revise the tariff and the appellant was not entitled to any relief.
It was further urged that the payments were made after coming into operation of the , under protest.
In respect of these contentions the learned Umpire held that the plea was that even if the agreement was in existence, it was not binding on the opposite party and that the opposite party was competent under section 49 of the Electricity Supply Act, to fix revised charges w.e.f.
12.10.1974 and had not violated any terms of the agreement.
The appellant had also relied on the alternative provisions of section 49(3) of the Act, set out hereinbefore.
The said sub section (3) provides that nothing contained in sub sections (1) & (2) of section 49 shall derogate from the power of the Board, if it happens to enter into an agreement at different rates of tariff with any person other than a licensee.
It appears that when the Supply Company was taken over on l7/18.12.1973, the resident Engineer wrote a letter on 16.1.1974 in which he informed the appellant that the licence of M/s. Agra Electric Supply Co. Ltd. having expired and the U.P. State Electricity Board having taken over the supply, it was to supply energy to the appellant at the aforesaid date.
Their further contention was that the bulk supply agreement which the appellant had with M/s. Agra Electric Supply Co. Ltd., would continue to be in force with the State Electricity Board until such time as the agreement was determined in accordance with the relevant provisions thereof.
The learned Umpire held that the letter clearly laid down that the U.P. Electricity Board had accepted the agreement which was in existence between the Supply Company and the appellant, and the Umpire proceeded on that basis.
The learned Umpire further stated as follows: "The Board thus having accepted the agreement with the claimant, it became binding on the Board and under sub section (3) of section 49 of the Electric Supply Act nothing contained in sub sections (1) & (2) of section 49 of the Act could have any bearing on the terms of the agreement.
The result was that the uniform tariff fixed by the Board with effect from 12th October, 1974 did not apply to the claimant and the claimant had to be granted the various rebates laid down in the agreement.
The decision of the Supreme Court in Indian Aluminium Co. Ltd. vs Kerala Electricity Board, PG NO 681 [1976] 1 SCR pa.
70 fully covers the case and supports the claim of the claimant.
In the case before the Supreme Court an agreement had been entered into by the State Government and it was held that under section 60 of the Electricity Supply Act, 1940 it became binding on the Kerala State Electricity Board and further that that agreement was enforceable under sub section (3) of s 49 irrespective of the fixation of uniform tariff under sub sections (I) and (2) of section 49.
In the present case the only difference is that instead of the agreement being first binding between the consumer and the State Government, the agreement became binding on the Electricity Board, because it accepted the agreement and became a party to it by letter dated 16th January 1974 (exhibit R).
" The aforesaid basis of the decision, it was contended, was the error of law which vitiated the award.
This question will require further consideration later.
It was held that the decision in Indian Aluminium Co., (supra) fully covered the dispute on this aspect in the instant case.
The learned Umpire further held as follows: "Once the agreement was binding on the Board its terms under sub section (3) of section 49 could not be varied by fixation of uniform tariff under sub sections (1) and (2) of section 49.
The opposite party in these circumstances must be held to have failed to fulfil its obligations under the agreement".
On 1st July, 1983.
an application was made under section 12 [2] of the before the learned District Judge, Lucknow, for filing of the award and making the same Rule of the Court.
Objections were filed by the respondent against the said award.
The learned kind Addl.
Distt.
Judge, Lucknow, held that the award was legal, valid and binding on the parties and the alleged grounds of misconduct were not maintainable.
The award was.
however, set aside on the ground that the reference made to arbitration was unilateral.
The appellant filed an appeal.
The Lucknow Bench of the Allahahad High Court held against the finding of the Ilnd Additional Distt.
Judge Lucknow that the reference was unilateral.
but set aside the award on the ground that there was an error of law apparent on the face of it in view of the agreement dated 20.10. 1962 and the ratio of the decision of this Court in Indian Aluminium Co., (supra).
The revision filed by the respondent against the judgment of the Vth Addl.
Distt Judge, Lucknow was also rejected.
This appeal is from the aforesaid decision of the High Court by special leave.
PG NO 682 The two learned Judges of the High Court gave separate judgments.
The High Court was of the view that the instant case was distinct from the facts in the case of Indian Aluminium Co., (supra).
There it was held that where a stipulation in a contract is entered into by a public authority in exercise of a statutory power then, even though such stipulation fetters subsequent exercise of the same statutory power, it would be valid and the exercise of such statutory power would pro tanto stand restricted.
Mr Justice Loomba was of the view that in the instant case even if the stipulation as to the tariff structure in the agreement by taken to have been continued to be in existence in view of sub section (3) of section 49 of the Act, the same was not unrestricted.
The stipulation was expressly made subject to certain reservations as would be clear from the opening sentence of clause 9 of the agreement, the main clause was "subject to the provisions hereinafter contained".
Mr Justice Loomba was of the view that the decision of the Indian Aluminium Co., (supra) case was inapplicable to the present case.
According to the learned Judge, the mistake committed by the Umpire was a manifest error.
It was further stated that it is well settled proposition of law that if the reasons are stated on the basis of which the award was made and such reasons are found to be erroneous, the errors become apparent on the face of the award and constitute legal misconduct on the part of the Umpire vitiating the award.
The other learned Judge Mr Justice Mathur also held that there was error of law apparent on the face of the award of the Umpire.
He was of the opinion that the expression "sum payable by the consumer under the foregoing provision of this present clause 9" was subject to the discounts mentioned in the subsequent clauses of the agreement.
In view of the discounts, the sum payable under clause 9 was altered and the altered amount becomes the sum payable under clause 9.
According to the learned Judge, since the amount determined after allowing discounts is also sum payable under clause 9, it followed that in exercise of the power conferred under the third proviso, the discount could only be tampered with in the same way the unit charge could be tampered with.
Beyond this it was not permissible.
In permitting this the Umpire committed an error in drawing distinction between 'rates ' and 'discount ' and upholding the right of the Board to tamper with the former and negating similar right in respect of the latter.
According to the learned Judge, this was a wrong understanding of the decision of the Indian Aluminium 's case (supra).
In the aforesaid view of the matter, the learned Judge agreed with the other learned Judge and held that the award was vitiated.
PG NO 683 It appears that the main question that arises is: whether the decision of this Court in Indian Aluminium 's case (supra) was properly understood and appreciated by the learned Umpire and whether he properly applied the agreement between the parties in the light of the aforesaid decision.
It was contended that the question was whether the sums payable under clause 9 included discounts.
On the aforesaid basis it was contended that there was an error of law and such error was manifest on the face of the award.
Even assuming, however, that there was an error of construction of the agreement or even that there was an error of law in arriving at a conclusion, such an error is not an error which is amenable to correction even in a reasoned award under the law.
Reference may be made to the observations of this Court in Coimbatore Distt.
P.T. Sangam vs Bala Subramania Foundry, AlR , where it was reiterated that an award can only be set aside if there is an error on its face.
Further, it is an error of law and not mistake of fact committed by the arbitrator which is justiciable in the application before the Court.
Where the alleged mistakes or errors, if any, of which grievances were made were mistakes of facts if at all, and did not amount to error of law apparent on the face of the record, the objections were not sustainable and the award could not be set aside.
See also the observations of this Court in Delhi Municipal Corpn.
vs M/S. Jagan Nath Ashok Kumar, ; , where this Court reiterated that reasonableness of the reasons given by an arbitrator in making his award cannot be challenged.
In that case before this Court, there was no evidence of violation of any principle of natural justice, and in this case also there is no violation of the principles of natural justice.
It may be possible that on the same evidence some court might have arrived at some different conclusion than the one arrived at by the arbitrator but that by itself is no ground for setting aside the award of an arbitrator.
Also see the observations of Halsbury 's Laws of England, 4th Edn., Vol. 2, at pages 334 & 335, para 624, where it was reiterated that an arbitrator 's award may be set aside for error of law appearing on the face of it, though that jurisdiction is not lightly to be exercised.
If a specific question of law is submitted to the arbitrator for his decision and he decides it, the fact that the decision is erroneous does not make the award bad on its face so as to permit it being set aside; and where the question referred for arbitration is a question of construction, which is, generally speaking, a question of law, the arbitrator 's decision cannot be set aside only because the court would itself have come to a different conclusion; but if it appears on the face of the award that the arbitrator has proceeded illegally, as, for instance, by deciding on evidence which was not admissible, or on principles of construction which the law does not PG NO 684 countenance, there is error in law which may be ground for setting aside the award.
It was contended by Mr F.S. Nariman, counsel for the appellant, that a specific question of law being a question of construction had been referred to the Umpire and, hence, his decision, right or wrong, had to be accepted.
In view of clause 18, it was submitted that in this case a specific reference had been made in the interpretation of the agreement between the parties, hence, the parties were bound by the decision of the Umpire.
Our attention was drawn to the observations of this Court in M/s. Hindustan Tea Co. vs M/s. K. Sashikant & Co., AIR 1987 SC 81, where this Court held that under the law, the arbitrator is made the final arbiter of the dispute between the parties, referred to him.
The award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate facts.
Where the award which was a reasoned one was challenged on the ground that the arbitrator had acted contrary to the provisions of section 70 of the Contract Act, it was held that the same could not be set aside.
In order to set aside an award, there must be a wrong proposition of law laid down in the award as the basis of the award.
For this see the observations of this Court in Kanpur Nagar Mahapalika vs M/s.
Narain Das Haribansh, In that case the appellant had entered into a contract with the respondent for certain construction work.
The contract contained an arbitration agreement between the parties.
The respondent filed a suit in 1946 claiming certain moneys due against its final bills but, at the instance of the appellant, the suit was stayed and the matter referred to arbitration.
The arbitrator made an award in March 1960 in favour of the plaintiffs determining the amount payable by the appellant.
Thereafter the appellant made an application for setting aside the award on the ground that the arbitrator had misconducted himself in not properly considering that the claim of the respondent was barred by limitation under section 326 of the U.P. Act 2 of 1916.
Although the trial court set aside the award, the High Court, in appeal, reversed this decision.
In appeal to this Court it was contended for the appellant that the award was bad by reason of an error apparent on its face.
Dismissing the appeal, it was held that there could not be predicated of the award that there was any proposition of law forming the basis of the award, and, therefore, it could not be said that there was any error apparent on the face of the award.
PG NO 685 The Judicial Committee in the famous decision of Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. Ltd., [ held that the error of law on the face of the award means that one can find in the award or in document incorporated thereto as, for instance, a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which is erroneous.
The same view was reiterated by this Court in Dr. S.B. Dutt vs University of Delhi, ; In this case.
Mr. Nariman appearing for the appellant contended that there was no proposition of law as such stated by the Umpire which could be said to be the basis of his decision.
Hence, the award was not amenable to corrections on the ground that there was an error of law apparent on its face.
Mr. Nariman further submitted that the Umpire had decided the specific question of law and such a decision, right or wrong, is binding on the parties.
In aid of his submission Mr. Nariman referred to the decision of this Court in M/s. Kapoor Nilokheri Co op.
Dairy Farm Society Ltd. vs Union of India & Ors., [ , where it was held that in a case of arbitration where the appellants had sepcifically stated that their claims were based on the agreement and on nothing else and all that the arbitrator had to decide was as to the effect of an agreement between the appellant and the respondent, the arbitrator had really to decide a question of law i.e. of interpreting the document, the agreement.
Such a decision his, is not open to challenge.
Our attention was drawn to the observations of this Court in Tarapore & Co. vs Cochin Shipyard Lld.
Cochin & Anr., [l984] 3 SCR 118, where Desai J., spoke for the Court and Justice Chinnappa Reddy agreed with him.
It was stated that a question of law might figure before an arbitrator in two ways.
It may arise as an incidental point while deciding the main dispute referred to the arbitrator or in a given case parties may refer a specific question of law to the arbitrator for his decision.
This Court reiterated that the arbitration has been considered a civilised way of resolving disputes avoiding court proceedings.
There was no reason why the parties should be precluded from referring a specific question of law to an arbitrator for his decision and agree to be bound by the same.
This approach manifests faith of parties in the capacity of the tribunal of their choice to decide even a pure question of law.
If they do so, with eyes wide open, there is nothing to preclude the parties from doing so.
If a question of law is specifically referred and it becomes evident that the parties desired to have a decision on the specific question from the arbitrator rather than one from the Court, then the court will not interfere PG NO 686 with the award of the arbitrator on the ground that there was an error or law apparent on the face of the award even if the view of law taken by the arbitrator did not accord with the view of the court.
A long line of decisions was relied upon by this Court for that proposition.
Mr. B. Sen, learned counsel for the respondent, however, contended that in the present case, there was no specific question of law referred to the Umpire.
He submitted that it was a general reference in which a question of law arose.
It was any question in the proceedings and the question of law, as such, did not arise.
According to Mr. Sen, the mistake that the Umpire, has committed is clear from his following statement: "The Board thus having accepted the agreement with the claimant, it became binding on the Board and under sub section [3] of section 49 of the Electricity Supply Act nothing contained in sub section ( 1) & (2) of section 49 of the Act could have any bearing on the terms of the agreement.
The result was that the uniform tariff fixed by the Board with effect from 12th October, 1974 did not apply".
It was stated that no specific question having been referred to, this mistake was fatal.
We are unable to accept this submission.
Our attention was drawn by Mr. Nariman to the observations of Justice Macnaghten in Hitchins & Anr.
vs British Coal Refining Processes Ltd., [1936] 2 A.E.R. Reprint 191.
Ihere, by an agreement the applicants were to act as consulting Engineers in connection with a certain coal refining process owned by the respondents.
While the plant for the working of the process was being erected, a dispute arose.
the respondents wanting the applicants to attend every day at the site of the plant and the applicants considering this to be no part of their duty.
The respondents thereupon terminated the agreement and the matter was referred to arbitration.
The applicants pleaded that the termination of the agreement was unjustified; the respondents pleaded that the applicants should have attended every day and that they had been quilty of negligence in respect of certain matters set out in the counterclaim.
The arbitrator found the termination of the agreement to be unjustified and also negligence on the part of the appellants in respect of the matters set out in the counterclaim, and he awarded the appellants damages after setting off an unspecified amount for damages for negligence.
The respondents moved to set aside the award on PG NO 687 the ground of error of law apparent on the face of it.
At the hearing the respondents contended that the whole of the pleadings in the arbitration were admissible.
The respondents contended that for the purpose of deciding whether there was an error of law apparent on the face of the award, the court could not look at any document except the award itself.
The respondents further contended that the arbitrator had committed an error of law in deciding that the negligence found did not afford sufficient ground for the termination of the agreement, and further that on the true consideration of the agreement, the refusal to attend daily was as a matter of law a sufficient ground for the termination of the agreement.
It was held that inasmuch as the arbitrator in his award referred to certain paragraphs in the counterclaim, such paras ought, in considering whether there was an error on the face of the award, to be regarded as forming part of the award.
Whether misconduct justifies dismissal is a question of fact, and the arbitrator 's decision was final.
It was further held that the light to terminate the agreement because the applicants refused to attend daily was a question specifically submitted to the arbitrator and the court could not interfere with his decision, even if the question was a question of law.
Mr. Justice Macnaghten at page 195 of the report observed that it was permissible to look at the whole of the pleadings delivered in the arbitration, and it appears therein that the respondents affirmed and the applicants denied that the respondents were entitled to terminate the agreement as the applicants refused to attend daily at the site, and that this was a specific question submitted to the decision of the arbitrator.
Our attention was also drawn to the observations of House of Lords in Pioneer Shipping Ltd. and Ors.
vs ETP Tioxide Ltd., In that case by a charterparty dated 2nd November, 197 the owners of a vessel chartered her to the charterers.
It was held by the House of Lords that having regard to the purpose the Arbitration Act, 1970 of England which was to promote greater finality in arbitration awards then had been the case under the special case procedure judicial interference with the arbitrator 's award was only justified if it was shown that the arbitrator had misdirected himself in law or had reached a decision which no reasonable arbitrator could have.
In the instant case, the view taken by the Umpire on the interpretation of the agreement between the parties in the light of the observations of this Court in Indian Aluminium Co. 's case (supra) was at best a possible view to take, if not the correct view.
If that was the position then such a view, even if wrong, cannot be corrected by this Court on the basis6is of long line of decisions of this Court.
In the PG NO 688 aforesaid view of the matter it is necessary to examine the aforesaid decision in the Indian Aluminium Co 's case (supra).
There under section 49(1) & (2) of the Electricity Supply Act, 1948, the Legislature had empowered the State Electricity Board to frame uniform tariffs and had also indicated the factors to be taken into account in fixing uniform tariffs.
Under sub section (3), the Board was empowered, in the special circumstances mentioned therein, to fix different tariffs for the supply of electricity, but in doing so, sub section (4) directed that the Board was not to show undue preference to any person.
Under section 59 it was stipulated that the Board shall not, as far as practicable, carry on its operations at a loss and shall adjust its charges accordingly from time to time.
Certain consumers of electricity had entered into agreements for the supply of electricity for their manufacturing purposes at specified rates for specified period.
Some of the agreements were entered into with the State Governments and the others with the State Electricity Boards.
In one of the agreements there was an arbitration clause.
On account of the increase in the operation and maintenance cost, due to various causes which caused loss to the State Electricity Boards, the Boards wanted to increase the charges in all the cases.
The consumers challenged the competency of the Boards to do so by petitions in the respective High Courts.
The High Court sustained the Board 's claim, in some cases, under sections 49 & 59, and in others, held that the Board was incompetent to do so.
In the case of the consumer where there was the arbitration clause.
the High Court refused to entertain the petition on account of the clause.
This Court held that fixation of special tariffs under section 49 (3) can be a unilateral Act on the part of the Board but more often it is the result of negotiations between the Board and the consumer and hence a matter of agreement between them.
Therefore, the Board can, in exercise of the power conferred under the sub section, enter into an agreement with a consumer stipulating for special tariff for supply of electricity for a specific period of time.
The agreements for supply of electricity to the consumers must therefore he regarded as having been entered into by the Boards in exercise of the statutory power conferred under section 49(3).
The Umpire in his award stated that the decision of this Court covered and supported the claim of the claimant.
In the present case the only difference is that there was only an agreement by which the Electricity Board accepted the agreement which was held by the Umpire to have become operative.
Once that agreement was binding on the Board, its terms could not be varied from the uniform rate under sub sections (1) and (2) of section 49.
The Umpire was right.
In our opinion, the Umpire committed no error in arriving at such conclusion.
Furthermore, such a conclusion is certainly a possible view of the interpretation of the decision of this PG NO 689 Court in Indian Aluminium Co 's case, if not the only view.
We need go no further than that.
We, are, therefore, of the opinion that the view taken by the Umpire on section 49 was a possible view in the light of the decision of this Court in Indian Aluminium 's case.
In the premises, a question of law arose certainly during the course of the proceedings.
Such a question has been decided by the Umpire on a view which is a possible one to take.
Even if there was no specific reference of a question of law referred to the Umpire, there was a question of law involved.
Even on the assumption that such a view is not right, the award is not amenable to interference or correction by the courts of law as there is no proposition of law which could be said to be the basis of the award of the Umpire, and which is erroneous.
In the premises, we are of the opinion that the High Court and the learned IInd Additional District Judge were in error in the view they took of the award of the Umpire.
The appeal must, therefore, be allowed and the decision of the High Court, dated 21st July, 1987 as well as the order of the IInd Additional Judge, Lucknow, dated 30th May, 1984 are set aside.
No other point was urged challenging the award of the Umpire.
The award of the Umpire is confirmed and let the award be made Rule of the Court under section 14(2) of the Act.
The appeal is allowed with costs.
R.S.S. Appeal allowed.
| On taking over the Agra Electric Supply Co. in December 1973, the respondent U.P. State Electricity Board intimated to the appellant U.P. Hotels that the Bulk Supply Agreement between the appellant and the Agra Electric Supply Co. would continue to be in force until such time the agreement was determined in accordance with its relevant provisions.
The agreement contained terms of rates, discounts, minimum sum payable and increase in the rates and sums payable once a year on account of increase in cost of production and distribution of electrical energy (clause 9) and also contained an arbitration clause (clause 18).
In November 1976, the appellant received a communication from the respondent informing that the uniform tariff rates issued under section 49 of the Electricity Supply Act, 1949 would be applicable to them.
The Board also withdrew the contractual discount and rebates.
While sub sections (1) and (2) of section 49, stipulate a uniform tariff for electric supply, sub section (3) authorises the Board to fix different tariffs for the supply of electricity.
The appellant protested against this unilateral increases and withdrawal, but without success.
The appellant then informed the respondent that it was referring the disputes for decision by the arbitrator and appointed a retired High Court Judge as its arbitrator.
The respondent in turn appointed another retired High Court Judge as a joint arbitrator.
The joint arbitrators appointed Justice V. Bhargava, a retired Judge of the Supreme Court, as the Umpire.
The arbitrators having failed, the proceedings started before the Umpire.
The Umpire gave his award in June 1983 and held that the Board having accepted the agreement, it became binding on the Board and once the agreement was binding, its terms under sub section (3) of section 49 could not be varied by PG NO 670 PG NO 671 fixation of uniform tariff under sub sections (1) and (2).
The Umpire further held that the present case was fully covered by the decision of the Supreme Court in Indian Aluminium Co. wherein it was held that where a stipulation in a contract was entered into by a public authority in exercise of a statutory power then, even though such stipulation fettered subsequent exercise of the same statutory power, it would be valid and the exercise of such statutory power would pro tanto stand restricted.
In that view of the matter the Umpire held that in terms of clause 9 the increase in unit rate was permissible and the fuel cost variation charges which were variable every month was contrary to clause 9 as increase was permitted only once in a year of accounts, and further that the appellant was entitled to discount of 50% of the charges for electricity and also to discount for prompt payment of bills.
Objections were filed by the respondent before the IInd Additional District Judge during the proceedings initiated for making the award the Rule of the Court.
The IInd Additional Distt.
Judge set aside the award on the ground that the reference made to arbitration was unilateral.
In appeal, the High Court, while holding against the above finding of the IInd Addl.
Judge, set aside the award on the ground that the Indian Aluminium Co. case was inapplicable to the present case, and the mistake committed by the Umpire in this regard was error of law apparent on the face of the award.
The High Court held that even if the stipulation as to the tariff structure in the agreement be taken to have been Continued in existence in view of sub section (3) of section 49 of the Act, the same was not unrestricted, and that the stipulation was expressly made subject to certain reservations as would be clear from the opening sentence of clause 9 of the agreement the main clause was "subject to the provisions hereinafter contained".
It was further held that in drawing distinction between `rates ' and `discount ' and upholding the right of the Board to tamper with the former and negating similar right in respect of the latter, the Umpire had committed an error.
Before this Court it was contended on behalf of the appellant that a specific question of law being a question of construction had been referred to the Umpire and hence, his decision, right or wrong, had to be accepted.
On behalf of the respondent it was contended that there was no specific question of law referred to the Umpire but it was a general reference in which a question of law arose, and that it was a question in the proceedings and the question of law, as such, did not arise.
PG NO. 672 Allowing the appeal, it was, HELD: (1) Even assuming that there was an error of construction of the agreement or even that there was an error of a law in arriving at a conclusion, such an error was not an error which was amenable to correction even in a reasoned award under the law.
[683B] (2) Where the question referred for arbitration is a question of construction, which is, generally speaking a question of law, the arbitrator 's decision can not be set aside only because the court would itself have come to a different conclusion, but if it appears on the face of the award that the arbitrator has proceeded illegally, as, for instance, by deciding on evidence which was not admissible, or on principles of construction which the law does not countenance, there is error in law which may be ground for setting aside the award.
[683G H; 684A] (3) In order to set aside an award, there must be a wrong proposition of law laid down in the award as the basis of the award.
[684D] (4) In the instant case, a question of law arose certainly during the course of the proceedings.
Such a question has been decided by the Umpire on a view which is a possible one to take.
Even if there was no specific reference of a question referred to the Umpire, there was a question of law involved.
Even on the assumption that such a view is not right, the award is not amenable to interference or correction by the Courts of law as there was no proposition of law which could be said to be the basis of the award of the Umpire, and which was erroneous.
[689B Cl (5) The Umpire in his award stated that the decision of this Court covered and supported the claim of the claimant.
In the present case the only difference was that there was only an agreement which was held by the Umpire to have become operative.
Once that agreement was binding on the Board, its terms could not be vaired from the uniform rate under sub sections (1) and (2) of section 49.
The Umpire was right.
The Umpire committed no error in arriving at such conclusion.
Further more, such a conclusion was certainly a possible view of the interpretation of the decision of this Court in Indian Aluminium Co. 's case, if not the only view.
[688G H; 689A] Indian Aluminium Co. Ltd. vs Kerala Electricity Board, ; ; Coimbatore Distt.
P.T. Sangam vs Bala PG NO 673 Subramania Foundry; , ; Delhi Municipal corpn.
vs M/s Jagan Nath Ashok Kumar; , ; M/s. Hindustan Tea Co. vs M/s. K. Sashikant & Co., AIR 1987 SC 81; Kanpur Nagar Mahapalika vs M/s.
Narain Das Haribansh, ; Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. Ltd., ; Dr. S.B. Dutt vs University of Delhi; , ; M/s. Kapoor Nilokheri Co op.
Dairy Farm Society Ltd. vs Union of lndia, ; Tarapore & Co. vs Cochin Shipyard Ltd. Cochin, ; ; Hitchins & Anr.
vs British Coal Refining, [1936] 2 A.E.R. Reprint 191; Pioneer Shipping Ltd. & Ors.
vs ETP Tioxide Ltd., , referred to.
|
Appeals Nos. 253 and 254 of 1961.
Appeals by special leave from the judgment and order dated May 2,1955, of the Allahabad High Court in Civil Revision Nos. 881 and 882 of 1952.
section F. Andley, Rameshwar Nath and P. L. Vohra, for the appellant in C. A. No. 253 of 1961 and respondent No. 2 in C. A. No. 254 of 1961.
section P. Varma, for the appellant in C.A. No. 254 of 61 and respondent No. 2 in C.A. No. 253 of 1961.
C. B. Aggarwala and C. P. Lal, for the respondent No. 1 in both the appeals.
January 19.
The Judgment of the Court was delivered by SHAH, J.
Vijay Pratap Singh(hereinafter called the plaintiff) a minor by his next friend Pandit Brij Mohan Misir filed a petition in the Court of the Subordinate Judge, Faizabad for leave to sue in forma pauperis for declaration of title to the Ajodhya Raj and accretions thereto and for possession and mesne profits for three years prior to the suit.
The petition was rejected by the Subordinate Judge because, in his view, it disclosed no cause of action.
An application by Ramjiwan Misir father of the plaintiff who was impleaded as the second defendant, to be transposed as a petitioner was also rejected by the Subordinate Judge.
The plaintiff and Ramjiwan Misir applied to the High Court of Judicature at Allahabad in the exercise of its revisional jurisdiction against the orders rejecting 677 their respective petitions but without success.
They have with special leave appealed to this Court against the orders passed by the High Court.
The case set up by the plaintiff in his petition was briefly this.
Maharaja Sir Man Singh holder of the Ajodhya Raj was a Taluqdar in lists I, II and V of the Oudh states set I of 1869.
He died in 1870 and the Raj devolved upon his daughter 's son Maharaja Pratap Narain Singh, who died on November 9, 1906, leaving him surviving two widows Suraj Kumari and Jagdamba Devi and no lineal descendant.
A will alleged to be executed by Maharaja Pratap Narain Singh on July 20, 1891, was set up but it was void and ineffective because, firstly, it was procured by undue influence, coercion and fraud practised upon the testater, and, secondly it created a line of succession contrary to law.
Accordingly on the death of Maharaja Pratap Narain Singh the Raj devolved upon Maharani Suraj Kumari the senior widow and on her death in 1927 upon Maharani Jugdamba Devi, and on the death of the latter on June 18, 1928 upon Ganga Dutt Misir, grand father of the plaintiff Ganga Dutt Misir died in 1942 and the estate devolved upon his son Ramjiwan and his grandson, the plaintiff as co parceners in a Hindu joint family.
Even if the will was valid and effective "the terms thereof alongwith Maharaja Pratap Singh 's other acts and declarations" had the effect of taking the estate out of the purview of Act I of 1869 with the result that Maharani Jagdama Devi enjoyed the property in suit with a life estate therein, and on her death on June 18, 1938, the entire property in suit vested in Ganga Dutt on whose death the plaintiff and defendant No. 2 became owners of the entire property in suit as their joint ancestral property".
Defendant No.1 Dukh Haran Singh Claimed to be adopted as a son by Jagdamba Devi on February 12, 1909 but the claim was "utterly false, fictitious and untrue" for the reasons set out in the partition, and the 678 Raj was in the wrongful possession of the first defendant Dukh Haran Singh.
The plaintiff alleged that his father Ramjiwan Misir was "detained and confined" by the first defendant and was unable to join the plaintiff in the petition.
The first defendant Dukh Haran Singh resisted the petition inter alia contending that it did not disclose a cause of action and that, in any event, the claim made by the plaintiff was barred by law of limitation.
Initially Ram Jiwan Misir supported the will and the plea of adoption set up by the first defendant, but by an application dated April 21, 1951, prayed that he be transposed as a petitioner submitting that his previous statement was procured by coercion and contained averments which were untrue.
Ramjiwan was directed to pay the court fee payable on the plaint within ten days and in default of payment, his application was to stand dismissed.
Ramjiwan did not pay the court fee as directed but on July 23, 1951, he again applied for being transposed as a petitioner in the petition for leave to sue in forma pauperis filed by the plaintiff.
Holding that it did not disclose a cause of action the Subordinate Judge rejected the petition of the plaintiff.
The Subordinate Judge observed that there was nothing in the petition to show how the disputed estate came to be governed by the rule of inheritance under the Hindu Law and, in any event, there was nothing in the petition to support the plea that the estate had lost its impartible character, and that even if in view of the allegations contained in para 12 of the petition it be held that the estate came to be governed by the ordinary Hindu Law, it did not become a partible estate which the plaintiff could inherit, so long at his father Ramjiwan was alive.
The petition filed by Ramjiwan Misir was then taken up for 679 hearing and was also rejected because, in the view of the learned Judge, "no useful purpose would be served" by transposing Ram Jiwan Misir as co plaintiff when the application filed by the plaintiff was held to be defective and liable to be rejected under O. 33, r. 5(d), of the Code of Civil Procedure.
Against the two orders passed by the subordinate Judge the plaintiff preferred Revision Application No. 881 of 1952 and Ram Jiwan preferred Revision Petition 882 of 1952.
The High Court rejected the petition of the plaintiff holding that on the death of Ganga Dutt in 1942 the estate would devolve upon Ram Jiwan Misir alone according to the rule of impartibility which governed the devolution of the estate.
The High Court also observed that there was nothing in the petition to show that Ganga Dutt succeeded to the estate "on the basis of his being the nearest male reversioner under the Ordinary Hindu Law", and that it was unnecessary to consider whether the will by Maharaja Pratap Narain took out the estate from the operation of the Act, "because the plaintiff did not rely upon the will and whatever the plaintiff had stated in the petition in connection with the will was simply by way of answer to what might be contended by the defendant in the suit.
" Dealing with the petition of Ram Jiwan Misir the High Court observed that "By an application to sue in forma pauperis the applicant prays for a relief personal to himself and therefore nobody else can be properly made a co applicant.
There is no direct provision which provides that a court should transpose a party from one side to the other.
Order 1, r. 10, gives the power to the court to strike out or add the names of parties when it appears that he has been improperly joined or that he ought to have been joined or his presence before the court would be necessary in order to enable the court effectively and completely to adjudicate upon and settle all the questions involved in the suit.
The provisions of 680 this rule will not apply to the proceedings on an application for permission to sue as a pauper".
We are unable to agree with the view of the High Court that the petition filed by the plaintiff did not disclose a cause of action, or that O. 1, r. 10 of the Code of Civil Procedure cannot properly be resorted to for transposing a party in a petition for leave to sue in forma pauperis.
The plaintiff had by his plaint set up an alternative case.
In the first instance he pleaded that the will alleged to be executed by Maharaja Pratap Narain on July 20, 1891, was "void and ineffective" and the estate devolved upon Ram Jiwan and the plaintiff as members of a co parcenary: alternatively, he pleaded that even if the will was valid, by the terms thereof and by the other acts and declaration of Maharaja Pratap Narain Singh, the estate was taken out "of the purview of Act I of 1869" and on the death of Maharani Jagdamba Devi the property devolved upon Ganga Dutt, the nearest reversioner under the Hindu law and on his death it devolved upon the plaintiff and upon his father Ram Jiwan Misir.
Order XXXIII of the Code of Civil Procedure prescribes the procedure for institution of suits by paupers.
Rule 2 provides that particulars a petition for permission to sue in forma pauperis shall contain and r.3 sets out the mode of presentation of the petition.
Rule 4 authorises the Court to examine the applicant or his agent regarding the merits of the case and the property of the applicant.
Rule 5 provides: "The Court shall reject an application for permission to sue as a pauper (a) where it is not framed and presented in the manner prescribed by rules 2 and 3, or (b) where the applicant is not a pauper, or 681 (c) where he has, within two months next before the presentation of the application, disposed of any property fraudulently or in order to be able to apply for permission to sue as a pauper, or (d) where his allegations do not show a cause of action, or (e) where he has entered into any agreement with reference to the subject matter of the proposed suit under which any other person has obtained an interest in such subject matter.
" Where the application is not rejected on the grounds set out in r. 5, the Court has under r. 6, to proceed, after giving notice to the opposite party and the Government pleader, to receive evidence as the applicant may adduce in proof of his pauperiam.
By r. 7 the Court is authorised to consider where the applicant is not subject to any of the prohibitions specified in r. 5.
The Court is enjoined to reject a petition where the prohibitions mentioned in cls.
(a) to (e) of r. 5.
exist.
Even if the petition is not so rejected at the hearing of the petition, if the court is satisfied as to the existence of these prohibitions it may be dismissed under r. 7.
It does not appear that any objection was raised as to the existence of prohibitions (c) and (d) set out in r. 5, and the Subordinate Judge disallowed the objection that the petition was not framed and presented as prescribed by r. 2 and 3.
He did not consider the question whether the plaintff was a pauper.
He rejected the application only on the ground that it did not show a cause of action, and the High Court confirmed the order also on that ground.
By the express terms of r. 5 cl.
(d), the court is concerned to ascertain whether the allegations made in the petition show a cause of action.
The court has not to see whether the claim made by the petitioner is likely to 682 succeed: it has merely to satisfy itself that the allegations made in the petition, if accepted as true, would entitle the petitioner to the relief he claims.
If accepting those allegations as true no case is made out for granting relief no cause of action would be shown and the petition must be rejected.
But in ascertaining whether the petition shows a cause of action the court does not enter upon a trial of the issues affecting the merits of the claim made by the petitioner.
It cannot take into consideration the defences which the defendant may raise upon the merits; nor is the court competent to make an elaborate enquiry into doubtful or complicated questions of law or fact.
If the allegations in the petition, prima facie, show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact, or whether the petitioner will succeed in the claims made by him.
By the Statute, the jurisdiction of the Court is restricted to ascertaining whether on the allegations a cause of action is shown: the jurisdiction does not extend to trial of issues which must fairly be left for decision at the hearing of the suit We do not propose to express any opinion on the question whether on the death of Jagdamba Devi the estate devolved under section 22(10) of Act I of 1869 upon Ramjiwan Misir and the plaintiff as members of a co parcenary.
Even if that claim is inconsistent with the words of section 22(10) of Act I of 1869 on which the plaintiff himself relies, the plaintiff had an alternative claim that the estate had become non taluqdari by virtue of the will and "the acts and declaration" of Maharaja Pratap Narain.
In support of this claim, section 15 of Act I of 1869, before it was amended by U. P. Act III of 1910, is relied upon.
At the time when Maharaja Pratap Narain died, section 15 of the Act stood as follows: "If any taluqdar or grantee shall hereto before have transferred or bequeathed, or if 683 any taluqdar or grantee or his heir or legatee shall hereafter transfer or bequeath, to any person not being a taluqdar or grantee the whole or any portion of his estate, and such person would not have succeeded according to the provisions of this Act to the estate or to a portion thereof if the transferor or testator had died without having made the transfer and intestate, the transfer of and succession to the property so transferred or bequeathed shall be regulated by the rules which would have governed the transfer of and succession to such property if the transferee or legatee had brought the same from a person not being a taluqdar or grantee.
" It is true that by section 8 of Act III of 1910, the section has been substantially modified and reads as follows: "If any taluqdar or grantee, or his heir or legatee, shall heretofore have transferred or bequeathed, or if any taluqdar or grantee, or his heir or legatee, shall hereafter transfer or bequeath the whole or any portion of his estate to any person who did not at the time when the transfer or bequest took effect belong to any of the classes specified in section 14, the transfer of and succession to the property so transferred or bequeathed shall be regulated by the rules which would have governed the transfer of and succession to such property if the transferee or legatee had bought the same from a person not being a taluqdar or grantee, heir or legatee." By section 21 of the Amending Act III of 1910 a partial retrospective operation was given to the amended section.
The retrospective operation was limited by the proviso which enacted that nothing contained in the amending section shall affect suits pending at the commencement of the amending 684 Act, or shall be deemed to vest in or confer upon any person any right or title to any estate, or any portion thereof, or any interest therein, which is, at the commencement of the Amending Act, vested in any other person who would have been entitled to retain the same if the amending Act had not been passed, and the right or title of such other person shall not be affected by anything contained in the said section.
Mr. Agarwalla, appearing on behalf of the first defendent Dukh Haran Singh, has contended that in view of the retrospective operation given to section 15, as amended, the claim of the plaintiff that the taluqdari character of the state is destroyed has no force and he has invited our attention to two decisions of the Oudh Chief Court in Kaur Nageshar Sahai vs Shiam Bahadur (1) and Mohammad Ali Khan vs Nisar Ali Khan(2).
But we need express no opinion on the correctness or otherwise of these decisions.
An enquiry whether by virtue of certain provisions of the statute on which the first defendant relies, the plaintiff may not be entitled to the estate is, as already observed, not contemplated to be made in considering a petition for leave to sue in forma pauperis.
The true effect of the amended section 15 of the Oudh Estates Act I of 1869 is a complicated question of law which the Court will not proceed to determine in ascertaining whether the petition for leave to sue discloses a cause of action.
The High Court, in our judgment, was in error in observing that there was nothing in the plaint to show that Ganga Dutt succeeded to the estate because he was the nearest male reversioner under the ordinary Hindu law.
The plaintiff has emphatically made that assertion: whether the claim to relief on the basis of that assertion was justified must be adjudicated at the trial of the suit, 685 and not in deciding whether the plaintiff should be permitted to sue in forma pauperis.
We are also of the view that the High Court was in error in holding that by an application to sue in forma pauperis, the applicant prays for relief personal to himself.
An application to sue in forma pauperis, is but a method prescribed by the Code for institution of a suit by a pauper without payment of fee prescribed by the Court Fees Act.
If the claim made by the applicant that he is a pauper is not establish the application may fail.
But there is nothing personal in such an application.
The suit commences from the moment an application for permission to sue in forma pauperis as required by O. 33 of the Code of Civil Procedure is presented, and O. 1, r. 10, of the Code of Civil Procedure would be as much applicable in such a suit as in a suit in which court fee had been duly paid.
It is true that a person who claims to join a petitioner praying for leave to sue in forma pauperis must himself be a pauper.
But his claim to join by transposition as an applicant must be investigated; it is not liable to be rejected on the ground that the claim made by the original applicable is personal to himself.
In our view, the orders passed by the High Court in both the revision applications must be set aside.
Before parting with the case, we must take notice of the unsatisfactory progress this litigation had made since it was instituted nearly twelve years ago.
We regret to observe that the petition filed in July 1950 for leave to sue in forma pauperis was not disposed of by the Subordinate Judge for two years and it took the High Court three years to dispose of the revision petitions against the orders of the Subordinate Judge.
The proceedings were further held up even after special leave was granted by this Court in March, 1957 for nearly five years before the appeal could be heard.
This 686 Court had ordered that the hearing of the appeals be expedited and heard on cyclostyled record but the record was not made ready for a long time.
We also find that a large number of documents were included in the books prepared for use of the court to which no reference was made at the Bar during the course of the hearing.
We trust that the case will be taken up for hearing with the least practicable delay and disposed of according to law.
The appellants in the two appeals will be entitled to their costs both in this Court and the High Court.
The costs of the trial court will be the cost in the cause.
Appeals allowed.
Cases remitted.
| The application for eviction against the appellant was based inter alia on the ground that the premises in suit were dilapidated and the landlord wished to rebuild them after dismantling the structure.
The Rent Controller dismissed the application observing that there was hardly any proof that the building was in a dilapidated condition and that the landlord had no means to rebuild the premises.
The appellate authority confirmed the finding holding that the premises were in good condition and that the landlord was not, in good faith, wanting to replace the building.
An applications purporting to be under section 15(5) of the East Punjab Urban Rent Restriction Act, 1949, was made before the High Court.
The High Court following an earlier decision of the same Court allowed the revision petition holding that in determining the question of ejectment, what needs alone to be considered is whether the landlord genuinely wants to rebuild the permises and that the condition of the premises is 'a wholly irrelevant factor '.
^ Held, that the investigation by the Rent Controller cannot be confined only to the existence of an intention in the mind of the landlord to reconstruct.
This intention must be honestly held in relation to the surrounding circumstances, otherwise the very purpose of the Rent Restriction Act would be defeated, if the landlords were to come forward and to get tenants turned out, on the bare plea that they want to reconstruct the house without first establishing, that the plea is bona fide with regard to all circumstances, viz. that the houses need reconstruction or that they have the means to reconstruct them.
Held, further, that when the Tribunals have examined the facts after instructing themselves correctly about law, a Court of Revision should be slow to interfere with the decision, thus reached, unless it demonstrates by its own decision the impropriety of the order which it seeks to revise.
Under section 15(5) of the East Punjab Urban Rent Restriction Act, 1949, the powers of the High Court do not include 624 powers to perverse a concurrent finding without showing how those finding are erroneous and without giving any substantial reasons for its finding.
Held, also, that a case cannot be an authority on a point of fact and reach case has to be examined in the light of the circumstances existing.
Moti Ram vs Suraj Bhan, [1960] 2 section C. R. 896, referred to.
|
Appeal No. 21 of 1960.
Appeal from the judgment and order dated January 16, 1959, of the Madras High Court in Writ Appeal No. 67 of 1958, arising out of the judgment and order dated July 15, 1958, of the said High Court in Writ Petn.
No. 922 of 1957.
C. B. Aggarwala, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellant.
R. Ganapathy Iyer, H. J. Umrigar, R. H. Dhebar and T. M. Sen, for respondent No. 2. 1960.
May 4.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal on a certificate granted by the Madras High Court.
The appellant Company had been carrying on various classes of insurance business other than life insurance after its incorporation in September, 1941.
On October 15, 1956, an extraordinary general meeting of the shareholders of the Company passed a resolution by which all its insurance business was to cease forthwith and no further policies of insurance of any kind were to be issued thereafter.
It was also resolved that no application should be made for renewal of the certificate granted under section 3 of the , No. IV of 1938 (hereinafter called the Act), and that thence forward the Company should only carry on the business of money lending as a loan Company and also to do investment business.
In consequence of these resolu tions, the Company informed the Controller of Insurance in December, 1956, that it was not applying for renewal of its registration for carrying on the business of insurance.
In May, 1957, the Controller wrote to the Company that its certificates for carrying on insurance business would be deemed to be cancelled from July 1, 1957, and the cancellation was notified in the Gazette of India.
It appears that the Government of India had been receiving complaints against the Company.
Consequently on July 17, 1957, the Government of India passed an order under section 33 of the Act directing the Controller of Insurance to investigate the affairs of the Company and to submit a report.
Thereupon the Controller appointed Messrs. Fraser and Ross to act as auditors to assist him in the investigation.
The Company was informed of this order in September 1957.
Thereupon it wrote to the Controller that no order under section 33 of the Act could be passed 860 against it, as it had closed its business of insurance and the order in question was without jurisdiction.
The Controller sent a reply to this communication and pointed to the provisions of section 2D of the Act in justification of the order.
Thereupon the Company made an application under article 226 of the Constitution in the Madras High Court.
Two main contentions were raised by it in the petition.
In the first place it was submitted that the Company having closed all its insurance business no order could be passed against it under section 33.
as that section only applied to companies actually carrying on the business of insurance and that in any case no such order could be passed even with the help of section 2D of the Act.
In the second place it was contended that even if such an order could be passed under section 33 read with section 2D of the Act, it could not be done in the present case, as the Company 's liabilities in respect of its insurance business did not remain unsatisfied or not otherwise provided for.
Messrs. Fraser and Ross as well as the Controller were made parties to the petition.
The petition was opposed on behalf of the Controller, and his contention was that the case was clearly covered by section 2D of the Act and therefore the order under section 33 was validly passed in this case and that it had not been shown that the liabilities had been satisfied or had been otherwise provided for.
The learned Single Judge held that an order under section 33 read with section 2D could be passed against the Company and that it had not been shown that the Company 's liabilities had been satisfied or otherwise provided for.
He therefore dismissed the writ petition.
This was followed by an appeal by the Company, which was dismissed.
The Division Bench sub stantially agreed with the view taken by the learned Single Judge.
Thereupon the Company applied for a certificate to enable it to appeal to this Court and obtained it; and that is how the matter has come up before us.
Mr. Aggarwala appearing for the Company has urged the same two points before us.
The Act was passed in 1938 to control persons carrying on the business of insurance.
Section 2(9) thereof defines an ' insurer ' inter alia as weaning any body corporate 861 (not being a person specified in sub cl.
(c) of this clause) carrying on the business of insurance, which is a body corporate incorporated under any law for the time being in force in India or stands to any such body corporate in the relation of a subsidiary company within the meaning of the Indian Companies Act, 1913, as defined by sub section
(2) of section 2 of that Act.
Section 3 provides for registration of any person carrying on the business of insurance and no such business can be carried on unless a certificate of registration for the particular class of insurance business has been obtained from the Controller.
Section 3(4) gives power to the Controller to cancel the certificate for reasons specified therein and section 3(5B) lays down that when a registration is cancelled the insurer shall not after the cancellation has taken effect, enter into new contracts of insurance, but all rights and liabilities in respect of contracts of insurance entered into by him before such cancellation takes effect shall, subject to the provisions of sub section
(5D), continue as if the cancellation had not taken place.
In order to safeguard the interest of policy holders, section 7 provides for deposits by the insurer for various classes of his business.
Section 8 lays down that any deposit made under section 7 shall be deemed to be part of the assets of the insurer but shall not be susceptible of any assignment or charge; nor shall it be available for the discharge of any liability other than liabilities arising out of policies of insurance issued by the insurer so long as any such liability remains undischarged ; nor shall it be liable to attachment in execution of any decree except a decree obtained by a policy holder of the insurer in respect of a debt due upon a policy which debt the policy holder has failed to realise in any other way.
Section 9(1) lays down that where an insurer has ceased to carry on in India any class of insurance business in respect of which a deposit has been made under section 7 and his liabilities in India in respect of business of that class have been satisfied or are other.
wise provided for, the court may on the application of the insurer order the return to the insurer of so much of the deposit as does not relate to the classes of insurance.
, if any, which he continues to carry on.
Under 112 862 section 10 an insurer who carries on business of more than one kind is required to keep a separate account of all receipts and payments in respect of each such class of insurance business.
Section 33(1) with which we are directly concerned, is in these terms: " The Central Government may at any time by order in writing direct the controller or any other person specified in the order to investigate the affairs of any insurer and to report to the Central Government on any investigation made by him: Provided that the controller or the other person may, wherever necessary, employ an auditor or actuary or both for the purpose of assisting him in any investigation under this section.
" Section 2D is in these terms: " Every insurer shall be subject to all the provisions of this Act in relation to any class of insurance business so long as his liabilities in India in respect of business of that class remain unsatisfied and not otherwise provided for.
" The contention of Mr. Aggarwala is that section 33 and section 2D both refer to an insurer which is defined in section 2(9) as a person carrying on the business of insurance.
He, therefore, contends that as soon as the insurer who was carrying on the business of insurance closes it down completely be no longer remains an insurer and the provisions of the Act do not apply to him.
Therefore, according to him, when section 33 provides for an order of investigation by the Central Government such an order can only be made in respect of a, person who is actually carrying on the business of insurance and is thus an insurer and cannot be made against a person who was an insurer but has closed his business.
Further, according to Mr. Aggarwala, section 2D also speaks of an insurer and makes him subject to all the provisions of the Act with respect to any class of insurance business so long as his liabilities in respect of that class remain unsatisfied or not other.
wise provided for and therefore section 2D would only apply to those cases where insurance business is being carried on, though some class of insurance business might have been closed.
The contention therefore is that reading sections 33 and 2D together, no order under 863 section 33 can be made in case of an insurer who has completely closed his business of insurance.
The main basis of this contention is the definition of the word "insurer" in section 2(9) of the Act.
It is pointed out that definition begins with the words " insurer means" and is therefore exhaustive.
It may be accepted that generally the word " insurer" has been defined for the purposes of the Act to mean a person or body corporate, etc., which is actually carrying on the business of insurance, i.e., the business of effecting contracts of insurance of whatever kind they might be.
But section 2 begins with the words " in this Act, unless there is anything repugnant in the subject or context " and then come the various definition clauses of which (9) is one.
It is well settled that all statutory definitions or abbreviations must be read subject to the qualification variously expressed in the definition clauses which created them and it may be that even where the definition is exhaustive inasmuch as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or the context.
That is why all definitions in statutes generally begin with the qualifying words similar to the words used in the present case, namely, unless there is anything repugnant in the subject or context.
Therefore in finding out the meaning of the word " insurer " in various sections of the Act, the meaning to be ordinarily given to it is that given in the definition clause.
But this is not inflexible and there may be sections in the Act where the meaning may have to be departed from on account of the subject or context in which the word has been used and that will be giving effect to the opening sentence in the definition section, namely, unless there is anything repugnant in the subject or context.
In view of this qualification, the court has not only to look at the words but also to look at the context, the collocation and the object of such words relating to such matter and interpret the meaning intended to be conveyed by the use of the words under the circumstances.
Therefore, though ordinarily the word " insurer " as used in the Act would mean a 864 person or body corporate actually carrying on the business of insurance it may be that in certain sections the word may have a somewhat different meaning.
A perusal of a few sections of the Act will illustrate this and immediately show that the word " insurer " has been used in some sections to mean not merely a person actually carrying on the business of insurance but also a person who intends to carry on the business of insurance but has not actually started it and also a person who was carrying on the business of insurance but has ceased to do so.
For example, section 3(2) which deals with an application for registration which naturally has to be made before the business of insurance actually commences, lays down in cl.
(b) that the application shall be accompanied by the name, address and the occupation, if any, of the directors where the insurer is a company incorporated under the Indian Companies Act.
Here the word ,insurer" has been used to indicate the company which is not actually carrying on the business of insurance but is intending to do so and is applying for registration.
Further in section 3(2) (e) which also deals with an application for registration, it is provided that an insurer having his principal place of business or domicile, outside India shall send along with the application a statement verified by an affidavit of the principal officer of the insurer setting forth various requirements.
Here again, the word " insurer " has been used for an intending insurer, for the business of insurance would only begin after the registration certificate is granted on the application made under section 3(2).
Then in section 9 it is provided that, where an insurer has ceased to carry on business, the court may on the application of the insurer order the return to him of the deposit made under section 7.
shows that though the, insurer is not actually carrying on the business of insurance he is still termed an insurer and on his application the deposit may be refunded to him.
Again section 55 which deals with a situation arising out, of the winding up of an insurance company or the insolvency of any other insurer, provides that the value of the assets and liabilities of the insurer shall be ascertained in such manner and upon such basis as the liquidators 865 or the receiver in insolvency thinks fit.
The word " insurer" has thus been used in this section for a person or body corporate, etc., which is not actually carrying on the business of insurance and has gone into liquidation or ' has become insolvent.
Therefore, though the ordinary meaning to be given to the word "insurer " is as given in the definition clause (section 2(9)) and refers to a person or body corporate, etc., carrying on the business of insurance, the word may also refer in the context of certain provisions of the Act to any intending insurer or quondam insurer.
The contention therefore that because the word " insurer" has been used in section 33 or section 2D those sections can only apply to insurers who are actually carrying on business cannot necessarily succeed, and we have to see whether in the context of these provisions an insurer will also include a person who was an insurer but has closed his business.
As we have said already the Act was passed to control the business of insurance in the interest of policy holders and the general public and section 33 is obviously a provision by which the Central Government can order investigation into the affairs of any insurer in order to carry out the policy of the Act.
Could it be said in the circumstances that section 33 only applies to insurers actually carrying on business and not to insurers who have closed their business? If the policy of the Act is to be carried out and the policy holders and the general public are to be protected, the need for making investigation into the affairs of an insurer who has closed his business is greater, for he may have done so dishonestly.
We are therefore of opinion that the word " insurer" as used in section 33 not only refers to a person who is actually carrying on business but in the context of that section and taking into account the policy of the Act and the, purposes for which the control envisaged by the Act was imposed on insurers also refers to insurers who were carrying on the business of insurance but have closed it.
Further if there were any doubt whether the word " insurer " in section 33 refers to those insurers also who had closed their business that doubt in our opinion is completely dispelled by section 2D.
That section 866 provides that every insurer shall be subject to all the provisions of the Act in relation to any class of insurance business so long as his liability in India in respect of business of that class remains unsatisfied or not otherwise provided for.
Obviously this section applies to those insurers who have closed their business.
It was not necessary to enact this section if the word ,insurer" here also meant a person actually carrying on the business of insurance, for the provisions of the Act apply to such a person proportion vigor.
Therefore, when the word " insurer " is used in section 2D it must mean a person who was carrying on the business of insurance but has closed it.
If that is so, section 33, which provides for investigation, would apply to such an insurer who has closed his business, by virtue of section 2D.
Mr. Aggarwala next contends that section 2D would only apply to those cases where an insurer was carrying on different classes of insurance business and had closed some of them but not all of them.
He contends that the section provides that the insurer shall remain subject to the provisions of the Act in relation to any class of insurance business so long as his liabilities with respect to that class of business remain unsatisfied or not otherwise provided for.
This, according to him, contemplates a closure of only some out of many classes of business of insurance and not of all.
We see no reason however to limit the words used in this section only to a case where out of many classes of business, some are closed and others are being carried on.
Under section 13 of the , No. X of 1897, in all Central Acts and Regulations, unless there is anything repugnant in the subject or context, words in the singular shall include the plural and vice versa.
Though therefore section 2D speaks of any class of insurance business in the singular it, includes the plural also and would refer to all classes of insurance business.
Mr. Aggarwala does not contend that where, for example, four classes of business are being carried on and three of them are closed and one is continued, the section will not apply; but he contends that at least one must continue and the section will not apply if all are closed.
We do not see why if the section 867 applies, even though the word "class" is in the singular, to a case where three out of four classes are closed and one is continued it should not apply to a case where all four classes are closed.
We see no repugnancy in the context in holding that if all classes of business are closed the insurer shall be subject to all the provisions of the Act so long as his liabilities in India in respect of any business of all classes remain unsatisfied or not otherwise provided for.
Therefore on a plain reading of, section 2D there can be no doubt that an insurer who has closed all classes of his insurance business remains subject to all the provisions of the Act in relation to such classes so long as his liabilities in India remain unsatisfied or not otherwise provided for.
Therefore section 33 will certainly apply to a case where all classes of insurance business have been closed so long as the liabilities remain unsatisfied or not otherwise provided for.
The first contention of the appellant therefore that no investigation can be ordered under section 33 in its case because it has closed all classes of its insurance business fails.
Turning now to the second contention, the argument on behalf of the appellant is three fold.
In the first place it is urged that an order can only be made under section 33 read with section 2D when the Central Government is satisfied that the liabilities have not been satisfied or otherwise provided for, and that the order should show on the face of it that the Central Government had considered this aspect of the matter and had come to the conclusion that the liabilities remained unsatisfied or not otherwise provided for.
Further there is nothing in the present order to show that the Central Government ever considered this aspect of the matter and was satisfied that the liabilities of the appellant Company remained unsatisfied or not otherwise provided for.
There is no doubt that the order is utterly silent on this point and it was only in his letter of October 15, 1957, that the Assistant Controller pointed out section 2D of the Act and referred to this aspect of the matter.
It seems to us only just and proper that when an order is being passed under section 33 read with section 2D of the Act it should show on the face of it that the 868 Central Government was prima facie satisfied that the liabilities had remained unsatisfied or not otherwise provided for it is only when the liabilities have not been satisfied or otherwise provided for that an order under section 33 read with section 2D would be justified in the case of an insurer who has closed his business.
We use the word " prima facie " advisedly, for it seems to have been suggested in the High Court that no order could be passed under section 33 unless it was proved to the hilt that there were liabilities which remained unsatisfied or otherwise unprovided for.
It is obvious that such proof would only be available after investigation in to the affairs of the insurer.
Therefore in order that section 2D may be workable, all that is required under it is that the Central Government should be satisfied after such prima facie inquiry as it considers necessary that there are reasons to believe that the liabilities of the insurer who has closed his business remain unsatisfied or not otherwise provided for and in coming to this prima facie conclusion the Central Government may make enquiry from the insurer with respect to complaints that it may have received against him.
But the fact that the order does not on the face of it show that the Central Government considered this aspect of the matter would not make it bad, if in subsequent proceedings taken to challenge it is shown that there were materials before the Central Government which would justify its coming to the prima facie conclusion that the liabilities had Dot been satisfied or otherwise provided for, and therefore an investigation into the affairs was called for.
In the present case we find from the materials on the record that there were complaints before the Central Government from those who had claims against the company.
Those complaints were apparently referred to the Company and it does not appear that the Company satisfied the Central Government that the complaints were unjustified.
It was in this situation that the order for investigation was made in July, 1957, after the Company had closed its insurance business.
Further on the materials available on the record it does appear that even now there are claims pending to the tune of about one lac of rupees against the Company.
So it cannot 869 be said that there were no liabilities of the Company outstanding which were not satisfied or otherwise provided for when the order was made in July, 1957.
In the circumstances the order cannot be held to be bad because it does not show on the face of it that there were liabilities which had remained unsatisfied or not otherwise provided for.
In the second place it is urged that there can be no question of satisfying or otherwise providing for liabilities unless the liabilities are ascertained and either admitted or proved.
In other words the argument is that it is only those liabilities which are admitted by the insurer or which have been decreed against him and the decrees have become final which can be taken into account in deciding whether the liabilities have remained unsatisfied or not otherwise provided for.
It is urged that only those liabilities which are ascertained and either undisputed or proved can be satisfied and that the same applies to their being otherwise provided for.
It is true that only those liabilities, which are ascertained and either admitted or proved, can be satisfied; but it does not follow that " provision otherwise " must also be only of liabilities which are ascertained and either admitted or proved.
If that were go a dishonest insurer who closes his business could always get out of the provisions of section 33 read with section 2D by repudiating all claims made against him and then saying that there are no liabilities which remained unsatisfied or otherwise `unprovided for.
There can be no doubt, therefore, if these provisions have to serve the purpose for which they were enacted, (namely, the protection of the interest of the policy holders and the general public), the words ',not otherwise provided for" in section 2D must refer to liabilities in the nature of claims against the insurer whether the insurer admits them or not and whether a decree has been finally passed in respect of them or not.
The intention of making this provision in section 2D is to ensure that probable claims arising out of the insurance business that is closed are provided for before the insurer who has closed his business can say that he is not governed by all the provisions of the Act.
There can be no doubt, therefore, 113 870 that when " provision otherwise " has to be made it must be with respect to probable claims also that are likely to arise out of the insurance business which has been closed.
In the present case even the Company admits that there are probable claims to the tune of about rupees one lac still pending and in the circumstances until they are satisfied or it is shown that they have been provided for otherwise, all the provisions of the Act, including section 33, will apply to the Company.
The last argument in support of the second contention is that the liabilities have been otherwise provided for.
It is said that the Company deposited Rs. 3,94,000 as security under section 7 of the Act, which is still available to pay off the liabilities of the Company and therefore when such liabilities do not appear to exceed that amount they have otherwise been provided for.
The question thus raised is whether the Company is entitled to take into account the security deposit under section 7 in order to show that the liabilities have been otherwise provided for.
The contention on behalf of the Controller is that when the Act envisages " provision otherwise ", this provision has to be over and above the security deposit made by the Company under section 7.
It appears from section 8 that this deposit is available for the discharge of liabilities arising out of policies of insurance issued by the insurer so long as any such liability remains unsatisfied.
But even if a decree has been obtained by a policy holder on the basis of a liability under the policy he is not entitled to attach any part of this deposit until he shows that he has failed to realise the decree in any other way.
Further it appears that section 8 only contemplates policy holders holding a decree attaching part of the security deposit in case they fail to realise their debt in any other way ; it does not contemplate, for example, third parties who have decrees against an insurer, like the Company (which in its motor insurance business indemnifies the policy holders against third party risk up to a certain extent), doing so.
Such third parties cannot under any circumstances attach any part of the deposit, for section 8 only permits its attachment in the last resort by a policy holder of the 871 insurer in respect of a debt due upon a policy.
But under section 2D the decree of a third party in such a case would be the liability of the insurer in respect of his motor insurance business which could not be realised by attachment of any part of the deposit under section 7.
Besides, even with respect to decrees of policy holders the deposit could only be attached when all other ways of realising the money have failed.
In these circumstances it can hardly be said that the fact that this deposit is there is itself a " provision otherwise " to meet the liabilities of the insurer.
The policy holder cannot attach this deposit unless he first exhausts all other means.
Even if be has got a decree and even if the insurer admits his claim and wants to pay it, he cannot do so out of the money in deposit under 'section 7.
As for third parties who may have decrees against the insurer, they can never attach this deposit in view of the provisions of section 8.
It could not be the intention of the legislature when it was in effect exempting the insurer from all the provisions of the Act on his liabilities being otherwise provided for that such provision should include the security deposit under section 7, when it has made it so difficult for a policy holder to get his debt satisfied from that deposit and when it is clear that a third party could not in any way attach the deposit.
In these circumstances we are of opinion that when section 2D provides that the insurer shall be subject to all the provisions of the Act so long as his liabilities in India in respect of the business which is closed remain unsatisfied or not otherwise provided for, the satisfaction or " provision otherwise " does not refer to the deposit under section 7 and has to be over and above that deposit.
It is true that section 9 provides that the insurer can take back the deposit after satisfying the court that he has satisfied or otherwise provided for his liabilities.
But this " provision otherwise " for the purposes of section 9 must obviously be other than the deposit itself.
Further when the insurer wants to take back his deposit on making " provision otherwise " he will have to satisfy the court that the " provision otherwise " has been fully made and the court will be in a position to investigate into the matter.
This, however, does not mean that if the insurer does 872 not want to take advantage of section 9 of the Act he can say without submitting to the terms of that section that he has made " provision otherwise ", because the deposit which is made under section 7 is more than all his liabilities of the insurance business that he has closed.
It is urged that it is hard, for example, on an insurer who has a large deposit and whose liabilities are small that he should not be able to fall back on his deposit for the purposes of section 2D.
We do not, however, see any hardship in a case of this kind, for if it is a fact that the deposit of the insurer is large and his liabilities are small he can always take advantage of section 9 of the Act and submit to an investigation by the court and take back his deposit after depositing the small sum required to meet his liabilities.
We are, therefore, of opinion that when section 2D speaks of satisfaction or " provision otherwise " for the liabilities of insurance business which is closed it contemplates such satisfaction or " provision otherwise" over and above the deposit made under section 7.
It is not in dispute in this case that there are some liabilities still pending; it is also not in dispute that they are not satisfied and no provision has been made otherwise for them irrespective of the security deposit.
This also appears to have been the position when the order was made in July, 1957.
In the circumstances the order is good and cannot be called in question by the Company.
The appeal therefore fails and is hereby dismissed with costs.
Appeal dismissed.
| A Swedish company manufacturing ball bearing equipment entered into an agreement with the respondent, section K. F. Ball Bearing Co. Ltd. registered under the Indian Companies Act, 1913, appointing the latter as its sole selling agent in India.
The material portion of the Agreement ran thus: " Clause 23: The Agent shall pay to section K. F. net sales value of the said products that are sold each month, after deduction of the Commission that has been agreed upon and the import expenses that have been paid.
Payment shall be made in Sweden thirty days at the latest following the last day of the month in which the sales have been effected." During the second world war a corporation known as the Pan rope Corporation was incorporated in the Republic of Panama to take over the assets and business of the Swedish company and the said Panrope Corporation in its turn conveyed the property and business to the Swedish company.
Thereafter the respondent company sold in India as the agent of the foreign Corporations goods manufactured by them, and in a majority of the sales the respondent company remitted the " sale value " to the foreign corporations after the goods were sold but before the sale proceeds were recovered from the buyers.
In some cases remittances were made even before the goods were sold and in others remittances were made after the sale proceeds were realised from the buyers.
The Income tax Officer assessed the foreign corporations under section 4(1)(a) of the Indian Income tax Act for payment of tax on the profit included in the price realised by the respondent company without making any distinction between remittances made before recovery of the sale proceeds and remittances made after recovery of the sale proceeds.
This order was confirmed by the higher income tax authorities.
On a reference made at the instance of the respondent company the High Court came to the conclusion that the foreign corporations had a business connection in the taxable territories in the years of account and the respondent company was liable to pay tax on their behalf only with regard to remittances made after the sale proceeds were recovered.
On appeal by the Commissioner of Income tax by special leave, 142 Held, that the liability to pay income tax finder s, 4(1)(a) arose on the receipt of the income and the question whether the income was received in the taxable territory was determined by the place where the price was received.
Profits were received by the respondent company on behalf of the foreign corporations in the taxable territory in respect of all sales of consigned goods irrespective of whether the remittances were made either before or after the price was received.
|
Civil Appeal No. 4512 of 1984 Appeal by Special leave from the Judgment and order dated 211 the 27th October, 1980 of the Bombay High Court in S.C.A. NO.
1021 of 1973.
M.S. Gujral, R.N. Poddar and Dalveer Bhandari for the appellant.
U.R. Lalit, N.M. Ghatate and S.V. Deshpande for the Respondent.
The Judgment of the Court was delivered by SEN, J.
This appeal by special leave directed against the judgment and order of a Division Bench of the Bombay High Court at Nagpur dated October 27, 1980 raises a questions to whether a staff car of the Technical Advisor to the North Chirimiri Collieries owned by respondent No. 1, the United Collieries Limited, which was nationalized under sub s.(l) of s.3 of the Coal Mines (Nationalization) Act, 1973 w.e.f.
May 1, 1973, was or was not covered by the definition of the term 'mine ' in s.2(h)(xii) and therefore stood transferred to, and became vested in, the Central Government free from all encumbrances.
It is common ground that the Ambassador car No. MHX 3771 was purchased by Messrs Karamchand Thapar & Bros. (Coal Sales) Ltd., Delhi in the year 1966 and was transferred to respondent No. 1, United Collieries Limited, the owners in relation to the North Chirmiri Collieries, and it was therefore the owner of the said vehicle.
On and from the appointed day i.e. May 1, 1973, the right, title, and interest of the owners in relation to the coal mines specified in the Schedule stood transferred to, and became vested absolutely in, the Central Government free from all encumbrances, under sub s.(1) of s.3 of the Act.
It is also not in dispute that the vehicle had been placed at the disposal of one D.D. Diddi, the Technical Advisor to the North Chirimiri Collieries to be used as his staff car.
Immediately after the nationalization of the coal mines, the Deputy Custodian General, Coal Mines Authority Limited, Nagpur addressed a letter dated May 9, 1973 to the aforesaid D. D. Diddi requiring him to hand over the staff car to the Custodian.
In his reply dated May 25, 1973, he asserted that although the said car belonged to respondent No. 1 and had been allotted to him for use as a staff car, it was not used exclusively for the North Chirimiri Collieries but used by him for looking after the multifarious activities of the Thapar Group of Industries which 212 was a composite concern with businesses other than coal mining.
It is not necessary for us to refer to the long correspondence that A ensued between the parties.
Eventually, the Managing Director, Western Division, Coal Mines Authority Ltd., Nagpur addressed letters dated August 9, 1973 both to respondent No. 1 and the erstwhile Technical Advisor stating that on coming into force of the Act the right, title and interest of the North Chirimiri Collieries vested in the Central Government under sub s.(1) of s.3 of the Act and therefore the car which was an asset belonging to the mine vested in the Central Government It further stated that if they failed to hand over possession of the car, they would he liable to prosecution under the Act.
Thereupon respondent No. 1, United Collieries Limited, the owners of the coal mine, and the aforesaid D.D. Diddi, the erstwhile Technical Advisor of the North Chirimiri Collieries.
filed a petition under article 226 of the Constitution before the Nagpur Bench of the High Court.
The High Court held that the question as to whether the staff car should be treated as belonging to the owner of a mine as part of the mine itself raised disputed questions of fact relating to its user which would have to be determined on the basis of evidence.
In taking that view, the High Court purported to rely upon the decision of this Court in New Satgram Engineering Works & Anr.
vs Union of India & Ors.(l) and left the parties to have their rights adjudicated in a civil suit.
It accordingly discharged the rule directing respondent No. I to establish its claim by filing a civil suit with a direction that in the event of such a suit being filed, the Civil Court will consider the making of an appropriate order for the grant of interim relief on condition of furnishing of adequate P security keeping in view that the Coal Mines Authority had been deprived of the staff car for all these years.
We are afraid, the judgment of the High Court cannot be sustained.
It failed to appreciate that in dealing with the question whether or not staff car was covered by the definition of 'mine ' in s.2(h)(xii) the nature of its user was immaterial.
Undoubtedly, the staff car belonged to respondent No. 1, the United Collieries Ltd., the owners in relation to the mine, and it being the staff car of the Technical Advisor of the North Chirimiri Collieries, was an asset belonging to the mine.
The High Court should therefore have (1) ; 213 answered the question in favour of the appellants and dismissed the writ petition on merits.
Instead it misdirected itself into thinking A that the matter was covered by the decision of this Court in New Satgram Engineering works ' case, supra, where it was observed that where there is a dispute as to whether a particular property vests in the Central Government or not under sub s.(l) of s.3 of the Act, the dispute undoubtedly is a civil dispute and must therefore be resolved by a suit.
These observations of the Court in New Satgram Engineering Work.s ' case were made in the context of s.2(h)(xi).
In the Act, 'mine ' in s.2(h) is defined, except what is immaterial, in the following terms: "2.
Definitions In this Act, unless the context otherwise requires, (h) 'mine ' means any excavation where any operation for the purpose of searching for the obtaining minerals has been or is being carried on.
and includes (vi) all lands, buildings, works, adits, levels, planes, machinery and equipments, instruments, stores, vehicles railways, tramways and siding in, or adjacent to a mine and used for the purposes of the mine, (xi) all lands and buildings other than those referred to in sub clause (x), wherever situated, if solely used for the location of the management, sale or liaison offices, or for the residence of officers and staff, of the mine; (xii) all other fixed assets, movable and immovable, belonging to the owner of a mine, wherever situated, and current assets, belonging to a mine, whether within its premises or outside.
" It will be seen that there is difference in the language used in s.2(h)(xi) and (xii).
Sub cl.
(xi) uses the words 'if solely used ' in relation to lands and buildings for the location of the management sale or liaison offices, or for the residence of officers and staff, or the mine, while sub cl.(xii) uses the words 'belonging to the owner of a mine, wherever situated '.
The difference in language between the two expression 'if solely used ' and 'belonging to the owner of a mine ' is obvious.
In New Satgram Engineering Works ' case, this 214 Court observed that it was therefore possible to contend that lands A and buildings appurtenant to a coal mine, if not exclusively used for the purposes of the colliery business, would not come within the definition of 'mine ' in s.2(h) i.e. it would depend upon the nature of user, and that the crucial date is the date of vesting.
It then went on to say that the distinction though apparent may not be real in the facts and circumstances of a particular case.
The workshop or a building constructed initially for the purposes of a coal mine cannot by itself being diverted to other purposes cease to belong to a mine.
What is of essence is whether the workshop or building originally formed a part and parcel of a coal mine.
The Court laid down that the subsequent user may not be very material.
The High Court was clearly in error in directing the parties to have the matter settled by a civil suit.
Parliament by an enlarged definition of 'mine ' in s.2(h) of the Act has indicated the nature of the properties that vest and the question whether a particular asset is taken within the sweep of s.2(h) depends on whether it answer the description given therein.
The staff car in question was undoubtedly a fixed asset of the North Chirimiri Collieries and it, belonging to respondent No. 1 the United Collieries Ltd., the owners in relation to the said mine, being the staff car of the Technical Advisor, was 'fixed asset ' belonging to the mine.
lt is righly not suggested that the staff car was not a fixed asset. 'Fixed assets ' in general comprise those asset which are held for the purpose of conducting a business, in contradistinction to those assets which the proprietor holds for the purpose of converting into cash, and they include real estate, building, machinery etc.
; Words & Phrases, Permanent Edition, Vol. 17, p. 161; Blacks Law Dictionary, 5th edn., p.573; Stroud 's Judicial Dictionary, 4th edn., Vol.1, p.201.
The staff car therefore fell within the definition of 'mine ' as contained in s.2(h)(xii) and vested in the Central Government under sub section
(1) of s.3 Coal Mines (Nationalization) Act, 1973.
Merely because the Technical Advisor was putting the staff car to his personal use or for multifarious activities of the Thapar Group of industries would not alter the true legal position since the subsequent user for a different purpose was not really germane.
For these reasons, the appeal must therefore succeed and is allowed, with costs.
The judgment and order passed by the High Court dated October 27, 1980 relegating the parties to a civil suit is set aside and the writ petition filed by the respondents is dismissed.
S.R. Appeal allowed.
| The appellant trade union filed two complaints against the employees.
The complaints were that the employers were guilty of imposing and continuing a lock out and had thus committed unfair labour practice.
The employers contended that they had finally and irrevocably closed the industrial under taking and were not guilty of any unfair labour practice.
The Industrial Cc.
Court dismissed the complaints.
The union 's appeals were dismissed by the High Court.
Hence these appeals by special leave.
Disposing of the appeals, ^ HELD .
Lock out has been defined in Sec.
2(L) of the to mean the closing of a place of business, or the suspension of work or the refusal by an employer to continue to employ any number of persons employed by him.
In lock out the employer refuses to continue to employ the workmen employed by him even though the business activity was not closed down nor intended to be closed down.
The essence of lock out is the refusal of the employer to continue to employ workmen.
There is no intention to close the industrial activity.
Even if the suspension of work is ordered it would constitute lock out.
On the other hand closure implies closing of industrial activity as a consequence of which workmen are rendered jobless.[67 G H; 68 Al The true test to find out whether the employer has imposed a lock out or has closed the industrial establishment, is that when it is claimed that the employer has resorted to closure of industrial activity, the Industrial Court in order to determine whether the employer is guilty of unfair labour practice must ascertain on evidence produced before it whether the closure was a device or pretence to terminate services of workmen or whether it is bonafide and for reasons beyond the control of the employer.
The duration of the closure may be a significant fact to determine the intention and bonafides of the employer at the time of the closure but is not decisive of the matter.
When it is claimed that the employer is not guilty of imposing a lock out but has closed the industrial activity, the Industrial Court before which the action of the employer 65 is questioned must keeping in view all the relevant circumstances at the time of A closure decide and determine whether the closure was a bonafide one or was a device or a pretence to determine the services of the workmen.
Answer to this question would permit the Industrial Court to come to the conclusion one way or the other.
[68 F H; 69A]
|
tition No. 215 of 1989.
(Under Article 32 of the Constitution of India.) M.S. Gujral, Ms. Kirti Misra and B .B. Sawhney for the Petitioners.
G.B. Pari, O.C. Mathur, Ms. Meera and section Sukumaran for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
This writ petition under article 32 filed on behalf of about 450 erstwhile employees of M/s. Burmah Shell retired between May 1, 1979 and December 1984, is for a mandamus or direction to the respondents to restore full pension (which had been commuted) to the petitioner Nos. 2 to 5 and others similarly situated upon the expiry of 12 1/2 years from date of retirement in case of those retired prior to April 1985 and after 11 1/3 years to those retired prior to April 1, 1985 from their respective dates of retirement.
They claim that though in their previous Writ Petition No. 590/87 disposed of by a Division Bench of this Court on May 11, 1988 of which one of us (Ranganath Misra, J.) was a member, a hike in the pension effective from May 1, 1988 was granted.
Consideration of the present relief had been left over for a later period.
Admittedly, the petitioners in Writ Petition No. 590/87 sought two reliefs, namely, (i) restora tion of the commuted portion of the pension, and (ii) en hancement of pension or par with the pensioners of the Hindustan Petroleum Corporation Limited, for short 'HPCL '.
During the course of hearing, claim for the 964 first relief was given up and submission was confined to the second relief.
This Court accepted the contentions of the petitioners and ordered a seizeable hike in the pension.
The relief in this writ petition squarely covers relief No. 1 of Writ Petition No. 590/87.
But the ground on which the peti tioners have again come before the Court within a short spell is that their hope of the respondent 's sister concern, namely, HPCL, restoring commuted portion of pension to its pensioners has been smashed as it has deferred its decision on the issue till 1992.
Their learned counsel contends that in Common Cause & Ors.
vs Union of India, ; this Court upheld the 15 years formula and directed that the commuted portion of the pension should be restored to all the civil servants as well as the armed forces personnel of the Central Government effective from April 1, 1985.
It is maintained that as principle the same would be applicable to the petitioners as well.
The respondents, it is claimed, have to bear an additional liability of only a sum of Rs.1,02,41,635 out of its huge profits without in any manner affecting its functioning.
When the employees of the Central Govt.
and other Public Sector Undertakings are receiving the same benefits, the denial thereof to the petitioners is arbitrary, unjust and unfair and offends article 14 of the Constitution.
There is no scheme in vouge in other Public Sector Undertakings like commuted pension scheme except in HPCI.
Though HPCL has postponed action in this regard till 1992, the petitioners are not precluded to approach this Court for redressal and the previous decision does not operate as res judicata.
This Court having accorded in equity benefits of pension, which is a legal right of the petitioner, the relief also may be granted to the petition ers.
Shri Pai, learned counsel for the respondents, has resisted all these contentions.
The short question is wheth er it is a fit case for interference and issue of a direc tion to the respondents to give the relief as prayed for.
Admittedly, the petitioners claimed this relief in Writ Petition No. 590/87.
This Court after appropriate considera tion held that a sizeable hike in pension would meet the ends of justice.
Admittedly, Burmah Shell has a unique scheme known as "Burmah Shell India Pension Fund" with its own rules.
This Court held that the retired personnel would be entitled to a hike in pension at par with pensioners of HPCL.
Admittedly, HPCL has not accorded to its pensioners the relief of restoration of the commuted portion of pension after the expiry of 15 years.
The order passed by this Court is as recent as May 11, 1988.
After such a short time lag and in the absence of any substantial change in the posi tion, in our considered view, it is not desirable to enter tain the claim for restoration of commuted pen 965 sion.
Admittedly, the petitioners are governed by a special scheme, which is not at par with Government employees or the other Public Sector Undertakings.
In all fairness Shri Pai also has stated that as and when HPCL revises its scheme the petitioners would be entitled to the same benefits.
Grant or ' the relief at this stage would create disparity between the personnel who receive pension from HPCL and the re spondents.
We find sufficient justification in the conten tion of Shri Pai.
So we do not feel justified that it would be appropriate to interfere and grant the relief as prayed for.
The writ petition is accordingly dismissed, but without costs.
G.N. Petition dismissed.
| The Deputy Commissioner of Amraoti, evolved a scheme for the distribution of standard cloth.
The assessees agreed to finance the scheme without charging any interest and were appointed financiers and distributors.
The orders for the cloth were placed by the Government with the mills and the cloth was delivered to the assessees upon their paying the value of the cloth together with 6 1/4% of the ex mill price.
The Deputy Commissioner paid 4 1/2% of the ex mill price to the asses sees for contingent expenses of working the scheme.
The assessees distributed the cloth at prices fixed by the Deputy Commissioner through the Tehsildars and the Deputy Commissioner was responsible to the assessees for the sale proceeds receivable from the Tehsildars.
Out of the sale proceeds the Deputy Commissioner paid to the assessees whatever they had advanced on the cloth.
The profits from the scheme were agreed to be utilised for such charitable purposes as might be decided by the Deputy Commissioner.
The assessees contended that the income was not their income and that it was exempt from taxation under section 4(3) (i a) of the Income tax Act.
Held, that the profits were income which accrued to the assessees.
The assessees worked the scheme and such working produced the profits.
The fact of the control of the Deputy Commissioner could not prevent the working of the scheme by the assessees from being a business carried on by them.
The provisions in the agreement that the Deputy Commissioner guaranteed the payment by the Tehsildars of the price due from them, and that the profits would be devoted to charity decided by the Deputy Commissioner and the claim for exemption under section 4(3) (i a) all indicated that the assessees were the owners of the business.
Held further, that the profits were not exempt from taxation under section 4(3) (i a), as the business was not carried on behalf of any religious or charitable institution.
|
minal Appeal No. 215 of 1963.
Appeal from the judgment and order dated April 30, 1963 of the Madhya Pradesh High Court in Criminal Revision No. 24 of 1963.
Ravinder Narain, O.C. Mathur and J. B. Dadachanji, for the appellants.
I. N. Shroff, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Station House Officer, Gharsiwa filed an informa tion in the Court of the Magistrate, First Class, Raipur against the two appellants complaining that they had on March 10, 1962 allowed three passengers to occupy the front seat in a public carrier and had loaded goods in excess of the sanctioned weight, and had, 854 thereby committed offences punishable under sections 124 and 112 of the 4 of 1939.
The Magistrate issued process against the appellants for their appearance in Court by pleader, but did not make any endorsement thereon in terms of section 130(1)(b) of the Act.
The appellants submitted that the summonses served upon them were not according to law and the Magistrate by failing to make an endorsement on the summonses as required by cl.
(b) of sub section
(1) of section 130 of the Act had deprived them of the right conferred by the Act to intimate without appearing in Court their plea of guilty and remitting an amount not exceeding Rs. 25/ as may be specified.
The Magistrate rejected this plea and directed that the case against the appellants be "proceeded further according to law".
The Sessions Judge, Raipur in a petition moved by the appellants made a reference to the High Court of Madhya Pra desh recommending that the order passed by the Magistrate be set aside, for in his view the Trial Magistrate having failed to comply with the mandatory terms of section 130(1) (b) the proceeding against the appellants was unlawful.
The High Court of Madhya Pradesh declined to accept the reference.
Against that order, with certificate granted by the High Court, the appellants have preferred this appeal.
Section 130 of the which occurs in Ch.
IX which relates to "Offences, penalties and procedure" provides: " (1) A Court taking cognizance of an offence under this Act shall, unless the offence is an offence specified in Part A of the Fifth Schedule, state upon the summons to be served on the accused person that he (a) may appear by pleader and not in person, or (b) may by a specified date prior to the hearing of the charge plead guilty to the charge by registered letter and remit to the Court such sum not exceeding twenty five rupees as the Court may specify.
(2) Where the offence dealt with in accordance with sub section (1) is an offence specified in Part B of the Fifth Schedule, the accused person shall, if he pleads guilty of the charge, forward his licence to the 855 Court with the letter containing his plea in order that the conviction may be endorsed on the licence.
(3) Where an accused person pleads guilty and remits the sum specified and has complied with the provisions of sub section (2), no further proceedings in respect of the offence shall be taken against him, nor shall he be liable to be disqualified for holding or obtaining a licence by reason of his having pleaded guilty.
" Offences under sections 112 & 124 of the Act with which the appellants were charged are not included in the first part of the Fifth Schedule to the Act, and the Magistrate was therefore bound to comply with the terms of section 130(1).
There can be no doubt on the plain terms of section 130(1) that the provision is mandatory.
But there was difference of opinion about the nature of the duty imposed by sub section
(1) upon the Court taking cognizance of the complaint.
The Sessions Judge held that a Magistrate taking cognizance of an offence of the nature specified had, by virtue of section 130(1), to make an endorsement on the summons in terms of cls.
(a) & (b) and thereby to give an option to the person charged either to appear by pleader or to plead guilty to the charge by registered letter and remitting therewith the sum specified in the summons, and if the Magistrate failed to give that option, the proceedings initiated would be liable to be set aside as infringing the mandatory provision of the Act.
The High Court was of the view that sub section
(1) of section 130 left an option to the Magistrate exercisable on a consideration of the materials placed before him when taking cognizance of an offence to issue a summons without requiring the accused to appear by pleader to call upon him to plead guilty to the charge by registered letter and to remit the fine specified in the summons.
According to the High Court therefore the Magistrate had the option to issue a summons with an endorsement in terms of sub section
( 1 ) (a) or of sub section
(1) (b) and only if a summons was issued with the endorsement specified by sub section
(1) (b) it was open to the accused to avail himself of the option to plead guilty and to claim the privilege mentioned in sub section
In our judgment the High Court was right in the view it has taken.
The Magistrate taking cognizance of an offence is bound to issue summons of the nature prescribed by sub section
(1) of section 130.
But there is nothing in that sub section which indicates that he must endorse the summons in terms of both the clauses (a) & (b): to hold that he is so commanded would be to convert the conjunc 4Sup./65 8 856 tion "or" into "and".
There is nothing in the words used by the Legislature which justifies such a conversion, and there are strong reasons which render such an interpretation wholly inconsistent with the scheme of the Act.
The procedure in sub section
(1) of section 130 applies to cases in which the offence charged is not one of the offences specified in Part A of the Fifth Schedule, but applies to the other offences under the Act.
The maximum penalty which is liable to be imposed in respect of these offences defined by the Act is in no case Rs. 25/ or less.
It could not have been the intention of the Legislature that the offender, even if the case was serious enough to warrant the imposition of the maximum penalty which is permissible under the section to which the provision is applicable, to avoid imposition of a hi her penalty than Rs. 25/ by merely pleading guilty.
Section 130, it appears, was enacted with a view to protect from harassment a person guilty of a minor infraction of the or the Rules framed thereunder by dispensing with his presence before the Magistrate and in appropriate cases giving him an option to plead guilty to the charge and to remit the amount which can in no case exceed Rs. 25/ .
If the view which prevailed with the Sessions Judge were true, a person guilty of a serious offence meriting the maximum punishment prescribed for the offence may by pleading guilty under sub section
(1) (b) escape by paying an amount which cannot exceed Rs. 25/ .
Again the Magistrate is authorised under section 17 of the Act in convicting an offender of an offence under the Act, or of an offence in the commission of which a motor vehicle was used, in addition to imposing any other punishment to pass an order declaring the offender unfit for holding a driving licence generally, or for holding a driving licence for a particular class or description of vehicle.
Such an order may be passed if it appears to the Court, having regard to the gravity of the offence, inaptitude shown by the offender or for other reasons, that he is unfit to obtain or hold a driving licence.
But if the offender avails himself of the option given to him by the Magistrate of pleading guilty, no further proceeding in respect of the offence can in view of sub section
(3) of section 130 be taken against him, and he will not be liable to be disqualified for holding or obtaining a licence, though he may otherwise eminently deserve to be disqualified for holding a licence.
It is true that to an offence punishable with imprisonment in the commission of which a motor vehicle was used section 130(1) 857 does not apply: see Sch.
Five Part A Item 9.
But there are offences under the which do not fall within that description and also do not fall under other items, which are punishable with imprisonment e.g. section 113(2).
There are also certain offences which, if repeated but not otherwise, are liable to be punished with imprisonment e.g. certain offences under sections 118A and under section 123 of the Act.
It would be difficult to hold that the Legislature could have intended that irrespective of the seriousness or gravity of the offence committeed, the offender would be entitled to compound the offence by paying the amount specified in the summons, which the Magistrate would be bound to accept, if the contention raised by the appellants is correct.
Having regard to the phraseology used by theLegislator which prima facie gives a discretion to the Magistrate exercisable at the time of issuing the summons, and having regard also to the scheme of the Act, we are of the view that the HighCourt was right in holding that the Magistrate is not obliged in offences not specified in Part A of the Fifth Schedule to make an endorsement in terms of cl.
(b) of sub section
(1) of section 130 of the Act.
We are of the opinion that the view to the contrary expressed by the High Court of Allahabad in State of U.P. vs Mangal Singh(1) and the High Court of Assam in State of Assam vs Suleman Khan(2) on which the Sessions Judge relied is not correct.
The appeal therefore fails and is dismissed.
Appeal dismissed.
| For offences under sections 112 and 124 of the , the Magistrate issued process against the appellants for their appearance in court by pleader, but did not make any endorsement thereon in terms of section 130(1)(b) of the Act.
The appellants submitted that the summons served on them were not according to law and the failure to make this endorsement had deprived them of their right conferred by the Act to intimate without appearing in Court their plea of guilty and remitting an amount not exceeding Rs. 25 as may be specified.
The trial Magistrate rejected this plea, but on being moved by the appellants, the Sessions Judge made a reference to the High Court recommending that the order passed by the Magistrate be set aside.
The High Court declined to accept the reference.
In appeal by certificate : HELD : The Magistrate was not obliged in offences not specified in Part A of the Fifth Schedule to make an endorsement in terms of section 130(1) (b) of the Act.
[857 D] The Magistrate taking cognizance of an offence was bound to issue summons of the nature prescribed by sub section
(1) of section 130.
But there is nothing in that subsection which indicates that he must endorse the summons in terms of both cls.
(a) & (b) : to hold that he was commanded would be to convert the conjunction "or" into "and".
[855 H 856 All]
|
N: Criminal Appeal No. 251 of 1972 and 243 of 1973.
Appeals by Special Leave from the Judgment and order dated 22 9 72 of the Madras High Court in Criminal Appeal No. 369/72 and 976/71.
Debaratea Mookerjee, M. section K. Sastri and M. section Narasimhan for the Appellants.
A. V. Rangam and Miss A. Subhashni, for the Respondents.
877 The Judgment of the Court was delivered by UNTWALIA, J.
Criminal Appeal No. 251 of 1972 has been filed under section 2 of the and Criminal Appeal No. 243 of 1973 is by special leave.
In all there are six appellants.
It would be convenient to refer to them with reference to their accused number given in the judgment of the Sessions Court.
They are as follows: Accused No. 1 (A 1) Ramaswami Ayyangar.
Accused No. 2 (A 2) Vattappan.
Accused No. 3 (A 3) Kaipillai alias Karuppayyan.
Accused No. 4 (A 4) Raman.
Accused No. 5 (A 5) Kathayyan.
Accused No. 6 (A 6) Kulandaiyan.
The occurrence giving rise to these two appeals took place on Monday the 21st April, 1971 at about 4.00 p.m. at Sivan Koil tank in village Thaduthalkondapuram.
In the said occurrence was seriously injured one Kaliaperumal who later died in the Hospital at about 9.00 p.m. the same evening.
Another person injured in the occurrence was also named Kaliaperumal, P.W. 1.
The prosecution case is that deceased Kaliaperumal was living with his maternal uncle Pichai Konar, P.W. 7 since infancy.
A 1 is the Karnam of the village and A 6 is the Government vetti.
A 2 and A 3 are brothers, A 4, A 5 and A 6 are also inter se brothers.
A 2 to A 6 worked under A 1.
There was enmity between P.W. 7 and the deceased on the one hand and A 1 on the other on account of several causes.
The facts showing the enmity between them are stated in the judgments of the courts below and are not necessary to be detailed here.
Two days prior to the occurrence Marimuthu, P.W. 10 was driving some cattle, 4 or 5 of them went astray and entered into the Gingillillai (field) belonging to A 1.
A 1 's men scolded P.W. 10 and the deceased who was informed about the incident by the former at a tea shop.
P.W. 1 was also present there.
Deceased Kaliaperumal passed on the information to P.W. 7.
Ramalingam, P.W. 4 brother of the deceased was taking his bath in the Sivan Koil tank.
Kaliaperumal (deceased) also came there saying something against the Karnam.
He also started bathing at the north western corner of the tank.
According to the prosecution case, A 1 came there followed by A 2 to A 6.
A 2 had a cross stop (an instrument used in Survey and measurement, perhaps the correct name of the instrument is cross staff).
A 3 and A 4 were each armed with an Aruval.
A 5 had a stick and A 6 was carrying a stick with a spear attached to it.
According to the evidence in Court, A 1 told the other accused "Not content to with grazing (his) cattle in my gingilly field, he is also abusing me.
Cut him, whatever be the expenses, I will look after that.
" Thereupon A 4 asked the deceased Kaliaperumal "Why are you abusing the 'Iyer ' ?" Saying something Kaliaperumal ascended the bank.
A 3 and A 4 assaulted him on his head with Aruvals.
P.W. 1 ran to separate them when A 2 assaulted him on 878 his head with the cross stop.
P.W. 1 attempted to run.
Thereupon it is said A 6 obstructed him from running with the help of the stick with spear head.
A 4 again cut on the head of Kallaperumal (deceased) with his Aruval.
A 2 beat on P.W 's head with the cross stop hour or five times.
P.W. 1 fell down unconscious.
P.W. 7 and others took the injured to the Government Dispensary Kodavasal.
Dr. Radha Singh, Civil Assistant Surgeon, P.W. 15 examined Kallaperumal deceased at 4.55 p.m. and issued a Wound Certificate.
Since his condition was serious he was sent to the Government Hospital, Kumbakonam.
P.W.15 examined the injuries or P.W. 1 at 5.20 p.m. and found as many as nine injuries on his person.
As already stated Kaliaperumal died at about 9.00 p.m.
Dr. N. Jayaraj, P.W. 18 performed the autopsy over the dead body.
As many as 14 injuries were found.
The injuries given on the head with Aruval according to the opinions of the Doctors were sufficient in the ordinary course of nature to cause his death.
Various charges were framed against the six accused including that of rioting under section 147 IPC against A 1 and A 5 and section 148 against A 2, A 3, A 4 and A 6.
A 1 was further charged under sections 302/149 and sections 302/109.
A 2 to A 6 were charged under section 302.
An extra charge under section 324 was levelled against A 2 for causing simple hurt to P.W. 1 with the cross stop, an instrument which had sharp edges.
A 6 was also charged under section 341 of the Penal Code for preventing P.W. 1 from escaping.
The accused denied their complicity in the occurrence and pleaded not guilty.
A 1 took a plea of alibi also and asserted that he had gone to Madras in connection with some marriage negotiations.
Two days after the date of occurrence he was arrested at Kumbakonam Railway Station when he alighted from the train on his return from Madras.
The Trial Judge acquitted A 1, A 5 and A 6 of all the charges.
He convicted A 3 and A 4 under section 302 of the Penal Code and awarded a sentence of life imprisonment to each of them.
They were acquitted of the charge under section 148.
A 2 was convicted only under section 324 with a sentence of 4 months ' rigorous imprisonment and acquitted of all other charges.
A 2, A 3 and A 4 preferred an appeal in the Madras High Court against their conviction and the sentences imposed upon them by the Trial Court.
State preferred an appeal against the acquittals of A 1, A 5 and A 6 as also against the acquittal of A 2 of the charge under section 302.
It, however, did not prefer any appeal against the acquittal of A 2, A 3 and A 4 of the charge under section 148 of the Penal Code.
Yet it is surprising to find that the High Court has convicted all the six accused for the offences of rioting, A 1 and A 5 under section 147 with two years ' rigorous imprisonment and A 2, A 3, A 4 and A 6 under section 148 with 3 years ' rigorous imprisonment.
Conviction of A 3 and A 4 for the offence of murder under section 302 has been maintained with the aid of section 34.
High Court has also convicted A 2, A 5 and A 6 under sections 302/34 and awarded each of them life imprisonment.
A 1 has been convicted by the High Court under sections 302/149 and 302/109 with sentence 879 of life imprisonment under each.
Conviction of A 2 under section 324 has been maintained.
Hence these two appeals.
That there was enmity and bad blood between A 1 and P.W. 7 is not open to any doubt.
An occurrence did take place on the date, time and place as given by the prosecution.
The manner of occurrence in so far as it relates to the attack on the deceased is concerned by A 2 and A 3 has also been proved to the hilt.
The factum of assault by A 2 on P.W. 1 also does not admit of any doubt.
But the High Court does not seem to be justified in reversing the order of acquittal recorded by the Trial Court in favour of A 1, A 5 and A 6.
It was claimed by the prosecution that apart from P.W. 1 there were four more eye witnesses to the occurrence namely Govindaswami, P.W. 3, Ramalingam, P.W. 4, Rajagopal, P.W. 5, and Kaliaperumal, P.W. 6.
P.Ws 3 and 4 are brothers of the deceased.
P.W. 5 is the brother in law of P.W. 3.
P 1 is the statement of P.W. 1 before the police on the basis of which the First Information Report was drawn up.
On reading this statement as also the evidence of P.W. 1 in Court, the Trial Judge rightly came to the conclusion that P.Ws. 3, 4, 5 and 6 arrived at the scene of occurrence after it had taken place.
None of them had witnessed it.
It considered the evidence of each witness, viz. P.Ws.
3 to 6, individually and did not rely upon it.
In our judgment, the High Court was not right as against the explicit statement and evidence of P.W. 1 in reading P.Ws.
3 to 6 as eye witnesses to the occurrence.
It is significant to note that although P.Ws. 3 and 4 were the brothers of the deceased Kaliaperumal but none of them made any attempt to save him form the attack of the assailants.
Had they been present at the occurrence surely they would have tried to save their brother, as was done by P.W. 1.
We are, therefore, left with the evidence of P.W. 1 alone.
Since he was injured in the same occurrence, undoubtedly, his ocular version of the incident is of great value to the prosecution.
The plea of alibi set up by A 1 has not been substantiated at all.
The Trial Judge was not right in doubting the prosecution case merely because A 1 had applied for leave on the 18th April 3 days before the occurrence.
There was no evidence to show that he was at Madras on the date of occurrence.
According to the Investigating Agency, A 1 was arrested not on the Railway platform but near the Railway level crossing of Kumbakonam Railway Station.
But the Trial Court was right in saying that the only part attributed to A 1 was the order giving for assault.
In the statement Ext.
P 1 the only words of order attributed to A 1 are "to cut".
In court there was great embellishment and improvement in the evidence of P.W. 1 when he put several sentences in the mouth of A 1 at the time of the alleged order giving.
As already stated, A 1 was the Karnam of the village and even if he was at the back of the assault on the deceased it does not stand to reason that he himself would go to the place of occurrence merely for giving the order for assault.
The order, if any, must have been given to the assailants in secret by A 1.
He must not have come to the place of occurrence merely for this purpose.
We 880 are, therefore, of the view that although the High Court in its judgment purported to keep in front the well settled principles of law to justify an interference by it with the order of acquittal, it did commit a mistake in the applications of those principles.
Conviction of A 1 by the High Court under any count is not justified.
So do we find in the case of A 5 and A 6 that they had not taken any part in the occurrence at all.
The alleged obstruction given by A 6 to P.W. 1 when he wanted to run was not believable and has not been believed by the Trial Court.
The reasons given by the Trial Court for their acquittal were not such as to justify an interference by the High Court.
The view taken by the Trial Court was reasonably possible to be taken.
Coming to the case of A 2 we find that he did assault P.W. 1 with the cross staff marked Ext.
This cross staff, as alleged, has been recovered from the house of A 1.
The Trial Court, rightly, did not believe the story of its recovery from his house.
But surely A 2 had used the cross staff for assaulting P.W. 1.
A serious question for consideration is whether his conviction under section 302 with the aid of section 34 is justified or not.
In this connection we find the statement of P.W. 1 in Ext.
P 1 to the following effect: "Raman too with the aruval in his hand dealt a cut at the front portion of his head.
I ran there to prevent it.
At that time Vattappan with the string fixed wood he was having in his hand beat on my head.
" In the Sessions Court also he deposed: "Thereupon, Accused No. 3 immediately cut on the head of Kaliyaperumal in the front portion with the aruval he was having in his hand.
I ran to separate them.
Immediately Accused No. 2 beat on my head with M.O. 1. .
Then accused number 2 beat on my head with M.O. 1, 4 or 5 times.
I fell down unconscious.
After some time, President Kaliyaperumal, Rajagopal, Mani alias Rajagopal, Ramalingam, Govindaswami these persons came there.
From the evidence of P.W. 1 corroborated as it is from his statement in Ext.
P 1 it is clear that P.W. 1 wanted to save Kaliyaperumal the deceased, from the murderous attack by A 3 and A 4.
A 2 was standing as a guard and did not allow P.W. 1 to protect the deceased.
A 2 went to the length of assaulting P.W. 1 and making him fall down unconscious.
It is contended that A 2 cannot be held vicariously liable with the aid of section 34 for the act of A 3 and A 4, for two reasons: Firstly, he did not physically participate in the fatal beating administered by A 3 and A 4 to the deceased and thus the "criminal act" of murder was not done by all these three accused within the contemplation of section 34, the act committed by A 2 in regard to the beating of P.W. 1 being a different and separate act of A 2.
Secondly, it has not been shown that the act of A 2 in beating P.W. 1 was committed in 881 furtherance of the common intention of all the three, pursuant to a pre arranged plan.
The contention is fallacious and cannot be accepted.
Section 34 is to be read along with the preceding section 33 which makes it clear that 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, for instance, one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the execution of the common design.
Such a person also commits an "act" as much as his co participants actually committing the planned crime.
In the case of an offence involving physical violence, however, 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.
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 '.
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.
In the case before us, A 2 obviously, was acting in concert with A 3 and A 4 in causing the murder of the deceased, when he prevented PW 1 from going to the relief of the deceased.
Section 34 was therefore fully attracted and under the circumstances A 2 was equally responsible for the murder of the deceased.
Under these circumstances we think the High Court was justified in convicting A 2 for the offence of murder of Kaliyaperumal with the aid of section 34 of the Penal Code.
There was absolutely no difficulty in maintaining the convictions of A 3 and A 4 for the murder of Kaliyaperumal with the aid of section 34 because both had mercilessly assaulted him with Aruvals on the vital parts of the body.
In the case of A 2 also it is quite legitimate to hold that he had shared the common intention of A 3 and A 4 in the commission of the murder of Kaliyaperumal.
The conviction of none of the accused for the offence of rioting can be maintained either in law or on facts.
In the view which we have expressed above that the High Court was not justified in reversing the acquittals of A 1, A 5 and A 6, there were only 3 left in the party of the assailants.
Moreover the State did not file any appeal, as 882 stated already, against the acquittal of A 2, A 3 and A 4 under section 148 of the Penal Code.
That being so, they could not be convicted for having formed an unlawful assembly for any criminal common object.
None could be convicted, therefore, under sections 147 or 148.
Section 149 could not be pressed into service against any.
In the result we allow both the appeals in part, restore the order of acquittal recorded in favour of A 1 viz., Ramaswami Ayyangar, A 5 Kathayyan and A 6 Kulandaiyan acquitting them of all the charges, set aside the conviction of the remaining accused under sections 147 and 148 of the Penal Code and maintain the convictions of A 2 Vattappan, A 3 Kaipillai alias Karuppayyan, A 4 Raman under section 302/34 with the sentence of life imprisonment to each.
We also maintain the conviction of A 2 under section 324 Indian Penal Code with the concurrent sentence of 4 months ' rigorous imprisonment under the said count.
M.R. Appeals partly allowed.
| The appellant acquired some land in district Jaunpur, for setting up a factory, but did not use the land for such purpose.
Under the U.P. Large Land Holdings Act, 1957, he was required to pay holdings tax for the assessment years 1365 to 1368 Fasli.
The appellant 's application section 143 of the U.P. Zamindari Abolition and Land Reforms Act, for treating his land as industrial land was rejected by the Sub Divisional Officer.
On appeal, the Collector affirmed the order.
In further appeal to the Commissioner, the appellant succeeded as regards the years 1365 and 1366 Fasli.
The State filed revision petitions.
Subsequently the Commissioner held that the appellant was liable to pay holdings tax for the years 1367 and 1368 Fasli.
The appellant also preferred revision applications.
The Board of Revenue decided all the revision petitions in favour of the State, holding that the appellant 's land was "sirdari" and not bhumidari, and it could not be meant for industrial purposes.
The appellant 's petitions under Article 226 of the Constitution were rejected by a Single Judge of the High Court on the ground that the disputed land constituted "land as defined in the Act, and that he was liable to pay the tax.
On appeal, the Division Bench of the High Court affirmed the order.
It was contended before this Court that the land is held for industrial purposes, and is not "land" under sec.
2(15) of the Act.
Dismissing the appeals, the Court, ^ HELD: The appellant holds the land as a sirdar.
Permission to use the land in question for industrial purposes was not granted.
The word "lands" used in the Act is wide enough to include all lands whether agricultural or not.
The appellant cannot escape liability for payment of holding tax by keeping the land in question uncultivated.
[1065 G, 1066C D] Raja Jagannath Baksh Singh vs State of Uttar Pradesh and Another, ; , referred to.
|
Civil Appeal NO.
383 Of 1976.
Appeal by special leave from the Judgment and Order dated 12 6 1975 of the Andhra Pradesh High Court in Writ Appeal NO. 313 of 1975.
Connected with Civil Appeal NOS.
1434 85/77, 2669/79 & 2670/79, 1763 1781/ 77, 2511, 2625, 2679, 2776/77, 332, 333, 909 & 930/78 and S.L.Ps. 70/76, 1769/77, 4246, 4379/77 and 251/79.
P. Rama Reddy, G. section Narayana and G. N. Rao for the Appellant in all the matters.
B. Parthasarthy for the Respondent in CAs 383/76, 1443/77, 1444/77 (for R. (for RR.
2 & for R.17), CA 1463/77 for RR l & 2 and R. 10 in CA 1464/77 for R.1 in CA 1466/77 for R.1, 1468/77 for both the Respondents, 1470/ 77 for R. for R. 2, 1481 for RR, 1767/77 for R. 1, 932 1768/77 for RR 1, 2, 4, and 5 8, 1773/77 for RR 1 4 and 5, 2625/ 77 for R.1, 2511/77 for all the RRs.
332/78 for R.3, 930/78 for RR.
SLP 1769/76 for RR 1 4, 5 & 7.
K. Ram Kumar and Mrs. J. Ramachandran for the RR in CA 1472/77, CA 1473/77 for RR 1 5, 7, 8, 14, 15 and CA 1485 for all RRs.
A. Subba Rao in CA 1434 for RR1, 3, 4, 7, 8, 9 & 11, in CA 1440/77 for RR 1, 2, 3, 4, 6, 7, 10, 11, 13 & 16, in CA 1457/77 for Respondent (Sole), CA 1459/77 for RR 2, 3 and for RR 1 2, 16 20, 22, 23, 28, 30, 32, 35 and in CA 1764/77 for Respondent (Sole).
G. Narasimhulu for all the Respondents in CA 1781/77.
B. Kanta Rao for RR 1 3 in CA 1441/77, in CA 1442/77 for RR 4, 8 11, 14, 15, 23 and 24, in CA 1769/77 for RR 1 35, 37 47, 49 62, 64, 65, 67 79, 81 83, 85, 87, 89, 91 99, 101 104, 106 108, 110 114, 116 117, 119 123, in CA 2670 for RR 1 5, 7 12 and 14 16 and 19 20 and in SLP 251/79 for RR 1 8.
The Judgment of the Court was delivered by SEN, J.
This and the connected 81 appeals by special leave and seven special leave petitions directed against various judgments and orders of the Andhra Pradesh High Court and the Andhra Pradesh Administrative Tribunal, raise a common question: Whether it is permissible for the State Government of Andhra Pradesh to enforce sub r.
(2) of r. 5 of the Andhra Pradesh Revised Scales of Pay Rules, 1969 (hereinafter referred to as 'the Rules ') issued by the State Government under proviso to article 309 of the Constitution.
That depends on whether the Government is competent to withhold the Selection Grade pay scales contrary to FR 22(a) (ii) to which the respondents were entitled on their being appointed to Selection Grade posts.
The Government tries to justify such fixation of pay at a lower level than the minimum of the Selection Grade pay scales on the basis that it was to ensure that seniors holding higher posts do not draw in such higher posts a pay less than what is drawn by their juniors in the lower posts in the Selection Grade.
The litigative propensities of the Government know no bounds.
The Government still assumes that it is within their powers to fix the pay of the respondents lower than the minimum of the pay scales of the Selection Grade posts to which they were promoted although the High Court has unequivocally struck down the impugned sub r.
(2) of r. 5 of the Rules as ultra vires the State Government being violative 933 of articles 14 and 16 of the Constitution and being contrary to FR 22 (a) (ii).
It is somewhat unfortunate that the Government should have embarked upon this course of action, thereby subjecting thousands of their employees into this fruitless litigation, which is nothing but an exercise in futility, resulting in wasteful expenditure of public money.
We wish to impress upon the Government that they are in duty bound to respect the judgments and orders of the courts pronouncing upon the constitutional validity of the various rules, orders and notifications issued by the Executive.
To bring out the point involved, it is necessary to state a few facts.
By G.O. MS. 173, Finance, dated June 13, 1969, the State Government issued the Andhra Pradesh Revised Scales of Pay Rules, 1969, providing for revision of pay and creation of Selection Grade posts, the number of such Selection Grade posts for every category being limited to 15% of the total number of posts in that category with a view to implement the recommendations of the One man Pay Commission appointed for the purpose.
The Selection Grade scale was fixed by adding three increments to the maximum of the revised scale of pay.
The pay scales for the Selection Grade so fixed were found to have a higher start than the minimum pay prescribed for the next higher category of posts.
Some of the senior persons holding permanent posts in one category, but holding posts in the next higher category on promotion were found to draw less pay in the higher posts as compared to their juniors in the lower category who were given the Selection Grade scale of pay.
The Government felt that this would result in serious discontentment among the senior employees holding higher posts but drawing less pay than the minimum prescribed for the Selection Grade in the lower category.
At a meeting of the Secretaries to Government held on June 24, 1969, it was decided to set right this anomalous position, by the issue of an executive order.
Consequently, the Government issued a departmental instruction in U.O. Note No. 808/PC/69 I dated July 26, 1969, directing that the pay of an employee placed in the Selection Grade shall be so fixed as not to exceed the pay of his seniors working in the higher post on promotion.
Para 3 (iii) of the U.O. Note was as follows: (iii) Since in many cases, the minimum of the 'selection grade ' is higher than the minimum of the next higher grade, there is a possibility of a junior appointed to 'selection grade ' hereafter drawing more pay than his senior who has already been promoted to higher grade.
With a view to avoid such an anomaly, it will be necessary to prescribe that a person promoted to a 'selection grade ' shall draw the minimum of the remedy was by way of an appeal.
That judgment has attained a 934 promotion category should be drawing less than such mini mum his pay shall be limited to the pay being drawn by such senior, in his own scale.
The direction contained in para 3(iii) of the aforesaid U.O. Note was struck down by Chinnappa Reddy, J. in section A. Prabhakar & Ors.
vs Government of Andhra Pradesh by his judgment dated December 26, 1973, on the ground that the executive instruction could not pre vail over FR 22(a) (ii) and secondly, fixation of pay at anything lower than the minimum of the scale of pay sanctioned for the Selection Grade posts was violative of articles 14 and 16 and was also contrary to the Directive Principles of State Policy enshrined in article 39 of the Constitution, according to which there shall be equal pay for equal work.
The learned Judge was of the view that the Government having created Selection Grade posts carrying a certain scale of pay and having appointed persons to those posts, it was not open to them to allow that pay to some and deny to others on the ground that their seniors working elsewhere were not drawing the same scale of pay.
The Government preferred a Letters Patent Appeal against the judgment of Chinnappa Reddy, J., and made a grievance that while the writ petition was pending the offending U.O. Note (No. 808/PC/ 69 I dated July 26, 1969) had been substituted by sub r.
(2) of r. 5 of the Rules issued under GO MS 215, Finance, dated September 5, 1973, with retrospective effect from March 19, 1969.
That being so, the Division Bench dismissed the appeal observing that the appropriate remedy was to file a review petition.
Against the judgment of the Division Bench, the Government preferred a petition for grant of special leave in the Supreme Court under article 136 of the Constitution, being SLP (Civil) No. 1878 of 1975 and this Court issued a show cause notice to the respondents on September 28, 1975.
But the Special Leave Petition was ultimately dismissed as withdrawn on October 27, 1978, in view of the fact that a review petition had been filed.
Sub r.
(2) of r. 5 of the Rules, inserted by G.O. MS. 215, Finance, dated September 5, 1973, reads: (2) Notwithstanding anything contained in sub rule (1) or any other rule relating to fixation of pay, if a person in any post is promoted or appointed to the selection grade in that post he shall draw the minimum of such selection grade provided that if any of his seniors, who is promoted or appointed by transfer to a higher post, draws a pay in that 935 higher post less than such minimum, his pay shall be limited to the pay so drawn by his senior.
Explanation.
For the purpose of this sub rule, a person shall be deemed to be a senior to another even though both of them belong to two different classes, categories/grades, provided these two are sources for promotion or appointment by transfer to a higher post.
In D. Krishnamurthy & Ors.
vs State of Andhra Pradesh & Anr.
(Writ Petition No. 4459 of 1972), Muktadar, J., by his judgment dated August 12, 1974, struck down the rule as it was violative of articles 14 and 16 of the Constitution.
The learned Judge observed that in view of the decision of this Court in B. section Vadera vs Union of India, Ors it was settled law that rules framed under the proviso to Art 309 of the Constitution, whether retrospective or prospective in effect, must be enforced, if framed by the appropriate authority, unless it can be shown that the rules so framed are in violation of any of the rights guaranteed under Part III or any other provision of the Constitution.
He was of the view that sub r.
(2) of r.5 of the Rules does not satisfy the test because it takes away the rights to equality before the law and equality of opportunity in matters of public employment, guaranteed under articles 14 and 16 and was, therefore, void and unconstitutional.
He was dealing with the case of Deputy Tahsildars in the Nizamabad District who were promoted to the Selection Grade but could not draw their pay of Selection Grade because it exceeded the pay of their immediate seniors working as Tahsildars, by reason of sub r.
(2) of r.5 of the Rules.
The learned Judges observed that if FR 22(a) (ii) was applicable, and there was no reason why it should not be made applicable, the pay of the Deputy Tahsildars in the Selection Grade could not be fixed at less than Rs. 500 which was the minimum of the time scale fixed for the Selection Grade of Deputy Tahsildars.
According to him, sub r.
(2) of r.5 was per se discriminatory because a Deputy Tahsildar in the Selection Grade with no seniors promoted to a higher post could draw minimum pay of such Selection Grade; but a Deputy Tahsildar in the Selection Grade who unfortunately had a senior promoted to a higher post who drew a pay in that higher post which was less than the minimum of the scale of pay of Selection Grade Deputy Tahsildar, could not draw more pay than that drawn by his senior, although he was performing the same duties and discharging the same responsibilities attached to such Selection Grade posts for which higher emoluments had been prescribed.
The learned Judge observed: "To put in the words Chinnappa Reddy, J. it amounts to denial of the 936 principle of 'equal pay for equal work ' enshrined in article 39 of the Constitution as one of the Directive Principles of State Policy and violates articles 14 and 16 which guarantee equality before the law and equal opportunity in the matter of public employment." The appellant, in the supplementary affidavit filed by the Deputy Secretary to Government of Andhra Pradesh, Finance and Planning: Department (Finance Wing) admits that the judgment of Muktadar, J., in Krishnamurthy 's case supra had become final because steps were not taken in time to go in appeal; but, nonetheless, asserts that since the matter before the learned Judge related to Selection Grade Deputy Tahsildars, it was wrong to suggest that all the judgments of the High Court involving a similar question had become final, or that the Government had lost its right of appeal in other similar matters.
We are really at a loss to appreciate this attitude on the part of the Government in showing scant respect to the High Court although the judgments had become final and the point involved was one and the same.
There has been total failure on the part of the Government to realise that the replacement by sub r.
(2) of r.5 of the Rules, of the executive instruction contained in the U.O. Note, does not cure the constitutional vice inherent in the governmental action.
This is nothing but a plea of justification for the Government had, in the meanwhile, on the strength of the offending U.O. Note and sub r.
(2) of r. 5, promoted thousands of their employees to Selection Grade posts in different departments, but fixed their pay at a point lower than the pay drawn by their seniors in the next higher grade.
There have been several judgments of the High Court and of the Andhra Pradesh Administrative Tribunal on writ petitions filed by the persons so affected.
The Government, instead of following a uniform policy, have refixed the pay of some of the employees holding Selection Grade posts, in compliance with the directions of the High Court, but declined to do so in the case of others on the pretext that the re fixation would be done only in the case of employees who have secured such directions.
It is impressed upon us that the Government wants a decision on merits as the matter involved a question of principle.
We were asked to determine the validity of sub r.
(2) of r.5.
It was urged that the Government wants a clear pronouncement on the extent of their powers in the matter relating to fixation of pay of a person appointed to the Selection Grade, in accordance with sub r.(2) of r.5.
We are afraid, the question does not arise in these appeals.
It is quite clear from the judgments under appeal that the validity of sub r.
(2) of r.5 was not in question.
We are constrained to observe that if the Government wanted 937 to question the correctness of the judgment in D. Krishnamurthy 's case, the 'selection grade ' provided that if his senior in the higher finality which cannot now be upset.
In that judgment, Muktadar, J., struck down sub r.
(2) of r.5 as ultra vires the Government as being violative of articles 14 and 16 of the Constitution and as being not in conformity with FR 22(a)(ii).
The effect of the judgment of Muktadar, J., in Krishnamurthy 's case (supra) is that sub r.
(2) of r.5 is wiped out for all purposes and the re fixation will have to be done as if sub r.
(2) of r. 5 never existed.
The whole attempt of the Government in filing these appeals is to retrieve the lost ground which cannot be permitted.
In the result, the appeals and the special leave petitions are dismissed.
There shall be no order as to costs.
N.V.K. Appeals & Petitions dismissed.
| To implement the recommendations of a one man Pay Commission, the State Government issued the Andhra Pradesh Revised Scales of Pay Rules 1969 providing for the revision of pay and creation of selection grade posts.
The selection grade scale was fixed by adding three increments to the maximum of the revised scale of pay.
While implementing the pay scales, the Government realised that a senior holding a permanent post in one category but holding a; post in the not higher grade on promotion would draw less pay in the higher post than a junior in the lower category who was given the selection grade.
To avoid the anomalous situation thus created the Government by an executive order direct ed that the pay of an employee placed in selection grade shall be so fixed as not to exceed the pay of his senior working in the higher post on promotion.
This executive instruction was struck down by the High Court as being violative of Articles 14 and 16 and also on the ground that the executive instruction could not prevail over Fundamental Rule 22 (a) (ii).
The Government thereupon introduced Rule 5(2) in the Rules with retrospective effect from the date of the original order.
In D. Krishnamurthy & Ors vs State of Andhra Pradesh & Anr.
this rule was struck down by the High Court as being violative of Articles 14 and 16.
No appeal was, however, preferred from the judgment of the High Court striking down the rule.
Instead of following a uniform policy in revising the pay of all employees in compliance with the direction of the High Court, the Government re fixed the pay of some of the employees holding selection grade posts but declined to do so in the case of others on the ground that the re fixation would be done only in the case of employees who had secured such directions.
In the appeals by the Government to this Court it was contended that it was wrong to suggest that since no appeal had been preferred against the judgment of the High Court in D. Krusgbanurthy 's case all the judgments of the High Court involving a similar question had become final become D. Krishnamurthy 's case related to an altogether different category of employees of the State Government.
931 Dismissing the appeals, ^ HELD: 1.
When the High Court issues a writ, direction or order under article 226 of the Constitution, it is not open to the State Government to implement the decision with regard to some and deny relief to others, although they belong to the same class of persons, and are equally governed by the principles laid down.
The State Government is expected to adopt a uniform policy In regard to all its employees.
[936 C D] 2.
Replacement of an executive instruction by the State Government by a rule framed under article 309 of the Constitution, for the fixation of pay of a person promoted to the Selection Grade at a stage lower than the minimum of the scales of pay of such Selection Grade so as not to exceed the pay of his seniors working in the higher posts on promotion, does not cure the constitutional ice inherent in the Government action as the provision is violative of articles 14 and 16 of the Constitution.
[935 G H] 3.
The judgment of the High Court, by which sub r.
(2) of r. 5 of the Andhra Pradesh Revised Scales of Pay Rules, 1969 having been struck down as offending articles 14 and 16 of the Constitution and as being not in conformity with FR 22(a)(ii) not having been appealed from, had attained a finality and the re fixation of pay, if any, had to be done as if sub r.
(2) of r. 5 never existed [937 B] 4.
It is not open to the Government to question the correctness of the judgment of the High Court when it had attained finality, particularly when in compliance with the directions, it had re fixed the pay of some of the employees in the Selection Grade posts, on the pretext that the right of appeal was not lost in the case of others in respect of whom no such direction has been issued.
At any rate, the point not having been taken before the High Court, could not be allowed to be raised for the first time under article 136 of the Constitution.
[936 H]
|
No. 1113 of 1974.
(From the Judgment and Order dated the 15/16/17 1 1974 of the Bombay High Court in S.C.A. No. 815 of 1972) AND CA No. 242 of 1974 (From the Judgment and order dated the 14 7 1973 of the Gujarat High Court in S.C.A. No. 1418 of 1971).
C. As.
Nos. 285 287 of 1974.
(From the Judgment and Order dated the 14 7 1973 of the Gujarat High Court in S.C.A. No. 1418/71, 422/70 & 1099/69 respectively).
K. K Singhvi in CA 1113/74, ,4.
K. Garg, S.C. Agarwal and V.J. Francis for the appellants in CAs 1113/and 242/74 & for respondents Nos. 2, 3, 5, 6 13 in CA No. 285, Rr. 2 18 in CA 286 and for Rr. 3, 7, 16 23, 28 and 33, 35 39, 41 43 and 45 in CA 287/74.
