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Appeal No. 153 of 1951.
Appeal from the Judgment and Decree dated 2nd January, 1946, of the Chief Court of Auadh in First Civil Appeal No. 9 of 1940 arising out of the Decree dated 6th November, 1939, of the Court of Civil Judge in Regular Suit No. 36 of 1937.
Bakshi Tek Chand (Onkar Nath Srivstava, with him) for the appellants.
Achhru Ram (Bishan Singh, with him) for the respondents.
January 23.
The Judgment of the Court was delivered by BHAGWATI J.
This is an appeal from the judgment and decree passed by the late Chief Court of Oudh, affirming the judgment and decree passed by the Civil Judge of Sitapur, dismissing the plaintiffs ' suit.
One, Thakur Shankar Bux Singh, proprietor of the Estate known as Rampur Kelali, situated in District Sitapur (Oudh) was heavily indebted and the estate had been in the possession of Deputy Commissioner of Sitapur as receiver from 1892 up to 11th July, 1901.
Thereafter he was declared a disqualified proprietor under the provisions of Section 8 (D) (1) of the U.P. Court of Wards Act (U.P. Act III of 1899) and the Court of Wards took possession of the estate on the 1st August, 1901.
Under Section 34 of the Act he was 916 not competent to dispose his property by will without the consent in writing of the Court of Wards, though prior to the 1st August, 1901, he had made four successive wills, the last being dated 19th June, 1901, under which he gave his estate absolutely to his wife.
On the 30th November, 1901, he made a will giving a life interest to his wife and the remainder over to his cousin Ganga Bux Singh after providing for certain legacies by way of maintenance in favour of his three daughters, his father 's sister and his mother.
The Court of Wards withheld its consent to this will which thus fell through.
On the 7th January, 1904, Ganga Bux Singh executed in his favour a registered deed of agreement agreeing to pay him Rs. 50 per month during his lifetime with effect from the month in which he would execute a will in favour of Ganga Bux Singh and his sons and submit the same for sanction of the Members of the Board of Revenue.
A draft of the will was accordingly prepared by him on the 18th January, 1904, under which he gave a life interest to his wife and the residue of the property to Ganga Bux Singh and after him to his sons after providing legacies for maintenance in favour of his daughters, father 's sister and mother.
The Board of Revenue intimated on the 25th May, 1904, that it would not withhold its consent to a will similar to that contained in the draft but altered in the light of the proposals contained in the further letter dated 27th April, 1904.
He thereupon duly made and published a will on the 28th July, 1904, in accordance with the suggestions contained in the Board 's letter dated 25th May, 1904, cancelling all the previous wills executed by him.
It appears that he handed over the original of this will to Ganga Bux Singh but did not give any intimation of the execution thereof to the authorities and the authorities could only come to know of the same when Ganga Bux Singh gave the original will to the Special Manager on or about the 19th December, 1905.
He appears to have changed his mind thereafter and having embraced Christianity intended to marry a Christian woman and submitted to the Court of Wards on the 8th June, 1906, the draft of a new will which he 917 intended to execute in favour of his Christian wife.
The Board withheld its consent to that new will and intimated on the 13th July, 1906, its refusal and also communicated thereby the withholding of its consent to the will already executed by him on the 28th July, 1904.
A further attempt by him on the 21st November, 1906, to obtain the consent of the Court of Wards to another draft will was also unsuccessful and the will dated the 28th July, 1904, was the only last will and testament executed by him and got registered after consent obtained from the Court of Wards.
Shankar Bux Singh died thereafter on the 28th July, 1922, and he being a Christian at the time of his death successsion to his property was governed by the Indian Succession Act.
His wife got 1/3rd of the estate and the remaining 2/3rds were divided in equal shares between his surviving daughter and the son of a predeceased daughter of his.
Mutation was effected in the records of rights and the name of the widow was .shown there as the owner of the estate in his place and stead.
The Court of Wards relinquished charge of the estate sometime in November, 1925.
The widow executed on the 16th August, 1927, a deed of gift conveying the bulk of the estate to her daughter and the son of the predeceased daughter.
She also executed another deed of gift in the same year conveying the rest of the properties and on the 8th September, 1928, Ganga Bux Singh filed a suit in the Court of the Subordinate Judge of Sitapur for a declaration that under the aforesaid will she had only a life interest in the property and the transfers made by her were void.
This suit was contested by her and one of the defences taken was that Ganga Bux Singh could not maintain the suit without first obtaining letters of administration with the will annexed.
This defence was upheld and the suit was dismissed on the 14th July, 1930.
Ganga Bux Singh having died in the meanwhile on the 19th October, 1929, his sons applied for letters of administration with the will annexed on the 25th September, 1930, on the original side of the Chief Court of Oudh.
This application was opposed by the 918 widow and other heirs of Shankar Bux Singh inter alia on the ground that the will had been executed without the sanction of the Court of Wards.
Mr. Justice Kisch delivered an elaborate judgment, negatived all the objections and granted letters of administration with the will annexed to the sons of Ganga Bux Singh on the 16th November, 1931.
An appeal filed by the widow and heirs of Shankar Bux Singh against that decision was allowed by the Bench of the Chief Court of Oudh at Lucknow on the 8th September, 1933, and the orders passed by the lower court granting letters of administration with the will annexed were set aside.
The sons of Ganga Bux Singh took an appeal to the Privy Council and their Lordships of the Privy Council on the 7th May, 1937, reversed the decree of the Appeal Court and restored the decree passed by Mr. Justice Kisch.
Their Lordships however observed that the only effect of their decision was that letters of administration with a copy of the will annexed must be granted as prayed but that would not in any way prejudice any proceedings against any of the beneficiaries which may be open to the respondents or any of them.
On the 9th September, 1937, the widow, the daughter and the son of the predeceased daughter of Shankar Bux Singh, the plaintiffs, 'filed the suit out of which this appeal arises, against the three sons of Ganga Bux Singh, the defendants, for a declaration that the will dated the 28th July, 1904, was inoperative and ineffectual and that in any case the defendants had no right, title or interest in the properties in suit, that plaintiff I was entitled to hold the property in suit under the will of Shankar Bux Singh dated 19th June, 1901, or that the plaintiffs 1 to 3 were entitled to the same as heirs at law of Shankar Bux Singh deceased under the provisions of the Indian Succession Act, and for further and other reliefs.
In the plaint they alleged that the will was inoperative as Shankar Bux Singh had no animus testandi and that it was void and inoperative in respect of the testamentary disposition in favour of Ganga 919 Bux Singh and his sons because Ganga Bux Singh failed to perform his part of the contract as regards the payment of monthly allowance and the defendants therefore could not take advantage of or claim any benefit tinder that testamentary disposition and further the payment of the said allowance being a condition precedent and the condition not having been fulfilled the disposition became inoperative.
The defendant 3 filed a written statement on the 7th February, 1938, contesting the plaintiff 's claim.
He contended that the plea as to the validity or effect of the will was barred by resjudicata by virtue of the judgment of the Privy Council dated 7th May, 1937.
He denied that the will was executed in consideration of the agreement.
He also denied that there was any contingent or conditional contract or any trace of the alleged condition in the whole of the correspondence between Shankar Bux Singh and the Board of Revenue.
The learned Civil Judge, Sitapur, after considering the evidence, oral as well as documentary, led before him held that the will as well as the agreement formed one contract, that Ganga Bux Singh had failed to perform his promise or his part of the contract, that the only point which was agitated before their Lordships of the Privy Council was as regards the consent of the Court of Wards and that therefore even though the plaintiffs were precluded from disputing the genuineness of the will they were not precluded from seeking a declaration to the effect that the defendants were not entitled to any benefit under the will, and that the decision therefore did not operate as res judicata so far as issues in the present case were concerned.
He however held that the contract clearly provided a remedy for breach on the part of either party, that Shankar Bux Singh did not in fact cancel the will and could not be said to have treated it as inoperative, that Ganga Bux Singh acquired a vested interest in the estate on the death of the testator and that on his death that interest devolved on his sons amongst whom were the defendants in the suit and that the plaintiffs were, not entitled to any relief as claimed, The 920 plaintiffs filed an appeal to the Chief Court of Oudh.
The Chief Court of Oudh negatived the contention that Shankar Bux Singh had no animus testandi and that it was a will in form only and not in substance, holding that it was barred by res judicata by reason of the decision of their Lordships of the Privy Council.
It also negatived the contention that the bequest in favour of Ganga Bux Singh was a conditional bequest or that Ganga Bux Singh having failed to fulfil his obligation to pay the gujara his original character as a legatee changed into that of a trustee and he must hold the beneficial interest for the testator or his heirs.
The appeal was therefore dismissed with costs.
The plaintiffs applied for leave to appeal to the Privy Council and the necessary certificate was granted by the Chief Court of Oudh on the 8th August, 1947.
It is necessary at the outset to set out the deed of agreement and the will executed by Ganga Bux Singh and Shankar Bux Singh respectively on dates the 7th January, 1904, and the 28th July, 1904.
The deed of agreement dated the 7th January, 1904, ran as under: "Whereas, my cousin Thakur Shankar Bakhsh Singh, Taluqdar of Rampur Kalan, has proposed to make a bequest of his taluka, immovables, movables, rights etc.
in favour of his wife and, after her death in my favour and that of my sons Dwarka Nath Singh, Ajodhya Nath Singh and Tirbhuwan Nath Singh, there fore by way of consideration for this concession and favour, I, the executant, out of my own free will do hereby execute this agreement in favour of my cousin aforesaid that in the month in which the said cousin might execute the said will in my favour and that of my sons and lays the same along with an application before the Deputy Commissioner, Sitapur district, for sanction of the Members of the Board of Revenue, I shall from the 1st date of the month following that month, continue to pay to my said cousin Rs. 50 in cash every month during his life, so long as the said will remains in force and under this contract I make my person liable and hypothecate the same by virtue 921 of this agreement.
If I, the executant, fail to perform the said contract the said cousin has power to have the same performed by me, the executant, through Court.
If the will mentioned above executed by the said cousin, be not sanctioned by the Members of the Board of Revenue or if under any circumstance, the kV said cousin may himself revoke the said will, then from the time of revocation or refusal by the Board of Revenue the said cousin shall not be entitled to receive the aforesaid monthly amount of Rs. 50 and whatever money the said cousin might have received from me, the executant, up to the said refusal or revocation the said cousin shall necessarily be bound to refund that money to me, the executant.
" The will dated the 28th July, 1904, was executed by Shankar Bux Singh in the terms following: " I am Thakur Shankar Baksh alias section John son of Thakur Anant Singh, Taluqdar of Rampur and Grantee of Piprawan, district Sitapur.
Out of my own free will, inclination and accord and consent I make a will that after my death my wife for her lifetime shall remain in possession of my entire Ilaqa (estate) as well as the movable and immovable property, left by me, together with the rights etc., relating to the said properties, without the power of any sort to transfer the said properties and rights, that on the death of the said wife all the aforesaid property and the rights shall devolve on my real cousin, Ganga Bakhsh with all the proprietary powers, and that on the death of Ganga Bakhsh the said entire property and the rights shall devolve on Dwaraka Nath, Ajodhia Nath and Tirbhuwan Nath, sons of Ganga Bakhsh, like Ganga Bakhsh himself, in the following shares: Dwaraka Nath annas 6, Ajodhia Nath aninas 5, Tirbhuwan Nath annas 5: and that the persons mentioned below shall continue to get the maintenance allowance (Guzara) according to the amounts and conditions noted below: Musammat Permeshuri, my eldest daughter, married at Allahabad to the son of Rai Anant Ram, generation 922 after generation, (limited) to male issue, Rs. 100 per month; Musammat Chandrani, my younger sister, married to Rai Raghubir Bakhsh, son of Rai Kunwar Bahadur, Rais of Shahabad, district Hardoi, generation after generation (limited) to male issue, Rs. 60 per month; Mussamat Roop Rani, my real paternal aunt (father 's sister), wife of Munshi Chedi Prasad deceased, Rais of Qasba Mahona, district Lucknow, generation after generation, (limited) to male issue, Rs. 45 per month; Musammat Sohni, my mother for her life, Rs. 70 per month.
* * * * * Be it also known that my estate (Ilaqa) is under the Superintendence of the Court of Wards and the Hon 'ble Members of the Board of Revenue have granted me power to execute the will so I do hereby execute this my last will cancelling all the previous wills executed by me ' " It is clear from the terms of the deed of agreement that Ganga Bux Singh agreed to pay Rs. 50 in cash every month during the lifetime of Shankar Bux Singh in consideration of Shankar Bux Singh having proposed to make a bequest of the remainder in favour of Ganga Bux Singh and his sons and that it was after the deed of agreement was got registered by Ganga Bux Singh on the 11 th January, 1904, that the draft of the will was submitted on the 18th January by Shankar Bux Singh to the Court of Wards.
It was this draft of the will amended as it was by the letter dated 27th April, 1904, that was engrossed in the will which was ultimately executed on the 28th July, 1904, after the letter of sanction obtained from the Board on 25th May, 1904.
The learned Civil Judge under the circumstances came rightly to the conclusion that the deed of agreement and the will formed part of the same transaction, that the consideration for the will was the deed of agreement and the consideration for the agreement was the will and that the will 923 as well as the agreement formed one contract.
This finding was not challenged before the Chief Court of Oudh and could not be challenged before us.
There was also a further finding of fact which was recorded by the learned Civil Judge and it was that Ganga Bux Singh failed and neglected to make any payment to Shankar Bux Singh in terms of the deed of agreement even though Shankar Bux Singh executed the will and laid the same along with the application before the Deputy Commissioner, Sitapur, for sanction of the Members of the Board of Revenue and that Ganga Bux Singh thus failed to perform his part of the contract.
This finding also was not challenged before the Chief Court of Oudh and could not be challenged before us.
The question therefore which falls to be considered by us is what is the effect of the failure on the part of Ganga Bux Singh to make the payments to Shankar Bux Singh in terms of the deed of agreement.
It was urged by Dr. Tekchand, who appeared for the plaintiffs before us that by reason of such non payment and the breach of contract on the part of Ganga Bux Singh the will became ineffective and inoperative, that the payment of Rs. 50 per month during the lifetime of Shankar Bux Singh was a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh and that condition not having been fulfilled the legacy did not vest in Ganga Bux Singh and that on a true construction of the terms of the will Ganga Bux Singh acquired no vested interest in the remainder.
He also urged that the scope of the Privy Council judgment was misunderstood by the Chief Court of Oudh and that both the questions as regards animus testandi and the payment of Rs. 50 per month being a condition precedent though they were barred by res judicata in regard to the due execution of the will were still open to him as affecting the right of Ganga Bux Singh to the legacy which was provided for him by Shankar Bux Singh under the will.
In regard to the last contention urged by Dr. Tekchand both the courts below were of the opinion that the question of animus testandi was barred by res 924 judicata.
It was held by their Lordships of the Privy Council that the will in dispute was not revoked and that it was the last will and testament of Shankar Bux Singh.
That decision necessarily meant that the testator when he appended his signature to the will was in a sound and disposing state of mind, was a free agent and 'duly executed the will in accordance with the law.
The decision was conclusive as regards the testamentary capacity, due execution and the representative title of the person to whom the letters of administration with the will annexed were granted.
It was not open therefore to the plaintiffs to contend that the will which was executed by Shankar Bux Singh was a will merely in form and not in substance.
The question of animus testandi was therefore barred by res judicata.
In regard however to the question whether the bequest in favour of Ganga Bux Singh could take effect by reason of default in payment the decision of the Privy Council did not constitute res judicata and it was open to the plaintiffs to urge that contention.
Both the courts ' below therefore allowed the plaintiffs to agitate that ques tion though they came to a conclusion adverse to the plaintiffs.
We are of the opinion that there was no bar of res judicata and the courts below were right in allowing the plaintiffs to agitate that question.
The payment of Rs. 50 per month to Shankar Bux Singh during his lifetime might be a condition precedent to the whole will coming into operation or might, be a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh.
If the plaintiffs urged the former position that plea would certainly be barred by res judicata.
No court would grant a probate or letters of administration with the will annexed in regard to a will which has ceased to be operative and was a mere scrap of paper.
The plaintiffs could not therefore be heard to say that 'by reason of the non fulfilment of the condition precedent the whole will had become inoperative, for that would run counter to the decision of the Privy Council.
Even on merits such a position would be untenable for the simple reason that besides 925 Ganga Bux Singh there was the widow, who was given a life interest and there were the three daughters, the father 's sister and the mother who were given legacies by way of maintenance and they were certainly not guilty of non fulfilment of any condition precedent.
The will would certainly therefore stand so far as they were concerned and the whole effect of the non fulfilment of the condition precedent qua Ganga Bux Singh would be to prevent the vesting of the legacy in his favour.
The latter position therefore would be available to the plaintiffs and they could contend that by reason of the non fulfilment of the condition precedent by Ganga Bux Singh the legacy provided in his favour did not vest in him.
If the payment of Rs. 50 per month therefore constituted a condition precedent the plaintiffs were on firm ground and that position could not and was not contested before us by the learned counsel appearing for the defendants.
It therefore remains to be considered whether the payment of Rs. 50 pet month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh.
There is no doubt, as held by the learned Civil Judge, that the consideration for the will was the deed of agreement and the consideration for the agreement was the will and that the will as well as the agreement formed one contract.
But for Ganga Bux Singh having executed the deed of agreement Shankar Bux Singh would not have forwarded the draft will to the Court of Wards for its sanction and he would also not have executed the will on the 28th July, 1904.
The contract was an overall contract under which both the parties had to perform their respective obligations.
The obligation on the part of Ganga Bux Sigh was to execute the deed of agreement, agreeing to pay the moneys to Shankar Bux Singh in accordance with the terms thereof.
The obligation on the part of Shankar Bux Singh was to execute the will and submit it to the Court of Wards for its sanction.
Both these obligations were fulfilled by the parties and the two documents were supported by consideration and became binding 926 on both the parties.
The nonperformance of the agreement to pay by Ganga Bux Singh constituted at best a failure.
to fulfil his obligation and Shankar Bux Singh became entitled to pursue his rights and remedies against Ganga Bux Singh by reason of the breach of contract by him.
It was urged by Dr. Tekchand that the consideration here constituted a condition precedent and that the non payment of Rs. 50 per month by Ganga Bux Singh constituted non fulfilment of condition precedent.
He relied upon the observations of Chief Justice Wills in Acherley vs Vernon, 125 English Reports 1106 at page 1108 (Willes 153 at page 156): " I know of no words that either in a will or deed necessarily make a condition precedent, but the same words will either make a condition precedent or subsequent according to the nature of the thing and the intent of the parties.
If therefore a man devise one thing in lieu and consideration of another, or agree to do anything or pay a sum of money in consideration of anything to be done, in these cases that which is the consideration is looked upon as a condition precedent.
So is the case of Peters vs Opie, I Ventr.
177, and I Saund.
If a man agree to pay a sum of money to another pro labore suo in pulling down a house, the pulling down of the house is a condition precedent.
So is the case of Thorpe and Thorpe.
I Salk.
171, where a man agreed to pay a sum of money to another he releasing the equity of redemption in certain lands.
And so is the case of Turner vs Goodwin, adjudged by Lord Macclesfield and the rest of the Judges of B. R. upon great consideration, P. 13 Anne, in which case Goodwin was to pay Turner 15001.
be assigning a judgment.
In all which cases it was holden that the party who was to receive the money was not entitled to demand it until he had performed that which was the consideration of the payment, and which was considered in all these cases to be in the nature of a condition prece dent.
* * * * 927 So likewise if it plainly appear to be the intent of the testator that the devise shall not have the benefit of the devise unless he perform a certain act enjoined him by the devisor, this is a condition precedent; and the devisee shall have no benefit of the devise until he perform it, even though the condition be never so unreasonable if it be not illegal or impossible; for cujus est dare ejus est disponere.
" These observations were particularly relied upon by Dr. Tekehand in support of his contention that the payment of Rs. 50 per month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in favour of Ganga Bux Singh.
While recognising the force of these observations we are constrained to observe that the terms of the deed of agreement negative any such contention.
The agreement itself provided what was to happen if payment was not made in accordance with the terms thereof.
If Ganga Bux Singh failed to perform the contract Shankar Bux Singh was to have the power to have the same performed by Ganga Bux Singh through Court.
This consequence could not be contemplated if the payment constituted a condition precedent and the non fulfilment of the condition precedent was to have the effect of rendering the agreement inoperative.
In that event the agreement itself would become inoperative and no rights under the agreement would survive to Shankar Bux Singh.
The right which was therefore given to Shankar Bux Singh to have the agreement performed by Ganga Bux Singh contemplated the existence and the continued existence of the agreement so as to enable Shankar Bux Singh to hold Ganga Bux Singh to its performance, The continued existence of the contract was in contemplation of the parties and so far as Ganga Bux Singh is concerned it was at no stage contemplated that he could forego the performance of the obligation on his part to pay Rs. 50 per month to Shankar Bux Singh during his lifetime so long as the will stood unrevoked.
928 It is significant to observe on the other hand that two events were contemplated so far as Shankar Bux Singh himself was concerned.
The one was the withholding of the consent of the Court of Wards and the other was the revocation of the will by Shankar Bux Singh himself.
The sum of Rs. 50 per month was agreed to be paid by Ganga Bux Singh to him from the month when Shankar Bux Singh executed the will and laid it before the Court of Wards for its sanction.
The Court of Wards might withhold its consent to the will and in that event whatever payments were made during the interval by Ganga Bux Singh to Shankar Bux Singh had to be refunded by the latter.
Even though the Court of Wards might sanction the will Shankar Bux Singh might later on revoke the will and the consequence of such revocation was also provided in that Shankar Bux Singh was to refund to Ganga Bux Singh the amounts which he had paid up to the time of revocation to Shankar Bux Singh in accordance with the terms of the agreement.
It has to be observed moreover that all these constituted independent obligations on the part of both the parties.
The obligation on the part of Ganga Bux Singh was so long as the will stood unrevoked to pay to Shankar Bux Singh Rs. 50 per month during his lifetime and the obligation on the part of Shankar Bux Singh was to obtain the consent of the Court of Wards and to leave the will unrevoked during his lifetime.
These obligations were independent of each other and the consequences of the non performance of these obligations on the part of each of the parties were expressly provided in the agreement itself.
It could not therefore be contended that the payment of Rs. 50 per month to Shankar Bux Singh during his lifetime constituted a condition precedent to the vesting of the legacy in his favour.
That was merely a consideration provided by Ganga Bux Singh for the execution of the will by Shankar Bux Singh in his favour and if Ganga Bux Singh committed a breach of the agreement the only result was that Shankar Bux Singh would become entitled to recover the amount due on such default 929 from Ganga Bux Singh by having recourse to a court of law.
The contract would continue to subsist, the parties being relegated to their rights and remedies thereunder as contemplated by the parties.
In spite of the non payment by Ganga Bux Singh of the sum of Rs. 50 per month to Shankar Bux Singh in accordance with the terms of the agreement at no time did Shankar Bux Singh revoke the will nor did he pursue Ganga Bux Singh in a court of law for the recovery of the amounts in respect of which Ganga Bux Singh was in default.
He left the will unrevoked and on his death the will became effective as his last will and testament and operated to vest in Ganga Bux Singh ail interest in the remainder as therein provided.
There is nothing in the will itself which in terms makes the bequest conditional on regular payment of the amount under the agreement.
The argument which was advanced by Dr. Tekchand based on section 81 of the Indian Trusts Act could not avail him for the simple reason that the intention of Shankar Bux Singh had to be gathered as on the date of the execution of the will and not at any subsequent time thereafter.
That intention was clearly to effect a testamentary disposition of the remainder in favour of Ganga Bux Singh.
It was certainly farthest from the thought of Shankar Bux Singh not to dispose of the beneficial interest in the remainder in favour of Ganga Bux Singh with the result that there could neither be a secret trust nor a trust of imperfect obligation created in favour of the heirs at law of the testator Shankar Bux Singh.
The argument of Dr. Tekchand that the remainder did not vest in Ganga Bux Singh but fell into residue by reason of his having predeceased the widow of Shankar Bux Singh is equally of no avail.
The legacy in favour of Ganga Bux Singh was a legacy of the remainder of the estate which vested in Ganga Bux Singh but was deferred in possession till after the extinction of the life interest created in favour of the plaintiff 1.
Such vested interest could devolve upon the defendants, the heirs and legal representatives of 120 930 Ganga Bux Singh on the death of the latter and the defendants were therefore as the heirs and legal repre sentatives of Ganga Bux Singh since deceased rightly entitled to the same.
As the bequest was not conditional and did not lapse there could be no question of any resulting trust or of any intestacy with respect to the remainder.
The result therefore is that the appeal fails and must be dismissed with costs.
Appeal dismissed.
Agent for the appellants : Rajinder Narain.
| On the 7th January, 1904, G, a cousin of S, executed an agreement in favour of S, the material portion of which ran as follow&: "Whereas my cousin S has proposed to make a request of his taluka in favour of his wife and after her death in my favour and 118 914 that of my sons therefore by way of consideration for this concession and favour, I, the executant, out of my own free will do hereby execute this agreement in favour of my cousin aforesaid that in the month in which the said cousin may execute the said will in my favour and that of my sons and lays the same along with an application before the Deputy Commissioner, Sitapur district, for sanction of the Members of the Board of Revenue, I shall from the 1st date of the month following that month continue to pay the said cousin the sum of Rs. 50 in cash every month during his life so long as the said will remains in force If I fail to perform the said contract the said cousin has power to have the same performed by me through the Court.
" This agreement was registered on the 11th January.
On the 18th January, S submitted a draft will for sanction and the will as amended and sanctioned was executed on the 28th July, 1904.
This will provided as follows: "after my death my wife for her lifetime shall remain in possession of my entire estate without the power of any sort to transfer the said properties and rights, that on the death of the said wife all the aforesaid property and rights shall devolve on my cousin G with all proprietary powers and that on the death of G, the said entire property and rights shall devolve on X, Y, Z, sons of G, in the following shares . " The will also provided for maintenance for the daughter, sister, aunt and mother of section On the application of G 's sons (G having died) letters of administration with the will annexed were granted to them by the Chief Court of Oudh and this decision was affirmed by the Privy Council on appeal in 1937.
The heirs of S thereupon instituted a suit against the sons of G for a declaration that the will was inoperative and ineffectual and that G 's sons had in any case no right to the properties of S, as S had no animus testandi and G had also failed to pay Rs. 50 to S as agreed: Held, (i) that the deed of agreement and the will formed parts of one transaction and formed one contract, consideration for the will being the agreement, and consideration for the agreement being the will; (ii) as the Privy Council had decided that the will was the last will and testament of S and granted letters of administration, the question of animus testandi was res judicata ; (iii) with regard to the plea that the monthly payment of Rs. 50 was a condition precedent to the validity of the will and that by reason of the non fulfilment of this condition the will had become inoperative, such a plea was also barred by res judicata as the Privy Council bad granted letters of administration; and even on the merits the plea was untenable as the wife and other relations of the testator had also certain rights under the will which did not depend on the monthly payment by G; (iv) the question whether the payment of Rs. 50 was a con dition precedent to the vesting of the legacy in G or G 'B sons was 915 not, however, res judicata and it was open to the plaintiff to raise such a plea; (v) on a proper interpretation of the terms of the agreement, the payment of Rs. 50 per month was not a condition precedent to the vesting of the legacy in G, but merely a consideration, and the plaintiffs ' remedy was to enforce the agreement if it was not duly performed; (vi) that as G obtained a vested remainder under the will, his interest did not fall into the residue on his death before the widow, but vested in his sons; and as the bequest to G did not lapse there was no question of any resulting trust or of any intestacy with respect to the remainder, and G 's sons were entitled to the estate under the will.
|
N: Criminal Appeal No. 476 of 1984.
Appeal by Special leave from the Judgment and Order dated the 6th December, 1983 of the Allahabad High Court in Appeal No. 611 of 1976.
Dr. N. M. Ghatate and C.K. Ratnaparkhi for the Appellants.
Manoj Swarup Dalveer Bhandari and A.K. Sanghi for the Respondents.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
It is necessary to record this short order so that it may be known as to what an incredible amount of ingenuity is exercised by the people to secure false acquittals.
A person by the name of Kunwar Bahadur was murdered in the village of Bamori Kalan, District Jalaun, on July 18, 1971.
The appellants were convicted for that murder and were sentenced to suffer imprisonment for life.
On June 2, 1983, dead body was found in Vidisha, Madhya Pradesh.
A letter purported to have been written by one Kunwar Bahadur was recovered from the person of the deceased.
On the next day, June 3, 1983, a Hindi daily called 'Nav Bharat ' carried a news item to the effect that the dead body of one Kunwar Bahadur Singh was found in Vidisha in suspicious circumstances and that the letter which was recovered from the person of the deceased showed that he was repentant.
This news item is alleged to have come to the notice of the relatives of the appellants, who contacted the Vidisha police.
The contention of the appellants is that Kanwar Bahadur, for whose murder they were convicted in 1971 was alive for 12 years thereafter and that his dead body was found on June 2, 1983.
By this appeal, they pray for an order of acquittal, or rather, for an order setting aside their 12 year old conviction on the ground that they were convicted for a murder that never was. 864 Since this appeal raised a question of serious concern to the administration of justice, an order was passed by this Court on April 11, 1984 directing the District Magistrate, Vidisha, to hold an inquiry into the allegation as to whether the person called Kunwar Bahadur, who was alleged to have been murdered in 1971, was found alive after the alleged murder and was thereafter murdered in some other incident which took place in 1983.
The District Magistrate, Vidisha, Shri O.P. Dube, has submitted a report which deserves high praise.
He has recorded statements of 18 persons and has examined documents leading to the conclusion that the person whose body was found on June 2, 1983 is not the person who was murdered in 1971 and for whose murder the appellants were sentenced to life imprisonment.
It is clear from the report of the District Magistrate that the letter which was found on the person of the dead body on June 2, 1983 is a forged and fictitious document manufactured for the purpose of getting over the order whereby the appellants were convicted for the murder of Kunwar Bahadur in 1971.
The age of Kunwar Bahadur who was murdered in 1971 does not tally with the age of the person alleged to be Kunwar Bahadur whose dead body was found on June 2, 1983.
The close relatives of the real Kunwar Bahadur who was murdered in 1971, have stated before the District Magistrate that the handwriting of the letter found on the person of the dead body which was discovered on June 2, 1983 is not that of Kunwar Bahadur who was murdered in 1971.
After the receipt of the District Magistrate 's Report, this appeal came up for hearing on August 13, 1984 when Dr. N.M. Ghatate, appearing for the appellants, asked that the District Magistrate should be directed further to show the photograph of the dead body which was discovered on June 2, 1983, to the close relatives of Kunwar Bahadur in order to remove any doubt on the question whether the person whose dead body was found in 1983 is the very Kunwar Bahadur for whose murder the appellants were convicted.
Seeing the plausibility of this submission, a direction was given by this Court to the District Magistrate to do the needful and submit a further report to this Court.
In accordance with the aforesaid direction, the District Magistrate showed the photograph of the dead body which was 865 found on June 2, 1983 to Kaushilya Rani, Jamana Das Lodhi and Sughar Singh who are respectively the widow, brother and son of Kunwar Bahadur who was murdered in 1971.
The brother and son of Kunwar Bahadur stated that the photograph of the dead body which was discovered on June 2, 1983 is not that of Kunwar Bahadur.
Kaushilya Rani stated before the District Magistrate that her husband was tall and slim, that he was not fat and that his complexion was fair.
However she was unable to say whether the photograph shown to her was that of her husband, since the impression in the photograph was not clear.
On the basis of these statements, the District Magistrate has submitted a Supplementary Report to this Court stating that the photograph of the dead body is not that of Kunwar Bahadur.
We had directed the District Magistrate to forward to us, along with his report, the photograph of Kunwar Bahadur who was murdered in 1971 and the photograph of the dead body which was found in 1983.
Having compared these two photographs, which are annexures and 10 to the report of the District Magistrate, we are of the opinion that the conclusion to which the District Magistrate has come is correct.
There is no resemblance between the two photographs.
The District Magistrate has stated that the officers of the Vidisha Police Station are guilty of a serious lapse in not registering the crime of murder when a dead body was found in their jurisdiction on June 2, 1983.
As observed by him in this report which is drawn with commendable care, the entire case is shrouded in suspicion and deserves to be inquired into by the higher Police authorities.
In the result, we are of the opinion that Kunwar Bahadur for whose murder the appellants were convicted 13 years ago, is not the same person whose dead body was found on June 2, 1983 in Vidisha.
The appeal is accordingly dismissed.
S.R. Appeal dismissed.
| The appellants were convicted and sentenced to suffer imprisonment for life for the murder of a person by the name of Kunwar Bahadur in the village of Bamori Kalan, District Jalaun on July 18, 1971.
Based on a news item carried by a Hindi daily called 'Nav Bharat ' on June 3, 1983, that the dead body of one Kunwar Bahadur Singh was found in Vidisha in suspicious circumstances and that a letter purported to have been written by one Kunwar Bahadur Singh was recovered from the person of the deceased, the appellants filed a petition before the High Court of Madhya Pradesh, praying for their acquittals contending that Kunwar Bahadur Singh for whose murder they were convicted in 1971 was alive for twelve years thereafter and, therefore, their conviction was illegal.
The High Court dismissed the petition.
Hence the appeal by Special Leave of the Court.
Dismissing the appeal, the Court, ^ HELD; 1:1.
When a person convicted of murder raised the question that he has material to show that he was convicted for a murder that had never taken place, as, for example, by showing that the person who was alleged to have been murdered is in fact alive the Supreme Court has the jurisdiction, in appropriate cases, to call for further data from the concerned authorities in order to examine the contention of the convict.
This jurisdiction on which the Supreme Court can exercise, though with circumspection, is in order to do complete justice in any matter which is pending before it or which has been disposed of by it.
[863G H, 864A] 1: 2.
The instant case, however, is an example of what an incredible amount of ingenuity is exercised by the people to secure false acquittals.
The two reports called for from the District Magistrate, Vidisha, and the two photographs of 863 the two dead bodies found in 1971 and 1983, respectively make it clear that, (1) Kunwar Bahadur Singh for whose murder the appellants were convicted thirteen years ago is not the same person whose dead body was found on June 2, 1983 in Vidisha and (2) The letter which was found on the person of the dead body on June 2, 1983 is a forged and fictitious document manufactured for the purpose of obtaining false acquittals.
[863D, 864E, 865E F]
|
minal Appeal No. 121 of 1961.
Appeal by special leave from the judgment and order dated May 26, 1961 of the Punjab High Court, Circuit Bench at Delhi in Criminal Revision No. 159 D of 1961.
Nur ud din Ahmed and Naunit Lal, for the appellant.
V. D. Mahajan and P. D. Menon for R. N. Sachthey, for the respondent.
November 27.
The judgment of the Court was delivered by SUBBA RAO, J.
This appeal by special leave is directed against the order of the Punjab High Court dismissing the Revision petition filed against the order of the Additional Sessions judge, Delhi.
The appellant entered India on May 9, 1956, on a Pakistan passport dated February 11, 1956.
He had a visa endorsed on the said passport permitting him to stay in India for three months.
Under that visa he had to leave India on or before August 8, 1956, As he failed to do SO., a notice under section 3 (2) of the as amended in 1957, hereinafter called the Act, was served on him on 562 November 19, 1959, by the Delhi Administration.
By that notice he was asked to report his presence personally to the Foreigners Regional Registration Officer, Taj Barracks, janpath, New Delhi, between 11 A. M. to 12 noon daily and enter into a personal bond in the amount of Rs. 5,000/ with two sureties in the amount of Rs. 10,000/ each for the due, observance of ' the restriction imposed on his movements.
The appellant did not comply with the requirements of the notice.
Therefore he was prosecuted under section 14 of the Act for violating the provisions of section 3 in the Court of the Sub Divisional Magistrate, Delhi.
The appellant pleaded in defence that the said notice was not served on him and that he was a citizen of India.
The learned Magistrate held on the evidence that the said notice was served on him and that he was not a citizen of India but a foreigner within the meaning of that Act and that he had committed an offence, inasmuch as he did not comply with the provisions of the said notice.
On those findings he convicted him under section 14 of the Act and sentenced him to six months ' rigorous im prisonment.
On appeal the Sessions Judge, Delhi confirmed the findings of the Magistrate and dismissed the appeal filed by him.
He held that the burden was upon the appellant to prove that he was not a foreigner and that he had failed to discharge the same.
He also rejected the plea of the appellant 'viz. that as on the date he entered India, he was not a foreigner within the meaning of the definition of "foreigner ' as it then stood he could not be convicted, on the ground that be was prosecuted for an offence committed after the definition was amended.
The High Court confirmed the conviction of the appellant and the sentence passed against him.
Hence the appeal.
The learned counsel Mr. Nur ud Din appearing for the appellant raised before us the following two points: (1) the appellant was not a foreigner 563 within the meaning of the definition of a foreigner as existed at the time he entered India, i. e. on May 9, 1956, and therefore the High Court went wrong in convicting him, and (2) the appellant is not a foreigner even under the amended definition To appreciate the first contention it will be convenient to read the relevant provisions of the Section 3 : "The Central Government may by order make provision, either generally or with respect to all foreigners or with respect to any particular foreigner or any prescribed class or des cription of foreigner, fir prohibiting, regulating or restricting the entry of foreigners into India or their departure therefrom or their presence or continued presence therein.
(2)In particular and without prejudice to the generality of the foregoing power, orders made under this section may provide that the foreigner. . (a) x x x (b) x x x (c) x x x (d) x x x (e) shall comply with such conditions as may be prescribed or specified (i) requiting him to reside in a particular place; (ii) imposing any restrictions on his movements; 564 (iii), (iv), (V), (vi), (vii), (viii), (iX), (X) (f) shall enter into a bond with or without sureties for the due observance of, or as an alternative to the enforcement of any or all prescribed or specified restrictions or conditions: The definition of a foreigner as it stood in 1953 was 'Foreigner ' means a person who is not a natural born British subject as defined in sub sections 1 & 2 of section 1 of the British Nationality and Status of Aliens Act, 1914.
Section I (1) of the British Nationality and Status of Aliens Act, 1914, is in these terms : 'The following persons shall be deemed to be natural born British subjects, namely, (a) any person born within His Majesty 's Dominion and allegiance. ' The definition of a foreigner was substituted by the Foreigners Laws (Amendment) Act, 1957 (11 of 1957) section 2 (a).
This amendment came into force with effect from January 19, 1957.
Under the said definition, ,foreigner ' means a person who is not a citizen of India.
Section 14 is : 'If any person contravenes the provisions of this Act or of any order made thereunder, or any direction given in pursuance of this Act or such order, he shall be punished with imprisonment for a term which may extend to five years and shall also be liable to fine; and if such person has entered into a bond in pursuance of clause (f) of Sub section
(2) of section 3, his bond shall be forefeited; and any person bound thereby shall pay the penalty thereof, or show cause to the satisfaction of the convicting Court why such penalty should not be paid. ' 565 The gist of the foregoing provisions relevant to the present inquiry may be stated thus : Under the definition of a foreigner as it stood in the Act in 1953 before the amendment of 1957, any person barn within His Majesty 's Dominion and allegiance was a citizen of India but after the amending Act 11 of 1957 which came into effect from january 19, 1957, a person who is not a citizen of India is a foreigner.
After that date if an order is issued by the Central Government in exercise of powers conferred on it under section 3 of the Act directing a foreigner so defined and prescribing certain conditions for his stay, it is the duty of such a foreigner to obey the said order.
If he did not, he would be committing an offence within the meaning of section 14 of the Act.
In the light of the said provisions let us look at the facts of the present case.
As aforesaid the appellant entered India in 1956 on a Pakistan passport, the visa endorsed on it enabled him to stay in India till August 8, 1956.
The Delhi Administration made an order and served on him on November 19, 1959, imposing the restrictions on his stay.
Admittedly the appellant did not comply with the said restrictions and therefore lie committed an offence within the meaning of section 14 of the Act.
It is contended that as the appellant was not a foreigner at the time he made his entry into India, he could not be convicted on the basis he was a foreigner within the meaning of the definition of a foreigner as subsequently amended.
There is a fallacy underlying in this argument.
The appellant was certainly not a foreigner when he entered India under the definition of a foreigner as it then stood.
In view of the amendment of the definition he became a foreigner after January 19, 1957.
He could not be convicted for an offence for an act done by him before the amendment on the basis he was a 566 foreigner ; for instance an act done by him such as his entry into India or his noncompliance with the conditions of an order issued on him before the amendment on the foot that he was a foreigner.
But the offence for which he is now charged is an act done by him in derogation of an order issued to him after the amendment.
On the date when the Delhi administration served on him the notice imposing certain restrictions and directing him to comply with certain conditions for his stay he was a foreigner within the meaning of amended definition.
On the basis of the existing law he committed an offence and it will be futile for him to contend that he was not a foreigner under the original definition.
The legality of the act done by him must be judged on the basis of the existing law as the act was done subsequent to the amendment.
Reliance is placed upon the decision of this court in Fida Hussain vs State of Uttar Pradesh (1) in support of the contention that as the appellant was not a foreigner when he made the entry, he could not be convicted on the ground he was a foreigner.
But the facts of that case are different from those in the present appeal and that decision is clearly distinguishable.
There a person was born at Allahabad at the time when it was his Majesty 's Dominion.
* He had left India to Pakistan but returned on a passport granted by the Government of Pakistan on May 16, 1953.
He had a visa endorsed on his passport by the Indian authorities permitting him to stay in India for three months and this permission was later extended up to November 1953.
Under Paragraph 7 of the Foreigners Order 1948 issued under section 3 of the , every foreigner entering India on the authority of a visa shall obtain from the appropriate authority a permit indicating the period during which he is authorised to remain in India and shall, unless that period is extended, depart from India before its expiry.
As the appellant stayed after November 15, 1953, without permission given 567 under that order, lie was prosecuted for breach of the said order.
It would be seen from the said facts that the appellant therein was prosecuted for an offence committed by him before the Amending Act of 1.957 came into force on January 19, 1957.
This court on the said facts held that the appellant therein could not be convicted for the breach of Paragraph 7 of the Foreigners Order as lie not being a. foreigner at that time could not have committed a breach thereof, but clearly this decision cannot apply to an offence committed by a person who falls within the amended definition of foreigner ', after the Amending Act came into force.
Indeed this court in express terms left open that question at page 1523 "No question as to the effect of the amended definition on the appellant 's status fell for our decision in this case, for we were only concerned with his status in 1953.
We would also point out that no order appears to have been made concerning the appellant under section 3(2) (c) and we arc not to be understood as deciding any question as to whether such an order could or could , not have been made against the appellant.
" What has been left open in that decision is to be considered in the present case.
The appellant who is 'a foreigner under the amended definition has committed a breach of an order served on him after the amended definition of a foreigner came to hold the field.
The appellant therefore in disobeying the directions given to him, by the Delhi Administration his committed an offence within the meaning of section 14 of the Act.
Even so it is contended that the appellant is an Indian citizen and therefore is not a foreigner within the meaning of the amended definition of a foreigner under the Act.
Some of the relevant provisions of the Constitution and the Citizenship Act 57 of 1955 may conveniently be extracted.
Article 5 of the Constitution says "At the commencement of this Constitution, 568 every person who has his domicile in the territory of India and (a) who was born in the territory of India; or (b) either of whose parents was born in the territory of India; or (c) who has been ordinarily resident of the territory of India for not less than five years immediately preceding such commencement, shall be a citizen of India.
" Section 9 of the Indian is in these terms : "If in any case not falling under section 8 any question arises with reference to this Act or any order made or direction given thereunder, whether any person is or is not a foreigner. the onus of proving that such person is not a foreigner. shall, notwithstanding anything contained in the (1 of 1872) lie upon such person".
Under article 5(a) of the Constitution the appellant cannot be a citizen of India unless he was born in the territory of India and had his domicile in the territory of India at the commencement of the Constitution.
In this case the appellant claimed to be a citizen under article 5(a) of the Constitution.
By reason of section 9 of the Foreigners ' Act whenever a question arises whether a person is or is not a foreigner, the onus of proving that he is not a foreigner lies upon him.
The burden is therefore upon the appellant to establish that he is a citizen of India in the manner claimed by him and therefore he is not a foreigner.
This court in Union of India vs Ghaus Mohammad (1) accepted this legal position and laid down at page 748 thus : "It does not seem to have (1) ; 569 been realised that the burden of proving that he was not a foreigner, was on the respondent and appears to have placed that burden on the Union.
This was a wholly wrong approach to the question," Rightly throwing the onus on the appellant the Magistrate considered the evidence and came to the conclusion that the appellant had failed to prove that he was a citizen of India and therefore not a foreigner.
The learned Additional Sessions judge after noticing that the onus was on the appellant considered the evidence both oral and documentary and came to the conclusion that the appellant had failed to discharge the onus.
It cannot be and indeed is not suggested that the said finding is vitiated by any error of law, but it is contended that the Additional Sessions judge was not justified in ignoring the evidence of 'respectable witnesses who spoke to the fact that the appellant was born in India and continued to reside in India at the date of the commencement of the Constitution and thereafter.
The learned Additional Sessions Judge as a Judge of fact considered the evidence in the light of probabilities and the documentary evidence and rejected the same as unworthy of credence.
The High Court in revision refused to interfere with that finding.
We do not see any permissible ground for interference with that finding in an appeal under article 136 of the Constitution.
No other point is raised before us.
The appeal fails and is dismissed.
| The appellant entered India on May 9, 1956, on a Pakistani passport.
He had a visa permitting him to stay in India for three months.
He had to leave India on or before August 8, 1956.
As he failed to do so, a notice under section 3 (2) of the , as amended in 1957, was served on him on November 19, 1959, by the Delhi Administration.
As he did not comply with the requirements of the notice, he was prosecuted under section 14 of the and convicted.
His appeal and revision were dismissed.
All came to this court by special leave.
His contention was that he was not a foreigner within the meaning of the definition of a foreigner as it existed at the time he entered India, and he was not a foreigner even under the amended definition.
Held, that the appellant was a foreigner under the amended definition and he had committed a breach of the order served on him after the amended definition of foreigner came into force.
In disobeying the directions given to him by the Delhi Administration, he had committed an offence within the meaning of section 14 of the .
Before the amendment of the definition in 1957, a person born within His Majesty 's Dominion and owing allegiance was a citizen of India, but after the amendment in January, 1957 a person who was not a citizen of India became a foreigner.
After that date, if an order was issued by the Central Government in exercise of powers conferred on it under section 3 of the Act, it was the duty of such a foreigner to obey that order and if he did not do so, he committed an offence within the meaning of section 14 of the Act.
The appellant was certainly not a foreigner when he entered India, but in view of the amendment of the definition, he became a foreigner after January 19, 1957.
He could not be convicted for an offence for an act done by him before the amendment on the 561 basis that he was a foreigner, but in the present case he had been punished for not complying with an order passed after the amendment.
The burden of proving that he was not a foreigner was on the appellant and he had failed to discharge that burden.
The legality of an act done by a person must be judged on the basis of the existing law at the time the act is done.
Union of India vs Ghaus Mohammad, ; followed Fida Hussain vs State of Uttar Pradesh 11962] 1 S.C.R. 776, distinguished.
|
minal Appeal No. 244 cf 1969.
Appeal by special leave from the judgment and order dated July 23, 1969 of the Punjab and Haryana High Court in Criminal Appeal No. 302 of 1969 and Murder Reference No. 25 of 1969.
Nur ud din Ahmad and R. L. Kohli, for the appellant.
R. N. Sachthev, for respondent No. 1.
Frank Anthony, section R. Agarwal and E. C. Agarwala, for respondent No. 2.
The Judgment of the Court was delivered by Dua, J.
In this appeal by special leave the appellant challenges his conviction and sentence under section 302, I.P.C. for the; murder of his brother in law (husband of his wife 's sister).
The occurrence is stated to have taken place on Sunday October 8, 1968 at about 4.45 p.m. near the clock tower in Ludhiana ' City.
601 It is not disputed that on August 13, 1968 the appellant Tapinder Singh, a business man and a Municipal Commissioner, had lodged a first information report (exhibit PR) with the police station, Sadar, Ludhiana against Kulwant Singh, deceased whom he described as.
his Sandhu (his wife 's sister 's husband) and one Ajit Singh, alleging that on the pretext of consulting him they had taken him in their car to the canal near the Agricultural College an after getting down from the car, when they had walked about 150 paces on the banks of the canal, the deceased Kulwant Singh, saying that he would teach the appellant a lesson, whipped out a clasp knife and attacked him.
Ajit Singh also shouted that the appellant should not be allowed to escape.
The appellant raised alarm and tried to run away.
" While endeavoring to ward off with his right hand the knife blow by Kulwant Singh the appellant 's right hand palm got wounded and started bleeding, Just at that moment Gurmel Singh, Sarpanch and Shamsher Singh, Lambardar, happened to pass that way in a car.
They stopped the car.
In the meantime Kulwant Singh and Ajit, Singh got into, their car and went away.
Pursuant to this report admittedly a criminal case was pending against the deceased when the occurrence in question took place.
Kulwant Singh, deceased, who had been arrested pursuant to that report, in a case under section 307/ 324, I.P.C., was actually on bail on the date of the occurrence.
According to the prosecution Gurdial Singh (P.W. 7), father of the deceased Kulwant Singh is employed, as Works Manager in the, Ludhiana Transport Company, which is a private concern and which plies buses on different routes in Ludhiana District.
Gurdial Singh is also a share holder of this Company.
The workshop, the office and the taxi stand of this Company are located in Sarai Bansidhar which faces the clock tower.
Gurdial Singh, in addition, owns two taxis which he runs on hire.
He also owns two private cars which are used both for personal requirements and as taxis.
The deceased used to look after these four vehicles.
The father and the son used to live together in Model Town.
The two taxis used to remain at the Taxi Stand about 100 yards away from the clock tower whereas the other two cars used to be parked at Gurdial Singh 's business premises.
On August 8, 1968 at about 4.45 p.m. the deceased was sitting on a Takhat posh at the Taxi Stand.
It being a Sunday the shops in the neighborhood were closed.
Sher Singh (P.W. 9) was standing close to the Takhat posh.
Harnek Singh, the driver of one of the taxis and Gurdial Singh were also present.
At the taxi stand there was at that time only one taxi belonging to Gurdial Singh.
The appellant came from the side of the railway station and fired at the deceased five shots from his pistol.
After receiving three shots the deceased dropped down and the remaining two shots hit him when he was lying.
The persons present there raised art 602 ,alarm, shouting 'Don 't kill; dont kill '.
The appellant, after firing the shots, briskly walked back towards the railway station.
The ,deceased who was bleeding profusely was taken in the taxi by Gurdial Singh, his father and Hamek Singh, the driver, to Dayanand Hospital where they were advised to take the injured to Brown 's Hospital because his condition was serious.
It is in evidence that some person had telephoned to the City Kotwali, Ludhiana on the day of the occurrence at about 5 30 p.m. informing the police authorities that firing had taken place at ax Stand, Ludhiana.
The person, giving the information on telephone, did not disclose his identity; nor did he give any further particulars.
When the police officer receiving the telephone message made further enquiries from him he disconnected the telephone.
This report was entered in the daily diary at 5.35 p.m.
The Assistant Sub Inspector, Hari Singh, along with_ Assistant Sub Inspectors Amrik Singh, Jagat Singh and Brahm Dev and constables Prakash ,Singh, Harbhajan Singh and Harbans Lal, left the police station in a government jeep for the Taxi Stand, Ludhiana near Jagraon Bus Stand on the Grand Trunk Road, about a furlong and a half away from the City Kotwali Police Station.
From there Hari Singh learnt that the injured man had been removed by some persons to Dayanand Hospital.
As it was rumored at the place of the occurrence that the appellant Tapinder Singh had shot at the deceased, Hari Singh deputed Amrik Singh and Brahm Dev to search for him.
Hari Singh himself, along with.sub Inspector Jagat Singh and the police constables left for Dayanand Hospital.
From there they went to the Civil Hospital and then they proceeded to C.M.C. Hospital at about 6 30 p.m.
On enquiry they were informed that Kulwant Singh had been admitted there as an indoor patient.
Hari Singh went upstairs in the Surgical Ward and obtained the report (exhibit PH/ 13) prepared by Dr. E. Pothan who was in the Surgical Ward where Kulwant Singh was lying.
The statement of Kulwant Singh (exhibit PM) was also recorded by him at about 6.50 p.m. in that ward and the same after being read out by him was thumb marked by Kulwant Singh as token of its correctness.
That statement was forwarded to the police station, City Kotwali for registration of the case under section 307, I.P.C. Exhibit PM was also attested by Dr. Sandhu, House Surgeon.
Hari Singh deputed Assistant Sub Inspector, Jagat Singh to arrange for a Magistrate for recording Kulwant Singh 's dying declaration in the hospital.
The statement of Gurdial Singh, father of the deceased was also recorded there at about 7.20 p.m. Jagat Singh, A.S.I. brought Shri Sukhdev Singh, P.C.S., Judicial Magistrate, First Class, to the Hospital at about 7.30 p.m The dying declaration was, however, recorded at about 8.30 P.m. because Kulwant Singh was not found to be in a fit 'state of health to make the statement earlier.
Kulwant Singh died 603 at the operation theatre the same midnight.
Pursuant to exhibit PH/ 13 first information report was registered and the appellant committed to stand his trial for an offence under section 302, I.P.C. The learned Additional Sessions Judge, believing Gurdial Singh (P.W. 7), Sukhdev Singh, Judicial Magistrate (p.
W. 10) and Mukhtiar Singh, H. C. (P.W. 6) held proved the motive for the crime viz., that the appellant suspected illicit intimacy between his wife and the deceased who was married to her elder sister.
According to the trial Judge the appellant for this reason bore a grudge against the deceased.
The three eye witnesses Gurdial Singh, (P.W. 7), Hamek Singh (P.W. 8) and Sher Singh (P.W. 9) were held to have given a true and correct account of the occurrence and being witnesses whose presence at the place of occurrence was natural their evidence, was considered trustworthy, which fully proved the case against the accused.
The dying declaration was also found to be free from infirmity and being categorical and natural the court considered it sufficient by itself to sustain the conviction.
The circumstantial evidence, including that of the recovery of blood stained earth from the place of occurrence, the recovery of blood stained clothes of the deceased, the fact of the accused having absconded and the recovery of the pistol and cartridges were also held to corroborate the prosecution story.
Omission on the part of the prosecution to produce a ballistic export was considered to be immaterial and it was held not to weaken or cast a doubt on the prosecution case because the oral evidence of eye witnesses to the commission of the offence impressed the court to be trustworthy and acceptable.
The trial court also took into consideration the allegations con the course of the committal proceedings in the court of Shri Mewa Singh, Magistrate, on November 20, 1968 to the effect, inter alia, tained in an application presented by Gurdial Singh (P.W. 7) in that an attempt was being made on behalf of the accused to tamper with the prosecution witnesses.
The trial court convicted the accused under section 302, I.P.C. and imposed capital sentence.
On appeal the High Court rejected the criticism on behalf of the accused that the occurrence had nottaken place at the spot and in the manner deposed to by the eye witnesses.
On a detailed and exhaustive discussion of the arguments urged before the High Court it came to this conclusion : ". . that there was motive on the part of the appellant to commit this crime, that the three eyewitneses produced by the prosecution are reliable, they were present at the time of the occurrence and have given a correct version of the incident and that the medical 604 evidence fully supports the prosecution and no suspicion is attached to it.
The deceased made more than one dying declaration and we are satisfied that they were not induced and that the deceased gave a correct version of the incident.
The suggestion made that Tapinder Singh has been roped in on suspicion in not correct because implicit in such an argument is the suggestion that the crime was committed by somebody else.
It was broad day light, the assailant must have been identified and consequently we are satisfied that the offence has been fully brought home to the appellant.
The place of the occurrence does not admit of any doubt because there is good deal of evidence on the record that blood was recovered from where the Takhat posh was kept by GurJial Singh and there is no suggestion that the blood was found from anywhere else.
The learned counsel has then urged that the offence does not fall under section 302, Indian Penal Code, but no reasons have been given as to why this is not an offence punishable under section 302, Indian Penal Code.
Learned counsel urged that something must have happened which induced Tapinder Singh to commit this crime.
There is nothing on the record, not even a suggestion, that anything happened.
Tapinder Singh came armed with a pistol and fired as many as five shots at Kulwant Singh, two of which he fired on his back when Kulwant Singh had falled on the ground.
The appellant, therefore, does not deserve the lesser penalty contemplated by law.
Consequently, we uphold the conviction and sentence imposed upon Tapinder Singh.
The appeal is dismissed and the sentence of death is confirmed.
" On appeal in this Court under article 136 of the Constitution, Mr. Nuruddin Ahmed, learned advocate for the appellant.
ad dressed elaborate arguments challenging the conclusions of the courts below on which they have sustained the appellant 's conviction.
He started with an attack on the F.I.R. based on the dying declaration.
According to the counsel, the information in regard to the offence had already been conveyed to the police by means of a telephone message and the police had actually statrted investigation on the basis of that information.
This argument was, however, not seriously persisted in and was countered by the respondents on the authority of the decision in Sarup Singh vs 605 State of Punjab(").
The telephone message was received by Hari Singh, A.S.I., Police Station, City Kotwali at 5 35 p.m. on September 8, 1969.
The person conveying the ' information did not disclose his identity, nor did he give any other particulars and all that is said to have been conveyed was that firing had taken place at the taxi stand Ludhiana.
This was, of course, recorded in the daily diary of the police station by the police officer responding to the telephone call.
But prima facie this cryptic and annoymous oral message which did not in terms clearly specify a cognizable offence cannot be treated as first information report.
The mere fact that this information was the first in point of time does not by itself clothe it with the character of first information report.
The question whether or not a particular document constitutes a first information report has, broadly speaking, to be determined on the relevant facts and circumstances of each case.
The appellant 's submission is that since the police authorities had actually proceeded to the spot pursuant to this information, however exiguous it may appear to the court , the dying declaration is hit by section 162, Cr.
This submission is unacceptable on the short ground that section 162(2), Cr.
P.C. in express terms excludes from its purview statements falling within the provisions of s.32 (1), Indian Evidence Act.
Indisputably the dying declaration before us falls within section 32(1), Indian Evidence Act and as such it is both relevant and outside the prohibition contained in section 162 (1), Cr.
The counsel next contended that the dying declaration does not contain a truthful version of the circumstances in which Kulwant Singh bad met with his death and, therefore, it should not be acted upon.
This argument is founded on the submission that the deceased did not meet with his death at the spot sworn by the prosecution witnesses and that none of these witnesses actually saw the occurrence 'because they were not present at the place and time where and when the deceased was shot at.
We are far from impressed by this contention.
The trial court and the High Court have both believed the three eye witnesses and have also relied on the dying declaration.
Normally, when the High Court believes the evidence given by the eye witnesses this Court accepts the appraisal of the evidence by that Court and does not examine the evidence afresh for itself unless, as observed by this Court in Brahmin Isharlal Manilal vs The State of Gujarat.
(1) "It is made to appear that justice has failed for reason of some misapprehension or mistake in the reading of the evidence by the High Court.
" (1) A.I.R. 1964 Punjab 508.
(1) Crl.
A. No. 120 of 1963 decided on August 10, 1965.
606 It was added in that judgment : "There must ordinarily be a substantial error of law or procedure or a gross failure of justice by reason of misapprehension or mistake in reading the evidence or the appeal must involve a question of principle of general importance before this Court will allow the oral evidence to be discussed.
" In the present case it was contended that the original document embodying the dying declaration is missing from the judicial record and it is suggested that the mysterious disappearance of this important document during the committal proceedings was intended to remove from the record the evidence which would have shown that this dying declaration could not legally constitute the basis of the F.I.R. and thereby frustrate the plea, of the accused that section 162, Cr.
P.C. operated as a 'bar to its admissibility.
The bar created by section 162(1), Cr.
P.C., as already noticed, is,inapplicable to dying declarations.
But, as the original dying declaration has somehow disappeared from the Judicial record and the case is of a serious nature, we undertook to examine the evidence in respect of the dying declaration.
The evidence of Shri Sukhdev Singh, Judicial Magistrate, as P.W. 10, is clear on the point.
The witness has repeated in court the statement made to him by Kulwant Singh which was recorded by the witness in Punjabi in his own hand.
An attempt was made by Mr. Nuruddin to persuade us to hold that Shri Sukhdev Singh 's statement is not trustworthy.
It was argued that there was no cogent reason for the Magistrate to permit the police officers to make a copy of the dying declaration.
This, according to the counsel, shows that the Magistrate acted in a manner subservient to the demands of the police officers and, therefore, his, statement should not be taken on its face value.
We do not agree.
The Magistrate, as observed by the High Court, is quite clear as to what the deceased had told him.
He has repeated the same in his statement in court.
Exhibit PJ has been proved by him as a correct account of the dying declaration recorded by.
It is not understood how the fact that the Investigating Officer was allowed to make a copy of the dying declaration could go against the Magistrate.
The dying declaration could legitimately serve as a guide in further investigation.
It was not argued that the dying declaration being a confidential document had to be kept secret from the Investigating Officer.
Our attention was drawn by the respondents to the application dated November 20, 1968(Ex.
PZ) filed by Gurdial Singh in the court Of Shri Mewa Singh, Magistrate, for expeditious disposal of the commitment proceedings.
In that application it was suggested that the defence had got removed ' the dying declaration and statements under section 164, Cr.
P.C. which 607 had presumably been destroyed.
According to the respondent 's suggestion it was the accused who was interested in the disappearance of the original dying declaration from the record.
In this connection we may point out that on October ' 27, 1968 Shri Mewa Singh, Magistrate, had lodged a report with the police under sections 379/400/201, I.P.C., alleging theft of the F.I.R., the, dying declaration and statements Of witnesses recorded under s.164 Cr.
P.C. in the case State vs Tapinder Singh.
For the disposal of this appeal it is unnecessary for us to express any opinion as to who is responsible for the disappearance of the dying declaration.
That question was the subject matter of a criminal proceeding and we have not been informed about its fate.
The dying declaration is a statement by a person as to the cause of his death or as to any of the circumstances of the transaction which resulted in his death and it becomes relevant under. section 32(1) of the Indian Evidence Act in a case in which the cause of that person 's death comes into question.
It is true that a dying declaration is not a deposition in court and it is neither made on oath nor in the presence of the accused.
It is, therefore, not tested by cross examination on behalf of the accused.
But a dying declaration is admitted in evidence by way of an exception to the general rule against the admissibility of hearsay evidence, on the principle of necessity.
The weak points of a dying declaration just mentioned merely serve to put the court on its guard while testing its reliability, by imposing on it an obligation to closely scrutinise all the relevant attendant circumstances.
This Court in Kushal Rao vs The State of Bombay( ') laid down the test of reliability of a dying declaration as follows : "On a review of the relevant provisions of the Evidence Act and of the decided cases in the different High Courts in India and in this Court, we have come to the conclusion, in agreement with the opinion of the Full Bench of the Madras High Court, aforesaid, (1) that it cannot be laid down as an absolute rule of law that a dying declaration cannot form the sole basis of conviction unless it is corroborated; (2) that each case must be determined on its own facts keeping in view the circumstances in which the dying declaration was made; (3) that it cannot be laid down as a general proposition that a dying declaration is a weaker kind of evidence than other pieces of evidence; (4) that a dying declaration stands on the same footing as another piece of evidence and has to be judged in the light of surrounding circumstances and with reference to the principles governing the weighing of evidence .
(5) that a dying (1) at pp.
568 569. 608 declaration which has been recorded by a competent magistrate in the proper manner, that is to say, in the form of questions and answers, and, as far as practicable, in the words of the maker of the declaration, stands on a much higher footing than a dying declara tion which depends upon oral testimony which may suffer from all the infirmities of human memory and human character, and (6) that in order to test the reliability of a dying declaration, the Court has to keep in view the circumstances like the opportunity of the dying man for observation, for example, whether there was sufficient light if the crime was committed at night; whether the capacity of the man to remember the 'facts stated had not been impaired at the time he was making the statement, by Circumstances beyond his control; that the statement has been consistent throughout if he had several opportunities of making a dying declaration apart from the official record of it; and that the statement had been made at the earliest opportunity and was not the result of tutoring by interested parties.
Hence in order to pass the test of reliability, a dying declaration has to be subjected to a very close scrutiny, keeping in view the fact that the statement has been made in the absence of the accused who had no opportunity of testing the veracity of the statement by cross examination.
But once the court has come to the conclusion that the dying declaration was the truthful version as to the circumstances of the death and the assailants of the victim, there is no question of further corroboration.
If, on the other hand, the court, after examining the dying declaration in all its aspects, and testing its veracity, has come to the conclusion that it is not reliable by itself and that it suffers from an infirmity, then, without corroboration it cannot form the basis of a conviction.
Thus, the necessity for corrobo ration arises not from any inherent weakness of a dying declaration as a piece of evidence, as held in some of the.
reported cases, but from the fact that the court, in a given case, has come to the conclusion that that parti cular dying declaration was not free from the infirmities referred to above or from such other infirmities as may be disclosed in evidence in that case.
" This view was approved by a Bench of five Judges in Harbans Singh vs State of Punjab.
( ') Examining the evidence in this (1) [1962] Supp. 1 S.C.R. 104.
609 case in the light of the legal position as settled by this Court we find that the dying declaration was recorded by the Magistrate within four hours of the occurrence.
It is clear and concise and sounds convincing.
It records : "Today at 4.45 p.m. my Sandhu (wife 's sister 's husband) Tapinder Singh fired shots with his pistol at me in the, presence of Harnek Singh, Sher Singh and Gurdial Singh at the taxi stand.
He suspected that I had illicit relations with his wife.
Tapinder Singh injured me with these fire shots.
" Considering the nature and the number of injuries suffered by the deceased and the natural anxiety of his father and others present at the spot to focus.
their attention on efforts to save his life we are unable to hold that he had within the short span of time between the occurrence and the making of the dying declaration been tutored to falsely name the, appellant as his assailant in place of the real culprit and also to concoct a non existent motive for the crime.
It is unnecessary for us to refer to the earlier declarations contained in exhibit PM, exhibit DC and exhibit PH/ 13 because the one recorded and proved by the Magistrate seems to us to be acceptable and free from infirmity.
If the dying decla ration is acceptable as truthful then even in the absence of other corroborative evidence it would be open to the court to act upon the dying declaration and convict the appellant stated therein to be the offender.
An accusation in a dying declaration comes from the victim himself and if it is worthy of acceptance then in view of its source the court can safely act upon it.
In this case, however, we have also the evidence of eye witnesses Gurdial Singh, (P.W. 7), Hamek Singh (P.W. 8) and Sher Singh (P. W. 9) whose testimony appears to us to be trustworthy and unshaken.
No convincing reason has been urged on behalf of the appellant why these three witnesses and particularly the father of the deceased should falsely implicate the appellant substituting him for the real assailant.
It is not a case in which, along with the real culprit, someone else, with whom the complainant has some scores to settle, has been added as a co accused.
The only argument advanced on behalf of the appellant was that the deceased was shot at somewhere else and not at the place where the prosecution witnesses allege he was shot at.
It was emphasised that these three witnesses were not present at the _place and time where the occurrence actually took place.
This submission is, in our view, wholly unfounded,and there is absolutely no material in support of it on the existing record.
The probabilites are clearly against it.
The fact that Hari Singh, A.S.I. (P.W. 2) went to the place of occurrence and from there he learnt from someone, 13Sup.
Cl/70 10 610 that the injured person bad been taken to Dayanand Hospital clearly negatives the appellant 's suggestion.
The fact that the A.S.I. did not remember the name of the person who gave this information would not detract from its truth.
On the contrary it appears to us to be perfectly natural for the A.S.I. in those circumstances not to attach much importance to the person who gave him this information.
And then, the short duration within which the injured person reached the hospital also shows that those who carried him to the hospital were closeby at the time of the occurrence and the suggestion that Gurdial Singh (P.W. 7), Hamek Singh (P.W. 8) and Sher Singh (P.W. 9) must have been informed by someone after the occurrence does not seem to us to fit in with the rest of the picture.
We are, therefore, unable to accept the appellant 's suggestion that the deceased was shot at somewhere else away from the place of the occurrence as deposed by the eye witnesses.
Some minor points were also sought to be raised by Mr. Nuruddin.
He said that the pair of shoes belonging to the deceased were left at the spot but they have not been traced.
The takhat posh on which the deceased was sitting has also not been proved to bear the marks, of blood nor a* the blood marks proved ,on the seats of the car in which the deceased was taken to the hospital.
The counsel also tried to make a point out of the omission by the prosecution to ' prove blood stains on the clothes of Gurdial Singh (P.W. 7) and Harmek Singh (P.W. 8) who had carried Kulwant Singh from the place of the occurrence to the hospital.
Omission to produce a. ballistic expert was also adversely criticised.
These, according to the counsel, are serious infirmities and these omissions militate against the prosecution story.
In our opinion, the criticism of the counsel assuming it to be legitimate, which we do not hold, relates to matters which are both insignificant and immaterial on the facts and circumstances of this case.
They do not in any way affect the truth of the main ,elements of the prosecution story.
On appeal under article 136 of the Constitution we do not think it is open to this Court to allow such minor points to be raised for the purpose of showing ,defects in appraisal of the evidence by the High Court and for ,evaluating the evidence for ourselves so as to arrive at conclusions different from those of the High Court.
The eye witnesses having been believed, these points lose all importance and cannot be pressed in this Court.
Considerable stress was laid on behalf of the appellant on the submission that according to the folder exhibit DC one Trilochan Singh was present in the hospital as a friend or relation of the injured person.
From this it was sought to be inferred that Gurdial Singh, father of Kulwant Singh, had not accompanied his 611 son to the hospital and that this would show that the eye witnesses are not telling the truth.
The argument seems to us to be without any basis and is misconceived.
In the first instance the name of Trilochan Singh on the folder has not been proved.
It is the contents of exhibit DC which have been proved by Dr. E. Pothan (P.W. I at the trial) who had appeared as P.W. 10 in the court of the Committing Magistrate.
Secondly in this document, as we have verified from the original record Gurdial Singh is actually mentioned as the father of the injured person.
We are, therefore, not impressed by the submission that Ex ' DC goes against the testimony of the eye witnesses.
Incidentally, exhibit DC also contains the precise information which was the subject matter of the dying declaration.
It appears that in order to discredit exhibit DC with respect to the information about the appellant being the assailant, the name of one Trilochan Singh (whose identity still remains unknown) was somehow made to appear on the folder but as it has not been legally proved and not referred to by any witness we need say nothing more about it.
This argument thus also fails.
The submission that the medical evidence contradicts the version given by eye witnesess also remains unsubstantiated on the record.
As a last resort it was contended that if the motive alleged by the prosecution is accepted then the sentence imposed would appear to be excessive.
In our view, the manner in which the five shots were fired at the deceased clearly shows that the offence committed was deliberate and pre planned.
We are unable to find any cogent ground for interference with the sentence.
The appeal accordingly fails and is dismissed.
G.C. Appeal dismissed.
| The appellant was tried for murder, on the allegation that he caused the death of B by firing five shots at him from his pistol.
The testimony against him consisted of a dying declaration made by B, the statements of three eyewitnesses and some circumstantial evidence.
The trial court convicted the appellant and sentenced him to death.
The conviction and sentence were affirmed by the High Court.
In appeal by special leave before this Court the appellant contended : (i) that the information relating to the occurrence given to the police by telephone regarding which, an entry was made in the daily dairy must be treated as the first information report; (ii) that the dying declaration of deceased was inadmissible because it was hit by section 162 of the code of Criminal Procedure; (iii) that the dying declaration was unreliable; (iv) that the evidence in the case was not sufficient to justify the conviction of the appellant; (v) that, among other omissions, the non examination of the ballistic expert created a lacuna in the prosecution case; and (vi) that in view of the alleged, motive the appellant 's suspicion that the deceased had illicit relations with his wife the sentence should be reduced.
HELD : (i) The telephonic message recorded in the daily diary of the police station was a cryptic and anonymous oral message which did not in terms clearly specify a cognizable offence and could not, therefore, be treated as first information report.
The mere fact that this information was the first in point of time could not by itself clothe it with the character of first information report.
The question whether or not a particular document constitutes a first information report, has to be determined on the relevant facts and circumstances of each case.
[605 B C] (ii)Section 162 Criminal Procedure Code in express terms excludes from its purview statements 'falling within the provisions of section 32(1) of the Indian Evidence Act.
indisputably, the dying declaration in the present case fell within section 3(1) of the Indian Evidence Act and as such it was both relevant and outside the prohibition contained in s.162(1) Cr. P. C. [605 D E] (iii)(a) In view of the evidence of the Judicial Magistrate who recorded the dying declaration the mere fact that the original dying declaration had been stolen from the file, could not destroy its value.
Nor could the fact that the investigating officer was allowed to make a copy 6 00 of the dying declaration be interpreted to mean that the Magistrate was subservient to the police.
A dying declaration is not a confidential document and can legitimately serve as a guide in further investigation.
[606 D G] (b) A dying declaration is not a deposition in Courtand it is neither made on oath nor in the presence of the accused.
Itis therefore not tested in cross examination on behalf of the accused.
But a dying declaration is admitted in evidence by way of an exceptionto the general rule against the admissibility of hearsay evidence on the principle of necessity.
The weak points of the dying declaration merely serve to put the court on its guard while testing its reliability by imposing on it an obligation to closely scrutinise all attendant circumstances.
So scrutinised.
the dying declaration in the present case must be accepted as true.
[607 D E] (iv)If the dying declaration is acceptable as true then even in the absence of other corroborative evidence it would be open to the court to act upon the dying declaration and convict the appellant stated therein to be the offender.
An accusation in a dying declaration comes from the victim and if it is accepted then in view of its sources the court can safely act on it.
In the present case not only the dying declaration but the other evidence including that of three eye witnesses justified the conviction of the appellant.
[609 E F] (v)When the eye witnesses have been believed minor points such as non production of the ballistic expert lose all importance.
[610 E F] (vi)In view of the manner in which five shots were fired at the deceased,the murder was deliberate and pre planned and the plea for reductionof the sentence could not be accepted.
[611 E] Sarup Singh vs State of Punjab, A.I.R. 1964 Punjab 508, Brahmin Ishwarlal Manilal vs State of Gujarat, Cr.
A. No. 120/63 dt.
10 8 1965.
Kushal Rao vs State of Bombay, at pp.
568 569 and Harbans Singh vs State of Punjab, [1962] Sup. 1 S.C.R. 104, referred to.
|
Appeal No. 91 of 1957.
Appeal from the judgment and order dated March 29, 1956, of the Saurashtra High Court at Rajkot in Civil Reference No. I of 1955.
Shankarlal G. Bajaj and P. C. Aggarwal, for the appellant.
K. N. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the respondent.
October 9.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal arises from the assessment proceedings taken against the appellant, Rajputana Agencies Ltd., Lavanpur, for its income for the assessment year 1952 53, the accounting period being the corresponding Marwadi Year ending in October, 1951.
The appellant is a ' private limited company and it was assessed to income tax and super tax by the Income tax Officer, Morvi Circle, Morvi, on a total income of Rs. 26,385.
The appellant had declared dividend of Rs. 30,000.
The Income tax Officer held that out of the said amount of dividend, Rs. 15,159 was excess dividend.
On this basis the Income tax Officer determined the additional income tax payable by the appellant at the rate of forty four pies in a rupee on the said excess dividend.
The additional income tax payable by the appellant in that behalf was computed at Rs. 3,473 15 0.
This order was passed on November 25, 1952.
The appellant filed an appeal against this order before the Appellate Assistant Commissioner of Income tax at Rajkot.
The appellate authority determined the additional income tax payable by the appellant at Rs. 2,084 12 0 on August 29, 1953.
An appeal was preferred by the appellant against the appellate order before the Income tax Appellate Tribunal, Bombay, but the appellate tribunal confirmed the order under appeal on November 27, 1954.
The 144 appellant then moved the appellate tribunal under section 66(1) of the Income tax Act and the appellate tribunal, by its order passed on April 25, 1955, referred two questions to the High Court at Saurashtra for its opinion.
In the present appeal, we are concerned with ,the second of the said two questions.
This question as framed by the tribunal was: Whether the expression " at the rate applicable to the total income of the company " as appearing in sub cl.
(b) of el.
(ii) to the second explanation to proviso to paragraph B of Part I of the First Schedule to the Indian Finance Act, 1952, means the rate at which a company 's total income is actually assessed or the rate prescribed by the respective Finance Act without taking into consideration the rebate allowed in the respective years in accordance with the provisions of the Part ' B ' States (Taxation Concessions) Order, 1950 (hereinafter called the Order).
Section 2 of the Finance Act, 1952, provides that the provisions of section 2 of, and the First Schedule to the Finance Act, 1951, shall apply in relation to income tax and super tax for the financial year 1952 53 as they apply in relation to the income tax and super tax for the financial year 1951 52 with the modification that, in the said provisions for the figures 1950, 1951 and 1952 wherever they occur, the figures 1951, 1952 and 1953 shall be respectively substituted ; and so in the present case we are really concerned with the material provisions of the Finance Act, 1951 (herein.
after called the Act).
By its judgment delivered on March 29, 1956, the High Court answered this question against the appellant and held that the expression " at the rate applicable to the total income of the company " means the rate at which the company 's total income is actually assessed.
The appellant then applied for and obtained a certificate from the High Court under article 133(1)(c) of the Constitution read with section 66A(2) of the Income tax Act that the case is a fit one for appeal to this Court.
It is with this certificate that the present appeal has been brought to this Court; and the only point which it raises for our decision relates to the construction of the expression " at the rate applicable 145 to the total income of the company " appearing in the relevant provision of the Act.
The appellant does not dispute its liability to pay additional income tax under cl.
(ii) of the proviso to paragraph B of Part I of the First Schedule to the Act.
The dispute between the parties is in regard to the rate at which the additional income tax has to be charged.
I The appellant has paid income tax on its total income in the relevant assessment year at the rate of sixteen pies in a rupee in accordance with the computation prescribed by para.
6 of the Order; and it is urged on its behalf, that the rebate to which it is entitled under the provisions of the said Order is irrelevant in determining the rate at which the additional income tax can be computed against it.
On the other hand, the respondent contends that the additional income tax has to be computed at the rate at which the appellant 's income has been actually assessed and so the rebate granted to the appellant under the said Order must be taken into account in determining the said rate of the additional tax.
It would be relevant, at this stage, to refer to the provisions of the Order under which the appellant has admittedly obtained rebate as a company carrying on its business in Saurashtra.
By the Order, the Central Government made exemptions, reductions in the rate of tax and modifications specified in the Order in exercise of the powers conferred by section 60A of the Income tax Act.
This Order applied to Part 'B ' states which included all Part 'B ' States other than the State of Jammu and Kashmir.
Paragraph 5 of the Order deals with income of a previous year chargeable in the Part 'B ' States in 1949 50.
Sub clause (3) of paragraph 5 shows that the State assessment year 1949 50 means the assessment year which commences on any date between April 1, 1949 and December 31, 1949.
We are not concerned with the provisions of this paragraph.
Paragraph 6(iii) applies to the present case.
The effect of para.
6(1), (ii) and (iii) is that in respect of so much of the income, profits and gains included in the total income as accrue or arise in any State other 19 146 than the States of Patiala and East Punjab States Union and Travancore Cochin (i) the tax shall be computed (a) at the Indian rate of tax; and (b) at the State rate of tax in force immediately before the appointed day; (ii) where the amount of tax computed under subclause (a) of clause, (1) is less than or is equal to the amount of tax computed under sub clause (b) of clause (1) the amount of the first mentioned tax shall be the tax payable; (iii) where the amount of tax computed under subclause (a) of clause (1) exceeds the tax computed.
under sub clause (b) of clause (1), the excess shall be allowed as a rebate from the first mentioned tax and the amount of the first mentioned tax as so reduced shall be the tax payable.
Thus under el.
(iii) the amount of income tax levied against the appellant is not the amount computed at the Indian rate; it represents the difference between the amounts calculated at the Indian rate of tax and that calculated at the State rate of tax.
The excess of the first amount over the second is allowed as a rebate.
In other words, the Indian rate of tax prescribed by the relevant provisions of the Act does not by itself determine the amount of tax payable by the appellant for the relevant year.
It is well known that when different Part ' B ' States merged with the adjoining States or Provinces and were made taxable territories under the Income tax Act, the operation of the Indian rate of tax was introduced by phases and rebates on a graduated scale were allowed to the assessees under the provisions of this Order.
As we have already mentioned, it is common ground that the appellant was entitled to and has obtained rebate under sub cl.
(iii) of paragraph 6 of 'the Order, with the result that his total income has been taxed to income tax at the rate of sixteen pies in a rupee.
The point for determination is whether this rebate is relevant in determining the rate at which the additional income tax has to ' be levied against the appellant under the relevant provisions of the Act.
147 Let us now consider the relevant provisions of the Act.
Section 3 of the Income tax Act which is the charging section provides that " where any Central Act enacts that income tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of the ' assessee ".
Thus, when levying income tax against the total income of the assessee, the rate at which the tax has to be levied is prescribed by the Act for the relevant year.
Section 2 of the Act provides that, subject to the provisions of sub sections
(3), (4) and (5), income tax shall be charged at the rates specified in Part I of the First Schedule; and sub section
(7) provides that " for the purpose of this section, and of the rates of tax imposed thereby, the expression " total income " means total income as determined for the purposes of income tax or super tax, as the case may be, in accordance with the provisions of the Act ".
So we must turn to the First Schedule to the Act to find the rate at which the appellant can be assessed.
Paragraph B of the said Schedule deals with companies and it provides that, in the case of every company, on the whole of total income the tax is leviable at the rate of four annas in the rupee.
There is a proviso to this paragraph and the clause which calls for our construction in the present appeal occurs in the explanation to el.
(ii) of this proviso.
This proviso deals with the case of a company which in respect of its profits liable to tax under the Act for the relevant year has made the prescribed arrangements for the declaration and payment within the territory of India excluding the State of Jammu and Kashmir of the dividends payable out of such profits and has deducted the super tax from the dividends in accordance with the provisions of sub section
(3D) or (3E) of section 18 of that Act; and in that connection, it provides: (1) where the total income, as reduced by seven annas in the rupee and by the amount, if any, exempt from income tax exceeds the amount of any dividends (including dividends payable at a fixed rate) declared 148 in respect of the whole or, part of the previous year for the assessment for the year ending on the 31st day of March, 1951, and no order has been made under subsection (1) of section 23A of the Income tax Act,, a rebate shall be allowed, at the rate of one anna per rupee on the amount of such excess (ii) where the amount of dividends referred to in clause (1i) above exceeds the total income as reduced by seven annas in the rupee and by the amount, if, any, exempt from income tax, there shall be charged on the total income an additional income tax equal to the sum, if any, by which the aggregate amount of income tax actually borne by such excess (hereinafter referred to as " the excess dividend ") falls short of the amount calculated at the rate of five annas per rupee on the excess dividend.
It would thus be seen that the object of the legislature in enacting this proviso is to encourage companies to plough back some of their profits into the industry not to distribute unduly large portions of their.
profits to their shareholders by declaring unreasonably high or excessive dividends.
In order to give effect to this intention the legislature has offered an inducement to the companies by giving them a certain rebate.
If a company does not distribute as dividends more than roughly nine annas of its profits which is specified as distributable, then the rebate of one anna is given to the company to the extent that the dividend paid by it was less than the distributable dividend.
If the company pays more than the distributable amount of dividend then it was not entitled to claim any rebate; but, on the contrary, it becomes liable to pay an additional income tax as provided in cl.
(ii) of the proviso.
In other words, the intention of the legislature appears to be that companies should no doubt declare reason able dividend and thereby invite the investment of capital in business; but they should not declare an excessive dividend and should plough back part of their profits into the industry.
It is with this object that the provision for rebate has been made.
It would be noticed that,, in addition to the rebate received by the appellant under the relevant provisions of the 149 Order, it would have been entitled to receive the rebate under el.
(1) of the proviso to paragraph B if the dividend declared by it had not exceeded the specified distributable amount.
In fact the dividend declared by the appellant has exceeded the said amount and the appellant has thus become liable to pay additional income tax in respect of the excess dividend under cl, (ii) of the proviso to paragraph B.
Under this clause, " the appellant shall be charged on the total income an additional income tax equal to the sum, if any, by which the aggregate amount of income tax actually borne by such excess (hereinafter referred to as " the excess dividend ") falls short of the amount calculated at the rate of five annas per rupee on the excess dividend ".
This provision raises the problem of determining the aggregate amount of income tax actually borne by the excess dividend; and it is to help the solution of this problem that an explanation has been added which says, inter alia, that " for the purposes of cl.
(ii) of the above proviso the aggre gate amount of income tax actually borne by the excess dividend shall be determined as follows: (i) the excess dividend shall be deemed to be out of the whole or such portion of the undistributed profit,% of one or more years immediately preceding the previous year as would be just sufficient to cover the amount of the excess dividend and as have not likewise been taken into account to cover an excess dividend of a preceding year; (ii) such portion of the excess dividend as is deemed to be out of the undistributed profits of each of the said years shall be deemed to have borne tax(a) if an order has been made under sub section (1) of section 23A of the Income tax Act, in respect of the undistributed profits of that year, at the rate of five annas in the rupee, and (b) in respect of any other year, at the rate applicable to the total income of the company for that year reduced by the rate at which rebate, if any, was allowed on the undistributed profits.
" Clause (1). explains what shall be deemed to be the 150 excess dividend and how it, should be ascertained.
Clause (ii) lays down how the portion of the excess dividend as is deemed to be out of the undistributed profits of each of the years mentioned in cl.
(ii) of the proviso shall be deemed to have borne tax.
clause (a) of cl.
(ii) is concerned with cases where an order has been made under section 23A (1) in respect of the undistributed profits of that year at the rate of five annas in a rupee.
We are not concerned with this clause in the present appeal.
It is sub cl.
(b) of el.
(ii) of the explanation to the proviso to paragraph B that falls for consideration in the present appeal.
The appellant 's case is that the expression " at the rate applicable to the total income " means the rate prescribed by paragraph B of the Act and not the rate at which income tax has actually and in fact been levied.
This contention has been rejected by the High Court and the appellant urges that the High Court was in error in rejecting its case.
The argument is that the words " at the rate applicable to the total income of the company " must be strictly and literally construed and reliance is placed on the principle that fiscal statutes must be strictly construed.
On the other hand, as observed by Maxwell " the tendency of modern decisions upon the whole is to narrow materially the difference between what is called a strict and beneficial construction (1) ".
Now the words " the rate applicable " may mean either the rate prescribed by paragraph B or the rate actually applied in the light of the relevant statutory provisions.
"Applicable", according to its plain grammatical meaning, means capable of being applied or appropriate; and appropriateness of the rate can be determined only after considering all the relevant statutory provisions.
In this sense it would mean the rate actually applied.
In the present case, if sub cl.
(b) is read as a whole, and all the material words used are given their plain grammatical meaning, its construction would present no serious difficulty.
When the clause refers to the rate applicable, it is necessary to remember that it refers to the rate applicable to the total income of the company for (1) Maxwell on " Interpretation of Statutes ", 10th Ed.
p. 284.
151 that year.
In other words, the clause clearly refers to the specific or definite rate which is determined to be applicable to the taxable income of the company for the specific year; and it is not the rate prescribed by the Act for the relevant year generally in reference to incomes of companies.
The result is that, for determining the aggregate amount of income tax actually borne by the excess dividend, the department must take into account the rate at which the income of the company for the specific year has in fact been applied or levied.
Besides, in construing the words "I the rate applicable " we must bear in mind the context in which they are used.
The context shows that the said words are intended to explain what should.
be taken to be " the tax actually borne ".
If the legislation had intended that the tax actually borne should in all, cases be determined merely by the application of the rate prescribed for companies in general, the explanation given by the material clause would really not have been necessary.
That is why in our opinion, the context justifies the construction which we are inclined to place on the words " the rate applicable ".
The same position is made clear by the further provision in sub cl.
(b) itself which requires that the relevant rate has to be reduced by the rate at which the rebate, if any, has been allowed on the undistributed profits; which means that, for determining the rate in sub cl.
(b), it is necessary to take into account the rebate which may have been allowed to the company under el.
(1) of the proviso to paragraph B, so that in such a case the rate applicable cannot be the rate prescribed in paragraph B of the Act; it must be the rate so prescribed reduced by the rate at which the rebate has been granted under cl.
(1) of the proviso to paragraph B.
It is thus clear that the words " rate applicable in such cases mean the rate determined after deducting from the rate prescribed by paragraph B the rate of rebate allowed by el.
(1) of the proviso to the said paragraph.
Therefore, at least in these cases, the material words mean the rate actually applied.
If that be the true position, the rate applicable must in 152 all cases mean the rate actually applied.
The same words cannot have two different meaning,% in the same clause.
Incidentally we may point out that the provision of the Act in regard to the payment of additional income tax appears to be intended to impose a penalty for distributing dividends beyond the distributable.limit mentioned by the statute.
The method prescribed for determining the amount of this additional income tax is this.
Calculate the amount at the rate of five annas per rupee on the excess dividend and deduct from the amount so determined the aggregate amount of income tax actually borne by such excess dividend; the balance is the amount of additional income tax leviable against the company.
In adopting this method, if rebate admissible under cl.
(1) of the proviso to para.
graph B has to be deducted from the rate prescribed, it is difficult to understand why a rebate granted under paragraph 6(iii) of the Order should not likewise be deducted.
We accordingly hold that the rate applicable in sub cl.
(b) of cl.
(ii) of the explanation read with cl.
(ii) of the proviso to paragraph B of Schedule I of the Act means the, rate actually applied in a given case.
On, this construction the rate at which the appellant is liable to pay the additional income tax would be the difference between the rate of five annas and the rate of sixteen pies in a rupee at which the appellant has in fact paid income tax in the relevant year.
That is to say, the additional income tax is leviable at the rate of forty four pies in a rupee.
In its judgment, the High Court of Saurashtra has referred with approval to the decision of the Bombay High Court in Elphinstone Spinning and Weaving Mills Co., Ltd. vs Commissioner of Income tax, Bombay City(1).
In this case, Chagla C. J. and Tendolkar J. have held that if a company has no taxable income at all for the assessment year 1951 52 and in that year it pays dividends out of the profits earned in the preceding year or years, additional income tax cannot be levied on the company by reason of the fact that it has paid an excess dividend within the meaning of that 153 expression in, the proviso to paragraph B of Part I of the Act.
We are not concerned with this aspect of the matter in the present appeal.
However, in dealing with the question raised before them, the learned judges have incidentally construed the relevant words " rate applicable" as meaning the rate actually applied; and their observations do support the view taken by the Saurashtra High Court in the present case.
The result is the appeal fails and is dismissed with costs.
Appeal dismissed.
| The assessee, a private limited company in Saurashtra, was assessed for the assessment year 1952 53 on a total income of Rs. 26,385.
It was assessable at the rate of four annas per rupee but in view of the provisions of the Part B States (Taxation Concession) Order, 1950, it was actually assessed at the rate of sixteen pies per rupee.
The assessee had declared dividend of Rs. 30,000 out of which Rs. 15,159 was found to be excess dividend.
On this excess dividend the assessee was liable to pay additional income tax and the dispute was regarding the rate at which tax was to be computed.
Clause (ii) of the proviso to para.
B of Part.
I of the First Schedule to the Finance Act, 1951, which applied to the case, provided that the additional income tax was to be equal to the sum by which the aggregate amount of income tax actually borne by the excess amount fell short of the amount Calculated at the rate of five annas per rupee on the excess dividend.
Sub clause (b) of cl.
(ii) to the second explanation to proviso to para.
B provided that the aggregate amount of income tax actually borne by the excess dividend was to be determined at the rate applicable to the total income of the company.
The assessee contended that the words 'at the rate applicable to the total income of the company ' meant the rate prescribed by para.
8 of the Act, i.e. four annas per rupee, and not the rate as reduced by the Order at which the income tax had actually and in fact been levied and that consequently it was liable to pay additional income tax on the excess dividend at the rate of one anna per rupee only.
Held, that the expression 'rate applicable to the total income of the company ' meant the rate actually applied and that the assessee was rightly charged at the rate of forty four pies per rupee being the rate by which the rate at which the assessee was actually assessed fell short of the rate of five annas per rupee.
The clause referred to the specific or definite rate which was determined to be applicable to the taxable income of the company for that specific year and not to the rate prescribed by the Act for the relevant year generally in reference to incomes of companies.
143 Elphinstone Spinning and Weaving Mills Co. Ltd. vs Commis sioner of Income tax, Bombay City, , con sidered.
|
Civil Appeal No. 1922 of 1979.
From the Judgment and order dated 7 5 1979 of the Disciplinary Committee of the Bar Council of India in D.C. Appeal No. 19/78.
Appellant ill Person and section section Khanduja for the Appellant.
The order of the Court was delivered by KRISHNA IYER, J.
The Appellant, a fledging in the legal profession, has been punished by the Tribunal of the Bar Council for eating the forbidden fruit of dubious professional conduct by improperly certifying the solvency of a surety for an accused person, his client.
suspension from practice for one month is the punishment awarded by the trial tribunal and in appeal.
Counsel for the appellant Shri Khanduja, has pleaded for an admonitory sentence by the Court ex misericordium.
Of course, the punitive pharmacopoeia of the Advocates Act, in Section 35, does permit reprimand provided the ends of public justice are met by this leniency.
After all, public professions which enjoy a monopoly of public audience have a statutorily enforced social accountability for purity, probity and people conscious service.
In our Republic, Article 19(1) (g) vests a fundamental right to practise any profession only subject to reasonable restrictions in the interests of the general public (vide article 19(6).
The law forbids the members of the legal or other like professions from converting themselves into a conspiracy against the laity and all regulations necessary for ensuring a people oriented bar without exploitation potential are permissible, nay necessary.
Rule 10, chapter 2 part six of the Rules of Bar Council of India for Professional Misconduct framed for disciplinary purposes is stated to have been violated by the appellant for which dispensatory punishment has been meted out.
The factual setting gives an insight into the degree of deviance of the delinquent appellant.
Punishment must be geared to a social goal, at once deterrent and reformatory.
In the present case, the appellant is charged with certifying the solvency of a surety in a bailable offence.
Obviously, the accused, who was the client of the appellant, was entitled to be enlarged on bail because the offence for Which he was in custody was admittedly bailable.
Even so, it is a common phenomenon in our country that bail has too, often become a bogey and an instrument of unjust incarceration.
There are 207 some magistrates who are never satisfied about the solvency of sureties except when the property of the surety is within their jurisdiction and Revenue officers have attested their worth.
This harasses the poor and leads to corruption as pointed out by this Court in Moti Ram 's case.
It may, therefore, be quite on the cards that some sympathetic lawyer who appears for an indigent accused may commiserate and enquire whether the surety is solvent.
If he is satisfied, on sure basis, that the surety is sufficiently solvent, then he may salvage the freedom of the accused by certifying the solvency of which he has satisfied himself.
It is also possible that the detainee is a close relation or close friend or a poor servant of his.
In that capacity, not as a lawyer, he may know the surety and his solvency or may offer himself as a surety.
If a lawyer 's father or mother is arrested and the Court orders release on bail, it is quite conceivable and perhaps legitimate, if the son appears for his parent and also stands surety.
He violates the rule all the same.
The degree of culpability in a lawyer violating Rule 10, chapter 2, part six depends on the total circumstances and the social milieu.
This Court has held, taking cognizance of the harassment flowing from sureties being insisted upon before a person is enlarged or bailed out, that the Court has the jurisdiction to release on his own bond without the necessity of a surety.
The question, therefore, is whether the circumstances of the offence and offender are venal or venial.
The Rule with which we are concerned is a wholesome one in the sense that lawyers should not misuse their role for making extra perquisites by standing surety for their clients or certifying the solvency of such sureties.
That is a bolt on the bar, an exploitative stain on the profession.
At the same time, the punishment is flexible in the sense that where the situation cries for the help of the lawyer in favour of a client who is languishing in jail because his surety is being unreasonably rejected, we may not frown upon a lawyer who helps out the person, not by false pretences, but on the strength of factual certitude and proven inability to substantiate solvency.
In the present case, the circumstances are amelioratary and hardly warrant condign Punishment.
The lawyer is young, the offence is not tainted with turpitude and the surety whose solvency be certified was found to be good.
The most that may be justified is perhaps a public reprimand since censure has a better deterrent value on the errant brethren in the 208 profession in some situations than a suspension for a month from professional practice which may pass unnoticed in the crowd of lawyers and the delinquent himself may be plying his business except for appearance in Court.
In suitable cases, of course, even severity of suspension or disbarment may be justified.
This Court should not interfere ordinarily with a punishment imposed by the Disciplinary Tribunal except where strong circumstances involving principle are present.
In our vast country of illiterate litigants and sophisticated litigation, the legal position must be so explained as to harmonise the interests of the indigents who are marched into Court and the professional probity of the Bar which is an extended instrument of justice.
We hold that public admonition is an appropriate sentence in the present case and proceed to administer it in open court to the appellant ! We hereby reprimand him and direct that he shall not violate the norms of professional conduct and shall uphold the purity and probity of the profession generally, and, in particular, as spelt out in the rules framed by the Bar Council of India.
We condone his deviance this time and warn him that he shall not violate again.
The appeal is, to this extent, allowed and the sentence of reprimand substituted for the sentence of suspension.
P.B.R. Appeal allowed in part.
| Clause (g) of Section 15 of the City of Nagpur Corporation Act, 1948 lays down that "no person shall be eligible for election as a Councillor if he is under the provisions of any law for the time being in force, ineligible to he a member of any local authority.
Under sub section (4) of the Life Insurance Corporation of India (Staff) Regulations, 1960, "No 'employee shall canvass or otherwise interfere or use his influence in connection with or take part in an election of any legislature or local authority".
However proviso (iii) to the said sub section lays down that "the Chairman may permit an employee to offer himself as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the provisions of the regulation so as to attract punishment under.
Regulation 39, ibid.
The appellant (in C.A. 2406/77) and a returned candidate as a councillor from ward No. 34 of Nagpur was an employee of the Life Insurance Corporation.
The had not sought or got the Chairman 's permission to stand for the election, with the result the election petition filed by his nearest rival respondent 1 and appellant in C.A. 356 of 1978 on this sole ground of taboo Was accepted by the Court 's below.
The direction given by the trial court declaring respondent 1 and an elected candidate was however set aside by the High Court and hence C.A. 356 of 1978 against that part of the decision by respondent 1 in C.A. 2406/77.
Allowing C.A. 2406/77 and dismissing C.A. 356/78.
the Court ^ HELD [Per Krishna Iyer J.] 1.
The impact of Regulation 25(4) is not to impose ineligibility on an L.I.C. employee to be a member of a municipal Corporation.
Its effect is not on the candidature but on the employment itself.
The sole and whole object of Regulation 25 read with Regulation 39, is to lay down a rule of conduct for the L.I.C. employees.
Among the many things forbidden are for instance prohibition of acceptance of gifts or speculation in stocks and share.
Obviously neither Regulation 32 can be read as invalidating a gift to an L.I.C. employee under the law of gifts, nor Regulation 33 as nullifying transfer of stocks and shares speculatively purchased by the L.I.C. employee.
Likewise, Regulation 1079 25 while it does mandate that the employee shall not participate in an election ,4, to a local authority cannot be read as nullifying the election or disqualifying the candidate.
The contravention of the Regulation invites disciplinary action which may range from censure to dismissal [1088H, 1089A B, 1091G] 2.
Section 15(g) of the City of Nagpur Corporation Act, 1948 relates to the realm of election law and eligibility to be a member of a local authority.
Ineligibility must flow from specific provision of law designed to deny eligibility or to lay down disqualification.[1089] 3.
If a rule of conduct makes it undesirable, objectionable or punishable for an employee to participate in election to a local authority, it is a distortion, even an exaggeration out of proportion, of that provision to extract out of it a prohibition of a citizen 's franchise to be a member in the shape of a disqualification from becoming a member of a local authority.
The thrust of Regulation 25 is disciplinary and not disqualificatory.
Its intent imposes its limit, language used by a legislature being only a means of communicating its will in the given environment.
This is clear from the fact that the Chairman is of the power under Proviso (iii) to Section 25(4) to permit such participation by an employee depending on the circumstances of each case.
Even the range of punishment is variable.
[1089C E] 4.
There is no ground in public policy to support the plea to magnify the disciplinary prescription into a disenfranching taboo.
To revere the word to reverse the sense is to do injustice to the art of interpretation.
Permission is a word of wide import and may even survive the death of the person who permits.
Equally clearly, where a statute does not necessarily insist on previous permission, it may be granted even later to have retrospective effect, or permission once granted may be retracted.
[1089, H, 1090A] 5.
The strictly literal construction may not often be logical if the context indicates a contrary legislative intent.
Courts are not victims of verbalism but are agents of the functional success of legislation, given flexibility of meaning, if the law will thereby hit the target intended by the law maker.
A policy oriented understanding of a legal provision which does not do violence to the text or the context gains preference as against a narrow reading of the words used.
So viewed, the core purpose of Regulation 25(4) is not to clamp down disqualifications regarding elections but to lay down disciplinary forbiddance on conduct of government servants qua government servants contravention of which would invite punishment.
This is a purpose oriented interpretation.
[1087H, 1088A, 1090E] Dr.
Hutton vs Phillips, 45 Del. 156, 160, 70A. 2d 15, 17 (1949); quoted with approval.
Sarafatulla Sarkar vs Surja Kumar Mondal A.I.R. 1955 Cal.
382 (DB); Uttam Singh vs section Kripal Singh A.I.R. 1976 Punj.& Har. 176, approved.
Narayanaswamy Naidu vs Krishnamurthy and Anr.
I.L.R. ; explained 6.
Another persuassive factor based on a broader constitutional principle supporting the semantic attribution is this : The success of a democracy to 1080 'tourniquet ' excess of authority depends on citizen participation.
An inert citizenry indifferent to the political process is an 'enemy of the Republic 's vitality.
Indeed, absolutism thrives on inaction of the members of the polity.
Therefore activist involvement in various aspects of public affairs by as many citizens as can be persuaded to interest themselves is a sign of the health and strength of our democratic system.
Local self Government and adult franchise give constitutional impetus to the citizens to take part in public administration, of course, this does not mean that where a plain conflict of interests between holding an office and taking part in the political affairs of government exists, a disqualification cannot be imposed in public interest.
The rule is participation, the exception exclusion.
Viewed from that angle if government servant or an employee of the L.I.C. participate in local administration or other election it may well be that he may forfeit his position as government servant or employment, if dual devotion is destructive of efficiency as employee and be subject to disciplinary action a matter which depends on a given milieu and potential public mischief.
[1091C F] 7.
In election law, a defeated candidate cannot claim a seat through an election petition, merely out of speculative possibilities of success.
[1092B] 8.
It is true that there is no common law rule applicable in this area and election statutes have to be strictly construed, but that does not doctrinally drive the Ccurt to surrender to bizarre verbalism when a different construction may inject reasonableness into the provision.
Section 428 of the Corporation Act aims at sense and when a plurality of contestants are in the run other than the one whose selection is set aside predictability of the next highest becomes a misty venture.
The rule in section 428 contains the corrective in such situations and the pregnant expression against whose election no cause or objection is found gives jurisdiction to the Court to deny the declaration by the next highest and to direct a fresh election when the constituency will speak.
[1092C E] Pyale Saheb Gulzar Chhotumiyan Sawazi vs Dashrath Wasudeo and Ors.
1977 Mah.
L.J. p. 246; approved.
Sukhdev Singh vs Bhagatram, [19751 3 S.C R. 619; [1975] I SCC 421, held inapplicable.
Per Tulzapurkar J. (contra) 1.
The words "any law for the time being in force" occurring in Section 15(g) of the City of Nagpur Corporation Act, 1948 in the context refers to the law in force at the relevant time, that is, at the time of nomination or election when the question of disqualification or ineligibility arises for consideration.
On proper construction Regulation 25(4) of the L.I C. (Staff) Regulations 1960 read with section 15(g) of the Corporation Act imposes a disqualification on or creates an ineligibility for the employees of Life Insurance Corporation to stand for election to any local authority.
[1097D E] (a) In the first place the heading of the Regulation clearly shows that it deals with the topic and intends to provide a prohibition against standing for election.
Secondly, cl.
(4) of the said Regulation in plain and express terms provides: (No employee shall . take part in an election to any local authority").
In other words, by using negative language it puts a complete 1081 embargo subject to proviso (iii)] upon every employee from taking part in an election to any local authority.
[1097F H] (b) To say That Regulation 25(4) merely creates a prohibition against standing for election but does not create any ineligibility or disqualification to stand for an election is merely to a quibble at words.
There s no distinction between a legal prohibition against a person standing for election and the imposition of an ineligibility or disqualification upon him so to stand.
[1097H, 1098A] (c) It is true that the purpose of framing Staff Regulations was and is to decline the terms and conditions of service of the employees of the L.I.C and that being the purpose it is but natural that a provision for imposition of penalties four breach of such Regulations would also be made therein.
In fact the validity of such prohibition contained in the concerned Regulation rests upon the postulate that it prescribes a code of conduct for the employees and as such it would be within the Regulation making power conferred on the L.I.C. under section 49 of the L.I.C. Act 1956 but while prescribing a code of Conduct the Regulation simultaneously creates a disqualification or ineligibility for the employee to stand for election to any local authority.
[1098A C] (d) To construe Regulation 25(4) as merely prescribing a code of conduct breach whereof is made punishable under Regulation 39 and not imposing a disqualification or.
ineligibility upon the employees to stand for election to a local authority would amount to rendering a residuary provision like section 15(g) in the Corporation Act otiose.
[1098C D] 3.
The cases falling within the aspects emerging from Regulation ` and proviso (iii) to Regulation 25(4) are completely taken out of the prohibition contained in Regulation 25(4).
Proviso (iii) to Regulation 25(4) is similar to the proviso tc.
section 15 of the Corporation Act under which a disqualification under cls.
(e) (f) (g) or (i) could be removed by an order of the Provincial Government in that behalf and obviously when any one of those disqualifications is removed by an order of the Provincial Government under the proviso the case would clearly be outside section 15.
Tn other words the two aspects (i) that certain employees under Regulation 2 would not be governed by the Staff Regulations at all and would not therefore be hit by the prohibition and (ii) that upon permission being obtained from the Chairman under proviso (iii) the employee would be outside the prohibition have no bearing on the questions of proper construction of Regulation 25 (4).
[1098E F] In the instant case the returned candidate suffered a disqualification or rather was under an ineligibility under Regulation 25(4) read with section 15 (g) of the Corporation Act 1948 which vitiated his election; if he were keen on active participation in the democratic process it was open to him to do so by either resigning his post or obtaining the Chairman 's permission before offering his candidature but his right as a citizen to keep up the Republic 's vitality by active participation in the political process cannot be secured to him by a purpose orientated construction of the relevant Regulation [1011D F] G. Narayanaswamy Naidu vs C. Krishnamurthy and Anr.
I.L.R. ; explained and approved.
13 409 SCI/79 1082 Md Sarafatulla Sarkar vs Surja Kumar Mondal, A.I.R. distinguished.
Uttam singh vs section Kripal Singh and Anr., A.I.R. 1976 P HELD FURTHER (Concurring) of 1978 should be dismissed.
The declaration granted to the appellant by the learned Assistant Judge under section 428(2) of the Corporation Act, 1948 should never have been granted.
It is true that the election petitioner secured the next highest number of votes but that by itself would not entitle him to meet a declaration in his favour that he be deemed to have been duly elected as a Councillor from Ward No. 34.
[1102G H] 5.
Section 428(2) is not that absolute for the relevant part of sub section
(2) provides that if the election of the returned candidate is either.
declared to be null and void or is set aside the District Court "shall direct that the candidate, if any, in whose favour next highest number of valid votes is recorded after the said person or after all the persons who have returned at the said election and against whose election the case or objection is found shall be deemed to have been elected".
The words "against whose election no cause or objection is found" give jurisdiction to the District Court to deny the declaration to the candidate who has secured the next best votes.
[1103A B] 6.
The High Court has rightly taken the view that there was no material on record to show how the voters, who had voted for the returned candidate, would have Cast their votes had they known about the disqualification.
[1103B C] Observation 1.
Judges and lawyers always clamour for legislative simplicity and when legislative simplicity is writ large on the concerned provision and the text of the provision is unambiguous and not susceptible to dual interpretation, it.
would not be permissible for a court, by indulging in nuances semantics and interpretative acrobatics to reach the opposite conclusion than is warranted by its plain text and make it plausible or justify it by spacious references to the object, purpose or scheme of the legislation or in the name of judicial activism.
[1093A B] 2.
Prefaces and exordial exercises, perorations and sermons as also theses almost every judgment irrespective of whether the subject or the context or language that needs simplification, have ordinarily no proper place in judicial pronouncements.
In any case.
day in and day out indulgence in these in almost every judgment irrespective of whether the subject or the context or the occasion demands it or not, serves little purpose, and surely such indulgence becomes indefensible when matters are to be disposed of in terms of settlement arrived at between the parties or for the sake of expounding the law while rejecting the approach to the Court at the threshold on preliminary grounds such as non maintainability laches and the like.
Judicial activism in many cases is the result of legislative inactivity and the role of a Judge as a law maker has been applauded but it has been criticised also lauded when it is played within the common law tradition but criticised when it is carried to extremes.
[1101F H, 1102A B] 1083 Pathak, J, (Concurring) 1.
Section 15 of the Nagpur Corporation Act declares a person ineligible for election as a Councillor on any one of the several grounds.
He may be ineligible because he is not a citizen of India, that is the say, he lacks in point of legal status.
He may also be intelligible in point of lack of capacity defined by reference to disqualifying circumstances, for example, he may nave beer adjudged by a competent court to be of unsound mind.
The disqualification 1 may be found, by nature of clause (g) under the provisions of any subsisting law.
But the law must provide that he is ineligible to be a member of any local authority.
The law must deal with ineligibility for membership, and in the context of section 15, that must be ineligibility for election.
lt must be a law concerned with elections.
Clause (g) is a residual clause.
not uncommonly found wherever provision of an election law sets forth specified category of disqualified or ineligible person and thereafter includes a residual clause, leaving the definition of remaining categories of the other laws.
These other laws must also be election laws.
An example is the Representation of the people Act, 1951 which is relevant to Article 102(1)(e) and Article 191 (I)(e) of the Constitution.
Since section 15 of the Nagpur Corporation Act is a provision of the election law, clause (g) must be so construed that the law providing for ineligibility contemplated therein must also be of the same nature, that is to say, election law.
[1104G H, 1105A C] 2.
Regulation 25(4) of the (Staff) Regulations is not a law, dealing with elections.
Chapter III of the (Staff) Regulations, in which Regulation 25 is found, deals with 'conduct, discipline and appeals ' in regard to employees of the Life Insurance Corporation of India.
A conspectus of the provision contained in the Chapter, from section 20 to SO shows that it deals with nothing else.
This is a body of provisions defining and controlling the conduct of employees in order to ensure efficiency and discipline in the Corporation, and providing for penalties (Section 39) against erring employees.
Regulation 25 prohibits participation in politics and standing for elections.
Regulation 25(4) forbids an employee not only from taking part in an election to any legislature or local authority, but also from canvassing or otherwise interfering or using his influence, in connection with such an election.
If he does, he will be guilty of a breach of discipline, punishable under Regulation 39.
Regulation 25(4) is a norm of discipline.
In substance it is nothing else.
In substance, it is not a provision of.
election law.
It cannot be construed as defining a ground of electoral ineligibility.
All that it says to the employee is: ' while you may be eligible for election to a legislature or local authority by virtue of your local status or capacity.
you shall not exercise that right if you wish to conform to the discipline of your service." [1105D G] 3.
The right to stand for election flows from the election law Regulation 25(4) does not take away or abrogate the right; it merely seeks to restrain the employee from exercising it in the interest of service discipline.
If in fact the employee exercises the right, he may be punished under Regulation 39 with any of the penalties visited on an employee a penalty which takes its colour from the relevance of 'employment, and has nothing to do with the election law.
No penalty under Chapter III of the (Staff) Regulations can provide for invalidating the election of an employee to a legislature or a local authority.
[1105G H, 1106A] 1084 When the restraint on standing for election imposed by Regulation 25(4) has to be removed, it is by the Chairman of the Life Insurance Corporation of India under the third proviso.
When he does so, it is as a superior in the hierarchy of service concerned with service discipline.
He does not do so as an authority concerned with elections.
Therefore Regulation 25(4) of the staff Regulations is not a law within the contemplation of Section 15(g) of the Nagpur Corporation Act.
Samarth must therefore, succeed in his appeal.
That being so, Marotrao must fail in his.
Samarth having been duly elected to the office of Councillor Marotrao cannot claim the same office for himself.
[1106A C,D] G. Narayanaswamy Naidu vs C. Krishnamurthy & Anr.
ILR [1958] Mad.
S 13, disapproved.
Md. Sarafatulla sarkar vs Suraj Kumar Mandal, A.I.R. Uttam Singh vs
section Kirpal Singh, AIR 1976 Punj.
& Har. 176; approved.
|
iminal Appeal.
No. 44 (N) of 1970.
Appeal by special leave from the judgment and order dated December 2, 1969 of the Punjab & Haryana High Court in Criminal Revision No. 612 of 1968.
section K. Dhingra, for the appellant.
Harbans Singh and R. N. Sachthey, for the respondent.
The Judgment of the Court was delivered by MATHEW, J.
The appellant was charged by the Chief Judicial Magistrate, Sangrur, with an offence under section 9(a) of the Opium Act.
He was found guilty of the offence and sentenced to undergo rigorous imprisonment for a period of one year and to pay a fine of Rs. 2,000/and in default of payment of fine, to undergo rigorous imprisonment for a further period of six months.
The appellant appealed against the decision to the Sessions Judge, Sangrur.
He dismissed the appeal.
The appellant filed a criminal revision before the High Court against the order of the Sessions Judge.
The revision was also dismissed.
This appeal, by special leave, is from the judgment of the High Court.
The case against the appellant was as follows.
The appellant presented Railway Receipt No. 641154 dated September 22, 1967, for consignment of a parcel of apples purporting to be from one Uchara Das of Solan to one Sham Lal of Dhuri and endorsed to him by the consignee, to the parcel clerk at the Railway Station, Dhuri, and got delivery of the consignment.
Head Constable Shiv Ram Singh got 217 secret information at the Railway Station Dhuri that there was opium in the consignment.
He organised a raid with the help of Pritam Singh and Mohinder Singh and stood in front of the parcel office under the bridge.
While the accused was carrying the parcel, the Head Constable intervened and questioned him.
The parcel was thereafter opened and it contained 4,350 gms. of opium along the apples.
The opium was seized and its samples were put in separate containers and sealed with the seal of the Head Constable.
When the report was received that the sample was opium, the appellant was challaned.
The prosecution examined Pritam Singh (PW 1), Bal Mukand, Parcel Clerk (PW 2), Mohinder Singh, Luggage Porter (PW 3), Ramji Dass, Octroi Moharrir (PW 4) and Shiv Ram Singh,.
Head Constable (PW 5).
PW 1, PW 3 and PW 4 did not support the prosecution c se.
But on the evidence of the parcel clerk (PW 2) and the Head Constable (PW 5), it was found by the, Judicial Magistrate that the appellant was in actual possession of opium and has committed an offence under section 9 of the Act.
This finding was confirmed in.
appeal and also in revision.
The question is whether the conviction of the appellant on basis of this finding for an offence under section 9(a) was justified.
Sections 9 and 10 of the Opium Act provide : "9.
Any person who, in contravention of this Act, or of rules made and notified under section 5 or section 8, (a) possesses opium, or (b) transports opium, or (c) imports or exports Opium, or (d) sells opium, or (e) omits to warehouse opium, or removes or "does any act in respect of warehouse opium, and any person who otherwise contravenes any such rule, shall, oil conviction before a magistrate, be Punishable for each such offence with imprisonment which may extend to three bears, with or without fine; and, where a fine is im posed, the convicting magistrate shall direct the offender to be imprisoned in default of payment of the fine for a term Which may extend to six months, and such imprisonment shall.
be in excess of any other imprisonment to which he may have been sentenced.
In prosecutions under section 9, it shall be presumed, until the contrary is proved, that all opium for which the accused person is unable to account satisfactorily is opium in respect of which be has committed an offence under this Act.
" It was argued that unless otherwise provided, it must be presumed that the legislature will not make an act an offence unless it is accompanied by mens rea.
In Brend vs Wood(1) Lord Goddard, C.J. said "It is of the utmost importance for the protection of the liberty of the subject that a court should always bear in mind, that, unless a statute, either clearly or by neces (1) 218 sary implication, rules out mens rea as a constituent part of a crime, the court should not find a man guilty of an offence against the criminal law unless he has a guilty mind." In Sherras vs De Rutzen(1) it was held that section 16(2) of the Licensing Act, 1872, which prohibits the supplying by a licensed person of liquor to a constable on duty, did not apply where the licensed person bona fide believed that the constable was off duty.
Wright, J. said at p. 921 : "There is a presumption that mens rea, an evil intention, or a knowledge of the wrongfulness of the act, is an essential ingredient in every offence; but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject matter with which it deals, and both must be considered : Nichols vs Hall See also the decision Sweet vs Paraley(2) Normally, it is true that the plain ordinary grammatical meaning of the words of an enactment affords the best guide.
But in cases of ,this kind, the question is not what the words mean but whether there are sufficient grounds for inferring that Parliament intended to exclude the general rule that mens rea is an essential element in every offence.
And, the authorities show that it is generally necessary to co behind the words of the enactment and take other factors into consideration.
So, in the context it is permissible to look into the object of the legislature and find out whether, as a matter of fact, the legislature intended anything to be proved except the possession of the article as constituting the element of the offence.
Even if it be assumed that the offence is absolute, the word 'possess ' in section 9 connotes some sort of knowledge about the thing possessed.
So we have to determine what is meant by the word 'possess ' in the section.
The question is whether the possessor of a parcel is necessarily in possession of everything found in it.
The, word 'possess ' is not crystal clear.
There is no clear rule as to the mental element required.
In Reg.
vs Ashwell(3) it was held that a person who received a sovereign thinking it to be a shilling cannot be said to possess 'he sovereign until the mistake was discovered.
It is necessary to show that the accused had the article which turned out to be opium.
In other words, the prosecution must prove that the accused was knowingly in control of something in circumstances which showed that he was assenting to being in control of it.
It is not necessary to show in fact that he had actual knowledge of that which he had (see the observations of Lord Morris in Reg.
vs Warner ( 4 ).
Lord Justice Parker said in Lockyer vs Gib (5): "In my judgment it is quite clear that a person cannot be said to be in possession of some article which he or she (1)IQ.
B. 918.
(2) (3) (4) , 289.
(5) , 248.
219 does not realise, is, for example, in her handbag, in her room, or in some other place over which she has control.
That I should have thought is elementary; if something were slipped into your basket and you had not the vaguest notion it was there at all, you could not possibly be said to be in possession of it." In Reg.
vs Warner(1), the House of Lords was concerned with the question whether the appellant there was in unauthorised possession of a scheduled drug and it was held that it is not necessary to prove mens rea apart from the knowledge involved in the possession of the article.
Lord Reid dissented.
The majority decision would show that in a case of this nature, it is not necessary for the prosecution to prove that the accused had consciousness of the quality or the nature of the thing possessed and that it would be sufficient if it is proved that a person was knowingly in possession of the article.
Lord Morris of Borth y Gest said : "Must the prosecution prove that an accused had a guilty mind ? It is a declared purpose of the Act to prevent the misuse of drugs.
If actual possession of particular substances which are regarded as potentially damaging is not controlled there will be danger of the misuse if Them by those who possess them.
They might be harmfully used; they might be sold in most undesirable ways.
Parliament set out therefore to 'penalise ' possession.
That was a strong thing to do.
Parliament proceeded to define and limit the classes and descriptions of people who alone could possess.
All the indications are that save in the case of such persons Parliament decided to forbid possession absolutely".
We think that the only question for consideration here is whether the appellant was in possession of opium.
It was held in a number of rulings of the various High Courts that if possession of an article is made an offence, then there must be proof that the accused was knowingly in possession of the article.
gee the decisions in Emperor vs Santa Singh(2), Sahendra Singh vs Emperor(3), Abdul Ali vs The State(4), Pritam Singh and Others vs The State(5) and Sub Divisional Officer and Collector, Shivasagar vs Shri Gopal Chandra Khaund and Another(6).
It is true that prosecution has not adduced any evidence to show that the appellant was knowingly in possession of 'opium.
The appellant took the endorsement of the Railway Receipt from the consignee, and presented it before the parcel clerk and obtained the parcel.
(1) (2) A. I. R. 1944 Lahore 339.
(3) A. I. R. 1948 Patna 222.(4) A. I. R.1950 Assam 152.
(5) (6) A. I. R. 22 0 There is, strictly speaking, no evidence that the appellant was aware that the parcel contained any contraband substance, much less opium.
But it is said on behalf of the prosecution that in most cases of unauthorised possession of opium the prosecution will never ' be able to prove that the accused was knowingly in possession of the article and that the burden to prove that he was not in conscious possession is upon the accused by virtue of section 10 of the Act.
That section seems to proceed on the assumption, if it is proved that the accused had something to do with opium, then the burden of proof that he has not committed an offence will be upon the accused.
In other words, when once it is proved in a ' prosecution under section 9 of the Act that the accused was in physical custody of opium, it is for the accused to prove satisfactorily that he has not committed an offence by showing that he was not knowingly in possession of opium.
It would, therefore, appear that the prosecution need only show that the accused was directly concerned in dealing with opium.
If the prosecution shows that the accused had physical custody of opium, then, unless the accused proves by preponderance of probability that he was not in conscious possession of the article the presumption under section 10 would arise.
We do not think that the language of section 10 would warrant the proposition that for the presumption mentioned in the section to arise it is necessary for the prosecution to establish conscious possession.
In our opinion section 10 would become otiose if it were held that prosecution must prove conscious possession before it can resort to the presumption envisaged in the section.
As we said Section 10 proceeds on the assumption that a person who is in any way concerned with opium or has dealt with it in any manner, must be presumed to have committed an offence under section 9 of the Act, unless the person can satisfactorily prove by Preponderance of probability either that he was not knowingly in possession or other circumstances which will exonerate him.
The burden to account Will arise only when the accused is in some manner found to be concerned with opium or has otherwise dealt with it.
In State vs Sham Singh and Others(1), Gurdev Singh, J. speaking about section 10 observed "Section 10 of the Opium Act, in my opinion, implies that a person who is in any way concerned with opium that forms the subject matte r of prosecution or has otherwise dealt with it in any manner go as to render him accountable for it will be presumed to have committed an offence under section 9 of the Opium Act unless he can 'account satisfactorily" for it." (1) I. L. R. (1971) 1 Punjab and Haryana 130.
221 in Sheo Raj Singh vs Emperor(1), it was held "Section 10 expressly throws upon the accused the burden to account for opium in respect of which he is alleged to have committed an offence." Practically the same view was taken in Syed Mehaboob All vs State(2).
In the last analysis, therefore, it is only necessary for the Prosecution to establish that the accused has some direct relationship with the article or has otherwise dealt with it.
If the prosecution proves detention of the article or physical custody of it, then the burden of proving that the accused was not knowingly in possession of the article is upon him.
The practical difficulty of the prosecution to prove something within the exclusive knowledge of the accused must have made, the legislature think that if the onus is placed on the prosecution, the object of the Act would be frustrated.
It does not follow from this that the word 'possess ' in section 9 does not connote conscious possession.
Knowledge is an essential ingredient of the offence as the word 'possess ' connotes, in the context of section 9, possession with knowledge.
The legislature could not have intended to make mere physical custody without knowledge an offence.
A conviction under section 9 (a) would involve some stigma and it is only pro per then to presume that the legislature intended that possession must be conscious possession.
But it is a different thing to say that the prosecution should prove that the accused was knowingly in possession.
It seems to us that by virtue of section 1 0, the onus of proof is placed on the accused when the prosecution has shown by evidence that the accused has dealt with the article or has physical custody of the same, or is directly concerned with it, to prove by preponderance of probability that he did not knowingly possess the article.
In his statement under section 342, the appellant totally denied having anything to do with the parcel.
He had no case that to his knowledge the parcel contained anything other than apples.
He never put forward the case that he bone fide believed that the parcel contained only apples.
He was in physical custody of opium.
He had no plea that he did not know about it.
We are, therefore, inclined to confirm the conviction and we do so.
As regards the question of sentence, in view of the fact that the appellant has already undergone a part of the sentence of rigorous imprisonment and was on bail from March 3, 1970, we do not think it proper to send him to jail again.
In the circumstances we think that the period of imprisonment already undergone by him together with a fine of Rs. 2,500/ would be adequate sentence.
If the fine is not paid, the appellant will be liable to imprisonment for a period of six months.
The appeal is allowed only to the extent indicated but dismissed in all other respects.
G.C. (1) A. I. R.(31) 1944 Oudh 297.
| The appellant obtained possession of a parcel purporting to contain apples after presenting before the railway authorities a railway receipt endorsed in his favour by the consignee.
The parcel on being opened was found to contain a considerable quantity of opium besides apples.
At his trial for an offence under section 9(a) of the Opium Act 1878 he however denied that he had anything to do with the parcel.
There was no evidence that the appellant was aware that the parcel contained opium.
He was convicted by the trial court and the conviction was upheld on appeal by the Sessions Judge and on revision by the High Court.
In appeal by special leave, this Court had to consider the effect of section 10 of the Act which provide that in a prosecution under s 9 "it shall be presumed until the contrary is proved, that all the opium for which the accused is unable to account satisfactorily is opium in respect of which he has committed an offence under this Act.
" The appellant contended that unless otherwise provided, it must be presumed that the legislature will not make an act an offence unless it is accompanied by mens rea.
HELD : (1) Normally, it is true that the plain ordinary grammatical meaning of the words of an enactment affords the best guide.
But in cases like the present, the question is not what the words mean but whether these are sufficient grounds for inferring that Parliament intended to exclude the general rule that mens rea is an essential element in every offence.
The authorities show that it is generally necessary to go behind the words of the enactment and take other factors into consideration.
in the context it is permissible to look into the object of the legislature and find out whether.
as a matter of fact.
the legislature intended anything to be proved except the possession of the article as constituting the element of the offence.
[218D] Brend vs Wood, , Sherras vs De Rutzen, I Q.B. 918 and Sweet vs Parsley, ; , referred to.
Even if it be assumed that the offence is absolute, the word possess ' in section 9 connotes some sort of knowledge about the thing possessed.
It is necessary to show that the accused had the article which turned out to be opium.
It is not necessary to show in fact that he had actual knowledge of that which he had.
[218E F] Reg. V. Ashwell, and Reg.
vs Warner, , 289, relied on.
(ii) Section 10 proceeds on the assumption that a person who is in any way concerned with opium or has dealt with it in any manner, must be presumed to have committed an offence under section 9 of the Act, unless the person can satisfactorily prove by preponderance of probability either that he was not knowingly in possession or other circumstances which exonerate him.
The burden to account will arise only when the accused is in some manner found to be concerned with opium or has otherwise dealt with it, [220D] 373SupCI/74 216 In the last analysis it is only necessary for the prosecution to establish that the accused has some direct relationship with the article or has otherwise dealt with it.
If the prosecution proves detention of the article or physical custody of it.
then the burden of proving that the accused was not knowingly in possession of the article is upon him.
The practical difficulty of the prosecution to prove something within the exclusive knowledge of the accused must have made the legislature think that if the onus is placed on ',he prosecution, the object of the Act would be frustrated.
[221C] Lockyer vs Gibb, , 246, Emperor vs Santa Singh, A.I.R. 1944 Lahore 339, Sahetzdra Singh vs Emperor, A.I.R. 1948 Patna 222, Abdul Ali vs The State, A.I.R. 1950 Assam 152, Pritam Singh and Others vs The State, 1966 P.L.R. 200, Sub Divisional Officer and Collecor Shivasagar vs Shri Gopal Chandra Khaund and Another. , State vs Slzam Singh and Others, I.L.R. [1971] 1 Punjab and Haryana, 130, Sheo Rai Singh vs Emperor, A.I.R. (31) 1944 Oudh 297 and Syed Mehaboob Ali vs State [1967] Cr. L.J. 1727, referred to.
(iii) In his statement under section 342 the appellant totally denied having anything to do with the parcel.
He never put forward the case that he bona fide believed that the parcel contained only apples.
He was in physical custody of opium.
He had no Plea that he did not know about it.
Accordingly the conviction must be confirmed.
[sentence altered [221F]
|
ivil Appeal No. 414 of 1965.
Appeal from the judgment and order dated February 21, 1962, of the Punjab High Court in I.T. Reference No. 9 of 1959.
N.C. Chatterjee and R.V. Pillai, for the appellant.
C.K. Daphtary, Attorney General, R. Ganapathy lyer, R.N. Sachthey for R.H. Dhebar, for the respondent.
The Judgment of SUBBA RAO, MUDHOLKAR and RAMASWAMI JJ.
was .delivered by SUBBA RAO, J.
The dissenting Opinion of DAYAL and BACHAWAT JJ.
was delivered by BACHAWAT J. Subba Rao, J.
This appeal by certificate raises the main question whether section 2(6A)(d) of the Indian Income tax Act, 1922, hereinafter called the Act, is ultra vires the Central Legislature.
The assessee, a public limited company, was incorporated on May 23, 1945, under the Indian Companies Act, 1913, with a share capital of Rs. 50 lakhs.
On December 15, 1947, at the instance of the appellant the High Court sanctioned the reduction of the capital of the company from Rs. 50 lakhs to Rs. 25 lakhs.
On December 16, 1953, the High Court sanctioned a further reduction of the share capital from Rs. 25 lakhs to Rs. 15 lakhs.
On November 4, 1954, the Registrar of Companies granted the requisite certificate under section 61(4) of the Indian Companies Act.
On November 5, 1954, the appellant issued notices to the shareholders inviting applications for the refund of share capital so reduced.
On the receipt of the applications, appropriate debit entries were made in the accounts of the shareholders and the amounts were actually paid to them during the previous year, i.e., December 1, 1954, to November 30, 1955.
Under section 2(6A)(d) of the Act, "dividend" includes any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits, whether such accumulated profits have been capitalised or not.
In assessing the income of the appellant company for the assessment year 1956 57, the Income tax Officer held that the said dividends were distributed during the accounting year and on that finding he calculated the rebate on super tax in terms of el.
(i)(b) of the second proviso tO paragraph D of Part I1 of the first schedule to the Finance Act, 1956.
If the dividends were distributed during the accounting year.
i.e., December I, 1953, to November 30, 1954, the appellant would be entitled to a higher rate of rebate on super tax under el.
(ii) of the first proviso to paragraph D of Part II of the first schedule to the Finance Act, 1956.
The Income tax Officer further held that the 4 assessee 's accumulated profits at the time of the reduction of the Capital from Rs. 25 lakhs to Rs. 15 lakhs were Rs. 8,42,337.
On appeal the Appellate Assistant Commissioner accepted the said figure arrived at the Income tax Officer.
On further appeal, the Income tax Appellate Tribunal, for the reasons recorded by it in its order, reduced the figure under the said head by a sum of Rs. 3.61,40.5.
It was contended on behalf of the assessee that in as much as the certificate from the Registrar for the reduction of the capital from Rs. 25 lakhs to Rs. 15 lakhs was obtained on November 4, 1954, the distribution of the dividends should be deemed to have taken place during the year 1953 54 and, therefore, the said dividends were not exigible to tax for the assessment year.
The Incometax Officer, the Appellate Assistant Commissioner and the Tribunal concurrently rejected that plea and held that, as the actual payment to the shareholders of the refund of the capital and the debit in the accounts of the shareholders were effected in the accounting year, the said dividends must be held to have been distributed in the accounting year.
There is another sum of Rs. 11,687 3 0 received by the appellant as security deposit on account of empty bottles.
A question was raised whether the said amount could be considered as capital gains and, therefore, should be excluded from the accumulated profits.
The Appellate Tribunal held in favour of the assessee.
The assessee and the Commissioner of Income tax filed two applications before the Tribunal for referring questions of law arising out of the Tribunal 's order to the High Court.
The Tribunal referred the following questions of law to the High Court for its opinion.
(1) Whether the provisions of section 2(6A)(d) of the Indian Income tax Act are ultra vires of the Central Legislature.
(2) Whether the accumulated profits amounting to Rs. 4,69,244 13 0 could be deemed to have been distributed on the reduction of the capital from Rs. 25 lakhs to Rs. 15 lakhs within the meaning of Section 2(6A)(d) of the indian Income tax Act.
(3) Whether the amount of Rs. 11.687 3 0 received by the assessee us security deposit on account of empty bottles could be considered as Capital Gains.
(4) Whether the accumulated profits could be considered as dividend deemed to have been distributed in the assessment year 1955 56 in view of the certificate granted by the Registrar of Companies under Section 61(4) of the Indian Companies Act, 1913, or could be considered us dividend deemed to have been distributed in the assessment year 1956 57 because the debits of refunds were actually made in the accounts of the shareholders during the accounting period of the assessment year 1956 57.
5 The High Court answered all the questions against the assessee.
Hence the appeal.
Mr. N.C. Chatterjee, learned ,counsel for the assessee, did not contest the correctness of the answer given by the High Court in 'regard to the third question and, therefore, nothing further ' need be said about it.
The first question is whether section 2(6A)(d) of the Act is ultra vires the Central Legislature.
Sub.section (6A) was inserted in section 2 of the Act by section 2 of the Indian Income tax (Amendment) Act,.
1939 (Act VII of 1939).
Section 2(6A)(d) of the Act reads: " 'Dividend ' includes any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits which arose after the end of the previous year ending next before the 1st day of April, 1933, whether such accumulated profits have been capitalised or not." The said Act VII of 1939 was passed by the Central Legislature in exercise of its powers conferred under section 100 of the Government of India Act, 1935, read with entry 54 of List I of the.
Seventh Schedule thereof.
Entry 54 reads: "Tax on income other than agricultural income." Mr. Chatterjee contends that while the said entry 54 enables the appropriate Legislature to impose a tax on "income", the Legislature by enlarging the definition of dividend so as to include the amount received by a shareholder towards the share capital contributed by him, which cannot possibly be income, seeks to tax a capital receipt, and, therefore, the said clause is ultra vires the Central Legislature.
Mr. R. Ganapathy lyer, learned counsel for the Revenue, contends that a legislative entry must receive the widest connotation and should not be interpreted in any narrow or restricted sense, and if so construed the said entry enables the Legislature to make a law to prevent evasion of tax on income by devious methods and that the Legislature in the instant case seeks to prevent the growing evil of tax evasion by companies distributing profits under the guise of reduction of capital.
It is well settled rule of construction that entries in the legislative lists cannot be read in a narrow or restricted sense: they should be construed most liberally and in their widest amplitude.
In the words of Gwyer, C.J., in The United Provinces vs Atiqa Begum(1) "each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended by it.
" This Court in a number of decisions held that the expression "income" in entry 54 of List I of the Seventh Schedule to the Government of India Act, 1935, and the (1) 6 corresponding entry 82 of List 1 of the Seventh Schedule to the Constitution of India, shall be widely and liberally construed so as to enable a Legislature to provide by law for the prevention of evasion of income tax.
In Sardar Baldev Singh vs Commissioner Income tax, Delhi and Ajmer (1) this Court maintained the constitutional validity of section 23A(1) of the Income tax Act, which empowered the Income tax Officer to impose super tax in a case where a private limited company distributed less than sixty per cent.
of the total income of the company as dividends on the ground that the object of the section was to prevent avoidance of super tax by shareholders of a company in which the public were not substantially interested.
In Balaji vs Income tax Officer, Special Investigation Circle (2) this Court ruled that section 16(3)(a)(i) and (ii) of the Income tax Act, which enabled the Income tax Officer in computing the total income of a person to include the share of the income of his wife and minor sons therein, was constitutionally valid for the reason that it was intended to prevent evasion of tax by persons putting the properties in the names of their wives or minor children, as the case may be.
This Court again in Navnitlal C. Javeri vs
K.K. Sen, Appellate Assistant Commissioner Income tax, "D" Range, Bombay (3) sustained the validity of section 2(6A)(e) of the Indian Income tax Act, 1922, which included the definition of "dividend", inter alia, payment made by the company by way of advance or loan to a shareholder to the extent to which the company possessed accumulated profits on the ground that it was a measure to prevent private controlled companies adopting the device of making advances or giving loans to their shareholders with the object of evading payment of tax.
The question in the instant case, therefore, is whether the constitutional validity of section 2(6A)(d) of the Act can be supported on the ground that it was enacted to prevent evasion of income tax.
While an entry delineating a legislative field must be widely and liberally construed, there must be a reasonable nexus between the item taxed and the field so delineated.
The said clause deals with the distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits.
Accumulated profits of a company may be utilised in the following 3 ways: (1) for increasing the capital stocks; (2) for distributing the same among the shareholders by way of dividends; and (3) for reducing the capital.
Ordinarily a company reduces the capital when there is loss or depreciation of assets; in that event there is no question of distribution of profits to the shareholders but the shares are only devaluated.
But a company may, on the pretext of reducing its capital, utilise its accumulated profits to pay back to the shareholders the whole or part of the paid up amounts on the shares.
A shareholder though in form gets back the whole (1) ; (2) [1962]2 S.C.R. 983.
(3)[1965] 1 S.C.R. 909.
7 or a part of the capital contributed by him, in effect he gets a share of the accumulated profits, which, if a straightforward course was followed, he should have received as dividend.
This is a division of profits under the guise of division of capital; a distribution of profits under the colour of reduction of capital.
If this was permitted, there would be evasion of super tax, the extent of the evasion depending upon the prevalence of the evil.
The Legislature, presumably in the interest of the exchequer, enlarged the definition of "dividend" to catch the said payments within the net of taxation.
By doing so, it is really taxing the profits in the hands of the shareholders, though they are receiving the said profits under the cloak of capital.
Learned counsel for the appellant contends that under the Companies Act a company can lawful1y reduce the share capital with the sanction of the Court, that there is no prohibition thereunder against such a reduction being made by way of distribution of accumulated profits to the shareholders, that the amounts so paid to them would be in law capital receipts and that, therefore, there could not be in law or in fact any evasion of tax on income.
Reliance is placed upon sections 100 to 103 of the Companies Act.
This argument mixes up two aspects the legal and fiscal.
Under Company Law the question of reducing capital is a domestic one for the decision of the majority of shareholders.
The Court comes into the picture only to see that the reduction is fair and equitable and that the interests of the minority and the creditors do not suffer.
It may not also be concerned with the motive of the general body in resolving to reduce the capital; but the Income tax law is concerned with tax evasion.
Tax can be evaded by breaking the law, or avoided in terms of the law.
When there is a factual avoidance of tax in terms of law, the Legislature steps in to amend the Income tax law so that it can catch such an income within the net of taxation.
There is, therefore, no inconsistency between a receipt being a capital one under the Company law, and by fiction being treated as taxable income under the Income tax Act.
Therefore, as section 2(6A)(d) of the Act embodies a law to prevent evasion of tax, it falls within the ken of entry 54 of List I of Schedule Seven to Government of India Act, 1935.
The next question is whether the said dividends were distributed in the year 1953 54, as the appellant contends, or in the accounting year 1954 55, as the respondent argues.
The relevant sections of the Act in this context are section 2(6A)(c1) and section 16(2).