M.C. Bhandare and M.N. Shroff, for respondent 's 1 and 2 in CA 1113/74.
M.V. Paranjpe, M.K. Joshi, K. Rajendra Choudhary and Mrs. Veena Devi, for respondent No. 3 in CA No. 1113/74.
M.K. Ramamurthi, Vimal Dave and Miss Kailash Mehta, for the appellants in CAs 285 to 287774 and for the respondents No. 2 and 3 in CA 242/74.
D.V. Patel, in CA 285 to 287/74, P.H. Parekh and M.N. Shroff for the respondent No. 1 in CAs Nos.
242/74 and 285 to 287 of 1974.
The Judgment of the Court was delivered by CHANDRACHUD, J.
This is a group of five appeals, one from Maharashtra and four from Gujarat.
They involve substantially identical questions and since the appeal from the judgment of the Bombay High Court was argued as the main appeal, we will refer 'to the facts of that appeal and indicate at appropriate places if there is any material difference between those facts and the facts leading to the Gujarat appeals.
Civil Appeal No. 1113 of 1974 from Maha rashtra is by certificate granted by the High Court of Bombay under article 133(1) (a) & (b) of the Constitution.
Civil Appeals Nos. 242 and 285 287 of 1974 from Gujarat are also by certificate granted by the Gujarat High Court under article 133(1) of the Constitution.
Special Civil Application No. 815 of 1972 which has given rise to Civil Appeal No. 1113 of 1974 was disposed of by a Division Bench of the Bombay High Court by its judg ment dated 15th, 16th and 17th January, 1974.
The four Gujarat appeals arise out of 781 Special Civil Applications Nos. 1099 of 1969, 422 of 1970 and 1418 of 1971 which were disposed of by a Full Bench of the Gujarat High Court by its judgment dated July 14, 1973.
The complexity of the questions involved in these ap peals has been expressed by the Bombay High Court by saying that the writ petitions before it involved "ticklish and complicated questions" and by the Gujarat High Court by saying that though it had many occasions to consider complex problems pertaining to service laws, there was "no case comparable" to the writ petitions filed before it in the instant case.
The learned Chief Justice (Bhagwati, J.) who delivered the judgment of the Full Bench obserVes that these questions of "unrivailed complexity" had caused considerable anxiety to the Court in reaching a satisfactory conclusion.
We share this anxiety which is further heightened by the diametrically opposite and entirely inconsistent stands taken by the State governments from time to time.
Evidently, the State governments did not know their own mind and being unable to take up a firm and consistent stand, they defended the various Writ petitions filed against them by their employees according to the mood of the passing moment.
That must be deprecated.
The appeals raise the familiar question of seniority in service, the competing groups being promotees on the one hand and direct recruits on the other, to the posts of Deputy Engineers.
The writ petitions were filed and de fended by the rival groups in a representative capacity so that, our decision will bind not only the parties thereto but all others whom, under the relevant provisions of the Code of Civil Procedure, they were permitted to represent.
Taking the facts of the Maharashtra case, the two appel lants therein were.
initially recruited as Overseers in 1953 and were promoted temporarily as Deputy Engineers, in Janu ary 1959 and October 1957 respectively.
They were con firmed as Deputy Engineers after the coming into force of certain rules framed on February 19, 1970.
The 1st respondent to the appeal is the State of Maharashtra.
The 2nd and 3rd respondents were appointed directly on probation as Deputy Engineers.
They are Engineering Graduates but so are the appellants.
Respondents 2 and 3 qualified for direct appointment after passing a competitive examination in 1963 and 1959 respectively.
They were confirmed two years later, in 1965 and 1961 respectively.
The grievance of the appellants is that notwithstanding the length of their continuous service as Deputy Engineers since 1959 and 1957, respondents 2 and 3 were shown as senior to them in the Cadre of Deputy Engineers though they were appointed later in 1963 and 1959 respectively. 'The appellants claim that their seniority should have been fixed under the rules framed by the then Government of Bombay on November 21, 1941 as clarified by the Chief Secretary to that Government by his letter dated January 11, 1949.
According to them, the rules flamed by the Maharashtra Government on April 29, 1960 cannot take away the right which had accrued to them under the rules existing fat the time of their promotion in 1959 and 1957.
They challenge the validity of rule 8(iii) of the 1960 rules and of rule 33 of the 1970 rules aS being violative of articles 14 and 16 of the 782 Constitution.
They also challenge the 1970 rules on the ground that they lack approval of the Central Government, thereby violating the proviso to s.81 (6) of the Bombay State Reorganisation Act of 1960.
According to the appel lants, the 1960 rules were superseded by the rules dated July 29, 1963 and still the State Government continued to apply the defunct rules of 1960.
On these grounds, broad ly, the appellants filed a writ petition in the Bombay High Court on behalf of themselves and all those promoted as Deputy Engineers in Class II of the Maharashtra Engineering Service.
Putting it as briefly as one may, the, sum and substance of the stand taken by respondents 2 and 3 is that neither the 1941 rules nor the 1963 rules are applicable to employ ees in Maharashtra Engineering Service.
The posts of Deputy Engineers, according to them and according to the State of Maharashtra, were required to be filled in by direct recruits and promotees in the ratio of 75 : 25 under the 1960 rules which had super seded the earlier rules of 1939.
Therefore, ac cording to them, the question of seniority of the appellants could not possibly arise until they were con firmed, and seniority has to be fixed from the respective dates of confirmation in terms of rule 8(iii) of the 1960 rules.
The Government of Maharashtra contended that the confirmation of appellants depended necessarily on the availability of vacancies allotable to them within the quota of 25% of the total vacancies, and delay in passing orders of confirmation was inevitably caused by the fact that the number of officiating Deputy Engineers was much too large.
In order to rectify the somewhat unsatisfactory position, the State Government, according to its contention, framed the 1970 rules, altering the ratio of direct recruits and promotees from 75: 25 to 34: 66, as a result of which sever al promotees were confirmed.
Even prior to that, according to the State Government, whenever vacancies occurred in the substantive posts which were required to be filled is ac cording to the prescribed ratio, those vacancies were duly filled in from amongst the officiating Deputy Engineers and they were given anterior dates of, confirmation with effect from the dates when the vacancies had actually occurred.
The respondents disputed that rule 8(iii) of the 1960 rules and rule 33 of 1970 rules were unconstitutional or otherwise invalid.
Before examining the merits of these contentions it would be necessary, for a proper understanding of the issues involved in the case, to set out briefly the history of the Engineering Service and the background in which the various rules came to be framed.
The Engineering Service in the then province 'of Bombay consisted, prior to 1937, of (i) the Indian Engineering Service which was an All India Service, (ii) the Bombay Subordinate Service of Engineers, (iii)Supervisors, both permanent and temporary, and (iv) temporary Engineers, appointed annually.
The Bombay Subordinate Service of Engineers consisted of non gazetted Class III employees, in which 2 posts used to be filled in annually by direct re cruitment on the basis of the results of the examination held for Diploma in Civil Engineering.
The remaining posts used to be filled in by promotion from the 783 rank of temporary Overseers.
On March 22, 1937 the Govern ment of Bombay in the Public Works Department passed a resolution reorganizing the Engineering Service.
This resolution contemplated the creation of two new Provincial Engineering Services to be designated as Bombay Engineering Service Class I and Bombay Engineering Service Class 1I.
The cadre strength of Class I Service was fixed initially at 36 while that of Class II Service was fixed at 80.
Class I Service comprised the apex posts of Chief Engineer, Superin tending Engineer and Executive Engineer, and the junior posts of Assistant Engineers.
Class II Service consisted of Deputy Engineers only.
On September 21, 1939 the Government of Bombay passed a resolution adopting rules for regulating the methods of recruitment to the posts of Assistant Engineers and Execu tive Engineers in Class I Service and the posts of Deputy Engineers in Class II Service.
These rules were made by the Governor of Bombay in exercise of the powers conferred by section 241(2) (b) of the Government of India Act 1935 and were called: "Recruitment Rules of the Bombay Service of Engi neers (Class 1 and Class II).
" The rules appear at Item 53 is Section V of A endix C to the Bombay Civil Services Classification and Recruitment Rules under the heading "Bombay Service of Engineers." Rule 2 of the 1939 Rules laid down the method of re cruitment to the Bombay Service.
of Engineers, Class I, by providing that such recruitment was to be made either (a) by nomination under the guarantee given to the College of Engineering, Poona, or (b) by promotion from the existing Bombay Service of Engineers or from the Bombay Service of Engineers Class II.
Rule 3 provided that as regards the recruitment from source (a), such number of appointments as may be fixed by the Government from time to.
time would be made from amongst the students of the College of Engineer ing, Poona, who had passed the examination for the Degree of B.E. (Civil) in First Class.
The candidates.
so recruited by nomination were to be appointed in the first instance as Assistant Engineers on probation for two years and on completion of the probationary period, they Were to be confirmed as Assistant Engineers.
Rule 10 of the 1939 Rules prescribed the method of recruitment to the Bombay Service of Engineers Class II.
It provided that recruitment of Class II service shall be made either (a) by nomination under rule 11 under the guar antee given to the College of Engineering, Poona, or (b) by promotion from any of the three prescribed sources.
Those sources were (1 ) the Bombay Subordinate Engineering Serv ice, ( 2 ) Permanent or temporary Supervisors and ( 3 ) Temporary Engineers appointed on annual sanction.
Rule 11 provided that such number of appointments as may be fixed by the Government from time to time shall be made annually from amongst the students of the College of Engineering, Poona, who have passed the examination for the Degree of B.E. (Civil).
Every such candidate recruited by nomination was required by rule 14 to serve intially as a "candidate" for one year on the expiry of which period he would be appointed as a Deputy Engineer on probation for one year.
On the satisfactory completion of the probationary period, the candidate would be eligible for confirmation as a Deputy Engineer.
784 The guarantee envisaged by rules 2(a) and 10(a) of the 1939 rules was given by the Government to the students of the College of Engineering, Poona, under a resolution dated July 12, 1940.
The guarantee operated in different measures until it was finally withdrawn by a resolution dated May 27, 1947.
The last batch of students who obtained the benefit of the guarantee were those that passed the examination for the Degree of B.E. (Civil) in 1949.
By a resolution dated November 25, 1950 the Government of Bombay appointed a Committee under the Chairmanship of Shri Gurjar to examine the, question of future recruitment to Engineering Services, Classes I and II.
That Committee submitted its recommendations to the Government after prolonged deliberations but since the implementation of the recommendations had to be deferred, the Government started making appointments to both classes of services by direct recruitment through the Public Service Commission.
Such appointments were made from the year 1950.
As stated earli er, the cadre strength of Class I and Class II Services was fixed initially at 36 and 80 permanent posts respectively.
But with the launching of new development projects, the strength of both cadres had to be expanded from time to time by addition to the permanent posts.
In fact, for an early and effective achievement of the target it became necessary to make appointments of several temporary Execu tive Engineers and Deputy Engineers.
On November 1, 1956 there were 360 temporary posts of Deputy Engineers as against 200 permanent posts.
By April 29, 1960 these numbers had risen respectively to 600 and 400.
One of, the bones of contention between the parties is whether these temporary posts of Deputy Engineers were additions to Class II cadre, even if temporary, or whether the temporary posts were wholly outside the cadre of Class II Service.
It is neces sary to mention at this stage that appointments as officiat ing Deputy Engineers to such temporary posts were made by promotion from amongst the members of the Bombay Subordinate Service of Engineers as also from amongst permanent and temporary Supervisors.
But no direct appointments were made by the Government to these temporary posts of officiat ing Deputy Engineers.
The direct appointments were made only to permanent posts because such appointees were prom ised confirmation after two years from the date of appoint ment, during which period they were expected to complete their probation.
On April 29, 1960 the Government of Bombay in the Public Works Department passed a resolution embodying rules of recruitment to Bombay Service of Engineers Class I and Class II.
These rules continued the existing division of Engineering Services into Class I and Class II and they provided that appointments to both classes of service should be made by nomination as well as by promotion.
As regards appointments by nomination it was provided that they should be made through competitive examination held by the Public Service Commission and that for both the classes of service there should be a common examination.
Candidates recruited directly were to be confirmed after two years in their respective cadres, if otherwise found fit.
The resolution of 1960 was signed by Under Secretary to the Government, "By order and in the name of the 'Governor of Bombay.
" 785 The rules regarding recruitment to Class I and Class II Engineering Service were set out in the Appendix to the 1960 Resolution.
Rule 1 of those rules provided that appointments to both classes of services shall be made either by nomina tion after a competitive examination held by the Public Service Commission or by promotion from amongst the members of the lower cadres concerned, provided however that the ratio of appointments by nomination and promotion shall, as far as practicable, be 75: 25.
By rule 2, candidates ap pointed to either of the services by nomination were to be on probation for two years.
They were to serve, in the first instance, as Trainees for a period not exceeding one year and thereafter they were to be placed in a probationary capacity in charge of a sub division for a period of not less than one year.
On the expiry of the aforesaid period of two years they were to be confirmed as Assistant Engi neers in Class I or as Deputy Engineers in Class II, as the case may be, if favourably reported upon by their superiors.
Rule 2 further provided that Assistant Engineer would be confirmed as Executive Engineer after 9 years ' service unless the period was extended by the Government.
Under rule 3, candidates securing higher places in the competi tive examinations were to be appointed in Class I service according to the number of vacancies declared for such recruitment in that cadre while candidates securing the next higher places were to be offered appointments to Class II service.
Rule 6 of the 1960 Rules read thus: "6.
(i) The number of posts to be filled in the Bombay Service of Engineers, Class I, by promotion of officers from the Bombay Service of Engineers Class II shall be about 25 per cent of the total number of superior posts, in the Bombay Service of Engineers, Class I cadre.
This percentage 'should be aimed at for confirmations made after 1st November, 1956, subject of course, to Class II officers of the requisite fitness and length.
of serv ice being available.
(ii) For absorption into Class I, a Class II officer must be in the permanent Bombay Service of Engineers, Class II cadre, should have at least 15 years ' service to his credit in Class II in temporary and permanent capacities, and should be holding an officiat ing divisional rank, at the time of such absorption.
On such absorption, the Class II officer shall be confirmed as an Executive Engineer.
(iii) The seniority of the Class II promo tees shall be fixed below the bunch of the Assistant Engineers, any one of whom is duo for confirmation as Executive Engineer during the calendar year, provided that an Class II promotee shall be placed senior to a direct recruit to Class I Assistant Engineer who has been officiating as Executive Engineer from a date earlier than the class II promo tee.
In the latter ease, the Class II promo tee though holding a post and lien as a confirmed Executive Engineer shall be 786 shown both under Permanent Executive Engineers and also along with the directly recruited Class I Assistant Engineers, with a suitable remark under the permanent Executive Engi neers list.
This is also subject to further conditions as in paragraph 7 below." In spite of the provisions contained in rules 2 and 6, sufficient number of direct recruits ,to Class I service were not available, which caused the apprehension that for the next few years it may not be possible to fill 75% of the superior posts from amongst direct recruits to Class I.
In order to meet this.
situation, it was provided by rule 7 that, as far as possible, promotions as officiating Execu tive Engineers shall be so made that the promotee under consideration from Class II has to his credit at least 6 years ' longer service than a promotee under consideration from Class I, subject, generally, to the condition that a Class I officer shall not hold a divisional rank at less than 4, and a Class II officer at less than 7 years ' serv ice.
Clause (iii) of rule 7 emphasised that if any promo tions were made from Class.
II to Class I service to the confirmed posts of Executive Engineers beyond the quota available to Class II service personnel, there, would have to be a consequent reduction in the promotion of Class II employee.s to Class I appointments in the following years in order to work up the overall percentage of 75:25.
Clause (iv) of rule 7 provided that if any confirmation is made from the bunch of temporary Executive Engineers.
who had no lien on any cadre, such confirmation shah be counted against the quota of 25% which was meant for the non direct recruits to Class I service.
Since the challenge to the vires of rule 8(iii) has occupied the best part of the arguments and since the High Court of Bombay and Gujarat have differed on that question it would be necessary to set out the whole of rule 8.
(i) The Sub Divisional posts in the Department are at present manned by direct recruits.
to Bombay Service of Engineers, Class II cadre, Deputy Engineers confirmed from subordinate Service of Engineers, the temporary Deputy Engineers recruited by the Bombay Public Service Commission, Officiating Deputy Engineers and similar other categories.
These various categories are being compiled into two lists only, viz. Bombay Service of Engineers Class 11 cadre of permanent Deputy Engineers and a list of officiating Deputy Engineers.
The future recruitment to Bombay Service of Engineers, Class II cadre, shall be made by nomination of candidates recruited direct by competitive examination, held by the Commission and by promotion from the list of officiating Deputy Engineers.
The number of such promotions shall be about one third the number of direct recruits appointed in that year.
(ii) All direct recruitment, of temporary Deputy Engineers having been stopped, further officiating vacancies will be 787 manned from the ranks of the subordinate Service of Engineers.
For this purpose, a State wide Select Seniority list will be maintained of members of the Subordinate Service of Engineers cadre, considered fit to hold sub divisional charges.
The list shall be compiled as on 30th June each year.
For inclusion in this list, a graduate shall have to, his credit not less than 3, a Diploma holder not less than 8, and a non qualified person not less than 13 years ' service as Overseer.
For confirmation as a Deputy Engineer, the officer would be expected to have put in not less than 3 years ' service as officiating Deputy Engineer.
(iii).
The probationers recruited directly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees confirmed during that year." The Rules of 1960 were made by the Government of Bombay on April 29, 1960 and within two days thereafter, that is, on May 1, 1960 State of Bombay was bifurcated into the States of Maharashtra and Gujarat.
With a view to avoiding any administrative difficulty, the Government of Gujarat passed a resolution on May 1, 1960 providing that all rules, regulations, circulars, etc.
prevailing in the former State of Bombay will continue to operate in the new State of Gujarat until changed or modified by that Government.
The Rules of 1960 were amended by the Government of Gujarat by a notification dated August 21, 1965 issued in the exer cise of powers conferred by the proviso to article 309 of the Constitution.
By that notification, the Government of Gujarat introduced a new clause, clause 10, in the Rules of 1960 providing that candidates selected through the competi tive examination and appointed to posts in the Gujarat Service of Engineers, Class I and Class II, shall if so required, be liable to serve in any Defence Service or post connected with the defence of India, provided that such a candidate shall not be required to serve as aforesaid after the expiry of ten years from the date of his appointment or after attaining the age of 40 years.
The terms of this Gujarat amendment are not the subject of controversy but it became necessary to refer to the amendment since it is argued that even if the Rules of 1960, being in the nature of executive instructions, did not have statutory force, those rules acquired a statutory character by being recognised and amended by the notification of August 21, 1965 which was issued under the proviso to art, 309 of the Constitution.
On the bifurcation of the State of Bombay, 181 permanent and 220 temporary posts of Deputy Engineers were allocated to the state of Gujarat.
In practice however, 99 permanent posts of Deputy Engineers were vacant in the State of Guja rat against which confirmation had to be made by that Gov ernment.
Some of the Deputy Engineers who were promoted to those posts from lower ranks were also allocated to the Stare of Gujarat and several of them having 788 completed three years ' qualifying service had become eligi ble for confirmation under rule 8(ii) of the 1960 Rules.
But they were denied confirmation in spite of their long service and in spite of the existence of clear vacancies in substantive posts of Deputy Engineers.
Since the quantum of pension also depended in those days on the average substan tive pay, the denial of confirmations to the promotee Deputy Engineers led to great dissatisfaction amongst them.
Some, who had officiated in those appointments for several years, had to retire without being confirmed.
On March 28, 1961 the Government of Gujarat passed an order provisionally confirming 37 officiating Deputy Engineers with effect from May 1, 1960.
On August 7 1968 it confirmed another batch of 26 officiating Deputy Engineers with retrospective effect from May 1, 1960 and directed that the order of provisional confirmation dated March 28, 1961 shall be treated as final.
In so far as the Gujarat appeals are concerned there are no further rules or resolutions to be considered.
But the Government of Maharashtra issued two.
resolutions after the bifurcation of the State of Bombay.
On July 29, 1963 it passed a resolution laying down principles of seniority and on December 19, 1970 it passed a resolution superseding the resolution passed by the Government of Bombay on April 29, 1960.
Rule 33 of the 1970 rules provides: "Seniority 33.
There shall be two parts of the seniority list in each cadre in Class I and Class 11 viz. Part A of confirmed officers and Part B of those who are not confirmed.
(a) In Part A the names shall be arranged with reference to the year of confirmation.
(b) The confirmed officers shall be treated as senior to the unconfirmed Officers in the respective cadre.
(c) In Part B of the seniority list of any cadre, the names shall be arranged with refer ence to the date of continuous officiation except where a promotion in an officiating capacity was by way of purely temporary or local arrangement.
" In Gujarat, there are no resolutions corresponding to, those of 1963 and 1970 issued by the Maharashtra Government.
Civil Appeal No. 1113 of 1974 by the promotees arises court of the judgment dated January 17, 1974 of the Bombay High Court dismissing SpeCial Civil Application No. 815, of 1972 filed by them against the State and the direct re cruits.
Four Special Civil Applications were filed in the Gujarat High Court which were disposed of by it by a common judgment dated July14, 1973.
S.C. As.
1099 of 1969.
422 of1970 and 957 of 1970 were filed by the direct recruits while S.C.A. No. 1480 of 1971 was filed by the promotees. ' The promotees failed in the Bombay High Court but succeeded in the Gujarat High Court.
Both the High Courts have granted certificates of fitness for filing appeals in tiffs Court.
789 Before us, Mr. K.K. Singhvi and Mr. R.K. Garg appeared for the promotees while Mr. M.V. Paranjpe and Mr. M.K. Ramamurti appeared for the direct recruits.
Mr. M.C. Bhandare appeared for the State of Maharashtra and Mr. D.V. Patel for the State of Gujarat.
Mr. Patel took a non contentious attitude, which highlights how difficult it was for the State counsel to support any particular cause in view of the shifting stand taken up by both the State Gov ernments from time to time.
Several points were raised be,fore us and a large number of decisions were cited in support thereof, but the main question for decision in these appeals is whether departmen tal promotees and direct recruits appointed as Deputy Engi neers in the Engineering Services of the Governments of Maharashtra and Gujarat belong to the same class so that they must be treated with an even hand or whether they belong to different classes or categories and can justifia bly be treated unequally.
Concededly, they are being treated unequally in the matter of seniority because whereas, promo tees rank for seniority from the date of their confirmation the seniority of direct recruits is reckoned from the date of their initial appointment.
The disparity is indeed so glaring that though direct recruits have to successfully complete a two years ' probationary period before confirma tion, even that period is not excluded while counting their seniority.
A promotee ranks below the direct recruit even if he has officiated continuously as Deputy Engineer for years before the appointment of the direct recruit is made and even if he, the promotee, could have been confirmed in an available substantive vacancy before the appointment of the direct recruit.
Learned counsel for the direct recruits have stoutly defended the preferential treatment accorded to them by contending, inter alia, that since the promotees do.
not belong to Class II service until they are confirmed, they have no fight to.
rank for seniority along with the direct recruits who enter that class or cadre on the very date of their initial appointment.
The fact that the Government did not confirm a particular promotee even though a substan tive vacancy was available in which he could have been confirmed cannot, according to the direct recruits, make any difference to that position.
For facilitating a proper understanding of this problem it is necessary to take bird 's eye view of the various rules and resolutions which were passed by the two State Govern ments, most of which we have already noticed.
In this be half, attention has to be called particularly to: (1) The rules framed by the Government of Bombay on September 21, 1939 under section 241 (2)(b).of the Government of India Act, 1935; (2) The rules framed by the Government of Bombay on November 21, 1941 regarding fixation of seniority (3) The letter dated January 11, 1949 written by the Chief Secra tary, Government of Bombay, to the Honorary Secretary, Bombay Civil Service Association: (4) The Resolution of the Government Of Bombay dated April 29, 1960 containing Rules regarding recruitment of Class I and Class II Engineering Services and regarding fixation of seniority; (5) The 790 Resolution of the Government of Maharashtra dated July 29, 1963 laying down principles of seniority; (6) The Notifi cation dated August 21, 1965 issued by the Government of Gujarat under the proviso to.
article 309 of the Constitu tion, introducing clause 10 in the Rules of 1960; (7) The Resolution of the Government of Maharashtra dated December 19, 1970 superseding the Resolution of April 29, 1950 and framing new rules of seniority; and (8) The Circulars dated January 12, 1961, March 15, 1963 and October 18, 1968 issued by the Government of Maharashtra, converting a cer tain number of temporary posts into permanent posts from time to time.
It is common ground that except the Bombay Rules dated September 21, 1939 and the Gujarat Notification dated August 21, 1965 the rest of the rules are in the nature of execu tive instructions.
The Rules of 1941, 1960, 1963, 1965 and 1970 were not framed by the State Government concerned in the exercise of constitutional or statutory power.
The Rules of 1960 and 1970 were issued "By order and in the name of the Governor," but that does not lend support to the construction faintly suggested on behalf of the direct recruits that the two sets of rules must be deemed to have been made under article 309 of the Constitution.
All execu tive action of the Government of a Stale is required by article 166 of the Constitution to be taken in the name of the Governor.
The appeals have therefore to be disposed of on the basis that except for the Bombay rules dated September 21, 1939 and the Gujarat Notification dated August 21, 1965 the remaining rules, whether of recruitment or of seniority, are in the nature of executive instructions.
These in structions, unlike rules regulating recruitment and condi tions of service framed under the proviso to article 309 of the Constitution or section 241(2)(b) of the Government of India Act, 1936, cannot have any retrospective effect.
The 1939 rules called "Recruitment Rules of the Bombay Service of Engineers (Class I and Class II)" have constitu tional authority but being rules made to regulate the methods of recruitment", they afford no assistance in finding a solution to the rival claims to seniority laid by the promotees and direct recruits.
The rules neither fix a quota for recruitment from the two, avenues nor do they provide, in any other manner, a guideline for fixation of seniority as between appointees recruited from different sources.
Rule 10 on which the promotees rely as affording to them a guarantee in the matter of promotion is also beside the point because the crux of their grievance is not that they are denied opportunities of promotion but that they are discriminated against in the matter of seniority in comparison with the direct recruits.
By its resolution dated November 21, 1941 the Government of Bombay, Political and services Department, directed that in the case of direct recruits appointed substantively on probation, the seniority should be determined with reference to the date of appointment on probation while in the case of officers promoted to "substantive vacancies", the seniority should be determined with reference to the date of their promotion to the substantive vacancies, pro vided there has been no break in their service prior to their confirmation in those vacancies.
This Reso lution expressly 791 governed the seniority of direct recruits and promoted officers in all provincial services except the Bombay Serv ice of Engineers, Class I Since Deputy Engineers do not belong to Class I Service, their seniority was governed by the Resolution.
The wording of the Resolution leaves no doubt that the Government of Bombay applied: two different standards for fixing inter se seniority of direct recruits and promotees appointed as Deputy Engineers.
The former were entitled to reckon their seniority with effect from the. date of their initial appointment on probation while the seniority of the latter had to be determined with reference to the date of their promotion to, substantive vacancies, subject to the further qualification that there was no break in their service prior to their confirmation in those vacancies.
Thus, for purposes of seniority, the promo tees had to depend firstly on the availability of substan tive vacancies and secondly on the arbitrary discretion of the Government to confirm or not to confirm them in those vacancies.
The fact that a substantive vacancy had arisen and was available did not, proprio vigore, confer any right on the promotee to be confirmed in that vacancy.
The 1941 Rules contained the real germ of discrimination because the promotees had to depend upon the unguided pleasure of the Government for orders of confirmation.
In the pre Consti tution era, such hostile treatment had to be suffered si lently as a necessary incident of government service.
It is curious that though the 1941 rules expressly recite that the principles contained therein should be observed in determining the seniority of direct recruits and promoted officers in the provincial Services except the Class I Bombay Service of Engineers, Shri L.M. Ajgaonkar, Deputy Secretary to the Government of Maharashtra says in his affidavit dated July 25, 1973 that in practice the Rules of 1941 were never applied to Class II officers in the Engineering Service and that their seniority used to be determined by the same rules by which the seniority of Class I officers was determined.
It is difficult to accept this bare statement which is not even supported by a proper verification.
Shri Ajgaonkar 's affidavit contains an omni bus and rolled up clause of verification at the end, which detracts from the weight of his assertion.
Turning next to the letter dated January 11, 1949 writ ten by the Chief Secretary, Government of Bombay, to the Honorary Secretary, Bombay Civil Service Association, we find it difficult to uphold the claim of the _promotees that the Rules of 1941 were modified by that letter.
The letter was written in answer to, the representation dated July 28, 1948 made by the Bombay Civil Service Association to, the Government of Bombay regarding emergency recruitment to the Indian Administrative service and "other matters".
Paragraph 2 of the letter says that promotees can have no grievance in the matter of seniority since the seniority of a direct recruit to the cadre of "Deputy Collectors" vis a vis a promoted officer is determined not according to the date of confirmation but according to the principles laid down in the Rules of 1941, i.e. with reference to the date of first appointment on probation in the case of direct recruits and of continious officiation in the ease of pro moted officers.
In the first place, 792 this part of the letter on which the promotees rely deals expressly and exclusively with the case of Deputy Collectors which makes it difficult, without any further data, to extend the benefit of what is said therein to Deputy Engi neers, working in an entirely different branch of govern ment service.
The Chief Secretary 's letter is a reply to the Association 's letter which the promotees did not pro duce.
The Association had addressed its letter not to the Ministry which handled problems of Engineering Services but to the Ministry of Home and Revenue, the latter of which was concerned to consider the grievance of Deputy Collectors.
Lastly the opening sentence of paragraph 2 of the Chief Secretary 's reply shows that he was referring to a class of service in which a quota system was then operating.
Admit tedly, the quota system properly so called, did not apply either under the 1939 or under the 1941 rules to Engineering Services.
The Chief Secretary 's reply cannot, therefore improve the promotees ' case.
But we disapprove that instead of explaining the circumstances in which the reply was sent, the State Government should merely say through Shri Ajgaon kar 's affidavit that it craves "leave to refer" to the reply for its "true effect".
The Government could surely have produced the letter of the Association which would have set this part of the controversy at rest.
That takes us to the 1960 Rules which are the meat of the matter.
We have already extracted rules 6 and 8 fully but it will be necessary to recapitulate briefly the scheme of the 1960 rules.
Under these rules, the,ratio of ap pointment by nomination and promotion of both Class I and Class II Engineering Services was fixed, as far as practica ble, at 75: 25.
Candidates appointed by nomination, i.e. direct recruits, were to be on probation for two years out of which, normally, one year was to be spent on training.
On satisfactory completion of probation, the direct recruits were to be confirmed as Assistant Engineers in Class I or as Deputy Engineers in Class II, as the case may be.
For ab sorption in Class I, a Class II officer had to be in the permanent Bombay Service of Engineers, Class II cadre.
He was further required to have at least 15 years ' service to his credit in Class II in temporary and permanent capaci ties.
In addition to these qualifications, he has to be holding, at the time of his absorption in Class 1, an offi ciating divisional rank.
On such absorption the Class II officer was to be confirmed as an Executive Engineer.
The Rules of 1960 show that the seniority of Class II promotees was to be fixed below the bunch of Assistant Engineers, any one of whom was due for confirmation as an Executive Engi neer during the calendar year.
But no Class II promotee could be placed above a direct recruit recruited to Class I, who was officiating as Executive Engineer from a date earlier than the Class II promotee, Rule 8(1) says that the various categories which manned the Class I sub divisional posts were being compiled into.
two lists: (i) One list of Bombay Service of Engineers Class 1I cadre of permanent Deputy Engineers and (ii) the other list of officiating Deputy Engineers.
The future recruit ment to Class II cadre was to be made by (a) nomination of candidates recruited directly by competitive examination and (b) promotion from the list of officiating Deputy Engineers, 793 in the ratio of 2/3rd and 1/3rd respectively.
After recit ing that direct recruitment of temporary Deputy Engineers was stopped, rule 8(ii) provides that further officiating vacancies would be manned from the ranks of the Subordi nate Service of Engineers.
For this purpose a statewise Select Seniority List was to be maintained of members to the Subordinate Service of Engineers, considered fit to hold subdivisional charge.
For inclusion in this list graduates, diploma holders and non qualified persons had to have to their credit Service of not less than 3, 8 and 13 years respectively.
For confirmation as a Deputy Engineer the officer was expected to have put in not less than three years ' service as officiating Deputy Engineer.
Then comes the much debated clause (iii) of rule 8: "(iii) The probationers recruited directly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees con firmed during that year.
It is patent that this clause is highly discriminatory against promotees and accords a preferential treatment to direct recruits.
Its principal justification is said to be that persons who are promoted as officiating Deputy Engi neers do not belong to Class II cadre so long as they are not confirmed as Deputy Engineers, whereas direct recruits appointed on probation as Deputy Engineers enter that class or cadre on the very date of their appointment since, on satisfactory completion of probation, confirmation is gua ranteed to them.
This contention needs careful examination.
There is no universal rule, either that a cadre cannot consist of both permanent and temporary employees or that it must consist of both. ' That is primarily a matter of rules and regulations governing the particular service in relation to which the question regarding the composition of a cadre arises.
For example, in Bishan Sarup Gupta vs Union of India(1) the cadre of Income Tax officers Class I, Grade II was held by this Court to consist of both permanent and temporary pests.
Similarly, in A.K. Subraman vs Union of India, (2) while holding that the cadre of Executive Engi neers in Class I Central Engineering Service consisted both of permanent and temporary posts, it was pointed out by this Court that a cadre may consist of permanent posts only or "sometimes, as is quite common these days, also of temporary posts".
Counsel for direct recruits relied upon a decision of this Court in Ganga Ram & Others vs Union of India(3) for showing that a cadre cannot consist of temporary posts but that decision rested on the finding, arising out of the rules contained in the Indian Railway Establishment Manual, that direct recruits and promotees constitute different classes.
The question which we have to consider at this stage is not whether direct recruits and promotees appointed as Deputy Engineers in the Bombay and Gujarat service of Engineers belong to different classes but Whether officiat ing Deputy Engineers belong to class II cadre at all.
(1) ; (2) [1975] 2 S.C.R. 979 (3) ; 794 On the state of the record in the Bombay and Gujarat appeals, such as it is, we find it difficult to hold that officiating Deputy Engineers do not belong to Class 1I cadre of the Bombay and Gujarat Service of Engineers.
In the Maharashtra writ petition, 815 of 1972, as many as four affidavits. were filed on behalf of the State Government by Shri L.M. Ajgaonkar.
These are dated July 25, December 17, December 21, 1973 and January 17, 1974.
The question whether officiating Deputy Engineers belong to Class II cadre was of the essence of the dispute in the High Court and was squarely raised by the promotees.
Yet, in none of the affidavits did the State Government say that they did not belong to Class II cadre.
The last affidavit dated January 17, 1974 was filed after the High Court had dictated its judgment in open Court for three days, and even then the affidavit is significantly silent on the question.
The only explanation of this can be that according to the State Government, officiating Deputy Engineers belong to Class II cadre.
The resolution dated November 8, 1962 issued by the Government of Maharashtra.
Buildings and Communications Department, shows unmistakably that even temporary posts of Deputy Engineers were treated as temporary additions to Class II cadre.
An additional Division with four subdivi sions was sanctioned by that resolution for construction of a section of National Highway No. 8.
Temporary posts had therefore to be created for that project for a period of one year.
The resolution says that "The posts of Executive Engineers and Deputy Engineers should be treated as tempo rary additions to their respective cadres." In so far as the Gujarat appeals are concerned, Shri N.S. Nagrani, Under Secretary to the Government of Gujarat, P.W.D., filed an affidavit dated April 28, 1970 in one of the writ petitions, 422 of 1970.
He says in that affidavit that "temporary posts are to be treated as temporary additions to the respective cadres of B.S.E. Class I and Class II", that "permanent posts are not created anew but come into existence by the conversion of the existing tempo rary posts into permanent posts" and that "both the tempo rary posts and permanent posts are two categories of posts belonging to the same cadre".
To the similar effect is the affidavit dated June 22, 1970 made in another writ petition, 1099 of1969, by Shri A.R. Bhatt, Under Secretary to, the Government of Gujarat, P.W.D. He says therein that "there are no separate categories of permanent and temporary posts of Deputy Engineers.
Temporary post of Deputy Engineers are treated as temporary additions to the G.S.E. Class II cadre.
" Pleading on behalf of the Gujarat Government, Shri Bhatt stoutly resisted the claim of direct recruits that they had prior claim for consideration for promotion to the posts of Executive Engineers on the ground that they belong to the Class II cadre while the officiating Deputy Engineers do not.
We cannot ignore these sworn assertions made solemnly by officers of the Maharashtra and Gujarat Governments.
The fact that the permanent strength of the.
cadre was deter mined on the basis of permanent posts at any given time, as for example when the Bombay 795 Government passed resolutions on March 22, 1937 and April 13, 1945 cannot detract from the position that even tempo rary posts of Deputy Engineers were treated as additions, though temporary, to Class II cadre.
The government offi cers who swore the affidavits knew of these resolutions and yet they were instructed to state, a position Which they contended for more then once, that officiating Deputy Engineers belonged to Class II cadre.
The learned counsel for the direct recruits laid great emphasis on the lists referred to in clauses (i) and (ii) o[ rule 8 for showing that officiating Deputy Engineers do not belong to Class 11 cadre of Engineering Service.
This contention has to be rejected since the point is concluded by a decision of this Court in P.Y. Joshi vs State of Maharashtra.
(1) It was contended in that case on behalf of direct recruits that officiating Deputy Engineers could only be considered as promoted to the grade of Deputy Engi neers on confirmation and therefore the 7 years ' qualifying service which they had to put in before being promoted as officiating Executive Engineers must be reckoned from the ' date of their confirmation as Deputy Engineers in support of this contention reliance was placed in that case on clause (ii) of rule 8 and it was argued that no person could be "promoted" as a Deputy Engineer unless he was first put in the list of officiating Deputy Engineers.
This argument was squarely dealt with and repelled by this Court by hold ing that the list referred to in clause (ii) of rule 8 is the same list which is referred to in the latter part of clause (i) of that rule which speaks of "future recruitment".
Consequently, a promoted officiating Deputy Engineer, who belonged to Class II cadre, was held entitled to be considered for promotion under rule 7 to the post of officiating Executive Engineer if he had put in 7 years ' qualifying service.
The eligiblity for promotion did not require that the officiating Deputy Engineer must have put in 7 years ' service after the date of his confirmation.
It must necessarily follow that "promotion" which the latter part of rule 8(i) relating to future recruitment speaks of means promotion as an officiating Deputy Engineer from the Select List prepared under clause (ii) of rule 8.
A person thus promoted from the Select List as an officiat ing Deputy Engineer is as full and complete a member of the Class II cadre as a person directly appointed as a Deputy Engineer.
In tiffs view of the matter, the prescription contained in the closing sentence of rule 8(i) that "the number of such promotions shall be about 1/3rd the number of direct recruits appointed in that year" would apply to initial appointments and cannot govern the confirmation of those who have already been appointed to Class II cadre.
In other words, direct recruits and promotees have to.
be appointed in the proportion of 75: 25 to Class II cadre, the former as Deputy Engineers and the latter as officiating Deputy Engineers, but once that is done, the quota rule would cease to apply with the result that confirmations in the posts of Deputy Engineers are not required to be made in the proportion in which the initial appointments had (1) 796 to be made.
Thus rule 8(i) only requires that for every three direct recruits appointed as Deputy Engineers only one promotee can be appointed as officiating Deputy Engineer.
The rule cannot be construed to mean that.
for every three confirmations, of Deputy Engineers, not more than one promo tee can be confirmed as Deputy Engineer.
In A. K. Subraman (supra) it was held by this Court, while interpreting rules relating to Central Engineering Service Class I, that though in cases where recruitment is made from different sources the quota system can be validly applied, the quota rule was to be enforced at the time of initial recruitment to the posts of officiating Executive Engineers and not at the time of their confirmation.
The Court further observed that there was a well recognised distinction between promotion and confirmation and that the tests to be applied for the purposes of promotion are entirely different from those that had to be applied at the time of confirmation.
If officiating Deputy Engineers belong to Class II cadre as much as direct recruits do and if the quota system cannot operate upon their respective confirmation in that cadre, is there any valid basis for applying different standards to the members of the two group for determining their seniori ty? Though drawn from two different sources, the direct recruits and promotees constitute in the instant case a single integrated cadre.
They discharge identical functions, bear similar responsibilities and acquire an equal amount of experience in their respective assignments.
And yet clause (iii) of rule 8 provides that probationers recruited during any year shall in a bunch be 'treated as senior to promo tees confirmed in that year.
The plain arithmetic of this formula is that a direct recruit appointed on probation say in 1966, is to be regarded as senior to a promotee who was appointed as an officiating Deputy Engineer, say in 1956, but was confirmed in 1966 after continuous officiation till then.
This formula gives to the direct recruit even the benefit of his one year 's period of training and another year 's period of probation for the purposes of seniority and denies to promotees the benefit of their long and valuable experience.
If there was some intelligible ground for this differentiation bearing nexus with efficiency in public services, if might perhaps have been possible to sustain such a classification.
It is interesting that time and again the State Governments themselves found it difficult to justify the hostile treatment accorded to the promotees.
In various affidavits filed on their behalf, entirely contra dictory contentions were taken, sometimes in favour of the promotees and sometimes in favour of direct recruits.
In stead of adopting an intelligible differentia, rule 8 (iii) leaves seniority to be determined on the sole touchstone of confirmation which Seems to us indefensible.
Confirmation is one of the inglorious uncertainities of government serv ice depending neither on efficiency.
of the incumbent nor on the availability of substantive vacancies.
A glaring in stance widely known in a part of our country is of a distin guished member of the judiciary who was confirmed as a District Judge years after he was confirmed as a Judge of the High Court.
It is on the record of these writ petitions that officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed.
It shows that confirmation does not have to conform to any set rules and whether an employee should be confirmed or not depends on the sweet will and pleasure of the government.
797 There is no substance in the plea that direct recruits must be given weightage on the ground that the engineering services require the infusion of new blood since it is a highly specialised service.
Were it so, the Government would not have itself reduced the proportional representa tion gradually so as to tilt the scales in favour of promo tees.
Besides, the plea that engineering service is a spe cialised service is made not by the Government but by direct recruits who, obviously, are interested in so contending.
Nor indeed is the apprehension justified that the higher echelons of engineering services will in course of time be manned predominantly by promotees.
Those recruited directly as Assistant Engineers in Class I can, under the rules, officiate as Executive Engineers after 4 years ' service and are eligible for confirmation as Executive Engineers after a total service of 9 years.
Promotees can hardly ever match with that class in terms of seniority.
Learned counsel for direct recruits relied on the deci sion of this Court in B.S. Gupta vs Union of India(1) where it was observed that when recruitment is made from several sources, it may be necessary in the public interest to depart from the normal rule of seniority and to provide that dates other than the dates of appointment will determine inter se seniority of officers.
These observations have to be understood in the context which the Court itself clari fied by saying that the, problem before it was not of dis crimination in the matter of promotion from an integrated service constituted from two sources but the problem was of integrating two sources in one service by adjusting inter se seniority (p. 115).
Besides, the rule of seniority pre scribed in that case was not shown to suffer from the in firmity from which rule 8 (iii), suffers.
Reliance was also placed by the direct recruits on another decision of this Court in V.B. Badami vs State of Mysore,(2) in which it was held that in cases where rules prescribe a quota between direct recruits and promotees, confirmations for substantive appointments can only be made in clear vacancies occurring in the permanent strength of the cadre and that confirmed persons have to be treated as senior to those who are officiating.
This decision is distinguishable because it is based on the consideration that rule 9 of the Probation Rules of 1957 provided for confirmation of a probationer as a full member of the serv ice in any substantive vacancy in the permanent cadre and that rule established the exclusion of temporary posts from the cadre (p.822).
Since the cadre consisted of permanent posts only, confirmation in permanent posts necessarily determined the inter se seniority of officers.
Rule 8(ii) in the instant case adopts the seniority cum merit test for preparing the statewise Select List of seniority.
And yet clause (iii) rejects the test of merit altogether.
The vice of that clause is that it leaves the valuable right of seniority to depend upon the mere accident of confirmation.
That, under articles 14 and 16 of the Constitution, is impermissible and therefore we.must strike down rule g(iii) as being unconstitutional.
(1) ; (2) [1976]1 S.C.R. 815 798 On July 29, 1963 the Government of Maharashtra in its General Administration Department passed a resolution super seding the rules of November 21, 1941 and framing new rules for determining the inter se seniority of direct recruits and promotees.
Paragraph A of the 1963 resolution provides that the seniority of direct recruits and promoted officers should be determined according to the date of appointment on probation in the case of direct recruits and according to the date of promotion to officiate continuously in the case of those appointed by promotion, irrespective of whether the appointments are made in temporary or in permanent vacan cies.
Paragraph B of the resolution says that a list of services in respect of which special orders for fixation of seniority are in force and to which the resolution will not apply would be issued in due course.
It is contended on behalf of the Maharashtra promotees that the rules of 1963 superseded the 1960 rules by neces sary implication and therefore the State Government had no power or authority to apply the criterion of seniority fixed under the 1960 rules after their repeal by the 1963 rules.
This contention has not only the merit of plausibility but is apparently supported by an observation in P. Y. Joshi (supra) case.
We are however satisfied that the Bombay High Court was right in rejecting the contention.
The quota system was the very essence of 1960 rules and if it was desired to abrogate that system it is unlikely that the 1963 rules will not even refer to those of 1960.
The rules of 1941 having been expressly superseded by the 1963 rules, it is difficult to accept that along with the 1941 rules the resolution of 1963 would not have referred to the 1960 rules also.
Secondly, the resolution dated December 19, 1970 of the Government of Maharashtra expressly superseded the 1960 rules which shows that the latter were in force until 1970 and were not superseded by the 1963 rules.
In fact, the resolution of 1970 refers to all previous resolutions except the resolution of 1963 which shows that the latter was not applicable to engineering services.
It is true that in P.Y. Joshi 's case (supra) it was observed that the 1963 rules repealed those of 1960 but that is a mere passing observa tion.
The question in regard to such repeal did not arise for decision in that case and it appears that no argument whatsoever was addressed to the Court on this question.
None of the considerations mentioned by us were placed before the Court in that case.
We therefore agree with the High Court that the 1960 rules were not superseded by those of 1963.
We have already indicated that in Gujarat there is no resolution corresponding to that of 1963.
In the Gujarat writ petitions it was argued that the 1960 rules, though originally in the nature of executive instructions, acquired a statutory force and character by reason of their amendment by the rules of 1965 which were made by the Governor of Gujarat in exercise of the power under the proviso to article 309 of the Constitution.
This argument was rightly rejected by the High Court because all that was done by the rules of 1965 was to introduce a new rule, rule 10, in the 1960 rules.
The rules of 1960 were neither reiterated nor re enacted by the rules of 1965 and the new rule introduced into the rules of 1960 is not of such a character as to compel the inference that the rule making authority had applied its mind to be rules of 1960 with a view to 799 adopting them.
In Bachan Singh vs Union of India(1), on which the direct recruits rely, the amendment made vital changes in the main fabric of the original rules which led this Court to the conclusion that the original rules became statutory rules by incorporation.
This question is not relevant in the Maharashtra appeal since there are no rules in Maharashtra corresponding to those of 1965 in Gujarat.
The challenge to rule 33 of the rules dated December 19, 1970 framed by the Government of Maharashtra is based on grounds identical with those on which the validity of rule 8(iii) of the 1960 rules was assailed.
The rules of 1970, which supersede the rules of 1960, were framed in order (i) to alter the ratio between direct recruits and promotees which was "causing hardship" to promotees; (ii) to correct the manifest error resulting from the fact that "A large number of temporarily promoted officers both in Class I and Class II could not be confirmed in spite of permanent vacan cies being available"; and (iii) to ensure the efficiency of the engineering services as a whole.
Rule 6 provides briefly that officers who are confirmed in or who have a lien on a post will be members of the Maharashtra Service of Engineers Class I or Class II as the case may be Those who do not have such a lien and who may be officiating in any one of the cadres of Class I or Class II will be treated as temporary members of their respective cadres.
Rules 7 to 11 deal with direct appointments to the posts of Assistant Engineers Class I and Assistant Engineers Class II.
By rule 11, such appointees are to be confirmed after a training of one year and a further probation for a period of not less than one year in their respective cadres.
Rules 12 to 23 deal with appointments by promotion to Class 11 service.
Rule 12(a) as amended by the Government resolution dated January 20, 1972 provides that the cadre of Deputy Engineers will consist of (i) all officers confirmed upto the date of commencement of the rules as Deputy Engineers, whether actually working in or only having a lien on the posts; (ii) all direct recruits who have been appointed upto the date of commencement of the rules on probation against permanent posts of Deputy Engineers (iii) all officers who were offi ciating as Deputy Engineers on 30th April, 1960, provided their promotions prior to 30th April, 1960 are not deemed to be fortuitous; and (iv) those who were not promoted prior to 30th April, 1960, but who have been included in the Select Lists for the period prior to 30th April 1900 of Overseers fit to be Deputy Engineers.
RuIe 12(c) fixes the ratio between direct recruits and promotees at 34: 66 instead of 75: 25 as under the 1960 rules.
Rule 33 called "Seniority", which we have extracted already, provides that there shall be two parts of the seniority list in each cadre in Class I and Class Ii, part A of confirmed officers and part B of those who are not confirmed.
In part A the names are to be arranged with reference to the year of confirmation.
Con firmed officers are to be treated as senior to the uncon firmed officers in the respective cadres.
In part B the names are to be arranged with reference to the date of continuous officiation except where promotion in an offici ating capacity is by way of a purely temporary or local arrangement.
(1) ; 800 Rule 33, in so far as it makes seniority dependent upon the fortuitous circumstance of confirmation, is open to the same objection as rule 8(iii) of the 1960 rules and must be struck down for identical reasons.
The circulars dated January 12, 1961, March 15, 1963 and October 18, 1969 which the promotees want to be enforced are issued by the Finance Department and being in the nature of inter departmental communications, they cannot confer any right on the promotees.
The Bombay High Court was therefore right in not accepting this part of the promo tees ' case.
We also agree with the view taken by the High Courts of Bombay and Gujarat, for the reasons mentioned by them, that the rules under consideration do not in any manner violate the provisions of the Bombay Reorganisation Act, 11 of 1960.
The proviso to section 81 (6) of that Act says that the condi tions of service applicable to any person allotted to the States of Maharashtra or Gujarat shall not be varied to his disadvantage except with the previous approval of the Cen tral Government.
Neither the rules of 1960 and much less the rules of 1970 alter the conditions of service of Deputy Engineers to their disadvantage within the meaning of the proviso.
We are not unmindful of the administrative difficulties in evolving a code of seniority which will satisfy all conflicting claims.
But care ought to be taken to avoid a clear transgression of the equality clauses of the Constitu tion.
The rules framed by the State Governments were con stitutionally so vulnerable that the administration was compelled to adopt inconsistent postures from time to time leaving the employees no option save to resort to courts for vindication of their rights.
In this process, courts, high and low, had to discharge functions which are best left to the expertise of the appropriate departments of the Govern ment.
Having struck down certain rules, we do not want to take upon ourselves the task of framing rules of seniority.
That is not the function of this Court and frankly it lacks the expertise and the data to do so.
We how.
ever hope that the Government will bear in mind the basic principle that if a cadre consists of both permanent and temporary employees, the accident of confirmation cannot be an intelligible criterion for determining seniority as between direct re cruits and promotees.
All other factors being equal, con tinuous officiation in a non fortuitous vacancy ought to receive due recognition in determining rules of seniority as between persons recruited from different sources, so long as they belong to the same cadre, discharge similar functions and bear similar responsibilities.
Saying anything beyond this will be trespassing on a field which does not belong to the courts.
We would like to clarify that the list of seniority, for the period till November 1, 1956, prepared by the Maharash tra Government by its resolution dated April 10, 1970 has been approved by the Government of India.
That list would therefore govern the seniority of direct recruits and promo tees as on November 1, 1956.
Secondly, it seems to us difficult to uphold the direction given by the Gujarat High Court that interim promotions made during the pendency of writ petitions should not be disturbed until the expiration of one month from the date of the seniority as finally fixed by the Government and intimated to the con 801 cerned parties.
Interim promotions which do not comply with the constitutional requirements and which under the judgment of the Gujarat High Court are bad cannot be permitted to stand.
We accordingly set aside that direction.
These then are our reasons in support of the order which we passed on January 31, 1977.
That order reads thus: "Civil Appeal No. 1113 of 1974 is filed by the promo tees and it arises out of special Civil Application No. 815 of 1972 filed by them in the Bombay High Court.
We set aside the judgment of the High Court and allow the appeal.
Civil Appeal No. 286 of 1974 is filed by direct re cruits and it arises out of Special Civil Application No. 1099 of 1969 filed by them in the High Court of Gujarat.
We confirm the judgment of the High Court and dismiss the appeal.
Civil Appeal No. 287 of 1974 is filed by direct re cruits and it arises out of Special Civil Application No. 422 of 1970 filed by them in the High Court of Gujarat.
We confirm the judgment of the High Court and dismiss the appeal.
Civil Appeal No. 242 of 1974 and Civil Appeal No. 285 of 1974 are cross appeals.
Both of these appeals arise out of Special Civil Application No. 1418 of 1971 which was field by the promotees in the High Court of Gujarat.
Civil Appeal No. 242 of 1974 is filed by the promotees in this Court challenging the decision of the Gujarat High Court to the extent to which they failed.
Civil Appeal No. 285 of 1974 is filed by the direct recruits challenging the afore said decision to the extent to which the High Court allowed the reliefs claimed by the promotees.
We allow Civil Appeal No. 242 of 1974 partly and dismiss Civil Appeal No. 285 of 1974.
The reasons in support of the conclusions to which we have come in these appeals will be given later.
The extent to which the appeals are allowed or dismissed will become clear from those reasons.
| From time to time the Life Insurance Corporation and its employees arrived at settlement relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them.
Clause (8) of the Settle ment dated January 24, 1974, which related to payment of bonus, provided (i) that no profit sharing bonus shall be paid but the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III and Class IV employees; (ii) that an annual cash bonus will be paid to all Class III and Class IV employees at the rate of 15% of the annual salary actually drawn by an employee in respect of the financial year to which the bonus relates and (iii) that save as provided therein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated June 26, 1972.
Clause (12) of the Settlement which refers to the, period of settlement provided (1) that the Settlement shall be effective from April 1, 1973 for a period of four years and (2) that the, terms of the Settlement shall be subject to the approval of the Board of the Corporation and the Central Government.
One of the administrative instructions issued by the Corporation in regard to the payment of cash bonus under cl.
8(ii) of the Settlement was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose, of determining the amount of bonus payable to the employee or his heirs and the other was that the bonus shall be paid along with the salary for the month of April but in case of retirement or death, payment will be made soon after the contingency.
The payment of Bonus (Amendment) Act.
1976 considerably curtailed the rights of the employees to bonus in industrial establishments.
But in so far as the employees of the Corporation were concerned this Act had no application because by reason of section 32 of the Payment of Bonus Act, the Corporation was outside the purview of its operation.
The Central Government however decided that the employees of establishments which were not covered by the Bonus Act would not be eligible for payment of bonus but exgratia payment in lieu of bonus would be made to them.
Pursuant to this decision the L.T C. was advised by the Ministry of Finance, Government of India, that no further payment of bonus should be made to its employees without getting the same cleared by the Government.
The Corporation accordingly issued administrative instructions not to pay bonus to its employees under the existing provisions until further instructions.
To the employees ' assertion that the Corporation was bound to, 335 pay bonus in accordance with the terms of the Settlement the Corporation cOntended that payment of bonus by the Corporation was subject to such directions as the Central Government might issue from time to time, and since the Central Government had advised it not to make any payment of bonus without its specific approval, bonus could not be paid to the employees.
Thereupon, the All India Insurance Employees ' Association moved the High Court for issue of a writ directing the Corporation to act in accordance with the terms of the Settlement dated January 24, 1974 read with administrative instructions dated March 29, 1974 and not to refuse to pay cash bonus to Class III and Class IV employees.
A single Judge of the High Court allowed the writ petition.
While the Letters Patent Appeal was pending, Parliament passed the Life Insurance Corporation (Modification of Settlement) Act, 1976 (which is the Act impugned in this case).
In the Letters Patent Appeal the Corporation stated that in view of the impugned Act , there was no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal.
Since the effect of the impugned Act was to deprive Class III and Class IV employees of bonus payable to them in accordance with the terms of the Settlement, two of the associations filed writ petitions in this Court challenging the constitutional validity of the impugned Act.
It was contended on their behalf that even if the impugned Act rendered cl.
(8) (ii) ineffective with effect from April 1, 1975 it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandamus issued by the High Court and (2) that the right of Class III and Class IV employees to annual cash bonus for the years 1975 76 and 1976 77 under Cl.
8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property.
without payment of compensation, it was violative of article 31(2) of the Constitution.
Allowing the writ petitions Beg C.J. (concurring with the majority) HELD : Section 3 of the Life Insurance Corporation (Modification of Settlement) Act, 1976 is struck by the provisions of article 19(1)(f) and is not saved by article 19(6) of the Constitution.
[346 A] 1.
The Statement of Objects and Reasons of the Act discloses that the purpose of the impugned Act was to undo settlements arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974 and recognised by the High Court.
In Smt.
Indira Gandhi vs Raj Narain this Court held that even a constitutional amendment cannot authorise the assumption of judicial power by Parliament.
One of the tests laid down was whether the decision is of a kind which requires hearing to be given to the parties i.e., whether it involves a quasi judicial procedure.
A decision reached by the Central Government is the result of a satisfaction on matters stated there and would imply quasi judicial procedure where the terms of a settlement had to be reviewed or revised.
But, the legislative procedure.
followed in this case does not require that to, be done.
It would be unfair to adopt legislative procedure to undo a settlement which had become the basis of a decision of a High Court.
Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of section 18 of the which had been held to be valid and enforceable by a High Court.
[341 G, H, 342 A C] 2(a) The object of the Act was in effect to take away the force of the judgment of the High Court.
Rights under that judgment could be said to, rise independently of article 19, of the Constitution.
To give effect to that judgment is not the same thing as enforcing a right under article 19.
It may be that a right under article 19 becomes linked up with the enforceability of the judgment.
Nevertheless the two could be viewed as separable sets of rights.
If the right conferred by the judgment independently is sought to be set aside section 3 would be invalid for trenching upon the judicial power.
[343 B D] 336 (b) A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public.
But the present is a pure and simple case of deprivation of rights of the employees without any apparent nexus with any public interest.
In the instant case the impugned Act is a measure which seeks to deprive workers of the benefits of settlement arrived at and assented to by the Central Government under the provisions of the .
Such a settlement should not be set at naught by an Act designed to defeat the purpose.
In judging the reasonableness of an Act the prospects held out, the representations made, the conduct of the Government and equities arising therefrom may all be taken into consideration.
[342 E F, 344 E F] 3.
Even though the real object of the Act was to set aside the result of mandamaus, the section does not mention this object.
This was perhaps because the jurisdiction of a High Court and the effectiveness of its orders derived their force from article 226 of the Constitution.
Even if section 3 seeks to take away the basis of the judgment without mentioning it, yet where the rights of the citizens against the State are concerned the court should adopt an interpretation which upholds those rights.
Therefore, the rights which had passed into those embodied in a judgment and become the basis of a mandamus from the High Court, could not be taken away in an indirect fashion.
[343 D E].
Even though the Directive Principles contained in article 43, cast an obligation on the State to secure a living wage for the workers and is part of the principles declared fundamental in the governance of the country, it is not a fundamental right which can be enforced.
Even though the Directive Principles give a direction in which the fundamental policies of the State must be oriented, yet this Court cannot direct either the Central Government or the Parliament to proceed in that direction.
Even if the Directives are not directly enforceable by a Court they cannot be declared ineffective.
They have the life and force of fundamentals.
The best way to give vitality and effect to them is to use them as criteria of reasonableness.
[344 B C] 5(a) Articles 358 and 359(1A) provide that as soon as the Proclamation of emergency cease to operate the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect. ' [346 B C] (b) The term "things done or omitted to be done", should be interpreted very narrowly.
In the present case it means that the settlements are not to be deemed to be wiped off.
All that it means is that no payment of bonus could be demanded during the emergency but as soon as the emergency was over, the settlement would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended.
In other words valid claims cannot be washed off by the emergency per se.
They can only be suspended by a law passed during the operation of articles 358 and 359(1A).
[346 C F] (Per Chandrachud, Fazal Ali and Shinghal, JJ.).
Concurring with the majority.
The impugned Act violates article 31(2) and is, therefore, void.
[369 G] (Per Bhagwati, Iyer and Desai, JJ.) Irrespective whether the impugned Act is constitutionally valid or not, the Corporation is bound to obey the Writ of Mandamus issued by the, High Court and to pay annual cash bonus for the year 1975 76 to Class III and Class IV employees.
[352 D E] 1.
Section 3 of the impugned Act merely provided that the provisions of the Settlement, in so far as they related to payment of annual cash bonus to Class in and Class IV employees, shall not have any force or effect and shall not be deemed to have had any force or effect from April 1, 1975.
The writ of Mandamus issued by the High Court was not touched by the impugned Act.
The right of the employees to annual cash bonus ' for the year 1975 76 became 337 crystallised in the judgment and this right was not sought to be taken away by the impugned Act.
The Judgment continued to subsist and the corporation was bound to pay bonus in obedience to the writ of Mandamus.
By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the Corporation could have successfully contended in the appeal that since the Settlement, in so far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975 and so the employees were not entitled to bonus for the year 1975 76 and hence no writ of Mandamus could issue against the Corporation directing it to make payment of bonus.
If such contention had been raised, there is little doubt that the judgment of the single Judge would have been upturned.
But that was not done, and the judgment of the single Judge became final and binding oil the parties.
[353 A F, 355 C] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality, [1970] 1 SCR 358 and Patel Gordhandas Hargovindas vs Municipal Commissioner, Alimedabad, ; ; distinguished and held inapplicable. 2(a).
The argument on behalf of the Corporation that on a proper interpretation of the clauses annual cash bonus payable under cl.
8(ii) was, by reason of cl.
8(i) subject to the directions issued by the Central Government from time to time and the Government having stopped further payment of bonus, the employees were not entitled to claim annual cash bonus, is erroneous.
The employees had absolute right to receive annual cash bonus from the Corporation in terms of el. 8(ii) and it was not competent to the Central Government to issue any directions to the Corporation to refuse or withhold payment of the same.
[356 D H] (b) Although under regulation 58 of the Service Regulations non profit sharing bonus could be granted subject to the directions of the Central Government and if the Government issues a direction to the contrary bonus could not be paid by the Corporation, in the instant case, as provided in cl. 12 of the Settlement, the Central Government approved the payment of bonus under cl. 8(ii).
That having been done it was not competent to the Central Government thereafter to issue another contrary direction which would have the effect of compelling the Corporation to commit a breach of its obligation under section 18(1) of the to pay annual cash bonus under clause 8(ii).
The overriding power given to the Central Government to issue directions from time to time contained in cl.
8(i) is conspicuously absent in cl. 8(ii).
The power contained in cl.
8(i) cannot be projected or read into cl. 8(ii).
These two clauses are distinct and independent.
While cl. 8(i) is a general provision, el. 8(ii) specifically provides that cash bonus in the manner prescribed therein shall be paid to the employees.
This specific provision is made subject only to the approval of the Central Government, which was obtained.
[357 A F] (c) Moreover, under cl.
8(ii) read with the administrative instruction issued by the Corporation, annual cash bonus accrued from day to day, though payable in case of retirement, resignation or death on the happening of that contingency and otherwise on the expiration of the year to which the bonus related, Thus the annual cash bonus payable for the year 1975 76 was a debt due and owing from the Corporation to each of the employees.
, On the date when the impugned Act came into force each of the employees was entitled to a debt due and owing to him from the Corporation.
[357 H, 358 A] 3(a) The impugned Act must be held to be violative of article 31(2) since it did not provide for payment of any compensation for the compulsory acquisition of the debts.
[369 C] (b) The direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of cash bonus to the Life Insurance Corporation and since the Corporation is a Corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of the debts by the State within the meaning of article 31(2A).
1369 B C] 338 (c) Choses in action can be acquired by the State.
So long as the acquisition sub serves a public purpose, it would satisfy the requirement of article 31(2).
There is a fundamental distinction between a chose in action and money.
A chose in action has not the same mobility and liquidity as money, and its value is not measured by the amount recoverable under it but depends on a variety of factors.
Where money is given as compensation for taking money the theory of forced loan may apply, but it is not applicable where a chose in action is taken and money representing its value is given as compensation.
[363 A, D F] R. C. Cooper vs Union of India, ; ; Madhav Rao Scindia vs Union of India : ; reiterated.
State of Bihar vs Kameshwar Singh, ; State of Madhya Pradesh vs Ranojirao Shinde, ; ; dissented; Deokinandan Prasad vs State of Bihar, [1971] Suppl.
S.C.R. 634; State of Punjab vs K. R. Erray & Sobhag Rai Mehta, ; ; State of Gujarat, vs Sri Ambica Mills Ltd., ; and Slat(, of Kerala vs The Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd., ; followed; State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489; State of Bihar vs Kameshwar Singh, and Bombay Dyeing and Manufacturing Co. Ltd. vs State of Bombay, ; explained; ; and ; held no longer good law.
(d) The debts due and owing from the Corporation in respect of annual cash bonus were clearly property of the employees within the meaning of article 31(2) and they could be compulsorily acquired under article 31(2).
Similarly their right to receive cash bonus for the period from the date of commencement of the impugned Act upto March 31, 1977 was a legal right enforceable through Court of law.
[360 B C] (a) Property within the meaning of articles 19(1)(f) and 31(2) comprises every form of property, tangible or intangible, including debts and choses in action such is unpaid accumulation of wages, pension, cash grants etc.
[360 A] R. C. Cooper vs Union of India, ; ; H. H. Maharajadhiraja Madhay Rao Jiwaji Rao Scindia Bahadur & Ors.
vs Union of India; , ; State of M.P. vs Ranojirao Shinde & Anr., ; ; Deokinandan Prasad vs State of Bihar, [1971] Supp.
S.C.R. 634; State of Punjab vs K. R. Erry & Sobhag Rai Mehta, [1973] 2 S.C.R. 485; and State of Gujarat & Anr vs Shri Ambica Mills Ltd., Ahmedabad, ; referred to.
4(a) The contention of the Corporation that when ownership of a debt is transferred it continues to exist as a debt but that when the debt is extinguished it ceases to exist as a debt and that extinguishment of a debt does not therefore involve transfer of ownership of the debt to the debtor is not well founded.
Where, by reason of extinguishment of a right or interest of a person, detriment is suffered by him and a corresponding benefit accrues to the State, there would be transfer of ownership of such right or interest to the State.
The question would always be : who is the beneficiary of the extinguishment of the right or interest effectuated by the law ? If it is the State, then there would be transfer of ownership of the right or interest to the State, because what the owner of the right or interest would lose by reason of the extinguishment would be the benefit accrued to the State [367 H, 368 B C] (b) Extinguishment of the debt of the creditor with corresponding benefit to the State or State owned/controlled Corporation would involve transfer of ownership of the amount representing the debt from the former to the latter.
This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the State or State owned/controlled Corporation cannot obtain benefit at the cost of the creditor and yet avoid ' the applicability of 339 article 31(2).
The verbal veil constructed by employing the device of extinguishment of debt cannot lot permitted to conceal or hide the real nature of the transaction [368 F B]
|
ivil Appeal No. 528 of 1963.
Appeal from the 'judgment and order dated March 28, 1962 of the Rajasthan High Court in D.B. Civil Writ Petition No. 164 of 1961.
G.S. Pathak, K. Jinder, B. Dutta, d.
B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellant.
G.S. Kasliwal, Advocate General for the State of Rajasthan, S.K. Kapur and B.R.G.K. Achar, for the respondents.
October 3, 1963.
The Judgment of the Court vas delivered by SHAH J.
By order of the President of India, H.H. the Maharana Sahib Shri Bhagwat Singh Bahadur hereinafter called 'the appellant ' was recognised 3 as the Ruler of Udaipur with effect from July 4, 1955 in succession to his father the late Maharana Bhupal Singh.
A, dispute arose between the appellant and his employees in the "Motor Garage Department" about the conditions of employment and representations were made by the latter to the Government of Rajasthan through the Motor Workers Mazdoor Union, Udaipur.
The Government of the State of Rajasthan, on December 18, 1957 referred under section 10 of the (14 of 1947), the following dispute to the Industrial Tribunal, Rajasthan: "Whether the Maharana Sahib Bahadur of Udaipur is liable to pay to the staff working with him in the Palace Power House and Motor Garage, consequent to their retrenchment, the arrears of claims or the due salary, leave wages, overtime wages and weekly holidays as per schedule appended here to and if so, to what extent.
If not.
to what relief the staff is entitled to under the provisions of the , as the question of payment of the claims has arisen with the termination of their services due to retrenchment effected by the employers.
" Two preliminary objections were raised before the Industrial Tribunal by the appellant against the maintainability of the reference: (1) That the reference to the Industrial Tribunal for adjudication of the dispute was not maintainable without the previous sanction of the Central Government to the making of the reference.
(2) That on the date when the reference was made no Industrial Tribunal was constituted under section 7A of the , as amended by Act 36 of 1956, and on reconstitution of the Tribunal, the reference became incompetent.
The Tribunal rejected both the objections and a writ petition filed by the appellant challenging the 4 validity of the order of the Tribunal was dismissed by the High Court of Rajasthan.
The appellant has appealed to this Court, with certificate granted by the High Court of Rajasthan.
The appellant contends in the first instance that without the sanction of the Union Government under section 87B of the Code of Civil Procedure, the reference to the Industrial Tribunal was incompetent.
But the dispute between the parties relates to the claim made by the employees for retrenchment and other compensation and leave facilities: the dispute is raised before the Industrial Tribunal in a reference under the , and not before a civil court in a suit.
The appellant is therefore not "sued" in a court.
Section 86 Code of Civil Procedure on which reliance is placed by the first sub section provides that: "No Ruler of a foreign State may be sued in any Court otherwise competent to try the suit except with the consent of the Central Government certified 111 writing by a Secretary to that Government :" and by section 87B the provisions of section 86 apply in relation to the Ruler of any former Indian State as they apply in relation to the Ruler of a foreign State.
The appellant is recognised under article 366(22) of the Constitution as a Ruler of an Indian State, but section 86 in terms protects a Ruler from being "sued" and not against the institution of any other proceeding which is not in the nature of a suit.
A proceeding which does not commence with a plaint or petition in the nature of a plaint or where the claim is not in respect of a dispute ordinarily triable in a civil court, would prima facie not be regarded as falling within section 86 Code of Civil Procedure.
The proceeding for adjudication under the is rounded in a reference made by the local Government under section 10 and the allied sections under the and is not commenced by a plaint or petition.
An Industrial Tribunal is again not a court within the meaning of section 86: it is a Tribunal consti 5 tuted for adjudicating industrial disputes.
Section 86 of the Code excludes the jurisdiction of the civil courts and must be strictly construed.
It does not debar the commencement of proceedings for adjudication of an industrial dispute for two reasons: neither party to the proceeding is sued by the initiation of the proceeding, and the Tribunal is not a court.
It was urged however that by article 362 of the Constitution the personal rights, privileges and dignities of the Ruler of an Indian State guaranteed or assured under any agreement or covenant made prior to the Constitution are preserved, and a fetter is placed upon the exercise of power, legislative and executive, of the Union and the States, against infringement of the guarantee or assurance given under the covenant or agreements entered into by a Ruler of an Indian State.
Consequently, it is submitted, as a Ruler of an Indian State the appellant is entitled to the same privileges which a sovereign enjoy,, under rules of International Law against foreign jurisdiction, and the same immunity from being proceeded against either in the ordinary or extraordinary civil or criminal tribunals, and from payment of all taxes, and being subjected to police or other administrative regulations.
The position of the former Rulers of Indian States has, since the year 1947, been fundamentally altered.
Prior to 1947 the Indian princes were, notwithstanding the varying degree of suzerainty exercised over them by the British Crown, recognised as having a. degree of sovereignty and were in an international sense regarded qua British India as foreign sovereigns, and entitled to certain rights, privileges and immumties.
On the enactment of the Indian Independence Act, the suzerainty which the British Crown had over the Indian States lapsed and with it all the treaties and agreements in force at the date of the passing of the Act between His Majesty and the Rulers of the Indian States, all functions exercisable by His Majesty at that date with respect to Indian States, all obligations of His Majesty exist 6 ing at that date towards Indian States or the Rulers thereof and all powers, rights, authority or jurisdiction exercisable by His Majesty at that date in or in relation to Indian States by treaty, grant, usage, sufferance or otherwise also came to an end.
Like other States the State of Udaipur executed an agreement of accession and thereby in matters of defence, external affairs and communications concerning the State, the Government of India assumed sole responsibility.
This accession was followed by a process of integration of the Indian States in Rajasthan which culminated in the formation of the United State of Rajasthan.
The Rulers of the Indian States in the Rajasthan area including the Ruler of Udaipur formed the United State of Rajasthan, under a covenant the provisions whereof were guaranteed by the Government of India.
This covenant was modified by an agreement which became effective from May 15, 1949.
On the enactment of the Constitution on January 26, 1950 the Union of Rajasthan became one of the Part 'B States, and by the Constitution (Seventh Amendment) Act, 1956, the Part 'B ' State of Rajasthan was recognised as one of the States in India.
As a result of the constitutional developments leading to the promulgation of the Constitution the father of the appellant who was at one time recognised as a sovereign of an independent State acquired the status of a citizen of India.
The appellant has also, since the Constitution, been a citizen of India, and his recognition as Ruler under article 366(22) of the Constitution has not altered his status, but as a citizen he is undoubtedly assured a privileged position.
The covenant of the United State of Rajasthan to which the appellant 's father as the Ruler of Udaipur was a party consists of 20 articles.
It would be fruitless for the purpose of this appeal to catalogue all the articles dealing with the rights, privileges and dignities of the Ruler of Udaipur.
A few only need be set out.
By article XI as Ruler of a covenanting State he was entitled to receive annually from the revenues of the United State of Rajasthan for his 7 privy purse the amounts specified against his State in Sch.
1 thereof.
By article XII he remained entitled to the full ownership, use and enjoyment of all private properties (as distinct from State properties), belong ing to him on his making over the administration of that State to the Raj Pramukh.
By article XIII the Ruler of each covenanting State, as also the members of his family, were entitled to all the personal privileges, dignities and titles enjoyed by them, whether within or outside the territories of the State, immediately before August 15, 1947, and by article XIV the succession, according to law and customs, to the gaddi of each covenanting State, and the personal rights, privileges, dignities and titles of the Ruler were guaranteed.
By article XV guarantee was given against any action or proceeding in any court whether in a personal capacity or otherwise, in respect of anything done or omitted to be done by him or under his authority during the period of his administration of that covenanting State.
The covenant is in general terms, and does not purport to make a comprehensive list of the personal rights, privileges and dignities except those which have been specifically referred to.
The agreement which came into force on May 15, 1949 makes no departure from the articles of the covenant.
The covenant which was entered into by the Rulers of the Indian States in Rajasthan and the agreement of May 15, 1949, had the concurrence of the Government of India and the provisions thereof were guaranteed by the Government of India.
In order to give constitutional recognition to the guarantees and assurances under the covenants and agreements articles 362, 363, 131 proviso and 291 were incorporated in the Constitution.
Article 362 with which we are directly concerned provides: "In the exercise of the power of Parliament or of the Legislature of a State to make laws or in the exercise of the executive power of the Union or of a State, due regard shall be had to the guarantee or assurance given under any such covenant or agreement as is referred to in article 8 291 with respect to the personal rights, privileges and dignities of the Ruler of an Indian State." The Article declares that in the exercise of legislative and executive power by the Union and the State due regard shall be had to the guarantee or assurance given under any covenant or agreement with respect to the personal rights, privileges and dignities of the Ruler of an Indian State.
It must be emphasized, that these rights, privileges and dignities which are, for historical reasons, recommended to be respected, avail the Rulers in their status as Indian citizens and not in recognition of any sovereign authority continuing to remain vested in them.
It is in that view unnecessary to enter upon a discussion as to.
what immunities and privileges, a foreign sovereign would be entitled to in the Republic of India.
The question on which attention must be concentrated is: does the reference of the industrial dispute by the Government of the State of Rajasthan which attracts the application of the , trench upon the guarantee or assurance under the covenant executed by the appellant 's father, with respect to the personal rights privileges and dignities of the Ruler of the State of Udaipur, and if it does so trench, are the courts competent to grant relief ? The , as originally enacted applied to British India.
But by the amendment made by the Industrial Disputes (Appellate Tribunal) Act (48 of 1950), section 34 and the Schedule thereto, the Act was extended to the whole of India except the State of Jammu and Kashmir, and since then by the enactment of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 36 of 1956, the Act extends to the whole of India.
The , therefore, applied at the material time to the territory of Rajasthan.
The appellant is a citizen of India, the Act extends to the territory of Rajasthan and prima facie he is governed by the provisions of the Act.
The plea raised by the appellant is that by virtue of article 362 of the Constitution reference of an 9 industrial dispute under the machinery provided under the Act for settlement of industrial disputes infringes the guarantee or assurance in respect of his personal rights, privileges and dignities assured to him by the covenant which formed the Union of Rajasthan.
But the plea of immunity from the jurisdiction of the Industrial Tribunal, in the matter of adjudication of an industrial dispute, because it was a personal right or privilege, was never raised in the High Court, and no evidence has been led in that behalf.
As observed in the White Paper on Indian States, para 240 at p. 125, the rights enjoyed by the Rulers varied from State to State and were exercisable both within and without the States.
They covered a variety of matters ranging from the use of red plates on cars to immunity from civil and criminal jurisdiction, and exemption from customs duties etc.
In truth no reliance at all was placed on article 362 of the Constitution in the High Court.
In the absence of evidence directed to the question whether the appellant as "Ruler of the Indian State of Udaipur" was entitled by virtue of the covenant or agreement relied upon by him to the privilege of not being proceeded against in the Industrial Tribunal, we would not be justified in entertaining his plea.
It may also be mentioned that if exemption from the jurisdiction of the Industrial Tribunal be claimed relying on the guarantee or assurance under the covenant being disputed, the questions whether the courts have jurisdiction to deal with the dispute if the covenant or the agreement was one of the nature referred tO in article 363, or the dispute relates to any right accruing under or liability or obligation arising out of any provisions of the Constitution relating to such treaty, agreement etc., may fail to be determined.
This Court in Sudhansu Shekhar Singh Deo vs State of Orissa(1) observed at p. 786: "If, despite the recommendation that due regard shall be had to the guarantee or assurance given under the covenant or agreement, the Parliament or the Legislature of a State makes laws inconsis (1) [1961] 1 S.C.R.779,786. 10 tent with the personal rights, privileges and dignities of the Ruler of an Indian State, the exercise of the legislative authority cannot, relying upon the agreement or covenant, be questioned in any court, and that is so expressly provided by article 363 of the Constitution." But whether the bar to the jurisdiction of a court arising out of article 363 can be effectively pleaded has, it must be observed, not been investigated before the High Court.
It was also not raised before us: it has fallen to be mentioned by us because it arises out of the plea raised for the first time before this Court in which reliance is placed on article 362 by the appellant.
We therefore decline to express any opinion on the questions whether by article 362 the appellant is privileged against a reference under the and also whether the courts have jurisdiction to adjudicate upon the plea set up by the appellant.
The second contention was, in our judgment, rightly negatived by the High Court.
The was applied to the territory of Rajasthan by the Industrial Disputes (Appellate Tribunal) Act (48 of 1950), and an Industrial Tribunal was thereafter constituted by notification dated June 2, 1953, under section 7 of that Act.
The was, however, amended by the Industrial Disputes (Amendment and Miscellaneous Provisions) Act (36 of 1956), and section 7 as originally enacted was deleted and in lieu thereof sections 7, 7A. 7B and 7C were enacted.
The power to appoint an Industrial Tribunal was, under the amended act, conferred upon the appropriate Government by section 7A.
But it appears that no fresh notification appointing the Tribunal was issued under section 7A, and the Tribunal originally constituted under section 7 'functioned.
To that Tribunal reference of the present dispute was made by order dated December 18, 1957.
The High Court of Rajasthan in Writ Petition No. 107 of 1958 Mundra Metal Works Private Ltd. vs The State of Rajasthan and two others held that the reference made to the Tribunal which was constituted under section 7 of the Industrial 11 Disputes Act before it was amended by Act 36 of 1956 was incompetent.
The State Government then reconstituted the Tribunal under section 7A of the Act by notification dated April 16, 1959, but no fresh 3 reference of the dispute in the present case was made by the State Government to the reconstituted Tribunal.
Relying upon this development the appellant urged that the Tribunal reconstituted by notification dated April 16, 1959 had no jurisdiction to entertain the reference originally made, and in the absence of a fresh reference to the reconstituted Tribunal the proceeding was incompetent.
He also urged that the constitution and the appointment of the Tribunal made after March 30, 1959 were invalid.
It is unnecessary however to consider the merits of these contentions because the Legislature has remedied the defects, if any, in the constitution of the Tribunal, by enacting the Rajasthan Industrial Tribunal (Constitution and Proceedings) Validating Act, 1959, which was reserved for the consideration of the President of India and has received his assent.
By section 2(1) of ' that Act, notwithstanding any judgment, decision or order of any court and notwithstanding any defect or want of form or jurisdiction, the Industrial Tribunal for Rajasthan, constituted under section 7 of the , by Government notification dated the 2nd June, 1953, as amended by order dated the 9th March, 1956, shall, as respects the period commencing on the 10th day of March 1957 and ending with the 15th day of April, 1959, be deemed to have been duly constituted under section 7A of the said Act.
By sub section
(2) it is provided that notwithstanding any judgment, decision or order of any court all references made to and all proceedings taken and orders passed by the Industrial Tribunal constituted in sub section
(1) between the period 10th March., 1957 and 15th April, 1959, shall be deemed respectively to have been made, taken and passed as if the said Tribunal were constituted under section 7A of the Act.
It is clear from the validating provisions that the Tribunal originally constituted under section 7 of the , before it was amended by Act 36 Of 1956 is to be deemed to 12 have been duly constituted under s.7A, and the reference made on December 18, 1957 is to be deemed to have been made as if the Tribunal were constituted under section 7A of the amended Act.
The Validating Act is, because of Item 22, List III of the Seventh Schedule to the Constitution, within the competence of the State Legislature, and it was reserved for the consideration of the President and has received his assent.
It must by virtue of article 254(2) prevail in the State of Rajasthan.
The contentions raised in this appeal must therefore fail.
The appeal is dismissed with costs.
Appeal dismissed.
| The appellant was in the service of Union of India, his appointment being temporary liable to be terminated on one month 's notice on either side.
He was appointed in June 1949.
On August 1954 he was informed that his services would be terminated from September 1954.
No cause was assigned for the termination of his services and no opportunity was given to him of showing cause against the action taken against him.
Before such termination the appellant was called upon to explain certain irregularities and was also asked to submit his explanation and to state why disciplinary action should not be taken against him.
Certain preliminary enquiries were held against him but he was not heard therein.
No regular departmental enquiry however followed and the proceedings were dropped.
Claiming that he is a quasi permanent servant he brought a suit against the Union of India alleging that the termination of his service was not justified.
He prayed in the suit for a declaration that the termination of his service was illegal.
He also claimed arrears of salary.
The trial Court dismissed the suit and he appealed to the High Court 191 without success.
The present appeal was filed on a certificate granted by the High Court.
The first contention raised by the appellant was that he was a quasi permanent employee and r. 5 of the Central Civil Service (Temporary Service) Rules, 1949 did not apply to him.
Secondly it was contended that r. 5 was invalid as it was hit by article 16 of the Constitution and in any event the action taken against him was discriminatory and therefore hit by article 16.
It was further contended that even if the appellant was a temporary servant he was entitled to the protection of article 311 (2) of the Constitution.
: (i) Sub cls.
(1) and (2) of r. 3 should be read conjunctively and not disjunctively and both the conditions contained therein should be fulfilled before a Government servant can be deemed to be in quasi permanent service.
The Government servant has to show that he has been in continuous Government service for more than three years and that the appointing authority has made a declaration under sub cl.
(2) of r. 3.
This being the position, since no declaration has been made in his case, the appellant cannot claim the benefits of r. 6 which places a quasi permanent servant and a permanent servant on the same footing in the matter of termination of service.
Hence he cannot claim the protection of article 311(2) on the ground that he must be deemed to be in quasi permanent service.
B.M. Pandit vs Union of India, A.I.R. 1962 Bom.
45, Purshottarn Lal Dhingra vs Union of India, ; and K.S. Srinivasan vs Union of India, ; , distinguished.
(ii) R. 5 which provides for termination of the services of a temporary Government servant by giving him one month 's notice is not hit by article 16.
The classification of Government servants into permanent, quasi permanent and temporary is reasonable and differences in the matter of termination of service between these classes cannot be said to be discriminatory.
(iii) Where termination of service of a temporary Government servant takes place as it has taken place in the present ease, on the ground that his conduct is not satisfactory there cannot be any question of any discrimination.
The contention of the appellant that he was denied the protection of article 16 and was treated in a discriminatory manner is rejected.
(iv) Temporary Government servants are also entitled to the protection of article 311(2) in the same manner as a permanent Government servants, if the Government takes action against them by meting out one of the three punishments i.e. dismissal, removal or reduction in rank.
purshottam Lal Dhingra vs Union of India, ; Held, that when a preliminary enquiry is held to determine whether a prima facie case for a formal departmental enquiry is made out in the case of a temporary employee or a Government servant holding a higher rank temporarily there is no question 192 of its being governed by article 311(2).
Such a preliminary enquiry may even be held ex parte.
It is only when the Government decides to hold a regular departmental enquiry for the purpose of inflicting one of the three major punishments that the Government servant gets the protection of article 311.
Shyamlal vs State of U.P. ; and Purshottam Lal Dhingra vs Union of India, ; , explained.
Held, that even if a departmental enquiry against the appellant was contemplated it was not pursued and no punitive action was taken against him on the basis of the memorandum issued to him.
Simply because the Government issued such a memorandum but later decided not to hold a departmental enquiry for taking punitive action, it cannot be said that the Government can never thereafter proceed to take action under the terms of r. 5 even though it is satisfied otherwise that the appellant 's conduct and work are unsatisfactory.
Madan Gopal vs State of Punjab, [1963] 3 S.C.R. 716, State of Bihar vs Gopi Kishore Prasad, A.I.R. 1960 S.C. 689.
State of Orissa vs Ram Narayan Das, ; and, Jagdish Mitter vs Union of India, A.I.R. distinguished.
|
Appeals Nos. 272 to 274 of 1966.
Appeals by special leave from the judgment and order dated July 28, 1961 of the Madras High Court in O.S.A. Nos. 65, 70 and 71 of 1956.
K.N. Balasubramaniam and R. Thiagarajan, for the appel lant (in all the appeals).
R.Gapalakrishnan, for respondents Nos. 2 to 4 (in C.A. No. 272 of 1966), respondents Nos. 1 and 2 (in C.A. No. 273 of 1966) and respondent No. 1 (in C.A. No. 274 of 1966).
The Judgment of the Court was delivered by Bachawat, J.
On February 23, 1953 the appellant instituted C.S. No. 56 of 1953 on the Original Side of the Madras High Court under the summary procedure of Order 7 of the Original Side Rules against Hajee Ahmed Batcha claiming a decree for Rs. 40,556/1/2/ and Rs. 8,327/12/9/ said to be due under two I promissory notes executed by Haji Ahmed Batcha.
On March 9 1953, Hajee Ahmed Batcha obtained leave to defend the suit on condition of his furnishing the security for a sum of 516 Rs. 50,000 to the satisfaction of the Registrar of the High Court.
On March 26, 1953 Hajee Ahmed Batcha executed a security bond in favour of the Registrar of the Madras High Court charging several immoveable properties for payment of Rs. 50,000.
The condition of the bond was that if he paid to the appellant the amount of any decree that might be passed in the aforesaid suit the bond would be void and of no effect and that otherwise it would remain in full force.
The bond was attested by B. Somnath Rao.
It was also signed by K. section Narayana Iyer, Advocate, who explained the document to Hajee Ahmed Batcha and identified him.
All the properties charged by the bond are outside the local limits of 'the ordinary original jurisdiction of the Madras High Court.
The document was presented for registration on March 29, 1.953 and was registered by D. W. Kittoo, the Sub Registrar of Madras Chingleput District.
Before the Sub Registrar, Hajee Ahmed Batcha admitted execution of the document and was identified by Senkaranarayan, and Kaki Abdul Aziz.
The identifying witnesses as also the Sub Registrar signed the document.
Hajee Ahmed Batcha died on February 14, 1954 and his legal representatives were substituted in his place in C.S. No. 56 of 1953.
On March 19, 1954 Ramaswami, J. passed a decree for Rs. 49,891/13/ with interest and costs and directed payment of the decretal amount on or before April 20, 1954.
While passing the decree, he observed : "It is stated that the defendant has executed a security bond in respect of their immoveable properties when they obtained leave to defend and this will stand enured to the benefit of the decree holder as a charge for the decree amount.".
Clauses 3 and 4 of the formal decree provided "(3) that the security bond executed in respect of their immoveable properties by defendants 2 to 4 in pursuance of the order dated 9th March 1953 in application No. 797 of 1953 shall stand enured to the benefit of the plaintiff as a charge for the a amounts mentioned in clause 1 supra; (4).that in default of defendants 2 to 4 paying the amount mentioned in clause 1 supra on or before the date mentioned in, clause 2 supra the plaintiff shall be at liberty to apply for the appointment of Commissioners for, sale of the aforesaid properties.
" The appellant filed an application for (a) making absolute the charge decree dated March 31, 1954 and directing sale of the properties; and (b) appointment of Commissioners for selling them.
On April 23, 1954 the Court allowed the application, appointed Commissioners for selling of the properties and directed that the relevant title deeds and security bond be handed over 5 17 to the Commissioners.
The Commissioners sold the properties on May 29 and 30, 1954.
The sales were confirmed and the sale proceeds were deposited in Court on July 2, 1954.
All the three respondents are simple money creditors of Hajee Ahmed Batcha.
The respondents Venkata Sastri & Sons filed O.S. No ' 13 of 1953 in the Sub Court, Vellore, and obtained a decree for Rs. 5,500 on March 27, 1953.
Respondent H.R. Cowramma instituted O.S. No. 14 of 1953 in the same Court and obtained a money decree on April 14, 1953.
The two decree holders filed applications for execution of their respective decrees.
One Rama Sastri predecessors of respondents H.R. Chidambara Sastri and H.R. Gopal Krishna Sastri obtained a money decree against Hajee Ahmed Batcha in O.S. No. 364 of 1951/52 in the Court of the District Munsiff, Shimoga, got the decree transferred for execution through the Court of the District Munsiff, Vellore, and filed an application for execution in that Court.
On June 7, 1954 the aforesaid respondents filed applications in the Madras High Court for (i) transfer of their execution petitions pending in the Vellore courts to the file of the High Court and (ii) an order for rateable distribution of the assets realized in execution of the decree passed in favour of the appellant in C.S. No. 56 of 1953.
The appellant opposed the applications and contended that as the properties were charged for the payment of his decretal amount, the sale proceeds were not available for rateable distributing amongst simple money creditors.
The respondents contended that the security bond was invalid as it was not attested by two witnesses and that the decree passed in C.S. No. 56 of 1953 did not create any charge.
Balakrishna Ayyar, J. dismissed all the applications as also exemption petitions filed by the respondents.
He held that the decree in C.S. No. 56 of 1953 did not create a charge on the properties.
But following the decision in Veerappa Chettiar vs Subramania(1) he held that the security bond was sufficiently attested by the Sub Registrar and the identi fying witnesses.
The respondents filed appeals against the orders.
On March 28, 1958 the Divisional Bench hearing the appeals referred to a Full Bench the following question "Whether the decision in Veerappa Chettiar vs Subramania lyer (I.L.R. requires reconsideration.
" The Full Bench held "In our opinion, such signatures of the registering officer and the identifying witnesses endorsed on a mortgage document can be treated as those of attesting witnesses if ' (1) the signatories are those who have seen the execution or received a personal acknowledgment (1) I.L.R. 518 from the executant of his having executed the document, (2) they sign their names in the presence of the executant and (3) while,so doing they had the animus to attest.
The mere presence of the signatures of the registering officer or the identifying witnesses on the registration endorsements would not by themselves be sufficient to satisfy the requirements of a Valid attestation; but it would be competent for the parties to show by evidence that any or all of these persons did in fact intend to and did sign as attesting witness as well.
" The Full Bench held that the decision in Veerappa Chettiar 's Case(1) can be held to, be correct to this limited extent only and not otherwise.
At the final hearing of the appeals, the Divisional Bench held that ( 1 ) a charge by act of parties could be created only by a document registered and attested by two witnesses; (2) the security bond was not attested by two witnesses and was therefore invalid; (3) the decree in C.S. No. 56 of 1953 should be construed as containing nothing more than a recital of the fact of there having been a security bond in favour of the plaintiff; and the sale in execution of the decree must be regarded as a sale in execution of a money decree; and (4) tie respondents were entitled to an order for rateable distribution.
Accordingly, the Divisional Banch allowed the appeals, directed attachment of the sale proceeds and declared that the respondents were entitled to rateable distribution along with the appellant.
The present appeals have been filed after obtaining special leave from this Court.
The following questions arise in these appeals : (1) Is the security bond attested by two witnesses; (2) if not, is it invalid? (3) does the decree in C.S. No. 56 of 1953 direct sale,of the properties for the discharge of a charge thereon, and (4) are the respondents entitled to rateable distribution of the assets held by court.? As to the first question, it is not the case of the appellant that K.S. Narayana Iyer is an attesting witness.
The contention is that the Sub Registrar D.W. Kittoo and the identifying witnesses Senkaranarayana and Kaki Abdul Aziz attested the document.
In our opinion, the High Court rightly rejected this contention.
Section 3 of the gives the definition of the word "attested" and is in these words : "Attested", in relation to an instrument, means and shall be deemed to have meant attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the (1) I.L.R. 519 direction of the executant, or has received from the executant a personal acknowledgment of his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant; but it shall not be necessary that more than one of such witnesses shall have been present it the same time and no particular form of attestation shall be necessary.
" It is to be noticed that the word "attested", the thing to be defined,.
occurs as part of the definition itself.
To attest is to bear witness.
to a fact.
Briefly put, the essential conditions of a valid attestation under section 3 are : (1 ) two or more witnesses.
have seen the executant sign the instrument or have received from him a personal acknowledgment of his signature; (2) with a view to attest or to bear witness to this fact each of them has.
signed the instrument in the presence of the executant.
It is essential that the witness should have put his signature animo attestandi, that is, for the purpose of attesting that he has seen the executant sign or has received from him a personal acknowledgment of his signature.
If a person puts his signature on the document for some other purpose, e.g., to certify that he is a scribe or an identifier or a registering officer, he is not an attesting witness.
"In every case the Court must be satisfied that the names were written animo attestandi", see Jarman on Wills, 8th ed. 137.
Evidence is admissible to show whether the witness had the intention to attest.
"The attesting witnesses must subscribe with the intention that the subscription made should be complete attestation of the will, and evidence is admissible to show whether such was the intention or not," see Theobald on Wills, 12th ed.
p. 129.
,In Giria Datt vs Gangotri (1)the Court held that the two persons who had identified the testator at the time of the registration of the will and had appended their signatures at the foot of the endorsement by the Sub Registrar, were not attesting witnesses.
as their signatures were not put "animo attestandi".
In Abinash Chandra Bidvanidhi Bhattacharya vs Dasarath Malo(2) it was held that a person who had put his name under the word "scribe" was not an attesting witness as he had put his signature only for the purpose of authenticating that he was a "scribe".
In Shiam Sundar Singh vs Jagannath Singh (3) the Privy Council held that the legatees who had put their signatures on the will in token of their consent to its execution were not attesting witnesses and were not dis qualifled from taking as legatees.
The Indian lays down a detailed pro cedure for registration of documents.
The registering officer is; (1) A.I.R. 1955 S.C. 346,351.
(3) (2) I.L.R. 5 under a duty to enquire whether the document is ' executed by the person by whom it purports to have been executed and to satisfy himself as to the identity of the executant, section 34(3).
He can register the document if he is satisfied about the identity of the person executing the document and if that person admits execution, [section 25(1)].
The signatures of the executant and of ,every person examined with reference to the document are endorsed on the document, (section 58).
The registering officer is required to affix the date and his signature to the endorsements (section 59).
Prima facie, the registering officer puts his signature on the document in discharge of his statutory duty under section 59 and not for the purpose of attesting it or certifying that he has received from the executant a personal acknowledgment of his signature.
The evidence does not show that the registering officer D.W. Kitto put his signature on the document with the intention of attesting it.
Nor is it proved that he signed the document in the presence of the executant.
In these circumstances he cannot be regarded as an attesting witness see SurendraBahadur Singh vs Thakur Behari Singh(1).
Like identifying witnesses Senkaranarayana and Kaki Abdul Aziz signatures on the document to authenticate the fact that they have identified the executant.
It is not shown that they put their signatures for 'the purpose of attesting the document.
They cannot therefore be regarded as attesting witnesses.
It is common case that B. Somnath Rao attested the document.
It follows that the document was attested by one witness only.
As to the second question, the argument on behalf of the respondents is that section 100 of the attracts section 59 and that a charge can be created only by a document signed, registered and attested, by two witnesses in accordance with section 59 where the principal money secured is Rs. 100 or upwards.
The High Court accepted this contention following its earlier decisions in Viswanadhan vs Menon(2) and Shiva Rao vs Shanmugasundara swami (3) and held that the security bond was, invalid, as it was swami attested b one witness only.
We are unable to agree with this opinion.
Section 100 is in these terms "Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property ', and all the provisions hereinbefore contained which apply to a simple mortgage shall, so" far as may be, apply to such charge.
(1) (2) I.L.R. [1939].Mad.
(3) I.L.R. [1940] mad.
521 Nothing in this section applies to the charge of a trustee on the trust property for expenses property incurred.
in the execution of his trust, and, save as otherwise expressly provided by any law for the time being in force no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.
The first paragraph consists of two parts.
The first part concerns the creation, of a charge over immoveable property.
A charge may be made by act of parties or by operation of law.
No restriction is put on the manner in which a charge can be made.
Where such a charge has been created the second part comes into play.
It provides that all the provisions hereinbefore contained which apply to a simple mortgage shall; so far as may be, apply to such charge.
The second part does not address itself to the question of creation of a charge.
It does not attract the provisions of section 59 relating to the creation of a mortgage.
With regard to the applicability of the provisions relating to a simple mortgage, the second part of the first paragraph makes no distinction between a charge created by act of parties and a charge by operation of law.
Now a charge by operation of law is not made by a signed, registered and attested instrument.
Obviously, the second part has not the effect of attracting the provisions of section 59 to such a charge.
Likewise the legislature could not have intended that the second part would attract the provisions of section 59 to a charge created by act of parties.
Had this been the intention of the legislature the second part would have been differently worded.
If a charge can be made by a registered instrument only in accordance with section 59, the subsequent transferee will always have notice of the charge in view of section 3 under which registration of the instrument operates as such a notice.
But the basic assumption of the doctrine of notice enunciated in the second paragraph is that there may be cases where the subsequent transferee may not have notice of the charge.
The plain implication of this paragraph is that a charge can be made without any writing.
If a non testamentary instrument creates a charge of the value of Rs. 100 or upwards, the document must be registered under section 17 (1) (b) of the Indian .
But there is no provision of law which requires that an instrument creating the charge must be attested by witnesses.
Before section 100 was amended by Act 20 of 1929 it was well settled that the section did not prescribe any particular mode of creating a charge.
The amendment substituted the words "all 522 the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge," for the words "all the provisions hereinbefore contained as to a mortgagor shall, so far as may be, apply to the owner of such property, and the provisions of sections 81 and 82 shall, so far as may be, apply to the person having such charge.
" The object of the amendment was to make it clear that the rights and liabilities of the parties in ,case of a charge shall,, so far as may be, the same as the rights, and liabilities of the parties to a simple mortgage.
The amendment was not intended to prescribe any particular mode for the creation of a charge.
We find that the Nagpur High Court came to a similar conclusion in Baburao vs Narayan(1).
It follows that the security bond was not required to be attested by witnesses.
It was duly registered and was valid and operative.
As to the third question, we find that the decree dated March 19, 1954 declared that the security bond in respect of the immovable I properties would enure for the benefit of the appellant as a charge for the decretal amount.
This relief was granted on the ,oral prayer of the plaintiffs.
We are unable to agree with the High Court that in view of the omission to amend the plaint by adding a prayer for enforcement of the charge, the decree should be construed as containing merely a recital of the fact that a security bond had been executed.
In our opinion, the decree on its true construction declared that the security bond created a charg e over the properties in favour of the plaintiffs for payment of the decretal amount and gave them the liberty to apply for sale of the 'properties for the discharge of the encumbrance.
Pursuant to the decree the properties were sold and the assets are now held by the Court.
The omission to ask for, an amendment of the plaint was an irregularity, but that does not affect the construction of the decree.
It was suggested that the decree was invalid as the High Court had no territorial jurisdiction under clause 12 of its Letters Patent to pass a decree for sale of properties outside the local limits of its ordinary original jurisdiction.
For the purpose of these appeals, it is sufficient to say that the respondents cannot raise this question in the present proceedings.
If the decree is invalid and the sale is illegal on this ground, the respondents cannot maintain their applications for rateable distribution of the assets.
They ,,can ask for division of the sale proceeds only on the assumption that the properties were lawfully sold.
It is therefore unnecessary to decide whether the objection as to the territorial jurisdiction of the High Court has been waived by the judgment debtor and cannot now be agitated by him and persons claiming through him, having regard to the decisions in Seth Hiralal Patni vs Sri Kali (1)I.L.R. ,1819 822., 523 Nath(1), Behrein Petroleum Co. Ltd., vs P. J. Pappu (2) , Zamindar of Etiyapuram vs Chidambaram Chetty(1).
As to the 4th question we find that the immoveable properties have been sold in execution of a decree ordering sale for the discharge of the encumbrance thereon in favour of the appellant.
Section 73(1) proviso (c) therefore applies and the proceeds of sale after defraying the expenses of the sale must be applied in the first instance in discharging the amount due to the appellant.
Only the balance left after discharging this amount can be dis tributed amongst the respondents.
It follows that the High Court was in error in holding that the respondents were entitled to rateable distribution of the assets along with the appellant.
In the result, the appeals are allowed, the orders passed by the Divisional Bench of the Madras High Court are set aside and the orders passed by the learned Single Judge are restored.
There will be no order as to costs.
G.C. Appeals allowed.
(1) ; ,751 2.
(2) ; ,462 3.
| The appellant filed suit No. 56 of 1953 against H for recovery of certain monies on the basis of promissory notes.
As the suit was under 0. 7 of the Madras High Court Original Side Rules H was given leave to defend it on furnishing certain security.
Accordingly H executed in favour of the Registrar, Madras High Court, a security bond charging certain properties 'for the payment of Rs. 50,000,.
The document was attested by only one witness.
At the time of registration it was signed by two identifying witnesses and the Sub Registrar.
The trial Judge decreed the appellant 's suit and the decree mentioned that the charge created by H 's security bond would enure for the benefit of the decree holder.
In execution proceedings the properties in question were sold and the proceeds deposited in court.
At this stage the three respondents who also held money decrees against H applied to the Court for ratable distribution of the assets realised in the execution of the appellant 's decree in suit No. 56 of 1953.
The trial Judge dismissed their applications.
In Letters Patent Appeals the High Court held that in the absence of attestation by the two witnesses the security bond executed by H was invalid inasmuch as a charge on property created under section 100 of the attracted the provisions of section 59.
As to the decree passed in suit No,.
56 of 1953 the High Court held that in view of the decree holder 's omission to amend the plaint by adding a prayer for enforcement of the charge the decree should be construed as containing merely a recital of the fact that a security bond had been executed.
On these findings the High Court held that the respondents were entitled to rateable distribution.
Against the High Court 's orders the appellant filed appeals in this Court.
On the question of attestation he contended that the sub Registrar and the two identifying witnesses must also be treated as having attested the security bond.
HELD : (i) The essential conditions of a valid attestation under section 3 of the are : (1) two or more witnesses have seen the executant sign the instrument or have received from him a personal acknowledgment of his signature; (2) with a view to attest or to hear witness to this fact each of them has signed 'the instrument in the presence of the executant.
It is essential that the witness should have put his signature animo attestendi, that is, for the purpose of attesting that he has seen the executant sign or has received from him a personal acknowledgment of his signature.
If a person puts his signature on the docu 514 meat for some other purpose, e.g., to certify that he is a scribe or an identifier or a registering officer, he is not an attesting witness.
[519 C D] Prima facie the registering officer puts his signature on the document in discharge of his statutory duty under section 59 of the and not for the purpose of attesting it or certifying that he has received from the executant a personal acknowledgment of his signature. [520 B C] In the present case the evidence did not show that the registering officer and the identifying witnesses signed the document with the intention of attesting it.
Nor was it shown that the registering officer signed it in the presence of the executant.
The document could not therefore be said to have been attested by these witnesses and must be held to have been signed by one attesting witness only.
[520 D] Veerappa Chettiar vs Subramania, I.L.R. , Girja Datt vs Gangotri, A.I.R. 1955 S.C. 346, Abinash Chandra Bidyanidhi Bhattacharya vs Dasarath Malo, I.L.R. 56 Cal.
598, Shiam Sundar Singh vs Jagannath Singh, 54 M.L.J,.
43 and Surendra Bahadur Singh vs Thakur Behari Singh, , referred to.
(ii)Section 100 of the does not attract the provisions of section 59.
[521 C D] The first paragraph of section 100 consists of two parts.
The first part concerns the creation of a charge over immovable property which may be by act of parties or by operation of law.
No restriction is put on the manner in which a charge can be made.
[521 C] When such a charge has been created the second part comes into play.
It provides that all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge.
The second part does not address itself to the question of creation of a charge.
It does not attract the provisions of section 59 relating to the creation of a mortgage.
The second part moreover makes no distinction between a charge created by act of parties and a charge by operation of law.
Obviously the provision of section 59 are not attracted to a charge by operation of law.
Likewise the legislature could not have intended that the second part would attract the provisions of section 59 to a charge created by act of parties.
[521 D E] If a charge can be made by a registered instrument only in accordance with section 59, the subsequent transferee will always have notice of the charge in view of section 3 of the Act.
But the basic assumption of the doctrine of notice enunciated in the second paragraph is that there may be cases when the subsequent transferee may not have notice of the charge.
The plain implication of this paragraph is that A charge can be made without any writing.
[521 F G] If a non testamentary instrument creates a charge of the value of Rs. 100/ or upwards the document must be registered under section 17(1) (b) of the Indian .
But there is no provision of law which requires that an instrument creating the charge must be attested by witnesses.
[521 G H] The object of the second part of the first paragraph of section 100 is to make it clear that the rights and liabilities of the parties in case of a charge shall so far as may be the same as the rights and liabilities of the parties of a simple mortgage.
It was not intended to prescribe any particular mode for the creation of a charge.
[522 B] 515 It followed that the security bond in the present case was not required to be attested by witnesses.
It was duly registered and was valid and operative.
[522 C] Viswanadhan vs Menon, I.L.R. and Shiva Rao vs Shanmugasundaraswami I.L.R. , disapproved.
Baburao vs Narayan, I.L.R. , 819 822, approved.
(iii)The decree in suit No. 56 of 1963 on its true construction declared that the security bond created a charge over the properties in favour of the plaintiffs for payment of the decretal amount and gave them the liberty to apply for sale of the properties for the discharge of the encumbrance.
Pursuant to the decree the properties were sold and the assets were held by the court.
The omission to ask for an amendment of the plaint was an irregularity, but that did not affect the construction of the decree.
[522 D E] (iv)The immovable properties had been sold in execution of a decree ordering sale for the discharge of the encumbrance thereon in favour of the appellant.
Section 73(1) proviso (c) therefore applied and the proceeds of the sale after defraying the expenses of the sale must be applied in the first instance in discharging the amount due to the appellant.
Only the balance left after discharging this amount could be distributed among the respondents.
[523 B] (v)Since the respondents ' own case rested on the assumption that the properties were lawfully sold they could not be allowed to raise the objection that the High Court had no territorial jurisdiction for sale of properties outside the local limits of its ordinary original jurisdiction.
[522 G] Seth Hiralal Patni vs Sri Kali Nath, ; , 751 52, Bahrein Petrolium Co. Ltd. vs P. J. Pappu, ; , 462 63 and Zamindar of Etiyapuram vs Chidambaram Chetty, I.L.R. 43 Mad . 675 (F.B.), referred to.
|
ivil Appeal Nos.
565 570 of 1978.
Appeal from the Judgment and Order dated 8 2 1977 of the Calcutta High Court in Income Tax Reference Nos 398, 399 and 400/69 and 456 of 1969.
Devi Pal and D. N. Gupta for the Appellant.
section T. Desai, B. B. Ahuja and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
These appeals, by certificates are directed against the common judgment and order rendered by the Calcutta High Court on February 8, 1977 in Income Tax Reference No.156 of 1969 and Income Tax References Nos. 398, 399 and 400 of 1969, whereby the assessee 's claim for deduction under s.36(1)(iv) of the Indian Income Tax Act, 1961 (hereinafter referred to as 'the Act ') in respect of three sums of Rs.95,421/ , Rs.1,00,564/ and Rs.1,17,969/ out of the total contributions made by the assessee to a recognised Provident Fund for the assessment years 1962 63, 1963 64 and 1964 65 respectively was disallowed and the principal question raised in these appeals is whether the expression "salary" as defined in Rule 2(h) in Part A of the Fourth Schedule to the Act includes "Commission" paid by the assessee to its salesmen in terms of their contracts of employment ? The assessee is a private limited company and carries on the business of manufacture and sale of duplicating machines and accessories.
It has in its regular employment three categories of salesmen machine salesmen, mixed salesmen and supply salesmen.
As a term of the contract of employment between the assessee and the salesmen of the aforesaid categories, the assessee, besides paying a fixed monthly salary also paid commission to them at fixed percentage of turnover achieved by each salesman, the rate of percentage varying according to the class of article sold and the category to which the salesman belonged.
The assessee maintained a regular Provident Fund for its employees which was recognised by the Commissioner of Income Tax some time in 1937 and the said recognition continued and was in force during the relevant years in question.
In the previous years ending 31st December 1961.
31st December 1962 and 31st December 1963 rele 792 vant to the assessment years 1962 63, 1963 64 and 1964 65 the assessee made contributions, out of its own moneys, to the individual accounts of these salesmen in the said Provident Fund on the basis of salary and commission paid to them and claimed such contributions as allowable deductions under section 36(1) (iv) of the Act and in that behalf reliance was placed by the assessee upon Rule 2 of the assessee company 's Recognised Provident Fund Scheme Rules under which "salary" meant not only the fixed monthly salary but also the commission and dearness allowance as might be paid by the company to its employees.
Out of such total contributions the Income Tax Officer disallowed the sums of Rs. 95,421/ , Rs. 1,00,564/ and Rs. 1,17,969/ on the ground that these amounts pertained to the commission paid by the assessee to its salesmen for the three years respectively and that under Rule 2(h) of Part A of the Fourth Schedule to the Act, which was applicable, the expression "salary" did not include such commission.
Three appeals, for the aforesaid three years, filed by the assessee were heard by two different Appellate Assistant Commissioners, one of whom rejected the appeal for the assessment year 1962 63 in view of Rule 2 (h) of Part A of the Fourth Schedule to the Act but the other Appellate Assistant Commissioner allowed the appeals for the assessment years 1963 64 and 1964 65 by accepting the assessee 's contention.
The assessee as also the Revenue preferred appeals to the Appellate Tribunal.
On the one hand, relying upon the dictionary meaning of the expression "salary" as given in the Shorter Oxford Dictionary and Stroud 's Judicial Dictionary and upon the manner in which the term was defined in Rule 2 of the assessee 's Recognised Provident Fund Scheme Rules, it was contended on behalf of the assessee that the commission of the nature paid by it to its salesmen was nothing but a composite part of the salary itself, the same being determinable as per the terms of the contract and as such the contributions on the basis of such commission made by the assessee to the Provident Fund were deductible under s.36(1)(iv) of the Act; it was further contended that since these payments were being admittedly made to a Provident Fund recognised by the Commissioner of Income Tax, which recognition was in force during the relevant years, the Taxing Authorities could not disallow the deduction claimed by the assessee, and the view taken by the Appellate Assistant Commissioner in respect of assessment years 1963 64 and 1964 65 was canvassed for acceptance.
On the other hand, the Revenue contended before the Tribunal that the definition of the expression "salary" as given in Rule 2(h) of Part A of the Fourth Schedule to the Act which applied to the recognised Provident Fund governed the matter and since that definition excluded all other allowances and perquisites the commission 793 paid by the assessee to its salesmen, which was nothing but some sort of allowance, could not be regarded as salary and, on that basis the Tribunal was pressed to accept the contrary view taken by the Appellate Assistant Commissioner for the assessment year 1962 63.
The Tribunal on a consideration of the rival submissions held that the commission paid by the assessee to various classes of salesmen was a part of the contractual obligation and as such was a part of the salary of the employees and contributions made on that basis were liable to be deducted under s.36(1)(iv) of the Act.
It also took the view that since the Provident Fund maintained by the assessee was a recognised Fund and since it fulfilled the condition laid down in Rule 4(C) of Part A of the Fourth Schedule to the Act the contributions by the employer to the same would be entitled to deduction under the said provision.
In this view of the matter the Tribunal by its order dated June 12, 1968 allowed the assessee 's appeal and dismissed the appeals of the Department.
At the instance of the Revenue the following two questions were referred to the High Court for its opinion: "(1) Whether, on the facts and in the circumstances of the case, the sums of Rs. 95,421/ , Rs. 1,00,564/ and Rs. 1,17,969/ disallowed by the Income Tax Officer out of the total contributions made by the assessee towards the provident fund were allowable under section 36(1)(iv) of the Income Tax Act, 1961 for the assessment years 1962 63, 1963 64 and 1964 65 respectively ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provident fund maintained by the assessee satisfied the condition laid down in Rule 4(c) of the Fourth Schedule, Part 'A ' of the Income Tax Act, 1961 ?" The former question was the subject matter of Income Tax Reference No.156 of 1969 made under s.256(1) of the Act while the latter was the subject matter of Income tax References Nos. 398, 399 and 400 of 1969 made under s.256(2) of the Act.
These References were heard together and disposed of by the High Court by a common judgment and order dated February 8, 1977.
Rejecting the contentions urged on behalf of the assessee the High Court answered both the questions in the negative and in favour of the Revenue.
In doing so the High Court principally relied upon (3) Rule 2(h) of Part A of the Fourth Schedule to the Act where the expression "salary" has been defined as inclusive of dearness allowance but exclusive of all 794 other allowances and perquisites, (b) Circular No. 6 dated January 16, 1941 issued by the Central Board of Revenue under the Indian Income Tax Act, 1922 but which has been continued under s.297(k) of the Act, which provided that unless commission and bonuses are fixed periodical payments not dependent on a contingency, they are not covered by the term "salary" as used in Chapter IXA of the Act (1922 Act) and (c) observations of this Court in M/s Bridge & Roofs Co. Ltd. vs Union of India and Ors.
to the effect that "commission and other similar allowances are excluded from the definition of "basic wages" under the Provident Fund Act 1952 because it was not a universal rule that each and every establishment must pay commission to its employees".
The High Court further held that the Circular No. 80 dated March 4, 1972 on which reliance was placed by the assessee and which stated that "if the terms and conditions of service are such that commission is paid not as a bounty or benefit but is paid as a part and parcel of the remuneration for services rendered by the employees such payment may partake of the nature of salary rather than as a benefit or perquisite" could not be availed of because the same was not in existence during the relevant years and further it had been issued under s.40(c) (iii) of the Act and would not apply to s.36(1)(iv).
The High Court also held that the ordinary meaning of "salary" was a fixed monthly payment while "commission" was not such payment and, therefore, it could not be included within the scope and ambit of the term "salary", the meaning of which could not be extended by the assessee company by defining it in a particular manner in its Provident Fund Scheme Rules for the purposes of recognition of its Fund and deductibility as well.
The High Court 's view on both the questions is challenged by the assessee in the instant appeals preferred on the strength of the certificates granted by that Court under s.261 of the Act.
Counsel for the assessee raised a two fold contention in support of the appeals.
In the first place he contended that once recognition was granted by the Commissioner of Income Tax to the Provident Fund maintained by the assessee under the relevant rules and such recognition was in force during the relevant assessment years, the Taxing Authorities could not disallow the deductions claimed by interpreting the expression "salary" in Rule 2(h) of Part A of the Fourth Schedule to the Act so as to exclude the "commission" that was paid by the assessee to its salesmen, for, by doing so the Taxing Authorities would be sitting in judgment over the recognition granted and allowed to be retained by the Commissioner of Income Tax to the assessee.
It was 795 pointed out that Rule 4 of Part A of the Fourth Schedule to the Act set out the conditions, particularly, the one contained in cl.(c) of the said rule that were required to be satisfied before recognition could be granted and in the instant case the Commissioner after having been satisfied that the said conditions had been fulfilled had granted recognition to the Provident Fund maintained by the assessee.
In particular, counsel placed reliance upon the correspondence which took place between the assessee and the Commissioner of Income Tax, West Bengal, during the course of which, the Commissioner had by his letter dated September 9, 1937 required the assessee to inform him of the basis on which the commission payable to the salesmen participating in the fund was computed with a view to seeing whether the commission would be includible in the definition of "salary" for purposes of Chapter IXA of the 1922 Act and the assessee had by its reply dated September 11, 1937 stated that the commission was the monthly amount payable to the salesmen in accordance with their written contract and was based on a fixed term of rate and that it was after such correspondence that recognition was granted to the Provident Fund of the assessee and that the said recognition had continued and was in operation during the relevant assessment years.
He, therefore, urged that it was not open to the Taxing Authorities to reach a conclusion that the Provident Fund of the assessee did not satisfy the condition laid down in Rule 4(c) of Part A of the Fourth Schedule to the Act during the relevant years nor was it open to them to disallow the deductions claimed under s.36 (1)(iv) of the Act by interpreting the expression "salary" in Rule 2(h) in Part A of the Fourth Schedule to the Act as being exclusive of the commission of the nature and kind paid by the assessee to its salesmen.
Secondly, counsel contended that on a true and proper construction of the expression "salary occurring in the said Rule 2(h) the commission of the nature and type paid by the assessee to its salesmen under the terms of their contract of employment would be included or covered by that expression.
According to him, commission in business practice covered various kinds of payments made under different circumstances and in the cases where a servant was employed by a businessman and as a condition of his employment it was agreed that he would be paid for his services at a fixed rate of percentage over the turnover it was clear that such commission payable to the employee will par take of the character of "salary" received by him for his services.
the percentage basis being the measure of the salary; in other words, according to him, there was no difference between the concept of salary and the concept of commission if the latter was of the aforesaid nature or kind and as such the expression salary in Rule 2 (h) would include such commission.
In this behalf he relied upon a decision of the Allaha 796 bad High Court in the case of Raja Ram Kumar Bhargava vs Commissioner of Income Tax, U.P. He urged that the decision of this Court in M/s Bridge & Roofs Co. Ltd. vs Union of Indian & Ors.
(supra) on which the High Court has relied was inapplicable since it was a case under the Provident Fund Act, 1952 and this Court was required to construe the term 'basic wages ' appearing in that Act and in that context it observed that that term did not include any bonus, commission or other similar allowances.
He, therefore, urged that the Tribunal was right in allowing the deductions claimed by the assessee under s.36(1)(iv) of the Act.
On the other hand, counsel for the Revenue contended that notwithstanding the recognition accorded to the assessee 's Provident Fund by the Commissioner of Income Tax the assessee had to satisfy the taxing authorities every year that the Provident Fund maintained by it satisfied the conditions of Rule 4, particularly, the one contained in Rule 4(c) of Part A of the Fourth Schedule to the Act and if for any particular assessment year the assessee 's Provident Fund failed to satisfy the condition in Rule 4(c) of Part A of the Fourth Schedule to the Act the assessee could not claim deduction under s.36(1)(iv) of the Act in respect of such portion of the contribution made by it to the Fund as was in breach of the said condition.
Secondly, he urged that by relying upon the fact of recognition obtained by it and the further fact that such recognition had remained in force during the relevant assessment years the assessee could not by pass the real question that arose for determination before the taxing authorities for the relevant assessment years, namely, whether the expression 'salary ' as defined in Rule 2(h) of Part A of the Fourth Schedule to the Act included or excluded commission paid by the assessee to its salesmen and he urged that the definition of the expression 'salary ' as given in the said Rule 2(h) clearly showed that the 'salary ' did not include commission, for, according to him, the definition merely included dearness allowance and excluded all other allowances and perquisites and commission payable by the assessee to its salesmen was nothing but an allowance paid without reference to any time factor which is associated with salary or wages as an important concomitant thereof.