Section 2(6A)(d) has been already extracted.
The relevant part of l 6(2) reads: "For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or di i b u t e d . . . . . . . . .
8 "Dividend", with which we are now concerned, is not that which we ordinarily understand by that expression, but dividend by definition.
Under section 2(6A)(d) of the Act it is one of the ingredients of the definition that it shall have been distributed by a company on reduction of the capital to the extent to which the company possesses accumulated profits.
Under section 16(2) of the Act such a dividend shall be deemed to be an income of the previous year in which it is paid, credited or distributed.
Unless such a distribution as is mentioned in cl.
(d) of section 2(6A) of the Act had taken place, it would not be a dividend.
If it was not so distributed, section 16(2) of the Act would not be attracted.
To put it in other words, if the accumulated profits were distributed, it would satisfy not only the definition of "dividend" in cl.
(d) but also would fix the year in which it would be deemed to be income.
What then is the meaning of the expression "distribution"? The dictionary meaning of the expression "distribution" is "to give each a share, to give to several persons".
The expression "distribution" connotes something actual and not notional.
It can be physical; it can also be constructive.
One may distribute amounts between different shareholders either by crediting the amount due to each one of them in their respective accounts or by actually paying to each one of them the amount due to him.
This Court had to construe the scope of the word "paid" in section 16(2) of the Act in J. Dalmia vs Commissioner of I.T. Delhi(1).
Shah, J., speaking for the Court observed: "The expression "paid" in section 16(2), it is true, does not contemplate actual receipt of the dividend by the member.
In general, dividend may be said to be paid within the meaning of section 16(2) when the company discharges its liability and makes the amount of dividend unconditionally available to the member entitled thereto." This Court again reaffirmed the said principle in Mrs. P.R. Saraiya vs Commissioner of Income tax, Bombay City 1, Bombay(2) and held that where dividend was not credited to any separate account of the assessee so that he could, if he wished, draw it, it was not "credited or paid" within the meaning of section 16(2) of the Act.
The same meaning must be given to the word "distribution".
The only difference between the expression "paid" and the expression "distribution" is that the latter necessarily involves the idea of division between several persons which is the same as payment to several persons.
At this stage the anomaly that is alleged to flow from our view may conveniently be noticed.
It is said that there will bedifferent points of time for ascertaining the extent of the accumu lated profits.
With the result section 2(6A)(d) of the .Act becomes un workable in practice or at any rate leads to unnecessary complications.
We do not see any justification for this comment.
9 Distribution is a culmination of a process.
Firstly, there will bea resolution by the General Body of a company for reduction of capital by distribution of the accumulated profits amongst the shareholders; secondly, the company will file an application in the Court for an order confirming the reduction of capital; thirdly, after it is confirmed, it will be registered by the Registrar of Joint Stock Companies; fourthly, after the registration the company issues notices to the shareholders inviting applications for refund of the share capital; and fifthly, on receiving the applications the company will distribute the said profits either by crediting the proportionate share capital to each of the shareholders in their respective, accounts or by paying the said amounts in cash.
Out of the said 5 steps, the first 4 are only necessary preliminary steps which entitle the company to distribute the accumulated profits.
Credits or payments are related to the said declaration; that is to say, distribution is from and out of the accumulated profits resolved to be distributed by the company.
In this view, the accumulated profits to be distributed are fixed by the resolution and the figure does not change with the date of payment or credit.
Indeed, a similar process is to be followed in the case of declaration of ordinary dividends; firstly, there will be a resolution by the General Body of the company declaring the dividends; secondly, thereafter the amounts payable to each of the shareholders are distributed by appropriate credits or payments.
Dividends may be paid or credited to different shareholders during.
different accounting years; and the shareholders may be assessed in respect of the said payments in different years.
Even so, the payments are referable only to the declaration of the dividends out of the profits of a particular year.
This Court, as we have noticed earlier, in the decisions cited supra held that the year of credit or payment to a shareholder was crucial for the purpose of assessment and not the date of declaration.
Let us see whether this view introduces any complication in the matter of reduction of rebate on super tax payable by the company.
The appellant Company set up a claim for a rebate on super tax under el.
(ii) of the first proviso to paragraph D of Part II of the first schedule to the Finance Act, 1956.
The Company based its claim on the contention that the distribution of dividends on reduction of capital took place during the year ending November 30, 1954, and not during the year ending November 30, 1955, and, therefore, el.
(i)(b) of the second proviso to paragraph D of Part II of the first schedule to the Finance Act, 1956, read with Explanation (ii) to paragraph D, which provides for reduction of rebate allowable under cl.
(ii) of the first proviso by an amount computed at certain slab rates on the amount of dividends distributed to the shareholders during the previous year.
could not be invoked.
To put it in other words, the assessee claimed that as the dividents were not distributed in the accounting year, there could not be any reduction of the rebates under 10 cl.
(i)(b) of the said proviso.
If, as we have held, the distribution was made during the year ending November 30, 1955, i.e., the accounting year when the amounts were paid, the Revenue would be entitled to reduce the rebate by the amount computed at the prescribed rates on the amount of dividends.
Some complication may arise only 'if we accept the argument that the date of payment fixes the date for ascertaining the quantum of accumulated profits.
But we have rejected that contention.
In this view, the claim of reduction of rebate on super tax provided by the first schedule to the Finance Act, 1956, can be worked out without any confusion or complication.
We, therefore, hold that the dividends must be deemed to have been paid or distributed in the year when it was actually, whether physically or constructively, paid to the different shareholders, that is to say when the amount was credited to the separate accounts of the shareholders or paid to them.
What are the facts in the present case? The High Court, on August 6, 1954, sanctioned the reduction of the capital from Rs. 25 lakhs to Rs. 15 lakhs.
On November 4, 1954, the Registrar of Companies issued the certificate under section 61(4) of the Companies Act.
On November 5, 1954, the Company issued notices to the shareholders inviting applications for refunds.
In the notice sent to the shareholders they were informed that the share transfer register of the Company would remain dosed from November 16, to November 30, 1954 (both days inclusive) and refund would be made to those shareholders whose names stood on November 15, 1954, in the books of the Company.
After the applications were received, the amounts payable to the shareholders were debited in the accounts and refunds were actually granted during the accounting year, i.e., between December 1, 1954, and November 30, 1955.
It is clear from the said facts that the amounts were distributed only during the accounting year, when the amounts were both debited and paid.
We, therefore, agree with the High Court that the dividends were distributed to the shareholders during the accounting year, i.e., 1954 55.
In the result, the appeal fails and is dismissed with costs.
Bachawat J;.
For the reasons given by brother Subba Rao J, we agree that section 2(6A)(d) of the Indian Income tax Act, 1922 is not ultra vires the Central Legislature, but we are unable to agree with his conclusion with regard to the fourth question of law referred for the opinion of the High Court.
The fourth question arose because of the claim of the appellant company to a rebate of super tax under cl.
(ii) of the first proviso to paragraph D of part II of the first schedule to the Finance Act, 1956 and its contention that the distribution of dividends on reduction of capital contemplated by section 2(6A)(d) of the Indian Income tax Act, 1922 took place during the year ending November 30, 1954, and not during the year ending November 30, 1955, and consequently there could be no reduction of the rebate under cl.
(i)(b) of the second proviso to paragraph D of part II of the first schedule to the Finance Act, 1956 read with explanation (ii) to paragraph D. 11 Now, el.
(i)(b) of the second proviso to paragraph D of part II of the first schedule to the Finance Act, 1956 provides for reduction of the rebate allowable under cl.
(ii) of the preceding proviso by an amount computed at certain slab rates on the amount of dividends "in the case of a company referred to in el.
(ii) of the preceding proviso which has distributed to its shareholders during the previous year dividends in excess of 6 per cent of its paid up capital not being dividends payable at a fixed rate", and the explanation (ii) to paragraph D provides that for purpose of paragraph D "the expression 'dividend ' shall be deemed to include any distribution included in the expression 'dividend ' as defined in el.
(6A) of section 2 of the Indian Income tax Act".
Section 2(6A)(d) of the Indian Income tax Act, 1922 provides that "dividend" includes "any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits which arose after the end of the previous year ending next before the lst day of April, 1933, whether such accumulated profits have been capitalised or not.
" Obviously, section 2(6A)(d) contemplates a distribution on reduction of capital under section 55(1)(c) of the Indian Companies Act, 1913,under which subject to confirmation by the Court, a limited company, if so authorised by its articles, may by special resolution reduce the share capital in any way, and in particular may "either with or without extinguishing or reducing liability on any of its shares, pay off any paid up capital which is in excess of the wants of the company", and may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.
Section 56 of the Act enables the company to apply to the Court for an order confirming the reduction, and under section 60 of the Act, the Court may make an order confirming,the reduction on such terms and conditions as it thinks fit.
Upon compliance with certain formalities, the Registrar of Joint Stock Companies is required under section 61 of the Act to register the order and a minute approved by the Court, and on such registration, and not before, the resolution for reducing share capital as confirmed by the order so registered shall take effect.
Under section 62,the minute when registered shall be deemed to be substituted for the corresponding part of the memorandum of the company.
In the instant ease, the issued, subscribed and paid up capital the company was Rs. 25 lakhs, consisting of 5 lakhs shares of Rs. 5 each.
On December 16, 1953, the company passed a special resolution for reducing its share capital from Rs. 25 lakhs to Rs. 15 lakhs and for payment of Rs. 2 per share to the existing share holders under section 55(1)(c) of the Indian Companies Act, 1913.On May 10.
1954, the company applied to the Court for an order confirming the reduction.
On August 6, 1954, the High Court made an order confirming the reduction.
On November 4, 1954,the order and the minute approved by the Court were duly registered with the Registrar, and on the same date, the Registrar 12 issued a certificate of registration.
On November 5, 1954, the notice of registration was duly published.
On the same day, the company issued a circular notice to its shareholders stating that the refund of Rs. 2 per share will be made on receiving confirmation of the registration and requesting the shareholders to send their share certificates to the company at an early date for necessary endorsement and refund of share capital and stating that the refund would be made to the shareholders, whose names stood on November 15, 1954 in the books of the company, the share transfer register would remain closed from November 16 to November 30, 1954, and the refunds would be made to the shareholders whose names stood on November 15, 1954 in the books of the company.
The balance ,sheet for the year ending November 30, 1954 did not show the reduction, and the capital of the company in this balance sheet was shown to be Rs. 25 lakhs.
The necessary book entries and the payments of dividends to the shareholders were not made during the year ending November 30, 1954.
The book entries with regard to the reduction and refund were made, and the refunds were given to the shareholders during the year ending November 30.
1955 and the reduction was shown in the balance sheet for the year ending November 30, 1955.
The point in issue is when does the distribution contemplated by section 2(6A)(d) of the Income tax Act.
1922 take place? Section 2(6A)(d) speaks of dividend in the shape of any distribution by a company amongst its shareholders on reduction on its capital to the extent of accumulated profits possessed by it.
We reject the contention that this distribution takes place when the dividend is paid or credited to the shareholders.
The distribution contemplated section 2(6A)(d) is a distribution by a company "on the reduction of its capital".
The word "on" has no fixed meaning, but in the context of the sub section, it must be given the meaning "at the time of".
as "on entering", "on the 1st of the month".
The distribution contemplated by the sub section is therefore, distribution at the time of the reduction of its capital, that is to say, when the resolution for reduction of its capital under section 55(1)(c) of the Indian Companies Act, 1913 takes effect.
As soon as the resolution for reduction of capital and consequential refund of the surplus capital to the shareholders takes effect, the capital stands reduced, the surplus ceases to be capital and stands allotted to the shareholders, each shareholder obtains a vested right to the refund of his share of the surplus, and a liability arises on the part of the company to make the refund.
This liability arises as soon as the reduction of capital takes effect, and it matters not that the company has not made the necessary book entries showing the reduction of capital and the transfer of the surplus to the account of the shareholders.
The word "distribution" has several dictionary meanings.
In the context of section 2(6A)(d), it means allotment or apportionment of the surplus amongst the shareholders; this allotment takes place and each shareholder gets a vested right to his portion of the surplus as soon as the capital stands reduced.
13 A close scrutiny of section 2(6A)(d) reveals that (a) the distribution takes place on a single date and (b) the expression "accumulated profits" means profits accumulated up to the date of the distribution.
These two basic ideas which are implicit in section 2(6A)(d) are forcibly brought out in the explanation to the corresponding section 2(22) of the Income tax Act, 1961.
We thus find firstly that the entire distribution of the surplus amongst the shareholders takes place on a single date.
Now if the distribution is to have a certain date, that date can only be the date when the reduction of capital becomes effective.
The payments to the shareholders either actual or notional by credit entries in the books of account are made subsequently.
The payments need not be made on one date; they may be and often are made on several dates.
The successive payments cannot be the distribution contemplated by section 2(6A)(d).
We find secondly that the accumulated profits are to be ascertained on the date of the distribution.
But we find independently for reasons mentioned hereafter.
that the accumulated profits must be ascertained on the date of the reduction of capital.
Thus the two events, namely, the distribution and the reduction of capital must synchronise, and the accumulated profits must also be ascertained at the same point of time.
The synchronisation is also obvious on a plain reading of the abridged text "any distribution on the reduction of capital to the extent of accumulated profits".
The artificial dividend under section 2(6A)(d) must be fixed by reference to the accumulated profits on the date of the reduction of capital and not by reference to the accumulated profits on the successive dates of the payments.
If the amount of the dividend were to be fixed by reference to the accumulated profits on the several dates of the payments, the result might well be that some payments would be dividends to their full extent, some would be dividends to a limited extent and some would not be dividends at all.
Take a case where the accounting year of the company ends on November 30, a resolution for the reduction of its capital to the extent of Rs. 10 lakhs and for refund of Rs. 2 for each share of Rs. 5 takes effect on June 30, 1954 and payments of rupees one, six and three lakhs are made respectively on October 30, 1954, October 30, 1955 and October 30, 1956; and assume that the extent of the accumulated profits is rupees ten lakhs on June 30, 1954 and on October 30, 1954, rupees two Iakhs on October 30, 1955 and rupees two lakhs on October 30, 1956.
If the amount of the dividend were ' to be fixed by reference to the accumulated profits on the dates of the payments, the result would be that the payment of rupees one lakh would be dividend to the full extent, the payment of rupees six lakhs would be dividend to the extent of one third and the payment of rupees three lakhs would not be dividend at all.
It is reasonable to think that the legislature did not contemplate such a result.
The character of the distribution is determined by the extent of the accumulated profits on the date when the reduction /B(D)2SCI 3 14 of capital becomes effective and is not altered by any subsequent increase or decrease of the accumulated profits, and all subsequent payment of the capital so distributed share alike the original character of the distribution.
It is argued that in the case of a normal dividend, a comparable distribution takes place, a declaration of dividend out of the profits of a particular year is made, and is followed by payment of the dividend, and decided cases under section 16(2) show that the distribution takes place on payment and not on the declaration of a dividend.
We think this comparison of the normal dividend with the artificial dividend in section 2(6A)(d) in the shape of distribution to the extent of the accumulated profits is misleading, and the assumptions on which this comparison is made are not correct.
The declaration of a normal dividend may be made out of accumulated profits, and need not necessarily be made out of the profits of any particular year.
Section 2(6A)(d) does not contain any definition of a normal dividend.
In the case of a normal dividend, the question of ascertaining the accumulated ' profits to the extent of which the distribution amounts to dividend does not arise.
This problem would have arisen, had section 2(6A) defined normal dividend as "any distribution by a company on the declaration of dividend to the extent to which the company possesses accumulated profits".
On such a definition, the only possible interpretation would have been that the accumulated profits are ascertained and the distribution takes place on the date of the declaration of the dividend.
The argument based upon the decided cases under section 16(2) is misconceived.
Section 16(2) dealt with the question when the dividend shall be deemed to be the income of the shareholders.
By section 16(2) the dividend was deemed to be the income of the shareholders when it was paid, credited or distributed.
An artificial dividend ' under section 2(6A)(d) is either distributed or paid, whereas the normal dividend is either paid or credited, and in the case of J. Dalmia vs Commissioner of Income tax(1) and Padmavati R. Suraiya vs Commissioner of Income tax(2) it was held that the normal dividend is neither paid nor credited by reason of the fact that the dividend is declared.
In this case, we are not concerned with the problem of construction of section 16(2) or the interpretation of the word "paid" or "credited".
The word "distributed" is not synonymous with the word "paid" or "credited".
The three words are used in the Act in different senses.
Moreover, the policy of the legislature on the question of the taxability of the dividend in the hands of the shareholders has varied from time to time.
Subsection (2) of section 16 was repealed and in its place, sub section (IA) of section 12 was introduced by the Finance Act, 1959 with effect from April 1, 1960, and the corresponding provision is to be found in section 8 of the Income tax Act, 1961.
Under section 12(IA) of the Incometax Act, 1922 and section 8 of the Income tax Act the declaration of , 90.
(2) [1965] 1 S.C.R. 307.
15 dividend is crucial even for purposes of assessment of the shareholders.
The legislature thus recognises now that the distribution of the normal dividend takes place on the declaration of the dividend.
In the instant case, the resolution for the reduction of the capital of the company and the consequential refund of the surplus capital to its shareholders took effect on November 4, 1954.
Consequently.
the distribution of the dividend as defined by section 2(6A)(d) took place on November 4.
1954, i.e. during the previous year corresponding to the assessment year 1955 56.
It is true that during the accounting year ending November 30, 1954.
the company did not pay any dividends, nor make any book entries with regard to reduction of capital or with regard to refund or payment of surplus capital.
But the company incurred on November 4, 1954 the legal liability to make the refunds and the distribution must be deemed to have taken place on November 4, 1954, though n0 book entries were made and no payments were made on that date.
In view of the fact that the distribution took effect on November 4, 1954, the company was bound to make necessary entries in their books on November 4, 1954 showing the reduction of capital, and was also bound to show the reduction in its balance sheet for the year ending November 30, 1954.
Irrespective of its method of book keeping, the company incurred on November 4, 1954, the legal liability to make the refunds.
The method of bookkeeping is not relevant, but, were it so, it is pertinent to remember that the accounts of the company were kept on the mercantile basis.
That system of accounting brings into debit an expenditure the amount for which a legal liability has been incurred before it is actually disbursed.
See Keshav Mills Ltd. vs Commissioner of Income tax, Bombay(1).
In conclusion, we must point out that the revenue authorities should have, but in fact have not fixed the amount of the dividend by reference to the accumulated profits on November 4, 1954.
when the resolution for reduction of capital became effective, or by reference to the accumulated profits brought forward on December 1, 1953 at the commencement of the accounting year during which the reduction of capital took effect.
Instead, the revenue authorities took into account the accumulated profits on December 1, 1954, that is to say, the date of the commencement of the subsequent accounting year during which the dividends were paid.
The amount of the accumulated profits as on December 1, 1954 was fixed by the Income tax Officer at Rs. 8,42,337, and was subsequently reduced by the Tribunal to Rs. 4,69,244 13 0.
The revenue authorities rightly assumed that the distribution and the ascertainment of the accumulated profits to the extent of which the distribution is deemed to be dividend under section 2(6A)(d) took place 16 during the same accounting year, but they erred in holding that the accounting year commencing on December 1, 1954 is the relevant year.
In our opinion, the High Court was in error in holding that dividends under section 2(6A)(d) were distributed during the previous year corresponding to the assessment year, 1956 57.
We think that the dividends, if any, under section 2(6A)(d) were distributed in the previous year corresponding to the assessment year 1955 56.
and the fourth question should be answered accordingly.
The appeal is allowed in part to this extent.
In view of the divided success, we direct that the parties will pay and bear their own costs in this Court and in the Court below.
ORDER BY COURT In accordance with the majority Judgment, the appeal fails and is dismissed with costs.
| The appellants manufacture a medicated syrup "Sharbat Rooh Afza" according to a formula and containing some fruit juices.
Acting under section 3 of the , the Central Government made the Fruit Products order in 1955; as a result of an amendment in September 1956 of the relevant provisions of this Order, the requirement of the minimum percentage of fruit juices in a fruit syrup covered in of the Second Schedule of the Fruit Order was raised from 10% to 25%.
This requirement was duly notified to the Appellants.
Thereafter as a result of an inspection of their factory by the Marketing development Officer, the appellants received an order from him requiring them to stop further manufacture and sale of 'Sharbat Rooh Afza ' forthwith on the ground that it did not contain the minimum percentage of fruit juices prescribed by the relevant provisions of the Fruit Order.
The appellants challenged this order in a Writ Petition on the ground, inter alia, that the Fruit Order did not apply to 'Sharbat Rooh Afza ' and also that the impugned order and the Fruit Order were invalid.
The High Court, however, rejected these grounds, upheld the validity of the Fruit Order and dis missed the petition.
It was contended on behalf of the appellants that the 'Sharbat ' was a medicinal product and not a 'fruit product ' as defined by cl. 2(d) of the Fruit Order; that the Fruit Order was invalid because it could have appropriately been issued only under the , and not the ; and that the impugned order was invalid because it affected the appellant 's Trade mark rigts.
HELD : (i) The Sharbat was a fruit product within the meaning of cl. 2(d) (v) of the Fruit order as the residuary part of that clause took in any beverages containing fruit juices or fruit pulp; as such, its production could be controlled by the relevant provisions of the order.
The High Court was right in rejecting the appellant 's contention that the Sharbat was a medicinal product in view of the fact that the appellants had not claimed exemption from the application of the Fruit Order by complying with Cl. 16(1)(c) thereof.
[200 E G; 201 H; 203 A] (ii)As section 3(1) of the authorised the Central Government to regulate the qualitative and quantitative production of essential commodities, and as the pith and substance of the relevant provisions of the Fruit Order was clearly to regulate the qualitative production of the Fruit Products covered by it, the contention that the regulations imposed by the order were outside the purview of section 3(1), could 193 not be accepted.
The order was not therefore invalid on the ground that it purported to tackle the problem of adulteration and should therefore have been issued under the .
[201 D 202 C] (iii)The Fruit Order and the Act under which it was issued were constitutionally valid as the restrictions imposed by them were reasonable and in the interest of the general public.
What the impugned order purported to do was to require the appellants to comply with reasonable restric tions imposed by the Fruit Order and the fact that, incidentally, compliance with the Fruit Order might tend to affect the trade mark rights, could not render the impugned order invalid.
[203 D E] (iv)The definition of 'synthetic beverage ' in cl. 2(k) of the Fruit Order which indicates that it is a beverage which contains no fruit juice cannot be said to conflict with the requirements of cl.
11(2) that beverages containing less than 25% fruit juices should be sold as 'synthetic ' pro ducts.
Furthermore, cl. 11 contains a positive provision and the validity of the mandatory requirements of cl. 11 could not be impaired by the alleged inconsistency between that provision and the definition of 'synthetic ' beverage prescribed by cl. 2(k).
[203 A B] Amrit Banaspati Co. Ltd. vs The Stale of U.P. Cr.
A. No. 141 of 1959 dated 30 11 60, referred to.
|
Appeal No. 525 of 1964.
Appeal from the judgment and order dated August 25, 1962 of the Bombay High Court (Nagpur Bench) at Nagpur in Special Civil Application No. 360 of 1961.
76 5 A. section Bobde G. L. Sanghi and Sardar Bahadur, for the appellant.
Janardan Sharma for respondent No. 1.
H. W. Dhabe and A. G. Ratnaparkhi, for the intervener.
The Judgment of the Court was delivered by Hidayatullah, J.
In this appeal by certificate against the judgment of the Bombay High Court dated August 25, 1962 the appellant is the Sawatram Ramprasad Mills Co., Ltd., Akola and the respondents two of the workmen of the Mills.
The respondents are claiming from the Mills compensation for lay off from March 5, 1960 to October 22, 1960.
The proceedings were commenced by an application to the Second Labour Court, Bombay under section 33C(1) of the (Act XIV of 1947).
The Mills objected on various grounds including firstly that the Second Labour Court had no jurisdiction to hear the case as the dispute fell to be tried under the C.P. & Berar Industrial Disputes (Settlement) Act, 1947 and, secondly, that the application under section 33C, in any event, was incompetent.
The Second Labour Court held against the Mills on both the grounds.
The Mills applied to the High Court of Bombay under articles 226 and 227 of the Constitution but by the judgment under appeal their application was dismissed.
It may be pointed out here that there were similar applications for com pensation for lay off by the other workmen of the Mills and on this preliminary point they were all heard together.
In this Court only these two grounds were urged.
The con tention on behalf of the Mills on the first ground was two fold.
The Mills attempted to establish that the dispute could not be tried under the Central Act but only under the C.P. & Berar Act and further that even if the Central Act applied the calculation of the amount could not be made under section 33C of the as that required proceedings other than those contemplated by that section.
The was passed in 1947 and was brought into force on April 1, 1947.
It is not disputed that it applied to the Textile Industry.
The C.P. & Berar Industrial Disputes (Settlement) Act (23 of 1947) came into force on June 2, 1947 but only the first section was then brought into force.
Later, the remaining sections were brought into force by a notification dated November 20, 1947 in all industries except the Textile Industry.
From March 1, 1951, the Act was also, 76 6 made applicable to the Textile industry.
In 1953 the was amended by Industrial Disputes (Amendment) Act, 1953.
The changes material to our purpose were the addition of two definitions and a new chapter in the Act.
Previous to the Act there was an Ordinance which the Act replaced but as nothing turns upon the existence of the Ordinance we need not refer to it.
The two definitions introduced in section 2 of the parent Act were : "(kkk) 'lay off ' (with its grammatical variations and cognate expressions) means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the break down of machinery or for any other reason to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched : Explanation Every workman whose name is home on the muster rolls of the industrial establishment and who presents himself for work at the establishment at the time appointed for the purpose during normal work ing hours on any day and is not given employment by the employer within two hours of his so presenting himself shall be deemed to have been laid off for that day within the meaning of this clause: Provided, and section (oo) 'retrenchment '.
The definition of 'retrenchment ' need not be quoted here because no question has been raised about retrenchment in this case.
Section 3 of the 1953 Amendment Act inserted Chapter V A headed "Lay Off and Retrenchment".
Section 25C gave a right to a workman to ask for compensation if laid off, provided he fulfilled certain conditions.
It is not necessary to go into those conditions here.
Section 25J then provided as follows : "25J. Effect of laws inconsistent with this Chapter. (1) The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any law including standing orders made under the (XX of 1946) : 76 7 Provided that nothing contained in this Act shall have effect to derogate from any right which a work man has under any award for the time being in operation or any contract with the employer.
(2) For the removal of doubts, it is hereby declared that nothing contained in this Chapter shall be deemed to affect the provisions of any other law for the time being in force in any State in so far as that law provides for the settlement of industrial disputes, but the rights and liabilities of employers and workmen in so far as they relate to lay off and retrenchment shall be determined in accordance with the provisions of this Chapter.
" In 1956 the was again amended by the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956.
Section 23 of the Amending Act inserted section 33C which reads as follows : "33 C. Recovery of money due from an employer. (1) Where any money is due to a workman from an employer under a settlement of an award or under the provisions of Chapter V A, the workman may without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrears of land revenue.
(2) Where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the amount at which such benefit should be computed may, subject to any rules that may be made under this Act, be determined by such Labour Court as may be specified in this behalf by the appropriate Government, and the amount so determined may be recovered as provided for in sub section (1).
(3) For the purposes of computing the money value of a benefit, the Labour Court may, if it so thinks fit, appoint a commissioner who shall, after taking such evidence as may be necessary, submit a report to 76 8 the Labour Court and the Labour Court shall determine the amount after considering the report of the Commissioner and other circumstances of the case.
" The powers of the Government under the above section admittedly have been delegated to the Second Labour Court Bombay.
Section 31 of this Amending Act provides as follows "31.
Act not to override State laws.
(1) If, immediately before the commencement of this Act, there is in force in any State any Provincial Act or State Act relating to the settlement or adjudication of disputes, the operation of such an Act in that State in relation to matters covered by that Act shall not be affected by the , as amended by this Act.
(2) From these sections, which we have quoted, certain conclu sions indisputably arise.
The first conclusion is that compensation for lay off can only be determined under Chapter V A of the .
This follows from section 25J(2) as it is so stated there.
The next is that the workmen are entitled under section 33C(1) to go before the Second Labour Court to realise money due from their employers under Chapter V A.
This is clearly stated in section 33C.
The contention on behalf of the Mills, however, is that the does not apply to the present matter but the C.P. & Berar Industrial Disputes (Settlement) Act does.
This argument is put in two ways.
By one argument the application of the is sought to be evaded and by the second the C.P. & Berar Industrial Disputes (Settlement) Act is sought to be applied.
We shall examine these two arguments in the same order.
The attempt to oust the Central Act is based upon section 31 of the 1956 (Amendment) Act and the opening part of section 25J. Section 31 can have no application because section 33C has been included for the purpose, among others, of enabling the workmen to claim any money due from their employers under the provisions of Chapter V A.
This is expressly so stated in that section.
Chapter V A is the only Chapter in which there is provision regarding lay off or compensation for lay off.
The C.P. & Berar Act contains no provision either for the recovery of money or for compensation for lay off.
It is thus obvious that 76 9 if a workman has a claim for lay off it can only come up for decision under the and, indeed, section 25J(2) says so in express terms.
The attempt to keep out the provisions of the , particularly Chapter V A and section 33C must, therefore, fail.
The next attempt, namely, that the C.P. & Berar Act applies is also ineffective.
It is pointed out that the preamble of the C.P. & Berar Act shows that it was an Act for the promotion of peaceful and amicable settlement of industrial disputes by conciliation and arbitration, that 'industrial disputes ' means any dispute or difference connected with an industrial matter arising between an employer and an employee or between employers or employees and that 'industrial matter ' means any matter relating to pay, wages, reward, etc.
It is submitted, therefore, that the dispute must come under the C.P. & Berar Act because of section 31 of the 1956 (Amendment) Act and section 25J of the 1953 (Amendment) Act already quoted.
The argument is the last one in another form.
This argument is fallacious at the very start because lay off and compensation for lay off are to be found only in Chapter V A of the .
There is no mention of lay off or compensation for lay off as one of the matters over which the C.P. & Berar Act has any jurisdiction.
Next, even if sections 31 and 25J save the application of the C.P. & Berar Act they do so subject to the condition that question of lay off must be decided in accordance with Chapter V A and section 33C clearly provides that a dispute for any money due under Chapter V A has to go before the appropriate Government or its delegate.
Here the delegate is the Second Labour Court, Bombay.
The argument that this controversy is wrongly before the Second Labour Court, Bombay is, therefore, entirely erroneous and must be rejected.
The next contention is that the claim for lay off is not a claim for money due because calculations have to be made before the money due can be found.
This argument has been considered on more than one occasion and it was rejected recently by this Court in Kays Construction Co. (P) Ltd. vs State of U.P. & Ors(1).
It is not essential that the claim which can be brought before the Government or its delegate under section 33C(1) must always be for a predetermined sum.
The Government or the Labour Court may satisfy itself about the exact amount and then take action under that section.
In the present case the dates of lay off are known and each workmen will show to the Second Labour Court that he is qualified to receive compensation for 1. ; up.
C165 6 770 lay off.
That will be shown from the muster roll which the employer is required to maintain and it will then be a simple arithmetical calculation which, in our judgment, section 33C permits to be made.
If there is any question whether there was lay off or not the Labour Court will decide it.
This argument, therefore, has no force.
The result is that the appeal must fail and is dismissed with costs.
The employers have.
by prolonging this litigation on a preliminary point, managed to avoid the trial of the real issue for a number of years and we hope that the Second Labour Court will now deal with this matter as expeditiously as possible.
Appeal dismissed.
| Two matters in dispute between the management of a paints manufacturing company and their workmen, namely: (1) the are of retirement of the workmen and (ii) the introduction of a gratuity scheme for them, were referred to the Industrial Tribunal.
Before the reference was made the workmen were entitled to work so long as they were physically and mentally fit.
The Tribunal fixed the age of retirement for clerical and subordinate staff at 58 years and for the factory workmen at 55 )rears.
The Tribunal also introduced a gratuity scheme.
It fixed 5 years minimum service in order to enable a workman to earn gratuity and while fixing 21 days ' basic wage or salary as the quantum for gratuity for each completed year of service, included dearness allowance in the words "basic wage or salary.
" Both the management and workmen appealed to this Court.
The workmen contended that : (i) the age of retirement both for the staff of the head office and the factory workmen should be fixed at 60 years, and (ii) 30 days ' wages instead of 21 days should have been fixed as the quantum for gratuity.
The management objected to the minimum period of five years to enable a workman to earn gratuity even in the case of voluntary retirement or resignation and contended for a longer minimum of service.
The management also urged that dearness allowance should not be included in the basic wages for fixing the quantum of gratuity.
HELD:(i) The award of the Tribunal should be modified, fixing :he age of retirement, for the clerical and subordinate staff as well as for the factory workmen, whether existing or future,at the age of 60 years.
[527 E] Age of retirement of 55 years was fixed in the last century in government service and had become the pattern for fixing the age of retirement everywhere.
But considering the improvement in the standard of health and increase in longevity, the age of retirement should be fixed ordinarily it the higher level of 60 years.
Since the work in the factory in the present case was not particularly arduous as compared to that of the clerical and subordinate staff, even in the case of factory workmen there s no reason why the age of retirement should be fixed at a lower level, specially when the management could always terminate the services of a workman if he becomes physically or mentally incapable of working, before the age of retirement.
With the age of retirement at 60 years here will be the added advantage that more experienced workmen will be available to the management and that would be a cause for greater efficiency.
As there are no valid and cogent reasons for making a difference in the age of retirement of existing workmen and those employed in future, the future workmen, both clerical and subordinate staff as 524 well as factory workmen, should also have the benefit of the same age of superannuation.
[526 B D; 527 B D] (ii)No case for increasing the quantum of gratuity from 21 days basic wage to 30 days ' basic wage had been made out by the workmen, especially when there was a provident fund scheme also in force in the concern and the workmen, were thus getting two retiring benefits.
[529 H] (iii)In the case of voluntary retirement or resignation by an employee before reaching the age of superannuation, the minimum period of qualifying service for gratuity should be 10 years, and not 5 years as prescribed by the Tribunal.
[528 E] The reason for pro tiding a longer minimum period of earning gratuity in the case of voluntary retirement or resignation is to see that workmen do no ' leave one concern after another, after putting in the short minimum service qualifying for gratuity; and gratuity schemes usually provide for a longer minimum in the case of voluntary retirement or resignation.
[527 A B] (iv)Gratuity should be paid at the rate of 21 days ' basic wage or Wary for each completed year of service, but such basic wage would not include dearness or any other allowance.
[529 F] As the gratuity scheme was being introduced for the first time in the concern, it would be proper to follow the usual pattern of fixing the quantum of gratuity on basic wages, excluding dearness allowance, especially when there was another retiring benefit in the shape of provident fund already existing in the concern.
[529 E] Case law reviewed.
|
Civil Appeal No. 4 of 1952.
Appeal from the judgment and order of the High Court of Judicature for the Punjab at 698 Simla dated 24th May, 1951, in Civil Writ No. 15 of 1951.
M.L. Manekshaw (P. N. Bhagwati, with him) for the appellant.
M.C. Setalvad, Attorny General for India (G. N. Joshi, with him) for the respondent.
May 26.
The Judgment of the Court was delivered by MAHAJAN J.
This is an appeal from the judgment of the High Court of Judicature of the State of Punjab dated the 24th May, 1951, dismissing the petition filed by the appel lants for writs of certiorari, prohibition and mandamus against the respondent.
Aboobaker Abdul Rahman, the father of the appellants, was ,possessed of considerable movable as well as immovable properties including a. cinema theatre, known as the Imperi al Cinema.
situateat Bombay.
Soon after the partition of India, he went to Pakistan and was in Karachi in the month of September, 1947, where he purchased certain properties in that month.
On information supplied by one Tek Chand Dolwani to the Additional Custodian of Evacuee Property, the Addi tional Custodian started proceedings under the Bombay Evacu ees (Administration of Property) Act, 1949, against Aboobak er in or about the month of July, 1949.
During the pendency of the said proceedings, the Government of India Ordinance XXVII of 1949 came into force.
Thereupon, on the 16th Decem ber, 1949, the Additional Custodian issued a notice to the said Aboobaker under section 7 of the Ordinance and a fur ther notice on the 11th January, 1950, to show cause why his property should not be declared to be evacuee property.
Pursuant to the said notices an enquiry was held by the Additional Custodian of Evacuee Property who after recording the statement of the said Aboobaker and examining some other evidence produced by the said Tekchand Dolwani and taking into consideration the written statement filed by him, adjudicated on the 8th February, 1950, that 699 the said Aboobaker was not an evacuee.
He, however, issued another notice to Aboobaker on the same day calling upon him to show cause why he should not be declared an intending evacuee under section 19 of the said Ordinance.
On the 9th February, 1950, he adjudicated him as an intending evacuee.
On the 31st March, 1950, Tekchand Dolwani being the informant and interested in the adjudication of the said Aboobaker as an evacuee, filed an appeal against the order of the 9th February to the respondent (The Custodian General of India) praying for an order declaring the said Aboobaker an evacuee and that he being the first informant should be allotted the said cinema.
On the 18th April.
1950, the Ordinance was replaced by Act XXXI of 1950.
The appeal was heard by the respondent in New Delhi on the 13th May. 1950.
At the hearing it was urged on behalf of Aboobaker that he having been declared an intending evacuee and he having accepted that order, no appeal lay therefrom and that the said Tekchand Dolwani was not a person ag grieved by any order passed by the Additional Custodian and therefore had no locus standi to appeal under the provisions of section 24 of Ordinance XXVII of 1949.
The hearing of the appeal was concluded on the lath May, 1951 and it is alleged in the written statement of the respondent that the order was dictated by him on the same day after the conclusion of the hearing and was also signed by him and it bore that date.
Aboobaker suddenly died on the 14th May, 1950, which was a Sunday and the respondent pronounced the order written on the 13th to the counsel of Aboobaker on the 15th May, 1950.
By this order the respond ent held that the appeal purporting to be from the order passed by the Additional Custodian on the 9th February, 1950, declaring the said Aboobaker an intending evacuee in effect and in substance was directed against the order made on the 8th February in the proceedings started under section 7 of the Ordinance declining to declare the said Aboobaker 's property as evacuee property.
700 He further held that the said Tekchand Dolwani was interest ed in the appeal and had locus standi to prefer it.
Having overruled the preliminary objections raised by the appel lants, the hearing of the appeal was adjourned and further inquiry was directed to be made in the matter.
Notices of the adjourned hearing of the appeal were given from time to time to the two appellants.
On the 30th February, 1951, they were informed that the appeal would be heard on the 7th March, 1951.
The two appellants allege that they are some of the heirs enti tled to the estate of the said Aboobaker.
Two of his sons migrated to Pakistan and one of the appellants is his third son and the other appellant is his only daughter.
Being aggrieved by the order of the respondent dated the lath May, 1950, the appellants filed a petition in the High Court of the State of Punjab at Simla on the 26th February, 1951, under article 226 of the Constitution, praying for a writ of certiorari for quashing and setting aside that order and for a writ of prohibition or mandamus directing the said respondent to forbear from proceeding with the hearing of the said appeal on the 7th March, 1951, or on any other date or dates.
The appellants raised the following contentions in the petition: 1.
That the appeal preferred by Tekchand Dolwani before the respondent was in terms an appeal against the order of the 9th February, 1950, and not an appeal against the conclusion reached on the 8th February, 1950, and inas much as the said order was made against Aboobaker and not in his favour, Tekchand had no right of appeal against the same and the respondent had no jurisdiction to entertain it or make any order therein.
That Tekchand was not a person aggrieved by the order dated the 8th February, 1950, within the meaning of section 24 of the Ordinance and was not entitled to appeal against the said order and inasmuch as no appeal lay at his instance, the respondent had no jurisdiction to entertain it or make any order therein.
701 3.
That after the death of Aboobaker on the 14th May, 1950, the respondent ceased to have jurisdiction to proceed with the hearing of the appeal or make any order therein.
The High Court held that the order of the respondent pronounced on the 15th May, 1950, was not a nullity and the appeal preferred by Tekehand was in effect and in substance an appeal from the order passed by the Additional Custodian on the 8th February, 1950, and that Tekchand was a person aggrieved within the meaning of section 24 of the Ordi nance.
It accordingly dismissed the petition with costs but on the 27th June, 1950, granted him leave to appeal to this Court under article 133 of the Constitution.
On the 30th July, 1951, during the pendency of the appeal in this Court, the respondent finally pronounced orders on the appeal of Tekchand and held that Aboobaker was an evacuee and his property was declared evacuee property.
A petition under article 226 for quashing.
this order is pending in the High Court of the State of Bombay.
The learned counsel for the appellants canvassed the following points before us: 1.
That the appeal to the respondent was against the order of the 9th and not against the order of the 8th, and as no appeal lay against the order of the 9th the respondent had no jurisdiction to hear it.
That assuming that the appeal was preferred against the order of the 8th, that order was not an appealable order inasmuch as section 24 allows an appeal against an order declaring properties evacuee properties and not against any conclusion that a certain person is or is not an evacuee, and thus no appeal was Competent at all which could be heard by the respondent.
That Tekchand was not a person aggrieved within the meaning of section 24 of the Ordinance and had no locus standi to prefer the appeal and the respondent had no juris diction to entertain it at his instance.
702 4.
That the order pronounced on the 15th after the death of Aboobaker was a nullity.
It is mentioned in the judgment of the High Court that Shri M.L. Manekshah conceded that the death of Aboobaker does 'not in any way affect the validity of the order pro nounced by the Custodian General on the 15th May, 1950.
The learned counsel adopted practically the same attitude before us in view of the affidavit of the respondent in which it was affirmed that the order in question was dictated on the 13th May, 1950, and was signed on the same date.
the High Court on the principle of Order XXII, Rule 6, Code of Civil Procedure, held that an order written but not pronounced could be pronounced even after the death of the party af fected.
In these circumstances the last contention of the learned counsel does not require any further consideration and is rejected.
The larger question that has been raised in the petition pending before the High Court of the State of Bombay that the properties of Aboobaker could not be declared evacuee properties after his death as they had devolved on his heirs was not raised in these proceedings and we have not been invited to decide it.
That being so, the question is left open.
The remaining three questions canvassed before us, unless they are of such a nature as would make the decision of the respondent dated the 13th May, 1950, a nullity, cannot be the subject matter of a writ of certiorari.
It is plain that such a writ cannot be granted to quash the deci sion of an inferior court within its jurisdiction on the ground that the decision is wrong.
Indeed, it must be shown before such a writ is issued that the authority which passed the order acted without jurisdiction or in excess of it or in violation of the principles of natural justice.
Want of jurisdiction may arise from the nature of the subjectmatter, so that the inferior court might not have authority to enter on the inquiry or upon some part of it.
It may also arise from the absence of some essential preliminary or upon the existence of some 703 particular facts collateral to the actual matter which the court has to try and which are conditions precedent to the assumption of jurisdiction by it.
But once it is held that the court has jurisdiction but while exercising it, it made a mistake, the wronged party can only take the course pre scribed by law for setting matters right inasmuch as a court has jurisdiction to decide rightly as well as wrongly.
The three questions agitated before us do not seem to be ques tions which bear upon the jurisdiction of the court of appeal, or its authority to entertain them.
It was contended that no court of limited jurisdiction can give itself jurisdiction by a wrong decision a point collateral to the merits of the case upon which the limit of its jurisdiction depends and that the questions involved in the appeal before the respondent were collateral to the merits of the case.
As pointed out by Lord Esher, M.R., in Reg.
vs Commissioner Income Tax(1),, the formula enunciated above is quite plain but its application is often mislead ing.
The learned Master of the Rolls classified the cases under two categories thus: "When an inferior court or tribunal or body which has to exercise the power of deciding facts, first established by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body.
It may in effect say that, if a certain stab of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things but not otherwise.
There it is not for them conclusively to decide whether that state of facts exists, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction.
But there is another state of things which may exist.
The legislature may entrust the tribunal on body with a jurisdiction which includes the jurisdiction, to determine whether the preliminary state of facts exists as well as the jurisdiction, and on finding that it doe: exist, to proceed further or do something more.
Wher (1) 21 Q .B DD. 313.
704 the legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider what ever jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there will be none.
In the second of the two cases I have mentioned it is erroneous application of the formula to say that the tribu nal cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the legislature gave them jurisdiction to determine all the facts.
including the existence of the preliminary facts on which the further exercise of their jurisdiction depends; and if they were given jurisdiction so to decide, without any appeal being given, there is no appeal from such exercise of their juris diction.
" The tribunal constituted to hear appeals under section 24 has been constituted in these terms: "Any person aggrieved by an order made under section 7, section 16, section 19 or section 38 may prefer an appeal in such manner and within such time as may be prescribed (a) to the Custodian, where the original order has been passed by a Deputy or Assistant Custodian; (b) to the Custodian General, where the original order has been passed by the Custodian, an Additional Custodian or an Authorized Deputy Custodian.
" Like all courts of appeal exercising general jurisdic tion in civil cases, the respondent has been constituted an appellate court in words of the widest amplitude and the legislature has not limited his jurisdiction by providing that such exercise will depend on the existence of any particular state of facts.
Ordinarily, a court of appeal has not only jurisdiction to determine the soundness of the decision of the inferior court as a court of error, but by the very nature of things it has also jurisdiction to deter mine any points raised before it in the nature of prelimi nary issues by the parties.
Such jurisdiction is inherent in its very constitution as a court of appeal.
Whether an appeal is competent, whether a party has locus standi to prefer it, whether the appeal in substance is from one or another order 705 and whether it has been preferred in proper form and within the time prescribed, are all matters for the decision of the appellate court so constituted.
Such a tribunal falls within class 2 of the classification of the Master of the Rolls.
In these circumstances it seems to us that the order of the High Court of Punjab that a writ of certiorari could not issue to the respondent quashing the order of the 13th May, 1950, was right.
We are further of the opinion that none of the contentions raised has any merit whatsoever.
For a proper appraisal of the contention that Tekchand Dolwani is not a "person aggrieved" within the meaning of those words in section 24 of the Ordinance, it is necessary to refer to the rules made under the Ordinance.
It is provided in rule S (5), that any person or persons claiming to be interested in the enquiry or in the property being declared as evacuee property, may file a written statement in reply to the written statement filed by the persons interested in the property claiming that the property should not be declared evacuee property; the Custodian shall then either on the same day or on any subsequent day to which the hearing may be adjourned, proceed to hear the evidence, if any, which the party appearing to show cause may produce and also evidence which the party claiming to be interested as mentioned above may adduce.
In the proceedings before the Additional Custodian, Tekchand Dolwani filed a reply to the written statement of Aboobaker and adduced evidence in support of the stand taken by him that the property of Aboobaker was evacuee property.
Further Tekchand Dolwani was the first informant who brought to the notice of the Custodian concerned that the property of Aboobaker was evacuee property and in view of the order of the Ministry of Rehabilitation he was, as a first informant, entitled to first consideration in the allotment of this property, the Additional Custodian was bound to hear him on the truth and validity of the information given by him.
When a person is given a right to raise a contest in a certain matter and his contention is negatived, then 706 to say that he is not a person aggrieved by the order does not seem to us to be at all right or proper.
He is certain ly aggrieved by the order disallowing his contention.
Sec tion 24 allows a right of appeal to any person aggrieved by an order made under section 7.
The conclusion reached by the Additional Custodian on the 8th February, 1950, that Aboo baker was not an evacuee amounted to an order under section 7 and Tekchand therefore was a person aggrieved by that order.
Section 43 bars the jurisdiction of the civil court in matters which fall within the jurisdiction of the Custo dian.
In clause 1 (a) it provides as follows: "no civil court shall have jurisdiction to entertain or adjudicate upon any question whether any property is or is not evacuee property or whether an evacuee has or has not any right or interest in any evacuee property .
" It is clear therefore that the Additional Custodian has to find and adjudicate on the question whether a certain property is or is not evacuee property and whether a certain person is or is not an evacuee and such an adjudication falls within the ambit of section 7 of the Ordinance.
Lord Esher M.R. in In re Lamb, Ex parte Board of Trade(1) observed as follows : "The meaning of the term 'person aggrieved ' was ex plained by this Court in Ex parte Official Receiver U).
It was there determined that any person who makes an applica tion to a Court for a decision, or any person who. is brought before a Court to submit to a decision, is, if the decision goes against him, thereby a 'person aggrieved ' by that decision." Lord Justice Kay in the same judgment made the following observations: "The preliminary objection to the appeal is two/old: (1) It is said that the Board of 'trade are not 'persons aggrieved '.
They are persons whom the court was bound to hear, If they wished to be heard, on the validity of this objection, and the decision has (1) (2) 707 been against them.
How it can be said that they are not 'persons aggrieved ', by the decision, passes my understand ing.
When two persons are in the position of litigants before the High Court, and the decision of the Court goes against one of them, how it can be said that he is not a 'person aggrieved ' by the decision, I cannot understand.
I am clearly of opinion that the Board were 'persons ag grieved ' by this decision.
Then (2) it is said that the decision is not an 'order '.
When the High Court makes a declaration of right, and further orders the costs of the application to be paid (which is the common form here used), and that is drawn up and sealed with the seal of the Court, and, I suppose placed on record, as all orders of the High Court are, it seems to me that it is clearly an order of the Court.
" In our opinion, Tekchand Dolwani is a person aggrieved within the rule stated in the decision mentioned above and the respondent rightly held that he had locus standi to prefer the appeal.
The next point urged was that the appeal had been pre ferred against the order of the 9th February and not against the order of the 8th and that the respondent had no juris diction to hear it.
Whether the appeal in substance had been preferred against the order of the 8th or the order of the 9th was a matter which was certainly within the compe tence of the respondent to decide and does not involve any question of jurisdiction whatsoever.
Be that as it may.
we have examined the memorandum of appeal presented by Tekchand Dolwani to the respondent and it appears to us that the High Court was right when it held that the appeal was in effect and in substance an appeal from the order passed by the Additional Custodian on the 8th February.
The relief claimed in appeal concerns the order of the 8th and the grounds of appeal only relate to this matter.
The only defect pointed out was in the description of the order attacked in appeal.
It is well settled that such errors of description cannot be allowed to prejudice the right of a party.
The two 708 orders of the 8th and 9th made on consecutive days, though under different provisions of the Ordinance, were inter linked and the latter order was merely consequential on the conclusion reached on the 8th and the description in the memorandum of appeal that the appeal was against the order of the 9th cannot be considered as really an error of a kind of which serious notice could be taken.
The last point raised before us was not taken in the High Court and therefore we have not the benefit of that court 's decision on the point.
It was contended that no appeal lay against the order of the Additional Custodian dated the 8th February declining to declare Aboobaker an evacuee, that the only order that the Custodian is entitled to pass under section 7 is an order declaring any property to be evacuee property and that it is this order and this order alone which is appealable under section 24.
In our opinion, this contention is without force.
Section 24 con fers a right of appeal against all orders made under section 7 and does not specify the nature of the orders made appeal able.
In an enquiry under section 7 the first point for adjudication is whether a certain person falls within the definition of the word "evacuee" given in the Ordinance.
Ii he comes within the ambit of the definition, then any property heldby him becomes evacuee property.
The civil court is barred from entertaining or adjudicating upon the questions whether the property is or is not evacuee proper ty, or whether an evacuee has any right or interest in any evacuee property.
The decision of the Custodian whether in the affirmative or in the negative amounts to an adjudica tion under section 7 and is as such appealable.
It was contended that when the Custodian reached the conclusion that a certain person is not an evacuee, then he is not entitled to make any order whatsoever but has just to file the proceedings.
This contention is unsound.
When a certain person claiming to be interested in getting a property declared evacuee property is allowed to put in a written statement and lead 709 evidence, then the decision of the court whether favourable or unfavourable to him has to take the form of an adjudica tion and necessarily amounts to an order.
Reference in this connection may be made to the decision of the Federal Court in Rayarappan Nayanar vs Madhavi Amma(1) on an analogous,provision of the Code of Civil Procedure contained in Orders XL, Rule 1, and XLIII, Rule 1 (s).
Order XLIII, Rule 1 (s) makes any order made under Order XL, Rule 1, appealable, while Order XL, Rule 1, only empowers the court to appoint a receiver.
It was held that the order removing a receiver was appealable under Order XLIII, Rule 1, inas much as such an order fell within the ambit of Order XL, Rule 1, and the power of appointing a receiver included the power of removing or dismissing him.
The present case stands on a higher footing.
The power of granting a certain relief includes obviously the power of refusing that relief.
In our opinion, therefore, the order made by the Additional Custodian refusing to declare Aboobaker an evacuee and his property evacuee property was an order made under section 7 of the Ordinance and was therefore appealable under section, 24.
The result is that this appeal fails and is dismissed with costs.
Appeal dismissed.
| The appellant, a private limited company, was incorporated in 1954 in the former Kotah State which had integrated with the United States of Rajasthan in 1949.
The United States of Rajasthan became State of Rajasthan, a Part B State.
The Indian Finance Act, 1950, made the Indian Income tax Act, 1922, applicable to Part B States with effect from April 1, 1950, whereupon Rajasthan became a taxable territory.
The Income tax (Amendment) Act, 1953, amended section 14(2)(C) of the Indian Income tax Act, 1922.
Thereupon the Income tax authorities sought to tax the profits and income of the appellant for the assessment year 1950 51 who claimed exemption under section 14(2)(C) of the Indian Income tax Act, 1922, as it stood before the amendment in 1953.
The question for decision was whether in view of the decision of this Court in Madan Gopal 's case it was still open to the appellant to contend that the amendment operated from April 1, 1950 and that income accrued prior to April x, 1950, was still exempt although the exemption was withdrawn only from April 1, 1950.
Held, that the withdrawal of the exemption in the assessment year 1950 51 conversely affected the income of the previous year 1949 50.
The application of the Indian Income tax Act made Rajasthan a taxable territory subject to the Indian Income tax law and Parliament was competent to enact a new law for the area, just as it did for the whole of the rest of India.
The fiction in the amendment made in section 14(2)(C) made the exemption in respect of liability to tax the income for the year 1949 50 to disappear as if it had never been granted and obliterated the exemption.
The whole purpose and intent of the amendment was to reach this result from the assessment year 1950 51 onwards, and there could be no saving.
The argument assumes the premise that the Income tax Act was incorporated in the Indian Finance Act, 1950, but there is neither precedent nor warrant for the assumption that when one Act applies another Act to some territory, the latter Act must be taken to be incorporated in the former Act.
It may be otherwise, if there were words to show that the earlier Act is to be deemed to be re enacted by the new Act.
454 Union of India vs Madan Gopal Kabra, ; , referred.
|
Petition No. Re. C. A. No. 33 of 1963.
Petition for Review of this Court 's judgment dated April 22, 19631, in Civil Appeal No. 707 of 1962.
C. K. Daphtary, Attorney General for India, H.N. Sanyal Solicitor General of India, H.L. Anand, Das Gupta and V. Sagar, for the appellant.
M K. Ramamurthy, R. K. Garg, section C. Agarwal and D. P. Singh, for the respondent.
December 19.
The Judgment of the Court was delivered by DAS GUPTA J.
This application for review of a judgment given by us on April 22 this year is by the Bank, which was the respondent in the appeal.
The appellant who had been appointed a clerk in the Bank on December 14, 1953, made an application under section 33 (b)(2) of the Industrial Disputes ,Act, before the Labour Court, Delhi.
He complained that in applying to him the award of the Sastry 282 Tribunal in the dispute between certain banks and their workmen as modified by the Labour Appellate Tribunal, the Bank had proceeded on the basis that under it the appellant was entitled to get his annual increment in each year on April 1.
According to the appellant, he was entitled under the award to have his annual increment in December each year, Accordingly, he prayed that the benefit of which he was being deprived by the Bank should be computed and directed to be paid to him.
At the hearing of the appeal it was contended before us on behalf of the appellant that on a proper interpretation of para.
292 of the Sastry Award which deals with the question of adjustment of clerks already in service into the scale of pay fixed by the award, he should get his increments on December 14, every year.
The Bank 's contention was that increments had been rightly given from April 1.
We did not however examine para.
292 as it appeared to us that when the appellant was first appointed by the Bank on December 14, 1953 the appointment was on the scale of pay as fixed by the Sastry Award.
There was, therefore, in our opinion, no question of adjustment.
We held that on those terms of appointment he was entitled to the pay as claimed by him in his application.
In this view we set aside the order of the Labour Court, Delhi, which had rejec ted the appellant 's application and computed the sum to which the appellant was entitled under the award at Rs. 146/ plus dearness allowance.
In asking us to review this judgment it is submitted by the learned Attorney General who appeared for the Bank, that it was an error to think that Daniel 's first appointment was on the pay scale as fixed by the Sastry Award.
He pointed out that the Labour Appellate Tribunal which decided the appeals from the award of the Sastry Tribunal gave a definite direction in para.
401 of its judgment that the Appellate Tribunal 's decision as to pa 283 scales, allowances and provident fund contributions will start from April 1, 1954.
This, according to the learned Attorney General, supersedes the direction by the Sastry Tribunal that the award will come into force on April 1, 1953.
When it was pointed out that the decision of the Appellate Tribunal was given long after the appellant 's appointment and so it might well be that the clerk was appointed on the scale under the Sastry Award which had already come into force on April 1, 1953, learned Counsel submitted that the operation of the award as to the pay scale had.
been stayed soon after the, award was pronounced and long before December 14, 1953.
We find it stated however in para.
42 of the Labour Appellate Tribunal 's decision that A and B Class Banks had not filed any appeals against the wage structure.
The reason is not far to seek.
This award had been preceded by the award of the Sen Tribunal that was published on August 12, 1950.
The Sen Award was declared void by the Supreme Court on April 9, 1951.
The Sen Tribunal gave the clerks for A and B Class Banks the following scales of pay Class A Banks Class I areas.
Rs. 96 6 132 7 174 9 190 205 9 250 10 290 Class II areas.
Rs. 82 5 112 6 148 7 162 172 8 212 9 248 Class III areas.
Rs. 70 4 94 5 124 6 136 145 7 180 8 212 Class B Banks Class I areas Rs. 92 6 128 7 170 8 186 200 9 245 10 285 284 Class II areas Rs. 78 5 108 6 144 7 158 167 8 207 9 243 Class III areas Rs. 66 4 90 5 120 6 132 140 7 175 8 207 The award of the Sastry Tribunal in this matter was less favourable to the clerks.
It gave the following scales: Class A Banks Area I Rs. 85 5 100 6 112 7 140 8164 9 245 10 265 15 280 Area II Rs. 73 4 .85 5 100 6 112 7 140 8 164 9 245 Area III Rs. 66 3 69 4 85 5 100 6112 7 140 8 164 9 227 Class B Banks Area I Rs. 73 4 85 100 6 112 7 140 8 164 9 245 Area II Rs. 66 3 69 4 85 100 6 1127 140 8 164 9 227 Area III Rs. 57 3 69 4 85 5 100 6112 7 140 8 164 9 200 It was in these circumstances that the A and B Class Banks were content to accept the award of the Sastry Tribunal as regards the wage structure and did not appeal; though the workmen being dissatisfied with the wage scale as awarded by the Sastry Tribunal appealed against it.
It does not seem to us unreasonable to think that having accepted the Sastry Award on wage structure the Bank an A Class Bank would make its appointment after April 1, 1953 285 on those scales or pay.
It has to be mentioned that the appointment letter is not on the record.
We are therefore still inclined to think that the appellant Daniel was appointed by the Bank on December 14, 1953 on the pay scale as fixed by the Sastry Tribunal.
In any case, the Bank has not been able to satisfy us that any error was made in disposing of the appeal on the basis that Daniel 's appointment was on the pay scale as fixed by the Sastry Award.
This is sufficient to dispose of the review application.
As, however, arguments were addressed to us in this application as to what the position would be if the appellant had not been appointed on the pay scale as fixed by the Sastry Award and his pay had to be adjusted in accordance with the provisions of para.
292, we propose to give our decision on that point as well.
The question of adjustment to the new pay scales formed a distinct item Item No. 12 in the Government Order making the reference to the Sastry Tribunal.
This was dealt with in Chapter XIII of the award in four sections.
Section I sets out the different contentions raised by the employer and the workmen 's Counsel.
Thus, after mentioning that the employees generally asked for point to point adjustment, i.e., placing of each employee at that stage in the new scale to which he would have risen by reason of the length of his service if he had entered service on the new scale, the Tribunal stated that for the reasons given in paras.
113 to 117 of the Sen Award it agreed with the conclusion of the Sen Tribunal that a compromise between the two methods advocated by the parties should be adopted.
After a general discussion of the arguments in paras.
285 to 291, the Tribunal proceeded to give concrete directions in para.
292 dealing with the matter in six 286 sub paragraphs, as regards workmen who entered the service of the Bank before January 31, 1950; one sub para.
was as regards workmen who joined service of the bank after January 31, 1950; seven more sub paras.
8 to 14 laid down general rules applicable to all workmen whether appointed before or after January 31, 1950.
This scheme of adjustment was maintained by the Appellate Tribunal with the modification that 31st January 1953 in the Award was substituted by "31st January 1954 and 1st April, 1953 was substituted by title words 1st April, 1954.
Clause (d) of sub para.
4 was deleted and in its place sub para 4 (A) was substituted which ran thus: "After adjustments are made in accordance with the directions given, three further annual increments in the new scale will be added thereto for service for the three years 1951 to 1953.
In addition, the workmen will be entitled to draw his normal increment for 1954 on the 1st of April 1954.
Thereafter, each succeeding year 's annual increment shall take effect as and from the 1st April of that year.
" For workmen appointed before January 31, 1950 there was thus a definite direction that succeeding year 's annual increment shall take effect from April 1, of that year.
Sub paragraph 7 dealing with the workmen who joined service after January 31, 1950 runs thus: "The workmen shall be fitted into the new scale of pay on a point to point basis as though it had been in force since he joined the service of the Bank, provided that his adjusted basic pay is not less than what it would be under a point to point adjustment on the corresponding "preSen" scale.
" 287 It is important to notice that in this provision as regards the workmen who joined service of the Bank after January 31, 1950, no direction has been given as regards the date from which annual increments should take effect.
Nor can we find anything in the remaining seven sub paras.
laying down generally the rules ' any directions whatsoever to justify the plea that the future increments of workmen who joined service of the Bank after January 31, 1950, would start from April 1, of the year.
The provision in para 12 that the adjusted pay shall have effect from April 1, 1954 has nothing to do with the commencement of future increments.
The reason why such a direction was given as regards the workmen who entered the service of the Bank before January 31, 1950 and none was given as regards workmen who joined after that date appears to be clear.
For workmen who entered the service of the Bank before January 31, 1950 detailed provisions for fitting them into the scales were made including the provisions for increments.
It was in view ' of this apparently that it was thought necessary to indicate the time from which further increments would commence.
As the Tribunal brought the new scales into force with effect from 1953 the direction that logically followed was that each succeeding year 's annual increment would take effect as and from April 1, of that year.
The Appellate Tribunal decided to adjust the pay up to April 1, 1954 instead of ' April 1, 1953.
But that did not change the logical position that each succeeding year 's increment would take effect as and from April 1 of that year.
The above considerations had no application to the workmen who were directed to be fitted into the new scale of pay on a point to point basis as though it had been in force since they joined the service of the Bank.
On the basis that the new scale was in force at the date when the workmen 288 joined the service of the Bank there can be no escape from the conclusion that the increments as provided in that scale would take effect from the anniversary of the date of appointment.
It is unnecessary for us to consider here why the workmen who joined the service of the Bank after January 31, 1950, were not being given increments in the same way as those who had entered the service before that date.
Some indication is given in the Tribunal 's observations that it would be proper to let bygones be bygones and there should be neither retrospective adjustment of pay or allowances actually paid nor further claims for more than what has been given already.
Whatever the reason be the fact remains that special directions were given as regards the adjustment into the pay scale of the workmen ' who had joined the service of the Bank after January, 1950, and in their case nothing was said as to the date from which future increments would take effect.
The necessary and inevitable consequence of the absence of any such direction in the matter is, as we have already indicated, that future increments would be on that date of the year when the workman was appointed.
We have thus reached the conclusion that even on application of the rules of adjustment into the new scale on the assumption that such adjustment was necessary, the appellant workman would be entitled to the relief he had asked for.
The application is accordingly dismissed with costs.
Review application dismissed.
| The application for review arose out of a judgment passed by this Court it, Civil Appeal No. 707 of 1962.
The appeal arose out of an application filed by a workman of the State Bank under s.33(c)(2) of the industrial Disputes Act before the Labour Court.
He was appointed as a clerk in the Bank on December 14, 1953.
He complained that 'the Bank had not paid him the increment on the basis of the Sastry Award.
His case was that he was entitled under the award to have his annual increment in December each year.
The case of the Bank was that on the basis of the award the workman was entitled to get his annual increment in each year on April 1.
On these facts it was held that the workman would get the benefit of 281 the new scales of pay from the very day of his appointment i.e. from December 14, 1953.
Thus the appeal of the workman was allowed.
Hence the review.
Held that (i) this application failed as this Court did not commit any error in disposing of the appeals.
(ii) in para 292 of the Sastry Award special directions were given as regards the adjustment into the pay scale of the workmen who had joined the service of the Bank after January, 1950, but in their case nothing was said as to the date from which future increments would take effect.
The necessary and inevitable consequence of the absence of any such direction in the matter is that future increments would be on that date of the year when the workman was appointed.
On the facts of this case it was held that the appellant workman would get the increments under the new scale on December 14, each year.
|
Appeal No. 1040/63.
C.K. Daphtary, Attorney General, M.S.K. Sastri and R.H. Dhebar, for the appellant.
C.B. Agarwala and A.G. Ratnaparkhi, for the respondent.
The Judgment of the Court was delivered by Gajendragadkar, C.J.
The short question of law which arises in this appeal is whether the appellant, the State of Bombay (now Maharashtra), shows that its predecessor State of Madhya Pradesh (hereinafter called the Government) had given a reasonable opportunity to.
the respondent, Narul Latif Khan, to defend himself before it passed the final order on June 6, 1952 compulsorily retiring him under Article 353 of the Civil Service Regulations.
By this order, the respondent was compulsorily retired and in relaxation of article 353, the Government was pleased to allow the respondent to draw a compassionate allowance equal to the pension which would have been admissible to him had he been invalidated.
This order was challenged by the respondent by filing a suit in the Court of the first Additional District Judge at Nagpur.
In his plaint, the respondent alleged that the impugned order whereby he was compulsorily retired, was invalid and he claimed a declaration that it was ultra vires and inoperative.
He also asked for a declaration that he was entitled to be restored to the post which he held on July 6, 1950, and that he should be given all pay, allowances.
increments and promotions to which he would have been entitled if he had been permitted to continue in service.
In the result, the respondent asked for a decree for Rs. 62,237 with interest at 6 per cent per annum from the date of the suit till realisation.
This claim was resisted by the appellant on several grounds.
The principal ground on which the appellant challenged the respondent 's claim, however, was that he had been given a reasonable opportunity to defend himself, and so, the impugned order was perfectly valid, and legal.
Several other pleas were also raised by the appellant.
On these pleas, the learned trial Judge framed appropriate issues.
The issue with which we are concerned in the present appeal, however, centered round the question as to whether the Constitutional provision prescribed by article 311 affording protection to the respondent had been contravened.
The trial Judge made a finding against the respondent on this issue.
He also recorded his findings on the other issues with which we are not directly concerned in the present appeal.
In regard to the money claim made by the respondent, the learned trial Judge made a finding that in case he was held entitled to such relief, a decree for Rs. 37,237 may have to be passed in his favour.
In view of his conclusion that the impugned order was valid, no question arose 137 for making such a decree in favour of the respondent.
The respondent 's suit, therefore, failed and was dismissed.
The respondent then took the matter in appeal before the High Court of Judicature at Bombay, Nagpur Bench.
The High Court has, in substance, held that the constitutional provisions prescribed by article 311 have not been complied with by the appellant before it passed the impugned order against the respondent.
It has found that the departmental enquiry which was held suffered from the serious infirmity that the enquiry officer did not hold an oral enquiry and did not allow an opportunity to the respondent to lead his oral evidence.
It has also held that the second notice served by the appellant on the respondent calling upon him to show cause why the report made by the enquiry officer should not be accepted and appropriate punishment should not be inflicted on him, was defective, and that also made the impugned order invalid.
The High Court appears to have taken the view that the impugned order does not show that the appellant had taken into account the explanation offered by the respondent in response to the second notice issued by the appellant.
As a result of these findings, the High Court has reversed the conclusion of the trial Court on the main question and has found that the impugned order is invalid and inoperative.
On that view, the High Court considered the money claim made by the respondent, and it confirmed the finding of the trial Court that the respondent would be entitled to a decree for Rs. 37,237.
In fact, the alternative finding recorded by the trial Court in respect of the amount to which the respondent would be entitled in case he succeeded in challenging the validity of the impugned order, was not questioned before the High Court.
In the result, the High Court allowed the appeal and passed a money decree for Rs. 37,237 in favour of the respondent in terms of prayer (A) of paragraph 31 of the plaint.
The appellant then applied for and obtained a certificate from the High Court and it is with the said certificate that it has brought the present appeal before this Court.
That is how the main question which falls for our decision is whether the constitutional provision prescribed by article 311 has been complied with by the appellant before it passed the impugned order.
At this stage, it may be relevant to refer to some material facts.
The respondent was appointed as Extra Assistant Commissioner in 1926 and since then he had been holding various offices in the State service of the then Madhya Pradesh Government.
In 1950, he was holding the post of a Treasury Officer at Nagpur.
It appears that privilege leave for over a year was due to him and he had applied for four months ' privilege leave.
On June 12, 1950, Government informed him that his request for leave was rejected and he was told that no further application for leave would be entertained in future.
On July 7, 1950, the respondent proceeded 138 on casual leave for two days, and on July 8, 1950 he renewed his application for four months ' leave on medical grounds.
This application was accompanied by a certificate given by Dr. Dange.
Government, therefore, decided to constitute a Medical Board for examining the respondent in order to .decide whether leave on medical grounds should be granted to him.
Accordingly, the respondent appeared before a Special Medical Board on July 22, 1950.
The Medical Board, however, could not come to a decision as to whether the respondent should be granted leave on medical grounds for four months.
It recommended that the respondent should get himself admitted in the Mayo Hospital, Nagpur.
for observation and investigation.
In accordance with this report, Government asked the respondent to get himself admitted in the Mayo Hospital in time, so that the Board could examine him on August 8, 1950.
The respondent refused to, go to the Mayo Hospital and pressed that he should be allowed to go to Calcutta to receive medical treatment from experts.
It appears that on July 26, 1950, the respondent received a telegram from Raipur stating that his daughter was dangerously ill there.
He, therefore, made another application on the same day requesting for ten days ' leave to enable him to go to Raipur and see his ailing daughter.
On July 31, 1950, Government granted the respondent 's request.
Accordingly, the respondent went to Raipur.
From Raipur he renewed his application for four months ' leave on Medical grounds and produced certificates from Dr. Bhalerao and Dr. Kashyap.
That led to a lengthy correspondence between the respondent and the Government which shows that Government insisted on his appearing before the Medical Board and the respondent was not prepared to go to.
Nagpur because he alleged that he was seriously ill and could not undertake a journey to Nagpur.
Ultimately, on September 9, 1950, Government called upon the respondent to resume his duties within three days from the receipt of the said letter failing which he was told that he would be suspended and a departmental enquiry would be started against him.
On October 4, 1950, the respondent wrote a lengthily reply setting forth his contentions in detail.
Since he did not resume his duties, Government decided to suspend him and start a departmental enquiry against him.
Mr. S.N. Mehta, I.C.S., was accordingly appointed to hold the.
enquiry.
On November 29, 1950, Mr. Mehta wrote to the respondent that Government had directed him to conduct the departmental enquiry, and called upon the respondent to attend his office on December 7, 1950, at 11.00 a.m.
The respondent, however.
did not appear before him and wrote to Mr. Mehta that owing to his illness, he was unable to appear before him.
He again pleaded that he was seriously ill.
On January 15, 1951, Mr. Mehta served the respondent with a charge sheet.
Three charges were framed against him.
The first charge was that he had deliberately disobeyed the orders of Government when he was asked to get himself admitted in the Mayo 139 Hospital for observation and investigation.
The second charge was that he had failed to report for duty even though no leave was sanctioned to him by Government and he was specifically ordered by Government to report for duty.
The third charge was that he had persistently disobeyed the orders of Government and he had thereby shown himself unfit to continue as a member of the State Civil Service.
Material allegations on which reliance was placed against the respondent in support of these charges were also specified under the respective charges.
The respondent was, however, not prepared to appear before Mr. Mehta and he raised several technical contentions.
Ultimately, he sent his written statement and denied all the charges.
His case appears to have been that he had not deliberately disobeyed any of the orders issued by Government.
In regard to his getting admitted in the Mayo Hospital, he seems to have taken the plea that when he was allowed to go on casual leave to see his ailing daughter at Raipur, it was clear that he could not have got himself admitted in the Mayo Hospital so as to enable the Medical Board to examine him on August 8, 1950.
In respect of the charge that he had persistently refused to obey the orders of Government, his case was that he was dangerously ill and that he genuinely apprehended that if he undertook a journey to resume his duty, he might even collapse.
He requested the enquiry officer to allow him to appear by a lawyer whom he would instruct to cross examine the witnesses whom the Government would examine against him.
He also stated that he wanted to give evidence of his own doctors who would depose to his ailing condition at the relevant time.
It appears that Mr. Mehta wanted to accommodate the respondent as much as he could and when he found that the respondent was not appearing in person before him, he in fact fixed a date for hearing at Raipur on September 21, 1951 where he happened to be camping.
On that date, the respondent appeared before Mr. Mehta and Mr. Mehta made a note as to what transpired on that date.
The note shows that "the whole case was discussed with the respondent.
His plea was that he should be allowed to appear through a counsel, but it was explained to him in detail that as far as the case can be seen from Government side at present, it does not involve the taking up oral evidence.
He agreed that he would not press for this facility.
He would, however, like to give a detailed answer to the charge sheet.
He also undertook to appear in person regularly in future".
Thereafter, Mr. Mehta required the respondent to file his detailed written statement.
and in fact, the respondent did file his detailed written statement containing the pleas to which we have already referred.
On November 8. 1951, Mr. Mehta wrote to the respondent that he would be glad to hear him in person in case he wished to make an oral statement on November 20, 1951, and when the respondent did not 140 appear on the said date, Mr. Mehta proceeded to examine the documentary evidence showing the failure of the respondent to comply with the orders issued by Government and made his report on November 24, 1951.
He found that the three charges framed against the respondent were proved.
In his report, Mr. Mehta observed that "the conduct of the respondent and the language used by him from time to time in his communications .discloses an attitude of disobedience and insubordination which no Government can tolerate from its subordinate officers".
We may incidentally observe that the comment thus made by Mr. Mehta in regard to the communications addressed by the respondent to him appears to us to be fully justified but, in our opinion, this aspect of the matter cannot have any material bearing on the question with which we are concerned.
The validity of the impugned order must be judged objectively without considering the impropriety of the language used by the respondent or the reluctance shown by him to appear before Mr. Mehta.
In his report, Mr. Mehta has also observed that when the respondent met him, he explained to him that the case did not involve recording of any oral evidence as it was based on documents only.
Mr. Mehta adds that according to the impression he got at that time, the respondent was satisfied that in the circumstances, the assistance of a counsel was unnecessary.
It is, however, plain from the several letters written by the respondent to Mr. Mehta that he was insisting upon an oral enquiry and that he wanted to examine his doctors to show that he was so iII at the relevant time that he could not have resumed his duties.
On March 2, 1951, the respondent wrote to Mr. Mehta stating, inter alia, that he wished to put in the witness box a few high ranking Government officers and the doctors whom he had consulted about his illness.
Earlier on January 20, 1951, he had written to Mr. Mehta requesting him to conduct an oral enquiry as laid down in paragraph 8(iv) G.B. Circular 13.
Similarly, on April 23, 1951, he again informed Mr. Mehta that in his opinion the institution of the departmental enquiry after suspending him was illegal and had caused him grave injury, and he added that oral and documentary evidence will be produced in defence.
It does appear that Mr. Mehta explained to the respondent that so far as Government was concerned, it rested its case merely on documents and did not think it necessary to examine any witnesses, and thereupon the respondent agreed that he need not have the facility of the assistance of a lawyer.
But it is clear from the remarks made by Mr. Mehta in the order sheet on September 21, 1951, and the observations made by him in his report that the only point on which the respondent agreed with Mr. Mehta was that he need not be allowed the assistance of the lawyer in the departmental enquiry.
We have carefully examined the record in 141 this case and we see no justification for assuming that the respondent at any time gave up his demand for an oral enquiry in the sense that he should be given permission to cite his doctors in support of his pica that his failure to resume his duties was due to his ill health.
The charge against him was that he had deliberately disobeyed the Government orders, and it is conceivable that this charge could have been met by the respondent by showing that though he disobeyed the orders, the disobedience was in no sense deliberate because his doctors had advised him to lie in bed; and thus considered, his desire to lead medical evidence cannot be treated as a mere subterfuge to prolong the enquiry.
It is true that the respondent did not give a list of his witnesses; but he had named his doctors in his communications to Mr. Mehta, and in fact Mr. Mehta never fixed any date for taking the evidence of the witnesses whom the respondent wanted to examine.
If Mr. Mehta had told the respondent that he would take the evidence of has witnesses on a specified date and the respondent had failed to appear on the said date with his witnesses, it would have been an entirely different matter.
Therefore, the position is that Mr. Mehta did net hold an oral enquiry and did not give an opportunity to the respondent to examine his witnesses and so, the question which arises for our decision is: does the failure of Mr. Mehta to hold an oral enquiry amount to a failure to give a reasonable opportunity to the respondent within the meaning of article 311 ? The requirements of article 311(2) have been considered by this Court on several occasions.
At the relevant time, article 311(2) provided that no person to whom article 311 applies shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard t9 him.
It is common ground that the impugned order of compulsory retirement attracts the provisions of article 311 (2).
If it appears that the relevant statutory rule regulating the departmental enquiry which was held against the respondent made it obligatory on the enquiry officer to hold an oral enquiry if the respondent so demanded.
then there would be no doubt that the failure of the enquiry officer to hold such an oral enquiry would introduce a serious infirmity in the enquiry and would plainly amount to the failure of the appellant to give a reasonable opportunity to the respondent.
This position is not disputed by the learned Attorney General and is indeed well settled.
So, the narrow question to which we must address ourselves is whether it was obligatory on Mr. Mehta to hold, an oral enquiry and give d reasonable opportunity to the respondent to lead oral evidence and examine his doctors.
We will assume for the purpose of this appeal that in a given case, Government would be justified in placing its case against the charge sheeted officer only on documents and may be under no obligation to examine any witnesses, 142 though we may incidentally Observe that even in such cases, if the officer desires that the persons whose reports or orders are being relied upon against him should be offered for cross examination, it may have to be considered whether such an opportunity ought not to be given to the officer; but that aspect of the matter we will not consider in the present appeal.
Therefore, even if it is assumed that Government could dispense with the examination of witnesses in support of the charges framed against the respondent, does the relevant rule make it obligatory on the Enquiry Officer to hold an oral enquiry and give the respondent a chance to examine his witnesses or not? This question falls to be considered on the construction of rule 55 of the Civil Services (Classification, Control and Appeal) Rules.
This rule reads thus: "Without prejudice to the provisions of the Public Servants Inquiries Act, 1850, no order of dismissal, removal or reduction shall be passed on a member of a service (other than an order based on facts which have led to the conviction in a Criminal Court or by a Court, Martial) unless he has been informed in writing of the grounds on which it is proposed to take action, and. has been afforded an adequate opportunity of defending himself.
The grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges, which shall be communicated to the person charged together with a statement of the allegations on which each.
charge is based and of any other circumstances which it is proposed to take into consideration in passing orders on the case.
He shall be required within a reasonable time, to put in a written statement of his defence and to state whether he desires to be heard in person.
If he so desires or if the authority concerned so direct, an oral enquiry shall be held.
At that enquiry oral evidence shall be heard as to such of the allegations as are not admitted, and the person charged shall be entitled to cross examine the witnesses, to give evidence in person and to have such witnesses called.
as he may wish, provided that the officer conducting the enquiry may, for special and sufficient reason to be recorded in writing.
refuse to call a witness.
The proceedings shall contain a sufficient record of the evidence and a statement of the findings and the grounds thereof.
" It appears that the Government of Madhya Pradesh had issued a Circular explaining this Rule.
The Circular contained Rule 8 which is relevant.
It provides that "particular attention is invited to the provisions regarding oral enquiry.
In case the person charged desires that an oral enquiry should be held, the authority holding the departmental enquiry has no option to refuse it".
The High 143 Court seems to have based its conclusion substantially, if not entirely, on this rule.
We do not propose to adopt that course.
The rule may be no more than a circular issued by Government and we do not propose to examine the question as to whether it has the force of a statutory rule.
Our decision would, therefore, be based on the construction of Rule 55 of the Civil Services Rules which admittedly applied and which admittedly is a statutory rule.
The relevant clause in this Rule provides that the officer charge sheeted shall be required within a reasonable time to put in a written statement of his defence and to state whether he desires to be heard in person.
This clause has been complied with m the present proceedings.
Mr. Mehta gave notice to the respondent to appear before him in person on the 20th November, 1951 and the respondent did net appear on that date.
It is the next clause on which the decision of the present appeal depends.
This clause lays down that if he, that is to say the charge sheeted officer, so desires or if the authority concerned so directs, an oral enquiry shall be held.
In our opinion, it is plain that the. requirement that an oral enquiry shall be held if the authority concerned so directs.
or if the charge sheeted officer so desires is mandatory.
Indeed.
this requirement is plainly based upon considerations of natural justice and fairplay.
If the charge sheeted officer wants to lead his own evidence in support of his plea, it is obviously essential that he should be given an opportunity to lead such evidence.
Therefore.
we feel no hesitation in holding .that once the respondent expressed his desire to Mr. Mehta that he wanted to lead evidence in support of his plea that his alleged disobedience of the Government orders was not deliberate, it was obligatory on Mr. Mehta to have fixed a date for recording such oral evidence and give due intimation to the respondent in that behalf.
It is true that the oral enquiry which the enquiry officer is bound to hold can well be regulated by him in his discretion.
If the charge sheeted officer starts cross examining the departmental witnesses in an irrelevant manner, such cross examination can be checked and controlled.
If the officer desires to examine witnesses whose evidence may appear to the enquiry officer to be thoroughly irrelevant, the enquiry officer may refuse to examine such witnesses; but in doing so, he will have to record his special and sufficient reasons.
In other words, the right given to the charges heated officer to cross examine the departmental witnesses or examine his own witnesses can be legitimately examined and controlled by the enquiry officer; he would be justified in conducting the enquiry in such a way that its proceedings are not allowed to be unduly or deliberately prolonged.
But, in our opinion it would be impossible to accept the argument that if the charge sheeted officer wants to lead oral evidence, the enquiry officer can say that having regard to the charges framed against the officer.
he would not hold any oral enquiry.
In the present case, the witnesse. 144 whom the respondent wanted to examine; would undoubtedly have given relevant evidence.
If the doctors who treated the respondent had come and told the enquiry officer that the condition of the respondent was so bad that he could not resume work, that undoubtedly would have been a relevant and material fact to consider in deciding whether the charges framed against the respondent were proved.
Even if we disapprove of the attitude adopted by the respondent in the course of this enquiry and condemn him for using extravagant words and making unreasonable contentions in his communications to the enquiry officer, the fact still remains that he wanted to examine his doctors, and though he intimated to Mr. Mehta that he desired to examine his doctors, Mr. Mehta failed to give him an opportunity to do so.
That, in our opinion, introduces a fatal infirmity in the whole enquiry which means that the respondent has not been given a reasonable opportunity to defend himself within the meaning of article 311(2).
On that view of the matter, it is unnecessary to consider whether the High Court was right in its other conclusions that the second notice served by the appellant on the respondent was defective and that the final order was also defective inasmuch as it did not appear that the appellant had taken into account the representation made by respondent.
It is not disputed by the learned Attorney General that if we hold that the enquiry conducted by Mr. Mehta contravened the mandatory provision of r. 55, the decision of the High Court could be sustained on that ground alone.
In the result.
the appeal fails and is dismissed with cost.
Appeal dismissed.
| The appellant who was in the service of a State Government asked for long leave which was refused.
Subsequently he asked for ten days ' leave which was granted.
On the expiry of the leave period he did not join duty on the ground that he was seriously ill.
The Government refused to accept the plea and instituted a departmental inquiry against him.
The respondent wanted to produce oral evidence in support of his plea including the evidence of doctors who treated him, but the enquiry officer refused to record oral evidence on the ground that the case against the appellant rested on documents alone and therefore no oral evidence was necessary.
On the report of the enquiry ' officer the State Government ordered the compulsory retirement of the respondent.
The latter filed a suit in which he claimed inter alia that the constitutional provision in article 311 had been contravened.
The trial judge held against him but the High Court decided in his favour.
The State Government appealed to the Supreme Court with certificate.
The narrow question to which the COurt had to address itself was whether it was obligatory on the enquiry officer to give a reasonable opportunity to the respondent to lead oral evidence and examine his doctors.
HELD: (i) The Civil Services (ClassifiCation, Control and Appeal) Rules provide in r. 55 that if the charge sheeted Officer so desires or if the authority concerned so directs an oral enquiry shall be held.
This provision is mandatory and is based on considerations of natural justice and fair play.
Therefore when the respondent expressed his desire to the enquiry officer that he wanted to lead evidence in support of his plea, it was obligatory on the enquiry officer to have fixed a date for recording such oral evidence and give due intimation to the respondent in that behalf.
[143 D F] (ii) Though an enquiry officer would be justified in conducting the enquiry in such a way that its proceedings are not allowed to be unduly or deliberately prolonged, it would be impossible to accept the argument that if the charge sheeted officer wants to lead oral evidence the enquiry officer can say that having regard to the charges against the officer he would not hold any oral enquiry [143 H] (iii) In the present case the witnesses whom the respondent wanted to examine would undoubtedly have given relevant evidence.
He wanted to examine his doctors but the enquiry officer failed to give him an opportunity to do so.
That introduced a fatal infirmity in the whole enquiry as the respondent had not been given a reasonable opportunity to de.fend himself within the meeting of article 311 (2).
The appeal of the State Government had therefore to be dismissed.
[144 A, C] 136
|
No. 53 of 1968.
Petition under article 32 of the Constitution of India for enforcement of the fundamental rights.
H.K. Shah, B. Datta and J.B. Dadachanji for the petitioners.
C.K. Daphtary, Attorney General, R. Gopalakrishnan, R.H. Dhebar and S.P. Nayar, for the respondents.
HIDAYATULLAH, C.J., BACHAWAT and MITTER, JJ., delivered segarate judgments dismissing the petition.
SIKRI and HEGDE, JJ. delivered separate dissenting opinions allowing the petition.
Hidayatullah, C.J.
This petition has led to a sharp division of opinion among my 'brethren: Sikri and Hegde, JJ. would allow the petition and Bachawat and Mitter, JJ.
would dismiss it.
They have differed on the question whether the petition deserves to be dismissed on the ground of delay.
I agree in the result reached by Bachawat and Mitter, JJ.
and would also dismiss if I wish briefly to state my reasons.
At the threshold it appears to me that as there is No. law which prescribes a period of limitation for such petitions, each of my brethren has really given expression to the practice he follows or intends to follow.
I can do no more than state the views 1 830 hold on this subject and then give my decision on the merits of the petition in the light of those views.
The problem divides itself into two.
The first part is a general question to be considered in two aspects: (a) whether any limit of time at all can be imposed on petitions under article 32, and (b) whether this Court would apply by analogy an article of the Indian appropriate to the facts of the case or any other limit ? The second is what is to be done in this case ? I shall begin by stating my views on the first question.
There appears to be some confusion about the scope of Article 32.
That Article gives the fight to move the Supreme Court by appropriate proceedings for enforcement of the rights conferred by of the Constitution.
The provision merely keeps open the doors of this Court, in much the same way, as it used to be said, the doors of the Chancery Court were always open.
The State cannot place any hindrance in the way of an aggrieved person seeking to approach this Court.
This is logical enough for it is against State action that Fundamental Rights are claimed.
But the guarantee goes no further at least on the terms of article 32.
Having reached this Court, the extent or manner of interference is for the Court to decide.
It is clear that every case does not merit interference.
That must always depend upon the facts of the case.
In dealing with cases which have come before it, this Court has ,already settled many principles on which it acts.
A few of them may be mentioned here.
This Court does not take action in cases covered ' by the ordinary jurisdiction of the civil courts, that is to say, it does not convert civil and criminal actions into proceedings for the obtainment of writs.
Although there is no rule or provision of law to prohibit the exercise of its extraordinary jurisdiction this Court has always insisted upon recourse to ordinary remedies or the exhaustion of other remedies.
It is in rare cases, where the ordinary process of law appears to be inefficacious, that this Court interferes even where other remedies are available.
This attitude arises from the acceptance of 'a salutary principle that extraordinary remedies should not take the place of ordinary remedies.
Then again this Court refrains from acting under article 32 if the party has already moved the High Court under article 226.
This constitutes a comity between the Supreme Court and the High Court.
Similarly, when a party had already moved the High Court with a similar complaint and for the same relief and failed, this Court insists on an appeal to be brought before it and does not allow fresh proceedings to be started.
In this connection the principle of res judicata has been applied, although the expression is somewhat inapt and unfortunate.
The reason of the rule no 831 doubt is public.
policy which Coke summarised as "interest reipublicae res judicates non rescindi" but the motivating factor is the existence of another parallel jurisdiction in another Court and that Court having been moved, this Court insists on bringing its decision 'before this Court for review.
Again this Court distinguishes between cases in which a speaking order on merits has been passed.
Where the order is not speaking or the matter has been disposed of on some other ground at the threshold, this Court in a suitable case entertains the application before itself.
Another restraint which this Court puts on itself is that it does not allow a new ground to be taken in appeal.
In the same way, this Court has refrained from taking action when a better remedy is to move the High Court under article 226 which can go into the controversy more comprehensively than this Court can under article 32.
It follows, therefore, that this Court puts itself in restraint in the matter of petition under article 32 and this practice has now become inveterate.
The question is whether this Court will inquire into belated and stale claims or take note of evidence of neglect of one 's own rights for a long time? I am of opinion that not only it would but also that it should.
The party claiming Fundamental Rights must move the Court before other rights come into existence.
The action of courts cannot harm innocent parties if their rights emerge by reason of delay on the part of the person moving the Court.
This principle is well recognised and has been applied by Courts in England 'and America.
The English and American practice has been outlined in Halsbury 's Laws of England and Corpus Juris Secundum.
It has been mentioned by my brethren in their opinions and I need not traverse the same ground again except to say this that Courts of Common Law in England were bound by the Law of Limitation but not the Courts of Chancery.
Even so the Chancery Courts insisted on expedition.
It is trite learning to refer to the maxim "delay defeats equity" or the Latin of it that the Courts help those who .are vigilant and do not slumber over their rights.
The Courts of Chancery, therefore, frequently applied to suits in equity the analogy of the law of Limitation applicable to actions at law and equally frequently put a special limitation of their own if they thought that the suit was unduly delayed.
This was independently of the analogy of law relating to limitation.
The same practice has been followed in the United States.
In India we have the which prescribes different periods of limitation for suits, petitions or applications.
There are also residuary articles which prescribes limitation in those cases where no express period is provided.
If it were a matter of a suit or application, either an appropriate article or the residuary article L6Sup.
C.I./69 2 832 would have applied.
But a petition under article 32 is not a suit and it is also not a petition or an application to which the applies.
To put curbs in the way of enforcement of Fundamental Rights through legislative action might well be questioned under article 13(2).
The reason is also quite clear.
If a short period of limitation were prescribed the Fundamental Right might well be frustrated.
Prescribing too long a period might enable stale claims to be made to the detriment of other rights which might emerge.
If then there is no period prescribed what is the standard for this Court to follow ? I should say that utmost expedition is the sine qua non for such claims.
The party aggrieved must move the Court at the earliest possible time and explain satisfactorily all semblance of delay.
I am not indicating any period which may be regarded as the ultimate limit of action for that would be taking upon myself legislative functions.
In England a period of 6 months has been provided statutorily, but that could be because there is no guaranteed remedy and the matter is one entirely of discretion.
In India I will only say that each case will have to be considered on its own facts.
Where there is appearance of avoidable delay and this delay affects the merits of the claim, this Court will consider it and in a proper case hold the party disentitled to invoke the extraordinary jurisdiction.
Therefore, the question is one of discretion for this Court to follow from case to case.
There is no lower limit and there is no upper limit.
A case may be brought within by reason of some Article but this Court need not necessarily give the total time to the litigant to move this Court under article 32.
Similarly in a suitable case this Court may entertain such a petition even after a lapse of time.
It will all depend on what the breach of the Fundamental Right and the remedy claimed ,are and how the delay arose.
Applying these principles to the present case what do I find ? The petitioner moved the High Court for relief on the ground that the recovery from him was unconstitutional.
He set out a number of grounds but did not set out the ground on which ultimately in another case recovery was struck down by this Court.
That ground was that the provisions of the Act were unconstitutional.
The question is: can the petitioner in this case take advantage, after a lapse of a number of years, of the decision of this Court ? He moved the High Court but did not come up in appeal to this Court.
His contention is that the ground on which his petition was dismissed was different and the ground on which the statute was struck down was not within his knowledge and therefore he did not know of it and pursue it in this Court.
To that I answer that law will presume that he knew the exact ground of unconsti 833 tutionality.
Everybody is presumed to know the law.
It was his duty to have brought the matter before this Court for consideration.
In any event, having set the machinery of law in motion he cannot abandon it to resume it after a number of years, because another person more adventurous than he in his turn got the statute declared unconstitutional, and got a favorable decision.
If I were to hold otherwise, then the decision of the High Court in any case once adjudicated upon and acquiesced it may be questioned in a fresh litigation revived only with the 'argument, that the correct position was not known to the petitioner at the time when he abandoned his own litigation.
I ,agree with the opinion of my brethren Bachawat and Mitter, JJ.
that there is no question here of a mistake of law entitling the petitioner to invoke analogy of the Article in the .
The grounds on which he moved the Court might well have impressed this Court which might have also have decided the question of the unconstitutionality of the Act as was done in the subsequent litigation by another party.
The present petitioner should have taken the right ground in the High Court and taken it in appeal to this Court after the High Court decided against it.
Not having done so and having abandoned his own litigation years ago, I do not think that this Court should apply the analogy of the Article in the and give him the relief now.
The petition, therefore, fails and is dismissed with costs.
Sikri, J. I have had the advantage of reading the drafts of the judgments prepared by Mitter, J., and Bachawat, J.
I agree with Mitter, J. in his conclusion that the rule laid down in Daryao vs State of U.P.(1) is inapplicable to the facts of the case, but for the reasons I will presently give, in my opinion the petition should be allowed.
article 32(2) of the Constitution confers 'a judicial power on the Court.
Like all judicial powers, unless there is an express provision to the contrary, it must be exercised in accordance with fundamental principles of administration of justice.
General principles of res judicata were accordingly applied by this Court in Daryao vs State of U.P.(1), and Amalgamated Coalfields Ltd. vs Janapada Sabha, Chindwara(2).
I understand that one of the fundamental principles of administration of justice is that, apart from express provisions to the contrary, stale claims should not be given effect to But what is a stale claim ? It is not denied that the Indian does not directly apply to a petition under article 32.
Both the English Courts and the American Courts were confronted with a similar problem.
In the United States the Federal Courts of Equity solved the problem thus: (1) ; (2) A.I.R. 1964 S.C. 1013, 1018.
834 "Except, perhaps, where the statute by its express terms applies to suits in equity as well as to actions at law, or where the jurisdiction of law and equity is concurrent, the rule appears to be that Federal courts sitting in equity are not bound by state statutes of limitation.
Nevertheless, except where unusual conditions or extraOrdinary circumstances render it equitable to do so, the Federal courts usually act in analogy to the state statutes of limitation applicable to cases of like character." (Vol 34, American Jurisprudence, Limitation of Actions, s 54.") In Courts of Admiralty, where the statutes of limitation do not control proceedings, the analogy of such statutes is ordinarily followed unless there is something exceptional in the case.
(ibid) Story on Equity Jurisprudence states the legal position thus: "It was, too, a most material ground, in all bills for an account, to ascertain whether they were brought to open and correct 'errors in the account recenti facto; or whether the 'application was made after a great lapse of time.
In cases of this sort, where the demand was strictly of a legal nature, or might be cognizable at law, courts of equity governed themselves by the same limitations as to entertain such suits as were prescribed by the ' Statute of Limitations in regard to suits in courts of common law in matters of account.
If, therefore, the ordinary limitation of such suits at law was six years, courts of equity would follow the same period of limitation.
In so doing, they did not act, in cases of this sort (that is, in matter of concurrent jurisdiction) so much upon the ground of analogy to the Statute of Limitations, as positively in obedience to such statute.
But where the demand was not of a legal nature, but was purely equitable; or where the bar of the statute was inapplicable; courts of equity had another rule, rounded sometimes upon the analogies of the law, where such analogy existed, and sometimes upon its own inherent doctrine, not to entertain stale or antiquated demands, and not to encourage laches and negligence.
Hence, in matters of account, although not barred by the Statute of Limitations, courts of equity refused.
to interfere after a considerable lapse of time.
from considerations of public policy, from the difficulty of doing entire justice, when, the original transactions had become obscure by time, and the evidence might have been lost, and from the consciousness that the repose of ' titles and the security of property are mainly promoted by a full en 835 forcement of the maxim, Vigilantibus, non dormientibus jura subveniunt.
Under peculiar circumstances, however, excusing or justifying the delay, courts of equity would not refuse their aid in furtherance of the rights of the party; since in such cases there was no presence to insist upon laches or negligence, as a ground for dismissal of the suit; and in one case carried back the account over a period of fifty years." (Third Edition, page 224, $529) In England, as pointed out by Bachawat, J., the Court of Chancery acted on the analogy of Statute of Limitation (vide Halsbury, Vol.
14, p. 647, article 1190).
It seems to me, however, that the above solution is not quite appropriate for petitions under article 32.
A delay of 12 years or 6 years would make a strange bed fellow with a direction or order or writ in the nature of mandamus, certiorari and prohibition.
Beating in mind the history of these writs I cannot believe that the Constituent Assembly had the intention that five Judges of this Court should sit together to enforce a fundamental right at the instance of a person, who had without any reasonable explanation slept over his rights for 6 or 12 years.
The history of these writs both in England and the U.S.A. convinces me that the underlying idea of the Constitution was to provide an expeditious and authoritative remedy against the inroads of the State.
If a claim is barred under the , unless there are exceptional circumstances, prima facie it is a stale claim and should not be entertained by this Court.
But even if it is not barred under the/radian , it may not be entertained by this Court if on the facts of the case there is unreasonable delay.
For instance, if the State had taken possession of property under a law alleged to be void, and if a petitioner comes to this Court 11 years after the possession was taken by the State, I would dismiss the petition on the ground of delay, unless there is some reasonable explanation.
The fact that a suit for possession of land would still be in time would not be relevant at all.
It is difficult to lay down a precise period beyond which delay should be explained.
I favour one year because this Court should not be approached lightly, and competent legal 'advice should be taken and pros and cons carefully weighed before coming to this Court.
It is common knowledge that appeals and representations to the higher authorities take time; time spent in pursuing these remedies may not be excluded under the , but it may ordinarily be taken as a good explanation for the delay.
It is said that if this was the practice the guarantee of article 32 would be destroyed.
But the article no where says that a petition, howsoever late, should be entertained and a writ or order or 836 direction granted, howsoever remote the date of infringement of the fundamental right.
In practice this Court has not been entertaining stale claims by persons who have slept over their rights.
There is no need to depart from this practice ,and tie our hands completely with the shackles imposed by the Indian .
In the case of applications under article 226 this Court observed in State of Madhya Pradesh vs Bhailal Bhai(1): "It may however be stated as a general rule that if there has been unreasonable delay the Court ought not ordinarily to lend its aid to a party by this extraordinary remedy of mandamus.
Again, where even if there is no such delay the Government or the statutory authority against whom the consequential relief is prayed for raises a prima facie triable issue as regards the availability of such relief on the merits on grounds like limitation, the Court should ordinarily refuse to issue the writ of mandamus for such payment.
In both these kinds of cases it will be sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a civil court and to refuse to exercise in his favour the extraordinary remedy under article 226 of the Constitution.
" In State of Kerala vs Aluminium Industries(2) Wanchoo, J., speaking on behalf of a large Bench of this Court, observed: "There is no doubt in view of the decision of this Court in Sales Tax Officer vs Kanhaiyalal(3) that money paid under a mistake of law comes within the word 'mistake ' in section 72 of the Contract Act and there is no question of estopped when the mistake of law is common to both the parties, which was the case here inasmuch as the respondent did not raise the question relating to Article 286 of the Constitution and the Sales Tax Officer had no occasion to consider it.
In such a case where tax is levied by mistake of law it is ordinarily the duty of the State subject to any provision in the law relating to sales tax (and no such provision has been brought to our notice) to refund the tax.
If refund is not made, remedy through court is open subject to the same restrictions and also to the period of limitation (see Article 96 of the Limitation Act, 1908), namely, three years from the date when the mistake becomes known to the person who has made the payment by mistake [see State of Madhya Pradesh vs Bhailal(1)].
In this view of the matter it was the duty of the State to (1) ; ,271 72.
(2) 16 S.T.C. 689, 692, (3) 837 investigate the facts when the mistake was brought to its notice and to make a refund if mistake was proved and the claim was made within the period of limitation.
" But these cases cannot directly apply to petitions under article 32 because they proceed from the premise that the remedy is discretionary under article 226.
Coming to the facts of this case, which have been stated in detail by Mitter, J., it seems to me that the delay in coming to this Court has been adequately explained.
In brief, the facts are these: The Sales Tax Officer, by his order dated March 17, 1958, forfeited a sum of Rs. 26,563.50 under section 21 (4) of the Bombay Sales Tax Act (Bombay Act III of 1953), which provision is similar to section 12A(4) of the Bombay Sales Tax Act, 1946.
The petitioner promptly filed a writ petition in the Bombay High Court challenging this order.
His petition was dismissed on November 28, 1958.
He also failed in appeal before the Division Bench on July 7, 1959.
An order of attachment followed.
The petitioner paid the sum of Rs. 26,563.50 in various instalments from October 3, 1959, to August 8, 1960.
By letter dated January 9, 1962, the petitioner was called upon to pay a penalty amounting to Rs. 12,517/68 on account of late payment of sales tax dues but this order of penalty was ultimately cancelled.
The Gujarat High Court (Shelat, C.J., and Bhagwati, J.) in Kantilal Babulal
H.C. Patel, Sales Tax Officer(x) held on December 2, 1963, that section 12A(4) of the Bombay Sales Tax Act, 1946, was valid and did not violate article 19(1) (f) as it was saved by article 19(5).
On September 29, 1967, this Court, on appeal, in Kantilal Babulal vs
H.C. Patel Sales Tax Officer(2) struck down this provision as it infringed article 19(1)(f).
On February 9, 1968, four petitioners hereinafter compendiously referred to as the petitioner filed this petition praying that the order dated March 17, 1958, and the notice and order dated December 18, 1958, and December 24, 1958, be quashed.
There is no doubt that under section 72 of the Contract Act the petitioner would be entitled to the relief claimed and the refund of the amount if he paid the money under mistake of law.
I find it difficult to appreciate why the payment was not made under a mistake of law.
In my opinion the petitioner was mistaken in thinking that the money was liable to be refunded under a valid law.
Nobody has urged before us that the grounds which he had raised before the High Court were sound.
The petitioner had 'attempted to raise before the Bombay High Court the following grounds: (1) 16 S.T.C. 973.
(2) 21 S.T.C. 174.
838 1.
Inasmuch as the sum of Rs. 26,563.50 was paid by way of refund under the Bombay Sales Tax Act 1946, the taxing authorities had exceeded their power under section 21 (4) of the Act of 1953, in forfeiting the said sum of money.
Assuming that the respondent had power to forreit the sum under the Act of 1953, it was strictly limited to taxes payable trader the provisions of the Act .and as no tax was payable on outside sale the authorities had no power to forfeit the sum of Rs. 26,563.50.
Even assuming while denying that the respondent had power to forfeit the sum of Rs. 26,563.50, the power to forfeit an amount as a tax presupposes a power to impose a tax and inasmuch as on a proper construction of the relevant provisions of the Constitution no State Legislature had at any time a power to impose tax on the aforesaid transactions, the power to forfeit tax in respect of those transactions is ultra vires the State Legislature.
" The learned Single Judge held: "This appears to me to be a gross case where even if I was of the opinion that the order is invalid and involved violation of fundamental rights would not in my discretion interfere by way of issuing a writ.
I 'am not depriving the petitioner of any other appropriate remedy.
I have, therefore, decided to dismiss this petition on that single ground.
" The Division Bench, on appeal, decided on the limited ground that "Mr. Justice K.K. Desai having exercised his discretion no Case is made out for interference with the exercise of that discretion." The petitioner rightly did not file an appeal to this Court for he would have had little chance of succeeding.
Suppose a petitioner challenges a provision of the Sales Tax Act before the High Court on the ground that it does not fall within List II or List III of the Seventh Schedule.
He fails and pays the tax and does not appeal to the Supreme Court.
Ultimately, in another petition, the provision is struck down under article 14 or article 19, a point which he and his lawyers never thought of All assessees who had paid tax without challenging the provision would be entitled to approach this Court under article 32 and claim a refund (see Sales Tax Officer, Benaras vs Kanhaiya Lal Mukundlal Saraf) (1).
But why not the assessee who applied to (1) 839 the High Court ? The answer given is that he had thought at one time that the law was bad, though on wrong grounds.
If a law were framed sanctioning the above discrimination, I believe, it would be difficult to sustain it under article 14, but yet this is the discrimination which the respondent wants me to sanction.
The grounds extracted above show that it never struck the petitioner that the provision could be challenged on the ground ultimately accepted by this Court.
If the petitioner had not thought of going to the Bombay High Court on the points he did, and had paid on demand, as most of the assessees do, he would, I imagine, have been entitled to maintain this petition.
But it is now said that the petitioner 's position is worse because he exercised his right to approach the High Court under article 226.
The contention seems to be that when a petitioner approaches a High Court and fails, he can no longer suffer from any mistake of law even if the point on which this Court ultimately strikes down the provision, never struck him or his lawyer or the Court.
I cannot uphold this contention.
In my opinion the petitioner was under a mistake of law, when he paid up, the mistake being that he thought that section 12A (4) was a valid provision in spite of its imposing unreasonable restrictions.
This mistake he discovered like 'all assessees when this Court struck down section 12A(4) of the Bombay Sales Tax Act.
He has come to this Court within six months of that day and there is no delay.
The petition is accordingly allowed and the impugned order dated March 17, 1958, quashed and the respondent directed to refund the amount.
Under the circumstances there will be no order as to costs.
Bachawat, J. I have had the advantage of reading the judgment prepared by G.K. Mitter, J.
For the reasons given in this judgment, 1.
agree with the order proposed by him.
As the earlier petition filed in the High Court was not dismissed on the merits, the present petition is not barred by res judicata or principle analogous thereto.
The petitioners realised Rs. 26,563.50 P from their customers outside Bombay on account of sales tax.
The Sales Tax Officer by his order dated March 17, 1958 forfeited this sum under section 21 (4) of the Bombay Sales Tax Act 3 of 1953.
On March 28, 1958 the petitioners filed a writ petition ' in the Bombay High Court seeking to restrain the Sales Tax Officer from recovering the amount.
They pleaded that they were not liable to pay the amount, that section 21 (4) was ultra vires the powers of the State legislature and that the order of forfeiture was violative of articles 19(1) (f) and 265 of the Constitution and was invalid.
On November 28, 1958, K.K. Desai, J. dismissed the petition.
He held that the petitioners having defrauded other persons were not 840 entitled to any relief.
The petitioners filed an appeal against the order.
In the memorandum of appeal, they pleaded that the threatened levy was in violation of articles 19(1)(f) and 31 of the Constitution.
The appeal was dismissed on July 13, 1959.
In the meantime on December 24, 1958 the Collector of Bombay attached the petitioners ' properties.
Between August 3, 1959 and August 8, 1960 the petitioners paid the sum of Rs. 26,563.50 P to the Collector of Bombay.
In Civil Appeal No. 126 of 1966, Kantilal Bapulal & Bros. vs
H.C. Patel decided on September 29, 1967 this Court struck down section 12(A)(4) of the Bombay Sales Tax Act, 1946 as unconstitutional and violative of article 19 ( 1 ) (f).
The arguments in the present 'appeal proceeded on the assumption that section 21 (4) of the Bombay Sales Tax Act, 1953 is liable to be struck down on the same ground.
On February 9, 1968 the petitioners filed the present writ petition under article 32 of the Constitution claiming refund of Rs. 26,563.50 P under section 72 of the .
They alleged that they paid this sum to the Collector under coercion and/or mistake of law, and that they discovered the mistake on September 29, 1967.
Two points arise for decision in this writ petition: (1 ) Would the claim be barred by limitation if it were the subject matter of a suit in February 1968 and (2) if so, are the petitioners entitled to any relief in this petition under article 32 of the Constitution.
Subject to questions of limitation, waiver and estoppel, money paid under mistake or coercion may be recovered under section 72 of the .
The fight to relief under section 72 extends to money paid under mistake of law, i.e., "mistake in thinking that the money paid was due when, in fact, it was not due.
" Shiva ' Prasad Singh vs Srish Chandra Nandi ( 1 ), Sates Tax Officer vs Mukundlal Saraf(2).
In my opinion, the petitioners were ' not labouring under any mistake of law when they made the payments.
As early as March 1958 they filed a wait petition for restraining the levy under the order dated March 17, 1958 claiming that the order was invalid and that section 21 (4) of the Bombay Sales Tax Act, 1953 was ultra vires and unconstitutional.
They might not have then known the precise ground upon which the Court subsequently struck down a similar provision of law, but they had discovered presumably under legal advice that they were not legally bound to make any payment.
After the writ petition was dismissed their properties were attached and they made the payments under coercion in 1959 and 1960.
The payments were not made under a mistake of law or as pointed out in Shiva Prasad Singh 's Case(1) under a mistake in thinking that the money was due.
They cannot claim any relief on the ground of mistake.
(1) [1949] L.R. 76 I.A. 244, 254.
(2) [1959] S.C.R. 1350, 1361, 1362.
841 As we are assuming in favour of the petitioners that section 21 (4) of the Bombay Sales Tax Act 1953 as invalid, we must hold that they made the payments under coercion.
A suit for the recovery of the money on this ground instituted on January 1, 1964 would be governed by Article 24 of the and the period of limitation would be three years from the dates in 1959 and 1960 when the money was received by fife respondents.
The petitioners cannot obtain an extension of fife period under section 30(a) of the as article 62 of the Indian Limitation Act, 1908 prescribed fife same period of limitation.
A suit for recovery of tax or other levy illegally collected was governed by article 62 and not by article 120, see A1.
Venkata Subba Rao vs State Andhra Pradesh(1).
Accordingly a suit for the recovery of money instituted in February 1968 would be barred by limitation.
If the petitioners could claim relief on the ground of mistake the suit would be governed by article 96 of fife Indian Limitation Act, 1908 and time would begin to run from the date when the mistake becomes known to the plaintiff.
In State of Madhya pradesh vs Bhailal Bhai & Ors.(2), and State of Kerala vs Aluminium Industries Ltd.(3) it was held that article 96 applied to a suit for recovery of money paid under a mistake of law.
Section 17(1)(c) of the now provides that in the case of a suit for relief from the consequences of a mistake the period of limitation does not begin to run until the plaintiff has discovered the mistake or could with reasonable diligence have discovered it.
Section 17(1)(c) corresponds to section 26(c) of the Limitation Act, 1939 (2 & 3 Geo. 6, c. 21).
It was held in Re Diplock(4) that sec.
26(c) applied by analogy to a suit for recovery of money paid under mistake of law.
On appeal, the House of Lords said that the section presented many problems and refrained from saying more about it, see Ministry of Health vs Simpson(5).
In some American States, it has been held that a mistake of law cannot be regarded as a mistake within a similar statute and time ran from the date of the accrual of the cause of action, see Corpus Juris Secundum, vol.
54, Limitation of Actions, Article 198, page 202, Morgan vs Jasper County(6), and the cases referred to therein.
It is not necessary to pursue the matter any further as the petitioners cannot claim relief on the ground of mistake.
Accordingly, I express no opinion on the scope of section 17(c) of the , For the reasons already stated a suit for the recovery of the money instituted in February 1968 would be barred by limitation.
(1) ; , 612 620.
(2) [1964] 6 S.C.R. 261, 274.
(3) [1965] 16 S.T.C. 689, 692.
(4) , 515 516.
(5) ,277.
(6) 11 A.L.R. 634:274 N.W. 310.
842 The next and the more fundamental question is whether in the circumstances the Court should give relief in a writ petition under article 32 of the Constitution.
No period of limitation is prescribed for such a petition.
The right to move this Court for enforcement of fundamental rights is guaranteed by article 32.
The writ under article 32 issues as a matter of course if a breach of a fundamental right is established.
Technical rules applicable to suits like the provisions of section 80 of the Code of Civil Procedure are not applicable to a proceeding, under article 32.
But this does not mean that in giving relief under article 32 the Court must ignore and trample under foot all laws of procedure, evidence, limitation, res judicata and the like.
Under article 145 (1 ) (c) rules may be framed for regulating the practice and procedure in proceedings under article 32.
In the absence of such rules the Court may adopt any reasonable rule of procedure.
Thus a petitioner has no right to move this Court under article 32 for enforcement of his fundamental right on 'a petition containing misleading and inaccurate statements and if he files such a petition the Court will dismiss it, see W.P. No. 183 of 1966, Indian Sugar and Refineries Ltd. vs Union of India decided on March 12, 1968.
On grounds of public policy it would be intolerable if the Court were to entertain such a petition.
Likewise the Court held in Daryao vs The State of U.P.(1) that the general principles of res judicata applied to a writ petition 'under article 32.
Similarly, this Court has summarily dismissed innumerable writ petitions on the ground that it was presented after unreasonable delay.
The normal remedy for recovery of money paid to the State under coercion or mistake of law is by suit.
Articles 32 and 226 of the Constitution provide concurrent remedy in respect of the same claim.
The extraordinary remedies under the Constitution are not intended to enable the claimant to recover monies, the recovery of which by suit is barred by limitation.
Where the remedy in a writ application under article 32 or article 226 corresponds to a remedy in an ordinary suit and the latter remedy is subject to the bar of a statute of limitation, the Court in its writ jurisdiction acts by analogy to the statue adopts the statute as its own rule of procedure and in the absence of special circumstances imposes the same limitation on the summary remedy in the writ jurisdiction. 'On similar grounds the Court of Chancery acted on the analogy of the statutes of limitation in disposing of stale claims though the proceeding in a Chancery was not subject to any express statutory bar, see Halsbury 's Laws of England, vol.
14, page 647, article 1190, Knox vs Gye(2).
Likewise the High Court acts on the analogy of the statute of limitation in a proceeding under article 226 though the statute does not expressly apply to the proceeding.
The Court will almost always refuse to give relief under article 226 if the ; C2) , 674.
843 delay is more than the statutory period of limitation, see Stale of.
Madhya Pradesh vs Bhailal Bhai(1).
Similarly this Court acts on the analogy of the statute of limitation in respect of a claim under article 32 of the Constitution though such claim is not the subject of any express statutory bar of limitation.
If the right to a property is extinguished by prescription under section 27 of the the petitioner has no subsisting right which can be enforced under article 32 (see Sobhraj Odharmal vs Slate of Rajasthan(2).
In other cases where the remedy only and not the right is extinguished by limitation, it is on grounds of public policy that the Court refuses to entertain stale claims under article 32.
The statutes of limitation are rounded on sound principles of public policy.
As observed in Whitley Stoke 's Anglo Indian Codes, Vol.
11 p. '940: "The law is rounded on public policy, its aim being to secure the quiet of the community, to suppress fraud and perjury, to quicken diligence, and to prevent oppression.
" In Her Highness Ruckmaboye vs Lulloobhoy Mottickchund(a) the Privy Council observed that the object of the statutes of limitation was to give effect to the maxim, "interest reipublicae ut sit finis litium" (Co Litt 303) the interest of the State requires that there should be a limit to litigation.
The rule of res judicata is rounded upon the same rule of public policy, see Daryao vs State of U.P.(4) at page 584.
The other ground of public policy upon which the statutes of limitation are rounded is expressed in the maxim "vigilantibus non dormientibus jura subveniunt" (2 Co. Inst.
690) the laws aid the vigilant and not those who slumber.
On grounds of public policy the Court ' applies the principles of res judicata to writ petitions under article 32.
On like grounds the Court acts on the analogy of the statutes of limitation in the exercise of its jurisdiction under article 32.
It follows that the present petition must be dismissed.
Miller, J.
The facts leading up to the filing of the petition under article 32 of the Constitution are as follows.
The first petitioner before us is a registered partnership firm (hereinafter referred to as 'the firm ') carrying on business in Bombay and the other petitioners are partners of the said firm.
The firm has been carrying on business as a dealer in and a trader of textiles and art silk etc.
It was registered as a dealer 'and has held registration certificates under the various sales tax laws prevailing in the State of Bombay from 1946 onwards including the Bombay Sales Tax Act 5 of 1946, the Bombay Sales Tax Act 3 of 1953 and the Bombay Sales Tax Act 51 of 1959.
In the course of assessment for the assessment period commencing on April 1, 1949 and ending on 31st October 1952 the 273 74.
(2) [1963] Supp. 1 S.C.R. 99, 111.
[1851 52] 5 M.I.A., 234. 251.
(4) [1962] 1 S.C.R. 574.
844 firm contended that its sales of the value of Rs. 13,42,165 15 6 were not liable to be taxed under the provisions of the Bombay Sales Tax Act then in force as the goods were delivered as a direct result of such sales for purposes of consumption outside the State of Bombay.
The firm claimed that it was entitled to a refund of the amount which it had collected from its customers and paid on account of the aforesaid sales at the time of submitting the returns of its turnover.
The Sales Tax Officer did not accept this contention but on appeal the Assistant Collector of Sales Tax upheld the firm 's contention after examining the details submitted by it and found that sales involving the sum of Rs. 26,563 8 0 realised by way of tax were protected under article 286 of the Constitution.
He therefore directed that the said sum be refunded to the firm on a proper application.
This appellate order was passed on November 7, 1956.
The firm preferred an application for refund of Rs. 26,563.50 on November 13, 1956 whereupon the Assistant Collector (the appellate authority) simultaneously with the issue of 'a cheque for the above amount by way of refund wrote a letter dated May 11, 1957 to the effect that the petitioner should produce before him within one month of the date of the cheque receipts totalling Rs. 26,563.50 from its customers outside Bombay State to show that the refund had been passed on to them.
It appears that the petitioner did not fulfil this condition and a notice dated 28th January 1958 was issued calling upon the firm to show cause why the said sum of Rs. 26,563.50 should not be forfeited under section 21(4) of the Bombay Sales Tax Act, 1953.
In reply thereto, the firm stated by letter dated February 7, 1958 that it had collected from its customers outside the State of Bombay the said sum of money and "under an honest mistake of law had paid the same to the sales tax authorities.
" The firm went on to add that the order for refund had been made only when the authorities were satisfied that 'it was not liable to pay the said sum but the latter had insisted upon a condition that the firm should in its turn refund the said amount to its customers from whom the collection had been made.
The letter records that the firm "had agreed to that condition under coercion even though in ,law the authorities were bound to refund the said ,amount without any such condition.
" Further the firm 's case in that letter was that the authorities had "no right to forfeit any amount collected by a dealer under a mistake of law in respect of these transactions" and the threat to forfeit the amount on the ground that it had not been refunded to the firm 's customers was without the authority of law.
The order on the show cause notice passed on March 17, 1958 records that though given sufficient opportunity to produce stamped receipts from its customers the firm had failed to do so and had thereby contravened the provisions of section 21(2) of the Bombay Sales Tax Act.
The firm was directed to refund the said sum to 845 the Reserve Bank of India on or before April 1, 1958 failing which it would be recoverable as arrears of land revenue from the firm together with penalty.
The order was purported to be passed under section 21 (4) of the Bombay Sales Tax Act, 1953.
Within a few days thereafter i.e. on March 28, 1958 the firm presented an application to the High Court of Bombay under article 226 of the Constitution for the issue of a writ in the nature of certiorari quashing the above mentioned order of forfeiture and for incidental reliefs.
In paragraph 4 of the petition it was stated that the order of forfeiture was "without the authority of law and therefore in violating of article 19(1)(g) and article 265 of the Constitution.
" It appears that a similar application had been presented on behalf of Pasha Bhai Patel and Co. (P) Ltd. to the Bombay High Court and the application of the firm along with the first mentioned application were disposed of by a learned single Judge of the Bombay High Court on November 28, 1958.
The main judgment was delivered in Pasha Bhai Patel and Company 's case.
The learned Judge observed in the course of his judgment that there was no merit whatsoever in it and "justice did not lie in his (the petitioner 's) side and this was a matter in which the court should not interfere by way of a writ and give relief to the petitioner company.
" The Judge further observed that the petitioner has not referred to fundamental rights of any kind in the petition and said: "This appears to me to be a gross case where even if I was of the opinion that the order is invalid and involved violation of fundamental rights, I would not in my discretion interfere by way of issuing a writ.
I am not depriving the petitioner of any other appropriate remedy.
I have therefore decided to dismiss this petition on that single ground.
" No copy of the petition in Pasha Bhai Patel and Company 's case is before us but the present petitioner, as shown already, did complain of violation of article 19(1)(g) and article 265 of the Constitution besides contending that the order was "ultra vires, bad and inoperative in law.
" Dealing with the petition of the firm the learned Judge said that "there was no merit in the case and justice did not lie on the side of the petitioner" and for reasons given in Pasha Bhai Patel and Co. 's case the petition was dismissed.
The firm went up in appeal to the same High Court.
A note may be taken of some of the grounds in the memorandum of appeal filed by the firm.
They were inter alia : "(13) The learned Judge erred in not deciding the petition on merits even when there was a question of violation of fundamental rights.
846 (16) The learned Judge erred in holding that this was a gross case where even if he had 'been of the opinion that the order was invalid or that it involved violation of fundamental rights, he would not in his discretion interfere by way of issuing a writ.
(30) The learned Judge failed to appreciate that the order of forfeiture was nothing but the deprivation of property without the authority of law and the action of the respondent was an unreasonable restriction on the fundamental rights of the petitioner under article 19(1)(f) and article 31 of the Constitution of India.
" In dismissing the appeal the learned Judges of the Division Bench observed: "The appellant claims to retain with himself amounts to which he has no claim and the appellant is seeking to come before this Court to retain with himself amount which he has obtained from the sales tax authorities on a representation that he is going to refund the same and which he has not refunded.
Mr. Justice K.K. Desai was of the view that the claim made by the appellant was a gross claim and even if it involved violation of fundamental rights, in exercise of his discretion, he will not interfere by issuing a writ.
The learned Judge having exercised his discretion which he undoubtedly was entitled to exercise, we do not think sitting in appeal we would be justified in exercising our powers as an appellate court in interfering with the order under appeal.
We may observe that we are not dealing with this case on the merits at all.
We have not considered the question whether the appellant is entitled in law to retain the moneys which he has obtained from the sales tax department.
We have decided this 'appeal on the limited ground that Mr. Justice K.K. Desai having exercised his discretion, no case is made out for our interference with the exercise of that discretion.
" It is therefore amply clear from the above that the learned JudGes of the Bombay High Court did not examine the merits of the firm 's contention that the order of refund was without the authority of law or ultra ' vires or in violation of an}, fundamental rights of the partners of the firm.
They merely exercised their discretion on the question of issue of a writ under article 226 of the Constitution in view of the firm 's conduct in obtaining an order for refund of the amount mentioned and later on refusing to fulfil the condition imposed.
It does not appear that the firm took any further steps in the court of law for vindicating its position before filing the present 847 writ petition.
It received a notice dated December 18, 1958 under the Bombay City Land Revenue Act 2 of 1876 calling upon it to pay the said sum of Rs. 26,563.50 to the State of Bombay failing which proceedings were threatened to be taken by attachment and sale of its property and by other remedies provided by section 13 of the Land Revenue Act.
It appears that the Collector of Bombay actually issued an order of attachment on the right, title and ' interest of two of the partners of the firm including the goodwill and tenancy right in the premises where the business was carried on.
The firm paid the sum of Rs. 26,563.50 in various instalments beginning on October 3, 1959 and ending on August 8, 1960.
In paragraph 8 of the present petition to this Court it is submitted that the petitioners "paid the sum to the State of Bombay under coercion 'and/or mistake of law.
" The petitioners also state they "did not know that the sections of the Sales ,Tax Acts under which the said sum was sought to be forfeited and/or recovered and/or retained were ultra vires.
" In paragraph 10 of the petition it is stated that the petitioners discovered their mistake in law when they came to know of the decision of this Court dated September 29, 1967 that section 12A(4) of the Bombay Sales Tax Act 5 of 1946 was ultra vires.
In paragraph 14 of the petition the firm also states: "that the said sum had been forfeited and/or recovered and/or retained by the respondents from the petitioners in violation of article 265, article 31 and article 19 ( 1 ) (f) of the Constitution.
The fundamental rights of the petitioners have thus been violated.
The petitioners submit that they have been deprived of their property, to wit, the said sum, by the respondents without any authority in law and contrary to the fundamental rights guaranteed to the petitioners by articles 19(1)(f) and 31 of the Constitution.
" The grounds of law under which the firm claimed that the action of the State of Bombay and the respondents in recovering, retaining, forfeiting and not returning the said sum were void and invalid in law are set forth in paragraph 15 of the petition.
In the view which we take of the firm 's claim and in view of the decision of this Court in Kantilal Babulal and Bros. vs H.C. Patei(1) dated September 29, 1967, it is not necessary to examine the validity or otherwise of the provisions of section 12A(4) of the Act of 1946 or the corresponding section of the Act of 1953 i.e. section 21 (4).
The appeal of Kantilal Babulal and Bros. vs
H.C. Patei(1) decided by this Court on September 29, 1967 was from a decision of the High Court of Gujarat reported in 16 Sales Tax (1) 21 S.T.C. 174.
L6Sup.
C.I./69 3 848 Cases 973.
The Gujarat High Court had held that section 12A(4) was saved by Art, 19 (5) of the Constitution.
The appeal by the assessee was allowed by this Court on the short ground that assuming that section 12A(4) was a penal provision within the legislative competence of the legislature, it was violative of article 19(1) (f) ' inasmuch as it did not lay down any procedure for ascertaining whether in fact the dealer concerned had collected any amount by way of tax from his purchasers outside the State 'and if so what that amount was.
It was further observed that the section did not contemplate any adjudication nor did it provide for making any order and on a reasonable interpretation of the impugned provision.
it was observed "that the power conferred under section 12A(4) was unguided, uncanalised and uncontrolled.
" On the above reasoning the Court held that the provisions in section 12A(4) were not a reasonable restriction on the fundamental right guaranteed under article 19 ( 1 ) within the meaning of article 19 ( 5 ).
To establish that the payments totalling Rs. 26,563.50 made in the years 1959 and 1960 were under a mistake of law, the petitioners must satisfy the court that they paid the money under a genuine belief that the law allowed it but that they later discovered that they were under no legal obligation to pay.
Repayment of money paid under a mistake is provided for by section 72 of the occurring in Chapter V of the said Act which deals with certain relations resembling those created by a contract.
It reads: "A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return "" It was laid down by the Judicial Committee of the Privy Council in Sri Sri Shiba Prasad Singh, deceased, now represented by Kali Prasad Singha vs Maharaja Srish Chandra Nandi(x) that: "Payment 'by mistake ' in section 72 must refer to a payment which was not legally due ,and which could not be enforced: the mistake is thinking that the money paid was due when in fact it was not due.
" The above decision of the Judicial Committee was relied on by this Court in Sales Tax Officer vs Kanhaiya Lal Mukundlal Saraf(2) where it was said: "The Privy Council decision has set the whole controversy at rest and if it is once established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law the party is entitled to recover the same and the party receiving the (1) 76 I.A. 244, 254.
(2) , 1363.
849 same is bound to repay or return it.
No distinction can therefore be made in respect of a tax liability and any other liability on a plain reading of sec.
72 of the Contract Act . .
In Mukundlal 's case(1) the respondent firm had paid sales tax in respect of its forward transactions in pursuance of the assessment orders passed by the Sales Tax Officer for the years 1949 to 1951.
The levy of sales tax on forward transactions being held to be ultra vires by the High Court of Allahabad by its judgment delivered on February 27, 1952 in the case of Budh Prakash Jai Prakash vs
S.T.O. Kanpur, the respondent by its letter dated 8th July 1952 asked for a refund of the amount of sales tax paid by it under assessment orders passed on May 31, 1949, October 30, 1950 and August 22, 1951.
The Commissioner of Sales Tax U.P. refused to refund the ,amount claimed by letter dated July 19, 1952.
The above judgment of the Allahabad High Court was confirmed by this Court on May 3, 1954 see Sales Tax Officer, Pilibhit vs Budh Prakash Jai Prakash(2).
In the meanwhile the respondent had filed a writ petition No. 355 of 1952 in the High Court for quashing the ,assessment orders which was allowed by an order of a single Judge on November 30, 1954.
The appellant 's Special Appeal from the said order contending that money paid under a mistake of law was irrecoverable being dismissed, a further appeal was taken to this Court under a certificate.
On the facts of that case the Court held that both the parties were labouring under a mistake of law the legal position as established later as by the decision of the Allahabad High Court in Budh Prakash Jai Prakash vs The S.T.O. Kanpur subsequently confirmed by this Court in S.T.O. Pilibhit vs Budh Prakash Jai Prakash(2 ) not having been known to the parties at the relevant time. ' This mistake of law had become apparent only on May 3, 1954 when this Court confirmed the decision of the Allahabad High Court in Sales Tax Officer, Pilibhit vs Budh Prakash Jai Prakash(2) observing: "on that position being established the respondent became entitled to recover back the said amounts which had been paid by mistake of law.
The state of mind of the respondent would be the only thing relevant to consider in this context and once the respondent established that the payments were made by it under a mistake of law . it was entitled to recover back the said amounts.
and the State of U.P. was bound to repay or return the same to the respondent irrespective of any other consideration .
On a true interpretation of section 72 of the the only two circumstances there indicated as 'entitling the party to recover the money (1) [1959]S.C.R. 1350.
(2) [1955] 1 S.C.R. 243.
850 back are that the moneys must have been paid by mistake or under coercion.
" In State of Madhya pradesh vs Bhailal Bhai(1) this Court had to deal with 31 appeals arising out of an equal number of applications filed before the Madhya Pradesh High Court contending that the taxing provisions under which the tax was assessed and collected from the petitioners (the Madhya Pradesh Sales Tax Act) infringed article 301 of the Constitution and did not come within the special provision of article 304(a).
In all the petitions a prayer was made for refund of the taxes collected.
The High Court allowed the prayer for refund in 24 applications but rejected the same in the other applications.
This Court agreed with the decision of the High Court that the imposition of the tax contravened the provisions of article 301 of the Constitution and was not within the saving provisions of article 304( 'a) and on that view observed that the payment was made under a mistake within section 72 of the and so the Government to whom the payment had been made must repay it.
The tax provisions under which these taxes had been assessed and paid were declared void by the High Court of Madhya Pradesh in their decision in Mohammad Siddique vs The State of M.P. on 17th January, 1956.The respondeats claimed to have discovered their mistake in making the payments after they came to know of these decisions.
Sixteen of the applications out of 31 were made to the High Court within three years from 17th January 1956 and the High Court took the view that this was not an unreasonable delay and in that view ordered refund.
The High Court also ordered refund in seven other applications made more than three years eight months after the said 17th January 1956.
This Court although of opinion that the High Court had power for the purpose of enforcement of fundamental rights and statutory rights to give consequential relief by ordering repayment of money realised by the Government without the authority of law, observed: "At the same time we cannot lose sight of the fact that the special remedy provided in article 226 is not in tended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defenses legitimately open in such actions.
It has been made clear more than once that the power to give relief under article 226 is a discretionary power.
This is specially true in the case of power to issue writs in the nature of mandamus.
Among the several matters which the (Courts rightly take into consideration in the exercise of that discretion is the delay made by the aggrieved party (1)[1964] 6 S.C.R 261 851 in seeking this special remedy and what excuse there is for it.
Thus, where, as in these cases, a person comes to the Court for relief under article 226 on the allegation that he has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back, the court, if it finds that the assessment was void, being made under a void provision of law, and the payment was made by mistake, is still not bound to exercise its discretion directing repayment.
Whether repayment should be ordered in the exercise of this discretion will depend in each case on its own facts and circumstances.
It is not easy nor is it desirable to lay down any rule of universal application.
It may however be stated as a general rule that if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by this extraordinary remedy of mandamus.
Again, where even if there is no such delay the Government or the statutory authority against whom the consequential relief is prayed for raises a prima facie triable issue as regards the availability of such relief on the merits on grounds like limitation, the Court should ordinarily refuse to issue the writ of mandamus for such payment.
In both these kinds of cases it will be sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a civil court and to refuse to exercise in his favour the extraordinary remedy under article 226 of the Constitution.
" In State of Kerala vs Aluminium Industries Ltd.(1) the respondents after submitting returns under the Sales Tax Act for the period May 30, 1950 to March 31, 1951 showing a net turnover exceeding Rs. 23 lakhs and depositing necessary sales tax claimed a refund on the ground of having discovered their mistake soon after March 7, 1951.
The petition to the Kerala High Court under article 226 of the Constitution was opposed on behalf of the State on various grounds.
Holding that money paid under a mistake of law was recoverable, this Court called for a finding from the Sales Tax Officer on the question whether the writ petition was within three years of the date on which the mistake first became known to the respondent so that a suit for refund on that date would not be barred under article 96 of the Indian of 1908.
Speaking for myself I am not satisfied that the petitioners in this case had made a mistake in thinking that the money paid was due when in fact it was not due.
As already noted, in their reply to the show cause notice dated February 7, 1958 the petitioners ;case was that the threat of the sales tax authorities to forfeit the amount was without the authority of law and that the firm had (1) 16 S.T.C. 689.
852 agreed to the condition of refunding the amount received to its own coustomers under coercion even though in law the authorities were bound to refund without any such condition.
The petitioners did not content themselves merely by opposing the claim of the sales tax authorities to forfeit the amount but suited their action to their belief by presenting a writ petition to the Bombay High Court describing the order of forfeiture as without the authority of law and in violation of article 19(1)(g) and article 265 of the Constitution 'and praying for the necessary reliefs.
They did not accept the decision of the learned single Judge of :the Bombay High Court under article 226 of the Constitution but filed their appeal raising practically the same contentions as they have done in the present petition except that they did not state having discovered any mistake on 'a perusal of the decision of any court of law.
The grounds of appeal to the Divisional Bench of the Bombay High Court are illustrative of the frame of mind and viewpoint of the petitioners then.
They complained about the violation of their fundamental rights, the illegality of the order of forfeiture and in particular mentioned the unreasonable restriction on their fundamental rights enshrined in article 19(1)(f) of the Constitution.
Further, they had the benefit of the judgment of the appeal Bench of the Bombay High Court that the case was not being decided on the merits at all and even if there was any violation of the fundamental rights of the petitioners the exercise of discretion by the learned single Judge would not be interfered with in appeal.
It was therefore clear to the petitioners that there was no adjudication as to their fundamental rights or the merits of their claim and there was nothing to prevent the petitioners then from coming up to this Court by preferring an appeal from the judgment of the Bombay High Court or by instituting a suit for declaration of the order of forfeiture illegal and ultra vires and for an injunction restraining the State from giving effect thereto.
Before the Bombay High Court the petitioners questioned the legality of the order of forfeiture and prayed for quashing it on the ground of the threatened invasion of their fundamental rights.
On these facts it is idle to suggest that the petitioners ever entertained any belief or thought that the money was legally due from them.
The way they asserted their position under the law precludes any inference that they were ever influenced by a mistake of law or that they ever failed to appreciate the correct position under the law.
Even after the decision of the Bombay High Court they did not willingly pay up the amount forfeited but only made disbursements after an attachment had been levied on the business including the tenancy of the premises and its good will.
They protested against the order of forfeiture not only out of court but in court and only paid after the issue of a legal process.
853 It is therefore not possible to hold that the payments complained of following the order of forfeiture were made in mistake of law.
They were payments under compulsion or coercion A payment under coercion has to be treated in the same way for the purposes of a claim to refund 'as a payment under mistake of law, but there is an important distinction between the two.
A payment under mistake of law may be questioned only when the mistake is discovered but a person who is under no misapprehension as to his legal rights and complains about the illegality or the ultra vires nature of the order passed against him can immediately after payment formulate his cause of action as one of payment under coercion.
The Limitation Acts do not in terms apply to claims against the State in respect of violation of fundamental rights.
A person ',complaining of infraction of any such rights has one of three courses open to him.
He can either make an application under article 226 of the Constitution to a High Court or he can make an application to this Court under article 32 of the Constitution, or he 'can file a suit asking for appropriate reliefs.
The decisions of various High Courts in India have firmly laid down that in the matter of the issue of ,a writ under article 226 the courts have a discretion and may in suitable cases refuse to give relief to the person approaching it even though on the merits the applicant has a substantial complaint as regards violation of fundamental rights, Although the does not apply, the courts have refused to give relief in cases of long or unreasonable delay.
As noted above in Bhailal Bhai 's case(1), it was observed that the "maximum period fixed by the legislature as the time within Which the relief by a suit in a civil court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under article 226 can be measured.
" On the question of delay we see no reason to hold that a different test ought to be applied when a party comes to this Court under article 32 from one applicable to applications under article 226.
There is a public policy behind all statutes of limitation and according to Halsbury 's Laws of England (Third Edition, Vol.
24), article 330 at p. 181: "The courts have expressed at least three different reasons supporting the existence of statutes of limitation, namely, (1) that long dorment claims have more of cruelty than justice in them, (2) that a defendant might have lost the evidence to disprove a stale claim and (3) that persons with good causes of action should pursue them with reasonable diligence.
" In my view, a claim based on the infraction of fundamental rights ought not to be entertained if made beyond the period fixed (1) ; 854 by the for the enforcement of the right by way of suit.
While not holding that the applies in terms.
I am of the view that ordinarily the period fixed by the should be taken to be a true measure of the time within which a person can be allowed to raise a plea successfully under article 32 of the Constitution.
article 16 of the of 1908 fixed a period of one year for a suit against Government to recover money paid under protest in satisfaction of a claim made by the revenue authorities on account of arrears of revenue or on account of demands recoverable as such arrears, from the date when the payment was made.
As an attachment was levied under section 13 of the Bombay City Land Revenue Act Ii of 1876 it is a moot question as to whether the payments made in 1959 and 1960 in this case would not attract the said article of the of 1908.
It was held by this Court in A.V. Subbarao vs The State(1) that the period of limitation for a suit to recover taxes illegally collected was governed by Article 62 of the of 1908 providing a space of three years from the date of payment.
But taking the most favourable view of the petitioners ' case, article 120, of the of 1908 giving a period of six years for the filing of a suit would apply to the petitioners ' claim.