In this behalf reliance was also placed by him upon the Circular No.6 dated January 16, 1941 issued by the Central Board of Revenue under the 1922 Act and continued under s.297(k) of the 1961 Act wherein on the question whether the term 'salary ' as used in Chapter IXA (of the old Act) 797 included commissions and bonuses paid to the employees, the Board expressed its view that "unless commissions and bonuses are fixed periodical payments not dependent on a contingency they are not covered by the term 'salary ' as used in Chapter IXA of the Act." Counsel further contended that in the matter of deductions claimable in respect of contributions to the Provident Fund the position of the employer could not be different from that of the employee and in regard to employee 's contribution the condition required to be satisfied in Rule 4 (b) was to the effect that the contribution of an employee in any year shall be a definite proportion of his 'salary ' for that year and shall be deducted by the employer from the employee 's 'salary ' in that proportion at each periodical payment of such salary in that year, and credited to the employee 's individual account in the Fund and under s.80C read with Rule 7 of Part A of the Fourth Schedule to the Act the employee is entitled to a deduction in respect of his contribution which pertains to a definite proportion of the 'salary ' which would not include commission.
He therefore, urged that the High Court was right in answering both the questions against the assessee and in favour of the Revenue.
As stated at the outset, in our view, the main question raised in these appeals is whether the expression 'salary ' as defined in Rule 2(h) of Part A of the Fourth Schedule to the Act includes commission payable by an assessee to his or its employees in terms of their contracts of employment ? We shall, therefore, address ourselves to that question first and then deal with the aspect regarding the true impact of the recognition granted by the Commissioner of Income Tax under the relevant Rules to a Provident Fund maintained by an assessee.
The expression 'salary ' has been defined in section 17 of the Act as well as in Rule 2(h) of Part A of the Fourth Schedule to the Act but each of the said definitions serves a different purpose.
Section 17 defines the expression 'salary ' for purposes of sections 15 and 16 which deal with "Salaries" as a head of income, and under cl.(iv) of sub s.(1) that expression includes: "any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages.
" In Part A of the Fourth Schedule to the Act, which contains rules relating to Recognised Provident Funds the word 'salary ' has been defined in Rule 2(h) thus : "Salary" includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.
" 798 Since we are concerned in this case with contributions made to a recognised Provident Fund and deductions thereof under section 36(1) (iv) it will be the definition of 'salary ' as given in Rule 2(h) of Part A of the Fourth Schedule to the Act and not the one given in section 17 that will be applicable and will have to be considered.
Under section 36(1) (iv) the deduction allowable is in respect of "any sum paid by the assessee as an employer by way of contribution towards a Recognised Provident Fund or an approved superannuation fund, subject to such limits as may be prescribed for the purpose of recognising the Provident Fund or approving the superannuation fund, as the case may be." Rule 2(c) of Part A of the Fourth Schedule defines contribution" as meaning "any sum credited by or on behalf of any employee out of his salary, or by an employer out of his own monies, to the individual account of an employee, but does not include any sum credited as interest." Rule 4 of Part A of the Fourth Schedule lays down the conditions which are required to be satisfied by a Provident Fund in order that it may receive and retain recognition and the conditions in cls.(b) and (c) are material and these conditions are: "4(b) the contributions of an employee in any year shall be a definite proportion of his salary for that year, and shall be deducted by the employer from the employee 's salary in that proportion, at each periodical payment of such salary in that year, and credited to the employee 's individual account in the fund; (c) the contributions of an employer to the individual account of an employee in any year shall not exceed the amount of the contributions of the employee in that year, and shall be credited to the employee 's individual account at intervals not exceeding one year.
" It may be stated that so far as the employer is concerned the contributions credited by him to the employee 's individual account in the funds are deductible under section 36(1) (iv) whereas the contributions of an employee are deductible in the computation of his total income under s.80C read with Rule 7 of Part A of the Fourth Schedule to the Act and the scheme of cls.(b) and (c) of Rule 4 of Part A of the Fourth Schedule does suggest that in the matter of deductions claim 799 able in respect of contributions to the recognised Provident Fund the position of both the employer and the employee would be the same; but since in the case of an employee his contributions are to be a definite proportion of his salary for a particular year, the question whether such proportion would be inclusive of commission received by him from his employer must depend upon the true meaning or construction of the expression 'salary ' as occurring in Rule 2(h) of Part A of the Fourth Schedule; in other words, in the matter of deductions claimable in respect of contributions to the Recognised Provident Fund qua both the employer and the employee the question has to be answered by reference to the true meaning of the expression 'salary ' occurring in Rule 2(h).
Now, Rule 2(h) of Part A of the Fourth Schedule does not define the expression 'salary ' conceptually but merely proceeds to state what is included therein and what is excluded therefrom and, therefore, one is required to turn to the dictionary meaning of that expression as also to ascertain how judicial decisions have understood that expression.
According to the Shorter Oxford English Dictionary (3rd Edn.) 'salary ' means: "To recompense, reward; to pay for something done;" In Jowitt 's Dictionary of English Law (1959 Edn.) the term is explained thus: "a recompense or consideration generally periodically made to a person for his service in another person 's business; also wages, stipend or annual allowance." In Stroud 's Judicial Dictionary (4th Edn.) the expression 'salary ' is explained at item (2) thus: "Where the engagement is for a period, is permanent or substantially permanent in character, and is for other than manual or relatively unskilled labour, the remuneration is generally called a salary".
[Per Latham C. J., in Federal Commissioner of Taxation vs Thompson (J. Walter) (Aus.) Pty. Ltd. 69 C.L.R. 227].
It appears that conceptually 'salary ' and 'wages ' connote one and the same thing, namely, remuneration or payment for work done or services rendered but the former expression is generally used in connection with services of a higher or non manual type while the latter is used in connection with manual services.
In Gordon vs Jennings Grover J. observed as follows: 800 "Though this word (wages) might be said to include payment for any services, yet, in general, the word 'salary ' is used for payment or services of a higher class, and 'wages ' is confined to the earnings of labourers and artisans." In Mohmedalli vs Union of India this Court, while repelling the contention that the Employees ' Provident Fund Act 1952 was intended by Parliament to apply to employees who were mere wage earners and not salaried servants, has made observations clearly indicating that there is no difference between the two concepts of salary and wages.
Chief Justice Sinha speaking for the Court observed in para 10 of the judgment as follows: "It is a little difficult to appreciate the distinction sought to be made.
Both 'salary ' and 'wages ' are emoluments paid to an employee by way of recompense for his labour.
Neither of the two terms is a 'term of art '.
The Act has not defined wages; it has only defined "basic wages" as all emoluments which are earned by an employee while on duty or on leave with wages in accordance with the terms of the contract of employment and which are paid or payable in cash to him,. . 'Salary ', on the other hand, is remuneration paid to an employee whose period of engagement is more or less permanent in character, for other than manual or relatively unskilled labour.
The distinction between skilled and unskilled labour itself is not very definite and it cannot be argued, nor has it been argued, that the remuneration for skilled labour is not 'wages '.
The Act itself has not made any distinction between 'wages ' and 'salary '.
Both may be paid weekly, fortnightly or monthly, though remuneration for the day 's work is not ordinarily termed 'salary '.
Simply because wages for the month run into hundreds, as they very often do now, would not mean that the employees is not earning wages, properly so called.
A clerk in an office may earn much less than the monthly wages of a skilled labourer.
Ordinarily he is said to earn his salary.
But, in principle, there is no difference between the two.
" It will thus appear clear that conceptually there is no difference between salary and wages both being a recompense for work done or 801 services rendered, though ordinarily the former expression is used in connection with services of non manual type while the latter is used in connection with manual services.
It is further common knowledge that this compensation to the labourer or artisan could be a specified sum for a given time of service or a fixed sum for a specified work i.e. payment made by the job, the commonest example of the latter category being a piece rated worker.
In other words, the expression 'wages ' does not imply that the compensation is to be determined solely upon the basis of time spent in service; it may be determined by the work done; it could be estimated in either way.
If conceptually salary and wages mean one and the same thing then salary could take the form of payment by reference to the time factor or by the job done.
In fact, in the case of salary the recompense could be determined wholly on the basis of time spent on service or wholly by the work done or partly by the time spent in service and partly by the work done.
In other words, whatever be the basis on which such recompense is determined it would all be salary.
Having reached the above conclusion, we have to consider the nature of recompense that is being made by the assessee to its salesmen, whether the whole of it partakes of the character of salary or not? The definition of 'salary ' in Rule 2(h) includes dearness allowance if the terms of employment so provide and excludes all other allowances and perquisites.
It does not in terms exclude 'commission ' as such and, in our view rightly, for, though ordinarily according to the Shorter Oxford English Dictionary 'commission ' means 'a pro rata remuneration for work done as agent ', in business practice commission covers various kinds of payments made under different circumstances.
In Raja Ram Kumar Bhargava vs Commissioner of Income Tax, U.P. (supra) the Allahabad High Court has pointed out how in certain circumstances commission payable to an employee may, in fact, represent the salary receivable by him for the services rendered to the employer.
At page 694 of the report the relevant observation run thus: "The word "commission", in business practice, covers various kinds of payments made under different circumstances.
There are cases where a servant is employed by a businessman and, as a condition of his employment, it is agreed prior to the services having been rendered that he would be paid for his services at a fixed rate of percentage of the turnover or profits.
In such a case, it is clear that the commission payable to the employee will, in fact, represent the salary to be drawn by him for his services.
The payment on the percentage basis will only determine the measure of the salary.
" 802 It is thus clear that if under the terms of the contract of employment remuneration or recompense for the services rendered by the employee is determined at a fixed percentage of turnover achieved by him then such remuneration or recompense will partake of the character of salary, the percentage basis being the measure of the salary and therefore such remuneration or recompense must fall within the expression 'salary ' as defined in Rule 2(h) of Part A of the Fourth Schedule to the Act.
In the instant case before us, admittedly, under their contracts of employment the assessee has been paying and did pay during the previous years relevant to the three assessment years to its salesmen, in addition to the fixed monthly salary, commission at a fixed percentage of the turnover achieved by each salesman, the rate of percentage varying according to the class of article sold and the category to which each salesman belonged.
The instant case is therefore, an instance where the remuneration so recompense payable for the services rendered by the salesmen is determined partly by reference to the time spent in the service and partly by reference to the volume of work done.
But it is clear that the entire remuneration so determined on both the basis clearly partakes of the character of salary.
In our view, therefore, the commission paid by the assessee to its salesmen would clearly fall within the expression 'salary ' as defined in Rule 2(h) of Part A of the Fourth Schedule to the Act and as such the three sums of Rs. 95,421/ , Rs. 1,00,564/ and Rs. 1,17,969/ representing proportionate contributions appertaining to the commission paid by the assessee to its salesmen would be deductible under section 36(1) (iv) of the Act.
Turning to the Circular dated January 16, 1941 issued by the Central Board of Revenue on which counsel for the Revenue has relied, it cannot, in our view, affect the question of deductibility, for, if the commission paid by the assessee to its salesmen is covered by the expression 'salary ' on its true construction, which, according to us, it does, the Board 's view or instructions cannot detract from the legal position arising on such proper construction.
In any case we are of the view that by the said Circular what the Board wants to keep out of the term 'salary ' are payments by way of commission which do not partake of the character of salary.
Similarly the decision of this Court in M/s. Bridge & Roof Co. 's case (supra) on which the High Court has relied cannot avail the Revenue.
In the first place it was a case under the Provident Fund Act, 1952 where this Court was required to construe the expression 'basic wages ' as defined in section 2(b) of that Act and to decide whether 'production bonus ' was included in that expression and it was in that context that this Court made observations 803 to the effect that the said expression as defined therein did not include any bonus, commission or other similar allowances.
Secondly, as against the definition of 'basic wages ' in section 2(b) (ii) which excluded any dearness allowance, house rent allowance, over time allowance, bonus, commission or any other similar allowance, section 6, of the Act provided for inclusion of dearness allowance for the purposes of contribution and, therefore, this Court was concerned with trying to discover some basis for the exclusion in cl.
(ii) of section 2(b) as also for the inclusion of dearness allowance and retaining allowance (if any) in section 6 of that Act and the Court found that the basis for inclusion in section 6 and exclusion in cl.
(ii) of section 2(b) was that whatever was payable in all concerns and was earned by all permanent employees was included for the purpose of contribution under section 6 but whatever was not payable by all concerns and was not earned by all employees of a concern was excluded for the purposes of contribution and that is why commission or similar allowances were excluded from the definition of 'basic wages ', for commission and allowances were not necessarily to be found in all concerns nor were they necessarily earned by all the employees of the same concern.
It is, therefore, clear that the ratio of the decision and the observations made by this Court in a different context in that case would be inapplicable to the facts of the present case.
Having regard to the above discussion it is clear that the High Court 's view on the first question is clearly unsustainable and that question must be answered in favour of the assessee and against the Revenue.
Dealing next with the second question it seems to us clear that having regard to our view on the proper construction of the expression 'salary ' occurring in Rule 2(h) of Part A of the Fourth Schedule to the Act it must be held that the Tribunal was right in holding that the Provident Fund maintained by the assessee satisfied the condition laid down in Rule 4(c) of Part A of the Fourth Schedule and that question also must be answered in favour of the assessee and against the Revenue However, we would like to make some observations with regard to the true impact of the recognition granted by the Commissioner of Income Tax to a Provident Fund maintained by an assessee.
The facts in the present case that need be stressed in this behalf are that it was as far back as 1937 that the Commissioner of Income tax had granted recognition to the Provident Fund maintained by the assessee under the relevant rules under 1922 Act, that such recognition had been granted after the true nature of the commission payable by the 804 assessee to its salesmen under their contracts of employment had been brought to the notice of the Commissioner and that said recognition had continued to remain in operation during the relevant assessment years in question; the last fact in particular clearly implied that the Provident Fund of the assessee did satisfy all the conditions laid down in Rule 4 of Part A of the Fourth Schedule to the Act even during the relevant assessment years.
In that situation we do not think that it was open to the taxing authorities to question the recognition in any of the relevant years on the ground that the assessee 's Provident Fund did not satisfy any particular condition mentioned in Rule 4.
It would be conducive to judicial discipline and the maintaining of certainty and uniformity in administering the law that the taxing authorities should proceed on the basis that the recognition granted and available for any particular assessment year implies that the Provident Fund satisfies all the conditions under Rule 4 of Part A of the Fourth Schedule to the Act and not sit in judgment over it.
There is ample power conferred upon the Commissioner under Rule 3 of Part A of the Fourth Schedule to withdraw at any time the recognition already granted if, in his opinion, the Provident Fund contravenes any of the conditions required to be satisfied for its recognition and if during assessment proceedings for any particular assessment year the taxing authority finds that the Provident Fund maintained by an assessee has contravened any of the conditions of recognition he may refer the question of withdrawal of recognition to the Commissioner but until the Commissioner acting under the powers reserved to him withdraws such recognition the taxing authority must proceed on the basis that the Provident Fund has satisfied all the requisite conditions for its recognition for that year; any other course is bound to result in chaos and uncertainty which has to be avoided.
Having regard to the above discussion, both the questions are accordingly answered in favour of the assessee and the appeals are allowed with costs.
P.B.R. Appeal allowed.
| The expression "salary," under section 17(1)(iv) of the Income Tax Act, 1961, includes "any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages"; under r. 2(h) in Part A of the Fourth Schedule to the Act, which contains Rules relating to recognised Provident Funds, the term `salary ' includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites, where an assessee, as an employer, has paid any sum by way of contribution towards a recognised provident fund, section 36(1)(iv) allows such sum as a deduction in computing the income subject to such limits as may be prescribed for the purpose of recognising the provident fund.
The term "contribution ' is defined in r. 2(c), of part A of the Fourth Schedule as any sum credited by or on behalf of any employee out of his salary or by an employer out of his own moneys to the individual account of an employee but does not include any sum credited as interest.
The assessee maintained a provident fund which was recognised by the Commissioner of Income tax in 1937.
Under r. 2 of the Provident Fund Scheme Rules "salary" meant not only fixed monthly salary but also commission and dearness allowance as might be paid by the company to its employees.
As a term of the contract of employment, in addition to monthly salary, the assessee paid to each of the salesmen commission at a fixed percentage of turnover achieved by them.
The assessee 's shares of the contribution to the provident fund was calculated on the basis of both salary as well as the commission paid to each of the salesmen.
In respect of assessment years 1962 63, 1963 64 and 1964 65 the assessee claimed the whole amount paid by it towards provident fund contributions, as a deduction allowable under section 36(1)(iv) of the Income tax Act and for this purpose it relied on r. 2 of its Provident Fund Scheme Rules.
Out of the total Provident Fund contributions claimed as allowable deduction under section 36(1)(iv) the Income tax Officer disallowed that part of the assessee 's contribution which related to the amounts calculated on the basis of commission paid to the salesmen on the ground that under r. 2(h) of Part A of the Fourth Schedule the expression "salary" did not include commission paid to the employees.
789 The assessee 's appeal in respect of the assessment year 1962 63 was rejected by an Appellate Assistant Commissioner; but in respect of the other two assessment years another Appellate Assistant Commissioner allowed its appeals.
On further appeals both by the assessee and the Department the Appellate Tribunal held that the commission paid being a part of the contractual obligation, it was a part of the salary paid to the employees and therefore contributions made towards provident fund on the commission were allowable as a deduction under section 36(1)(iv) of the Act, and secondly since the provident fund was a recognised fund which fulfilled the conditions laid down in r. 4(c) of Part A of the Fourth Schedule, the employer 's contributions were entitled to be deducted.
The High Court answered the reference in favour of the Department.
It held that since commission, unlike salary, was not a fixed monthly payment it could not be included within the meaning of "salary" and that the meaning of the term "salary" could not be extended by the assessee by defining it in a particular manner in its provident fund scheme rules for the purpose of recognition of its fund.
The High Court relied upon a circular dated January 16, 1941 issued by the Central Board of Revenue which provided that unless commission and bonuses were fixed periodical payments not dependent on a contingency, they were not covered by the term "salary".
On further appeal to this Court it was contended on behalf of the Revenue that the definition of "salary" in r. 2(h) clearly showed that it did not include commission and since commission was nothing but an allowance paid without reference to any time factor which is associated with salary or wages, it is not deductible under section 36(1) (iv).
Allowing the assessee appeals, ^ HELD : The commission paid by the assessee to its salesmen would clearly fall within the expression "salary" as defined in r. 2(h) of Part A of the Fourth Schedule to the Act and the amounts representing proportionate provident fund contributions made by the assessee to its salesmen would be deductible under section 36(1)(iv) of the Act.
[802 E] 1(a) The expression "salary" has been defined in section 17 as well as in r. 2(h) of Part A of the Fourth Schedule.
But each of the definitions serves a different purpose.
Since this case is concerned with contributions made to a recognised provident fund and deductions thereof under section 36(1)(iv), it would be the definition of "salary" as given in r. 2(h) of Part A of the Fourth Schedule, and not the one given in section 17, that will be applicable.
A B] (b) Conceptually salary and wages connote one and the samething viz., remuneration or.
payment for work done or services rendered.
The former expression is generally used in connection with services of higher or non manual type while the latter is used in connection with manual services.
If conceptually salary and wages mean one and the same thing then salary could take the form of payment by reference to the time factor or by the job done.
In the case of salary the recompense could be determined wholly on the basis of time spent on service or wholly by the work done or partly by the time spent on service and partly by the work done.
In other words, whatever be the basis on which such recompense is determined it would all be salary.
[799 G; 801C] 790 Gordon vs Jennings, ; Mohmedalli vs Union of India, AIR 1964 SC 980: referred to.
(c) The definition of "salary" in r. 2(h) includes dearness allowance if the terms of employment so provide and excludes all other allowances and perquisites.
It does not, in terms, exclude commission.
But though the dictionary meaning of the term "commission" is "a pro rata remuneration for work done as agent", in business practice commission covers various kinds of payments made under different circumstances.
[801 E] (d) If under the terms of the contract of employment remuneration or recompense for the services rendered by the employee is determined at a fixed percentage of turnover achieved by him, then such remuneration or recompense will partake of the character of salary, the percentage basis being the measure of the salary.
Therefore, such remuneration or recompense must fall within the expression "salary" as defined in r. 2(h).
[802 A] In the instant case under the term of the contract of employment the assessee had been paying to the salesmen, in addition to the fixed monthly salary.
commission at a fixed percentage of the turnover.
It is, therefore, a case where remuneration or recompense payable for the services rendered by the salesman is determined partly by reference to the time spent in the service and partly by reference to the volume of work done.
The entire remuneration so determined on both the bases clearly partakes of the character of salary.
[802 C D] (e) The Circular dated January 16, 1941 issued by the Central Board of Revenue did not affect the question of deductibility because if the commission paid by the assessee to its salesmen was covered by the expression "salary" on its true construction, the Board 's view or instructions could not detract from the legal position arising on such construction.
What the Board, by the said circular, wanted to keep out of the term "salary" were payments by way of commissions which did not partake of the character of salary.
[802 F G] Bridge & Roofs Co. Ltd. vs Union of India & Ors. ; at p. 1477: held inapplicable.
2(a) The Tribunal was right in its view that the provident fund maintained by the assessee satisfied the condition laid down in r. 4(c) of Part A of the Fourth Schedule.
[803 G].
(b) After taking into account the true nature of the commission payable by the assessee to its salesmen under the terms of the employment, the Commissioner granted recognition to the provident fund, as far back as 1937 and that recognition continued to remain in operation during the relevant assessment years.
The provident fund clearly satisfied all the conditions laid down in r. 4 of Part A of the Fourth Schedule.
It was, therefore, not open to the Taxing Authorities to question the recognition on the ground that the assessee 's provident fund did not satisfy any particular condition mentioned in r. 4.
For the sake of certainty and uniformity in administering the law the Taxing Authorities should proceed on the basis that the recognition granted and available for any particular assessment year implied that the provident fund satisfied all the conditions in that rule.
Under r. 3 the Commissioner had ample power to withdraw at any time the recognition already granted if the provident fund contravened any of the conditions required to be satisfied for its recognition.
791 But until the Commissioner withdrew such recognition, the Taxing Authorities must proceed on the basis that the provident fund satisfied all the requisite conditions for its recognition for that year.
Any other course would result in uncertainty.
[803 H 804 F]
|
iminal Appeal No.155 of 1965.
M. R. Barot and R. Gopalakrishnan, for the appellants.
P. K. Chatterjee, R. H. Dhebar and section P. Nayyar, for the respondent.
The Judgment of the Court was delivered by Hegde,J.
The appellants in this appeal are two police officers.
The first appellant Bhanuprasad Hariprasad Dave was the police Sub Inspector and the second appellant, Rajuji Gambhirji, was his writer constable in February 1963.
At that time both of them were attached to the Navrangpura police station, Ahmedabad.
They were tried and convicted by the Special Judge, Ahmedabad, for offences under section 161 read with section 165 A of the Indian Penal Code and section 5 (1) (d) read with section 5 (2) of the Prevention of Corruption Act, (No. 2 of 1947), and for those offences each of them was sentenced to suffer rigorous imprisonment for two and half years and a fine of Rs. 1,000, in default to suffer further rigorous imprisonment for year.
The judgment of the learned Special Judge was affirmed by the High Court ,of Gujarat.
It is against that judgment, this appeal has been filed, after obtaining special leave from this Court.
To state briefly, the prosecution case is as follows : Ramanlal, the complainant in this case, wrote a postcard on February 11, 1963 to one Madhukanta, a lady teacher, requesting her to ask Chandrakanta, another lady teacher working with her, to meet him in connection with certain work.
Therein he also wrote that he would be glad if Madhukanta could accompany Chandrakanta.
The headmaster of the school where Madhukanta and Chandrakanta were working, happened to read that postcard.
She took Madhukanta to task for allowing strangers to write to her in that manner.
Piqued by the conduct of Ramanlal, Madhukanta made over the postcard in question to the first appellant, probably with a request that Ramanlal might be pulled up for his conduct.
On February 16, 1963, the first appellant sent the second appellant to fetch Ramanlal to the police station.
On his arrival at the police station, Ramanlal was abused and slapped by the first appellant.
With a view to got out of the situation.
Ramanlal agreed to pay the sum demanded.
He therefore asked the first appellant time for payment till the 18th.
The first appellant agreed to the same.
On the morning of 18th, Ramanlal met the Deputy Superintendent of Police, AntiCorruption Department, and complained to him about the incident in question.
He was asked to give a written complaint in that regard which he did.
Thereafter he produced before the Dy.
S.P. ten currency notes of Rs. 10 each.
The numbers of those notes were noted and then those notes were treated with anthracene powder.
Ramanlal was asked to give those notes to the first appellant if he made any further demand for bribe.
Thereafter he was sent to the police station with the panch witness, Dahyabhai.
But when they went to the police station they found that the first appellant was not there.
They were told that he had gone to attend court.
Hence Raman lal and Dahyabhai returned to the office of the Anti Corruption Department and reported to the Dy.
S.P. about the same.
Under instructions from the Dy.
S.P. he again went to the office of the Anti Corruption Department on the evening of that day with currency notes.
Those notes were again treated with anthracene powder and their numbers noted.
Ramanlal was again sent to the Police station with Dahyabhai on that evening at about 5 3o p.m.
When they went there, the first appellant was not there, but the second appellant was there.
He told them that the first appellant was expected in the station at any moment.
Thereafter the second appellant, Ramanlal and Dahyabhai went to a nearby tea shop and took tea.
By the time they returned to the police ,station the first appellant was there.
Ramanlal told the first appellant that he had brought the money.
Then he asked him to pay the same to the second appellant who was in one of the rooms of the police station.
When Ramanlal went to pay the money to the second appellant, the first appellant took out the postcard written by Ramanlal to Madhukanta, showed it to Dahyabhai and thereafter tore it to pieces and burnt it.
Meanwhile Ramanlal went and paid the currency notes in question to the second appellant.
While Ramanlal and Dahyabhai were in the police station, police Sub Inspector Erulker and constable Santramji, both belonging to the Anti Corruption Department, were observing from a nearby compound the happenings in the police station.
The second appellant immediately on receiving the notes in question left the police station.
But he was followed by constable Santramji.
From the police station the second appellant first went to the shop of one Sanghvi and changed one of the currencynotes.
From there he went to the pan shop of Sendhalal and there changed three more currency notes.
Thereafter constable Santramji was not able to keep track of him.
Meanwhile when things did not go according to plan, Ramanlal was somewhat confused.
He after paying the amount to the second appellant L1OSup.
Cl/68 3 26 straight rused back to the Dy.
S.P. and told him what had happened at the police station.
Immediately, the Dy.
He seized the burnt pieces of the postcard.
Some of the unburnt pieces were recognised by Ramanlal as portions of the postcard written by him to Madhukanta.
From there the Dy.
S.P. proceeded to the shop of Sanghvi and Sendhalal and seized the currency notes changed in their shops by the second appellant.
Their numbers tallied with the numbers of the notes earlier handed over to Ramanlal after being treated with anthracene powder.
Those notes were full of anthracene powder.
The same night the second appellant was arrested and at that time it was found there ,was considerable anthracene powder on his person.
After in vestigation the appellants were prosecuted for the offences mentioned earlier.
Both the trial court and the High Court have accepted the prosecution case.
This Court being a court of special jurisdiction does not examine the evidence afresh except under exceptional circumstances.
No good reasons were shown to us for departing from the ordinary rule.
Hence we proceed on the basis that the findings of fact reached by the High Court are ,.correct.
Before proceeding to examine the various contentions ad vanced on behalf of the appellants it is necessary to mention that in this case there were two investigations.
As seen earlier the trap in this case was laid by the Dy.
S.P., Anti Corruption Department.
But when the case came up for trial before the learned Special Judge objection was taken to the trial of the case on the ground that in view of the provisions of the Bombay State Commissioner of Police Act, 1959, the investigation in this case should have been made by a Superintendent of Police as there was a Police Commissioner for the city of Ahmedabad.
The learned Special Judge accepted that contention and directed a fresh investigation to the extent possible by one of the Superintendents of Police.
Because of the fresh investigation, in respect of most of the prosecution witnesses, the police diary contained, two statements one recorded by the Dy.S.P. and the other by the S.P. in the course of the trial of the case, several prosecution witnesses were alleged to have gone back on the statements given by them during investigation.
While deposing in court 27 Madhukanta asserted that she had destroyed the postcard written by Ramanlal as soon as she read the same whereas both Ramanlal as well as the panch witness Dahyabhai had deposed that the first appellant had shown them the postcard in question.
S.P. wherein she appears to have stated that she had given the postcard in question to the first appellant.
Mr. Barot, learned counsel for the appellants, strenuously contended that in view of the order of the Special Judge, directing re investigation, in law, the record of the investigation made by the Dy.S.P. stood wiped out, and therefore Madhukanta should not have been cross examined with reference to the statement alleged to have been made by her during the first investigation.
We are unable to accept this contention as correct.
It is true that the first investigation was not in accordance with law, but it is no sense non est.
Investigation, as held by this Court in section N. Bose vs State of Bihar(1), includes the laying of trap.
That part of the investigation was, admittedly done by the Dy.
The statements recorded by the Dy.
S.P. in the course of his investigation ' though the investigation in question was illegal, (see, H .
N. Rishbud vs the State of Delhi(2), are still statements recorded by a police officer in the course of investigation under Chapter XIV of the Code of Criminal Procedure and consequently they fall within the scope of sections 161 and 162 of the said Code.
Neither in Rishbud 's case(2) nor in section N. Bose 's case(), where investigations had been carried on in contravention of section 5 A of the Prevention Corruption Act, this Court considered those investigations as non est.
Both the trial court and the High Court have accepted the evidence of Ramanlal and Dahyabhai in preference to that of Madhukanta that the first appellant was in possession of the postcard in question on February 18, 1963.
This is essentially a finding of fact.
In our judgment in coming to that conclusion those courts did not ignore any legal principle.
It was next contended by the learned counsel for the appellants that the appellants were convicted solely on the basis of the testimony of Ramanlal, the Dy.S.P. Erulker and Santramji, who, according to him, are all interested witnesses and their evidence not having been corroborated by any independent evidence, the same was insufficient to base the conviction of the appellants.
Before examining this contention it may be mentioned that so far as Dahyabhai was concerned, he appeared to have turned hostile to the prosecution at the trial.
He supported the evidence of Ramanlal in some respects; but in most important respects he did not support the prosecution case.
He admitted (1) Cr.A.109/1967,decided on March26,1968.
(2) 11955] 1 S.C.R. 1150.
28 to have accompanied Ramanlal both in the morning and on the evening of the 18th.
He also admitted that he and Ramanlal met a police Sub Inspector in the police station who showed them the postcard written by Ramanlal to Madhukanta.
He also corroborated Ramanlal about the talk that Ramanlal had with that Sub Inspector, in connection with the payment of bribe.
But when it came to the question of identifying that Sub Inspector, he denied that it was the first appellant.
He also did not identify the second appellant.
It was obvious that the had been gained over.
So far as Sanghvi is concerned, he admitted that a police constable in uniform came to his shop on the evening of the 18th and changed a ten rupee corrency note.
But he stated that he was not able to say whether that constable was the second appellant.
Sendhalal deposed that a person came to him on the evening of the 18th and changed three 'ten rupee currency notes.
He also stated that he was unable to say whether it was the second appellant who changed those notes; he went a step further and stated that the person who came to his shop was not in uniform.
But the fact remains that the currency notes seized from the shops of Sanghvi and Sendhalal are the very notes whose numbers had been earlier noted by the Dy.
S.P. and further treated with anthracene.
There is the evidence of constable Santramji to establish that the notes in question were changed at the shops of Sanghvi and Sendhalal by the second appellant.
The trial court as well as the High Court accepted the evidence of Dahyabhai, Sanghvi and Sendhalal to the extent it supported the prosecution case and rejected the rest.
It was open for those courts to do so.
Now coming back to the contention that the appellants could not have been convicted solely on the basis of the evidence of Ramanlal and the police witnesses, we are of opinion that it is an untenable contention.
The utmost that can be said against Ramanlal, the Dy.S.P., Erulker and Santramji is that they are partisan witnesses as they were interested in the success of the trap laid by them.
It cannot be said and it was not said that they were accomplices.
Therefore, the law does not require that their evidence should be corroborated before being accepted as sufficient to found a conviction.
This position is placed beyond controversy by the decision of this Court in the State of Bihar vs Basawan Singh(1), wherein this Court laid down, overruling the decision in Rao Shiv Bahadur Singh vs State of Vindhya Pra desh (2) that where the witnesses are not accomplices but are merely partisan or interested witnesses, who are concerned in the success of the trap, their evidence must be tested in the same way as any other interested evidence is tested, and in a proper case, the court may look for independent corroboration before convict (1) ; (2) 29 ing the accused person.
We are unable to agree that any different rule was laid down in Major E. G. Barsay vs The State of Bombay(1).
It must be remembered that the decision in Basawan Singh 's case(1) was given by a Bench of Five Judges and that decision was binding on the Bench that decided Major Barasay 's case(1).
Some of the observations in Major Barasay 's case(1) no doubt support the contention of the appellants.
But those observations must be confined to the peculiar facts of that case.
It is now well settled by a series of decisions of this Court that while in the case of evidence of an accomplice, no conviction can be based on his evidence unless it is corroborated in material particulars but as regards the evidence of a partisan witness it is open to a court to convict an accused person solely on the basis of that evidence, if it is satisfied that that evidence is reliable.
But it may in appropriate case look for corroboration.
In the instant case, the trial court and the High Court have fully accepted the evidence of Ramanlal, the Dy.
S.P., Erulker and Santramji.
That being so, it was open to them to convict the appellants solely on the basis of their evidence.
That apart, their evidence is substantially corroborated by the evidence of Dahyabhai, Sanghvi and Sendhalal.
in the case of partisan witnesses, the corroboration that may be looked for is corroboration in a general way and not material corroboration as in the case of the evidence of accomplices.
It was next contended that even if we accept the prosecution case in full, no offence can be said to have been made out under section 161 of the Indian Penal Code.
We are unable to accept that contention.
To establish the offence under section 161 of the Indian Penal Code all that prosecution had to establish was that the appellants were public servants and that they had obtained illegal gratification for showing or forbearing to show, in the exercise of their official functions, favour or disfavour to Ramanlal.
If he had used his official position to extract illegal gratification the requirements of the law is satisfied.
This position is made clear by the decision of this Court in Mahesh Prasad vs The State of U.P. (3) and Dhaneshwar Narain Saxena vs The Delhi Administration (4).
Lastly we come to the question whether the prosecution was barred by section 161 (1) of the Bombay Police Act, 1951 (Bombay Act 22 of 1951), which, to the extent material for our present purpose, says that in any case of alleged offences by a police officer or of a wrong alleged to have been done by such officer by any (1) [1962] 2 S.C.R.195.
(2) ; (3) ; (4) ; 30 act done under colour or in excess of any such duty or authority as mentioned in that Act, the prosecution shall not be entertained or shall be dismissed if instituted, more than six months of the act complained of.
Admittedly, the prosecution in this case was instituted more than six months after February 18, 1963, the day on which illegal gratification was obtained.
In support of the contention that the prosecution is barred by limitation, reliance was placed on the decision of this Court in Virupaxappa Veerappa Kadampur vs The State of Mysore(1).
Therein a head constable was charged under section 218 of the Indian Penal Code.
The prosecution case was that on February 23, 1954 on receipt of some information that some persons were smuggling ganja, the headconstable arrested a person with a bundle containing 13 packets of ganja and seized them, and in the panchnama he incorrectly showed the seizure of nine packets of ganja, and that on the next day he however prepared a new report in which it was falsely recited that the person with the bundle ran away on seeing the police after throwing away the bundle containing nine packets of ganja.
The allegation against the head constable was that the prepared a false report with the dishonest intention of saving the person concerned from whom the ganja was seized and who had been actually caught with ganja, from legal punishment.
This Court held that under section 161 of the Bombay Police Act, 1951, the words "under colour of duty" have been used to include acts done under the cloak of duty, even though not by virtue of the duty; that when the head constable prepared a false report he was using the existence of his legal duty as a cloak for his corrupt action and that, therefore, the act thus done in dereliction of his duty must be held to have been done "under colour of duty".
The rule laid down in that decision is inapplicable to the facts of the present case.
He by taking advantage of_that duty pre pared a false panchnama and false report and therefore it was held that what he did was under the colour of duty.
In the present case the appellants cannot be said to have received the bribe under the colour of their duty.
There was no connection between the duties to be performed by them and the receipt of the bribe in question.
The facts of the present case bear some similarity to the facts in the State of Andhra Pradesh vs N. Venugapol(2) and the rule laid down therein bears on the question under discussion.
This cannot be said to have been done under (1) [1963] Supp. 2 S.C.R. 6.(2) ; 31 colour of duty.
The charge against the second appellant is that he aided the first appellant in his illegal activity.
For the reasons mentioned above, this appeal fails and the same is dismissed.
The appellants who are on bail shall surrender forthwith to serve the remaining portion of the sentences imposed on them.
Y.P. Appeal dismissed.
| The ten appellants were convicted under sections 302 and 201 both read with section 149 of the I.P.C. mainly on the evidence of four eye witnesses who were members of the family of the two murdered persons.
Four of the appellants were sentenced to death and the rest to imprisonment for life.
The High Court confirmed the convictions and sentences.
in appeal to this Court by special leave it was contended, inter alia, on behalf of the appellants that (i) there were various discrepancies and inconsistencies in the evidence showing miscarriage of justice; (ii) though two independent eye witnesses were available they were purposely excluded and only the family members were examined as eye witnesses; and the High Court had wrongly refused to draw from their non examination an adverse inference under section 114(g) of the Evidence Act; and (iii) the sentences on the appellants were wrongly confirmed by the High Court.
HELD : (i) There was no reason to interfere with the concurrent findings of the trial court and the, High Court that the appellants were responsible for the deaths of the two deceased persons and were guilty of ,the offences they were charged with.
[782 E] (ii) The prosecutor need not examine witnesses who, in his opinion, have not witnessed the incident.
Normally, he ought to examine all the eye witnesses in support of his case.
But in a case where a large number of persons have witnessed the incident, it is open to him to make a selec tion which must, however, be fair and honest and not with a view to suppress inconvenient witnesses.
If it is shown that persons who had witnessed the incident have been deliberately kept back, the court may draw an adverse inference and in a proper case record such failure.
as constituting a serious infirmity in the proof of the prosecution case.
[781 G H; 782 A] In the present case, the prosecution had explained that the two independent eye witnesses were not necessary.
The defence remained content with that explanation and did not ask the other concerned witnesses any questions to elicit why these two persons were considered unnecessary witnesses.
Furthermore, there was nothing in the evidence to suggest that they were not produced because they would have turned out to be inconvenient witnesses.
It was not therefore possible to say that the prosecution had deliberately withheld these two persons for any oblique motive or that the High Court ought to have drawn an adverse inference.
[782 C D] (iii) The sentence of death on four of the ten appellants must be set aside and the sentence of rigorous life imprisonment substituted therefore.
775 In imposing the sentence of death on four of the appellants the trial court made a distinction between them and the others as three of them were armed with firearms and the fourth with a hatchet.
This reason for imposing the extreme penalty on the four appellants could not be sustained on the evidence as the others were also armed with equally, dangerous weapons.
In the absence of evidence as to who inflicted the fatal blows, the same punishment should have been imposed on all of them.
[783 C D]
|
etition (Crl.) No. 1323 of 1979.
(Under Article 32 of the Constitution.) Ram Jethamalani and Harjinder Singh and M. M. Lodha for the Petitioner.
U.R. Lalit, A. V. Rangam and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
The Petitioner Ramchandra A. Kamat has preferred this petition under article 32 of the Constitution of India praying for the issue of writ of Habeas Corpus directing his release by quashing the order of his detention dated 31 8 1979 passed by second respondent, Additional Secretary to the Government of India, Ministry of Finance.
The petitioner was directed to be detained by an order dated 31st August, 1979 under section 3(1) of the .
In pursuance of the order, the petitioner was arrested on 5 9 1979.
He was served with the grounds of detention on the same day.
The Petitioner through his advocate by a letter dated 7 9 1979 wrote to the second 1074 respondent stating that it was found that the detaining authority relied upon a number of statements of various persons including the detenu as well as documents referred to in the grounds, but the detenu was not furnished with the copies of the same.
The Advocate stated that detenu desires to make a representation against the order of detention but found that without the copies of documents referred to in the grounds of detention order it is not possible to make an effective representation.
A reply to his letter was sent to the Advocate by Mr. Thawani, Deputy Secretary to the Government of India, wherein he acknowledged the receipt of the letter of the Advocate dated 7 9 1979.
By this letter the Deputy Secretary requested the Advocate to contact the Deputy Director, Directorate of Enforcement, Bombay, who it was stated, had been suitably advised regarding supply of copies of statements and documents, relied upon in the detention order dated 31 8 1979.
It may be noted that the detaining authority, the second respondent did not acknowledge the letter from the detenu 's advocate or take any action by himself but directed the Deputy Secretary to address the communication dated 10 9 1979 referred to above.
Though the letter states that the Deputy Director, Bombay has been suitably advised regarding the request for supply of copies of statements and documents relied on in the detention order nothing further was done by the Deputy Director of Enforcement, Bombay.
On the 14th September, 1979, the advocate not having received any communication, addressed a letter to the Deputy Director enclosing a copy of the letter which he received from the Deputy Secretary and requested the Deputy Director to supply him on behalf of his client copies of the relevant statements and documents referred to and relied upon in the order of detention at an early date.
In reply to the letter of 14 9 79 by the Advocate, the Deputy Director in his communication dated 22 9 1979 requested the advocate to see the Deputy Director on 24 9 1979 at 1430 hours to take inspection of the documents.
On inspecting the documents the advocate was not satisfied and insisted on supply of copies of documents and ultimately copies were supplied on 3 days, namely, on 26 9 79, 28 9 79 and 29 9 79.
The representation was made by the detenu on 5 10 79.
It is settled law that the appropriate authority is bound to give an opportunity to the detenu to make representation and to consider the representation of the detenu as early as possible.
There should not be any delay in the matter of consideration.
The Constitutional Bench of this Court in Jayanarayan Sukul vs State of West Bengal(1) has held that the fundamental right of the detenu to have representation considered by the appropriate Govern 1075 ment will render meaningless if the Government will not deal with the matter expeditiously.
The Court observed: "It is established beyond any measure of doubt that the appropriate authority is bound to consider the representation of the detenu as early as possible.
The appropriate Government itself is bound to consider the representation as expeditiously as possible.
The reason for immediate consideration of the representation is too obvious to be stressed.
The personal liberty of a person is at stake.
Any delay would not only be an irresponsible act on the part of the appropriate authority but also unconstitutional because the Constitution enshrines the fundamental right of a detenu to have his representation considered and it is imperative that when the liberty of a person is in peril immediate action should be taken by the relevant authorities.
The same view has been expressed by this Court in a number of cases vide Seervai 's Constitutional Law of India, Vol.
I, page 542, paragraph 12.82.
The right to make a representation is a fundamental right.
The representation thus made should be considered expeditiously by the Government.
In order to make an effective representation, the detenu is entitled to obtain information relating to the grounds of detention.
When the grounds of detention are served on the detenu, he is entitled to ask for copies of the statements and documents referred to in the grounds of detention to enable him to make an effective representation.
When the detenu makes a request for such documents, they should be supplied to him expeditiously.
The detaining authority in preparing the grounds would have referred to the statements and documents relied on in the grounds of detention and would be ordinarily available with him when copies of such documents are asked for by the detenu the detaining authority should be in a position to supply them with reasonable expedition.
What is reasonable expedition will depend on the facts of each case.
It is alleged by the detenu that there had been unreasonable delay in furnishing of the statements and documents referred to in the grounds of detention.
It is the duty of the detaining authority to satisfactorily explain the delay, if any, in furnishing of these documents.
We are in this context not referring to the statements and documents not referred to in the grounds of detention for it may be that they are not in the possession of the detaining authority and that reasonable time may be required for furnishing copies of the relevant documents, which may not be in his possession.
1076 If there is undue delay in furnishing the statements and documents referred to in the grounds of detention the right to make effective representation is denied.
The detention cannot be said to be according to the procedure prescribed by law.
When the Act contemplates the furnishing of grounds of detention ordinarily within five days of the order to detention, the intention is clear that the statements and documents which are referred to in the grounds of detention and which are required by the detenu and are expected to be in possession of the detaining authority should be furnished with reasonable expedition.
It will have to be considered on the facts of the case whether there was any unexplained delay in furnishing the statements and documents relied on in the grounds of detention.
The detenu was arrested on 5 9 1979 and his advocate by a letter dated 7 9 1979 Annexure 'C ' to the writ petition wrote to the detaining authority stating that for making an effective representation, he must have copies of statements and documents referred to in the detention order.
He prayed that the copies of the statements and documents may be furnished to him.
This letter was received by the detaining authority on the 10th of September, 1979 and a communication was addressed not by the detaining authority but by Mr. Thawani, Deputy Secretary on the same date.
It is not clear whether the detaining authority applied his mind and realised the necessity for furnishing of the documents to the detenu expeditiously.
The communication was addressed by the Deputy Secretary to the Advocate of the detenu informing him that the Deputy Director of Enforcement at Bombay had been suitably advised regarding the request for supply of copies of statements and documents relied on in the detention order.
One would have expected that the detaining authority or the Deputy Secretary acting on his behalf, to have directed the Deputy Director of Enforcement, Bombay to furnish the necessary documents expeditiously to the Advocate as requested or to the detenu himself.
The direction in the communication from the Deputy Secretary was not immediately complied with.
The Advocate for the detenu wrote again on the 14th September, 1979 reminding the Deputy Director of the communications, he had received from the Deputy Secretary.
The Advocate requested that the copies of the relevant statements and documents referred to and relied upon in the detention order may be supplied to him.
This letter was replied by the Deputy Director on the 22nd September, 1979 in which the Advocate was asked to have inspection of the documents in his premises, between 1430 hours on 24 9 1979.
The copies of the statements and documents requested by the Advocate for the detenu and directed by the Deputy Secretary to be furnished to the Advocate were not furnished to him instead the Deputy Director asked the Advocate to 1077 have inspection at the Deputy Director 's office.
After inspecting the documents on 22/24/25 9 1979, he insisted of having copies which were supplied on the 26th, 27th and 28th of September, 1979.
The explanation given by the detaining authority regarding the delay in furnishing copies as seen in his counter affidavit is that the constitutional right of the petitioner to make effective representation had not been infringed.
According to the detaining authority "it was not incumbent upon the detaining authority to supply copies of all the documents relied upon in the grounds of detention to the petitioner alongwith the grounds within 5 days of detention as petitioner has contended.
In this context it would be relevant to state that the grounds were sufficiently detailed so as to enable the petitioner to make an effective representation against the detention." He further stated that all steps were taken to comply as expeditiously as possible.
It may not be necessary for the detaining authority to supply copies of all the documents relied upon in the grounds of detention at the time when the grounds are furnished to the detenu but once the detenu states that for effective representation it is necessary that he should have copies of the statements and documents referred to in the grounds of detention, it is the duty of the detaining authority to furnish them with reasonable expedition.
The detaining authority cannot decline to furnish copies of the documents on the ground that the grounds were sufficiently detailed to enable the petitioner to make an effective representation.
In this case, the detaining authority should have taken reasonable steps to provide the detenu or his advocate with the statements and documents as early as possible.
The reply to the detenu was not sent by the detaining authority and it is not clear whether he appreciated the necessity to act expeditiously.
As noted already, a communication was sent by the Deputy Secretary to the Deputy Director, who did not comply with the direction and furnish copies of the statements and documents.
After a lapse of 12 days i.e. on 22 9 1979, the Deputy Director offered inspection.
Taking into account the facts and circumstances of the case and explanation furnished by the detaining authority, we are of the view that the detaining authority failed to act with reasonable expedition in furnishing the statements and documents referred to in the grounds of detention.
On the facts of the case, therefore, we are satisfied that the detention is not in accordance with the procedure contemplated under law.
The continued detention is not warranted.
The order of his release has already been issued by this Court.
N.V.K. Petition allowed.
| The petitioner was directed to be detained by an order dated August 31, 1979 under section 3(1) of the and in pursuance thereof was arrested on September 5, 1979.
He was served with the grounds of detention on the same day.
The petitioner 's advocate wrote a letter dated September 7, 1979 to the detaining authority second respondent stating that it was not possible to make an effective representation without the copies of statements and documents referred to in detention order.
The detaining authority did not take any action on the letter but forwarded it to the Deputy Secretary to the Government of India who by a communication dated September 10, 1979 acknowledged its receipt and requested the advocate to contact the Deputy Director, Directorate of Enforcement, Bombay regarding the supply of copies of statements and documents.
As no further communication was received, the advocate addressed a letter dated September 14, 1979 to the Deputy Director to supply him copies of the statements and documents.
The Deputy Director in his communication dated September 22, 1979 requested the advocate to see him on September 24, 1979 to take inspection of the documents.
On inspecting the documents the advocate was not satisfied and insisted on supply of copies of documents, which were supplied on three days, September 26, 1979, September 28, 1979 and September 29, 1979.
On October 5, 1979 the petitioner made his representation against the detention.
In the writ petition, it was contended on behalf of the petitioner that as there was unreasonable delay in furnishing of the statements and documents referred to in the grounds of detention and the right to make an effective representation was denied, the detention could not be said to be according to the procedure prescribed by law.
On behalf of the detaining authority it was contended that the constitutional right of the petitioner to make an effective representation had not been infringed and that it was not incumbent upon the detaining authority to supply copies of all documents relied upon in the grounds of detention and that the grounds of detention were sufficiently detailed so as to enable the petitioner to make an effective representation against the detention.
Allowing the petition, ^ HELD: 1.
The detaining authority failed to act with reasonable expedition in furnishing the statements and documents referred to in the grounds of detention.
The detention is therefore not in accordance with the procedure contemplated under law, and the continued detention is not warranted.
[1077G] 2.
It is settled law that the appropriate authority is bound to give an opportunity to the detenu to make representation and to consider the representation 1073 of the detenu as early as possible.
There should not be any delay in the matter of consideration.
[1074G] Jayanarayan Sukul vs State of West Bengal, ; , referred to.
(i) The right to make a representation is a fundamental right.
The representation thus made should be considered expeditiously by the Government.
In order to make an effective representation, the detenu is entitled to obtain information relating to the grounds of detention.
When the grounds of detention are served on the detenue he is entitled to ask for copies of the statements and documents referred to in the grounds of detention to enable him to make an effective representation.
When the detenu makes a request for such documents, they should be supplied to him expeditiously.
[1075E] (ii) When the Act contemplates the furnishing of grounds of detention within five days of the order of detention, the intention is clear that the statements and documents which are referred to in the grounds of detention and which are required by the detenu should be furnished with reasonable expedition.
[1076B] 4.
If there is undue delay in furnishing the statements and documents referred to in the grounds of detention the right to make an effective representation is denied.
It is the duty of the detaining authority to satisfactorily explain the delay, if any, in furnishing of the documents.
[1076A, 1075G] 5.
It may not be necessary for the detaining authority to supply copies of the documents relied upon in the grounds of detention at the time when the ground are furnished to the detenu but once the detenu states that for effective representation it is necessary that he should have copies of the statements and documents referred to in the grounds of detention it is the duty of the detaining authority to furnish them with reasonable expedition.
The detaining authority cannot decline to furnish copies of the documents on the ground that the grounds were sufficiently detailed to enable the petitioner to make an effective representation.
[1077D E]
|
Civil Appeal No. 2450 of 1969.
From the judgment and decree dated 14 8 63 of the Calcutta High Court in Appeal from Appellate Decree No. 632/63.
L. N. Sinha, A. N. Sinha and Rathin Das for the Appellant.
A.K. Sen, D. N. Mukherjee and N. R. Chaudhary for Respondents 1, 2 7 and 9. D. Mookerjee and P. K. Mukherjee for Respondent No. 3.
The Judgment of the Court was delivered by DESAI, J.
Kalpana Theatre with its furnishings and fixtures situated at 61, Chintamoni Dey Road, Howrah, belonging to respondents 1 and 2 is the subject matter of dispute between its landlords and tenant awaiting resolution for the last two decades.
Under a registered lease deed dated 11th September 1948 respondent 3 Kanti Bhusan Bose, took this Theatre on lease for a period of 5 years with effect from 1st September 1948.
Respondent 3 is the Managing Director of the appellant Biswabani Pvt.
Ltd. ( 'company ' for short).
It appears that during the period of lease respondents 1 and 2, the owners of the Theatre, accepted the appellant company as their tenant and in token of it accepted rent from the company at the rate of 655 Rs. 2,000/ p.m.
On the expiry of the period of 5 years disputes arose between the lessors and the lessee whereupon respondents 1 and 2 lessors commenced an action in ejectment against the company on 5th October 1953 in the Court of the First Subordinate Judge, Howrah.
In August 1953 appellant company as lessee filed an application before the Rent Controller under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, for fixation of standard rent of the demised premises.
Ultimately the parties arrived at a compromise and the consent terms were filed in T.S. No. 68 of 1953 instituted by the lessors respondents 1 and 2 for eviction of the company and the Court was invited to pass a decree in terms thereof.
The consent decree, inter alia provided that the company would be the tenant of Kalpana Theatre ona monthly rent of Rs. 1,000/ from 1st March 1955 for a period of 5 years and that the third respondent Kanti Bhusan Bose had to offer security by deposit of G.P. Notes of the face value of Rs. 20,000/ with the lessors.
The lease was to be for a period of 5 years commencing from 1st March 1955.
An indenture of lease was to be drawn up and executed by both the parties in terms of the consent decree.
The company was given permission to sublet the premises with prior approval of the lessors.
There is a furious controversy about one of the terms of the consent decree which reads as under: "After the period of five years there shall be no renewal of the lease, the lessee shall be treated as trespasser".
On the expiry of the term of five years on 29th February 1960 it appears that respondents 1 and 2 lessors locked up a portion of the demised premises whereupon the company filed a suit on 14th March 1960 against respondents 1 and 2 lessors and the proforma respondent 3 for a declaration that the company was the tenant of the premises, and for a permanent injunction restraining respondents 1 and 2 from interfering with its tenancy rights.
There was also a prayer for a mandatory injunction directing respondents 1 and 2 to remove the locks put by them on some portion of the demised premises and for reliefs incidental and ancillary thereto.
The suit was, inter alia, contested on a contention that as the consent decree provided for a fresh lease of five years such a lease can only be valid if it is registered and as the consent decree or the document incorporating the terms of compromise was not registered, the company continued in possession under a void lease and, therefore, on the expiry of the period of five years the company was a trespasser 656 and respondents 1 and 2 were entitled to take over possession from such a trespasser.
It was also contended that on the expiry of the period of five years on 29th February 1960 the company handed over peaceful and vacant possession to respondents 1 and 2 in terms of the consent decree.
The trial court held that as the consent decree provided for a lease for a period of five years in the absence of registration the lease for a period of five years did not come into existence but if the tenant entered into possession under an invalid lease and the landlord accepted rent a tenancy from month to month came into existence between the lessors and the lessee and that such a lessee cannot be evicted except after terminating the tenancy by a valid notice to quitand in the absence of such determination the lessee would be a lessee from month to month and can protect its possession.
In accordance with this finding the trial court decreed the appellant plaintiff 's suit.
Respondents 1 and 2 appealed to the District Court at Howrah.
The learned Additional District Judge held that the lease being void, yet the lessors would not be entitled to disturb the possession of the tenant for a period of 5 years under the provisions of section 53A of the Transfer of Property Act but after the expiry of the period of five years the appellant became a rank trespasser and the respondents 1 and 2 were entitled to take possession of the property.
Accordingly the appeal was allowed and the company 's suit was dismissed.
The appellant company preferred second appeal to the High Court.
The High Court broadly agreed with the findings of the learned Addl.
Distt.
Judge and dismissed the appeal.
The High Court granted a certificate unfortunately very vague without specifying whether the certificate was under Article 133(a), (b) or (c) as it stood at the relevant time.
The undisputed facts are that Kanti Bhusan Bose, 3rd respondent took on lease the demised premises under a registered lease need dated 11th September 1948, the period reserved under the lease being 5 years at a monthly rent of Rs. 2,000/ with an option for renewal to be exercised by a notice two months before the expiry of the lease.
It is equally undisputed that during this period of 5 years the appellant company was accepted as tenant of the demised premises and the company paid the rent reserved under the lease being Rs. 2,000/ p.m.
The period reserved under the lease expired on 31st August 1953.
But before the expiry of the period an application was made by the appellant for fixation of standard rent of the demised premises under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950.
In October 1953 respondents 657 1 and 2 as lessors commenced an ejectment action against the appellant and third respondent on the ground that the period reserved under the lease has expired and the lessee has failed to exercise the option for renewal.
During the pendency of the aforementioned actions the parties entered into a compromise and the consent terms were filed in the suit instituted by respondents 1 and 2 lessors inviting the Court to pass a decree in terms thereof, and a consent decree was passed which has been referred to in the evidence as 'solenama '.
It, inter alia, provides for a lease for a further period of 5 years commencing from 1st March 1955 on a monthly rent of Rs. 1,000/ p.m. made up of a rent of Rs. 500/ for the premises and a rent of Rs. 500/ for furniture and fixtures and the lessee would have no further option of renewal of the lease on the expiry of the period reserved under the lease.
This consent decree incorporating the terms of a fresh lease to be effective as a valid lease required registration in view of the provisions contained in section 107 of the Transfer of Property Act read with section 17(1)(d) of the , because the period reserved under the lease was exceeding one year.
It is an admitted position that the instrument containing terms of lease, i.e. either the consent terms or the consent decree was not registered as required by law.
However, it is equally an admitted position that the company continued in possession and paid rent which was accepted by the lessors from the company from month to month.
It appears that on 29th February 1960, i.e. the last day on which would expire the lease for a period of 5 years, the lessors respondents 1 and 2 entered into the demised premises and locked a portion thereof.
The questions that emerge for consideration in this appeal are: 1.
What would be the status and nature of possession of a person who was admittedly a tenant of premises covered by the local rent restriction Act till the date of commencement of a fresh lease which turns out to be void for want of registration, during and at the expiry of the period purporting to be reserved by such a void lease ? 2.
Would such a person be a tenant who could only be removed by proper legal proceeding or a licensee without any interest in the premises and could be forcibly evicted by the landlords of the premises entering the premises and locking the same ? 3.
Could such a person defend his possession by a suit seeking a declaration and mandatory injunction ? 658 Appellant was accepted as tenant by respondents 1 and 2 even though the indenture of lease dated 11th September 1948 (referred to as 'the first lease ') was executed by the third respondent who was the Managing Director of the appellant company.
Indisputably when the first lease expired on 31st August 1953 the appellant was the tenant of the demised premises, a fact demonstrably established and expressly accepted by respondents 1 and 2 and evidenced by their conduct of accepting rent from the appellant company.
The indenture of first lease granted an option to the lessee which would be none other than the appellant company, to claim renewal of lease.
This option was not exercised.
Notwithstanding the non exercise of the option on the date of expiry of the lease the contractual tenancy having come to an end, the tenant would be a tenant holding over if requirements of section 116 of the Transfer of Property Act are satisfied.
However, on the date of expiry of contractual tenancy the West Bengal Premises Rent Control Temporary Provisions) Act, 1950, was in force and was applicable to the premises and, therefore, on the determination of contractual tenancy by efflux of time the terms and conditions of the lease are extinguished and the rights of such a person remaining in possession are governed by the statute alone.
He is loosely described as statutory tenant which is another name for status of irremovability (see Anand Nivas Private Ltd. vs Anandji Kalyanji Pedhi & Ors.(1).
It must be recalled here that the first lease expired on 31st August 1953.
Respondents 1 and 2 filed Title Suit No. 68 of 1953 in October 1953.
This suit ended in a consent decree as aforementioned and the appellant and respondents 1 and 2 agreed to enter into a fresh lease for a period of 5 years commencing from 1st March 1955 on a monthly rent of Rs. 1,000/ .
It is not in dispute that from 1st September 1953 to 28th February 1955 rent was paid by the appellant and the same was accepted by respondents 1 and 2.
There is no bar in law to a statutory tenant entering into a fresh contract of tenancy with the landlords which was attempted by the consent decree.
From this undisputed position an inference of tenancy can be reasonably made.
Accordingly it must be held that when the parties agreed to enter into a fresh lease (referred to as 'the second lease ') commencing from 1st March 1955, appellant company was a statutory tenant in possession of the demised premises.
By the consent decree appellant and respondents 1 and 2 entered into a fresh lease for a period of 5 years.
The High Court 659 has found this lease to be void for want of registration and this position was not disputed before us.
The appellant continued in possession for a period of 5 years and paid rent as agreed to between the parties in the consent decree.
Now, if the lease is void for want of registration neither party to the indenture can take advantage of any of the terms of the lease.
At best the provision contained in section 53A of the Transfer of Property Act which incorporated the English equitable doctrine of part performance can, if the terms thereof are satisfied, be relied upon to protect possession for the period reserved under such a void lease.
But no other terms of such an indenture inadmissible for want of registration can be the basis for a relief.
In this case respondents 1 and 2 rely upon a provision in the consent decree that there was not to be any further renewal of the lease and the High Court was so much impressed with this provision when it observed: "Here is a party who has solemnly entered into an agreement, has enjoyed the benefit of it, has committed a flagrant breach of it, and now wishes the law to come to his aid and protect him from the evil consequence.
If the appellant succeeds it will be most unhappy state of affairs".
This observation appears to be provoked by the High Court looking into that part of the consent decree which provides for no further renewal of the lease, which being a term in an indenture inadmissible for want of registration, could not have been looked into.
And this feeling of righteous indignation completely ignores the overriding provisions of the relevant Rent Restriction Act which came to the aid of every tenant in its area of operation on the determination of contractual tenancy.
At its commencement every lease world have its origin in a bilateral contract which except for lease for indefinite period or permanent lease would be for some specified duration.
On the expiry of the period the solemn implied promise or assurance is to return possession.
If such a promise is to be enforced overlooking or ignoring Rent Restriction Act it would make a mockery of protection extended by Rent Restriction Act.
It must further be made clear that section 53A of the Transfer of Property Act is not at all attracted in the facts of this case.
The suit was field by the appellant who sought to protect its possession.
The equitable doctrine of part performance can be used as a shield and not as a sword.
It can be used to defend and protect one 's possession, (see Probodh Kumar Das & Ors.
vs Dantmara Tea Co. Ltd. & Ors.).(1) In fact, any discussion of section 53A in the facts of this case 660 would be entirely beside the point.
It was so made clear by the learned counsel appearing for the present appellant before the High Court but somehow or the other the High Court has practically put into forefront the application of section 53A.
We must accordingly steer clear of this position that neither the appellant relies on section 53A to protect its possession nor would it be of any use or assistance because it can be a sheath and not a sword as the appellant has come to the Court for a declaration of its tenancy rights, seeking to protect its possession not under the doctrine of part performance as incorporated in section 53A but with specific allegation that the appellant is a tenant and it be so declared, and for an injunction restraining respondents 1 and 2 landlords from interfering or disturbing the appellant 's possession of the premises as tenant.
If, as it clearly transpires from the facts of this case, the appellant was a tenant on the date on which the second lease, which is found to be void, was to commence what would be the nature of possession of the appellant during the period of 5 years, the period sought to be reserved under the second lease and on the expiration of such period ? If the appellant was put into possession for the first time under a void lease the appellant could have protected its possession under section 53A.
But it must be made distinctly clear that the appellant was in possession on the date on which the second lease now found void was to commence.
Would this attempt inchoate or still born of entering into a fresh contractual tenancy make any difference in the position of the appellant and the nature of his possession ? If the second lease is void or inchoate or ineffective or still born it is not all effective.
If it is not effective it does not impinge upon the nature of the appellant 's possession which was that of a tenant.
In other words, the appellant continued to remain in possession of the demised premises as tenant because there was no impact of the lease which is found to be void.
It must be made distinctly clear that the appellant was not put in possession under the lease which turns out to be void.
In such a situation even during the period of 5 years for which the second lease was to be created the appellant continued to be in possession as tenant and this is evidenced by the further fact that rent was accepted from the appellant by respondents 1 and 2.
There is nothing to show that the rent was accepted from month to month by respondents 1 and 2 under the second lease and not what was determined by the Court in rent fixation case No. 114/53 wherein the parties had filed a consent precipe by which the parties invited the Rent Controller to fix the standard rent of the premises at Rs. 500/ p.m. and Rs. 500/ for use of the machinery, furniture and 661 fixtures, in all Rs. 1,000/ p.m.
In this connection, attention was drawn to Receipt Ext.
10 issued by respondents 1 and 2 on 1st January 1960 in which it is stated that the amount is accepted as per terms of consent decree (solenama), but it could not be overlooked that this amount was determined by consent of parties in the case initiated by the appellant before the Rent Controller for fixation of standard rent.
If thus the appellant was already in possession as a tenant of the premises an unsuccessful attempt to create a fresh lease would not change the nature of his possession as from a tenant to one in part performance under a void lease.
The appellant continues to be in possession as tenant and no cloud is created over its title to remain in possession as tenant merely because the appellant and respondents 1 and 2 attempted to enter into a fresh lease which did not become effective.
Even if it is assumed that the appellant was put in possession for the first time under a lease which turns out to be void, the appellant came into possession of the premises with the consent of the landlords and paid rent from month to month.
As the lease was to be for a period of 5 years, for want of registration no operative lease came into existence.
In almost identical circumstances in Ram Kumar Das vs Jagdish Chandra Deb Dhabal Deb & Anr.,(1) an inference of tenancy was made and the duration of the tenancy in such circumstances was held to be from month to month.
Woodfall on 'Landlord and Tenant ', Volume 1, 27th Edn., p. 187 para 446, in this context states as under: "Moreover, if the tenant enters into possession under a void lease, he thereupon becomes tenant from year to year upon the terms of the writing, so far as they are applicable to and not inconsistent with a yearly tenancy.
Such tenancy may be determined by the usual notice to quit at the end of the first or any subsequent year, and it will determine, without any notice to quit, at the end of the term mentioned in the writing.
But if the lessee does not enter he will not be liable to an action for not taking possession; nor will an action lie against the lessor for not giving possession at the time appointed for the commencement of the term but before the lease is executed".
In the context of fiction enacted in section 106 of the Transfer of Property Act depending upon the nature of lease, namely, one of a 662 Theatre, the person so put in possession would be a tenant from month to month.
The Privy Council in Arif vs Jadunath,(1) in terms held that if an indenture of lease is compulsorily registrable under section 107 of the Transfer of Property Act such a lease can only be made by a registered instrument and if not so made, is void altogether.
However, if from such a person in possession under a void lease the landlord accepts rent as held in Ram Kumar Das 's case, (supra) an inference of tenancy would follow.
Mulla in 'Transfer of Property Act ', 6th Edn., at p. 680 has observed that an oral agreement accompanied by delivery of possession, if for more than one year is valid, by delivery of possession, for the first year, and thereafter the lessee continuing in possession with the assent of the lessor becomes a tenant by holding over under section 116 of the Transfer of Property Act.
Such a lease being created by operation of law is binding even though the provisions of section 107 have not been complied with.
It is also noted at p. 681 that though an unregistered lease is void as a permanent lease, it can be deemed to be a monthly lease terminable by 15 days ' notice.
Mr. Sen, however, strenuously urged that the ratio in Ram Kumar Das 's case (supra) would have to be understood in the light of the recent decision of this Court in Technicians Studio Pvt. Ltd. vs Lila Ghosh & Anr.(2) As this case was heavily relied upon to assert that it concludes the point raised in the present appeal, it warrants an indepth analysis.
Much before the premises came to be owned by the respondent Lila Ghosh, her predecessors in title had brought a suit for ejectment of the lessees of the property impleading the appellant Technicians Studio Pvt. Ltd., a private limited company who were the sub lessees also as a defendant.
This suit ended in a decree some time in 1954.
The appellant applied for a review of the judgment which did not meet with success.
Against this decision rejecting the review application the sub lessee appellant moved the High Court in revision.
This revision was disposed of in terms of a consent precipe.
By the consent terms the appellant was to become the direct tenant under the first respondent 's husband and his brother who had by then become the owners of the property at a monthly rent of Rs. 1000/ .
The lease was to be for a period of 16 years from May 1954 with an option to the appellant to terminate the lease on giving 60 days ' notice to the lessors.
The indenture of lease, however, was not executed nor the consent decree was registered.
On the expiry of the 663 period of 16 years the first respondent commenced an ejectment action alleging that the appellant was a trespasser.
The appellant resisted the suit contending that it was a monthly tenant.
Negativing this contention this Court, agreeing with the High Court, held that the payments made by the appellant in that case can be explained as evidence of appellant 's willingness to perform its part of the contract and that a person who is led into possession on, the strength of a void lease does not acquire any interest in the property but gets under section 53A a right to defend his possession.
The decision in Ram Kumar Das 's case (supra) was distinguished observing that in Ram Kumar Das 's case (supra) it was admitted that in the beginning there was a relationship of landlord and tenant between the parties and the only question that arose for decision was whether the defendant was infect a monthly tenant under the plaintiff on the date when the notice to quit was served upon him.
In the case before us, as pointed out earlier, the appellant was admittedly a tenant of respondents 1 and 2 between 1948 and 1953.
Again, the appellant was a tenant from 1st September 1953 to 1st March 1955 when the second lease was to commence.
In the case under discussion appellant was a sub lessee and he was to acquire a status of direct lessee or tenant under the lease which was found to be void.
To be precise, the appellant Technicians Studio Pvt.
Ltd. was not the tenant at the commencement of the lease which turned out to be void.
That is the distinguishing feature.
In the present case the appellant was the tenant from 1948 to 1953 and till February 1955, a feature similar to Ram Kumar Das 's (supra) and which was considered decisive.
Therefore, the case falls squarely in terms of the ratio in Ram Kumar Das 's case wherein the position was admitted that in the beginning there was a relationship of landlord and tenant between the parties.
This Court in Technicians Studio 's case (supra) did not once and for ever conclude the point that a person coming in possession under a void lease can never claim to be a tenant.
On the contrary, it was in terms held that each case will have to be decided on its own facts.
This becomes abundantly clear from a pertinent observation extracted herein: "This does not mean however that there cannot be a relationship of landlord and tenant in any case where the transferee has taken possession of the property under a void lease or in part performance of a contract and is entitled to protection under section 53A of the Transfer of Property Act Such a view would be incorrect and encourage attempts to circumvent the protection of the Rent Acts given to the tenants.
Whether the relationship of land 664 lord and tenant exists between the parties depends on whether the parties intended to create a tenancy, and the intention has to be gathered from the facts and circumstances of the case.
It is possible to find on the facts of a given case that payments made by a transferee in possession were really not in terms of the contract but independent of it and this might justify an inference of tenancy in his favour.
The question is ultimately one of fact".
In this case it is unquestionably established that at the commencement of the lease which turns out to be void, i.e. on 1st March 1955 appellant was a tenant of the premises and that on its application standard rent in respect of the demised premises was determined and the same was accepted as the rent to be paid under the second lease.
Payment has in fact been made and it would be twisting the language to hold that the payment was not made as rent but under the terms of the second lease.
In view of the statutory enactment of the equitable principle of part performance as found in section 53A, the equity recognised in Walsh vs Lonsdale,(1) may not be attracted.
However, it would not be correct to hold that a tenant who was in possession of the demised premises as tenant and who negotiated a fresh agreement of lease with the landlord for a period exceeding one year which, in order to be legal, must be by a registered instrument and which turns out to be void for want of registration, would alter his position from one as tenant at the commencement of such void lease and would render him a licensee continuing in possession under the terms of a lease being void and, therefore, ineffective and that he ceases to be a tenant and could be forcibly removed at the end of the period which was reserved under the void lease.
Such an incomplete and ineffective attempt at creating a fresh lease would have no impact on a tenant who was in possession as tenant at the commencement of such a void lease and he would continue to be the tenant because section 53A would not be attracted as he is not put in possession in part performance of an agreement of lease not registered and that it would be unwise to hold that the payment of the standard rent fixed by the Rent Controller having jurisdiction could be by any process of construction treated as payment under such an agreement of lease.
Therefore, it would appear that the appellant company was a tenant during the period 1948 53 and on the expiry of the contractual tenancy on 31st August 1953 it became a statutory tenant.
A person remaining in occupation of premises let to him after the determination of or expiry of the period of the tenancy is commonly, though in 665 law not accurately, called a statutory tenant.
In other words, he acquires the status of irremovability [see Anand Nivas (Private) Ltd. case].(1) Statutory tenant being a person who enjoys the status of irremovability, would enjoy the protection of the statute until he is evicted from the premises under the enabling provisions of the statute.
A statutory tenancy would, therefore, come to an end on either the surrender of premises by such a tenant or if a decree of eviction is passed against him (See Hiralal Vallabhram vs Kastorbhai Lalbhai & Ors.) (2) As the period reserved under the first lease expired an 31st August 1953 and thereafter the tenant continued in possession, it became a statutory tenant under the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950.
If thereafter an ineffective attempt was made to enter into a fresh contract of tenancy the status of the appellant as tenant did not undergo any change and it continued to be the tenant of the premises and the statutory tenancy would come to an end if it surrenders possession or is evicted by due process of law.
If the appellant thus continued to be a tenant it could not be forcibly evicted.
If the premises enjoyed the protection of the West Bengal Premises Tenancy Act, 1956, which was in force on 29th February 1960 when according to respondents 1 and 2 the period reserved under the void lease expired, respondents 1 and 2 cannot, ignoring the provisions of the relevant Rent Restriction law and merely treating the appellant as licensee or trespasser, ignoring its status of irremovability, take over forcible possession.
In such circumstances the appellant as tenant would be entitled to protect its possession unless evicted in due course of law and in order to protect its possession it can legitimately sue, there being no bar in law, for a declaration of its status as tenant and for an injunction either prohibitory or mandatory, as the case may be.
The High Court really missed the core problem and with respect misled itself into invoking the provisions of section 53A which the learned counsel appearing for the present appellant declined to invoke in its favour and came to an unsustainable conclusion that under the consent decree the parties agreed that the old tenancy would be wiped out and a new tenancy would be created for a period of 5 years expiring in February 1960.
A still born attempt not clothed with legal formality cannot destroy the existing status.
The second lease never came into existence for want of registration and more particularly the appellant was not put in possession under the purported second lease which turns out to be void.
The paradoxical approach manifested in the approach is that if a valid lease had come into existence on the expiry of it the 666 appellant tenant would have continued in possession under the protection of the relevant Rent Restriction Act.
However, if such an attempt at creating a fresh lease was ineffective or infructuous, how can such an inchoate exercise destroy the existing rights which the High Court held to have been destroyed ignoring the very existence of West Bengal Premises Tenancy Act, 1956 ? The High Court was further in error in holding that if on the expiry of the agreed period of lease there was a covenant for not getting any renewal of the lease the tenant would be a trespasser, wholly overlooking the legal position as affirmatively established that on the expiry of the contractual tenancy the tenant continues as a statutory tenant except where he surrenders possession or is evicted under the enabling provisions of the relevant Rent Restriction Act.
It thus clearly transpires that the appellant was a tenant and continued to be a tenant and was entitled to protect its possession by appropriate proceeding unless evicted in due course of law.
Before we conclude it is necessary to dispose of a contention in the form of a preliminary objection raised by Mr. Sen for the respondents that the certificate granted by the High Court being invalid, the appeal must fail on that account alone.
Certificate granted by the High Court leaves much to be desired.
It is merely stated that it is a case fit for appeal to the Supreme Court.
It may be pointed out that the appellant had prayed for a certificate under Article 133(1)(a), (b) and (c) as it stood at the relevant time in 1969.
In the application for the certificate it was stated that the subject matter of the suit and appeal to the Supreme Court will exceed Rs. 20,000/ and that judgment is one of affirmance.
It was also stated that the appeal involves a question of general public importance and, therefore, a certificate may be granted under Article 133(1)(a), (b) and (c).
In the affidavit in opposition on behalf of respondents 1 and 2 it was stated that the value of the subject matter of dispute was less than Rs. 20,000/ and the appeal does not involve any question of law of general public importance which had to be determined by the Supreme Court.
With these two affidavits before it, the High Court granted certificate that it is a fit case for appeal to the Supreme Court.
A certificate which the High Court grants must be supported by adequate reasons.
It is obligatory upon the High Court to set out the question of public or private importance which in their opinion falls to be determined in the proposed appeal (see Sohanlal Naraindas vs Laxmidas Raghunath Gadit,(1) and Railway Board, Govt.
of India vs M/s. Observer Publications (P) Ltd.(2) 667 In both these cases the appeals were disposed of on merits and the preliminary objection was merely noticed.
However, in Nund & Samont Co. Pvt. Ltd. vs Commissioner of Income tax, Bihar & Orissa,(1) this Court held that a certificate of fitness for appeal to the Supreme Court issued by the High Court under section 66A of the Income tax Act, 1922, will be defective if it does not set out the substantial question of law which, in the view of the High Court, falls to be determined by the Supreme Court, and following the decision in India Machinery Stores P. Ltd. vs Commissioner of Income Tax, Bihar and Orissa,(2) the appeal was liable to be dismissed in view of the defective certificate.
However, in both the cases after observing that the certificate was defective the appeals were disposed of on merits.
In this case a very substantial question of law of general public importance is raised and it would be a travesty of justice if we now dismiss the appeal on the sole ground that the certificate is defective.
It would have been open to us to grant special leave on the question raised before us.
Therefore, the preliminary objection must be overruled.
This appeal accordingly succeeds and is allowed and the judgment and decree of the High Court as well as of the first appellate Court are set aside and the judgment and decree of the trial court are restored with costs throughout.
N.V.K. Appeal allowed.
| The prosecution alleged that the police officers of the appellant state while investigating a case discovered a workshop run by a mechanic who was then actually working on a revolver.
Several other guns, revolvers and rifles were found in the workshop and all these fire arms were seized.
The mechanic claimed to have received one of the guns so seized from a gun licensee and the rest from respondents 1 to 4 for repairs.
The mechanic had no valid licence under the to keep or repair these fire arms but respondent No. 4 however possessed licences under the Act to run the business of repairing and dealing in fire arms.
The police charge sheeted the mechanic, the gun licensee and respondents 1 to 4, for having committed offences under Sections 25(1)(a) and 27 of the Act.
The Magistrate held that there were materials to make out a prima facie case under section 25(1)(c) of the Act against the gun licensee and under section 29(b) of the Act against the mechanic and charged them accordingly.
As regards Respondents 1 to 4 taking the view that giving of the arms to the mechanic by the respondents for the limited purpose of repairs, did not amount to delivery of 'possession ' of those arms within the meaning of section 29(b) of the Act, he discharged the said respondents.
The appellant 's criminal revision against the said order, was dismissed, the High Court holding that Respondents 1 to 4 could not be said to have delivered the fire arms into the 'possession ' of the mechanic within the meaning of section 29(b) of the Act, because the respondents possessed valid licences for repairs as well as for sale of fire arms and had given only 'temporary ' custody of those arms to the mechanic for the limited purpose of carrying out the repair job, while the effective control over those arms all the time remained with the respondents.
In appeal to this Court it was contended on behalf of the appellant State that the question whether a person is in possession of a fire arm or had transferred and delivered it to another, is largely one of fact; that in the instant case, the mechanic was not a servant or employee of the respondents but was independently running his own business of repairing fire arms; that the fire arms were handed over by the respondents to the mechanic to be repaired at the latter 's residence cum workshop which was not the respondent 's licensed place 324 of business; that the mechanic had no licence for repairing or keeping fire arms and the respondents were either aware of this fact or did not ascertain it before delivering the fire arms to him, that 'possession ' within the purview of section 29(b) means immediate possession and consequently, delivery of even temporary possession and control to an unauthorised person falls within the mischief of the section; that in the circumstances of the instant case there was a clear prima facie case not only under section 29(b) but also under section 30 read with section 5 of the Act, against the Respondents and consequently the Magistrate was not justified in discharging them.
On behalf of the Respondents it was contended that the mechanic was only in temporary custody of the fire arms for the limited purpose of repairing them, as an agent of the owners, who being licencees in Form IX entitled to repair and keep these fire arms, throughout remained in their lawful possession and control.
The delivery of possession contemplated by section 29(b) is something more than entrusting the arms to an 'agent ' for the limited purpose of repairs.
Allowing the appeal, ^ HELD: 1.
"Possession" is a polymorphous term which may have different meanings in different contexts.
It is impossible to work out a completely logical and precise definition of "possession" uniformly applicable to all situations in the contexts of all statutes.
"Possession" implies a right and a fact; the right to enjoy annexed to the right of property and the fact of the real intention.
It involves power of control and intent to control.
[328D E] "Possession" is not a purely legal concept but also a matter of fact, and the broad test for determining whether a person is in possession of anything is whether he is in general control of it.
[328H 329A] Salmond 's Jurisprudence 11th Edn.
p. 52 referred to.
In the instant case although the respondents held licences in Form IX for repairing and dealing in fire arms at the place of business, factory or shop which was specified in Column 3 of their licences, they handed over the fire arms to the mechanic who had no such licence to be repaired at the latters own workshop.
Since that workshop and the repairing business being run therein, was in the exclusive control and occupation of the mechanic, the inference would be that by handing over the fire arms to the mechanic for repair the respondents had divested themselves for the time being not only of physical possession but also of effective control over those fire arms.
The respondents had not done anything to ascertain whether the mechanic was legally authorised to retain those fire arms even for the limited purpose of repairing them.
Prima facie the materials before the Magistrate showed that the respondents had delivered the fire arms in question into the possession of the mechanic without previously ascertaining that he was legally authorised to have the same in his possession, and as such, they appeared to have committed an offence under section 29(b) of the Act.
[330B C, 330G 331A] 3.
By allowing the fire arms to be removed to a place other than the place of business or factory specified in Column 3 of the licences in Form IX, the respondents contravened condition (1)(c) of the licence, amounting to an offence punishable under section 30 of the Act.
[331 B C] 325 The materials before the Magistrate, prima facie disclosed the commission of offences under Sections 29(b) and 30 of the Act by Respondents 1 to 4.
The Magistrate was thus clearly in error in discharging these respondents.
[331D] 4.
The ratio of cases decided under the Old (Act 11 of 1878) should not be blindly applied to cases under the Act of 1959 which has in several aspects modified or changed the law relating to the regulation of arms.
[331H] 5.
Trial of summons case as a warrant case does not amount to an illegality but is a mere irregularity that does not vitiate the trial unless there is a prejudice.
[333 B] 6.
Case remitted to trial Magistrate with direction to frame charges in respect of offences under Sections 29(b) and 30 of the Act against Respondents 1 to 4 and to proceed further with the trial.
[333C] Manzur Hussain vs Emperor, AIR 1928 All.
55(1); Sadh Ram vs State, AIR 1953 HP 121; Emperor vs Harpal Raj, ILR XXIV All. 454; A. Malcom vs Emperor, AIR 1933 Cal.
218; Emperor vs Koya Hansji, ; Parmeshwar Singh vs Emperor, AIR 1933 Pat.
600; Murli vs Crown, AIR 1929 All. 720; Tola Ram vs Crown, ILR 16 All.
276; held inapplicable.
|
Criminal Appeal No. 342 of 1974.
Appeal under Section 2(a) of the Supreme Court Enlargement of Criminal Appellate Jurisdiction Act, 1970 from the Judgment and Order dated 2 7 74 of the Kerala High Court in Criminal Appeal No. 338 of 1973 and 87/74.
T. C. Raghavan and N. Sudhakaran for the Appellant.
K. R. Nambiar for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
Narayanan Satheesan alias Baboo, the appellant herein, was tried by the Additional Sessions Judge, Mavelikara, under section 302 of the Indian Penal Code for intentionally causing the death of one K. G. Thomas alias Thampi, a well built male, aged about 32 years, who was an inhabitant of Eruvallipra Muri in Thiruvala Village, by inflicting an injury with a dagger (M.O. 1) on the back of his chest at 7.30 P.M. on December 16, 1972 at a sandy place situate on the Western side of the village road which goes to Veliyam Kadavu (Ghat Ferry) from Thirumoola on the eastern extremity of Purayidom known as Kaval Purayidom belonging to Arya Community within the jurisdiction of Thiruvalla Police Station.
On a consideration of the material adduced before him, the learned Judge acquitted the appellant of the charge under section 302 of the Indian Penal Code but convicted him under section 326 of the Code and sentenced him to rigorous imprisonment for a term of seven years with the finding that he had, by means of a dangerous weapon like M.O. 1.
caused grievous hurt on the person of the deceased which had endangered his life.
Aggrieved by this judgment and order, both the State as well as the appellant appealed to the High Court of Kerala at Ernakulam.
The High Court set aside the conviction of the appellant under section 326 of the Indian Penal Code and instead convicted him under section 302 of the Code and sentenced him to imprisonment for life.
Dissatisfied with this judgment, the appellant has come up in appeal to this Court under section 2(a) of the (Act 28 of 1970).
The case as put forth by the prosecution is that a couple of weeks before the date of occurrence, there was an altercation between the appellant and the deceased over the refusal by the latter to relinquish possession of the Purayidom before the expiry of the term of one year of the lease granted in his favour by the father of the accused on a pattom of Rs. 550/ which entitled him to the usufruct of the coconut trees standing on the Puravidom that during the course of the aforesaid alternation the appellant threatened to kill the deceased if he 579 did not hand back possession of the property peaceably; that irked at the refusal of the deceased to surrender possession of the Purayidom, the appellant armed himself with a dagger and followed the deceased on the evening of December 16, 1972, While the latter was passing along the above mentioned road and after thrusting the dagger in the back of the chest of the deceased,took to his heels without even taking out the weapon from the situs of the wound; that the deceased pulled out the weapon from his back and threw it on the ground hereafter blood gushed out of the wound and he fell down; that on seeing this incident Gopala Kurup (P.W.1), who was going to have his bath at Veliyam Kadavu and Thommi Mathai (PW.2) who was on his way to Thirumoola which is about five furlongs from his house to buy some provisions rushed to the scene of occurrence; that Thommi Mathai (P.W. 2) and Gopala Kurup (P.W. 1) removed the deceased about 6 or 7 feet towards the East whereafter Gopala Kurup (P.W. 1) bandaged the wound of the deceased which was bleeding profusely with his thorough (bath towel); that while the wound was being bandaged by Gopal Kurup, Pappan (P.W. 5), the Ferryman employed by the Municipality at Veliyath for ferrying people across Manimala river, also hastened to the scene of occurrence, saw the appellant running away and heard the deceased saying "Mathaichacha.
Babu stabbed me"; than after bandaging the wound as aforesaid, Gopal Kurup (P.W. 1) Thommi Mathai (P.W. 2) and Pappan (P.W. 5) removed the deceased to the middle of the road, laid him on the level surface and started raising an alarm, on hearing which the brothers of the deceased including Geevarghese George (P.W. II ) and some other persons arrived at the scene of occurrence, that in reply to the query made by his elder brother, Geevarghese George (P.W. 1 1), the deceased said "Achaya, Babu stabbed me"; that the deceased was thereafter removed by his brothers in a taxi car to the Thiruvalla Hospital where P.W. 6, Dr. G. K. Pai, examined his person and found a stab injury over his left infrascapular area, 3 XI c.m., horizontal in position, both edges sharp penetrating into the pleural cavity (left side) Direction of the wound obliquely forward and to the right side(?) Anenumothorax on the left side; that the doctor made an entry of the injury noticed by him in the relevant register of the Hospital and rendered first aid to the deceased; that while the first aid was being given to him, the deceased told the doctor that the injury was caused to him by stabbing at 8.00 P.M.; that in view of the serious nature of the wound, the doctor advised the relatives of the deceased to take him to the Medical College Hospital, Kottayam for expert medical attention and treatment; that thereafter the doctor gave intimation of the incident on telephone and by means of a letter (Ext.
p 4) to the Thiruvalla Police Station whereupon P.W. 15 viz. Madhavan Pillai Head Constable attached to the said Police Station proceeded to the Hospital but on learning on arrival at that place that the injured had already been sent to the Medical College Hospital, Kottayam, he at once returned to the Police Station and forthwith contacted Arpookara Police Station on telephone and informed the person in charge thereof that since the statement of the injured person by name K.G. Thomas who had been brought to Thiruvalla Hospital with serious injuries could not be, taken as he had been removed to the Medical College Hospital.
Kottayam for expert medical treatment, his 580 statement might be taken and the needful be done in the matter; that on being thus informed by Madhavan Pillai (P.W.15), Govinda Pillai (P.W. 13), Head Constable In charge of the Police Station, Kottayam proceeded to the College Hospital and after taking the permission of Dr. K. M. R. Mathew, who was examining the deceased in the casualty room, recorded his statement (Exh. p 9) at 9.30 P.M. which was to, the following effect : "I know that it is a Head Constable who is talking to me now.
I am called Thampi.
Babu, son of Ezharapra Narayanan stabbed, me with a dagger.
It was on my back that he stabbed me from behind.
It was at Veliyamkadavu (ferry) that he stabbed me.
It was I myself who pulled out the dagger with which I was stabbed and threw it there.
Ferryman Pappan and others have seen him stabbing me.
It was today at 7.30 p.m. that the incident took place.
It was in order to kill me on account of prior enmity that he stabbed me.
The place of incident is within the limits of Thiruvalla Station.
It is 40 kms.
south from here.
" The prosecution case further proceeds that it was not before 2 O 'clock at night intervening between 16th and 17th December, 1972 that Govinda Pillai (P.W. 13) could return to his Police Station as he had to record statements in four or five other cases intimation regarding which was received by him while he was at the Hospital; that on his return to the Police Station, Govinda Pillai (P.W. 12) prepared the First Information Report (Exh.
P 10) on the basis of Exbibit P 9 and sent the same to the Munsiff Magistrates Court Ettumanoor; that an hour after his return to the Police Station, Govinda Pillai got intimation from the Hospital vide Exhibit P 1 1 that the injured person, whose statement (Exh.
P 9) he had recorded had died at 3.00 A.M.; that about 8 O 'clock in the morning, Govinda Pillai went to the Medical College Hospital and prepared the Inquest Report (Exh.
P 8) whereafter he sent the dead body of the deceased to the Police Surgeon for post mortem examination; that P.W. 4, Dr. vs K. Jayapalan, Professor of Forensic Medicine and Police Surgeon, Medical College, Kottayam conducted the autopsy of the body of the deceased on December 17, 1972 at 2.00 P.M. and noticed the following appearances : "General Body was that of a well built adult male.
Rigor mortis fully established and retained all over.
Dried blood stains were seen on the front of right fore arm and front of chest.
Injuries (antemortem) (1) Sutured incised penetrating wound horizontally placed on the back of chest 3 cm.
to the left of middle and 24 cm.
below the top of shoulder.
The wound was found entering chest cavity cutting through the 9th intercostal space, perforated the lower lobe of left lung and penetrated the left ventricle of the heart.
The wounds on the lung and heart measured 2.8 cm.
in length and were found sutured.
The wound was directed forwards upwards and to the right.
581 (2) Sutured surgical thorocotomy wound 26 cm.
in length on the outer aspect and back of left chest 17 cm.
below the arm pit.
(3) Surgical wound 1.3 X .5 cm.
obliquely placed on the back of chest 3 cm.
below injury No. 1.
(4) Multiple small abrasions over an area 3.5 x 2 cm.
on the outer aspect of right shoulder.
Other findings are; Left lung was collapsed.
Left chest cavity contained 75 cc.
of blood clots.
Pericardial cavity contained 50 cc.
of blood clots.
Stomach was empty and mucous was normal.
" The doctor opined that injury No. 1 which could have been caused with a weapon like M.O. 1 was sufficient in the ordinary course to cause death.
The doctor further opined that the cause of death of the deceased was bleeding and shock following stab injury sustained by him on the back.
P.W. 17, V. Rajasekharan Nair, Circle Inspector of Police, Kayamkulam, took over investigation of the crime on receipt of the express intimation regarding the registration of the case under section 302 of the Indian Penal Code on December 17, 1972.
He repaired to the scene of occurrence without any loss of time, prepared the, scene mahazar, seized the blood stained earth and questioned the witnesses and prepared notes of their statements on the same evening.
He also seized the dagger (M.O. 1) which was produced before him by Geevarghese George (P.W. 11) on December 30, 1972.
It was not, however, before January 1, 1973 that the Police could arrest the appellant at Nedumbram.
After completion of the investigation, the appellant was proceeded against in the Court of Sub Magistrate, Thiruvalla, who committed him to the Court of Sessions to stand his trial under section 302 of, the Indian Penal Code with the result as stated above.
Although in addition to the other witnesses, the prosecution examined Gopal Kurup (P.W. 1), Thommi Mathai (P.W. 2) and Pappan (P.W. 5), who claimed to be the eye witnesses of the incident, both the Additional Sessions Judge and the High Court while holding that their arrival on the spot was proved, discarded the evidence of Gopal Kurup (P.W. 1) and Thommi Mathai (P.W. 2) on the )ground that their testimony was not trustworthy and rested the conviction of the appellant on the dying declaration (Exh.
P 9) which, according to them.
received ample corroboration from the testimony of Pappan (P.W. 5).
Appearing in support of the appeal, Mr. Raghavan has urged that the conviction of the appellant cannot be sustained firstly because the evidence on the record is not sufficient to bring home the offence to the appellant.
secondly because the dying declaration (Exh. P 9) which 582 has been heavily relied upon by the trial court and the High Court could not have been made by the deceased who was in a critical condition and clearly appears to have been fabricated after the death of the deceased and thirdly because the testimony of Pappan (P.W. 5) and Geevarghese George (P.W. 11) from which corroboration has been mainly derived is not cogent and convincing.
We have carefully gone through the entire evidence on the record.
While we do not consider it safe to place reliance on the eye witness account of the occurrence given by Gopal Kurup (P.W. 1) and Thommi Mathai (P.W. 2) which has been rejected as untrustworthy by the trial court and the High Court or on the statement of Geevarghese George (P.W. II) in view of his queen and unnatural conduct in wiping away the blood from the weapon of offence and not producing the same before the Police for nearly 14 days, we think that the statements of ' Govinda Pillai (P.W. 13) and Pappan (P.W. 5) cannot easily be brushed aside.
Pappan (P.W: 5) who belongs to the community of the appellant and has no animus against him and whose testimony is natural and consistent and whose credit has remained unshaken despite the lengthy cross examination to which he was subjected has unequivocally stated that at about 7.30 on the evening of December 16, 1972 while he was sitting in his boat which he had rowed to the Northern ferry as there were no passengers to take across the river, he heard the cry "Heigho", "heigho" from the shore; that on ascending five or six steps, be saw the deceased standing in a bent position on the western side of the road with a dagger stuck on his back and the accused whom he knew from his childhood running westwards from near the deceased; that the deceased himself pulled out the dagger and threw it in the Purayidom; that it was after Gopal Kurup (P.W. 1) and Thommi Mathai (P.W. 2) had come running lo the spot from the North that the deceased fell down on the right side; that Gopal Kurup (P.W. 1) bandaged the wound of the deceased with his bath towel and while his wound was being bandaged, the deceased was saying "Mathaicha, abut stabbed me".
The evidence of Govinda Pillai, Head Constable (P.W. 13) has also remained unshaken in cross examination.
From his statement which receives corroboration from the statements of not only Dr. V. K. Jayapalan (P.W. 4) and Dr. G. K. Pai (P.W. 6) who were examined by the prosecution but also from the statement of Dr. Mathew Varghese (P.W. 5) who was examined by the appellant, it is crystal clear that the deceased (whose central nervous system remained normal and who neither lost his consciousness nor his power of speech) gave a coherent account of the circumstances leading to his injury which be faithfully and accurately recorded in Exhibit P 9 and forthwith asked the deceased to append his signatures thereon which he did with a steady hand.
We are, therefore, absolutely convinced that the incident took place in the manner disclosed by the prosecution.
This does not, however, conclude the matter.
The important question as to the nature of the offence committed by the accused still remains to be determined by us.
adopting the reasoning of the trial court, it is emphasized by learned counsel for the appellant that since the appellant inflicted only one stab injury on the person of the 583 deceased and the deceased died during the performance of operation on his lung and heart and the prosecution has not tried to establish either that the doctor who performed the delicate operation was at specialist or a competent and skilful surgeon and took all reasonable; care and caution or that the death was the inevitable result of the stab injury, the appellant can at the utmost be held guilty of the offence, under section 326 of the Indian Penal Code.
We find it difficult to accede to this contention.
It is true that the appellant inflicted only ones stab wound on the deceased but the facts established in the case viz. that the appellant did not act under any sudden impulse but pursued the deceased after arming himself with a dagger which is a dangerous weapon in execution of a premeditated plan motivated by ill feelings nurtured for a number of days and inflicted a servere stab injury on the vital region of the body of the deceased which perforated not only his left lung but also penetrated into and impaired the left ventrical of his heart clearly show that the appellant had the intention of causing the death of the deceased and pursuant thereto acted in a manner which brings his offence within the mischief of section 302 of the Penal Code.
It is no doubt unfortunate that the prosecution has not attempted to examine the doctor who performed the operation but this lapse is, in our opinion, not sufficient to downgrade the enormity of the offence committed by the accused.
It cannot be overlooked that Dr. V. K. Jayapalan (P.W. 4) who conducted the autopsy has categorically stated that stab injury No. 1 was 'sufficient in the ordinary course to cause death ' and that the cause of death of the deceased was bleeding and shock following the said injury.
In Gudar Dusadh vs State of Bihar(1) where the accused made a pre meditated assault and inflicted an injury with a lathi on the head of the deceased which was sufficient in the ordinary course of nature, to cause death and actually resulted in the death of the latter, it was held that the mere fact that the accused gave only one blow on the head would not mitigate the offence of the accused and make him guilty of the offence of culpable homicide not amounting to murder.
In the instant case, the prosecution having succeeded in establishing that the stab injury inflicted on the person of the deceased was sufficient in the ordinary course of nature to cause the death, the offence committed by the accused squarely falls within the purview of clause 'thirdly ' of section 300 of the Indian Penal Code according to which culpable homicide is murder if the act by which the death is caused is done with the intention of causing bodily injury to any person and the bodily injury intended to be caused is sufficient in the ordinary course of nature to cause death of the deceased.
Again the non production by the prosecution of the doctor who performed the operation on the deceased is of no avail to the appellant.
As rightly held by the High Court, the case is clearly covered by Explanation 2 to Section 299 of the Indian Penal Code which provides that where death is caused by an injury the person who (1)A.I. R. 584 causes it would be deemed to have caused the death although by resorting to proper remedies and skilful treatment the death might have been prevented.
It appears that the attention of the Additional Sessions Judge was not drawn to this aspect of the matter and while quoting a passage from Modi 's Medical Jurisprudence and Texicology (1963 Edition), he not only glossed over the last sentence thereof where it is succinctly stated that "it should be, noted that the liability of the offender is in no way lessened even though life might have been preserved by resorting to proper remedies and skilful treatment" but also tried to highlight something which did not possess any significance.
Taking into consideration the deadly character of the weapon used, the dastardly assault made by the accused and the vital organs of the body on which the injury was caused as also the categorical.
statement of Dr. V. K. Jayapalan, Professor of Forensic Medicine, who conducted the autopsy of the dead body of the deceased that the injury No. 1 was sufficient in the ordinary course to cause death of the deceased, we have no hesitation in holding that the appellant deliberately caused the fatal wound on the person of the deceased and in maintaining the conviction under section 302 of the Indian Penal Code.
For the foregoing reasons, we find no merit in this appeal which is dismissed.
S.R. Appeal dismissed.
| The appellant, though charged section 302 of the Indian Penal Code for intentionally causing the death of one K. G. Thomas alias Thampi, a well built male of 32 years on the night of December 16, 1972, by inflicting a stab 3X1 cm.
over his left infrascapular area was, however, on a consideration of the material adduced before him, acquitted of the said charge and convicted section 326 and sentenced to 7 years rigorous imprisonment by the Sessions Judge.
Both the appellant and the State appealed against the said orders.
The High Court ,accepted the State 's appeal, set aside the conviction section 326 and convicted him u/s 302 and sentenced him to imprisonment for life.
The High Court rested the conviction on the dying declaration (exhibit p. 9) which received ample corroboration from the testimony of; one of the three eye witnesses, Pappan (P.W. 5).
Dismissing the appeal to this court section 2(a) of the Supreme Court (Enlargement of Criminal Appellate Jurisdiction) (Act 28 of 1970), 1970, the court, HELD : (1) Non production by the prosecution of the doctor who performed the operation on the deceased is of no avail.
It is no doubt unfortunate that the prosecution has not attempted to examine the doctor who performed the operation, but this lapse is not sufficient to downgrade the enormity of the offence committed by the accused.
[583 C D, H] Explanation (2) to section 299 of the Indian Penal Code which provides that where death is caused by an injury, the person who causes it would be deemed to have caused the death although by resorting to proper remedies and skilful treatment, the death might have been prevented.
[583 H, 584 A] (3)(a) In the instant case, taking into consideration the deadly character of theweapon used, the dastardly assault made by the accused and the vital organsof the body on which the injury was caused as also the categorical statement of Dr. Jayapalan, P.W. 4, who conducted the autopsy of the dead body of the deceased that the injury No. 1 was sufficient in the ordinary course to cause death of the deceased, it is clear that the appellant deliberately caused the fatal wound on the person of the deceased.
The conviction u/s 302 of the Indian Penal Code must be maintained.
[584 B C] (b)It is true that the appellant inflicted only one stab wound on the deceased but the facts established in the case, namely, that the appellant did not act under any sudden impulse but pursued the deceased after arming himself with a dagger which is a dangerous weapon in execution of a premeditated plan motivated by ill feelings nurtured for a number of days and inflicted a severe stab injury on the vital region of the body of the deceased which perforated not only his left lung but also penetrated into and impaired the left centrical of his heart clearly show that the appellant had the intention of causing the death of the deceased and pursuant thereto acted in a manner which brings the offence within the mischief of section 302 of the Penal Code.
The offence committed by the accused squarely falls within the purview of clause "thirdly" of section 300 of the Indian Penal Code according to which culpable homicide is murder if the act 13 930SCI/77 578 by which the death is caused is done with the intention of causing bodily injury to any person and the bodily injury intended to be caused is sufficient in the ordinary course of nature to cause death of the deceased.
[583 B E] Gudar Dusadh vs State of Bihar, A.I.R. 1972 S.C. 952, followed.
|
Appeal No. 1862 of 1967.
Appeal under section 116 A of the Representation of the People Act 1951 from the judgment and order dated November 16, 1967 of the Punjab and Haryana High Court in Election Petition No. 19 of 1967.
112 A. K. Sen, B. Dutta, P. C. Bhartari, M. L. Aggarwal and J. B. Dadachanji, for the appellant.
section K. Mehta and K. L. Mehta, for respondent No. 1 The Judgment of the Court was delivered by Hidayatullah, J.
This appeal is directed against the judgment of the High Court of Punjab and Haryana at Chandigarh, November 16, 1967 by which the election of the appellant to the Vidhan Sabha of Haryana State from the Kaithal constituency has been declared to be void.
The election was held on February 19, 1967 and the result of the pool was declared on February 22, 1967.
The appellant had a margin of nearly 2000 votes.
over the first respondent who was the closest rival.
One other candidate had also stood but we are not concerned with him in the present appeal since he has not shown any interest in it.
He secured less than 1000 votes and forfeited his security.
The election petition was based upon allegations of corrupt practice against the successful candidate.
The gravamen of the charge was that she as a minister in the Government of Mr. Bhagwat Dayal Sharma used certain discretionary grants to bribe the voters of her constituency and in particular by paying two sums, of Rs. 2,000 for the construction of two dharamsalas ,for the Kumhar and the Sweeper Colonies at Kaithal.
There were other allegations also against her but as they have been found against the election petitioner and have not been brought to our notice we need not say anything about them.
The learned Judge who tried the election petition did not accept the evidence tendered by the election petitioner to prove the corrupt practice outlined above but held on a general appraisal of the circumstances of the case that these sums were in fact paid to bargain for votes and to influence the voters in favour of the appellant.
We shall now give a few facts of the case before stating our conclusion.
The election petition was filed on April 7, 1967.
It was later amended and better particulars were supplied on July 29, 1967.
In the original election petition as filed by the election petitioner it was stated that a sum of Rs. 2,000 from the discretionary giant of the appellant was paid to the Harijans of Keorak Gate, Kaithal for the construction of a dharamsala.
The allegation then was that in the beginning of January 1967 the Harijans were approached by the appellant and were asked to vote for her.
They flatly refused to vote for her.
Thereupon she promised to provide funds for the construction of a dharamsala in their basti and tempted by this offer they agreed to vote for her.
In regard to the other discretionary grant it 'was ' stated in the original petition that the Kumhar voters who reside in Dogran Gate.
Kaithal, were also 113 approached,by the appellant in the beginning of January 1967 and were asked to vote for her.
When they refused to vote she promised them a sum of Rs. 2,000 for building the dharamsala in their locality.
It was further pointed out that the first sum of Rs. 2,000 was paid through the Deputy Commissioner, Kamal, vide his Memo No. 78 BP III/67/335 of January 12, 1967.
The second payment was also made on the same date through the Deputy Commissioner, Karnal, vide Development Department Memo No. 47 BAP III 67/326.
The affidavit in support of the election petition was sworn by the election petitioner on information supplied by others and believed to be true.
It was stated in the verification clause that.this information was received "from my workers and believed to be true".
On an objection being raised that the particulars of the corrupt practice were not adequate and on the other hand vague and that the affidavit did not disclose the persons from whom the information was derived the Court ordered that better particulars be supplied and a fresh affidavit filed.
The amended election petition was then filed in July, 1967.
In this election petition a change was introduced.
It was stated that on December 22, 1966 the Harijans were called to a Canal Rest House through one Om Prakash Shorewala.
President of the Municipal Committee, Kaithal.
Other members of the Municipal Staff including the Executive Officer Bhalla were also present.
Among those who came were one Khaki Ram, Banwari Lal and one Harijan Lamberdar whose name was not given.
In the presence of these persons request Was made to the Harijans to vote for the appellant, and when they refused to do a sum of Rs. 2,000 was promised from the discretionary grant, and on this offer the Harijan voters consented to .vote for the appellant.
It was further alleged that this.
amount was ultimately paid to Khaki Rain and Banwari Lal through Shri Om Parkash Shorewala (R.W. 4).
As regards the second charge it was stated that on December 29. 1966 the Kumhar voters were summoned to the Canal Rest House and three persons, Thakru, Attra and Lilloo came as the representatives of the Kumhar community.
The same procedure, viz., asking them to vote for her candidature was followed by the appellant and on their refusal to do so a sum of Rs. 2,000 was promised to them for the construction of a dharamsala in their basti at Dogran Gate.
Kaithal.
This induced them to change their views.
The affidavit was also corrected.
It was stated that the allegation was based upon information received from Pandit Kailash Chander, s/o Pandit Hari Ram of Kaithal and Ch.
Inder Rai, ex Municipal Commissioner, Chandena Gate Gamri, Kaithal.
114 In answer to the amended election petition the written statement added that the allegation was a pure concoction.
The appellant pointed out that the grant for the construction of the dharamsalas was made by the appellant as far back as December 19, 1966 and that the allegation that it was the result of a bargain either on December 22 or December 29, was a pure fiction.
The election petitioner examined fourteen witnesses.
We are, however, not concerned with all of them because they are connected with the other allegations in the election petition.
Witnesses bearing upon this case were only four.
They were Gurbax Singh (P.W. 1), who only proved certain documents, P. N. Bhalla (P.W. 3), the Executive Officer of the Municipality, Thakru (P.W. 8), whose name has already been mentioned by us and Abnash Chander, the election petitioner.
In the evidence a change was again introduced.
It was attempted to be proved that the bargain which had been referred to in the election petitions actually took place on December 3, 1966.
This time it was affirmed that the Kumhars and the Sweepers were called together.
An objection was taken before the learned Judge that this evidence could not be considered because the plea was quite different.
The learned Judge ruled that the objection would be decided later.
It appears that the learned Judge did not put too much emphasis on the change of pleading presumably because he found the evidence to be unsatisfactory and unreliable.
On the side of the appellant were examined one R. N. Kapur (R.W. 1), the personal Secretary of the appellant who proved her tour programme to give a lie to some of the allegations in the election petition.
Attroo (R.W. 3), who was said to have been present at the conferences, Om Parkash Shorewala (R.W. 4), the Municipal President, Mr. Bhagwat Dayal Sharma (R.W. 5), the Chief Minister in whose Ministry the appellant was working as the Finance Minister and the appellant herself.
It is not necessary to go largely into what the witnesses said because the learned Judge himself observed as follows "Whereas according to the respondent the fact of the grant is not disputed, but it is denied that the grant was made in consideration of these communities voting for her.
If the matter had remained at this stage and the executing agency (the Sub Divisional Magistrate) had disbursed these grants I would not have been prepared to accept the oral evidence regarding the bargain which led to the grants.
But the manner, how the money was realised and disbursed, lends ample support to the evidence that the bargain was struck.
" It is clear that the learned Judge was of the opinion that the evidence led to prove the conference and the bargain at the con 115 ference was unacceptable.
He, however, accepted it because it was supported by circumstantial details of the withdrawing of the money which was sanctioned; but for this the learned Judge would not have accepted the election petition.
We shall glance at this evidence which has been led in the case.
As pointed out above the only witnesses from 'the conference are Thakru (P.W. 8) and Bhalla (P.W. 3).
With regard to Thakru it is sufficient to point out what the learned Judge himself said at the end of the deposition of Thakru : "The testimony of, this witness has not at all impressed me.
I will place no reliance whatsoever on his testimony.
" In view of this observation of the learned ' Judge we think we are entitled to ignore his testimony altogether.
As regards Bhalla (P.W. 3), he seems to have deposed not only in.
respect of these two grants but every allegation made in the election petition.
Mr. A. K. Sen, for the appellant, very pertinently described him as an omnibus witness.
His evidence is not convincing.
It appears on the record of this .case (and it was in fact admitted by Bhalla) that the appellant had taken action against him in respect of a house which fell down owing to the negligence of the Municipal Authorities.
It appears to us that Bhalla was hostile to the appellant.
There is enough material to show that he was trying to get even with the appellant for her action in putting the blame upon him for the falling down of a house from seepage of water from the municipal mains.
The learned Judge did not place any direct reliance upon Bhalla 's testimony.
As we have shown above, if it had not been for the circumstances attending the grant the learned Judge himself would have discarded his testimony.
We must, therefore, proceed with extreme caution in dealing with Bhalla 's evidence in the case.
It may be pointed out here that in the election petition as well as in the evidence it was stated that the Harijans and Kumhars were summoned through Bhalla and the peon was ordered by Om Prakash Shorewala to call the leaders of these two communities to the Canal Rest House: Sat Prakash, the peon was not examined in the case.
Of the persons present on the first occasion, viz., Banwari Lal, Khaki Ram, Lilloo and Attra and the Harijan Lamberdar who was not even named, none was examined except Attroo and Thakru.
Attroo was examined by the appellant.
We have shown above that the learned Judge placed no reliance upon Thakru 's word.
He made a similar remark about Attroo also so that the case really comes to this that there is only the evidence of the parties and such other evidence as was furnished by Shore wala and Bhalla.
The persons from whom information was derived as stated in the verification of the affidavit were not called as witnesses.
We have shown that Bhalla 's testimony must not be taken on its face value.
, Om Prakash Shorewala was support 116 ing the election petitioner but even so his evidence goes in favour Of the appellant.
The fact, 'however.
remains that the .
election petitioner himself was fumbling with the facts and was not able to state quite categorically when the conferences took place and on what date and at which place.
He changed the dates as more information came to hand.
This was not information about the conferences but the date on which the grant was sanctioned and the dates on which the appellant could be expected to have held the conferences.
In these circumstances, we are satisfied that in this case the oral evidence is practically non existing.
Mr. Mehta, who argued the case on behalf of the answering respondent, stated that it was not necessary at all to give the facts about the conferences and that the charge of bribery could be proved even without the details of how the bribe came to be given.
He relied upon the judgment of the Madras High Court in Kandaswami vs section B. Adityan for the proposition that a bribe is a bribe although the date on which it is given may not be capable of being specified if it could be established otherwise that the.
money was in: fact paid; and he further relied on a judgment of this Court in Bhagwan Datta Shasri vs Ram Ratanji Gupta & Ors.
that even if the full particulars be not given evidence might still be led to determine whether a corrupt practice had in fact taken place or not.
We need not decide in this case what the pleadings and the proof should be.
The ordinary rule of law is that evidence is to be given only on a plea properly raised and not in contradiction.
of: the plea.
Here the pleas were made on two different occasions and contradicted each other.
The evidence which was tendered contradicted both the pleas.
The source of the information was not attempted to 'be proved and the witnesses who were brought were found to be thoroughly unreliable.
In these circumstances we do not propose to refer to the evidence in this judgment any more.
This brings us to the question whether the circumstances of this case clearly demonstrated that there must have been some kind of bargain before the grant was made and that this bargain was with a view to inducing the voters to support the candidature of the appellant.
In Ghasi Ram vs Dal Singh & Ors.
(3) in which the judgment of this Court was pronounced today, the law relating to corrupt practice specially in the matter of giving of discretionary grants has been considered and stated.
It has been pointed out that a Minister in the discharge of his duties may be required to do.
some acts of administration including the granting of money for the uplift of certain communities and this action of the Minister is not to be construed against him unless it can be established (1) (3) ; 2.
(2) A.I.R. 1960 S.C. 200.
117 that there 'was a bargain with the voters for getting their assistance at the election.
Since the oral evidence in this case is non existing we must now look at the circumstances whether this conclusion which has been drawn by the High Court can be irresistibly reached.
The State of Haryana came into existence on November 1,1966.
Immediately afterwards the Cabinet placed certain sums of money at the disposal of, the Chief Minister, the Cabinet Ministers, Ministers for State and Deputy Ministers, to be used at their, discretion for the uplift of the communities.
A sum of Rs. 50,000 was placed in the discretionary grant of a Minister and the appellant as the Finance Minister in the Ministry of Shri Bhagwat Dayal Sharma was required to spend this money.
The money had to be disbursed before the end of the Financial Year, that is to say, before March 31, 1967.
It is reasonable to think that there must have been several demands in this State from the various community centres for their own uplift and they must have been clamouring even before for money for the establishment of schools, hospitals, supply of water, and so on.
The policy statement attached to the sanction of the discretionary grant stated the purposes for which the money could be utilised.
It was stated quite clearly that the money should not be given to any private person 'but should be given through the Development Commissioner for purposes of public utility and for benefit of the general public and that the execution of the works should be through certain named agencies such as Zilla Parishad, Panchayat Samities, the Panchayats concerned, the Public Works Department or any other Government Agencies or Municipality as the Minister may indicate.
In the present case money was to be disbursed through the Municipal Committee.
It is argued that the money was withdrawn and made available a day before the poll suggesting thereby that this was done to assure the voters that the money had come in as a result of the, bargain.
The hurry in reaching the money to these two wards in the Kaithal Municipality is the main reason behind the learned Judge 's conclusion that it must have been a part of a bargain.
Evidence, however shows that Bhalla (who was not favourable to the appellant) himself wrote saying that the money should be made available at once; and this money came to the hands of Om Prakash Shorewala, who, as we have already pointed out, was helping the answering respondent in his election.
It appears to us that all this hurry which did not emanate from the appellant was the result of and anxiety on the part of the recipients that the money should be made available as soon as possible.
| The three appellants were convicted under section 120B I.P.C. and section 167(81) of the Sea Customs Act for having entered into a criminal conspiracy among themselves and with a Chinese citizen in Hong Cong to smuggle gold into India with the, help of E, an Airlines stewardess.
E gave evidence at the trial as a witness for the prosecution.
Her testimony was clearly that of an accomplice and although she could have been prosecuted, she was not arraigned.
It was contended, inter alia, on behalf of the appellants (i) that it was the duty of the prosecution and/or the Magistrate to have tried E jointly with the appellants and the breach of this obligation vitiated the trial; in the alternative, E 's testimony must be excluded from consideration and the appeal re heard on the facts; (ii) that no oath could be adminis tered to E as she was an 'accused person in 'a criminal proceeding ' within the meaning of section 5 of the Indian Oaths Act as shown by her own statements made to the Customs officials and in Court; she could not therefore be examined as a witness; furthermore, the provisions relating to tender of pardon to accomplices contained in Chapter XIV of the Criminal Procedure Code do not apply to offences under section 120B (first Part) I.P.C. and section 168 (81) of the Sea Customs Act; the only ways in which E 's testimony could have been obtained was either to, take her plea of guilty and convict and sentence her or withdraw the prosecution against her under section 494 Cr. P. C. Not to send up a person for trial with the sole object of taking accomplice evidence is illegal.
Furthermore, under section 351 read with section 91 of the Code it was the duty of the Court to.
have detained E and included her in the array of accused before it; (iii) the evidence of E in respect of the identification of two of the appellants was inadmissible because she had been shown "heir photographs before her statements were taken; (iv) the photostats of certain document 's without the production of the originals were wrongly admitted and should have been excluded; and (v) selection, of E as once out of several accused ",,is discriminatory.
HELD : dismissing the appeal, (i) The offences were non cognizable and were investigated by Customs officers under the Sea Customs Act and not by the Police under Chapter XIV of the Code.
Therefore, no question of the application of sections 169 and 170 arose.
The accused were placed on trial on the complaint of the 625 Assistant Collector of Customs under the authority of the Chief Customs Officer, Bombay.
Although the Magistrate was taking cognizance of offences and not of offenders, it was no part of his duty to find offenders in view of the bar of section 187A if the complaint did not name a particular offender.
All that the Magistrate could do was to take a bond from E for her appearance in court if required.
[629 C E] Under section 118 of the Evidence Act, all persons are competent to testify unles the court considers that they are prevented from under standing the questions put to them for reasons indicated in that section.
Under section 132 a witness is not excused from answering any relevant question upon the ground that the answer will incriminate him or expose him to a penalty of forfeiture of any kind and when compelled to answer such question is protected 'against arrest or prosecution by the safeguard in the proviso to section 132 as well as in Art, 20(3).
The evidence of E could not therefore be ruled out, as that of an incompetent witness.
Since E was a self confessed criminal, in conspiracy with others who were being tried, her evidence was accomplice evidence.
section 133 of the Evidence Act makes the accomplice a competent witness against an accused person.
For this reason also E 's testimony was that of a competent witness.
[630 B H] (ii) The competency of an accomplice is not destroyed because he could have been tried jointly with the accused but was not and was instead made to give evidence in ;the case.
Section 5 of the Indian Oaths Act and section 342 of the Code of Criminal Procedure do not stand in the way of such a procedure.
If any accomplice is not prosecuted but is tendered as a witness, the bar of the Indian Oaths Act ceases because the person is not an accused person in a criminal proceeding.
The interrelation of section 342(4) of the Code and section 5 of the Indian Oaths Act.
both of which prohibited the giving of oath or affirmation to an accused on trial is fully evidenced by the simultaneous amendment of the Code in 1955 by which the right to give evidence on oath is conferred on the accused and provisions in pari materia are made in section 5 of the Oaths Act.
The only prohibition against the use of accomplice testimony exists in the rule of caution about corroboration and the interdiction, of influence in any form by section 343 of the Code.
If any influence by way of promise of pardon has to be made, the provisions of sections 337 and 338 or of the Criminal Law Amendment Act have to be observed.
That, however, applies to special kinds of cases of which the present was not one.
[632 F H] The expression, 'criminal proceeding ' in the exclusionary clause of section 5 of the Indian Oaths Act cannot be used to widen the meaning of 'he word 'accused '.
The same expression is used in.
the proviso to section 132 of the Indian Evidence Act and there it means a criminal trial and not investigation.
The same meaning must be given to the exclusionary clause of section 5 of the Indian Oaths Act to make it conform to the provisions in pari materia to be found in sections 342, 342A of the Code and section 132 of the Indian Evidence Act.
The expression is also not rendered superfluous because, given this meaning, it limits the operation.
of the exclusionary clause to criminal Prosecutions as opposed to investigations had civil proceedings.
[633 D F] (iii) If the court is satisfied that there is no trick photography and the photograph is above suspicion, the photograph can be received in evidence.
It is, of course, always admissible to prove the contents of the document, but subject to the safeguards indicated to prove the authorship.
This is all the more so in India under section 10 of the Evidence Act 626 to prove participation in a conspiracy.
Detection and proof of crime will be rendered not only not easy but sometimes impossible if conspirators begin to correspond through photographs of letters instead of originals.
But evidence of photographs to prove writing or handwriting can only be received if the original cannot be obtained and the photo graphic reproduction is faithful and not faked or false.
In the present case no such suggestion exists and the originals having been suppressed by the accused, were not available.
The evidence of photographs as to the contents and as to handwriting was receivable.
[638 F H] (iv) If the prosecution had to rely only on the identification by E to fix the identity of the suspects, the, fact that their photographs were shown to her would have materially affected the value of identification.
How, ever there was considerable other evidence of identification and the prosecution was not required to rely only on this identification.
(v) Section 337 Cr.
P.C. has been held not to offend article 14 and the matter of taking accomplice evidence outside section 337 by using section 494 or otherwise is not very different.
It cannot be held that there was any breach of the Constitution in selecting E out of several accused to give evidence.
[640 F] Case law discussed.
|
ivil Appeal No. 365 of 1981.
From the Judgment and Order dated 23.3.
1978 of the Gujarat High Court in First Appeal No. 236 of 1971.
R.F. Nariman, P.H. Parekh and M.K. Pandit for the Appellant.
R.P. Bhatt, C.V. Subba Rao, P.P. Srivastava, Mrs. H. Wahi and M.N. Shroff, (NP) for the Respondents.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
The plaintiff Bhavnagar Municipality are the appellants.
The suit was filed by the plaintiff for a declaration of its title and for possession of the suit property described in the schedule to the plaint.
They had also prayed for damages for wrongful occupation in respect of a portion of the property and rent for another portion, for the period from 1st January, 1964 till possession of the property is delivered to the plaintiff.
The defendants are the Union of India and.
the State of Gujarat.
The suit property is described in two parts in the schedule to the plaint.