The period of six years would have expired some time in 1966 but the of 1908 was repealed by the of 1963 and by section 30(a) of the Act of 1963 it was provided that: "Notwithstanding anything contained in this Act (a) any suit for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act, 1908, may be instituted within a period of five years next after the commencement of this Act or within the period prescribed for such suit by the Indian Limitation Act, 1908, whichever period expires earlier: A claim for money paid under coercion would be covered by article 113 of the giving a period of three years from the first of January 1964 on which date the Act came into force.
The period of limitation for a suit which was formerly covered by article 120 of the Act of 1908 would in a case like this be covered by article 113 of the new Act and the suit in this case would have to be filed by the 1st January, 1967.
As the petition to this Court was presented in February 1968 a suit, if filed, would have been barred and in my view the petitioners ' claim in this case cannot be entertained having been preferred after the 1st of (1) ; 855 January, 1967.
The facts negative any claim of payment under a mistake of law and are only consistent with a claim for money paid under coercion.
As the petitioners have come to this Court long after the date when they could have properly filed a suit, the application must be rejected.
I may also note in brief another contention urged on behalf of the respondents that the present petition is barred by principles analogous to res judicata.
It was contended by learned counsel for the respondents that the decisions of the Bombay High Court were speaking orders and even if the petition to the Bombay High Court had been dismissed in limine there would be a decision on the merits.
I am unable to uphold this contention.
It was ,held in Daryao and others vs The State of U.P.(1) that when a petition 'under article 226 is dismissed not on the merits but because of laches on the party applying for the writ or because an alternative 'remedy is available to him, such dismissal is no bar to the subsequent petition under article 32 except in cases where the facts rouged by the High Court might themselves be relevant under under article 32.
It was pointed out in Joseph vs State of Kerala(2) that: "Every citizen whose fundamental right is infringed by the State has a fundamental right to approach this Court for enforcing his right.
If by a final decision of a competent Court his title to property has been negatived, he ceases to have the fundamental right in respect of that property and, therefore, he can no longer enforce it.
In that context the doctrine of res judicata may be invoked.
But where there is no such decision at all, there is no scope to call in its aid.
" The judgment of the Bombay High Court in 1958 clearly shows that the merits of the petitioners ' claim were not being examined.
I cannot however find no merit in the contention that because there is an invasion of a fundamental right of a citizen he can be allowed to come to this Court, no matter how long after the infraction of his right he applies for relief.
The Constitution is silent on this point; nor is there any statute of limitation expressly applicable, but nevertheless, on grounds of public policy I would hold that this Court should not lend its aid to a litigant even under article 32 of the Constitution in case of an inordinate delay in asking for relief and the question of delay ought normally to be measured by the periods fixed for the institution of suits under the Limitation The petition therefore fails and is dismissed with costs.
(1) ; (2) A.I.R. 1965 S.C. 1514.
856 Hegde, J. I had the advantage of studying the judgments just delivered by my brothers Sikri, Bachawat and Mitter, JJ.
The facts of the case are fully set out in those judgments.
I shall not restate them.
I agree with the decision of Mitter J. that to the facts of this case the rule laid down by this Court in Daryao and Ors.
vs The State of U.P. and Ors.(1) is inapplicable.
The principle underlying that decision as I understand, is that the right claimed by the petitioner therein had been negatived by a competent court and that decision having become final, as it was not appealed against, he could not agitate the same over again.
It is in that context the principle of res judicata was relied on.
A fundamental right can be sought to be enforced by a person who possesses that right.
If a competent court holds that he has no such right, that decision is binding on him.
The binding character of judgments of courts of competent jurisdiction is in essence a part of the rule of law on which administration of justice depends.
In view of the decision of this Court in Kantilal Babulal and Bros. vs
H.C. Patel(2) that section 12A(4) of the Bombay Sales Tax Act, 1946 is violative of article 19(1)(f) of the Constitution on the grounds that that section did not lay down any procedure for ascertaining whether in fact the dealer concerned had collected any amount by way of tax from its purchasers outside the State and if so what that amount was; neither the section nor any rule framed under the Act contemplated any enquiry much less a reasonable enquiry in which the dealer complained of could plead and prove his case or satisfy the authorities that their assumptions were wholly or partly wrong and further the section also did not provide for any enquiry on disputed questions of fact or law or for making an order, it follows that the impugned collection was without the authority of law and consequently the same is an exaction resulting in the infringement of one of the proprietary rights of the petitioners guaranteed to them under article 19(1 )(f) of the Constitution.
Hence the petitioners have a fundamental right to approach this Court under article 32 of our Constitution for appropriate relief and this Court has a duty to afford them appropriate relief.
In Kharak Singh vs The State of UP and Ors.(a) Rajagopala Ayyangar 1.
speaking for the majority observed that once it is proved to the satisfaction of this Court that by State action the fundamental right of a petitioner has been infringed it is not only the right but the duty of this Court under article 32 to afford relief to him by passing appropriate orders in that behalf.
The right given to the citizens to move this Court under article 32 is itself a fundamental right and the same cannot be circumscribed or curtailed except as provided by the Constitution.
It is in ; (2) 21 S.T.C. 174.
(3) [1964] 1 S.C.R. 332. 857 appropriate to equate the duty imposed on this Court to the powers, of the Chancery Court in England or the equitable jurisdiction of the American Courts.
A duty imposed by the Constitution cannot be compared with discretionary powers.
Under article 32.
the mandate of the Constitution is clear and unambiguous and that mandate has to be obeyed.
It must be remembered, as emphasized by several decisions of this Court that this Court is charged by the Constitution with the special responsibility of protecting and enforcing the fundamental rights under Part III of the Constitution.
If I may with respect, borrow the felicitous language employed by Chief Justice Patanjali Sastri in State of Madras vs
V.G. Rao(1) that as regards fundamental rights this ' Court has been assigned the role of a Sentinel on the qui vive.
The anxiety of this Court not to whittle down the amplitude of the fundamental rights guaranteed has found expression in several of its judgments.
It has not allowed its vision to be blurred by the fact that some of the persons who invoked its powers had no equity in their favour.
It always took care to see that a bad case did not end in laying down a bad law.
I am not unaware of the fact that the petitioners before us have no equity in their favour but that circumstance is irrelevant in deciding the nature of the fight available to an aggrieved party under article 32 of the Constitution.
All of us are unanimous on the question that the impugned collection amounts to an invasion of one of the fundamental rights guaranteed to the petitioners.
Our difference primarily centres round the question whether their fight to get relief under article 32 is subject to any limitation or to be more accurate whether this Court has any discretion while exercising its jurisdiction under that Article ? As mentioned earlier a right to approach this Court under article 32 is itself a fundamental right.
In that 'respect our Constitution makes a Welcome departure from many other similar Constitutions.
As seen earlier a party aggrieved by the infringement of any of its fundamental rights has a right to get relief at the hands of this Court, and this Court has a duty to grant appropriate relief see Joseph Pothen vs The State of Kerala(2) '.
The power conferred on this Court by that Article is not a discretionary power.
This power is not similar to the power conferred on the High Courts under article 226 of the Constitution, Hence laches on the part of an aggrieved 'party cannot deprive him of the right to get relief from this Court under article 32.
A DiVision Bench of the Bombay High Court in Kamalabai Harjivandas Parekh vs
T.B. Desai(3) held that where a constitutionals to the validity of a legislation is taken in a petition under article 226, the question of mere delay will not affect the (1) ; (2) A.I.R. 1965 S.C. 1514.
(3) [1965] Vol.
67 B.L.R.p.
85. 858 maintainability of that petition.
Law reports do not show a single instance, where this Court had refused to grant relief to a petitioner in a petition under article 32 on the ground of delay.
There has been some controversy whether an aggrieved party can waive his fundamental right.
That question was elaborately considered in Basheshar Nath vs The Commissioner of Income Tax Delhi, Rajasthan and anr.(1) by a Constitution Bench consisting of S.R. Das, C.J. and Bhagwati, S.K. Das, J.L. Kapur and Subba Rao, JJ.
The learned Chief Justice and Kapur J. held that there could be no waiver of a fundamental right founded on article 14.
Bhagwati and Subba Rao JJ.
held that no fundamental right can be waived and S.K. Das J. held that only such fundamental rights which are intended to the benefit of a party can be waived.
I am mentioning all these aspects to show how jealously this Court has been resisting every attempt to narrow down the scope of the rights guaranteed under Part 111 of our Constitution.
Admittedly the provisions contained in the do not apply to proceedings under article 226 or article 32.
The Constitution makers wisely, if I may say with respect, excluded the application of those provisions to proceedings under article 226, 227 and 32 lest the efficacy of the constitutional remedies should be left to the tender mercies of the legislatures.
This Court has laid down in I.C. Golaknath and ors.
vs State of Punjab and anr.(2) that the Parliament cannot by amending the Constitution abridge the fundamental rights conferred under Part III of the Constitution.
If we are to bring in the provisions of by an indirect process to control the remedies conferred by the Constitution it would mean that what the Parliament cannot do directly it can do indirectly by curtailing the period of limitation for suits against the Government.
We may console ourselves by saying that the provisions of the will have only persuasive value but they do not limit the power of this Court but the reality is bound to be otherwise.
Very soon the line that demarcates the rule of prudence and binding rule is bound to vanish as has happened in the past.
The fear that forgotten claims and discarded rights may be sought to be enforced against the Government after lapse of years, if the fundamental rights are held to be enforceable without 'any time limit appears to be an exaggerated one.
It is for the party who complains the infringement of any right to establish his right.
As years roll on his task is bound to become more and more difficult.
He can enforce only an existing right.
A right may be lost due to an earlier decision of a competent court or due to various other reasons.
If a right is lost for one reason or the other there is no right to be enforced.
In this case we are dealing with an existing right even if it can be said that the petitioners ' (1) [1959] Supp. 1 S.C.R. 528.
(2) ; 859 remedy under the ordinary law is barred.
If the decision of Bachawat and Mitter, JJ. is correct, startling results are likely to follow.
Let us take for example a Case of a person who is convicted and sentenced to a long period of imprisonment on the basis of ,a statute which had been repealed long before the alleged offence was committed.
He comes to know of the repeal of the statute long after the period prescribed for filing.
appeal expires.
Under such a circumstance according to the decision of Bachawat and Mitter, JJ.
he will have no right the discretion of the Court apart to move this Court for a writ of habeas corpus.
Our Constitution makers in their wisdom thought that no fetters should be placed on the right of an aggrieved party to seek relief from this Court under article 32.
A comparison of the language of article 226 with that of article 32 will show that while under article 226 a discretionary power is conferred on the High Courts the mandate of the Constitution is absolute so far as the exercise of this Court 's power under article 32 is concerned.
Should this Court, an institution primarily created for the purpose of safeguarding the fundamental rights guaranteed under Part III of the Constitution, narrow down those rights ? The implications of this decision are bound to be far reaching.
It is likely to pull down from the high pedestal now occupied by the fundamental fights to the level of other civil rights.
I am apprehensive that this decision may mark an important turning point in down grading the fundamental rights guaranteed under the Constitution.
I am firmly of the view that a relief asked for under article 32 cannot be refused on the ground of laches.
The provisions of the have no relevance either directly or indirectly to proceedings under article 32.
Considerations which are relevant in proceedings under article 226 are wholly out of place in a proceeding like the one before us.
The decision of this Court referred to in the judgment of Bachawat and Mitter JJ.
where this Court has taken into consideration the laches on the part of the petitioners are not apposite for our present purpose.
None of those cases deal with proceed under article 32 of the Constitution The rule enunciated by this court in the State of M.P.v.
Bhailal Bhai(1) is only applicable to proceedings under article 226.
At page 271 of the report Das Gupta, 1. who spoke for the Court specifically referred to this aspect when he says: "that it has been made clear more than once that power to relief under article 226 is a discretionary power".
Therefore those decisions are of no assistance to us in deciding the present case.
Once it is held that the power of this Court under article 32 is a discretionary power that in nay opinion is the result of the decision of Bachawat and Mitter JJ then it follows that this Court can refuse relief under Art 32 on any one of the ; 860 grounds on which relief under article 226 can be refused.
Such a conclusion militates not only against the plain words of article 32 but also the lofty principle underlying that provision.
The resulting position is that the right guaranteed under that Article would cease to be a fundamental right.
Assuming that the rule enunciated by this Court in Sales Tax Officer vs Kanhaiya Lal Mukundlal Saraf(1) and further refined by this Court in State of M.P.v.
Bhailal Bhai(") can apply to the facts of this case even then I am of opinion that the petitioners are entitled to the relief that they have asked for.
As could be gathered from the decision of Bachawat and Mitter, JJ., the Bombay High Court did not decide the merits of the case in the writ petition filed by the petitioners.
In that petition the Court refused to exercise its discretion in favour of the petitioners.
The grounds on which the petitioners challenged the validity of section 12A(4) of the Bombay Sales Tax Act, 1946 before the High Court of Bombay have now been found to be unsustainable by the Gujarat High Court in Kantilal Babulal and Bros. v.H. C. Patel(3).
In the appeal against that decision this Court did not examine those grounds.
It struck down section 12A(4) on a wholly different ground, a ground not put forward by the petitioners in their writ petition before the Bombay High Court.
A mere impression of a party that a provision of law may be ultra vires the Constitution can not be equated ' to knowledge that the provision is invalid.
Hope and desire are not the same things as knowledge.
A law passed by a competent legislature is bound to be presumed to be valid until it is struck down by a competent court.
The fact that after a futile attempt to get the provision in question declared invalid the petitioners gave up their right and submitted to the law which was apparently valid is no proof of the fact that they knew that the provision in question is invalid.
As seen earlier that none of the grounds urged by the petitioners in support of their contention that the provision in question is invalid has been accepted by any court till now.
Under these circumstances I see no justification to reject the plea of the petitioners that they became aware of the invalidity of the provision only after the decision of this Court in Kantilal Babulal 's case(4) which decision was rendered on September 29, 1967.
This petition was filed very soon thereafter.
Hence this case under any circumstance falls within the rule laid down by this Court in Bhailal Bhai 's case(2).
For the reasons mentioned above I allow this petition and grant the relief prayed for by the petitioners.
ORDER In accordance with the opinion of the majority, the petition fails and is dismissed with costs.
V.P.S. (2) ; (3) 16 S.T.C. 973.
(4) 21 S.T.C. 174.
| The appellant was the highest bidder for the exclusive privilege of retail vend of toddy and arrack for the year 1968 69, in a group of 1168 shops situated in 19 tehsils in the districts of Raichur and Gulbarga.
He made the deposits of money required under rr. 7(f) 'and 10 of the Mysore Excise (Disposal of Privileges of Retail Vend of Liquors) Rules, 1967 made under section 71 of the Mysore Excise Act, 1965.
The highest bid of the appellant was accepted and confirmed by the Divisional Commissioner of Gulbarga under r. 17(1) on June 4, 1968.
Thereafter, the appellant made further deposits required by rr.
17(5) and 19(2).
In all he deposited about Rs. 40 lakhs by June 15.
On June 18 he applied to the Divisional Commissioner for the issue licence.
He however, did not comply with r. 19(1) and (3) which required that a statement of immovable Properties should be furnished and that he should furnish security or sureties, respectively.
The Divisional Commissioner Gulbarga issued a notice to the appellant to show cause why the sale should not be cancelled and the deposits already made forfeited under r. 20(2).
The appellant prayed for two months time for compliance with the requirements of r. 19, but the Divisional Commissioner rejected the application and cancelled the sale.
He did not pass any order forfeiting the deposits.
The appellant filed a writ petition in the High Court for quashing the order and under directions of the Court deposited another Rs. 50 lakhs.
The 4th respondent, who was the next highest bidder applied to be made a party to the petition and contended that the appellant was a benamidar for other persons and so acceptance of his tender was forbidden by r. 12.
The High Court dismissed the writ petition holding (1) that the appellant did not comply with the mandatory requirements of r. 19 in that he did not furnish the statements and apply 'at once ' for licences as required by r. 19(1); (2) the appellant was a benamidar; and (3) the authorities should consider the advisability of accepting the bid of the 4th respondent.
On the very next day after the judgment of the High Court, the respondent State issued licences in respect of 1168 shops to the 4th respondent.
In appeal to this Court.
HELD : The licences issued to the 4th respondent should be cancelled and a writ of mandamus should issue for the grant of licences to the appellant.
[26 A] 15 (1)(a) The opening part of r. 19(4) requires the purchaser to furnish to 'the tehsildar ' the location of shops and the boundaries of the shop sites that is to the tahsildar within whose tehsil the shops are situated.
If the shops are situated in more than one tehsil, the details can be fur nished to the several tahsildars, but in such a case it is not possible to give effect to the last part of the sub rule and also to the provisions of sub rr.
(3) and (4).
The statement of immovable properties under the last part of sub r.
(1) can be furnished to only one tahsildar so that he can peruse the same; and on such perusal or on independent inquiry ascertain under sub r.
(3) whether or not purchaser is of doubtful solvency and satisfy himself under sub r.
(4) whether or not the value of the immovable property tendered as security is adequate.
Sub rr.
(3) and (4) do not contemplate findings by more than one tahsildar nor do they provide any machinery for resolving the conflict of opinion, if any, between two or more tahsildars.
The last part of sub r.
(1) and sub rr.
(3) and (4) do not apply where the shops are situated in two or more tahsils.
Consequently, those provisions were not attracted to the sale in the present case and the appellant was not required to comply with those provisions.
[22 E] (b) In the absence of 'an independent enquiry under sub r.
(3), the appellant could not be regarded as a person of doubtful solvency.
(c) Under the Mysore Excise Licences (General Conditions) Rules, 1967, a licencee is required to commence his business on July 1.
The expression 'at once ' in r. 19(1), means within a reasonable time before July 1.
In the present case, the appellant sufficiently complied with subrule.
[23 D E] (d) Under r. 17(2) it is only the excise commissioner or the State Government that could revise the order of the divisional commissioner confirming a sale and the divisional commissioner himself was not authorised to revise his, own order or cancel it.
[23 G] Therefore, the High Court was in error in holding that the appellant committed breaches of r. 19.
[Rule 19 is clumsily drafted, its import is not clear, its tight time schedule works hard ship and its procedure is cumbersome.
The Government should immediately consider the question of redrafting the rule.] [24 C D] (2) The appellant was a retired inspector drawing a pension of about Rs. 75 per month and, is not an income tax or wealth tax assessee.
He evidently has the backing of powerful financiers, but the purchase is not illegal merely because the appellant obtained necessary funds from some financiers.
The onus of proving that appellant was a benamidar was on the 4th respondent and from the materials on record it is not possible to hold that he is a benamidar for some other person.
[25 D] (3) Under r. 17(4), it is only when the highest bid is rejected that the next highest bid may be considered.
Where there is an acceptance of the highest offer and 'if for some reason it is revised, r. 17(4) cannot be invoked.
In such a case there must be a fresh disposal of the right of retail vend of liquor in accordance with the Rules.
Therefore, the High Court erred in observing that the 'authorities should consider the advisability of accepting the 4th respondents bid.
[26 E]
|
ecial Leave Petition (C) No. 5628 of 1988.
From the Judgment and Order dated 4.1.1988 of the Punjab and Haryana High Court in Regular Second Appeal No. 9 18 of 1987.
P.P. Rao and Shakeel Ahmed for the Petitioner.
S.C. Maheshwari, P.K. Chakravarti, Ms. Sandhya Goswami and V.K. Bhardwaj for the Respondent.
The following Order of the Court was delivered We have heard this case arising out of Haryana Urban (Control of Rent and Eviction) Act 1973.
We feel that this case is fully covered by the decision of Hon 'ble Mr. Justice Sabyasachi Mukharji & Hon 'ble Mr. Justice Ranganathan in Atma Ram Mittal vs Ishwar Singh Punia, 122 ; We respectfully agree with the princi ple enunciated in that decision.
The special leave petition is dismissed.
Learned counsel for the respondent Mr. S.C. Maheshwari states that the decree will not be executed till 30th April, 1990 subject to an undertaking on usual terms being filed in this Court within four weeks from today.
If the undertaking is not filed, the decree shall become executable forthwith.
G.N. Petition dis missed.
| The High Court, in an appeal against a decision of the Forest Tribunal, under the provisions of the Kerala Forests (Vesting & Assignment) Act, 1971, held that 92 acres of forest land were to be given back to the appellants.
Accord ingly, the Forest Department returned certain lands.
Later on they realised that the lands constituted thick forests and had valuable trees thereon and refused the timber trans it permits applied for by the appellants.
Aggrieved against the decision, the appellants ap proached the High Court by way of a Writ Petition.
The High Court held that the appellants were not entitled to any relief with regard to rosewood and other trees cut from the lands that did not form part of the land ordered to be restored to them.
The High Court directed the Forest Depart ment to consider the application of the appellants and pass appropriate orders after giving an opportunity to the appel lants to put forward their contentions.
This appeal, by special leave, is against the said order of the High Court.
Allowing the appeal in part, HELD: 1.1 The appellants are entitled to return of 92 acres of land and not 80 acres.
This is on the ground that the direction of the High Court in the first appeal became final and in terms of such direction 92 acres were to go back to the appellants.
Government had no authority to alter the decision by an administrative order as has been done in this case.
[41D] 1.2 There is no dispute that 56.31 acres have been restored to the appellants.
By the affidavit of 24th June, 1989, 23.69 acres have been 38 offered to be restored from three survey numbers indicated therein.
With the restoration of 23.69 acres the appellants would have got back 80 acres of land.
There would still be 12 acres to be returned to the appellants.
The respondents shall have a direction to trace these 12 acres in the local ity and make over vacant possession to the appellants there of within four months.
[41E] 1.3 In case 23.69 acres or any part thereof as indicated in the affidavit Cannot be delivered possession and the balance 12 acres are not identified and possession thereof cannot be delivered, the appellants shall be entitled to compensation in respect of the shortfall out of 35.69 acres in all which remain to be delivered and compensation for such shortfall shall be determined as if it were acquisition under the provisions of the Land Acquisition Act, the date of the preliminary notification being deemed to be the date of judgment of the Division Bench in MFA 401/78.
The direc tions indicated above shall be worked out by the respondents within a total period of six months.
[41F G] 2.
The High Court called upon the respondents to consid er the appellants ' plea for timber transit permits in re spect of trees cut from certain other lands.
There is no material on record as to whether that has been complied with.
In case the respondents have not done the same yet, they are directed to comply with the order of the High Court within three months.
[41H; 42A]
|
Civil Appeal No. 2229 of 1978.
From the Judgment and Order dated 12 10 1978 of the Bombay High Court in Election Petition No. 2/78.
N.N. Keshwani and Ramesh N. Keshwani for the Appellant.
A.K. Ganguli for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal is filed under section 116 A of the Representation of the People Act, 1951 (Act No. 43 of 1951) (hereinafter referred to as 'the Act ') against the judgment of the High Court of Bombay (Nagpur Bench) in Election Petition No. 2 of 1978 by which the election of the appellant to the Maharashtra Legislative Assembly from the Armori Constituency (No. 151) in Chandrapur District at the general election held in February, 1978 was set aside.
1137 The Armori Constituency was reserved for Scheduled Tribes.
The appellant and respondents Nos. 1 to 4 were the candidates at the election.
As the appellant secured the highest number of votes, he was declared as having been elected by the Returning Officer.
In his nomination paper, the appellant declared that he belonged to 'Mana ' community.
Respondents Nos. 1, 2 and 4 declared themselves as belonging to 'Pradhan ' community and respondent No. 3 claimed that he belonged to 'Raj Gond ' community.
After the result of the election was declared, respondent No. 1 who had secured the next highest number of votes at the election filed an election petition under section 81 of the Act before the High Court of Bombay calling in question the election of the appellant.
One of the grounds urged in the petition was that the appellant did not belong to any of the Scheduled Tribes specified in Part IX of the Schedule to the Constitution (Scheduled Tribes) Order, 1950 (hereinafter referred to as 'the Order ') as it stood at the time of the election and was not, therefore, qualified to be chosen to fill the seat which was reserved for Scheduled Tribes.
It was alleged that the appellant belonged to Kshatriya Bidwaik Mana community and not to the 'Mana ' community referred to in Entry No. 18 of Part IX of the Schedule to the Order.
Respondent No. 1 also claimed that in the event of the appellant 's election being declared as void, the Court should make a declaration that he (respondent No. 1) himself had been duly elected.
The High Court upheld the contention of respondent No. 1 that the appellant did not belong to any of the Scheduled Tribes referred to in Part IX of the Schedule to the Order and declared his election as void.
The other prayer made by respondent No. 1 that he should be declared as elected was, however, rejected.
Aggrieved by the judgment of the High Court, the appellant has come up in appeal to this Court.
It should be mentioned at this stage that in the general election held in the year 1967, the appellant was declared as a successful candidate from the very same constituency which was a constituency reserved for Scheduled Tribes at that time also and that on an election petition being filed against the appellant, the High Court held that he did not belong to any of the Scheduled Tribes mentioned in the appropriate part of the Schedule to the Order at that time and therefore he was not qualified to contest the election.
Accordingly his election was set aside.
In the appeal filed before this Court, the judgment of the High Court was affirmed vide Dina vs Narayan Singh.(1) In the course of the decision of this Court, it was held that the appellant belonged to 'Kshatriya Bidwaik Mana ' community and not to the 'Mana ' community 1138 referred to in Entry No. 12 of Paragraph 5 of Part VII A of the Schedule to the Order as it stood at the time of the said election for the reasons to which we shall advert hereafter.
In the election petition out of which this appeal arises, respondent No. 1 pleaded that the appellant belonged to 'Kshatriya Bidwaik Mana ' community which was not a tribe mentioned in the Schedule to the Order and that the appellant was not a member of the 'Mana ' community referred to in Entry No. 18 of Part IX of the Schedule to the Order as it stood at the time of the election in question.
It was further alleged that the said 'Mana ' community was a sub tribe of Gond tribe and it had no relationship with the 'Kshatriya Bidwaik Mana ' community to which the appellant belonged.
The appellant denied the above allegation that there were two types of Manas viz. (a) 'Mana ' a sub tribe of 'Gond ' referred to in Entry No. 18 of Part IX of the Schedule to the Order and (b) 'Kshatriya Bidwaik Mana ' community.
He further contended that the 'Mana ' community to which he belonged had been included in that Entry after the Schedule to the Order was amended by the Scheduled Castes and Scheduled Tribes Order (Amendment) Act, 1976.
In order to appreciate the rival contentions, it is necessary to make a brief survey of the law bearing on the question.
Article 332 of the Constitution provides that seats shall be reserved for the Scheduled Castes and the Scheduled Tribes, except the Scheduled Tribes in the tribal areas of Assam and Nagaland, in the Legislative Assembly of every State and that the number of seats for the Scheduled Castes and the Scheduled Tribes so reserved shall bear, as nearly as may be, the same proportion to the total number of seats in the Assembly as the population of the Scheduled Castes in the State or of the Scheduled Tribes in the State or part of the State, as the case may be, in respect of which seats are so reserved, bears to the total population of the State.
The expression 'Scheduled Tribes ' with which we are concerned in this case is defined in clause (25) of Article 366 of the Constitution as such tribes or tribal communities or parts of or groups within such tribes or tribal communities as are deemed under Article 342 to be Scheduled Tribes for the purposes of the Constitution.
Article 342(1) of the Constitution provides that the President may with respect to any State or Union territory and where it is a State after consultation with the Governor thereof, by public notification, specify the tribes or tribal communities or parts of or groups, within tribes or tribal communities which shall for the purposes of the Constitution be deemed to be Scheduled Tribes in relation to that State or Union Territory, as the case may be.
It was in pursuance of this constitutional provision that 1139 the President issued the Order specifying the tribes or tribal communities which should be deemed to be Scheduled Tribes in relation to the several parts of India.
Article 342(2) of the Constitution confers the power on the Parliament to modify by law the order issued under Article 342(1) by including in or excluding from the list of Scheduled Tribes specified therein any tribe or tribal community or part of or group within any tribe or tribal community.
Section 5(a) of the Act provides that a person shall not be qualified to be chosen to fill a seat in the Legislative Assembly of a State unless, in the case of a seat reserved for the Scheduled Tribes of that State he is a member of any of those tribes and is an elector for any Assembly constituency in that State.
The area in which the appellant and respondents Nos.
1 to 4 are residing is situate within the area known as Gadchiroli and Sironcha Tahsils of the Chandrapur District of the State of Maharashtra.
Prior to the amendment made in 1956, Entry No. 12 in the relevant part of the Schedule to the Order read as "Gond including Media (Maria) and Mudia (Muria)".
By the Scheduled Castes and Scheduled Tribes (Amendment) Act 63 of 1956, the said Entry No. 12 was substituted by Entry No. 12 in Paragraph (5) of Part VII A of the Schedule to the Order which was as follows: "12.
Gond, including Arakh or Arrakh Kandra Agaria Kalanga Asur Khatola Badi Maria or Koitar Bada Maria Koya Bhatola Khirwar or Khirwara Bhimma Kucha Maria Bhuta, Koilabhut Kuchaki Maria or Kollabhuti Bhar Madia (Maria) Bisonhorn Maria Mana Chota Maria Mannewar Dandami Maria Moghya or Mogia or Monghya Dhuru or Dhurwa Mudia (Muria) Dhoba Nagarchi Dhulia Nagwanshi Dorla Ojha Gaiki Raj Gatta or Gatti Sonjhari Jhareka Gaita Thatia or Thotya Gond Gowari Wade Maria or Vade Maria.
" Hill Maria The 30th tribe amongst the tribes included within the broad classification of 'Gond ' tribe is 'Mana ' tribe.
As mentioned earlier, the claim of the appellant that he belonged to the said tribe in the previous case 1140 was negatived.
In August, 1967, a Bill was introduced in the Lok Sabha proposing to amend the Schedule to the Order.
By that Bill, it was proposed to substitute the Schedule to the Order as it stood then by a new Schedule.
Part VIII of the new Schedule related to Maharashtra.
Entry No. 22 in that Part read as follows: ___________________________________________________________ Tribe Synonym Sub tribe __________________________________________________________ 1 2 3 ___________________________________________________________ "22.
Gond Koitur Arakh Kalanga Bada Madia Kandra Bhatola Koya Chhota Madi Khirwar Dandami Mad Kucha Madia Dhulia Kuchaki Madia Dhuru or Dwa Machalir Madia Dhoba Mana Dorla Mannewar Gaiki Mudia Gaita Nagarchi Gatta or Gi Nagwanshi Naikpod Ojha Sonjhari Jharekha Thatia or Thotia." _________________________________ __________________________ In the proposed Entry, 'Mana ' community was shown as a sub tribe of 'Gond ' tribe.
With the concurrence of the Rajya Sabha, the Bill was referred to a Joint Committee of the Parliament presided over by Shri Anil K. Chanda.
The Report of the Joint Committee on the Bill was presented to the Lok Sabha on November 17, 1969.
In so far as the amendments proposed to the Schedule to the Order were concerned, the Joint Committee inter alia observed at Paragraph 20(ii) thus: "20(ii).
The Committee feel that the proposal to specify the tribes, the synonyms and the sub tribes in three separate columns will not be appropriate.
As in the case of Schedule Castes Orders, the Committee are of the view that it would be best to follow the wording of article 342(1) of the Constitution and specify.
"The tribes or tribal communities, or parts of, or groups within, tribes or tribal communities".
Each of the Scheduled Tribes Orders have been modified accordingly, and in the lists of Scheduled Tribes the main tribe name is written first followed by the synonyms and subtribes in alphabetical order." 1141 The Joint Committee also recommended that the Mana sub tribe referred to in the Bill should be excluded from the Schedule to the Order altogether.
Thereafter the matter was again considered by the Parliament.
In the Statement of Objects and Reasons dated May 12, 1976 attached to the Bill, it was stated as follows: "Under the Scheduled Castes and Scheduled Tribes Orders some communities have been specified as Scheduled Castes or as Scheduled Tribes only in certain areas of the State concerned and not in respect of the whole State.
This has been causing difficulties to member of these communities in the areas where they have not been so specified.
The present Bill generally seeks to remove these area restrictions.
However, in cases where continuance of such restrictions were specifically recommended by the Joint Committee on the Scheduled Castes and Scheduled Tribes Orders (Amendment) Bill, 1967, no change is being effected.
The Committee had also recommended exclusion of certain communities from the lists of Scheduled Castes and Scheduled Tribes.
These exclusions are not being made at present and such communities are being retained in the lists with the present area restrictions.
Such of the communities in respect of which the Joint Committee had recommended exclusion on the ground that they were not found in a State are, however, being excluded if there were no returns in respect of these communities in the censuses of 1961 and 1971. . ." Thereafter the (Act No. 108 of 1976) was passed by the Parliament and it had come into force before the election in question was held.
By the above Act, the entire Schedule to the Order as it stood prior to the amendment was substituted by a new Schedule consisting of XVI parts.
Part IX of the new Schedule relates to the State of Maharashtra.
Entry No. 18 of Part IX of the new Schedule corresponds to Entry No. 22 of the Bill referred to above and to Entry No. 12 in Paragraph (5) of Part VII A of the Order as it stood prior to the amendment.
Entry No. 18 of Part IX of the Schedule to the Order after the amendment reads thus: "18.
Gond; Rajgond, Arakh, Arrakh, Agaria, Asur Badi Maria, Bada Maria, Bhatola, Bhimma, Bhuta, Koilabhuta, Koilabhuti, Bhar, Bisonhorn Maria, Chota Maria, Dhandami Maria, Dhuru, Dhurwa, Dhoba, Dhulia, Dorla, Gaiki, Gatta, Gatti, Gaita, Gond Gowari, Hill Maria, Kandra, Kalanga, 1142 Khatola, Koitar, Koya, Khirwar, Khirwara, Kucha Maria, Kuchaki Maria, Madia, Maria, Mana, Mannewar, Moghya, Mogia, Monghnya, Mudia, Muria, Nagarchi, Naikpod, Nagwanshi, Ojha, Raj, Sonjhari Jhareka, Thatia, Thotya, Wade Maria, Vade Maria.
" It is seen from the above Entry that 'Mana ' community is one of the communities included in the group of communities headed by Gond community.
It appears that the recommendation of the Joint Committee to exclude it from the Schedule to the Order was not accepted by the Parliament.
If the Schedule to the Order had not undergone any change, there would not have been any room for argument that the appellant was a person belonging to a Scheduled Tribe eligible to contest as a candidate at an election to fill a seat from the reserved constituency as the question was conducted by the judgment of this Court in Dina 's case (supra).
Mr. M. M. Phadke, learned counsel for the appellant, however, argued that a comparison of Entry No. 12 as it stood prior to the amendment and Entry No. 18 as it stood on the date of the election in question would show that the Parliament while substituting the Schedule by a new Schedule by Act No. 108 of 1976 intended to make a departure from the old law and that every person who belonged to any 'Mana ' community whether it had any affinity with Gond tribe or not would be entitled to the privilege of contesting at the election from the reserved constituency.
The question for consideration before us therefore is whether by reason of the amendment made in the year 1976, persons belonging to the Mana community to which the appellant belonged and which was not a Scheduled Tribe before such amendment can be considered as persons belonging to a Scheduled Tribe after such amendment.
Apart from Article 366(25) of the Constitution, there is no other definition of the expression "Scheduled Tribes".
Scheduled Tribes are, therefore, only those which are deemed under Article 342 of the Constitution to be Scheduled Tribes.
Hence in order to find out whether a community is a Scheduled Tribe or not, we have only to see the order which is made under Article 342 of the Constitution.
Mr. M. N. Phadke, learned counsel for the appellant drew the attention of the Court to the omission of the word 'including ' which according to him, had been used in Entry No. 12 of the Schedule as it stood prior to the amendment to indicate that the communities mentioned after it were those having affinity with the 'Gond ' tribe, from the new Entry No. 18 of Part IX of the Schedule to the Order and 1143 contended that the group of communities mentioned in Entry No. 18 need not necessarily be those having mutual affinity amongst them.
On the above basis, it was urged on behalf of the appellant that a person belonging to any 'Mana ' community should be treated as a person belonging to a Scheduled Tribe even though it had no affinity with the 'Gond ' tribe.
We find it difficult to agree with the submission made by him.
Sometimes, the word 'including ' is used in a definition to give an extended meaning also to the word defined.
In Dilworth vs Commissioner of Stamps(1), Lord Watson observed that when the word 'include ' is used in an interpretation clause to enlarge the meaning of words or phrases in a statute "these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include".
Sometimes the word 'includes ' is used as a synonym for 'means ' and not as a word of extension, but limitation.
This again is clear from the following observations of Lord Watson in the decision referred to above: "But the word 'include ' is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined.
It may be equivalent to 'mean and include ', and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions." In South Gujarat Roofing Tiles Manufacturers Association & Anr.
vs State of Gujarat & Anr.(2) this Court interpreted the expression 'includes ' found in Entry No. 22 which had been included in Part I of the Schedule to the by the Gujarat Government as being equivalent to 'means '.
It is significant that even when it was possible to give an extended meaning to the expression 'Mana ' appearing in Entry No. 12 in the Order before the amendment relying on the presence of the word 'including ' in that Entry, this Court gave a restricted meaning to it and held that only that 'Mana ' community which had affinity with the Gond community could be considered as a Scheduled Tribe and that Kshatriya Bidwaik Mana community to which the appellant belonged could not be treated as a Scheduled Tribe.
Now that the word 'including ' has been omitted from the present Entry No. 18, is it open to construe it as including communities which had no affinity with the principal tribe 'Gond ' mentioned first in that Entry? 1144 We do not think that it is possible to do so.
Even though the proceedings of the Joint Committee cannot be relied upon for the purpose of construing the Order, they may be looked into to ascertain the circumstances in which the several communities were grouped under one Entry or the other.
The extract from the proceedings of the Joint Committee quoted above shows that in order to avoid confusion, the Committee recommended to follow the words in Article 342 of the Constitution and to enlist the "tribes or tribal communities or parts of, or groups within, tribes or tribal communities" under specific Entries.
It also recommended that the main tribe should be mentioned first in any Entry followed by its synonyms and its sub tribes in alphabetical order.
Even without the aid of the proceedings of the Joint Committee, it is possible to arrive at the same conclusion in the context in which the word 'Mana ' is found in Entry No. 18.
Part IX of the Schedule to the Order as it stands today contains 47 Entries.
In certain entries only one community is mentioned and in certain others.
two or more communities are mentioned.
It is obvious that certain communities have been grouped together under a single entry in the light of Article 342 of the Constitution which requires parts of or groups within a tribal community also to be specified in the order issued thereunder.
It is, therefore, reasonable to hold that the communities mentioned against any specific entry are those which have mutual affinity amongst them.
It is also not possible to hold that by replacing the Schedule to the Order by a new Schedule by the , the Parliament intended to treat persons belonging to 'Kshatriya Bidwaik Mana ' community also as Scheduled Tribes.
If really that was the intention, the Parliament would have mentioned 'Mana ' community under an independent entry.
The inclusion of the 'Naikpod ' community amongst the group of communities in Entry No. 18 for the first time also is of no special significance since the appellant has admitted in the course of his evidence that 'Naikpod ' is also a tribe, found alongwith other Scheduled Tribes in that area and it is not stated that the said tribe has no affinity with them.
It may have been omitted from the order earlier due to oversight.
A reading of the Schedule to the Order also shows that where there are two communities with the same name, one having affinity with a tribe and the other not having anything to do with such tribe and both are treated as Scheduled Tribes the community which has affinity with another tribe is shown alongwith it in the same group against a single entry and the other is shown against a different entry.
This is illus 1145 trated by the inclusion of the 'koya ' community having affinity with 'Gonds ' in Entry No. 18 and the 'koya ' community having no such affinity in Entry No. 33 of Part IX of the Schedule to the Order.
If the Parliament intended to treat the appellant 's community also as a Scheduled Tribe, it would have shown 'Mana ' community under a separate entry.
No such entry is found in the Schedule.
Some arguments were addressed at the Bar on the basis of the difference in the punctuation marks used in Entry 12 and in entry 18.
It is well known that punctuation marks by themselves do not control the meaning of a statute when its meaning is otherwise obvious.
Hence we do not feel that we should deal with it in greater detail having regard to the nature of this case.
We are, therefore of the view that the 'Mana ' community included in Entry No. 18 can only be that which has affinity with 'Gonds ' and any other community which also bears the name 'Mana ' but does not have any such affinity cannot be deemed to fall within the scope of 'Mana ' in Entry No. 18.
The appellant has categorically admitted in the course of his evidence that there was no connection between his community and Gonds.
His evidence is, "We have no concern with the Gond community also.
The customs and traditions with regand to marriage of our community are different from those of the Gonds".
He has also stated in his deposition that 'I have no concern whatsoever with Gonds.
There are sub castes amongst Gonds.
Some of them are Arak, Gowari, Raj gond, Bada Magia, Madia, Ojha and Wanjari.
It is not true that Mana is a sub caste of the Gonds.
There is no community known as Gond '.
That the appellant was a member of the 'Mana ' community which has the qualification of 'Kshatriya ' is established by his admission in his deposition that he was a member of the Kshatriya Mana Shikshana Sahayak Mandal, Chandrapur.
Although in another part of his statement of objections, there are some contradictory statements, the following plea in para 9 of the said statement makes it obvious that there is a community called Kshatriya Bidwaik Mana community: "9 As to Para 11 : It is admitted that the respondent No. 1 was the Vice President for some time and also an active worker of the Kshatriya Bidwaik Mana Shikshana Sanastha.
The object of the said institution was not limited to spread education amongst the boys belonging to Kshatriya Bidwaik Mana community, and it is denied that the said 1146 society has been founded in order to give educational facilities to the students belonging to this community only".
In the appeal filed by the appellant where the question was whether he belonged to a Scheduled Tribe or not, this Court observed: "That there are sub tribes amongst the Gonds is not denied.
Names of some of those sub tribes are included in Entry 12 of Item 5 of Part VII A of the Schedule is also a matter which is beyond dispute.
The customs, manners, form of worship, and dress of the members of the Maratha Mana community are all different from the customs manner, form of worship and dress of the Gonds.
No rational explanation has been suggested why the Parliament should have, while including under Entry 12 several sub tribes of Gonds, specified Mana under that entry, if Manas had no affinity at all with Gonds.
The appellant was uncertain about the claim that he was making.
In the nomination paper filed by him he claim to be a Gond (Mana).
His subsequent explanation that he did so because the rules so required cannot be accepted as true.
He relied upon the status of a Mana in the belief that all Manas were intended to be given the benefit of the privileges conferred by the Scheduled Tribes Order.
He described himself as a Gond (Mana).
Realizing thereafter that his community had no affinity with the Gonds he stated that he was not a Gond; that he had nothing to do with the Gonds, and that his community had also nothing to do with the Gonds.
He rested his claim solely upon the description in Entry 12 in item 5 of Part VIIA of the Schedule.
But the form in which the entry is made prima facie indicates that in the view of the Legislature, Mana was a sub tribe of Gonds and a Mana who was a member of the sub tribe of Gonds alone was entitled to the privileges conferred by the Schedule to the Scheduled Tribes Order.
We therefore agree with the High Court that the appellant, merely because he belonged to the Mana community amongst the Marathas, is not eligible to stand as a candidate for election to the Maharashtra Legislative Assembly from the reserved seat of the Armori constituency in Gadchiroli tahsil of Chanda District.
" The position has not since changed even though the Schedule to the Order is substituted by a new Schedule.
There has only been a 1147 re arrangement of the Schedule with slight modification which has no effect on the question at issue in this case.
The High Court was, therefore, right in rejecting the case of the appellant that he belonged to a Scheduled Tribe, and in setting aside his election to the Maharashtra Legislative Assembly.
In the result the appeal fails and is hereby dismissed with costs.
P.B.R. Appeal dismissed.
| On August 31, 1976, the Food Inspector lifted a sample of 'Postman ' brand refined ground nut oil from M/s. Amar Provision & General Stores, which was sold/supplied to it by M/s. Gainda Mull Hem Raj on August 20, 1976 and the same was found, as per the Public Analyst 's report dated September 9, 1976, to be adulterated due to the presence of Castoroil (not an edible oil).
This adulterated article of food was supplied/sold to Gainda Mull Hemraj by M/s. Ahmad Oomer Bhoy through its sales managers at Delhi, T. K. Nangia and Y. P. Bhasin.
On June 23, 1977, the Delhi Administration filed a complaint under section 7(1) read with Section 16(1)(a) and Section 17 against (i) M/s. Ahmed Oomer Bhoy Ahmed Mills, Bombay manufacturers of well known brand Postman groundnut oil (ii) their distributors M/s. Gainda Mull Hemraj, New Delhi, a partnership firm, and its managing Partner Meher Chand Jain (iii) M/s. Amar Provision and General Stores, Netajinagar Market, New Delhi and its owner Amrik Lal, the retailer (iv) Y. A. Khan, Manager, Quality Control, Ahmed Mills appointed by the manufacturers as the person responsible under section 17(2) of the Act, and (v) The two sales managers, Delhi Branch of M/s. Ahmed Oomer Bhoy, manufacturers, I.K. Nangia and Y. P. Bhasin.
The Metropolitan Magistrate, Delhi by his order dated April 1, 1978 found that there was a prima facie case against all except the two sales managers and issued process accordingly.
He dismissed the complaint against the respondents on the ground "that they were not concerned with the manufacturer of the article in question, but had only effected the sale thereof".
The Delhi Administration moved the High Court in revision against dismissal, but it declined to interfere.
1017 Allowing the appeal by special leave the Court, ^ HELD: 1.
At the initial stage, if there is strong suspicion which leads the Court to think that there is a ground for presuming that the accused had committed an offence, then it is not open to the Court to say that there was no sufficient ground for proceeding against the accused.
[1020 C D] In the instant case, the allegations in the complaint constitute a prima facie, case against the respondents of having committed an offence under section 7(1) read with section 16(1)(a) of the .
The words "were in charge of" and "responsible to it for the conduct of its business" are wide enough to include all the business activities of M/s. Ahmed Oomer Bhoy at Delhi who have their office at Delhi and the two respondents are the sales Managers.
[1020 E, G H, 1021 A] State of Bihar vs Ramesh Singh, ; ; applied.
The person actually effecting the sale of an adulterated article of food is directly liable under section 7(i) of the Act.
The manufacturers M/s. Ahmed Oomer Bhoy, Bombay became liable because they were directly selling the adulterated article through their branch office at Delhi.
The respondents I. K. Nangia and Y. P. Bhasin also became liable because of the words "by any person on his behalf" in Section 7 which includes their agents and servants.
In view of this, the learned Metropolitan Magistrate should not have dismissed the complaint against the respondents.
[1021 C F] 3.
On the plain meaning of the new section 17, introduced by Act 34 of 1976, when an offence has been committed by a company, where there is no nomination under s 17(2), every person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business, is deemed to be guilty of the offence and is liable to be proceeded against and punished.
Notwithstanding the nomination of a person under section 17(2), any director, manager, secretary or other officer of the company [not being a person nominated under sub section
(2)] can also be vicariously made liable if it is proved that the offence has been committed "with the consent or connivance of, or is attributable to any neglect on the part of such person".
[1023 B D] 4.
To construe section 17(2) of the Act to mean that the only person liable to be proceeded is the named/nominated person under section 17(2) would render the Explanation to Section 17(2) wholly illusory.
[1023 E F] 5.
Where there is a large business organisation, with a widespread network of sales organisation throughout the country, it ought to nominate different persons for different places or face the consequences set forth in section 17(1)(a)(ii).
The Explanation appended to section 17(2) does, in terms, contemplate that where a company has different establishments or branches or different units in any establishment or branch, it may nominate different persons in relation to different establishments or branches or units and the person so nominated in relation to any establishment or branch or unit shall be deemed to be the person responsible in respect of such establishment or branch or unit.
The language of the Explanation shows a purpose and, therefore, a construction consistent with that purpose must reasonably be placed upon it.
[1024 F H, 1025 A] 1018 The Explanation to section 17(2), although in terms permissive imposes a duty upon such a company to nominate a person in relation to different establishments or branches or units.
There can be no doubt that this implies the performance of a public duty, as otherwise, the scheme underlying the section would be unworkable.
[1024 A D] The Explanation lays down the mode in which the requirements of section 17(2) should be complied with.
Normally, the word 'may implies what is optional, but for the reasons stated, it should in the context in which it appears.
mean 'must '.
There is an element of compulsion.
It is a power coupled with a duty.
Though the company is not a body or authority, there is no reason why the same principle should not apply.
It is thus wrong to suggest that the Explanation is only an enabling provision, when its breach entails in the consequences indicated above.
It is not left to one 's choice, but the law makes it imperative.
Admittedly, M/s. Anand Oomer Bhoy had not at the material time nominated any person, in relation to their Delhi branch.
The matter is, therefore, squarely conversed by section 17(1)(a)(ii).
[1024D E, H, 1025 A] Julias vs Lord Bishop of Oxford, ; quoted with approval.
The individual liability of the sales manager is distinct and separate from the corporate liability of the manufacturer.
In case of a 'company prosecution ', the company alongwith its agent, that is, the person nominated under section 17(2) as well as the sales manager can both be prosecuted under section 7(i) read with section 16(1) (a).
Notwithstanding the nomination of a person responsible under section 17(2), there can also be prosecution of any director, manager, secretary, or other officer of the company under section 17(4).
But in such a case it is necessary for the prosecution to prove that the offence has been committed 'with the consent or connivance of, or is attributable to, any neglect on the part of such person '.
[1025 B D]
|
(C) No. 1269 of 1989.
2 (Under Article 32 of the Constitution of India).
K.M. Sharma petitioner in person.
Soli J. Sorabjee, Attorney General, Santosh Hegde, Additional Solicitor General, A.K. Sen, Manbir Singh, Girish Chandra and Ms. A. Subhashini for the Respondents.
The Court delivered the following order: ORDER Two contentions were raised by the petitioner in this writ petition challenging the appointment of Respondent No. 1, Shri Devi Lal as Deputy Prime Minister of India: (i) that the oath administered to him as Deputy Prime Minister was not the oath in accordance with the prescrip tion of the Constitution; and (ii) he was still functioning as the Chief Minister of Haryana when the oath of office of his new assignment was administered to him.
Pursuant to notice, two affidavits have been filed one by the Respondent No. 1 and the other on behalf of the Union of India.
In the affidavit of Respondent No. 1 certain precedents have been relied upon and the practice which has been followed eversince the Constitution came into force has been referred to.
Learned Attorney General appearing on behalf of the Union of India has stated that the form prescribed in the Third Schedule pursuant to the requirement of Article 75(4) of the Constitution is only for a Minister of the Union and there is no separate form even for the Prime Minister.
Since the Prime Minister is also a member of the Council of Minis ters, he takes the same oath as the other ministers are required to take.
He maintains that yet in view of the fact that the Constitution describes him as the Prime Minister, while being sworn into office, he describes himself as Prime Minister and this practice is in vogue eversince 1950.
The oath register is by the incumbent signed as Prime Minister and all other ministers sign as Ministers.
He further indi cates that describing Shri Devi Lal as Deputy Prime Minister is descriptive only and for all purposes he is a Minister and there is no 3 constitutional sanction for the post of Deputy Prime Minis ter as such.
Relying on a bench decision of this Court in the case of Virji Ram Sutaria vs Nathalal Premji Bhavadia & Ors., , learned Attorney General further contends that the prescribed oath should be divided into two parts, one which is descriptive and the other which contains the sub stantial part.
And according to him, as long as the substantial part is properly followed, a mere mistake or error in the descriptive part would not vitiate the oath.
This Court in the reported decision said: "In this case, as we have already noted, the essential requirement of Article 173 read with Form VII A was that the person taking the oath or making the affirmation would bear true faith and allegiance to the Constitution and uphold the sovereignty and integrity of India.
The words which precede this portion are merely descriptive of the person and of his nomination as a candidate.
" In view of the clear statement.
made by the learned Attorney General that Respondent No. 1 is just a Minister like other members of the Council of Ministers though he has been described as Deputy Prime Minister but the description of him as Deputy Prime Minister does not confer on him any powers of the Prime Minister, along with his other submis sions, we think the first contention raised by the petition er has no force.
So far as the second contention is con cerned, the petitioner himself does not press it.
We accordingly reject the writ petition for the reasons indicated above.
No costs.
P.S. S Petition dismissed.
| The petitioner challenged the appointment of Respondent No. 1 as Deputy Prime Minister of India on the ground that the oath administered to him as such was not the oath in accordance with the prescription of the Constitution.
The petition was contested by Respondent No. 1 and the Union of India.
It was contended for the latter that de scribing Respondent No. 1 as Deputy Prime Minister was descriptive and for all purposes he was a Minister, that the form of oath prescribed in the Third Schedule pursuant to the requirement of Article 75(4) of the Constitution is only for a Minister of the Union, and that there was no separate form even for the Prime Minister.
It was further submitted that the prescribed oath is susceptible of division into two parts, descriptive and substantial, and as long as the substantial part is properly followed, as in the instant case, a mere mistake or error in the descriptive part would not vitiate the oath.
Dismissing the writ petition, HELD: Respondent No. 1 is just a Minister like other Members of the Council of Ministers though he has been described as Deputy Prime Minister.
The description of him as Deputy Prime Minister does not confer on him any power of Prime Minister.
It cannot, therefore, be said that the oath administered to him as Deputy Prime Minister was not the oath in accordance with the prescription of the Constitution.
[3E, 2D]
|
Civil Appeal No. 2598 of 1987.
370 From the Judgment and order dated 26.5.1987 of the Karnataka A High Court in W.A. No. 615 of 1987.
Dr. Y.S. Chitale and K.J. John for the Appellant.
S.S. Javali, Ranjit Kumar and Dev Dass for the Respondents.
The Judgment of the Court was delivered by Dutt, J.
Special leave is granted.
As elaborate submissions have been made at the preliminary hearing of the special leave petition on the merits of the case by both the parties, we proceed to dispose of the appeal on merits.
This appeal involves the question as to the eligibility of the appellant for admission in the First Year MBBS Course of the Mysore University.
The appellant passed the B.Sc.
Examination of the Mysore University with Botany, Chemistry and Zoology securing 54.7% marks in the aggregate.
She also passed the PUC in the year 1979 with Physics, Chemistry and Biology as optional subjects and obtained 43.1% marks in the aggregate.
She sought for admission in a private Medical College or Institute.
On her query, the second respondent, who is the Principal of the Institute, by his latter dated February 26, 1986 con firmed that the appellant was eligible for admission to MBBS Course.
The relevant portion of the letter, as quoted in the special leave petition, is extracted below: "With reference to your telegram, I wish to write that candidates passing B.Sc.
degree examination with Physics, Chemistry and Biology or Chemistry, Biology and Zoology as optional subjects, are eligible, provided such of these candidates who have passed with Chemistry, Biology and Zoology should have passed Physics as optional subject in II year PUC or equivalent examination (Pre degree or Intermediate) or the additional Physics examination of any University or Institution recognised by the State Government.
The candidate should have obtained 50% marks in the optional subjects in the B.Sc.
degree examination.
" It is the case of the appellant that on the basis of the said letter, she joined the Institute in February, 1986.
However, by Memo dated 371 September 19, 1986 the second respondent intimated the appellant that her admission had not been approved by the University of Mysore.
The relevant portion of the letter of the Registrar of the University of Mysore, as quoted in the said Memo, is given below: "She has secured 54% in B.Sc., but secured 43% in PUC.
Hence she is not eligible.
Her admission may be cancelled.
" The appellant moved the Karnataka High Court by filing a writ petition under Article 226 of the Constitution of India challenging the validity of the cancellation of her admission in the First Year MBBS Course and praying for an order directing the respondents to allow her to continue as a student of the First Year MBBS Course.
A learned Single Judge of the High Court by his judgment dated April 8, 1987 rejected the writ petition on the ground that the appellant not having obtained 50% marks in the aggregate in Physics, Chemistry and Biology in the PUC examination, was not eligible for admission to the MBBS Course.
On appeal by the appellant, the Division Bench of the High Court also took the same view and dismissed the appeal.
Hence the present appeal by special leave.
The Mysore University to which the Institute or College is affiliated has framed regulations regarding admission to MBBS Course for the academic year 1985 86.
The relevant provisions of the said regulations are extracted below: " 1. ADMlSSlONS ELIGIBIL1TY: (a) The candidate shall have passed the Two Year PUC Examination conducted by the PUC Board, Karnataka State with Physics, Chemistry and Biology as optional subjects or any other examinations recognised as equivalent by the Mysore University and/or shall have passed the competitive examination conducted by the Karnataka Government for this purpose.
or B.Sc.
Examination of an Indian University provided that 372 he has passed the B.Sc.
Examination with not less than two of the following subjects: Physics, Chemistry, Biology (Botany, Zoology) and further that he has passed the earlier qualifying examinations with the following subjects: Physics, Chemistry, Biology and English.
Provided that the candidate should have secured not less than 50% of the total marks in Physics, Chemistry, Biology subjects taken together at the qualifying and/or competitive examination.
Provided further that in respect of candidates belonging to Scheduled Caste/Scheduled Tribe the minimum marks required for admission shall be 40% in lieu of 50% for general candidats.
(b) The candidate should have completed 17 years on the 31st December of the year of admission. " Under Regulation l(a), a candidate having passed the Two Year PUC or equivalent examination with Physics, Chemistry and Biology as optional subjects or B.Sc.
Examination of an Indian University with Physics, Chemistry, Biology will be eligible for admission in the First Year MBBS Course subject to this that the candidate should have secured not less than 50% of the total marks in Physics, Chemistry and Biology taken together at the qualifying and/or competitive examination.
It follows, therefore, that a candidate has to secure 50% of the total marks in Physics, Chemistry and Biology taken together in the PUC or an equivalent examination, which is a condition precedent to her eligibility for admission in the First Year MBBS Course.
The High Court has rightly observed that as the appellant did not secure 50% of the total marks in Physics, Chemistry and Biology in the PUC Examination, she was not eligible for admission in the First Year MBBS Course also rightly overruling the contention of the appellant that the marks obtained by her in Physics in the PUC Course should be added to the marks obtained by her in the B.Sc.
Examination so that it would work out to 50% of the tot.
marks in Physics, Chemistry and Biology.
Under Regulation 1(a), a candidate after passing B.Sc.
Exami 373 nation and seeking admission in the seats reserved for B.Sc.
candidates has to secure 50% of the total marks in Physics, Chemistry and Biology in the PUC Examination.
It is true that the appellant has obtained 54% marks in the B.Sc.
Examination, but she had failed to obtain 50% marks in the aggregate in the PUC Examination in Physics, Chemistry and Biology.
In the circumstances, she was not eligible for admission ill the First Year MBBS Course.
We are afraid, the Karnataka Medical Colleges (Selection of Candidates for Admission to 1 MBBS) Rules, 1985, hereinafter referred to as 'the said Rules ', are not applicable to seats in Private Colleges other than Government seats, which is apparent from Sub rule (2) of rule 1.
Sub rule (2) of rule 1 provides as follows: "R.1(2) These rules shall be applicable to the selection of candidates made on or after the date of commencement of these rules, for admission to the I year MBBS Course in the State of Karnataka in respect of all the seats in Government Colleges and the Government seats in the Private Colleges, as indicated in the Schedule to these Rules.
" Dr. Chitale, learned Counsel appearing on behalf of the appellant, has placed much reliance upon the Government Order dated August 1, 1984 annexing a copy of the said Rules.
The relevant portion of the Government Order is as follows: "O R D E R Accordingly, after considering the matter, Government of Karnataka hereby direct that Rules for selection of candidates for admission on to I M.B.B.S. Course in the Government and Private Medical Colleges for the academic year 1985 86 and onwards shall be as in Annexure to this order." In the Government order, no doubt, Private Medical Colleges have been mentioned, but it does not follow that the said Rules would apply to all candidates in the Private Medical Colleges.
Sub rule (2) of rule 1 of the said Rules, which has been extracted above, clearly shows that the said Rules would apply to only Government seats in the Private Colleges and, as such, in the Government order Private Colleges have been mentioned.
There is, therefore, no substance in the contention made on behalf of the appellant that the said Rules would also be applicable to the appellant.
374 Even assuming that the said Rules are applicable to the case of A the appellant, still the appellant will not be eligible for admission in the First Year MBBS Course in view of sub rule (5) of rule 3 of the said Rules, which provides, inter alia, that a person who does not belong to any of the Scheduled Castes or Scheduled Tribes, he has to obtain 50% of marks in PUC or equivalent examination in Physics, Chemistry and Biology as optional subjects.
Thus, the appellant was not eligible for admission in the First Year MBBS Course of Mysore University.
The High Court was, therefore, right in overruling the contention of the appellant that she was eligible for admission in the First Year MBBS Course.
Now the question is whether the appellant should be allowed to continue her studies in the MBBS Course.
By virtue of the interim order of the High Court, the appellant completed the First Year MBBS Course and by virtue of the interim order passed by this Court, the appellant appeared in the First Year MBBS Examination.
It has been strenuously urged by the learned Counsel appearing on behalf of the University that as the appellant was not eligible for admission and was illegally admitted by the Institute in violation of the eligibility rules of the University, the appellant should not be allowed to continue her studies in the MBBS Course under the University.
In support of that contention, much reliance has been placed by the learned Counsel on a decision of this Court in A.P. Christians Medical Educational Society vs Government of Andhra Pradesh, ; What happened in that case was that the appellant Society without being affiliated to the University and despite strong protests and warnings of the University admitted students to the Medical College in the First Year MBBS Course in total disregard of the provisions of the A.P. Education Act, the Osmania University Act and the regulations of the Osmania University.
Some students, who were admitted to the Medical College, filed a writ petition before this Court.
While dismissing the writ petition of the students, this Court observed as follows: "Shri Venugopal suggested that we might issue appropriate directions to the University to protect the interest of the students.
We do not think that we can possibly accede to the request made by Shri Venugopal on behalf of the student.
Any direction of the nature sought by Shri Venu gopal would be in clear transgression of the provisions of the University Act and the regulations of the University.
We cannot by our fiat direct the University to disobey the statute to which it owes its existence and the regulations 375 made by the University itself.
We cannot imagine anything more destructive of the rule of law than a direction by the court to disobey the laws.
" It was further observed by this Court as follows: "We regret that the students who have been admitted into the college have not only lost the money which they must have spent to gain admission into the college, but have also lost one or two years of precious time virtually jeopardising their future careers.
But that is a situation which they have brought upon themselves as they sought and obtained admission in the college despite the warnings issued by the University from time to time.
" It appears from the observations extracted above that the students were themselves to blame, for they had clear knowledge that the College was not affiliated to the University and in spite of the warning of the University they sought for the admission in the College in the First Year MBBS Course and were admitted.
In that context this Court made the above observations.
We may refer to a later decision of this Court in Rajendra Prasad Mathur vs Karnataka University, ; In that case, the condition for eligibility for admission to B.E. Degree Course of the Karnataka University was that the students seeking admission should have passed the two year pre University Examination of the pre University Education Board, Bangalore, or an examination held by any other Board or University recognised as equivalent to it.
The appellants, in that case, were admitted to certain private Engineering Colleges for the B.E. Degree Course upon payment of capitation fees, although they were not eligible for admission as the Higher Secondary Examination held by the Secondary Education Board, Rajasthan, passed by some of the appellants and the first B.Sc.
Examination of Rajasthan and Udaipur University passed by the remaining appellants, were not recognised as equivalent to the two year pre University Education Board, Bangalore.
While dismissing the appeals of the students on the ground that they were not eligible for admission in the engineering colleges, Bhagwati, C.J. who delivered the judgment of the Court, observed as follows: "We accordingly endorse the view taken by the learned Judge and affirmed by the Division Bench of the High 376 Court.
But the question still remains whether we should allow the appellants to continue their studies in the respective Engineering Colleges in which they were admitted.
It was strenuously pressed upon us on behalf of the appellants that under the orders initially of the learned Judge and thereafter of this Court they have been pursuing their course of study in the respective Engineering Colleges and their admissions should not now be disturbed because if they are now thrown out after a period of almost four years since their admission their whole future will be blighted.
Now it is true that the appellants were not eligible for admission to the Engineering Degree Course and they had no legitimate claim to such admission.
But it must be noted that the blame for their wrongful admission must lie more upon the Engineering Colleges which granted admission than upon the appellants.
It is quite possible that the appellants did not know that neither the Higher Secondary Examination of the Secondary Education Board, Rajasthan nor the first year B.Sc.
examination of the Rajasthan and Udaipur Universities was recognised as equivalent to the Pre University Examination of the Pre University Education Board, Bangalore.
The appellants being young students from Rajasthan might have presumed that since they had passed the first year B.Sc.
examination of the Rajasthan or Udaipur University or in any event the Higher Secondary Examination of the Secondary Education Board, Rajasthan they were eligible for admission.
The fault lies with the Engineering Colleges which admitted the appellants because the Principal of these Engineering Colleges must have known that the appellants were not eligible for admission and yet for the sake of capitation fee in some of the cases they granted admission to the appellants.
We do not see why the appellants should suffer for the sins of the managements of these Engineering Colleges.
We would, therefore, notwithstanding the view taken by us in this judgment allow the appellants to continue their studies in the respective Engineering Colleges in which they were granted admission.
But we do feel that against the erring Engineering Colleges the Karnataka University should take appropriate action because the managements of these Engineering Colleges have not only admitted students ineligible for admission but thereby deprived an equal number of eligible students from getting admission to the 377 Engineering Degree Course.
We also endorse the directions given by the learned Judge in the penultimate paragraph of his judgment with a view to preventing admission of ineligible students.
" This Court was, therefore, of the view that as the students were innocent and were admitted to the Colleges for the sake of capitation fee in some cases, they should not be penalised and should be allowed to continue their studies in the respective Engineering Colleges in which they were granted admission.
The facts of the instant case are, more or less, similar to the Rajendra Prasad Mathur 's case (supra).
It has been already noticed that on the appellant s query ' the Principal of the Institute by his letter dated February 26, 1986 informed her that she was eligible for admission in the First Year MBBS Course.
It was, inter alia, stated in the letter that the candidate should have obtained 5()% marks in the optional subjects in the B.Sc.
Examination.
There is no dispute that the appellant had obtained 50% marks in those subjects in the B.Sc.
Examination.
The appellant was, therefore.
quite innocent and she was quite justified in relying upon the information supplied to her by none else than the Principal of the Institute in the said letter in regard to the eligibility of the admission in the First Year MBBS Course.
In the circumstances, we do not think that we shall be justified in penalising the appellant by not allowing her to continue her studies in the MBBS Course.
Prima facie it was the fault of the Principal of the Institute but, in our view, the statement that was made by him in his said letter to the appellant as to the eligibility of the appellant for admission in the MBBS Course, was on a bona fide interpretation of the regulations framed by the Mysore University for admission to MBBS Course for the academic year 1985 86, which to some extent suffer from ambiguity.
The regulations should have been more clear and specific.
Be that as it may, following the decision of this Court in Rajendra Prasad Mathur 's case (supra) while we dismiss the appeal.
we direct that the appellant shall be allowed to prosecute her studies in the MBBS Course, and that her result for the First Year MBBS Examination be declared within two weeks from date.
There will, however, be no order as to costs.
H.L.C. Appeal allowed.
| % The appellants had joined the government service as clerks cum typists before the bifurcation, in May, 1960, of the State of Bombay into Maharashtra and Gujarat States.
The Subordinate Secretariat Service then consisted of four grades (i) Clerk cum typist, (ii) Junior Assistant, (iii) Senior Assistant, and (iv) Superintendent.
On the formation of Gujarat State, Government business in the secretariat was divided into nine separate Departments so far as the Subordinate service was concerned.
Later, by a government Resolution, a common cadre of Superintendents for all the departments was created, and promotion to the post of the Superintendent was directed to be made out of a common list of senior assistants, and by another resolution, the grades of the senior assistants and junior assistants were merged into one post termed as Assistant, and a common seniority list of the Assistants was prepared.
In October, 1974, by another Resolution, a common cadre of the clerks cum typists was created and promotion to the post of Assistant was provided therefrom.
This October Resolution of the government was challenged before the High Court by two writ petitions.
In the meantime, the Gujarat Subordinate Secretariat Service (Seniority of Assistants) Rules, 1977, were framed, which were to come into operation with retrospective effect from May, 1960.
Rule 4 of the Rules laid down the principle for determining seniority by providing that seniority among promotees Assistants inter se shall be fixed on the basis of their length of service in the joint cadre of clerk cum typist for all Departments of the Secretariat as a whole.
The High Court passed an order, dismissing the two writ petitions.
The order of the High Court is appealed against by Special Leave in this Court, mainly on the ground that the retrospective operation of the Rules regarding seniority takes away the vested rights of the appellants of their prospects of promotions.
Dismissing the appeal, the Court, 612 ^ HELD: A Common cadre was created for increasing efficiency A and in the interests of discipline.
After the formation of the common cadre, general feeling of dissatisfaction owing to disparity of seniority was generated.
The 1977 rules were introduced to ease that situation.
The scheme of the Rule regarding seniority protected the rank then held by every member of the service notwithstanding the alteration of seniority on the new basis.
To that extent, the 1977 rules were not retrospective.
[615B C] There was no challenge to the creation of the common cadre.
Secondly, the rules of seniority are a matter for the employer to frame, and even though the prospects of promotion were likely to be prejudiced by the introduction of some new set of rules to regulate seniority, if the rules were made bona fide to meet the exigencies of the service, no entertainable grievance could be made, and the appellants have no grievance to make.
[615E FI Mervyn vs Collector of Customs, Bombay and others, [1966] 3 S.C.R.600; Roshan Lal Tandan vs Union of India, [1968]1 S.C.R.185 and State of Jammu & Kashmir vs Triloki Nath Khosa & others, [1974] I S.C.R. 771, relied upon.
|
ivil Appeal Nos.3033 34 of 1989.