The first part consist of a large extent of vacant land which is referred to in these proceedings as Parade Ground.
The second part is covered by Survey Nos. 162, 163, 164 and 165 on which structures of old Lancer 's lines, are standing and certain evacuees were Occupying at the time of the suit.
This second part is sometimes referred to as Lancers quarters and also sometimes ' as Rasala Lines.
The plaintiffs ' case was that by Resolution No. 37 dated 19th January, 1984 published in the Bhavnagar Darbar Gazette dated 24th January, 1948: ".
The Bhavnagar State bestowed the rights of the State of Bhavnagar to effect sales of land in the Municipal area of Bhavnagar City in Bhavnagar Municipality and by a further Order No. 77 of dated the 29th of February, 1948 the State vested the said lands except four plots of land mentioned therein in the Bhavnagar Municipality . " 222 The further case of the plaintiff was that by virtue of these orders the entire suit lands mentioned in the plaint have: "vested in and belongs to the plaintiff who entered into and remained in possession thereof till recently." And that subsequent to the erstwhile State of Bhavnagar merging in the United States of Kathiawar which was subse quently known as the State of Saurashtra, the Government of Saurashtra recognised the aforesaid Resolutions dated 19th January, 1948 and 29th February, 1948.
The further case of the plaintiff was the Government of India claiming to be the owner of the Parade Ground, in or about June, 1961 fixed the boundary marks and that the Government of India 's entry into possession constitute wrongful encroachment.
The plaintiff claimed damages for this wrongful occupation of the Parade Ground from 1st January, 1964 till they vacate the wrongful encroachment and hand over possession to the plaintiff.
So far as the Lancer quarters or Rasala Lines is con cerned it was stated in the plaint that the structures in the land covered by the Survey numbers referred to in part 2 of the schedule to the plaint did not belong to the plain tiff, that the same were occupied by the State Lancers and subsequently by the refugees, and that the plaintiff allowed the land and the structures thereon to be used free by the Government.
However, they were entitled to recover rent or compensation in respect of this land for the period from 1st January, 1954 till delivery of possession.
The Union of India filed a written statement which was adopted by the State of Gujarat.
it was contended by the defendants that the Parade Ground was used by the Ex Bhavna gar state forces and that barracks and other military build ings used for accommodation of the Ex Bhavnagar state forces known as Lancer 's Lines were in existence for a long time prior to 1948 in the suit property known as Rasala Lines and that consequent upon the Bhavnagar State acceding to the Indian Union and consequent on the Federal Financial Inte gration of States, accommodation, lands and buildings in the use or occupation of the Ex state forces were transferred to the Government o[ india and became its property.
The Board of officers consisting of six members including Executive Engineer, Public Works Department as representative of the State of Saurashtra was constituted and the buildings known as infantry lines and Lancer 's lines were taken over on 7th June, 195 1 by the Government of India.
They further stated that the 223 State of Saurashtra admitted the ownership of the suit property and the structures vested in the Defence Ministry from the date of Financial integration and when the State of Saurashtra, (as it was then known) required the land of the Parade Ground for this use that was handed over to the Saurashtra Government on 7th July, 1952 by the military engineers of the Government of India.
The defendants denied that either the Resolution No. 37 dated 19th January, 1948 or Resolution No. 77 dated 29th February, 1948 vested in the plaintiff the land of the Parade Ground or the lands and buildings known as Rasala Lines.
The defendants also denied that they were trespassers or liable to pay damages and rent in respect of the suit property.
The Trial Court held that the plaintiff had proved its title to the suit land and that they were in possession in the suit property till 7th July, 1952 when physical posses sion was handed over by the military engineers of the Gov ernment of India to the State Public Works Department of the State of Saurashtra.
Since the suit was filed on 3rd March, 1964 the suit was not barred under section 65 of the Limita tions Act, 1963.
However, on the ground that in respect of Rasala Lines the plaintiff have admitted that they did not own the buildings thereon, they are not entitled to recover possession of the lands covered by the Survey numbers de scribed in the second part of the schedule to the plaint.
Accordingly, the suit for possession was decreed in respect of the Parade Ground and dismissed in respect of the Rasala Lines.
The first defendant Union of India, filed an appeal to the High Court of Gujarat against this judgment and decree of the Trial Court and the Bhavnagar Municipality filed cross objections in so far as the suit was dismissed in respect of the land comprised in the Rasala Lines.
The High Court dismissed the cross objections filed by the Municipal ity holding that Resolution No. 37 dated 19th January, 1948 was confined to open lands and not to lands below standing structures and that, therefore, the cross objections relat ing to the Rasala Lines could not be sustained.
The High Court however allowed the appeal of the Union of India in the view that even assuming that by virtue of the Resolution No. 37 dated 19th January, 1948 the title to the Parade Ground had come to be vested in the Municipality, there was nothing on record to show that the Municipality was formally handed over the land in question, that its right over the land was never recognised by the Union of India or the State Government and that the various documents filed in this case, would go to show that as early as July, 1950 these lands and other properties which were in occupation of the 224 erstwhile state military had been taken over and remained under the control of the Defence Ministry of the Union of India and that the possession was handed over by the Union of India to the State Government on 7th July, 1952 for use.
The High Court also held since the plaintiff had not shown possession of the suit building within 12 years prior to 3rd March, 1964 when the suit was filed, the suit was also liable to be dismissed as barred by limitation, and that therefore it was not necessary either to deal with the argument of the defendants that the vesting that was contem plated in the Resolution 37 dated 19th January, 1948 and Resolution 77 dated 29th February, 1948 was not intended to be vesting in its full amplitude, but was meant only to appoint the Municipality as agent of the State to dispose of the land.
The plaintiff Municipality have filed this appeal under Article 136(1) of the Constitution against this judg ment of the High Court of Gujarat.
The learned counsel for the appellant contended that the High Court should have given a finding on title as Article 65 of the is applicable to this case since the suit was filed on 3rd March, 1964, and that on the finding of the Trial Court in favour of the plaintiff on the question of title in respect of 'Parade Ground ', and in the absence of specific plea of adverse possession in the writ ten statement, the Trial Court 's decree should have been confirmed.
He also assailed the finding of the High CoUrt on the question whether the plaintiff was handed over or taken possession of the suit property in pursuance of the Resolu tion dated 19th January, 1948.
We are of opinion that the learned counsel for the appellant is well founded in his contention that Article 65 of the is applicable in this case as the suit was filed on 3rd March, 1964 but the Act had come into force on 1st January, 1964.
Therefore, since the suit is for possession based on title to the suit property and the defendants had denied title, of the plaintiff, it is necessary for the Court to give a finding on title of the plaintiff even if the defendants in possession had not pleaded adverse possession.
We also think that it is just and necessary that we ourself consider the question of title and that it is not necessary to remand the case for that purpose.
We, therefore, proceed to consider the question of title of the plaintiff to the suit proper ties.
In order to understand the nature and implication of the Resolution No. 37 and the other documents relied on by the learned counsel for the appellants in support of the claim of title of the Municipality for the Parade Ground and the land in Rasala Lines or Lancer quarters it is necessary to trace briefly the constitutional history of accession and 225 integration of the Indian States with the Union of India.
The federal scheme embodied in the Government of India Act, 1935, was the first effort to provide for a constitutional relationship between the Indian States and the Government of India on a federal basis.
Section 311 of the Government of India Act, 1935 defined as 'Indian State ' as meaning any territory not being part of 'British India '.
whether de scribed as a State, an Estate, a Jagir or otherwise.
Part II of the Government of India Act, 1935 provided for the estab lishment of a Federation of India by accession of Indian States.
In spite of the protracted negotiations that fol lowed the enactment of Government of India Act the Federa tion envisaged under the Act could not come into existence in view of the States not opting for accession.
But by the setting up of the new dominions under the Indian Independ ence Act, 1947 the suzerainty of the British Crown over indian States lapsed along with it all functions, obliga tions, powers, rights, authority or jurisdiction exercisable by the Crown.
However, the proviso to section 7 provided that effect shall, as nearly as may be continued to be given by the Dominion Government, to the provisions of any agree ment between the Indian State and the Crown in regard to matters specified therein until the same are denounced by either of the parties.
It was in this background the Domin ion Government of India created a new department called the State Department on the 5th July, 1947 to deal with matters arising between the Central Government and the Indian States.
This department was in charge of Sardar Patel.
After persistent negotiations and persuation, barring three States, all the Indian States in the geographical limits of India had acceded to the Indian Dominion by 15th August, 1947.
The integration of States however did not follow uniform pattern in all cases.
Merger of States in the prov inces geographically contiguous to them was one form of integration; the second was the conversion of States into Central administered areas.
The third category are those cases where several small groups of States which could be consolidated into sizeable units by uniting them to form unions of States on the basis of full transfer of power from the rulers to the people.
This form of consolidation of States was adopted in Kathiawar covering 222 States and Estates with varying territories and jurisdiction.
The scheme for the constitution of the United State of Kathia war, later known as Saurashtra was finalised and the cove nant was signed on 23rd January, 1948 and the new State of Saurashtra inaugurated on the 15th February, 1948, vide Government of India, Ministry of States, "White Paper on Indian States".
The financial integration was simultaneously taken up with accession and territorial integration.
The Indian States Finances 226 Enquiry Committee headed by Shri V.T. Krishnamachari was constituted by Resolution dated 27th October, 1948 of the Government of India and the recommendations were incorporat ed in the Constitution.
On the adoption of the new Constitu tion of India the process of territorial integration of States thus became complete.
Under the new Constitution all the constituent units both Provinces and States were classi fied into three classes.
namely, Part 'A ' States which correspond to the former Governor 's Provinces; Part 'B ' States which comprised the Union of States and the States of Hyderabad, Mysore and Jammu and Kashmir; and Part 'C ' States which correspond to the former Chief Commissioners ' Prov inces.
This territorial integration of States is effected by defining in Article 1 of the Constitution that the territo ries of India include the territories of all the States specified in Parts A, B and C of the First Schedule.
Thus with the inauguration of the new Constitution on the 26th November, 1949 the merged States have lost a11 vestiges of existence as separate entitles.
With the accession and completion of territorial and financial integration and the Part 'B ' States forming part of Indian Union, the lands and buildings in the use or occupation of the former Indian State Governments, have distinguished from the private properties of the rulers, were transferred and vested in the Government of India and became its property.
The documents which the learned counsel for the plain tiff strongly relied in support of title to the suit proper ty are Resolution No. 37 dated 19th January, 1948 and Reso lution No. 77 dated 29th February, 1948.
A translation of these documents which are in Gujarati, have been marked as exhibit 87 and they reads as under: "It may be noted by your Honourable Highness that we have personally made application regarding some matter regarding our Bhavnagar State in respect of the Scheme of making one State of Saurashtra: Kathiawar: and the fol lowing arrangement is required to be made.
1,2,3,4 5.
The right of the State to sell the land in the limit of the Municipalities of Bhavnagar City and of the District Towns (Kasba) vested hereby in the Municipalities concerned hence forth; and the amount of the rent and lease of the Town Planning area shall be given to the Bhavnagar City 227 Municipality henceforth.
Sheth Abdul Hussain Gulamhussain and Sheth Masumali Zafarali has given their plot for Mahatma Gandhi Mandir.
And they have made application for getting the plot of the land of the same area for building their own houses.
I have made recommendation thereunder for giving the same to them without taking Premium (Sukhadi).
And if the recommen dation which I have made is accepted the said approval may not get disturbed in these rights are given to Municipality.
6, 7, 8, 9, 10, 11, 12, 13, 14.
Forwarded with compliments to the Honourable Your Highness for passing necessary order in favour with kindness, regarding the implemen tation accordingly in respect of the approval of the scheme of the above stated Paragraphs No. 1 to 14 after going through the above stated facts.
Sd/ Anantrai Prabhashanker, Chief Diwan Sansthan Bhavnagar H.D.R. No. 37 Upon considering all the facts stated above, under the above recommendation, the schemes according to the Darakast made in the afore said paragraphs from 1 to 14 are sanctioned.
Papers returned to Chief Diwans.for informa tion and for necessary action to be taken.
19.1.1948 Sd/ Krishkumarsinhji Maharaj section Bhavna gar." "The right of the State to sell the land in the limits of the Municipalities of Bhavnagar City and of the District Towns (Kasba) has been vested in the Municipalities concerned under the Di.
R. No. 37 dated 19.1.1948 of His Highness.
228 It is deemed proper to make clarification that the council of Ministers had decided to keep in reserve the below mentioned lands in Bhav nagar for the use of the State.
Therefore the same are not included in the lands handed over to the Municipality.
Particulars of the lands: 1.
Open land of Gangajalia Talav situated at South side of the theatre and the temple and wire fencing done near Gangajalia Talav.
The open square plot (Chogan) situated opposite to Gangnath Mahadev Towards Darbar Hall and Nakubag.
The open square plot (Chogan) opposite to Darabari Motor Garrage.
A triangular piece of the land opposite to Sir Takhatsinhji Hospital near Kailasbaug.
Information regarding this resolution may be sent to the parties concerned.
29.3.48 Sd/ Jadanji K. Mode chief Minister" The translation also does not appear to be accurate, as in another translation made, which were filed with the special leave petition the first operative portion is translated as follows: "the right of the State to sell the land be transferred to the Municipalities of proper Bhavnager and other Municipalities of Kasbas, and the rent which is being realised of the plots of Town Planning Area henceforth be realised by Bhavnagar Municipality.
" Again the first paragraph of Resolution No. 77 is translated as: "Proper Bhavnagar and Kasba Municipalities have been given the right of the State to sell the land within the limits of the Municipality as in H.D.R. No. 37 dated 19.1.1948.
" In fact, in the suit notice under section 80, Civil Proce dure Code the 229 plaintiff have stated that these orders "bestowed the rights of the then State of Bhavnagar to effect the sales of land in the Municipal area.
" We have already noticed that the Saurashtra State was formed by consolidation of several small States.
The scheme referred to in the first paragraph was the scheme of consol idation of the States into United States of Saurashtra.
The 14 proposals in that letter were the arrangements that were required to be made in order to give effect to the scheme.
There should have been number of Municipalities in the States which had merged into a union under the covenant.
The land within the limits of Municipalities referred to in the orders extracted above were the lands of the Government of the States concerned because obviously the covenants of accession and integration under the scheme of forming Union of States could not deal with the private properties of the rulers.
The right to sell such lands of the State Government were with the Government concerned.
It is that right in our view, that was given to the Municipalities after the forma tion of the Union of the United States of Saurashtra.
It cannot be treated, therefore, as a transfer of title in respect of those lands to the municipality but the right to execute the sale deed in respect of those lands of the Government was transferred or vested in the Municipalities concerned.
It amounts conferring an authority or authorising the Municipalities to execute the sale deeds in respect of Government lands situate within the Municipality, which should normally have been done by the State Government.
The subsequent correspondance and orders of the Government also show that the Government of India understood and treated these orders only as authorisation or transferring of power to execute sale deeds and collect rent in respect of Govern ment lands situated within the Municipality.
The Government had treated those orders as liable for cancellation or modification.
If the effect of those orders were transfer and vesting of title in the Municipalities, no question divesting of title would or could arise.
Resolution 77 itself was subsequent to Resolution 37 but excluded certain lands from the scope of Resolution 37.
This could only be on the basis that the title had not vested in the Municipali ties under Resolution 37.
Again this authorisation itself was cancelled by the Government of Gujarat under Order No. LMN 546 14576 A.G. dated 26.3.63.
But since a number of Municipalities made representation to the Government to reconsider the same, the Government reconsider the entire case and decided that the right to sell plots of land given under Resolution No. 37 dated 19th January, 1948 by the State of Bhavnagar to all 230 the Municipalities of Old Bhavnagar States, and the right to give the same on rent lease and to take the income therefrom shall be enjoyed by the Municipalities subject to the condi tions mentioned in the letter of the Government dated 10th August, 1965.
These conditions read as follows: "1.
The right to sell the land and to give it on rent lease and to get the out come there from shall apply to the land of the Government coming within the limit to the Municipality decided fixed on the date of the Order of the State of Bhavnagar i.e. dt.
19.1.48.
And the same shall not apply to the land falling within the extended limit if the limit of the Municipality is increased.
The procedure to be followed for giving this land in sale or on rent lease shall generally be followed according to the rules of Government, that is to say public auction shall be made.
If the approximate value of the land to be given on sale or on rent lease comes to Rs.25 per sq.
metre or it is more than that the sale or the lease land shall be considered final after permission of the revenue department of the Government for sale or lease is obtained.
The sale or rent lease of this land shall be done according to the purpose decided in the scheme following the Town Development Scheme of the Municipality, that is to say if the locality is fixed in the development scheme for industrial or residential purpose the land of the suit locality shall be given for that particular purpose.
And if some lands are fixed to be reserved for keeping open or for the purpose of garden or for some public purpose in the development scheme, the said land shall not be given on sale or on lease for private purpose.
The Municipalities shall have to deposit the income obtained from sale or rent lease of the land of the aforesaid land of the Govern ment, in a separate fund and the same shall be used for the work of the development of the city town" These conditions are inconsistent with the plaintiff 's case of absolute 231 ownership in themselves.
We have, therefore, no doubt that what was conferred on the Municipality under Resolution 37 dated 19th January, 1948 was only a right or an authorisa tion to sell the land as representing the Government but not a vesting of the title itself in the Municipality.
The other documents relied on by the learned counsel in support of his contention that the title itself should have been vested in the Municipality may now be noticed.
exhibit 95 dated 2lst July, 1950 is a copy of the proceedings of the Board of Officers of the Defence Department in which they have described detailed inventory of Defence department assets, accommodations, installations, furniture, fitting and connected stores pertaining to Saurashtra state forces in Bhavnagar.
In this while referring to the suit lands which was stated to be in their possession a remark has been made to the effect: "The Bhavnagar Municipality claims the land in question on the basis that the whole assets of the Bhavnagar town planning Department had been transferred to them by the orders of his Highness, Bhavnagar, State in 1948 and they are collecting the Revenue from the farmers.
The claim will subsequently have to be veri fied.
" We are unable to see how on the basis of this letter the Municipality could claim a title.
At best it may be treated as evidence that in July, 1950 the Municipality made a claim for the land.
But at the same time it may be pointed that the document is evidence against the Municipality in so far as it treated the properties as belonging to the Defence Department of the Government of India and that the Defence Department were in possession of the same.
In the two let ters exhibit 73 dated 30.11.1950 and exhibit 72 dated 15.6. 1951 which are communications from the Government of Saurashtra it is only stated that suit lands do not vest to the Govern ment of Saurashtra.
As seen earlier, possession of the lands were handed over by the Government of India to the State Government only on 7.7.
1952 and, therefore, these letters cannot be of any help to the appellant.
However, it may be mentioned, that the Government of Saurashtra have corrected themselves in their communication dated 6th May, 1952 and stated that the claim of the plaintiff that the lands were vested in Bhavnagar Municipality was erroneous and that the land is vested and is in the possession of Government of India.
The plaintiff have also admitted that the structures in Rasala Lines are not shown to be that of the Municipality in the Municipal records and even in the plaint they did not claim the 232 structures as belonging to the Municipality.
In the suit notice the plaintiff have also not claimed that they "en tered into and remained in possession" of the land as stated in the plaint para 5.
It is also in evidence that these buildings were there long before 1948 and that, therefore, the land alone could not have been vested in the Municipali ty without buildings.
In fact, the Resolution No. 37 dated 19th January, 1948 which is relied on does not make any distinction and it refers to only lands and not buildings.
We, therefore, agree with the finding of the High Court that possession of the land was also not taken by the Municipali ty at any time.
It is not open to the appellant to rely on the principle that possession follows title.
In this case not only there is evidence to show that physical possession was with the defendant but also there could not be any legal possession with the plaintiff as the title to the land is not vested in them.
Since the suit itself is for possession based on title and the plaintiff have not proved title it is not necessary for the defendant to plead or prove adverse possession.
In the result the appeal fails and it is dismissed.
However, the parties will bear their respective costs in this Court.
Y. Lal Appeal dis missed.
| The Expenditure Tax Act, 1987, envisaged a tax at 10% ad valorem on chargeable expenditure incurred in the class of hotels wherein room charges for any unit of residential accommodation were Rs.400 per day per individual.
Section 5 of the Act defined chargeable expenditure to include expend iture incurred in or payments made in such class of hotels in connection with the provision of any accommodation, residential, or otherwise, food or drink whether at or outside the hotel, or for any accommodation in such hotel on hire or lease or any other services envisaged in that Sec tion.
The petitioners, who were engaged in, or associated with the hotel industry challenged the constitutional validity of the Act on grounds of 919 lack of legislative competence and violation of Articles 14 and 19(1)(g) of the Constitution.
It was contended that the Act, in its true nature and character, was not one imposing an expenditure tax, as known to law, accepted notions of Public Finance, and to legislative practice but was, in pith and substance, either a tax on luxuries falling within Entry 62 of List II of the Seventh Schedule, or a tax on the consideration paid for the purchase of goods constituting an impost of the nature envisaged in entry 54 of List II, and was clearly outside the legislative competence of the Union Parliament; that the Act was violative of Article 14 as the basis on which the hotels were classified was arbitrary an unintelligible, having no rational nexus with the taxing policy under the Act, inasmuch as persons similarly situat ed, and who incurred the same extent and degree of expendi ture on the same luxuries, were differentiated on the sole basis that in one case the expenditure was incurred in a hotel where one of the rooms had a charge of Rs.400 per day per individual marked for it, while in the other though equally wasteful expenditure was incurred in a more luxuri ous restaurant, the latter expenditure was exempt, that even if more sophisticated and expensive food and drinks and other services, envisaged in clauses (a) to (d) of Section 5 were provided in a hotel or catering establishment which fell outside the class, the expenditure incurred thereon is unaffected by the law, that the standards and measures for the computation of the chargeableexpenditure under the Act was vague and arbitrary, that the expression 'other similar services ' in clauses (d) of Section 5 was non specific and vague; and that the Act was violative of petitioners ' funda mental right under Article 19(1)(g) as it imposed unreasona ble onerous restrictions on their freedom of business.
The respondent Union of India sought to sustain the legislative competence of Parliament to enact the law under Article 248 read with Entry 97 of List I of the Seventh Schedule, contending that the law, in pith and substance, was not one 'with respect to luxuries under Entry 62, List 1, and the tax on expenditure, as the legislative had chosen to conceive it, was referrable to residuary power, that the economists ' concept of such an expenditure tax was at best an idea of the manner of effectuation of fiscal programme and was no limitation on the legislative power, that the legislative power recognised the demarcation of distinct aspects of the same matter as distinct topics of legislation and that the challenge to legislative competence overlooked the dichotomy of these distinct aspects, the line of demar cation, though sometimes thin and subtle, being real, that the measure adopted for the levy of the tax did not neces sarily determine its essential character and that the object on which the expenditure was laid out might or might not be an item of 920 luxury, or the expenditure might constitute the price of the goods but, what was taxed was the expenditure aspect which, in itself, was susceptible of recognition, as a distinct topic of legislation.
Dismissing the Writ Petitions, this Court HELD: (R.S. Pathak, CJ., Sabyasachi Mukharji, section Natara jan and M.N. Venkatachaliah Per: Venkatachaliah, J.) 1.1 A law imposing the expenditure tax is well within the legislative competence of Union Parliament under Article 248 read with Entry 97 of List I. [940E F] 1.2 The tax envisaged by the Expenditure Tax Act, 1987, is essentially a tax on expenditure and not on luxuries or sale of goods falling within the State power.
The distinct aspect, namely, the expenditure aspect of the transaction failing with the Union power must be distinguished and the legislative competence to impose a tax thereon sustained.
[947D E] 2.1 If a legislature with limited or qualified jurisdic tion transgresses its powers, such transgression may be open, direct and overt, or disguised, indirect and covert.
The latter kind of trespass is figuratively referred to as "colourable legislation", connoting that although apparently the legislature purports to act within the limits of its own powers yet, in substance and in reality, it encroaches upon a field prohibited to it, requiring an examination, with some strictness, the substance of the legislation for deter mining as to what the legislature was really doing.
[939E F] Prafulla Kumar Mukherjee and Ors.
vs Bank of Commerce, , referred to.
2.2 Wherever legislative powers are distributed between the Union and the States, situations may arise where the two legislative fields might apparently overlap.
It is the duty of the Courts, however difficult it may be, to ascertain to what degree and to what extent, the authority to deal with matters failing within these classes of subjects exists in each legislature and to define, in the particular case before them, the limits of the respective powers.
It could not have been the intention that a conflict should exist; and, in order to prevent such a result the two provisions must be read together and the language of one interpreted, and, where necessary modified by that of the other.
[939F G] 921 Union Colliery Co. of British Columbia vs Bryden, at 587; Lefroy Canada 's Federal System., referred to.
2.3 The law 'with respect to ' a subject might inciden tally 'affect ' another subject in some way; but that is not the same thing as the law being on the latter subject.
There might be overlapping; but the overlapping must be in law.
The same transaction may involve two or more taxable events in its different aspects.
But the fact that there is an overlapping does not detract from the distinctiveness of the aspects.
[941E] Governor General in Council vs Province of Madras, at 193 and Laskin Canadian Constitu tional Law, referred to.
2.4 The consequences and effects of the legislation are not the same thing as the legislative subject matter.
It is the true nature and character of the legislation and not its ultimate economic results that matters.
[944C] 2.5 The scope of the present legislation cannot be considered by reference to legislative practice because firstly, the question of legislative practice as to what a particular legislative entry could be held to embrace is inapposite while dealing with a tax which is suigeneris or non descript imposed in exercise of the residuary powers so long as such tax is not specifically enumerated in Lists II ing that the appropriate legislature had limited the notion of a tax of this kind within any confines.
[944E G] Walace Brothers and Company Ltd. vs Commissioner of Income Tax, Bombay City and Bombay Suburban District, [1948] LR 75, IA 86; Navinchandra Mafatlal vs CIT, Bombay City, [1955] 1 SCR 829; Union of India vs H.S. Dhillon, ; at 61; Attorney General for Ontario vs Attorney General for Canada, at 581; Croft vs Dunphy, and Azam Jha Bahadur vs Expenditure Tax Offi cer; , referred to.
2.6 The subject of a tax is different from the measure of the levy.
The measure of the tax is not determinative of its essential character or of the competence of the legisla ture.
[946F G] M/s. Sainik Motors vs State of Rajasthan, ; and Encyclopaedia Britannica on Luxury Tax, Vol.
14 p. 459, referred to.
922 3.1 Though taxing laws are not outside Article 14, however, having regard to the wide variety of diverse eco nomic criteria that go into the formulation of a fiscal policy, legislature enjoys a wide latitude in the matter of selection of persons, subject matter, events, etc., for taxation.
A legislature does not, have to tax everything in order to be able to tax something.
if there is equality and uniformity within each group, the law would not be discrimi natory.
The tests of the vice of discrimination in a taxing law are, accordingly, less rigorous.
[948G H] 3.2 In examining the allegations of a hostile, discrimi natory treatment what is looked into is not its phraseology, but the real effect of its provisions.
The classification must be rational and based on some qualities and character istics which are to be found in all the persons grouped together and absent in the others left out of the class.
Besides, differentia must also have a rational nexus with the object sought to be achieved by the law.
However, no precise or set formulae or doctrinaire tests or precise scientific principles of exclusion or inclusion are to be applied.
The test could only be one of palpable arbitrari ness applied in the context of the felt needs of the times and societal exigencies informed by experience.
[949A, C E] 3.3 Classification based on differences in the value of articles or the economic superiority of the persons of incidence are well recognised.
A reasonable classification is one which includes all who are similarly situated and none who are not.
In order to ascertain whether persons are similarly placed, one must look beyond the classification and to the purposes of the law.
[949E F] Jaipur Hosiery Mills Ltd. vs State of Rajasthan, ; Hiralal vs State of U.P., ; ; State of Gujarat vs Sri Ambika Mills Ltd., ; ; G.K. Krishnan vs Tamil Nadu, [1975] 2 SCR 715; I.T.O. vs N. Takim Roy Limbe, ; ; Secretary of Agriculture vs Central Roig Refining Co.; , ; M/s. Hoechst Pharmaceuticals Ltd. vs State of Bihar, ; and Wallace Mendelson: Supreme Court Statecraft; The Rule of Law and Men, p. 4, referred to.
3.4 In the present case, the bases of classification cannot be said to be arbitrary or unintelligible nor as being without a rational nexus with the object of the law.
A hotel where a unit of residential accommodation is priced at over Rs.400 per day per individual is, in the legislative wisdom, considered a class apart by virtue of the economic superiority of those who might enjoy its custom, comforts and services.
923 This legislative assumption cannot be condemned as irration al.
Judicial veto is to be exercised only in cases that leave no room for reasonable doubt.
Constitutionality is presumed.
[952B C] 3.5 The words "other similar services" in Section 5(d) were intended to embrace services like but not identical with those described in the preceding words.
The content of the expression "other similar services" following, the preceding expressions "by way of beauty parfour, health club, swimming pool or . . "has a definite connotation in the interpretation of such words in such statutory con tents.
The matter is one of construction whether any partic ular service fails within the section and not one of consti tutionality.
[953E F] 4.
A taxing statute is not, per se, a restriction of the freedom under Article 19(1)(g).
The policy of a tax, in its effectuation, might, of course, bring in some hardship in some individual cases.
But that is inevitable, so long as law represents a process of abstraction from the generality of cases and reflects the highest common factor.
The mere excessiveness of a tax or even the circumstance that its imposition might tend towards the diminution of the earnings or profits of the persons of incidence does not, per se, and without more.
constitute, violation of the rights under Article 19(1)(g).
[954F G] Per Ranganathan, J. (Concurring), 5.1 In the context of the social and economic conditions that prevailed in India, it was a luxury for any person to stay in hotels charging high rents and providing various types of facilities, amenities and conveniences such as telephone, television, air conditioner, etc.
An expenditure on something which is in excess of what is required for economic and personal well being would be expenditure on luxury although the expenditure may be of a nature which is incurred by a large number of people including those not economically well off.
[958G H] Abdul Kadir & Sons vs State of Kerala, ; , relied on.
5.2 The legislature has, particularly in a taxing stat ute, a considerable amount of latitude and it cannot be held that, in fixing the standards of indication of luxury, the legislature, has not applied its mind.
In fact, the figures have been amended from time to time and, it has to be pre sumed that the legislature had good reason for fixing these standards.
From the scheme of the legislations, the state legislations fall 924 within the scope of Entry 62, List I and are, therefore, clearly within the competence of the State legislatures and are not liable to be challenged.
[959D; 957C] 6.1 In interpreting the scope of the legislative entries in the three lists, it has to be kept in mind that, while on the one hand, it is desirable that each entry in each of the lists should receive the broadest interpretation, it is equally important, on the other, that the three lists should be read together and harmoniously.
[959E F] 6.2 The power of the State legislature to make laws with respect to any of the matters enumerated in List II is subject to the exclusive power of Parliament to make laws with respect to any of the matters enumerated in List I. Hence, if a matter is covered by an entry in the Union List, no restrictions can be read into the power of Parliament to make laws in regard thereto.
[959G H; 960A] 6.3 The legislative entries are so arranged that the power to enact laws in general and the power to impose taxes are separately dealt with.
Under Article 246(1), the Parlia ment has exclusive powers to make laws with respect to any of the matters, including power to impose taxes, enumerated in List I. [960B C] M.P.V. Sundararamier & Co. vs The State of Andhra Pra desh Another; , at pp.
1479 and 1490, referred to.
It cannot be held that the tax cannot be considered to be an expenditure tax because it is not on expenditure generally but is restricted to specific types of expendi ture.
There is no legal, judicial, economic or other concept of expenditure tax that would justify any such restrictive meaning.
If, conceptually, the expenditure incurred by a person can be a subject matter with reference to which a tax can be levied, such taxation can be restricted only to certain items or categories of expenditure, and its base need not necessarily be so wide as to cover all expenditure incurred by an assessable entity.
Selection of objects and goods for taxation is the essence of any tax legislation and any limitation is an unlimited curtailment of this selective power of taxation of Parliament.
[960H; 961A B, F] 8.1 There is not much of legislative practice which would justify importing any limitation on the concept of a tax on expenditure under entry 97 of List I. Once it is granted that the tax need not exhaust the entire universe of the subject matter, the extent of the subject matter 925 that should be covered or selected for imposing tax should be entirely left to Parliament subject only to any criteria of discrimination or unreasonableness that may attract the provisions of Part 1II of the Constitution.
[962D E, F G] State of Madras vs Gannon Dunkerley Co., ; ; Navinchanda Mafat Lal vs CIT. [1955] 1 SCR 829; Naynit Lal vs AAC, ; ; Harikrishna Bhargava vs Union, ; and Bhagwandas Jain vs Union of India, ; , referred to.
8.2 Legislative lists cannot be interpreted on the assumption that there is a deemed entry "Taxes on Expendi ture" added to List I as a result of the decision in Azam Jha 's case; , Entries cannot be added to the legislative Lists on the basis of decisions of this Court.
In Azam Jha 's case, the pith and substance of the Act con sidered did not fail under any of the entries in List II or III.
However, in the instant case, the legislation coveres only certain types of expenditure.
The decision in Azam Jha 's case cannot help in determining whether the Expendi ture Act 1987 should be construed as imposing tax on expend iture or and on luxuries.
[964A C] Azam Jha Bahadur vs Expenditure Tax Officer, ; distinguished.
Merely because the 1987 Act as well as the State Acts levy taxes which have ultimate impact on persons who enjoy certain luxuries, the pith and substance of both cannot be considered to be the same.
The object of a tax on luxury is to impose a tax on the enjoyment of certain types of bene fits, facilities and advantages on which the legislature wishes to impose a curb.
The idea is to encourage society to cater better to the needs of those who cannot afford them.
Such a tax may be on the person offering the luxury or the person enjoying it.
It may be levied on the basis of the amount received for providing, or the amount paid for or expended for enjoying, the luxury.
Conceivably, it could be on different bases altogether.
The object of an expenditure tax is to discourage expenditure which the legislature considers lavish or Ostentatious.
The object of the first would be to discourage certain types of living or enjoyment while that of the second would be to discourage people from incurring expenditure in unproductive or undesirable chan nels.
If a general Expenditure Tax Act, like that of 1957, had been enacted, no challenge to its validity could have been raised because it incidentally levied the tax on ex penditure incurred on luxuries.
The fact that there will be some overlapping then or that here there is a good deal of such 926 overlapping, because the States have chosen to tax only some types of luxuries and the Centre to tax, atleast for the time being, only expenditure which results in such luxuries, should not be allowed to draw a curtain over the basic difference between the two categories of imposts.
[968E H; 969A B] This distinction is not obliterated merely because of the circumstances that both legislatures have chosen to attack the same area of vulnerability, one with a view to keep a check on 'luxuries ' and the other with a view to curb undesirable 'expenditure '.
[969C] Kerala State Electricity Board vs Indian Aluminium Co., ; In the Central Provinces & Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, ; Province of Madras vs Boddu Paidanna & Sons, ; G.G. in Council vs Province of Madras, ; Ralla Ram vs East Punjab, ; Bhagwan Dass Jain vs Union, ; ; Hingir Rampur Coal Co. Ltd. vs State of Orissa; , and Sainik Motors vs State of Rajasthan, ; , referred to.
A.H.F. Lefroy: Canadian Constitution and Laskin: Canadi an Constitutional Law, referred to.
|
Appeal No. 431 of 1967.
Appeal by special leave from the judgment and decree dated September 1, 1966 of the Andhra Pradesh High Court in Second Appeal No. 719 of 1962.
R. Venugopal Reddy and K. Jayaram, for the appellants.
B. Parthasarathy, for the respondent.
The Judgment of the Court was delivered by Hegde, J.
The point in controversy in this appeal by special leave is whether the properties in dispute herein constitute a hereditary archakatwam service inam granted to the plaintiff 's predecessors or whether they are the properties of the appellant temple.
The High Court and the courts below have come to the conclusion that the appellant 's contention that it is the owner of the suit properties is barred by res judicata.
That conclusion is challenged in this appeal.
In the suit under appeal the respondent who is an archaka in the appellant temple prayed for a declaration that the suit properties had been granted to his family as archakatwam service Inam land and that the appellant has no right therein.
He has also asked for an injunction restraining the appellant from interfering with his possession and enjoyment.
The appellant denied the respondent 's claim.
The High Court as well as the appellate court have upheld the respondent 's claim on the ground that the appellant 's claim is barred by res judicata.
130 In 1931 the Madras Religious Endowments Board framed a scheme for the better management of the appellant temple.
At that time the question arose whether the suit properties were the properties of the temple.
The respondent 's family put forward the claim that those properties had been granted to them as archakatwam service inam and consequently those properties were not temple properties.
That contention was accepted by the Board.
It is said that the said decision operates as res judicata against the claim made by the appellant.
On behalf of the appellant it was urged that the proceeding before the Board under section 57(1) of the Madras Religious & Charitable Endowments Act, 1927 (in short the Act) was a summary proceeding, the question as to the title to the suit properties was not directly and substantially in issue in that proceeding and as such the decision in question does not operate as res judicata in the present suit.
Section 57(1) as it stood in 1931 reads thus "When the Board is satisfied that in the interest of the proper administration of the endowments of a temple, a scheme of administration should be settled, the Board may after consulting in the prescribed manner, the trustee, the committee, if any and the persons having interest by order settle a scheme of administration for the endowments of such temple".
Sub section (3) of that section says "Every order of the Board under this scheme shall be published in the prescribed mariner.
The trustee or any person having interest may within six months of the date of such publication institute a suit in the court to modify or set aside such order.
Subject to the result of such suit every order of the Board shall be final and binding on the committee, the trustee and all persons having interest.
" It is not disputed that the decision of the Board holding that the properties in question were archakatwam service inam lands was not challenged by means of a suit under section 57(3).
Therefore the said decision has become final.
We have now to see what is the effect of the finality in question.
According to the appellant as the title to the suit properties was not directly and substantially in issue in the proceeding before the Board and the decision thereon being only incidental, the same cannot operate as res judicata.
In support of the contention that the decision rendered by the Board was only an incidental one, it was urged that the essential purpose of framing of a scheme for the management of temple is 131 to see that the temple 's administration is carried on properly; and" in such a proceeding it is not necessary to determine what all properties the temple owns.
We are unable to accede to this contention.
A scheme framed for the better management of a temple must necessarily show therein the properties of the temple.
Before deciding to frame a scheme the authority framing the scheme must know the nature and extent of the trust funds.
There can be no scheme of management of a temple in vacuum.
As observed by the Judicial Committee in Chotalal Lakhmiram and ors.
vs Manohar Ganesh Tambekar and ors.(1) : "Until the trust funds are ascertained, it seems impossible that any scheme can be settled." Varadachariar J. in (Sri Mahant) Sitaram Dass Bavaji vs Madras Religious Endowment Board, Madras and OrS;(2) observed.
that the power given by section 63 to the Board for framing a scheme for the management of a mutt, a power similar to that conferred on the Board under section 57 for framing scheme for the management of a temple carries with it the power to settle what the properties of the institution are.
A scheme for proper administration of a temple must necessarily provide for the proper administration of its assets.
The persons empowered to manage must know what properties are to be governed by the scheme and what the resources of the temple are.
It is not correct to say that the power conferred on the Board.
under section 57 is a summary power as urged by the learned Counsel for the appellant.
A decision rendered by the Board under that section is final subject to the result of the suit contemplated in the said section.
Section 57 provides for an exhaustive enquiry in the matter of framing scheme, firstly by the Board and then by the Court.
The trial before the court has to be held in the same manner as any other suit that may be instituted under the provisions of the Civil Procedure Code.
In Arikapudi Balakotayya vs Yadlapalli Nagayya(3); a Division Bench of the Madras High, Court held that the order made by the District Court under section 84(2) of the Act operates as res judicata in a subsequent proceeding.
Under section 84(1) the Board is given Dower to decide if any dispute arises as to (a) whether an institution is a math or temple as defined in the Act; (b) whether the trustee is a hereditary trustee a_ defined in the Act or not and (c) whether any property or money endowed is a specific endowment as defined in the Act or not.
(2) of that section provides that any person affected by a decision under sub section
(1) may, within six months apply to the Court to modify or set aside that decision.
Sub s (3) thereof provides for (1) I.L.R. XXIV Bom.
p. 50.
(2) A.I.R. 1937 Mad. 106.
(3) A.I.R. (33) 132 an appeal to the High Court against the order of the District Judge.
Sub section
(4) of that section provides that subject to the result of an application under sub section
(2) or an appeal under sub section
(3), the decision of the Board shall be final.
In Balakotayya 's case( '1) while examining the effect of a decision under section 84(2), it was observed that the doctrine of res judicata is (not confined to a decision in a suit it applies to decisions in other proceedings as well.
But how far a decision which is rendered in other proceedings will bind the parties depends upon other considerations one of which is whether that decision determines substantial rights of parties and the other is whether the parties are given adequate opportunities to establish the rights pleaded by them.
The doctrine of res judicata is not confined to the limits prescribed in section 11, Civil Procedure Code.
The underlying principle of that doctrine is that there should be finality in litigation and that a person should not be vexed twice over in respect of the same matter.
In the proceedings with which we are concerned in this appeal one of the important question the Board had to decide was whether the properties in dispute are archakatwam service inam properties.
The Board 's decision which was adverse to the temple, affected the rights of the temple in a substantial manner.
It was open to the temple to get its right established by means of a suit under section 57(3).
It failed to take that step.
Therefore the decision of the Board has become final and binding on the temple.
In State of Madras vs Kunnakudi Melamatam alias Annathana Matam(2) this Court held that a decision of the Board under section 84(1) which had become final in the absence of any application to the court to set aside that decision under section 84(2), holding that the institution was outside the purview of the Act, bars the board from levying any contribution on the institution under the Act subsequently.
In our judgment the decision of the Board in 1931 that the suit properties are not temple properties operates as res judicata in the present proceeding.
In the result this appeal fails and the same is dismissed with costs.
G.C. Appeal dismissed.
(1) A.I.R. (33) (2) (1962) 2 M.L. J. p. 13.
| A first information report was lodged in respect of a crime and the appellant, who was the Additional District Magistrate (Judicial) was named therein as principal accused.
The offences mentioned were cognizable and the Police after registering the case, started investigation.
The appellant applied to the Judicial Magistrate for invocation of the provisions of section 159 Cr.
P.C., and for conducting preliminary enquiry by the Court itself and for issuance of necessary directions to the Police to stop investigation alleging that a false report had been lodged at the instance of the local police.
The Magistrate directed the police to stop investigation and decided to hold the enquiry himself.
Thereupon an application was moved in the High Court under section 561 A Cr.
P.C. for quashing the order of the Magistrate as he had no jurisdiction to pass such an order under section 159 Cr.
The High Court accepted the application and set aside the Magistrate 's order.
Dismissing the appeal, this Court, HELD : Section 159 Cr.
P.C. does not empower a Magistrate to stop investigation by the police.
This section first mentions the power of the Magistrate to direct an investigation on receiving the report under section 157, and then states the alternative that, if he thinks fit, he may it once proceed, of depute any Magistrate subordinate to him to proceed, to hold a preliminary enquiry into, or otherwiseto dispose of, the case.
On the face of it, the first alternative of directing an investigation cannotarise in a case where the report itself shows that investigation by the police is going on in accordance with section 156.
It is to be noticed that the second alternative does not give the Magistrate an unqualified power to proceed himself or depute any Magistrate to hold the preliminary enquiry.
That power is preceded by the condition that he may do so, "if he thinks fit" The use of this expression makes it clear that section 159 is primarily meant to give to the Magistrate the power of directing an investigation in cases where the police decides not to investigate the case under the proviso to section 157(1), and it is in those cases that.
if he thinks fit, he can choose the second alternative.
Without the use of the expression "if he thinks fit" the second alternative could have been held to be independent of the first; but the use of this expression makes it plain that the power conferred by the_ second clause of this section is only ,in alternative to the Power given by the first clause and Fan, therefore.
he exercised only in those, cases in which the first clause is applicable.
Even in sub s.(3) of section 156, the only power given to the Magistrate, who can take cognisance of an offence under section 190, is to order an investigation, there is no mention of any power to stop an investigation by the police.
The scheme of these sections, thus, clearly is that the Dower of the Police to investigate any cognizable offence is uncontrolled by the Magistrate, and it is only in cases where the police 947 decide not, to investigate the case that the Magistrate can intervene and either direct an investigation, or, in the alternative, himself proceed or depute a Magistrate subordinate to him to proceed to enquire into the case.
[949 G 950 F] The Crown vs Mohammad Sadia Naiz, A.I.R. 1949, Lah.
204, Pancham Singh vs The State, A.I.R. 1967 Pat. 416 and King Emperor vs Khwaja Nazir Ahmad, 71 I.A. 203, referred to.
(2)The Code of Criminal Procedure gives to the police unfettered power to investigate all cases where they suspect a cognizable offence has been committed.
If the police engineer a false report of a cognizable offence against any person he can in appropriate cases always invoke the Power of the High Court under Act.
Therefore, the fact that the Code does not provide for.a power to a Magistrate to stop investigation by the Police cannot be a ground for holding that such a power must be read into section 159 of the Code.
[951 H]
|
ivil Appeal Nos.
4483 & 4484 of 1986 From the Judgment and Order dated 26.6.86 of the Bombay High Court in Notice of Motion No. 1418/86 in Appeal No. 512/86 in W.P. 1007/86.
F.S. Nariman, O. Chenoy, A.K. Verma, D.N. Mishra and D.N. Bhansaria for the Appellant.
Soli J. Sorabjee, M.M. Jayakar and B.R. Aggarwala for the Respondents.
935 The Judgment of the Court was delivered by VENKATARAMIAH, J.
These appeals by special leave are filed against the Order dated 26.6.1986 passed in Appeal No. 512 of 1986 in Writ Petition No. 1007 of 1986 and the Order dated 26.6.1986 in Appeal No. 535 of 1986 in Writ Petition No. 1424 of 1986 of the High Court of Bombay.
Since these two are connected matters, they are disposed of by this common judgment.
The facts of these two cases are these.
The appellant in both these appeals is the Board of Trustees of the Port of Bombay (hereinafter referred to as 'the Port Trust ') and the 1st Respondent in both these appeals is a partnership firm by name M/s. Jai Hind Oil Mills Company.
The 1st Respondent imported 5 consignments of Propylene of 10 metric tons each in January, 1986 by S.S. Maribor.
The general landing date of the said consignments was 20th January, 1986 and the last free date in respect of them was 23rd January, 1986.
There after the said consignments were incurring demurrage.
The bills of entry were submitted by the 1st Respondent to the Customs authorities in the same month.
Disputes arose be tween the 1st Respondent and the Customs authorities with regard to the basic customs duty payable in excess of 32.50% (as goods were imported from the Republic of Korea which was a developing country), with regard to loading the assessable value with customs duty for calculation of the additional duty and with regard to loading the CIF value with the landing charges.
Not being satisfied with the contentions of the Customs authorities the 1st Respondent filed a writ petition in Writ Petition No. 122 of 1986 for the issue of certain directions to the Customs authorities with regard to the levy of customs duty.
In that Writ Petition on January 21, 1986 the High Court passed an interim order which di rected the Customs authorities not to insist on payment of the customs duty in dispute pending hearing and disposal of the Writ Petition on the 1st Respondent furnishing a Bank Guarantee to the extent of the 90 per cent of the disputed amount of duty in respect of one item and 100 per cent of the disputed amount of duty in respect of two other items in favour of the Collector of Customs.
Thereafter some corre spondence ensued between the 1st Respondent and the Customs authorities in connection with the description of the above goods.
It would appear that while the Bill of Lading and the Invoice described the goods as 'Propylene ' the marks on the consignments indicated that they contained 'Polypropylene '.
The 1st Respondent was asked to explain the discrepancy by the Customs authorities.
There was also some dispute raised as regards the invoice price.
The 1st Respondent could not, however, clear the goods 936 from the Port of Bombay.
Thereafter the 1st Respondent filed another Writ Petition No. 519 of 1986 for the issue of a direction to the Customs authorities to permit it to clear the consignments.
On April 2, 1985 the learned Single Judge of the High Court of Bombay who heard the said Writ Petition passed an order allowing the 1st Respondent to dear the consignments on furnishing an Import Trade Control bond for the value of the consignments calculated at the rate of U.S $ 735 per metric ton and furnishing a Bank Guarantee of a nationalised bank in favour of the Collector of Customs, Bombay to the satisfaction of the Prothonotary & Senior Master, High Court, Bombay, for a sum equivalent to the difference in the value between U.S $ 7 15 and U.S $ 735 per metric ton without prejudice to the rights and contentions of the 1st Respondent.
The said order provided that the Customs authorities could continue their investigation and adjudicate upon the duty payable by the 1st Respondent.
On the basis of the above order the 1st Respondent was allowed to withdraw the Writ Petition with liberty to file a fresh petition, if required.
Since there was a delay in the clear ance of the consignments in question and the 1st Respondent had become liable to pay demurrage to the Port Trust, the 1st Respondent addressed a letter to the Collector of Cus toms, Bombay asking him to issue a Detention Certificate stating that the goods had been detained for bona fide Import Trade Control formalities so that it could claim the remission of demurrage payable to the Port Trust.
The 1st Respondent followed up the above letter by another Writ Petition No. 1007 of 1986 which was filed on or about the 17th April, 1986 against the Customs authorities for the issue of a writ directing them to issue a Detention Certifi cate in respect of all the 5 consignments.
On the 24th April, 1986 the learned Single Judge passed a final order directing the Customs authorities to issue a Detention Certificate to the 1st Respondent on the 1st Respondent giving an undertaking to the Court that it would pay the amount, if it failed in Writ Petition 122 of 1986.
Pursuant to the Order ' dated 24th April, 1986 passed in Writ Petition No. 1007 of 1986 the 1st Respondent gave an undertaking to the Court that it would pay the amount upon its not succeed ing in Writ Petition No. 122 of 1986.
On the 21st May, 1985 the Port Trust received a letter dated 19th May, 1986 from the Assistant Collector of Customs in which it had been stated inter alia that five Detention Certificates had been sent along with the said letter.
Actually no enclosures were received along with the said letter.
But later on they received two Detention Certificates in respect of two out of the five consignments on that day.
They related to two bills of entry bearing Nos. 3133/219 and 3 133/220.
On the same day the Docks Manager of the Port Trust received a letter from the clearing agent of the 1st Respondent asking 937 the Port Trust to grant the remission of demurrage in view of the Detention Certificates issued by the Customs authori ties.
Since the Port Trust was not a party to any of the Writ petitions, referred to above; and no Bank Guarantee or Demand Draft had been furnished by the 1st Respondent cover ing the 80% amount of the demurrage fees, the Port Trust wrote a letter dated 30th May, 1986 to the 1st Respondent asking the 1st Respondent to give a Bank Guarantee to the effect that in the event.
of the 1st Respondent losing Writ Petition No. 122 of 1986 it would pay to the Port Trust, Bombay the entire amount of remission along with interest at 15% per annum.
When the aforesaid letter was sent, the Port Trust was not aware of the Order dated 2nd April, 1986 passed in Writ Petition No. 519 of 1986.
Thereupon, on June 12, 1986 the 1st Respondent and its partner Sham Lal Kishna ni, who is 2nd Respondent herein filed another Writ Petition No. 1424 of 1986 in the High Court against the Port Trust for quashing the communication dated 30th May, 1986, re ferred to above, under which the Port Trust had asked the 1st Respondent to furnish the Bank Guarantee or a Demand Draft to the extent of 80% of the demurrage fees claimed by the Port Trust and for compelling the Port.
Trust to honour the Detention Certificates issued by the Customs authorities pursuant to the Order dated 24th April, 1986 and to permit the clearance of the goods without payment of demurrage and without insisting upon the furnishing of a Bank Guarantee or a Demand Draft, as stated above.
They also asked for an interim order of the effect that pending hearing and final disposal of the said Writ Petition, the Port Trust should forthwith honour the Detention Certificates issued by the Customs authorities and allow the clearance of the goods without payment of demurrage and without insisting on the Bank Guarantee or the Demand Draft.
In that Writ Petition an interim order was passed on the 17th June, 1986 as prayed for by the 1st Respondent.
Thereafter the Port Trust was advised to file an appeal before the Division Bench against the Order dated 2nd April, 1986 passed in Writ Petition No. 519 of 1986 and the Order dated 17th June, 1986 passed in Writ Petition No. 1424 of 1986.
While the Port Trust was in the process of getting the said appeals made ready for filing by their advocates, the 1st Respondent threatened the Port Trust with contempt proceedings by its letter dated 20th June, 1986.
Immediately after the receipt of the said letter, the Port Trust lodged the Appeal No. 512 of 1986.
By an order dated 26th June, 1986 the appeal filed against the Order dated 2nd April, 1986 passed in the Writ Petition No. 1007 of 1986 was summarily dismissed.
The said order, howev er, stated as under: "It is, however, clarified that it is clear from the im pugned 938 order dated 24.4.1986 that the undertaking pertains to the demurrage charges payable to the Port Trust.
if the Respond ents Nos. 1 and 2 (Petitioners) failed in Writ Petition No. 122 of 1986 on the footing that no valid detention certifi cate could have been issued in that event.
Mr. Chinoy contends that the detention certificate could not be issued, if in the adjudication proceedings the Petitioners are found at fault and the question of the Petitioners giving an undertaking to provide for this does not appear to have been present in the mind of the learned Judge when the order was passed.
Liberty to the Appellants 'to seek further clari fication and/or orders on this question from the learned Single Judge.
" The appeal filed against the Order dated 17th June, 1986 in Writ Petition No. 1424 of 1986 was numbered as Appeal No. 535 of 1986.
The said appeal was also summarily dismissed on 26th June, 1986.
As the Port Trust was advised to file an appeal in this Court by special leave, the Port Trust did not apply to the learned Single Judge for clarification as suggested in the Order passed in Appeal No. 512 of 1986.
It may be mentioned at this stage that the remaining three Detention Certificates relating to Bills of Entry Nos.
3133/221,222 and 223 were received by the Port Trust from the Customs authorities on 3rd July, 1986.
Two out of the five consignments were cleared by the 1st Respondent on 3rd July, 1986 and the remaining three consignments were cleared by the 1st Respondent on 5th July, 1986 on payment of an aggregate amount of Rs.49,510/50 paise for the charges of the Port Trust in accordance with the Order dated 17th June, 1986 passed in Writ Petition No.1424 of 1986 as against a total amount of Rs.3,53,514.75 paise due to the Port Trust for wharfage and demurrage charges upto the dates of the clearance of goods.
Thus a sum of Rs.3,04,004.25 in respect of wharfage and demurrage charges of the said five consign ments remains unpaid to the Port Trust.
Aggrieved by the two orders passed on 26th June, 1986 in Appeal No. 512 of 1986 and Appeal No. 535 of 1986 the Port Trust has filed these two appeals by special leave.
939 The principal contention urged in both these appeals is that the High Court should not have directed the Customs authorities to issue Detention Certificates without the Port Trust being made a party to the Writ Petition and in any event without passing an order duly providing for the pay ment of the wharfage and demurrage charges due to the Port Trust in the event of the 1st Respondent failing in its contention in Writ Petition No. 122 of 1986.
It is urged that a mere undertaking given in favour of the High Court agreeing to pay the amount was not sufficient security for the amount due to the Port Trust in the event of the 1st Respondent being held to be the party in default.
It is further contended that the High Court committed an error in directing the 1st Respondent to give a Bank Guarantee only in respect of the Customs duty payable by the 1st Respondent in the event of its Writ Petition being dismissed and in not making a similar order directing the 1st Respondent to furnish a Bank Guarantee in respect of the wharfage and demurrage charges payable to the Port Trust in the event of the 1st Respondent being ultimately held as the party in default.
The Port Trust is constituted under the (hereinafter referred to as the Act).
Under Section 5 of the Act every Board constituted under it is declared to be a body corporate having perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold or dispose of property and it may be the name by which i.t is constituted, sue or be sued.
The affairs of the Port Trust are managed by the Board of Trus tees and committees appointed by it in accordance with the provisions of the Act.
It is thus an independent statutory body and not just a department of Government.
Under Chapter VI of the Act the Board of Trustees of a Port Trust is empowered to impose and recover rates at Ports, for services rendered by the Port Trust or other persons at the port under its jurisdiction.
Sections 48 to 65 of the Act which are in Chapter VI of the Act deal with the said power of the Board of Trustees.
Section 48 authorises a Board from time to time to frame a scale of rates at which and a statement of the conditions under which, any of the services specified thereunder shall be performed by itself or any person autho rised by it at the port or port approaches.
Clause (d) of section 48 specifically empowers the Board to impose rates in respect of wharfage, storage or demurrage of goods on any such place.
Every scale of rates and every statement of conditions framed by the Board under the foregoing provi sions are required to be submitted to the Central Government for sanction and will have effect when so sanctioned and published by the Board in the Official Gazette.
It is, however, provided in section 53 of the Act that the Board of Trustees in special 940 cases and for reasons to be recorded in writing, may exempt either wholly or partially any goods or vessels or class of goods or vessels from the payment of any rate or of any charge leviable in respect thereof according to any scale in force under the Act or remit the whole or any portion of such rate or charge so levied.
The Port Trust has fixed the scale of rates charged at the docks.
A booklet containing the said rates which are revised upto 10.1.1985 is produced before the Court.
Section III of the said booklet which commences at page 14 thereof contains the Docks scale of rates ' fixed by the Port Trust.
In consultation with the Customs authorities, the Port Trust has provided for the grant of concession in the matter of payment of demurrage charges on the issue of Detention Certificate by the Customs authorities.
Section III A(c) of the said booket deals with the demurrage fees chargeable by the Port Trust.
Proviso (d) to the said clause (c) states that the goods detained by the Customs Department for special examination 'involving ana lytical or technical tests other than the ordinary processes of appraisement ' will be exempt from demunage fees during such period of detention as may be certified by the Collec tor of Customs to be not attributable to fault or negligence on the part of importers or exporters plus two working days and that the Certification by the Customs will be given by endorsement on relative duplicate copies of Bills of Entry or Shipping Bills.
On the suggestion of the Customs Depart ment the Port Trust has accepted to allow concession in the matter of demurrage charges to the extent indicated in Paragraph 4.10 of the note which is enclosed as Ext. 'B ' to the Special Leave Petition (Civil) No. 8466 of 1986.
It reads thus: "4.10 The best course seems to be to charge a rate per day which corresponds to our minimum charge for handling, stor age, care and custody or the goods after the expiry of the free days.
Wharfage constitutes handling costs plus storage charges for a period of four days.
Deducting handling costs, the balance represents storage charges for a period of four days.
It is estimated that, excluding the handling costs, storage charges per day are equal to 20% of total wharfage.
is, therefore, suggested that for the entire period of certified detention we may retain per day 20% of the wharf age to cover the services referred to herein.
" The above concession is extended by the Port Trust in appropriate cases where Detention Certificates are issued by the Customs authorities.
The Customs authorities have laid down the procedure for issue of Detention Certificates and the current procedure in 941 regard to the issue of Detention Certificates is embodied in the Bombay Custom House Public Notice No.111 dated 29th July, 1985.
Paragraph 2.of the said notice sets out the circumstances under which a regular Detention Certificate could be issued by the Customs House for facilitating the importers to get remission of demurrage charges.
They are as under: "(a) Where the goods are detained by Custom House for bona fide operation of Import Control Formalities without any default on the part of the importers.
(b) Where the goods have been released on caution (a regular Detention Certificate and not a Recommendatory letter).
(c) Where, the goods are detained the Custom House pending test report and the facility of clearance against provisional assessment has not been allowed.
Such Detention Certificates will be issued on merits for the period for which the goods were detained for the purpose.
(d) Where, the goods are detained for PHO formalities, the certificate will cover the period stretching between the date of drawal of the sample by the PHO and the date of his test results, and (e) In cases where samples have been drawn from the imported consignments by the Asstt.
Drug/Controller for ensuring compliance with the provisions of Drugs and Cos metics Act, 1940 and where the Assistant Drugs Controller is of the opinion that release cannot be allowed against a Letter of Guarantee pending test.
" The said Public Notice also states that Detention Cer tificates will not be issued in the following types of cases: (a) "Time taken by the Custom House Laboratory for analytical/chemical testing of samples drawn from the con signments, since the facility of clearing the goods on bond in terms of Section 18 already exists.
(b) Samples drawn from the imported consignments by the 942 Assistant Drugs Controller for ensuring compliance with the provisions of and for being forwarded to the Central Drugs Laboratory, Calcutta, as the importers can avail of the facility of clearing the goods against Letters of Guarantee and need not wait till the receipt of the test report.
The facility of allowing clearance of goods against letters of Guarantee is extended only on the specific recom mendations of the Assistant Drugs Controller on the Bill of Entry in each case.
(c) The period taken for mutilation of woollen rags in the Docks.
(d) Cases where goods are detained in the ordinary course of appraisement such as for determination of the Tariff classification of goods or their assessable value in terms of Section 14 of the Customs Act.
" It is agreed between the Customs authorities and the Port Trust that no Detention Certificate would, however, be issued by the Customs Department if there has been any default on the part of the importer or exporter.
It is thus clear that in the event of the importer or exporter being at fault, he would not be entitled to any concession in the matter of demurrage charges.
He has to pay whatever is payable in accordance with the 'scale of rates ' charged at the docks as fixed by the Port Trust.
The power of a Port Trust to fix rates of demurrage and to recover the same from an importer or exporter (although the question of an exporter paying demurrage arises rarely) under law and to show concession as regards demurrage charges in certain specified cases is recognised by this Court in the Trustees of the Port of Madras vs M/s. Amin chand Pyarelal & Others, ; and in the Board of Trustees of the Port of Bombay versus Indian Goods Sup plying Co.; , These decisions are no doubt based on the relevant laws which were in force at the mate rial time.
But the decisions are still relevant insofar as cases arising under the Act because the Act also contains provisions more or less similar to the statutory provisions considered in the said decisions.
Demurrage charges are levied in order to ensure quick clearance of the cargo from the harbour.
They are always fixed in such a way that they would make it unprofitable for 943 importers to use the port premises as a warehouse.
It is necessary to do so because congestion in the ports affects the free movement of ships and the loading and unloading operations.
As stated earlier.
the Port Trust shows conces sion to the party concerned in certain types of cases.
In the instant case the High Court by the order passed in the writ petition to which the Port Trust was not a party directed the Customs authorities to issue Detention Certifi cates in respect of the consignments in question.
In doing so while the High Court had safeguarded the interests of the Customs authorities by.
its earlier orders by directing the 1st Respondent to furnish a Bank Guarantee in respect of the duty payable to them, in respect of the demurrage charges payable to the Port Trust the High Court merely directed an undertaking to be given in favour of the High Court.
In the ordinary course, the High Court should have directed the 1st Respondent to furnish Bank Guarantee in respect of the demurrage charges payable to the Port Trust in the event of the 1st Respondent being held to be in default ultimately.
It is, however, to be observed that before compelling the Customs authorities to issue a Detention Certificate, the High Court should have issued notice to the Port Trust which was vitally interested in securing its own interests as regards the demurrage charges recoverable by it under law.
This was necessary because on the production of the Detention Certificate issued by the Customs authorities the Port Trust was under an obligation to permit the clearance of the goods without payment of full demurrage charges.
If ultimately the party concerned is found to be at fault and becomes liable to pay the full demurrage charges the Port Trust may not be in a position to recover such full demur rage charges from the party concerned, since it would have no longer any lien as provided by section 59 of the Act on the goods which are already cleared The Port Trust being a body corporate constituted under the Act is entitled to be heard by the Court before any order which affects its inter ests prejudicially is passed.
This case serves as an illus tration to what is stated above.
The Port Trust has been asked to permit the clearance of goods in respect of which demurrage charges of Rs.3,53,5 14.75 paise are payable in the event of the 1st Respondent being held liable in law to pay the full demurrage charges.
The orders passed by the High Court in the proceedings to which the Port Trust was not a party which had the effect of prejudicially affecting the interests of the Port Trust would not be binding on it in view of the violation of the principles of natural jus tice.
The High 944 Court erred in not imposing any condition on the 1st Re spondent for protecting the interests of the Port Trust even in the Writ Petition to which it was a party.
The impugned orders are contrary to the public notice issued by the Customs authorities as well as the rules of the Port Trust.
Having regard to the peculiar circumstances of this case in which the goods have already been cleared, the orders of the High Court of Bombay against which these appeals are filed are, therefore, to be modified appropriately in order to protect the interests of the Port Trust.
Accordingly, at the conclusion of the hearing of these appeals we passed an order on 16.12.1986 before reserving the appeals for judg ment directing the 1st Respondent to furnish within eight weeks a Bank Guarantee of a Nationalised Bank in favour of the appellant for due payment of Rs.3,04,004.25 paise to the appellant on demand, without any demur, being the balance of wharfage and demurrage charges in the event of the 1st Respondent not succeeding ultimately in Writ Petition No. 127 of 1986 and on failure to furnish such Bank Guarantee within eight weeks to pay in cash Rs.3,04,004.25 paise to the appellant forthwith.
This shall be the final order in these appeals.
These appeals are disposed of in the above terms.
The Customs authorities shall complete the adjudication proceed ings as expeditiously as possible and in any event within 16.3.1987.
P.S.S. Appeals disposed of.
| The empowers by cl.(d) of s.48 the Board of Trustees, constituted under that Art, to impose rates in respea of wharfage, storage or demurrage of goods at the port.
Section 53 of the Act empowers and Board in special cases to exempt either wholly or partially any ' goods from payment of any rate or of any charge leviable in respect thereof or remit the whole or any portion of such rate or charge so levied.
The Port Trust had in consultation with the Customs authorities provided for grant of conces sion in the matter of payment of demurrage charges on the issue of detention certificate by the latter.
Paragraph 2(a) of the Bombay Customs House Public Notice No. 111 dated 29th July, 1985 provides for a regular deten tion certificate to be issued where the goods are detained by the Customs House for the bona fide operation of import control formalities.
A dispute arose between the 1st respondent and the Customs authorities with regard to the basic customs duty payable on the goods imported by the former.
By an interim order passed in a writ petition filed by the respondent, the High Court directed the Customs authorities to allow clear ance of the consignments on respondent furnishing a bank guarantee in respect of the disputed amount of duty payable, in favour of the Collector of Customs.
The respondent, however, failed to clear the goods from the Port.
Since the consignments were incurring demurrage the respondent filed another writ petition seeking a direction to the Customs authorities 933 to issue detention certificates, which was allowed by the Court on the 1st respondent giving an undertaking that it would pay the demurrage amount if it failed in the earlier writ petition.
The Customs authorities were, thus, obliged to issue the detention certificates.
The Port Trust was not made party to any of the writ petitions.
It refused to honour the detention certificates and to grant remission of demurrage unless the respondent gave a bank guarantee to the extent of 80 per cent of the fees claimed.
The High Court, however, by an interim order, in the writ petition filed against the Port Trust, directed the clearance of goods without payment of demurrage and without insisting on the bank guarantee.
The appeals filed against the aforesaid orders were summarily dismissed by the High Court.
In the appeals by special leave, it was contended for the appellantPort Trust, that the High Court should not have directed the Customs authorities to issue detention certifi cates without the Port Trust being made a party to the writ petition and in any event without passing an order duly providing for the payment of the wharfage and demurrage charges due to the Port Trust in the event of the first respondent failing in its contention, and that the High Court had committed an error in directing the first respond ent to give a bank guarantee only in respect of the customs duty payable and not making a similar order with regard to wharfage and demurrage charges payable to the Port Trust.
Disposing of the appeals, the Court, HELD: 1.
The power of the Port Trust to fix rates of demurrage and to recover the same from an importer and to show concession as regards demurrage charges in certain specified cases has been recognised.
[942F G] Trustees of the Port of Madras vs M/s. Aminchand Pyare lal & Others; , and The Board of trustees of the Port of Bombay vs Indian Goods Supplying Co., ; , referred to.
2.1 The orders passed by the High Court in the proceed ings to which the Port Trust was not a party, were not binding on the Port Trust in view of the violation of the principles of natural justice.
[943G H] 2.2 The Port Trust being a body corporate constituted under was entitled to he heard by the Court 934 before any order which affected its interests prejudicially was passed.
The High Court, therefore, before compelling the Customs authorities to issue a detention certificate should have issued notice to the Port Trust.
This was necessary because on the production of that certificate the Port Trust was under on obligation to permit the clearance of the goods without payment of full demurrage charges.
If ultimately the party concerned was found to he at fault and become liable to pay the full demurrage charges the Port Trust in the absence of a bank guarantee would not be in a position to recover full demurrage charges from the party concerned since it would have no longer any lien as provided by s.59 of the Act on the goods which were already cleared.
[943D F] 3.
The orders of the High Court in the proceedings to which the Port Trust was a party were contrary to the public notice issued by the Customs authorities as well as the rules of the Port Trust.
It erred in not imposing any condi tion on the first respondent for protecting the interests of the Port Trust.
It should have directed the first respondent to furnish bank guarantee in respect of the demurrage charges payable to the Port Trust in the event of the first respondent being held to be in default ultimately, rather than merely directing an undertaking to be given in favour of the High Court.
[943B D] 4.
The goods having already been cleared, to protect the interests of the Port Trust the order passed on December I6, 1986 directing the first respondent to furnish bank guaran tee in favour of the appellant with regard to the balance of wharfage and demurrage charges and in default thereof to pay the amount in cash would be the final order in the matter.
The customs authorities to complete the adjudication pro ceedings expeditiously and within March 16, 1987.
[944B E]
|
N: Criminal Appeal No. 144 of 1992.
From the Judgement and Order dated 27.9.1991 of the Karnataka High Court in W.P. No. 113 of 1991.
WITH Writ Petition (Crl.) No. 1394 of 1991.
C.S. Vaidyanathan and P.K. Manohar for the Appellant.
K.T.S. Tulsi, Addl.
Solicitor General, P. Parmeswaran, A.K. Srivastava, M. Veerappa and Kh.
Nobin Singh (For the State of Karnataka) for the Respondents.
The Judgment of the Court was delivered by section RATANAVEL PANDIAN, J.
Leave granted.
The appellant/petitioner K.P.M. Basheer by the above appeal is challenging the correctness and legality of the order dated 27th September 1991 made by the High Court of Karnataka dismissing the Writ Petition filed by the appellant challenging the legality and validity of the order of detention dated 7.1.1991 passed by the State of Karnataka.
The first respondent in the appeal, namely, the State of Karnataka in exercise of the powers conferred by the Section 3(1) of the (hereinafter 1077 referred to as `the Act ') passed the impugned detention order on 7th January 1991 with a view to preventing him from engaging in keeping and transporting smuggled goods falling within the mischief of Section 3(1)(iii) of the Act.
The appellant was directed to be detained and kept in the custody of the central prison, Banglore.
The brief facts of the case which led to the passing of the impugned order can be summarised as follows: On 12.11.1990 the Superintendent of Central Excise on information interrogated the appellant at the Balgaum bus stand on his arrival from Bombay in the presence of some panchas and recorved two gold pellets with foreign markings each weighing ten tolas, wrapped in a paper packet from his front side right watch pocket of his pant.
The appellant was not having any valid permit and also was not able to give any satisfactory explanation for possessing the gold pellets.
Therefore, the Superintendent entertaining a reasonable belief that they were smuggled gold pellets recorded the statement of the appellant.
The State Government on the information passed on by the sponsoring authority passed the impugned order on 7.1.1991 on being subjectively satisfied of the necessity of passing the impugned order on the materials placed before it.
The detention order was served on the detenu only on 28.6.1991 from which date onwards he has been detained.
Challenging the detention order, the petitioner filed a Writ Petition No. 113/91 before the High Court of Karnataka and raised several contentions; those being (1) the order of detention is based on a solitary incident; (2) there has been an undue and prolonged delay in serving the order on the detenu; and (3) the materials placed before the detaining authority were not sufficient for drawing the requisite satisfaction for passing the impugned order.
The High Court rejected all those contentions and dismissed the Writ Petition.
Hence this appeal.
Before this Court the petitioner has filed a separate Writ Petition under Article 32 of the Constitution of India raising certain additional grounds.
Those grounds are: (1) The detenu made a request to the detaining authority to forward a copy of his representation to the Central Government and that the detaining authority has not forwarded the same to the Central Government as requested by him.
Even assuming that it has been forwarded, his represe tation has not been disposed of in time and as such there is violation of Article 22(5) of the Constitution of India.
1078 (2) The normal criminal process which would be adequate to take care of the possession of the gold has not been followed; and (3) The first respondent in the Writ Petition (Union of India) has failed in its duty to inform the petitioner regarding the Government instruction issued to the sponsoring agencies not to make an order of detention in cases where the value of the smuggled goods is less than Rs.1 lakh.
In the Writ Petition both the State Government as well as the Central Government have filed their counter affidavits refuting all the additional grounds.
Before scrutinising the additional grounds raised in the Writ Petition, we shall now examine the contentions raised in the appeal and find out whether the order of the High Court warrants interference.
Mr. C.S. Vaidyanathan, the learned counsel appearing on behalf of the appellant contends that the delay of more than five months in executing the order of detention is not only an inordinate and unreasonable one but also stands un explained and on that ground the High Court ought to have set aside the order of detention.
According to him, the High Court has not gone deep into that question but summarily disposed of the same holding "The explanation offered by the 1st respondent, in para 9 of the statement of objection is quite acceptable.
" Of course, this contention has not been specifically taken in the Memorandum of Appeal, but there can be no bar to advance a legal argument in a case of this nature and especially when such a contention has been raised before the High Court.
We want through the explanation given in para 9 of the counter affidavit filed on behalf of the first respondent by the then commissioner and Secretary to Government, Home Department.
It is not denied that the detention order was executed after a period of 5 months and 11 days.
What the first respondent states is that various efforts were taken to trace the detenu at Tellicherry at the address given in the grounds of detention as well as in the Bombay address, but he could not be secured.
Further it has been stated that though the arresting officers attempted to secure him at the Court of Chief Judicial Magistrate at Belgaum on 6.3.91, 28.3.91 and 14.5.91 on which dates the criminal case aS against him stood posted before that court, the officers could not do so as the appellant did not appear before the court for hearing.
Further it is mentioned that though COFEPOSA Section in the office of the Collec 1079 torate of Customs requested the State Government on 19.4.91 to initiate action under Section 7(1)(b) of the Act it was not done so because the seizing unit was asked to make one more attempt to trace out and detain the appellant.
This explanation is not a satisfactory and reasonable one for the following reasons : (1) No sufficient cause is shown for not taking any action under Section 7 of the Act.
(2) It appears from the paragraph 9 of the counter that the officers came to know of the correct address of the appellant at Bombay, but they could not trace him.
It may be pointed out that the Bombay address at which place the appellant detenu was attempted to be secured is not given in the counter.
Had it been given, the Court would have been in a position to verify the averments made in the grounds of detention stating that the address at Bombay given by the appellant was a fictitious one.
In paragraph 17 of the Writ Petition filed before the High Court, the appellant has asserted that he appeared before the Asstt.
Collector of Customs, Marine Lines, Bombay on 6.2.91 and 20.2.91 but no attempt was made to arrest and detain him.
This specific averment is not all denied in the counter.
This indicates that the arresting officers did not take any real and genuine effort to secure and detain the appellant.
The explanation now offered stating that the appellant was fugitive, eluding the dragnet of the detention order cannot be accepted, because during the alleged period of search he has appeared before the Assistant Collector of Customs, Bombay on two occasions during Feb. 1991, that is after passing of the detention order.
All the above points show that no serious and sincere effort appears to have been taken by the arresting officers and that there was only exchange of correspondence between the Department and the arresting officers.
It is incomprehensible as to why no effort has been made to secure the appellant/detenu during the two days, namely, on 6th and 20th February when he appeared before the Assistant Collector of Customs.
No supporting affidavits or documents are filed to substantiate the averments made in the counter.
Incidentally, it may be mentioned that though the two gold pellets (the contrabans) were seized from the appellant on 1080 12.11.90 the authorities concerned passed these orders only on 7.1.1991, i.e. nearly after two months.
Under these circumstances, we are of the view that the order of detention cannot be sustained since the `live and proximate link ' between the grounds of detention and the purpose of detention is snapped on account of the undue and unreasonable delay in securing the appellant/detenu and detaining him.
As we have now come to the conclusion that the order of detention is liable to be set aside on this ground alone we are not dealing with other contentions raised in the Memorandum of Appeal as well as in the Writ Petition.
Hence for the reasons stated above we allow the appeal, set aside the order of the High Court and quash the impugned detention order and direct the detenu to be set at liberty forthwith.
In view of the order in this present appeal, no order is necessary in the Writ Petition.
R.P. Appeal allowed.
| In exercise of its power under section 68 D of the the Government of Andhra Pradesh approved a draft scheme framed under section 68 C relating to the route Anantapur to Dharamavaram via Mamillapalli.
However, exemption was granted to persons holding permit for the routes namely (a) Kodikonda to Anantapur via Dharmavaram; (b) Bukkapatnam to Anantapur via Dharmavaram; (c) Interstate route Virechal to Dharmavaram via Anantapur; (d) Anantapur to Puttaparti via Dharmavaram and the partial exemption of these routes from the scheme was upheld by the Andhra Pradesh High Court.
Thereafter, the respondents filed a writ petition in High Court for a direction for exemption from the operation of the scheme, and the High Court held that exclusion of the respondents was discriminatory, Accordingly it directed the State Govt.
to consider the respondent 's case and pass appropriate orders to accord exemption from the operation of the scheme.
Against the decision of the High Court the Andhra Pradesh State Road Transport Corporation filed an appeal in this Court.
It was contended on behalf of the respondents that since the State Government exempted four routes from the operation of the scheme they are entitled to parity and denial offends their right to equality under Article 14 of the Constitution.
831 Allowing the appeal and setting aside the order of the High Court, this Court.
HELD: 1.
Section 68 C of the , whose constitutional validity can no longer be questioned, gives power to the State Transport Undertaking to exclude the private operators completely or partially from an area or route or part thereof in the draft scheme.
It gives exclusive power to offer transport service in that area or route or part thereof.
[833H, 834A] 2.
The statute itself gives power to the State to exercise discretion for formulating a scheme for an area or route or part thereof and necessarily has the effect of excluding the existing or potential private operators from the fields to render transport service in that partially prohibited area etc.
while retaining similar private operators in other area, route or part thereof.
The exclusion completely or partially is allowable under the statute itself and is writ large.
The discretion need not necessarily be discriminatory.
Section 68 C left the choice to the State Transport Undertaking and so discrimination in that sense is discernible from the section which itself authorises the State Transport Undertaking, based on factual matrix, eliminate in its choice of a partial exclusion of private operators in an area or route or part thereof.
Opportunity has been given to an affected party to file his or their objections and of a right of hearing before the State Govt.
approved of the draft scheme and publication thereof in the gazette.
The exercise of discretion by the State Transport Undertaking in its selective application of partial prohibition is controlled and regulated by the statute in Ss.
68 D and 68 E of the Act.
[834B D] Ram Nath Verma vs State of Rajasthan, [1963] 2 S.C.R. 152.
referred to.
Giving primacy to the contention of violation of Article 14 would be fraught with insidious effect of upsetting the very scheme itself since anyone of the existing or potential operators would always contend that he too is similarly situated with that of the exempted operators of other area, route or part thereof and unequal treatment has been meted out in the grant of permit to offer transport service offending his right under Article 14.
[834H, 835A] 4.
It is now settled law that even on a partial overlapping approved 832 scheme private operators have been totally prohibited to have corridor shelters and could no longer enter into the frozen area, route or part thereof and obtain permit to render transport service to the travelling public.
When that be so, the partial exclusion does not offend Article 14 of the Constitution.
[835 E]
|
As Nos.
1172, 1354, 1355 and 1751 of 1972.
(Appeals by Special Leave from the Judgment and Order dated the 27.9.1971 of the Kerala High Court in O.P. No. 1339/70 W.A.No. 8/70, W.A. No. 420/69 and O.P. No. 862 of 1969 respectively.) AND Civil Appeal No. 2275 of 1972 679 (Appeal by Special Leave from the Judgment and Order dated the 18.11.1971 of the Andhra Pradesh High Court in Writ Petition No. 5662/70).
AND Civil Appeals Nos.
1015/73, 1865/74 and CA No. 506/76.
(From the Judgments and Orders dated the 7 9 72, 22 7 74, and 30 10.1975 of the Andhra Pradesh High Court in Writ Petitions Nos.
4717/71, 3914/74 and 4213/75 respectively).
AND CA No. 1866 of 1973 and 1867/73.
(Appeals by Special Leave from the Judgment and Order dt.
the 15.2.1972 of the Andhra Pradesh High Court in Writ Petition No. 2933 and 3385/71 respectively.) AND Civil Appeal No. 1234 of 1974.
(Appeal by Special Leave from the Judgment and Order dated the 18.10.1973 of the Andhra Pradesh High Court in S.A. No. 360 of 1972).
AND Civil Appeal Nos.
1300 and 1393 of 1976.
(From the Judgment and Order dated the 5 12 1975 of the.
Kerala High Court in Writ Appeals Nos. 414 & 415 of 1975).
AND Civil Appeal No. 1313 of 1976.
(Appeal by Special Leave from the Judgment and Order dated the 10.3.1976 of the Orissa High Court in O.J.C. No. 531/74).
Niren De, Attorney General of India in CAs 1171, 1354 1355; V.P. Raman, Addl.
General in CAs 2275 and 1313 with B. Datta in CAs 1172, 1355 and 2275 and Girish Chandra, for the appellants in all the appeals.
Vepa Sarathi, N. Sudhakaran and P.K. Pillai for respond ents in CA 1172/72.
Vepa Sarathi (1354) K.M.K. Nair and Mrs. B. Krishnan for respondents in CAs 1354, 1751/72 and 1300 and 1393 of 1976.
Mrs. section Gopalakrishnan, for respondent in CA 1355.
K. Jayaram and K. Ram Kumar for respondents in CAs 1866 67, 1015/73 and 1865 of 1974 and 506/76.
Mrs. Veena Devi Khanna, for respondent in CA 2275/72.
C.S. S Rao, for respondent in CA 1313/76.
The respondents in all these fourteen ap peals, some of which are on certificate and some by special leave, are extra departmental agents connected with the postal department.
Six of these.
appeals are from the Kerala High Court, seven from the Andhra Pradesh High Court and one from.
the Orissa High Court.
These respondents were either dismissed or removed from service during the period between January 1, 1966 and June 18, 1974, and admit tedly the order of dismissal or removal was passed without complying with the provisions of Article 311(2) of the Constitution.
The question in each case is whether the respondent held a civil post as contemplated in Article 311 of the Constitution; if he did the dismissal or removal, as the case may be, would be unquestionably invalid for non compliance with Article 311(2).
The conditions of service of the respondents are gov erned by a body of rules called the Posts and Telegraphs Extra Departmental Agents (Conduct and Service) Rules, 1964 (hereinafter called the rules) issued under the authority of the Government of India.
Rule 2(b) of the rules defining "Extra Departmental Agent" includes within the category, among others, Extra Departmental Sub Postmaster 's, Extra Departmental Branch postmasters, Extra Departmental Delivery Agents, and several sections of class IV employees.
Eleven of the respondents arc extra departmental branch postmas ters, one is an extra departmental delivery agent, and two are class IV extra departmental employees.
In all these cases the High Courts have found that the respondents held civil posts under the Union of India and the orders termi nating their services in violation of Article 311 (2) of the Constitution were invalid.
This Court in State of Assam and others vs Kanak Chandra Dutta(1) has explained what a civil post is.
In that case the respondent who was a Mauzadar in the Assam Valley was dismissed from service in disregard of the provi sions of Article 311 (2).
It was held that "having regard to the existing system of his recruitment, employment and functions", he was "a servant and a holder of a civil post under the State", and therefore entitled to the protection of Article 311(2).
This Court observed: " . a civil post means a post not connected with defence and outside the regu lar civil services.
A post is a service or employment . .
There is a relationship of master and servant between the State and a person holding a post under it.
The exist ence of this relationship is indicated by the State 's right to select and appoint the holder of the post, its right to suspend and dismiss him, its right to control the manner and method of his doing the work and the payment by it of his wages or remuneration.
" (1) [1967]1 S.C,R. 679 (682).
681 A post, it was explained, exists apart from the holder of the post.
"A post may be created before the appointment or simultaneously with it.
A post is an employment, but every employment is not a post.
A casual labourer is not the holder of a post.
A post under the State means a post under the administrative control of the State.
The State may create or abolish the post and may regulate the conditions of service of persons appointed to the post.
" Turning now to the rules by which the respondents were admittedly gov erned, it appears that they contain elaborate provisions controlling the appointment, leave, termination of services, nature of penalties, procedure for imposing penalties and other matters relating to the conduct and service of these extra departmental agents.
There is a schedule annexed to the rules naming the appointing authorities in respect of each category of employees.
Rule 5 states that the employ ees governed by these rules shall be entitled to such leave as may be determined by the Government from time to time and provides that if an employee fails to resume duty on the expiry of the maximum period of leave admissible and granted to him or if an employee who is granted leave is absent from duty for any period exceeding the limit upto which he could have been granted leave he shall be removed from the service unless the Government decides otherwise in the exceptional circumstances of any particular case.
The services of employees who had not put in more than three years ' continu ous service are liable to be terminated at any time under rule 6 for unsatisfactory work or for any administrative reason.
The rules also indicate the nature of penalties which may be imposed on an employee and the procedure for imposing them.
A right of appeal is provided against an order imposing any of the penalties on the employee.
Various other conditions of service are also provided in these rules.
It is thus clear that an extra departmental agent is not a casual worker but he holds a post under the administrative control of the State.
It is apparent from the rules that the employment of an extra departmental agent is in a post which exists "apart from" the person who happens to fill it at any particular ' time.
Though such a post is outside the regular civil services, there is no doubt it is a post under the State.
The tests of a civil post laid down by this Court in Kanak Chandra Dutta 's case (supra) are clearly satisfied in the case of the extra departmental agents.
For the appellants it is contended that the relationship between the postal authorities and the extra departmental agents is not of master and servant, but really of principal and agent.
The difference between the relations of master and servant and principal and agent was pointed out by this Court in Lakshminarayan Ram Gopal and Son Ltd. vs The Gov ernment of Hyderabad.
(1) On page 401 of the report the following lines from Halsbury 's Laws of England (Hailsham edition) Volume 1, at page 193, article 345, were quoted with approval in explaining the difference: (1) ; 682 "An agent is to be distinguished on the one hand from a servant, and on the other from an independent contractor.
A servant acts under the direct control and supervision of his master, and is bound to conform to all reasonable orders given him in the course of his work, an independent contractor, on the other hand, is entirely independent of any control or interference and merely undertakes to produce a specified result, employing his own means to produce that result.
An agent, though bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal, is not subject in its exercise to the direct control or supervision of the principal.
An agent, as such is not a servant, but a servant is generally for some purposes his master 's implied agent, the extent of the agency depending upon the duties or position of the servant.
" The rules make it clear that these extra departmental agents work ' under the direct control and supervision of the authorities who obviously have the right to control the manner in which they must carry out theft duties.
There can be no doubt therefore that the relationship between the postal authorities and the extra departmental agents is one of master and servant.
Reliance was placed on behalf of the appellants on two decisions, one of the Orissa High Court Venkata Swamy vs Superintendent, Post Offices(1) and the other of the Madras High Court V. Subbaravalu vs Superin tendent of Post Offices.(2) The judgment in these cases were rendered before the elaborate rules governing the conduct and service of these extra departmental agents were brought into operation in 1964.
We do not therefore think an examination of these two decisions will be relevant or useful for disposing of the appeals before us.
The appeals are accordingly dismissed with costs: one set o[ hearing fee in respect of all the appeals except C.A. 1172 of of 1972 and C.A. 2275 of 1972 in which separate orders as to costs was made earlier.
S.R. Appeals dismissed (1) AIR 1957 Orissa 112.
(2) AIR 1961 Madras 166.
| In a bus accident on June 23, 1961, one Mrs. Usha Kotas thane and her one year old son died.
One Sailesh Kumar.
a boy of about four years coming from a well to do family was disabled due to a compound fracture of his right tibia and fabula lower third near the ankle joint.
_ Sudhakar Kotas thane, the husband of the deceased and respondent No. 1 in C.A. 2254 of 1968 and Smt.
Indu Bala Bhandari.
mother of Sailesh Kumar and respondent No. 1 in C.A. 2255 of 1968 applied to the Motor Accident Claims Tribunal, Gwalior for compensation.
The Tribunal took into consideration (i) the loss of life of Sudhakar 's wife which resulted into condi tions of inconvenience, suffering, shock, derangement in house and the life for a period of nearly 11 months i.e., till he remarried and (ii) The fact that Mrs. Usha was working as Physical Instructress in a school getting a salary of Rs. 190/ p,m.
in the scale of Rs. 150 10 250 and awarded a sum of Rs. 15,000/ as compensation as against the claim of Rs. 75,000/ computed on the deceased 's earn ings.
The Tribunal also awarded a sum of Rs. 10,000/ as damages and Rs. 890/ as special damages to Smt.
Indubala.
Both the respondents and the appellant preferred appeals to the High Court from the decision of the Tribunal.
The High Court enhanced the compensation to Rs. 50,000/ in the case of Sudhakar and to Rs. 20,000/ in the case of Indubala.
Allowing the appeal in C.A. No. 2254 of 1968 and dis missing the appeal in C.A. No. 2255 of 1968, the Court.
HELD: (1) A method of assessing damages usually followed in England is to calculate the net pecuniary loss upon an annual basis and "to arrive at a total award by multiplying the figure assessed as the amount of the annual 'dependency ' by a number of year 's purchase", that is, the number of years that benefit was expected to last taking into consid eration the imponderable factors in fixing either the multi plier or the multiplicand.
The husband may not be dependant on the wife 's income.
the basis of assessing the damages payable to the husband for the death of his wife would be similar.
[631 AB] Rule in Mallet vs Mc Mongale 1970 (A.C.) H.L. 166 at 174 quoted with approval.
P.B. Kaclar vs Thatchamma AIR 1970 Kerala 241, approved.
In assessing damages certain other factors have to be taken note of, such as, the uncertainties of life and the fact of accelerated payment that the husband would be getting a lump sum payment which but for his wife 's death would have been available to him in driblets over a number of years.
Allowance must be made for the uncertainties and the total figure sealed down accordingly.
The deceased might not have been able to earn till the age of retirement 628 for some reason or other, like illness or for having to spend more time to look after the family which was expected to grow.
Thus, the amount assessed has to be reduced taking into account these imponderable factors.
[630 G H] In the instant case, the deceased had 35 years of serv ice before her when she died.
The claimant 's loss reasona bly works out to Rs. 50/ a month i.e., Rs. 600/ a year.
Keeping in mind all the relevant factors and contingencies and taking 20 as the suitable multiplier, the figure comes to Rs. 12,000.
The Tribunal 's award cannot, therefore, be challenged as too low though it was not based on proper grounds.
The High Court was also not right in estimating the damages at Rs. 50,000/ in the manner it did.
2255 of 1968: Though the possibility was there, in the instant case, of the deformity being removed by surgical operation when the boy grew up to be 16 years, the other possibility of "likelihood to develop a permanent limp" cannot be altogeth er ruled out.
That being the position, the increase of general damages to Rs. 20,000/ , in the instant case, in addition to Rs. 890/ as special damages is proper.
[631 D F]
|
No. 300 of 1969.
M. C. Chagla, N. A. Palkhivala, B. Datta, J. B. Dadachanji 0.
C. Mathur and Ravinder Narain, for the applicants.
H. R. Gokhale and section B. Wad, for the respondent.
The Judgment of the Court was delivered by Hidayatullah, C.J.
This petition is an off shoot of the decision of this Court on the constitutional validity of the Banking Companies (Acquisition of Transfer of Undertakings) Act, being Act 22 of 1969.
By a majority of ten Judges against one, 'this 513 Court declared the Act to be unconstitutional.
The decision of the Court was given on February 10, 1970.
On February 13, 1970 a meeting was organised by the Blitz National Forum at Vithalbhai Patel House at Delhi.
it was presided over by Mr. Mohan Kumarmanglam, an advocate of this Court.
According to the news items published the next day in the Hindustan Times, the Times of India and the Patriot, a number of persons spoke about the Act and the decision of this Court upon it.
Among the speakers were Mr. R. K. Khadilkar, Minister in the Ministry of Finance, Mr. A. section R. Shari, Mr. Kumarman glam, Mr. Prabhatkar, Mr. section M. Joshi, M.P., Mr. Bhupesh Gupta M.P. and Mr. V. K. Krishna Menon M.P.
These speakers criticised the decision. 'Mr. R. K. Khadilkar, the Hindustan Times, reported, said that such decisions 'do not enhance the prestige of the Judiciary ', that such acts on the part of the highest Court 'will only encourage Naxalites who have rejected constitutional means to bring about socialism ' and that the judgment would be treated with 'more and more contempt by ordinary people '.
He observed that the situation would be rectified by Parliament because ten Judges 'sitting in an ivory tower ' could not sit over the verdict of Parliament which represented the people.
The Times of India report said that Mr. Khadilkar said that 'Government would soon bring forward an amending measure to offset the dangerous implications for social progress of the community of the Supreme Court judgment in the Bank Nationalization case, that if necessary the issue whether Parliament or the Supreme Court was the final arbiter of the 'people 's will should be referred to the people and a mandate taken from them, and quoted Pandit Nehru that it was never the intention of the Constitution to make the Supreme Court 'the third house of correction '.
The Patriot reported that 'attempts to utilize community savings lying in banks for the welfare of the common man have been blocked by the judiciary ', that 'the Supreme Court could not be accepted as the third chamber of legislature ', that he did not "want to threaten the judiciary ' but Parliament would have 'to take steps to respect the feelings of the people for stabilizing democracy '.
Mr. Khadilkar also wished that the judiciary would take note 'of the changing situation and helped to transform the society for the benefit of the common man. ' The three reports also described what the other speakers had said at the meeting.
On February 26, 1970, two petitioners (Mr. Krishna Rao Kaushik M.P. and Lt. Col. H. R. Pasricha) swore an information based on the newspaper reports (with copies annexed) that a serious contempt of this Court was committed by Mr. R. K. Khadilkar inasmuch as his speech had a clear tendency to affect the dignity and prestige of this Court and there was danger of grave Sup.
Cl/70 4 514 mischief in the administration of justice and the confidence of the whole community in the administration of justice was bound to be undermined.
Two affidavits sworn in support were based on the newspaper, reports.
As some of the alleged observations, particularly those reported in the Hindustan Times, prima facie exceeded the bounds of legitimate criticism, a notice was issued to Mr. Khadilkar to show cause why action should not be taken against him.
In reply Mr. Khadilkar filed an affidavit denying the main allegations.
He stated in his affidavit as follows "I am a firm believer in the independence of judiciary as an integral part of our democratic polity.
I am in entire agreement with the sentiment expressed in para 1 of the petition, viz. that the., dignity of the Hon 'ble Supreme Court must be maintained and the administration of justice should not be allowed to be undermined in this country.
I have a deep faith in the social and economic objectives of our Constitution as enshrined in the Directive Principles of the Constitution and the democratic and constitutional methods of achieving them.
Indeed, by oath of office, I am duty bound to uphold these objectives of our Constitution.
" In reply to the specific charge of making statements tending to vilify the Judges and to bring the ' administration of justice into hatred and contempt, Mr. Khadilkar denied having made the statement attributed to him by the Patriot 'that attempts to utilize community savings in the banks for the welfare of the common man had been blocked by the judiciary ' and the statements attributed to him by the Hindustan Times to the effect that "(a) The majority decision in the Bank case "did not enhance the prestige of the Judiciary".
(b)Supreme Court judgment would be treated with "more and more contempt by ordinary people".
(c)The judiciary had persistently failed to interpret the Constitution and remained static.
(d)Ten Judges sitting in ivory tower could not sit in judgment over verdict of Parliament which represented the people.
" He asserted that he had said ". no aspersions should be cast on the judiciary and event bough the decision had far reaching consequences.
pointed out, that the judgment was cautiously worded and the learned Judges had not challenged 515 the authority of Parliament to bring forward a measure of nationalisation".
He claimed to have added: "No desire to cast aspersions on the judiciary and would very much like to see its prestige remained high and its image untarnished.
We cannot, however, avoid pointing out wherein according to us the decision is erroneous primarily by reason of its consequences for 'attempts at social reform.
" He explained what he had said by recalling his speech.
It is not necessary to quote his version.
He complained that the newspapers had picked out ideas but put them in their own words and that it was not always possible to contradict the newspapers.
He expressed his views on the institution of property as a fundamental right to which it is not necessary to refer here.
He concluded by saying "I may also state that in my comments on the Bank Judgment, no improper motives were attached to the Hon 'ble Judges.
There was no malice either against the Hon 'ble Judges or the institution of Supreme Court, the independence of which I honestly cherish.
" In support of his own affidavit, Mr. Khadilkar exhibited affidavits from Messrs. Mohan Kumarmangalam, A. section R. Chari and section M. Joshi.
In these affidavits (which are insissima verba) support was given to the denials of Mr. Khadilkar.
At an earlier hearing, the petitioners promised to file affidavits of reporters etc.
present at the meeting.
At the resumed hearing no affidavits were filed on the ground that the journalists following their code of conduct did nit wish to file any ' material unasked and request was, therefore, made to summon them in the interest of justice.
We did not think it necessary to prolong the hearing of the case as on the material before us there was nothing to contradict the affidavits which deny the accuracy of the newspaper reports.
We accordingly.
closed the case for orders.
There is no doubt that the Court like any other institution does not enjoy immunity from fair criticism.
This Court does not claim to be always right although it does not spare any effort to be right according to the best of the ability, knowledge and judgment of the Judges.
They do not think themselves in possession of all truth or hold that wherever others differ from then, it is so far error.
No one is more conscious of his limitations and fallibility than a Judge but because of his training and the assistance he gets from learned counsel he is apt to avoid mistakes more than others.
5 1 6 Further the supremacy of a legislature under a written Constitution is only within what is in its power but what is within its power and what is not, when any specific act is challenged, it is for the courts to say.
If that were realised much of the misunderstanding would be avoided and the organs of Government would function truly in their own spheres .
We are constrained to say also that while fair and temperate criticism of this Court or any other Court even if strong, may be actionable attributing improper motives, or tending to bring Judges or courts into hatred and contempt or obstructing directly or indirectly with the functioning of Courts is serious contempt of which notice must and will be taken.
Respect is expected not only from those to whom the judgment of the Court is acceptable but also from those to whom it is repugnant.
Those who err in their criticism by.
indulging in vilification of the institution of Courts, administration of justice and the instruments through which the administration acts, should take heed for they will act at their own peril.
We think this will be enough caution to persons embarking on the path of criticism.
With these words we order the papers to be filed.
| At a public meeting held a few days after the decision of this Court on the constitutional validity of the Banking Companies (Acquisition of Transfer of Undertakings) Act 22 of 1969, K, a Minister in the Central Government, was reported by newspaper$ to have made certain critical remarks which, two petitioners before the Court contended constituted a serious contempt of this Court.
The petitioners swore an affidavit in support of their petition based on the newspapers reports.
As the Court considered that some of the alleged observations, prima facie, exceeded the bounds of legitimate criticism, a notice to show cause was issued to K.
In reply K filed an affidavit denying the main 'allegations and contending that he has been misreported.
In support of his own affidavit, three other affidavits were filed by persons present at the public meeting.
Although an application was made for summoning the reporters present at the public meeting, the Court did not consider it necessary to prolong the hearing of the case as on the material before the Court there was nothing to contradict the affidavits which denied the accuracy of the newspaper reports.
However, while closing the case, the Court observed : While fair and temperate criticism of this Court or any other court even if strong, may not be actionable, attributing improper motives, or tending to bring judges or courts into hatred and contempt or obstructing directly or indirectly the functioning of Courts is serious contempt of which notice must and will be taken.
Respect is expected not only from those to whom the judgment of the Court is acceptable but also from those to whom it is repugnant.
Those who err in their criticism by indulging in vilification of the institution of Courts administration of justice and the instruments through which the administration acts, should take heed for they will act at their own peril.
[516 B]
|
Appeals Nos.
909 to 923 of 1963.
Appeals from the judgment and orders dated July 26, and August 1, 1962, of the Calcutta High Court in Appeals from Original Orders Nos.
288 and 274 276, 278, 280, 279, 281, 273, 272, 271, 270, 269, 282 and 292 of 1961.
H.N. Sanyal, Solicitor General, S.J. Banaji, Prasanta Kumar Ghose and K.L. Hathi, for the appellants.
B. Sen, Salil Kumar Datta and Sukumar Ghose, for the respondents Nos. 1 to 5.
November 22, 1963.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This is a group of 15 appeals which raise a common question about the validity of the orders passed by the appellant Life Insurance Corporation of India terminating the services of its employees who are the respondents in these appeals.
The facts which give rise to the present disputes between the parties in all the 15 cases are substantially similar, and so, it would be enough if we state the relevant facts in one of these cases.
One of the respondents is Sunil Kumar Mukherjee.
He was in the insurance line since June, 1941 and had been confirmed in his service by the Metropolitan Insurance Co. Ltd. in March, 1950.
Since about 1953, he had been working as Inspector of the said Company, and since March 18, 1955, he was holding the appointment as Inspector at Barrackpore.
The appellant which took over the controlled business of the Metropolitan Insurance Co. Ltd., terminated the services of Mukherjee by an order passed on the 16th October, 1958.
The respondent then moved the Calcutta High Court under article 226 of the Constitution and prayed for a writ of certiorari or other appropriate writ or order quashing the said impugned 531 order of discharge passed against him.
Sinha J. who heard the writ petition allowed the petition and directed that a writ in the nature of certiorari quashing and/or setting aside the impugned order be issued.
A further writ in the nature of mandamus was also issued directing the respondents to the writ petition not to give effect to the said impugned order.
To the petition filed by the respondent, he had impleaded eight respondents, the principal amongst them being the appellant Corporation and the Union of India.
Aggrieved by the decision of Sinha J. the appellants preferred an appeal under the Letters Patent before a Division Bench of the said High Court.
Bose C.J. and Debabrata Mokerjee J. who heard the Letters Patent appeal substantially agreed with the view taken by Sinha J. and confirmed the order passed by him.
The appellants then applied for and obtained a certificate of fitness from the said High Court and it is with the said certificate that they have come to this Court in appeal.
On similar facts, the appellants have brought to this Court the other fourteen appeals, and a common question which has been raised by the learned Solicitor General on behalf of the appellants is that the High Court was in error in holding that the orders of discharge passed respectively against the respondents in these appeals were invalid.
Before dealing with the points raised by the appellants in the present appeals, it would be convenient to set out the relevant orders passed in respect of the appointment and discharge of the respondent Mr.Mukherjee.
When Mr.
Mukherjee was appointed a whole time Inspector by the Metropolitan Insurance Co. Ltd. on the 18th or 19th March, 1955, the terms and conditions of his employment were communicated to him by a document which contained 14 clauses (Annexure A to the W.P.).
Clause 13 of this document provided that the appointment was subject to termination without notice in case he was found guilty of fraud, misappropriation, breach of discipline, insubordination, acting detrimental to the interests of the company, disloyalty or gross neglect 532 of duty: provided, however, that he would be entitled to 30 days ' notice if his services were terminated for any other reason.
It is thus clear that under the terms and conditions of Mr. Mukherjee 's original appointment with the Insurance Co., he was liable to be dismissed for misconduct and was entitled to receive 30 days ' notice if his services were terminated for reasons other than misconduct.
When the Life Insurance Corpn.
took over the business of the Metropolitan Insurance Co. Ltd., an order was issued in favour of Mr. Mukherjee on the 14th February, 1958.
By this order it was stated that in terms of Government Order No. 53(1) I.S.N. (1) 57 dated 30th December, 1957, he was required to work as a Field Officer.
It was also added that he would continue to be attached to Barrackpore Branch Office until further orders.
This order was issued by the Divisional Manager.
Thus, it appears that after this order was given to Mr. Mukherjee, he began to work as a Field Cfficer by virtue of his appointment under the relevant Government Order.
One of the points which we have to consider in the present appeal is : what is the effect of this order of appointment? On the 16th October, 1958, the impugned order terminating Mr. Mukherjee 's services was passed.
This order said that in terms of section 5 of the Categorisation circular of the 2nd December, 1957, Mr. Mukherjee 's case was examined by the Special Committee appointed by the Board of the Corporation to review the cases of Ex Branch Secretaries etc., and it was added that in accordance with the recommendations of the Committee which had been accepted by the Corporation, it had been decided to terminate his services with immediate effect.
Mr. Mukherjee was also told that he would be paid his emoluments up to the current month and one month 's salary in lieu of notice.
It is the validity of this order which has been successfully challenged by Mr. Mukherjee before the Calcutta, High Court, and the learned Solicitor General contends that the High Court was in error in upholding Mr. Mukherjee 's plea.
533 The history of the nationalisation of the Life Insurance business in this country is well known.
On the 19th January, 1956, the Life Insurance (Emergency Provisions) Ordinance (No. 1 of 1956) was promulgated by the President for the purpose of taking over, in the public interest, the management of the life insurance business, pending nationalisation of such business.
In due course, Act No. 9 of 1956 was passed which took the place of the original Ordinance and it came into effect on the 21st March, 1956.
This Act was followed by Act 31 of 1956 (hereinafter called 'the Act ') which was published on the 1st of July, 1956.
The appointed date under s.3 of this Act was the 1st of September,1956.
Section 7 of the Act provides that on the appointed day there shall be transferred to and vested in the Corporation all the assets and liabilities appertaining to the controlled business of all insurers.
That is how the Life Insurance Corporation took over all the assets and liabilities appertaining to the controlled business of all the insurers in this country.
As a result of this taking over, section II proceeded to make a provision for the transfer of service of existing employees of insurers to the Corporation.
For the purpose of these appeals, it is necessary to set out sec.
11 (1) & (2).
These sub sections read as under: "(1) Every whole time employee of an insurer whose controlled business has been transferred to and vested in the Corporation and who was employed by the insurer wholly or mainly in connection with his controlled business immediately before the appointed day shall, on and from the appointed day, become an employee of the Corporation, and shall hold his office therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same on the appointed day 534 if this Act had not been passed, and shall continue to do so unless and until his em ployment in the Corporation is terminated or until his remuneration, terms and conditions are duly altered by the Corporation: Provided that nothing contained in this sub section shall apply to any such employee who has, by notice in writing given to the Central Government prior to the appointed day, intimated his intention of not becoming an employee of the Corporation.
(2) Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions of service applicable to employees of insurers whose controlled business has been transferred to,, and vested in, the Corporation, it is necessary so to do, or that, in the interests of the Corporation and its policy holders, a reduction in the remuneration payable, or a revision of the other terms arid conditions of service applicable, to employees or any class of them is called for, the Central Government may, notwithstanding any thing contained in sub section (1), or in the , or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms & conditions of service to such extent and in such manner as it thinks fit, and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months ' remuneration unless the contract of service with such employee provides for a shorter notice of termination.
" 535 Then follow an explanation and sub sections (3) and (4) which are not relevant for our purpose.
It would thus be seen that under section 11(1), persons who were employed by an insurer wholly or mainly in, connection with his controlled business before the appointed day, became the employees of the Corpora , tion as from the appointed day.
After they thus became the employees of the Corporation, they held their offices by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges.
In other words, on the taking over of the controlled business by the Corporation, the employees of the insurers to whom section 11 (1) applied became the employees of the Corporation, but their employment continued to be on the same terms and conditions as before.
This state of affairs was to continue until the employment of the employee was brought to an end or until his remuneration, terms and conditions were duly altered by the Corporation.
The scheme of section 11(1) is thus clear.
With the transfer of the controlled 'business from the insurer to the Corporation, the employees of the former became the employees of the latter, but they were governed by the same terms and conditions until they were altered by the latter.
The proviso to section II (1) shows that if any employee had, by notice in writing, conveyed to the Central Government prior to the appointed day his intention not to become an employee of the Corporation, his case was outside section 11 (1) In other words, such an employee would not become the employee of the Corporation and his case would have to be dealt with apart from section II (1) & (2).
Section 11 (2) as it originally stood was substantially modified in 1957, and the plain effect of the provisions contained in the said sub section as modified, is that the Central Government.
is given the power to alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit.
It is significant that this power can 536 be exercised by the Central Government notwithstanding anything contained in sub section (1) or in the , or in any other law, or in any award, settlement or agreement for the time being in force.
It was thought that for a proper functioning of the Corporation it was essential to confer upon the Central Government an over riding power to change the terms and conditions of employees who were wholly or mainly employed by the insurers prior to the appointed day.
Having conferred such wide power on the Central Government, section 11 (2) further provides that if the alteration made by the Central Government in the terms and conditions of his service is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months ' remuneration unless the contract of service with such employee provides for a shorter notice of termination.
It is thus clear that in regard to cases which fall under section 11 (2) if as a result of the alteration made by the Central Government any employee does not want to work with the Corporation, he is given the option to leave its employment on payment of compensation provided by the last part of section 11 (2).
Thus, the scheme of the two sub sections of section II is clear.
The employees of the insurers whose controlled business has been taken over, become the employees of the Corporation, then their terms and conditions of service continue until they are altered by the Central Government, and if the alteration made by the Central Government is not acceptable to them, they are entitled to leave the employment of the Corporation on payment of compensation as provided by section 11(2).
After the Corporation took over the controlled business of insurers under the Act, two circulars were issued by the Managing Director, the first on the 30th September, 1957 and the second on the 2nd December, 1957.
These circulars need not detain us at this stage, because, by themselves, they were without any authority in law.
However, we would have occasion to refer to the second circular later on.
537 On the 30th December, 1957, an order was issued by the Central Government in exercise of the powers conferred on it by section 11(2) of the Act.
This order was issued on blue paper and has been described by the High Court as the 'blue order '.
We will refer to this order as 'the order ' in the course of this judgment.
This order was issued because the Central Government was satisfied that for the purpose of securing uniformity, in the scales of remuneration and the other terms and conditions of service applicable to certain classes of employees of insurers, it, was necessary to clarify the position by making specific and clear provisions in that behalf.
The object of the order was to secure the interests of the Corporation and its policy holders by making a reduction in the remuneration payable to the employees governed by the order, and effecting a revision of the other terms and conditions applicable to them.
This order was confined in its operation to the officers of the insurers who were known as 'Field Officers ', and so, the order was named as the Life Insurance Corporation Field Officers ' (Alteration of Remuneration and other Terms and Conditions of Service) Order, 1957.
It consists of 12 clauses.
Clause 2 defines, inter alia, a Field Officer.
In 1962, the designation 'Field Officer ' was changed into a "Development Officer", though curiously enough the title of the Order still refers to the Field Officer and does not incorporate a consequential amendment in the said designation.
The definition of the "Development Officer" shows that it takes in a person however he was designated before the appointed day if he was wholly or mainly engaged in the development of new life insurance business for the insurer by supervising, either directly or through one or more intermediaries, the work of persons procuring or soliciting new life insurance business, and who was remunerated by a regular monthly salary, and who has become an employee of the Corporation under section 11 of the Act.
This definition excludes certain categories of employees to which it is not necessary to refer.
It is thus clear that the Order was intended to prescribe the terms and conditions of service in respect of Development Officers who had become employees of the Corporation under section 11 (1) of the Act.
Clause 3 of the Order prescribes the duties of the Development Officer.
Clause 4 prohibits the Development Officers from engaging themselves in certain activities.
Clause 5 provides for the scales of pay and allowances .
Clause 6 deals with the matter of leave and retirement, and provides that in the matter of leave and retirement, Development Officers shall be governed by the Life Insurance Corporation (Staff) Regulations, 1960, as amended from time to time. ' Clause 7 provides for increments, and clause 8 deals with new business bonus, while clause 9 refers to promotion of Development Officers.
Clause 10 is relevant for our purpose and must be set out in full: "10.
Penalties and termination of service: (a) In case of unsatisfactory performance of duties by a Development Officer or if a Development Officer shows negligence in his work or is guilty of misconduct or is otherwise incapable of discharging his duties satisfactorily, his remuneration may be reduced or his services may be terminated, after giving him an opportunity of showing cause against the action proposed to be taken in regard to him and after conducting such enquiry as the Corporation thinks fit.
(b) The services of any Development Officer may, with the prior approval of the Chairman of the Corporation, be terminated without assigning any reason after giving the Development Officer three months ' notice thereof in writing.
" Clause 11 prescribes that the actual pay and allowances admissible to any Development Officer under the scale of pay specified in paragraph 5 shall be determined in accordance with such principles as may be laid down by the Corporation by regulations made in this behalf under sec.
49 of the Act.
The last clause lays down that if a doubt arises as to the interpretation of any of the provisions of the Order, the matter will be decided by the Central Government.
539 It is thus clear that in regard to the Field Officers subsequently designated as Development Officers who became the employees of the Corporation after the appointed day the Order provides a self contained with the material terms and conditions of service of the said Officers.
In regard to the scales of pay and.
allowances which have been prescribed by clause 5, clause 11 contemplates that the actual pay and allowances admissible to any Development Officer will have to be determined in accordance with the principles which the relevant regulation would in that behalf lay down, and so, in the matter of scales of pay and allowances clause 5 read with clause 11 has to be co related with the relevant regulation which had to be subsequently framed.
In regard to the other terms and conditions of service, however, the Order makes specific and clear provisions.
That being so, there can be no doubt that in regard to the Officers to whom the Order applies, if any action is intended to be taken for the termination of their services, it has to be taken under clause 10(a) or (b).
Clause 10 (a) deals with two alternatives; it empowers the appropriate authority to reduce the remuneration of the Development Officer or to terminate his services; in either case, an opportunity of showing cause against the action proposed to be taken has to be given to him, and an enquiry has to be conducted in the manner which the Corporation may think fit.
If the Development Officer shows negligence in his work, or is guilty of misconduct, or is otherwise incapable of discharging his duties satisfactorily, the Corporation may reduce his remuneration or may terminate his service ; but that can be done only after complying with the conditions prescribed by clause 10(a).
Clause 10(b) empowers the Corporation to terminate the services of the Development Officer without assigning any reason and without holding any enquiry or giving him an opportunity to show cause, provided, of course, the order terminating his services is passed with the prior approval of the Chairman of the Corporation.
is power can be exercised without complying 540 with clause 10(a) and is independent of it.
Thus, in the matter of penalties and termination of service, two alternative powers are conferred on the authority and they are contained in the sub clauses (a) and (b) of clause 10.
As envisaged by clause 11 of the Order, Regulations were framed in 1958 by the Life Insurance Corporation under section 49 of the Act read with clause 11 of the Order.
These Regulations contain five Clauses; the first gives the title of the Regulations; the 2nd defines the "Categorisation Order" which is the same as the blue Order, as well as the "Corporation" and the "Field Officer".
Regulation 3 deals with the conveyance allowance.
Regulation 4 provides for the manner of fixing the pay of the Development Officer.
Regulation 4 (1) lays down that the basic pay in the scale of pay prescribed for Field Officers by the Order shall be so fixed that the said pay together with the dearness allowance and conveyance allowance is not less than the total monthly remuneration to which the Officer was entitled before the 31st August, 1956.
Regulation 4(2) provides that where the work of the Field Officer has been either below or above the adequate standard, the Corporation may fix his basic pay at such stage in the scale as it may think fit.
Regulation 4(3) prescribes that in judging a Field Officer 's work, the Corporation shall observe the principles contained in the circular issued by the Managing Director on the 2nd December, 1957.
Regulation 5 provides for the computation of total monthly remuneration which was paid to the Officer on the 31st August, 1956.
It will be noticed that clause 4(3) of the Regulations makes the circular issued by the Managing Director on the 2nd December, 1957 a part of the regulation by treating it as its annexure and referring to its provisions for the purpose of determining the remuneration payable to the Development Officer.
That is how the said circular which, when it was issued, had no legal authority, has now become valid as a part of the Regulations issued by the Corporation under section 49 of the Act read with clause 11 of the Order.
541 This circular contains five paragraphs.
The object of the material provisions of this circular is to determine the quality of the work which the Development Officer puts in which would afford a basis for fixing his remuneration.
Paragraph 4 of this circular deals with the problem of fitting in the respective Development Officers in the pay scales provided by clause 5 of the Order.
It consists of eight clauses (a) to (h).
In the present appeals, we are concerned with the last of these clauses.
Paragraph 4, clause (h) reads thus: "If the actual performance is less than 50of the revised quota, the cases of such Field Officers will be referred to a Committee to be specially appointed in each Zone.
The Committee will go through the past records of such Field Officers and decide whether they could be continued as Field Officers either as Probationers or on substantially reduced remunerations.
In the case of those who cannot be continued as Field Officers, the Committee will examine whether any of them could be absorbed in administration and where this is possible, the Committee will fix the remuneration in accordance with the rules to be prescribed.
Where the Committee decides that the poor performance of a Field Officer was not due to circumstances beyond his control or that he has made no efforts and not shown inclination or willingness to work, ' the services of such Field Officers will be terminated.
" It is clear that paragraph 4(h) deals with the cases of persons whose actual performance is less than 50 % of the revised quota, and as such, who are re : garded as ineligible for fitting in the employment of the Corporation.
Their cases are required to be referred to the Committee specially appointed in each Zone, and on examining the record of these Officers, if the Committee comes to the conclusion that some of them cannot be continued as Field Officers it may enquire whether any of them could be absorbed 542 in administration, and if yes, their remuneration may be suitably fixed: if the Committee thought that the poor performance was not due to circumstances beyond his control, or that he made no efforts or showed no inclination or willingness to work, the services of such Field Officer will be terminated.
Paragraph 5 deals with the question of ex Branch Secretaries and Supervisory Officers, and it provides that if their work is found to be unsatisfactory, the Committee may recommend termination of the services of the officers concerned.
In other cases, the Committee will make recommendations as to whether they should continue such Inspectors as Field Officers and if yes, on what remuneration; or whether their services could be utilised in any other capacity in the Corporation, and if yes, on what remuneration? The learned Solicitor General has contended that when the Corporation took over the controlled business of insurers in this country on the appointed day, it was found that a large number of employees in the category of Field Officers were either incompetent or unwilling to work efficiently, and so, it was thought desirable, in the interests of the Corporation itself and in the interests of the policy holders, to terminate their services.
That is why a well devised scheme was framed by the circular and adopted in the Regulations laying down principles for determining the effi ciency of the work done by the said Officers.
He urges that by the application of ' the principle laid down by paragraph 4 (h) of the circular, it was competent to the Corporation to terminate the services of the respondents, and that is what in fact has been done in each of the cases before us.
In support ot this plea, he has relied on the fact that paragraph 4 (h) empowers the Corporation to terminate the services of incompetent officers and paragraph 5 also gives the same power in respect of ex Branch Secretaries and Supervisory Officers.
The argument is that where cases are dealt with under the provisions of paragraph 4 (h) or paragraph 5 of the circular, there can be no question of applying the provisions of clause 10 of the Order.
543 it is common ground that before terminating the services of the respective respondents in the group of appeals before us, no enquiry has been held and no opportunity has been given to the said officers as required by clause 10(a) of the Order.
It is also common ground that the impugned termination of their services has not been effected under clause 10(b) of the Order.
The respondents ' contention is that the termination of their services can be brought about only under clause 10(a) or 10(b) of the Order, and since it has not been so brought about, the impugned orders are invalid.
On the other hand, the learned Solicitor General contends that the power to terminate services conferred by paragraph 4 (h) of the circular is independent of clause 10 of the Order, and the same can be, and has been, validly exercised in the present cases.
In considering the validity of these rival contentions, it is necessary to bear in mind the true legal position about the character of the relevant statutory provisions.
It is plain that the provisions contained in section 11(2) of the Act are paramount and would override any contrary provisions contained in.
the Order or the Regulations.
Subject to the provisions of section 11(2), the provisions of ' the Order will prevail, because the Order has been issued by the Central Government by virtue of the powers conferred on it by section 11(2) itself The provisions of the Order in law partake of the character of the rules framed under section 48 of the Act.
Thus next to the provisions of section 11(2) of the Act will stand the provisions of the Order.
Then we have the Regulations issued by the Corporation under section 49(1) of the Act.
But it must be borne in mind that the power of the Corporation to make Regulations is burdened with the condition that these regulations must not be inconsistent with the Act and the rules framed thereunder, so that if any of the provisions contained in the Regulations made by the Corporation under section 49 are found to be inconsistent either with section 11( 2) or with the Order made by the Central Government under section 11(2), they would be 544 invalid.
It is in the light of this legal position that the problem posed before us in the present appeals must be decided.
We have already noticed that as soon as the Field Officers or the Development Officers became the employees of the Corporation on the appointed day under section 11 (1), they initially carried with them their original terms and conditions of service, and this state of affairs continued until the Order was issued on the 30th December, 1957.
As we, have already seen, the provisions of this Order provide for the terms and conditions of service in matters covered by the Order.
In regard to remuneration, the Order did not completely resolve the problem, but it left the determination of the scale of pay and allowances payable to each employee in the light of the Regulations which would be framed by the Corporation in pursuance of the authority conferred on it by clause 11 of the Order; but in regard to the termination of services of the employees, clause 10 has made a specific provision, and wherever the Corporation wants to terminate the services of any Development Officer, clause 10 has to be complied with.
It is true that paragraph 4(b) of the circular purports to say that in cases falling under the last part of the said paragraph, the services of the Field Officers will be terminated.
If the said portion of paragraph 4 (h) is interpreted to mean that it confers on the Corporation an authority to terminate the services of the Development Officer independently of clause 10 of the Order, it would be inconsistent with the said clause and would, therefore, be invalid.
We are, however, satisfied that the said portion of para 4 (h) really means that in cases falling under it, the services of the officers concerned would be liable to be terminated, and that means that the termination of the services of the said officers must be effected in the manner prescribed by clause 10 of the Order.
That is how paragraph 4(h) and clause 10 can be reasonably reconciled.
What we have said about para 4(h) is equally true about paragraph 5 of the circular.
545 in regard to the fixation of remuneration, however, the position is that clause 5 of the Order fixes the scales of pay and allowances and leaves it to the regulations to lay down the principles in the light of which each individual case should be judged.
It was, therefore, perfectly competent to the Corporation to adopt the circular issued by the Managing Director, and in consequence, lay down the principles which should be followed in fitting individual officers into the scheme prescribed by clause 5 of the Order.
But it is necessary to emphasise that the scope and purpose of fitting the officers obviously is to treat the officers as continuing to remain in the category of Development Officers and prescribe their remunerations accordingly.
The total amount of remuneration would undoubtedly be determined in the light of the principles prescribed by the circular, but under the guise of fitting in a particular officer in the light of the said principles it would not be open to the Corporation to demote the officer from the grade of Development Officer to a lower grade, that would be beyond the competence of the regulations.
All that the Regulations can purport to do is to lay down principles for fixing the actual pay and allowances admissible to the Development Officers.
That is the direction contained in clause II of the Order and it is within the limits of the said direction that the principles can be validly laid down by the Regulations.
After the remuneration is determined in the light of the principles laid down by the Regulations, if any officer is not inclined to accept the said altered remuneration, occasion may arise for the Corporation to exercise its power under section 11(2) of the Act and pay him compensation as therein contemplated.
That, however, is a matter with which we are not concerned in the present appeals.
What we are concerned with in the present appeals is the validity of the orders terminating the services of the officers on the ground that they are found to be incompetent.
If the officers were found to be incompetent in the light of the pro visions of paragraph 4(h) of the circular, their services could no doubt be terminated, but such termination of services must 1/SCI/64 35 546 conform to the requirements of clause 10(a) or (b) of the Order.
As we have already seen, it is common ground that the impugned orders terminating the services of the respective respondents have not been passed in accordance either with clause 10(a) or 10(b), and so, they must be held to be invalid.
It is true that in the present proceedings the respondents had claimed relief under article 311(2) of the Constitution and had in their writ petitions challenged the validity of the Order and the Regulations.
That, however, does not dis entitle the respondents from claiming the same relief on the alternative basis that though the Order and the Regulations may be valid, the impugned orders whereby their services have been terminated are invalid for the reason that they do not comply with clause 10 of the Order.
Therefore, we are satisfied that the learned Solicitor General is not justified in contending that the impugned orders can be sustained under paragraph 4(b) of the Circular which has been adopted by the Regulations as annexure thereto.
There is one more point which has yet to be examined.
In regard to the case of Haridas Roy who is the respondent in C.A.No. 917 of 1963, the learned Solicitor General has contended that the order terminating his services is valid either under para 4(h) of the circular or under section 11(2) of the Act.
Haridas Roy was originally employed by the Hindustan Co operative Insurance Society Ltd., before the appointed day as an Inspector of Agents.
After the Corporation took over the controlled business of the said Insurance Co., he was appointed as a Field Officer under the Order, and the order of his appointment was communicated to him on the 15th February, 1958.
It appears that on the 9th August, 1958, he was told that his case had been considered by the Zonal Committee and it had been decided to absorb him in the office as an Assistant on the emoluments mentioned in the order.
Haridas Roy declined to accept this assignment and stated that he wanted to continue as a Field Officer as before.
Thereupon, 547 his services were terminated by an order dated the 18th September, 1958.
In this letter, Roy was told that his case had been carefully considered by the Zonal Committee and he was offered ex gratia to be absorbed on the administrative side as an Assistant; since he refused to accept that assignment, his services were terminated on payment of one month 's salary in lieu of notice less deductions, if any.
This letter also told Roy that there were no extenuating circumstances in his case and his work was found to be of very poor quality.
It would be noticed that the Corporation presumably examined the performance of Roy in the light of the principles laid down by the relevant provisions in the circular and held that his case fell under the last part of paragraph 4(h) of the said circular.
That only means that having regard to his poor performance Roy became eligible to be dealt with under clause 10 of the Order.
It was not open to the Corporation to require Roy to accept an assignment in a lower or different category.
What the regulations are authorised to do is merely to determine his salary in the category of Development Officers, and so, we do not see how the order terminating his services because he refused to take an assignment as an Assistant can be justified.
It would have been open to the Corporation to fix Roy 's salary at the minimum in the grade prescribed by clause 5 of the Order and if he had refused to take it, an occasion may have arisen for the operation of section 11(2) of the Act.
Therefore, we are satisfied that the case of Roy cannot be distinguished from the cases of other respondents in the present group of appeals.
The result is, the orders passed by the High Court are confirmed, and the appeals are dismissed with costs.
One set of hearing fees.
Appeals dismissed.
| One of the respondents Mr. S.K. Mukherjee was an employee of the Metropolitan Insurance Co. Ltd., and had been working as an Inspector when the appellant took over the company There after, in February 1958, he was directed to work as a field officer.
By the order dated, October 16, 1958 his services were terminated with immediate effect and he was informed that he would be paid. his emoluments up to the current month and one month 's salary in lieu, of notice.
He was not given.
an opportunity to show cause against this termination.
His petition before the High Court under article 226 of the Constitution challenging the vatidity of this order was allowed by 'the learned single Judge.
After appealing ,,to a Division Bench without success the appellant came in appeal 529 to this Court with a certificate granted by the High Court.
It was urged on behalf of the appellant that by the application of the principle contained in paragraph 4(h) of the Circular issued by the Managing Director under cl.
4(3) of the Life Insurance Corporation Regulation 1958, it was competent to the corporation to terminate the services of the respondents.
It was contended that where cases are dealt with under paragraphs 4(h) and 5 of the Circular, there can be no question of the application of cl. 10 of the Life Insurance Corporation Field Officers Order, 1957, which empowers the appropriate authority to reduce the remuneration of the Development Officer or to terminate his services and in either case, an opportunity of showing cause against the action proposed to be taken has to be given to him.
The contention of the respondents was that the termination of their services can be brought about only under cl.
10(a) or 10(b) of the order, and since it has not been so brought about, the impugned orders are invalid.
Held: (i) The power of the corporation to make Regulations is burdened with the condition that these Regulations must not be inconsistent with the Act and the rules framed thereunder , so that if any of the provisions contained in the Regulations made by the corporation under section 49 of the Act are found to be inconsistent either with section 11(2) or with the order made by the Central Government under section 11(2) of the Act, they would be invalid.
(ii) Paragraph 4(h) means that in cases falling under it, the services of the officers concerned would be liable to be terminated, and that means that the termination of the services, of the said officers must be effected in the manner prescribed by cl. 10 of the Order.
That is how paragraph 4(h) of the Circular and cl.
10 of the Order can be reasonably reconciled.
This applies equally to paragraph 5 of the Circular.
(iii) It was competent to the corporation to adopt the Circular, and in consequence, lay down the principles which should be followed in fitting individual officers into the scheme prescribed by cl. 5 of the order.
The total amount of remuneration would undoubtedly be determined in the light of the principles prescribed by the Circular, but under the guise of fitting in a particular officer in the light of the said principles it would not be open to the corporation to demote the officer from the grade of Development Officer to a lower grade; that would be beyond the competence of the Regulations.
(iv) Since the orders terminating the services of the respective respondents have not been passed in accordance either with cl.
10(a) or (b), they must be held to be invalid.
(v) An employee whose performance is poor is liable to be dealt with under cl. 10 of the order.
But it is not open to the corporation to require that person to accept an assignment in a lower or different category.
What the Regulations are authorised to do is merely to determine his salary in the category of develop 1/SCI/64 34 530 ment officers, and so, an order terminating his service on the ground that he refused to take an assignment in a lower category cannot be justified.
|
Appeal No. 31 of 1957.
Appeal from the judgment and order date September 27, 1955, of the Jammu and Kashmir High Court in Misc.
Application No. 23 of 1955.
Jaswant Singh, Advocate General for the State of Jammu and Kashmir and R. H. Dhebar, for the appellant.
section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for respondent.
February 23.
The Judgment of the Court was delivered by SARKAR, J.
The respondent is a Civil Engineer who held various positions under the appellant, the Government of the State of Jammu and Kashmir.
On September 8, 1954, while the respondent was holding the post of Development Commissioner, he was placed under suspension by an order made by the appellant on that date.
Later, the appellant passed another order on February 12, 1955, demoting the petitioner to the post of a Divisional Engineer.
On May 12, 1955, the respondent moved the High Court of Jammu and Kashmir under article 32(2A) of the Constitution of India as applied to the State of Jammu and Kashmir, for a writ directing the appellant not to give effect to the order dated February 12, 1955, and to recognise him as the Chief Engineer, the substantive post held by him when he was suspended, with effect from the date of suspension and with all the emoluments of that office.
The High Court issued the writ as prayed.
The State appeals from the judgment of the High Court, 971 In the view that, we think, must be taken of this case, it is unnecessary to go into the facts a great deal.
At one stage of his career under the appellant, the respondent held a job of some responsibility in what was called the Sindh Valley Hydro Electric Scheme.
This Scheme was for generating electric power by dams erected in the Sindyh water course and for using the water for irrigation purposes.
The work on this Scheme seems to have commenced some time ago.
The respondent was connected with the Scheme from 1949 till he was transferred from the work in 1953.
It appears that the appellant was dissatisfied with the Progress of the work and the manner in which it had been carried out and decided to establish a Commission of Inquiry (a) to investigate into the reasons for (i) progressive rise in the estimates, (ii) the defective planning and the delay in the execution of the work and (iii) the other irregularities and (b) to fix responsibility upon the persons concerned and make appropriate recommendations.
Pending the investigation various officers associated with the planning and execution of the Scheme including the respondent, were placed under suspension on September 8, 1954.
Thereafter on October 20, 1954, a commission was set up by the appellant consisting of various persons.
The Commission made certain enquiries and eventually submitted its report to the appellant.
The appellant then made the order demoting the respondent purporting to act on the basis of the report.
It is not necessary to set out the facts any more.
The respondent, in his application for the writ, questioned the validity of the orders suspending and demoting him on these grounds.
He alleged that the Commission did not conduct the enquiry according to the rules of natural justice.
He said that he was not even informed of the charges against him nor given a proper hearing and that if he had been given proper opportunity, he would have proved that he had not been at fault at all.
He also said that the appointment of the Commission could only have been made under section 2 of the Public Servants (Inquiries) Act, 1977 124 972 (Kashmir era), and must, therefore, be deemed to have been so made.
He complained that the provisions of this Act were not observed by the Commission in making the enquiry.
Lastly, he said that the respondent could be reduced in rank only in accordance with the procedure laid down in the Kashmir Civil Service Rules passed by the State Council Order No. 81 C of 1939 and this procedure had not been followed.
In the High Court, the question as to whether these Rules had the status of law seems to have been debated at great length.
The High Court took the view (that they had.
We will proceed on the basis that the High Court was right and the allegations made by the respondent in his petition had been substantiated.
Now, the High Court was moved to exercise its powers under article 32 (2A) of the Constitution.
The order made by it cannot be upheld if it was not justified by that provision.
This is not in dispute.
That provision is in these terms: article 32(2A).
" Without prejudice to the powers conferred by clauses (1) and (2), the High Court shall have power throughout the territories in relation to which it exercises jurisdiction to issue to any person or authority, including in appropriate cases any Government within those territories, directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by this Part.
" The High Court can then exercise its powers under article 32 (2A) only " for the enforcement of any of the rights conferred by this Part ".
The Part referred to is Part III and the rights conferred by it are the fundamental rights.
Therefore, the High Court can act under cl.
(2A) of article 32 only to enforce a fundamental right.
The only fundamental right, however, on the violation of which learned counsel for the respondent could rely in support of the order of the High Court was that conferred by article 14, namely, the right to the equal protection of the laws.
He said that the 973 respondent was entitled to have the procedure prescribed by the Kashmir Civil Service Rules followed before the order demoting him could be made and as that procedure was not followed, his client had been denied the equal protection of the laws.
It seems to us that even if the Rules are a law and the respondent has not been given the benefit of them, all that can be said to have happened is that the appellant has acted in breach of the law; But that does not amount to a violation of the right to the equal protection of the laws.
Otherwise, every breach of law by a Government would amount to a denial of the equal protection of the laws.
We are not aware of any authority in support of that proposition and none has been cited to us.
Nor are we able to find any support for it in principle.
It is not the respondent 's case that other servants of the appellant had been given the benefit of those Rules and such benefit has been designedly denied only to him.
It seems to us that the appeal must be allowed on the simple ground that the respondent 's petition does not show a violation of any fundamental right.
The High Court had no power to act under article 32 (2A) at all.
We think it right to point out that articles 226 and 311(2) of the Constitution of India had not been applied to the State of Jammu and Kashmir at any material time.
No question of the respondent 's application being maintainable in view of these articles, therefore, arises.
The appeal is accordingly allowed.
There will be no order as to costs.
Appeal allowed.
| A partnership consisting of four persons was formed on March 31, 1949, which was to come to an end on March 31, 1954.
On July 27, 1951, a fifth partner was taken into the partnership.
On March 29, 1954, a new partnership was entered into taking in a sixth partner will) contributed Rs. 40,000 as his share to the capital.
In the partnership deed no express provision was made as to the manner in which profits and losses were to be divided.
A deed of rectification was executed on September 17, 1955, after the close of the account year 1054 5 5, adding a clause to the partnership deed that the partners shall share in the profits and losses in proportion to their contributions to the capital.
Upto the end of the assessment year 1954 55, the old firms were registered under section 26A of the Income tax Act.
The new firm applied for registration for the assessment year 1955 56, but registration was refused on the ground that there was no specification of shares of the partners.
Held, that registration was rightly refused.
Section 26A requires that for registration in a particular year there must be an instrument of partnership specifying the shares of the partners in the profits and losses.
Though in the present case there was an instrument of partnership in the year of assessment 1955 56, it did not specify the shares.
The right of registration can be claimed only in accordance with section 26A and the assessee must bring himself strictly under the terms of that section.
Ravula Subba Rao vs The Commissioner of Income tax, Madras, [1956] S.C.R. 577 and R. C. Mitter & Sons vs Commissioner of Income tax, E1959] , referred to.
|
Criminal Appeal No. 195 of 1984.
From the Judgment and Order dated 30.11.
1982 of the Punjab & Haryana High Court in Crl.
Appeal No. 425 D.B./1982.
O.P. Soni, Ms. Kamlesh Datta and S.K. Sabharwal for the Appellant.
664 U.R. Lalit and Uma Datta for the Respondents.
Mahabir Singh for the State of Haryana.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
The respondents Puran and Tara Chand along with Ved, Balwan, Dhapan, Jagdish and Lal Chand were tried before the Additional Sessions Judge, Sonepat, for the murder of one Partap Singh and causing injuries to others.
The learned Judge by judgment dated 18.5.
1972 convicted these respondents for offences under section 302, I.P.C., and sections 323,325 read with 149, I.P.C. They were sen tenced to undergo imprisonment for life and ordered to pay a sum of Rs.500 each under section 302, I.P.C., R.I. for one year under section 148, I.P.C., R.I. for one year under section 325 and R.I. for six months under section 323, I.P.C.
The other accused were convicted for the minor of fences and released on probation under sections 360/36.1, Cr.
P.C. The respondents appealed against the conviction and sentence.
The High Court by the impugned judgment dated 30.11.
1982 disposed of the appeal thus: "Admittedly there was no prior enmity between the parties.
The quarrel arose out of a very insignificant matter like the burning of dry sugarcane leaves on the common boundary of the fields of the two parties.
The ensuing altercation would probably have been forgotten had Partap Singh deceased not died.
Even when there is an altercation arising out of a minor incident there is some tendency on the part of the prosecution witness to exaggerate matters.
The three eye witnesses have of course fully supported the prosecution case but the investigating officer recorded statement of one Paras Ram at the time of making the inquest report which gives a somewhat different version.
The learned trial judge has himself found that the object of the unlawful assembly was not to commit the murder of the deceased.
It is precise ly for this reason that five accused persons have been released on probation and only two accused, i.e., Puran and Tara Chand appellants, have been convicted under section 302, I.P.C. We do not propose to go into the details of the controversy and in the peculiar circumstances of this case convert the conviction of Puran and Tara Chand appellants into one under section 304.
Part1, 1.
P.C., on the basis that in view of the statement made by 665 Paras Ram at the time when the investigating officer made the inquest report a somewhat different version was given.
This Paras Ram was not produced as a witness by the prosecu tion.
Since there was no prior enmity between the parties, we order that sentence already undergone by Puran and Tara Chand appellants will meet the ends of justice.
They are, however, ordered to pay a fine of Rs. 12,000 each.
In de fault of payment of this fine, the defaulter is ordered to undergo rigorous imprisonment for five years.
The sentences of imprisonment imposed upon Puran and Tara Chand appellants on other counts are also reduced to that already undergone by them.
The total fine, if realised, shall be paid to the next heirs of Partap Singh deceased as compensation." (emphasis supplied) The High Court has, by this Cryptic order, acquitted re spondents of the major charge under section 302, I.P.C., and recorded their conviction under section 304 Part I reducing the sentence of life imprisonment to a term of imprisonment already undergone while enhancing the sentence of fine.
The State has not preferred any appeal against the order of acquittal or reduction of sentence.
The respondents.
it appears, have accepted the judgment.
Sham Sunder, the de facto complainant, however, being aggrieved approached this Court under Article 136 of the Constitution.
This Court has granted special leave to appeal.
The High Court, exercising power under section 386, Cr. P.C., in an appeal from a conviction may reverse the finding and sentence and acquit the accused or alter the finding maintaining the sentence or with or without altering the finding after the nature or the extent or the nature and extent of the sentence but not so as to enhance the same.
The powers of the High Court in dealing with the evidence are as wide as that of the trial Court.
As the final court of facts, the High Court has also duty to examine the evi dence and arrive at its own conclusion on the entire materi al on record as to the guilt or otherwise of the appellants before it.
It is true that the High Court is entitled to reappraise the evidence in the case.
It is also true that under Article 136.
the Supreme Court does not ordinarily reappraise the evidence for itself for determining whether or not the High Court has come to a correct conclusion on facts but where the High Court has completely missed 666 the real point requiring determination and has also on erroneous grounds discredited the evidence and has further failed to consider the fact that on account of long standing enmity between the parties, there is a tendency to involve innocent persons and to exaggerate and lead pre judged evidence in regard to the occurrence, the Supreme Court would be justified in going into the evidence for the pur pose of satisfying itself that the grave injustice has not resulted in the case.
We have extracted the material portion of the judgment of the High Court to indicate that the line of approach adopted by the High Court is wholly wrong.
There is no discussion of the evidence much less any reasoning.
The respondents herein along with five others had been found guilty by the trial court accepting the testimony of the two eye witnesses and other material evidence on record.
A brief resume of the facts is necessary.
Lal Chand and Tara Chand are brothers.
Ved Singh, Puran, Balwan and Ishwar are the sons of Tara Chand and Dhapan is his wife.
Jagdish is the son of Lal Chand.
Partap and Bhim Singh are brothers.
Sham Sunder is the son of Bhim Singh.
Roshan is the son of Partap.
Tara Chand owns sugarcane field adjoining the wheat field of Partap.
On 10.3.
1981 in the morning, Ved Singh burned sugarcane patties causing damage to the wheat crop.
The protest raised by Roshan was not heeded.
Bhim Singh arrived at the scene and altercation 'ensued.
Partap later raised protest before Tara Chand.
His grievance was not redressed.
At about 6.00 P.M. Partap raised the protest before Puran who also turned down the same.
Shortly thereaf ter Puran and the other members of his family including his wife, brother and their children all numbering about eight reached in front of the house of Partap.
They were armed and attacked Partap.
The allegation is that the respondents Tara Chand and Puran had attacked Partap with jailies, first they gave jailies blows from the prong side in the chest and when Partap fell down, they gave jailies blows like lathi on his head, back and shoulder.
Partap died on his way to the hospital.
It is further alleged that in the course of the incident Lal Chand and Jagdish caused injuries to Roshan; Ishwar caused injuries to Dhapan wife of Partap; Puran, Ved, Balwan caused injuries to Sham Sunder.
It has come out in evidence that Ved, Dhapan, Lal Chand, Puran and Ishwar also received injuries in the course of the incident.
Sham Sunder and Roshan are the two eye witnesses, be sides Smt.
Dhapan the wife of deceased Partap.
There had been no independent witness.
Sham Sunder and Roshan said that they had caused 667 injuries to the members of the opposite party in self de fence.
They do not however state in what circumstances they had to use force.
The evidence does not disclose the genesis of the occurrence; how it developed and culminated in fatal injuries to Partap.
There had been no enmity between the two groups.
The immediate provocation for the quarrel is the damage to the wheat crops.
It is admitted that Partap raised his protest right from the morning till the arrival of Puran who was employee of the Medical College, Rohtak.
The prose cution has, it appears, given a twist when they say that at 6.00 P.M. Partap met Puran who turned down his request and went home and after 15 minutes all the members of his family including the womenfolk reached the house of Partap and started the assault.
It is significant to note that the women and even the minor children of both families were present and received injuries recording their presence at the place.
It would therefore appear that it was a continu ous transaction and when Partap persistently raises the protest and started abusing Puran, other members of his household had come out.
The quarrel had taken a serious turn and in the course of further development fatal injuries had been caused to Partap.
The plea of the respondents was that they did not cause any injury, that there was a Panchayat where a large crowd assembled and there had been brick batting and altercation.
The plea of private defence was not specifically set up.
However, if there are material in evidence to indicate that the incident could not have hap pened in the manner spoken to by the eye witnesses and in all probability the respondents had used the force exercis ing the right of private defence, then accused are entitled to the benefit thereof.
Whether the respondents have in such circumstances exceeded their right and are justified in causing death, has necessarily to be considered.
In the absence of a full discussion of the evidence by the High Court, we have been constrained to consider the materials on record.
We have seen that there is the evidence of only the interested witnesses who have the tendency to exaggerate and involve even innocent persons.
We have seen that most of the accused have sustained injuries and in explaining the same, the prosecution witnesses have not come forward with a truthful account.
We are led to draw the inference that in the melee and ensued on account of the aggressive attitude of Partap, the respondents and other members of the family participated and used the force against Partap and his associates in all probabilities in the exercise of right of private defence.
However, the circumstances did not warrant the causing of death and the respondents must be deemed to have exceeded their right.
The nature of the injuries indi 668 cate that injuries sufficient in the ordinary course of nature to cause death had been inflicted intentionally.
In such circumstances.
, the act of the respondents squarely falls under section 304 Part I, EP.C. While we agree with the conclusion arrived at by the High Court, we record that the High Court has not given any cogent or clear reasons for its conclusion and whatever reason has been stated is erro neous.
It is on the basis of the statement given in the course of investigation by a person who was not examined in the case that the High Court has drawn its conclusion.
We, however, maintain the conviction under section 304 Part I, I.P.C.
The High Court has reduced the sentence to the term of imprisonment already undergone while enhancing the fine.
It is pointed out that the respondents have undergone only imprisonment for a short period of less than six months and, in a grave crime like this, the sentence awarded is rather inadequate.
No particular reason has been given by the High Court for awarding such sentence.
The court in fixing the punishment for any particular crime should take into consid eration the nature of the offence, the circumstances in which it was committed and the degree of deliberation shown by the offender.
The measure of punishment should be propor tionate to the gravity of the offence.
The sentence imposed by the High Court appears to be so grossly and entirely inadequate as to involve a failure of justice.
We are of opinion that to meet the ends of justice, the sentence has to be enhanced.
In the result, we maintain the conviction of the re spondents but enhance the sentence to one of rigorous im prisonment for a period of five years.
The respondents should surrender to the bail to undergo the unexpired por tion of the sentence.
The fine, if paid, shall be refunded to the respondents 1 and 2.
The appeal is disposed of as above.
G.N. Appeal disposed Of.
| Respondent 1 is the son of Respondent No. 2.
Including Respondent No. 1 Respondent No. 2 had 4 sons.
Respondent No. 2 owned a sugarcane field adjoining the wheat field of one P. One of the sons of Respondent 2 had burnt sugarcane patties causing damage to the wheat crop of P, against which P protested before the respondents.
The protest was turned down.
Shortly thereafter the respondent and the family members reached the house of P. They were all armed.
Re spondents attacked P and he fell down.
On the way to hospi tal P died.
Most of the accused as well as the family mem bers of P sustained injuries.
On a complaint, F.I.R. was registered.
After investigation, Prosecution filed a case before the Additional Sessions Judge.
Two eye witnesses were produced by the prosecution.
They were relatives of the deceased and there was no independent witness.
The Additional District Judge convicted the respondent for offences under sections 302 IPC and 323, 325 read with 149 IPC.
Both were sentenced to imprisonment for life and a fine Rs.500 each under section 302 IPC.
They were also sentenced to rigorous imprisonment ranging from six months to one year for the other offences.
The other accused were convicted for minor offences and released on probation.
The respondent appealed against the conviction and sentence.
The High Court acquitted the respondents of the major charge under section 302 IPC and recorded the conviction under section 304 Part I reducing the sentence of life imprison ment to the term already undergone, and enhanced the sen tence of fine.
No appeal was preferred by the State.
Howev er, the complaint filed an appeal by special leave.
663 Disposing the appeal, this Court, HELD 1.
There is the evidence of only the interested witnesses who have the tendency to exaggerate and involve even innocent persons.
Most of the accused have sustained injuries and in explaining the same, the prosecution wit nesses have not come forward with a truthful account.
In the melee that ensued on account of the aggressive attitude of the respondents and other members of the family who partici pated and used force against P and his associates.
in all probabilities in the exercise of right of private defence.
However, the circumstances did not warrant the causing of death and the respondents must be deemed to have exceeded their right.
The nature of the injuries indicate that they were sufficient in the ordinary course of nature to cause death and had been inflicted intentionally.
In such circum stances, the act of the respondents squarely fails under section 304 Part I, IPC.
The High Court has not given any cogent or clear reasons for its conclusion and whatever reason has been stated is erroneous.
It is on the basis of the statement given in the course of investigation by a person who was not examined in the case that the High Court has drawn its conclusion.
However.
the conviction under section 304 Part I, IPC is maintained.
The High CoUrt has reduced the sentence to the term of imprisonment already undergone, and enhanced the fine.
The respondents have undergone imprisonment only for a short period of less than six months and, in a grave crime like this, the sentence awarded is rather inadequate.
No particu lar reason has been given by the High Court for awarding such sentence.
The Court in fixing the punishment for any particular crime should take into consideration the nature of the offence, the circumstances in which it was committed, and the degree of deliberation shown by the offender.
The measure of punishment should be proportionate to the gravity of the offence.
The sentence imposed by the High Court appears to be so grossly and entirely inadequate as to involve a failure of justice.
The sentence is enhanced to one of rigorous imprisonment for a period of five years.
|
N: Criminal Appeal No. 245 of 1975.
Appeal by Special Leave from the Judgement and order dated 25 3 1975 of the Delhi High Court in Criminal Appeal No. 122/72.
Harjinder Singh for the Appellant.
E. C. Agarwala and R. N. Sachthey for Respondent No. 1 V. section Desai, B. P. Maheshwari and Suresh Sethi for Respondent No. 2.
The Judgment of the Court was delivered by KOSHAL, J.
This is an appeal by special leave against a judgment of the High Court of Delhi dated 25th March, 1975 convicting the appellant of an offence under clause (i) of sub section (1) of section 16 read with clause (i) of section 7 of the (hereinafter called the Act) and sentencing him to rigorous imprisonment for six months and a fine of Rs. 1000/ , the sentence in default of payment of fine being rigorous imprisonment for three months.
The facts giving rise to the appeal may be briefly stated.
Food Inspector V. P. Anand, (P.W.2) visited the premises of Messrs Mebrose Ice Cream and Frozen Food Co. (which carries on business in Greater Kailash No.1, a locality of New Delhi and is hereinafter referred to as the Company) on the 22nd May 1970 and bought for 315 purposes of analysis a sample of chocolate ice cream from the appellant who was one of the employees of the Company.
An inventory of the sample was prepared by the Food Inspector and at the foot of the same the appellant made the following endorsement: "A sample of Chocbar Ice Cream (Chocolate Ice Cream) manufactured by Mebrose Ice Cream and Frozen Food Co., M 67, Greater Kailash, given as per above.
This Ice Cream Chocolate is of one lot.
This is prepared of covering Chocolate, vegetable ghee and Ice Cream.
" The sample was forwarded to the Public Analyst who thus details the conclusions arrived at by him on analysis thereof, in report exhibit PE: "Total solids by Weight : 45 per cent.
Protein by weight: 4.4 per cent.
Chocolate: Present.
Butyro refractometer reading at 40 degree C of the fat extracted from ice cream: 49.4.
Baudouin test of the extracted fat: Positive.
Melting point of the extracted fat: 34 degree C." In his report the Public Analyst further stated that in his opinion the sample was adulterated "as the Butyro refractometer reading at 40 degree C was round 6.4 in excess and the Baudouin test was found positive of the extracted fat. . " A complaint was lodged by the Municipal Corporation of Delhi against the appellant, the Company and its managing partner Avtar Singh in respect of an offence under section 7 read with section 16 of the Act.
The trial court acquitted the Company but convicted the other two accused, sentencing each of them to rigorous imprisonment for six months and a fine of Rs. 1000/ , the sentence in default of payment of fine being rigorous imprisonment for four months.
Both the convicts appealed to the Sessions Court and were acquitted by an order dated 9th March 1972 passed by an Additional Sessions Judge.
The Municipal Corporation of Delhi then knocked at the door of the High Court which upheld the acquittal of Avtar Singh but convicted and sentenced the appellant as aforesaid by the impugned judgment, mainly for the reasons reproduced below: "It is established on the record beyond doubt that this endorsement was made by Kishan Chand and it contains an admission that vegetable ghee was used in the preparation of 316 the ice cream sold by him.
The judgment of the learned Additional Sessions Judge reveals that the contention of the defence before him was that Vanaspati was used in the preparation of the relevant ice cream by way of emulsifier but the plea was misconceived because vegetable ghee cannot be made to serve as an emulsifying agent.
A reference to the Prevention of Food Adulteration Rules, 1955 shows that as per Rule 60 'brominated ' vegetable oil is one of the recognised emulsifying and stabilising agents but Rule 61 forbids addition of brominated vegetable oil to milk or cream and without milk and/or cream manufacture of ice cream is inconceivable.
Moreover, the stand of the accused from the very start has been that 'vegetable ghee ' had been used in the preparation of ice cream and not that any 'brominated ' vegetable oil got into the ice cream by way of an emulsifying or stabilising agent.
The evidence would not countenance the contention raised before us.
" 3. Having heard learned counsel for the parties at length we are of the opinion that the sample in question is not shown to have been adulterated within the meaning of the Act.
The case is admittedly governed by the Prevention of Food Adulteration Rules 1955 which have been framed by the Central Government in exercise of the powers conferred on it by section 23 of the Act and which are hereinafter called the Rules.
Rule 60 defines "emulsifying agents" and "stabilising agents" to mean substances which, when added to food, are capable of facilitating a uniform dispersion of oils and fats in aqueous media, or vice versa, and/or stabilising such emulsions.
The rule then proceeds to specify numerous agents of the type mentioned and they include brominated vegetable oils.
Rule 61 declares that no emulsifying or stabilising agents shall be used in any food except where their use is specifically permitted.
A proviso added to the rule states that certain emulsifying or stabilising agents, including brominated vegetable oils, shall not be used in milk and cream.
Appendix B to the Rules specifies the standard of quality of various articles of food.
Milk and milk products are dealt with in that Appendix under Group A.11 which is divided into various items.
Item A.11.01 which is further divided into sub items A 11.01.01 to A 11.01.11 contains definitions and standards of purity of various kinds of milk.
Item A.11.02 defines milk products thus: "MILK PRODUCTS means the products obtained from milk such as cream, malai, curd, skimmed milk curd, 317 chhanna, skimmed milk chhanna, cheese, processed cheese, ice cream, milk ices, condensed milk sweetened and unsweetened, condensed skimmed milk sweetened and unsweetened, milk powder, skimmed milk powder, partly skimmed milk powder, khoa, infant milk food, table butter and deshi butter.
" Then follow definitions of different kinds of milk products in sub items A.11.02.01 to A.11.02.21.
"Cream" is defined as follows in sub item A.11.02.02: "CREAM excluding sterilised cream means the product of cow or buffalo milk or of a combination thereof which contains not less than 25.0 per cent milk fat.
" Chocolate ice cream forms the subject matter of sub item A.11.02.08 which runs thus: "ICE CREAM, KULFI, AND CHOCOLATE ICE CREAM mean the frozen product obtained from cow or buffalo milk or a combination thereof or from cream, and/or other milk products, with or without the addition of cane sugar, eggs, fruits, fruit juices, preserved fruits, nuts, chocolate, edible flavours and permitted food colours.
It may contain permitted stabilizers and emulsifiers not exceeding 0.5 per cent by weight.
The mixture shall be suitably heated before freezing.
The product shall contain not less than 10.0 per cent milk fat, 3.5 per cent protein and 36.0 per cent total solids except that when any of the aforesaid preparations contain fruits or nuts or both, the content of milk fat may proportionately reduced but shall not be less than 8.0 per cent by weight.
"Starch may be added to a maximum extent of 5.0 per cent under a declaration on a label as specified in sub rule (2) of Rule 43. "The standards for ice cream shall also apply to softy ice cream." From the above examination of the provisions of Appendix B to the Rules, it is clearly made out that the standard of purity for each milk product has been separately laid down and that ice cream, kulfi and chocolate ice cream are treated as a class by themselves, which is different, for the purpose of purity from other milk products including cream.
The classification employed leaves no room for doubt that 318 when the proviso to rule 61 states that certain emulsifying and stabilising agents shall not be used in milk and cream, it prohibits the use of those agents only in milk and one of its products, namely, cream and not other milk products such as malai, dahi, cheese, ice cream and chocolate ice cream.
Had the rule making authority meant by the proviso to prohibit the use of the said agents in all milk products, the expression used would have been "shall not be used in milk and milk products" and not "shall not be used in milk and cream".
The prohibition contained in the proviso thus does not apply to ice cream, kulfi, chocolate ice cream covered by sub item A.11.02.08, wherein it is clearly stated that these three milk products may contain permitted stabilisers and emulsifiers not exceeding, 0.5 per cent by weight.
In equating the words "milk and cream" with milk and all its products, the high Court was clearly in error and this is so in spite of the fact that ice cream, kulfi and chocolate ice cream must have milk or cream as a necessary ingredient.
It follows that brominated vegetable oils could have formed a part of the chocolate ice cream sold by the appellant, to the extent 0.5 per cent by weight, without the article being treated as adulterated under the Rules.
Before the appellant could be convicted, therefore, it was incumbent on the prosecution to establish that the sample taken from him contained either brominated vegetable oils or other permitted stabilisers and emulsifiers exceeding 0.5 per cent by weight or that it did not conform to the prescribed standard in some other detail.
Apart from falling into the error of misreading rules 60 and 61, the High Court considered the sample taken from the appellant to be adulterated by reason of the stand he had taken from the very beginning to the effect that he had used "vegetable ghee" in the preparation of the chocolate ice cream and because, according to the High Court, "vegetable ghee" was not brominated vegetable oil.
This is again an erroneous approach to the problem in hand.
It was for the prosecution to prove affirmatively that the sample in, question contained an ingredient which made it adulterated and any stand taken by the accused could hardly be used as evidence, unless its truth was otherwise established which is not the case.
All that was made out from the evidence before the court was that the Butyro refractometer reading at 40 degree C was higher than the maximum prescribed for milk fat by 6.4 and that the Baudouin test was positive.
These two factors indicated that either vanaspati or milk fat to which til oil had been added was one of the ingredients of the sample.
There is not an iota of evidence on the record to show whether or not such til oil was brominated, which means that the prosecution had completely failed to prove that the ingredient objected to by it was a substance other than 319 a brominated vegetable oil or that if it was oil of that description its quantity was in excess of 0.5 per cent by weight.
The Butyro refractometer reading did no doubt except the maximum of the prescribed standard by 6.4 and the Baudouin test was also positive but these factors did not indicate the presence in the sample of brominated vegetable oil beyond the prescribed maximum of 0.5 per cent by weight or of unbrominated vegetable oils.
The sample of chocolate ice cream obtained by the Food Inspector from the appellant not having been shown to be adulterated, the appeal is accepted, the judgment of the High Court in so far as it relates to the appellant is reversed, the conviction recorded against and the sentence imposed upon the appellant by the High Court are set aside and he is acquitted of the charge.
The bail bond executed by him shall stand cancelled.
P.B.R. Appeal allowed.
| Rule 60 of the Prevention of Food Adulteration Rules, 1955 defines "emulsifying agents" and "stabilising agents" to mean substances which, when added to food, are capable of facilitating a uniform dispersion of oils and fats in acqueous media or vice versa and/or stabilising such emulsions.
One of the agents mentioned, among others, in the rule is brominated vegetable oils.
Rules 61 declares that no emulsifying or stabilising agents shall be used in any food except where they are used as specifically permitted.
The proviso to the rule states that certain emulsifying or stabilising agents including brominated vegetable oils shall not be used in milk and cream.
A food inspector visited an Ice cream factory and collected a sample of chocolate ice cream.
In the inventory of the sample prepared by him it was stated that "this is prepared of covering chocolate, vegetable ghee and ice cream".
The Public Analyst, to whom the sample was sent for analysis, stated that the sample was adulterated "as the butyro refractometer reading at 40 degree C was found 6.4 in excess and the Baudouin test was found positive of the extracted fat.
" The factory, its owner and the employee who sold the ice cream, were prosecuted under the Prevention of Food Adulteration Act.
The trial court acquitted the factory but convicted and sentenced both its owner and the employee.
On appeal the Additional Sessions Judge acquitted both the accused.
On further appeal the High Court acquitted the factory owner but convicted the employee (appellant before this Court).
The High Court pointed out that vegetable ghee could not be made to serve as an emulsifying agent because r. 61 forbids addition of brominated vegetable oil to milk or cream and without milk and/or cream manufacture of ice cream was inconceivable and that the appellant 's stand had been that vegetable ghee had been used and not that any brominated vegetable oil got into the ice cream by way of an emulsifying or stabilising agent.
Allowing the appeal, ^ HELD: 1 (a) The sample of ice cream obtained from the appellant was not shown to have been adulterated within the meaning of the Act and the Rules.
[316 D] (b) The prohibition contained in the proviso to r. 61 does not apply to ice cream, kulfi and chocolate ice cream covered by sub item A.11.02.08, wherein it is clearly stated that these three milk products may contain permitted stabi 314 lisers and emulsifiers not exceeding 0.5 per cent by weight.
Clearly, therefore, brominated vegetable oils could have formed a part of the chocolate ice cream to the extent of 0.5 per cent by weight, without the article being treated as adulterated under the rules.
What the proviso to r. 61 prohibits is the use of certain emulsifying and stabilising agents only in milk and one of its products, namely, cream and not in other milk products such a malai, dahi, cheese, ice cream and chocolate ice cream.
Had the intention of the rule been to prohibit the use of the said agents in all milk products, the expression would have been "shall not be used in milk and milk products" and not "shall not be used in milk and cream".
[318 C E] 2.
It was for the prosecution to prove affirmatively that the sample contained an ingredient which made it adulterated and any stand taken by the accused could hardly be used as evidence, unless its truth was otherwise established.
The prosecution had completely failed to prove that the ingredient objected to by it was a substance other than a brominated vegetable oil or that if it was oil of that description, its quantity was in excess of 0.5% by weight.
The analyst 's report did not indicate the presence in the sample of brominated vegetable oil beyond the prescribed maximum of 0.5% by weight or of unbrominated vegetable, oils.
[318G H]
|
N: Writ Petition (Crl.)No. 54 of 1989.
(Under Article 32 of the Constitution of India).
T.U. Mehta and S.C. Patel for the Petitioner.
S.K. Dholakia, M.N. Shroof and Ms. Hemantika Wahi for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The Commissioner of Police, Ahmedabad by his order dated 26.12.1988, directed the deten tion of the petitioner under section 3(2) of the Gujarat Prevention of AntiSocial Activities Act, 1985 (hereinafter referred to as 'the Act ').
The petitioner was taken into custody under the order on that very day.
The material portion of the order of detention stated: "WHEREAS, I.S.N. Sinha, Commissioner of Police, Ahmedabad City, am empowered in this behalf by the Government of Gujarat by its order, Home Department No. G.G./155/SB IV/PASA/1085/1191 dated 28.5.1985 under sub section (2) of section 3 of the Gujarat Pre vention of Anti Social Activities Act, 1985.
AND WHEREAS, I am satisfied with respect to person known as Shri Ahmed hussain @ Kalio Shaikhhussain Shaikh resident of Dariyapur, Bukhari Mohallo, Ahmedabad City, that with a view to preventing him from acting in any manner prejudicial to the maintenance of public order in the area of Ahmedabad City, it is necessary to make an order directing that the said Shri Ahmedhussain @ Shaikhhus sain Shaikh be detained.
NOW, THEREAFTER, in exercise of the powers conferred by sub section (1) of section 3 of the Gujarat Prevention of Anti Social Activities Act, 1985, I, S.N. 180 Sinha, Commissioner of Police, Ahmedabad City hereby direct that the said Shri Ahmedhussain @ Kalio Shaikhhussain Shaikh be detained.
" The grounds communicated to the petitioner under section 9(1) of the Act alleged that the petitioner was conducting anti social activities of illegally storing indigenous and foreign liquor in his possession and was selling it by himself and through his men in the area of Dariyapur and three prosecutions had been launched against him under the Bombay Prohibition Act of 1949.
From the particulars it appeared that one case was pending in court while the other two were under investigation.
The detaining authority there after stated: "Thus on careful study of the above said complaints and entire papers with the propos al, it is found that you are a prohibition 'bootlegger ' and are conducting anti social activities of selling indigenous and foreign liquor illegally.
You and your companions beat the innocent citizens of the above stated area in public and create an atmosphere of fear and terror for continuing your criminal anti social activities.
Moreover, you and your companions are creating atmosphere of fear by beating the innocent citizens, threaten them to kill while passing through that area by showing dangerous weapons suspecting them to be the informants of the police.
The customers of your adda in drunken condition play mis chief, and beat the persons in open; people residing there have fear and terror is spread in the said area.
Moreover, you beat those who oppose your bringing the quantity of wine and you threaten to kill and you create an atmos phere of fear and terror.
Because of such activities, the citizens residing in the above stated area have fear of damage to their property and the safety for themselves.
Thus you become an obstructionist in the mainte nance of public order.
The citizens residing or doing their trade in the said area have stated the facts corroborating your above stated criminal anti social activities as a result of which you become obstructionist in the maintenance of public order.
Such incidents have been stated in detail.
The copies of the statements thereof are given to you herewith".
Reference was made to a previous order of detention of July 12, 1987, 181 which was set aside by the High Court on 3.12.1987 and to the fact that notwithstanding the previous detention, the petitioner continued to carry on his criminal and anti social activities affecting maintenance of public order.
In the grounds it was further stated: "I had also considered to prevent your anti social activities of selling wine by taking action u/s 93 of the Prohibition Act.
But according to the provision of section 93, only surety for good conduct can be taken.
I am fully satisfied that even if you give the surety for good conduct, you will not obey the same.
Looking to your activities uptil now, I feel that you will not obey the same.
So I do not think it possible to prevent your such anti social activities immediately by taking action against you under section 93 of the Prohibition Act.
I had considered to take action against you u/s 57(c) of the Bombay Police Act for your externment.
But under the provision of section 57(c), three convictions within a period of three years under the Prohibition Act are necessary.
In your case, of the cases which are registered against you under the Prohibition Act, one is pending in the Court and two cases are pending for police investi gation.
In your case there is no such convic tion; so it is not possible under the law to take action against you u/s 57(c) for extern ment.
I had also considered to take pro ceeding against you u/s 56B of the Bombay Police Act for externment: but if the proceed ings u/s 56B of the Bombay Police Act are taken against you, first of all show cause notice is required to be given to you u/s 59(1) of the Bombay Police Act.
Then such order can be passed only after giving you full opportunity to defend by examining your de fence witnesses.
Even if such order is passed against you, you can go in appeal against the externment u/s 60 of the said Act and the possibility of granting stay to you cannot be avoided.
So a long time is taken in the pro ceedings of externment u/s 56B and during this period you may continue your anti social activities and there are all chances that you become obstructionist in the maintenance of public order; so it is not possible to prevent your anti social activities immedia 182 tely by taking action u/s 56B and I do not think proper to take action against you u/s 56B.
You and your companions of Dariyapur Kalupur are keeping dangerous weapons and making conspiracy to beat the innocent persons and because of your activi ties an atmosphere of fear and terror is spread in the said area and people have fear of safety for themselves and damage to their property.
Because of your such activities you have become obstructionist to the maintenance of public order and because of your such activities the atmosphere of public order has been disturbed.
Thus considering all the above facts, I am fully satisfied that you are a prohibition boot legger and you are conducting anti social activities of selling indigenous and foreign liquor and you are creating an atmosphere of fear and terror by beating innocent persons in public and threaten them to kill by keeping dangerous weapons in the above stated area and you are conducting activity of selling the wine in person or through your persons.
Action under the ordi nary law has been taken for preventing your such activities.
At present you are in jail under the Prohibition Act . .
There is every possibility that you will be bailed out by giving surety by the Court because this offence is bailable.
It is quite possible that you may continue your criminal anti social activities after release on bail from court . .
As it has become necessary to prevent your anti social activities to prevent the same as there is no other alternative and as the last alternate I pass the order to take you in detention under the said Act.
" A list of documents relied upon by the detaining author ity was appended to the grounds and the said list is Annex ure D to the petition.
The detaining authority has filed his affidavit in support of the order of detention.
In paragraph 7 of such affidavit the deponent has stated: "With reference to paragraph 7 of the peti tion, I submit that the averments made therein are absolutely wrong in view of the fact that the petitioner has not 'been wrongly involved by me under the P.A.S.A. Act.
It is only on 183 perusal of the relevant record which has been supplied to the petitioner and after consider ing the prognosis about the futuristic activi ties of the petitioner, I was subjectively satisfied that it is necessary to detain the petitioner preventively under the provisions of the P.A.S.A. Act with a view to preventing him from indulging in like activities and, therefore, the impugned order was passed by me".
In paragraph 8(c)of the counter affidavit the detaining authority has further stated: "I further submit that so far as the petition er 's detention in the year 1987 is concerned, it is true that the Hon 'ble Gujarat High Court had directed the authorities to release the petitioner and the said fact has already been clearly mentioned in the grounds of detention.
I further submit that since the Hon 'ble Guja rat High Court had passed the order, the order being judicial one, I have nothing to comment on it.
However, I submit that there is no nexus between the order of the Hon 'ble High Court in that petition and the facts of the present case and, therefore, the judicial pronouncement by the Hon 'ble Gujarat High Court has no application whatsoever to the facts of the present case.
Since the present order is passed on totally fresh grounds which are sufficient enough to give subjective satisfaction to me for the purpose of passing the order of detention . .
I further submit that the fact that the petitioner was earlier detained and the fact that the order of detention was quashed by the Hon 'ble Guja rat High Court was considered by me and that has also been mentioned in the grounds of detention . . " The Bombay Prohibition Act of 1949 is in force in the State of Gujarat and prohibition is in force in this State.
We have extracted a substantial portion of the grounds of detention communicated to the petitioner to show how helpless the authorities feel in the matter of enforcing prohibition within the State.
Obviously neither the Prohibi tion Act nor the other statutes referred to by the detaining authority could be called in aid to meet the requirements of the situation.
On his own showing, afraid of the petitioner being released on bail and resorting to anti social activi ties, and with a view to ensuring his detention in jail the impugned order has been made.
184 The satisfaction of the detaining authority is not open to judicial review but as has been pointed out by several Constitution Bench decisions of this Court a citizen is entitled to protection within the meaning of Article 22(5) of the Constitution of the procedural guarantees envisaged by law.
The Court frowns upon any deviation or infraction of the procedural requirements.
That in fact is the only guar antee to the citizen against the State 's action of preven tive detention.
The fact that the detenu was in jail at the time the order of detention was made and the possibility of his release from jail being made a ground of detention was not approved of by this Court in Rarnesh Yadav vs District Magistrate, Etah & Ors., and Binod Singh vs District Magistrate, Dhanbad, Bihar & Ors., ; In Smt.
Shashi Aggarwal vs State of U.P. & Ors., A.I.R. , this Court pointed out: "Every citizen in this country has the right to have recourse to law.
He has the right to move the court for bail when he is arrested under the ordinary law of the land.
If the State thinks that he does not deserve bail the State could oppose the grant of bail.
He cannot, however, be interdicted from moving the court for bail by clamping an order of detention.
The possibility of the court grant ing bail may not be sufficient.
Nor a bald statement that the person would repeat his criminal activities would be enough.
There must also be credible information or cogent reasons apparent on the record that the dete nu, if enlarged on bail, would act prejudi cially to the interest of public order.
" We may now refer to two decisions of this Court under the present Act.
In the case of Abdul Razak Abdul.
Wahib Sheikh vs Shri S.N. Sinha, 'Commissioner of Police, Ahmeda bad & Anr., J.T. it has been held that the detaining authority must disclose in a case where the detenu is already in jail that there is cogent and relevant materi al constituting fresh facts to necessitate making of an order of detention.
In that case, as here, the detenu was in jail in connection with a criminal case and the order of detention was served on him in jail.
The detenu 's mere complicity in earlier incidents was not considered adequate and the detention under the Act was set aside.
In the case of Ramesh vs State of Gujarat & Ors., J.T. , an order of detention under the Act was under challenge.
The Court found that referring to incident which constituted the subject matter of an earlier 185 order of detention vitiated the impugned order.
Apart from these, in the instant case, the material disclosed is quite vague with reference to the persons affected or victimised as also the time and place of such victimisation.
This Court has on several occasions indicated that there is a wide gap between law and order and public order.
The criminal offence may relate to the filed of law and order but such an offence would not necessarily give rise to a situation Of public order.
Depending upon peculiar situations an act which may otherwise have been overlooked as innocuous might constitute a problem of public order.
Selling of liquor by the petitioner would certainly amount to an offence under the Prohibition Act but without some thing more would not give rise to problem of public order.
Similarly commission of any other criminal offence even assault or threat of assaUlt would not bring the matter within the ambit of public order.
Disclosure of adequate facts to enable a full and ade quate representation to the Preventive Detention Board is one of the positive guarantees within the scope of Article 22(5) of the Constitution.
In A.K. Roy 's case, a Constitution Bench of this Court indicated that full est disclosure of material should be made to enable the representation to be effective.
In the present case the grounds which we have extracted show that the allegations are more or less vague and have the effect of making it difficult for the petitioner to make an adequate representa tion.
Four witnesses had deposed against the petitioner.
Their statements were supplied to the petitioner without disclos ing their names.
It is the stand of the respondent that if the names were disclosed the witnesses were likely to be bodily injured or even eliminated.
There may be certain situations where the disclosure has to be with held but in view of the infirmities already indicated it is not neces sary for us to examine whether in the facts of the present case such withholding would not by itself vitiate the order of detention.
We are satisfied that the impugned order cannot be sustained.
Accordingly, we quash the order and direct that the petitioner be set at liberty forthwith.
It is perhaps necessary to indicate that the provisions of the Prohibition Act of 1949 or the Bombay Police Act should be suitably amended to meet the requirements of society.
Even if the provisions under those Acts are made stringent the person proceeded against has 186 the benefit of a trial or a regular hearing and pursuing an appeal against adverse orders, but in a case of preventive detention trial is avoided and liberty of a citizen is taken away without providing a right to defend himself.
The grounds provided by the detaining authority have clearly exhibited a sense of helplessness to meet the requirement of the situation; that, however, is a matter for the Legisla ture and the Administration to consider but the Court has to zealously guard enchroachments on the liberty of the citi zen.
R.S.S. Petition allowed.
| This is an application filed by the Petitioners seeking directions of the Court for implementation of this Court 's order dated 17.12.86 in its true spirit, in particular, praying that the promotion orders dated 30.12.87 be given effect from the back dates (deemed dates) or the dates when their juniors were promoted.
The circumstances that led to the filing of this application may be stated thus.
The Petitioners were members of the regularly constitut ed class II Engg.
service of the State with effect from 25.12.1970 and were working as Sub Divisional Officers.
Further avenues of promotion to them were barred because the State Government construed the service Rules to mean that without a degree in Engineering, a class II officer could not be promoted to class I service.
The said interpretation of the State Government was disapproved by this Court in the case of A.S. Parmar vs State of Haryana, [1984] 2 SCR 476 as a consequence whereof a degree in Engineering did not remain an essential pre requisite for a member of Class II service for being promoted to Class I service.
After the Judgment in Parmar 's case, the Petitioners filed a Writ Petition in this Court seeking a direction to the State Government to consid er the case of the Petitioners and others similarly situated for promotion to the post of Executive Engineers in Class I service.
On 24.2.84 an undertaking was given to the Court by the State, that the State would consider the claims of all the eligible persons including the petitioners for regular appointment to Class I service within four months.
Instead of granting promotions, the State.
Government amended the Rules with retrospective effect from 10.7.64 so as to make a degree in Engineering as an indispensable qualification for an officer in Class II service for being promoted as Class I officer.
The Petitioners thereupon amended their Writ Peti tion and challenged the validity of 1080 the amendment and the Court by its Judgment dated 17.12.86 struck down the amendment to the Rules as ultra vires the State Government.
In another case involving the same point viz., Ashok Gulati vs B.S. Jain, this Court directed the State Government to consider the cases of all eligible members of Class II service for promotion as Executive Engineers, within six months time.
The State having failed to comply with the Court 's order aforesaid, a contempt petition was flied, which was disposed of by the Court 's order dated 30.12.87 by which time the State had reported to the COurt that the promotions to all concerned eligible officers had since been granted.
The Petitioners have now filed this application contend ing that since their placement In Class II service had been made effective with effect from 25.12.70 though the order therefore was issued on 27.10.85, they Were entitled to be considered for promotion to Class I service as and when they attained eligibility after 25.12.70 especially in view of the Court 's Judgment in Parmar 's case whereby the degree in Engineering was no longer a necessary qualification.
The Petitioners therefore urge that they be placed in their rightful position by giving promotion from back dates or deemed dates, or, in any case, the date when persons junior to them were given promotions.
According to them promotions granted to them belatedly on 30.12.87 did not render true justice to them and that the said order did not fully comply with the Court 's order.
Further a grievance is also made that no benefit has been given to those officers who retired from service during this period.
On the other hand the State contended that it has duly complied with the Court 's order by giving promotions w.e.f. 30.12.87.
The State supported its contention by saying that in approval of its action the Court on 17.12.86 dropped further proceedings in contempt petition which meant that there has been due compliance with the Court 's order.
Disposing of the application with directions this Court, HELD: The combined effect of the striking down of the amendment to the Rules by the Government and the direction issued to the Government in Ashok Gulati 's case to consider for promotion the names of all the eligible Class II offi cers would entitle the petitioners to seek the benefit of promotion from 24.6.84 When the time limit of four months sought for by the State Government to make the promotions came to expire.
But for the unsustainable amendment made to the Rules, the Government could not have postponed the promotions of the 1081 Petitioners and other Class II officers similar to them beyond the time limit of four months which expired on 24.6.84.
It would therefore follow that the order of promo tion made by the State Government on 30.12.87 will not amount to due compliance of the Court 's directions dated 17.12.86.
The Government cannot take advantage of its own error in making an illegal amendment to the Rules with retrospective effect and postpone the benefit of promotion to Class II officers.
[1087G 1088B] The Government cannot also take umbrage for its action in giving promotion to the petitioners and other eligible Class II officers with effect from 30.12.87 either because the directions given on 17.12.86 did not set out the date from when promotions should be given or because the Court passed orders on 4.1.1989, dropping further proceedings in the contempt petition.
[1088C] The State Government was directed to give promotions to all eligible Class II officers with effect from 24.6.84 and to give them all the consequential benefits arising there from.
The court further directed that the benefit of promo tion and consequential benefits should also be given to all those officers who were eligible for promotion on 24.6.84 but who have retired since then.
[1089B]
|
ivil Appeal No. 2534 of 1989.
From the Judgment and Order dated 15.1.1988 of the High Court in C.W.J.C. No. 1852 of 1987.
G.B. Pai, S.K. Sinha for the Appellants.
Shanti Bhushan, section Sukumaran, D.N. Misra, S.B. Upadhyay and B.B. Singh for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
Special leave is granted.
Heard learned Counsel for the parties.
The appellants, Telco Convoy Drivers Mazdoor Sangh, Jamshedpur, and another, have preferred this appeal against the judgment of the Patna High Court whereby the High Court dismissed the writ petition of the appellants challenging the order of the State of Bihar refusing to make a reference of the disputes raised by the appellants to the Industrial Tribunal under section 10 of the , hereinafter referred to as "the Act".
The appellant Sangh represents about 900 convoy drivers.
By a 805 letter of demand dated October 16, 1986 addressed to the General Manager of the Tata Engineering & Locomotive Co. Ltd., Jamshedpur (for short "TELCO"), the Sangh demanded that permanent status should be given by the management to all the convoy drivers, and that they should also be given all the facilities as are available to the permanent employ ees of TELCO on the dates of their appointment.
The said demand proceeds on the basis that the convoy drivers are all workmen of TELCO.
The dispute that has been raised in the said letter of demand is principally whether the convoy drivers are workmen and/or employees of TELCO or not.
In other words, whether there is relationship of employer and employees between TELCO and the convoy drivers.
The Deputy Labour Commissioner by his letter dated February 26, 1979 informed the appellant Sangh that in view of the opinion of the Law Department of the year 1973 to the effect that there was no relationship of master and servant between TELCO and the convoy drivers, the demands of the convoy drivers did not come within the purview of the Act and, accordingly, it was not possible to take any action in regard to the dispute of convoy drivers under the Act.
The appellant Sangh being aggrieved by the said refusal to make a reference under section 10(1) of the Act, moved before the Ranchi Bench of the Patna High Court a writ petition praying for a writ of mandamus commanding the State of Bihar to refer the dispute under section 10(1) of the Act.
A learned Single Judge of the High Court, who heard the writ petition, took the view that the letter of the Deputy Labour Commis sioner only referred to the Law Department 's opinion of the year 1973 without indicating in what context and under what circumstances, he rejected the demand for a reference.
In that view of the matter, the learned Judge granted liberty to the Sangh to reagitate the mater before the appropriate Government and expressed the hope that the appropriate Government would consider the matter in a proper perspective in the light of the documents and the materials that would be placed by the Sangh, in accordance with law.
The writ petition was dismissed subject, however, to the observation and direction mentioned above.
Pursuant to the liberty granted by the High Court, the Sangh made a representation to the Government for a refer ence of the dispute under section 10(1) of the Act.
The Deputy Labour Commissioner, Jamshedpur, by his letter dated November 6, 1986 gave the same reply and refused to make a reference.
806 Again, the appellant Sangh moved a writ petition before the High Court and, as stated already, the High Court sum marily dismissed the same holding that the appellants had failed to prima facie satisfy that they were employed either by TELCO or by the Telco Contractors ' Association.
Hence this appeal.
It has been urged by Mr. Pai, learned Counsel appearing on behalf of the appellants, that the Government exceeded its jurisdiction in purporting to decide the dispute raised by the appellant Sangh in the said letter of demand.
Counsel submits that in the facts and circumstances of the case, the Government should have made a reference to the Industrial Tribunal under section 10(1) of the Act for the adjudication of the dispute of the convoy drivers and should not have embarked upon the task of deciding the dispute on its merits through the Deputy Labour Commissioner.
On the other hand, it has been vehemently urged by Mr. Shanti Bhusan, learned Counsel appearing on behalf of TELCO, that the Government has the jurisdiction to consider whether any industrial dispute exists or not and, in considering the same, as the Government found that the convoy drivers were not even workmen of TELCO or, in other words, there had been no relationship of master and servants between TELCO and the convoy drivers, the Government refused to make a reference of the dispute under section 10(1) of the Act.
It is submit ted that the refusal by the Government to make a reference was perfectly within its jurisdiction inasmuch as, in the opinion of the Government, there was no existence of any industrial dispute.
After conclusion of the hearing, we took the view that the Government should be given one more chance to consider the question of making a reference and, accordingly, we by our order dated March 30, 1989 directed the Government to reconsider the question of referring the dispute raised by the convoy drivers to the Industrial Tribunal under section 10 of the Act, keeping the appeal pending before us.
The learned Counsel, appearing on behalf of the Govern ment, has produced before us an order dated April 13, 1989 of the Government whereby the Government has, upon a recon sideration of the matter, refused to make a reference under section 10(1) of the Act.
In refusing to make a reference, the Government has adjudicated the dispute on its merits.
807 It is true that in considering the question of making a reference under section 10(1), the Government is entitled to form an opinion as to whether an industrial dispute "exists or is apprehended", as urged by Mr. Shanti Bhusan.
The formation of opinion as to whether an industrial dispute "exists or is apprehended" is not the same thing as to adjudicate the dispute itself on its merits.
In the instant case, as already stated, the dispute is as to whether the convoy drivers are employees or workmen of TELCO, that is to say, whether there is relationship of employer and employees between TELCO and the convoy drivers.
In considering the question whether a refer, should be made or not, the Deputy Labour Commissioner and/or the Government have held that the convoy drivers are not workmen and, accordingly, no refer ence can be made.
Thus, the dispute has been decided by the Government which is undoubtedly, not permissible.
It is, however, submitted on behalf of TELCO that unless there is relationship of employer and employees or, in other words, unless those who are raising the disputes are work men, there cannot be any existence of industrial dispute within the meaning of the term as defined in section 2(k) of the Act.
It is urged that in order to form an opinion as to whether an industrial dispute exists or is apprehended, one of the factors that has to be considered by the Government is whether the persons who are raising the disputes are workmen or not within the meaning of the definition as contained in section 2(k) of the Act.
Attractive though the contention is, we regret, we are unable to accept the same.
It is now well settled that, while exercising power under section 10(1) of the Act, the function of the appropriate Government is an administrative function and not a judicial or quasijudicial function, and that in performing this administrative function the Govern ment cannot delve into the merits of the dispute and take upon itself the determination of the lis, which would cer tainly be in excess of the power conferred on it by section 10 of the Act.
See Ram Avtar Sharma vs State of Haryana, ; ; M.P. Irrigation Kararnchari Sangh vs The State of M.P., ; and Shambhu Nath Goyal vs Bank of Baroda, Jullundur; , Applying the principle laid down by this Court in the above decisions, there can be no doubt that the Government was not justified in deciding the dispute.
Where, as in the instant case, the dispute is 808 whether the person raising the dispute are workmen or not, the same cannot be decided by the Government in exercise of its administrative function under section 10(1) of the Act.
As has been held in M.P. Irrigation Karamchari Sangh 's case (supra), there may be exceptional cases in which the State Government may, on a proper examination of the demand, come to a conclusion that the demands are either perverse or frivolous and do not merit a reference.
Further, the Govern ment should be very slow to attempt an examination of the demand with a view to declining reference and Courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of valid dis putes, and that to allow the Government to do so would be to render section 10 and section 12(5) of the Act nugatory.
We are, therefore, of the view that the State Govern ment, which is the appropriate Government, was not justified in adjudicating the dispute, namely, whether the convoy drivers are workmen or employees of TELCO or not and, ac cordingly, the impugned orders of the Deputy Labour Commis sioner acting on behalf of the Government and that of the Government itself cannot be sustained.
It has been already stated that we had given one more chance to the Government to reconsider the matter ,red the Government after reconsideration has come to the same con clusion that the convoy drivers are not workmen of TELCO thereby adjudicating the dispute itself.
After having con sidered the facts and circumstances of the case and having given our best consideration in the matter, we are of the view that the dispute should be adjudicated by the Industri al Tribunal and, as the Government has persistently declined to make a reference under section 10(1) of the Act, we think we should direct the Government to make such a reference.
In several instances this Court had to direct the Government to make a reference under section 10(1) when the Government had declined to make such a reference and this Court was of the view that such a reference should have been made.
See Sankari Cement Alai Thozhilalar Munnetra Sangam vs Govern ment of Tamil Nnadu, ; Ram Avtar Sharma vs State of Haryana; , ; M.P. Irrigation Karam chari Sangh vs The State of M.P. ; and Nirmal Singh vs State of Punjab, [1984] 2 LLJ396.
In the circumstances, we direct the State of Bihar to make a reference under section 10(1) of the Act of the dispute raised by the 809 Telco Convoy Drivers Mazdoor Sangh by its letter dated October 16, 1986 addressed to the General Manager TELCO (Annexure R 4/1 to the Special Leave Petition), to an appro priate Industrial Tribunal within one month from today.
The appeal is allowed and the judgment of the High Court and the impugned orders are set aside.
There will, however, be no order as to costs.
T.N.A. Appeal allowed.
| The petitioners in the writ petition are building contractors engaged in the business of constructing build ings, factories, bridges etc.
They have challenged the levy of sales tax, by the concerned State Governments under the sales tax laws passed by them, on the turnover .
of the works contracts entered into by them.
The petitions raised two questions for the considera tion of the Court; the first question relates to the consti tutional validity of the 46th Amendment Act by which the State legislatures have been empowered to levy sales tax on certain transactions described in sub clauses (a) to (f) of clause (29 A) of Article 366 of the Constitution, and the second question is whether the power of the State legisla ture to levy tax on the transfer of property in goods in volved in the execution of works contracts referred to in sub clause (b) of clause (29A) of article 366 of the Constitu tion is subject to the restrictions and conditions in article 286 of the Constitution.
On the passing of the 46th Amendment, the State Govern ments after making necessary amendments in their laws com menced to levy sales tax on the turn over of the works entered into by the building contractors for constructing houses, factories, bridges etc.
In some States taxable turnover was determined by deducting the money spent on labour engaged in connection with the execution of the works con 321 tracts.
In some other States a certain fixed percentage of the total turnover was deducted from the total turnover as labour charges before arriving at the taxable turnover.
Each State adopted its own method of determining taxable turnover either by framing rules under its sales tax law or by issu ing administrative directions.
Affected and aggrieved by the levy of sales tax so imposed, the petitioners filed the writ petitions under article 32 of the Constitution challenging inter alia the Constitu tional validity of the 46th Amendment Act.
Civil appeals were also filed by some other building contractors against the orders of the High Court for similar relief.
The petitioners and the appellants have raised two contentions; viz (1) that the 46th Amendment Act is uncon stitutional because it had not been ratified by the legisla tures of not less than one half of the states by Resolutions passed to that effect by these legislatures before the Bill which led to the amendment in question was presented to the President for assent; and (2) that it was not open to the States to ignore the provisions contained in article 286 of the Constitution and the provisions of the Central Sales Tax Act, 1966 while making assessment under the Sales Tax laws passed by the legislatures of the States.
Notices were issued to the Attorney General for India and the Advocates General for the concerned States, some of which contested the Issues.
The main contention of the States on the second point was that sub clause (b) of Article 326(29 A) bestowed on them a power to levy tax on works contract independent of Entry 54 of List IL Disposing of the Writ Petitions and directing that the appeals be now placed before the Bench hearing Tax matters, this Court, HELD.
There has been in the instant case due compliance of the provisions contained in the proviso to article 368(2) of the Constitution.
[344E] Sales tax laws passed by the legislatures of States levying taxes on the transfer of property in goods whether as goods or in some other form involved in the execution of a works contract are subject to the restrictions and condi tions mentioned in each clause of sub clauses of article 286 of the Constitution.
[355B] 322 All transfers, deliveries and supplies of goods referred to in clauses (a) to (f) of clause (29 A) of article 366 of the Constitution are subject to the restrictions and conditions mentioned in clause (1), clause (2) and sub clause (a) of clause (3) of article 286 of the Constitution and the transfers and deliveries that take place under sub clauses (h), (c) and (d) of clause (29 A) of article 366 of the Constitution are subject to an additional restriction mentioned in sub clause (b) of article 286 (3) of the Constitution.
[349C] The power to levy sales tax was conferred on the legis latures of States by the Constitution by Entry 54 of List II of the Seventh Schedule to the Constitution of India.
[329B] State of Bombay and Another vs The United Motors (India) Ltd. and Others, ; and Bengal Immunity Company Limited vs The State of Bihar & Others, , referred to.
Ordinarily unless there is a contract to the contrary in the case of a works contract, the property in the goods used in the construction of a building passes to the owner as the materials used are incorporated in the buildings.
The con tractor becomes liable to pay the sales tax ordinarily when the goods or materials are so used in the construction of the building and it is not necessary to wait till final bill is prepared for the entire work.
[3S2C] Hudson 's Building Contracts (8th Edition) at page 362 and Benjamin 's Sale of Goods (3rd Edition) in para 43 at page 36.
The constitutional Amendment in article 366 (29 A) read with the relevant taxation entries has enabled the States to exert its taxing power in an important area of social and economic life of the community.
In exercising this power particularly in relation to transfer of property in goods involved in the execution of "works contracts" in building activity, in so far as it affects the housing projects of the under privileged and weaker sections of society, the State might perhaps, be pushing its taxation power to the peripheries of the social limits of that power and perhaps even of the constitutional limits of that power, in dealing with unequals.
In such class of cases 'building Activity ' really relates to a basic subsistential necessity.
It would he wise and appropriate for the State to consider whether the requisite and appropriate classifications should not he made of such building activity attendant with such social purposes for appropriate separate treatment.
[355E G] 323 Whatever might be the situational differences of indi vidual cases, the constitutional limitations on the taxing power of the State as are applicable to "works contracts" represented by "building contracts" in the context of the expanded concept of "tax on the sale or purchase of goods" as constitutionally defined under article 366 (29 A) would equally apply to other species of "works contracts" with the requisite situational modifications.
[355C D] At the commencement of the Act it should have been stated that the bill in question had been presented to the President for his assent after it had been fury ratified by the required number of legislatures of the States.
This suggestion should be followed by the Central Secretariat hereafter since it was found that even the Attorney General was not quite aware till the case was taken up for hearing that the bill which had become the 46th Amendment had been duly ratified by the required number of States.
[344F] Gannon Dunkerley and Co. (Madras) Ltd. vs State of Madras, A.I.R. 1954 Mad. 1130; Gannon Dunkereley & Co. Madras (Pvt.) Ltd. vs Sales Tax Officer, Matrancher, A.I.R. 1957 Kerala 146; Mohamed Khasim vs State of Mysore, [1955] VI Sales Tax Cases 211; Pandit Banarsi Das vs State of Madhya Pradesh and Ors., [1955] VI Sales Tax Cases 93; Jubilee Engineering Co. Ltd. vs Sales Tax Officer, Hyderabad City & Ors., ; Bhuramal and Ors.
vs State of Rajasthan, A.I.R. ; State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd., ; M/s. New India Sugar Mills Ltd. vs Commissioner Of Sales Tax, Bihar, [1963] Supp. 2 SCR 459; Oil and Natural Gas Commission vs State of Bihar & Ors., ; ; Vishnu Agencies (Pvt.) Ltd. etc.
vs Commercial Tax Officer & Ors.
; , ; Northern India Caterers (India) Ltd. vs Lt. Governor of Delhi, ; ; Sydney Hydraulic and Central Engineering Co. vs Blackwood & Son, and M.R. Bornbrook (Pvt.) Ltd. vs Federal Commis sioner of Taxation; ,
|
ivil Appeal No. 1011 of 1972.
Appeal by Special Leave from the Judgment and Order dated the 18th August, 1971 of the Punjab and Haryana High Court in Income Tax Reference No. 17 of 1971.
section T. Desai, (Mrs.) A.K. Verma and Shri Narain for the Appellant.
T.A. Ramachandran and R.N. Sachthey for Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The short question that arises for determination in this appeal is whether certain commission paid by the assessee to two of its employees is an allowable expenditure in computing the profits of the assessee from business.
The assessee is a registered firm which at all material times consisted of five partners, namely, Chaman Lal, Madan Lal, Harbans Lal, Raj Mohan and Saheb Dayal representing a trust.
Chaman Lal was the son of Saheb Daval and Raj Mohan was the son of one Gurditta Mal.
During the accounting year relevant to the assessment year 1963 64, Chaman Lal and Harbans Lal had their own independent factories and hence they were not attending 531 to the business of the assessee and Raj Mohan too was not actively associated with the conduct of the business of the assessee as he was working with the Oriental Carpet Manu facturers India Pvt. Ltd. (hereinafter referred to as OCM).
Thus, from amongst the partners, only Madan Lal was looking after the day to day management of the business of the assessee and he was assisted by Saheb Dayal and Gurditta Mal who were engaged as employees of the assessee.
Saheb Dayal and Gurditta Mal were .looking after the busi ness of the assessee since a long time and they were each paid remuneration of Rs. 1000/per month.
The business of the assessee consisted of sole selling agency of OCM in respect of yarn, cloth and blankets manufactured by OCM and for the sales affected by the assessee as such sole selling agents, commission was paid to the assessee by OCM.
The figures show that the business of the assessee prospered from year to year from 1959 60 onwards and there was a gradual increase in the turnover of the assessee which jumped from the figure of Rs. 39.99 lacs for the assessment year 1962 63 to the figures of Rs. 54.28 lacs for the as sessment year 1963 64.
Since the assessee showed very satisfactory turnover from year to year, OCM started giving to the assessee, in addition to the usual commission, over riding commission at the rate of 21/2% on the sales affected by the assessee and the. over riding commission thus re ceived by the assessee during the previous years correspond ing to the assessment year 1960 61 to 1963 64 was as fol lows: Assessment year Amount Received 1960 61 Rs. 35,964/ 1961 62 Rs. 61,818/ 1962 63 Rs. 83,922/ 1963 64 Rs. 1,13,449/ Since the turnover of the sales reached the figure of Rs. 54.28 lacs and overriding commission increased to Rs. 1,13,449/ during the previous year corresponding to the assessment year 1963 64, the assessee decided to give to each of Saheb Dayal and Gurdita Mal, who were look ing after the business and were primarily responsible for the increased prosperity of the assessee, commission at the rate of 1/2% of the sales out of 21/2% overriding commis sion received from OCM and each of these two employees was accordingly paid by the assessee a sum of Rs. 22,690/ by way of commission.
The aggregate amount of commission paid to Saheb Dayal and Gurditta Mal thus came to Rs. 45,380/ and this amount of commission was claimed by the assessee as a deductible expenditure in its assessment to income tax for the assessment year 1963 64.
The Income Tax Officer, disallowed the claim of the assessee on the ground that there was no material produced by the assessee which would "prove the nature of services rendered by these two gentlemen in lieu of which the commission is claimed to have been paid" and there being no evidence to show that the increase in sales during the relevant accounting year was due to the efforts of Saheb Dayal and Gurditta Mal, the claim for deduction of the amount of commission as a business expenditure remained unproved.
The assessee appealed against the disallowance of the amount of commission but the Appellate Assistant Commis sioner in appeal affirmed the disallowance on the ground that no evidence had been 532 produced by the assessee to prove that the activities of Saheb Dayal and Gurditta Mal in the relevant account year were or a nature different from those in the earlier years or that they put in any extra time or energy,in the conduct of the business of the assessee so as to justify the payment of the commission and hence it could not be said that the commisson was paid for services rendered by them.
The matter was carried in further appeal before the Tribu nal, but the Tribunal also took the same view and held that since there was no proof to show that any services were rendered by Saheb Dayal and Gurudayal Mal for which payment of commission in addition to salary and bonus could be justified, commission could not be said to have been paid for services rendered so as to attract the applicability of section 36, subsection (1 ) clause (ii).
The Tribunal observed that it was not possible to say "that the increase in the turnover in the year under appeal was due to the extra efforts put in by these two employees or that the employees had worked in the hope of receiving extra commission" and since bonus equivalent to three months ' salary was paid to saheb Dayal and Gurditta Mal in addition to their salary during the relevant accounting year, any extra services rendered by them, if any, "should be deemed to have been covered by the payment of this bonus" Since in the view taken by the Tribunal it was necessary that there should be some extra services rendered by Saheb Dayal and Gurditta Mal for which payment of commission could be said to be justi fied and there was nothing to show that any such extra services were rendered by them, the Tribunal came to the conclusion that the payment of commission could not be said to be justified on grounds of commercial expediency and section 36, sub section (1), clause (ii) had no application.
The assessee being aggrieved by the order made b the tribu nal applied for a reference of the question of law arising out of the order of the Tribunal and on the application of the assessee, the following question of law was referred for the opinion of the High Court: "Whether on the facts and circum stances of the case the sum of Rs. 45,380/ paid to L. Gurandittamal and L. Sahebdiyal, employees of the applicant firm is permissi ble deduction in computing the business income of the applicant ?" The High Court answered the question in favour of the Revenue.
The view taken by the High Court was that in order to attract the applicability of section 36, sub section (1), clause (ii), it was necessary that the payment of commission should be for services rendered and since there was no evidence led on behalf of the assessee to show that any extra services were rendered by Saheb Dayal and Gurditta Mal, which were responsible for increase in the sales and consequent enlargement of the overriding commission, there was no justification for payment of commission to them and the commission paid could not be said to be for services rendered.
The High Court in this view held that section 36, sub section (1), clause (ii) was not applicable and no claim for deduction could be sustained under it.
The correctness of this decision is impinged in the present appeal preferred by the assessee with special leave obtained from this Court.
533 Now, before we proceed to consider, the question which arises for determination before us, we must make it clear at the out set that m the present case the genuineness of the payment of commission made to Saheb Dayal and Gurditta Mal was at no time doubted by the Revenue authorities.
It was not the ease of the Revenue that this payment was not made or that it was sham or bogus.
If that had been the finding, there would have been an end of the case of the assessee.
No question would then have arisen for considering the applica bility of section 36, sub section (1), clause (ii).
No payment having been made, no deduction would have been permissible.
But here the commission was paid: it was a genuine payment and the only question was whether it was deductible as an allowable expenditure under section 36, sub section (1), clause (ii).
Section 36, sub section (1) provides for making of various deductions in computing the income of an assessee under the head: "Profits and Gains of Business or Profession" and one such deduction is set out in clause (ii) which, as it stood at the material time during the assessment year 1963 64, read as follows: "36(1)(ii) Any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profit or dividend if it had not been paid as bonus or commission: Provided that the amount of bonus or commission is reasonable with reference to (a) the pay of the employee and the condi tions of his service; (b) the profits of the business or profes sion for the previous year in question; and (c) the general practice in similar busi ness or profession.
" Saheb Dayal and Gurditta Mal were admittedly employees of the assessee.
They were each paid a salary of Rs. 1000/ per month and for the previous year relevant to the assess ment year 1963 64 bonus equivalent to three months ' salary was also paid to each of them.
The income Tax Officer disal lowed even this salary and bonus paid to Saheb Dayal and Gurditta Mal on the ground that there was nothing to show that any services were rendered by them and the payment of salary and bonus appeared to be ex gratia.
But this deci sion was reversed in appeal by the Appellate Assistant Commissioner who, following his earlier order dated 12th December, 1967 in the appeal against the assessment to tax for the assessment year 1962 63, allowed the payment of salary and bonus as a deductible expenditure.
The Appel late Assistant Commissioner c:early recognised that Saheb Dayal and Gurditta Mal were employees of the assessee and were attending to the business of the assessee as such employees since a long time and Gurditta Mal was in fact "a seasoned and experienced businessman" and he looked after the assessee 's transactions with OCM and on behalf of 'he assessee advised OCM in connection with designs etc.
The Tribunal also found that Saheb Dayal and Gurditta Mal 534 "were looking after the business of the assessee firm for a long time".
Thus, there can be no doubt that services were rendered by Saheb Dayal and Gurditta Mal to the asses see and for these services, besides Salary and bonus, com mission was paid to them, because, according to the asses see, during the relevant accounting year, there was consid erable enlargement in the turnover of the sales with consequent increase in the amount of overriding commis sion and the assessee felt, on grounds of commercial expediency, that a part of the overriding commission should be paid to the two employees who had worked so well and contributed to the prosperity of the assessee.
The question is whether this commission qualifies for deduction as an allowable expenditure under section 36, sub section (1), cause (ii).
The only ground on which the High Court negatived the ap plicability of section 36, sub section (1), clause (ii) was that during the relevant accounting year Saheb Dayal and Gurditta Mal rendered the same services which they were rendering in earlier years and no extra services were ren dered by them which could justify payment of commission in addition to salary and bonus.
The High Court appeared to take the view that there must be correlation between the payment of commission and the services rendered and since commission was paid by the assessee for the first time during the relevant accounting year, there must be some extra services rendered by Saheb Dayal and Gurditta Mal in that year over and above the usual services rendered by them in the earlier years.
Since, according to the High Court, there was no proof that any extra services were rendered by Saheb Dayal and Gurditta Mal, the High Court held that the payment of commission could not be said to be for services rendered within the meaning of section 36, sub section (1), clause (ii).
This view taken by the High Court is, in our opinion, plainly erroneous.
Section 36, sub section (1 ), clause (ii) does not postulate that there should be any extra services rendered by an employee before payment of commission to him can be justi fied as on allowable expenditure.
What it requires is only this, namely, that commission paid to an employee should be for services rendered by him.
For example, if an employ ee has not rendered any services at all during the relevant accounting year, no commission can be paid to him which would be an allowable expenditure.
There must be some services rendered by an employee and where commission is paid for the services so rendered, section 36 sub section (1), clause (ii) would apply and the commission to the extent to which it is found reasonable would be an allowable expenditure under that provision.
It is not necessary that the commission should be paid under a contractual obligation.
It may be purely voluntary.
But it must be for services rendered and here services were in fact rendered by Saheb Dayal and Gurditta Mal during the relevant accounting year.
It is true that the services rendered by these two employees during the relevant accounting year were in no way greater or more onerous than the services ren dered by them in the earlier years, but that is immaterial.
There is no such requirement and the argument based on it cannot be sustained.
It is not justified by the language of section 36 sub section (1), clause (ii) and indeed, if it were pushed to its logical extreme, it would be difficult to support even payment of bonus as a permissible deduction under that provision.
Of course the circumstance that no additional services are rendered 535 by an employee would undoubtedly be of some relevance in determining the reasonableness of the amount of commission but it would have to be considered along with other circum stances and the question whether commercial expediency justified the payment of commission would have to be judged in the light of all the circumstances existing at the mate rial time.
This was the view taken by the Gujarat High Court in Laxmandas Sejram vs Commissioner of Income Tax, Gujarat, (1) and we wholly accept that view.
It is, therefore, no answer to the applicability of section 36, sub section (1), clause (ii) to say that no extra services were rendered by Saheb Dayal and Gurditta Mal during the relevant accounting year.
The amount of commission having been paid for services admittedly rendered by them, the only question would be whether it was reasonable under section 36, sub section (1), clause (ii).
Turning to the provisions of section 36, sub section (1), clause (ii), we find that the proviso to that clause lays down three factors for the purpose of determining the reasonableness of the commission paid to an employee.
The question whether the amount of the commission is a reasona ble amount or not has to be determined with reference to these three factors.
Sometimes these three factors are loosely described as conditions but they are not really conditions on the fulfilment of which alone the amount of commission paid to an employee can be regarded as reasona ble.
They are merely factors to be taken into account by the Revenue authorities in determining the reasonable ness of the amount of commission.
It may be that one of these factors yields a negative response.
To take an exam ple, there may be no general practice in similar business or profession to give commission to an employee, but, yet, having regard to the other circumstances, the amount of commission paid to the employee may be regarded as reasonable.
What the proviso requires is merely that the reason ableness of the amount of commission shall be determined with reference to the three factors.
But it is well settled that these factors are to be considered from the point of view of a normal, prudent businessman.
The reasonableness of the payment with reference to those factors has to be judged not on any subjective standard of the assessing authority but from the point of view of commercial expediency.
Let us see whether the amount of commission paid to Saheb Dayal and Gurditta Mal in the present case can be said to be reasonable from this stand point.
It is clear from the order of the Tribunal that reliance was placed by the Tribunal mainly and substantially on the fact that the nature of the work done by Saheb Dayal and Gurditra Mal remained unchanged in the relevant accounting year and there was nothing to show that the increase in the turnover during the relevant accounting year was as a result of any extra efforts made by these two employees and hence it could not be said that there were any special circumstances which warranted the payment of commission to them.
But, as al ready pointed out above the commission aid to an employee cannot be branded as unreasonable merely because the employ ee has done m the relevant accounting year the same work which he was doing in the earlier years.
Even where the nature of the work has remained the same, commercial expedi ency may require payment of commission to an employee.
Here, Saheb Dayal and Gurditta (1) 536 Mal were each receiving a salary of Rs. 1000/ per month and besides this salary, there were admittedly no other perqui sites given to them.
They were the persons attending to the business of the assessee and in fact Gurditta Mal was an experienced and seasoned businessman and it was he who was advising OCM in regard to designs etc.and he and Saheb Dayal were primarily responsible for the flourishing state of the business.
The turnover of the sales of the assessee steadily rose from 1960 61 and in the relevant accounting year, it reached the exciting figure of Rs. 54.28 lacs.
So also the overriding commission which started with the modest figure of Rs. 35,964/ in the accounting year relevant to the assessment year 1960 61 went on steadily increasing from year to year until it reached the figure of Rs. 1,13,449/ in the relevant accounting year.
The assessee, therefore, felt that in view of the tremendous progress in the business which was largely the result of the services rendered by Saheb Dayal and Gurditta Mal, apart of the overriding commission should be paid to them, so than they may carry a sense of satisfaction that their efforts have been suitably rewarded and they may have an added incentive to work and may be spurred to greater efficiency in the future.
It may be noted that the overriding commission of the assessee during the relevant accounting year was Rs. 1,13,449/ and the total profit was Rs. 3,08,034/ and if out of this total profit of Rs. 3,08,034/ , an aggregate sum of Rs. 45,380/ was paid to Saheb Dayal and Gurditta Mal as commission, it is difficult to see how such payment could be regarded as unreasonable.
It is true that there was no obligation on the assessee to make payment of this commission to Saheb Dayal and Gurditta Mal, but it is now well settled that the mere fact that commission is paid ex gratia would not necessarily mean that it is unreasonable.
Commercial expediency does not mean that an employer should not make any payment to all employee unless the employee is entitled to it under a contract.
Even where there is no contract, an employer may pay commission to an employee if he thinks that it would be in the interest of his business to do so.
It is obvious that no business can prosper unless the employees engaged in it are satisfied and contented and they feel a sense of involvement and identifi cation and this can be best secured by giving them a stake in the business and allowing them to share in the profits.
It would indeed be a wise step on the part of an employer to offer incentive to his employees by sharing a part of his profits with them.
This would not only be good business but also good ethics.
It would be in consonance with Gandhian concept as also modern socialistic thought which, with its deeply rooted faith in social and economic democracy, regards; the employees as much as the employer as co sharers in the business.
If an employer earns profits to which the employees have necessarily contributed by putting in their labour, there is no reason why the employer should not share a part of these profits with the employees.
That is the demand of social justice today and it is high time that the administration of our tax law recog nised it and encouraged sharing of profits by employers with employees by adopting a progressive and liberal approach in the applicability of section 36, sub section (1), clause (ii) What is the requirement of commercial expediency must bejudged not in the light of the 19th Century laissez faire doctrine which regarded man as an economic being concerned only to protect and 537 advance his serf interest but in the context of current socio economithinking which places the general interest of the community above the personal interest of the individu al and believes that a business or undertaking is the product of the combined efforts of the employer and the employees and where there is sufficiently large profit, after providing for the salary or remuneration of the employer and the employees and other prior charges such as interest on capital, depreciation, reserves etc,a part of it should in all fairness go to the employees.
We are, there fore, of the view that the sum of R.s. 45,380/ paid by the assessee to Saheb Dayal and Gurditta Mal by way of commission during the relevant accounting year was reasona ble having regard to all the circumstances of the case and it ought to have been allowed as a deductible expenditure under section 36, sub section (1), clause(ii).
We accordingly allow the appeal, set aside the judgment of the High Court and answer the question referred by the Tribunal in the affirmative in favour of the assessee.
The Commissioner will pay the costs of the appeal as also of the reference to the assessee.
S.R. Appeal allowed.
| Per section R. DAS, ACTING C.j., VIVIAN BOSE, BHAGWATI AND JAGANNADHADAS JJ., SINHA J. dissenting.
The exemption created by the provisions of section 5(2)(a)(iii) of the Bengal Finance (Sales Tax) Act of 1941 must be construed strictly and cannot be extended to sales to Government departments other than those mentioned therein.
The Department of Industries and Supplies, which was subse quently redesignated as the Ministry of Industries and Supplies, was not the same as the Indian Stores Department or the Supply Department of the Government of India and, consequently, sales made to the Ministry of Industries and Supplies are not exempt from payment of sales tax under that section.
In a welfare State with ever expanding activities in different fields including trade and commerce, Government departments are often entrusted with the performance of well defined activities and are authorised to deal with the outside world and enter into transactions in the same way as an ordinary person or a Company may do and may well be regarded as distinct units or quasi legal entities for the purpose for which they are created.
Consequently, the sales of hessian made to the Ministry of Industries and Supplies of the Government of India by the appellant Mills were not exempt from payment of sales tax under the Act and the State of West Bengal was entitled to levy the same.
1077 Per SINHA J.
The language of a statute has sometimes to be construed in a modified form in order to give effect to the real intentions of the legislature where, as in the present case, the language is only of a descriptive nature and not a definitive one.
Miller vs Salomons ([1852] 7 Exchequer 475), referred to.
Commissioners of Inland Revenue vs Forrest ([1890] 15 A. C. 334), held inapplicable.
The terms of section 5(2)(a)(iii) indicate that the exemption created attaches to a particular function of the Government of India described by a certain name.
The change of nomenclature was, therefore, of no consequence so long as a particular department continued to discharge that function, namely, that of purchasing articles including hessian for the Government of India.
History of the department shows that the Ministry of Industry and Supply is a lineal descendant of the Indian Stores Department and was at the time of the contract discharging its function on behalf of the Government of India and, consequently, the sales made to it must be held to be exempt from payment of sales tax.
A department of the Government is neither a natural nor a legal person but is one of the many functions of a Government placed in charge of a hierarchy of officials with the head of the department at the apex.
|
ivil Appeal No. 215 of 1955.
Appeal from the judgment and decree dated April 1, 1953, of the Calcutta High Court in Appeal from Original Decree No. 89 of 1946, arising, out of the judgment and decree dated December 4, 1945, of the Subordinate Judge, Darjeeling, in Money Suit No. 5 of 1940.
409 L. K. Jha and D. N. Mukherjee, for the appellant.
C. B. Aggarwala, K. B. Bagchi and Sukumar Ghosh, for Respondents Nos. 1 to 5. 1959.
March 26.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal filed against the judgment of the High Court of Judicature at Calcutta raises the question of the legality of a partnership to carry on business in wagering contracts.
The facts lie in a small compass.
They, omitting those not germane to the controversy before us, are as follows: The appellant, Gherulal Parakh, and the first respondent, Mahadeodas Maiya, managers of two joint families entered into a partnership to carry on wagering contracts with two firms of Hapur, namely, Messrs. Mulchand Gulzarimull and Baldeosahay Surajmull.
It was agreed between the partners that the said contracts would be made in the name of the respondents on behalf of the firm and that the profit and loss resulting from the transactions would be borne by them in equal shares.
In implementation of the said agreement, the first respondent entered into 32 contracts with Mulchand and 49 contracts with Baldeosahay and the nett result of all these transactions was a loss, with the result that the first respondent had to pay to the Hapur merchants the entire amount due to them.
As the appellant denied his liability to bear his share of the loss, 'the first respondent along 'With his sons filed O. section No. 18 of 1937 in the Court of the Subordinate Judge, Darjeeling, for the recovery of half of the loss incurred in the transactions with Mulchand.
In the plaint he reserved his right to claim any further amount in respect of transactions with Mulchand that might be found due to him after the accounts were finally settled with him.
That suit was referred to arbitration and on the basis of the award, the Subordinate Judge made a decree in favour of the first respondent and his sons for a sum of Rs. 3,375.
After the final accounts were settled between the first respondent and the two merchants of Hapur and after 52 410 the amounts due to them were paid, the first respondent instituted a suit, out of which the present appeal arises, in the Court of the Subordinate Judge, Darjeeling, for the recovery of a sum of Rs. 5,300 with interest thereon.
Subsequently the plaint was amended and by the amended plaint the respondents asked for the same relief on the basis that the firm had been dissolved.
The appellant and his sons, inter alia, pleaded in defence that the agreement between the parties to enter into wagering contracts was unlawful under section 23 of the Contract Act, that as the partnership was not registered, the suit was barred under section 69(1) of the Partnership Act and that in any event the suit was barred under section 2, Rule 2 of the Code of Civil Procedure.
The learned Subordinate Judge found that the agreement between the parties was to enter into wagering contracts depending upon the rise and fall of the market and that the said agreement was void as the said object was forbidden by law and opposed to public policy.
He also found that the claim in respect of the transactions with Mulchand so far as it was not included in the earlier suit was not barred under section 2, Rule 2, Code of Civil Procedure, as the cause of action in respect of that part of the claim did not arise at the time the said suit was filed.
He further found that the partnership was between the two joint families of the appellant and the first respondent respectively, that there could not be in law such a partnership and that therefore section 69 of the Partnership Act was not applicable.
In the result, he dismissed the suit with costs.
On appeal, the learned Judges of the High Court held that the partnership was not between the two joint families but was only between the two managers of the said families and therefore it was valid.
They found that the ' partnership to do business was only for a single venture with each one of the two merchants of Hapur and for a single season and that the said partnership was dissolved after the season was over and therefore the suit for accounts of the dissolved firm was not hit by the provisions of subsections (1) and (2) of section 69 of the Partnership Act.
411 They further found that the object of the partnere was to deal in differences and that though the said transactions, being in the nature of wager, were void under section 30 of the , the object was not unlawful within the meaning of section 23 of the said Act.
In regard to the claim, the learned Judges found that there was no satisfactory evidence as regards the payment by the first respondent on account of loss incurred in the contracts with Mulchand but it was established that he paid a sum of Rs. 7,615 on account of loss in the contracts entered into with Baldeosahay.
In the result, the High Court gave a decree to the first respondent for a sum of Rs. 3,807 8 0 and disallowed interest thereon for the reason that as the suit in substance was one for accounts of a dissolved firm, there was no liability in the circumstances of the case to pay interest.
In the result, the 'High Court gave a decree in favour of the first respondent for the said amount together with another small item and dismissed the suit as regards " the plaintiffs other than the first respondent and the defendants other than the appellant ".
Before we consider the questions of law raised in the case, it would be convenient at the outset to dispose of questions of fact raised by either party.
The learned Counsel for the appellant contends that the finding of the learned Judges of the High Court that the partnership stood dissolved after the season was over was not supported by the pleadings or the evidence adduced in the case.
In the plaint as originally drafted and presented to the Court, there was no express reference to the fact that the business was dissolved and no relief was asked for accounts ' of the dissolved firm.
But the plaint discloses that the parties jointly entered into contracts with two merchants between March 23, 1937, and June 17, 1937, that the plaintiffs obtained complete accounts of profit and loss on the aforesaid transactions from the said merchants after June 17, 1937, that they issued a notice to the defendants to pay them a sum of Rs. 4,146 4 3, being half of the total payments made by them on account of 412 the said contracts and that the defendants denied their liability.
The suit was filed for recovery of the said amount.
The defendant filed a written statement on June 12, 1940, but did not raise the plea based on section 69 of the Partnership Act.
He filed an additional written statement on November 9, 1941, expressly setting up the plea.
Thereafter the plaintiffs prayed for the amendment of the, plaint by adding the following to the plaint as paragraph 10: " That even Section 69 of the Indian Partnership Act is not a bar to the present suit as the joint business referred to above was dissolved and in this suit the Court is required only to go into the accounts of 'the said joint business ".
On August 14, 1942, the defendant filed a further additional written statement alleging that the allegations in paragraph 2 were not true and that as no date of the alleged dissolution had been mentioned in the plaint, the plaintiffs ' case based on the said alleged dissolution was not maintainable.
It would be seen from the aforesaid pleadings that though an express allegation of the fact of dissolution of the partnership was only made by an amendment on November 17, 1941, the plaint as originally presented contained all the facts sustaining the said plea.
The defendants in their written statement, inter alia, denied that there was any partnership to enter into forward contracts with the said two merchants and that therefore consistent with their case they did not specifically deny the said facts.
The said facts, except in regard to the question whether the partnership was between the two families or only between the two managers of the families on which there was difference of view between the Court of the Subordinate Judge and the High Court, were concurrently found by both the Courts.
It follows from the said findings that the partnership was only in respect of forward contracts with two specified individuals and for a particular season.
But it is said that the said findings were not based on any evidence in the case.
It is true that the documents did not clearly indicate any period limiting the operation of the partnership, but from the attitude adopted by the 413 defendants in the earlier suit ending in an award and that adopted in the present pleadings, the nature of the transactions and the conduct of the parties, no other conclusion was possible than that arrived at by the High Court.
If so, section 42 of the Partnership Act directly applies to this case.
Under that section in the absence of a contract to the contrary, a firm is dissolved, if it is constituted to carry out one or more adventures or undertakings, by completion thereof.
In this case, the partnership was constituted to carry out contracts with specified persons during a particular season and as the said contracts were closed, the partnership was dissolved.
At this stage a point raised by the learned Counsel for the respondents may conveniently be disposed of.
The learned Counsel contends that neither the learned Subordinate Judge nor the learned Judges of the High Court found that the first respondent entered into any wagering transactions with either of the two merchants of Hapur and therefore no question of illegality arises in this case.
The law on the subject is wellsettled and does not call for any citation of cases.
To constitute a wagering contract there must be proof that the contract was entered into upon terms that the performance of the contract should not be demanded, but only the difference in prices should be paid.
There should be common intention between the parties to the wager that they should not demand delivery of the goods but should take only the difference in prices on the happening of an event.
Relying upon the said legal position, it is contended that there is no evidence in the case to establish that there was a common intention between the first respondent and the Hapur merchants not to take delivery of possession but only to gamble in difference in prices.
This argument, if we may say so, is not really germane to the question raised in this case.
The suit was filed on the basis of a dissolved partnership for accounts.
The defendants contended that the object of the partnership was to carry on wagering transactions, i. e., only to gamble in differences without any intention to give or take delivery of goods.
The Courts, on the evidence, both 414 direct and circumstantial, came to the conclusion that the partnership agreement was entered into with the object of carrying on wagering transactions wherein there was no intention to ask for or to take delivery of goods but only to deal with differences.
That is a concurrent finding of fact, and, following the usual practice of this Court, we must accept it.
We, therefore, proceed on the basis that the appellant and the first respondent entered into a partnership for carrying on wagering transactions and the claim related only to the loss incurred in respect of those transactions.
Now we come to the main and substantial point in the case.
The problem presented, with its different facets, is whether the said agreement of partnership is unlawful within the meaning of section 23 of the .
Section 23 of the said Act, omitting portions unnecessary for the present purpose, reads as follows : " The consideration or object of an agreement is lawful, unless it is forbidden by law, or the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful.
Every agreement of which the object or consideration is unlawful is void.
" Under this section, the object of an agreement, whether it is of partnership or otherwise, is unlawful if it is forbidden by law or the Court regards it as immoral or opposed to public policy and in such cases the agreement itself is void.
The learned Counsel for the appellant advances his argument under three sub heads: (i) the object is forbidden by law, (ii) it is opposed to public policy, and (iii) it is immoral.
We shall consider each one of them separately.
(i) forbidden by law: Under section 30 of the , agreements by way of wager are void; and no suit shall be brought for recovering anything 415 alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made.
Sir William Anson 's definition of " wager " as a promise to give money or money 's worth upon the determination or ascertainment of an uncertain event accurately brings out the concept of wager declared void by section 30 of the Contract Act.
As a contract which provides for payment of differences only without any intention on the part of either of the parties to give or take delivery of the goods is admittedly a wager within the meaning of section 30 of the Contract Act, the argument proceeds, such a transaction, being void under the said section, is also forbidden by law within the meaning of section 23 of the Contract Act.
The question, shortly stated, is whether what is void can be equated with what is forbidden by law.
This argument is not a new one, but has been raised in England as well as in India and has uniformly been rejected.
In England the law relating to gaming and wagering contracts is contained in the Gaming Acts of 1845 and 1892.
As the decisions turned upon the relevant provisions of the said Acts, it would help to appreciate them better if the relevant sections of the two Acts were read at this stage: Section 18 of the Gaming Act, 1845: " Contracts by way of gaming to be void, and wagers or sums deposited with stakeholders not to be recoverable at law Saving for subscriptions for prizes. . . .
All contracts or agreements, whether by parole or in writing, by way of gaming or wagering, shall be null and void; and. . no suit shall be brought or maintained in any court of law and equity for recovering any sum of money or valuable thing alleged to be won upon any wager, or which shall have been deposited in the hands of any person to abide the event on which any wager shall have been made: Provided always, that this enactment shall not be deemed to apply to any subscription or contribution, or agreement to subscribe or contribute, for or towards any plate, prize or sum of money to be awarded to the winner or winners of any lawful game, sport, pastime or exercise." 416 Section 1 of the Gaming Act, 1892: " Promises to repay sums paid under contracts void by 8 & 9 Viet.
c 109 to be null and void.
Any promise, express or implied, to pay any person any sum of money paid by him under or in respect of any contract or agreement rendered null and void by the Gaming Act, 1845, or to pay any sum of money by way of commission, fee, reward, or otherwise in respect of any such contract, or of any services in relation thereto or in connexion therewith, shall be null and void, and no action shall be brought or maintained to recover any such sum of money.
" While the Act of 1845 declared all kinds of wagers or games null and void, it only prohibited the recovery of money or valuable thing won upon any wager or desposited with stakeholders.
On the other hand, the Act of 1892 further declared that moneys paid under or in respect of wagering contracts dealt with by the Act of 1845 are not recoverable and no commission or reward in respect of any wager can be claimed in a court of law by agents employed to bet on behalf of their principals.
The law of England till the passing of the Act of 1892 was analogous to that in India and the English law on the subject governing a similar situation would be of considerable help in deciding the present case.
Sir William Anson in his book " On Law of Contracts " succinctly states the legal position thus, at page 205: ". . . the law may either actually forbid an agreement to be made, or it may merely say that if it is made the Courts will not enforce it.
In the former case it is illegal, in the latter only void; but inasmuch as illegal contracts are also void, though void contracts are not necessarily illegal, the distinction is for most purposes not important, and even judges seem sometimes to treat the two terms as inter changeable.
" The learned author proceeds to apply the said general principles to wagers and observes, at page 212, thus: "Wagers 'beidg only void, no taint of illegality attached to a transaction, whereby one man employed another to make bets for him; the ordinary rules which 417 govern the relation of employer and employed applied in such a case.
" Pollock and Mulla in their book on Indian Contract define the phrase ',forbidden by law " in section 23 thus, at page 158: "An act or undertaking is equally forbidden by law whether it violates a prohibitory enactment of the Legislature or a principle of unwritten law.
But in India, where the criminal law is codified, acts forbidden by law seem practically to consist of acts punishable under the Penal Code and of acts prohibited by special legislation, or by regulations or orders made under authority derived from the Legislature.
" Some of the decisions, both English and Indian, cited at the Bar which bring out the distinction between a contract which is forbidden by law and that which is void may now be noticed.
In Thacker vs Hardy (1), the plaintiff, a broker, who was employed by the defendant to speculate for him upon the stock Exchange, entered into contracts on behalf of the defendant with a third party upon which he (the plaintiff) became personally liable.
He sued the defendant for indemnity against the liability incurred by him and for commission as broker.
The Court held that the plaintiff was entitled to recover notwithstanding the provisions of 8 & 9 Viet.
c. 109, section 18 (English Gaming Act, 1845).
Lindley, J., observed at page 687: " Now, if gaming and wagering were illegal, I should be of opinion that the illegality of the transactions in which the plaintiff and the defendant were engaged would have tainted, as between themselves, whatever the plaintiff had done in futherance of their illegal designs, and would have precluded him from claiming, in a court of law, any indemnity from the defendant in respect of the liabilities he had incurred: Cannan vs Bryce ; McKinnell vs Robinson ; ; Lyne vs Siesfeld (1 H. & N. 278).
But it has been held that although gaming and wagering contracts cannot be enforced, they are (1) 53 418 not illegal.
Fitch vs Jones ; is plain to that effect.
Money paid in discharge of a bet is a good consideration for a bill of exchange: Oulds vs Harrison ; ; and if money be so paid by a plaintiff at the request of a defendant, it can be recovered by action against him : Knight vs Camber ; ; Jessopp vs Lutwyoho ; ; Rosewarne vs Billing (15 C. B. (N. section) 316); and it has been held that a request to pay may be inferred from an authority to bet: Oldham vs Ramsden Having regard to these decisions, I cannot hold that the statute above referred to precludes the plaintiff from maintaining this action.
" In Read vs Anderson.(1) where an agent was employed to make a bet in his own name on behalf of his principal, a similar question arose for consideration.
Hawkins, J., states the legal position at page 104 : " At common law wagers were not illegal, and before the passing of 8 & 9 Vict.
c. 109 actions were constantly brought and maintained to recover money won upon them.
The object of 8 & 9 Viet.
c. 109 (passed in 1845) was not to render illegal wagers which up to that time had been lawful, but simply to make the law no longer available for their enforcement, leaving the parties to them to pay them or not as their sense of honour might dictate." After citing the provisions of section 18 of that Act, the learned Judge proceeds to observe thus, at page 105 : " There is nothing in this language to affect the legality of wagering contracts, they are simply rendered null and void; and not enforceable by any process of law.
A host of authorities have settled this to be the true effect of the Statute." This judgment of Hawkins, J., was confirmed on appeal (reported in 13 Q. B. 779) on the ground that the agency became irrevocable on the making of the bet.
The judgment of the Court of Appeal cannot be considered to be a direct decision on the point.
The said principle was affirmed by the Court of Appeal again in Bridger vs Savage (2).
There the plaintiff sued his (1) (2) 419 agent for the amount received by him in respect of the winnings from the persons with whom the agent had betted.
Brett, M. R., observed at page 366 : ". . the defendant has received money which he contracted with the plaintiff to hand over to him when he had received it.
That is a perfectly legal contract ; but for the defendant it has been contended that the statute 8 & 9 Vict.
c. 109, section 18, makes that contract illegal.
The answer is that it has been held by the Courts on several occasions that the statute applies only to the original contract made between the persons betting, and not to such a contract as was made here between the plaintiff and defendant.
" Bowen, L. J., says much to the same effect at page 367: "Now with respect to the principle involved in this case, it is to be observed that the original contract of betting is not an illegal one, but only one which is void.
If the person who has betted pays his bet, he does nothing wrong; he only waives a benefit which the statute has given to him, and Confers a good title to the money on the person to whom he pays it.
Therefore when the bet is paid the transaction is completed, and when it is paid to an agent it cannot be contended that it is not a good payment for his prin cipal. .
So much, therefore, for the principle governing this case.
As to the authorities, the cases of Sharp vs Taylor , Johnson vs Lansley (12 C. B. 468), and Beeston vs Beeston (I exhibit D. 13), all go to shew that this action is maintainable, and the only authority the other way is that of Beyer vs Adams , and that case cannot be supported, and is not law.
" This case lays down the correct principle and is supported by earlier authorities.
The decision in Partridge vs Mallandaine (1) is to the effect that persons receiving profits from betting systematically carried on by them are chargeable with income tax on such profits in respect of a " vocation " under 5 & 6 Vict.
c. 35 (the Income Tax Act) Schedule D. Hawkins, J., rejecting the argument that the (1) 420 profession of bookmakers is not a calling within the meaning of the Income Tax Act, makes the following observations, at page 278: "Mere betting is not illegal.
It is perfectly lawful for a man to bet if he likes.
He may, however, have a difficulty in getting the amount of the bets from dishonest persons who make bets and will not pay.
" The decision in Hyams vs Stuart King (1) deals with the problem of the legality of a fresh agreement between parties to a wager for consideration.
There, two bookmakers had betting transactions together, which resulted in the defendant giving the plaintiff a cheque for the amount of bets lost to him.
At the request of the defendant, the cheque was held over by the plaintiff for a time, and part of the amount of the cheque was paid by the defendant.
Subsequently a fresh verbal agreement was come to between the parties, by which, in consideration of the plaintiff holding over the cheque for a further time and refraining from declaring the defendant a defaulter and thereby injuring him with his customers, the defendant promised to pay the balance owing in a few days.
The balance was never paid and the plaintiff filed a suit to recover the money on the basis of the fresh verbal agreement.
The Court of Appeal, by a majority, Fletcher Moulton, L. J., dissenting, held that the fresh verbal agreement was supported by good consideration and therefore the plaintiff was entitled to recover the amount due to him.
At page 705, Sir Gorell Barnes posed the following three questions to be decided in the case: (1) Whether the new contract was itself one which falls within the provisions of 8 & 9 Vict.
c. 109, section 18; (2) whether there was any illegality affecting that contract; and (3) whether that contract was a lawful contract founded on good consideration.
Adverting to the second question, which is relevant to the present case, the President made the following observations at page 707: ". . . it is to be observed that there was nothing illegal in the strict sense in making the bets.
(1) 421 They were merely void under 8 & 9 Vict.
c. 109, and there would have been no illegality in paying them.
There is no doubt whatever about this.
There was also nothing illegal in giving the cheque nor would there have been any illegality in paying it, though the defendants could not have been compelled by the plaintiff to pay it, because by statute it was to be deemed and taken to have been made and given for an illegal consideration, and therefore void in the hands of the plaintiff. .
The statutes do not make the giving or paying of the cheque illegal, and impose no penalty for so doing.
Their effect and intention appear only, so far as material, to be that gaming or wagering contracts cannot be enforced in a Court of Law or Equity. . . " The view expressed by the President is therefore consistent with the view all along accepted by the Courts in England.
This case raised a now problem, namely, whether a substituted agreement for consideration between the same parties to the wager could be enforced, and the majority held that it could be enforced, while Fletcher Moulton, L. J., recorded his dissent.
We shall have occasion to notice the dissenting view of Fletcher Moulton, L. J., at a later stage.
The aforesaid decisions establish the proposition that in England a clear distinction is maintained between a contract which is void and that which is illegal and it has been held that though a wagering contract is void and unenforceable between parties, it is not illegal and therefore it does not affect the validity of a collateral contract. 'The same principle has been applied to collateral contracts of partnership also.
In Thwaites vs Coulthwaite (1) the question of legality of a partnership of bookmaking and betting was raised.
There the plaintiff and defendant were partners in a bookmakers and betting business, which was carried on by the defendant; the plaintiff claimed an account of the profits of the partnership, and the defendant contended that, having regard to the nature of the business, no such relief could be obtained.
Chitty, J., rejected the (1) 422 plea holding that the partnership was valid, for the following reasons, among others, and stated at page 498: " The Gaming Act, 1845 (8 & 9 Vict. c. 109), did not make betting illegal; this statute, as is well known, merely avoided the wagering contract.
A man may make a single bet or many bets; he may habitually bet; he may carry on a betting or bookmakers business within the statute, provided the business as carried on by him does not fall within the prohibition of the Betting Act, 1853.
" In Thomas vs Day (1), a similar question arose.
There the plaintiff claimed an account and money due under a partnership which he alleged had existed between himself and the defendant to take an office and carry on a betting business as bookmakers.
Darling, J., held that a partnership to carry on the business of a bookmaker was not recognized by law, that even if there was such a legal partnership, an action for account would not lie as between the two bookmakers founded on betting and gambling transactions.
This judgment certainly supports the appellant; but the learned Judge did not take notice of the previous decision on the subject and the subsequent decisions have not followed it.
When a similar objection was raised in Brookman vs Mather (2), Avery, J., rejected the plea and gave a decree to the plaintiff.
There the plaintiff and the defendant entered into a partnership to carry on a betting business.
Two years thereafter, in 1910, the partnership was dissolved and a certain amount was found due to the plaintiff from the defend ant and the latter gave the former a promissory note for that amount.
A suit was filed for the recovery of the amount payable under the promissory note.
Avery, J., reiterated the principle that betting was not illegal per se.
When the decision in Thomas vs Day(1) was cited in support of the broad principle that the betting business could not be recognized as legal in a Court of Justice, the learned Judge pointed out that that case was decided without reference to Thwaites (1) (2) 423 vs Coulthwaite (1).
This judgment, therefore, corrected the deviation made by Darling, J., in Thomas vs Day(2 ) and put the case law in line with earlier precedents.
The earlier view was again accepted and followed in Keen vs Price (3) where an action by one of the partners in a bookmakers and betting business against the other for an account of the partnership dealings was entertained.
But the Court gave liberty to the defendant to object to repaying anything which represented profits in such business.
The reason for this apparent conflict between the two parts of the decision is found in the express terms of the provisions of the Gaming Act of 1892.
Commenting upon Thwaites vs Coulthwaite (1) in which Chitty, J., held that such an action would lie for an account of the profits of the partnership, Sargant, J., pointed out that in that case the Gaming Act, 1892, was not referred to.
At page 101, the learned Judge says: " Curiously enough, in that case the Gaming Act, 1892, was not referred to, and although the decision is a good one on the general law, it cannot be regarded as a decision on the Act of 1892.
" This judgment confirms the principle that a wager is not illegal, but states that after the Gaming Act, 1892, a claim in respect of that amount even under a collateral agreement is not maintainable.
In O 'Connor and Ould vs Ralston (4), the plaintiff, a firm of bookmakers, filed a suit claiming from the defendant the amount of five cheques drawn by him upon his bank in payment of bets which he had lost to them and which had been dishonoured on presentation.
Darling, J., held that as the plaintiffs formed an association for the purpose of carrying on a betting business, the action would not lie.
In coming to that conclusion the learned Judge relied upon the dissenting view of Fletcher Moulton, L. J., in Hyams vs Stuart King We shall consider that decision at a later stage.
(1) (2) (3) (4) (5) 424 The opinion of Darling, J., was not accepted in Jeffrey Co. vs Bamford (1) wherein McCardie, J., held that a partnership for the purpose of carrying on a betting and bookmakers business is not per se illegal or impossible in law.
The learned Judge says at page 356: ". . betting or wagering is not illegal at common law. .
It has been repeatedly pointed out that mere betting on horse races is not illegal ".
The learned Judge, after noticing the earlier decisions already considered by us and also some of the observations of Fletcher Moulton, L. J., came to the conclusion that the partnership was not illegal.
We shall now scrutinize the decision in Hill vs William Hill (I) to see whether there is any substance in the argument of the learned Counsel for the appellant that this decision accepted the dissenting view of Fletcher Moulton, L. J., in Hyams vs Stuart King (3) or the view of Darling, J., in Thomas vs Day (4) and O 'Connor and Ould vs Ralston (5).
The facts in that case were: The appellant had betting transactions with the respondents, a firm of bookmakers.
As a result of those transactions, the appellant lost pound 3,635 12 6.
As the appellant was unable to pay the amount, the matter was referred to the committee of Tattersalls, who decided that the appellant should pay the respondents a sum of pound 635 12 6 within fourteen days and the balance by monthly instalments of pound 100.
It was laid down that if the appellant failed to make those payments, he was liable to be reported to the said committee which would result in his being warned off Newmarket Heath and posted as defaulters The appellant informed the respondents that he was unable to pay the pound 635 12 6 within the prescribed time and offered to send them a cheque for that sum post dated October 10, 1946, and to pay the monthly instalments of pound 100 thereafter.
On the respondents agreeing to that course, the appellant sent a post dated cheque to (1) (2) (3) (4) (5) 425 them and also enclosed a letter agreeing to pay the monthly instalments.
As the post dated cheque was dishonoured and the appellant failed to pay the entire amount, the respondents filed a suit claiming the amount due to them under the subsequent agreement.
The respondents contended that the sum the appellant had promised to pay was not money won upon a wager within the meaning of the second branch of section 18, but was money due under a new lawful and enforceable agreement and that even if the sum was to be regarded as won on a wager, the agreement was outside the scope of the second branch of section 18 of the Gaming Act, 1845.
The House of Lords by a majority of 4 to 3 held that the agreement contained a new promise to pay money won upon a wager and that the second branch of section 18 applied to all suits brought to recover money alleged to have been won on a wager and therefore the contract was unenforceable.
In coming to that conclusion, Viscount Simon, one of the Judges who expressed the majority view, agreed with Fletcher Moulton, L. J., in holding that the bond constituted an agreement to pay money won upon a wager, notwithstanding the new consideration, and was thus unenforceable under the second limb of section 18.
In Hyams vs Stuart King(1), the facts of which we have already given, the suit was filed on the basis of a subsequent agreement between the same parties to the wager.
The majority of the Judges held that the subsequent agreement was supported by good consideration, while Fletcher Moulton, L. J., dissented from that view.
The basis for the dissenting view is found at page 712.
After reading section 18 of the Gaming Act, 1845, the learned Judge proceeded to state: " In my opinion too little attention has been paid to the distinction between the two parts of this enactment, and the second part has been treated as being in effect merely a repetition of the first part.
I cannot accept such an interpretation.
So far as the actual wagering contract is concerned, the earlier provision is ample.
It makes that contract absolutely void, (1) 54 426 and it would be idle to enact in addition that no suit should be brought upon a contract that had thus been rendered void by statute.
The language of the later provision is in my opinion much wider.
It provides with complete generality that no action shall be brought to recover anything alleged to be won upon any wager, without in any way limiting the application of the provision to the wagering contract itself.
In other words, it provides that wherever the obligation under a contract is or includes the payment of money won upon a wager, the Courts shall not be used to enforce the performance of that part of the obligation ".
These observations must be understood in the context of the peculiar facts of that case.
The suit was between the parties to the wager.
The question was whether the second part of the concerned section was comprehensive enough to take in an agreement to recover the money won upon a wager within the meaning of that part.
Fletcher Moulton, L. J., held that the second part was wide and comprehensive enough to take in such a claim, for the suit was, though on the basis of a substituted agreement, for the recovery of the money won upon a wager within the meaning of the words of that part of the section.
The second question considered by the learned Judge was whether the defendants ' firm which was an association formed for the purpose of a betting business was a legal partnership under the English Law.
The learned Judge relied upon the Gaming Act.
1892 in holding that it was not possible under the English law to have any such partnership.
At page 718, the learned Judge observed : In my opinion no such partnership is possible under English law.
Without considering any other grounds of objection to its existence, the language of the Gaming Act, 1892, appears to me to be sufficient to establish this proposition.
It is essential to the idea of a partnership that each partner is an agent.
of the partnership and (subject to the provisions of the partnership deed) has authority to make payments on its behalf for partnership purposes, for which he is entitled 427 to claim credit in the partnership accounts and thus receive, directly or indirectly, repayment.
But by the Gaming Act, 1892, all promises to pay any person any sum of money paid by him in respect of a wagering contract are null and void.
These words are wide enough to nullify the fundamental contract which must be the basis of a partnership, and therefore in my opinion no such partnership is possible, and the action for this reason alone was wrongly framed and should have been dismissed with costs ".
It would be seen from the said observations that Fletcher Moulton, L. J., laid down two propositions: (i) The second part of section 18 of the Gaming Act, 1845, was comprehensive enough to take in a claim for the recovery of money alleged to be won upon a wager though the said claim was based upon a substituted contract between the same parties; and (ii) by reason of the wide terms of the Gaming Act, 1892, even the fundamental contract, which was the basis of a partnership, was itself a nullity.
The learned Lord Justice did not purport to express any opinion on the effect of a void contract of wager on a collateral contract.
In Hill 's case (1) the only question that arose was whether the second part of section 18 was a bar to the maintainability of a suit under a substituted agreement for the recovery of money won upon a wager.
The majority accepted the view of Fletcher Moulton, L. J., on the first question.
The second question did not arise for consideration in that case.
The House of Lords neither expressly nor by necessary implication purported to hold that collateral contract of either partnership or agency was illegal; and that the long catena of decisions already referred to by us were wrongly decided.
This judgment does not therefore support the contention of the learned Counsel for the appellant.
The legal position in India is not different.
Before the Act for Avoiding Wagers, 1848, the law relating to wagers that was in force in British India was the common law of England.
The Judicial Committee in Ramloll Thackoorseydass vs Soojumnull Dhondmull (2) (1) (2) (1848) 4 M.I.A. 339.
428 expressly ruled that the common law of England was in force in India and under that law an action might be maintained on a wager.
The wager dealt with in that case was upon the average price which opium would fetch at the next Government sale at Calcutta.
Lord Campbell in rejecting the plea that the wager was illegal observed at page 349: " The Statute, 8 & 9 Viet.
c. 109, does not extend to India ' and although both parties on the record are Hindoos, no peculiar Hindoo law is alleged to exist upon the subject; therefore this case, must be decided by the common law of England ".
It is a direct decision on the point now mooted before us and it is in favour of the respondents.
Again the Privy Council considered a similar question in Doolubdass Pettamberdass vs Ramloll Thackoorseydass and others There again the wager was upon the price that the Patna opium would fetch at the next Government sale at Calcutta.
There the plaintiff instituted a suit in the Supreme Court of Bombay in January, 1847, to recover the money won on a wager.
After the suit was filed, Act 21 of 1848 was passed by the Indian Legislature where under all agreements whether made in speaking, writing, or otherwise, by way of gaming or wagering, would be null and void and no suit would be allowed in any Court of Law or Equity for recovering any sum of money or valuable thing alleged to be won on any wager.
This section was similar in terms to that of section 18 of the Gaming Act, 1845.
Their Lordships held that the contract was not void and the Act 21 of 1848 would not invalidate the contracts entered into before the Act came into force.