From the Judgment and Order dated 28.2.1989 of the Punjab Haryana High Court in C.W.P. No. 7209 of 1987 (in L.P.A. No. 748/87) and C.W.P. No. 7607 of 1987.
WITH Special Leave Petition (C) Nos.
4483 4485 of 1989.
D.V. Sehgal, R.D.Upadhyaya, Ashok Sharma, Nabhyawala, D.S. Tewatia and Ms. Madhu for the Appellants.
Ms. B. Rana and N.S. Das Behl (for the State) for the re spondents.
The Judgment of the Court was delivered by K RAMASWAMY, J.
Leave granted in Special leave Petitions and heard alongwith the appeals.
Common questions of facts and law arise in the appeals and hence are disposed of by a common judgment.
It is not necessary to restate the facts, preceding the decision of the High Court of Punjab & Haryana in Gurjit Singh & Ors.
vs State of Punjab & Ors.
(WP No. 2374 of 1985).
Suffice to state that the High Court in the said judgment, while allow ing the ad hoc appointments made by the Government of Punjab to the posts of Patwaris under the Punjab Revenue Patwari Class II1 Service Rules, 1963, for short 'the Rules ' to continue for six months, directed the State Government to make regular appointments in accordance with the rules within the said period from the date of the judgment or else the ad hoc arrangement would lapse.
Pursuant thereto, since the Service Selection 155 Board, Punjab was not constituted, the Government of Punjab by a notification dated August 26, 1986 amended rule 2(a) and empowered the State Govt.
to authorise "other authori ties" to make recruitment to the service.
Accordingly the Govt.
constituted a Committee for each District, by proceed ing dated May 27, 1986 to make selection.
For the District Committee of Patiala, the Dy.
Commissioner, Patiala was the Chairman, the District Revenue Officer, Patiala, District Sainik Welfare Officer and District 'Social Welfare Officer (Scheduled Caste) were nominated as members of the Commit tee.
to the pending names of the candidates before the S.S. Board were sent to the Committee for selection.
The Dis trict Collector invited applications ' from special catego ries, namely, children effected by the riots at Delhi, terrorists effected families in Punjab, etc.
and issued call letters to 1210 candidates for interview.
By the date of the interview Shri Piara Singh, the District Revenue Officer was transferred and his successor had participated in the selec tion.
Out of 821 candidates appearing for interview, 189 candidates were selected; the list was prepared in their order of merit; and the Distt.
Collector appointed 146 candidates and sent them for Patwari training and on their completion of it in a period of one year, they were appoint ed as Patwaris on probation.
The selections were challenged by unsuccessful candidates in several writ petitions and by judgment dated February 28, 1989, the High Court dismissed the L.P. Appeal and the Writ Petitions.
On leave under Article 136, the appeals arise from that batch.
The first contention of the appellants that the Commit tee was not properly constituted and, therefore, the selec tion of the candidates are invalid has no force.
Under rule 4(1) of the rules, as per amended rule 2(a) the authority authorised by the Govt. is entitled to make recruitment to the service of Patwaris.
The Committee constituted consists of Dy.
Commissioner as Chairman, the District Revenue Offi cer, Patiala, District Sainik Welfare Officer and District Social Welfare Officer (S.C.) as members.
Undoubtedly, at the time when the Committee was constituted, Piara Singh was the District Revenue Officer.
On his transfer, his successor had participated in the selection.
We have seen the notifi cation.
The Distt.
Revenue Officer, Patiala was nominated in official capacity.
Therefore, the member having been nomi nated by virtue of his office, the incumbent in office was, therefore, entitled to participate in the selection of the candidates.
It is true that the representation of the sched uled castes need be by an officer belonging to Scheduled Caste.
The District Social Welfare Officer (Scheduled Caste) as required should be an officer belonging to the members of the scheduled caste.
It is not uncommon that the Social Welfare Officer may be an officer other than one from the scheduled castes.
But here in this case it is not the contention that the 156 District Social Welfare Officer was not a scheduled caste officer representing the scheduled castes.
Therefore, we find that the committee constituted was properly composed of the representatives enumerated therein.
The composition of the committee and the selection of the candidates, there fore, are legal and valid.
It is next contended that the District Collector was not competent to invite applications afresh and selection of the candidates from out of those applicants is illegal.
It is true that he is bound by the instructions issued by the Government in Annexure 'D ' wherein it was stated that since the number of applicants are quite large in number, it would not be necessary to solicit candidate afresh from Employment Exchange or through public advertisement.
But in paragraph 4 therein it was stated that priority categories listed in the proceeding dated April 24, 1986 will have to be given prece dence over candidates from all other sources other than the regularisation of the existing ad hoc Patwaris.
It had given room to the District Collector to invite applications from those categories.
Though it was a mistaken compliance on wrong impression, the selection of the candidates, so apply ing does not become illegal.
It was next contended that.
instead of calling the applications by publication in the newspapers, only notice was put on the Notice Board of the Collector 's office and some candidates submitted their applications in pursuance thereof and that is not a proper notification.
Though we find that the procedure adopted by the Collector, in inviting applications is not ommendable, but the grievance would be voiced only by the persons who did not have the opportunity to make applications within the prescribed period.
But no such grievance could be raised by persons like the appellants.
Under those circumstances, the procedure adopted, though irregular, does not vitiate the selection of candidates, ultimately made by the Committee.
It is next sought to raise a contention that none of the candidates from the priority categories were selected and this was used only as a lever to invite applications from the candidates other than those, some of which were ulti mately selected and it is irregular.
We find no substance in it.
That apart it is a factual position to be investigated and that no such plea was raised nor argued in the High Court.
Therefore, we cannot permit the appellants to raise this contention for the first time in this Court.
It is next contended that there was no proper opportuni ty given to the appellants in the interview.
Only 15 hours were spent to interview 821 candidates and the selection, therefore, is a farce.
This contention also was not raised before the High Court, but raised in these appeals for the first time.
In the counter filed in this court, it was refuted.
It was stated that they had spent 35 hours in total at the rate of 7 hours per day.
That 157 means they spent 5 days in selecting the candidates.
The selection is for the Patwaris in the Class III service.
The ratio in Ashok Yadav vs State of Haryana, [1985] Suppl.
1 SCR 657 has no application to the facts in this case.
There in the selection was to the Class I service of the State service and sufficient time was required to interview each candidate.
In this case, on calculation, we found that on an average three minutes were spent for each candidate for selection.
Rule 7 of the rules provides the qualifications, namely, pass in the Matriculation or Higher Secondary Exami nation; knowledge in Hindi and Punjabi upto the Middle Standard and good knowledge of rural economy and culture.
The educational qualifications are apparent from record and need no interview in this regard.
It could be seen that candidates normally hailing from rural backgrounds had presumptively good knowledge of rural economy and culture.
Therefore, there is no need for special emphasis to ascer tain their knowledge of the rural economy or culture.
Under those circumstances much time need not be spent on each candidate for selection except asking some questions on general knowledge and aptitude for work as Patwari etc.
It is then contended that the written test, conducted by the previous Service Selection Board, was abandoned and only oral interviews were conducted.
The selection, therefore, is illegal.
Normally it may be desirable to conduct written test and in particular hand writing that which is vital for a Patwari whose primary duty is to record clearly entries in revenue records followed by oral interview.
The rules do not mandate to have both.
Options were given either to conduct written test or viva voce or both.
In this case the Commit tee adopted for viva voca as a method to select the candi dates which cannot be said to be illegal.
It is next contended that the appellants have now become over aged and that they are 22 in all.
Therefore, direc tions may be given to the Government to relax their age qualification and given appointments to them.
We find no justification to give such a direction.
Admittedly, the appellants have taken the chance for selection and they were not selected on the basis of comparative merits.
Therefore, merely because appellants are carrying on the litigation, there cannot be any justification to give direction to the Govt.
to consider their cases by relaxing the age qualifica tion for appointment as Patwari.
It is not in dispute that hundreds of candidates who could not be selected would in that event seek similar relief.
Under these circumstances we do not find any cause to add to the selection and appoint ment of the candidates as Patwaris.
The High Court, though for different reasons, has rightly dismissed the writ peti tions.
The appeals are accordingly dismissed, but without costs.
R.P. Appeals dismissed.
| Respondents No. 3 and 4, who were junior to the appel lants as Inspectors of Police in the State of Haryana, were given out of turn promotions as Deputy Superintendents of police earlier than the appellants.
The Appellants chal lenged the said promotion order in a writ petition which was dismissed by the High Court by a non speaking order.
Ag grieved, the appellants filed the appeal by special leave to this Court.
Disposing of the appeal, this Court, HELD: 1.
The order dismissing the writ petition must be a speaking one in order to enable the person affected to know what were the reasons which weighed with the High Court in dismissing it.
The High Court should not pass a laconic order.
[860G] 2.
In the instant case, in the order of promotion there was not a single whisper why the said out of turn promotion was given.
[860E] 3.
The order of the High Court is fit to be set aside, and the case be sent back on remand to the High Court to hear the writ petition after giving an opportunity to the parties and recording a reasoned speaking order on merits.
[861A]
|
Appeals Nos.
429 439, 591, 592, 597, 689, 694, 724, 725 and 727 of 1962 and 15, 139, 140, 159, 267 to 269, 331, 334, 337, 340, 342, 343, 347, 352, 389, 746 and 748 of 1963.
Appeals from the judg ments and order dated December 19, 1958, March 7, 1959, March 11, 1959, April 22, 1959, April 24, 1959 in Writ Appeals Nos. 135, 122 of 1957 etc.
T. V. R. Tatachari, for the appellants (in C.A. Nos.
429 to 434 and 694 of 1962 and C.A. No. 269/63).
M. C. Setalvad, P. Kodandaramayya, E. V. Bhagarathi Rao and T. V. R. Tatachari, for the appellants (in C.A. Nos. 438 and 439/62).
M. C. Setalvad, and R. Ganapathi Iyer, for the appellants (in C. A. Nos. 436, 437, 724, 725 and 727/62).
458 K. Srinivasamurthy and Naunit Lal, for the appellants (in C. As.
Nos. 591, 582, 597, and 689/62 and 140, 267 and 268/63).
K. Jayaram and R. Thiagarajan, for the appellants (in C.A. Nos.
139, 159, 330, 334, 337, 340, 342, 343, 347 and 352/63).
K. R. Chaudhuri, for the appellants (in C.A. Nos. 15 and 389 of 63).
A. Vedavalli and A. V. Rangam, for the appellant (in C. As.
746, and 748 of 63).
D. Narsaraju, T. Anantha Babu, M. V. Goswami and B. R. G. K. Achar, for the respondents (in C. As.
435437, 724, 725 and 727/62).
D. Narsaraju, T. Anantha Babu, Yogeshwar Prasad and B. R. G. K. Achar, for the respondents (in C. As.
Nos. 429434, 438, 439 and 694/62 and 269 of 63).
D. Narsaraju, T. Anantha Babu, M. section K. Sastri and B. R. G. K. Achar, for the respondents (in C.A. Nos. 591, 597 and 689/62 and 140, 267 and 268/63) and respondent No. 1 (in C.A. No. 592/62).
J.V.K. Sharma and T.Satyanarayana, for respondent No. 2 (in C.A. No. 592/62).
D. Narsaraju, T. Anantha Babu, R. Gopalakrishnan and BR.
G. K. Achar, for the respondents (in C. As.
Nos. 15, 139, 331, 334, 337, 340, 342, 343, 347, 352, 159, 389 and 746 748 /63).
March 25, 1964.
The judgment of the Court was delivered by GAJENDRAGADKAR, C. J.
The principal question of law which arises in this group of 37 civil appeals relates to the construction of section 3 of the Madras Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 (No. 29 of 1949) (hereinafter called 'the Act ').
The dispute which has given rise to these appeals centres round the validity of two notified orders issued by the respondent, State of Andhra Pradesh on the 28th January, 1955, and 30th January, 1955 respectively, and it is the contention of the appellants that the said notified orders are outside the purview of section 3.
The appellants in all these appeals are supplied electricity by the respondent for many years past, and several individual agreements have been passed between them and the respondent during the period 1946 to 1952 prescribing the terms and conditions on which the said supply would be made to them.
One of these terms stipulated the rate at which the supply of electricity had to be charged 459 against the consumers.
The impugned orders have purported to increase this rate, and the appellants contend that the respondent had no authority to change this important term of the contract to their prejudice by taking recourse to section 3(1) and issuing notified orders in that behalf.
That, in substance, is the nature of the controversy between the parties before us.
It appears that the Government of Madras, and subsequently, its successor, the respondent, had a single power grid system for the whole State comprising Tungabhadra and Machkund Hydro Electric System and the Thermal System of Nellore.
The entire energy was integrated into one power system.
The Government of Madras entered into agreements with several consumers in the State, including the appellants, for the supply of energy in bulk at the specified rates which were called tariffs, for the years 1951 and 1952.
These agreements were to be in operation for ten years.
It is common ground that these agreements did not contain any provision authorising the Government to increase the rates during their operation.
The charges fixed were calculated at graded regressive rates according to increasing slabs of consumption units, and the overall unit rates including the demand charge were not to exceed 66 annas without prejudice to the monthly minimum payment and the guaranteed consumption.
The Government of Andhra then issued the two impugned orders relating to Machkund and Nellore, and Tungabhadra and Chittoore District areas respectively, enhancing the agreed rates.
These enhanced rates were specified in Schedules A and B attached to the said orders.
According to these orders, these increased tariffs were to take effect from the date on which meter readings were to be taken in the month of February, 1955 and were to operate for the future.
The increase in the rates effected by these orders was thus to operate not retrospectively, but prospectively.
The impugned orders indicate that the main reason which inspired the said orders was the knowledge that the existing electricity tariffs which were formulated nearly 15 years before, had become completely uneconomic; the charges of labour and the price level of all material had enormously increased; and that in evitably meant continuously growing loss to the Government.
The Accountant General made queries in respect of this recurring loss and drew pointed attention of the State Government to the deficits in the working of the Power System.
Accordingly, the question of revision of tariffs was considered in the State of Madras, but was not decided because reorganisation of the States was then in contemplation.
After the respondent State wits born, its Chief Engineer sumbitted proposals for 460 revisions of tariffs in all the areas covered by the relevant schemes.
That is how the impugned notified orders came to be issued by the respondent.
The appellants were naturally aggrieved by these orders, because they added to their liability to pay the rates for the supply of electricity by the respondent to them.
Accordingly, a large number of consumers moved the Andhra Pradesh High Court under article 226 of the Constitution, and challenged the validity of the two impugned orders.
The learned single Judge who heard these writ petitions upheld the appellants ' plea and came to the conclusion that the impugned orders were not justified by the authority conferred on the respondent by section 3 of the Act, and were unauthorised, illegal and inoperative.
In the result, the writ petition filed by some of the appellants before us were allowed and an appropriate order was issued against the respondent restraining it from enforcing the revised tariff rates.
These decisions were challenged by the respondent by preferring several Letters Patent Appeals.
The Division Bench which heard these Letters Patent Appeals took a different view; it held that on its fair and reasonable con struction, section 3 did confer authority on the respondent to issue the impugned orders, and so, the challenge made to the validity of the said orders could not be sustained.
That is why the Letters Patent Appeals preferred by the respondent were allowed and the writ petitions filed by the appellants were dismissed.
It is against these orders that the appel lants have come to this Court with a certificate issued by the said High Court.
After the Division Bench had pronounced its decision on this point, several other writ petitions were filed by other consumers, and naturally the single Judge who heard them followed the decision of the Division Bench and dismissed the said writ petitions.
The consumers who were aggrieved by the decision of the learned single Judge were then allow ed to come to this Court directly by special leave, because the points which they wanted to raise were exactly the same as were raised by the other consumers who had come to this Court against the principal decision of the Division Bench.
The present group of appeals thus consists of matters which have been decided by a Division Bench of the Andhra Pradesh High Court, as well as those which have been decided by a learned single Judge, and they all raise the same common question about the construction of section 3 of the Act, and the validity of the impugned notified orders.
Before addressing ourselves to the question of construing section 3, it is necessary to recapitulate the legislative history of the Act.
It will be recalled that during the Second World 461 War, the Government of India passed the Defence of India Act (No. 35 of 1939) on the 29th of September, 1939.
By virtue of the powers conferred on the Central Government by section 2 of the said Act, several Rules came to be framed by Central Government known as the Defence of India Rules.
Amongst these Rules was Rule 81(2) which clothed the Central Government with power to issue orders which may appear to the Central Government to be necessary or expedient for securing "the defence of British India, or the efficient prosecution of the war, or for maintaining supplies and services essential to the life of the community".
These Rules were in operation during the continuance of the war.
After the war came to an end, it was realised that the eco nomic situation in the country continued to be serious, and for the proper regulation of economic affairs, it was thought necessary to continue the orders issued under the Defence of India Rule 81(2), because shortage of supply of essential articles was very much in evidence then.
The purpose of continuing the orders was to ensure the supply of essential articles to the community at large at reasonable prices and to secure their equitable distribution.
In due course, the Defence of India Act came to an end in 1946, but the Central Legislature thought it necessary to pass another Act to take its place and that was the Essential Supplies (Temporary Powers) Act, 1946 (No. 24 of 1946).
On the same lines, the Madras Legislature passed an Act in 1946 (No. 14 of 1946).
Later, it was replaced by Act No. 29 of 1949 with which we are concerned in the present appeals.
After the respondent State was created under the Scheme of Reorganisation of States, it passed Act No. 1 of 1955 and this Act received the assent of the President on the 21st of January, 1955.
By this Act, the Legislature of the respondent State virtually adopted the Madras Act.
As a result, the impugned orders are, in substance, referable to section 3 of the Madras Act.
Before we part with this topic, it may be mentioned that when the Madras Act was passed, its Schedule gave a list of the essential articles as defined by section 2(a) and these articles were 12 in number.
When the Andhra Legislature passed Act No. 1 of 1955 and adopted the Schedule of essen tial articles for its purpose, the number of these articles was reduced to two; they are charcoal and electrical energy.
The Andhra Act was originally intended to be in operation until the 25th January, 1956, but it was later continued from time to time.
It is common ground that when the impugned orders were passed, section 3 of be Act was in operation and the present appeals have been argued on the basis that the said section is constitutionally valid, so that the main point which calls for our decision is the construction of the said section.
462 Mr. Setalvad for the appellants contends that in construing section 3, we ought not to concentrate on the words used in section 3 in isolation, but must look at the said section along with the other provisions of the Act.
The rule of harmonious construction, he urges, requires that we must so construe all the provisions of the Act as to avoid any conflict or repugnancy between them.
So construed, section 3, according to him, cannot be said to confer power on the respondent to enhance the tariff rate chargeable against the appellants in respect of the supply of energy made by the respondent to them.
The whole scheme of the Act indicates clearly that the power to regulate the supply of an essential article which has been conferred on the State Government has to be applied in regard to transaction between citizens and citizens and cannot be applied to an essential article: which the State itself supplies.
It would be odd, he suggests, if the State Government is given the power to issue a notified order regulating the rates at which it should supply energy which it itself produces.
Therefore, the dealings by the State Government in the matter of supply of energy to the consumers should be deemed to be outside the provisions of section 3, and that would make the impugned orders invalid.
The question as to whether the State Government would be bound by the provisions of legislative enactments passed by the State Legislature has sometimes led to difference in judicial opinion; but the decision of this Court in the Director of Rationing and Distribution vs The Corporation of Calcutta and Ors.(1) must be taken to have settled this question.
The effect of the majority decision rendered in that case is to recognise the validity of the rule of interpretation of statutes enunciated by the Privy Council in Province of Bombay vs Municipal Corporation of the City of Bombay (2) and that rule is that the State is not bound by a statute unless it is so provided in express terms or by necessary implication.
In applying this rule, it is obviously necessary that the Court must attempt to ascertain the intention of the Legislature by considernig all the relevant provisions of the statute together and not concentrating its attention on a particular provision which may be in dispute between the parties.
If, after reading all the relevant provisions of the statute, the Court is satisfied that by necessary implication the obligation imposed by the statute should be enforced against the State, that conclusion must be adopted.
If there are express terms to that effect, there is, of course, no difficulty.
In dealing with this vexed question, sometimes it is necessary also to enquire whether the conclusion that the State is not bound by the specific provision of a given statute, (1) ; (2)73 I.A. 271.
463 would hamper the working of the statute, or would lead to the anomalous position that the statute may lose its effi cacy, and if the answer to either of these two questions indicates that the obligation imposed by the statute should be enforced against the State, the Court would be inclined to infer by necessary implication that the State, in fact, is bound by the statute.
Where, however, the question is not so much as to whether the State is bound by the statute, but whether it can claim the benefit of the provision of a statute, the same rule of construction may have to be applied.
Where the statute may be for the public good, and by claiming the benefit conferred on it by its provisions the State may allege that it is serving the public good, it would still be necessary to ascertain whether the intention of the legislature was to make the relevant provisions applicable to the State.
This position is also established by the decision of the Privy Council in Province of Bomboy(1) and it still continues to be a law in this Country.
Incidentally, we may add that where the Crown seeks to take advantage of a statute and urges that though it is not bound by the statute, it is at liberty to take advantage of it, English Law does not easily entertain such a plea, though there are observations made in some judicial pronouncements to the contrary.
As Halsbury points out, "it has been said that, unless it is expressly or impliedly prohibited from doing so, the Crown may take advantage of a statute not withstanding that it is not bound thereby.
" Having made this statement, Halsbury has added a note of caution by ,,saying that "there is only slender authority for this rule, and since both the rule and such authority as does exist have also been doubted, the rule cannot, perhaps, be regarded as settled law(2)".
To the same effect is the comment made by Maxwell when be quotes with approval the view expressed by Sir John Simon that the decisions which recognise the right of the Crown to take advantage of a statutory provision "start with a passage in an unsuccessful argument of a law officer which was not even relevant to the case before the court, but which has been taken out by a text writer and repeated for centuries until it was believed that it must have some foundation(3)".
Therefore, in construing section 3 of the Act, we cannot permit the respondent to rely upon the artificial rule that since (1) 73 T.A. 271.
(2)", Halsbury 's Laws of England, Vol. 36, p. 432, para 654.
(3) Maxwell on Interpretation of Statutes, 11th Ed.
p. 136 464 the respondent claims a benefit under section 3, that construc tion should be adopted which supports such a claim.
Thus, the position is that when we construe section 3, we must adopt the usual rule of construction; we must not read section 3 in isolation, but must consider it in its proper setting and must have due regard for the other provisions of the Act, and its general scheme and purpose.
Reverting then to Mr. Setalvad 's main argument, it may be conceded that when the Act was passed in 1949, mainly and primarily the power conferred by section 3 on the State Government must have been intended to regulate the supply of essential articles made by one citizen to another.
The State had not then entered commercial activities on a large scale and when section 3(1) contemplated notified orders issued for the purpose of securing equitable distribution and availability at fair prices of essential articles, the legislature could not have in its mind supply of essential articles made by the State itself.
That is one point in favour of Mr. Setalvad 's construction.
If we examine the scheme of the Act, it may also have to be conceded that some of the provisions may not be applicable to the State.
Take, for instance, the provision of section 4 which relate to the powers of requisitioning and acquisition of properties, and the subsequent two sections that deal with payment of compensation and release from requisition respectively; these provisions may not be applicable to the State.
Take, again, the control of agriculture which is contemplated by section 7; it would not be applicable to the State.
Section 12 which deals with penalties may also be inapplicable to the State, and so, would section 13 be inapplicable, because it deals with abetment and assistance of contravention of the provisions of the Act.
Therefore, the general scheme of the Act and some of its provisions seem to suggest that the State may not have been within the contemplation of the Act.
But it is obvious that the rule of harmonious construction on which Mr. Setalvad has solely rested his case, can be invoked successfully by him only if the words used in section 3 are capable of the construction which he suggests.
If the said words are capable of two constructions one of which supports the appellants ' case and the other that of the res pondent, it would be legitimate to adopt the first construc tion, because it has the merit of harmonising the provisions of section 3 with the general scheme and purpose of the Act.
On the other hand, if the words used in section 3(1) are not reason ably capable of the construction for which the appellants contend, then it would be unreasonable and illegitimate for the Court to limit the scope of those words arbitrarily solely for the purpose of establishing harmony between the 465 assumed object and the scheme of the Act.
Therefore, it is necessary to examine the words used in section 3 very carefully.
Let us first read section 3(1): "The State Government so far as it appears to them to be necessary or expedient for maintaining, increasing or securing supplies of essential articles or for arranging for their equitable distribution and availability at fair prices may, by notified order, provide for regulating or prohibiting the supply, distribution and transport of essential articles and trade and commerce therein".
Sub section (2) provides that without prejudice to the gene rality of the powers conferred by sub section (1), an order made thereunder may provide for objects specified in clauses (a) to (k).
The majority of these objects may not be appli cable to the State, while, conceivably, some may be appli cable to it.
Section 3(1) is obviously intended to secure supplies of essential articles and to arrange for their equitable distribution and availability at fair prices.
If electrical energy is one of the essential articles mentioned in the Schedule, there can be no difficulty in holding that a notified order can be issued under section 3(1) for regulating the supply of the said energy and making it available at a fair price.
Indeed, it is not disputed and cannot be disputed that if electrical energy is produced by a private licensee and is then supplied to the consumers, such a supply would fall within the mischief of section 3(1), and the terms on which it can and should be made to the consumers can be regulated by a notified order.
There can also be no serious dispute that the terms of a contract entered into between a private supplier of electrical energy and the consumer could be modified by a notified order.
Section 3(1) undoubtedly confers power on the State Government to vary and modify contractual terms in respect of the supply or distribution of essential articles.
If that be so, on a plain reading of section 3(1) it seems very difficult to accept the argument that the supply of electrical energy which is included in section 3(1) if it is made, by a private producer should go outside the said section as soon as it is produced by the State Government.
The emphasis is not on who pro duces and supplies, but on the continuance of the equitable distribution and supply of essential articles at fair prices.
If the object which section 3(1) has in mind is such equitable distribuiton and availability at fair prices of essential articles, then that object would still continue to attract the provisions of section 3(1) even though the essential article may be produced by the State and may be supplied by it to the consumers.
466 The words used in section 3(1) are so clear, unambiguous and wide that it would be unreasonable to limit their scope arti ficially on the ground that by giving effect to the wide language of the section, we might reach a result which is not completely harmonious or consistent with the assumed object and purpose of the Act.
Indeed, as we have just indicated, if the purpose of the Act is to secure the supply of essential articles at fair prices, it would be irrelevant as to who makes the supply; what is relevant is to regulate the supply at a fair price.
Therefore, we are not prepared to accede to Mr. Setalvad 's argument that section 3(1) does not confer on the respondent the power to modify the terms of agreements between it and the appellants.
Mr. Setalvad, no doubt, contended that in construing section 3(1), we may have regard to the fact that most of the clauses under section 3(2) would be inapplicable to the respondent State, and so, he virtually suggests that even though the words in section 3(1) may be wide, their width should be controlled by the limited scope of the clauses prescribed by subsection (2).
We are not prepared to accept this argument.
After the decision of the Privy Council in King Emperor vs Sibnath Banerjee(1), it is well settled that the function of a clause like clause (2) of section 3 merely illustrative (vide also Santosh Kumar Jain vs The State(3)).
In other words, the proper approach to adopt in construing clauses (1) and (2) of section 3 is to assume that whatever is included in clause (2) is also included in clause (1).
That is not to say that if the words of clause (1) are wide enough to include cases not included in clause (2), they must, for that reason, receive a narrower construction.
Therefore, we must ultimately go back to clause (1) to decide whether the supply of electrical energy made by the respondent to the appellants can be regulated by a notified order issued under it or not, and the answer to that question must, in our opinion, be in the affirmative.
In this connection, it may be pertinent to refer to section 3(2)(b) which provides for controlling the prices at which any essential article may be bought or sold.
It is not easy to see why this clause cannot take in articles which may be purchased or sold by the State.
The clause is so worded that the transactions of sale and purchase of all essential articles would be included in it.
It is true that where the State wants to sell its essential articles, it may be able to regulate the prices and control them by means of an executive order; but that is not relevant and material in construing the effect (1) 72 I.A. 241 at p. 248.
(2) ; 467 of the words; if the words take within their sweep essential articles sold by the State, there is no reason why it should not be competent to the State to issue a notified order con trolling the prices in that behalf.
In regard to the purchase of essential articles by the State, the position is still clearer.
If the State wants to purchase essential articles, power to regulate the prices of such, articles would seem to be clearly included in section 3(2)(b).
In ' deed, during the course of his arguments, Mr. Setalvad did not seriously dispute this position.
Therefore, when the State wants to purchase essential articles, it can regulate the price in that behalf by means of a notified order issued under section 3(1) and that shows that in the cases of both sale and purchase of essential articles by the State, section 3(2)(b) read with section 3(1) would clothe the State with the power to issue the relevant notified order.
Then, it was faintly argued by Mr. Setalvad that the power to regulate conferred on the respondent by section 3(1) cannot include the power to increase the tariff rate; it would include the power to reduce the rates.
This argument is en tirely misconceived.
The word "regulate" is wide enough to confer power on the respondent to regulate either by in creasing the rate, or decreasing the rate, the test being what is it that is necessary or expedient to be done to maintain, increase, or secure supply of the essential articles in question and to arrange for its equitable distribution and its availability at fair prices.
The concept of fair prices to which section 3(1) expressly refers does not mean that the price once fixed must either remain stationary, or must be reduced in order to attract the power to regulate.
The power to regulate can be exercised for ensuring the payment of a fair price, and the fixation of a fair price would inevitably depend upon a consideration of all relevant and economic factors which contribute to the determination of such a fair price.
If the fair price indicated on a dispassionate consideration of all relevant factors turns out to be higher than the price fixed and prevailing, then the power to regulate the price must necessarily include the power to increase the price so as to make it fair.
That is why we do not think Mr. Setalvad is right in contending that even though the respondent may have the power to regulate the prices at which electrical energy should be supplied by it to the appellants, it had no power to enhance the said price.
We must, therefore, hold that the challenge to the validity of the impugned notified orders on the ground that they are outside the purview of section 3(1) cannot be sustained.
That takes us to the next question as to whether the im pugned notified orders are invalid, because they contravene 468 the provisions of article 19(1)(f) and (g) of the Constitution.
The impugned orders have been notified by virtue of the fore, be treated as law for the purpose of article 19.
We may also assume in favour of the appellants that the right to receive the supply of electricity at the rates specified in the agreements is a right which falls within article 19(1)(f) or (g).
Even so, can it be said that the impugned notified orders are not reasonable and in the interests of the general public '? That is the question which calls for an answer in dealing with the present contention.
It is true that by issuing the impugned notified orders, the respondent has successfully altered the rates agreed between the parties for their respective contracts and that, prima facie, does appear to be unreasonable.
But, on the other hand, the evidence shows that the tariff which was fixed several years ago had become completely out of date and he reports made by the Accountant General from time to time clearly indicate that the respondent was supplying electricity to the appellants at the agreed rates even though it was incurring loss from year to year.
Therefore, it cannot be said that the impugned notified orders were not justified on the merits.
The prices of all commodities and labour charges having very much increased meanwhile, a case had.
certainly been made out for increasing the tariff for the supply of electrical energy.
But it could not be possible to hold that the restriction imposed on the appellants ' right by the increase made in the rates is reasonable and in the interests of the general public solely because the impugned orders have saved the recurring loss incurred by the respondent under the contracts.
If such a broad and general.
argument were accepted, it may lead to unreasonable and even anomalous consequences in some cases.
This question, however, has to be considered from the point of view of the community at large; and thus considered, the point which appears to support the validity of the impugned orders is that these orders were passed solely for the pur pose of assuring the supply of electrical energy and that would clearly be for the good of the community at large.
Unless prices were increased, there was risk that the supply of electrical energy may itself have come to an end.
If the respondent thought that the agreements made with the appel lants were resulting in a heavy loss to the public treasury from year to year, it may have had to consider whether the supply should not be cut down or completely stopped.
It may well be that the respondent recognised its obligation to the public at large and thought that supplying electrical energy to the consumers who were using it for profit making purposes, at a loss to the public exchequer would not be reasonable and legitimate, and it apprehended that the legislature may well question the propriety or wisdom of such 469 a course; and so, instead of terminating the contracts, de cided to assure the supply of electrical energy at a fair price and that is why the impugned notified orders were issued.
We ought to make it clear that there has been no suggestion before us that the prices fixed by the impugned notified orders are, in any sense, unreasonable or excessive, and it is significant that even the revised tariff has to come into operation prospectively and not retrospectively.
Therefore,( having regard to all the circumstances in this case, we are disposed to hold that the change made in the tariff by the notified orders must be held to be reasonable and in the interests of the general public.
Mr. Setalvad also attempted to challenge the validity of the impugned orders on the ground that they contravene article 14 of the Constitution.
In support of this contention, he invited our attention to the allegation made in Writ Petition No. 923 of 1956.
In that writ petition, one of the petitioners stated that the rate prescribed under the agree ments had not changed and had remained stationary as far as consumers under the State Government 's licensees were concerned.
The affidavit appears to concede that certain ,other licensees had increased their rates, but that increase, it is claimed, was negligible or nominal; and so, the argument was that the rates which are widely divergent between consumer and consumer constitute a contravention of article 14.
Mr. Setalvad fairly conceded that these allegations are vague and indefinite and no other material has been pro duced either by the petitioner who has made this affidavit, or by any of the other petitioners who moved the High Court for challenging the validity of the impugned orders.
In fact, we do not know what the rates charged by other licensees are and have been, and how they compare with the rates prescribed by the original contracts as well as the rates enhanced by the impugned notified orders.
We ought to add that the Division Bench of the High Court appears to be in error when it assumed that the respondent was the sole supplier of electrical energy in the State of Andhra.
It is true that the bulk of the energy is supplied by the respon dent; but there are some other private licensees which are licensed to supply electrical energy to the consumers and in that sense, at the relevant time the respondent was not a monopolist in the matter of supply of electricity.
This Court has repeatedly pointed out that when a citizen wants to challenge the validity of any statute on the ground that it contravenes article 14, specific, clear and unambiguous alle gations must be made in that behalf and it must be shown that the impugned statute is based on discrimination and that such discrimination is not referable to any classification 470 which is rational and which has nexus with the object in tended to be achieved by the said statute.
Judged from that point of view, there is absolulety no material on the record of any of the appeals forming the present group on which a plea under article 14 can even be raised.
Therefore, we do not think it is necessary to pursue this point any further.
The result is the appeals fail and are dismissed with costs.
One set of hearing fees.
Appeals dismissed.
| The petitioner was serving as an officiating Teleprinter Supervisor at Jaipur when the employees of the Posts and Telegraphs Department went on strike from the midnight of July 11, 1960, throughout India and there was a similar strike at Jaipur.
The petitioner 's case was that he was on duty that day from 12 noon to 8 p.m. and after his duty was over, he did not go home but went to the dormitory where he fell asleep as he was tired.
On hearing some noise he woke up at 11 30 p.m. and wanted to go home but was arrested by the police under the Essential Services Maintenance Ordinance, No. 1 of 1960.
The criminal charge was however withdrawn.
On July 21, 1960, a chargesheet was served on the petitioner in the following terms: "That Shri Radhey Shyam Sharma I C/S Telegraphist, CTO Jaipur committed gross misconduct in that on the midnight of the 11th July, 1960, he took part in a demonstration in furtherance of the strike of the P. & T. Employees in violation of the orders dated 8 7 1960 issued by the Government of India under the 'Essential Services Maintenance Ordinance, 1960 (1 of 1960) ' prohibiting strikes in any Postal, telegraph or telephone service".
The enquiry officer found him guilty of the charge and ordered that his pay should be reduced in the time scale by three stage,% for a period of two years and on restoration the period of reduction was not to operate to postpone his future increments.
0n appeal, the Director General considered the whole matter on merits and rejected the appeal.
In this Court it was urged that the punishment imposed upon the petitioner was violative of his fundamental rights under articles 19(1)(a) and (b), reliance being placed on two cases of this court in Kameshwar Prasad vs State of Bihar and O. K. Ghosh vs E. X. Joseph; that sections 3, 4 and 5 of the Ordinance were ultra vires, as they contravened article 19(1.)(a) and (b) and that in any case there was no evidence on which it could ' be found that the charge against him had been proved.
Held: The provisions of the Ordinance in sections 3, 4 and 5 did not violate the fundamental rights enshrined in article 19(1)(a) and (b).
A perusal of article 19(1) shows that there is no fundamental right to strike, and all that the ordinance provided was with respect to any illegal strike as provided in the Ordinance.
There was no provision in the Ordinance which in any way restricted those fundamental rights.
It was not in dispute that Parliament had the competence to make a law in the terms of the Ordinance and therefore the President had also the power to promulgate, such an Ordinance.
404 The competence of the legislature therefore being not in dispute it cannot be held that the Ordinance violated the fundamental rights guaranteed under article 19(1)(a) and (b).
All India Bank Employees Association vs National Industrial Tribunal, ; , referred to.
The two cases relied on by the petitioner have no relevance in connection with the charge in the present case.
The punishment given to the petitioner cannot therefore be set aside on the ground that the charge was in violation of the fundamental rights guaranteed under article 19(1)(a) and (b).
Kameshwar Prasad vs State of Bihar, [1962] Supp. 3 S.C.R. 369 and O. K. Ghosh vs E. X. Joseph, [1963] Supp. 1 S.C.R. 789, held inapplicable.
If on the undisputed facts the authorities came to the con clusion that the petitioner acted in furtherance of the strike 'Which was to commence half an hour later and was thus guilty of gross misconduct, it could not be said that there was no evidence on which the authorities concerned could find the charge framed against the petititoner proved.
|
Civil Appeal No. 1700 (NT) of 1974.
From the Judgment and Order dated 23.9.1972 of the Allahabad High Court in Writ No. 2956 of 1972.
S.K. Dhingra for the Appellant.
M.K. Banerjee, Additional Solicitor General, Miss A. Subhashini and B.B. Ahuja for the Respondent.
The appellant is a private limited company carrying on the business of the manufacture and sale of locks used in suit cases.
It filed a return of its income for the assessment year 1963 64 and was assessed to income tax by an assessment order dated March 12, 1968.
No claim was made by the assessee for rebate under section 84 of the Income Tax Act, 1961.
There was an appeal by the assessee to the Appellate Assistant Commissioner of Income Tax but no claim was made for rebate at that stage either.
Subsequently on August 20, 1969 the appellant made an application under section 154 of the Income Tax Act praying for rectification of the assessment order by the grant of relief under section 84 of the Act.
The application was rejected by the Income Tax Officer.
A revision application moved by the appellant before the Commissioner of Income tax was also rejected on March 6, 1972.
Against the order of the Commissioner the appellant now filed a writ petition in the High Court of Allahabad.
The High Court dismissed the writ petition on September 23, 1972.
And now this appeal by special leave.
Section 84 of the Income Tax Act, as it stood at the relevent time, provided that income tax would not be payable by an assessee on so much of the profits and gains derived from any industrial undertaking to which the section applied as did not exceed 6 per cent per annum on the capital employed in such undertaking computed in the prescribed manner.
The section applied to an industrial undertaking which satisfied certain conditions detailed in the section.
It may be observed that section 84 was deleted with effect from April 1, 1968 and now finds place as section 80J in the Act.
226 The appellant contends that the Income tax authorities were obliged to exercise the jurisdiction conferred by section 154 of the Act and grant relief to the appellant under section 84.
Section 154 empowers the Income Tax Officer to rectify any mistake apparent from the record and for that purpose to amend an assessment order passed by him.
It is urged that the income tax authorities and the High Court erred in holding that no mistake was apparent from the record merely because no claim to relief under section 84 had been made by the appellant before the Income Tax officer during the assessment proceedings.
It is contended that an obligation was imposed on the Income Tax Officer by the statute to grant such relief and it could not be refused merely because the appellant had omitted to claim the relief.
While we believe the appellant is right in his contention, we do not think that the mere existence of such an obligation on the Income Tax Officer is sufficient.
Before the Income Tax Officer can grant relief there must be clear data on the assessment record sufficient to enable him to consider whether the relief should be granted.
In the absence of such material, no fault can be found with the Income Tax Officer for not making an order under section 84 favouring the assessee.
It will be noticed from the provisions of section 84 that several conditions must be satisfied before the grant of relief can be considered.
The industrial undertaking should not have been formed by the splitting of, or the reconstruction of, a business already in existence.
It should not have been formed by the transfer to a new business of a building, machinery or plant previously used for any purpose.
It should manufacture or produce articles in any part of India, which manufacture or production should have begun at any time within 23 years next following April 1, 1948 or such other further period as the Central Government may specify.
An industrial undertaking manufacturing or producing articles should be found to employ 10 or more workers in a manufacturing process carried on with the aid of power or to employ 20 or more persons in a manufacturing process carried on without the aid of power.
These are some of the conditions which need to be fulfilled before relief under section 84 can be granted.
It is apparent that precise factual material must be contained in the record in order to enable the Income Tax Officer to discharge his obligation to grant relief under section 84.
It has not been shown to us that the record before the Income Tax Officer contained all that information.
Our attention was drawn to Subhash Chandra Sarvesh Kumar vs Commissioner of Income tax and Another, where the Allahabad High Court quashed an order of the Commissioner of 227 Income tax rejecting revision applications for the grant of relief under section 80J and section 80HH of the Income Tax Act, on the ground that the Commissioner should have considered whether there was material on the record to sustain the claim of the assessee to relief, and the fact that claim was not made formally in the return or during the pendency of the assessment proceedings before the Income Tax Officer should not have prevented the Commissioner from considering whether the assessee was entitled to relief.
That was a case where the assessee complained in the writ petition that it lay within the jurisdiction of the Commissioner to entertain the claim of the assessee even though the claim had not been made before the Income Tax officer.
The present is a case, however, where the appellant sought to invoke the jurisdiction of the Income Tax Officer to rectify the assessment order.
That can only be justified on the ground of a mistake apparent from the record.
If the record does not contain any material, it cannot be said that the Income Tax Officer has committed a mistake in omitting to grant relief under section 84.
We are conscious that the jurisdiction under section 154 of the Income Tax Act is, as pointed out by this court in Income tax Officer, Alwaye vs Asok Textiles Ltd., , wider than that provided under rule 1 of Order XLVII of the Code of Civil Procedure.
Rule 1 of Order XLVII of the Code confines the jurisdiction of the Court to the rectification of "an error apparent on the face of the record" while section 154 of the Income Tax Act, 1961 (which corresponds to section 35 of the Income Tax Act 1922) uses wider language and empowers the Income tax authorities to rectify any mistake "apparent from the record".
Nonetheless there must be material to support the claim to relief under section 84, and unless such material can be referred to no grievance can be made if the Income Tax Officer refuses to rectify the assessment and refuses relief under section 84.
Learned counsel for the appellant says that the material is contained in the record of the assessment made on the appellant under the .
He contends that the record of the Super Profits Tax assessment must be regarded as an integral part of the record of the income tax assessment and, therefore, it must be inferred that the material necessary for granting relief under section 84 in the income tax assessment lay before the Income Tax Officer.
The was enacted to impose a special tax on certain companies.
The tax is charged on the excess of the chargeable profits of a company over the standard deduction and the "chargeable profits", according to the definition in sub section
(5) of section 2 of 228 that Act, means the total income of an assessee computed under the Income Tax Act, 1961 adjusted in accordance with the provisions of the First Schedule.
In many respects, the borrows its provisions from the Income Tax Act, and the scheme for assessment, appeals, revision and rectification in the follows closely the pattern set forth in the Income Tax Act.
As has been noted the computation of chargeable profits turns on the computation of the total income determined under the Income Tax Act.
Where any order of rectification is made under section 154 or under section 155 of the Income Tax Act recomputing the total income of an assessee, a consequential recomputation of the chargeable profits is provided for by section 15 of the .
Moreover, the Super Profits Tax payable by a company for the assessment year is deductible from the total income of the company for that assessment year in computing the distributable income of a company for the purposes of section 104 and section 105 of the Income Tax Act.
There is undeniably a close relationship between the and the Income tax Act and any change in the assessment made under the Income Tax Act has its consequential impact on the assessment made under the .
It is apparent therefore, that the record of an income tax assessment can be regarded as part of the record of a Super Profits Tax assessment.
The converse can also be true that is made abundantly clear by sub section
(2) of section 20 of the which provides that all the information contained in any statement or return made or furnished under the provisions of the or obtained or collected for the purposes of that Act may be used for the purposes of the Income Tax Act.
To the extent that information contained in the Super Profits Tax record is employed for the purpose of the Income Tax proceeding, it cannot be doubted that the Super Profits Tax record becomes part of the Income Tax record.
It is apparent that if the record of the Super Profits Tax assessment contains material pertaining to the claim under section 84 of the Income Tax Act, such material can be considered by the Income Tax Officer for the purpose of granting relief under section 84 in the Income Tax assessment.
In that sense and to that degree learned counsel for the assessee is perfectly right in contending that the record of the Super Profits Tax assessment becomes part of the record of the Income Tax assessment.
That does not suffice, however, to entitle the assessee to relief.
As has been mentioned earlier, there are a number of conditions which must be satisfied before relief can be granted under section 84.
All that data was evidently not contained in the Super Profits Tax assessment record at the time when the Income Tax assessment was completed.
The 229 Additional Commissioner of Income Tax, while dismissing the revision petition of the assessee against the order of the Income Tax Officer refusing to rectify the Income Tax assessment under section 154, went through the Income Tax record and the Super Profits Tax record of the assessee and found that no attempt had been made at any stage by the assessee to place facts on the record indicating that the undertaking belonging to the assessee was a new one and was entitled to relief under section 84.
He noted that in the return relating to the the assessee had made a claim for relief under section 84, but he pointed out that the claim had not yet been examined.
It has also not been shown to us that all the material required for satisfying the conditions requisite for the grant of relief under section 84 existed on the Super Profits Tax record at the time when the income tax assessment was completed.
When that is the position, it can hardly be said that in omitting to grant relief under section 84 when making the assessment order the Income Tax Officer committed a mistake apparent from the record.
We must remember that we are dealing with a challenge to an order refusing rectification and not to an order directly assailing the assessment.
In the result, the appeal fails and is dismissed with costs.
P.S.S. Appeal dismissed.
| The three respondents accused were charged with offences which fell within the scope of section 52 of the of 1950.
The ordinary criminal court and the Court Martial both had concurrent jurisdiction to try the said offences.
They were tried by the Judge presiding over the Fourth Addl.
Special Court, Calcutta.
The learned Trial Judge, while convicting one of the respondents and acquitting the remaining two, failed to follow the procedure prescribed by the Criminal Courts and Court Martial (Adjustment of Jurisdiction) Rules, 1952 framed under Section 549(1) of the Code of Criminal Procedure of 1898.
The High Court, in appeal, took the view that the learned Judge presiding over the Special Court had acted without jurisdiction in taking cognizance of the case and proceeding with the trial of three Army officers resulting in the conviction of one of them, and the acquittal of the remaining two and quashed the proceedings.
Dismissing the appeals, by the State, ^ HELD: 1.
The High Court was right in allowing the appeal of the officer who was convicted and dismissing the appeal of the State calling into question the acquittal of the remaining two.
However, the acquittal rendered by the High Court is on the ground of lack of jurisdiction on 114 the part of the learned Special Judge who tried the case in the Special Court and not on merits.
The expression 'acquitted ' has been employed by the High Court though it was sufficient to say no more than this, 'that the order of conviction and sentence was without jurisdiction and was therefore being quashed '.
In the eye of law, it is not an acquittal since it is not on merits.
It is, therefore, for the competent authority to decide whether or not to subject the accused to a fresh trial after following the procedure prescribed by the Rules.
[125D F] 2.1 In order to avoid any conflict of jurisdiction between the criminal court and the court martial in regard to offenders who are charged with having committed offences which fall under the purview of Section 52 of the , Section 549(1) of Cr.
P.C. provides that Central Government may make Rules consistent with Cr.
P.C. and the .
In pursuance of this provision contained in Section 549(1), Cr.
P.C., the Central Government has framed Rules known as Criminal Courts and Court Martial (Adjustment of Jurisdiction) Rules 1952.
[117H; 118A B] 2.2 Rule 3 of the Rules requires that when a person subject to military, Naval or Air Force law is brought before a Magistrate on accusation of an offence for which he is liable to be tried by Court Martial also, the magistrate shall not proceed with the case unless he is requested to do so by the appropriate military authority.
A combined reading of rules 3 and 4 shows that in case the Magistrate is of the opinion that he should proceed with the case without there being any such request from the appropriate military authority, the concerned Magistrate is enjoined to give notice to the commanding officer in this behalf.
Till the expiry of seven days from the service of such notice on the commanding officer, the Magistrate is prohibited from making any order of conviction or acquittal or framing any charges or committing the accused.
Therefore, the ordinary criminal court would have no jurisdiction to take cognizance of the case and to try the accused in a matter where the procedure prescribed by the Rules has not been complied with.
The initial lack of jurisdiction to take cognizance and try the case would, of logical necessity, vitiate the trial and the order of conviction and sentence would be liable to be quashed as a result thereof.
[118B F] In the instant case, admittedly the procedure prescribed by the Rules was not followed.
Under the circumstances it is futile to contend that the Army authorities had voluntarily abandoned their option to try the accused person in the court martial.
There is no substance in the plea and it has been rightly repelled by the High Court.[123D E] 115 Delhi Police Establishment, New Delhi vs Lt. Col. S.K. Loraiya.
[1973] (1)SCR 1010 relied upon.
Major E.G. Barsay vs The State of Bombay ; referred.
3.1 Section 13 of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949 in terms accords recognition to the applicability of the Criminal Law (Amendment) Act of 1952 enacted by the Parliament except and save some of the sections, namely, sections 6,7,8,9 and 10 thereof which, as provided in Section 13, shall not apply and shall be never deemed to have applied to West Bengal.
It is implicit in Section 13 of the West Bengal Act that the Central Act, namely, Criminal Law (Amendment) Act of 1952 is applicable to the State of West Bengal except and save the aforesaid five sections.
There can be no doubt or debate about this position having regard to the fact that criminal law is a subject which falls under the concurrent list and the Criminal Law (Amendment) Act of 1952 enacted by the Parliament is applicable subject to inconsistency, if any, between the said Act and the West Bengal Act.
Moreover, the West Bengal Act does not contain any provision pertaining to personnel governed by the .
It is altogether silent in regard to the matter pertaining to the procedure to be followed in regard to Army personnel from the perspective of Section 549 Cr.
P.C. and the rules framed under the authority thereof.
There is thus no conflict between the Criminal Law (Amendment) Act of 1952 and the West Bengal Act in so far as this matter is concerned.
Such being the position the provision contained in Criminal Law (Amendment) Act of 1952 with a special eye on the procedure to be followed in Section 8(3A) and Section 11 of the Criminal Law (Amendment) Act of 1952 will operate in this sphere without any let or hindrance.
And inasmuch as Section 8(3A) in terms provides that the provision of Section 549 Cr.
P.C. shall so for as may be applied to the proceeding before the Special Judge and that for the purposes of that provision a Special Judge shall be deemed to be a Magistrate, the said provisions remain fully alive and unaffected by the West Bengal Act.
[124C H; 125A]
|
Civil Appeal Nos.
1495 1507 and 1509 1511 of 1986 etc.
From the Judgment and order dated 24.5.1985 of the Allahabad High Court in Civil Misc.
Writ Petition Nos. 7729/82, 12762/81, 7810, 7865, 8408, 8409, 8407, 8410, 8872, 9527, 9439, 2482, 5170, 5122, 7903 and 7904 of 1982.
K. Parasaran, Attorney General, Anil Dev Singh, Mrs. section Dixit, B.P. Maheshwari and S.N. Agarwal for the Appellants.
R.K. Garg, Raja Ram Agarwal, P.D. Sharma, M.C. Dhingra, D.D. Gupta and Ashok Srivastava for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
Meerut city which is situated in a densely populated part of the State of Uttar Pradesh is growing very fast.
The State Government constituted a Development Authority under the provisions of the U.P. Urban Planning and Development Act, 1973 for the city of Meerut for the purpose of tackling the problems of town planning and urban development resolutely, since it felt that the existing local body and other authorities in spite of their best efforts had not been able to cope up with the problems to the desired extent.
The Meerut Development Authority sent a proposal to the Collector of Meerut for acquisition of 662 bighas 10 biswas and 2 biswanis of land (approximately equal to 412 acres) situated at villages Mukarrabpur, Plahera, Paragana Daurala, Tehsil Sardhana, Distt.
Meerut for its housing scheme with the object of providing housing accommodation to the residents of Meerut city.
After making necessary enquiries and receipt of the report from the tehsildar of Sardhana, the Collector was fully satisfied about the need for the acquisition of the land.
He accordingly wrote a letter on December 13, 1979 to the Commissioner and Secretary, Housing and Urban Development, Government of Uttar Pradhesh recom mending the acquisition of the above extent of land in the villages men 747 tioned above and he also stated that since there was acute shortage of houses in Meerut city, it was necessary that the State Government should invoke section 17(i) and (4) of the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act ').
He also submitted a certificate as required by the Rules containing the relevant data on the basis of which the Government could take a decision.
In that certificate he stated that the acquisition of the land was very necessary for the purposes of the housing scheme.
The total value of the land was estimated to be about Rs.55,01,270.25 paise and the cost of trees and structures was stated to be in the order of about Rs. 1 lakh.
The Secretary of the Meerut Development Authority also submitted his certificate in support of the acquisition of the land in question.
He stated that the proposed cost of the project was in the order of Rs. 48 crores.
He also furnished the number of flats to be constructed and house sites to be allotted.
The certificate further stated that the land which was proposed to be acquired was being used for cultivation and that the said land had been proposed to be used for residential purposes under the master plan of Meerut city.
After taking into consideration all the material before it including the certificates of the Collector and the Secretary, Meerut Development Authority, referred to above, the State Government published a notification under subsection (1) of section 4 of the Act notifying for general information that the land mentioned in the Schedule was needed for a public purpose, namely, for the construction of residential buildings for the people of Meerut by the Meerut Development Authority under a planned development scheme.
The notification further stated that the State Government being of the opinion that the provisions of subsection (1) of section 17 of the Act were applicable to the said land inasmuch as it was arable land which was urgently required for the public purpose, referred to above.
The notification further directed that section 5 A of the Act shall not apply to the proposed acquisition.
The above notification was published in the U.P. Gazette on July 12, 1980 and it was followed by a declaration under section 6 of the Act which was issued on May 1, 1981.
The possession of the land, which had been notified for acquisition, was taken and handed over to the Meerut Development Authority in July, 1982.
Thereafter about 17 persons who owned in all about 40 acres of land out of the total of about 412 acres acquired, filed writ petitions in the High Court of Allahabad questioning the notification under section 4 and declaration under section 6 of the Act on the ground that the action of the Government in invoking section 17(1) of the Act and dispensing with the inquiry under section 5 A of the Act was not called for in the circumst 748 ances of the case.
The High Court after hearing the parties held that the notification dated 29.4.1980 under section 4 of the Act which contained a direction under section 17(4) of the Act dispensing with the inquiry under section 5 A of the Act was an invalid one and, therefore, both the notification under section 4 and the subsequent declaration made under section 6 of the Act were liable to be quashed.
Accordingly they were quashed.
It should be stated here that while only 17 persons owning about 40 acres of land had filed the writ petitions, the High Court set aside the acquisition of the entire extent of about 412 acres.
That was the effect of quashing the notification issued under section 4(1) of the Act and all subsequent proceedings as the relief was not confined to the petitioners only.
By the time the judgment of the High Court was pronounced on May 24, 1985, it is stated, that the Meerut Development Authority had spent more than Rs.4 crores on the development of the land which had been acquired.
By then 854 houses had been constructed on the land and 809 plots had been allotted by it to various persons.
All the landowners other than the writ petitioners before the High Court had been paid two thirds of the compensation due to them.
Aggrieved by the decision of the High Court, the State of Uttar Pradesh and the Meerut Development Authority have filed the above appeals by special leave.
The main ground on which the High Court set aside the impugned notification and the declaration was that the case of urgency put forward by the State Government for dispensing with the compliance with the provisions of section 5 A of the Act had been belied by the delay of nearly one year that had ensued between the date of the notification under section 4 and the date of declaration made under section 6 of the Act.
It, however, rejected the contention of the petitioners based on the delay that had preceded the issue of the notification under section 4 of the Act.
The High Court observed that 'if the Government were satisfied with the urgency it would have certainly issued declaration under section 6 of the Act immediately after the issue of the notification under section 4 of the Act. ' It found that the failure to issue declaration under section 6 of the Act immediately on the part of the State Government was fatal.
That there was delay of nearly one year between the publication of the notification under section 4(1) of the Act containing the direction dispensing with the compliance with section 5 A of the Act and the date of publication of the 749 declaration issued under section 6 of the Act is not disputed.
It is seen from the record before us that after the publication of the notification under section 4(1) of the Act, the Collector after going through it found that there were some errors in the notification which needed to be corrected by issuing a corrigendum.
Accordingly, he wrote a letter to the State Government on 25.8.1980 pointing out the errors and requesting the State Government to publish a corrigendum immediately.
Both the corrigendum and the declaration under section 6 of the Act were issued on May 1, 1981.
It is on account of some error on the part of the officials who were entrusted with the duty of processing of the case at the level of the Secretariat there was a delay of nearly one year between the publication of the notification under section 4(1) and the publication of the declaration under section 6 of the Act.
The question for consideration is whether in the circumstances of the case it could be said that on account of the mere delay of nearly one year in the publication of the declaration it could be said that the order made by the State Government dispensing with the compliance with section 5 A of the Act at the time of the publication of the notification under section 4(1) of the Act would stand vitiated in the absence of any other material.
In this case there is no allegation of any kind of mala fides on the part of either the Government or any of the officers, nor do the respondents contend that there was no urgent necessity for providing housing accommodation to a large number of people of Meerut city during the relevant time.
The letters and the certificates submitted by the Collector and the Secretary of the Meerut Development Authority to the State Government before the issue of the notification under section 4(1) of the Act clearly demonstrated that at that time there was a great urgency felt by them regarding the provision of housing accommodation at Meerut.
The State Government acted upon the said reports, certificates and other material which were before it.
In the circumstances of the case it cannot be said that the decision of the State Government in resorting to section 17(1) of the Act was unwarranted.
The provision of housing accommodation in these days has become a matter of national urgency.
We may take judicial notice of this fact.
Now it is difficult to hold that in the case of proceedings relating to acquisition of land for providing house sites it is unnecessary to invoke section 17(1) of the Act and to dispense with the compliance with section 5 A of the Act.
Perhaps, at the time to which the decision in Narayan Govind Gavate etc.
vs State of Maharashtra, [1977] (1) S.C.R. 768 related the situation might have been that the schemes relating to development of residential areas in the urban centres were not so urgent and it was not necessary to eliminate the inquiry under 750 section 5 A of the Act.
The acquisition proceedings which had been challenged in that case related to the year 1963.
During this period of nearly 23 years since then the population of India has gone up by hundreds of millions and it is no longer possible for the Court to take the view that the schemes of development of residential areas do not 'appear to demand such emergent action as to eliminate summary inquiries under section 5 A of the Act '.
In Kasireddy Papaiah (died) and Ors.
vs The Government of Andhra Pradesh & Ors., A.I.R. 1975 A.P. 269.
Chinnappa Reddy, J. speaking for the High Court of Andhra Pradesh dealing with the problem of providing housing accommodation to Harijans has observed thus: "That the housing conditions of Harijans all over the country continue to be miserable even today is a fact of which courts are bound to take judicial notice.
History has made it urgent that, among other problems, the problem of housing Harijans should be solved expeditiously.
The greater the delay the more urgent becomes the problem.
Therefore, one can never venture to say that the invocation of the emergency provisions of the Land Acquisition Act for providing house sites for Harijans is bad merely because the officials entrusted with the task of taking further action in the matter are negligent or tardy in the discharging of their duties, unless, of course, it can be established that the acquisition itself is made with an oblique motive.
The urgent pressures of history are not to be undone by the inaction of the bureaucracy.
I am not trying to make any pontific pronouncements.
But I am at great pains to point out that provision for house sites for Harijans is an urgent and pres sing necessity and that the invocation of the emergency provisions of the Land Acquisition Act cannot be said to be improper, in the absence of mala fides, merely because of the delay on the part of some Government officials." (Underlining by us) What was said by the learned Judge in the context of provision of housing accommodation to Harijans is equally true about the problem of providing housing accommodation to all persons in the country today having regard to the enormous growth of population in the country.
The observation made in the above decision of the High Court of Andhra Pradesh is quoted with approval by this Court in 751 Deepak Pahwa etc.
vs Lt. Governor of Delhi & Ors., ; even though in the above decision the Court found that it was not necessary to say anything about the post notification delay.
We are of the view that in the facts and circumstances of this case the post notification delay of nearly one year is not by itself sufficient to hold that the decision taken by the State Government under section 17(1) and (4) of the Act at the time of the issue of the notification under section 4(1) of the Act was either improper or illegal.
It was next contended that in the large extent of land acquired which was about 412 acres there were some buildings here and there and so the acquisition of these parts of the land on which buildings were situated was unjustified since those portions were not either waste or arable lands which could be dealt with under section 17(1) of the Act.
This contention has not been considered by the High Court.
We do not, however, find any substance in it.
The Government was not acquiring any property which was substantially covered by buildings.
It acquired about 412 acres of land on the out skirts of Meerut city which was described as arable land by the Collector.
It may be true that here and there were a few super structures.
In a case of this nature where a large extent of land is being acquired for planned development of the urban area it would not be proper to leave the small portions over which some super structures have been constructed out of the development scheme.
In such a situation where there is real urgency it would be difficult to apply section 5 A of the Act in the case of few bits of land on which some structures are standing and to exempt the rest of the property from its application.
Whether the land in question is waste or arable land has to be judged by looking at the general nature and condition of the land.
It is not necessary in this case to consider any further the legality or the propriety of the application of section 17(1) of the Act to such portions of land proposed to be acquired, on which super structures were standing because of the special provision which is inserted as sub section (1 A) of section 17 of the Act by the Land Acquisition (U.P. Amendment) Act (20 of 1954) which reads thus: "(1 A).
The power to take possession under sub section (1) may also be exercised in the case of land other than waste or arable land where the land is acquired for, in connection with sanitary improvements of any kind or planned development.
" It is no doubt true that in the notification issued under section 4 752 of the Act while exempting the application of section 5 A of the Act to the proceedings, the State Government had stated that the land in question was arable land and it had not specifically referred to sub section (1 A) of section 17 of the Act under which it could take possession of land other than waste and arable land by applying the urgency clause.
The mere omission to refer expressly section 17(1 A) of the Act in the notification cannot be considered to be fatal in this case as long as the Government had the power in that sub section to take lands other than waste and arable lands also by invoking the urgency clause.
Whenever power under section 17(1) is invoked the Government automatically becomes entitled to take possession of land other than waste and arable lands by virtue of sub section (1 A) of section 17 without further declaration where the acquisition is for sanitary improvement or planned development.
In the present case the acquisition is for planned development.
We do not, therefore find any substance in the above contention.
It is, however, argued by the learned counsel for the respondents that many of the persons from whom lands have been acquired are also persons without houses or shop sites and if they are to be thrown out of their land they would be exposed to serious prejudice.
Since the land is being acquired for providing residential accommodation to the people of Meerut those who are being expropriated on account of the acquisition proceedings would also be eligible for some relief at the hands of the Meerut Development Authority.
We may at this stage refer to the provision contained in section 21(2) of the Delhi Development Act, 1957 which reads as follows: "21(2).
The powers of the Authority or, as the case may be, the local authority concerned with respect to the disposal of land under sub section (1) shall be so exercised as to secure, so far as practicable, that persons who are living or carrying on business or other activities on the land shall, if they desire to obtain accommodation on land belonging to the Authority or the local authority concerned and are willing to comply with any requirements of the Authority or the local authority concerned as to its development and use, have an opportunity to obtain thereon accommodation suitable to their reasonable requirements on terms settled with due regard to the price at which any such land has been acquired from them: Provided that where the Authority or the local au 753 thority concerned proposes to dispose of by sale any land without any development having been undertaken or carried out thereon, it shall offer the land in the first instance to the persons from whom it was acquired, if they desire to purchase it subject to such requirements as to its develop ment and use as the Authority or the local authority concerned may think fit to impose." Although the said section is not in terms applicable to the pre sent acquisition proceedings, we are of the view that the above provision in the Delhi Development Act contains a wholesome principle which should be followed by all Development Authorities throughout the country when they acquire large tracts of land for the purposes of land development in urban areas.
We hope and trust that the Meerut Development Authority, for whose benefit the land in question has been acquired, will as far as practicable provide a house site or shop site of reasonable size on reasonable terms to each of the expropriated persons who have no houses or shop buildings in the urban area in question.
Having regard to what we have stated above, we are of the view that the judgment of the High Court cannot be sustained and it is liable to be set aside.
We accordingly allow these appeals, set aside the judgment of the High Court and dismiss the Writ Petitions filed by the respondents in the High Court.
There is no order as to costs.
P.S.S. Appeals allowed.
| The appellants are owners of arable land Lying on the outskirts of Meerut City.
The land was sought to be acquired by the Meerut Development Authority for its scheme to provide housing accommodation to the residents of the city.
The Collector, recommended the acquisition of the said land on December 13, 1979, stating that in view of the acute shortage of houses in the city it was necessary that the State Government invoke section 17(1) and (4) of the Land Acquisition Act, 1894.
The notification under section 4(1) of the Act dated April 29, 1980 was published in the Gazette on July 12, 1980, stating that the provisions of sub section
(1) of section 17 of the Act were applicable to the said land and that section 5 A shall not apply to the proposed acquisition.
After publication of the notification the Collector noticed some errors in it which needed to be corrected by a corrigendum.
The corrigendum and the declaration under section 6 of the Act were issued on May 1, 1981.
The possession of the land was taken and handed over to the Authority in July 1982.
The appellants filed writ petitions in the High Court questioning the notification under section 4 and declaration under section 6 of the Act alleging that the action of the Government in invoking section 17(1) and dispensing with the inquiry under section 5A were not called for since the case of urgency put forward by the State Government had been belied by the delay of nearly one year that had ensued between the date of notifica 744 tion under section 4 and the declaration under section 6 of the Act.
It was also contended that in the large extent of the land acquired there were some buildings here and there and so the acquisition was not justified since these portions were not either waste or arable lands which could be dealt with under section 17(1).
The High Court being of the view that the failure to issue the declaration under s.6 of the Act immediately after the notification under section 4 was fatal, held that the notification dated April 29, 1980 under section 4 which contained a direction under section 17(4) dispensing with the inquiry under section 5A of the Act was invalid and, therefore, both the notification under section 4 and the subsequent declaration made under section 6 were liable to be quashed.
In the appeals by special leave to this Court on the question: Whether in the circumstances of the case it could be said that on ac count of mere delay of nearly one year in the publication of the declaration it could be said that the order made by the State Government dispensing with compliance with section 5A at the time of publication of the notification under section 4(1) would stand vitiated in the absence of any other material.
Allowing the appeals, ^ HELD: 1.1 Having regard to the enormous growth of population in the country the provision of housing accommodation in these days has become a matter of national urgency.
The schemes relating to development of residential areas in the urban centres are so urgent that it is necessary to invoke section 17(1) of the Act to dispense with the inquiry under section 5A. [749 F G] 1.2 In the instant case, there is no allegation of any kind of mala fides on the part of either the Government or any of the officers, nor do the respondents contend that there was no urgent necessity for providing housing accommodation to a large number of people of the city during the relevant time.
[749 E] 1.3 The mere fact that on account of some error on the part of the officials processing the case at the level of the Secretariat there was a post notification delay of nearly one year in issuing declaration under section 6 is, therefore, not by itself sufficient to hold that the decision taken by the State Government under section 17(1) and (4) of the Act at the time of the issue of the notification under section 4(1) of the Act was either improper or illegal.
[751 A B] 745 Deepak Pahwa etc.
vs Lt. Governor of Delhi & Ors., ; referred to.
Narayan Govind Gavate etc.
vs State of Maharashtra, distinguished.
2.1 Where a large extent of land is being acquired for planned development of an urban area it would not be proper to leave small portions, over which some super structures have been constructed, out of the development scheme.
In a situation where there is real urgency it would be difficult to apply section 5 A of the Act in the case of few bits of land on which some structures are standing and to exempt the rest of the property from its application.
[751 D E] 2.2 Whether the land in question is waste or arable land has to be judged by looking at the general nature and condition of land.
[751 E F] 3.1 Whenever power under section 17(1) is invoked, the Government automatically becomes entitled to take possession of land, other than waste and arable, by virtue of sub section
(1 A) of section 17 without further declaration where the acquisition is for sanitary improvement or planned development.
[752 B C] 3.2 In the instant case, the acquisition was for planned development.
The mere omission to refer expressly to section 17(1 A) of the Act in the notification cannot be considered to be fatal in this case.
[752 B] 4.1 It may be that many of the persons from whom lands have been acquired are also persons without houses or shop sites and if they are to be thrown out of their lands they would be exposed to serious prejudice.
Since the land is being acquired for providing residential accommodation to the people of Meerut those who are being expropriated on account of the acquisition proceedings would also be eligible for some relief at the hands of the concerned Development Authority.
[752 D E] 4.2 Although section 21(2) of the Delhi Development Act, 1957 which provides for such relief is not in terms applicable to the present acquisition proceedings, the provision nonetheless contains a wholesome principle which should be followed by all Development Authorities throughout the country when they acquire large tracts of land for the purposes of land development in urban areas.
[753 B C] The Meerut Development Authority, for whose benefit the land in 746 question has been acquired, it is hoped, will as far as practicable, provide a house site or shop site of reasonable size on reasonable terms to each of the expropriated persons who have no houses or shop buildings in the urban area in question.
[753 C D]
|
ivil Appeal No. 4160 of 1989.
From the Judgment and Order dated 24.3.1988 of the Karnataka High Court in W.A. No. 637 of 1985.
section Ganesh, A.C. Gulati and B .B.
Sawhney for the Appellants.
T.S. Krishnamurthy Iyer and N. Nettar for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Leave granted.
356 This is an appeal from the judgment and order of the Division Bench of the High Court of Karnataka dated 25th March, 1988.
There was a notification under section 98(2) of the City of Bangalore Municipal Corporation Act, 1949 dated 4th March, 1975 levying octroi, inter alia, on food drinks (including milkfood) brought into the municipal limits of Bangalore for sale, consumption or use.
On 8th October, 1976, representation was submitted on behalf of the peti tioners, HMM Limited, protesting against levy of octroi on "Horlicks" milkfood powder brought into the municipal limits in bulk containers (Large steel drums) for being packed at the packing station in Bangalore in Unit containers (glass bottles) and thereafter exported outside the municipal limits.
In respect of the quantity of the goods which were exported outside the municipal limits after being bottled, the petitioners sought refund of the octroi duty as there was no use or consumption or sale of the said milkfood within the municipal limits.
The respondent corporation rejected the claim on the ground that rule 24 of the Byelaw 45 framed by the Municipal Corporation had not been complied with and as such refund could not be given.
The petitioners again sought on 4th February, 1978, refund of octroi duty for the period 1974 75 to December, 1977 amounting to Rs. 13,39,652.92 enclosing computation of the duty collected for the aforesaid period.
Again, the ' refund was refused by the respondents in March, 1978.
Petitioners thereafter filed writ petition in the High Court of Karnataka challenging the levy/retention of octroi duty on "Horlicks" exported out of the municipal limits and seeking refund thereof.
From 1st April, 1979, levy of octroi on milkfood was totally abol ished in Karnataka.
Learned Single Judge of the High Court on 1st February, 1984, allowed the writ petition and direct ed that the amount of octroi duty collected for the period commencing three years prior to the filing of the writ petition be verified within 3 months and refunded within 45 days thereof.
Learned Single Judge noted that the case of the petitioners was that it was engaged in the manufacture and sale of a malted milk product marketed under the brand name "Horlicks".
The petitioner used to manufacture the said product in its two factories situated at Nabha in the State of Punjab and Rajahmundhry in the State of Andhra Pradesh and marketed these throughout the country through its bot tling and marketing centers situated in different parts of the country.
One such centre was situated in the city of Bangalore to which it brought its said product in bulk, then rebottled the same in small bottles of different capacities like 800 gms, 450 gms and 250 gms.
It was the case of peti tioners that small portion of the product, rebottled in small bottles, alone was sold within the city of 357 Bangalore to its dealers and the rest was exported to its agents situated in different parts of the State and other nearby places of the country also.
In this connection, it may be mentioned that rules 24 to 27 of the relevant Bye laws were as follows: "24.
On all articles on which octroi duty has been paid and which are subsequently exported beyond the octroi limits without breaking bulk, refunds shall, subject to the following rules, be granted at the rates originally charged at the time of import; provided that no such refunds shall, except in the case of timber imported and re exported in log be granted unless such goods are exported within three months from the date on which octroi was levied.
Any person claiming refund under the above bye laws shall produce the goods to be exported at the Central Octroi Office, togeth er with the Original receipt for octroi duty paid thereon, and an application for refund prepared in triplicate in the form prescribed in Schedule V. He shall fill up columns 1 to 10 of the application signing and dating the same, before he presents it at the Central Octroi Office.
He shall produce for record in office a certified copy of the invoice as per which duty was paid on the article at the time of its import.
Any person who has been exempted under bye law No. 10 from production of goods at the Central Octroi Office on import shall, subject to the same conditions, he exempted from the production of goods to be exported.
The Octroi Superintendent of the Central Octroi Office on being satisfied as to the identity of the goods produced with those for which the receipt has been granted or the validity of the claim, shall fill up columns 11 to 15 and also the coupon and handover the form to the exporter.
" There is no dispute that on the entire quantity of the goods brought within the municipal limits, octroi was col lected from the petitioner.
It claimed for refund only in respect of those quantities which were rebottled and export ed from the city to outside places.
This was refused.
The contention of the petitioners was that only that portion of the goods which was imported in drums and was rebottled in 358 bottles and exported outside the city was not liable to duty of octroi.
It was contended before the learned Single Judge that portion of the goods was not dutiable to octroi as these did not fall within the term "sale, consumption or use" within the local area of the city of Bangalore.
When the petitioner approached the High Court, rule 24 aforesaid of the Bye law 45 was in force.
Octroi was, however, abol ished with effect from Ist April, 1979.
The question that was canvassed before the learned Single Judge of the High Court was that when the product was imported in bulk in the city only for rebottling and rebottled in small bottles for the consumer requirements and marketed, there could not be consumption or sale of that product.
On the other hand, it was contended that in any event, it is a case of 'use ' to attract levy of octroi.
The Horlicks powder remains the same even after packing, as was held by Mittal, J. of the High Court of Punjab in C.W.P. No. 19873 of 1977.
In that case, the Horlicks powder in drums was sold direct to bulk consum ers.
It was held that the Horlicks powder remains the same after packing.
It does not become different commodity.
It also cannot be held that it acquired distinct commercial utility, according to Mittal, J. Therefore, in that context; Mittal, J. held that the packing of the Horlicks powder in small bottles does not fall within the ambit of the word 'use ' and, therefore, the petitioner in that case was not liable to the charge of octroi for its import within the limits of the city.
This decision was affirmed by the Divi sion Bench.
It was contended that in the judgment before Mittal, J, packing was entrusted to a separate agency, but it does not make any difference, according the learned Single Judge of Bangalore.
Therefore, the learned Single Judge in this case found that only on that quantity of milk product imported by the petitioner in bulk but rebottled in small bottles at its Bangalore bottling station and export ing from the city to other places for sale in those places and not using the same in Bangalore city, was not dutiable to octroi till that levy was in force.
The learned Single Judge, therefore, held that the amounts so levied and col lected as octroi for a period of three years prior to the presentation of the writ petition only and not beyond that are refundable by the respondents to the petitioner.
He directed refund and pursuant to this direction, the learned Single Judge further directed that the same may be verified.
We were informed that the same has been verified.
There was an appeal to the Division Bench of the High Court.
The question before the Division Bench was whether the Corporation was liable to refund that part of the amount of octroi duty paid by the petitioners on the quantity of the Horlicks powder imported into the city of Bangalore on the petitioners ' informing the Corporation that 359 they had despatched that part of the same from time to time by filing the same in bottles to places outside the city of Bangalore even though petitioners had not followed the procedure prescribed in rules 24 and 25 of Bye law No. 45 flamed by the Corporation and even though they had not even informed of such despatches as and when these were made? Item 17 of the notification dated 4th March, 1975, as mentioned before, so long as it continued, was as follows: "17.
Confectionary, biscuits, toffee, chocolates food essence, food coloured, aerated water and soft drinks, food drinks other than milk in condensed form bottled or canned arecounts both scomted or plain.
2% 0.06 ps.
ad valorem 10 Kg.
" The Division Bench noted that in terms of the aforesaid levy, the petitioners were paying octroi on the basis of the total quantity of Horlicks imported into the city of Banga lore.
Then a letter was addressed on the 8th October, 1975 to the Corporation of the city of Bangalore, which was set out in the judgment of the Division Bench.
In the said letter, it was, inter alia, stated that the petitioners were not bringing the goods within the municipal limits for use or consumption therein and as such the imposition of octroi was illegal and unwarranted and that the petitioners had paid under protest the amount and claimed the refund.
The petitioners claimed only the octroi paid on the goods which were exported outside the city of Bangalore and not used or consumed within the city.
The petitioners further stated, inter alia, as follows: "The petitioner is willing to differentiate the goods intended to be used consumed within the octroi limit of Bangalore and the goods which are exported out of the limits of Banga lore and not used or consumed therein appro priately in order to facilitate movements of goods and avoid difficulties to the octroi incharge." The Corporation turned down the demand.
The Division Bench noted that the petition was resisted by the respondent on to grounds: "1.
The transferring of Horlicks imported in bulk into the 360 city of Bangalore into bottles amounts to use of the Horlicks within the city of Bangalore notwithstanding the fact that a part of the total number of bottles were despatched out side the city of Bangalore.
The octroi collected on the Horlicks im ported into the city of Bangalore was in accordance with law and unless the procedure prescribed under rules 24 and 25 of Bye law 45 was followed, no obligation or duty was cast on the part of the Corporation to refund any part of the octroi collected.
" The Division Bench of the High Court in the decision under appeal observed that as far as the first ground raised was concerned, the learned Single Judge had rejected the claim and held that when the Horlicks powder was transferred into bottles of different sizes it did not use Horlicks within the city of Bangalore.
In this connection, the Divi sion Bench referred to the decision of Burmah Shell Oil Storage & Distributing Co. of India Ltd. Belgaum vs Belgam Borough Municipality, Belgaum, [1963] 2 Supp.
SCR 2 16.
This Court in that case held that mere transferring of a bulk product into small containers like packets or bottles for the purpose of sale does not amount to use of the goods in the sense the word is used in relation to levy of octroi.
On this aspect, the Division Bench agreed with the learned Single Judge.
So far as the second contention raised by the Corporation was concerned, the Division Bench noted that the relevant provision of the rules was not considered.
We have set out hereinbefore the said rules.
In the Schedule there is a form for refund.
The contention of the petitioners was that rule 24 did not apply.
Rule 24, as we have noticed hereinbefore, provided that in respect of articles on which octrio has been paid and which are 'subsequently exported beyond the octroi limits without breaking bulk ', refunds shall be subject to the rules indicated therein.
So, accord ing to the petitioners, after opening or breaking open the drums and putting the powder in the bottles, as in this case amount to breaking bulk, and as such there was no scope of applying for refund under Rule 24.
But the Corporation contended that it was not so.
The Division Bench, however, accepted the contention of the Corporation.
It is indubita bly true that the petitioners had not claimed the refund in accordance with the law because according to the petitioners the said rules would have no application as the bulk was broken.
The Division Bench, however, observed that the petitioners in their letter addressed to the Commissioner have specifically stated that the goods were subsequently exported outside the city of Banga 361 lore as envisaged by Bye law 24 of notification No. N.A.I(53) of 1952 53 dated 5th April, 1954.
Regarding the expression "without breaking bulk", the Division Bench of the High Court was unable to accept the contention that the bulk of the goods on which the octroi has been paid was transferred to containers of small sizes and despatched outside the city, the bulk was broken.
But the question was whether in such a situation, it can be said that it was done without breaking the bulk.
The Division Bench was of the view that having regard to the rule and having regard to the fact that it was imported into the city of Bangalore, and was to be despatched outside the city of Bangalore in the same form, i.e., without the same having been used or sold or consumed in the production or manufacture other goods, the person concerned can only claim refund in accordance with the rules.
Therefore, according to the Division Bench, no importance can be attached to the expression "without breaking bulk" on despatches of the goods.
Refund could be claimed only on despatches of the goods outside the city, for octrio is leviable only if the goods imported into the city are consumed, used or sold within the city.
Therefore, 'bulk ', in the view of the Division Bench, was, in fact, broken and the petitioner not having applied in accordance with rules 24 and 25, no amount could be refunded to the appellant.
In that view of the matter, the appeal was al lowed by the Division Bench and the judgment of the learned Single Judge was reversed.
It may be mentioned that there is no dispute that the Horlicks powder was brought in bulk in drums.
At the rele vant time, there was levy of octroi at the entry of such goods.
After being imported, it has been found that the entirety of the Horlicks powder had not been sold.
A part of the powder has been put in the bottles and exported outside the city of Bangalore.
It has been found by the Division bench that putting powder from the drums to the bottles inside the city, is not user or consumption as contemplated by the rule.
And on that no octroi duty was leviable.
In this case also, it has been found pursuant to the order of the learned Single Judge how much octroi will be refundable on account which has been paid by the petitioners.
The only ground on which the Division Bench had resisted the refund was that the petitioners did not apply in accordance with the procedure envisaged by rules 24 and 25 of the aforesaid Bye laws.
Mr. Krishnamurthi Iyer, learned counsel for the respondent, contended that the High Court was right in the view it took on the construction of rules 24, 25 and 26.
We are unable to agree with this submission.
As we have indi cated before, "without breaking bulk" is not an expression of art, nor is it an expression defined in the Act or the rules.
It has, therefore, to be construed 362 in its literal and ordinary sense to the extent possible, and construed as it is, in our opinion, transferring the product from the drums by breaking seal of the drums to bottles, cannot be said to be "without breaking bulk".
"Breaking bulk" is an expression not unknown to legal termi nology especially in England.
In the Cyclopedic Law Diction ary, 3rd Edn., "breaking bulk" has been stated to mean that for a bailee to open a box or packaging entrusted to his custody and fradulently appropriate its contents.
In Stroud 's Judicial Dictionary, 4th Edn., Vol 1, it has been stated that to 'break bulk ' is not now necessary to consti tute larceny or theft by a bailee.
It is stated that the cases were very numerous and turned on nice distinctions as to what amounted to "breaking bulk".
In the Dictionary of English Law by Earl Jowitt "breaking bulk" has been defined as that at common law there could be no larceny of goods which had originally been lawfully obtained by a person who subsequently wrongfully converted them to his own use, unless such conversion was preceded by some new act of taking.
It that is so, we are unable to agree with the construction suggested by the Division Bench.
It was con tended that the octroi was leviable on the entry of the goods in the municipal limits of the city but the Horlicks powder had not entered into the local limits of Bangalore for the purpose of use or consumption, as understood in the decision of the Burmah Shell 's case (supra) and as found both by the learned Single Judge and the Division Bench that putting the powder from the drums to the bottles for the purpose of exporting or for taking this out of the city, is neither use nor consumption of the Horlicks powder, attract ing the levy of octroi.
Certainly, the bulk was broken in the procedure followed.
The High Court was wrong in putting the construction on the expression as it did.
Mr. Iyer sought to raise before us the plea that in a case where refund is due in respect of the duties like this whether petitioners would be entitled to refund on the basis that refund cannot be given because there was possibility of undue enrichment of the claimant, is pending before the Seven Judge Constitution Bench in this Court.
Therefore, it was submitted that we should await the said decision or refer the matter to the Constitution Bench.
Octroi in this case is a duty on the entry of the raw materials for coming in.
It is the duty on the coming in of the raw materials which is payable by the producer or the manufacturer.
It is not the duty on going out of the finished products in re spect of which the duty might have been charged or added to the costs passed on to the consumers.
In such a situation, no question of 'undue enrichment ' can possibly arise in this case.
If that is the position then the pendency of the question before the Constitution Bench should not deter us from proceeding with this adjudication.
363 Shri Ganesh drew our attention to a decision of this Court in Kirpal Singh Duggal vs Municipal Board, Ghaziabad, ; There, the appellant had transported, between August 1953 and March 1955, certain materials in execution of a contract to supply goods for use by the Government of India.
The respondent Municipality collected toll while the appellant 's trucks were passing through the toll barrier.
The appellant, in that case, obtained in June, 1955, a certificate from the authority concerned that the goods transported were "meant for Government work and had become the property of the Government".
The appellant then applied to the Municipality for refund of the amount paid pursuant to the exemption granted by the Government of India under the U.P. Municipalities Act, 1916.
The respondent declined to refund the amount.
In an action against the respondent, the trial court decreed the claim.
The High Court affirmed the order of the Civil Judge.
Both the Civil Judge and the High Court took the view that by the rules framed under the Act an application for refund within six months from the date of actual payment is a condition prece dent for refund of the toll.
The party appealed to this Court.
This Court was unable to accept this contention Shah, 3, as the learned Chief Justice then was, speaking for this Court noted that the respondent therein had contended that the rules framed by the Government regarding the procedure constituted a condition precedent to the exercise of the right to claim refund and recourse to the civil court being conditionally strict, compliance to that procedure was necessary for obtaining any decree in civil court.
Allowing the appeal, this Court held that this contention was untena ble.
Shah, J. observed at p. 555 of the report as under: "The rules framed by the Government merely set up the procedure to be followed in preferring an application to the Municipality for obtain ing refund of the tax paid.
The Municipality is under a statutory obligation, once the procedure followed is fulfilled, to grant refund to the toll.
The application for refund of the toll must be made within fifteen days from the date of the issue of the certificate and within six months from the date of payment of the toll.
It has to be accompanied by the original receipts.
If these procedural re quirements are not fulfilled, the Municipality may decline to refund the toll and relegate the claimant to a suit.
It would then be open to the party claiming a refund to seek the assistance of the court, and to prove by evidence which is in law admissible that the goods transported by him fell within the order issued under section 157(3) of the Act.
364 The rules framed by the Government relating to the procedure to be followed in giving effect to the exemptions on April 15, 1939, do not purport to bar the jurisdiction of the civil court if the procedure is not followed.
In our judgment, the Civil Judge and the High Court exalted what were merely matters of procedure, which the Municipality was entitled to require compliance with in granting refund, into conditions precedent to the exercise of juris diction of the civil court.
It is impossible on a bare perusal of the order issued by the Government and the rules framed by it to give to the order and the rules that effect." These observations, in our opinion, in view of the contentions raised on behalf of the Municipality here are apposite in this case.
The aforesaid Rule 24 does not apply.
In that view, rules 25 and 26 have no scope of application.
Indubitably, amounts have been realised as octroi on the entry of the goods on which octroi was not leviable because these were not for use or consumption within the municipal limits.
Mere physical entry into the city limits would not attract the levy of octroi unless goods were brought in for use or consumption or sale.
In this case, putting the powder from the drums to the bottles for the purpose of exporting or taking these out of the city is neither use nor consump tion of the Horlicks powder attracting the levy of octroi.
Such amounts, therefore, cannot be retained by the respond ent Corporation.
There is no dispute as to the quantum in view of the fact that the amount has now been found to be certified to be credited pursuant to the direction of the learned Single Judge of the High Court.
We see no ground as to why amount should not be refunded.
Realisation of tax or money without the authority of law is bad under Article 265 of the Constitution.
Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits.
So these amounts become collec tion without the authority of law.
The respondent is a statutory authority in the present case.
It has no right to retain the amount, so far and so much.
These are refundable within the period of limitation.
There is no question of limitation.
There is no dispute as to the amount.
There is no scope of any possible dispute on the plea of undue en richment of the petitioners.
We are, therefore, of the opinion that the Division Bench was in error in the view it took.
Where there is no question of undue enrichment, in respect of money collected or retained, refund, to which a citizen is entitled, must be made in a situation like this.
We, therefore, hold that amounts should be refunded subject to 365 the verification directed by the learned Single Judge of the High Court of the amount of refund.
The appeal is, thus, allowed.
The Judgment and the order of the Division Bench of the High Court are, therefore, set aside.
In the facts and the circumstances, there will be no orders as to costs.
R.S.S. Appeal allowed.
| The appellant company was engaged in the manufacture and sale of a malted milk product marketed under the brand name "Horlicks".
The appellant brought the product within the octroi limits of Bangalore in bulk containers, rebottled the same in small bottles and exported the major portion of the rebottled product beyond the octroi limits of Bangalore.
The appellants made representation protesting against the levy of octroi on Horlicks in respect of the quantity of the goods which was exported outside the municipal limits after being rebottled, and sought refund of the octroi duty on the ground that there was no use or consumption or sale of the said milkfood within the municipal limits, and that the imposition of octroi was illegal and unwarranted.
The re spondent Corporation rejected the claim.
Thereupon the appellant filed a writ petition in the High Court challeng ing the levy/retention of the octroi duty on Horlicks ex ported out of the municipal limits.
The petition was resisted by the Corporation on two grounds, namely, (i) the transferring the Horlicks imported in bulk into bottles amounted to use of the Horlicks within the city; and (ii) the octroi collected was in accordance with law and unless the procedure prescribed under rules 24 and 25 of Bye law 45 framed by the Municipal Corporation under the City of Bangalore Municipal Corporation Act, 1949 was followed no obligation or duty was cast on the part of the Corporation to refund any part of the octroi collected.
The learned Single Judge allowed the writ petition and held that when the Horlicks powder was transferred into bottles of different sizes, 354 the appellant did not use Horlicks within the city of Banga lore.
In the appeal, the Division Bench agreed with the learned Single Judge on the first point.
On the second point, however, the Division Bench rejected the contention of the appellant that opening or breaking open the drums and putting the powder in the bottles amounted to breaking bulk and as such there was no scope of applying for refund under rule 24 which provided for refund in the case of articles on which octroi duty had been paid and which were subsequently exported beyond the octroi limits without breaking bulk.
According to the Division Bench, no importance could be attached to the expression 'without breaking bulk ', and the appellant not having applied in accordance with rules 24 and 25, no amount could be refunded.
Before this Court, the Corporation sought to raise an additional plea that where refund was due in respect of the duties like this, the amount could not be refunded because there was possibility of undue enrichment of the claimant.
Allowing the appeal, this Court, HELD: (1) Octroi in this case is a duty on the coming in of the raw materials which is payable by the producer or the manufacturer.
It is not the duty on going out of the fin ished products in respect of which the duty might have been charged or added to the costs passed on to the consumers.
In such a situation, no question of 'undue enrichment ' can possibly arise.
[362G] (2) There is no dispute that the Horlicks powder was brought in bulk in drums.
After being imported, the entirety of the Horlicks powder had not been sold.
A part of the powder has been put in the bottles and exported outside the city of Bangalore.
[361E] (3) Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits.
[364F] (4) Indubitably, amounts have been realised as octroi on the entry of the goods on which octroi was not leviable because these were not for use or consumption within the municipal limits.
Mere physical entry into the city limits would not attract the levy of octroi unless goods were brought in for use or consumption or sale.
[364C D] (5) In this case, putting the powder from the drums to the bottles 355 for the purpose of exporting or taking these out of the city is neither use nor consumption of the Horlicks powder at tracting the levy of octroi.
Such amounts, therefore cannot be retained by the respondent corporation.
[362D E] C.W.P. No. 19873 of 1977 High Court of Punjab Burmah Shell Oil Storage & Distributing Co. of India Ltd. vs Bel gaum Borough Municipality, [1963] 2 Supp.
SCR 216, referred to.
(6) "Without breaking bulk" is not an expression of art, nor is it an expression defined in the Act or the rules.
It has, therefore, to be construed in its literal and ordinary sense to the extent possible, and construed as it is, trans ferring the product from the drums by breaking seal of the drums to bottles cannot be said to be "without breaking bulk".
Certainly the bulk was broken in the procedure fol lowed.
[361H; 362A E] (7) Rule 24 does not apply.
In that view, rules 25 and 26 have no scope of application.
[364C] Kirpal Singh Duggal vs Municipal Board, Ghaziabad, , referred to.
(8) Realisation of tax or money without the authority of law is bad under Article 265 of the Constitution.
Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits.
So these amounts become collection without the authority of law.
The respondent is a statutory authority in the present case.
It has no right to retain the amount, so far and so much.
These are refundable within the period of limitation.
[364E F]
|
Appeals Nos.131 to 304 of 1957.
Appeals by special leave from the judgments and order dated October 19, 1955 and January 31, 1956, of the Authority under , Bombay, in Applications Nos.
950 961, 963 967, 970 989, 992, 994 1013, 1015 1016, 1049 1050 and 11510 11511 and 11513 11517 of 1955 respectively.
M.C. Setalvad, Attorney General for India, R. Ganapathy Iyer and R. H. Dhebar, for the appellants.
Purshottam Tricumdas and G. N. Srivastava, for the respondents in all the appeals except C. A. No. 186 of 1957.
1959 May 8.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
This group of 174 appeals by special leave arises from the several applications made against Mr. B. P. Hira, Works Manager, Central Railway Workshop and Factory, Parel, Bombay (hereafter called the appellant) by the employees at the said factory (hereafter called the respondents) under the (IV of 1936) claiming payment of overtime wages since 1948.
All these applications were heard by the Payment of Wages Authority, Bombay, as companion matters and they have been disposed of by a common judgment.
The main judgment has, however, been delivered by the said Authority in the application filed by Mr. C. M. Pradhan (hereafter called the respondent) which gives rise to Civil Appeal No. 131 of 1957 before us.
We would, therefore, deal with this appeal in particular and our decision in this appeal will govern the rest of the appeals in this group.
139 In his application made before the Payment of Wages Authority the respondent alleged that he had been employed in the factory called the Central Railway Workshop and Factory, Parel, Bombay, and that he had not been paid overtime wages due to him from April 1, 1949, to September 30, 1954.
The respondent claimed that the delay made by him in filing the present application should be condoned because jointly with his co workers he had been in correspondence with the railway administration in regard to the said payment of overtime wages since, 1948 and that the claim made by him and his colleagues had been finally rejected by the railway administration on August 31, 1954.
His case was that he had filed the present application soon thereafter and so the delay made by him ,in making the claim before the Authority should be condoned.
The Authority heard the parties on the; question of delay and held that the delay only in respect of the claim for the period after May 1953 should be condoned.
In the result the claim for overtime wages for the period prior to May 19, 1953, was rejected on the preliminary ground of delay whereas the claim.
for the period subsequent to the said date was considered on the merits.
The respondent 's case was that he was entitled to the overtime wages for work on such Sundays when he was not given a holiday within three days prior to or three days subsequent to the Sundays on which he worked.
The appellant conceded that the respondent had not been given a holiday within the three days prior to or the three days subsequent to the Sundays on which he had worked as required by section 52 of the Indian .
The respondent alleged that he was a worker within the meaning of section 2, sub section
(1) of the said (LXIII of 1948) and as such he was entitled to overtime wages under s 59 of the said Act.
Alternatively he urged that even if he was not a worker within the meaning of section 2(1) of the said Act, he would nevertheless be entitled to overtime wages under the said section 59 by reason of section 70 of the Bombay Shops and Establishments Act, 1948 (Bom.
79 of 1948) (hereafter called the Act).
Thus the claim for 140 overtime wages was made by the respondent on two alternative grounds.
The appellant disputed the validity of this claim.
It was urged on its behalf that the respondent was not a worker under section 2(1) of the and that section 70 of the Act did not justfy the claim alternatively made by the respondent for overtime wages.
The Authority considered the evidence led before it in respect of all the repondents for overtime wages.
It appears that these respondents are employed by the appellant in the time office of the Parel Workshop and not in the factory itself.
The duties of these timekeepers are to maintain initial records of attendance of workshop staff, to prepare pay sheets for them to maintain their leave accounts, to dispose of final settlement cases of the said staff and to maintain records for statistical information.
The Authority held that the time office where the timekeepers work is an integral part of the factory and so it came to the conclusion that the timekeepers are employed in the factory called the Central Railway Workshop and Factory, Parel, Bombay.
The Authority then examined the question as to whether the timekeepers are workers within the meaning of section 2(1) of the .
Evidence showed that four timekeepers, are required to do the work of progress timekeepers.
This work consists in preparing the progress time sheets and operation time sheets of machine shop staff working on various jobs dealing with the production of railway spare parts.
The Authority was disposed to take the view that having regard to the nature of the work assigned to the progress time keepers they must be held to be persons employed in work incidental to, or connected with the manufacturing process or the subject of the manufacturing process and as such they are workers within the meaning of section 2(1) of the .
In the result, the finding made by the Authority was that timekeepers are employees of the workshop, but are not workers under the ; while the progress time keepers can claim the status of workers under the said Act.
141 The Authority then considered the respondent 's argument that even if he was not a worker under the he was neverthless entitled to claim the benefit of section 59 of the said Act by virtue of section 70 of the Act.
The Authority accepted this contention and held that, even if the respondent was not a worker under the , section 70 of the Act entitled him to claim overtime wages under section 59 of the .
That is why the Authority ordered that the respondents would be entitled for the period 19 5 1953 to 30 9 1954 to overtime wages at double the ordinary rate for the Sundays on which they worked when they were not given a a holiday on one of the three days immediately preceding or after the said Sunday.
The appellant was accordingly directed to file a statement showing the overtime wages to which the several respondents were entitled and orders were passed on each one of the applications directing the appellant to pay the respective amounts to.
each one of the respondents.
It is against these orders that the appellant has filed the present group of appeals by special leave.
The first point which has been urged before us by the learned Attorney General on behalf of the appellant is that the Authority was in error in holding that the progress timekeepers are workers under section 2(1) of the .
A worker under section 2(1) means a person employed directly or through any agency, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process; and the manufacturing process under section 2(k) means any process for inter alia (1) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal.
It is clear that the duties of the progress timekeepers do not fall within the first part of a. 2(k).
The Authority has however, 142 held that the said duties can be treated as incidental to, or connected with, the manufacturing process or the subject of manufacturing process; it is the correctness of this finding that is challenged by the appellant.
On the other hand, Mr. Purshottam, for the respondents, argues that the Authority was in error in holding that the timekeepers are not workers under section 2 (1).
His contention is that the expression "incidental to, or connected with, the manufacturing process " is wide enough to include not only the cases of the progress timekeepers but the cases of all timekeepers as a class.
It is true that the finding of the.
Authority in respect of the timekeepers is against the respondents; but Mr. Purshottam says that he is entitled to support the final order passed by the Authority on the additional ground that the time.
keepers, like the progress timekeepers, are workers under section 2(1) and as such they are entitled to claim overtime wages under section 59 of the .
The final decision of the Authority is, however, based on the view that under section 70 of the Act the respondents would be entitled to overtime wages under section 59 of the even if they are not workers under section 2(1).
That being so, we think it is necessary first to consider the correctness of this view.
If the conclusion of the Authority on the scope and effect of the provisions of section 70 of the Act is correct, then it would be unnecessary to consider whether the timekeepers and the progress timekeepers are workers under section 2(1) of the .
We would, therefore, deal with that question first.
It appears that there are three statutes which pro.
vide for the payment of extra wages for overtime work.
The proviso to section 71 (c) of the Indian Railways Act (IX of 1890) lays down that the exempted railway servant specified in it shall be paid for overtime at not less than one and a quarter times his ordinary rate of pay.
This provision has been subsequently amended by Act 59 of 1956, which makes the rate for overtime one and one half times the ordinary rate of pay; but it is common ground that we are not 143 concerned with the amended provision in these appeals since the respondents ' claim is for.
a period prior to the date of the amendment.
It is suggested by the appellant that the respondents are railway servants under section 3 (7) of the said Act, and as such they may be entitled to make a claim for overtime wages under the said proviso; but the respondents have not made, and do not wish to make, a claim under the said provision; and so the question as to the application of the said section need not detain us.
If the construction placed on section 70 of the Act by the Authority is correct, the claims of employees who are working in a factory in the State of Bombay would be governed by that provision; this position is not seriously disputed before us.
Section 59 of the also deals with the question of extra wages for overtime.
It provides for the payment of wages in respect of overtime work at the rate of twice the ordinary rate of wages.
This benefit is, however, available only to persons who are workers within the meaning of section 2(1) of the said Act Since we are dealing with the case on the assumption that the respondents are not workers under s ' 2(1) it follows that section 59 by itself would not be applicable to them.
The Bombay Shops and Establishments Act, 1948, is the third statute which makes a provision for the payment of extra wages for overtime work.
Section 63 of the Act deals with this topic.
Section 63(1) provides for the payment of overtime work at the rate of 1 1/2 times the ordinary rate of wages in the case of employees in any establishment other than a residential hotel, restaurant, or eating house, whereas sub section
(2) provides for wages for overtime at the rate of twice the ordinary rate of wages in respect of employees in a residential hotel, restaurant or eatinghouse, subject to the other conditions specified in the said section.
It is clear that this section does not apply to the respondents because they are employees in a factory and not in any of the establishments enumerated in its two sub sections.
144 The respondents ' case, however, is that by virtue of section 70 of the.
Act the provisions of the Factories Act,including a. 59, are extended to the cases of all employees in factories, and so they are entitled to claim wages for overtime under the said section of the .
This contention has been upheld by the Authority.
It is not disputed by the appellant that the Bombay Legislature was competent to prescribe for the extension of the provisions of the to employees in the factories within the territory of the State of Bombay; and since sanction for this legislation has been duly obtained from the Governor General of India on January 3, 1949(1), no question about any repugnance between the provisions of section 70 and those of the can possibly arise.
Thus the validity of the said section is not in dispute; and so the only point which calls for our decision is one of construction: Does section 70 supplement the provisions of the by extending them to all employees in factories like the respondents though they are not workers under section 2(1) of the said Act ? Before dealing with this point it is necessary to refer briefly to the broad features of the Act.
The Act no doubt is a piece of beneficent social legislation intended to serve the cause of labour welfare.
It has been passed in order to consolidate and amend the law relating to the regulation and conditions of work and employment in shops, commercial establishments, residential hotels, restaurants, eating houses, theaters, other places of public amusements and entertainments and other establishments.
Section 2, sub sections
(3), (4) and (27) define respectivly the establishment, commercial establishment and shop.
The definitions of commercial establishment and shop exclude inter alia factory.
Establishment is defend as meaning a shop, commercial establishment, residential hotel, restaurant, eating house, theatre or other place of public amusement are entertainment to which the Act applies and includes such other establishment as the State Government may by notification in the official gazette declare (1) Published in the Bombay Government Gazette, Part IV, dated 11 1 1949.
145 to be, an establishment for the purposes of this Act.
It would be noticed that the definition of establishment is very wide, and it does not purport to be exhaustive because it expressly empowers the State Government to include within its purview by notification other establishments not specified in it.
Section 2, sub section
(6) defines an employee as meaning a person wholly or principally employed in, and in connection with, any establishment, and includes an apprentice but does not include a member of the employer 's family.
This definition shows that the Act intends to confer the benefit of its provision on all persons who fall within the wide definition of the expression " Employee ".
It is necessary at this stage to refer to the definition of "factory" under the Act.
Section 2(9) defines a factory as meaning any premises which is a factory within the meaning of cl.
(m) of section 2 of the or which is deemed to be a factory under section 85 of the said Act.
Now section 2(m) of the defines a factory as meaning any premises including the precincts thereof " (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, but does not include a mine subject to the operation of the (XXXV of 1952), or a railway running shed; " and section 85 confers authority on the State Government to extend the definition of factory to other places subject to the requirements specified in the said section.
It is common ground that the place where the respondents are employed is a factory under section 2(m) of the , and so it satisfies the definition of section 2(9) of the Act.
19 146 The scheme of the Act shows that it deals separately with shops and commercial establishments (ch. 111), residential hotels, restaurants and eating houses (ch., IV) and theaters and other places of public amusement (ch. V).
Separate provisions are made to regulate these different establishments having regard to the special needs of each one of them.
There are, however, general provisions applicable to and regulating all the establishments alike and these are found in chs.
VI to IX.
It is significant that with the exception of section 70, no other section of the Act deals with factories.
We have already noticed that in defining " commercial establishment " and " shop " respectively the Act has expressly excluded " factories " from the said expressions.
It is true that the definition of " establishment " does not expressly exclude factory; but it is plain that factory is treated by the Act as separate and distinct and there can be no doubt that the provisions in the Act which apply to establishment are not intended to, and do not, apply to factories.
In other words, though the definition of " establishment " is wide enough, it does not include factory for the purposes of the Act.
It is conceivable that a kitchen attached to an establishment like a residential hotel may satisfy the definition of factory; but it seems to us that such an adjunct of an establishment is prima facie not intended by the Act to be treated apart and separately from the main establishment itself, and so it would be taken as a part of the establishment and be governed by the provisions of the Act in relation thereto.
The factory where the respondents are employed is not connected with, much less an inseparable adjunct of, any establishment, and so this academic aspect of the matter which was incidentally posed before us by the learned Attorney General need not be pursued any further in the present appeal.
The conclusion of the Authority has been challenged by the appellant on the ground that section 70 on which it is based cannot be invoked by the respondents.
In support of this argument reliance is placed on section 4 of the Act.
Section 4 provides that notwithstanding anything contained in the Act its provisions mentioned 147 in the third column of sch.
11 shall not apply to the establishments, employees and other persons mentioned against them in the second column of the said schedule.
The proviso to this section authorises the State Government to add to, omit or alter any of the entries in the said schedule in the manner indicated( by it.
It is urged that the establishment of any railway administration is mentioned as sr.
No. 5 in sch.
II and the entry against it in col. 3 of the said schedule shows that the provisions of the Act are inapplicable to the said establishments.
If the establishment in question is exempted from the application of all the provisions of the Act, how can section 70 be said to apply to it? asks the learned Attorney General.
It is obvious that section 4 mentions and applies only to establishments and it has no application to factories; and we are dealing with employees in a factory.
Indeed as we have already observed, no provision of the Act except section 70 applies to factories and so it would not be legitimate to base any argument on the assumption that section 4 is applicable to the present case.
Incidentally the learned Attorney General suggested, though faintly, that the establishments mentioned at sr.
1 to 6 in col. 2 of sch.
II are wider than and different from the establishment as defined by section 2(8).
We do not think that this suggestion is well founded.
There can be no doubt that section 4 grants exemptions to the said establishments from the application of the provisions mentioned in col. 3 of sch.
II; and that itself postulates that but for the exemption thus granted the provisions of the Act would have applied to them.
Indeed the scheme of sch.
11 shows that whereas all the provisions of the Act are made inapplicable to the establishments and offices enumerated at sr.
1 to 6 including 6(a) to 6(k), in regard to the others which are enumerated at sr.
7 to 55 it is only some provisions of the Act specified in col. 3 that are excluded.
In other words, the remaining sections not so specified would apply to them.
If that is so, they must be and are establishments under section 2(8) of the Act.
148 In this connection it must be borne in mind thats.
2(8) empowers the State Government to include by notification any office or institution within the definition of establishment; and so the inclusion of any such office or institution in col. 2 of sch.
11 would make it an establishment under the Act, and as such it would be governed by it subject of course to the corresponding entry in col. 3.
That is why we think that the suggestion of the learned Attorney General as to the denotation and character of establishments enumerated in sr.
1 to 5 in col. 2 of sch.
11 cannot be accepted.
All the offices, establishments and other institutions mentioned in col. 2 of sch.
II are and must be held to be establishments under section 2(8).
In regard to the argument that the operation of section 4 excludes the application of section 70 we have held that section 4 applies only to establishments and not to factories.
But even if section 4 is assumed to be applicable to factories, we do not think it would materially affect the application of section 70.
The plain object underlying section 70 and its context emphatically point out that it is intended to operate independently of the other provisions of the Act and in that sense it stands apart from them.
It is this aspect of the matter which is clarified by the Legislature by laying down in section 70 that nothing in the Act shall be deemed to apply to any persons employed in the factory.
That, however, anticipates the argument on the construction of section, 70.
Let us therefore,cite the said section and construe it.
Section 70 provides that nothing in this Act shall be deemed to apply to any person employed in or within the precincts of a factory and the provisions of the shall, notwithstanding anything in the said Act, apply to such person.
This section consists of two parts.
The first part makes it clear that no provision in the Act shall be deemed to apply to the persons specified in it.
The Legislature knew that in fact the Act contained no provision which in terms or expressly applies to any such person; but in order to remove any possible doubt it has provided that no provision in the Act shall even by inference or fiction be deemed to apply to them.
In other words this clause 149 is intended to clarify the position that though factory has been defined by section 2(9) of the Act, no provision of the Act is intended to be applied to a factory or employees in.
Having clarified this position the second part of the section extends the application of the to the said persons.
It would have been possible for the Legislature to include in the present statute all the relevant provisions of the and make them applicable to factories as defined by section 2(9); but apparently the Legislature thought that the same object can be achieved by enacting the second part of section 70.
This part provides that the provisions of the shall apply to the persons in question notwithstanding anything contained in the said Act.
The said Act contains the provision by which workers are defined under section 2(1), and it necessarily involves the consequence that the relevant provision about the payment of overtime wages applies only to workers as defined and not to employees in factories who are not workers.
It is in reference to this provision that section 70 has provided that notwithstanding the said provision the relevant provisions of the will apply to persons employed in a factory.
The non obstante clause in section 70 thus serves the purpose of clarifying the position that the is made applicable to employees in factories and that they are not governed by any of the provisions of the Act.
This conclusion is obviously consistent with the policy of the Act.
It has itself made provision for the payment of overtime wages to employees in all establishments by section 63; and it has made applicable inter alia the relevant provisions of the in regard to employees in factories.
That is the view which the Authority has taken, and in our opinion its validity or correctness is not open to doubt.
In the result the orders passed by the authority are confirmed and the appeals are dismissed with costs in one set.
Appeals dismissed.
| These appeals by special leave arose from applications made by the respondents, who were employed as timekeepers in the time office of the Central Railway Workshop and Factory, Parel, Bombay, claiming payment of overtime wages under the (4 of 1936).
The case of the respondents was that they were workers within the meaning of section 2(1) of the (LXIII Of 1948) and as such were entitled to overtime wages under section 59 of the said Act.
Alternatively, they urged that even if they were not workers within the meaning of section 2(1) of the said Act, they would nevertheless be entitled to overtime wages under the section 59 by reason Of section 70 of the Bombay Shops and Establishments Act, 1948 (Bom.
79 of 1948).
The validity of the claim on both the grounds was disputed by the appellant.
The Authority under the found that only four of the respondents, who were required to do the work of progress timekeepers, could claim the status of workers within the meaning Of section 2(1) Of the and the rest were merely employees of the workshop, but the Authority accepted the alternative case made by the respond ents and directed the appellant to file a statement showing the overtime wages due to each of the respondents and ordered it to pay the same.
Held, that the Authority was right in the view that it took Of section 70 Of the Bombay Shops and Establishments Act, 1948, and its decision must be affirmed.
On a proper construction Of section 70 Of the Act it is clear that the first part of the section excludes a factory and its employees from the operation of the Act; but the second part makes the relevant provisions of the applicable to them.
The non obstante clause in the section shows that the employees in a factory, although they might not be workers within the meaning Of section 2(1) of the , are entitled to claim overtime wages as provided for by that Act.
It is not correct to say that section 4 Of the Bombay Shops and Establishments Act, 1948, has the effect of excluding the operation Of section 70 Of the Act.
Section 4 applies only to establishments and not to factories; but even if it applied, to factories 18 138 that cannot materially affect the application Of section 70 which is intended to operate not withstanding the other provisions of the Act.
Consistently with its policy, the Act, which provides for overtime wages for employees in all establishments, provides for overtime wages for employees in factories as well by making the relevant provisions of the applicable to them.
|
Civil Appeal No. 3045 of 1980 etc.
From the Judgment and order dated 3.6.1980 of the Kerala High (Court in C.R.P. No. 2711 of 19178 section Padmanabhan and N. Sudhakaran for the Appellant.
Abdul Khader and K.M.K. Nair for the Respondents.
The Judgment of the Court was delivered by 665 NATARAJAN, J.
The appeals by special leave and the special leave petitions raise a common question of law regarding the scope and effect of Explanation II A to Clause (25) of Section 2 of the Kerala Land Reforms Act.
1964, (for short the Act hereafter) as amended by Act.
17 of 1972.
It is, however, necessary to mention two matters even at the outset of the judgment.
Had the judgments in the two appeals been pronounced after the decision in Velayudhan vs Aishabi, AIR 1981 Kerala 185 by a Full Bench of the Kerala High Court, the results would have been different and there would have been no necessity for these appeals being filed.
Secondly, the decision in Velayudhan vs Aishabi. has become final since no appeal has been preferred to this Court against the judgment therein.
What falls for consideration in all these cases is whether by reason of Explanation IIA to Section 2(25) of the Act, a person in occupation of a homestead or a hut belonging to another during the period stipulated in the Explanation would become a Kudikidappuka ran and be entitled to Kudikidappu rights under the Act.
For a proper understanding of the issue.
we may make a brief reference to the history of the Legislation and to some of the earlier decision of the High Court.
Originally.
the occupants of dwelling houses or huts on homestead land belonging to others were only given a right to remove the materials of the super structure put up by them or alternately to seek monetary compensation thereof.
The restricted conferment of rights exposed the occupants of huts belonging to others to indiscriminate eviction.
To afford protection to them, the erstwhile Cochin State and the Travancore State passed suitable enactments to safeguard their possession.
Eventually, when the Travancore Cochin State came to be formed, an Act known as the Travancore Cochin Prevention of Eviction of Kudikidappukars Act, 1950 was passed.
Even under that Act, protection was given only to those persons who had put up the super structures themselves and not to persons who were occupying huts put up by the land owners.
Protection was extended to that class of persons also under the Kerala Stay of Eviction Proceedings Act.
The said Act was amended by the Kerala Stay of Eviction Proceedings Act, 1958.
This was followed by the Kerala Land Reforms Act, 1964 (the Act).
Clause (25) of Section 2 of the Act defined a Kudikidappukaran and Kudikidappu as under: "25. 'Kudikidappukaran means a person who has neither a homestead nor any land exceeding in extent three cents in any city or major municipality or five cents in any other 666 municipality or ten cents in any panchayat area or town ship, in possession either as owner or as tenant, on which he could erect a homestead and: (a) who has been permitted with or without an obligation to pay rent by a person in lawful possession of any land to have the use and occupation of a portion of such land for the purpose of erecting a homestead; or (b) who has been permitted by a person in lawful possession of any land to occupy, with or without an obligation to pay rent, a hut belonging to such person and situate in the said land; and 'Kudikidappu ' means the land and the homestead or the hut so permitted to be erected or occupied together with the easement attached thereto.
" There were two Explanation to Section 2(25).
For our purpose, it is enough if we set out Explanation II alone.
It read as under: "Explanation II".
"Any person who was in occupation of a Kudikidappu on the 11th day of April, 1957, and who continued to be in such occupation at the commencement of this Act, shall be deemed to be in occupation of such Kudikidappu with permission as required under the clause.
(Emphasis supplied).
In Gopalan vs Chellamma, Madhavan Nair, J. of the Kerala High Court held, without noticing a contrary view taken in an earlier case in Second Appeal No. 558 of 1961, that to be a Kudikidappukaran, the occupancy must have commenced with the permission of the owner of the land, that the permission given should not have been withdrawn or terminated subsequently but must have continued to be effective till the relevant time, that Explanation II would only have the effect of extending the permission initially granted to the date of the commencement of the Act and that a trespasser forcibly entering upon the land will not be entitled to claim rights as a Kudikidappukaran.
Subsequent to this decision, the Act underwent several amendments under the Kerala Land Reforms (Amendment) Act, 1969.
One of the changes effected was the substitution of Explanation II 667 (extracted above) by a proviso which read as under: A "Provided that a person who, on the 16th August, 1968 was in occupation of any land and the homestead thereon, or in occupation of a hut belonging to any other person, and who continued to be in such occupation at the commencement of the Kerala Land Reforms (Amendment) Act, 1969, shall be deemed to be in occupation of such land and homestead, or hut, as the case may be, with permission as required under this clause." (Emphasis supplied).
The proviso came to be construed by Krishna Iyer, J. (as he then was) in Mariam and others vs Ouseph Xavier, [19711 K.L.T. 709 and the learned Judge differed only partly from the view taken in Gopalan vs Chellamma (supra) and held that "the initial leave to occupy is obligatory to make the dweller a Kudikidappukaran" and that the proviso operates only at the next stage and hence such protection was afforded only to persons who had initially obtained permission to occupy the homestead or hut and continued to be in occupation till the commencement of the Act but without reference to any further question as to whether the permission initially granted continued to subsist or had been subsequently revoked.
After this decision was rendered, the Legislature once again brought about certain amendments to the Act by means of the Kerala Land Reforms (Amendment) Act, 1972.
The Legislature omitted the proviso to Section 2(25) (extracted above) and introduced Explanation II A with retrospective effect.
Explanation II A is to the following effect: Explanation Il A "Notwithstanding any judgment, decree or order of any court, a person, who on the 16th day of August, 1968, was in occupation of any land and the dwelling house thereon (whether constructed by him or by any of his predecessors in interest or belonging to any other person) and continued to be in such occupation till the 1st day of January, 1970, shall be deemed to be a Kudikidappukaran: (emphasis supplied).
Provided that no such person shall be deemed to be a Kudikidappukaran (a) in cases where the dwelling house had not been 668 constructed by such person or by any or his predecessors in interest, if (i) such dwelling house was constructed at a cost, at the time of construction, exceeding seven hundred and fifty rupees; or (ii) such dwelling house could have, at the time of construction, yielded a monthly rent exceeding five rupees; or (b) if he has a building or is in possession of any land exceeding in extent three cents in any city or major municipality or five cents in any other municipality or ten cents in any panchayat area or township, either as owner or as ten ant, on which he could erect a building.
The scope and effect of Explanation II A introduced by the Amending Act of 1972 came to be construed by a Division Bench of the Kerala High Court in Achuthan vs Narayani Amma, [1980] K.L.T. 160: AIR 1980 NOC 90.
The Bench held that the effect of Explanation II A is to dispense with proof of permissive occupation, either in sup port or rebuttal thereof, and that even in the absence of such proof and without any enquiry as regards the original occupation, a person who satisfies the conditions mentioned therein and does not fall within the ambit of the proviso thereto has to be deemed a Kudikidappukaran.
However, in Moideenkuktty vs Gopalan, another Division Bench took a contrary view and held that the legal fiction which had all along existed right from 1955 under Section 4(2) of the Travancore Cochin Act, 1955, Explanation II to Section 2(20) of the Agrarian Relations Act, 1961, Explanation II To Section 2(25) of the Kerala Land Reforms Act, 1964 and the proviso thereto as inserted by the Amending Act, 1969 was only intended to protect a Kudikidappukaran who began his occupation of a Kudikidappu with permission by providing for the statutory continuance of the permission initially given till the commencement of each of the above mentioned Statutes and the Explanation II A introduced by Act 17 of 1972 had not altered or widened the legal fiction so as to cover a case of initial permission also.
The Bench, therefore, held that unless initial permission for occupation of a homestead or hut is established, Explanation II A will not be attracted.
It was on account of the conflicting views taken by the two Division Benches in Achuthan 's case (supra) and Moideenkukutty 's case (supra), a reference was made to a Full Bench for decision 669 of the case in Velayudhan & Ors.
vs Aishabi & Ors.
(supra) The Full Bench, after elaborately tracing the history of the Legislation and considering the changes brought about periodically by the Legislature to confer Kudikidappu rights on occupants of homesteads and huts and reviewing the earlier decisions, came to the conclusion that Explanation II A could be treated as an addendum to Section 2(25) in order to widen the definition or alternately Section 2(25) can be treated as the main provision and Explanation II A as an exception thereto.
In that view of the matter, the Full Bench held that the decision in Achuthan 's case (supra) laid down the correct law and the view taken in Moideenkukutty 's case was not sustainable.
It is in the conspectus of the several amendments made by the Legislature to Section 2(25) of the Act and the decisions rendered by the Kerala High Court, we have to examine the contentions of the counsel for the appellants and the respondents in the respective appeals.
The Full Bench of the Kerala High Court has analysed the position and summed up its view in the following manner regarding the purpose underlying the changes brought about in the Act and the new dimension that has now been given by Explanation II A to Section 2(25).
The relevant passage in Velayudkan 's case (supra) occurs in para 24 at page 192 of the report (AIR 1981 Kerala 192) and is as follows: "When the words 'in occupation of a Kudikidappu ' in Explanation II to Sec. 2(25) in the K.L.R. Act as originally enacted was held by this Court to be suggestive of the need for the person claiming Kudikidappu right thereunder to prove permissive occupation as on the relevant date (11.4.1957) thereunder, the legislature omitted the word "Kudikidappu", and resorted to the terminology of 'in occupation of any land and the homestead thereon, or in occupation of a hut . . ' in the proviso to Section 2(25) as amended by the Amending Act, 1969.
When this Court pointed out that still the emphasis of the fiction is on the permissive aspect of occupation and not on the status of the person as Kudikidappukaran, and that the words 'homestead ' and 'hut ' are indicative of the requirement that permissive occupation as on the relevant date (16.8.1968) has to be established, the legislature reacted by omitting the words 'homestead ' and 'hut ' from the fiction and laying stress on the status as Kudikidappukaran by enacting Explanation II A to Section 2(25) of the K.L.R. Act as per the.
K.L.R. (Amending) Act, 1972.
" 670 At the outset it has to be pointed out that Explanation II A has been made a non obstante provision in order to give over riding effect to the Explanation over any judgment, decree or order of any Court passed against a person who was, on 16.8.1968 in occupation of a homestead or hut thereon and who continued to be in such occupation till the 1st day of January 1970.
Now, if we look at Explanation II to Section 2(25) as it originally stood and the proviso which replaced it under the 1969 (Amendment) Act and Explanation II A which was introduced by the amending Act 1972, we may notice the significant changes made by the Legislature and the underlying reasons therefor.
In Explanation II, it was laid down that any person in occupation of a Kudikidappu during the prescribed period viz. 11.4.1957 to the date of commencement of the Act "shall be deemed to be in occupation of such Kudikidappu with permission as required under this clause".
Since it was held in Gopalan 's case (supra) that the use of the words "in occupation of a Kudikidappu with permission", obligated an occupant of a Kudikidappu to prove initial permission to enter a homestead or occupy a hut on the land of another and further prove continuance of such permission till the relevant date, the Legislature omitted the word "kudikidappu" in the proviso that was substituted for Explanation II under the 1969 Amendment Act.
Even then, it was held in Mariam 's case (supra) that initial leave to occupy was obligatory to make an occupant a Kudikidappukaran because of the use of the words "with permission as required under the clause" in the proviso.
Therefore, what the Legislature has done while introducing Explanation by the 1972 Amendment Act is to do away with any reference to occupation being referable to any permission granted by the owner of the land or the hut as the case may be.
Not only has the Legislature eschewed any reference to permissive occupation but has also given a mandate that everyone in actual occupation of any land and the dwelling house thereon, between the dates 16.8.1968 to 1.1.1970, irrespective of who built the dwelling place, shall be granted recognition as a Kudikidappukaran.
The words used are "the person . in occupation . shall be deemed to be a Kudikidappukaran.
" By reason of this explicit provision, there is no scope whatever for restricting the class of persons entitled to the benefit of Explanation II A to only those who are able to prove obtainment of initial permission to occupy a homestead or a hut thereon.
Explanation II A equates an occupant of a homestead or a hut thereon during the relevant period with a Kudikidappukaran as defined under the main clause.
Such being the case, anyone satisfying the requirements of Explanation II A would automatically be entitled to have the status of a Kudikidappukaran and to all the benefits flowing therefrom.
In other 671 words, a person falling under Explanation II A has to be statutorily deemed as one permitted to occupy a homestead or the hut thereon as envisaged in Sub Clauses (a) and (b) of Clause(25) to Section 2.
The only limitation placed by Explanation II A is that a person falling within the terms of the definition should satisfy the conditions laid down by the proviso to the Explanation viz. that if he or his predecessor had not constructed the dwelling house, the house should not costwise exceed Rs.750 or rentwise exceed a monthly rent of Rs.5 and the occupant should not be in possession of land exceeding three cents in extent in any city or major municipality or five cents in any other municipality or ten cents in any panchayat area or township either as owner or as a tenant on which he could erect a building.
viewed in the proper perspective, Explanation II A constitutes a second limb of Clause (25) of Section 2 devised by the Legislature to give full effect to its intendment viz. entitling a person to claim Kudikidappu rights under Section 2(25) if he proves initial permission to occupy the land and the dwelling house without the need of proving continuous possession during a prescribed period of time or in the alternative to claim Kudikidappu rights under Explanation II A by proving continuous occupation during the period of time prescribed by the Explanation without the necessity of proving obtainment of initial permission to occupy the land and the dwelling house thereon.
Explanation II A has got operative force of its own and this may be seen from the fact that Clause (25) of Section 2 as well as Sub Clause (b) of the proviso to Explanation II A lay down identical conditions which are to be satisfied by an applicant under the main clause or the Explanation for claiming rights as a Kudikidappukaran.
Both the provisions lay down that any claimant for Kudikidappu rights should not have a homestead or any land exceeding in extent three cents in any city or major municipality or five cents in any other municipality or ten cents in any panchayat area or township in his possession either as owner or tenant on which he could erect a homestead.
If the Explanation is subservient to Section 2(25), there was no need for the Legislature to have provided Sub Clause (b) to the proviso to Explanation II A.
There is no repugnancy between the two provisions because Section 2(25) pertains to occupants of homestead of one category while Explanation II A pertains to homestead occupants of a different category.
By introducing Explanation II A, the Legislature has created a statutory fiction.
As to how statutory fictions are to be interpreted is by now well settled.
The approach formulated by Lord Asquith in East End Dwelling Co. Ltd. vs Finsbary Borough Council, has been approved by this Court in a number of cases.
The line of 672 approach set out by Lord Asquith is as under: "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanies it.
The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.
" This line of approach has been adopted by this Court in a number of cases and we may refer only to some of them.
See M.K. Venkatachalam v Bombay Dyeing and manufacturing Co. Ltd.; , ; Commissioner of Income Tax, Delhi vs Teja Singh, AIR 1959 SC 355 In Commissioner of Income Tax, Delhi vs Teja Singh (supra), this Court pointed out that "it is a rule of interpretation well settled that in construying the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate." In Industrial supplies Pvt. Ltd. vs Union of India, [1980] IV SCC 341, this Court observed as follows: "It is now axiomatic that when a legal fiction is incorporated in a statute, the court has to ascertain for what purpose the fiction is created.
After ascertaining the purpose, full effect must be given to the statutory fiction and it should be carried to its logical conclusion.
The court has to assume all the facts and consequences which are incidental or inevitable corollaries to giving effect to the fiction.
The legal effect of the words 'as if he were ' in the definition of owner in Section 3(n) of the Nationalisation Act read with Section 2(1) of the Mines Act is that although the petitioners were not the owners, they being the contractors for the working of the mine in question, were to be treated as such though, in fact, they were not so.
" It has also to be borne in mind that the Kerala Land Reforms Act is a beneficial enactment intended to secure occupancy rights to farmers and agricultural labourers who do not have homestead lands and dwelling places of their own for their occupation.
Incidentally, we may mention that Act 17 of 72 has been subsequently included in the 9th Schedule to the Constitution and this would reflect in fuller mea 673 sure the anxiety of the Legislature to protect the rights of occupants of homestead and huts thereon.
In the case of beneficial enactments the courts should follow a policy of benevolent and liberal construction.
In Jeewanlal & Ors.
vs Appellate Authority; , it was observed as follows: "In construing a social welfare legislation, the court should adopt a beneficent rule of construction; and if a section is capable of two constructions, that construction should be preferred which fulfils the policy of the Act, and is more beneficial to the persons in whose interest the Act has been passed.
When, however, the language is plain and unambiguous, the Court must give effect to it whatever may be the consequence, for, in that case, the words of the statute speak the intention of the Legislature.
When the language is explicit, its consequences are for the Legislature and not for the courts to consider.
The argument of inconvenience and hardship is a dangerous one and is only admissible in construction where the meaning of the status is obscure and there are two methods of construction.
In their anxiety to advance beneficent purpose of legislation, the courts must not yield to the temptation of seeking ambiguity when there is none.
In Bharat Singh vs Management of New Delhi Tuberculosis Centre, New Delhi & Ors., ; , the abovesaid policy was reiterated in the following words: "Now it is trite to say that acts aimed at social amelioration giving benefits for the have nots should receive liberal construction.
It is always the duty of the court to give such a construction to a statute as would promote the purpose or object of the Act.
A construction that promotes the purpose of the legislation should be preferred to a literal construction.
A construction which would defeat the rights of the have not and the underdog and which would lead to injustice should always be avoided.
" Therefore, even if there is any little room for doubt whether Explanation II A can go to the extent of conferring Kudikidappu rights on persons who are not able to prove their lawful entry upon the land on the occupation of the dwelling house, it has to be held that the Explanation has been specifically provided for giving greater thrust to 674 the intendment of the legislature and, therefore, the Explanation warrants a liberal and purposive interpretation so as to fulfil the object of the legislation and comply with the legislative intent.
Mr. Abdul Khader, learned counsel for the respondent however sought to contend, that whichever way Explanation II A is construed i.e. whether as a legal fiction or as a re enacted provision of substantive law the Explanation would still be trammelled by the basic prescription contained in the main clause regarding permissive occupation.
The counsel argued that so long as clause (25) of Section 2 continued to define a Kudikidappukaran as a person "who has been permitted . by a person in lawful possession . to have the use and occupation of a portion of the land for the purposes of erecting a homestead/hut belonging to him in the said land", the Explanation would necessarily be governed and controlled by the words in Clause (25) of Section 2 and as such even if a person was in occupation of a homestead or hut between the period 16.8.1968 to 1.1.1970 he will not be entitled to claim rights as a Kudikidappukaran unless he is able to prove grant of initial permission by the owner of the land or the hut, as the case may be.
It was argued that it was not the intention of the legislature to confer Kudikidappukaran rights on trespassers and unauthorised occupants.
Our attention was drawn to the decisions in Sonawati & Ors.
vs Shri Ram & Anr., [1968] 1 SCR 617, and Azad Singh & Others vs Barkat Ullah Khan & others; , In these decisions the words "Cultivatory possession" occurring in the U.P. Zamindari abolition & Land Reforms Act and the U.P. Land Reforms (Supplementary) Act have been held to refer to lawful possession and as such they would not, cover the case of a trespasser upon the land.
These decisions can be of no avail in this case because Explanation II A has avoided any reference to permissive occupation and has straight away equated an occupant of a homestead during the prescribed period with a Kudikidappukaran as defined in the main clause.
The Explanation has to be interpreted in the light of the words used by the legislature and having in mind the object sought to be achieved and the evil sought to be remedied by the Act Mr. Abdul Khader alteratively contended that Explanation II A should be construed as a validating provision introduced by the legislature to overcome the limitations noticed by the Courts in the corresponding provisions in the previous enactments and as such the validation exercise cannot be given acceptance unless the validating law satisfied the tests prescribed therefor.
The learned counsel referred to certain decisions in this behalf.
viz. Shri Prithvi Cotton Mills 675 Ltd. & Anr.
vs Broach Borough Municipality & Ors., ; Hari Singh & Ors.
vs The Military Estate officer and Anr.; , and D. Cawassi & Co. Mysore vs The State of Mysore & Anr., ; AIR 1984 SC 1980 and argued that a validating law can be upheld only if the legislature has competence to legislate over the subject matter and secondly, only if the legislature has removed the defects noticed by the Courts in the previous law.
This argument fails to take note of the significant change the legislature has made in the wording of Explanation II A.
It is therefore futile to contend that Explanation II A suffers from the same limitations the earlier provisions were thought to suffer from.
After the arguments were concluded, learned counsel for the respondents have circulated a copy of the judgment of this Court in C.A. No. 165 of 1974 etc.
Palayi Kizhakkekara Mathaiy 's son K.M. Mathew & Anr.
v Pothiyill Mommutty 's son Hamsa Haji & Ors.
, JT delivered on 29.4.1987 wherein Section 7D of the Kerala Land Reforms Act, 1963 as amended by the Kerala Land Reforms (Amendment) Act, 1969 has been interpreted as conferring benefit thereunder only on persons whose occupation of the private forests or unsurveyed lands had a lawful origin and not on persons in unlawful occupation based on trespass or forcible and unlawful entry.
We have carefully considered the judgment and find that the pronouncement therein does not in any way lend support to the contentions of the respondents herein.
The scheme of Sections 7A, 7B, 7C, 7D, 8 & 9 of the Kerala Land Reforms Act, 1963 is entirely different and this position is succinctly brought out by the following passage in the decision referred to above.
The Court had summed up the scheme of the Act in the following words: "On a careful scrutiny of the aforesaid provisions, it becomes abundantly clear that the intention of the legislature was to grant protection only to persons whose possession had a lawful origin in the sense that they had either bona fide believed the lands to be Government 's land of which they could later seek assignment or had taken the lands on lease from person whom they bona fide believed to be competent to grant such leases or had come into possession with the intention of attorning to the lawful owners or on the basis of arrangements like varam etc.
which were only in the nature of licences and fell short of a leasehold right.
It was not within the contemplation of the legislature to confer the benefit of protection on persons 676 who had wilfully trespassed upon lands belonging to others and whose occupation was unlawful in its origin.
The expression "in occupation" occurring in Section 7D must be construed as meaning "in lawful occupation.
" The clear finding in that case was that the appellant had claimed title on the basis of adverse possession and his own plea was that he had come into possession of the lands by trespass.
He was therefore, far removed from the class of persons whom the Legislature wanted to provide for viz. persons who had entered upon land under a bona fide mistaken belief that the land belongs to Government and is capable of assignment or that the land belongs to the person who had granted them lease etc.
The entry was, therefore, linked with a bona fide belief though mistaken, about the character of the land and hence a trespasser is not entitled to claim any benefit.
But in so far as Section 2(25) and Explanation II A of the Act are concerned the occupant of the homestead or hut is not enjoined to prove that he occupied the homestead or hut under a bona fide mistaken belief and that he was not a trespasser.
He need only prove under the main clause that he had been permitted to occupy the homestead or hut and under Explanation II A that he had been in continuous occupation from 16.8.1968 to 1.1.1970.
Presumably the Legislature has thought that an occupant of a homestead or a hut would not have been allowed to remain in occupation for so long if he was a trespasser.
There is therefore, no conflict between the view taken by us in these appeals and the view taken by this Court in CA No. 165/74 etc.
(supra) Having settled the question of law we will now deal with the appeals and the Special Leave Petitions on their merits.
In C.A. No. 3045 of 1980 it was found that the appellant was in possession of a hut from 1962 onwards.
Nevertheless his claim for Kudikidappu rights under Explanation II A was rejected as he was not able to prove grant of permission to him by the respondent for occupying the hut.
Since we have held that a claimant for Kudikidappu rights under Explanation II A, who does not suffer any disqualification under the proviso, need only prove the factum of possession between the prescribed dates for being placed on par with a Kudikidappukaran as defined in Section 2(25) of the Act, the appeal has to succeed and will accordingly stand allowed.
Consequently, the order of the Land Tribunal Telicherry in O.A. No. 22 of 1973 will stand restored but having regard to the lapse of time, the appellant is directed to pay the entire amount towards the value of the hut and the land, as fixed by the Land Tribunal, within three months from today.
677 As regards C.A. No. 2505 of 1977, the appellant claimed Kudikidappu rights in respect of two sheds set out in plaint A & schedules.
In so far as A schedule property is concerned, the appellant is not entitled to any relief because it has been concurrently found by all the Courts that he had taken the shed on lease in the year 1954 under a rent chit for running a tea shop and that the shed continued to be in existence and it had not been rebuilt by the appellant.
However, in so far as the shed comprised in schedule is concerned, the appellant has been denied relief solely on the ground that he had failed to prove grant of permission by the respondent and his predecessors in title to occupy the homestead and put up the shed.
Having regard to the factum of occupation of the schedule property during the period envisaged by Explanation II A, it follows that the appellant is entitled to a decree in respect of the schedule property.
The appeal is, therefore, partly allowed in so far as the schedule property is concerned.
The matter will stand remitted to the Land Tribunal Telicherry for determining the price of the schedule property for the directions regarding the manner in which the purchase price should be paid by the appellant Special Leave Petitions 204 & 205 have to fail because it has been concurrently found that the sheds occupied by the respondent in each case were included in the property leased to the petitioner though possession was allowed to be retained by the respondents, and as such the respondents are entitled to claim Kudikidappu rights under Explanation II A of Section 2(25) of the Act As the respondents had been inducted into possession of the huts by the owner of the land and as the lease granted to the petitioner comprised the sheds occupied by the respondents also, the petitioner cannot contend that the respondents are not entitled to seek the sale of ten cents of land adjoining each hut under Section 80B of the Act.
Hence the Special Leave Petitions are dismissed.
There will be no order as to costs in the appeals as well as the special leave petitions.
| The respondent filed a suit against the appellant under 0.
xxxvII of the Code of Civil Procedure on the basis of a cheque for Rs. 60,000 drawn by the appellant in favour of the respondent which, on presentation to the Bank, had been dishonoured.
The appellant applied under r. 3 Of 0.
XXXVII for leave to appear and defend the suit on the ground that the cheque had been given only as a collateral security for the price of goods supplied, that the goods had been paid for by cash payments and by other cheques and that therefore the cheque in question had served its I54 1212 end and was without consideration.
The Court held that the defence raised a triable issue but that the defence was vague and was not bona fide as the appellant had produced no evidence to prove his assertions and consequently granted leave to defend the suit on the condition of the appellant giving security for the suit amount and the costs of the suit : Held, that the imposition of the condition was illegal and the appellant was entitled to defend the suit without giving the security.
The object of the special procedure under 0.
XXXVII of the Code is to see that a defendant does not unnecessarily prolong the litigation by raising untenable and frivolous defences.
The test is to see whether the defence raises a real issue and not a sham one, in the sense that, if the facts alleged by the defendant are established, there would be a good, or even a plausible, defence on those facts.
If the Court is satisfied about that, leave must be given and given unconditionally.
Held, further, that the Court was wrong in imposing the condition about giving security on the ground that for want of production of documentary evidence the defence was vague and not bona fide as the stage of proof can only arise after leave to appeal and defend has been granted.
Though the Court is given a discretion about imposing conditions it must be exercised judicially and in consonance with principles of natural justice.
If the discretion is exercised arbitrarily, or is based on a misunderstanding of the principles that govern 'its exercise, then interference is called for if there has been a resultant failure of justice.
|
Civil Appeal No. 1626 of 1973.
Appeal by Special Leave from the Judgment and Order dated 16 9 1971 of the Calcutta High Court in Appeal from Original Decree No. 209/66.
section N. Andley, K. C. Sharma, Prem Malhotra and Uma Datta for the appellant.
342 L. N. Sinha, G. section Chatterjee, D. N. Mukherjee and D. P. Mukherjee for the Respondent.
The Judgment and Order of the Court was delivered by KAILASAM, J.
This appeal is by plaintiff 1, legal representatives of plaintiff 2 and plaintiff 3 by certificate granted by the High Court Calcutta against its judgment dismissing the suit.