Adverting to the next argument that under Hindu Law such contracts were void, they restated their view expressed in Ramloll Thackoorserdas vs Soojumnull Dhondmull (2) thus at page 127: " Their Lordships have already said that they are not satisfied from the authorities referred to, that such is the law among the Hindoos. " The Judicial Committee again restated the law in similar terms in Raghoonauth Sahoi Chotayloll vs (1) (1850) 5 M.I.A. 109.
(2) (1848) 4 M.I.A. 339.
429 Manickchund and Kaisreechund (1).
There the Judicial Committee held that a wagering contract in India upon the average price opium would fetch at a future Government sale, was legal and enforceable before the passing of the Legislative Act, No. 21 of 1848.
The aforesaid three decisions of the Privy Council clearly establish the legal position in India before the enactment of the Act 21 of 1848, namely, that wagering contracts were governed by the common law of England and were not void and therefore enforceable in Courts.
They also held that the Hindu Law did not prohibit any such wagers.
The same view was expressed by the Indian Courts in cases decided after the enactment of the Contract Act.
An agent who paid the amount of betting lost by him was allowed to recover the same from his principal in Pringle vs Jafar Khan (2).
The reason for that decision is given at page 445: " There was nothing illegal in the contract; betting at horse races could not be said to be illegal in the sense of tainting any transaction connected with it.
This distinction between an agreement which is only void and one in which the consideration is also unlawful is made in the Contract Act.
Section 23 points out in what cases the consideration of an agreement is unlawful, and in such cases the agreement is also void, that is, not enforceable at law.
Section 30 refers to cases in which the agreement is only void, though the consideration is not necessarily unlawful.
There is no reason why the plaintiff should not recover the sum paid by him. .
" In Shibho Mal vs Lachman Das (3) an agent who paid the losses on the wagering transactions was allowed to recover the amounts he paid from his principal.
In Beni Madho Das vs Kaunsal Kishor Dhusar (4) the plaintiff who lent money to the defendant to enable him to pay off a gambling debt was given a decree to recover the same from the defendant.
Where two partners entered into a contract of wager with a third (1) (1856) 6 M.I.A. 251.
(3) All.
(2) All.
(4) All.
430 party and one partner had satisfied his own and his co partner 's liability under the contract, the Nagpur High Court, in Md. Gulam Mustafakhan vs Padamsi (1) held that the partner who paid the amount could legally claim the other partner 's share of the loss.
The learned Judge reiterated the same principle accepted in the decisions cited supra, when he said at page 49: " Section 30 of the does not affect agreements or transactions collateral to wagers. .
" The said decisions were based upon the well settled principle that a wagering contract was only void, but not illegal, and therefore a collateral contract could be enforced.
Before closing this branch of the discussion, it may be convenient to consider a subsidiary point raised by the learned Counsel for the appellant that though a contract of partnership was not illegal, in the matter of accounting, the loss paid by one of the partners on wagering transactions, could not be taken into consideration.
Reliance is placed in support of this contention on Chitty 's Contract, p. 495, para. 908, which reads: " Inasmuch as betting is not in itself illegal, the law does not refuse to recognise a partnership formed for the purpose of betting.
Upon the dissolution of such a partnership an account may be ordered.
Each partner has a right to recover his share of the capital subscribed, so far as it has not been spent; but he cannot claim an account of profits or repayments of amounts advanced by him which have actually been applied in paying the bets of the partnership.
" In support of this view, two decisions are cited.
They are: Thwaites vs Coulthwaite (2 ) and Saffery vs Mayer(3).
The first case has already been considered by us.
There, Chitty, J., in giving a decree for account left open the question of the legality of certain transactions till it arose on the taking of the (1) A.I.R. (1923) Nag. 48.
(2) (3) 431 account.
Far from helping the appellant, the observations and the actual decision in that case support the respondents ' contention.
The reservation of the question of particular transactions presumably related only to the transactions prohibited by the Betting Act, 1853.
Such of the transactions which were so prohibited by the Betting Act would be illegal and therefore the contract of partnership could not operate on such transactions.
The case of Saffery vs Mayer(1) related to a suit for recovery of money advanced by one person to another for the purpose of betting on horses on their joint account.
The appellate Court held that by reason of the provisions of the Gaming Act, 1892, the action was not maintainable.
This decision clearly turned upon the provisions of the Gaming, Act, 1892.
Smith, M. R., observed that the plaintiff paid the money to the defendant in respect of a contract rendered null and void and therefore it was not recoverable under the second limb of that section.
The other Lord Justices also based their judgments on the express words of the Gaining Act, 1892.
It will be also interesting to note that the Court of Appeal further pointed out that Chitty, J., in Thwaites ' Case(2) in deciding in the way he did omitted to consider the effect of the provisions of the Gaming Act, 1892, on the question of maintainability of the action before him.
The aforesaid passage in Chitty 's Contract must be understood only in the context of the provisions of the Gaming Act, 1892.
The aforesaid discussion yields the following results: (1) Under the common law of England a contract of wager is valid and therefore both the primary contract as well as the collateral agreement in respect thereof are enforceable; (2) after the enactment of the Gaming Act, 1845, a wager is made void but not illegal in the sense of being forbidden by law, and thereafter a primary agreement of wager is void but a collateral agreement is enforceable; (3) there was a conflict on the question whether the second part of section 18 of the Gaming Act, 1845, would cover a case for the recovery of money or valuable thing alleged to be won upon (1) (2) 432 any wager under a substituted contract between the same parties: the House of Lords in Hill 's Case,(1) had finally resolved the conflict by holding that such a claim was not sustainable whether it was made under the original contract of wager between the parties or under a substituted agreement between them; (4) under the Gaming Act, 1892, in view of its wide and comprehensive phraseology, even collateral contracts, including partnership agreements, are not enforceable; (5) section 30 of the is based upon the provisions of section 18 of the Gaming Act, 1845, and though a wager is void and unenforceable, it is not forbidden by law and therefore the object of a collateral agreement is not unlawful under section 23 of the Contract Act; and (6) partnership being an agreement within the meaning of section 23 of the , it is not unlawful, though its object is to carry on wagering transactions.
We, therefore, hold that in the present case the partnership is not unlawful within the meaning of section 23(A) of the Contract Act.
(ii) Public Policy: The learned Counsel for the appellant contends that the concept of public policy is very comprehensive and that in India, particularly after independence, its content should be measured having regard to political, social and economic policies of a welfare State, and the traditions of this ancient country reflected in Srutis, Smritis and Nibandas.
Before adverting to the argument of the learned Counsel, it would be convenient at the outset to ascertain the meaning of this concept and to note how the Courts in England and India have applied it to different situations.
Cheshire and Fifoot in their book on " Law of Contract ", 3rd Edn., observe at page " 280 thus: ' The public interests which is designed to protect are so comprehensive and heterogeneous, and opinions as to what is injurious must of necessity vary so greatly with the social and moral convictions, and at times even with the political views, of different judges, that it forms a treacherous and unstable (1) 433 ground for legal decision These questions have agitated the Courts in the past, but the present state of the law would appear to be reasonably clear.
Two observations may be made with some degree of assurance.
First, although the rules already established by precedent must be moulded to fit the new conditions of a changing world, it is no longer legitimate for the Courts to invent a new head of public policy.
A judge is not free to speculate upon what, in his opinion, is for the good of the community.
He must be content to apply, either directly or by way of analogy, the ' principles laid down in previous decisions.
He must expound, not expand, this particular branch of the law.
Secondly, even though the contract is one which prima facie falls under one of the recognized heads of public policy, it will not be held illegal unless its harmful qualities are indisputable.
The doctrine, as Lord Atkin remarked in a leading case, " should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds . .
In popular language . the contract should be given the benefit of the doubt ".
" Anson in his Law of Contract states the same rule thus, at p. 216: "Jessel, M. R., in 1875, stated a principle which is still valid for the Courts, when he said: ' You have this paramount public policy to consider, that you are not lightly to interfere with the freedom of contract '; and it is in reconciling freedom of contract with other public interests which are regarded as of not less importance that the difficulty in these cases arises. .
We may say, however, that the policy of the law has, on certain subjects, been worked into a set of tolerably definite rules.
The application of these to particular instances necessarily varies with the conditions of the times and the progressive development of public opinion and morality, but, as Lord Wright has said public policy, like any other branch of the Common Law, ought to be, and I think is, governed by 55 434 the judicial use of precedents.
If it is said that rules of public policy have to be moulded to suit new conditions of a changing world, that is true; but the same is true of the principles of the Common Law generally.
" In Halsbury 's Laws of England, 3rd Edn., Vol. 8, the doctrine is stated at p. 130 thus: " Any agreement which tends to be injurious to the public or against the public good is void as being contrary to public policy. . . .
It seems, however, that this branch of the law will not be extended.
The determination of what is contrary to the so called policy of the law necessarily varies from time to time.
Many transactions are upheld now which in a former generation would have been avoided as contrary to the supposed policy of the law.
The rule remains, but its application varies with the principles which for the time being guide public opinion.
" A few of the leading cases on the subject reflected in the authoritative statements 'of law by the various authors may also be useful to demarcate the limits of this illusive concept.
Parke, B., in Egerton vs Brownlow(1), which is a leading judgment on the subject, describes the doctrine of public policy thus at p. 123: " 'I Public policy ' is a vague and unsatisfactory term, and calculated to lead to uncertainty and error, when applied to the decision of legal rights; it is capable of being understood in different senses; it may, and does, in its ordinary sense, mean I political expedience ', or that which is best for the common good of the community; and in that sense there may be every variety of opinion, according to education, habits, talents, and dispositions of each person, who is to decide whether an act is against public policy or not.
To allow this to be a ground of judicial decision, would lead to the greatest uncertainty and confusion.
It is the province of the statesman, and not the lawyer, to discuss, and of the Legislature to determine, what is best for the public good, and to provide for it by proper enactments.
It 1s the province of the judge (1) ; , 123; ; ,408. 435 to expound the law only; the written from the statutes; the unwritten or common law from the decisions of our predecessors and of our existing Courts, from text writers of acknowledged authority, and upon the principles to be clearly deduced from them by sound reason and just inference; not to speculate upon what is the best, in his opinion, for the advantage of the community.
Some of these decisions may have no doubt been founded upon the prevailing and just opinions of the public good ; for instance, the illegality of covenants in restraint of marriage or trade.
They have become a part of the recognised law, and we are therefore bound by them, but we are not thereby authorised to establish as law everything which we may think for the public good, and prohibit everything which we think otherwise.
" In Janson vs Driefontein Consolidated Mines, Ltd.(1) an action raised against British underwriters in respect of insurance of treasures against capture during its transit from a foreign state to Great Britain was resisted by the underwriters on the ground that the insurance was against public policy.
The House of Lords rejected the plea.
Earl of Halsbury, L.C., in his speech made weighty observations, which may usefully be extracted.
The learned Lord says at page 491: In treating of various branches of the law learned persons have analysed the sources of the law, and have sometimes expressed their opinion that such and such a provision is bad because it is contrary to public policy; but I deny that any Court can invent a new head of public policy ; so a contract for marriage brokerage, the creation of a perpetuity, a contract in restraint of trade, a gaming or wagering contract, or, what is relevant here, the assisting of the King 's enemies, are all undoubtedly unlawful things; and you may say that it is because they are contrary to public policy they are unlawful; but it is because these things have been either enacted or assumed to be by the common law unlawful, and not because a judge or Court have a right to declare that such and such (1) 436 things are in his or their view contrary to public policy.
Of course, in the application of the principles here insisted on, it is inevitable that the particular case must be decided by a judge; he must find the facts, and he must decide whether the facts so found do or do not come within the principles which I have endeavoured to describe that is, a principle of public policy, recognised by the law, which the suggested contract is infringing, or is supposed to infringe.
" These observations indicate that the doctrine of public policy is only a branch of common law and unless the principle of public policy is recognised by that law, Court cannot apply it to invalidate a contract.
Lord Lindley in his speech at p. 507 pointed out that public policy is a very unstable and dangerous foundation on which to build until made safe by decision.
A promise made by one spouse, after a decree nisi for the dissolution of the marriage has been pronounced, to marry a third person after the decree has been made absolute is not void as being against public policy: see Fender vs St. John Mildmay (1).
In that case Lord Atkin states the scope of the doctrine thus at p. 12: " In popular language, following the wise aphorism of Sir George Jessel cited above, the contract should be given the benefit of the doubt.
But there is no doubt that the rule exists.
In cases where the promise to do something contrary to public policy which for short I will call a harmful thing, or where the consideration for the promise is the doing or the promise to do a harmful thing a judge, though he is on slippery ground, at any rate has a chance of finding a footing. .
But the doctrine does not extend only to harmful acts, it has to be applied to harmful tendencies.
Here the ground is still less safe and more treacherous ".
Adverting to the observation of Lord Halsbury in Janson vs Driefontein Consolidated Mines Ltd. Lord Atkin commented thus, at page 11: ". . .
Lord Halsbury indeed appeared to decide that the categories of public policy are closed, (1) (2) 437 and that the principle could not be invoked anew unless the case could be brought within some principle of public policy already recognised by the law.
I do not find, however, that this view received the express assent of the other members of the House; and it seems to me, with respect, too rigid.
On the other hand, it fortifies the serious warning illustrated by the passages cited above that the doctrine should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds ".
Lord Thankerton summarised his view in the following terms, at p. 23: " In the first place, there can be little question as to the proper function of the Courts, in questions of public policy.
Their duty is to expound, and not to expand, such policy.
Thai does not mean that they are precluded from applying ail existing principle of public policy to a new set of circumstances, where such circumstances are clearly within the scope of the policy.
Such a case might well arise in the case of safety of the State, for instance.
But no such case is suggested here.
Further, the Courts must be watchful not to be influenced by their view of what the principle of public policy, or its limits, should be ".
Lord Wright, at p. 38, explains the two senses in which the words " public policy" are used : " In one sense every rule of law, either common law or equity, which has been laid down by the Courts, in that course of judicial legislation which has evolved the law of this country, has been based on considerations of public interest or policy.
In that, sense Sir George Jessel, M. R., referred to the paramount public policy that people should fulfil their contracts.
But public policy in the narrower sense means that there are considerations of public interest which require the Courts to depart from their primary function of enforcing contracts, and exceptionally to refuse to enforce them.
Public policy in this sense is disabling 438 Then the noble Lord proceeds to lay down the following principles on which a judge should exercise this peculiar and exceptional jurisdiction: (1) It is clear that public policy is not a branch of law to be extended ; (2) it is the province of the judge to expound the law only; (3) public policy, like any other branch of the common law, is governed by the judicial use of precedents ; and (4) Courts apply some recognised principles to the new conditions, proceeding by way of analogy and according to logic and convenience, just as Courts deal with any other rule of the common law.
The learned Lord on the basis of the discussion of case law on the subject observes at p. 40: " It is true that it has been observed that certain rules of public policy have to be moulded to suit now conditions of a changing world : but that is true of the principles of common law generally.
I find it difficult to conceive that in these days any new head of public policy could be discovered ".
The observations of the aforesaid Law Lords define the concept of public policy and lay down the limits of its application in the modern times.
In short, they state that the rules of public policy are ' well settled and the function of the Courts is only to expound them and apply them to varying situations.
While Lord Atkin does not accept Lord Halsbury 's dictum that the categories of public policy are closed, he gives a warning that the doctrine should be invoked only in clear cases in which the harm to the public is substantially incontestable, Lord Thankerton and Lord Wright seem to suggest that the categories of public policy are well settled and what the Courts at best can do is only to apply the same to new set of circumstances.
Neither of them excludes the possibility of evolving a new bead of public policy in a changing world, but they could not conceive that under the existing circumstances any such head could be discovered.
Asquith, L. J., in Monkland vs Jack Barclay Ltd. (1) restated the law crisply at p. 723: "The Courts have again and again said, that where a contract does not fit into one or other of these (1) 439 pigeon holes but lies outside this charmed circle, the courts should use extreme reserve in holding a contract to be void as against public policy, and should only do so when the contract is incontestably and on any view inimical to the public interest ".
The Indian cases also adopt the same view.
A division bench of the Bombay High Court in Shrinivas Das Lakshminarayan vs Ram Chandra Ramrattandas observed at p. 20: " It is no doubt open to the Court to hold that the consideration or object of an agreement is unlawful on the ground that it is opposed to what the Court regards as public policy.
This is laid down in section 23 of the and in India therefore it cannot be affirmed as a matter of law as was affirmed by Lord Halsbury in Janson vs Driefontein Consolidated Mines, Limited at p. 491) that no Court can invent a new head of public policy, but the dictum of Lord Davey in the same case that " public policy is always an unsafe and treacherous ground for legal decision " may be accepted as a sound cautionary maxim in considering the reasons assigned by the learned Judge for his decision ".
The same view is confirmed in Bhagwant Genuji Girme vs
Gangabisan Ramgopal (2) and Gopi Tihadi vs Gokhei Panda (3).
The doctrine of public policy may be summarized thus: Public policy or the policy of the law is an illusive concept; it has been described as " untrustworthy guide ", " variable quality ", " uncertain one ", " unruly horse ", etc. ; the primary duty of a Court of Law is to enforce a promise which the parties have made and to uphold the sanctity of contracts which form the basis of society, but in certain cases, the Court may relieve them of their duty on a rule founded on what is called the public policy; for want of better words Lord Atkin describes that something done contrary to public policy is a harmful thing, but the doctrine is extended not only to harmful cases but also to harmful tendencies; this doctrine of public policy is only a branch of common law, and, (1) I.L.R. (2) I.L.R. 1941 Bom 71.
(3) I.L.R. 1953 Cuttack 558.
440 just like any other branch of common law, it is governed by precedents; the principles have been crystallized under different heads and though it is permissible for Courts to expound and apply them to different situations, it should only be invoked in clear and incontestable cases of harm to the public; though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world, it is advisable in the interest of stability of society not to make any attempt to discover new heads in these days.
This leads us to the question whether in England or in India a definite principle of public policy has been evolved or recognized invalidating wagers.
So far as England is concerned, the passages from text books extracted and the decisions discussed in connection with the first point clearly establish that there has never been such a rule of public policy in that country.
Courts under the common law ' of England till the year 1845 enforced such contracts even between parties to the transaction.
They held that wagers were not illegal.
After the passing of the English Gaming Act, 1845 (8 & 9 Vict. c. 109), such contracts were declared void.
Even so; the Courts held that though a wagering contract was void, it was not illegal and therefore an agreement collateral to the wagering contract could be enforced.
Only after the enactment of the Gaming Act, 1892 (55 Vict. c. 9), the collateral contracts also became unenforceable by reason of the express words of that Act.
Indeed, in some of the decisions cited supra the question of public policy was specifically raised and negatived by Courts: See Thacker vs Hardy (1); Hyams vs Stuart King (2) ; and Michael Jeffrey & Company vs Bamford (3).
It is therefore abundantly clear that the common law of England did not recognize any principle of public policy declaring wagering contracts illegal.
The legal position is the same in India.
The Indian Courts, both before and after the passing of the Act (1) (2) (3) 441 21 of 1848 and also after the enactment of the Contract Act, have held that the wagering contracts are not illegal and the collateral contracts in respect of GI.
them are enforceable.
We have already referred to these in dealing with the first point and we need not A,, cover the ground once again, except to cite a passage from the decision of the Judicial Committee in Ramloll Thackoorseydass vs Soojumnull Dhondmull (1), which is directly in point.
Their Lordships in considering the applicability of the doctrine of public policy to a wagering contract observed at p. 350: " We are of opinion, that, although, to a certain degree, it might create a temptation to do what was wrong, we are not to presume that the parties would commit a crime; and as it did not interfere with the performance of any duty, and as if the parties were not induced by it to commit a crime, neither the interests of individuals or of the Government could be affected by it, we cannot say that it is contrary to public policy.
" There is not a single decision after the above cited case, which was decided in 1848, up to the present day wherein the Courts either declared wagering contracts as illegal or refused to enforce any collateral contract in respect of such wagers, on the ground of public policy.
It may, therefore, be stated without any contradiction that the common law of England in respect of wagers was followed in India and it has always been held that such contracts, though void after the Act of 1848, were not illegal.
Nor the legislatures of the States excepting Bombay made any attempt to bring the law in India in line with that obtaining in England after the Gaming Act, 1892.
The Contract Act was passed in the year 1872.
At the time of the passing of the Contract Act, there was a Central Act, Act 21 of 1848, principally based on the English Gaming Act, 1845.
There was also the Bombay Wagers (Amendment) Act, 1865, amending the former Act in terms analogous to those later enacted by the Gaming Act, 1892.
Though the Contract (1) (1848) 4 M.I.A. 339.
56 442 Act repealed the Act 21 of 1848, it did not incorporate in it the provisions similar to those of the Bombay Act; nor was any amendment made subsequent to the passing of the English Gaming Act, 1892.
The legislature must be deemed to have had the knowledge of the state of law in England, and, therefore, we may assume that it did not think fit to make wagers illegal or to hit at collateral contracts.
The policy of law in India has therefore been to sustain the legality of wagers.
The history of the law of gambling in India would also show that though gaming in certain respects was controlled, it has never been absolutely prohibited.
The following are some of the gambling Acts in India: The Public Gambling Act (111 of 1867); The Bengal Public Gambling Act (11 of 1867); The Bombay Prevention of Gambling Act (IV of 1887); Madhya Bharat Gambling Act(LI of 1949); Madhya Pradesh Public Gambling Act; Madras Gaming Act (111 of 1930); The Orissa Prevention of Gambling Act (XVII of 1955); the Punjab Public Gambling Act (111 of 1867); the Rajasthan Public Gambling Ordinance (Ordinance XLVIII of 1949) and the U.P. Public Gambling Act.
These Acts do not prohibit gaming in its entirety, but aim at suppressing gaming in private houses when carried on for profit or gain of the owner or occupier thereof and also gaming in public.
Gaming without contravening the provisions of the said Acts is legal.
Wherever the State intended to declare a particular form of gaming illegal, it made "an express statute to that effect: See section 29 A of the Indian Penal Code.
In other respects, gaming and wagering are allowed in India.
It is also common knowledge that horse races are allowed throughout India and the State also derives revenue therefrom.
The next question posed by the learned Counsel for the appellant is whether under the Hindu Law it can be said that gambling contracts are held to be illegal.
The learned Counsel relies upon the observations of this Court in The State of Bombay vs R. M. D. Chamarbaugwala (1).
The question raised in that case was (1) ; 443 whether the Bombay Lotteries and Prize ' Competition Control and Tax (Amendment) Act of 1952 extending the definition of " prize competition " contained in section 2(1)(d) of the Bombay Lotteries and Prize Competition Control and Tax Act of 1948, so as to include prize competition carried on through newspapers printed and published outside the State, was constitutionally valid, It was contended, inter alia, that the Act offended the fundamental right of the respondents, who were conducting prize competitions, under article 19(1) (g) of the Constitution and also violated the freedom of inter State trade under article 301 thereof This Court held that the gambling activities in their very nature and essence were extra commercium and could not either be trade or commerce within the meaning of the aforesaid provisions and therefore neither the fundamental right of the respondents under article 19(1)(g) or their right to freedom of interState trade under article 301 is violated.
In that context Das, C. J., has collected all the Hindu Law texts from Rig Veda, Mahabharata, Manu, Brihaspati, Yagnavalkya, etc., at pp.
922 923.
It is unnecessary to restate them here, but it is clear from those texts that Hindu sacred books condemned gambling in unambiguous terms.
But the question is whether those ancient text books remain only as pious wishes of our ancestors or whether they were enforced in the recent centu ries.
All the branches of the Hindu Law have not been administered by Courts in India; only questions regarding succession, inheritance, marriage, and religious usages and institutions are decided according to the Hindu Law, except in so far as such law has been altered by legislative enactment.
Besides the matters above referred to, there are certain additional matters to which the Hindu Law is applied to the Hindus, in some cases by virtue of express legislation and in others on the principle of justice, equity and good conscience.
These matters are adoption, guardianship, family relations, wills, gifts and partition.
As to these matters also the Hindu Law is to be applied subject to such alterations as have been made by legislative enactments: See Mulla 's Hindu Law, para.
444 3, p. 2.
In other respects the ancient Hindu Law was not enforced in Indian Courts and it may be said that they became obsolete.
Admittedly there, has not been a single instance in recorded cases holding gambling or wagering contracts illegal on the ground that they are contrary to public policy as they offended the principles of ancient Hindu Law.
In the circumstances, we find it difficult to import the tenets of Hindu Law to give a novel content to the doctrine of public policy in respect of contracts of gaming and wagering.
To summarize: The common law of England and that of India have never struck down contracts of wager on the ground of public policy ; indeed they have always been held to be not illegal notwithstanding the fact that the statute declared them void.
Even after the contracts of wager were declared to be void in England, collateral contracts were enforced till the passing of the Gamina Act of 1892, and in India, except in the State of Bombay, they have been enforced even after the passing of the Act 21 of 1848, which was substituted by section 30 of the Contract Act.
The moral prohibitions in Hindu Law texts against gambling were not only not legally enforced but were allowed to fall into desuetude.
In practice, though gambling is controlled in specific matters, it has not been declared illegal and there is no law declaring wagering illegal.
Indeed, some of the gambling practices are a perennial source of income to the State.
In the circumstances it is not possible to hold that there is any definite head or principle of public policy evolved by Courts or laid down by precedents which would directly apply to wagering contracts.
Even if it is permissible for Courts to evolve a new head of public policy under extraordinary circumstances giving rise to incontestable harm to the society, we cannot say that wager is one of such instances of exceptional gravity, for it has been recognized for centuries and has been tolerated by the public and the State alike.
If it has any such tendency, it is for the legislature to make a law prohibiting such contracts and declaring them illegal and not for this Court to resort to judicial legislation.
445 Re. Point 3 Immorality: The argument under this head is rather broadly stated by the learned Counsel for the appellant.
The learned counsel attempts to draw an analogy from the Hindu Law relating to the doctrine of pious obligation of sons to discharge their father 's debts and contends that what the Hindu Law considers to be immoral in that context may appropriately be applied to a case under section 23 of the Contract Act.
Neither any authority is cited nor any legal basis is suggested for importing the doctrine of Hindu Law into the domain of contracts.
Section 23 of the Contract Act is inspired by the common law of England and it would be more useful to refer to the English Law than to the Hindu Law texts dealing with a different matter.
Anson in his Law Of Contracts states at p. 222 thus : " The only aspect of immorality with which Court of Law have dealt is sexual immorality. . .
" Halsbury in his Laws of England, 3rd Edn., Vol.
makes a similar statement, at p. 138: " A contract which is made upon an immoral consideration or for an immoral purpose is unenforceable and there is no distinction in this respect between immoral and illegal contracts.
The immorality here alluded to is sexual immorality.
" In the Law of Contract by Cheshire and Fifoot, 3rd Edn., it is stated at p. 279: " Although Lord Mansfield laid it down that a contract contra bonos mores is illegal, the law in this connection gives no extended meaning to morality but concerns itself only with what is sexually reprehensible." In the book on the by Pollock and Mulla it is stated at p. 157: " The epithet " immoral " points, in legal usage, to conduct or purposes which the State, though disapproving them, is unable, or not advised, to visit with direct punishment." The learned authors confined its operation to acts which are considered to be immoral according to the standards of immorality approved by Courts.
The case law both in England and India confines the operation of the doctrine to sexual immorality.
To cite 446 Only some instances: settlements in consideration of encubinage, contracts of sale or hire of things to be used in a brothel or by a prostitute for purposes incidental to her profession, agreements to pay money for future illicit cohabitation, promises in regard to marriage for consideration, or contracts facilitating divorce are all held to be void on the ground that the object is immoral.
The word " immoral " is a very comprehensive word.
ordinarily it takes in every aspect of personal conduct deviating from the standard norms of life.
It may also be said that what is repugnant to good conscience is immoral.
Its varying content depends upon time, place and the stage of civilization of a particular society.
In short, no universal standard can be laid down and any law based on such fluid concept defeats its own purpose.
The provisions of section 23 of the Contract Act indicate the legislative intention to give it a restricted meaning.
Its juxtaposition with an equally illusive concept, public policy, indicates that it is used in a restricted sense; otherwise there would be overlapping of the two concepts.
In its wide sense what is immoral may be against public policy, 'for public policy covers political, social and economic ground of objection.
Decided cases and authoritative text book ' writers, therefore, confined it, with every justification, only to sexual immorality.
The other limitation imposed on the word by the statute, namely, " the court regards it as immoral ", brings out the idea that it is also a branch of the common law like the doctrine of public policy, and, therefore, should be confined to the Principles recognized and settled by Courts.
Precedents confine the said concept only to sexual immora lity and no case has been brought to our notice where it has been applied to any head other than sexual immorality.
In the circumstances, we cannot evolve a new head so as to bring in wagers within its fold.
Lastly it is contended by the learned Counsel for the appellant that wager is extra commercium and therefore there cannot be in law partnership for wager within the meaning of section 4 of the Partnership Act; for partnership under that section is relationship between 447 persons who have agreed to share the profits of a business.
Reliance is placed in respect of this contention on the decision of this Court in The State of Bombay vs R. M. D. Chamarbaugwala (1).
This question was not raised in the pleadings.
No issue was framed in respect of it.
No such case was argued before the learned Subordinate Judge or in the High Court; nor was this point raised in the application for certificate for leave to appeal to the Supreme Court filed in the High Court.
Indeed, the learned Advocate appearing for the appellant in the High Court stated that his client intended to raise one question only, namely, whether the partnership formed for the purpose of carrying on a business in differences was illegal within the meaning of section 23 of the Contract Act.
Further this plea was not specifically disclosed in the statement of case filed by the appellant in this Court.
If this contention had been raised at the earliest point of time, it would have been open to the respondents to ask for a suitable amendment of the plaint to sustain their claim.
In the circumstances, we do not think that we could with justification allow the appellant to raise this new plea for the first time before us, as it would cause irreparable prejudice to the respondents.
We express no opinion on this point.
For the foregoing reasons we must hold that the suit partnership was not unlawful within the meaning of section 23 of the .
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
| The assessee appellant in the appeal is a non resident company having its place of business at Coven" in the United Kingdom.
It entered into a collaboration agreement with an Indian company in November, 1939 the assessee being entitled to royalty of 5% on all sales effected by the Indian Company, and this amount less the Indian tax had to be remitted by the assessee in Sterling currency.
The assessee 's accounting year was the year ending 30th September and with respect to its Indian income, it was filing its returns through the Indian Company.
The aforesaid collaboration agreement expired in the year 1965, but it was renewed and the renewed agreement also expired in November, 1970.
For the assessment years 1967 68 and 1968 69 the assessee riled returns in which it stated that it was maintaining its accounts on mercantile basis, and did not dispute its liability to assessment.
In these returns, it disclosed a royalty income of Rs. 7,21,600 and Rs. 4,57,311 respectively.
When it came to the filing of the return for the assessment year 1969 70 the assessee admitted a royalty of Rs. 9,25,357 but filed a nil return saying that it was maintaining its accounts on cash basis and not on mercantile basis, that no part of the royalty amount had been received by it and, therefore, nothing was taxable.
For the next assessment year 1970 71 as well, the same stand was taken by the assessee.
The Income Tax Officer completed the assessment for the first two 97 assessment years on the basis of the returnes, but for the assessment years 1969 70 and 1970 71, he refused to accept the plea of the assessee; and held that the assessee maintaining its accounts on mercantile basis alone and that the royalty amount disclosed be brought to tax.
The assessee filed appeals against the assessments relating to all the four years, taking the stand that even with respect to the accounting year relevant to the assessment years 1967 68 and 1968 69, it had been maintaining accounts on cash basis and since it did not actually receive any income in all these 4 years no tax was payable.
The Appellate Assistant Commissioner dismissed the appeals holding that the assessment orders for the past years reveal that the method of accounting was mercantile, that for the assessment year 1967 68, the assessee never contested its liability to be taxed on the amounts disclosed and further it was not open to the assessee to change the method of accounting to suit its convenience, without the approval of the Income Tax Officer.
The assessee carried the matter In further appeals to the Tribunal and contended that it was not following any particular method of accounting regularly in the past years that it was the Indian Company which was finally filing the returns of income on behalf of the assessee by incorporating the figures as per its profit and loss account, that the Indian Company was not aware of the assessee 's system of accounting in regard to royalty and that, therefore, it had committed a mistake in filing the returns for the assessment years 1967 68 and 1968 69, that as soon as the mistake had been noticed, it was corrected and returns for the assessment year 1969 70 on correct basis showing that the method of account cash receipt basis was filed. 'Me appeals were allowed the Tribunal which held that as the assessee had not been following any particular method of accounting regularly over the past years, the question of the method of accounting adopted by the assessee must be examined afresh and for that purpose remanded the matters to the Income Tax Officer.
On a reference made at the instance.
of the Revenue, the High Court answered the reference in favour of revenue and against assessee.
The High Court held that it was 'immaterial whether the assessee was keeping his accounts in regard to a particular income regularly on the cash basis; that even if the assessee was keeping his accounts on the cash basis in regard to his income the assessee was liable to tax under Section 5 (2) (a); to hold 98 otherwise would be to take the income outside the purview of taxation under the Act, though such income had accrued in India to a non resident, and under Section 5(2)(b) the charge to tax had taken effect; and, therefore, there is no possibility of Section 5(2)(b) ever coming into operation and that Section 145(1) cannot be given such an overriding effect so as to defeat the charge and the provisions of Section 5(2)(b).
The assessee appealed to this Court contending that so far as the royalty income was concerned, the assessee was maintaining its accounts at Coventry in the United Kingdom on receipt basis, that the accounting year was the year ending 30th September of each year, whereas the accounting year for the Indian Company was the Calendar year and that notwithstanding the stipulation in the collaboration agreement for half yearly remittances, the practice was that the Indian Company was determining the amount of royalty at the end of its accounting year and that this amount was credited to the account of the assessee in the account books of the Indian Company and that receipt is only when the amount is remitted to the United Kingdom in accordance with the Company.
Dismissing the appeals, this Court, HELD: The collaboration agreement between the assessee and the Indian Company was as old as 1939.
The assessee had been riling its income tax return in India through the Indian Company.
Though the collaboration agreement contemplated the royalty amount being remitted in Sterling Currency to U.K., it cannot be said that until it was so remitted to and received in the U.K., the assessee had not received the income.
The practice evidently was that the Indian Company was maintaining an account pertaining to the assessee in its Books.
After it made up its accounts at the end of the calender year and determined the royalty amount payable to the assessee, the Indian Company was crediting the said amount to the account of the assessee in its Books, and this was recorded as income by the assessee over all these years.
The returns riled by the assessee even with respect to the assessment years 1967 68 and 1968 69 were based upon this premise.
In the said returns, the assessee declared a particular amount of income and offered the same for taxation.
It did not take the stand that the said credit entry in the Books of the Indian Company did not give rise to income in India nor did it ever say that the receipt in U.K. in the shape of sterling pounds alone constitutes 99 income or for that matter receipt of income.
It can also be noticed that in its returns relating to the assessment years 1967 68 and 1968 69, the assessee stated that it was maintaining its accounts on mercantile basis, and that only in the returns relating to the assessment year 1968 69, did it raise the plea that it was maintaining its books, with respect to the said royalty amount, on cash receipt basis.
[105E H] The receipt of the said income in the U.K., is immaterial.
It may happen that a non resident assessee may choose not to repatriate his income/profits to his parent country; he may choose to plough back the said amount in India for such purposes as he may choose.
It, therefore, cannot be said in such a situation that he has not received the income in India.
[106H] Raghava Red& vs C.I.T, Andhra Pradesh, ; relied on.
[107A] The credit entry to the account of the assessee in the Books of the Indian Company does amount to receipt by assessee and is accordingly taxable.
It is immaterial when it was actually received in U.K. [108C] The method of accounting adopted by the assessee for the relevant accounting years Is really irrelevant.
Thi very concept of 'receipt" as espoused by the assessee is untenable and unacceptable.
The order of remand made by the Tribunal was unnecessary.
It is not necessary to express any opinion either on the question whether there is any conflict or inconsistency between Section 5(2) and Section 145 of the Act or on the view expressed by the High Court that in the case of a non resident assessee like the appellant clause (a) of sub section (2) of Section 5 has no application whatsoever and that Section 5(2)(b) governs it irrespective of the fact whether it maintains its accounts on cash basis or mercantile basis.
The question referred did not really arise in the facts and circumstances of the case and need not have been answered.
The Tribunal shall complete the assessments in question.
[108D F] C.I. T. vs Machillan & Co., ; and Keshav Mills Ltd. vs C.I T., Bombay, , distinguished.
[108G]
|
Civil Appeal No. 4264 of 1983.
Appeal by Special leave from the Judgment and Order dated the 25th April, 1979 of the Bombay High Court in Writ Petition No. 1117 of 1979.
V. section Desai and M. N. Shroff with him for the Appellant.
Nemo for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
A question frequently arises under the Agricultural Ceiling Acts passed by the State Legislatures as to whether the land owned and held by a wife as her separate property can be clubbed together with the lands held by her husband and the other members of the family for the purpose of computing the ceiling on the holding of the 'family unit '.
That question arises in this appeal under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 27 of 1961, (The Act ').
The respondent Vyasendra filed a return under section 12 of the Act showing the lands held by him and mentioning that certain lands which stood in the name of his wife were her separate property.
The Surplus Lands Determination Tribunal held under section 21 of the Act that the total holding of the respondent, including the land which was alleged to be the separate property of his wife, was 67 acres and 34 gunthas.
Since the ceiling under the Act is 54 acres, the respondent was asked to surrender an area admeasuring 13 acres and 34 gunthas.
The Additional Commissioner, Aurangabad, called for the record and proceedings of the Tribunal suo motu.
The respondent 3 contended in those proceedings that an area of 17 acres and 27 gunthas which was sold by his wife after the notified date, was wrongly included in the holding of the family unit on the basis that the sale was mala fide and was not supported by legal necessity.
By an order dated January 16, 1979 the Additional Commissioner remanded the matter to the Tribunal for a fresh inquiry into the question as to whether the sale of land effected by the respondent 's wife after the notified date was supported by legal necessity.
The contention was that the respondent 's wife had sold the land in order to meet the medical expenses in connection with her illness.
The respondent filed a writ petition (No. 1117 of 1979) in the High Court of Bombay against the judgment of the Additional Commissioner.
The contention of the respondent before the High Court was that the Additional Commissioner should have remanded the proceedings to the Tribunal not only for the purpose of determining whether the respondent 's wife had sold the land for the purpose of legal necessity but also for the purpose of determining whether the land which stood in the name of the respondent 's wife constituted her separate or Stridhan property.
This contention was accepted by the High Court which, by its judgment dated April 25, 1979 enlarged the scope of the remand by directing the Tribunal to inquire also into the question as to whether the land which stood in the name of the respondent 's wife was her separate property.
The correctness of the judgment of the High Court is challenged by the State of Maharashtra in this appeal.
By an order dated March 8, 1983 this Court had issued a show cause notice to the respondent stating therein that the matter will be finally heard and disposed of at the next hearing.
The show cause notice has been served on the respondent but he has not put in his appearance.
Shri V. section Desai, who appears on behalf of the appellant, contends that the High Court was in error in enlarging the scope of the order of remand passed by the Additional Commissioner by directing the Tribunal to hold an inquiry into the question whether the land which stood in the name of the respondent 's wife and which was sold by her allegedly for medical expenses, was her separate property.
This contention is well founded and must be accepted.
Section 3(1) of the Act provides, to the extent material, that no 'family unit ' shall after the commencement date, hold land in excess of the ceiling 4 areas as determined in the manner provided by the Act.
By subsection (2) of section 3, the land held by a family unit in excess of the ceiling area is regarded as surplus land, liable to be dealt with in the manner prescribed by the Act.
Section 4(1) of the Act, which is of crucial importance in this case, reads thus: "4.
Land held by family unit (1) All land held by each member of a family unit, whether jointly or separately, shall for the purposes of determining the ceiling area of the family unit, be deemed to be held by the family unit.
Explanation A 'Family unit ' means, (a) a person and his spouse (or more than one spouse) and their minor sons and minor unmarried daughters, if any; or (b) where any spouse is dead, the surviving spouse or spouses, and the minor sons and minor unmarried daughters; or (c) where the spouses are dead, the minor sons and minor unmarried daughters of such deceased spouses.
" It is clear from these provisions that all land held by each member of the family unit, whether jointly or separately, is to be deemed to be held by the family unit, for the purpose of determining the ceiling area which the family unit may retain.
The expression 'family unit ' is defined by the Explanation to mean "a person and his spouse. ".
The circumstance that the land held by a constituent member of the family unit is separate property or stridhan property is a matter of no consequence whatsoever for the purpose of determining the ceiling area which the family unit can retain.
The respondent, his wife and their minor sons and minor unmarried daughters, if any, are all constituent members of the family unit and all the lands held by them have to be pooled together for the purpose of determining the ceiling area which is permissible to the family unit.
The nature or character of their interest in the land held by them is irrelevant for computing the ceiling area which the family unit may retain.
The High Court was therefore in error in directing the Tribunal to 5 inquire into the question as to whether the land which stood in the name of the respondent 's wife and which was sold by her was her personal or separate property.
Assuming it was so, it is still liable to be aggregated with the land held by the respondent.
In the result, we allow the appeal, set aside the judgment of the High Court and confirm the order of remand passed by the Additional Commissioner, Aurangabad.
The Surplus Lands Determination Tribunal will inquire into the limited question referred to it by the Additional Commissioner, Aurangabad, only.
There will be no order as to costs.
H.S.K. Appeal allowed.
| Admissions to the Punjab Engineering College, Chandigarh for the academic year 1982 83 granted to eight candidates by what is described as the spot test method, to seven wards of the employees of the Punjab Engineering College and another were struck down by the Punjab High Court as in violation of the rules and regulations governing admissions to the institution.
However, the students wrongly admitted were allowed to continue their studies on humanitarian grounds.
Hence the appeals after obtaining special leave of the Court.
Disposing of the appeals, the Court ^ HELD: 1:1 Since all the sixteen students wrongly admitted have already completed one or two semesters it will be unjust to cancel their admission at this stage and to remove their names from the rolls of the College, and therefore, they must be allowed to continue their studies as if their admission to the College suffered from no defect or illegality.
[803 F G] 1:2 Cases like these in which admissions granted to students in educational institutions are quashed raise a sensitive human issue.
It is unquestionably true that the authorities who are charged with the duty of admitting students to educational institutions must act fairly and objectively.
If admissions to these institutions are made on extraneous considerations and the authorities violate the norms set down by the rules and regulations, a sense of resentment and frustration is bound to be generated in the minds of those unfortunate young students who are wrongly or purposefully left out.
On the other hand, students who are wrongly admitted do not suffer the consequences of the manipulations, if any, made on their behalf by interested persons.
[804 B D F] 1:3 Law 's delays work their wonders in such diverse fashions with the result that the courts find it difficult to adjust equities between students who are wrongly admitted and those who are unjustly excluded.
Since by the time the High Courts take up the matter and finally decide the cases, students who are 802 wrongly admitted finish one or two semesters of the course and the courts are regretfully perforced to allow them to continue their studies.
[804 F G] The court observed that "this situation has emboldened the erring authorities or educational institutions of various States to indulge in violating the norms of admission with impunity.
They seem to feel that the courts will leave the admissions in tact, even if the admissions are granted contrary to the rules and regulations, which is a most unsatisfactory state of affairs.
Laws are meant to be obeyed, not flouted.
Some day not distant, if admissions are quashed for the reason that they were made wrongly, it will have to be directed that the names of students who are wrongly admitted should be removed from the rolls of the institution." [804 H, 805 A B] 2:1 The contention that the seats cannot correspondingly be increased since the State Government cannot meet the additional expenditure which will be caused by increasing the number of seats or that the institution will not be able to cope up with the additional influx of students cannot be accepted.
[805 C D] 2:2 Those who infringe the rule must pay for their lapse and the wrong done to the deserving students who ought to have been admitted has to be rectified.
The best solution under the circumstances is to ensure that the strength of seats is increased in proportion to the wrong admissions made.
[805 E F] The court directed that 8 seats should be for the students from the Chandigarh list and the other 8 seats from the General List of students which were prepared for the academic year 1982 83.
[805 G H] 3.
The reservation of the sixteen seats are not open exclusively to the writ petitioners.
The circumstance that they filed writ petitions in the High Court but others similarly aggrieved did not, will not justify the granting of admission to them by ignoring those others who were higher up in the merit list.
[806 A B] [The Court directed the authorities to fill up the additional vacancies "on the basis of open merit"] State of Kerala vs Kumari T.P.Roshana, ; ; Ajay Hasia etc.
vs Khalid Mujib Sehrawardi, ; Arti Sapru vs State of Jammu and Kashmir and Ors., ; , followed.
|
ivil Appeal No. 4437 of 1990.
From the Order dated 30.6.1990 of the Disciplinary Committee of the Bar Council of India in B.C.I. TR Case No. 127 of 1988.
Satish Chandra, V.B. Joshi and Umesh Bhagwat for the Appellant.
Respondent in person (NP) The Judgment of the Court was delivered by G. N. Ray, J.
This Civil Appeal is directed against the order dated June 30, 1990 passed by the disciplinary Committee of the Bar Council of India under Section 36B of the Advocate Act, 1961 in BCL Tr.
Case No. 127 of 1988 arising out of the complaint made before the Bar Council of Maharashtra in D.C. No.22 of 1987.Shri Ramesh Chandra Vit haldas Sheth made a complaint on February 9, 1987 to the D.C. No.21 of Bar Council of Maharastra against the respondent Devendra Bhaishankar Mehta,an Advocate practising in Bombay inter alia alleging professional misconduct against the said advocate.
It was alleged by the respondent complainant,that he carries on business of manufacturing at Jhalod and he owns a proprietary firm named as M/s Ravi Dyechem Manufacturing Industries and M/s Vithaldas Dye Stuff Manufacturing Company.
The complainant was in need of finan cial accommodation and was in search of a reliable financier and Mr. Balu Bhai Modi impressed the complainant that they would give financial accommodation on being satisfied about the documents of security.
It was represented to the com plainant that a firm of Solicitors run by the said Shri Devendra Bhaishankar Mehta would examine the papers for the purpose of financing and the said Shri Devendra Bhai Mehta was also an investor.
The complainant on such representation agreed to get financial loan through the said Balu Bhai Modi.
The complainant alleged that an inspection of factory and other premises at Jhalod was made by Shri Balu Bhai and he was informed that the said properties were in excellent condition and the estimated value was Rs.12 lakhs.
He 692 was also assured that since the properties were valuable and in excellent condition a lower rate of interest would be considered and he was also told that a loan up to Rs.7 lakhs would be advanced to him provided the complainant would be advanced to him provided the complainant would pay a draft or cash at the rate of 5 and 1/2% on the advance of the amount of loan towards legal and other expense.
He was also informed that a meeting of the financiers would be held including Mr. Devendra Bhai Mehta who was one of such finan ciers.
Thereafter a meeting was arranged at the residence of the said Shri Devendra Bhaishankar Mehta and in such meeting Shri Devendra Bhaishankar Mehta falsely represented to the complaint that he was an advocate of the firm of solicitors M/s Dayalji and Deepchand and he worked only for the genuine financiers and he would look to the interests of the loan seekers.
Shri Devendra Bhaishankar Mehta also represented to the complainant that he was himself a member of the internal group of the financiers who would advance the loan and hence he was not only preparing the mortgage deed for the proposed loan but also scrutinising it for his own satisfaction.
He also assured the complainant that once the mortgage deed was drafted by him the complainant would get loan within ten days because thereafter only the formalities were required to be gone into.
The said Shri Mehta induced the complainant to part with money for legal expenses and informed the complainant that out of 5, and 1/2% of the amount of loan required to be paid by the complainant by way of legal expenses, Shri Devendra Bhaishankar Mehta would keep 3 and 1/2% for the stamp duty payable to the Government and he also represented that the disbursement could be expedited only if the complainant would pay cash to Balubhai Modi on April 10, 1986.
Shri Devendra Mehta also promised that he would see that the loan proposal was passed in the internal group of meeting of the financiers of which he himself was one of the financiers and he would ensure that Shri Balu Bhai Modi would sanction the loan as early as possible.
Thereafter Shri devendra Mehta had inspected the documents and returned most of the original documents and assured the complainant that he would get loan in a few days.
On April 10, 1986 the complainant went to the office of Shri Balu B. Modi and handed over to him a sum of Rs.25,000 for the loan of Rs.7 lakhs @ 14%.
Shri Balu B. Modi told the typist to prepare the stamp receipt and also informed the complainant to arrange for the payment of balance of Rs.13,500.
The complainant informed him that he would pay the balance to Shri Devendra Mehta at the time of disbursement of loan.
Shri Balu Bhai Modi told the 693 complainant to pay to Shri Devendra Mehta within a week and he instructed the typist to put the date as April 17, 1986 by which date the complainant would pay the balance sum of Rs.13,500.
The complainant alleged that thereafter he had contacted Shri Devendra Bhaishankar Mehta who represented to the complainant that if the complainant could not pay the balance of Rs.13,500 in a week, how internal group of finan ciers would believe that the complainant would repay the loan of Rs.7 lakhs.
He, therefore, advised the complainant that he should pay a balance of Rs.13,500 and the complain ant accordingly paid the said balance sum.
Shri Devendra Bhaishankar Mehta, thereafter, made all attempts to delay the advancement of loans by unending demands and the com plainant had to forward about 200 documents to Shri Devendra Bhaishankar Mehta, but Shri Mehta ultimately conveyed to the complainant through Shri Balu Bhai Modi that as the clear ance certificate under Section 230 A(i) of the Income Tax Act had not reached the Office of the concerned authorities and as the said advancement of loan was very heavy, he would neither advance his share of finance nor he would agree to the disbursement until a sum of Rs.10,000 would be handed to Shri Devendra Bhaishankar Mehta.
The complainant caused an enquiry and came to know that the Certificate under Section 230 A(i) had reached the office on June 5, 1986.
He, howev er, paid Rs.10,000 in July,1986 to Shri Devendra Bhaishankar Mehta in the presence of Shri Balu Bhai Modi, when Shri Devendra Bhaishankar Mehta told the complainant that he would issue the receipt at the time of the disbursement of the loan and he should be trusted.
The complainant further alleged that despite such payment and other steps taken by the complainant, instead of disbursing the proposed loan, Shri Balu Bhai Modi lodged a false complaint against the complainant in Social Security Branch of Bombay Police on September 5, 1986.
The complainant thereafter made an appli cation to the C.I.D. Branch of Bombay Police on September 8, 1986.
The complainant alleged that because of the friendly relationship by the racketeers including the said Shri Balubhai Modi and Shri Devendra Bhaishankar Mehta with the police, nothing was heard about his complaint but ultimately on the personal intervention by the Commissioner of Police, Bombay, his application was duly registered and Shri Balub hai Modi was chargesheeted in Criminal Case No. 1110/86.
The complainant was advised by the police to make an application to the Bar Council against Shri Devendra Bhai Mehta.
The complainant also alleged in his petition of complaint to the State Bar 694 Council that Shri Devendra Bhai Mehta had indulged in fraudulent activities in respect of other persons and a list of witness was attached to the said latter of complaint.
As the complainant case before the State Bar Council, could not be disposed of within the statutory period , the complaint stood transferred to the Disciplinary Committee of the Bar Council of India and numbered as B.C.I. Tr.
Case No.127/88.
As aforesaid, the judgment dated June 30, 1990 in the B.C.I. Tr.
Case No.127 of 1988 is the subject matter of Civil appeal No. 4437 of 1990.
When the complaint case was pending before the Disci plinary Committee of the State Bar Council of Maharashtra, the said Disciplinary Committee called upon the appellant to file and affidavit.
Pursuant to the direction of the State Bar Council of Maharashtra, the appellant filed an affidavit dated November 26, 1987 indicating therein the particulars of the documents drafted by the appellant at the instance of the said Shri Balubhai Modi for advancing loans to different persons intending to get loan accommodation.
The complain ant respondent also deposed before the Disciplinary Commit tee of the State Bar Council and had applied for issuing summons to the witnesses namely to the deponents of the affidavits affirmed by Shri Munjibhai M. Shah and Shri Devendra Shashikant Dyanmhotre, who had stated in their affidavits that they had also become victim of fraudulent action and cheating by the said Shri Balubhai Modi in conni vance with the appellant Devendra Mehta.
The appellant op posed examination of such persons as witnesses in the pro ceedings inter alia on the ground that the said affidavits had disclosed independent grievances of the deponents and the said deponents had not complained before the Bar Coun cil.
It, however, appears that the State Bar Council of Maharashtra overruled such objections of the appellant.
The appellant in an attempt to stall the proceeding before the State Bar Council moved a Writ Petition under Articles 226 and 227 of the Constitution of India being Writ Petition No. 1897 of 1988 in the High Court of Bombay inter alia chal lenging the legality and validity of the said complaint proceeding before the State Bar Council.
Such Writ Petition, however, was rejected by the Bombay High Court on April 27, 1988 and the matter thereafter proceeded before the State Bar Council and then stood transferred to the Disciplinary Committee of Bar Council of India.
The Disciplinary Commit tee of Bar Council of India examined and recorded evidences of Prafulchandra Shah (CW 2), Munjibhai M. Shah (CW 3), Shashikant D. Dyanmhotre (CW 5), Bhawanji Bharot (CW 6) and Mahesh Ramanlal Shah (CW 4).
It may be noted here 695 that Mahesh R. Shah (CW 4) an advocate had acted for Praful chandra Shah in Criminal Case.
The appellant and complainant had also deposed in the said disciplinary proceeding before the Bar Council of India and their respective statements were also recorded.
The Disciplinary Committee of the Bar Council of India scrutinised and analysed the evidences and materials on record and by giving elaborate reasoning, the Disciplinary Committee inter alia came to the finding that it was established beyond reasonable doubt that there was a racket for defrauding and/or cheating to aspirant loanees and Shri Balubhai Modi and the appellant advocate were parties to such racket.
The Disciplinary Committee had also come to the finding that it was established that the appellant had received Rs. 10,000 from the complainant respondent on July 11, 1986.
The Disciplinary Committee also came to the finding that the appellant in connivance with the complainant defrauded the complainant in receiving large sum of money on the pretext of legal expenses and other incidental costs for advancing the proposed loan to the complainant but such loan was never advanced to the complainant and instead of disbursing the loan.
Shri Balubhai Modi got a false complaint lodged against the complainant in Social Security Branch on September 5, 1986.
The Disciplinary Committee also came to the finding that a case of professional misconduct under Section 35 of the had been established against the appel lant.
On the question of punishment to be imposed on the appellant, the Disciplinary Committee of the Bar Council of India inter alia came to the finding that in the facts and circumstances of the case, the offence of misconduct commit ted by the concerned Advocate was of a very serious nature.
The Advocate had no feeling of regret and remorse.
There was no extraneous circumstances of the basis of which the mem bers of the Committee could persuade themselves to take a lenient and liberal view about the punishment and a lenient view would not be justified in the facts of the case.
The Committee felt that the name of the said Advocate should be removed from roll of the Advocates.
The Disciplinary Commit tee has noted that the Committee has taken into considera tion the guidelines given by the decisions of this court in several namely in Re: P an Advocate ; in M. veerbhadra Rao vs Tek Chand ; for imposing the punishment on the concerned Advocate.
The Disciplinary Committee therefore passed the following order in exercise of power under Section 35(3)(d) read with Section 36 and 36 B under Section 43 of .
696 ORDER: "The name of respondent Advocate Mr. Devendra Bhaishankar Mehta, Advocate on the State Roll of the Bar Council of Maharashtra be removed from its Roll.
He shall pay Rs.2,000 as costs of these proceedings to complainant Mr. Rameshchandra Vithaldas Sheth.
" At the hearing of this appeal, it has been very strongly contended before us by the learned counsel for the appellant that the Disciplinary Committee of the Bar Cous teau of India had proceeded with a closed mind presumably being influenced by the serious nature of complaint made by the complainant respondent without appreciating properly that the appellant had no role in the matter of alleged fraudulent activities and of cheating by Shri Balubhai Modi and/or some other persons.
The appellant had only rendered the professional service as an Advocate in a fair and proper manner.
It has been contended by the learned counsel for the appellant that the appellant is a practising counsel and he was engaged by the said Shri Balubhai Modi for preparing the documents of mortgage, on inspection of the records of the complainant for advancing the proposed loan for Rs. seven lakhs.
The appellant in his professional capacity had to give his advice.
Accordingly, he had looked into the docu ments placed before him by Shri Balubhai Modi and the com plainant and prepared the draft deed for mortgage and he had also advised his client Shri Balubhai Modi for compliance of the conditions mentioned in the draft deed before advance ment of loan so that his client Shri Modi was properly secured.
The learned counsel has also contended that such action on the part of the appellant was only fair and proper and any responsible.
Advocate when engaged by a client was expected to do in the manner in which he had acted.
The learned counsel has further contended that it is not a case of the complainant or anybody that the appellant had given any advertisement for advancing loan to any person and it is also nobody 's case that he on his own had induced persons to seek such loan and/or he had referred the complainant or any other person to Shri Balubhai Modi or to any other person for getting such loan.
It has been contended by the learned counsel that it is the positive case of the complainant respondent that pursuant to the advertisement given by Shri Balubhai MOdi he had approached Shri Balubhai Modi for a loan for running his business and Shri Balubhai Modi had clearly stated to the complainant that such loan could be advanced if 697 on inspection of the properties of the complainant the financiers would decide that such loan could be advanced to the complainant and such loan would be advanced on the basis of advice to be taken from the lawyer of the financiers and on execution of proper mortgage deed, on scrutiny of the relevant papers and documents.
The appellant did not come into the picture at all when the complainant pursuant to the advertisement had contacted Shri Balubhai Modi.
It has also been submitted by the learned counsel that admittedly the complainant was referred to the appellant in his capacity as a legal practitioner engaged by the said Shri Balubhai Modi and/or the financiers.
The learned counsel has contended that only in the capacity of an Advocate engaged by a cli ent, the appellant had drafted the deed of mortgage and he had also clearly indicated to the complainant and also to the said Shri Balubhai Modi when the Conference was held in his place that for advancement of loan, the mortgage deed as drafted by him should be executed and the complainant should fulfil the terms and conditions indicated by the appellant in the draft deed.
Since the complainant failed to satisfy the terms and conditions as drafted by the appellant, he had advised Shri Balubhai Modi that he could not approve the advancement of loan.
The learned counsel has further submit ted that it is an admitted case that thereafter the com plainant got another document prepared by somebody else and the appellant refused to approve such document because the same was not drafted by him and he did not want to take any responsibility in the matter on the basis of a document not drafted by him.
The learned counsel has contended that such action on the part of the appellant clearly indicates that the appellant was a responsible lawyer who wanted to safe guard the interest of his client and despite request he did not agree to approve any document not drafted by him.
It has been submitted by the learned counsel for the appellant that if the appellant had real intention to defraud the complain ant and to be a party to the alleged racket, he would not have dealt in a straightcut manner and would not have washed his hands in the matter of execution of the document of mortgage.
The learned counsel for the appellant has further submitted that the case of payment of any money directly by the complainant to the appellant as sought to be made was not true and should not be accepted.
The appellant had received his professional fees only from his client namely, Shri Balubhai Modi.
He had further submitted that the com plainant respondent falsely stated before the Bar Council that the appellant had extorted Rs.10,000 from him and such payment of Rs.10,000 698 was made by the complainant directly to the appellant.
He has submitted that such case was not made out by the complainant in his complaints before the Police.
The complainant made embellishment to his case by falsely alleg ing that the appellant had asked the complainant to pay a sum of Rs.10,000 on the assurance that on such payment mortgage deed would be executed without any delay so that the complainant would get the loan of Rs. Seven lakhs and the appellant had actually received Rs.10,000 from him.
The learned counsel has contended that such uncorroborated testimony of the complainant about payment of Rs.10,000 by him to the appellant is not at all convincing and should not be accepted more so when such case had not been made out in the beginning and a false case of payment of Rs.10,000 was sought to be introduced at a later state.
The learned coun sel has contended that if the judgment/order under appeal is scrutinised in the proper perspective, it will clearly reveal a closed mind and a biased approach of the members of the Disciplinary Committee.
The Committee unfortunately presumed various facts against the appellant on mere surmise and conjecture for the purpose of coming to the finding that the appellant had been a member of the racket and he had taken part in defrauding and cheating the complainant a large sum of money by assuring him that a loan of Rs. seven lakhs would be advanced to him.
The learned counsel has also contended that the Disciplinary Committee has committed a grave error in law in considering the evidences of four witnesses who were total strangers to the case of alleged fraud and cheating of the complainant.
Such witnesses had no knowledge whatsoever about the alleged deal relating to the case of the complainant and they claimed to be aspirants of getting loans individually in different transactions.
The learned counsel has also submitted that the Disciplinary Committee has committed a grave error in law in considering the evidences of CW 2 Prafulchandra Shah, CW 3 Munjibhai M. Shah, CW 5 Shashikant D dyanmohtre and CW 6 Bhawanji Bharot because the alleged case of complicity of the appellant in being a member of the racket to cheat the said aspiring loanees had not been put to the appellant when he was under cross examination.
The learned counsel had further submitted that the appellant is a practising advocate and he has a status and respect in the Society.
In discharge of his professional duties, he has acted as a responsible member of the legal profession when he was engaged by Shri Balubhai Modi.
It is neither possible nor desirable for an Advocate to cause enquiries about the real intention of the client in the proposed transaction between the client 699 and a third party.
Even if it is accepted that Shri Balubhai Modi gave advertisements to dupe the intending loanees for the purpose of cheating them on false assurance of loans, the Disciplinary Committee should have adverted to the real question in issue as to whether or not the appellant himself made any false representation to the complainant and had taken part in defrauding or cheating the complainant.
The mere fact that he was engaged by a dishonest person cannot be any ground to hold that the appellant himself was guilty of misconduct only because he had acted as an advocate of a party who may be guilty of the offence of fraud or cheating.
The part played by the appellant as an advocate was required to be analysed with an open mind and with reference to the documents and evidences on record but unfortunately the Disciplinary Committee miserably failed and neglected to discharge the responsibilities and the duties and functions entrusted to the Committee.
The Committee has accepted inadmissible evidences and uncorroborated testimony of the complainant, which in the facts and circumstances of the case were required to be discarded.
It has been submitted by the learned counsel for the appellant that it is only unfor tunate that instead of holding that the complainant unjustly tried to implicate the appellant by falsely alleging against him that he was guilty of misconduct, the Disciplinary Committee, on mere suspicion has drawn adverse inferences against the appellant and based its finding which really lay in the realm of surmise and conjecture.
The learned counsel has submitted that this being a statutory appeal, this Court Should intrinsically consider the facts and circumstances of the case and should make proper evaluation of the evidences on record and in doing so should discard the improper and unjust finding made by the Disciplinary Committee.
The learned counsel for the appellant has contended that the Court may have a concern to ensure that the professional morality and standard are maintained by the members of the profession but at the same time the Court should not loose sight of the fact that any finding based on surmise and conjecture against the appellant will not only do a great harm to his avocation in life and professional career but will also cause immense harm in the matter of his standing and repute in the society and to his friends and relatives and such harms cannot be compensated in any manner.
In the facts and circumstances of the case the learned counsel for the appellant has contended, that the complainant has miser ably failed to establish the complaint made to the Discipli nary Committee and the disciplinary proceeding was liable to be dismissed with exemplary cost.
This 700 Court should therefore allow the appeal and dismiss the complaint with cost.
After giving careful consideration to the facts and circumstances of the case and materials on record and arguments advanced at the hearing of the appeal, we, howev er, do not subscribe to the view that the Disciplinary Committee of the Bar Council has proceeded with a closed mind and with a definite bias presumably being influenced by the serious nature of allegation as sought to be contended by the learned counsel for the appellant.
The Judgment and Order under appeal clearly reveal that the Disciplinary Committee has taken pains in scrutinising and analysing the facts of the case as dispassionately as practicable.
It also appears to us that the weaknesses in the case of the com plainant was not lost sight of and has been specifically adverted to by the Disciplinary Committee even when such infirmity was not pointed out by the appellant at the hear ing.
It was contended that Rs.10,000 was not advanced by the complainant and the case of such advancement of Rs.10,000 to the appellant advocate by the complainant himself was false and after thought.
The Disciplinary Committee has not only considered the case of the appellant as argued but has also taken into consideration the other possible argument in favour of the appellant though not argued.
It was on consid eration of all aspects of the matter, the Disciplinary Committee has come to the finding by giving cogent reasons therefor.
To illustrate this aspect, reference may be made to paragraph 18 of the judgment under appeal : "If really A was not merely an advocate, but also a financier, would D utter the words: "I will pay Rs.10,000 fees to A only after the registration of the documents", and even if he so utters these words, would C not feel suspect about the same ? In fairness to A.
We have addressed this question to ourselves though A did not address us on this.
But in the predicament in which C was placed, in the situation in which he was made to drive himself from pillar to post and particularly having gone out of pocket to the tune of Rs 40,000 after com plying with the necessary formalities so far and keen as he was to get the loan of Rs. 7,00,000 as early as possible, it is quite possible that his conduct might not be that of a person who would be one of the accurate calculation and assessment.
" 701 It has been strongly contended by the learned counsel for the appellant before us that the other aspirant loanees who had also approached Shri Balubhai Modi and were referred to Shri Devendra Mehta for taking legal steps to enable the said aspirant loanees to get the proposed loan should not have been examined in the case of Shri Devendra Mehta be cause they were not witnesses to the case of fraud and cheating of the complainant and they had no personal knowl edge of the case and they had also not made any complaint to the Bar Council in respect of their cases.
Such contention, in out view, is devoid of any merit and should be discarded.
The complainant specifically alleged that there was a racket to which the concerned advocate and Shri Balubhai Modi were parties.
The complainant has indicated the modus operandi by which he became victim of the fraudulent activities of the said members of the racket.
To bring home the case of racket the depositions of other persons who had also approached Shri Balubhai Modi for advancement of loan and had been dealt with by Shri Modi and Shri Devendra Mehta in similar manner and though they had to part with substantial amount towards legal and other expenses for getting the proposed loan, such loan had not been ultimately sanctioned to them, became relevant and necessary to be looked into.
As a matter of fact, before the Bombay High court the appellant also challenged the propriety and correctness of the Disciplinary Committee of the State Bar Council to examine other loanees dealt with by Shri Balubhai Modi and Shri Devandra Mehta but the High Court of Bombay did not accept such contention by holding inter alia that, read in proper context, it cannot be said that the allegation of racket was totally absent.
It may be noted here that the Disciplinary Committee was anx ious to independently assess the facts and circumstances of the dispassionate manner without being influenced by any observation of the Bombay High Court in disposing of the Writ Petition of Shri devendra Mehta.
Such anxiety is clear ly demonstrated by the observation of the Disciplinary Com mittee in paragraph 2 (c) of the judgment/order under appeal which may be quoted hereunder: "2(c) The High Court also went through C 's evidence before the State D.C and opined that read in proper context it cannot be said that the allegation of a "a racket" was totally absent therein.
All said and done, when the State D.C. properly exercised its discretion, the High Court thought it improper to entertain the writ petition under article 227 of the Constitution.
702 We must say at this stage that at the time of assessing the whole evidence at the end of full dress inquiry we have taken sufficient care and caution to see that the findings of the State D.C. on the preliminary issue and the High Court 's dismissal in limine of A 's writ petition declining to interfere with the said findings do not weigh with us for the said assessment.
Suffice it to say, we have briefly narrated the details for keeping the record straight.
" It has also been contended by the learned counsel for the appellant that the Disciplinary Committee could not appreciate the facts and circumstances of the case in their proper perspective in view of the fact that the Committee proceeded with a preconceived notion.
It was precisely on account of such a pre conceived view and bias, the Discipli nary Committee failed to appreciate that the appellant had only acted in responsible manner expected of an advocate engaged by a client.
The learned counsel has contended that it was nobody 's case that the appellant had floated a pro posal to advance loan and he had given any advertisement in response to which the complainant had come in contact of Shri balubhai Modi.
It is an admitted case that in response to an advertisement by Shri Balubhai Modi, the complainant had approached Shri Balubhai Modi for loan and only then he was referred to the appellant by Shri Modi because the appellant was engaged by Shri Modi as a counsel.
Although the appellant had always dealt with the complainant only in his capacity as an advocate engaged by Shri Modi, a false complaint was lodged by the complainant that the appellant had assured him and represented him that he himself was a financier and he should pay the amount in question to Shri Balubhai Modi and also to the appellant towards legal ex penses and other expenses so that loan for Rs.7 lakhs would be advanced to him without delay.
Such case, according to the learned counsel, could not be established by any corrob orative evidence but has been accepted by the Disciplinary committee on mere surmise and conjecture.
We are, however, unable to accept the said contention of the learned counsel.
We have carefully considered the materials on record and the reasonings of the Disciplinary Committee in the impugned judgment and we are unable to hold that the findings of the Disciplinary committee are outcome of any closed mind or bias on the part of the committee and/or findings of the Committee really lay in the realm of surmise and conjecture.
We have already indicated the anxiety of the Disciplinary Committee to dispassionately assess the facts of the case 703 without being influenced by any observation of the High Court of Bombay.
The Committee was alive to various aspects of the case and has taken care in meticulously scrutinising and analysing the evidence on record and the materials and the Committee has based its finding by giving cogent reasons and the inferences drawn from the established facts also appear to us quite reasonable.
It may be indicated at this stage that Shri Balubhai Modi had died during the pendency of the proceedings before the Disciplinary Committee of the Bar Council of India and there was no occasion to proceed further with the criminal proceeding initiated against him and/or to examine him in the instant case.
It is always permissible to draw reasonable inference from the facts established in a proceeding and such reasonable inference cannot be termed as finding based on surmises and conjec tures.
There is no doubt that in any proceeding, judicial or quasi judicial.
there is requirement of proof and such requirement cannot be substituted by surmise and conjecture.
But proof may be established directly on the basis of the evidence adduced in the proceeding or the allegation of fact may be established by drawing reasonable inferences from other facts established by evidence.
In the instant case, the committee, in our view, has referred to the admitted facts and also the facts established in evidence and on a proper analysis of the facts so established and/or admitted it has drawn reasonable inference .
The Disciplinary Commit tee deserves commendation in disposing of the complainant 's case fairly and dispassionately.
In the matter of imposition of punishment, the Disciplinary Committee has referred to the relevant decisions of this Court imposed the penalty by recording good reasons for the same.
We are not oblivious of the fact that a member of legal profession should not be permitted to be exposed to the hazards of false and malicious allegation against such member and extreme care and caution is required to be taken in dealing with the case of allegation of unfair and improp er conduct on the part of a member of legal profession.
There is no manner of doubt that the impugned decision of Disciplinary Committee has a very serious implication on the reputation and standing of the appellant in the society and to the members of his family.
friends and relatives.
The im pugned decision has also a serious bearing on the profes sional career of the appellant and avocation of life in future.
But giving out anxious thought and consideration in the matter we have not been able to come to the finding that the impugned order was improper and unjust and the findings 704 are not tenable law and/or the decision has resulted in a failure of justice to the appellant.
During the course of arguments before us, we had pointedly asked the learned counsel for the appellant to show us any material on record that in any other case on the advice tendered by the appel lant any loan was in fact given by Mr. Balu Bhai Modi in order to dispel the inference that the appellant was not a member of the racket and was only discharging his profes sional duty.
The learned counsel for the appellant was unable to show any evidence worth the name to prove the innocence of the appellant.
The evidence of many other applicants seeking loan shows that they were also duped and met the same fate as the complainant ' speaks volumes against the conduct of the appellant.
An advocate indulging in such nefarious activities is not entitled to continue as a member of legal profession which is based on the implicit faith and confi dence in the mind of the client.
From a perusal of the entire evidence placed on record and read before us, leads us to the irresistible conclusion that the appellant was not only having full knowledge about the racket but was also active member in the complicity of such racket and was get ting substantial financial advantage.
The appellant was not a silent spectator merely given his legal advice, but was an important link in the modus operandi of running a racket by Balu Bhai Modi.
It is really unfortunate that a member of a legal profession has indulged in fraudulent activities in a calculated manner for financial gain at the cost of an innocent person.
To say the least, an advocate enrolled under the , having a licence to represent the case of litigants is expected to maintain a high stand ard of morality and un impeachable sense of legal and ethi cal propriety.
It is not the case of a lapse to take appro priate steps by an Advocate and/or a case of negligence in discharging the duties so that any lenient view may be taken against the concerned advocate.
The concerned advocate has not only misused the trust reposed in him but has played an active part in defrauding or cheating the complainant who on the basis of the false representation of the concerned advocate had to part with substantial amount to his serious loss and prejudice.
In such facts and circumstances of the case, we do not find any reason to reduce the punishment imposed on the appellant.
This appeal, therefore, fails and is dismissed with costs.
| The appellants and the private respondents were Sub Engineers in Public Health Engineering Department of the Government.
The minimum period for Sub Engineer to qualify for promotion to the post of Assistant Engineer was 12 years for diploma holders and 8 years for such Sub Engineers who obtained the degree of graduation in the course of service.
By an executive order dated 7.2.1989, quota of direct recruitment was reduced to 50 per cent and the quota by promotion from the Sub Engineers, Draftsman, increased to 50 per cent.
The 50 per cent quota by promotion was sub divided.
The promotion quota for category of the Graduate Sub Engineers completing 8 years of service was 10%.
The principle of counting the seniority was from the date of their continuous officiation irrespective of the date on which such diploma holder Sub Engineer acquired degree of graduation in engineering.
The Departmental Promotion Committee considered the cases of 30 Graduate Sub Engineers for promotion to the post of Assistant Engineers and by order dated 4.12.1989 it prepared a panel of 18 Graduate Sub Engineers found suitable for promotion to the post of Assistant Engineer.
On 6.12.1989 the Government promoted one M.B.Joshi and six others as Assistant Engineer, who are appellants in appeal arising out of Special Leave Petition No.2507 of 1992.
The Private respondents in the appeal, filed and application in the State Administrative Tribunal challenging the orders dated 4.12.1989 and 6.12.1989.
They contended that the seniority for the purpose of promotion to the post of Assistant Engineers in 10 per cent quota of Graduate Sub Engineers completing 8 years of service ought to have been considered from the date of attaining the graduate degree of engineering and not from the date of attaining the graduate degree of engineering and not from the date of appointment as Sub Engineer.
The Tribunal allowed the petition placing reliance on its earlier decision in Sanaulla Sunzani V. State of M.P. & Ors., T.A. No. 771/88.
The Tribunal held that the applicants (private respondents in the appeal) having secured the degrees in engineering prior to respondents 3 to 9 ( the appellants in the appeal) would rank higher in the graduation list of Graduate Sub Engineers.
It directed the State Government and Engineer in Chief, Public Health Engineering Department to convene a special D.P.C. to consider the applicants for promotion to the post of Assistant Engineers as on 4.12.1989 and if found suitable for promotion, promote them and give them seniority over respondents 3 to 9.
Identical questions of law were involved in all the appeals (C.A. Nos. 4255 57 of 1992), which were preferred against the judgments of the Tribunals.
The appellants contended that so far as the post of Sub Engineers was concerned, the minimum qualification prescribed was diploma holder and the seniority was determined on the basis of the date of appointment on the post of Sub Engineer irrespective of the fact that the person joining such post was a degree holder or a diploma holder; that the scale of pay was similar and the diploma holder and degree holder Sub Engineers stood on the same footing and their gradation list was prepared on the basis of length of service in the cadre of Sub Engineers that in the service jurisprudence where the rules were silent, the seniority was always determined on the basis of length of service amongst the employees appointed on a similar post in the same cadre; that obtaining a degree during the continuation of service as Sub Engineer simply accelerated the entitlement to promotion for the post of Assistant Engineer from 12 years to 8 years but it did not in any manner disturb the seniority which was already settled on the basis of length of service on the post of Sub Engineer; and that the D.P.C. rightly prepared the panel of selection and the Government took a correct decision in issuing the order dated 6.12.1989.
2 The respondents contended that it was necessary to obtain the degree of engineering for being qualified for promotion to the post of Assistant Engineer within a period of 8 years instead of 12 years; that the period of 8 years to be counted from the date when the diploma holder Sub Engineer acquired the degree of engineering and not prior to said date.
Allowing the appeals, this Court, HELD: 1.1.
It is a well settle principle of service jurisprudence that in the absence of any specific rule, the seniority amongst persons holding similar posts in the same cadre has to be determined on the basis of the length of service and not on any other fortuitous circumstance.[12 B] 1.2.
The Government itself has been adopting the practice and making promotion as contended by the appellants.
Such practice is upheld by the Court.
[12 A] 1.3.
The Rules do not contemplate any equivalence of any period of service with the qualification of acquiring degree of graduation in engineering.
The Rules clearly provide that the diploma holders having obtained a degree of engineering while continuing in service as Sub Engineer shall be eligible for promotion to the post of Assistant Engineer in 8 years of service and quota of 10 per cent posts has been earmarked for such category of persons.
[11 C D] 1.4.
If the period of 8 years is counted from the date of acquiring degree then this incentive of adding the qualification during the continuation of service and getting the advantage of acceleration in promotion in 8 years would for all practical purposes become nugatory and of no benefit.
[11 G H] 1.5.
The Tribunal was wrong in determining the seniority from the date of acquiring degree of engineering and it ought to have been determined on the basis of length of service on the post of Sub Engineer and the State Government was right in doing so and there was no infirmity in the orders passed by the Government.
[12 D E] N. Suresh Nathan & Anr.
vs Union of India & Ors., [1992] Supp.1 SCC 584, explained.
|
ition (Criminal) No. 584 of 1983.
(Under article 32 of the Constitution of India) R.K. Garg and D.K. Garg for the Petitioner.
Ravindra Bana and A.K. Sanghi for the Respondent.
The following Judgments were delivered, DESAI, J. I have very carefully gone through the opinion prepared by my learned brother Varadarajan, J.
But I regret my inability to agree with the same.
All the relevant facts and the grounds on which the order of detention was made against the petitioner have been succinctly set out by my learned brother and therefore, it is not necessary to recapitulate them here.
However, the only ground examined by my learned brother is that the order of detention is vitiated on account of taking into consideration grounds Nos. 1 and 2 which were stale and not proximate to the time when detention order was made and therefore, they are irrelevant, and would vitiate the order of detention.
Grounds Nos. 1 and 2 relate to the events that occurred on March 20, 1978 and August 9, 1980.
The order of detention is made on May 6, 1983.
In between there are four other incidents involving the detenu dated July 13, 1982, July 26, 1982, September 8, 1982 and January 10, 1983.
The order of detention is grounded on the subjective satisfaction of the Detaining Authority that with a view to preventing the detenu from acting in any manner prejudicial to the security of Satna City, it was necessary to detain the detenu.
When criminal activity of a person leads to such a drastic action as detention without trial, ordinarily a single stray incident may not unless contrary is shown be sufficient to invoke such drastic power of preventive detention.
Ordinarily, drastic power of preventive detention without trial is invoked when the normal administration of criminal justice would fail.
to prevent the person so acting in a manner set out in sub sec.
(2) of Sec. 3 of the National 320 Security Act, 1980.
In order to avoid the charge that a stray incident seized upon to invoke such drastic power of preventive detention, the authority charged with a duty to maintain public order or assure security of the State, may keep a close watch on the activities of the miscreant for some time and repeated indulgence into prejudicial activity may permit an inference that unless preventive detention is resorted to, it would not be possible to wean away such person from such prejudicial activity.
Therefore, when in 1983, an action was proposed to be taken under sub sec.
(2) of Sec. 3, the Detaining Authority examined the history of the criminal activity of the detenu and took into account a continuous course of conduct which may permit an inference that unless interdicted by a detention order, such activity cannot be put to an end the power under sub sec.
(2) of Sec.
3 is exercised.
Obviously, if there is a big time lag between the last of the events leading to the detention order being made and the remote earlier event, the same cannot be treated as showing a continuity of criminal activity.
But if events in close proximity with each other are taken into account for drawing a permissible inference that these are not stray or spasmodic events but disclose a continuous prejudicial activity, the reference to earlier events cannot be styled as stale or remote which would vitiate the order of detention.
In this connection, one may refer to Gora vs State of West Bengal.
This Court after a review of the earlier decisions observed that the test of proximity is not a rigid or mechanical test to be blindly applied by merely counting the number of months between the offending acts and the order of detention.
The question is whether the past activities of the detenu are such that the detaining authority can reasonably came to the conclusion that the detenu is likely to continue in his unlawful activities.
This view was affirmed in Smt.
Rekhaben Virendra Kapadia vs State of Gujarat and Others.
In a recent decision in Firrat Raza Khan vs State of Uttar Pradesh and Ors.
this Court held that when both the incidents are viewed in close proximity, the propensity of the petitioner to resort to prejudicial activity becomes manifest and the Court therefore, rejected the contention that the earlier event was not proximate in point of time and had no rational connection with the conclusion that the detention was necessary for maintenance of public order.
321 Turning to the facts of this case, if each event is examined in close proximity with each other, the events of 1978 and 1980 referred to in grounds Nos. 1 and 2 cannot be rejected as a stray or not proximate to the making of the detention order.
But they provide the genesis of the continuity of the prejudicial activity of the detenu and they appear to have been relied upon for that limited purpose.
I would therefore, find it difficult to quash the detention order on the short ground that incidents set out in grounds Nos. 1 and 2 are stale and would be irrelevant and therefore, the detention order is vitiated.
I would therefore uphold the detention order.
VARADARAJAN, J.
This writ petition under Article 32 of the Constitution is for quashing the Order of detention dated 6.5.1983 passed by the second respondent District Magistrate, Satna as being arbitrary and unreasonable and for the issue of a writ of habeas corpus directing the immediate release of the petitioner Kamlakar Prashed Chaturvedi.
There is also another prayer in the petition, which cannot be granted in these proceedings, and that is to direct the first respondent State of Madhya Pradesh to pay compensation to the petitioner for the wrongful detention.
The second respondent passed the Order of detention dated 6.5.1983 against the petitioner under section 3 (2) of the .
The grounds of detention were served on the petitioner in jail and copy thereof was served on the petitioner 's brother on 6.5.1983.
The following are the grounds: (1) On 20.3.1978 petitioner unauthorisedly entered the Nagar Mahapalika at Satna and beat the Revenue Inspector Ram Biswas Tiwari in the presence of other Government employees as a result of which those employees ran away on account of fear and a first information report has been lodged against the petitioner for offences under Ss. 323 and 353 I.P.C.; (2) On 9.8.1980, petitioner and his associates Vijay Shankar and three others formed themselves into an unlawful assembly and unauthorisedly entered the Badri Hotel situate at Station Road and beat Surender Kumar Srivastava with sticks and rod, as 322 a result of which the customers in the hotel and passers by ran away in panic, and a first information report has been lodged against the petitioner and others for offences under Ss. 307, 147, 149 and 501 I.P.C.; (3) On 13.7.1983, petitioner and his associate Kamlesh entered the Land Development Bank and beat Gaya Prasad Pandey in the presence of the Manager of the Bank and threatened to beat him with shoes at the road crossings in Satna and on account of the terror the staff of the Bank ran away and Gaya Prasad Pandey has not lodged any report; (4) On 26.7.1982, petitioner unauthorisedly entered the office of the Public Works Department and tried to obtain by force approval of a wood contract from the Office Secretary R.P. Sharma and on his refusal to comply with his demand the petitioner took away papers and intended to beat the Office Secretary, and the office staff ran away due to the terror and a first information report has been lodged against the petitioner for offences under Ss. 353 and 448 I.P.C.; (5) On 8.9.1982, petitioner unauthorisedly entered the office of the Land Development Bank at Satna and threatened to beat the Chairman Ram Asray Prasad, M.L.A. and he again threatened to beat that person on 1.10.1982 at the Guest House at Bhopal in the presence of one Gulshar Ahmed; (6) On 1.1.1983, petitioner with his associates entered the Land Development Bank, Satna and threatened the Guard and broke the telephone and beat one Tara Chand Jain at the Dharamshala later, and a first information report was lodged at the Police Station about that incident, and on 15.1.1983 Ram Asray Prasad, M.L.A. has reported to the police at Jahangirabad, Bhopal that at the Tara Chand Jain Guest House the petitioner threatened to break his arm as a result of which Harijans employed in the Land Development Bank were feeling insecure and a 323 first information report has been lodged against him on 6.1.1983; (7) On 25.3.1983 at night, petitioner with his associates threatened Bijju Prasad Misra and Shanti Prasad Misra near Dashrath Singh garage saying that he would kill them if they gave evidence against Anup Singh and Ram Charan and a case has been registered against him on 26.3.1983 under Ss. 107 and 117 I.P.C. and a notice calling upon him to appear in the Court on 2.4.1983 had been served on him and he left the Court without signing the order sheet.
The petitioner 's case is that the detention Order is politically motivated and has been passed at the instance of the Congress (I) M.L.A.Ram Asray Prasad as the petitioner is a social worker who had always raised his voice against goondas who are protected by the Congress (I) Party in Madhya Pradesh and had organised a number of rallies against the unscrupulous and uncivilized behaviour of the Block Development Officers with illiterate and poor farmers of the State.
The second respondent has passed the Order of detention mechanically without applying his mind to the facts and circumstances of the case on the basis of the first information, reports lodged against the petitioner.
The grounds of detention must be precise, pertinent, proximate and relevant.
Vagueness and staleness would vitiate the ground of detention as held in Shiv Prasad Bhatnagar vs State of Madhya Pradesh.
All the seven grounds do not fall within the realm of public order but relate only to law and order.
Grounds 1 to 4 suffer from want of proximity to the order of detention.
Grounds 5 and 6 are vague.
Ground 7 is irrelevant.
The State Government has not considered the petitioner 's representation dated 25.5.1983 expeditiously.
The Order of detention contravenes Article 22 (5) of the Constitution and is consequently liable to be quashed.
The petition is opposed.
The District Magistrate, Satna has contended in his counter affidavit that the petitioner 's detention has been ordered because his recent activities coupled with the past incidents are prejudicial to the maintenance of public order.
The Order of detention was considered necessary to prevent him from 324 repeating the offences because the petitioner has a tendency to go on violating the laws.
The grounds of attack made in the petition have been denied in the counter affidavit and it is stated that the State Government had considered the petitioner 's representation and rejected it on 4.6.1983 and even the Advisory Board has rejected his representation.
In addition to the above grounds of attack on the Order of detention the petitioner has stated in para 13 of the Writ Petition that the Detaining Authority has not "suggested the relevant documents on the basis of which the satisfaction of passing the detention Order has been framed".
Perhaps, what is meant to be conveyed by that allegation of the petitioner is that relevant documents on the basis of which the subjective satisfaction of the Detaining Authority had been reached have not been supplied to the petitioner.
The learned counsel for the petitioner submitted in the course of his arguments before us that the copies of the first information reports referred to in the grounds of detention had not been supplied to the petitioner alongwith grounds of detention.
The said allegation in para 13 of the Writ Petition does not naturally appear to have been understood by the second respondent who has not stated anything about it in his parawise reply in the counter affidavit.
It is not necessary to consider all the other objections raised by the petitioner in his Writ Petition as we propose to dispose of the petition on the ground of want of proximity of grounds 1 and 2, particularly ground 1 to the order of detention dated 6.5.1983.
Those grounds relate to alleged incidents of 20.3.1978 and 9.8.1980 which are more than 5 years and about 2 years respectively prior to the date of the Order of detention.
This Court has taken a strict view of the law of preventive detention which deprives the citizen of his freedom without a trial and full fledged opportunity for him to prove his innocence.
In Shalini Soni vs Union of India to which one of us was a party, it is observed: "Quite obviously, the obligation imposed on the detaining authority, by article 22 (5) of the Constitution, to afford to the detenu the earliest opportunity of making a representation, carries with it the imperative implication 325 that the representation shall be considered at the earliest opportunity.
Since all the constitutional protection that a detenu can claim is the little that is afforded by the procedural safeguards prescribed by article 22 (5) read with article 19, the Courts have a duty to rigidly insist that preventive detention procedures be fair and strictly observed.
A breach of the procedural imperative must lead to the release of the detenu.
The representation dated July 27, 1980 was admittedly not considered and on that ground alone the detenu was entitled to be set at liberty.
In the view that we have taken on the question of the failure of the detaining authority to consider the representation of the detenu it is really unnecessary to consider the second question raised on behalf of detenu in Criminal Writ Petition No. 4344 of 1980.
However, this question has been squarely and directly raised and, indeed, it was the only question raised in the other two Criminal Writ Petitions and we have, therefore, to deal with it." In Mehdi Mohamed Joudi v State of Maharashtra to which one of us was a party the Order of detention was set aside on the ground that the materials and documents were not supplied pari passu the grounds of detention and that there was delay of more than a month in disposing of the representation of the detenu.
In Taramati Chandulal vs State of Maharashtra to which one of us was a party the Order of detention was set aside on the ground that the documents relied upon in the Order of detention were not supplied as part of the grounds alongwith the grounds of detention.
In Shibban Lal Saksena vs The State of Uttar Pradesh it is observed: "The petitioner was arrested on the 5th of January, 1953, under an order, signed by the District Magistrate of Gorakhpur, and the order expressly directed the detention of the petitioner in the custody of the Superintendent, 326 District Jail, Gorakhpur, under sub clauses (ii) and (iii) of clause (a) of section 3(1) of the , as amended by later Acts.
On the 7th of January following, the grounds of detention were communicated to the detenu in accordance with the provisions of section 7 of the and the grounds, it appears, were of a two fold character, falling respectively under the two categories contemplated by sub clause (ii) and sub clause (iii) of section 3(1) (a) of the Act.
In the first paragraph of the communication it is stated that the detenu in course of speeches delivered Ghugli on certain dates exhorted and enjoined upon the cane growers of that area not to supply sugar cane to the sugar mills or even to withhold supplies from them and thereby interfered with the maintenance of supply of sugar cane essential to the community.
The other ground specified in paragraph 2 is to the effect that by using expressions, some of which were quoted under neath the paragraph, the petitioner incited the cane growers and the public to violence against established authority and to defiance of lawful orders and directions issued by Government officers and thereby seriously prejudiced the maintenance of public order. . . "The sufficiency of the grounds upon which such satisfaction purports to be based, provided they have a rational probative value and are not extraneous to the scope of purpose of the legislative provision, cannot be challenged in a court of law except on the ground of mala fides.
A court of law is not even competent to enquire into the truth or otherwise of the facts which are mentioned as grounds of detention in the communication to the detenu under section 7 of the Act.
What was happened, however, in this case is some what peculiar.
The Government itself, in its communication dated the 13th of March, 1953, has plainly admitted that one of grounds upon which the original order of detention was passed is unsubstantial or non existent and cannot be made a ground of detention.
The question is, whether in such circumstances the original order made under section 3(1) (a) of the Act can be allowed to stand, 327 The answer, in our opinion, can only be in the negative.
The detaining authority gave here two grounds for detaining the petitioner.
We can neither decide whether these grounds are good or bad, nor can we attempt to assess in what manner and to what extent each of these grounds operated on the mind of appropriate authority and contributed to the creation of the satisfaction on the basis of which the detention order was made.
To say that the other ground, which still remains is quite sufficient to sustain, the order, would be to substitute an objective judicial test for the subjective decision of the executive authority which is again the legislative policy underlying the statute.
In such cases, we think, the position would be the same as if one of these two grounds was irrelevant for the purpose of the Act or was wholly illusory and this would vitiate the detention order as a whole.
" The first two incidents which are of 1978 and 1980 are mentioned as grounds of detention in the order dated 6.5.1983.
There can be no doubt these grounds especially ground No. 1 relating to an incident of 1978 are too remote and not proximate to the Order of detention.
It is not open to the Detaining Authority to pick up an old and stale incident and hold it as the basis of an Order of detention under section 3(2) of the Act.
Nor it is open to the Detaining Authority to contend that it has been mentioned only to show that the detenu has a tendency to create problems resulting in disturbance to public order, for as a matter of fact it has been mentioned as a ground of detention.
Now there is no provision in the similar to section 5A of the which says that where a person has been detained in pursuance of an Order of detention under sub section 1 of section 3 which has been made on two or more grounds, such Order of detention shall be deemed to have been made separately on each of such grounds and accordingly (a) such Order shall not be deemed to be invalid or inoperative merely because one or some of the grounds is or are vague, non existent, non relevant, not connected or not proximately connected with such persons or invalid for any other reason, and it is not therefore possible to hold that the Government or officer making such order would have been satisfied as provided in sub section 1 of section 3 with reference to the remaining ground or grounds and made the order of detention and (b) the Government or officer making 328 the order of detention shall be deemed to have made the order of detention under the said sub section 1 after being satisfied as provided in that sub section with reference to the remaining ground or grounds.
Therefore in the present case it cannot be postulated what view would have been taken by the Detaining Authority about the need to detain the petitioner under section 3(2) of the Act if he had not taken into account the stale and not proximate grounds 1 and 2 into consideration in arriving at the subjective satisfaction.
We are, therefore, of the opinion that the petitioner 's detention is unsustainable in law.
Accordingly, we quash the order of detention and direct that the petitioner be set at liberty forthwith.
H.S.K. Petition allowed.
| The appellant, with its head office at Kanpur in U.P., runs two woollen mills one of which is in Dhariwal in the State of Punjab.
The raw material purchased by the head office at Kanpur was sent from various centres to the mills and no raw material used in the mills was purchased locally or within the area of the Market Committee.
On demand of market fee by the Committee under section 23 of the Punjab Agricultural Produce Markets Act, 1961 the appellant stated that no purchase or sale of the raw material received by the mills took place within the area of the Market Committee and that for this reason the Committee had no jurisdiction to levy any fee in respect of those materials.
A Writ Petition filed by the appellant in the High Court was dismissed a infructuous since the Market Committee agreed to withdraw the assessment and to make fresh assessment according to the rules.
Some time later, however, the Market Committee once again levied market fee and penalty.
A single Judge of the High Court quashed the demand notice of the Market Committee on the ground that the assessment order was not in accordance with the provisions of the Act and Rules.
But a Division Bench of the High Court allowed the Committee 's Letters Patent Appeal.
On the question whether the Market Committee was competent to levy fees.
Dismissing the appeal, ^ HELD: Clauses (b) and (c) of rule 29 (7) of the Punjab Agricultural Produce Markets (General) Rules, 1962 would be attracted bringing the transaction within the term 'bought or sold ' if in pursuance of the agreement of sale or purchase, even if entered at the head office of the mills at Kanpur, the agricultural produce was weighed in the market area or if in pursuance of the 160 agreement of sale or purchase the agricultural produce was delivered in the said area to the purchaser or to some other person on behalf of the purchaser.
[163 E F] In the instant case both clauses (b) and (c) would be applicable provided the transaction of sale was completed immediately on the delivery of the goods to the mills on weighment within the market area, if the delivery and/or weighment are such that without both or either of them there will no sale at all in law.
[164 A B]
|
Appeals Nos. 272 to 280 of 1962.
Appeals by special leave from the Award dated June 3, 1960, in reference (IT) Nos. 84 and 251 of 1959, June 15, 1960, in References (IT) Nos. 112 and 252 of 1959, June 16, 1960, in References (IT) Nos. 121 of 1959, and 7 of 1960, June 15, 1960, in References (IT) Nos. 123, 180 and 236 of 1959 of the Industrial Tribunal, Maharashtra at Bombay.
S.V. Gupte, Additional Solicitor General N. V. Phadke, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the appellants (in all the appeals).
M.C. Setalvad, K.T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma, for the respondents (in C.A. No. 272/1962).
K.T. Sule, Madan G. Phadnis, Jitendra Sharma and Janardan Sharma, for the respondents (in C. As.
273 280/62).
November 14, 1963.
The Judgment of the Court was delivered by WANCHOO J.
These nine appeals by special leave arise out of the awards of the Industrial Tribunal, Bombay and will be dealt with together.
There were disputes between the four appellants companies and the respondents, their workmen, which were referred for adjudication to the Industrial Tribunal by nine reference orders on various dates between April to December 1959.
The main dispute which gave rise to the references was with respect to wages, dearness allowance and gratuity.
The references included other items also but we are not concerned in the present appeals with those items.
Of the four companies who are the appellants before 364 us, Greaves Cotton and Co., is the first company and its main activity is to invest money in manufacturing concerns.
The second company is Greaves Cotton and Crompton Parkinson Private Limited and its main business is distribution of the products of a manufacturing concern known as Crompton Parkinson (Works) India Limited and service and repair to the said products at its workshop.
The third company is Konyon Greaves Private Limited and its main business is to manufacture high grade interstranded ropes for the textile industry.
The last company is Ruston and Hornsby (India) Private Limited and its main business is to manufacture oil engines and pumps.
The last three companies are controlled by the first company, namely Greaves Cotton and Co., in one way or the other and that is how the main dispute relating to wages and dearness allowance was dealt with together by the tribunal.
There were two references each with respect to the first three companies and three references with respect to Ruston and Hornsby Private Limited; and that is how there are nine appeals before us.
There were nine awards, though the main award dealing with the main dispute relating to wages and dearness allowance was common.
It appears that wages and dearness allowance prevalent in the four companies had been continuing since 1950 when the last award was made between the parties.
It may also be stated that there was no .serious dispute before the Tribunal as to the financial capacity of the companies and further, as the first company controls the other three companies, the wages and dearness allowance are the same so far as the clerical and subordinate staff are concerned.
The same appears to be the case with respect to factory workmen.
The Tribunal dealt with clerical and subordinate staff separately from the factory workmen.
So far as the clerical and subordinate staff are concerned, the Tribunal, after a comparison of wages and dearness allowance prevalent in the four companies with wages 365 and dearness allowance prevalent in comparable concerns revised them.
Further it provided bow the clerical and subordinate staff would be fitted in the new scales after making certain adjustments and in that connection it gave one to three extra increments depending upon length of service between 1950 to 1959.
Finally, it ordered that the award would have effect from April 1, 1959, which was a week before the first reference was made with respect to the first company.
The Tribunal then dealt with the case of the factory workmen and prescribed certain rates of wages.
Further it gave the same dearness allowance to the factory workmen as to the clerical and subordinate staff and directed adjustments also on the same basis.
Finally it considered the question of gratuity and the main provision in that respect was that the maximum gratuity allowable would be upto 20 months and a provision.
was also made to the effect that if an employee was dismissed or discharged for misconduct which caused financial loss to the employer, gratuity to the extent of that loss only will not be paid to the employee concerned.
The main attack of the appellants is on the award as regards wages and dearness allowance.
It is urged that the industry cum region formula, which is the basis for fixation of wages and dearness allowance has not been properly applied by the Tribunal and it had been carried away by the recommendations of the tripartite conference which suggested need based minimum wages.
It is also urged that whatever comparison was made was with concerns which were not comparable and the wages awarded were even higher than those prevalent in any comparable concern.
It is also urged that the Tribunal did not consider the total effect of the increase it was granting in basic wage and dearness allowance together as it should have done, for the purpose of finding out whether the total pay packet in the appellants ' concerns can bear comparison with the total pay packet of the concerns with which the Tribunal had compared the appellants ' concerns.
In this connection it is urged that in flying 366 scales of wages the Tribunal increased the maximum and the minimum and the annual rate of increment and decreased the span of years in which the maximum would be reached.
Adjustments made by the Tribunal are also attacked and so is the order making the award enforceable from April 1, 1959.
As to the factory workmen it is urged that the Tribunal made no attempt to make a comparison with wages prevalent even in what it considered to be comparable concerns.
Lastly it is urged that the Tribunal created a new category of factory workmen called higher unskilled which was not demanded and which in any case did not exist in any comparable concern.
The first question therefore which falls for decision is whether the Tribunal went wrong in not following the industry cum region principle and in leaning on the recommendations of the Tripartite Conference.
It is true that the Tribunal begins its award with a reference to the recommendations of the Tripartite Conference wherein the need based minimum wage was evolved.
It is urged that this disposed the Tribunal to pitch wage scales too high.
It is however clear from the award that though the Tribunal discussed the recommendations of the Tripartite Conference at some length, when it actually came to make the award it did not follow those recommendations.
The reason why it referred to those recommendations was that the respondents workmen based their claim on them and wanted that the Tribunal should fix wagescales accordingly.
But the Tribunal 's conclusion was that it was not feasible to do so, though looking at the financial stability of the appellants, emoluments needed upgrading.
It then went on to consider the wages prevalent in comparable concerns and finally fixed wages for the appellants on the basis of wages prevalent in such concerns.
Though therefore the recommendations of the Tripartite Conference are referred to in the Tribunal 's award, its final decision is not based on them and what the Tribunal has done is to make comparisons with what it considered comparable concerns so far as clerical and subordi 367 nate staff are concerned.
We are therefore not prepared to say that reference to the recommendations of the Tripartite Conference in the opening part of the award was irrelevant and therefore the rest of the award must be held to be vitiated on that ground alone.
The main contention of the appellants however is that the tribunal has gone wrong in applying the industry cum region formula which is the basis for fixing wages and dearness and has made comparison with concerns which are not comparable.
It is also urged that the Tribunal has relied more on the region aspect of the industry cum region formula and not on the industry aspect when dealing with clerical and subordinate staff and in this it went wrong.
Reference in this connection is made to two decisions of this Court, namely, Workmen of Hindusthan Motors vs Hindusthan Motors( ',) and French Motor Car Company vs Their Workman (2 ) and it is emphasis that the principles laid down in Hindusthan Motors ' case(") were more applicable to the present case than the principles laid down in the French Motor Car Co. 's case(2).
In the Hindusthan Motors case(1), this Court observed that it was ordinarily desirable to have as much uniformity as possible in the wage scales of different concerns of the same industry working in the same region, as this puts similar industries more or less on an equal footing in their production struggle.
This Court therefore applied the wage scales awarded by the Third Major Engineering Tribunal in Bengal in the case of Hindusthan Motors also.
It is urged that the Tribunal should have taken into account comparable concerns in the same industry and provided wage scales on the same lines so that, so far as manufacturing concerns in the present appeals are concerned, there will be equality in the matter of competition.
In the French Motor Car Co. 's case(2) however this Court held so far as clerical staff and subordinate staff are concerned that it may be possible to take into account (1) (2) [1963] Supp. 368 even those concerns which are engaged in different lines of business for the work of clerical and subordinate staff is more or less the same in all kinds of concerns.
We are of opinion that there is no inconsistency as urged in the principles laid down in these two cases.
As we have already said the basis of fixation of wages and dearness allowance is industry cum region.
Where there are a large number of industrial concerns of the same kind in the same region it would be proper to put greater emphasis on the industry part of the industry cum region principle as that would put all concerns on a more or less equal footing in the matter of production costs and therefore in the matter of competition in the market and this will equally apply to clerical and subordinate staff whose wages and dearness allowance also go into calculation of production costs.
But where the number of comparable concerns is small in a particular region and therefore the competition aspect is not of the same importance, the region part of the industry cum region formula assumes greater importance particularly with reference to clerical and subordinate staff and this was what was emphasised in the French Motor Car Co. 's case() where that company was already paying the highest wages in the particular line of business and therefore comparison had to be made with as similar concerns as possible in different lines of business for the purpose of fixing wage scales and dearness allowance.
The principle therefore which emerges from these two decisions is that in applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind.
But where the number of industries of the same kind in a particular region is small it is the region part of the industry cum region formula which (1) [1963] Supp. 369 assumes importance particularly in the case of clerical and subordinate staff, for, as pointed out in the French Motor Car Co. 's case,(" there is not much difference in the work of this class of employees in different industries.
In the present cases it does appear that the Tribunal has leaned more on the region part of the industry cum region formula and less on the industry part.
But we think that it cannot be said that the Tribunal was wrong in doing so for two reasons.
In the first place these four companies are not engaged in the same line of industry; but on account of certain circumstances, namely, that Greaves Cotton and Co. is the controlling company of the other three, it has been usual to keep the same scales for clerical and subordinate staff in all these concerns.
In the second place, it is not clear, as was clear in the Hindusthan Motors case(" that there are a large number of comparable concerns in the same region.
As a matter of fact the main company out of these four is Greaves Cotton and Co. Limited, which is in the main an investment and financial company and the Tribunal was therefore right in taking for comparison such companies as would stand comparison with the main company in the present appeals (namely, Greaves Cotton & Co).
Both parties filed scales of wages prevalent in what they considered to be comparable concerns and it is clear from the documents filed that some of the comparable concerns were the same in the documents filed by the two parties.
On the whole therefore we do not think the Tribunal was wrong in putting emphasis on the region aspect of the industry cum region formula in the present case insofar as clerical and subordinate staff was concerned.
, for the four companies before us do not belong to the same industry and Greaves Cotton and Co. controls the other three.
Considering therefore the standing of the main company (namely, Greaves Cotton and Co. Ltd.), it was not improper for the Tribunal in the present cases to rely on the comparable concerns (1) [1963] Supp. 1/SCI/64 24 (2) 370 which were cited on behalf of the respondents, some of which were common with the comparable concerns cited on behalf of the appellants.
What the Tribunal lid thereafter was to consider the minimum for various categories of clerical and subordinate staff prevalent in these comparable concerns and the maximum prevalent therein at id also the annual increments and the span of years in which.
the maximum would be reached.
The Tribunal then went on to fix scales for various categories of clerical and subordinate staff of the appellants which were in between the scales found in various concerns.
Further, as the financial capacity of the appellants was not disputed, the Tribunal pitched these scales nearer the highest scales taking into account the fact that for nine years after 1950 there had been no increase in wage scales.
We do not think therefore that the wage sales fixed by the Tribunal, learning as it did, on the region aspect of the industry cum region formula, for the clerical and subordinate staff can be successfully assailed by the appellants.
It has however been urged that the Tribunal overlooked considering what would be the total wage packet including basic wages and dearness allowance and that has made the total wages (i.e. basic wage and dearness allowance) fixed by the Tribunal much higher in the case of the appellants than in comparable concerns which it took into account.
It is true that the Tribunal has not specifically considered what the total wage packet would be on the basis of the scales of wages and dearness allowance fixed by it as it should have done; but considering that wage scales fixed are less than the highest in the comparable concerns though more than the lowest, it cannot be said that the total wage packet in the case of the appellants would 'be necessarily higher than in the case of the other comparable concerns.
This will be clear when we deal with the dearness allowance which has been fixed by the Tribunal, for it will appear that the dearness allowance fixed is more or less on the same lines, i.e. less than 371 the highest but more than the lowest in other comparable concerns.
On this basis it cannot be said that the total wage packet fixed in these concerns would be the highest in the region.
Though therefore the Tribunal has not specifically considered this aspect of the matter which it should have done its decision cannot be successfully assailed on the ground that the total wage packet fixed is the highest in the region.
This brings us to the case of factory workmen.
We are of opinion that there is force in the contention of the appellants insofar as the fixation of wagescales for factory workmen is concerned.
The respondents wanted that separate wages should be fixed for each category of workmen.
The Tribunal however rejected this contention and held that the usual pattern of ' having unskilled, semi skilled and skilled grades should be followed and the various workmen, though they should be known by their designation and not by the class in which they were being placed, should be fitted in these categories.
In the present concerns, there were six categories from before, namely (i) unskilled, (ii) semiskilled 1, (iii) semiskilled If, (iv) skilled 1, (V) skilled 11, and (vi) skilled 111.
The Tribunal kept these categories though it introduced a seventh category called the higher unskilled.
It is not seriously disputed that this category of higher unskilled does not exist in comparable concerns; nor have we been able to understand how the unskilled category can be sub divided into two namely, lower and higher unskilled, though we can understand the semi skilled and skilled categories being sub divided, depending upon the amount of ' skill.
But there cannot be degrees of want of skill among the unskilled class.
The Tribunal therefore was not justified in creating the class of higher unskilled.
It is neither necessary nor desirable to create a higher unskilled category and only the six categories which were prevalent from before should continue.
The main attack of the appellants on the wages fixed for these six categories is that in doing so, the 372 Tribunal completely overlooked the wages prevalent for these categories in concerns which it had considered comparable.
A look at the award shows that it is so.
The Tribunal has no where considered what the wages for these categories in comparable concerns are, though it appears that some exemplars were filed before it; but the way in which the Tribunal has dealt with the matter shows that it paid scant regard to the exemplars filed before it and did not care to make the comparison for factory workmen in the same way in which it had made comparison for clerical and subordinate staff.
In these circumstances, wage scales fixed for factory workmen must be set aside and the matter remanded to the Tribunal to fix wage scales for factory workmen dividing them into six categories as at present and then fixing wage after taking into account wages prevalent in comparable concerns.
The parties will be at liberty to lead further evidence in this connection.
Then we come to the question of dearness allowance.
So far as clerical staff is concerned, dearness allowance prevalent in the appellants ' concerns was as follows on the cost of living index of 411 420: Basic salary D.A at cost of Verification for in Rs. living index every 10 point group 411 420 movement 1 to 100 115% of basic salary 5% or the textile scale on 30 day month which ever is higher 101 to 200 35% 1 1/2% 201 to 300 25% 1% 301 and above 17 1/2% 3/4% 373 The Tribunal fixed the dearness allowance as follows: When the consu Variation for Salary slab mer price index each 10 point rise is between 411.
or fall in the 420 index On 1st Rs. 100 115% 5% On 2nd Rs. 100 50% 2.% On 3rd Rs. 100 25% 1%.
Balance upto 20% 1.% Rs. 600 A comparison of these figures will show that on the first hundred and the third hundred there is no difference in the scale fixed by the Tribunal; but there is a slight improvement on the second hundred and a very slight one above three hundred.
This scale fixed by the Tribunal is in line with some scales of dearness allowance recently fixed by Tribunals in that region.
The main improvement is on the second hundred and it cannot really be said that employees in that wage range do not require the higher relief granted to them by tribunals in view of the rise in prices.
We do not think therefore that the dearness allowance fixed by the Tribunal, taking into account what was already prevalent in these concerns and also taking into account the trend in that region, can be successfully assailed so far as clerical staff ' is concerned.
This brings us to the case of subordinate staff.
It appears that in these concerns, subordinate staff was getting dearness allowance on different scales based on the old textile scale of dearness allowance.
The Tribunal has put the subordinate staff in the same scale of dearness allowance as clerical staff.
The reason given by it for doing so is that incongruity in the payment of dearness allowance between clerical and subordinate staff should be removed.
It appears that on account of different scales of 374 dearness allowance for subordinate and clerical staff a member of 'the subordinate staff drawing the same wages would get less dearness allowance than a member of the clerical staff.
The discrepancy is very glaring as between clerical staff and factory workmen who also have different scales of dearness allowance.
The Tribunal therefore thought that dearness allowance which is meant to neutralise the rise in cost of living, should be paid to clerical staff, subordinate staff as well as factory workmen on the same scale, for the need for neutralisation was uniformly felt by all kinds of employees.
It also pointed that there was a trend towards uniformity in the matter of scales of dearness allowance as between clerical staff and other staff and factory workmen and referred to a number of firms where same scales prevailed for all the staff.
It has however been urged on behalf of the appellants that the pattern in the region is that there are different scales of dearness allowance for clerical staff and other staff including factory workmen and the Tribunal therefore should have followed this pattern.
The reasons given by the Tribunal for giving the same scales of dearness allowance to all the categories of staff, including the factory workmen appear to us to be sound.
Time has now come when employees getting same wages should get the same dearness allowance irrespective of whether they are working as clerks, or members of subordinate staff or factory workmen.
The pressure of high prices is the same on these various kinds of employees.
Further subordinate staff and factory workmen these days are as keen to educate their children as clerical staff and in the circumstances there should be no difference in the amount of dearness allowance between employees of different kinds getting same wages.
Further an employee whether he is of one kind or another getting the same wage hopes for the same amenities of the and there is no reason why he should not get them, simply because he is, for example, a factory workman, though he may be coming from the same class of people as a member of clerical staff.
On the whole therefore the Tribunal was in 375 our opinion right in following the trend that has begun in this region and in fixing the same scale of dearness allowance for subordinate staff and factory workmen as in the case of clerical staff.
So far therefore as subordinate and clerical staff are concerned, we see no reason to disagree with the rate of dearness allowance fixed by the Tribunal.
This brings us to the case of the dearness allowance for factory workmen.
In their case we have set aside the award relating to wage scales.
It follows that we must also set aside the award relating to dearness allowance as we have already indicated that the Tribunal has to take into consideration the total pay packet in fixing wages and dearness allowance.
When therefore the case goes back to the Tribunal for fixing wages and dearness allowance for factory workmen, it will be open to the Tribunal to fix the same rates of dearness allowance for factory workmen as for clerical staff; but in doing so the Tribunal must when making comparisons take into account the total wage packet (i.e. basic wages fixed by it as well as dearness allowance) and then compare it with the total wage packet of comparable concerns and thus arrive at a just figure for basic wage, for each category of factory workmen.
But the entire matter is left to the Tribunal and it may follow such method as it thinks best so long as it arrives at a fair conclusion after making the necessary comparison.
This brings us to the question of adjustment.
We have already said that the Tribunal allowed one to three increments depending upon the length of service between 1950 and 1959.
It has been urged that no adjustment should have been allowed taking into account the fact that incremental scales were in force previously also in these concerns and the Tribunal has increased both the minimum and the maximum in its award and has granted generous annual increments reducing the total span within which a particular employee belonging to clerical and subordinate staff will reach the maximum.
Reliance in this connection has been placed on the 376 French Motor Car Co. 's case (".
It is true that the Tribunal has given larger increments thus reducing the span of years for reaching the maximum.
That alone however is no reason for not granting adjustment.
But it is said that in the French Motor Co. case( ' ', this Court held that where scales of pay were existing from before no adjustment should be granted by giving extra increments and that case applies with full force to the facts of the present case.
Now in that case this Court pointed out on a review of a large number of awards dealing with adjustments that "generally adjustments are granted when scales of wages are fixed for the first time.
But there is nothing in law to prevent the industrial tribunal from granting adjustments to the employees in the revised wage scales even in a case where previously pay scales were in existence; but this has to be done sparingly taking into consideration the facts and circumstances of each case.
The usual reason for granting adjustment even where wage scales were formerly in existence is that the increments provided in the former wage scales were particularly low and therefore justice required that adjustment should be granted a second time." Another reason for the same was that the scales of pay were also low.
In those circumstances adjustments have been granted by tribunals a second time.
This Court then pointed out in that case that the incremental scales prevalent in that company were the highest for that kind of industry and therefore struck down the adjustments granted and ordered that clerical staff should be fixed on the next higher step in the new scales if there was no step corresponding to the salary drawn by a clerk in the new scale.
The question therefore whether adjustment should be granted or not is always a question depending upon the facts and circumstances of each case.
Let us therefore see what the circumstances in the present cases are.
Tables of comparative rates of increments were filed before the Tribunal (1) [1963] Supp. 377 for various grades of clerks.
It is clear from the examination of these tables and pay scales prevalent in the appellants ' concerns from 1950 that pay scales were not high as compared to pay scales in comparable concerns.
If anything, they were on the low side.
Further, as an example, in the case of junior clerks, the first rate of increment was Rs. 5 in the appellants ' concerns and this rate went on for 13 years; in other concerns where the first rate of increment was Rs. 5 it lasted for a much shorter period, which in no case exceeded eight years and was in many cases three or four years.
In some concerns the first rate of increment was higher than Rs. 5.
Almost similar was the case with senior clerks.
So it appears that in the appellants ' concerns the first rate of increment was generally on the low side and lasted for a longer period than in the case of comparable concerns.
In these circumstances if the Tribunal decided to give increments by way of adjustments it cannot be said that the Tribunal went wrong.
The facts 'in these cases are different from the facts in the case of the French Motor Car Co. 's case(2) and therefore (1) we see no reason for interfering with the order of adjustment.
After the change in wage scales, dear ness allowance and adjustment, the employees of the appellants ' concerns will stand comparison with some of the best concerns in that region.
But considering that there is no question of want of financial capacity and that Greaves Cotton & Co. which is the main company concerned in these appeals, has a high standing in that region, we do not think that the total wage packet fixed is abnormal or so disproportionate as compared to the total wage packet in other comparable concerns as to call for any interference with adjustments.
The next question is about the so called retrospective effect of the award.
The first reference was made to the Tribunal on April 8, 1959, while the last was in December 1959.
What the Tribunal has done is to grant wage scales etc., from April 1, 1959.
This cannot in our opinion be said to be really (1)[1963] Supp.
378 retrospective, because it is practically from the date of the first reference in the case of the main company.
On the whole therefore we see no reason to interfere with the order of the Tribunal fixing the date from which the award would come into force.
Lastly we come to the question of gratuity.
The attack in this connection is on two aspects of the gratuity scheme.
The first is about the fixation of 20 months as the maximum instead of ' 15 months, which was usual so far, The second is with respect to deduction from gratuity only to the extent of the financial loss occasioned by misconduct in case of dismissal for misconduct.
So far as the second provision is concerned it cannot be disputed that this is the usual provision that is being made in that region.
So ear as the increase in the maximum from 15 months to 20 months is concerned, it appears that the Tribunal has relied on a number of cases in which the maximum is higher than fifteen months wages.
In these circumstances considering that tri bunals have now begun to, give a higher ceiling and in one concern, namely Mackinnon Mackenzie, the ceiling has been fixed even so high as thirty moths by agreement, we do not think that any interference is called for in the present case.
We therefore dismiss the appeals so far as retrospective effect and adjustments as also fixation of wages and dearness allowance with respect to clerical and subordinate staff are concerned.
We allow the appeal with respect to factory workmen and send the cases back to the Tribunal for fixing the wage structure including basic wage and dearness allowance and for granting adjustments in the light of the observations made by us.
The new award pursuant to this remand will also come into force from the same date, namely, April 1, 1959.
The appeals with respect to gratuity are dismissed.
In the circumstances we order parties to bear their own costs.
Two months from today is allowed to pay up the arrears.
Appeal partly allowed and remanded.
| On the enactment of the , providing for the nationalisation of life insurance business.
the 126 controlled business i.e., the life insurance business of the appellant, a composite insurer, vested in the respondent corporation.
Thereafter disputes arose between the appellant and the respondent in the matter of ascertainment of the compensation payable to the appellant and in respect of incidental and consequential matters thereto.
The respondent offered to pay the appellant towards compensation a certain amount after setting off the amount due to it from the appellant in respect of part of the paid up capital of the controlled business and assets representing that part.
The appellant refused to accept this offer in toto.
The dispute was referred to the Tribunal.
The Tribunal ascertained the compensation payable to the appellant and set off against that amount the balance of the amount due from the appellant towards the allocable paid up capital.
Relying upon the books of account of the appellant to find out whether the unpaid dividends of any share holder of the appellant was the liability of one department or the other, the Tribunal held that the entire liability for the unclaimed dividends and assets appertained to the controlled business, and therefore, statutorily vested in the respondent.
The Tribunal held that it had no jurisdiction to award interest on the amount of compensation.
On appeal by special leave, it was contended (i)that the Tribunal had no jurisdiction to decide on the question of the capital allocable to the controlled business as there was no dispute thereto between the parties and the said question was not referred to it; (ii) the liability of the appellant for the unclaimed dividends and assets equivalent to the liability were not transferred to and vested in the respondent under section 7(1) of the Act, and (iii) that the appellant would be entitled to interest on the amount of compensation payable to it and the Tribunal had jurisdiction to award the same.
Held: The dispute between the parties related not only to compensation, but to the set off also, that the dispute was referred to the Tribunal, and the Tribunal had jurisdiction to decide that dispute.
A combined reading of cls.
(iv) and (vi) of r. 12A of the Rules under the Act makes it abundantly clear that a claim for set off is certainly covered by the wide phraseology of cl.
(iv) of r. 12A.
The calculations under r. 18(1) show that there is an integral connection between the compensation payable to the insurer and the amount representing the capital allocable to the controlled business transferred to the respondent.
As these figures cannot be dissociated, the respondent made a composite offer.
The Act contemplates the setting off one against the other.
National Insurance Co. v Life Insurance Corporation of India ; , followed.
(ii) The definition of assets and liability of a controlled business in sub section
(2) of section 7 of the Act is certainly comprehensive enough to take in unclaimed dividends and corresponding assets.
Sub sections (1) and (2) of section 7 of the Act provides that the assists and liabilities to be transferred must belong to the controlled 127 business of the insurer.
The antithesis is not between the company and its business but between the controlled business and other business of the insurer.
All the rights and liabilities pertaining to the controlled business are transferred to the Corporation.
(iii) When a company declared a dividend on its shares, a debt immediately becomes payable to each shareholder in respect of his share of the dividend 'for which he can sue at law and the declaration does not make the company a trustee of the dividend for the shareholder.
In re Seven and Wye Severn Bridge Railway Co. , applied.
(iv) The provisions of the do not, expressly or by necessary implication, exclude the jurisdiction of the Courts and Tribunals from going into the correctness of the balance sheet certified by the Controller.
For the purpose of the it would be accepted as correct.
There is no provision in the making the contents of the balance sheet final for the purpose of transfer to and vesting in the Corporation the assets and liabilities of the insurer.
It certainly affords valuable evidence in an enquiry before the Tribunal; but the contents of the balance sheet can be proved to be wrong.
(v) The circumstances of the ease do not justify this Court exercise of the extraordinary jurisdiction under article 136 of the Constitution to permit the appellant to raise the plea of apportionment of the unclaimed dividends for the first time here and to remand the matter to the Tribunal for apportionment of the dividends and the corresponding assets.
(vi) In view of the decision of this Court in the National Insurance Co. Ltd. vs Life Insurance Corporation of India, the appellant will be entitled to interest at the rate of 4% on the amount of compensation.
National Insurance Co. Ltd. vs Life Insurance Corporation of India ; , followed.
|
(Civil) No. 7698 of 1982.
(Under Article 32 of the Constitution of India).
M.S. Ganesh, (Amicus Curiae) for the Petitioner.
K. Parasaran, Attorney General, Altar Ahmed, Adv.
, S.K. Bhattacharya, Ms. A. Subhashini and H.C. Paonam for the Respondents.
371 The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The petitioner is the Chairman of the Action Committee of West Pakistani Refugees.
He migrated from West Pakistan to the State of Jammu & Kashmir in India in 1947 in the wake of the partition of the country.
He claims to speak on behalf of the refugees from West Pakistan who migrated and settled in the State of Jammu & Kashmir.
He contends that notwithstanding the fact that it is almost four decades since they migrated and settled down in the State of Jammu & Kashmir, they are denied many basic rights which other Indian citizens have in other parts of the country, such as, the right to acquire any immovable proper ty in the State, the right to employment under the State, the right to start an industry, the right to purchase trans port vehicles, the right to higher technical education, the right to be elected to the State Assembly or a local body, etc.
He complains that while refugees from West Pakistan who migrated into the State of Jammu & Kashmir in 1947 and have settled down in the State are denied these rights, recently the Jammu & Kashmir Legislature has enacted the Resettlement Act, 1982 by which all these rights are given to erstwhile residents of Jammu & Kashmir who had voluntarily migrated to West Pakistan at the time of the partition of the country in 1947 and their children, who may now choose to return to Jammu & Kashmir.
The present writ petition was initially filed challenging the vires of the Resettlement Act, 1982.
The vires of the Act is already awaiting the decision of this court in special reference No. 1 of 1982.
The petition er, therefore, gave up the challenge to the vires of the Act in this petition leaving the question to be decided in special reference No. 1 of 1982.
For the purposes of this petition, he now proceeds on the basis that the Act is valid but claims that he and other persons situated like him should at least be given the same rights as are given to those who voluntarily migrated to est Pakistan at the time of the partition in 1947.
It is true that the persons in the position of the petitioner who migrated from West Pakistan to the State of Jammu & Kashmir in the wake of the 1947 partition and have settled down in the State in Jammu & Kashmir and who are citizens of India and who also have the right to participate in elections to Parliament, have very anomalous rights within the State.
For example, they are not entitled to be included in the electoral roll of the State Assembly, they are not entitled to be elected to a village panchayat, they are not entitled to purchase any land and they are also not entitled to be appointed to any service under the State Government.
All these denials and deprivations are 372 the consequence of the definition of a 'permanent resident ' under sec.6 of the Jammu & Kashmir Constitution.
6 is as follows: "Permanent residents (1) Every person who is, or is deemed to be, a citizen of India under the provisions of the Constitution of India shall be a permanent resident of the State, if on the fourteenth day of May, 1954 (a) he was a State Subject of Class I or of Class II; or (b) having lawfully acquired immovable proper ty in the State, he has been ordinarily resi dent in the State for not less than ten years prior to that date.
(2) Any person who, before the fourteenth day of May, 1954, was a State Subject of Class I or of Class II and who having migrated after the first day of March, 1947, to the territory now included in Pakistan, returns to the State under a permit for resettlement in the State or for permanent return issued by or under the authority of any law made by the State Legis lature shall on such return be a permanent resident of the State.
(3) In this section, the expression "State Subject of Class I or of Class II" shall have the same meaning as in (State Notification No. 1 L/84 dated the twentieth April, 1927, read with State Notification No. 13/L dated the twentyseventh June, 1932.)" The 1927 Notification defining State Subject is as follows: "The term State Subject means and includes Class I.
All persons born and residing within the State before the commencement of the reign of His Highness the late Maharaja Ghulab Singh Sahib Bahadur, and also persons who settled therein before the commencement of Samvat year 1942, and have since been permanently residing therein.
Class II.
All persons other than those be longing to Class I who settled within the State before the close of Samvat year 1968, and have since permanently resided and ac quired immovable property therein.
373 Class III All persons, other than those belonging to Classes I and II permanently residing within the State, who have acquired under a rayatnama any immovable property therein or who may hereafter acquire such property under an ijazatnama and may execute a rayatnama after ten years continuous residence therein.
Class IV.
Companies which have been regis tered as such within the State and which, being companies in which the Government are financially interested or as to the economic benefit to the State or to the financial stability of which the Government are satis fied, have by a special order of His Highness been declared to be State Subjects.
Note 1 In matters of grants of the State scholarships, State lands for agricultural and house building purposes and recruitment to State service, State Subjects of Class I should receive preference over other classes and those of Class II, over Class III, sub ject, however, to the Order dated 31st Janu ary, 1927 of His Highness the Maharaja Bahadur regarding employment of hereditary State subjects in Government service.
Note II.
The descendants of the persons who have secured the status of any class of the State Subjects will be entitled to become the State Subjects of the same class.
For example, if A is declared a State Subject of Class II his sons and grandsons will ipso facto acquire the status of the same class (II) and not of Class I. Note III.
The wife or a widow of a State Subject of any class shall acquire the status of her husband as State Subject of the same class as her husband, so long as she resides in the State and does not leave the State for permanent residence outside the State.
Note IV.
For the purposes of the interpreta tion of the term 'State Subject ' either with reference to any law for the time being in force or otherwise, the definition given in this Notification as amended up to date shall be read as if such amended definition existed in this Notification as originally issued.
" 374 There is no dispute that the petitioner and others like him are not 'permanent residents ' of Jammu & Kashmir within the meaning of sec.6 of the Jammu & Kashmir Constitution.
It is because they are not permanent residents as defined by sec.6 of the Jammu & Kashmir Constitution, they do not have the rights and privileges mentioned earlier.
12(b) of the Jammu & Kashmir Representation of the People Act pro vides that a person shall be disqualified for registration in an electoral roll if he is not a permanent resident of the State as defined in Part III of the Constitution, sec.8(a) of the Villages Panchayat Act provides that a person shall be disqualified for being chosen as or for being a member of a Panchayat if he is not permanent resi dent of the State, sec.4 of the Land Alienation Act, 1995 BK.
provides that transfer of land in favour of any person who is not a State subject is prohibited and rule 17(a) of the Jammu & Kashmir Civil Services, Classification of Con trol and Appeal Rules provides that no person shall be eligible for appointment to any service by direct recruit ment unless he is a hereditary State subject to be known hereafter as a permanent resident.
It is to be noticed here that these provisions are not open to challenge as incon sistent with the rights guaranteed by Part III of the Con stitution of India because of "the Constitution (Application to Jammu & Kashmir) Order, 1954" issued by the President of India under article 370(1)(d) of the Constitution by which article 35(A) was added to the Constitution in relation to the State of Jammu & Kashmir.
This Article states: "35 A.
Notwithstanding anything contained in this Constitution, no existing law in force in the State of Jammu & Kashmir, and no law hereafter enacted by the Legislature of the State, (a) defining the classes.
of persons who are or shall be, permanent residents of the State of Jammu & Kashmir; or (b) conferring on such permanent residences any special rights and privileges or imposing upon other persons any restrictions as re spects: (i) employment under the State Government; (ii) acquisition of immovable property in the State; (iii) settlement in the State; or 375 (iv) right to scholarships and such other forms of aid as the State Government may provide, shall be void on the ground that it is incon sistent with or takes away or abridges any rights conferred on the other citizens of India by any provisions of this part.
" The net result is that persons in the position of the peti tioner, though citizens of India and entitled to the various Fundamental Rights guaranteed by the Constitution, are not in a position to enjoy many of those rights within the State of Jammu & Kashmir though they are domiciled in that State for nearly 40 years.
On the other hand, those who had migrated to West Pakistan in 1947 and who may choose to return to the State of Jammu & Kashmir now, appear to stand in a better position.
But that is apparently because of the special position secured to them in the Jammu & Kashmir Constitution itself.
Sec.6(2) of the Jammu & Kashmir Constitution which has already been extracted by us, expressly provides that such persons if they were previously State Subjects of Class I and Class II shall be permanent residents of the State on their return to the State of Jammu & Kashmir from West Pakistan under a permit for resettlement in the State or for permanent return issued by or under the authority of any law made by the State Legislature.
It is pursuant to this provision that the Resettlement Act has been enacted.
In the circumstances, in view of the peculiar Constitu tional position obtaining in the State of Jammu & Kashmir.
We do not see what possible relief we can give to the peti tioner and those situate like him.
All that we can say is that the position of the petitioner and those like him is anomalous and it is up to the Legislature of the State of Jammu Kashmir to take action to amend legislature, such as, the Jammu & Kashmir Representation of the People Act, the Land Alienation Act, the Village Panchayat Act, etc.
so as to make persons like the petitioner who have migrated from West Pakistan in 1947 and who have settled down in the State of Jammu & Kashmir since then, eligible to be included in the electoral roll, to acquire land, to be elected to the Panchayat, etc.
This can be done by suitably amending the legislations without having to amend the Jammu & Kashmir Constitution.
In regard to providing employment opportuni ties under the State Government.
it can be done by the Government by amending the Jammu & Kashmir Civil Services, Classification of Control and Appeal Rules.
In regard to admission to higher technical educational 376 institutions also, the Government may make these persons eligible by issuing appropriate executive directions without even having to introduce any legislation.
The petitioners have a justifiable grievance.
We are told that they consti tute nearly seven to eight per cent of the population of the State of Jammu & Kashmir.
Surely they are entitled to expect to be protected by the State of Jammu & Kashmir.
In the peculiar context of the State of Jammu & Kashmir, the Union of India also owes an obligation to make some provision for the advancement of the cultural, economic and educational rights of these persons.
We do hope that the claims of persons like the petitioner and others to exercise greater rights of citizenship will receive due consideration from the Union of India and the State of Jammu & Kashmir.
We are, however, unable to give any relief to the petitioners.
P.S. S Petition dismissed.
| The refugees from West Pakistan who had migrated into the State of Jammu and Kashmir in 1947 and had been domi ciled in that State for nearly forty years are not permanent residents as defined in s.6 of the Jammu and Kashmir Consti tution, with the result that they were disentitled to be included in the electoral rolls of the State Assembly, to be elected to village Panchayats, to be appointed to any serv ice under the State Government by direct recruitment, to purchase land in the State and to be admitted to higher technical educational institutions under the relevant Acts and Rules.
Section 6(2) of the Jammu and Kashmir Constitu tion, however, provides that permanent State subjects who had migrated to West Pakistan in 1947 shah be permanent residents of the State on their return to the State under a permit for resettlement, thereby entitling them to all the above rights.
The petitioner, who claimed to speak on behalf of the refugees from West Pakistan settled in the State, claimed that be and other persons situated like him should at least be given the same rights as are given to those who had voluntarily migrated to West Pakistan at the time of parti tion in 1947, on their return to the State for resettlement.
Dismissing the writ petition, the Court, HELD: Section 12(1)(b) of the Jammu and Kashmir Repre sentation of the People, Act 1957 disqualifying a person for registration in an 370 electoral roll if he is not a permanent resident of the State as defined in s.6 of the Constitution, s.8(a) of the Village Panchayat Act, 1958 disqualifying such a person for being chosen as or for being member of a Panchayat, s.4 of the Land Alienation Act, 1995 B.K. prohibiting transfer of land in favour of any person who is not a State subject, and r.17(a) of the Jammu and Kashmir Civil Services (Classifica tion, Control and Appeal) Rules, 1956 rendering ineligible a person who is not a hereditary State subject for appointment to any service under the State Government by direct recruit ment are not open to challenge as inconsistent with the rights guaranteed by Part III of the Constitution of India because of the "Constitution (Application to Jammu & Kash mir) Order, 1954" issued by the President of India under article 370(1)(d) of the Constitution, by which article 35A was added to the Constitution in relation to the State of Jammu and Kashmir.
[374B E] The petitioner and those like him have a justifiable grievance.
They have very anomalous rights within the State.
Though citizens of India and entitled to the various funda mental rights guaranteed by the Constitution they are not in a position to enjoy many of those rights within that State in which they are domiciled for nearly 40 years.
In view of the peculiar constitutional position obtaining in the State, it is upto the legislature of the State to take action to suitably amend legislations, and for the State Government to amend Service Rules and issue appropriate executive instruc tions to make these persons eligible to exercise greater rights of citizenship.
They constitute nearly seven to eight per cent of the population of the State.
Surely, they are entitled to expect to be protected by the State.
[376A C] The Union of India, in the peculiar context of the State also owes an obligation to make some provision for the advancement of cultural, economic and educational rights of these persons.
[376B]
|
Appeal No. 249 of 1954.
Appeal by special leave from the judgment and order dated January 8, 1952, of the Patna High Court in Misc.
Judicial Cases Nos. 13, 14, 15, 16, 17, 18 and 19 of 1949.
38 Bhawani Lal and K. L. Mehta, for the appellants.
L.K. Jha, B. K. P. Sinha and R. C. Prasad, for the respondent.
May 22.
The Judgment of the Court was delivered by S.K. DAS J.
The appellant Messrs. Raghubar Mandal Harihar Mandal, hereinafter referred to as the assessee, is a firm of bullion dealers carrying on its business at Laheriasarai in the district of Darbhanga in the State of Bihar.
The assessee was assessed to sales tax for seven quarters ending December 31, 1945, March, 31, 1946, June 30, 1946, September 30, 1946, December 31, 1946, March 31, 1947 and June 30, 1947, respectively.
For three of the aforesaid quarters, namely those ending on December 31, 1945, March 31, 1947 and June 30, 1947, the assessee failed to file the necessary returns as required by the provisions of the Bihar Sales Tax Act, 1944 (hereinafter referred to as the Act), which was the Act in force during the material period; therefore, the assessee was assessed for those three quarters under sub section
(4) of section 10 of the Act.
For the remaining four quarters, the assessee did file returns.
The Sales Tax Officer rejected those returns as also the books of account filed by the assessee for all the seven quarters and assessed the assessee under el.
(b) of sub section
(2) of section 10 of the Act.
The Sales Tax Officer passed separate orders assessing the tax for all the seven quarters simultaneously on October 9, 1947.
He assessed the tax on a taxable turnover of Rs. 2,94,000 for each of the five quarters ending December 31, 1945, March 31, 1946, September 30, 1946, December 31, 1946 and March 31, 1947; for the other two quarters ending on June 30, 1946, and June 30, 1947, he assessed the tax on a taxable turnover of Rs. 3,92,000.
The assessee then moved in appeal the Commissioner of Commercial Taxes, Tirhut Division, but the Commissioner dismissed the appeals by his order dated February 23, 1948.
The Board of Revenue was then moved in revision but, by its order dated July 31, 1948, the Board refused to interfere.
The Board expressed 39 the view that the finding of the Sales Tax Officer and the Commissioner that the books of account maintained by the assessee were not dependable was a finding of fact which could not be interfered with in revision ; therefore the assessing officer was bound to assess to ' the best of his judgment.
The Board was then moved under section 21 of the Act to refer certain questions of law to the High Court of Patna which, the assessee contended, arose out of its order.
By its order dated December 10, 1948, the Board rejected the applications for making a reference to the High Court on the same ground, namely, that no question of law was involved and the assessment orders were concluded by a concurrent finding of fact.
The assessee then moved the High Court and by its order dated April 27, 1949, passed in Miscellaneous Judicial Cases Nos. 13 to 19 of of 1949, the High Court directed the Board of Revenue to state a case on the following question: " Whether the Sales Tax.
Officer is entitled under section 10(2)(b) of the Act to make an assessment on any figures of gross turnover without giving any basis to justify the adoption of that figure ?" The Board of Revenue then stated a case, and the High Court disposed of the reference by answering the question in the affirmative by its judgment and order dated January 8, 1952.
The assessee then moved this Court and obtained special leave to appeal from the said judgment and order of the High Court.
The main contention of the assessee is that the High Court has not correctly answered the question of law referred to it.
Before we proceed to consider this contention of the assessee, it is necessary to clear the ground by delimiting the precise scope of the question referred to the High Court.
It is well settled that the jurisdiction of the High Court in the ' matter of incometax references is an advisory jurisdiction and under the Income tax Act the decision of the Tribunal on facts is final, unless it can be successfully assailed on the ground that there was no evidence for the conclusion on facts recorded by the Tribunal or the conclusion was such as no reasonable body of persons could have arrived at.
It is also well settled that the duty 40 of the High Court is to start with the statement of the case as the final statement of the facts and to answer the question of law with reference to that statement.
The provisions of the Indian Income tax Act are in pari materia with the provisions of the Act under our consideration, the main scheme of the relevant provisions of the two Acts being similar in nature, though the wording of the provisions is not exactly the same.
Under section 21 of the Act, the High Court exercises a similar advisory jurisdiction, and under sub section
(3) of that section, the High Court may require the Board of Revenue to state a case and refer it to the High Court, when the High Court is satisfied that the refusal of the Board to make a reference to the High Court under sub section
(2) is not justified.
Under sub section
(5) of section 21 the High Court hears the reference and decides the question of law referred to it, giving in a judgment the grounds of its decision.
In the case under our consideration, the question which was referred to the High Court related to the assessments made under section 10(2)(b) of the Act; in other words, the question related to those four quarters only for which the assessments were made under section 10(2)(b).
The question did not relate to the three quarters for which the assessee had filed no returns and assessments were made under section 10(4) of the Act.
At one place in its judgment, the High Court referred to a slight inaccuracy in the question framed, but it did not reframe the question so as to widen its scope and include the three quarters for which assessments were made under section 10(4) of the Act.
The question, as it stood and as it was answered by the High Court, did not relate to the propriety or legality of the assessments made under section 10(4) of the Act.
We must, therefore, make it clear at the very outset that the question relates to those four quarters only for which assessments were made under section 10(2)(b) of the Act, and the answer given to the question will govern those four quarters only.
Having thus indicated the precise scope of the question referred to the High Court, we proceed now to consider the main contention of the assessee.
We must first read the relevant provisions of the statute 41 under which the assessments were made.
Sub section (1) of section 10 of the Act states that if the Commissioner is satisfied without requiring the presence of a registered dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns.
Clause (a) of sub section
(2) states what the Commissioner shall do, if he is not satisfied without requiring the presence of a registered dealer who furnished the returns or production of evidence that the returns furnished in respect of any period are correct and complete; the clause states that in that event the Commissioner shall serve on the dealer a notice in the prescribed manner requiring him either to attend in person or to produce or cause to be produced any evidence on which such dealer may rely in support of his returns.
Then comes cl.
(b) of sub section
(2) which must be quoted in extenso: " (b) On the day specified in the notice or as soon afterwards as may be, the Commissioner, after hearing such evidence as the dealer may produce, and such other evidence as the Commissioner may require on specified points, shall assess the amount of tax due from the dealer.
" These provisions are similar to the provisions contained in section 23 of the Indian Income tax Act.
Sub section (1) of section 10 of the Act corresponds to sub section
(1) of section 23 of the Indian Income tax Act; clause (a) of sub section
(2) of section 10 of the Act corresponds to sub section
(2) of section 23 of the Indian Income tax Act; and clause (b) of sub section
(2) of section 10 of the Act corresponds to sub section
(3) of section 23 of the Indian Income tax Act, though there are some verbal differences between the two provisions.
Sub section (3) of section 23 of the Indian Income tax Act requires the Income tax Officer to assess the total income of the assessee and determine the sum payable by him on the basis of such assessment, by "an order in writing"; but cl.
(b) of sub section
(2) of section 10 of the Act requires the Commissioner to assess the amount of tax due from the dealer and does not impose any liability as to "an order in writing.
" In spite of these differences, the 42 two provisions are substantially the same and impose on the assessing authority a duty to assess the tax after hearing such evidence as the dealer may produce and such other evidence as the assessing authority may require on specified points.
The point for our consideration is can the assessing authority, purporting to act under section 10(2)(b) of the Act, assess the amount of tax due from a dealer more or less arbitrarily or without basing the assessment on any materials whatsoever ? In the question referred to the High Court, the expression used is, "make an assessment on any figure of gross turnover without giving any basis to justify the adoption of that figure".
That expression is perhaps a little ambiguous, but read in the context of the statement of the case, the question can only mean this: can the assessing authority adopt a figure of gross turnover by pure guess and without referring to any materials on which the figure is based ? It is clear to us that, understood in that sense, the High Court has answered the question incorrectly.
The High Court went into an elaborate consideration, by way of comparison and contrast, of sub section
(4) and el.
(b) of sub section
(2) of section 10 of the Act.
It is unnecessary for us to make any pronouncement in this appeal with regard to the precise scope of sub section
(4) of section 10 of the Act, which corresponds more or less to sub section
(4) of section 23 of the Indian Income tax Act; nor is it necessary for us to decide if an assessment made under el.
(b) of sub section
(2) of section 10 of the Act, when the account books of the assessee are disbelieved, stands exactly on the same footing as an assessment made under sub section
(4) of section 10 when the assessee has failed to furnish his returns.
In some decisions relating to the corresponding provisions of the Indian Income tax Act, it has been said that the difference between the two is one of degree only, the one being more summary than the other.
These are questions which do not really fall for decision in the present appeal, which is confined to interpreting the true nature and scope of el.
(b) of sub section (2) of section 10 of the Act.
With regard to the corresponding provision in sub section
(3) of section 23 of the Indian Income tax Act, there is a decision of this 43 Court which, in our opinion, answers the question before us.
The decision is that of Dhakeswari Cotton Mills Ltd. vs Commissioner of Income Tax, West Bengal(1).
This Court observed: "As regards the second contention, we are in entire agreement with the learned Solicitor General when he says that the Income tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a Court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub section
(3) of section 23 of the Act, the Income tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all.
There must be something more than bare suspicion to support the assessment under section 23(3).
" In our view, the aforesaid observations clearly show that the High Court was in error in answering the question in the affirmative.
Firstly, the High Court treated the question referred to it as a pure question of fact; if that were so, then the High Court should have rejected the reference on the ground that it was not competent to answer a question of fact.
Then, the High Court proceeded to consider certain decisions relating to the interpretation of sub sections
(3) and (4) of section 23 of the Indian Income tax Act, and held that there was no difference between an assessment under sub section
(3) and an assessment under sub section
(4) of section 23.
The High Court applied the same analogy and on that footing held that there being no difference between an assessment under cl.
(b) of sub section
(2) and an assessment under sub section
(4) of section 10 of the Act, the answer to the question must be in the affirmative.
In our view, the approach of the High Court to the question referred to it was erroneous and the answer given to the question by it solely on the basis of sub section
(4) of section 10 of the Act was vitiated by that wrong approach.
It was not sub section
(4) of section 10 of the Act which the High Court had to consider; it had to consider the true scope and effect of cl.
(b) of sub section
(2) of section 10 of the Act.
(1) ; , 949.
44 Learned counsel for the respondent has strongly urged two points in support of the answer which the High Court gave.
Firstly, he has contended that, on a proper reading of the assessment orders and the orders of the Commissioner, it would appear that the gross turnover for the quarters in question was based on certain materials; therefore, the argument of learned counsel is that it is not correct to say that the figure of gross turnover was arbitrarily adopted or was adopted without reference to any evidence or any material at all.
We have examined the assessment orders in question, which form part of the statement of the case.
It is clear to us that what the Sales Tax Officer and the Commissioner did was to hold, for certain reasons, that the returns made by the assessee and the books of account filed by it were incorrect and undependable.
It is not necessary to repeat those reasons, because we must accept the finding of fact arrived at by the assessing authorities that the returns and the books of account were not dependable.
The assessing authorities rightly pointed out that several transactions were not entered in the books of account; and a surprise inspection made on July 15, 1947, disclosed certain transactions with a Bombay firm known as Messrs. Kishundas Lekhraj, which were not mentioned in the books of account; and finally, the assessee Was importing silver in the name of five confederates in order to suppress the details of the transactions etc.
The assessing authorities further pointed out that there was a discrepancy between the return filed for the quarter ending June 30, 1946, and the accounts filed in support of it; the return showed a gross turnover of Rs. 2,28,370 12 0 while the accounts revealed a gross turnover of Rs. 1,48,204.
All these we must accept as correct.
Having rejected the returns and the books of account, the assessing authorities proceeded to estimate the gross turnover.
In so estimating the gross turnover, they did not refer to any materials at all.
On the contrary, they indulged in a pure guess and adopted a figure without reference to any evidence or any material at all.
Let us take, for example, the assessment order for the quarter ending June 30, 1946.
45 The Sales Tax Officer said: "I reject the dealer 's accounts and estimate a gross turnover of Rs. 4,00,000. 1 allow a deduction at 2% on the turnover and assess him on Rs. 3,92,000 to pay sales tax of Rs. 6,125." For the quarter ending on September 30, 1946, the Sales Tax Officer said: "I reject his irregular account and estimate a gross turnover of Rs. 3,00,000 for the quarter and assess him on Rs. 2,94,000 to pay tax of Rs. 4,593 12 0." These and similar orders do not show that the assessment was made with reference to any evidence or material; on the contrary, they show that having rejected the books of account, the assessing authorities indulged in pure guess and made an assessment without reference to any evidence or any material at all.
This the assessing authorities were not entitled to do under cl.
(b) of sub.s.
(2) of section 10 of the Act.
Secondly, learned counsel for the respondent has referred us to several decisions on which the High Court relied and has argued that on the basis of those decisions, it must be held that the answer given by the High Court to the question referred to it was a correct answer.
We propose to examine briefly some of those decisions, though, as we have stated earlier, the question is really answered by the observations made by this Court in Dhakeswari Cotton Mills ' case (1).
The first decision is the Privy Council decision in Income tax Commissioner vs Badridas Ramrai Shop, Akola (2).
Lord Russell of Killowen in delivering the judgment of their Lordships made the following observations as respects a " best of judgment " assessment within the meaning of section 23 (4) of the Indian Income tax Act: " The officer is to make an assessment to the best of his judgment against a person who is in default as regards supplying information.
He must not act dishonestly, or vindictively or capriciously, because he must exercise judgment in the matter.
He must make what he honestly believes to be a fair estimate of the proper figure of assessment, and for this purpose he must, their Lordships think, be able to take into consideration local knowledge and repute in regard to the assessee 's circumstances, and his own knowledge of previous returns by, and assessments of, the assessee, (1) , 949.
(2) (1937) 64 I.A. 102, 114 115.
46 and all other matters which he thinks will assist him in arriving at a fair and proper estimate: and though there must necessarily be guess work in the matter, it must be honest guess work.
" We find nothing in those observations which runs counter to the observations made in Dhakeswari Cotton Mills ' case(1).
No doubt it is true that when the returns and the books of account are rejected, the assessing officer must make an estimate, and to that extent he must make a guess; but the estimate must be related to some evidence or material and it must be something more than mere suspicion.
To use the words of Lord Russell of Killowen again, " he must make what he honestly believes to be a fair estimate of the proper figure of assessment" and for this purpose he must take into consideration such materials as the assessing officer has before him, including the assessee 's circumstances, knowledge of previous returns and all other matters which the assessing officer thinks will assist him in arriving at a fair and proper estimate.
In the case under our consideration, the assessing officer did not do so, and that is where the grievance of the assessee arises.
The next decision is Ganga Ram Balmokand vs Commissioner of Income Tax, Punjab (2).
It was held therein that where the income tax authorities were not satisfied with the correctness or completeness of the assessees ' accounts and, taking into consideration the state of affairs in general and the fact that the assessees had a large business and the profit shown by them was abnormally low in comparison with that of other persons carrying on the same business in the locality, calculated the taxable income by applying a flat rate of 7 per cent.
, the authorities were justified in applying such a flat rate, and the burden was on the assessees to displace the estimate.
There again, the estimate made was not a pure guess and was based on some materials which the Income tax Officer had before him.
Din Mohammad J. who gave the leading judgment, observed: " It cannot be denied that there must be some material before the Income tax Officer on which (1) ; , 949.
(2) 47 to base his estimate, but no hard and fast rule can be laid down by the Court to define what sort of material is required on which his estimate can be founded.
" With that observation we generally agree.
If, in this case, the Sales Tax authorities had based their estimate on some material before them, no objection could have been taken; but the question which was referred to the High, Court and which arose out of the orders of assessment was whether it was open to the said authorities to make an assessment on a figure of gross, turnover, without referring to any materials to justify the adoption of that figure.
In answering that question in the affirmative, the High Court has given a carte blanche to the Sales Tax authorities and has, in our opinion, misdirected itself as to the true scope and effect of cl.
(b) of sub section
(2) of section 10 of the Act.
The next decision is Gunda Subbayya vs Commissioner of Income tax, Madras (1).
This decision also does not help the respondent.
It was held in that decision that though there is nothing in the Indian Income tax Act which imposes a duty on an Incometax Officer, who makes an assessment under section 23 (3), to disclose to the assessee the material on which he proposes to act, natural justice requires that he should draw the assessee 's attention to it and give him an opportunity to show that the officer 's information is wrong and he should also indicate in his order the material on which he has made his estimate.
This decision is really against the respondent and does not lay down any rule which may be said to be inconsistent with the observations made by this Court in Dhakeswari Cotton Mills ' case (2).
The decision of the Lahore High Court in Seth Gurmukh Singh vs Commissioner of Income tax, Punjab (3) was specifically approved by this Court in Dhakeswari Cotton Mills ' case (2).
The rules laid down in that decision were these: (1) While proceeding under sub section
(3) of section 23 of the Income tax Act, the Income tax Officer is not bound to rely on such evidence produced by the assessee as he considers to be false; (2) if he proposes to make an estimate in disregard of (1) 1.
(2) ; , 949.
(3) 48 the evidence, oral or documentary, led by the assessee, he should in fairness disclose to the assessee the material on which he is going to found that estimate; (3) he is not however debarred from relying on private sources of information, which sources he may not disclose to the assessee at all; and (4) in case he proposes to use against the assessee the result of any private inquiries made by him, he must communicate to the assessee the substance of the information so proposed to be utilised to such an extent as to put the assessee in possession of full particulars of the case he is expected to meet and should further give him ample opportunity to meet it, if possible.
The decision does not lay down that it is open to the Income tax Officer to make an estimate on pure guess and without reference to any material or evidence before him.
The last decision to which we have been referred is the decision in Malik Damsaz Khan vs Commissioner of Income tax (1).
That again is a decision of the Privy Council.
In that case, the validity of the assessment under section 23 (3) of the Indian Income tax Act was not challenged by the assessee and the appeal was directed solely to the amount of assessment.
Their Lordships observed: 'But it appears to them that it was clearly competent for the Income tax Officer in the circumstances of the present case to accept the return as a valid return and proceed to assessment under section 23 (1) or section 23 (3) as the case might be.
Since he was not satisfied that the return was correct and complete he could not proceed under section 23 (1); he, therefore, as appeared upon the face of the assessment, proceeded under section 23 (3).
Neither in the incompleteness of the return nor in the fact that in any accompanying statement the appellant referred to his return as an estimate can their Lordships find any possible justification for the plea that the assessment was incompetent or that the Appellate Assistant Commissioner had no jurisdiction to entertain the appeal proceedings which the appellant himself initiated. " (1) 49 These observations do not help the respondent in any way; nor do they lay down any rule contrary to the rules laid down in Seth Gurmukh Singh 's case (1).
For these reasons we hold that the High Court, was in error in answering the question referred to it.
The appeal is accordingly allowed and the judgment and order of the High Court are set aside.
The answer to the question referred to the High Court is in the negative.
The appellant will be entitled to its costs both in this Court and in the High Court.
Appeal allowed.
| The appellant filed the necessary returns, as required by the provisions of the Bihar Sales Tax Act, 1944, and produced the account books.
The Sales Tax Officer considered that the account books were not dependable and, after rejecting them as well as the returns, proceeded to estimate the gross turnover by adopting a figure by pure guess, without reference to any evidence or material, and made the assessment under section 10 (2) (b) of the Act.
Held, that under section 1O (2) (b) of the Bihar Sales Tax Act, 1944, a duty is imposed on the assessing authority to make the assessment after hearing such evidence as the assessee may produce and such other evidence as the assessing authority may require on specified points, and, in case the returns of the assessee and his books of account are rejected, the assessing authority must make an estimate, but this must be based on such evidence or material as the assessing authority has before him, including the assessee 's circumstances, knowledge of previous returns and all other matters which the assessing authority thinks will assist him in arriving at a fair and proper estimate.
Dhakeswari Cotton Mills Ltd. vs Commissioner of Income Tax, West Bengal, ; and Income tax Commissioner vs Badridas Ramrai Shop, Akola, (1937) L.R. 64 I.A. 102, relied on.
|
, Appeals Nos. 202 and 203 of 1958.
Appeals from the judgment and decree dated October 5, 1956, of the Patna High Court in Misc.
Judicial Cases Nos. 330 and 331 of 1955.
K. D. Chatterjee, section N. Andley and J. B. Dadachanji, for the appellants.
D. P. Singh, for the respondents.
October 26.
The Judgment of the Court was delivered by AYYANGAR J.
These two appeals are from a common judgment of the High Court of Patna dated October 5, 1956, in two petitions under article 226 of the Constitution and have been filed pursuant to a certificate granted by the High Court under article 132.
The Tobacco Manufacturers (India) Ltd., the appellants in the above appeals are an incorporated company manufacturing cigarettes and tobacco in their factory at Monghyr in the State of Bihar, and these 109 appeals are concerned with the legality of the levy of sales tax under the Bihar Sales Tax Act (hereafter referred to as the Act) on the appellants in respect of sales effected during the financial years 1949 50 and 1950 51.
The point urged in these appeals is a very narrow one and relates to the proper construction to be placed on certain orders of the Board of Revenue passed in regard to the tax properly leviable for these two years.
The facts relevant to this point are briefly these The assessment of the appellants for both the years was completed by the Superintendent of Sales Tax, Monghyr, on May 7, 1952, and the total tax liability was determined in the sum of Rs. 6,44,940 2 6 and Rs. 7,46,876 1 3 for the two assessment years 1950 51 and 1951 52 respectively.
Before the assessing officer, the appellants contended that all sales effected by them as a direct result of which the goods were delivered outside the State of Bihar were exempted from tax liability under article 286(1)(a) of the Constitution.
This objection was overruled, the reason assigned being, that the sales were completed in Bihar, and that the entire turnover of the appellants was therefore subjected to tax under the Act.
In taking this view the assessing authority followed a previous ruling of the Board of Revenue of the State in the Bengal Timber case (Case 61 of 1952).
An appeal preferred to the Deputy Commissioner of Sales Tax, Bihar, by the appellants was dismissed on October 8, 1952, on the same grounds.
The appellants paid the tax demanded for both the years and invoked the revisional jurisdiction of the Board of Revenue.
In their petitions to the Board the appellants pointed out, that the sales of goods delivered for consumption outside the State of Bihar which involved a tax liability of Rs. 1,23,813 0 2 in the earlier year and Rs. 7,10,185 12 0 in the later year were made up of two types of transactions: (a) those in which the goods thus delivered were for consumption in the State of first delivery or first destination, (b) those in which the goods thus delivered were 110 for consumption, not in the State of first delivery but in.
other States.
(These two classes would be referred to hereafter for convenience as typo (a) and type (b) respectively).
The appellants claimed that on the proper construction of article 286(1) & (2) they were entitled to have both these types of sales excluded from their taxable turnover.
By the date of the hearing of these petitions by the revisional authority, this Court had rendered the decision in State of Bombay vs United Motors (India) Ltd. and Others (1) expounding the scope of the explanation to article 286(1)(a) and its inter relation to the exemption under article 286(2), and naturally this decision was brought to the attention of the member of the Board at the hearing.
Without examining whether the decision cited did or did not cover both the two (a) & (b) types of sales effected by the appellants, the Board passed on August 28, 1953, a laconic order in these terms: "The two points urged in this Court were among those points urged in the Lower Court and they are (i) No tax should have been levied on the Company 's canteen sales.
(ii) that despatches outside the State for consumption in other States should not have been taxed for the period after the Constitution came into force.
As regards the admitted despatches of goods out.
side the State after the 26th January, 1950, when the Constitution came into force, the learned Lower Court has been guided by the decision of the Board in the Bengal Timber case (Case No. 61 of 1952).
But this ruling of the Board stands superseded by the subsequent decision of the Supreme Court in the United Motor 's case,.
According to the decision of the Supreme Court, no tax can be levied on despatches to the places outside the State after the 26th January, 1950 and on this point the petition are allowed, and the (1) ; 111 sales tax officer directed to recalculate the amount of tax payable by the assessee ".
Apparently the appellants understood this order as meaning that all sales, whereunder goods were delivered outside the State, whether or not for consumption in the State of first delivery (i.e., both types (a)& (b)) were exempted from the tax levy.
The sales tax authorities, however, took the order to mean that only those sales in which deliveries were made outside the State for consumption in the State of first destination, i. e., those of type (a) were intended to be exempted, and these rival interpretations were put forward in the correspondence that passed between the appellants and the sales tax authorities.
The appellants made an application for the refund of the amount of tax attributable to all the sales under which goods were delivered outside the State, but the tax authorities sticking to their interpretation of the order of the Board and of their interpretation of the decision of this Court in the United Motors case (1) refunded the tax collected on the sales falling within type (a) but refused to refund Rs. 20,923 15 2 for the 1st year and Rs. 1,29,823 5.0 for the later year these amounts representing the tax on sales of type (b).
The appellants however persisted in pressing their claim for the refund of these amounts also.
In this state of affairs, the State of Bihar moved the Board of Revenue to review its order dated August 28, 1953, or at any rate clarify it so as to confine its operation to sales falling within type (a), urging that this would bring it in accord with the interpretation of article 286(1) by this Court in the United Motors case (1).
The appellants objected to the jurisdiction of the Board of Revenue to review its previous decision and on April 25, 1955, it passed the following order : " These are what appear to be two miscellaneous petitions filed on behalf of the State of.
Bihar seeking certain clarifications regarding the interpretation of the Board 's order dated 28 8 1953 in Cases Nos.
514 of 1952.
After argument was heard it was conceded (1) ; 112 by both parties that there is no provision in the Act under which the parties concerned may move the court to clarify or explain the order passed, this function essentially being a matter of legal advice.
It was also agreed that no further clarification was really required in view of the specific reference to the judgment of the Supreme Court in the United Motor 's case.
The petitions are, therefore, rejected.
" If the order of the Board dated August 28, 1953, was laconic and ambiguous, the later order dated April 25, 1955, was if anything more obscure.
The appellants, however, considered it an order in their favour, because the petition by the State for clarification of the first order on the lines of the interpretation put upon it by the tax authorities had been dismissed, and when the refusal to refund the two sums of tax referred to earlier was continued, they filed two petitions in the High Court of Patna under article 226 of the Constitution for the issue of writs of mandamus to compel the refund of the tax on the principal ground that a duty to do so had been imposed by the orders of the Board of Revenue, though the petition made an incidental reference to the appellants being entitled to such refund on a proper construction of article 286(1) & (2) of the Constitution, even apart from the order of the Board of Revenue.
The learned Judges of the High Court however in the main considered the question whether on a proper interpretation of the relevant Articles of the Constitution, sales under which goods were delivered outside Bihar but for consumption not in the State of first delivery, were exempt from tax under the Bihar Sales Tax Act and decided the point against the appellants.
They next dealt with the central point urged in the petitions, viz., that the Board of Revenue by its order dated August 28, 1953, had allowed the appellant 's revision in regard to " the second point " which included sales of all categories whether or not for the purpose of consumption in the State of first destination outside Bihar, and directed the Sales tax Officer to recompute the tax by allowing this exemption, and that the officer was therefore statutorily bound to 113 give effect to the order of the Board, be the same right or wrong, particularly when the Board refused to vary or modify it so as to exclude particular types of sales from the scope of the exemption when moved to do so by the State Government.
In regard to this point after stating that the orders of the Board of Revenue were ambiguous, the learned Judges proceeded to answer the question on the assumption that the Board of Revenue had directed the officer to recompute the tax on the basis that all the outside sales both the (a) and the (b) types were exempted from liability.
The learned Judges then pointed out that the order of the Board would be clearly erroneous in regard to the (b) type sales and that the petitioner in a writ of mandamus could not insist on a manifestly wrong order being enforced.
The petitions were therefore dismissed.
The appellants applied to the High Court for certificates under articles 132 and 133, but the learned Judges granted a certificate under article 132 alone and it is on the strength of these certificates that the appeals are before us.
The principal point that Mr. Chatterjee, learned Counsel for the appellants, argued before us related to the duty of the tax authorities to obey the orders of the Board of Revenue and give effect to them, and he submitted that the High Court erred in denying his clients the relief of mandamus on the ground that that order was erroneous.
In support of this argument learned Counsel sought reliance on a recent decision of this Court in Bhopal Sugar Mills V. Com missioner of Income tax (1) in which it was held that when an order was made by a superior tribunal (in that case the Income tax Appellate Tribunal) directing the Income tax Officer to compute the income of an assessee on a particular basis and that order had become final, the subordinate officer had no right to disregard the direction, because it was wrong and that the High Court when approached by the assessee for the issue of a writ of mandamus, was bound to (1) [1961] 1 S.C. R 474 15 114 enforce the final order of the superior Tribunal and could not refuse to do so because it considered the order of the Tribunal to be wrong.
This Court pointed out that when the order which the Tribunal had jurisdiction to pass became final, it bound all parties to it and its correctness could not be challenged collaterally in proceedings for enforcing that order.
The attempt of learned Counsel for the appellants was to bring this case within the scope of the above ruling.
The ratio of this decision is to be found in this passage: " By that order the respondent virtually refused to carry out the directions which a superior tribunal had given to him in exercise of its appellate powers in respect of an order of assessment made by him.
Such refusal is in effect a denial of justice, and is furthermore destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of courts.
If a subordinate tribunal refuses to carry out directions given to it by a superior tribunal in the exercise of its appellate powers, the result will be chaos in the administration of justice and we have indeed found it very difficult to appreciate the process of reasoning by which the learned Judicial Commissioner while roundly condemning the respondent for refusing to carry out the directions of the superior tribunal, yet held that no manifest injustice resulted from such refusal.
" To attract the principle thus enunciated, it is necessary that there should be an order of a superior tribunal clear, certain and definite in its terms, and with.
out any ambiguity, to which the subordinate authority or officer to whom it is addressed, could give effect.
We are clearly of the opinion that the decision referred to cannot apply to the situation in the present case.
Taking the earlier order of the Board first it is to put it at the mildest ambiguous.
The Board referred to the Bengal Timber case which had been followed by the lower authorities in disallowing the appellants ' claim to exemption to both the (a) and (b) type sales,involving out of State deliver.
A reference was then 115 made to the decision of this Court in the State of Bombay vs United Motors (India) Ltd. and others (1) as superseding the previous decision of the Board, adding that according to the decision of this Court no tax could be levied on despatches outside the State after the 26th January, 1950, and on that point the petitions were allowed.
It will be noticed that the member did not set out the precise extent to which the ruling of this Court superseded the previous decision of the Board, and this was left in a state of uncertainty.
It was suggested by learned Counsel for the appellants that Mr. Bakshi, the member of the Board, drew no distinction between sales of type (a) or (b), and bad included both of them as falling within a single category of sales in which delivery had taken place outside the State for consumption in other States, and for that reason we should hold that the member had rightly or wrongly treated the decision in the United Motors ' case as applicable to all such sales.
We find ourselves unable to agree in this construction of the order.
We cannot presume that Mr. Bakshi did not peruse the judgment in the United Motors ' case when he referred to it in his order, nor that he did not acquaint himself with the terms of the Explanation to article 286(1)(a) of the Constitution, the scope and significance of which was analysed and elaborated in that decision.
We are rather inclined to agree with the construction which the member himself put on this order in April, 1955, that he left it to the Sales tax Officer to decide for himself the relief to which the appellants were entitled on that officer 's interpretation of the judgment of this Court.
It may be that this was not a satisfactory method of disposing of the revision petition leaving the point which arose for decision by the member of the Board of Revenue, to be decided by the Sales tax Officer, but we are now only concerned with the simple question whether Mr. Bakshi had or had not determined the true scope and effect of the judgment of this Court and decided it as meaning that all sales as a result of which goods were delivered outside the State (1) ; 116 of Bihar were within the Explanation and so were exempt from the tax liability.
Notwithstanding the cryptic language used by the Member of the Board, we are clearly of the opinion that he did not intend to decide this point in favour of the appellants in the manner contended for by them.
It is now common ground that when the Board of Revenue was approached by the State Government to review or clarify this order, Mr. Bakshi, by his order dated April 25, 1955, expressed himself as having decided earlier that he had directed the sales tax officer to give effect to the judgment of this Court in the United Motors case and had done nothing further.
Learned Counsel for the appellants strongly pressed before us that the member of the Board having accepted the preliminary objection that there was no provision in the Bihar Sales tax Act by which a party concerned might move the Board to clarify or explain the order, he had no jurisdiction to effect any clarification of his previous order and that whatever was said by the Board on the second occasion could not be held to modify the earlier order or deny the appellants such benefits as were granted to them by the earlier order of August 28, 1953.
But as against this, it has to be noted that before the Board both the parties, i.e., the State Government as well as the appellants agreed that clarification was not needed because " of the specific reference to the judgment of the Supreme Court in the United Motors case ".
As this observation was embodied in the later order with the consent of both the parties, we consider that it is too late now for the appellants to raise any technical objection to this sentence being given effect to.
In view, however, of the conclusion that we have reached as to the construction of the earlier order of August, 1953, it is unnecessary to pursue the matter any further.
If, therefore, as a result of the order or orders passed by the Board, the sales tax officer was directed to give effect to the judgment of this Court in the United Motors case, it followed that the interpretation of the judgment was left to that officer.
We have, already pointed out that to such a situation the principle of 117 the decision of this Court in Bhopal Sugar Mills vs Commissioner of Income Tax (1) is inapplicable.
We might also point out that even if the decision applied and the High Court issued an order in the nature of mandamus to the sales tax officer, it could only take the form of a direction to effect the reassessment in the light of the decision in the United Motors case (2) an order which would leave the appellants in the same position in which they now find themselves without such an order by the High Court.
The next question for consideration is whether on a proper construction of the decision in the United Motors case (2) the exclusion of type (b) sales from those exempted under article 286(1) was erroneous.
Mr. Chatterjee, learned Counsel for the appellants sought to establish that this Court had decided in the United Motors case three points: (1) that sales as a result of which goods were delivered in a State for consumption in such State, i.e., the sales falling within the Explanation to article 286(1) were fictionally inside that State for all purposes and so within the taxing power of the State in which such delivery took place, (2) that sales which by the fiction created by the Explanation were inside a particular State, were " outside " all other States, and so exempt from tax levy by all such other States, (3) that further and beyond ' this, all sales which did not satisfy the terms of the Explanation but in which goods were delivered outside the State in which title passed were " outside sales " over which no State would have power to levy a tax.
In other words, the argument was that this Court had laid down that every sale which was not " an Explanation sale " and therefore not an " inside sale " within a particular State was an " outside sale" for all States and therefore exempt from the levy of sales tax by every State in India.
In support of this submission learned Counsel relied on a passage in the judgment of the learned Chief Justice at page 1081 of the Re. port which ran: ". . .
The authors of the Constitution had to devise a formula of restrictions to be imposed on the State power of taxing sales or purchases involving (1) [1961] 1 S.C.R 474 (2) ; 118 inter State elements which would avoid the doubts and difficulties arising out of the imposition of salestax on the same transaction by several Provincial Legislatures in the country before the commencement of the Constitution.
This they did by enacting Clause (1)(a) with the Explanation and clause (2) of Article 286.
Clause (1)(a) prohibits the taxation of all sales or purchases which take place outside the State but a localised sale is a troublesome concept, for, a sale is a composite transaction involving as it does several elements such as agreement to sell, transfer of ownership, payment of the price, delivery of the goods and so forth, which may take place at different places. . . .
To solve the difficulty an easily applicable test for determining what is an outside sale had to be formulated, and that is what, in our opinion, the Explanation was intended to do.
It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State. .
An " outside " sale or purchase is explained by defining what is an inside sale, and why actual delivery and consumption in the State are made the determining factors in locating a sale or purchase will presently appear.
The test of sufficient territorial nexus was thus replaced by a simpler and more easily workable test: Are the goods actually delivered in the taxing State as a direct result of a sale or a purchase, for the purpose of consumption therein ? Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States.
The latter States are prohibited from taxing the sale or purchase ; the former alone is left free to do so.
Multiple taxation of the same transaction by different States is also thus avoided.
" In our opinion, this passage explains the scope of the Explanation and deals with what might be termed " Explanation sales ".
If there is a sale falling within the terms of the Explanation, it is " inside" the State of delivery cum consumption and that State alone can levy the tax.
Such a sale is outside all other 119 States, which are prohibited from taxing such a sale by reason of any territorial nexus however close or cogent.
The passage extracted, however, does not deal with cases where the sale in question does not satisfy the requirements of the Explanation leading to the fixation of the fictional situs of the sale deter mining the State by which the tax might be levied.
Whether any and, if so, which is the State which can levy a tax on a sale not covered by the Explanation, is not dealt with by this decision at all.
From this it would follow that sales of type (a) would be exempt from the levy of tax under the Bihar Sales Tax Act by reason or their being "inside" sales within the State of delivery cum consumption and therefore being " outside" sales quoad the State of Bihar.
Sales of type (b), however, not having been dealt with by the decision in the United Motors case, it would follow that on the orders of the Board of Revenue, the previous decision of the Board in the Bengal Timber case would have still held the field and the transactions would be liable to the levy of tax and the tax levied on those sales would continue to be valid.
Learned Counsel for the appellants was certainly right in his submission that as the orders of the Board of Revenue had became final as between the parties, the liability to tax must be determined on the basis of these orders be they right or wrong.
It is therefore unnecessary to consider whether, apart from the decision of this Court in the United Motors case, the appellants would be entitled to any further relief on the basis of any other decision of this Court interpreting article 286(1) & (2).
As already stated, the appellants have already been granted a refund in regard to the tax collected in respect of the sales falling within type (a).
As, in our opinion, the appellants were not on the orders of the Board of Revenue entitled to a refund of the tax on transactions falling within type (b), the judgment of the High Court dismissing their petitions is clearly right.
The appeals fail and are dismissed, but in the circumstances of the case there will be no order as to costs.
Appeals dismissed.
| The appellants who were manufacturers of cigarettes and tobacco in the State of Bihar contested the levy of sales tax on sales effected by them during the financial years 1949 5o and 1950 51 on the ground that as a direct result of every sale effected by them the goods concerned were delivered outside the State of Bihar and were, therefore, exempted from tax liability under article 286(i)(a) of the Constitution.
Both the Superintendent of sales tax and the Deputy Commissioner of sales tax, Bihar, overruled the objection of the appellants, and following a previous ruling of the Board of Revenue of Bengal in a case known as the Bengal Timber Case (61 of 1952) held the appellants liable to pay the tax.
The appellants paid the tax demanded but filed an application in revision to the Board of Revenue, claiming a constitutional exemption from tax on every sale effected by them as a result of which goods were delivered outside the State of Bihar whether the delivery was for consumption in the State of first delivery or not.
The Board passed the following order on the revision petition.
" As regards the admitted despatches of the goods outside the State after the 26th January, 1950, when the Constitution came into force, the learned lower court has been guided by the decision of the Board in the Bengal Timber Case (No. 61 of 1952).
But this ruling of the Board stands superseded by the subsequent decision of the Supreme Court in the United Motors Case According to the decision of the Supreme Court, no tax could be levied on despatches to the places outside the state after the 26th January, 1950, and on this point the petitions are allowed, and the sales tax officer directed to recalculate the amount of tax payable by the assessee ".
The appellants taking the above order to be in their favour claimed refund of the tax already paid by them and the sales tax authorities contested the position and claimed that they were bound to refund the tax only on those sales wherein the goods were delivered outside the State for consumption in the State of first delivery.
The department thereafter sought clarification of the above order.
The Board refused to clarify or explain its order and passed an order saying that " no further clarification was really required in view of the specific reference to the judgment of the Supreme Court in the United Motors Case ".
Thereafter as the authorities still refused to refund the balance of the tax the appellants filed two applications in the High Court for the issue of a writ of mandamus to compel the refund.
The High Court held that the Board 's decision that sales in which the goods were delivered outside the State for consumption, not in the State of first delivery but in other States were also exempted from tax, was wrong and that the appellants were not entitled to a writ of mandamus for enforcing a wrong order.
On appeal by special leave, Held, that the proper construction of the Board 's orders was that the sales tax officer was directed to decide the relief that 108 should be given to the assessee on the officers ' interpretation of the decision of this Court in the United Motors Case.
The Board did not determine the effect of that judgment and did not decide that every sale in which the goods were delivered outside the State of Bihar was exempted from liability to tax.
The principle that a subordinate tribunal should not refuse to carry out the directions of a superior tribunal was therefore not applicable to the instant case.
Bhopal Sugar Mills vs Commissioner of Income tax, [1961] 1 S.C.R. 474, held inapplicable.
The United Motors Case merely decided that sales in which goods were delivered outside the State for consumption in the State of first delivery would fall under the Explanation to article 286(1) of the Constitution and would therefore be exempted from tax liability, but it did not deal with other sales in which the goods thus delivered were for consumption, not in the State of first delivery but in other states.
Such sales would on the order of the Board of Revenue which was binding on the appellant be liable to tax in accordance with the previous decision of the Board of Revenue in the Bengal Timber Case.
State of Bombay vs United Motors (India) Ltd. and Ors., ; , explained and applied.
Board of Revenue of the State in the Bengal Timber Case, 61 of 1952, referred to.
|
Civil Appeal No. 239 of 1985.
S.H. Sheth for the Appellant.
P.H Parekh, and Miss Indu Malhotra for the Respondents The Judgment of the Court was delivered by TULZAPURKAR, J.
The short question raised in this appeal is whether a pending appeal would be governed by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short the Act) upon the Part II of the Act being made applicable to the area in which the suit premises were situate during its pendency ? The material facts giving rise to the question are these: By a registered lease dated 3.6.1957 (Exb. 75) the respondents plaintiffs gave a lease of an open plot admeasuring about 7,500 sq.
forming part of a non agricultural land bearing Survey No. 70/4/1 situated in village Kalwada in Valsad District, Gujarat State to the appellant defendant for a period of 10 years for the purpose of running a flour mill after making necessary construction thereon at an yearly rent of Rs. 101/ .
There was a clause for the renewal of the term but if it was not renewed the lessors were given the right to recover vacant possession on removal of construction at the expiry of the initial term.
Admittedly, there was no renewal of the term and therefore on the expiry of 10 years the lessors became entitled to recover vacant possession on 3.6.1967 but the appellant defendant was permitted to hold over.
By a notice under section 106 of the Transfer of Property Act issued on 2.12.1970 the respondents plaintiffs called upon the appellant defendant to vacate and hand over vacant possession of the suit plot after midnight of 2.6.1971 that is to say on 3 6.1971 but as the notice was not complied with a suit in ejectment was filed against the appellant defendant on 12.7.1972.
Since the suit premises were not governed by any rent legislation eviction on the ground of determination of tenancy under Transfer of Property Act was available to the respondents plaintiffs.
The trial court negatived all the defenses that were raised by the defendant 1055 appellant and decreed the suit for ejectment in favour of the respond A dents plaintiffs on 28.2.19?7.
On 20.61977 the appellant defendant challenged the decree by filing an appeal to the District Court, Navsari being Civil Appeal No. 60 of 1977.
While aforesaid appeal was pending in the District Court the State of Gujarat by its Notification dated 26th March, 1980 applied Part 11 of the Act to village Kalwada where the suit premises were situated.
Thereupon the defendant appellant with the permission of the court raised the contention that he was entitled to the protection of Part II of the Act and since none of the grounds on which eviction could be had by the landlord under Part II had been made out by the respondents plaintiffs they were not entitled to recover possession of the suit plot by virtue of the decree passed by the trial court.
That contention was refuted on behalf of the respondents plaintiffs on the ground that in view of the proviso to section 50 of the Act and particularly the latter part thereof Part I I of the Act had no retrospective operation so far as pending appeals were concerned and such appeals had to be disposed of as if Part II of the Act was not applicable.
The learned Assistant Judge who heard the appeal took the view that the proviso to section 50 read with the latter part thereof expressly enacted that pending appeals arising out of decrees or orders passed before the coming into operation of the Act had to be disposed of as if the Act had not been passed and therefore the appellant defendant was not entitled to any protection as claimed by him and the respondents plaintiffs were entitled to the decree for possession; he therefore dismissed the appeal.
The High Court confirmed the view taken by the learned Assistant Judge by dismissing the appellant defendant 's second appeal summarily The appellant defendant has challenged before us the aforesaid view taken by the courts below in this appeal.
In support of the plea that his client 's appeal pending in the district Court was governed by Part II of the Act no sooner that Part was made applicable to Village Kalwada, Counsel for the defendant appellant raised two contentions In the first place he urged that a section could be prospective in one part and retrospective i n another and that it has been so held in regard to section 12 occurring in Part II of the Act by this Court; he pointed out that in Chandrasingh Manibhai and others vs Surjit Lal Ladhamal Chhabda and others(l) this Court has taken the view that (1) 1056 sub secs.
(2) and (3) of sec.
12 are, having regard to the language employed therein prospective in operation and therefore would apply to suits filed after the Act has come into force while in Shah Bhojraj Kuverji Oil Mills and Ginning factory vs Subhash Chandra Yograj Sinha(1) it has been held that sub sec.
(1) of sec 12, by reason of the words used therein, is retrospective in operation and covered even suits pending on the date when the Act is brought into force or is made applicable to an area and all such pending suits would have to be decided as if the protection afforded by sub sec.
(l) is available to the tenants who are parties to such suits; he urged that such protection against eviction under sec.
12 (l) of the Act would be available to the tenant independently of sec.
50 of the Act.
Further according to the learned Counsel since an appeal is a continuation of a suit the protection of sub sec.
( I ) would be available to the tenant in the pending appeal He therefore, urged that since Civil Appeal No. 60 of 1977 was nothing but a continuation of the suit which was pending at the time when sec.
12 was made applicable to Village Kalwada the defendant appellant was entitled to the protection of sec.
12(1) of the Act and the trial court 's decree for eviction obtained by the respondents plaintiffs was of no avail to them.
Secondly, he contended that sec.
50 and the proviso thereto did not apply to the present case at all; according to him that the proviso is not an independent provision but is linked with the substantive enactment contained in sec.
50 which deals with the repeal of two earlier enactments, namely, Bombay Rent Restriction Act, 1939 and the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944 and since the present suit was one under the Transfer of Property Act and was not under either of the two repealed Acts there would be no question of applying the proviso to such a suit or to any appeal arising out of a decree in such suit.
According to P him such suits and appeals arising from decrees in such suits would be governed by sec 12(1) of the Act which has retrospective operation, and since protection was available to his client in the pending appeal the decree for ejectment ought to have been set aside by the lower courts.
The question thus raised requires proper construction being placed on the two relevant and connected provisions of the Act, namely section 12(1) and section 50.
These provisions run thus: (1) ; 1057 12.
(1) no ejectment ordinarily to be made if tenant A pays or is ready and willing to pay standard permitted increases.
A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act.
Repeal.
The Bombay Rent Restriction Act, 1939, and the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, are hereby repealed; Provided that all suits and proceedings between a landlord and a tenant relating to the recovery or fixing of rent or possession of any premises to which the provisions of Part II apply and all suits and proceedings by a manager of a hotel or an owner of a lodging house against a lodger for the recovery of charges for, or possession of, the accommodation provided in a hotel or lodging house situate in an area to which Part III applies, which are pending in any Court, shall be transferred to and continued before the Courts which would have jurisdiction to try such suits or proceedings under this Act or shall be continued in such Courts, as the case may be, and all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings.
Nothing in this proviso shall apply to execution proceedings and appeals arising out of decrees or orders, passed before the coming into operation of this Act; and such execution proceedings and appeals shall be decided and disposed of as if this Act had not been passed.
So far as section 12 of the Act is concerned, having regard to the two decisions mentioned earlier it is clear that this Court has ruled that sub secs.
(2) and (3) of s 12 are prospective but sub sec.
(1) thereof is retrospective in operation and in that behalf the Court in Shah Bhojraj 's case (supra) has relied upon the difference in the language employed in sub sec.
(2) and (3) on the one hand and sub sec.
(1) on the other.
Since sub sec.
(2) commences with the words, "no suit for recovery of possession shall be instituted . ." and since sub sec.
(3) as it then stood commenced with the words "no decree for eviction shall be passed in any such suit . " the 1058 Court took the view that such language plainly indicated that these provisions w re intended to operate prospectively, that is to say would apply to suits instituted after the coming into force of the Act.
but so tar as sub sec (l) is concern the court pointed out that the point of time when sub sec.
( t) operates is when the decree for recovery of possession has to be passed and that the language of that sub section, which provides that the landlord is not entitled to recover possession if the tenant pays or shows his willingness to pay the standard rent and to observe the other conditions of the tenancy, is such that it applied equally to suits pending when Part II comes into force and those to be filed subsequently and is not limited only to suits filed after the Act comes into force in a particular area and in fact the Court in that case granted the benefit of the protection of sub sec.
(1) of sec.
12 to the tenant who was a party to a suit which was already pending when Part II of the Act was made applicable.
to the area in which the suit premises were situated.
the decision in Shah Bhojraj 's case therefore is a clear authority for the proposition that sec.
12(1) of the Act has retrospective operation and would apply to a suit which is pending when Part II comes into force or is made applicable to a particular area where the suit premises are situated but it must be observed that the question whether the protection of sec.
12(1) of the Act would be available in regard to a pending appeal when Part II is made applicable to the particular area did not arise for consideration nor was decided in that case.
Counsel for the appellant defendant has however, urged that on the well accepted principle that an appeal is nothing but a continuation of the suit the retrospective operation of s 12(i) must be extended to such pending appeal especially as the languages thereof must receive the same interpretation in regard to a pending appeal.
We have no doubt that by itself the provision would apply to pending appeals but the provision has to be considered in the light of the other provision to be found in s 50 and the proviso thereto read with the latter part thereof which expressly deals differently with the aspect of applicability of the Act especially Part II thereof to pending suits and original proceedings on the one hand and pending execution proceedings and appeals on the other.
That is why counsel for the appellant defendant raised the second contention that section 50 and the proviso thereto read with the latter part thereof did not apply to the present case at all and in that behalf urged that the proviso M together with the latter part thereof is not an independent provision 1059 but is linked with the substantive enactment contained in s 50 that A is to say the proviso has been inserted merely with a view to qualify or create an exception to what is state in the main provision .
The manner in which the two contentions were put forward by counsel for the appellant defendant clearly showed that he realized that unless the present case was taken out of the purview of s 50 and the proviso thereto read with the latter part thereof his client would not be able to claim the benefit of the protection of section 12(1) of the Act.
Therefore, the two contentions being inter dependent it will be desirable to deal with the second contention first.
Of course, we shall also deal with his contention that the defendant.
appellant would be entitled to the protection of section 12(1) independently of and irrespective of whether his client 's case is covered by section 50 and the proviso thereof read with the latter part thereof or not.
Turning then to the second contention of counsel for the appellant defendant it is obvious that the question whether the present case falls within or outside the purview of the proviso to section 50 depends upon what is true nature and scope of the proviso introduced at the end of s 0 ? Is it introduced merely with a view to quality or create exceptions to what is contained in the main provision of section 50) or does it g; beyond that purpose and enact a substantive law of its own by way of providing for special savings following upon the repeal of the two earlier enactments, the 1939 Act and the 1944 Act ? That a proviso could be of either type was not disputed before us by counsel for the appellant defendant.
In fact in Shah Bhojraj 's case (supra) this is Court after referring to two English decisions and a passage in Caries on Statute Law (5th edition) at page 166 of the Report has observed thus: "The law with regard to provisos is well settled and well understood As a general rule, a proviso is added to enactment to qualify or create an exception to what is in the enactment and ordinarily a proviso is not interpreted as stating a general rule But provisos are often added not as exceptions or qualifications to the main enactment but as savings clauses, in which cases they will not be considered as controlled by the section.
" The question is in which category the instant proviso together with latter part thereof fall .
It may be stated that this very question 1060 Was hotly debated before the Court in that case but was not decided and kept open because of the view taken by the Court on the contention pertaining to proper interpretation of s 12(1) of the Act and since the Court held that section 12(1) is retrospective in operation and covers suits pending on the date when Part II was applied to the particular area it granted relief to the tenant appellant against eviction.
We might observe, however, that the same result would have obtained even if the case were considered under the proviso to s 50 because under it suits and proceedings pending at the date when Part II is made applicable are required to be decided by applying the 1947 Act to them.
Since the question raised before us relates to the applicability of the 1947 Act to a pending appeal we shall have to decide the question pertaining to the true nature and scope of the proviso to sec.
50 in this case.
Before we deal with that question we might indicate that the said proviso to section 50 as it originally stood has undergone certain amendments effected by Bombay Act 3 of 1949.
The proviso as it originally stood ran thus (omitting unnecessary parts): "Provided that all suits and proceedings (other than execution proceedings and appeals between a landlord and a tenant relating to recovery or fixing of rent or possession of any premises to which the provisions of part II apply . . . which are pending in any Court, shall be transferred to and continued before the Courts which h would have jurisdiction to try such suits or proceedings under this Act; and thereupon all the preprovisions of this Act and the Rules made thereunder shall apply to all such suits and proceedings.
" By the Bombay Act 3 of 1949 three changes were made by the legislature.
(i) it deleted the words "other than execution proceedings and appeals" appearing in brackets from the proviso and inserted a new paragraph at the end of that proviso dealing separately with executions proceedings and appeals, (ii) it inserted the words "or shall be continued in such Courts as the case may be" in the proviso and (iii) it deleted the word "thereupon" from the proviso.
The object of amendments made at (ii) and (iii) was to remove the judicial confusion caused by Courts taking conflicting views on the question whether the Act ( 1947 Act) applied only to transferred cases and not others Previously the proviso stated that all suits and proceedings of a certain category mentioned there.
1061 in "shall be transferred to and continued" before the Courts which A would have jurisdiction to try them under the Act and "thereupon" the provisions of the Act shall apply to them and therefore some Courts took the view that the provisions of the Act (1947 Act) will apply only to suits and proceedings which were so transferred and continued and others held to the contrary. 'This conflict was set at rest by these amendments.
By the amendment made at (i) what was there in the body of the proviso was relegated to a new separate paragraph and no change was effected except that the effect of the wide expression "all suits and proceedings" was re emphasised and further clarified by using the words "execution proceedings and appeals arising out of decrees and orders, passed before the coming into operation of this Act" in the new paragraph.
Bearing in mind the aforesaid legislative amendments we shall proceed to consider the question as to what is the true nature and scope of the proviso.
For that purpose it will be necessary to read as a whole the entire provision, namely, the substantive part of section 50.
the proviso thereto and the new paragraph added at the end of the proviso.
So read, two aspects stand out very clearly.
In the first place, it is clear that under the substantive part of section 50 on the coming into force of the Act (the 1947 Act) the two earlier enactments (1939 Act and the !944 Act) stand repealed.
If nothing more was said then section 7 of the Bombay General Clauses Act, 1904 would have come into play and would have had the effect of saving the legal proceedings or remedies in respect of any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactments.
In other words, all suits and proceedings including education proceedings and appeals arising therefrom which were pending on the relevant date and which were governed by the provisions of these respective repealed Acts would have been saved and the rights and obligations of the parties thereto would have been worked out under the relevant provisions of the repealed Acts.
But here a clear intention to deviate from the normal rule which applies to the repeal of enactments is clearly evinced by the Legislature by the manner in which the proviso w s enacted initially or as it now stands after the amendments.
Either under the proviso as it originally stood or under the new separate paragraph enacted by way of an amendment the legislative intent was and is quite clear that only suits and original proceedings between a landlord and a tenant (of the description or categories specified 1062 therein) which were pending on the relevant date are required to be decided and disposed of by applying the provisions of the 1947 Act while execution proceedings and appeals arising out of decrees or orders passed before the coming into operation of the Act are denied the benefits of the provisions of the Act and have been directed to be decided and disposed of as if this Act had not been passed, that is to say, such execution proceedings and appeals would be continued to be governed by and shall be disposed of in accordance with the law that was then applicable to them In other words, it is clear that the proviso was and has been enacted to provide for special savings which suggests that it has not been introduced merely with a view to qualify or create exceptions to what is contained in the substantive part of section 50.
Secondly, it does appear that the Legislature while framing the Act (the 1947 Act) was enacting certain provisions for the benefit of tenants which conferred larger benefits on them than were in fact conferred by the earlier enactments which were repealed, (and this would be clear if regard be had to the wider definition of the expression 'tenant ' adopted in section 5(11) of the Act) and therefore, the legislature thought it advisable that in regard to pending suits and original proceedings also (of course of the description or categories specified therein) in which the decrees and orders were not passed to provisions of the Act should be made applicable.
It is with this intention that the proviso to section 50 has been enacted in the manner it has been done.
What is more, while so extending the larger benefits of the Act (the 1947 Act) to tenants the Legislature has used a very wide expression, namely, "all suits and proceedings between a landlord and a tenant" so as to include within that category suits and proceedings filed under the repealed Acts as also under the general law or Transfer of Property Act.
Deliberate use of such wide expression clearly shows that the benefit of the Act was intended to be given to all tenants who were parties to all suits and proceedings filed either under the repealed Acts or under the general law or Transfer of Property Act and were pending at the relevant date.
It is therefore, clear that the proviso read with the separate paragraph added thereto will have to be regarded as an independent provision enacting a substantive law of its own by way of providing for special savings and (Counsel 's contention that the same has been added merely with a view to qualify or to create an exception to what is contained in the main provision of section 50 has to be rejected.
We might refer to a Bombay High Court decision in Shankarlal 1063 Ramratan vs Pandharinath Vishnu(1) where a similar view of the proviso to section 50 of the Act has been taken and we approve the same.
Having regard to the aforesaid conclusion which we have reached on the true nature and scope of the proviso to section 50 of the Act it would be clear that the present case, in which an appeal (arising out of a decree passed in a suit filed under the Transfer of Property Act) was pending when Part II of the Act was made applicable to village Kalwada, would be directly covered by the proviso read with the separate paragraph added thereto and the appeal was liable to be decided and disposed of as if the 1947 Act had not been passed, that is to say, had to be disposed of in accordance with the law that was then applicable to it In this view of the matter, we are of the opinion that the learned Assistant Judge as well as the High Court were right In coming to the conclusion that the appellant plaintiff was not entitled to any protection of the 1947 Act as claimed by him.
Counsel for the appellant defendant however, faintly urged before us that his client would be entitled to the protection of section 12(1 ) of the Act, (which has been held to be retrospective in operation) independently of and irrespective of whether his case was covered by the proviso to section 50 read with the latter part thereof or not.
It is impossible to accept this contention for the simple reason that 8.
12(1) of the Act would unquestionably be a general provision whereas the proviso to section 50 read with the new paragraph added thereto, which has now been held to be an independent provision enacting substantive law in itself and which expressly deals with pending matters (suits and other proceedings in contradistinction with execution proceedings and appeals) would be a special provision contained in the Act and obviously under the normal rule of interpretation the special provision must prevail over the general and therefore if a case is covered by the special provision the general provision will not be attracted to it The Contention has therefore to be rejected Before parting with the case we would like to point out that Chandrasingh Manibhai 's case (supra) was also a case dealing (1) 53 Bom.
L.R 319 1064 with an appeal (arising out of a decree passed on a date prior to the coming into force of the 1947 Act in a suit filed under the Transfer of Property Act) which was pending at the relevant date and the question was whether on the principle that the appeal was in the nature of a rehearing of the suit the same should be decided in accordance with the provisions of the 1947 Act which had come into force during its pendency and this Court took the view that having regard to the proviso to section 50 as it originally stood the Act was given retrospective operation only to a limited extent and execution proceedings and appeals were excluded from this effect and were to be governed by the law in force at the time when the decrees were passed and therefore, the tenant was not entitled to the protection of the 1947 Act and was liable to be evicted.
Really speaking this decision had concluded the point raised before us in the present appeal But since in Shah Bhojraj 's case (supra) a distinction was made between sub sec.
(1) of section 12 on the one hand and sub secs.
(2) and (3) on the other and it was held that the former provision was retrospective in operation and the latter prospective, Counsel for the appellant defendant made valiant attempt to brings his client 's case within the purview of section 12(1) by putting forward the plausible contention that his case was not covered by the proviso to section 50 read with the separate paragraph added thereto at all on the ground that the said proviso together with the new separate paragraph added thereto was not an independent provision enacting any substantive law therein but was linked with the main provision contained in section 50 and had been introduced merely with a view to qualify or create an exception to what is contained in the main provision but that attempt has failed in view of our conclusion on the true nature and scope of the said proviso read with the Dew separate paragraph added to it.
In the result, the appeal fails and is dismissed but in the circumstances there will be no order as to costs.
N.V.K. Appeal dismissed.
| The respondents plaintiffs gave a lease of an open plot lo the appellant defendant for a period of 10 years for the purpose of running a flour mill after making necessary construction thereon at a yearly rent.
In the lease deed there was a clause for the renewal of the term, and also that if it was not renewed, the lessors were given the right to recover vacant possession on removal of construction at the expiry of the initial term.
There was no renewal of the term on the expiry of 10 years lease period and the appellant defendant was permitted to bold over.
Later by a notice nuder section 106 of the Transfer of Property Act the respondent called upon the appellant defendant to vacate and hand over vacant possession As the notice was not complied with a suit in ejectment was filed against the a appellant defendant The trial court negatived all the daffiness that were raised by the appellant defendant and decreed the suit for ejectment in favour of the respondents plaintiffs.
The appellant defendant challenged the decres by an appeal to the District Court and while the appeal was pending the State by a Notification dated 26th March, 1980 applied Part II of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 to the village where the suit premises were situated.
The appellant defendant with the permission of the court raised the contention in the appeal that he was entitled to the protection of Part II of the Act and since none of the grounds on which eviction could have been made under Part II had been made out by the respondents plaintiffs they were not entitled to recover possession.
This contention was refuted ml behalf of The respondents plaintiffs on the ground that in view of the proviso to s 50 of the Act and particularly the latter part thereof Part II of the Act had no retrospective operation so far as 1052 pending appeals were concerned and such appeals had to be disposed of as if Part II of the Act was not applicable.
The Assistant Judge took the view that the proviso to section 50 read with the latter part thereof expressly enacted that pending appeals arising out of decrees or orders passed before the coming into operation of the Act had to be disposed of as if the Act had not been passed and therefore the appellant defendant was not entitled to any protection as claimed by him and the respondents plaintiffs were entitled to the decree for possession and dismissed the appeal.
The second appeal of the appellant defendant to the High Court was summarily dismissed.
In the appeal to this Court on the question: whether a pending appeal would be governed by the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1947 Upon the Part II of the Act being made applicable in the area in which the suit premises were situated during its pendency .
Dismissing the Appeal, ^ HELD: 1.
Having regard to the two decisions in Chandrasingh Manibhai and others vs Surjit lal Ladhamal Chhaabda and others, and Shah Bhojraj Kuverji Oil Mills and ginning factory v, Subhash Chandra Yograj Sinha; , it is clear that sub secs.
(2) and (3) of section 12 are prospective but sub sec.
(1) thereof is retrospective in operation.
[1056B] 2.
By the Bombay Act 3 of 1949 three changes were made by the legislature, (i) it deleted the words other than execution proceedings and appeals" appearing in brackets from the proviso and inserted a new para graph at the end of that proviso dealing separately with execution proceedings and appeals, (ii) it inserted the words 'or shall be continued in such Courts as the case may be" in that proviso, and (iii) it deleted the word "thereupon" from the proviso.
the object of amendments made at (ii) and (iii) was to remove the judicial confusion caused by Courts taking conducting views on the question whether the Act (1947 Act) applied only to transferred cases and not others.
By the amendment made at i i) what war there in the body of the proviso was relegated to a new separate paragraph and no change was effected except that the effect of the wide expression ' all suits and proceedings" was re emphsised and further clarified by using the words "execution proceedings and appeals arising out orders, passed before the coming into operation of this Act" in the new paragraph.
[1060G H; 1061B C] 3.
(i) The substantive part of section 50, the proviso thereto and the new paragraph added at the end of the proviso has to be read as a whole to know the true nature and scope of the proviso.
[1059B] (ii) Under the substantive part of section 50 on the coming into force of 11 the Act (the 1947 Act) the two earlier enactments (the 1939 Act and the 1053 1944 Act) stand repealed.
If nothing more was said then section 7 of the A Bombay General Clauses Act, 1904 would have come into play and would have had the effect of saving the legal proceedings or remedies in respect of any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactments.
In other words, all suits and proceedings including execution proceedings and appeals arising therefrom which were pending on the relevant date and which were governed by the provisions of the repealed Acts would have been saved and the rights and obligations of the parties thereto would have been worked out under the relevant provisions of the repealed Acts.
But the proviso which provides for special savings clearly indicates that pending suits and original proceedings in which decrees and orders have not been passed alone should be governed by the provisions of the Act and not execution proceedings and appeals arising out of such decrees and orders passed before the coming into operation of the Act.
[1061E G; 1062A B] (iii) The proviso was and has been enacted to provide for special savings which suggests that it has not been introduced merely with a view to qualify or create exceptions to what is contained in the substantive part of section 50.
Secondly, it does appear that the Legislature while framing the Act (the 1947 Act) was enacting certain provisions for the benefit of tenants which conferred larger benefits on them than were in fact conferred by the earlier enactments which were repealed, this is clear if regard be had to the wider definition of the expression tenant ' adopted in section S (II) and therefore, the Legislature thought it advisable that in regard to pending suits and original proceedings of the description or categories specified therein, in which the decrees and orders were not passed the provisions of the Act should be made applicable.
It is with this intention that the proviso to section 50 has been enacted in the manner it has been done.
[1062C E] (iv) While extending the larger benefits of the 1947 Act to tenants the Legislature has used a very wide expression, namely, "all suits and proceedings between a landlord and tenant" so as to include within that category suits and proceedings filed under the repealed Acts as also under the general law or Transfer of Property Act [1062F] (v) The proviso read with the separate paragraph added thereto will have to be regarded as an independent provision enacting a substantive law of its own by way of providing for special savings.
[1062G] Shankarlal Ramrotan vs Pandharinath Vishnu, 53 Bom.
L. R. 319, approved.
In the instant case, an appeal (arising out of a decree passed in a suit filed under the Transfer of Property Act) was pending when Part II of the Act was made applicable to village Kalwada, (where the suit property was situated) would be directly covered by the proviso read with the separate paragraph added there(o and the appeal was liable to be decided and disposed of as if the 1941 Act had not been passed, that is it had to 1054 be disposed of in accordance with the law that was then applicable to it.
The Assistant Judge as well as the High Court were therefore right in coming to the conclusion that the appellant defendant was not entitled to any protection of the 1947 Act as claimed by him.
[1063B Dl
|
254 to 261 of 1981.
Under Article 32 of the Constitution of India.
N.A. Palkhiwala, Soli J. Sorabjee, T.R. Andhyarujina, H.P. Ranina, section Ganesh, J.B. Dadachanji, Ravinder Narain, Mrs. A.K. Verma, D.N. Misra, section Sukumaran, Lira Goswami, Joel Pares, Ms. Rubia Anand, R.F. Nariman, P.H. Parekh, Sanjay Bhartari, M.K.S, Menon, R.K. Dhillon, Ms. Rohini Chhabra, Sunita Sharma, Ms. Ayesha Misra, A. Subba Rao, section Balakrishnan, Harish N. Salve, S.S. Shroff, Mrs. P.S. Shroff, Ms. Malvika Rajkotia, B. Parthasarthi, Vijay Kumar Verma, Mukul Mudgal, Suresh Verma, Praveen Kumar and Vishnu Mathur for the Petitioners.
K. Parasaran, B. Datta, V. Jaganatha Rao, K. Sudhakaran, Dr. 883 V. Gauri Shankar, S.K. Dholakia, P.S. Poti, G.A. Shah, Ms. A. Subhashini, B.B. Ahuja, H.K. Puri, A. Subba Rao, K.R. Nambiar, A.S. Bhasme and M.N. Shroff for the Respondents.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
In this batch of writ petitions under Article 32 of the Constitution of India petitioners who are hoteliers challenge on grounds of lack of legislative compe tence and of violation of Articles 14 and 19(1)(g) the constitutional validity of the Hotel Receipts Tax Act, 1980 ( 'Act ' for short) which imposes a special tax on the gross receipts of certain cetegory of hotels.
Section 3 of the Act limits the application of the 'Act ' to those hotels where the "roomcharges" for residential accommodation provided to any person during the previous year are Rs.75 or more per day per individual.
If a hotel is within this class, then, Section 5 brings to charge the Hotel 's 'chargeable receipts ' as defined under Sec.
6 of the Act.
The Act was passed on 4.12.1980 and came into force on 9.12.1980 when it received the assent of the President of India.
The levy under the 'Act ' commences from the assess ment year 1981 82 and brings to tax the chargeable receipts of the corresponding previous year.
The rate of tax is a flat rate of 15 per cent of the "chargeablereceipts" defined in sec.
6 as the total amount of all charges, by whatever name called, received by or accruing or arising to the assessee in the previous year in connection with the provi sion of residential accommodation, food, drink and other services in the course of carrying on the business of a hotel.
But such charges received from persons within purview of Vienna Convention on Diplomatic Relations, 1961, or Vienna Convention on Consular Relations are exempt from the tax.
The machinery under the Income tax Act, 1961, is en grafted for purposes of assessment, levy and collection of tax under the Act.
It is, however, relevant to note that though the 'Act ' is put into force from the Asst.
Year 1981 82 the levy was discontinued from 27.2.1982.
This batch of writ petitions were heard along with Writ Petition 1395 of 1987 and the connected writ petitions in which the constitutional validity of the Expenditure Tax Act, 1987, was challenged on substantially similar grounds.
In the present 'Act ' the levy is on 'Chargeable Receipts ' while in the Expenditure Tax Act, 1987, it is on "Charge able Expenditure" which represents substantially the same items as to constitute 'Chargeable Receipts ' under the present 'Act '.
We have disposed WP 1395 of 1987 and the connected matters by a separate Judgment.
884 3.
Sections 3, 5, 6 of the Act have a bearing on the application of the contentions urged in support of the challenge to the constitutionality of the Act.
Section 3 reads: "3.(1) Subject to the provisions of sub sec tion (2) and subsection (3), this Act shall apply in relation to every hotel wherein the room charges for residential accommodation provided to any person at any time during the previous year are seventy five rupees or more per day per individual.
Explanation.
Where the room charges are payable otherwise than on daily basis or per individual, then the room charges shall be computed as for a day and per individual based on the period of occupation of the residential accommodation for which the charges are pay able and the number of individuals ordinarily permitted to occupy such accommodation accord ing to the rules and custom of the hotel.
(2) Where a composite charge is payable in respect of residential accommoda tion and food, the room charges included therein shall be determined in the prescribed manner.
(3) Where (i) a composite charge is payable in respect of residential accommodation, food, drink and other services, or any of them, and the case is not covered by the provisions of sub section (2); or (ii) it appears to the Income tax Officer that the charges for residential accommodation, food, drink or other services are so arranged that the room charges are understated and the other charges are over stated, the Income tax Officer shall, for the purposes of subsection (1), determine the room charges on such reasonable basis as he may deem fit." Section 5(1) provides: "5.(1) Subject to the provisions of this Act, there shall be 885 charged on every person carrying on the business of a hotel in relation to which this Act applies, for every assessment year com mencing on or after the 1st day of April, 198 1, a tax in respect of his chargeable receipts of the previous year at the rate of fifteen per cent of such receipts: Provided that Where such chargeable receipts include any charges received in foreign ex change, then, the tax payable by the assessee shall be reduced by an amount equal to five per cent of the charges (exclusive of the amounts payable by way of sales tax, enter tainment tax, tax on luxuries or tax under this Act) so received in foreign exchange.
" Explanation omitted as unnecessary Section 5(2) omitted as unnecessary except explanation (ii) Explanation (ii) to Section 5(2) provides: "any food, drink or other services shall be deemed to have been provided on the premises of a hotel if the same is or are provided in the hotel or any place appurtenant thereto and where the hotel is situate in a part of build ing, in any other part of the building." Section 6 provides: "6(1) Subject to the provisions of this Act, the chargeable receipts of any previous year of an assessee shall be the total amount of all charges, by whatever name called, received by, or accruing or arising to, the assessee in connection with the provision of residential accommodation, food, drink and other services or any of them (including such charges from persons not provided with such accommodation) in the course of carrying on the business of a hotel to which this Act applies and shall also include every amount collected by the assessee by way of tax under this Act, sales tax, entertainment tax and tax on luxuries." (2) For the removal of doubts, it is hereby declared that where any such charges have been included in the chargeable receipts of any previous year as charges accuring or arising to the assessee during that previous year, 886 such charges shall not be included in the chargeable receipts of any subsequent previous year in which they are received by the asses see." Other provisions are machinery provisions, providing for the mode of assessment: levy and collection of the tax; for appeals; for of fences: penalties; punishments, etc.
The challenge to the 'Act ' is, in the main, lack of legislative competence on the part of the Union Parliament to enact the law.
Respondent union seeks to support the legisla tion under and as referable to Entry 82 of List 1 i.e., Taxes on Income.
The contentions raised in support of the petitions are these: (a) That in pith and substance, the law is one imposing a tax on luxuries provided in Hotels and therefore, the law is one under Entry 62, List I of the 7th Schedule to the Constitution and outside the Union power; (b) That, at all events, the Act is patently violative of Article 14 in that the basis of classification of hotels on the dividing line of room charges, though in itself an intelligible one, has, however, no nexus, let alone any rational nexus with the object of the law viz., to impose a tax on income; While hotels which collect room charges of Rs.75 per day from any individual in the previous year fail within the tax net, other hotels which have much higher gross receipts are left out.
The classification does not include all persons who, from the point of view of the objects of the Act, are similarly situated.
(c) That the law imposes unreasona ble burden on the petitioners ' freedom of business and constitutes a violation of Arti cle 19(1)(g) of the Constitution.
Re: Contention (a): Shri Palkhivala contended that the impugned law which seeks to impose a tax on what is styled 'Chargeable re ceipts ' which includes payments for residential accommoda tion, food, drink and other services at petitioners ' hotels really brings to tax "luxuries" an impost under Entry 62, List I, reserved to the States.
Learned counsel submitted that the reliance by the Respondents on Entry 82, List I, to support the impost as a tax on income is wholly misconceived 887 inasmuch as, the concepts of "income" and "tax on income" have definite legal connotations crystallised by settled legislative practice and do not admit of "gross receipts" being treated as "income" for purposes of levy of tax under Entry 82, List I. Learned counsel submitted that neither the nomenclature given to the tax nor the standard by which it is measured can determine its true nature and the legisla ture cannot enlarge its power by choosing an appropriate name to the tax.
To show the essential characteristics of what is the concept of 'income ' learned counsel referred to certain observations of the Supreme Court of the United Stated of America: ". it becomes essential to distinguish between what is and what is not "income" as the term is there used; and to apply the distinction, as cases arise, according to truth and substance, without regard to form.
Congress cannot by any definition it may adopt conclude the matter, since it cannot by legis lation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised.
The fundamental relation of "capital" to "income" has been much discussed by econo mists, the former being likened to the tree or the land, the latter to the fruit or the crop; the former depicted as a reservoir supplied from springs, the latter as the outlet stream, to be measured by its flow during a period of time.
" [See: Eisner vs Macomber, ; at 528] Learned counsel also relied upon the following observations of Gajendragadkar, J. in Navnitlal vs K.K.Sen, ; at 915 "This doctrine does not, however, mean that . . " " Parliament can choose to tax as income an item which in no rational sense can be regard ed as a citizen 's income.
The item taxed should rationally be capable of being consid ered as the income of a citizen . . " Learned counsel submitted that the grosS receipts of a hotel received from a customer towards room charges, food, drink and other services provided at the hotel cannot con stitute 'income ' known as 888 such to law.
The submission, in substance are two fold: first that while the "Chargeable Receipts" as conceived in the "Act" do not constitute 'income ' for purposes, and within the meaning of Entry 82 list I, as the receipts cannot rationally be related to the concept of 'income '; and, secondly, that in pith and substance the levy is one under Entry 62 list I within the States ' power.
Learned counsel inviting attention to the following observations of Lord Salmond 's in Governor General in Council vs Province of Madras, 191 " . .
Their Lordships do not doubt that the effect of these words is that, if the legislative powers of the Federal and Provin cial legislatures, which are enumerated in List I and List II of the seventh schedule, cannot fairly be reconciled, the latter must give way to the former.
But it appears to them that it is right first to consider whether a fair reconciliation cannot be effected by giving to the language of the Federal Legisla tive List a meaning which, if less wide than it might in another context bear, is yet one that can properly be given to it, and equally giving to the language of the Provincial Legislative List a meaning which it can prop erly bear." submitted that Entry 62 list II and Entry 82 list I would require to be reconciled accordingly.
Learned Attorney General, appearing for the Union of India sought to support the impost as a tax on income under Entry 82 of list I. It was urged that the word 'income ' in that entry broadly indicates the topic or field of legisla tion and that it should not be read in a narrow and pedantic sense, but must be given its widest amplitude and should not be limited by any particular definition which a legislature might have chosen for the limited purposes of that legisla tion.
The Statutory definitions of and meanings given to 'income ' are matters of legislative policy and do not ex haust the content of the legislative entry by the particular manner in which, and the extent to which, the statute has chosen to define that expression.
On a consideration of the matter, we arc of the opinion that the submission of the learned Attorney General as to the source of the legislative power to enact a law of the kind in question require to be accepted.
The Word 'i ncome ' is of elastic import.
In interpreting expressions in the legislative lists a very wide meaning should be given to the entries.
In understanding the scope and amplitude of the expres 889 sion 'income ' in Entry 82, list I, any meaning which fails to accord with the plenitude of the concept of 'income ' in all its width and comprehensiveness should be avoided.
The cardinal rule of interpretation is that the entries in the legislative lists are not to be read in a narrow or re stricted 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.
The widest possible construction, according to the ordinary meaning of the words in the entry, must be put upon them.
Reference to legislative practice may be admissible in reconciling two conflicting provisions in rival legislative lists.
In construing the words in a constitutional document conferring legislative power the most liberal construction should be put upon the words so that the same may have effect in their widest amplitude.
In Navinchandra Mafatlal vs CIT, Bombay City, [1955] 1 SCR 829 the question was whether the provisions of section 12(b) of the Indian Income tax Act, 1922, imposing a tax on capital gains was ultra vires the powers of the federal legislature under Government of India Act, 1935.
It was contended that taxes on income under Entry 54, list I, of the Government of India Act, 1935, did not embrace within its scope a tax on capital gains.
This contention was re jected.
This Court after referring to the following observa tions of the judicial committee in Kamakshya Narain Singh vs CIT, 13 (PC) "income it is true, is a word difficult and perhaps impossible to define in any precise general formula.
It is a word of the broadest connotation." proceeded to observe: "What, then, is the ordinary, natural and grammatical meaning of the word "income"? According to the dictionary it means "a thing that comes in".
(See Oxford Dictionary, Vol.
V, page 162; Stroud, Vol.
II, pages 14 16).
In the United States of America and in Australia both of which also are English speaking coun tries the word "income" is understood in a wide sense so as to include a capital gain: Reference may be made to Eisner vs Macomber, Merchants ' Loan & Trust Co. vs Smietunka, and United States vs Stewart, and Resch vs Federal Commissioner of Taxation.
In each of these cases very wide meaning was ascribed to the word "income" as its natural meaning.
The relevant observations of learned 890 Judges deciding those cases which have been quoted in the judgment of Tendolkar J. quite clearly indicate that such wide meaning was put upon the word "income" not because of any particular legislative practice either in the United States or in the Commonwealth of Aus tralia but because such was the normal concept and connotation of the ordinary English word "income".
Its natural meaning embraces any profit or gain which is actually received.
This is in consonance with the observations of Lord Wright to which reference has already been made." (Emphasis Supplied) Indeed, Navneet Lal 's case, relied upon by Shri Palkhiwala, would itself conclude the point: "In dealing with this point, it is necessary to consider what exactly is the denotation of the word "income" used in the relevant Entry.
It is hardly necessary to emphasise that the entries in the Lists cannot be read in a narrow or restricted sense." "But in considering the question as to whether a particular item in the hands of a citizen can be regarded as his income or not, it would be inappropriate to apply the tests tradition ally prescribed by the Income tax Act as such." In Bhagwandas Jain vs Union of India, ; the question of includibility, for purposes of income tax, of the assessee 's notional income from a house property in the personal residential occupation of the asses see was assailed on the ground that it did not constitute 'income ' for the purposes and within the meaning of Entry 82 of List I. The amplitude of the expression 'income ' in Entry 82 of List I came in for consideration.
In that context, this Court said: "Even in its ordinary economic sense, the expression 'income ' includes not merely what is received or what comes in by exploiting the use of a property but also what one saves by using it oneself.
That which can be converted into income can be reasonably regarded as giving rise to income.
The tax levied under the Act is on the income (though computed in an artificial way) from house property in the above sense and not on house property." 891 The expression 'income ' in Entry 82, List I cannot, therefore, be subjected, by implication, to any restriction by the way in which that term might have been deplayed in a fiscal statute.
A particular statute enacted under the Entry, might, as a matter of fiscal policy, seek to tax some species of income alone.
The definitions would, therefore, be limited by the consideration of fiscal policy of a par ticular statute.
But expression 'income ' in the legislative entry has always been understood in a wide and comprehensive connotation to embrace within it every kind of receipt or gain either of a capital nature or of a revenue nature.
The 'taxable receipts ' as defined in the statute cannot be held to fall outside such a 'wider connotation ' of 'income ' in the wider constitutional meaning and sense of the term as understood in Entry 82, List I. Contention (a), therefore,, fails.
Re: Contention (b) and (c): We had an occasion to deal with a similar argument in the other batch of cases dealing with the constitutionality of the Expenditure Tax Act, 1987, where the 'chargeable expenditure ' incurred in a particular class of hotels alone was brought to tax, leaving the other hotels out.
We have rejected the challenge to the constitutionality of the provisions of that Act based on Article 14 and 19(1)(g).
There, hotels in which room charges were Rs.400 or more per day per person were alone brought under the Act.
The differ entia was held to be both intelligible and endowed with a rational nexus to the objects of the legislation viz., bringing to tax certain class of expenditure incurred at hotels which were legislatively presumed to, attract an economically superior class of clientale.
Having regard to the wide latitude available to the Legislature in fiscal adjustments, the classification was found not violative of Article 14. 8.
Similar contentions as to the unreasonableness of the restrictions which the imposition of the impugned tax was said to bring about on the petitioners ' freedom of trade and business and the adverse affect of this tax on a significant area of national economy generally and the Tourism Industry in particular have been considered in the petitions assail ing the vires of the Expenditure Tax Act, 1987.
It is now well settled that a very wide latitude is available to the legislature in the matter of classification of objects, persons and things for purposes of taxation.
It must needs to be so, having regard to the complexities involved in the formulation of a taxation policy.
Taxation is not now a 892 mere source of raising money to defray expenses of Govern ment.
It is a recognised fiscal tool to chief fiscal and social objectives.
The defferentia of classification presup poses and proceeds on the premise that it distinguishes and keeps apart as a distinct class hotels, with higher economic status reflected in one of the indicia of such economic superiority.
The presumption of constitutionality has not been dislodged by the petitioners by demonstrating how even hotels, not brought into the class, have also equal or higher chargeable receipts and how the assumption of econom ic superiority of hotels to which the Act is applied is erroneous or irrelevant.
For the reasons stated in and following our Judgment in the said W.P. 1395/87 and connected cases contentions (b) and (c) are also held and answered against the petitioners.
In the result, for the foregoing reasons these petitions are dismissed.
There will, however, be no order as to costs in these petitions.
G.N. Petitions dismissed.
| Section 4(1) of the West Bengal Rural Employment.
and Production Act, 1976 provided for levy of rural employment cess on immovable properties.
Clause (aa) of section 4(2) as amended by section 7(b) of the West Bengal Taxation Laws (Amend ment) Act, 1981 provided for levy of rural employment cess in respect of tea estates on the despatches of tea grown therein.
The first proviso thereto provided for exclusion of despatches of tea for sale made at recognised centres.
The second proviso thereto empowered the State Government 10 fix different rates of cess on despatches of different classes of tea.
Sub section (4) of the amended section 4 provided for exemption of certain categories of despatches from the liability to pay the whole or part of the cess or to reduce the rate of the cess payable thereon.
The first proviso to section 4(2)(aa) was.
however, omitted by the West Bengal Taxa tion Laws (Amendment) Act, 1982.
Article 304(b) of the Constitution permits the legislature of a State to impose reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State provided the Bill or amendment for that purpose is introduced with the previous sanction of the President.
It was contended for the petitioners that the levy of the cess under section 4(1) read with section 4(2)(aa) of the Act, as amended in 1981 and 1982.
was violative of the freedom guaranteed by Article 301 of the Constitu 294 tion and also lay outside the legislative competence of the State Government.
Allowing the writ petitions.
HELD: 1.1 If the levy of a tax on goods has direct and immediate effect of impeding the movement of goods through out the territory of India, there is a violation of Article 301 of the Constitution.
If, however, the impact of the levy is indirect or remote, no valid complaint can be made in relation to Article 301.
There is also no violation of Article 301 if the case fails under Article 304(b) and its proviso.
[299F, 300D E] 1.2 Therefore, if the legislature of a State enacts a law which imposes such reasonable restrictions on the free dom of trade, commerce or intercourse with or within that State as may be required in the public interest and further that the Bill or amendment for the purposes of clause (b) has been introduced or moved in the Legislature of a State with the previous sanction of the President, such enactment will not offend Article 301.
The rural employment cess in the instant case was a tax.
[300F, 299F] Ariabari Tea Co., Ltd. vs The State of Assam & Ors. ; ; The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 S.C.R. 491; Firm A.T.B. Mehtab Majid and Company vs State of Madras & Anr., [1963] Suppl.
2 S.C.R. 435; Kalyani Stores vs TIre State of Orissa & Ors., ; ; State of Mysore vs Ii.
Sanjeeviah, ; and Andhra Sugars Ltd. & Anr.
vs State of Andhra Pradesh & Ors.
, ; , referred to.
2.1 To determine whether the levy was in respect of tea estates, and, therefore, of land thus making an indirect impact or was a levy on despatches of tea thereby directly impeding movement of goods, the substance of the legislation must be ascertained from the relevant provisions of the statute.
[301B] 2.2 The subject of the levy, the nature of which de fines the quality of the levy, however, must not be confused with the measure of liability, that is to say, the quantum of the tax.
Furthermore, the standards laid down for measur ing the liability under the levy must bear a relationship to the nature of levy.
[301B C, 302D E] 295 Union of India & Ors.
vs Bombay Tyre International Ltd. 2.3 If the levy is regarded as one in respect of tea estates and the measure of the liability is defined in terms of the weight of tea despatched from the tea estate there must be a nexus between the two indicating a relationship between the levy on the tea estate and the criteria for determining the measure of liability.
If there is no nexus at all it can conceivably be inferred that the levy is not what it purports to be.
[301H, 302A] 2.4 In the instant case, the nexus with the tea estate is lost altogether in the provisions for exemption or reduc tion of the levy and throughout the nexus is confined to despatches of tea rather than related to the tea estate.
There is nothing to suggest that a particular tea estate produces only one class of tea, and when reference is made to a certain class of tea the reference identifies a certain class of tea estates.
[302E F] 2.5 While there must always be a nexus between the subject of the levy and the measure of the levy that nexus extends into different dimensions.
Variations considered appropriate for the purpose of determining the measure must correspond to variations in the subject of the levy.
If the measure of levy is to vary with the despatches of different classes of tea, there must be something in the class of tea concerned which points to a reason located in the particular tea estate or classes of tea estates which are made the subject of the levy.
So also, if the measure varies with the centre of sale of tea, the variation must relate to a reason to be found in the nature of the tea estate concerned.
Ultimately, the benefit of exemption or reduced levy must be related to the need for exempting the tea estate from that levy or relieving it from part of the normal levy.
[302F, 303A] 2.6 In the instant case the relevant statutory provi sions, including section 4(2)(aa) and section 4(4), indicate no such relationship or nexus between the tea estate and the varied treatment accorded in respect of the despatch of different kinds of tea.
The levy of rural employment cess was, there fore, a levy in respect of despatches of tea and not in respect of tea estates.
It must, thus, be regarded as con stituting a direct and immediate restriction on the flow of trade and commerce in tea throughout the territory of India.
[303B C] 2.7 Such a levy could avoid the injunction declared in Article 301 296 only if it satisfied the provisions of Article 304(b) and the proviso thereto.
The amendments made to the West Bengal Act in 1981 and 1982 had not been moved in the Legislature of the State with the previous sanction of the President.
The provisions brought into the Act by the said amendments were, therefore, unconstitutional and void and could not be given effect to.
[303C D, F, G] 3.
Under the Parliament had assumed con trol of the tea industry including the tea trade and control of tea prices.
Under section 25 of that Act a cess on tea pro duced in India had also been imposed.
The State legislation imposing a cess on despatches of tea was, therefore, also void for want of legislative competence as it pertained to a covered field.
[304B]
|
Civil Appeal No. 5047 (NT) of 1985.
From the Judgment and Order dated 17.7.
1985 of the Allahabad High Court in Sales Tax Revision No. of 1985.
Madan Lokur for the Appellant.
Ashok K. Srivastava for the Respondent.
M/s. D.H. Brothers Pvt. Ltd., a registered dealer under the U.P. Sales Tax Act, is engaged in the sale of machinery including sugarcane crushers.
After coming into force of the Uttar Pradesh Sales Tax Act, 1948 (hereinafter called 'the Act ') the State Government issued a notification dated June 7, 1948 exempting agricultural implements from the levy of sales tax.
Thereafter fresh notifications were issued from the time to time.
The relevant notification dated November 14,1980 enumerated the "Agricultural implements" as under: "Agricultural implements" worked by human or animal power, including Khurpi, Dibbler, Spade, Hansla (Sickle) Garden Knife, Axe, Gandasa, Chaff Cutters, Shears, Seca teurs, Rake, Shovel, Ploughs, Water lifting leather buckets (Pur and Mhot), Rahat and persian whell, Chain Pump, Harrows, Hoes, Cultivators, Seed Drills, Threshers, Shellers, Winnowing fans, Paddy weeders, Gardenfork, Lopper), Belcha, Bill Hook (Double edge), Kudali,Fork, garden Hatchet, Bill Hook (Single edge), Hay Bailer, Bund formers, Scrappers, Levellers or Levelling Karahas, Yokes, crop yield Judginghoops, Hand sprayers Hand dust ers, Animal driven vehicles including carts having pneumatic tyre wheels, crow bars, sugarcane Planters and accessories, attach ments and spare parts of these agricultural implements".
The assessee invoked the jurisdiction of Commissioner, Sales Tax, Uttar Pradesh under Section 35 of the Act claim ing that the Kohlu meant for extracting juice from sugarcane was an agricultural implement within the above quoted noti fication and as such was exempt from levy of Sales Tax.
The Commissioner by his order dated December 31, 1983 decided the question against the assessee.
The assessee filed appeal against the said order before the Sales Tax Tribunal.
Luc know Bench, under Section 10 of the Act.
The Tribunal upheld the findings of the Commissioner and dismissed the appeal.
Thereafter the assessee preferred a revision petition under Section 11 of the Act before the Allahabad.
High Court.
The High Court relying on its earlier decision in Bharat Engi neering and Foundry Works vs 426 The U.P. Government, [1963] 14 S.T.C. 262 dismissed the revision petition.
In that case the question for considera tion before the High Court was "whether cane crushers are agricultural implements within the meaning of the words 'agricultural implements ' as mentioned in the Government Notification. . and hence exempt from U.P. sales tax.
" The question was answered in the negative on the following reasoning: "Cane crushers and boiling pans are used only in the manufacture of gur from sugarcane.
Sugarcane is an agricultural produce and the process which results in the production of sugarcane is undoubtedly agriculture, but the production of gur from sugarcane is a manufac turing process and not an agricultural proc ess.
The agricultural process comes to an end with the production of sugarcane and when gur is subsequently being prepared it is manufac turing process that commences.
Merely because sugarcane is an agricultural produce anything that is done to it after it is product is not necessarily a continuation of the agricultural process.
It cannot be doubted that agricultur al produce can the subjected to a manufactur ing process; merely because gut is produced out of sugarcane which is an agricultural produce, the process of preparing gut does not become an agricultural process. .
An agricultural implement is an implement that is used in agriculture; any implement that is used after the agricultural process comes to an end and a manufacturing process commences, is not an agricultural implement.
" The High Court in Bharat Engineering case relied upon the following observations of this Court in Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy, "Agriculture is the basic idea underlying the expressions 'agricultural purposes ' and 'agricultural operations ' and it is pertinent therefore to enquire what is the connotation of the term 'agriculture '.
As we have noted above, the primary sense in which the term agriculture is understood is agar field and cultracultivation, i.e., the cultivation of the field, and if the term is understood only in that sense agriculture would be restricted only to cultivation of the 427 land in the strict sense of the term meaning thereby, tilling of the land, sowing of the seeds, planting and similar operations on the land.
They would be the basic operations and would require the expenditure of human skill and labour upon the land itself.
There are however other operations which have got to be resorted to by the agriculturist and which are absolutely necessary for the purpose of effec tively raising the produce from the land.
They are operations to be performed after the produce sprouts from the land, e.g., weeding, digging the soil around the growth, removal of undesirable undergrowths and all operations which foster the growth and preserve the same not only from insects and pests but also from depradation from outside, tending, pruning, cutting, harvesting, and rendering the produce fit for the market.
The latter would all be agricultural operations when taken in conjunc tion with the basic operations above de scribed, and it would be futile to urge that they are not agricultural operations at all. . " It is clear from the above quoted observations of this Court that the agricultural process comes to an end when the crop is harvested and is brought home for marketing or for further processing.
In the present case the agricultural process finishes when sugarcane is harvested.
Preparation of gur from sugarcane is not the continuation of the agricul tural process.
While giving meaning to an item in a taxing statute the Courts should give it a meaning as intended by the framers of the statute by looking at the various items mentioned in a particular group.
The items in one group should be consid ered in a genderic sense.
The notification dated November 14, 1980 includes various items under the head "agricultural implements".
It is no doubt correct that the said definition cannot be confined to the various implements specifically mentioned therein.
The definition being inclusive it has a wider import and any other implement which answers the description of an agricultural implement can be included in the definition.
A bare reading of the notification, however, shows that all the implements mentioned by name after the word "including. . "are by and large those which are used for cultivation of land and other operations which foster the growth and preserve the agricultural produce.
None of these implements can be worked after the agricultur al process in respect of a crop comes to an end.
Therefore the intention of the framers of the 428 notification could only be to limit the general words in the notification to the implements of the same kind as are specified therein.
We are, therefore, of the view that on the plain reading of the notification the sugarcane crushers do not come within the definition of agricultural imple ments.
It has been brought to our notice that from 1985 onwards the State Government has specifically exempted sugarcane crushers from the levy of sales tax.
We dismiss the appeal with no order as to costs.
G.N. Appeal dis missed.
| By a letter dated December 9, 1983 certain incentives and allowances were provided by the appellant to its offi cers posted at Gauhati who were not from the North Eastern region.
Those allowances were generally known as special duty allowances and the main special duty allowance com prised 25% of basic pay, subject to a maximum of Rs.400 per month.
By a Memorandum issued by the appellant on April 11, 1985, an ad hoc increase in salary was effected for non local officers and an option was given to them either to choose the ad hoc increase or the special duty allowances for the period during which they were posted at Gauhati.
The respondent demanded the extension of the said bene fits to the local officers by their letter dated May 10, 1985.
When the appellant bank declined to allow the benefits to the local officers, the respondent association challenged the Memorandum dated April 11, 1985 in a writ petition in the High Court, contending that all the officers of the appellant bank posted at Gauhati, whether they were from the North Eastern region or outside had to live in the same conditions and suffer from the same hardships, and hence, if any allowance was given to the officers transferred from outside to the Gauhati Office, the very same allowance should also be given to the local officers posted at Gau hati.
The appellant bank averred in its counter that the scheme of ad hoc incentives was introduced to tide over the problem of adequately staffing the Gauhati office; that the non local officers experienced difficulties in getting accommodation, getting familiar with the language and so on, and some incentives had to be given to them to mitigate the hardships experienced by them on transfer to Gauhati; that the said incentives were temporary and because of the pecul iar circumstances 461 prevailing at the moment in.
the North Eastern region, which was regarded as a difficult region.
The High Court allowed the petition, holding that all officers at Gauhati suffered from substantially the same hardship and that the local officers of the appellant bank at Gauhati were discriminated against and directed that they must be given the same benefits as the non local officers transferred to Gauhati.
Allowing the appeal by special leave filed by the.bank, this Court, HELD: 1.01.
The hardship and inconveniences suffered by an officer of the appellant bank who was transferred to Gauhati from regions other than the North Eastern region would certainly be more acute than those suffered by local officers posted at Gauhati.
[463G H] 1.02.
Some of the officers coming from the North Eastern region may also face considerable hardship when posted at Gauhati but the fact that there might be a few such officers would not render the payment of special allowance, exclu sively to officers transferred from distant regions discrim inatory and bad in law.
[464B C] 1.03.
The Reserve Bank of India, is a banking institu tion and if in the interest of efficiency and proper work ing, it bona fide took the decision to grant some extra benefits to the non local officers transferred to Gauhati with a view to maintain efficient working of its unit at Gauhati, they cannot be treated as being guilty of any unlawful discrimination.
[464E F]
|
: Criminal Appeal Nos.
375 77 of 1987.
From the Judgment and Order dated 22.10.1984 in the Allahabad High Court in Crl.
A. Nos. 1925, 1808 of 1981 and Government Appeal No. 2599 of 1981.
R.K. Garg, Prith Raj, U.R. Lalit, R.L. Kohli, Shivpujan Singh, Manoj Prashad, Dalveer Bhandari, T. Sridharan (N.P.) and B.S. Chauhan for the appearing parties.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
On 29.5.
1981 at about 8 A.M. a grave rioting took place in the village of Tirro in Varanasi District.
1n the course of the said rioting two persons Mahendra Singh and Virendra Singh deceased Nos. 1 and 2 were killed and Vijay Narain Singh, P.W. 1, Uma Shankar Singh, P.W. 2 and one Kailash Singh 577 received injuries.
In respect of these offences 14 accused were tried under Sections 148 and 302 read with Sec.
149 I.P.C. Chirkut Singh, Accused No. 6 was tried for offence punishable under Section 307 I.P.C. for attempting to commit the murder of P.W. 1 and the remaining accused under Section 307 read with Sec.
149 I.P.C. for causing injuries to Uma Shankar Singh, P.W. 2 and Kailash Singh.
It is alleged that the material prosecution witnesses, deceased persons and the accused belong to the same village.
Since 1972 there have been disputes between these two rival groups.
A number of cases were also pending in the courts.
On the day of occur rence at 8 A.M.P.W. 1 went to his pumping set.
P.W. 2 Uma Shankar Singh and his relation Kailash Singh were also at the pumping set.
Deceased Nos. 1 and 2 were proceeding alongwith the rasta towards the pumping set for taking bath.
When they reached near the Khandhar (old building) of Vijay Pratap Singh Accused No. 5 Lallan Singh exhorted the other accused who were all lying in wait to kill them.
All the 14 accused emerged out of the Khandar.
Out of them Accused Nos. 1, 3, 4 and 6 (accused Nos.
are being referred to as arrayed before the trial court) were armed with guns and the rest were armed with lathis.
They advanced towards deceased Nos. 1 and 2.
Accused No. 1 fired a shot which hit deceased No. 1 and he was immediately also shot at by accused No. 3 Ranjit Singh and he fell down.
In the meanwhile Accused No. 4 Ram Briksh Singh fired at Deceased No. 2 Virendra Singh who fell down and both deceased died on the spot.
The other accused carrying lathis advanced towards P.W. 1 who ducked and escaped unhurt.
Then the lathis wielding accused assaulted P.W. 1 Vijay Narain Singh, P.W. 2 Uma Shankar Singh and Kailash Singh.
P.W. 1 managed to escape and ran away.
The trial court relying on the evidence of P.Ws. 1 and 2, who are the main eye witnesses, convicted all the 14 accused of the offences for which they were charged and the substantial sentence awarded is imprisonment for life under Section 302 I.P.C. read with Section 149 I.P.C.
The convict ed accused preferred appeals.
The State also filed appeal for enhancement of the sentence.
A Division Bench of the Allahabad High Court consisting of Justice Katju and Justice Agrawal heard the appeals.
Justice ' Katju allowed the ap peals filed by the accused and dismissed the appeal filed by the State but the other learned Judge disagreed and dis missed all the appeals concurring with the trial court.
The matter came up before a third Judge Seth, J. He took the view that only such of those accused to whom specific overt acts were attributed could be convicted and the other should be given benefit of doubt.
In that view of the matter he confirmed the convic 578 tion of Accused Nos. 1, 3, 4 and 6 and acquitted the rest of the accused.
Accused Nos. 1, 3, 4 and 6 applied for special leave which was granted by this Court and theft appeals are numbered as Criminal Appeal Nos. 375 77/87 and the State has preferred appeals against the acquittal of the other remaining 10 accused which are numbered as Criminal Appeal Nos. 372 74/87.
It is contended on behalf of the State that the occur rence has taken place in broad day light and merely because the witnesses are interested their evidence cannot be re jected and that the view taken by Justice Seth is incorrect and the view taken by the trial court as well as by Justice Agrawal has to be accepted.
On the other hand, the counsel appearing for the accused submitted that witnesses who were partisans and were highly interested have made omnibus allegations and it is highly dangerous to accept their evidence because there is every likelihood of innocent persons having been falsely implicated.
It is also their further submission that the prosecution has not come forward with the whole truth; and that the origin of the occurrence has been suppressed in as much as injuries to some of the accused persons have not been explained and consequently it must be held that occurrence did not take place in the manner alleged by the prosecution and that under these circumstances the truth from falsehood cannot be separated and therefore, none of the accused could be convicted.
Before we consider these rival contentions some of the facts which are not indispute may be noted.
There was a longstanding rivalry between the two groups.
The time and place of occurrence are not in controversy.
That the two deceased persons died of gun shots injuries also is not in dispute.
P.Ws. 1 and 2 also received injuries during the course of this occurrence.
The prosecution in support of its case examined P.Ws 1 to 11.
P.W. 7 the Doctor examined P.W. 2 at about 11.40 A.M. on the same day and found 10 injuries.
All of them were contusions and he opined that they might have been caused by a blunt object like lathi.
On the same day, he examined P.W. 1 and on his person he found four contusions which could have been caused by Lathis.
The Doctor also examined Kailash Singh, who was not examined as a witness.
and found two contusions.
P.W. 4 another Doctor who conducted postmortem on deceased No. 2 Virendra Singh found two gun shots wounds on the cranial cavity.
Injury No. 1 is an entry wound and injury No. 2 is an exist wound.
Then he conducted the autop sy on the dead body of deceased No. 1.
He found two in juries, the first one is on 579 the left nipple which is an entry wound and injury No. 2 is on the left palm.
On internal examination he found a bullet embedded and the same was recovered.
P.W. 5 is the Investi gating Officer.
After registration of the crime he undertook the investigation, went to the scene of occurrence, held the inquest of the two dead bodies and recorded the statement of the witnesses.
He also found two live cartridges one of 16 bore and another of 12 bore.
P.W. 3 is another eye witness.
He deposed that Accused Nos. 1, 3, 4 and 6 were armed with guns and the other were armed with lathis.
Accused No. 1 fired at the deceased No. 1 and Accused No. 3 also fired at him as a result of which he fell down and when deceased No. 2 tried to move, Accused No. 4 shot at him and deceased No. 2 also fell down.
When P.Ws 1, 2 and Kailash Singh rushed towards the place, accused No. 6 fired at P.W. 1 but he escaped.
Then the lathi wielding persons beat P.Ws 1 and 2 and Kailash Singh.
To the same effect is the evidence of P .Ws 1 and 2 also.
Under Section 3 13 Cr.
P.C. all the circumstances appearing against the accused were put to them.
They in general denied the offence.
However, among them, accused Nos. 6, 7, 8, 9, 11, 13 and 14 admitted their presence at the scene of occurrence.
Accused No. 6 in par ticular stated that P.W. 1 and others armed with guns, spears and lathis tried to do fishing in the pond in which accused No. 6 had a share.
Accused No. 6 and others went to the pond for fishing.
P.W. 1 and other challenged and they chased accused No. 6 and others and accused No. 13 was shot at by P.W. 1 and others and he and accused No. 14 were beaten with lathis and in defence he fired two gun shots hitting deceased Nos. 1 and 2.
He then went to the police station and lodged a report and deposited his gun and that P.W. 1 has falsely implicated him.
As regards this report which is purported to have been given by accused No. 6, P.W. 5 the Investigating Officer was questioned.
He admitted that when he returned to the Police Station on 30th May, 1980 he came to know that, accused No. 6 has surrendered his gun.
He also admitted in the cross examination that the crime was registered on the basis of the report given by Chirkut Singh and the same was also investigating but it appears that no action was taken.
Investigating Officer also admitted that when he saw accused Nos. 13 and 14 he found injuries on them.
The other circumstance strongly relied upon by the defence is that there were gun shots injuries on accused No. 13.
It may be noted that the same has not been explained by the prosecution.
P.W. 7 the Doctor admitted that he examined Accused No. 14 and found on him a skindeep 12" x 2" lacerat ed wound on the left thigh and a wound certificate was issued.
He also admitted that he examined accused No. 13 and he found five tiny abrasions in the area of 4cm x 4cm on outer surface of right thigh just above knee joint and the injured was refer 580 red to the radiologist.
P.W. 7, however, stated that he has not seen the report of the radiologist.
The defence examined Dr. S.K. Singh as D.W. 1.
He deposed that he took the X ray of the right thigh of the accused No. 13 Mahendra Kahar and the report was marked as an exhibit.
He further deposed that the shadows in the X ray go to show that there were 10 radio opaque round shadows and these shadows may very well corre spond to the pallets fired by some fire arms and the same appear to have pierced upto muscles and bone.
His examina tion further showed that the pallets remained embedded in the thigh.
Before the trial court as well as before the High Court, firstly it was contended on behalf of the accused that the eye witnesses are highly interested and therefore, their evidence cannot be accepted and even otherwise they have not come out with the whole truth and the injuries found on two of the accused would go to show that the accused.
acted in fight of self defence.
Relying on the presence of gun shots injuries on accused No. 13 it was strongly contended that the prosecution party have also used fire arms and, there fore, the accused were entitled to the fight of private defence.
The trial court accepted the evidence of all the three witnesses holding that their evidence is consistent and does not suffer from any serious infirmity.
So far as the plea of self defence is concerned, the trial court held that the plea taken by accused No. 6 was to be rejected mainly on the ground that there was no material to show that at the pond the fishing operations were going on.
As regards the presence of injuries on the accused persons, learned Sessions Judge having regard to the nature and size of the injuries found on accused Nos. 13 and 14 took the view that they are simple and that it is not proved that these in juries were received during the occurrence.
Regarding the presence of the alleged gun shots injuries on accused No. 13 he pointed out that the medical evidence is inconclusive on the point whether those injuries were caused at the time when this incident took place.
In the appeal before the High Court, Justice Katju took the view that the theory that the injuries on accused Nos. 13 and 14 were self inflicted cannot be accepted and that the plea taken by accused No. 6 appears to be probable in view of the fact that the bullet found in the dead body of deceased No. 2 was fired by a 16 Bore gun and that as admitted by the Investigating Officer, P.W. 5, it was accused No. 6 only in that area who had a licence for 16 Bore gun which was deposited by him in the police station after the occurrence.
Coming to the injuries found on accused Nos. 13 and 14 Justice Katju took the view that they received injuries during the course of the same occurrence and that the three eye witnesses have not fur nished any explanation regarding those injuries and that these 581 witnesses have falsely implicated some of the accused due to enmity and, therefore, their evidence cannot be relied upon and accordingly ordered total acquittal.
As already men tioned Justice Agrawal, on the other hand, agreed with the trial court completely.
Justice Seth, to whom the case was referred because of the difference of opinion took a third view and convicted only accused Nos. 1, 3, 4 and 6 to whom specifically overt acts were attributed.
Dealing with the plea of self defence Justice Seth held that lacerated injury on accused No. 14 was a simple one and he could have re ceived that even subsequent to the occurrence.
With regard to the gun shots injuries found on accused No. 13 Mahendra Kahar, the learned Judge himself examined accused No. 13 who was present in the Court when the appeal was being heard and found that hard substance were palpable underneath the flesh round about the location of his injury.
In the circumstances it does appear that fire arm shots to exist underneath the location of injury found on the person of accused Mahendra Kahar.
But he ultimately held that in all probability the pallets found in the leg of accused No. 13 Mahendra Kahar must have been there long before the incident, as in the view of the learned Judge it was doubtful that those pallets could have entered the body through the external injuries which are described as tiny abrasions.
Seth, J. accordingly rejected the plea of self defence.
Before we advert to the above contentions it becomes necessary to consider whether the accused No. 13 Mahendra Kahar and accused No. 14 Sant Singh received the injuries during the course of occurrence.
P.W. 7 the Doctor examined accused No. 13 Mahendra Kahar on 30.5.
1980 at about 6 A.M. and he found the following injuries.
Five tiny abrasions in the area of 4cm x 4cm on outer surface of fight thigh just above knee joint.
The injured complained of pain in the right thumb and left forearm.
In respect of injury No. 1 the Doctor advised X ray with a view to ascertain whether or not there were pallets, and pending the same he reserved his opinion.
P.W. 7 also opined that injuries appeared to have been caused within 24 hours preceding the medical examination which correspond to the time of occurrence, namely, 8 A.M. on 29.5.
P.W. 7, however, stated that the X ray report was not shown to him.
The evidence of P.W. 7 makes it clear that accused No. 13 Mahendra Kahar received these injuries during the course of the 582 occurrence.
D.W. 1 is the Doctor who took the X ray.
He deposed that on 5.6.80 he took the X ray of the fight thigh of the undertrial prisoner Mahendra Kahar accused No. 13 and the same is marked as Ex Kha 12.
On the basis of the X ray plate he opined that he noticed 10 radio opaque round shad ows in the injured and they correspond to the pallets fired by some fire arm.
Justice Seth considered the evidence of these two Doctors.
He also examined the accused in the Court and he found that hard substance were palpable underneath the flesh.
As already mentioned he was of the view that these appeared to be pallets but according to him they must have been there long before the incident.
The learned Judge took this view because he was doubtful that those pallets could have entered the body through the external injuries which are described as tiny abrasions.
Having given our careful consideration we are unable to agree with the view taken by Seth, J.P.W. 7 the Doctor 's evidence makes it clear that the external injuries were caused during this occur rence only and underneath the same these pallets were found by the radiologist D.W. 1.
The injuries are not self in flicted.
Therefore, there is no basis whatsoever to presume that the pallets under the flesh must have been there al ready even before this occurrence took place.
As a matter of fact accused No. 13 Mahendra Kahar was referred to the Doctor P.W. 7 since there was an injury.
P.W. 7 having examined him found that there were 10 ' radio opaque round shadows underneath the injury and it was only for that reason he referred the injured to the radiologist and D.W. 1 the radiologist after taking the X ray concluded that under neath the injury pallets discharged from a fire arm were embedded in the flesh.
Therefore, the only view that is possible is that accused No. 13 Mahendra Kahar received gun shot injuries during the course of this occurrence only.
P.W. 7 also examined accused No. 14 Sant Singh on the same day.
He found a skin deep 12 ' x2 ' lacerated wound vertically inflicted on the front and outer surface of left thigh from which blood was oozing and the injured complained of pain.
The Doctor pointed out that the injury was simple and could have been caused by blunt weapon like a lathi.
The injury was also stitched.
It is suggested by the prosecution that this could have been a self inflicted one but again there is no basis for such presumption.
The Investigating Officer said that on finding the injury on him he was sent for medical examination.
As a matter of fact accused No. 6 in his statement under Section 313 stated that accused Nos. 13 and 14 received injuries and he also went to the police station and lodged a report to that effect.
It, therefore, emerges that accused No. 13 received gun shot injuries and accused No. 14 received lacerated injury during the course of the same occurrence and these injuries must have been caused by some member 583 belonging to the prosecution party.
Now the question is whether the prosecution has ex plained these injuries and if there is no such explanation what would be its effect? We are not prepared to agree with the learned counsel for the defence that in each and every case where prosecution fails to explain the injuries found on some of the accused, the prosecution case should automat ically be rejected, without any further probe.
He placed considerable reliance on some of the judgments of this Court.
In Mohar Rai & Bharath ' Rai vs The State of Bihar, ; , it is observed: "Therefore the version of the appellants that they sustained injuries at the time of the occurrence is highly probabi lised.
Under these circumstances the prosecution had a duty to explain those injuries.
The evidence of Dr. Bishnu Prasad Sinha (P.W. 18) clearly shows that those injuries could not have been self inflicted and further, according to him it was most unlikely that they would have been caused at the instance of the appellants themselves.
Under these circum stances we are unable to agree with the High Court that the prosecution had no duty to offer any explanation as regards those injuries.
In our judgment, the failure of the prosecu tion to offer any explanation in that regard shows that evidence of the prosecution witnesses relating to the inci dent is not true or at any rate not wholly true.
Further those injuries probabilise the plea taken by the appellants.
" In another important case Lakshmi Singh and Ors.
vs State of Bihar, , after referring to the ratio laid down in Mohar Rai 's case, this Court observed: "Where the prosecution fails to explain the injuries on the accused, two results follow: (1) that the evidence of the prosecution witnesses is un true; and that the injuries probabilise the plea taken by the appellants.
It was further observed that: "In a murder case, the non explanation of the injuries sustained by the accused at about the time of the occur 584 rence or in the course of altercation is a very important circumstance from which the court can draw the following inferences: (1) that the prosecution has suppressed the genesis and the origin of the occurrence and has thus not presented the true version; (2) that the witnesses who have denied the presence of the injuries on the person of the accused are lying on a most material point and, therefore, their evidence is unreliable.
(3) that in case there is a defence version which explains the injuries on the person of the accused assumes much greater importance where the evidence consists of interested or inimical witnesses or where the defence gives a version which competes in probability with that of the prosecution one.
" Relying on these two cases the learned counsel for the defence contended that in the instant case the prosecution has failed to explain the injuries on the two accused and the genesis and the origin of the occurrence have been suppressed and a true version has not been presented before the Court and consequently the truth from falsehood cannot be separated and consequently the entire prosecution case must be rejected.
We are unable to agree.
In Mohar Rai 's case it is made clear that failure of the prosecution to offer any explanation regarding the injuries found on the accused may show that the evidence related to the incident is not true or at any rate not wholly true.
Likewise in Lakshmi Singh 's case also it is observed that any non expla nation of the injuries on the accused by the prosecution may affect the prosecution case.
But such a non explanation may assume greater importance where the evidence consists of interested or inimical witnesses or where the defence gives a version which competes in probability with that of the prosecution.
But where the evidence is clear, cogent and creditworthy and where the Court can distinguish the truth from falsehood the mere fact that the injuries are not explained by the prosecution cannot by itself be a sole basis to reject such evidence, and consequently the whole case.
Much depends on the facts and circumstances of each case.
In the instant case, the trial court as well as the two learned Judges of the High Court accepted the prosecu tion case as put forward by P.Ws 1 to 3 in their evidence.
The presence of these three witnesses could not be doubted at all.
P.Ws 1 and 585 2 are the injured witnesses and P.W. 1 gave a report giving all the details.
However, he attributed specific overt acts to accused Nos. 1, 3, 4 and 6 and made an omnibus allegation against the remaining accused.
It is for this reason that Justice Seth found it to be safe to convict only accused Nos. 1, 3, 4 and 6 who are the appellants before us.
P.Ws 1, 2 and 3 are the eye witnesses.
We have carefully considered their evidence and nothing material is elicited in the cross examination which renders their evidence wholly untrustwor thy.
No doubt they have not explained the injuries found on accused Nos. 13 and 14.
From this alone it cannot be said that the prosecution has suppressed the genesis and the origin of the occurrence and has not presented a true ver sion.
Though they are interested, we find that their evi dence is clear, cogent and convincing.
The only reasonable inference that can be drawn is that the two accused persons received the injuries during the course of the occurrence which were inflicted on them by some members of the prosecu tion party.
As discussed above we are satisfied in this case that nonexplanation of injuries on these two accused persons does not affect the prosecution case as a whole but in a case of this nature what all that the defence can contend on the basis of non explanation of injuries found on these two accused is that the accused could have had a right of pri vate defence or at any rate a reasonable doubt arises in this regard.
The learned counsel for the defence, however, submits that if for any reason the prosecution case in its entirety is not rejected because of the non explanation of the in juries found on these two accused, yet the right of private defence of the accused cannot be denied and that on that score also these four convicted accused are entitled to an acquittal.
It is also their submission that a careful exami nation of the provisions of Sections 96, 99 and 102 I.P.C. would show that on a reasonable apprehension of grievous hurt or death the accused had a right even to the extent of causing the death of the assailants and they cannot be expected to modulate this right in such a situation and that in the instant case these four appellants were justified even to the extent of causing death of the two deceased by inflicting gun shot wounds.
In this ' context it is also submitted that the plea taken by accused No. 6, Chirkut Singh that he shot at the two deceased persons in self defence cannot be brushed aside.
We should at this juncture point out that the plea taken by accused No. 6, Chirkut Singh does not commend itself.
The same 586 appears to be an after thought.
The observation report and other circumstances in the case would show that there were no fishing operations in the pond.
Therefore, the plea of accused No. 6, Chirkut Singh that fishing operations were going on in the pond and that he and some of the other accused went there and that was the genesis and the origin of the occurrence, has no basis whatsoever.
On the other hand, the evidence of the eye witnesses regarding the time, place and manner of occurrence in general, as put forward by the prosecution, cannot be doubted at all.
We shall now consider the submission whether the accused had the right of self defence.
Learned counsel for the State contended that if the accused want to claim the benefit of the general or special exception of the right of private defence then they should plead and discharge the burden by establishing that they are entitled to the benefit of excep tion as provided under Section 105 of the Evidence Act.
In other words, the submission is that the burden of proof of the existence of such a right is on the accused and that in the instant case the accused have not discharged the burden and that mere presence of simple injuries on the accused cannot necessarily lead to an inference that they had a right of self defence.
We have already held that having regard to the facts and circumstances of the case, mere non explanation of these injuries by the prosecution cannot render the whole case unacceptable.
We have also held that those injuries on one of the accused No. 13, Mahendra Kahar were inflicted by a fire arm during the same occurrence.
Under these circumstances, the important question that we have to consider is whether the accused should be denied the benefit of an exception on the ground that the accused have not discharged the necessary burden of establishing their right to the benefit of the exception beyond all reasonable doubt just like the prosecution is bound under Section 102 of the Evidence Act, or if upon a consideration of the evidence as a whole and the surrounding facts and circum stances of the case, a reasonable doubt is created in the mind of the court about the existence of such a right wheth er the accused, in such a situation, is entitled to the benefit of the said exception, i.e. the right of private defence.
If so, whether they have exceeded the same? The nature and extent of the burden that the accused has to discharge under Section 105 of the Evidence Act has been one of questions of great general importance and for consid erable time the opinions of the Courts were not uniform.
As a matter of fact, in Partap vs State of U.P., ; , this Court noted "that the question 587 of law that arises here seems to have troubled several High Courts.
" The phrase "burden of proof" is not defined in the Act.
In respect of criminal cases, it is an accepted principle of criminal jurisprudence that the burden is always on the prosecution and never shifts.
This flows from the cardinal principle that the accused is presumed to be innocent unless proved guilty by the prosecution and the accused is entitled to the benefit of every reasonable doubt.
Section 105 of the Evidence Act is in the following terms: "When a person is accused of any offence, the burden of proving the existence of circumstances bringing the case within any of the General Exceptions in the Indian Penal Code, or within any special exception or proviso contained in any other part of the same Code, or in any law defining the offence, is upon him, and the Court shall presume the absence of such circumstances.
" The Section to some extent places the onus of proving any exception in a penal statute on the accused.
The burden of proving the existence of circumstances bringing the case within the exceptions mentioned therein is upon him.
The Section further lays down that the Court shall presume non existence of circumstances bringing the case within an exception.
" The words "the burden of proving the existence of circumstances" occuring in the Section are very signifi cant.
It is wellsettled that "this burden" which rests on the accused does not absolve the prosecution from discharg ing its initial burden of establishing the case beyond all reasonable doubts.
It is also well settled that the accused need not set up a specific plea of his offence and adduce evidence.
That being so the question is: what is the nature of burden that lies on the accused under Section 105 if benefit of the general exception of private defence is claimed and how it can be discharged? In Woolmington vs The Director of Public Prosecutions, [1935] Appeal Cases 462, Viscount Sankey, L.C. observed: "When evidence of death and malice has been given (this is a question for the jury), the prisoner is entitled to show by evidence or by examination of the circumstances adduced by the Crown that the act on his part which caused death was either unintentional or provoked.
If the jury are either satisfied with his explanation or, upon a review of all, the evidence are left in reasonable doubt whether, even if his explanation be not accepted, ' the act was unintentional or 588 provoked, the prisoner is entitled to be acquitted.
" It is further observed: "Just as there is evidence on behalf of the prosecution so there may be evidence on behalf of the prisoner which may cause a doubt as to his guilt.
In either case, he is enti tled to the benefit of the doubt.
But while the prosecution must prove the guilt of the prisoner, there is no such burden laid on the prisoner to prove his innocence and it is sufficient for him to raise a doubt as to his guilt; he is not bound to satisfy the jury of his innocence .
Through out the web of the English criminal law one golden thread is always to be seen, that it is the duty of the prosecution to prove the prisoner 's guilt subject to what I have already said as to the defence of insanity and subject also to any stationary exception.
If, at the end of and on the whole of the case, there is reasonable doubt created by the evidence given by either the prosecution or the prisoner as to wheth er the prisoner killed the deceased with a malicious inten tion, the prosecution has not made out the case and the prisoner is entitled to an acquittal.
No matter what the charge or where the trial, the principle that the prosecu tion must prove the guilt of the prisoner is part of the common law of England and no attempt to whittle it down can be entertained.
" Emperor vs
U. Dampala, AIR 1937 Rangoon 83 a full Bench of the Rangoon High Court following the Woolmington 's case held that the ratio therein is not in any way inconsistent with the law in British India, and that indeed the princi ples there laid down from valuable guide to the correct interpretation of Section 105 of the Evidence Act and the full Bench laid down that even if the evidence adduced by the accused fails to prove the existence of circumstances bringing the case within the exception or exceptions plead ed, the accused is entitled to be acquitted if upon a con sideration of the evidence as a whole the court is left in a state of reasonable doubt as to whether the accused is or is not entitled to the benefit of the exception pleaded.
We have noticed that Section 105 requires that when a person is accused of any offence, the burden of proving the existence of circumstances bringing the case within any of the General Exceptions or special exception or proviso contained in any pan of the Penal Code is 589 on him and the Court shall presume the absence of such circumstances.
This presumption is rebuttable.
In Parbhoo and Ors.
vs Emperor, AIR 1941 Allahabad 402, a Full Bench of seven Judges considered the scope of Sections 102 and 105 of the Evidence Act.
The majority agreed with the view taken by the Full Bench in Dampala 's case.
In Parbhoo 's case Bajpai, J. in his concurring judgment observed that Section 105 is stated in two forms, that of a rule as to the burden of proof and that of a presumption and that the burden of proving the guilt of the accused always rests on the prose cution and never: shifts and the learned Judge further held that the doubt cast in connection with the right of private defence must be a reasonable doubt and if there is such a reasonable doubt, it casts a doubt on the entire case of the prosecution and that the result is that the accused gets a benefit of doubt.
"The presumption laid down in Section 105 of the Evidence Act might come into play but it does not follow therefrom that the accused must be convicted even when the reasonable doubt under the plea of the right of private defence or under any other plea contained in the general or special exceptions pervades the whole case.
" In Dampala 's case Dunkley, J. while concurring with the majori ty view after discussing the law on the subject observed: "The conclusion therefore is that if the Court either is satisfied from the examination of the accused and the evi dence adduced by him, or from the circumstances appearing from the prosecution evidence, that the existence of circum stances bringing the case within the exception or exceptions pleaded has been proved, or upon a review of all the evi dence is left in reasonable doubt whether such circumstances had existed or not, the accused in the case of a general exception is entitled to be acquitted, or, in the case of a special exception, can be convicted of a minor offence." This case has been followed subsequently by a number of High Courts.
In K.M. Nanavati vs State of Maharashtra, [1962] Suppl.
1 SCR 567 it is observed that: "In India, as it is in England, there is a presumption of innocence in favour of the accused as a general rule, and it is the duty of the prosecution ' to prove 'the guilt of the accused.
But when an accused relies upon the General Excep tions in the Indian Penal Code or on any special 590 exception or proviso contained in any other part of the Penal Code, or in any law defining an offence, Section 105 of the Evidence Act raises a presumption against the accused and also throws a burden on him to rebut the said presump tion.
Under that Section the Courts shall presume the ab sence of circumstances bringing the case within any of the exceptions, that is, the Court shall regard the nonexistence of such circumstances as proved till they are disproved.
This presumption may also be rebutted by admissions made or circumstances elicited by the evidence led by the prosecu tion or by the combined effect of such circumstances and the evidence adduced by the accused.
But the section does not in any way affect the burden that lies on the prosecution to prove all the ingredients, of the offence with which the accused is charged; that burden never shifts.
The alleged conflict between the general burden which lies on the prose cution and the special burden imposed on the accused under Section 105 of the Evidence Act is more imaginary then real.
Indeed, there is no conflict at all." In Dahyabhai Chhaganbhai Thakkar vs State of Gujarat, ; it is observed: "It is fundamental principle of criminal jurisprudence that an accused is presumed to be innocent and therefore, the burden lies on the prosecution to prove the guilt of the accused beyond reasonable doubt.
The prosecution, therefore, in a case of homicide shall prove beyond reasonable doubt that the accused caused death with the requisite intention described in Section 299 of the Penal Code.
The general burden never shifts and it always rests on the prosecution.
But, under Section 105 of the Evidence Act the burden of proving the existence of circumstances bringing the case within the exception lies on the accused; and the Court shah presume the absence of such circumstances.
Under Section 105 of the Evidence Act, read with the definition of "shall presume" in Section 4 thereof, the Court 591 shall regard the absence of such circumstances as proved unless, after considering the matters before it, it believes that the said circumstances existed Or their existence was so probable that a prudent man ought, under the circum stances of the particular case, to act upon the supposition that they did exist.
To put it in other words, the accused will have to rebut the presumption that such circumstances did not exist, by placing material before the Court suffi cient to make it consider the existence of the said Circum stances so probable that a prudent man would act upon them.
The accused has to satisfy the standard of a "prudent man".
If the material placed before the Court such as, oral and documentary evidence, presumptions, admissions or even the prosecution evidence, satisfied the test of "prudent man", the accused will have discharged his burden.
The evidence so placed may not be sufficient to discharge the burden under Section 105 of the Evidence Act, but it may raise a reasona ble doubt in the mind of a Judge as regards one or other of the necessary ingredients of the offence itself.
It may, for instance, raise a reasonable doubt in the mind of the Judge whether the accused had the requisite intention laid down in Section 299 of the Penal Code.
" A careful reading of these two decisions would reveal that the statement of law therein neither expressly or impliedly overrules or is in conflict with the majority view in Parb hoo 's case.
However, in Rishi Kesh Singh & Ors.
vs The State, AIR 1970 Allahabad 51, the question that came up for consideration before a Larger Bench consisting of nine Judges was whether the dictum in Parbhoo 's case is still a good law on the ground that some of the decisions of the Supreme Court have cast a cloud of doubt.
A majority of seven Judges approved the principle laid down in Parbhoo 's case.
The Larger Bench also referred to various subsequent decisions of the Supreme Court also including the Nanavati 's case; Bhikari vs State of Uttar Pradesh, ; and Dahyabhai 's case, Beg, J., as he then was, in a separate but concurring judgment after referring to the Nanavati 's case; Bhikari 's ease; Dahyabhai 's case and Mohar Rai & Bharath Rai 's case, held that there is no conflict between what was held by the Supreme Court and the majority view taken in Parbhoo 's case.
After analysing the view expressed by the Surpeme Court in the several above mentioned decisions, Beg, J. observed: 592 "After a close scrutiny of every part of each of the seven opinions in Parbhoo 's case [1941] All LJ 619=AIR 1941 All 402 (FB).
I have come to the conclusion that the majority of their Lordships did not lay down anything beyond three important propositions which, if not either directly or indirectly supported by decisions of their Lordships of the Supreme Court have not been affected in the slightest degree by these decisions.
These propositions are; firstly, that no evidence appearing in the case to support the exception pleaded by the accused can be excluded altogether from consideration on the ground that the accused has not proved.
his plea fully; secondly, that the obligatory .presumption at.the end of Sec. 105 is necessarily lifted at least when there is enough evidence on record to justify giving the benefit of doubt to the accused on the question whether he is guilty of the offence with which he is charged; and, thirdly, if the doubt, though raised due to evidence in support of the exception pleaded, is reasonable and affects an ingredient of the offence with which the accused is charged, the accused would be entitled to an acquittal.
As I read the answer of the majority in Parbhoo 's case [1941] All LJ 619=AIR 1941 All 402 (FB).
I find it based on these three propositions which provide the ratio decidendi and this is all that needs t6 be clarified.
" "The practical result of the three propositions stated above is that an accused 's plea or an exception may reach one of three not sharply demarcated stages, one succeeding the other, depending upon the effect of the whole evidence in the case judged by the standard Of a prudent man weighing or balancing probabilities carefully.
These stages are; first ly, a lifting of the initial obligatory presumption given at the end of Sec. 105 of the Act; secondly the creation of a reasonable doubt about the existence of an ingredient of the offence; and thirdly, a complete proof of the exception by "a preponderance of probability", which covers even a slight tilt of the balance of probability in favour .of the ac cused 's plea.
The accused is not entitled to an acquittal if his plea does not get beyond the first stage.
At the second stage, he becomes entitled to acquittal by obtaining a bare benefit of doubt.
At the third stage, he is undoubtedly entitled to an acquittal.
This, in my opinion, is the effect of the majority view in Parbhoo 's case which directly re lates 593 tO first two stages only.
The Supreme Court decisions have considered the last two stages so far, but the first stage has not yet been dealt with directly or separately there in any case brought to our notice.
" Mathur, J., with whom five Judges agreed, while holding that ratio laid down by the majority in Parbhoo 's case is in conformity with law, however, observed that the reasoning in support of the conclusions is erroneous.
Beg, J. was not prepared to go to that extent.
The majority speaking through Shri Mathut, J. laid ' down that the dictum in Parbhoo 's case which is still a good law, can, however, be modified as follows: "In a case in which any General Exception in the Indian Penal Code, or any special exception or proviso contained in another part of the same Code, or in any law defining the offence, is pleaded or raised by an accused persons and the evidence led in support of such plea, judged by the test of the preponderance of probability, as in a civil proceeding, fails to displace the presumption arising from Section 105 of the Evidence Act, in other words, to disprove the absence of circumstances bringing the case within the said excep tion; but upon a consideration of the evidence as a whole, including the evidence given in support of the plea based on the said exception or proviso, a reasonable doubt is created in the mind of the Court, as regards one or more the ingre dients of the offence, the accused person shall be entitled to the benefit of the reasonable doubt as to his guilt and hence to acquittal of the said offence." Learned counsel for the State, however, submitted that if the view taken by the Allahabad High Court is to be accepted then it would amount to throwing the burden on the prosecution not only to establish the guilt of the accused beyond all reasonable doubt but also that the accused is not entitled to benefit of any exception and if such a principle is laid down then Section 105 of the Evidence Act would be rendered otiose and there would be inconsistency between Sections 102 ' and 105.
This very question has been answered by the Supreme Court in Nanavati 's case and it has been held that the general burden of proving the ingredients of the offence is always on the prosecution but the burden of proving the circumstances attracting the exception lies on the accused.
But the failure on the part of the accused to establish all the circumstances bringing his case under the exception 594 does not absolve the prosecution to prove the ingredients of the offence and the evidence relied upon by the accused in support of his claim for the benefit of the exception though insufficient to establish the exception may be sufficient to negative one or other of the ingredients of the offence and thus throw a reasonable doubt on the essential ingredients of the offence of murder.
The accused for the purpose of discharging this burden under Section 105 can rely also on the probabilities.
As observed in Dahyabhai 's case "the accused will have to rebut the presumption that such circum stances did not exist" by placing material before the court which satisfies the standard of a prudent man and the mate rial may consist of oral and documentary evidence, presump tions, admissions or even the prosecution evidence and the material so placed may not be sufficient to discharge the burden under Section 105 of the Evidence Act but it may raise a reasonable doubt in the mind of a Judge as regards one or other of the necessary ingredients of the offence itself.
Therefore there is no such infirmity in the view taken in these cases about the scope and effect of Sections 102 and 105 of the Evidence Act.
We have not come across any case of the Supreme Court where the ratio laid down in Parbhoo 's case and which was subsequently approved by a larger Bench in Rishi Kesh Singh 's case has been considered comprehensively.
However, in Behram Khurshed Pesikaka vs The State of Bombay, [1955] 1 SCR 6 13 there is a specific reference to Parbhoo 's case and Woolmington 's case while considering the scope and the manner of the expression 'burden of proof ', in the judgment of Hon ' Venkatarama Ayyar, J.
But the learned Judge was not prepared to go into this question in an appeal under Article 136 but only noted that the Bombay High Court in Government of Bombay vs Sakur, AIR 1947 Bombay 38 has taken a different view.
In State of U.P.v. Ram Swarup; , a Bench consisting of M.H. Beg, J., as he then was, Y.V. Chandrachud and V.R. Krishna lyer, JJ., while considering the right of private defence put forward by the accused to some extent went into the question of burden of proof under Section 105 and a reference is made to a decision of the larger Bench in Rishi Kesh Singh 's case.
Chandrachud, J. who spoke for the Bench, observed thus: "The judgment in Rishikesh Singh vs State, AIR 1970 All 51 explains the true nature and effect of the different types 595 of presumptions arising under Section 105 of the Evidence Act.
As stated is that judgment, while the initial presump tion regarding the absence of circumstances bringing the case within an exception may be met by showing the existence of appropriate facts, the burden to establish a plea of private defence by a balance of probabilities is a more difficult burden to discharge.
The judgment points out that despite this position there may be cases where, though the plea of private defence is not established by an accused on a balance of probabilities, yet the totality of facts and circumstances may still throw a reasonable doubt on the existence of "mensrea" which normally is an essential ingre dient of an offence.
The present is not a case of this latter kind.
" We may also refer to a judgment of a Bench of three Judges consisting of M.H. Beg, P.N. Bhagwati and R.S. Sarkaria, JJ.
in Partap 's case.
Sarkaria, J. speaking for himself and Bhagwati, J. observed: "We have carefully scrutinised the judgments of the courts below.
In our opinion, their finding in regard to the plea of self defence is clearly erroneous.
They appear to have overlooked the distinction between the nature of burden that rests on an accused under Sec.
105, Evidence Act to estab lish a plea of self defence and the one cast on the prosecu tion by Section 101 to prove its case.
It is wellsettled that the burden on the accused is not as onerous as that which lies on the prosecution.
While the prosecution is required to prove its case beyond a reasonable doubt, the accused can discharge his onus by establishing a mere pre ponderance of probability.
" Beg, J., however in a separate judgment felt a doubt about the veracity of the defence case and the evidence found in support of it to be able to hold that it is proved on a balance of probabilities.
But in his view what transpires from a consideration of the whole evidence is enough to entitle the accused to a benefit of doubt.
Beg, J. referred to the judgments of the Full Bench in Parbhoo 's case; Nana vati 's case and the larger Bench decision in Rishi Kesh Singh 's case and applying the principles of benefit of doubt laid in the above three cases to the facts of the case before them observed: "Applying the principle of benefit of doubt as I had exp 596 lained above, to the plea of private defence of person in the instant case.
I think that, even if the appellant did not fully establish his plea, yet, there is sufficient evidence, both direct and circumstantial, to justify the finding that the prosecution has not established its case beyond reasonable doubt against Partap on an essential ingredient of the offence of murder; the required mensrea.
After examining all the facts and circumstances revealed by the prosecution evidence itself and the defence evidence and considering the effect of non production of the better evidence available which, for some unexplained reason, was not produced.
I am not satisfied that the plea of private defence of person can be reasonably ruled out here.
This is enough, in my opinion, to entitle the appellant to get the benefit of doubt. ' ' In Mohd. Ramzani vs State of Delhi, AIR 1980 SC 134 1 Sar karia, J., who spoke for the Bench, observed that the onus which rests on the accused person under Section 105, Evi dence Act, to establish his plea of private defence is not as onerous as the unshifting burden which lies on the prose cution to establish every ingredient of the offence with which the accused is charged beyond reasonable doubt.
There fore, the contrary view taken by the Bombay High Court in Sakur 's case and in State vs Bhima Devraj, AIR 1956 Sau. 77 that the burden is entirely on the accused to establish that he is entitled to the benefit of the exception, does not lay down the correct law.
At this stage it becomes necessary to consider the meaning of the words "the Court shall presume the absence of such circumstances" occurring in Section 105 of the Evidence Act.
Section 4 of the Act explains the meaning of the term "shall presume" as to mean that the Court shall regard the fact as proved unless and until it is disproved. 'From a combined reading of these two Sections it may be inferred that where the existence of circumstances bringing the case within the exception is pleaded or is raised the Court shall presume the absence of such circumstances as proved unless and until it is disproved.
In Section 3 of the Act meaning of the terms "proved", "disproved" and "not proved" are given.
As per this provision, a fact is said to be "proved" when, 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.
A fact is said to be "disproved" when, after consid ering the matters before it, the Court either believes 597 that it does not exist, or considers its non existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist.
A fact is said to be "not proved" when it is neither "proved" nor "disproved.
" The first part of Section 105 as noted above lays down that when a person is accused of an offence, the burden of proving the existence of circumstances bringing the case within any of the exceptions or proviso is on him and the latter part of it lays down that the Court shall presume the absence of such circumstances.
In a given case the accused may discharge the burden by expressly proving the existence of such circumstances, thereby he is able to disprove the absence of circumstances also.
But where he is unable to discharge the burden by expressly proving the existence of such circumstances or he is unable to disprove the absence of such circumstances, then the case would fall in the category of "not proved" and the Court may presume the absence of such circumstances.
In this background we have to examine the meaning of the words "the Court shall presume the absence of such circumstances" bearing in mind the general principle of criminal jurisprudence that the prose cution has to prove its case beyond all reasonable doubt and the benefit of every reasonable doubt should go to the accused.
It will be useful to refer to some of the passages from the text books of outstanding authors on evidence and then proceed to consider the ratio laid down by the Supreme Court cases on this aspect.
In Phipson on Evidence, 13th edn.
page 44, a passage reads as follows: "The burden is upon the prosecution of proving a defendant 's guilt beyond reasonable doubt before he is convicted.
Even where the evidential burden shifts to the defendant the burden of establishing proof beyond reasonable doubt remains upon the prosecution and never changes.
If on the whole case the jury have such a doubt the defendant is entitled to be acquitted." Another passage at page 48 reads as follows: ' "In criminal cases the prosecution discharge their eviden tial burden by adducing sufficient evidence to raise a prima facie case against the accused.
If no evidence is called for the defence the tribunal of fact must decide whether the prosecution has succeeded in discharging its persuasive 598 burden by proving its case beyond a reasonable doubt.
In the absence of any defence evidence, the chances that the prose cution has so succeeded fare greater.
Hence the accused may be said to be under an evidential burden if the prosecution has established a prima facie case.
Discharge of the eviden tial burden by defence is not a pre requisite to an acquit tal.
The accused is entitled to be acquitted if at the end of and on the whole of the case, there is a reasonable doubt created by the evidence given by either the prosecution or the prisoner . .No matter what the charge . . the principle that the prosecution must prove the guilt of the prisoner is part of the common law of England and no attempt to whittle it down can be enter tained.
XX XX XX XX XX XX In many cases, however, the accused 's defence will involve introducing new issues, for example, automatism, provoca tion, self defence, duress, etc.
Once there is any evidence to support such "explanations" the onus of disproving them rests upon the prosecution.
The accused, either by cross examination of the prosecution witnesses or by evidence called on his behalf or by a combination of the two, must place before the court such material as makes the defence a live issue fit and proper to be left to the jury.
But once he has succeeded in doing this and thereby discharged his evidential burden it is then for the Crown to destroy that defence in such a manner as to leave in the jury 's minds no reasonable doubt that the accused cannot be absolved on the grounds of the alleged facts constituting the defence.
" Dealing with the presumptions of law, the author has noted on page 60, thus: "Generally in criminal cases (unless otherwise directed by statute and subject to 4 15 ante) the presumption of inno cence casts on the prosecutor the burden of proving every ingredient of the offence, even though negative averments be involved therein.
Thus, in cases of murder, the burden 599 of proving death as a result of a voluntary act of the accused and malice on his part is on the prosecution.
On charges of rape, etc.
the burden of proving non consent by the prosecutrix is on the prosecution and in bigamy, that of proving the defendant 's knowledge that his or her spouse was alive within the seven years last past." Wigmore on evidence, dealing with the "Legal Effect of a presumption" (3rd ed., Vol.
IX p. 289) explains: "It must be kept in mind that the peculiar effect of a presumption 'of law ' (that is, the real presumption) is merely to invoke a rule of law compelling the jury to reach the conclusion 'in the absence of evidence to the contrary ' from the opponent.
If the opponent does offer evidence to the contrary (sufficient to satisfy the Judge 's requirement of some evidence), the presumption disappears as a rule of Taylor in his 'Treatise on the Law of Evidence ' ( 12th Edn.
1 page 259) points out: "On the two fold ground that a prosecutor must prove every fact necessary to substantiate his charge against a prison er, and that the law will presume innocence in the absence of convincing evidence to the contrary, the burden of proof, unless shifted by legislative interference, will fall in criminal proceedings on the prosecuting party, though, to convict, he must necessarily have recourse to negative evidence.
Thus, if a statute, in the direct description of an offence, and not by way of proviso (a), contain negative matter, the indictment or information must also contain a negative allegation, which must in general be supported by prima facie evidence.
" Dealing with the presumptions, the author says: "The proper direction as to onus of proof where prima facie evidence has been given on the part of the prosecution which, if unanswered, would raise a presumption upon which the jury might be justified in finding a verdict of guilty, and the defendant has called evidence to rebut that presump tion, is that if they accepted the explanation given 600 by and on behalf of the prisoner, or if that explanation raised in their minds a reasonable doubt as to his guilt, they should acquit him as the onus of proof that he was guilty still lay upon the prosecution.
If upon the whole evidence the jury are left in a real state of doubt the prosecution has failed to satisfy the onus of proof which lies upon them.
" It is held in Nanavati 's case that under Section 105 of the act the Court shall presume the absence of circumstances bringing the case within any of the exceptions, i.e. the Court shall regard the non existence of such circumstances as proved till they are disproved, but this presumption can be rebutted by the accused by introducing evidence to sup port his plea of accident in the circumstances mentioned therein.
This presumption may also be rebutted by admissions made or circumstances elicited from the evidence led by the prosecution or by the combined effect of such circumstances and the evidence adduced by the accused.
Dealing with the ingredients of the offence to be proved by the prosecution and the burden to be discharged under Section 105 of the Evidence Act by the accused and a reasonable doubt that may arise on the basis of such rebuttal evidence by the accused, it is observed: "An illustration may bring out the meaning.
The prosecution has to prove that the accused shot dead the deceased inten tionally and thereby committed the offence of murder within the meaning of section 300 of the Indian Penal Code; the prosecu tion has to prove the ingredients of murder, and one of the ingredients of that offence is that the accused intentional ly shot the deceased; the accused pleads that he shot at the deceased by accident without any intention or knowledge in the doing of a lawful act in a lawful manner by lawful means with proper care and caution, the accused against whom a presumption is drawn under section 105 of the Evidence Act that the shooting was not by accident in the circumstances men tioned in section 80 of the Indian Penal Code, may adduce evi dence to rebut that presumption.
That evidence may not be sufficient to prove all the ingredients of section 80 of the Indian Penal Code, but may prove that the shooting was by accident or inadvertance, i.e. it was done without any intention or requisite state of mind, which is the essence of the offence, within the meaning of section 300 Indian Penal Code.
or at any rate may throw a reasonable doubt on the essential ingredients of the offence of murder.
In that event, though the accused failed to bring his case 601 within the terms of section 80 of the Indian Penal Code, the Court may hold that the ingredients of the offence have not been established or that the prosecution has not made out the case against the accused.
In this view it might be said that the general burden to prove the ingredients of the offence, unless there is a specific statute to the contrary, is always on the prosecution, but the burden to prove the circumstances coming under the exceptions lies upon the accused.
The failure on the part of the accused to establish all the circumstances bringing his case under the exception does not absolve the prosecution to prove the ingredients of the offence; indeed, the evidence, though insufficient to establish the exception, may be sufficient to negative one or more of the ingredients of the offence.
" In Dahyabhai 's case as already noted, the relevant portion reads thus: "The evidence so placed may not be sufficient to discharge the burden under section 105 of the Evidence Act, but it may raise a reasonable doubt in the mind of a Judge as regards one or other of the necessary ingredients of the offence itself.
It may, for instance, raise a reasonable doubt in the mind of the judge whether the accused had the requisite intention laid down in section 299 of the Penal Code.
" The maxim that the prosecution must prove its case beyond reasonable doubt is a rule of caution laid down by the Courts of Law in respect of assessing the evidence.in criminal cases.
Section 105 places 'burden of proof ' on the accused in the first part and in the second part we find a presumption which the Court can draw regarding the absence of the circumstances which presumption is always rebuttable.
Therefore, taking the Section as a whole the 'burden of proof ' and the presumption have to be considered together.
It is axiomatic when the evidence is sufficient as to prove the existence of a fact conclusively then no difficulty arises.
But where the accused introduces material to dis place the presumption which may affect the prosecution case or create a reasonable doubt about the existence of one or other ingredients of the offence and then it would amount to a case where prosecution failed to prove its own case beyond reasonable doubt.
The initial obligatory presumption that the Court shall presume the absence of such circumstances gets lifted when a plea of exception is raised.
More so when there are circumstances on the record (gathered from the prosecution evidence, chief and cross examinations, pro 602 babilities and circumstances, if any, introduced by the accused, either by adducing evidence or otherwise) creating a reasonable doubt about the existence of the ingredients of the offence.
In case of such a reasonable doubt, the Court has to give the benefit of the same to the accused.
The accused may also show on the basis of the material a prepon derance of probability in favour of his plea.
If there are absolutely no circumstances at all in favour of the exist ence of such an exception then the rest of the enquiry does not arise inspite of a mere plea being raised.
But if the accused succeeds in creating a reasonable doubt or shows preponderance of probability in favour of his plea, the obligation on his part under Section 105 gets discharged and he would be entitled to an acquittal.
From what has been discussed above it emerges that the presumption regarding the absence of existence of circum stances regarding the exception can be rebutted by the accused by introducing evidence in any one of the manners mentioned above.
If from such a rebuttal, a reasonable doubt arises regarding his guilt, the accused should get the benefit of the same.
Such a reasonable doubt consequently negatives one or more of the ingredients of the offence charged, for instance, from such a rebuttal evidence, a reasonable doubt arises about the right of private defence then it follows that the prosecution has not established the necessary ingredients of intention to commit the offence.
In that way the benefit of a reasonable doubt which arises from the legal and factual considerations even under Section 105 of the Evidence Act should necessarily go to the accused.
It can be argued that the concept of 'reasonable doubt ' is vague in nature and the standard of 'burden of proof ' contemplated under Section/05 should be somewhat specific, therefore, it is difficult to reconcile both.
But the gener al principles of criminal jurisprudence, namely, that the prosecution has to prove its case beyond reasonable doubt and that the accused is entitled to the benefit of a reason able doubt, are to be borne in mind.
The 'reasonable doubt ' is one which occurs to a prudent and reasonable man.
Section 3 while explaining the meaning of the words "proved", "disproved" and "not proved" lays down the standard of proof, namely, about the existence or nonexistence of the circumstances from the point of view of a prudent man.
The Section is so worded as to provide for two conditions of mind, first, that in which a man feels absolutely certain of a fact, in other words, "believe it to exist" and secondly in which though he may not feel absolutely certain of a fact, he thinks it so extremely probable that a prudent man would under the circumstances act on the assump 603 tion of its existence.
The Act while adopting the require ment of the prudent man as an appropriate concrete standard by which to measure proof at the same time contemplates of giving full effect to be given to circumstances or condition of probability or improbability.
It is this degree of cer tainty to be arrived where the circumstances before a fact can be said to be proved.
A fact is said to be disproved when the Court believes that it does not exist or considers its non existence so probable in the view of a prudent man and now we come to the third stage where in the view of a prudent man the fact is not proved i.e. neither proved nor disproved.
It is this doubt which occurs to a reasonable man, has legal recognition in the field of criminal dis putes.
It is something different from moral conviction and it is also different from a suspicion.
It is the result of a process of keen examination of the entire material on record by 'a prudent man '.
There is a difference between a flimsy or fantastic plea which is to be rejected altogether.
But a reasonable though incompletely proved plea which casts a genuine doubt on the prosecution version indirectly succeeds.
The doubt which the law contemplates is certainly not that of a weak or unduly vacillating, capricious, indolent, drowsy or confused mind.
It must be the doubt of the prudent man who assumed to possess the capacity to "separate the chaff from the grain".
It is the doubt of a reasonable, astute and alert mind arrived at after due application of mind to every relevant circumstances of the case appearing from the evidence.
It is not a doubt which occurs to a wavering mind.
Lord Denning, J. in Miller vs Minister of Pensions, while examining the degree of proof required in criminal cases stated: "That degree is well settled.
It need not reach certainty but it must reach a high degree of probability.
Proof beyond reasonable doubt does not mean proof beyond the shadow of a doubt.
The law would fail to protect the community if it admitted fanciful possibilities to deflect the course of justice.
If the evidence is so strong against a man as to leave only a remote possibility in his favour which can be dismissed with the sentence "of course, it is possible but not in the least probable", the case is proved beyond rea sonable doubt.
" Regarding the concept of benefit of reasonable doubt Lord Du Paraq, in another context observed thus: 604 "All that the principle enjoins is a reasonable scepticism, not an obdurate persistence in disbelief.
It does not demand from the Judge a resolute and impenetrable incredulity.
He is never required to close his mind to the truth.
" Now, let us examine the types of cases to which these principles underlined under Section 105 can be applied and to what extent? The Section deals with the burden of proof in respect of the general exceptions, special exceptions and proviso contained in the Penal Code or in any part of the same code, or in any law defining the offence.
It is already noted that the doctrine of burden of proof has to be the general law and the same remains always upon the prosecu tion.
However, in respect of the cases where the statute wholly places the burden of proof on the accused himself, then the burden is more onerous on him.
As already noted in Rishi Kesh Singh 's case Mathur, J. speaking for the majori ty, while affirming the view taken in Parbhoo 's case ob served that in a case where any such exception is pleaded and the evidence led in support of such plea, judged by the test of preponderance of probability, fails to displace the presumption arising from Section 105 of the Evidence Act; yet if upon a consideration of the evidence as a whole including the evidence led in support of plea of exception or proviso, a reasonable doubt is created in the mind of the Court, as regards one or more of the ingredients of the offence, the accused shall be entitled to the benefit of the reasonable doubt as to his guilt.
In C.S.D. Swami vs The State, ; the character of a presumption of guilt under Section 5 of the Prevention of Corruption Act from proof.of certain facts "unless the contrary is proved" was considered and it was held there that the exception laid down by statute was "a complete departure from the estab lished principle of the criminal jurisprudence that the burden always lies upon the prosecution to prove all the ingredients of the offence charged and that the burden never shifts on to the accused to disprove his guilt.
" V.D. Jhin gan vs State of U.P.; , also is a case deal ing with the presumption under Section 4 of the Prevention of Corruption Act under which the accused was under an obligation to disprove his guilt by adducing such evidence by which the preponderance of probabilities prove the de fence case.
An examination of these cases would reveal that the statutory exception which modifies the operation of the general principle that the prosecution must prove all ingre dients of the offence with which the accused is charged, to some extent stands on a different 605 However, Beg, J. in his separate judgment, in Rishi Kesh Singh 's case observed thus: "It covers every tilt or preponderance of the balance of probability whether slight or overwhelming.
In fact, the dividing line between a case of mere "preponderance of probability" by a slight tilt only of the balance of proba bility and a case of reasonable doubt is very thin indeed although it is there.
A case of reasonable doubt which must necessarily be one of which, on a balancing of probabili ties, two views are possible.
What may appear to one reason able individual to be a case not fully proved may appear.to another to be so proved on a balancing of probabilities.
Such a case and only such a case would, in my opinion, be one of reasonable doubt.
A mere preponderance of probability in favour of the exception pleaded by an accused would, however, constitute a "complete" proof of the exception for the accused but a state of reasonable doubt would not.
" Somewhat to the same effect are the observations made by the Supreme Court in Harbhajan Singh vs State of Punjab, ; After citing Woolmington 's case it is therein held that "The principle of common law is part of the crimi nal law of the country.
That is not to say that if an excep tion is pleaded by an accused person he is not required to.
justify his plea; but the degree and character of proof which the accused is expected to support his plea, cannot be equated with the degree and character of proof expected from the prosecution which is required to prove its case.
The onus on the accused may well be compared to the onus on a party in civil proceedings; just as in civil proceedings the ' Court which tries an issue makes its decision by adopt ing the test of probabilities, So must a criminal court hold the ' plea made by the accused proved, if a preponderance of probability is established by the evidence led by him.
" It can thus be seen that there is a dividing line between a case of the accused discharging the burden by preponderance of probabilities which is equated to proof of the exception and a state of reasonable doubt that arises on a considera tion of the evidence and facts and circumstances as a whole, as regards one or more of the ingredients of the offence.
Therefore, in a case where the prosecution has discharged.
its burden and where the accused pleads exception and if there is some evidence to support that plea the obligatory presumption under Section 105 is lifted and the accused may proceed further and establish his plea by a preponderance 606 of probabilities or he may carry his plea further and suc ceed in creating a reasonable doubt about an ingredient of an offence.
Consequently in respect of the general excep tions, special exceptions, provisos contained in the Penal Code or in any law defining the offence, the accused by one of these processes would be discharging the burden contem plated under Section 105 but in cases of the exceptions covered by special statutes and where the burden of proof is placed on the accused to establish his plea, he will be discharging the same by preponderance of probabilities and not by merely creating a doubt.
At this stage we have to point out that these principles cannot be made applicable to a case where the accused sets up alibi.
There the burden entirely lies on him and plea of alibi does not come within the meaning of these exceptions.
Circumstances leading to alibi are within his knowledge and as provided under Section 106 of the Act he has to establish the same satisfactorily.
Likewise in the case where the statute throws special burden on the accused to disprove the existence of the ingredients of the offence, he has to discharge the burden, for example, in the cases arising under Prevention of Food Adulteration Act if the accused pleads a defence under Section 19, the burden is on him to establish the same since the warranty on which he relies is a circumstance within his knowledge.
However, it may not be necessary to enumerate these kinds of cases as we are mainly concerned in this case only with the scope and application of Section 105 of the Evidence Act.
We also make it clear that the principles laid down by us are only in respect of the said provision only.
As we think that it would be appro priate and useful to set out the sum and substance of the above discussions regarding the scope of Section 105 and we accordingly state the same as follows: The general burden of establishing the guilt of accused is always on the prosecution and it never shifts.
Even in respect of the cases covered by Section 105 the prosecution is not absolved of its duty of discharging the burden.
The accused may raise a plea of exception either by pleading the same specifically or by relying on the probabilities and circumstances obtaining in the case.
He may adduce the evidence in support of his plea directly or rely on the prosecution case itself or, as stated above, he can indi rectly introduce such circumstances by way of cross examina tion and also rely on the probabilities and the other cir cumstances.
Then the initial presumption against the accused regarding the non existence of the circumstances in favour of his plea gets displaced and on an examination of the material if a reasonable doubt arises the benefit of it should go to the accused.
The 607 accused can also discharge the burden under Sec. 105 by preponderance of probabilities in favour of his plea.
In case of general exceptions, special exceptions, provisos contained in the Penal Code or in any law defining the offence, the Court, after due consideration of the evidence in the light of the above principles, if satisfied, would state, in the first instance, as to which exception the accused is entitled to, then see whether he would be enti tled for a complete acquittal of the offence charged or would be liable for a lesser offence and convict him accord ingly.
In the instant case we are concerned with the exception of right of private defence.
In the instant case a plea of right of private defence is raised.
As noted above one of the accused received a 12 'x2 ' lacerated wound and other accused received gun shot injuries.
The plea that the non explanation of these injuries by the prosecution warrants rejection of the prosecution case, is rejected as the evi dence of the material witnesses even otherwise found to be cogent, convincing and acceptable but from the circumstances these two accused particularly one of them had received gun shot injuries during the course of the same occurrence is established.
The accused have also adduced defence evi dence namely that of a Doctor in support of their plea.
This material though by itself is not sufficient to establish the General Exception under Section 96 or the special exception No. 2 to Section 300 IPC but creates a reasonable doubt about the existence of such a right.
The accused have proved the infliction of injuries on them by the complainant party in the course of the occurrence.
Therefore, the obligatory initial presumption against them is removed and their plea appears to be reasonably true and consequently they are entitled to the right of self defence.
The next question is whether they have exceeded this right.
Learned counsel submits that the accused is not expected to modulate his right of self defence and that in the instant case it cannot with certainty be said that they have exceeded this right and therefore, they are entitled to an acquittal.
In Amjad Khan vs The State, ; , on the facts and circumstances of the case it was held that the accused was entitled to a right of private defence of the body even to the extent of causing death as there was no time to have recourse to the authorities and had reasonable grounds for apprehending that either death or grievous hurt would be caused either to himself or to his family.
These things could not be weighed in too fine a set of scales or "in golden scales.
" In 608 Puran Singh and Ors.
vs State of Punjab, ; it is observed that the right of private defence of property or person, where there is real apprehension that the aggressor might cause death or grievous hurt to the victim, could extend to the causing of death also and it is not necessary that death or grievous hurt should actually be caused before the right could be exercised.
A mere reasonable apprehension is enough to put the right of private defence into opera tion.
It is also observed that the question whether a person having a right of private defence has used more force than is necessary would depend on the facts and circumstances of a particular case.
In the case before us as per the evidence of the materi al witnesses the two deceased were only proceeding alongwith the rasta towards the pump set for taking bath.
Even in the plea set up by Chirkut Singh, accused No. 6, it is not stated specifically that deceased Nos. 1 and 2 were armed with any deadly weapons.
Therefore, the assailants had definitely exceeded the right of private defence when they went to the extent of intentionally shooting them to death by inflicting bullet injuries.
Therefore, the offence com mitted by them would be one punishable under Section 304 Part 1 I.P.C.
We accordingly set aside the conviction of the.
appel lantsaccused Nos. 1, 3, 4 and 6, Vijayee Singh, Ranjit Singh, Ram Briksh Singh and Chirkut Singh respectively for an offence punishable under Section 302/149 I.P.C. and the sentence of imprisonment for life awarded thereunder.
In stead they are convicted under Section 304 Part I read with Section 34 I.P.C. and sentenced each of them to undergo 10 years imprisonment.
The other sentences/convictions awarded to them are confirmed.
The sentences shall run concurrently.
Criminal Appeal Nos.
375 77 of 1987 are allowed to this extent only and Criminal Appeal Nos. 372 74/87 are dis missed.
R.N.J. Crl.
A. Nos. 375 77/87 are allowed and Crl.
A. Nos.
372 74/87 are dismissed.
| Notifications No. 24 and 25 of 1984 under rule (1) of the Central Excise Rules, were issued on 1.3.1984 in respect of paper and paper board falling under item 17(1) of the first schedule to the .
While notification No. 24 of 1984 restricted the excise duty on certain items, notification No. 25 of 1984 provided for a concession in respect of paper and paper boards manufactured out of pulp containing not less than 50 per cent by weight of pulp made from materials (other than bamboo, hardwoods, softwoods, reeds or rags) and cleared on or after the 1st day of April in any financial year, subject to certain important conditions set out in the provisoes to the notifi cation.
Under the provisoes, the concessional rates were applicable only if the factory did not have plant attached to it for making bamboo, wood pulp and the exemption would not apply to cigarette tissue, glassing paper, grease proof paper, coated paper (including waxed paper) and paper of a substance not exceeding 25 grammes per square metre.
Another notification No. 45 of 1985 dated 17.3.1985 was also issued prescribing rates on paper and paper board failing under the aforesaid item including coated paper.
The appellant assessee had a factory in which different varieties of paper and paper board were being manufactured, using waste paper and cereal straw containing more than 50 per cent by weight of pulp made from the unconventional raw materials.
The factory did not have a bamboo pulp plant.
The assessee was manufacturing art paper and chromo paper.
These two types of paper generally fell under catego ry of printing and writing paper.
These two articles also fell under the description coated 798 paper used in the second proviso to the notification No. 25 of 1984.
The appellant initially paid excise duty on the goods manufactured by it in terms of notification No. 24 of 1984, but later claimed concessional rates prescribed by notification No. 25 of 1984.
Since coated paper was taken out of the purview of notification No. 25 of 1984, by the proviso, the Excise Department refused to permit the asses see to avail of this concession in respect of its manufac tured goods.
This was confirmed by the Central Excise and Gold Control Appellate Tribunal.
In the appeal before this Court, on behalf of the appel lantassessee it was contended that though the expression 'coated paper ' had generally a wide connotation and included coated papers of all varieties, it should be given a re stricted meaning in the context in which it appeared in the proviso, that in the paper business, paper was broadly two varieties, "industrial paper" and "cultural paper", that while paper used for printing or writing was treated as cultural paper that used for various purposes, broadly described as industrial purposes, such as wrapping, packing, sanitary use and the like, was industrial paper, that since a common strain ran through all the five categories men tioned in the proviso, inasmuch the first three varieties, admittedly fell under the category of industrial paper and the last one was invariably used for industrial purposes, and so found by the Tribunal, the word 'coated paper ', must be read in that context, and should be interpreted by apply ing the principle of "Noscitur A Sociis" or on the analogy of the "Ejusdem generis" principle and that even if the words of the proviso were capable of being construed in a wider manner so as to deny exemption to all kinds of coated paper, the Court should apply the well established principle of construction of taxing statutes that an ambiguous provi sion should be interpreted in favour of the subject.
On behalf of the respondent it was contended that there was no principle of interpretation by which the plain and natural meaning of the word 'coated paper ' could be abridged nor was there anything in the context to warrant such a limitation, that there was no 'clear cut distinction between industrial and cultural paper, and that it could not be said that light paper could only be industrial paper.
Allowing the appeals, this Court, HELD: 1. 'Coated paper ' in the second proviso to notifi cation No. 25 of 1984 refers only to coated paper used for industrial purposes and not to coated varieties of printing and writing paper.
The 799 appellant is, therefore, entitled to concessional rates specified in the notification.
[812F G] 2.1 The expression 'coated paper ' in the proviso should draw colour from the context in which it is employed and receive an interpretation consistent therewith than its literal one, which in its widest sense, may be comprehensive enough to include all coated paper, industrial or otherwise, [809G H] 2.2 The concession of the notification is denied to five kinds of paper.
Three of them are varieties of industrial paper.
The fourth is light paper, not exceeding a particular weight.
Light paper is by and large industrial paper and is also used occasionally for cultural purposes also.
The five varieties of paper are found in serial Nos. 3 and 4 of the 1985 notification and serial Nos. 1 and 3, reflect a con trast between coated paper and light paper used for cultural purposes (item No. 1) and that used for other (industrial) purposes (item No. 3).
On this basis, it is clear that four out of the five varieties of paper which are denied the benefit of the concession constitute industrial paper.
In fact, even if, only three of these items are of the indus trial variety, while the other two could be either, it will not still be unreasonably (though may be, a little less plausible) to draw an inference that only industrial paper falling in those two categories are intended to be compre hended in the classification rather than assume, for no detectable reason, that all paper of these two varieties alone are excluded from the concession, [809E G] 2.3 Though no meticulous reasons can always be made available or discovered for variations in rates of duty as between various types of goods and the absence of some common thread ' in relation to a set of goods treated alike may not necessarily render the classification irrational or arbitrary, it can legitimately be postulated that the denial of a concession to a group proceeds on the basis of some aspect or feature common to all items in the group.
If such a principle can be conceived of which would rationalise the inclusion of all the items, it would be quite reasonable and proper to give effect to a construction of the notification as will accord with that principle.
[808F G] 2.4 In interpreting the scope of any notification, the Court has first to keep in mind the object and purpose of the notification.
All parts of it should be read harmonious ly in aid of, and not in derogation, of that purpose.
[811F] 800 Collector of Central Excise vs Parle Exports (P) Ltd., ; and Tata Oil Mills Co. Ltd. vs
C.C.E.; , , referred to.
In the instant case, the aim and object of the notifica tion is to grant a concession to small scale factories which manufacture paper with unconventional raw materials.
If the proviso had referred only to coated paper no special object or purpose would have been discernible and perhaps there would have been no justification to look beyond it and enter into a speculation as to why the notification should have thought of exempting only coated paper manufactured by these factories from the purview of the exemption.
But the notifi cation excepts not one but a group of items.
If the items mentioned in the group were totally dissimilar and it were impossible to see any common thread running through them, again, it may be permissible to give the exceptions their widest latitude.
But when four of them undoubtedly, at least three of them can be brought under an intelligible classifi cation and it is also conceivable that the Government might well have thought that these small scale factories should not be eligible for the concession contemplated by the notification where they manufacture paper catering to indus trial purposes, there is a purpose in the limitation pre scribed and there is no reason why the rationally logical restriction should not be placed on the proviso based on this classification.
[811H; 812A C] The only reasonable way of interpreting the proviso is by understanding the words 'coated paper ' in a narrower sense consistent with the other expressions used therein.
[812D] 3.
The principle of statutory interpretation by which a generic word receives a limited interpretation by reason of its context is well established.
The expression noscitur a sociis simply means that the meaning of a word is to be judged by the company it keeps [810A B] In the context of the instant case, this principle can be legitimately drawn upon.
However, the latin maxims and precedents are not to be mechanically applied; they are of assistance only in so far as they furnish guidance by com pendiously summing up principles based on rules of common sense and logic.
[811E F] State vs Hospital Mazdoor Sabha, ; ; Rainbow steels Ltd. vs
C.S.T.; , and Lethang vs Coopex, ; , referred to. 801 "The Dictionary of Paper" published by the American Paper and Pulp Association (Second Edition), referred to.
|
Appeal No.449 of 1958.
Appeal by special leave from the judgment and decree dated August 7, 1956, of the Patna High Court in Misc.
Judicial Case No. 604 of 1953.
406 D. P. Singh, for the appellant.
section P. Varma, for the respondent.
January 11.
The Judgment of the Court was delivered by SHAH, J.
The High Court of Judicature at Patna answered in the affirmative the following question which was submitted by the Board of Agricultural Income tax, Bihar, under section 28(3) of the Bihar Agricultural Income tax Act, XXXII of 1948 hereinafter referred to as the Act: " Whether, in the facts and circumstances of the case, the petitioner could be legally assessed for the income of the Estate in 1355 Fasli when the Estate was in the hand of the Receiver ? " With special leave under article 136 of the Constitution, this appeal is preferred against the order of the High Court.
The appellant is the Mahant of the Asthal Estate, Salauna, in the District of Bhagalpur in Bihar.
In a suit concerning that estate, a Court Receiver was appointed by the First Class Subordinate Judge, Monghyr, to manage the estate.
The Receiver functioned till sometime in December, 1949, and under the order of the Subordinate Judge he handed over charge of the estate to the appellant on January 8, 1950.
On January 15, 1950, the appellant submitted a return of income of the estate to the Agricultural Income tax Officer, Monghyr, for the Fasli year 1355 corresponding to September 16, 1948, to September 15, 1949.
The Agricultural Income tax Officer assessed on August 7, 1950, the agricultural income of the estate at Rs. 90,507 2 6 and ordered the appellant to pay Rs. 20,290 13 0 as agricultural income tax.
Appeals against the order of assessment preferred to the Commissioner of Agricultural Income tax and the Board of Agricultural Income tax, Bihar, were unsuccessful.
The Board however referred the question set out hereinbefore to the High Court under section 28(3) of the Act as arising out of its order.
The only question which falls to be determined in this appeal is whether the appellant was liable to be assessed to pay agricultural income tax for the year 407 in which the estate was in the management of the Court Receiver.
Section 3 of the Act which is the charging section provides: " Agricultural income tax shall be charged for each financial year in accordance with and subject to the provisions of this Act on the total agricultural income of the previous year of every person.
" By section 4,it is provided: Save as hereinafter provided, this Act shall apply to all agricultural income derived from land situated in the State of Bihar.
" The income of the estate of the appellant was not exempt from payment of tax and by virtue of section 3, agricultural income tax was charged upon the income for the assessment year in question, and the appellant was prima facie liable as owner of the estate to pay tax on that income.
The appellant however relied upon section 13 of the Act which provides: " Where any person holds land, from which agricultural income is derived, as a common manager appointed under any law for the time being in force, or under any agreement or as receiver, administrator or the like on behalf of persons jointly interested in such land or in the agricultural income derived therefrom, the aggregate of the sums payable as agricultural income tax by each person on the agricultural income derived from such land and received by him shall be assessed on such common manager, receiver, administrator or the like, and he shall be deemed to be the assessee in respect of the agricultural income tax so payable by each such person and shall be liable to pay the same.
" The appellant urged that if the land from which agricultural income is derived is held by a Receiver and the income is received by the Receiver, the Receiver alone can, by virtue of section 13, be deemed to be the assessee and the Receiver alone is liable to pay the tax in respect of that income.
In support of his contention, the appellant relies upon the definition of the word.
, " person " in s, 2, cl.
(m) which estates; 408 Person ' mean,% any individual or association of individuals, owning or holding property for himself or for any other, or partly for his own benefit and partly for another, either as owner, trustee, receiver, common manager, administrator or executor or in any capacity recognised by law, and includes an undivided Hindu family, firm or company.
" In our view, there is no substance in the contention raised by the appellant.
The liability to pay tax is charged on the agricultural income of every person.
The income though collected by the Receiver was the income of the appellant.
By section 13, in addition to the owner, the Receiver is to be deemed to be an assessee.
But the fact that the Receiver may, because he held the property from which income was derived in the year of account, be deemed to be an assessee and liable to pay tax, does not absolve the appellant on whose behalf the income was received from the obligation to pay agricultural income tax.
Section 13 merely provides a machinery for recovery of tax, and is not a charging section.
When property is in the possession of the Receiver, common manager or administrator, the taxing authorities may, but are not bound to, treat such persons as assessees and recover tax.
The taxing authorities may always proceed against the owner of the income and assess the tax against him.
The definition in the connotation of" person " undoubtedly included a receiver, trustee, common manager, administrator or executor, and by such inclusion, it is open to the taxing authorities to assess tax against any such persons; but on that account, the income in the hand of the owner is not exempt from liability to assessment of tax.
Counsel for the appellant urged that the income received by the appellant from the Receiver did not retain its character of agricultural income and therefore also the appellant was not liable to pay agricultural income tax.
But this contention was never raised before the taxing authorities and no such question has been referred to this court.
The character of the income was accepted to be agricultural 409 income in the hands of the appellant and the only question which was sought to be referred and raised before the Board of Agricultural Income tax was one as to the liability of the appellant to be assessed to agricultural income tax for the year in question.
In that view of the case, the appeal fails and is dismissed with costs.
Appeal dismissed.
| One Rangachari, a partner of a partnership firm, assigned by means of a deed of settlement a fourth share of the profits of the firm each to his wife, a married adult daughter and a minor daughter for 8 years with the right to receive the said share of profits absolutely and exclusively from the firm.
The question which arose before the High Court on a reference under section 66(1) of the Income tax Act was " Whether the inclusion in the assessee 's total income of the profits settled by him on his wife and two daughters is justified in law ?" The assessee Rangachari relying on the rule laid down by the Privy Council in Bijoy Singh Dudhuria 's case claimed that the amounts payable to his wife and two daughters never became his income, being diverted by an overriding title and that those amounts could not be included in his total income for the purposes of assessment being excluded by reason of the third proviso to section 16(1)(c) of the Income tax Act.
The High Court held that the third proviso was not attracted and that the income had accrued to the assessee in the first instance, and had then been applied for payments under the deeds.
On appeal with a certificate of the High Court: Held, that the answer given by the High Court was correct.
381 An examination of the deeds of settlement showed that the disponer had stated that from the profits " payable to him " certain amounts in specified shares were to be paid to his wife and two daughters.
No doubt, the assessee in those deeds created a right in favour of the disponees to get the amounts direct from the firm, of which he was a partner.
The tenor of the document In, showed that the profits were first to accrue to him and were then applied for payments to the disponees.
Under the law of partnership, it is the partner and the partner alone who is entitled to the profits.
A stranger, even if he were an assignee, has not and cannot have a direct claim to the profits.
By the deeds in question, the assessee merely allowed a payment to his wife and daughters to constitute a valid discharge in favour of the firm, but what was paid was, in law, a portion of his profits or, in other words, his income.
The rule in Bijoy Singh 's case was not applicable to this case, and in view of the decision of this court in Sitaldas Tirathdas 's case it cannot be said that the profits were diverted by an overriding title before they accrued to the assessee.
Provat Kumar Mitter vs Commissioner of Income tax, West Bengal ; Tulsidas Kilachand vs The Commissioner of Income tax ; The Commissioner of Income tax, Bombay vs Sitaldas Tirathdas ; , applied.
Bijoy Singh Dudhuria vs Commissioner of Income tax, Bengal , held inapplicable.
|
ivil Appeal No. 3947 of 1986 From the Judgment and Order dated 30.8.1982 of the Allahabad High Court in Civil Misc.
Writ Petition No. 5105 of 1982.
Pramod Swarup, R. Singh Rana and Ashok K. Srivastava for the Appellant.
G.N. Dixit, M.K. Dua, Aman Vachher and S.K. Mehta for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
Smt.
Amna Begum was a resident of Rehpura Village, Tehsil Kichha, District Nainital in the State of Uttar Pradesh.
She owned a fairly large extent of agricultural land.
On 8.6.1973 the Uttar Pradesh Imposition of Ceiling on Land Holdings (Amendment) Act, 1972 came into force.
Section 5 of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960 (hereinafter referred to as 'the Act ') provided that on and from the commencement of the Uttar Pradesh Imposition of Ceiling on Land Holdings (Amend ment) Act, 1972 no tenure holder would be entitled to hold in the aggregate throughout Uttar Pradesh, any land in excess of the ceiling area applicable in him or her.
The expression 'ceiling area ' is defined in sub section (2) of section 3 of the Act as the area of land not being exempted under the Act, determined as such in accordance with the provisions of section 5 thereof Since Smt.
Arena Begum, the tenure holder, was holding in the aggregate in the State of Uttar Pradesh land in excess of the ceiling area applicable to her, she became liable to surrender the surplus land, i.e., the land held by her in excess of the ceiling area.
applicable to her, in favour of the Government under the Act.
A general notice was issued under section 9 of the Act to all tenure holders holding land in excess of the ceiling area for submission of statements in respect thereof.
She did not file any statement before the Prescribed Authority as provided by section 9 of the Act.
After the publication of the said general notice but before she could be served with a notice under section 10(2) of the Act to submit her statement, Smt.
Arena Begum died.
The Prescribed Authority 103 who had no knowledge of the.
death of Smt.
Amna Begum, however, issued a notice addressed to her under section 10(2) of the Act calling upon her to show cause within the period specified in the notice why the statement prepared by him under section 10(1) of the Act should not be taken as correct.
The said notice could not, no doubt, be served on her, but one Fazai Ahmad, the father of Shams Ahmad re spondent No. 4, who was one of the heirs of Smt.
Amna Begum filed objections before the Prescribed Authority to the notice issued under section 10(2) of the Act.
The Prescribed Authority overruled the said objections and declared that Smt.
Amna Begum was holding 17.37 hectares of land as sur plus land by his order dated November 29, 1975.
Aggrieved by that order Fazal Ahmad, since deceased, and Shams Ahmad, son of Fazal Ahmad filed on appeal in Ceiling Appeal No. 541 of 1975 before the District Judge, Nainital.
That appeal was allowed on February 14, 1977.
The order against which the appeal had been filed was set aside and the case was remand ed to the Prescribed Authority to issue fresh notice to the tenure holders concerned, if necessary.
The reason given in the order passed by the District Judge, Nainital for allow ing the appeal was that the tenure holder, Smt.
Amna Begum was dead by the time the notice under section 10(2) of the Act was issued and the order of the Prescribed Authority passed against a dead person could not be allowed to stand.
The learned District Judge did not record any other finding on the merits of the case.
After remand the case was en quired into by the Prescribed Authority.
In that proceeding fresh notices under section 10(2) of the Act was issued to the heirs of Smt.
Amna Begum.
Sharifan Begum.
respond ent No. 3, one of the heirs of Smt.
Amna Begum appeared before the Prescribed Authority and contended inter alia that she held only 91.12 bighas of land in village Rehpura, as her one fourth share in the estate of Smt.
Amna Begum along with the other heirs of Smt.
Amna Begum.
She also pleaded that 12 acres of land had been transferred in favour of Daulat Ram and Prem Nath through registered sale deed for adequate consideration, the transfer was in good faith and, therefore, the said extent of land should be excluded from the holding while determining the surplus land.
She further contended that the determination of the surplus land should be made on the basis of the share held by each of the heirs of Smt.
Amna Begum treating each of them as an individual tenure holder entitled to land equal to one ceiling area in the estate of Smt.
Amna Begum as she had died prior to the service of the notice.
The Prescribed Authority accepted the contentions urged on behalf of the heirs of Smt.
Amna Begum and found that there was no surplus land that could be claimed from the holding in question since none of the heirs of Smt.
Amna 104 Begum was in possession of the land in excess of the ceiling area.
Against the order of the Prescribed Authority, the State Government filed an appeal before the Civil Judge, Nainital in Civil Appeal No. 32 of 1981.
The learned Civil Judge dismissed the appeal holding that Smt.
Amna Begum could not be treated as a tenure holder after her death and that after her death each of the heirs of Smt.
Amna Begum should be treated as an independent tenure holder entitled to one unit of ceiling area for purposes of determination of the surplus land.
He agreed with the Prescribed Authority that since none of the heirs of Smt.
Amna Begum was holding the land in excess of the ceiling area, they were not liable to surrender any surplus land.
The learned Civil Judge also held that the contention urged on behalf of the State Gov ernment that Smt.
Amna Begum who was alive on 8.6.1973 which was the relevant date for determining the surplus land should be treated as the tenure holder could not be main tained because the said contention was barred by res judica ta on account of the decision of the District Judge, Naini tal in Ceiling Appeal No. 541 of 1975, under which the case had been remanded earlier to the Prescribed Authority for fresh disposal.
The appeal filed by the State Government was, therefore, dismissed.
Aggrieved by the decision of the learned Civil Judge, Nainital, the State Government filed a writ petition before the High Court.
That writ petition was dismissed by the learned Judge, who heard it by his order dated August 30, 1982.
The only reason given by the learned Judge, who heard the writ petition, for dismissing it was that the State Government was not entitled to question the correctness of the orders of the Prescribed Authority and the Civil Judge as the order of remand of the case passed by the District Judge had become final and the contentions of the State Government were barred by the rule of res judica ta.
This appeal by special leave is filed against the order of the High Court dismissing the writ petition.
At the outset it should be stated that the reason given by the High Court for holding that the contentions urged on behalf of the State Government were barred by the rule of res judicata is wholly untenable since the learned District Judge, who disposed of the appeal on 14.2.1977 had not recorded any finding on the merits of the contentions of the parties.
He had set aside the order of the Prescribed Au thority passed earlier only on the ground that a proceeding which had been commenced against a dead person was a nulli ty.
He, however, remanded the case to the Prescribed Author ity for fresh disposal in accordance with law after issuing notices to the heirs of Smt.
Amna Begum whom he wrongly described as tenure holders solar as the estate of Smt.
Amna Begum was concerned.
The High Court was, 105 therefore, wrong in dismissing the writ petition on that ground.
As regards the contention urged on behalf of re spondent Nos. 3 to 5 Smt.
Sharifan Begum, Shams Ahmad and Smt.
Ahmadi Begum who were the heirs of Smt.
Amna Begum, namely, that for purposes of computation of the surplus land in their hands the relevant date that should be taken into consideration is the date on which such computation was made and not the date on which the ceiling was imposed by section 5 of the Act it has to be stated that the orders of the Prescribed Authority and the Civil Judge passed after the order of remand are wholly erroneous.
Arena Begum was alive on 8.6.1973 on which date the ceiling on the holdings in the State of Uttar Pradesh was imposed by section 5 of the Act.
Amna Begum became liable to surrender the surplus land in her hands in excess of what she could retain in accordance with that section.
Merely because she had died before the issue of the notice under section 10(2) of the Act her liability to surrender the surplus land would not come to an end.
Rule 19 of the Uttar Pradesh Imposition of Ceiling on Land Holdings Rules, 1961 flamed under the Act provides that where a tenure holder dies before the publication of the general notice under section 9 of the Act, such publication shall be deemed to apply to the executor, administrator or other legal representatives and the Prescribed Authority may proceed to determine the ceiling area applicable to the deceased person as if such executor, administrator, or other legal represen tatives were the tenure holder.
It also provides that where a tenure holder dies before he is served with a notice under sub section (2) of section 10 of the Act, the Prescribed Authority may serve such notice on his executor, administra tor or other legal representatives and may proceed to deter mine the ceiling area applicable to the deceased person as if such executor, administrator, or other legal representa tives were the tenure holder.
The principle applicable to the determination of the surplus land under the land reform laws in the hands of persons holding land on the date on which the ceiling is imposed is explained by this Court in Raghunath Laxman Wani vs State of Maharashtra, at page 397, thus: "The scheme of the Act seems to be to deter mine the ceiling area of each person (includ ing a family) with reference to the appointed day The policy of the Act appears to be that on and after the appointed day no person in the State should be permitted to hold any land in excess of the ceiling 106 area as determined under the Act and that ceiling area would be that which is determined as on the appointed day.
Therefore, if there is a family consisting of persons exceeding five in number on January 26, 1962, the ceil ing area for that family would be the basic ceiling area plus 1/6th thereof per member in excess of the number five.
The ceiling area so fixed would not be laible to fluctuations with the subsequent increase or decrease in the number of its members, for, there is, apart from the explicit language of sections 3 and 4, no provision in the Act providing for the redetermination of the ceiling area of a family on variations in the number of its members.
The argument that every addition or reduction in the number of the members of a family requires redetermination of the ceiling area of such a family would mean an almost perpetual fixation and refixation in the ceiling area by the Revenue authorities, a state of affairs hardly to have been contem plated by the legislature.
" The principle enunciated in the above decision has been followed by this Court in Bhikoba Shankar Dhumal (dead) by Lrs.
and Others vs Mohan Lal Punchand Tatbed and Others.
, ; In that case it was held that the surplus land in the case of a person who held land in excess of the ceiling area on the appointed day had to be deter mined as on the appointed day even though such person might have died before the actual extent of surplus land was determined and notified.
It was further held that the per sons on whom his holding devolved on his death would be liable to surrender the surplus land as on the appointed day because the liability attached to the holding of the de ceased would not come to an end on his death.
Although the above decisions are rendered in cases arising under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 the principle set out therein applies to all cases where there is an imposition of ceiling on lands held bY land holders by land ceiling laws with effect from a specified date.
In fact rule 19 of the Rules framed under the Act which is referred to above also leads to the same view.
Whatever surplus land was liable to be surrendered by a tenure holder has to be determined as on 8.6.1973 and taken possession under the Act even though the tenure holder might have died after 8.6.1973 and before such ascertain ment.
We, therefore, do not agree with the view of the Prescribed 107 Authority and the Civil Judge that for purposes of determin ing the surplus land the share of land in the hands of each of the heirs of Smt.
Amna Begum should be treated as a separate unit for determining the surplus land.
We hold that for purposes of deciding the surplus land which is liable to be surendered from out of the estate of Smt.
Amna Begum, the relevant date that should be taken into account is 8.6.1973 on which date the ceiling on holdings was imposed and Smt.
Arena Begum became liable to surrender the surplus land in accordance with the provisions of the Act.
The heirs or legal representatives of Smt.
Amna Begum together are enti tled to retain out of the estate of Smt.
Amna Begum only an extent of land equal to the area which Smt.
Arena Begum could have retained in her hands after the imposition of ceiling on land holdings and are liable to surrender the surplus land.
The High Court failed to consider this aspect of the question when it disposed of the writ petition.
We, therefore, set aside the orders passed by the High Court, by the Civil Judge on 4.12.1981 and by the Prescribed Authority on 16.1.1981 and remand the case to the Prescribed Authority for fresh disposal in accordance with law and in the light of this judgment.
All other questions are left open.
This appeal is accordingly allowed will be no order as to costs.
A.P.J. Appeal al lowed.
| Section 5 of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960 provided that on and from the com mencement of the U.P. Imposition of Ceiling on Land Holdings (Amendment) Act, 1972, which came into force on 8.6.1973, no tenure holder would he entitled to hold in the aggregate throughout Uttar Pradesh, any land in excess of the 'ceiling area ', as defined in Sub s.(2) ors.3 of the Act.
Since Smt.
Anma Begum, the tenure holder was holding in the aggregate land in excess of the ceiling area, she became liable to surrender the surplus land.
Pursuant to a general notice issued under s.9 to all tenure Imlders, holding land in excess of the ceiling area, she did not file any state ment before the Prescribed Authority After the publication of the general notice but before she could he served with a notice under s.10(2) she died.
The Prescribed Authority not knowing of her death issued a notice under s.10(2) calling upon her to show cause why the statement prepared by him under section 10(1) should not he taken as correct.
The father of respondent No. 4, one of the .heirs, filed objections which were over ruled, and it was declared that Smt.
Arena Begum was holding 17.37 hectares of land as surplus land.
The District Judge holding that since the tenure holder was dead by the time the notice under section 10(2) was issued, the order of the Prescribed Authority passed against a dead person could not be allowed to stand, allowed the appeal, set aside the order of the Prescribed Authority and remanded the case.
Fresh notices under s.10(2) were issued to the heirs.
Respondent No. 3 contended that she held only 91.12 bighas of land as her onefourth share and that 12 acres of land had been transferred through registered sale deed far adequate consideration and in good faith and 100 the land to that extent should be excluded from the holding while determining the surplus land and that the determina tion of the surplus land should be made on the basis of the share held by each of them as an individual tenure holder.
The Prescribed Authority held that there was no surplus land that could be claimed from the holding in question since none of the heirs of deceased tenure holder was in possession of the land in excess of the ceiling area.
The appeal by the State Government against the order of the Prescribed Authority was dismissed by the Civil Judge holding that Smt.
Anma Begum could not be treated as a tenure holder after her death, and that since none of the heirs of Amna Begum was holding the land in excess of the ceiling area they were not liable to surrender any surplus land.
The petition under Article 226 filed by the State Gov ernment was dismissed holding that the State Government was not entitled to question the correctness of the orders of the Prescribed Authority and the Civil Judge as the order of remand of the case passed by the District Judge had become final.
Allowing the Appeal, HELD: 1.
The orders passed by the High Court, the Civil Judge and the Prescribed Authority are set aside and the case is remanded to the Prescribed Authority for fresh disposal.
[107D] 2.
The reason given by the High Court for holding that the contentions urged on behalf of the State Government were barred by the rule of res judicata is wholly untenable since the District Judge while remanding the case had nut recorded any finding on the merits of the contentions of the parties.
He had set aside the order of the Prescribed Authority passed earlier only on the ground that a proceeding which had been commenced against a dead person was a nullity.
He, however, remanded the case to the Prescribed Authority for fresh disposal in accordance with law after issuing notices to the heirs of Smt.
Amna Begum whom he wrongly described as tenure holders so far as her estate was concerned.
The High Court was, therefore, wrong in dismissing the writ petition on that ground.
[104D 105A] 3. Smt.
Amna Begum was alive on 8.6.1973 on which date ceiling 101 on the holdings in the State of Uttar Pradesh was imposed by s.5 of the Act.
Amna Begum became liable to surrender the surplus land in excess of what she could retain in accordance with that section.
Merely because she had died before the issue of the notice under s.10(2) of the Act the liability to surrender the surplus land would not come to an end.
[105C] 4.
Rule 19 of the Uttar Pradesh Imposition of Ceiling on Land Holdings Rules, 1961 framed under the Act provides that where a tenure holder dies before the publication of the general notice under s.9 of the Act, such publication shah be deemed to apply to the executor, administrator or other legal representatives and the Prescribed Authority may proceed to determine the ceiling area applicable to the deceased person as if such executor administrator of other legal representatives were the tenure holder It also pro vides that where a tenure holder dies before he is served with a notice under sub section
(2) of section 10 of the Act, the Prescribed Authority may serve such notice on his executor, administrator or other legal representatives and may proceed to determine the ceiling area applicable to the deceased person as if such executor, administrator or other legal representatives were the tenureholders.
[105D F] 5.
The principle applicable to the determination of the surplus land under the land reform laws in the hands of person holding land is the date on which the ceiling is imposed.
[105G] 6. 'The surplus land in the case of a person who held land in excess of the ceiling area on the appointed day had to he determined as an the appointed day even though such person might have died before the actual extent of surplus land was determined ,tad notified.
The persons on whom his holding devolved on his death would be liable to surrender the surplus land as on the appointed day because the liabil ity attached to the holding of the deceased would not come to an end on his death.
[I06E F] Raghunath Laxman Wani vs
State of Maharashtra, at page 397 & Bhikoba Shankar Dhumal (dead) by Lrs.
and Others vs Mohan Lal Punchand Tathed and Others, [1982] 1 S.C.C680, followed.
For the purpose of deciding the surplus land which is liable to be surrendered from and out of the estate of Smt.
Arena Begum, the relevant date that might be taken into account is 8.6.1973 on which date the ceiling on holdings was imposed and she became liable to surrender the surplus land.
Her hews or legal representatives together are enti tled 102 to retain out of her estate only an extent of land equal to the area which she could have retained in her hands after the imposition of ceiling on land holdings and are liable to surrender the surplus land.
[107B C]
|
Civil Appeal No. 1868 of 1974.
From the Judgment and order dated 2.9.1974 of the Madr as High Court in Writ Petition No. 2729/1974.
F.S. Nanman, C.S. Vaidyanathan and K.R. Nambiar for t he Appellants.
T.S. Krishnamoorthy Iyer, A.V. Rangam and T.V. Ratn am for the Respondent.
section Balakrishnan (not present) for the Intervener.
The Judgment of the Court was delivered by 39 PATHAK, CJ.
The appellants in these two appeals a re manufacturers of Ayurvedic drugs and medicines, 'includi ng Arishtams and Asavas.
Arishtams and Asavas contain alcoho l, and it is said that the presence of alcohol is essential f or the effective and easy absorption of the medicine by t he human system and also because it acts as a preservative.
A ll the Ayurvedic preparations as well as Allopathic, Siddha a nd Unani medicines were originally subject to a multi poi nt levy of 31/2 % under the Tamil Nadu General Sales Tax Ac t, 1959.
By a notification dated 4 March, 1974, the State of Tamil Nadu included a large number of items in the Fir st Schedule to the aforesaid Act in order to make them subje ct to a single point levy.
While all other patent or propri e tary medicinal preparations belonging to the differe nt systems of medicines were taxed at the rate of 7% onl y, Arishtams prepared under the Ayurvedic system were ma de subject to a levy of 30%.
It seems that representations we re made to the State Government against the high rate of tax on Arishtams, and therefore a separate entry was introduced by Tamil Nadu Act No. 23 of 1974 in the First Schedule as it em 135 dealing specifically with Arishtams and Asavas.
Th ey were shown as attracting a rate of 30% while all oth er medicinal preparations were shown under item No. 95 a nd subjected to tax at 7%.
The appellants filed writ petitions in the High Court of Madras challenging the levy of 30% on Arishtams and Asava s, but on 2 September, 1974 the High Court dismissed the wr it petitions.
From the counter affidavit filed by the Government of Tamil Nadu in the writ petition, out of which one of t he present appeals arises, it appears that the higher levy of sales tax on Arishtams and Asavas was introduced by t he State Legislature to curb the abuse of medicinal prepar a tions for their alcoholic content by drink addicts and to eliminate the mushroom growth of Ayurvedic Pharmacies pr e paring sub standard Arishtams and Asavas for purposes oth er than medicinal use.
The appellants contend that Arishta ms and Asavas manufactured by them are essentially Ayurved ic medicines, and that in any event the object of controlli ng the consumption of liquor is amply served by several oth er existing statutes, including the Medicinal and Toilet Prep a rations (Excise Duty) Act, 1955, Drugs and Cosmetic Ac t, 1940, as amended in the year 1964, and Spirituous Prepar a tions (Inter State Trade and Commerce) Control Act, 1955.
It is said that there are over 130 Allopathic medicines co n taining alcohol which are potable as against only thr ee Ayurvedic medicines, and that therefore the levy of tax at 30% of Arishtams and Asavas alone while 40 other medicinal preparations are subjected to tax at 7% (n ow increased to 8%) results in an invidious discriminati on against the manufacturers of those Ayurvedic preparatio ns thus violating article 14 of the Constitution.
It is contend ed that the impugned rate of tax also offend Article 19(1)( g) of the Constitution.
The appellants in Civil Appeal No. 18 68 of 1974 have also taken the point that the high rate of t ax on Arishtams and Asavas has been imposed by the State of Tamil Nadu with the object of discouraging the import of these Ayurvedic medicines from the neighbouring State of Kerala, and consequently the measure is violative of Ar t. 301 as well.
While dismissing the writ petitions the High Cou rt observed that the imposition of the rate of 30% on the sa le of Arishtams and Asavas must be regarded principally as a measure for raising revenue, and it repelled the argume nt that the rate of tax was discriminatory or that Ar t. 19(1)(g) was infringed.
It rejected the plea of the appe l lants that article 301 was contravened and refused to acce pt that there was any ulterior object in imposing a high ra te of tax on those two commodities.
Now there is no doubt that Arishtams and Asavas a re Ayurvedic medicinal preparations.
The question is wheth er these two medicines attract different considerations fr om those applied to other medicinal preparations.
Reference is made by the State to their high content of alcohol, a nd that, it is said, attracts a class of customers who purcha se them for their alcoholic content rather than their medicin al value.
On that basis, it is urged, there is justificati on for a higher rate of tax.
We think that the appeals are entitled to succeed.
It em 95 mentions the rate of 7% (now 8%) as the tax to be levi ed at the point of first sale in the State.
Item 135 provides a rate of 30% in respect of Arishtams and Asavas at the poi nt of first sale.
We see no reason why Arishtams and Asav as should be treated differently from the general class of Ayurvedic medicines covered by Item 95.
It is open to t he Legislature, or the State Government if it is authorised in that behalf by the Legislature, to select different rates of tax for different commodities.
But where the commoditi es belong ' to the same class or category, there must be a rational basis for discriminating between one commodity a nd another for the purpose of imposing tax.
It is common ly known that considerations of economic policy constitute a basis for levying different rates of sales tax.
For i n stance, the object may be to encourage a certain trade or industry in the context of the State policy for econom ic growth, and a lower rate would be considered 41 justified in the case of such a commodity.
There may be several such considerations bearing directly on the choi ce of the rate of sales tax, and so long as there is go od reason for making the distinction from other commodities no complaint can be made.
What the actual rate should be is n ot a matter for the courts to determine generally, but where a distinction is made between commodities fairing in the sa me category a question arises at once before a Court wheth er there is justification for the discrimination.
In t he present case, we are not satisfied that the reason behi nd the rate of 30% on the turnover of Arishtams and Asav as constitutes good ground for taking those two preparatio ns out from the general class of medicinal preparations to which a lower rate has been applied.
In Adhyaksha Math ur Babu 's Sakti Oushadhalaya Dacca (P) Ltd. and others vs Uni on of India, this Court considered whether t he Ayurvedic medicinal preparations known as Mirtasanjiban i, Mritasanjibani Sudha and Mritasanjibanj Sura, prepared in accordance with an acknowledged Ayurvedic formula, could be brought to tax under the relevant State Excise Act wh en medicinal preparations were liable to excise duty under t he Medicinal and Toilet Preparations (Excise Duty) Act, whi ch was a Central Act.
The Court held that the three prepar a tions were medicinal preparations, and observed that t he mere circumstance that they contained a high percentage of alcohol and could be used as ordinary alcoholic beverag es could not justify their being treated differently from oth er medicinal preparations.
The Court said: "So if these preparations are medicinal preparations but a re also capable of being used as ordinary alcoholic beverage s, they will fail under the (Central) Act and will be liable to duty under item No. 1 of the Schedule at the rate of R section 17.50nP per gallon of the strength of London Proof spiri t.
On a consideration of the material that has been plac ed before us, therefore, the only conclusion to which we c an come is that these preparations are medicinal preparatio ns according to the standard Ayurvedic text books referred to already, though they are also capable of being used as ordinary alcoholic beverages.
They cannot however be tax ed under the various Excise Acts in force in the concern ed States in view of their being medicinal preparations whi ch are governed by the Act.
" We are of opinion that similar considerations should app ly to the appeals before us.
The two preparations, Arishta ms and Asavas, are medicinal preparations, and even though th ey contain a high alcohol 42 content, so long as they continue to be identified as medi c inal preparations they must be treated, for the purposes of the Sales Tax Law, in like manner as medicinal preparatio ns generally, including those containing a lower percentage of alcohol.
On this ground alone the appellants were entitl ed to succeed.
In the circumstances, we do not consider it necessary to enter upon the question whether there is substance in t he complaint of the appellants that there is a violation of article 301 of the Constitution.
In the result, the appeals must be allowed and t he appellants held entitled to a refund of the excess paid as sales tax on account of the turnover being treated und er Item 135 rather than under Item 95.
Learned counsel for t he appellants states that the appellants will inform all the ir customers, from whom the higher rate has been charged, th at the customers are entitled to a refund of the excess paid by them and that an application will be invited for such refu nd and that if any part of the excess remains unrefunded to t he customers the appellants undertake that such balance will be paid over to the Arya Vaidya Rama Varier Educational Found a tion of Ayurveda.
The appeals are allowed, the judgment and order of t he High Court on each writ petition are set aside and the Sal es Tax Authorities are directed to reassess the turnover of t he Arishtams and Asavas at the rate mentioned in Item No. 95 and to refund to the appellants the amount of tax paid in excess.
The appellants, in their turn, on obtaining su ch refund will within one month thereof, serve notice on t he customers from whom such excess has been recovered to obta in a refund from the appellants of such corresponding exces section In the event of any balance of the excess remaining unr e funded by the appellant to the customers upon the expiry of three months from such notice, the balance will be paid ov er by the appellants to the Arya Vaidya Rama Varier Education al Foundation of Ayurveda.
There is no order as to costs.
H.L.C. Appeals allowed.
| The petitioner was detained under an order dated 17 th September, 1988 made by the detaining authority under sub section (2) of section 3 of the Gujarat Prevention of Anti Social Activ i ties Act, 1985 with a view to prevent him from acting in a ny manner prejudicial to the maintenance of public order.
T he grounds of detention mentioned five offences register ed against him with police records, out of which the first o ne under section 324 IPC was stated to have been compromised, t he second under section 332 IPC and the third under sections 148 and 3 07 IPC respectively were stated to be pending trial, the four th under section 302 IPC was stated not proved, while the fif th under section 302 IPC was stated to be in the court.
The Government approved the said order on 21st Septe m ber, 1988.
The detenu submitted his representation dat ed 22nd September, 1988 to the first respondent who by h is order dated 30th September, 1988 rejected the same.
He thereupon, filed this petition under Article 32 of t he Constitution.
It was contended for the petitioner that he has be en acquitted even on 26th August, 1988 in the case shown at serial No. 2 in the Table appended to the grounds of dete n tion, and on 6th June, 1988 in the case shown at Serial N o. 3, that this material and vital fact of his acquittal in t he said cases had not been placed before the detaining author i ty and this non placing and the consequent non considerati on of the said material likely to influence the mind of t he detaining authority vitiates the subjective satisfaction a nd invalidates the detention order, that the names of his s o called associates were nowhere disclosed which fact wou ld show either the authority did not know as to who the se associates were or knowing their names has refrained fr om furnishing it to the detenu thereby disabling him to ma ke his effective representation, and 44 that the grounds of detention otherwise were vague or def i cient.
For the respondent it was contended that each activ i ty of the petitioner was a separate ground of detention a nd that the fact that the petitioner was acquitted in the sa id cases was of no consequence.
Allowing the writ petition, HELD: The requisite subjective satisfaction, the form a tion of which is a condition precedent to passing of a detention order, will get vitiated if material or vit al facts which would have bearing on the issue and weighed t he satisfaction of the detaining authority one way or the oth er and influenced his mind are either withheld or suppressed by the sponsoring authority or ignored and not considered by the detaining authority before issuing the detention orde r. [51D E] In the instant case, at the time when the detaini ng authority passed the detention order the vital fact of acquittal of the detenu in cases mentioned at serial Nos. 2 and 3 had not been brought to his notice and on the oth er hand it was withheld and the detaining authority was giv en to understand that the trial of those cases was pendin g.
This non placing of the material fact resulting in no n application of the mind of the detaining authority to t he said fact has vitiated the requisite subjective satisfa c tion, rendering the impugned detention order invalid.
T he same is, therefore, set aside.
The detenu be set at liber ty forthwith.
[51E, F, G, H] S.K. Nizamuddin vs State of West Bengal, ; ; Suresh Mahato vs The District Magistrate, Burdwan Ors., AIR 1975 SC 728; Asha Devi vs Additional Secretary to the Government of Gujarat & Anr., ; and Si ta Ram Somani vs State of Rajasthan & Ors., referred to.
Shiv Rattan Makim vs Union of India & Ors., [1985] Sup p. (3) SCR 843 and Subharta vs State of West Bengal , distinguished.
|
Appeal No. 66 of 1959.
Appeal by special leave from the judgment and order dated the February 1, 1958, of the Deputy Custodian General, Evacuee Property, New Delhi, in No. 1017 R/ Judl/Punj.
Achhru Ram and M. L. Kapur, for the appellants.
N. section Bindra and T. M. Sen, for the, respondents.
March 8.
The Judgment of the Court was delivered by 216 SUBBA RAO, J.
This is an appeal by special leave against the order of the Deputy Custodian General of Evacuee Property, India, dated February 1, 1958, setting aside the order dated June 6, 1949, passed by the Custodian of Evacuee Property, Patiala, and remanding the case for enquiry.
The facts lie in a small compass and may be briefly stated.
One Dafedar Niranjan Singh, the first appellant herein, owned houses Nos. 915 and 916 situate in the town of Patiala.
During the latter part of 1948, the Custodian of Evacuee Property, Patiala, took possession of the said houses under the provisions of the Patiala Evacuees (Administration of Property) Ordinance of Samvat 2004 (No. IX of 2004) (hereinafter referred to as Ordinance IX of 2004), on the ground that they were evacuee properties.
On January 27, 1949, Dafedar Niranjan Singh filed a claim petition before the said Custodian alleging that the said properties belonged to him by inheritance.
The Custodian by order dated June 6, 1949, allowed the claim and released the said properties.
This order was communicated to the Assistant Custodian on June 7, 1949, and pursuant to that order the said houses were released.
On June 9, 1955, the first appellant sold a part of the said properties to Major Bhagwant Singh, the second appellant herein, for Rs. 6,000.
On June 21, 1949, Ordinance IX of 2004 was repealed by the Patiala and East Punjab States Union Ordinance No. XIII of Samvat 2006 (hereinafter referred to as Ordinance No. XIII of 2006) which was in its turn repealed by the Patiala and East Punjab State Union Ordinance No. XVII of 2006 (hereinafter referred to as Ordinance No. XVII of 2006).
On October 18, 1949, Ordinance No. XVII of 2006 was also repealed by Central Ordinance No. XXVII of 1949, under which for the first time the office of Custodian General was created.
This Central Ordinance was replaced by the Administration of Evacuee Property Act (No. XXXI of 1950).
The said Act was amended from time to time.
Nothing turns upon the said amendments in the present appeal.
On December 24, 1955, i.e., more than six years after the order of the Custodian, the Litigation 217 Inspector of Evacuee Properties filed an application before the Custodian of Evacuee Property, Patiala, for review of the order of the Custodian dated June 6, 1949.
During the pendency of that application, the powers of the Custodian and the Additional Custodian of Evacuee Property of review and revision under section 26 of the Act were taken away by the Administration of Evacuee Property (Amendment) Act XCI of 1956.
On April 2, 1957, the Additional Custodian submitted the case to the Custodian General of Evacuee Property to enable him to take action suo motu under section 27 of the Act.
On May 24, 1957, the Deputy Custodian General, to whom the powers of the Custodian General in that behalf had been delegated, issued notice to the appellants to show cause why the order of the Custodian of Evacuee Property, Patiala, dated June 6, 1949, be not revised.
On February 1, 1958, after hearing the parties, the Deputy Custodian General, set aside the order of the Custodian dated June 6, 1949, and remanded the case to the Custodian for further enquiry.
The present appeal by special leave was directed against the said order.
Learned counsel for the appellants raised before us the following three points: (1) The deeming provisions of the repealing.
Ordinances and Acts culminating in section 58(3) of the Act apply only to things done or action taken by the Custodian in exercise of his administrative powers and not to orders made by him in exercise of his judicial powers.
(2) The order passed by the Custodian under Ordinance IX of 2004 cannot be deemed to be an order passed under the Act, as the chain of 'fiction was broken when Ordinance No. XIII of 2006 was issued.
(3) Section 58(3) of the Act expressly saves the previous operation of Ordinance XXVII of 1949 or any corresponding law, and, therefore, the orders that had become final under the said Ordinance could not be revised under section 27 of the.
Learned counsel for the State in addition to countering the said arguments, further submitted that the Custodian under Ordinance IX of 2004 had no jurisdiction to allow the claim of the first appellant and, 28 218 therefore, the said order was non est; with the result, the Custodian General could vacate it at any time under section 27 of the Act.
Before considering the arguments advanced by learned counsel, it would be convenient at the outset to give a short history of the legislation relevant to the present enquiry leading to the conferment of plenary powers of revision under the Act on the Custodian General.
The earliest Ordinance was the Patiala Evacuee (Administration of Property) Ordinance No. IX of 2004.
It extended to the whole of Patiala State.
Section 3 thereof enabled the appointment of Custodian of Evacuee Property and also the appointment of one or more Deputy Custodians and Assistant Custodians for such local areas as might be specified.
Section 5 enjoined on the Custodian within the area placed in his charge to take possession of evacuee property and to take all measures he considered necessary or expedient for preserving or safeguarding such property.
Under the proviso to section 6, the said Custodian, if any owner objected to his taking possession, after the issue of notice for taking possession and before taking possession thereof, should stay proceedings forthwith and should send the record of the case to the claims officer for decision.
Section 12 provided for preferring of claims of any kind against evacuees or their property before the claims officer appointed for that purpose.
Sub section (2) thereof conferred a right of appeal within 60 days of the date of decision of the said officer to the Custodian, urban areas; and under sub section
(4) the decision of the claims officer, and, where an appeal had been filed, the decision of the appellate authority, should be final and conclusive and should not be called in question in an court by way of appeal or revision or in any original suit, execution application or other petition.
Section 14 enabled the Custodian, urban areas, either suo motu or on application of any claimant to transfer on sufficient grounds any claim from the claims officer to any other officer appointed in this behalf by the Prime Minister Under section 16, decisions of the claims 219 officer and the Custodian were deemed to be decrees of court.
It may be noticed at this stage, as it may have some bearing on an argument for the first time ' advanced on behalf of the State, that none of the provisions of the said Ordinance expressly enabled the Custodian to decide himself at time first instance a claim set up by an evacuee in respect of his property proposed to be taken possession of by him.
But it may be contended that such a power was implicit in the power conferred on the Custodian to take possession of an evacuee property.
When he could take possession of an evacuee property, if he had reason to believe that it was an evacuee property, he could equally release it if he was satisfied that he made a mistake in that regard.
It may also be that the Custodian could withdraw the case to himself under section 14, if he was appointed by the Prime Minister under section 14 of the Ordinance to make an enquiry.
Ordinance IX of 2004 was repealed by Ordinance XIII of 2006 which came into force on June 21, 1949.
Under section 10 of the said Ordinance, any person claiming any right to or interest in any property of which the Custodian had taken possession or assumed control under section 9 might prefer such claim before the Custodian by an application within 30 day.
,.; from the date on which the possession of the property was taken.
The Custodian was empowered to make a summary inquiry and to make an order on the application.
Sub section (5) of section 10 conferred a power of revision on the Custodian against the order of an Assistant or Deputy Custodian for the purpose of satisfying himself as to the legality or propriety of any order passed by the said officer.
Under sub section
(6) thereof, any person aggrieved by an order made under sub section
(4) or sub section
(5) could prefer an appeal to the District Judge within whose ' jurisdictional limits the property was situate within one month of the date of the said order.
Under sub section (7) thereof, all orders passed by the Claims Officer appointed under Ordinance IX of 2004 should be deemed to have been passed under sub section
(4) of the said section of this Ordinance for the purpose of appeal or revision, 220 and such appeal could be filed to the District Judge within whose jurisdictional limits the property was situate within one month after the commencement of this Ordinance or the period prescribed under sub section
(6) whichever expired later.
Sub section (8) conferred revisional jurisdiction on the High Court against orders made under sub section
(4), (5) or (6).
Under sub section
(9), subject to the decision of the District Judge on appeal or the High Court in revision, the order of the Custodian would be final and 'conclusive.
One thing that may be noticed in this Ordinance is that no order made by the Custodian under Ordinance IX of 2004 was deemed to continue under this Ordinance.
Sub section (7) of section 10 applied only to orders made by a Claims Officer appointed under the earlier Ordinance.
Ordinance No. XVII of 2006, which came into force on July 31, 1949, repealed the earlier Ordinance XIII of 2006.
Section 40 of this Ordinance read as follows: (1) The Patiala and East Punjab States Union Evacuees ' (Administration of Property) Ordinance, 2006, is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken in the exercise of any power conferred by the Ordinance aforesaid shall be deemed to have been done or taken in the exercise of the powers conferred by this Ordinance, and any penalty incurred or proceeding commenced under the repealed Ordinance shall be deemed to be a penalty incurred, or proceeding commenced under this Ordinance as if this Ordinance were in force on the day when such thing was done, action taken, penalty incurred or proceeding commenced.
(3) Notwithstanding anything contained in this Ordinance or in any other law relating to the administration of evacuee property in force in the Union before the commencement of this Ordinance, all claims pending in the court of the Claims Officer appointed under the provisions of the Patiala Evacuee (Administration of Property) Ordinance, 2004 , shall be heard and decided by him in accord ance with the provisions of the aforesaid Ordinance.
221 (4) Any order passed under sub section (3) shall be appealable to or revisable by the Custodian with.
in such time and in such manner as is laid down it the Ordinance referred to in sub section (3).
Under this Ordinance anything done or an action taken under Ordinance XIIII of 2006 should be deemed to have been done or taken in the exercise of the powers conferred by this Ordinance.
If the order of the Custodian under Ordinance IX of 2004 could not be deemed to be an order made under Ordi nance XIII of 2006, sub section
(2) of section 40 of this Ordinance could not obviously operate on the said order, for the condition necessary for invoking the deeming provision was that the order should have been made under Ordinance XIII of 2006.
Then came the Administration of Evacuee Property Ordinance, 1949 (No. XXV 11 of 1949).
This Ordinance came into force on October 18, 1949.
This Ordinance for the first time created the office of Custodian General.
Under section 5 of this Ordinance, "The Central Government may, by notification in the Official Gazette, appoint a person to be the Custodian General of Evacuee Property in India for the purpose of discharging the duties imposed on the Custodian General by or under this Ordinance.
" Section 27 of this Ordinance which dealt with powers of revision of the Custodian General, read as follows: "(1) The Custodian General may at any time, either on his own motion or on application made to him in this behalf, call for the record of any proceeding in which any District Judge or Custodian has passed an order in appeal under the provisions of this Chapter for the purpose of satisfying himself as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit." "(2) Notwithstanding anything contained in subsection (1), where in respect of any proceeding called for under sub section (1), the Custodian General is 222 of opinion that the District Judge is in error in holding any person not to be an evacuee or any property not to be evacuee property, he shall not pass any order in relation thereto but shall refer the matter, with his own opinion thereon, to the High Court to which the District Judge is otherwise subordinate." "(3) Any reference made under subsection (2) shall be heard by a Bench of the High Court consisting of not less than two Judges, and the Custodian General shall dispose of the proceeding in accordance with the decision of the High Court.
" Section 28 read: "Save as otherwise expressly provided in this Chapter, every order made by the Custodian General, District Judge, Custodian, Additional Custodian, Authorized Deputy Custodian, Deputy Custodian, or Assistant Custodian shall be final and shall not be called in question in any original suit, application or execution proceeding." A combined reading of sections 27 and 28 indicates that the Custodian General 's revisional jurisdiction was confined only to appellate orders of the District Judge or the Custodian; and, subject to the provisions of the Ordinance, the orders of the respective authorities were made final.
Section 55 repealed the Ordinances of the various Provinces and provided under sub section
(3) there of as follows: "Notwithstanding the repeal by this Ordinance of the Administration of Evacuee Property Ordinance, 1949, or of any corresponding law, anything done or any action taken in the exercise of any power conferred by that Ordinance or law shall be deemed to have been done or taken in the exercise of the powers conferred by this Ordinance, and any penalty incurred or proceeding commenced under that Ordinance or law shall be deemed to be a penalty incurred or proceeding commenced under this Ordinance as if this Ordinance were in force on the day on which such thing was done; action taken, penalty incurred or proceeding commenced.
" The effect of the provisions of this Ordinance may be 223 stated thus: An order made under Ordinance No. XVII of 2006 should be deemed to have been made in exercise of the powers conferred under this Ordinance; any order so made, if it had not become final under the earlier Ordinance would be subject to the appellate or revisional jurisdiction, as the case may be, in the manner prescribed by this Ordinance; but if the said order was not made in appeal by the Custodian or the District Judge, it would not be subject to the revisional jurisdiction of the Custodian General, with the result that, under this Ordinance, even if the said order had not become final under the earlier Ordinance, it would become final under this Ordinance, if no further proceedings as provided under this Ordinance were taken in respect of the said order.
Ordinance No. XXVII of 1949 was repealed by the (No. XXXI of 1950) (hereinafter called the Act), which came into force on April 17, 1950.
This Act enlarged the revisional jurisdiction of the Custodian General.
Section 27 is in the following terms: "(1) The Custodian General may at any time either on his own motion or on application made to him in this behalf call for the record of any proceedings in which any Custodian has passed an order for the purpose of satisfying himself as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit: The main difference between section 27 of the Act and section 27 of the Ordinance repealed by the Act is that under the.
Act the Custodian General may exercise his revisional powers in respect of any proceedings in which any Custodian had passed an order, while under the Ordinance his revisional jurisdiction was confined only to an appellate order made by the Custodian or the District Judge, as the case may be.
Section 58 of the Act, which repealed the ordinance provided in sub section
(3) as follows: "The repeal by this Act of the Administration of Evacuee Property Ordinance, 1949 (XXVII of 1949), or the, Hyderabad Administration of Evacuee 224 Property Regulation (Hyderabad No. XII of 1359 F.) or of any corresponding law shall not affect the previous operation of that Ordinance, Regulation or corresponding law, and subject thereto, anything done or any action taken in the exercise of any power conferred by or under that Ordinance, Re gulation or corresponding law shall be deemed to have been done or taken in the exercise of the powers conferred by or tinder this Act as if this Act were in force on the day on which such thing was done or action taken.
" The second part of section 58(3) of the Act is similar to that of section 55(3) of the Ordinance.
But there is an essential difference between the first part of the said sub section in the Act and that in the Ordinance.
The difference lies in the fact that under the Act the repeal of the Ordinance or of any corresponding law was not to affect the previous operation of that Ordinance or the corresponding law.
Only subject to this qualification, anything done or any action taken in exercise of any power conferred by the Ordinance shall be deemed to have been done or taken in exercise of the powers conferred by or under the Act.
One of the questions raised in this appeal turns upon the interpretation of ' the words "previous operation of that Ordinance".
This Act was amended from time to time and the latest of the amendments was by Act 91 of 1956.
As nothing turns upon the provisions of the ' amending Acts, we need not consider all of them; it would be enough if section 7A which was added by section 4 of Act 52 of 1954 was noticed.
Under that section, "Notwithstanding anything contained in this Act, no property shall be declared to be evacuee property on or after the 7th day of May. 1954".
There is also a proviso to that section, but that does not concern us here.
With this background we shall proceed to consider the arguments advanced by learned counsel.
The first argument of learned counsel for the appellant, namely, that the operation of section 58(3) of the Act shall be confined only to administrative acts done by the Custodian under the earlier Ordinances, was specifically raised before this Court and negatived by 225 it in Indira Sohan Lal vs Custodian of Evacuee Property, Delhi(1).
There, on February 23, 1948, and application was made to the Custodian of Evacuee s Property for confirmation of the transaction of exchange under section 5 A of the East Punjab Evacuees ' (Administration of Property) Act, 1947, as amended in 1948.
That application was not disposed of until March 20, 1952, on which date the Additional Custodian passed an order confirming the exchange.
Meanwhile Act XXXI of 1950 was passed which conferred by section 27 revisional powers on the Custodian General.
The Custodian General, in exercise of his powers under that section, set aside the order of confirmation and directed the matter to be reconsidered by the Custodian.
It was contended, inter alia,that the positive operation of the provision that "anything done or any action taken in the exercise of any power conferred by or under that Ordinance. . shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act were in force on the day on which such thing was done or action taken" applied only to purely administrative matters.
But this contention was rejected by this Court which held that the said provision applied to the order in question which was admittedly a judicial order.
It was further held in that decision that the said application had to be dealt with and disposed of under the said Act and, therefore, the order of confirmation passed in 1952 was subject to the revisional power of the Custodian General under section 27 of the said Act.
In view of this decision nothing further need be said on the first point and it is, therefore, rejected.
There is force in the second contention.
The Custodian General found an unbroken chain of fiction leading to the conclusion that the order dated June 6, 1949, made by the Custodian must be deemed to be an order made by the Custodian in exercise of the powers conferred on him under the Act and, therefore, was subject to the revisional jurisdiction of the Custodian General under section 27 of the Act.
But the history (1) ; 29 226 of the legislation in the context of the facts of the present case shows that the said chain had broken even during the period when Ordinance No. XIII of 2006 was in force.
In the narration of facts we have pointed out that the order under Ordinance No. IX of 2004 was made by the Custodian and not by the Claims Officer.
Sub section
(7) of section 10 only provided that orders passed by the Claims Officer under Ordinance No. IX of 2004 should be deemed to have been passed under sub section
(4) of section 10 of Ordinance No. XIII of 2006 for the purpose of appeal or revision.
This sub section, therefore, had introduced a fiction with two limitations one limitation was that the original order should have been made by the Claims Officer and the other was that it was only for the purpose of appeal or revision.
The result was that the said order of the Custodian could not be deemed to be an order made under the said Ordinance, as he was not the Claims Officer and that, even if he was the Claims Officer, his order must be deemed to be an order made under the later Ordinance only for the limited purpose, namely, for the purpose of appeal or revision.
If this be so, it follows that the said order could not be deemed to have been passed under the successive Ordinances and the Act.
We, therefore, accept this contention.
The third contention is based upon the assumption that the order of the Custodian dated June 6, 1949, by the process of fiction shall be deemed to be an order made by the Custodian in exercise of the powers conferred on him by Ordinance No. XXVII of 1949.
As we have already indicated at an earlier stage of our judgment, the order of a Custodian under that Ordinance was subject to an appeal under section 25 thereof to the District Judge designated in that behalf by the Provincial Government.
The order of the District Judge on appeal was subject to revision by the Custodian General under section 27.
Subject to the said provision, the order of the Custodian was final under section 28.
In the present case, no appeal was filed against the order of the Custodian to the District Judge and, therefore, the said order had become final under section 28.
To put it in other words, by operation of the provisions of the said Ordinance the order of the Custodian 227 made under Ordinance No. IX of 2004 but deemed to have been made under Ordinance No. XXVII of 1949 had become final.
What then was the effect of the Sin repeal of that Ordinance by the Act of 1950? We have already noticed the provisions of section 58 which repealed the said Ordinance and which also made certain savings in respect of acts done tinder the Ordinance.
Sub section
(3) of section 58 dealing with the said savings, as we have stated when considering the history of the legislation, is in two parts.
The first part says that the repeal by the Act of the said Ordinance shall not affect the previous operation of the said Ordinance; and the second part says that anything done or any action taken in the exercise of any power conferred by or under that Ordinance shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act were in force on the day on which such thing was done or action taken.
The second part is expressly made subject to the first part.
If a case falls under the first part, the, second part does not apply to it.
In the present case under the previous operation of the Ordinance the order of the Custodian had become final.
If so, the fiction introduced in the second part could only operate on that order subject to the finality it had acquired under that Ordinance.
Looking at the section from a different perspective, the same result would flow therefrom.
The section does not expressly affect a vested right of a person in whose favour there was a final determination under the Ordinance.
Nor does the section imply such retroactivity by necessary intendment.
An order which had become final under the Ordinance could be deemed to be an order under the Act without disgorging itself of the attribute of finality acquired by it under the repealed Ordinance.
The first part of the section definitely precludes any implication of such intendment.
In Delhi Cloth and General Mills vs Incometax Commissioner Delhi (1), a similar question arose for consideration.
There, on references made to, the High Court under section 66 of the Indian Income tax Act, (1) Lah.
228 1922, the High Court made orders before April 1, 1926.
On April 1, 1926, the Income tax (Amendment) Act, 1926, came into force and under that amendment a right of appeal was given to an aggrieved party against the order of a High Court, subject to certain conditions, to the Privy Council.
The question was whether that Act could retrospectively confer a right of appeal against orders which became final before the amendment came into force.
The Judicial Committee restated the principle laid down by them in Colonial Sugar Refining Co. Ltd. vs Irving (1) thus at p. 290: " While provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment." After stating the principle, the Judicial Committee made the following remarks in respect of the question that arose in that case: "Their Lordships can have no doubt that provi sions which, if applied retrospectively, would deprive of their existing finality Orders which, when the statute came into force, were final, are provisions which touch existing rights.
Accordingly, if the section now in question is to apply to orders final at the date when it came into force, it must be clearly so provided.
Their Lordships cannot find in the section even an indication to that effect.
" We respectfully accept the said principle as laying down the correct law on the subject.
If so, by the same parity of reasoning, we must hold in the present case that the order of the custodian which had become final under Ordinance No. XXVII of 1949, could not be affected retrospectively under section 58(3) of the Act so as to deprive the order of the Custodian of the finality it had acquired under the said Ordinance.
Not only the said provision does not contain any positive indication giving it such (1) 229 retroactivity.
but also in express terms it saves the previous operation of that Ordinance.
It is said that.
this construction of section 58(3) is no longer open in view of the authoritative interpretation placed upon the said sub section by this Court in Indira Sohan Lal 's case (1).
We have carefully gone through that judgment and we are of the view that the said decision is not only not against the construction placed by us on the said sub section but also the observations therein support the, same construction.
There, unlike here, an application made to the Additional Custodian of Evacuee Property on March 20, 1948, was not disposed of until March 20, 1952 that is, till after the Act of 1950 came into force.
The Additional Custodian made the order in that application on March 20, 1952.
The Custodian General, in exercise of his powers under section 27 of the Act of 1950, Bet aside the order of the Additional Custodian and directed the matter to be reconsidered by the Custodian.
In the present case the order made by the Custodian, as we have earlier pointed out, had become final before the Act of 1950 came into force and no proceeding in respect thereof was pending at the com mencement of the Act.
With this difference in mind if one reads the observations of Jagannadhadas, J., at p. 1132 of the above judgment, the legal position will be clear.
After considering the decision of the Judicial Committee in Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi (2) the learned Judge proceeded to observe thus at p. 1132: "This is obviously so because finality attached to them, the moment orders were passed, prior to the new Act.
In the present case, the position is different.
The action was still pending when Central Act XXXI of 1950 came into force.
No order was passed which could attract the attribute of finality and conclusiveness under section 5 B of the East Punjab Act XIV of 1947.
Further the possibility of such finality was definitely affected by the repealing provision in Central Ordinance No. XII of 1949, and Central Ordinance No. XXVII of 1949, (1) ; (2) (927) I.L.R. 230 which specifically provided that a pending action was to be deemed to be an action commenced under the new Ordinance as if it were in force at the time and therefore required to be continued under the new Ordinances.
" These observations are certainly in accord with our view.
The same distinction can also be discerned in the observations made by the learned Judge at p. 1133: "Nor can this be brought under the ambit of the phrase 'previous operation of the repealed law '.What in effect, learned counsel for the appellant contends for is not the 'previous operation of the repealed law ' but the 'future operation of the previous law '.
There is no justification for such a construction.
Besides, if in respect of the pending application in the present case, the previous repealed law is to continue to be applicable by virtue of the first portion of section 58(3) the question arises as to who are the authorities that can deal with it.
" In that case, therefore, the repealed law could not operate on the subsequent stages of a pending application, for the previous law was repealed; whereas in the present case by operation of the "previous law, the order had become final.
We are, therefore, of the opinion that the decision of this Court does not touch the point that arises for consideration in the present case.
Reliance is placed by learned counsel for the respondents on a judgment of a division bench of the Punjab High Court in Janki Prasad vs The Custodian, Evacuee Property, Jullundur (1).
There, an order confirming the sale effected by an evacuee was made by the Assistant Custodian on February 25,1949, and the said order was confirmed by the Additional Custodian on February 28, 1949. 'the question was whether under the provisions of the East Punjab Act XIV of 1947, the order of the Assistant Custodian could be reviewed by the Additional Custodian in exercise of the powers conferred on him under section 26 of the Act of 1950.
The learned Judges hold that by fiction the (1) Punjab 823.
231 earlier order must be deemed to have been made under the Act of 1950 and, therefore, the Custodian would have power to review it under section 26 of the Act of 1950.
We think, with respect to the learned Judges, that they have not correctly appreciated the scope of the provisions of section 58(3) of the Act of 1950.
In our view, for the reasons already mentioned, that view of the Punjab High Court in the above decision is not correct.
We, therefore, accept the third contention of learned counsel.
Then remains the point that was raised for the first time before us by learned counsel appearing for the State.
The argument was that Ordinance No. XXVII of 1949 was repealed and reenacted by the Act of 1950 in substantially the same terms, and, therefore, a repeal by implication was effectuated only of those provisions which were omitted from reenactment.
For this position reliance was placed upon a passage from Sutherland 's Statutory Construction 3rd edn., Vol. 1, at p. 514.
Therefore, it was contended that, as there was no provision in the Act correspond.
9 to the proviso to section 6 of the Ordinance No. IX of 2004, that proviso must be deemed to have been repealed; and an order made illegally under that proviso was non est.
It is said that under section 27 of the Act, the Custodian General, at any time can ignore that order and proceed with fresh inquiry in respect of the question whether the property was an evacuee property or not.
This question was raised for the first time before us and it was not hinted even in the statement of case filed by the State.
In the circumstances, we would not be justified in allowing the respondents to sustain the order of the Custodian General on the said basis.
Even otherwise it.would be of no avail to the respondent in the present case.
We are 'not concerned in this case with the question whether the said order was made by the Custodian illegally or without jurisdiction.
We are only concerned with the question whether the Custodian General can, under section 27 of the Act set aside an.
order made by the Custodian.
We have pointed '.
out, that he has no such power to revise 232 orders that had become final before the Act came into force.
Nor do we find any force in the argument of learned counsel for the State that under section 27 of the Act, the Custodian General may at any time revise the order of any Custodian and, therefore, the Custodian General can revise without any limit of time any order made by any Custodian under any previous law.
Section 27 of the Act can be given retrospective operation only to the extent permitted by section 58(3) of the Act.
We have held that section 58(3) does not affect the previous operation of the law and therefore cannot affect the finality of the orders made under the Ordinance.
So the words in the section "any time" or "any Custodian" must necessarily be confined only to orders of any one of the Custodians defined in the Act and to orders of Custodians deemed to have been made under the Act but had not become final before the Act came into force.
No other point was raised.
In the result, the order of the Custodian General is set aside and that of the Custodian dated June 6, 1949, is restored.
The respondents will pay the costs to the appellants.
Appeal allowed.
| The Bombay Municipal Boroughs Act, 1925, empowered a municipality to levy rates on lands and buildings which were to be assessed on the valuation based on the capital or the annual letting value.
The Act defined the annual letting value inter alia as the annual rent for which any building or land might reasonably be expected to let from year to year.
The General Body of the Municipality of Barsi framed new rules under section 58 of the Act for levying rates: for all buildings and non agricultural lands the rate was to be levied on the annual letting value, but for mills and factories and buildings relating thereto it was provided by r. 2C that the annual letting value was to be fixed on the floor area.
The Municipality issued notices of demand under the new r. 2C calling upon the appellant (which is a company owning a textile mill) to pay house and water taxes which were assessed as rates which was paid by the appellants under protest.
The question to be determined was whether by r. 2C the Municipality was entitled to collect tax leviable as a rate after computing the annual letting value solely on the area of the factory and building relating thereto.
Held, that a rate may be levied by a municipality under the Bombay Municipal Boroughs Act, 1925, on the valuation made on the basis of capital or on the annual letting value of a building and not on a valuation computed merely on the floor area of the structures, such a rate was clearly not a tax based either on the capital value or on the annual letting value, for "annual letting value" postulates rent which a hypothetical tenant may reasonably be expected to pay for the building if let.
The Municipality had no power under the Act to ignore the methods of valuation prescribed by the Act, and to adopt a method not sanctioned by the Act.
By prescribing valuation computed on the area of the factory building the Barsi Municipality not only fixed arbitrarily the annual letting value which bore no relation to the rental which a hypothetical tenant may reasonably be expected to pay but rendered the statutory right of the tax payer to challenge the valuation illusory as the objection which the tax payer could raise thereto was in substance restricted to the area of the building and not to its valuation.
307 The rule adopting a flat and uniform rate on the assumption that all factory buildings within the area of a municipality were not alike in essential features and were not intended to be used for purposes which were alike was not permissible under the Act.
The vice of the rule lies in an assumed uniformity of return per square foot which structures of different classes in their nature not similar, may reasonably fetch if let out to tenants and in the virtual deprivation to the rate payer of his statutory right to object to the valution.
Rule 20 by the Barsi Borough Municipality under section 58 of the Bombay, Municipal Boroughs Act, 1925, was illegal and ultra vires.
The Madras and Southern Mahratta Railway Co. Ltd. vs The Bezwada Municipality I.L.R. , not applicable.
The Borough Municipality of Amalner vs The Pratap Spinning Weaving and Manufacturing Co. Ltd., Amalner, I.L.R. , not approved.
Motiram Keshavdas vs Ahmedabad Municipal Borough, , referred to
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