The suit was filed by the plaintiffs for the declaration of each of the plaintiffs ' title to the extent of 1/4th share each and in all 3/4th for all the plaintiffs of the suit property and the premises with the findings that the suit property and the premises were purchased in co ownership awarding the plaintiffs and the defendants equal 1/4th share each in terms of the agreement dated 2.4.1960 and for partition of the suit property and premises in equal 1/4th share each and for a decree of Rs. 45,000 with further accruals by way of receipt of further rent till full realisation of the claim.
In the alternative a decree for accounts of the dissolved partnership on declaration of dissolution of the same and partition of the suit property and premises in equal 1/4th share to each of the plaintiffs and the defendant by metes and bounds.
The defendant in his written statement denied the claim of the plaintiff and contended that the suit property was never purchased in co ownership or that the plaintiffs were entitled to 3/4th share.
He contended that plaintiffs 2 and 3 advanced Rs. 10,000 each as loan and that they had no claim to the property he having purchased the property in court auction as the absolute owner.
The trial court decreed the suit.
The defendant preferred an appeal to the High Court which accepted the appeal and dismissed the suit.
The facts of the case may be shortly stated.
The suit property in Darjeeling belonged to one Harbhajan Singh Wesal.
He executed a mortgage in favour of the Calcutta National Bank Ltd. The bank instituted a suit against Harbhajan Singh Wesal for recovery of Rs. 1,82,403 11 3 and for enforcement of the mortgage.
Pending suit the Calcutta National Bank was wound up and the High Court of Calcutta passed a decree against Harbhajan Singh and appointed the Official Liquidator of the Calcutta National Bank as Receiver of the mortgaged property including the suit properties.
On 5 9 1959 a final decree was passed directing the sale of the mortgaged property including the suit properties at Darjeeling by public auction subject to confirmation by the Court.
The defendant Prafulla Kumar Chatterjee was interested in buying the property in Darjeeling.
He was negotiating with the Receiver for 343 the purchase of Darjeeling properties.
On 10.6.1959 he received a letter from D. N. Mukherjee advocate advising him to give an offer to the Receiver and on 22.6.59 the defendant obtained an engineering estimate and made an offer to the Receiver to purchase the property for Rs. 32,000.
On 20.11.59 an advertisement appeared in the newspaper by P.W. 1, K. K. Kshetry, Solicitor of the bank, for auction of the suit property.
The property was auctioned on 15th December, 1959 and the defendant offered the highest bid for Rs. 30,000.
On the same day the defendant deposited Rs. 7,500/ .
While the sale was awaiting confirmation by the High Court a higher offer was made by one Baidyanath Garsi and thereupon the defendant offered Rs. 40,000 which was accepted by the court and the sale in favour of the defendant was confirmed by the the High Court for a sum of Rs.40,000 on 19.1.60.
The defendant deposited a sum of Rs. 2,500 in addition to Rs. 7,500 that had already been deposited.
The defendent was granted three months ' time for depositing the balance sum of Rs. 30,000.
The defendant did not have funds to pay the balance of Rs. 30,000 and had to raise the amount.
On 2.4.1960 an agreement was entered into between the three plaintiffs and the defendant.
The suit by the plaintiffs is mainly based on this agreement P 45 dated 2.4.60.
The agreement is signed by the three plaintiffs as well as by the defendant.
According to the recital in the agreement the parties after learning from the notification in the newspaper of the sale of the suit property agreed between themselves to call the bid jointly in co ownership in the name of the defendant and that in pursuance of the agreement the defendant was deputed to call the bid.
The agreement further states that accordingly the defendant was sent to Calcutta and the bid at the auction which was finally knocked down on 19.1.60 for a sum of Rs. 40,000 in the name of the defendant.
The agreement also provided that the plaintiffs and the defendants would be entitled to equal shares in the property.
Another term of the agreement provided that the conveyance shall be drawn in the joint names of the parties by obtaining leave from the High Court.
On 7.4.60 the defendant executed two receipts Exs. 22 and 22A in favour of the second and the third plaintiffs respectively.
It is recited in the receipt that the defendant received a sum of Rs. 10,000 as the share of the purchase price of the property sold in public auction by the Official Liquidator in pursuance of the agreement amongst themselves.
Though the receipt was typed in Darjeeling on 7.4.60 the defendant signed the receipt at Calcutta on 11 4 60.
In the meantime on 8.4.60 the defendant filed an application in the High Court of Calcutta praying that the time for completion of the sale be extended by three months from 19 4 60 and the conveyance be executed in 344 favour of the three plaintiffs and himself.
On 11 4 60 a sum of Rs. 30,000 was paid to M.R. Kshetry.
The request for the conveyance to be made in favour of the three plaintiffs and the defendant was given up and the court directed the execution of the conveyance in favour of the defendant alone.
On 17 6 60 a conveyance was executed by the Registrar of the High Court and the Receiver in favour of the defendant alone in pursuance of the order of the court dated 11 4 60.
On 2 1 61 the plaintiffs served a notice on the defendant calling upon him to partition the property and deliver their shares and render accounts.
On 3 6 61 the plaint in the suit was filed.
The plaintiffs apart from oral evidence very strongly rely on three documents to prove that they are joint owners and are entitled to 3/4th share in the suit property.
The first document is the agreement between the parties dated 2.4.60.
The second are two receipts dated 7.4.60 issued by the defendant in favour of plaintiffs 2 and 3.
The third document is the application filed by the defendant on 8 4 60 in the High Court praying that the conveyance may be effected in favour of the three plaintiffs and himself.
The case for the plaintiffs is that between 20th and 23rd November, 1959 there was an advertisement in the newspapers by the Official Receiver announcing the sale of the suit property.
According to the plaintiffs the three plaintiffs and the defendant mutually agreed to call the bid jointly in co ownership in the name of the defendant and to purchase the property in equal shares contributing equally the bid money and the other costs as might be incurred for the conveyance of the property.
It was further agreed that the plaintiffs and defendant would have equal share in the property.
According to the plaintiffs in pursuance of the agreement the defendant was sent to Calcutta where he bid on 15.12.59 for Rs. 30,000 and the bid was confirmed by the High Court on 19.1.60 for a sum of Rs. 40,000.
Out of the bid money a sum of Rs. 7,500 was paid to the Receiver on 15.12.59 and a sum of Rs. 2,500 on 19 1 60 and the balance of Rs. 30,000 on 11 4 60.
In the meantime it is stated that the plaintiffs and the defendants considered it advisable to have the verbal agreement between them reduced to writing and thus the agreement dated 2.4.60 came into existence.
After the full bid money was paid, the plaintiffs contributing equally, a deed of conveyance was executed on 17 6 60 and registered at Darjeeling.
According to the mutual agreement the parties were entitled as co sharers to enjoy and occupy the suit property in co ownership and were also entitled to income from them.
It was further agreed that the defendant would manage the joint property for the co owners of the property and the defendant would realise the rents for and on behalf of the parties with liability to pay the respective shares 345 to each of the plaintiffs.
The defendant, on the other hand, submitted that he was trying to purchase the suit property from the previous owner Harbhajan Singh by private negotiations before the proceeding was started for auction sale.
The defendants efforts to purchase the property from the owner proved abortive and he decided to purchase the suit property in the auction sale when the property was advertised for sale.
As the defendant was not acquainted with the procedure of court 's sale he approached the first plaintiff for legal service and the first plaintiff gave directions as to how the defendant should proceed.
The defendant denied that he was sent by the plaintiffs to Calcutta for calling the bid.
According to him he went of his own accord, attended the public auction on 15.12.59 and offered Rs. 30,000 for purchasing the property and when the bid was accepted he paid Rs. 7,500 and that money belonged to him alone.
Eventually, the sale was confirmed in favour of the defendant for Rs. 40,000 and he paid a sum of Rs. 2,500 in court to make up Rs. 10,000 i.e. One fourth of the bid amount all by himself As the defendant had to pay the balance of Rs. 30,000 and as he was in short of funds he approached the first plaintiff who was his lawyer and asked for his advice.
As the time for payment of balance amount was fast approaching the defendant frantically tried to find a person who could advance him temporary loan of Rs. 20,000 which amount he needed for completing the purchase.
As he was not successful he requested the first plaintiff to find from amongst his clients persons who could make temporary advance of the amount.
According to the defendant in the first week of April, 1960 the first plaintiff informed the defendant that two of his clients, namely plaintiff Nos. 2 and 3, were agreeable to advance the requisite amount but in view of the provisions of Bengal Money Lenders ' Act they were not willing to advance the amount unless some sort of safeguards were provided for and the transaction was not described as loan.
The first plaintiff drafted a document in the form of an agreement and the defendant signed it under the advice and suggestion of the first plaintiff on the understanding that the document was not intended to be acted upon and was only to remain as a security for the loan and that the recitals in the said document do not represent the real nature of the transaction.
The defendant admitted that plaintiffs 2 and 3 advanced to the defendant a sum of Rs. 10,000 each by way of loan and the defendant had to sign in their favour the documents acknowledging the receipt of the loan.
The defendant denied that the plaintiffs and the defendant contributed equally for payment of the bid money or in defraying the incidental costs in equal shares.
The defendant asserted that he alone paid the entire bid money and bore all the incidental expenses and that there was never any co ownership or co 346 partnership.
He submitted that as the conveyance was executed exclusively in his favour the plaintiffs had no right to the property.
The plaintiffs have sought to prove that the parties after learning from the notification in the newspaper of the sale of the property agreed between themselves to call the bid jointly in co ownership in the name of the defendant and in pursuance of that agreement the defendant paid the deposit.
Further it is the plaintiffs ' case that in pursuance of the agreement the defendant was sent to Calcutta where he bid at the auction which was finally knocked down for the benefit of all.
The plaintiffs ' claim that they contributed 1/4th of the price of the property and the expenses i.e. Rs. 13,500 each.
Further, it was contended by the plaintiffs that the bid by the defendant was for the benefit of the three plaintiffs and the defendant and that it was agreed that the conveyance should also be in favour of all of them.
It is seen from the evidence that the defendant was interested in buying the property alone before the advertisement appeared in the newspapers on 20 11 59 and 23 11 59.
The defendant received exhibit V a letter dated 10 6 59 from D. N. Mukherjee advocate, advising him to give an offer to the Receiver so that he can place the matter to the court for an order for sale by private negotiation.
Soon after, the defendant obtained an engineering estimate of the value of the property under exhibit M and in accordance with the valuation wrote exhibit L on 22.6.59 to K. K. Kshetry offering Rs. 32,000 for the property.
On 15 12 79 the defendant went to Calcutta by himself and made a bid for Rs. 30,000 and deposited Rs. 7,500 of his money.
The plaintiffs admit that the entire deposit was made by the defendant but pleaded that it was agreed that on accounts being taken the expenses will be shared by the plaintiffs.
Due to a third party making a higher offer the defendant had to raise the bid for Rs. 40,000.
It is also not in dispute that the defendant by himself paid Rs. 2,500 over Rs. 7,500 already paid to make 1/4th of the bid amount.
The bid for Rs. 40,000 was made by the defendant alone.
On behalf of the plaintiffs it is stated that 2 or 3 days after the advertisement appeared the defendant went to the first plaintiff and told him that he did not have sufficient funds and requested the first plaintiff to join him to purchase the property and that 2 or 3 days later plaintiff 3 and son of plaintiff 2 came to first plaintiff and expressed their desire to purchase the property and the plaintiff advised them to purchase the property jointly with the defendant in shares.
Plaintiff 3, Daluram Agarwala, deposing as P.W. 5 does not support this case.
In cross examination P.W. 5 stated that on November 24 or 25, 1959 he and one N. K. Aggarwala, who is the son of plaintiff No. 2, went to see the first 347 plaintiff.
It was decided among them that the property would be purchased in the names of all the four of them, the plaintiffs and the defendant.
He would further say that the defendant on return from Calcutta towards the end of December, 1959 stated that the property had been purchased in the names of three plaintiffs and the defendant.
It is thus the case of P.W. 5 that the defendant was sent by all the three plaintiffs to bid on their behalf and that the defendant bid on behalf of all of them.
P.W. 7, the son of the second plaintiff, would state that it was agreed that the property would be bought in the name of the defendant and that there was no talk that it would be purchased in the names of all the four of them.
It is rather inexplicable as to how plaintiffs 2 and 3 who wanted to buy the property separately for themselves agreed to purchase jointly for the benefit of all of them.
It is also difficult to accept the plea that palintiffs 2 and 3 went to the first plaintiff who is an advocate and there agreed to purchase the property in equal shares between the defendant, first plaintiff and themselves.
The second plaintiff had an office in Calcutta and the Calcutta office had a Munim and three other partners in whom they had complete confidence.
In the circumstances it is strange that they wanted the first plaintiff to be a co sharer so that he could attend to all the legal questions.
There is no explanation as to why plaintiffs 2 and 3 who were independant businessmen would join to purchase the property.
The explanation that the agreement was arrived at to keep the bid low is purile.
The evidence discloses that the plaintiffs were taking active part in the transaction after 2.4.1960 while between November, 1959 when the advertisement appeared and the date of agreement, there was comparative quiet, which fact probablises that the plaintiffs were not taking any part in the activities of the defendant regarding the bid in the court auction of the property.
The dealings of plaintiffs 2 and 3 show that they were dealing with the defendant at arms ' length insisting on passing of a receipt for their payment of Rs. 20,000 and accompanying the defendant and paying the money to the Receiver themselves.
It is highly improbable that they would have deputed the first defendant to go and bid on their behalf.
There is no explanation as to why their share of the bid of Rs. 30,000 or the subsequent bid for Rs. 40,000 was not paid by them.
The story that before the defendant bid for the property for Rs. 30,000 there was an agreement between the plaintiffs and the defendant that the bid should be on behalf of all of them cannot be accepted.
The next question that arises is whether the plaintiffs have proved their case that plaintiffs 1, 2 and 3 each of them paid Rs. 13,500, Rs. 10,000 being their share of the bid money and Rs. 3,500 towards expenses.
The two receipts Exs.
22 and 22A are acknowledgements by 348 the defendant of receipt of Rs. 10,000 from each of the plaintiffs 2 and 3.
The defendant admits that he did receive Rs. 10,000 from each of the plaintiffs 2 and 3 but his case is that it is a loan.
There can be no doubt that the defendant was paid Rs. 10,000 by each of the plaintiffs 2 and 3.
The case of the plaintiffs is that they paid in addition Rs. 3,500 each towards expenses.
There is no receipt for this extra payment.
But the plea on behalf of plaintiffs 2 and 3 is that the son of the second plaintiff paid Rs. 27,000 to the Receiver Kshetry personally representing the share of plaintiffs 2 and 3 of Rs. 13,500 each.
We find it difficult to accept the story for plaintiffs 2 and 3 were reluctant to part with Rs. 10,000 each without receipt even though the first plaintiff assured that there was no need for a receipt.
In fact the money was not parted with by them till the second plaintiff 's son accompanied the defendant to Calcutta and paid it in person to the Receiver.
In such circumstances, it is not possible to accept the plea of plaintiffs 2 and 3 that they did not insist on a receipt for payment of Rs. 3,500 each.
In this connection, the evidence of P.W. 1 Kshetry that out of the sum of Rs. 30,000 paid in cash Rs. 27,000 was handed over to him by Narendra Kumar Aggarwal and only the balance was paid by the defendant was relied on by the plaintiffs to show that the share of plaintiffs 2 and 3 of Rs. 13,500 each was paid.
According to the defendant second plaintiff 's son Narendra gave him Rs. 20,000 and he had Rs. 10,000 and he and Narendra counted Rs. 30,000 and handed over the sum of Rs. 30,000 to Kshetry, in the presence of the Judge.
On the evidence the High Court came to the conclusion that the money was counted by Narendra and the defendant before it was paid to Kshetry and if Narendra handed to the Solicitor a sum of Rs. 27,000 after counting, the inference that Rs. 27,000 belonged to plaintiffs is not justified.
We agree with the view taken by the High Court.
We therefore find that plaintiffs 2 and 3 have not proved that they paid Rs. 3,500 each towards the expenses.
The evidence relating to payment by the first plaintiff is even worse.
According to the first plaintiff, who examined himself as P.W. 2, on 2nd April, 1960 when the agreement was signed he paid Rs. 10,000 as his share of purchase price and Rs. 2,500 towards cost, Rs. 12,500 in all in cash to the defendant.
He did not consider it necessary to take a receipt in view of the signed agreement which he thought was sufficient acknowledgment of the liability by the defendant.
The first plaintiff was cross examined about the availability of the sum with him.
He admitted that he had no accounts and that the payment of Rs. 12,500 is not recorded any where.
The first plaintiff would add that he paid another Rs. 1,000 by issuing a cheque in favour of the third plaintiff with a direction that the third plaintiff should pay the 349 sum of Rs. 1,000 to the defendant towards expenses.
A cheque was no doubt drawn by the first plaintiff in favour of the third plaintiff but there is nothing to indicate that this amount was to be paid to the defendant.
The third plaintiff did not obtain any receipt from the defendant.
The High Court rightly rejected the plea on behalf of the first plaintiff that the proceeds of the cheque were paid to the defendant.
On the record there is hardly any acceptable evidence for establishing the payment of Rs. 13,500 by the first plaintiff to the defendant or the payment of Rs. 3,500 each by the plaintiffs 2 and 3 to the defendant.
There is no explanation by the plaintiffs as to how the conveyance came to be registered in the name of the defendant only when the agreement was that it should be taken in the name of the three plaintiffs and the defendant jointly.
The agreement contemplated taking of the conveyance in the names of the three plaintiffs and the defendant and in fact the application made by the defendant to the court prayed that the sale be confirmed in favour of the three plaintiffs and the defendant and the conveyance issued in their joint names.
But the application for confirmation in the joint names was not pressed and the conveyance was ultimately made in favour of the first defendant alone.
There is no explanation as to why the plaintiffs did not insist on the bid being confirmed in the names of all of them and the conveyance issued in their joint names.
Equally on the side of the defendant there is no explanation as to why the signed the agreement which povided that the sale should be for the benefit of all of them and as to why he applied to the court praying for the confirmation of the sale in favour of all of them.
Neither has the defendant denied receipt of Rs. 10,000 from each of the plaintiffs 2 and 3.
There is no provision for payment of interest by the defendant to plaintiffs 2 and 3 for the sums advanced.
If it had been loan simpliciter there could be no explanation for absence of provision for payment of interest.
On a close analysis of the evidence led on behalf of the plaintiffs and the defendant we agree with the High Court that neither the version of the plaintiffs nor that of the defendant discloses the entire truth.
The conclusion we arrive at on the evidence is that the plaintiffs have failed to prove any prior agreement before the defendant made his bids for Rs. 30,000 and later for Rs. 40,000 and paid the deposits amounting to Rs. 10,000 by himself.
Plaintiffs 2 and 3 have failed to prove that they have paid Rs. 3,500 each towards expenses in addition to payment of Rs. 10,000 by each of them which is admitted.
The first plaintiff has totally failed in proving that he had paid any part of the consideration.
On the side of the defendant there is no explanation as to why he subscribed to the 350 agreement agreeing to share the property along with the three plaintiffs and for his applying to the court for confirmation of the sale in favour of all of them.
Neither is there any explanation by him as to why plaintiffs 2 and 3 advanced Rs. 20,000 without interest.
Taking all the circumstances into account we feel the irresistible inference is that the defendant having made the bid by himself later on found himself badly in need of money to pay the balance of the bid amount.
In trying to find the money he sought the help of the plaintiffs and received payment of Rs. 20,000 from plaintiffs 2 and 3.
The crucial question is whether this amount was received merely as a loan as contended by the defendant or given on the agreement that plaintiffs 2 and 3 should be entitled to a share each.
The conduct of the defendant shows that while he badly needed the money he was not willing to share the property with them for the amount.
Equally plaintiffs 2 and 3 wanted the share in the property for the money advanced by them.
It is clear that the money was not advanced as a loan.
It may be that the plaintiffs 2 and 3 were insisting on a hard bargain but it cannot be denied in the circumstances in which the defendant was placed that he had accepted it.
The condition insisted upon by plaintiffs 2 and 3 might not have been fair but the agreement arrived at in the circumstances cannot be said to be due to undue influence.
The relief to which the plaintiffs are entitled to under the agreement cannot be denied.
The High Court after observing that plaintiffs 2 and 3 who are businessmen would not have lent a large sum of money without charging interest and that it is not likely that the plaintiffs would have been so charitable towards the defendant who was a stranger was of the view that it was not necessary to examine the defendant 's financial position and record a finding on the point for the purpose of appeal.
While holding that the defendant 's version also does not disclose the entire truth the High Court held that would not help the plaintiffs who have to prove the case they set up in the plaint.
On the short ground that the agreement dated 2nd April, 1960 does not reflect the true nature of the transaction the High Court held that the suit must fail.
We are of the view that if the amount was not advanced as a loan but paid towards acquiring of a share in the property the relief cannot be denied.
In the circumstances, the plaintiffs 2 and 3 are entitled to 1/4th share each in the property on their payment of their share of the expenses i.e. Rs. 3,500 each.
The defendant has been in possession of the property ever since the purchase and the plaintiffs are entitled to their share of the rents collected by the defendant.
We estimate the share of the rents collected for each of the plaintiffs at Rs. 25,000.
The result is the appeal is allowed to the extent that there will be a decree for partition and separate possession of 1/4th share 351 each of plaintiffs 2 and 3.
Plaintiffs 2 and 3 will pay to the defendant Rs. 3,500 each and interest at 10 per cent per annum from the date of the conveyance and receive Rs. 25,000 each from the defendant towards their share of the rent collected upto date.
The first plaintiff will not be entitled to any relief and the suit so far as he is concerned is dismissed.
There will be no order as to costs.
Before we conclude we will shortly refer to the question of law raised by Mr. L. N. Sinha on behalf of the defendant.
He submitted that as the title in the property vested in the defendant by confirmation of the court sale and later by a registered conveyance, the plaintiffs cannot seek relief on the unregistered agreement exhibit 4 as conveying any title to them.
This point was not taken in any of the courts below but learned counsel submitted that because it is a pure question of law not involving any investigation of facts and as it goes to the root of the matter the court may permit the point to be taken.
In support of his contention that a pure question of law in the circumstances can be taken for the first time in this Court he relied on the decisions of this Court in Yaswant Deorao Deshmukh vs Walchand Ramchand Kothari(1), Raja Sri Sailendra Narayan Bhanja Deo vs The State of Orissa (2), Seth Badri Prasad and others vs Seth Nagarmal and others(3), State of Uttar Pradesh & Anr.
vs Anand Swarup(4) and T. G. Appanda Mudaliar vs State of Madras(5).
As the point raised is a pure question of law not involving any investigation of the facts, we permitted the learned counsel to raise the question.
The plea of the learned counsel is that as the title has vested in him by virtue of the confirmation of the sale and the registered conveyance the plaintiff cannot rely on the unregistered agreement.
In support of his contention the learned counsel relied on the decision of the Privy Council in G. H. C. Ariff vs Jadunath Majumdar Bahadur(6) and Maritime Electric Co. Ltd. vs General Dairies Ltd.(7).
In G. H. C. Ariff vs Jadunath Majumdar Bahadur it was doubted whether the English equitable doctrine can be applied so as to modify the effect of an Indian statute.
The court expressed itself thus:". .but that an English equitable doctrine affecting the provisions of an English statute relating to the right to sue upon a contract, should be applied by analogy to such a statute as the Transfer of Property Act and with such a result as to create without any writing an interest which the statute says can only 352 be created by means of a registered instrument, appears to their Lordships, in the absence of some binding authority to that effect, to be impossible".
The Court further observed: "Their Lordships do not understand the dicta to mean that equity will hold people bound as if a contract existed, where no contract was in fact made: nor do they understand them to mean that equity can override the provisions of a statute and (where no registered document exists and no registrable document can be procured) confer upon a person a right which the statute enacts shall be conferred only by a registered instrument." In Meritime Electric Co. Ltd. vs General Dairies Ltd. (supra) the court observed: ". where as here the statute imposes a duty of a positive kind, not avoidable by the performance of any formality, for the doing of the very act which the plaintiff seeks to do, it is not open to the defendant to set up an estoppel to prevent it".
The decisions are clear that the plaintiffs cannot succeed in displacing the title of the defendant on the basis of the unregistered agreement.
But this will not help the defendant as the suit is based on the plea that the suit property and the premises were purchased in co ownership i.e. on a claim that the plaintiffs were the real owners of the property.
The claims of the plaintiffs as a real owner is not based on the unregistered agreement alone.
On the pleadings in the case the question of law raised cannot result in the suit being dismissed as not maintainable.
The second question the learned counsel raised was that the suit is barred under section 66 of the Civil Procedure Code.
The trial court overruled the plea on the ground that although the sale in question is a court sale it is not according to the rules prescribed by the Civil Procedure Code but only according to the Rules of the Calcutta High Court on the original Side.
The learned counsel submitted that the purpose of section 66, Civil Procedure Code, applies equally to court sales conducted under Rules of Civil Procedure Code as well as those conducted under the High Court Rules.
Reliance was placed on a decision of the Privy Council in Bishun Dayal vs Kesho Prasad and Anr.(1) where the only case pleaded by the plaintiff was that the person through whom he claimed derived his right to half of the village from the auction purchase having been made in part on his behalf by the auction purchaser, it was held that the claim was barred by section 66, Civil Procedure Code, inasmuch as no case independent of auction purchase and basing title upon subsequent possession was put forward in the plaint.
Section 66 of the Civil Procedure Code runs as follows: "66(1).
No suit shall be maintained against any person claiming title under a purchase certified by the Court in such 353 manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims." (2).
x x x x x section 66 prohibits any person claiming that a purchase certified by the court in such manner as may be prescribed in favour of a person was made on behalf of the plaintiff.
In order to invoke the prohibition it is necessary to establish that the person against whom the suit cannot be maintained is a person claiming title under a purchase certified by the court in such manner as may be prescribed.
A certificate by the court for the purchase in the manner prescribed is therefore essential.
The word "prescribed" is defined under section 2(16) of the Civil Procedure Code as meaning prescribed by Rules.
The provisions as to grant of a certificate by a court under a purchase is prescribed in Order 21.
Order 21, Rules 64 to 73 prescribe the procedure relating to sale generally while Rules 82 to 108 prescribe the procedure relating to sale of immovable property.
When the court makes an order confirming the sale under order 21, Rule 92, the sale becomes absolute.
After the sale becomes absolute under Rule 94 the court shall grant a certificate specifying the properties sold and the name of the person who at the time of the sale is declared to be the purchaser.
Such certificate is required to bear the day and the date on which the sale became absolute.
The certificate by the court referred to in sec.
66 is a certificate under order 21, Rule 94.
The procedure envisaged for sale generally and sale of immovable property under Order 21 is sale by a public auction.
Sale by a court through the Receiver appointed by court is not contemplated under these provisions.
In a sale by a Receiver a certificate to the purchaser under Order 21, Rule 94, is not given by the Court.
Therefore, the prohibition under sec.
66 cannot be invoked in the case of a sale by the Receiver.
A Receiver is appointed under Order 40, Rule 1, and a property can be sold by the Receiver on the directions of the court even by private negotiations.
The requirement of section 66 of the C.P.C. is a certificate by the court as prescribed.
In this case the conveyance exhibit 5 was in accordance with the original side Rules of the High Court.
In the view we have taken that section 66 is not applicable to sale by Receiver it is not necessary to go into the question whether a sale by the Receiver under the Rules of the Calcutta High Court would come within the purview of section 66.
Section 66 refers to execution of sales only and has no application to a sale held by a Receiver.
In this view the objection raised by the learned counsel for the defendant has to be rejected.
354 ORDER When the Judgment was delivered in Court on 16th January, 1979, allowing the appeal to the extent that there will be a decree for partition and separate possession of one fourth share each of plaintiffs 2 and 3, the parties expressed their desire to agree amongst themselves and divide the properties finally and report a settlement to that effect and prayed that the Court may be pleased to pass a decree in terms of the compromise.
Leave was granted to the parties to enter into a compromise and report the matter to the Court for the passing of the decree in terms of the compromise.
Accordingly the parties have entered into a compromise and have filed the compromise memo along with plans for passing of the final decree.
Accordingly we direct that a decree be passed in terms of the compromise.
S.R. Appeal allowed.
| The respondent, an officer belonging to the Indian Administrative Service, was due to retire on February 1, 1962.
Since a departmental enquiry in respect of some charges levelled against him was pending, he was retained in service, in the first instance, for a period of three months beyond the date of his retirement or till the termination of departmental proceedings whichever was earlier.
This date was, however, extended from time to time and eventually on August 28, 1963 an order under r. 16(2) of the All India Services (Death cum Retirement) Rules, 1958 was passed.
That Rule provides that "a member of the service under suspension on a charge of misconduct shall not be required or permitted to retire from service but shall be retained in service until the enquiry into the charges against him is concluded and a final order is passed.
" The charges levelled against the respondent were (1) that he completely failed to take any effective preventive measures against widespread disturbances which broke out in the district, (2) that he showed complete lack of leadership and failed to give proper directions to his subordinate officers, (3) that he did not personally visit the scene of disturbances; (4) that he did not keep the Government informed of the extent of disturbances; and (5) that he showed complete inaptitude, lack of foresight, capacity to take firm and quick decision and, that therefore, he proved himself completely unfit to hold any responsible position.
On the report of the enquiry officer that all the charges (except one) were substantially proved, he was removed from service.
Striking down the order of his removal from service, the High Court held that (i) negligence and efficiency in the performance of one 's duty would not constitute misconduct so as to attract punishment of removal from service and (ii) under r. 16(2) an officer could be retained in service only for the purpose of holding or completing disciplinary proceedings for misconduct and since in this case there was no enquiry into what could be called misconduct, his retention in service beyond his date of retirement was void.
Dismissing the appeal, ^ HELD: 1(a) No case, stricto sensu, for a disciplinary proceeding for misconduct had been made out against the respondent.
Any deficiency in the discharge of one 's duties would not constitute misconduct.
The enquiry held 505 was to establish that the respondent was not fit to hold a responsible post; it did not establish any misconduct on his part to deserve the punishment.
[516 H] (b) Conduct which is blameworthy on the part of a government servant in the context of the Conduct Rules would be misconduct, that is if a government servant conducts himself in a way which is not consistent with due and faithful discharge of his duties it is misconduct.
Similarly, disregard of an essential condition of the contract of service may constitute misconduct.
So too an error or omission resulting in serious or atrocious consequences may amount to misconduct.
But competence for the post, capability to hold and discharge the functions attached to it with requisite efficiency are different from some act or omission on the part of its holder so as to be called misconduct.
A single act or omission or error of judgment while holding a post of responsibility unaccompanied by serious or atrocious conduct would not constitute misconduct.
[511 G H] Pierce vs Foster, 17 QB 536 at 542; Laws vs London Chronicle (Indicator Newspapers),[1959] 1 WLR 698; section Govinda Menon vs Union of India, ; ; P.H. Kalyani vs Air France, Calcutta, ; ; referred to.
(c) The All India Services (Conduct) Rules, 1954 prescribe a code of conduct for members of the service, such for example as, that every member shall at all times maintain absolute integrity and devotion to duty and that an act or omission contrary to or in breach of the prescribed norms of conduct would constittute misconduct for disciplinary proceedings.
But the Rules are not exhaustive.
In the absence of an exhaustive or self contained code, therefore it would not be correct to say that only that act or omission would constitute misconduct for the purposes of Discipline and Appeal Rules which is contrary to the provisions of the Conduct Rules.
[511 C E] In the instant case all that the charges framed against the respondent show is that he was not a very efficient officer.
They did not specify any act or omission in derogation of or contrary to Conduct Rules, except the general rule (r.3) prescribing devotion to duty.
Lack of leadership, inaptitude, lack of foresight, lack of firmness and indecisiveness which are deficiencies in the personal character or ability of a Government servant would not by themselves constitute misconduct for the purpose of disciplinary proceedings.
They may be relevant while considering an officer 's promotion to higher post or for his retention in a higher post but they cannot be elevated to the level of acts of omission or commission contemplated by Discipline and Appeal Rules for imposing punishment.
When the respondent was sought to be removed from service as a disciplinary measure by way of penalty, a clear case of misconduct should have been established.
(d) In the context of disciplinary proceedings, misconduct does not mean misbehaviour involving some form of guilty mind or mens rea.
Gross or habitual negligence in the performance of one 's duty may not involve mens rea but yet it may constitute misconduct for disciplinary proceedings.
[513 D] 2(a) The respondent was no longer in service on the date on which the order removing him from service was made and to retain him in service 506 beyond the period of his normal retirement with a view to punishing him was wholly unjustified.
[517 C D] (b) Since the State Government had no power to retain him in service under r. 16(1)(a) of the Retirement Rules beyond August 1, 1962 it could not continue the enquiry thereafter.
Although under r. 16(1)(b) the Central Government had power to retain him in service beyond six months of the date of his retirement, no order had been passed by it.
[515 H] (c) Before r. 16(2) (which provides that a member of the service under suspension on a charge of misconduct shall not be required or permitted to retire from service until the enquiry into the charges against him is concluded and a final order passed) would be attracted it must be shown that a member of the service was under suspension on a charge of misconduct and an enquiry was being conducted against him.
No misconduct having been alleged against the respondent, it cannot be said that r. 16(2) was attracted and that he was deemed to have been retained in service until the enquiry was concluded.
[516 F G]
|
ivil Appeal Nos.
300 301 of 1963.
562 Appeals by special leave from the award dated October 23, 196 of the Industrial Tribunal (111), Allahabad in Adjudication Case No. 33 of 1961.
G.B. Pai, J. B. Dadwhanji, O. C. Mathur and Ravinder Narain, for the appellant in C.A. No. 300 of 1963 and the respondent in C.A. No. 301 of 1963.
C.B. Agarwala, O. P. Lal and G. O. Mathur, for the respondents in C.A. No. 300 of 1963 and the appellants in C.A. No. 301 of 1963.
May 3.
The Western India Match Gompany; the Bareilly Branch of which is the appellant in the first of the two appeals before us, is engaged in the manufacture and sale of matches in India.
The manufacture of matches is carried on by the company at its four factories at Ambernath, Madras, Calcutta and Clutterbuckgan j in Bareilly.
At these four places the company has also four sales offices catering to the needs of the regions assigned to them.
The sales office at Clutterbuckganj with which we are concerned in this appeal carries on its sales activities in the States of U.P., Punjab, Delhi, Himachal Pradesh, a part of Rajasthan and a part of Madhya Pradesh.
According to the appellant each of these sales offices is independent of the factories of their respective regions and so the Bareilly Sales Office is quite independent of the "factory at Bareilly.
As an incentive to larger production of matches the 0company introduced in 1945 a Production Bonus Scheme the details of which will be mentioned later.
The scheme was applied at the beginning not only to the 1500 workmen engaged in the factory in making matches but also to the workmen working in the factory office, who numbered about 100.
In 1947, the production bonus was withdrawn from the office staff of the factory, though it continued to operate as regards 563 the other workmen.
The factory office staff raised a dispute on this question in 1957 and ultimately as a result of a decision of the Adjudicator given on March 13 1958, the factory office staff also became entitled to the benefits of the production bonus scheme on the same terms as the other workmen in the factory.
The workmen of the sales office consisting of the clerical staff as also salesmen and inspectors of salesmen were however denied the benefits of the scheme, though it does appear that for a very short period in 1946 the sales office staff also received payments purporting to be production bonus.
The Adjudicator 's decision extending the production bonus scheme to the factory staff was confirmed by this Court on March 17, 1961.
It appears that during the pendency in this Court of the appeal against the Adjudicator 's order there was some discussion between the Union of which the sales office staff became members in 1957 or thereabout and the sales manager 'at Bareilly, in regard to extending the Production Bonus Scheme to the members of the sales staff, if the appeal in this Court was decided in favour of the factory office staff On March 13, 1961, the Union wrote to the sales manager reiterating the claim to Production bonus and pointing out that "discrimination between the employees of the same company in the matter of admissibility of item of wage was bound to lead to heartburning." The manager replied on May 22, 1961, characterizing this demand of the sales office staff as unreasonable to which the management could not agree.
Ultimately, on August 18, 1961, the dispute which thus arose between the employers and the workmen was referred by the Government of U. P. to the Third Industrial Tribunal at Allahabad for adjudication.
The dispute referred was described in these words: "Should the employers be required to pay production bonus to the workmen employed 564 in their sales office ? If so, with effect from what date and with what other details By a later amendment on December 4, 1961, the word " 'in" was substituted by the word "by".
Though a number of matters were raised in issue, both the parties rightly 'concentrated at the hearing on the question whether the sales office and the Factory were independent units of production or formed integral parts of one and the same unit of industrial production.
Whether or not an incentive scheme for better production should be introduced in any industry is essentially a matter for the management to decide.
This position has been recognized by this Court in Titaghur Paper Mills Company Ltd. v Their Workmen (1).
and again in Burn & Co., vs Their Workmen (2).
While in view of the importance of industrial adjudication not interferng with what is purely management functions, the Court felt that industrial adjudication should not impose an incentive bonus on the management for the first time.
the Court pointed out that the position would be different where an incentive bonus is already in force for themajority of the workmen.
"We can see no reasonwe said in Burn Company 's Case"why where anincentive bonus scheme is in force in a concern for the majority of its workmen, the Tribunal should not be able to extend the same to the remainder of the workmen.
" In view of this the appellant in this case tried to establish the fact that the sales office was entirely 'independent of the factory, while the workmen, on the other band, directed their efforts to showing that these are only two departments of the one and the same unit of production.
Another question on which the parties joined issue was whether Inspectors, Salesmen and Retail Salesmen out of the sales office staff were workmen (1) [1959] Supp. 2 S.C.R. 1012 (2) 565 or not within the meaning of the U. P. Industrial disputes Act.
The management contended that they were not workmen and so were not within the terms of reference; the respondents claimed that they were workmen within the meaning of the Act.
Applying the principles laid down by this Court in several cases where the question whether two or more units of business under the same ownership form one industrial unit or more to the facts and circumstances of this case as disclosed by the oral and documentary evidence, the Tribunal came to the conclusion that the sales office and the factory form one single unit of industry and there being no reason for making any discrimination against the sales office staff on the question of production.
bonus held that the employers should be required to pay production bonus to the workmen employed by their sales office also.
The Tribunal directed that the sales office staff should be paid production bonus at the same rate at which it was given to the workmen of the factory and the factory office.
The question whether inspectors, salesmen and retail salesmen employed by the sales office were workmen was also answered by the Tribunal in the affirmative so that they also became entitled to the benefit of the award.
Being of opinion that the dispute should have been raised earlier by the workmen of the sales office, the Tribunal directed that the payment of production bonus to the sales office staff would start from the date the award became enforceable in law.
Against this decision the employers, the Western India Match Co., Ltd., Bareilly, has appealed by special leave granted by this Court.
The workmen have also appealed against the direction that the payment of production bonus should start from the date the award became enforceable in law.
Three points have been raised before us on behalf of the employers in support of their appeal, 566 which has been numbered Civil Appeal No. 300 of 1963.
The first and the main contention is that the Tribunal has erred in holding that the sales office and the factory formed parts of one and the same unit of industrial production.
In any case, it was next urged, the Tribunal ought not to have extended to the sales office staff the production bonus scheme, for the factory and the factory office without any modification.
Thirdly, it was contended that the Tribunal was wrong in holding that Inspectors, Salesmen and Retail Salesmen are workmen within the meaning of the U.P.
This last contention can be disposed of easily.
"Workman" has been defined in the U. P. Industrial disputes Act to mean any person employed in an industry to do any manual, supervisory, technical or clerical work for hire or reward.
The Tribunal has accepted the evidence of the workmen 's witness Sexena that the writing work takes up 75% of the time of these categories of the sales staff Mr. Pai has characterized this finding as arbitrary.
We do not think this criticism is justified The management did not file any document to show the list of duties of these persons but contented itself with filing an affidavit that no certified duty list of inspectors, .salesmen and retail salesmen has been circulated for travelling letters by the employers.
A statement of duties of the salesmen and retail salesmen was filed on behalf of the workmen and was marked exhibit W. 61.
The correctness of what is stated in this document has not been challenged by the management.
On a consideration of the statement of duties as detailed in this document along with the oral testimony of the workmen 's witnesses, we are of opinion that the Tribunal cannot be said to have acted unreasonably or arbitrarily in believing that 75% of the time of these categories of workmen is devoted to writing work.
It is not out of place to mention in this connection that on some previous occasions the management 567 itself has treated these categories as workmen within the meaning of the U. P.
The management 's contention that the Tribunal has erred in thinking that the inspectors, salesman and retail salesmen are workmen must therefore be rejected, A more difficult question is whether the sales office and the factory form part of one and the same unit of industrial production or are independent of each other.
It will be useful to clear the ground first of the confused notion which is expressed in para.
8 of the Company 's written statement that the employees of the Sales office have nothing to do with "Production".
It does not require an economist to tell us that just as the man who tills the soil, and grows the crop is engaged in producing wealth for the community, so also is the person who reaps the harvest, the person who transports it from the field to a place of storage and the people who are engaged in completing the process by bringing it to the ultimate consumer.
It is equally trite that just as a man who makes an article, be it bricks or steel or boxes or something else by using different materials in such a way as to make them more suitable to satisfy people 's wants is engaged in productive labour, so also is the person or persons who help in the ultimate achievement of satisfaction of those wants by bringing them to the consumer 's reach Therefore, it would be unreasonable to say that though those who make the matches are "producing" but those who sell them are not.
Once, this misapprehension is cleared we are face to face with the centre of the problem.
The principles to be followed in deciding these problems have so often been considered by this Court and the tests that can be applied to assist their solution have so frequently been laid down that further detailed discussion is un neccessary.
It is enough to mention 568 that among the many tests that have been evolved, functional integrality, inter dependence or community of financial control and management; community of man power and of its control, recruitment and discipline, the manner in which the employer has organised the different activities, whether he has treated them as independent of one another or as inter connected and inter dependent, enjoy pride of place.
But this list is by no means exhaustive.
Nor can the tests and the principles that have been laid down be applied mechanically or by way of syllogism.
A mechanical or syllogistic approach may appear to furnish the easiest way of solving a complicated problem, but the allurement of the easy way has to be resisted.
For, while such ways are beset with risks of error in all branches of law, they are even more unsafe and inexpedient in industrial law, where sensitive problems of human relations have to be solved in the midst of all the complexities of modem industrial Organisation.
That is why in applying the well settled tests and principles on these problems we have to bear in mind that while all tests that are possible of application should be applied, the value and importance to be attached to individual tests will vary according to the nature of the industrial activities and according to the nature of the disputes in which the problem has arisen, viz., whether it is in respect of lay off, retrenchment, production bonus, profit bonus or something else.
Again, as in most questions which come before the courts, it is the substance which matters and not the form; and every fact and circumstance relevant to the ascertainment of the substance deserve careful attention.
In the first place, functional integrality is writ large on the activities under consideration.
The sales office cannot exist without the factory While 569 it is true that the sales office does from time to time handle the production of a sister concern of the company, the Assam Company, by far the largest portion of its activities is devoted to the marketing of what is made at the Bareilly factory and to a certain extent of the products of the Western India Match Company.
It is equally clear that the factory itself cannot conveniently function without a sales organization.
The inter dependence of the two activities the manufacture of matches in the factory and their sale by the sales office is further emphasized by the fact that the factory arranges its volume of production in accordance with the programmes made from time to time by the sales manager.
Turning now to the question of finance, we find that the sales office and the factory have the same banking account, though separate cheque books are maintained and operated upon Even more important is the fact that the financial forecasts that are made for this Branch from time to time make no distinction between the disbursements in the sales office and the factory.
This is clear from the fore cast for the period October December This forecast was prepared by the sales manager and bears the heading "Bareilly Sales Office" Under the head "Cash Disbursements" we find first some figures in respect of bonus, woods, splints, ' raw materials and general stores and then one inclusive item for salaries and wages for both factory and sales office.
This document discloses the further interesting fact that excise duty a duty on the production of matches also finds place in the financial forecast, prepared by the sales manager for the sales office.
The manner in which the financial forecast was prepared by the sales manager in respect of functions not only of, the sales office but also of the factory proper is eloquent testimony that the 570 company did consider them as inter dependent parts of the same production unit.
Against all this, Mr. Pai seeks support for his contention that the sales office is independent of the factory, mainly in the rules and practice in connection with the recruitment, control and discipline of man power.
The documents, including letters of appointment and standing orders, which have been produced undoubtedly show that the company has kept these matters distinct and separate between the factory and the sales office.
It is also clear that separate muster rolls are maintained for the factory and the sales office, though it must be pointed out that a few workmen are common.
Our attention has been drawn also to the fact that the sales office pays rent to the factory for the area occupied by it by means of book adjustments.
These and some other details to which our attention has been drawn by Mr. Pai are of little assistance however to establish his proposition that the Tribunal hasacted arbitrarily in deciding that the sales officeand the factory are parts of one and the same industrial unit.
We have to mention here that our purpose in referring to these details of evidence is not to find out whether the Tribunal has come to a wrong conclusion on fact, but only to see if it has made any mistake in applying the correct principles or has come to a conclusion that is unreasonable, arbitrary or perverse On an analysis of the materials on the record we are clearly of opinion that the correct principles have been applied in a fair and reasonable manner and the conclusion reached cannot be challenged before us.
There remains for consideration Mr. Pai 's cotention that the Tribunal was not justified in 571 extending to the sales office staff the production bonus for the factory and the factory office without any modification.
Mr. Pai complains that having come to the conclusion that production bonus should be extended to the sales office staff the Tribunal did not apply its mind to the further question that was referred to it, viz.; with what details the production bonus scheme should be applied to the sales office staff According to Mr. Pai the sales office staff, speaking generally, enjoys much higher rates of pay than the corresponding categories in the factory office and that this was a factor which ought to be taken into consideration in deciding whether the production bonus scheme in force in the factory for the factory staff should be applied to the sales office staff without any modification.
If it were clear that the Tribunal had applied its mind to this aspect of the problem we would not have felt justified in upholding Mr. Pai 's complaint.
As it appears however that this aspect was not considered, we think it will be in the best interests of industrial peace and of social justice that the Tribunal applies its mind to the question and then comes to a decision.
We express no opinion whether Mr. Pai 's contention that the sales office staff enjoys higher pay scales than the factory staff is correct in fact or not nor on the question whether if this assertion be found to be correct any modification in the production bonus scheme would be called for.
We confirm the Tribunal 's decision that the production bonus scheme should be extended to the sales office staff and remand the case to the Tribunal for decision after taking note of all relevant facts whether the production bonus scheme in force in the factory and the factory staff should be extended to the sales office staff with or without modification.
572 This disposes of the management 's appeal viz., Civil Appeal No. 300 of 1963.
The workmen 's appeal Which is numbered Civil Appeal No. 301 of 1963 challenges the correctness of the Tribunal 's direction that the payment of production bonus should start from the date the award became enforceable in law.
According to the workmen the payment of production bonus should have been directed to be made with effect from the date of reference, if not from the date of the demand.
The question as to the date from which the benefit granted by an award should take effect must generally be left to the discretion of the Tribunal making the award and this Court ordinarily refuses to interfere with the exercise of that discretion.
We are unable to find any special circumstances in this case that would justify any departure from our established practice.
The Appeal No. 301 of 1963 is therefore dismissed.
In view of the fact that the case is going back to the Tribunal for a decision of the question as mentioned above we think it proper to direct that the ultimate award by the Tribunal should be given effect from the same date from which the award now under appeal would have come into force.
There will be no order as to costs in either of the appeals.
Appeal No. 300 remanded.
Appeal No. 301 dismissed.
| A and B were tried together at one trial, A of offences under sections 120 B, 409,477 A and 471 read with section 476 Indian Penal Code and B of offences under sections 120 B,409 read with 109 298 and 471 read with 467 Indian Penal Code.
The Sessions judge who tried them convicted A of all the offences charged and B of the first two charges.
On appeal the High Court acquitted both of them.
The State appealed to the Supreme Court.
The respondents contended: (i) that there was a misjoinder of charges and persons on account of the cumulative use of the various clauses of section 239 of the Code of Criminal Procedure which was not permissible, (ii) that no charge of conspiracy could be framed after the conspiracy had fructified, (iii) that the Sessions judge had failed to inform the accused of their right under 3. 342 ( 4 ) of the Code to examine themselves as witnesses, (iv) that the pardon had been granted to the approver illegally, (v) that the approver had been allowed illegally to refresh his memory by reference to documents at the time when he was examined before the Court, and (vi) that the account books of certain firms which contained no entries regarding payments alleged to have been made to them were inadmissible in evidence.
Held that there was no misjoinder of charges and of accused persons.
It is open to the Court to avail itself cumula tively of the provisions of the different clauses of section 239 of the Code for the purpose of framing charges.
Sections 233 to 236 do not override the provisions of section 239.
But the provisions of sections 234 to 236 can also be resorted to in the case of a joint trial of several persons permissible under section 239.
Even if there was a misjoinder the High Court was incompetent to set aside the convictions without coming to the definite conclusion that the misjoinder bad occasioned failure of justice.
Re: Fankaralapati Gopala Rao, A.I.R. 1936 Andhra 21 and T.B. Mukherji vs State, A.I.R. 1954 All.
501, not approved.
State of Andhra Pradesh vs Kandimalla Subbaiah, , K.V. Kriahna Murthy Iyer vs State of Madras, A.I.R. 1954 S.C. 406, Willi (William) Slaney vs State of Madhya Pradesh.
; , Birichh Bhuian vs The State of Bihar.
(1964) Supp.
2 S.C.R. 328.
Held further that where offences have been committed in pursuance of a conspiracy, it is legally permissible to charge the accused with these offences as well as with the conspiracy to commit those offences.
Conspiracy is an entirely independent offence and though other offences are committed in pursuance of the conspiracy, the liability of the conspirators for the conspiracy itself cannot disappear.
299 State of Andhra Pradesh vs Kandimalla Subbaiah. , relied on.
S, Swamirathnam vs State of Madras, A.I.R. 1957 S.C. 340 and Natwarlal Sakarlal Mody vs State of Bombay, Cr.
A. No. 111 of 1959, dt 19.1.196 1, referred to.
Held further, that there was no violation of the provisions of section 342 of the Code.
The Sessions Judge had erred on the side of overcautiousness by putting every circumstance appearing in the evidence to the accused.
Copies of the questions put to the accused were given to them before hand.
Any point left over in the questions was covered in the written statements filed by the accused.
In such circumstance the length of the questions or of the examination could not prejudice the accused.
Further, there was no duty cast on the Court to inform the accused of their right under section 342 (4) to examine themselves as witnesses.
They were represented by counsel who must have been aware of this provision.
Held further, that the pardon was legally granted to the approver under section 337 of the Code and was a valid pardon.
The offences with which the accused were charged were all such in respect of which a pardon could be granted under section 337 (1).
The offences under section 467 read with section 471 which was exclusively triable by a court of sessions and the offence under section 477 A which was mentioned in section 337 (1) itself and thus both fell within the ambit of section 377 (1).
the offence under section 409.
and consequently the offence under section 120 B also, was punishable with imprisonment for life or with imprisonment not exceeding ten years and was an "offence punishable with imprisonment which may extend to ten years" within the meaning of section 337 (1).
Further, tinder G.O. No. 3106 dated September 9, 1949, the Madras Government, the power of a District Magistrate to grant pardon was specifically conferred on Additional District Magistrates, and the Additional District Magistrate, (Independent) who granted the pardon in the present case was competent to do so.
Held further, that the Sessions judge acted legally and properly in allowing the approver to refresh his memory, while deposing, by referring to the account books and other documents produced in the case.
Where a witness has to depose to a large number of transactions and those transactions are referred to or mentioned either in the account books or in other documents there is nothing wrong in allowing the witness to refer to the account books and the documents 300 while questions are put to him.
Such a course is specifically permitted by sections 19 and 160 of the Evidence Act.
Held further, that the account books of the firms which contained no entries with respect to payments alleged to have been made were not relevant under section 34 of the Evidence Act, as that section is applicable only to entries in account books regularly kept and says nothing about non existence of entries.
But they were relevant under section I I of the Act as the absence of the entries would be inconsistent with the receipt of the amounts which was a fact in issue.
They were also relevant under section 5 to prove the facts alleged by the prosecution that payments were never made to these firms and that those firms maintained their accounts in the regular course of business, and both these were relevant facts.
Queen Empress V. Grees Chander Banerjee (1884) I.L.R. IO Cal, 1024, and Ram Pershad Singh vs Lakhpati Koer, Cal. 231, referred to.
|
minal Appeal No. 102 of 1960.
Appeal by special leave from the judgment and order dated October 7, 1959, of the Punjab High Court in Criminal Revision No. 610 of 1959.
Hardev Singh and Y. Kumar, for the appellants.
section M. Sikri, Advocate General for the State of Punjab, N. section Bindra and P. D. Menon, for the respondent.
February 6.
The four appellants were at one time members of the Pepsu Police force and were charged, before the First Class Magistrate at Faridkot, with having committed three offenses : (1) under section 26 of the PepsU Public Safety Ordinance (No. 7 of Samvat 2006), (2) under section 33 of the said Ordinance, and (3) under section 1 of the impugned Act.
We shall be referring to the provisions of the relevant enactments in due course.
The accused pleaded not guilty and were tried by the learned Magistrate who by his judgment dated August 28, 1958, held the 27 prosecution case fully established against all the accused.
He convicted the four appellants under section 26 of the Public Safety Ordinance and sentenced them to imprisonment for six months.
The third appellant alone Was convicted of the offence under a. 33 of the same Ordinance and was sentenced to imprisonment for six months.
Appellants 1, 2 and 4 were further convicted of offenses under section 3 of the impugned Act and sentenced, to imprisonment for six months, the several sentences against the respective accused being directed to run concurrently.
The appellants filed an appeal to the Sessions Judge at Bhatinda who upheld the convictions but reduced the sentences.
In respect of the offence under section 26 of the Public Safety Ordinance the sentence passed against the four appellants was reduced to imprisonment for three months while in respect of the third accused who had been addition ally sentenced under section 33 of the Ordinance the same was reduced to imprisonment for 11 /2 months and the sentences on appellants 1, 2 and 4 under section 3 of the impugned Act was reduced to imprisonment for three months, the sentences again being directed to run concurrently.
With these modifications the appeals stood dismissed.
The appellants thereafter preferred a revision to the, High Court and this was heard by a learned Single Judge who while accepting the revision of the appellants in so far as it related to their conviction and sentence under section 26 of the Ordinance.
maintained the other convictions and sentences but reduced the sentences.
It is from this judgment of the High Court that this appeal has been preferred by the four appellants.
It would be seen from the above narrative that the appeal is concerned with the propriety of the conviction of appellants 1, 2 and 4 of an offence under a. 3 of the impugned Act and of the third appellant under section 33 of the Ordinance, all the appellants having been acquitted by the High Court of the charge against them under s, 26 of the 28 Ordinance.
It is therefore not necessary to refer to the terms of section 26 or the offence constituted by it.
In the Courts below including the High Court no challenge was made as regards the legality of any of the provisions of law of the violation of which the appellants were found guilty but before us though learned Counsel did not raise any contention regarding the validity of section 33 of the Pepsu Public Safety Ordinance, challenged the constitutionality of section 3 of the impugned Pepsu Police (Incitement to disaffection) Act which appellants 1, 2 and 4 were found to have violated and for which they were sentenced to a term of imprisonment.
Learned Counsel for the appellants raised for our consideration three points : (1) the constitutional validity of s.3 of the impugned Act, (2) if section 3 were constitutional and valid whether appellants 1, 2 and 4 were proved to have been guilty of an offence for violating that provision, and (3) whether appellant 3 was property held guilty of an offence under section 33 of the Pepsu Public Safety Ordinance.
We shall first take up for consideration the attack on the validity of section 3 of the impugned Act.
Patiala and East Punjab State Union, commonly called Pepsu was one of the States specified in Part B of the First Schedule to the Constitution when the Constitution was brought into force in January 1950.
For reasons not necessary to be stated here, the administration of Pepsu was taken over by the President under article 356 of the Constitution.
The powers of the State Legislature were declared by the Presidential Proclamation issued on March 4, 1953.
to be "exercisable by or under the authority of Parliament" (vide article 356(1)(b) ).
Thereafter Parliament enacted Act XXII of 1953 which received the assent of the President on May 17, 1953, which was entitled : "The Patiala and East Punjab States Union Legislature (Delegation of Powers) Act, 1953.
" Section 3 of this enactment provided 29 "The power of the legislature of the State of Patiala and East Punjab States Union to make laws which has been declared by the proclamation to be exercisable by or under the authority of the Parliament is hereby con ferred on the President.
" There are other provisions which are contained in the other subsections of section 3 but these have no relevance for this appeal.
In exercise of the power thus delegated to him by Parliament the President enacted Pepsu Act 1 of 1953 whose long title runs : "An Act to provide a penalty for spreading disaffection among the police and for kindred offenses.
" It is the 3rd section of this enactment whose validity is challenged in this appeal and that reads "3.
Penalty for causing disaffection, etc.
Whoever inte ntionally causes or attempts to cause, or does any act which he knows is likely to cause, disaffection towards any Government established by law in India amongst the members of a police force, or induces or; attempts to induce, or does any act which he knows is likely to induce, any member of a police force to withhold his services or to commit a breach of discipline shall be punishable with imprisonment which may extend to six months, or with fine, or with both. " The attack upon the validity of this provision was rested on its being violative of the freedom guaranteed by article 19(1)(a), the submission being that the section was Dot saved by article 19(2).
Before considering the arguments advanced it is necessary to mention, for being put aside, that in construing the validity of section 3 of the impugned Act 30 the provision contained in article 33 of the Constitution has no relevance.
That Article enacts : "article 33.
Parliament may by law determine to what extent any of the rights conferred by this Part, shall in their application to the members of the Armed Forces or the Forces charged with the maintenance of public order, be restricted or abrogated so as to en,sure the proper discharge of their duties and the maintenance of discipline among them.
" No doubt, the impugned provision is concerned with ensuring discipline among the forces charged with the maintenance of public order but as the powers of the President were exercised by virtue of the delegation contained in section 3 of Act XXII of 1953 under which only the powers of the State Legislature were vested in him, any law enacted by him would not have the force of Parliamentary legislation contemplated by article 33.
Article '33 being out of the way the very short question that has to be considered is whether the impugned provision is saved by Art '.
19(2), for 'it is common ground that provision does not violate any freedom other than that of ""free speech and expression" guaranteed by article 19 (1) (a).
Article 19(2) as it stands after the amendment by the Constitution (First Amendment) Act of 1951 reads : " 19(2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, 'in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interest of 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.
" of the criteria set out in this clause the one relevant 31 in the present context is that which refers to "in the interests of. . public order".
The contention urged by learned Counsel was that section 3 was too wide in that it embraced within itself not merely matters which might have relevance to circumstances intimately connected with the maintenance of public order, but also those whose connection with it might be remote or fanciful.
While not seriously disputing that seducing the loyalty of the police force, or inducing the.
members thereof not to do their duty might imperil public order and so fall within the limit of restrictions permissible of imposition under article 19(2), learned Counsel laid, stress on the fact that the impugned section made it an offence to induce a member of the police force to "commit a breach of discipline," laying special emphasis on the fact that the words "breach of discipline" besides being vague, might include within itself acts which might be innocent as well as others of varying degrees of culpability.
The content of the expression "in the interests of. . public order" has been the subject of detailed and elaborate consideration by this Court in Superintendent, Central Prison, Fatehgarh vs Ram Manohar Lohia (1) where the effect of the First (Constitution) Amendment by which the words "for the maintenance of public order" were replaced by the words ",in the interests of public order" was considered in the light of the previous decisions of this Court on that topic, Subba Rao, J., speaking for this Court said that the expression "Public order" in the juxtaposition of the different grounds set out in article 19(2) was synonymous with "public peace, safety and tranquility".
He also pointed out that the expression ,in the interests of public order" though undoubtedly wider than the previous phrasing ",for the maintenance of public order" could not mean that the existence of any remote or fanciful connection between the impugned act (1) ; 32 and public order was sufficient to sustain the validity of the law, but that on the other hand, the connection between the act prohibited or penalised and public order should be intimate; in other words there should be a reasonable and rational relation between it and the object sought to be achieved, viz., public order.
The nexus should thus be proximate not far fetched, problematical or too remote in the chain of its relation with public order.
Keeping this exposition in mind.
the question to be considered is whether the connection between what is prohibited or penalised by the impugned provision and public order, i.e., the ensuring of tranquility and orderly life is so remote or fanciful as to lead to an inference that there is no proximate connection between the two.
We have no hesitation in answering this question against the appellants.
The impugned enactment seeks to lay an embargo on certain activities in the interests of the Police service which is the arm of the State barged with the duty of ensuring and maintaining public order.
The efficiency of that service and its utility in achieving the purpose for which it is formed aid exists is sought to be secured by penalising attempts to undermine its loyalty and dissuade the members of that force from performing their functions and being available to the State as a disciplined body, Any breach in the discipline by its members must necessarily be reflected in a threat to public order and tranquility.
If the police force itself were indisciplined they could hardly serve as instruments for the maintenance of public order or function properly as the machinery through which order could be maintained among the general public.
As we have pointed out earlier, learned Counsel did not seriously contest that the impugned provision in so far as it penalised the creation of disaffection among members of the police force or the incitement of the members of the police force to withhold their services from the government could properly be sustained as enacted 33 ", 'in the interests of public order," We consider that attempts to induce indiscipline among the police do not stand on any different footing.
We do not further consider well founded the submission of learned Counsel that the word "discipline" or the .Phrase "breach of discipline" is vague.
We have therefore no hesitation in rejecting this challenge to the validity of a. 3 of the impugned Act.
The next question that was urged by learned Counsel was that the High Court was wrong in considering that the three appellants 1, 2 and 4 were guilty of any contravention of section 3 of the Act.
We do not consider that this submission is justified.
It is needless to point out that in considering an appeal which comes before us by special leave this Court normally accepts as final every finding of fact reached by the High Court as well as its appreciation of oral testimony and that if there is evidence which could serve as a basic for any finding reached by the High Court the same cannot be canvassed before us.
If the submission of learned Counsel is viewed in the light of this principle it appears to us that there is hardly any scope for argument as regards what might be termed the merits of the case.
One of the "witnesses whose evidence has been accepted by the Courts below and which is referred to in the judgment of the learned Judge in the High Court was Krishan Dayal P.W. 4 who deposed to the accused saying ",Police brothers, come and join us, stop the office work; we will sit here in dharma, start hunger strike. . and would not allow the office work to run.
" It is clear from this evidence that the accused had induced or had attempted to induce members of the police force to withhold their services as also to commit a breach of discipline by staying away without doing their duty.
In our opinion, it is not shown that the conviction of appellants 1, 2 and 4 of an offence under section 3 of Act 1 of 1953 was improper or illegal.
34 The last of the points arising in the appeal is as regards the conviction of Lal Singh the third appellant .of an offence under, section 33 of the Ordinanoe.
Section 33 of the Ordinance runs : ,"Whoever induces or attempts: to induce any public servant or any servant of local authority to disregard or fail in his duties as such servant shall be punishable with imprisonment which may extend to one year or with fine or with both.
" As regards this appellant this is what the learned Judge of the High Court stated : "As againat Lal Singh there is evidence of P. 'W. 11 Kartar Singh and P.W. 18 Balwant Singh, Foot Constable that he asked them to disobey their officers and should give up government work.
His offence under section 33 of the Ordinance is substantiated.
" As we have pointed out earlier, the validity of a. 33 of the Ordinance was not challenged and the only question therefore was whether the third appellant was properly held guilty of the offence.
It was not disputed that the two prosecution witnesses 11 & 18 did state on oath the matters referred to by the learned Judge.
In view of what we have stated earlier as regards the manner in which this Court deals with appeals under article 136 there is no ground shown for interfering with the conviction of the third appellant or the sentence passed.
Before parting with this case it is necessary to advert to one matter.
In the course of his arguments learned Counsel for the appellant drew our attention to certain police rules framed 'by the State Government which prohibited policemen from joining unions and sought to raise a point that the said rule was unconstitutional as in violation of Art.19(1)(b) and that II the activities of the four 35 accused were in reality an attempt to form an union and that therefore we should consider the legality of this rule of the police force in considering the propriety of their Convictions.
Though there is a reference to the rule in the judgment of the High Court, it is referred to only incidentally and as part of the narrative in detailing the activities of the accused.
The offence with which the accused were charged was certainly not the violation of that rule, which if might be pointed out did not create any offence, so that the validity of that rule was wholly irrelevant to their guilt when charged with substantive offences under the various enactments we have noticed earlier.
It need hardly be pointed out that the fact that a person is engaged in asserting a fundamental right affords no defence to a charge of having contravened a valid penal statute while so engaged.
In the High Court the validity of the police rule was never challenged and in the circumstances we declined to permit learned Counsel to argue any question before us in relation to the validity of that rule.
The appeal fails and is dismissed.
| The appellant Company was incorporated in 1908 and its principal activity then was to manufacture hosiery.
In 1924 when the appellant shifted its factor to Ahmedabad it installed spinning machinery with a view to ensure suitable and even supply of yarn for its hosiery manufacture.
Originally, a notification had been issued on May 30, 1939, under the Bombay Industrial Dispute Act, 1938, whereby hosiery concerns were included in the definition of "Cotton Textile Industry",, but subsequently on,July 17, 1945, another notification was issued as a result of which the Hosiery manufacture was excluded from the Cotton Textile Industry and it was covered by a separate notification.
For the purposes of the Bombay Industrial Relations Act, 1946, the appellant concern was recognised as an undertaking of the hosiery industry by the Registrar under section II of that Act.
Subsequently as a result of certain proceedings taken by the Textile Lobour Association of Ahmedabad, the Registrar decided 197 to recognise the appellant concern as consisting of two undertakings, the hosiery section and the rest excluding the hosiery section and this decision was confirmed by the Industrial Court.
The appellant challenged the order of the Industrial Court on the grounds (1) that the spinning and the hosiery sections in its establishment were one concern because (a) there was unity of ownership, management, supervision, con trol and employment, (b) there was complete functional integration, and (c) the two sections were functioning under the same roof, and (2) that, in any case, section 11 of the Act did not authorise the splitting up of a concern into two undertakings.
The evidence showed that though in 1924 the spinning section had begun as a subsidiary to the hosiery section in order to serve as its feeder, later on the spinning section developed to such an extent that it became a spinning mill by itself and could no longer be regarded as a minor section attached to the hosiery works, that only 20% of the yarn manufactured by the spinning section was con sumed for hosiery purposes while the rest was sold in the market, that the spinning department produced yarn of all counts, some of which could not be used for hosiery work, that when the knitting department was closed in '1948, the spinning department was not.
It was also found that the amount paid to the employees in each of the two departments by way of minimum wages and dearness allowance was different.
Held, that the decision of the Registrar recognising the hosiery and spinning departments of the appellant concern as separate undertakings under s.11 of the Bombay Industrial Relations Act, 1946, was correct, Held, further, that the question whether the several undertakings carried on by the same company are separate or not depends on whether they arc distinct and independent of each other or are functionally integral or inter department and that the Registrar was within his powers under section II of the Act to come to a decision on this question on the basis of the circumstances disclosed on evidence.
Associated Cement Companies Ltd. vs Their Workmen, (1960) 1 S.C.R.703, Pratap Press vs Their Workmen, (1960) 1 L. L. J. 497 Pakshiraja Studios vs Its Workmen.
and Honorary Secretary, The Soath India Millowrers 'Asso ciation vs The Secretary Coimbatore District Textile Workers ' Union, Coimbotore (1962) Supp. 2, S.C.R. 926 relied on.
|
Appeal No. 4233 of 1984.
From the Judgment and Order dated 25.3.1983 of the Bombay High Court in W.P. No. 25 of 1982.
S.B. Bhasme and A.S. Bhasme for the Appellant.
Umesh Bhagwat and V.B. Joshi for the Respondent.
The Judgment of the Court was delivered by R.M. SAHAI J.
Can a statutory tenant create a licence? If the answer is in affirmative then can such licensee claim immunity from eviction in execution proceedings in view of Section 15A of this Bombay Rent Hotel and Loging House Rates Control Act 57 of 1947 (hereinafter referred to as 'the Act ')? These are questions which arise for consideration in this appeal directed against the judgment and order of the Bombay High Court.
462 What happened was that the landlord determined the tenancy of the contractual tenant in October 1966 and filed a suit for his eviction in 1967 which was decreed ex parte on 5th October 1973.
In execution of the decree the licensee obstructed and claimed to be protected licensee under Section 15A of the Act.
The objection was rejected by the executing and the appellate court.
The appellate court found that even though the first licence was, created in 1966 before determination of the tenancy for a period of six years but the second licence having been created in 1972, it was not necessary to examine the validity of the first, as second was created when contractual tenant had become statutory tenant therefore he was incapable of transferring any right or interest in favour of the licensee.
The High Court did not disturb the finding that the licence was created in 1972 but it held that creation of licence by a statutory tenant, was valid.
Consequently the licensee was in occupation of the premises as licensee on the date the Bombay Rent Act was amended and was entitled to the benefit of Section 15A of the Act.
For this reliance was placed on certain observations made by a Division Bench of that Court in Vasant Tatoba Hargude and Others vs Dikkava Mutta Pujari, to the following effect: "On this point of initial presumption as to the subsisting incidence of the tenancy, we shall have to follow the ratio of Damadilal 's case ; in preference to the decision in Anand Nivas case and shall have to proceed on the assumption that statutory tenant does ordinarily possess transferable interest in his tenancy.
" Who is a statutory tenant, what right or interest he can assign or transfer have been dealt by this Court in more that one decisions.
In Anand Nivas Private Lid vs Anandji Kalyanji 's Pedhi & others AIR 1965 SC 414 a decision rendered under Bombay Rent Act the majority held, "A person remaining in occupation of the premises let to him after the determination of or expiry of the period of the tenancy is commonly though in law not accurately, called 'a statutory tenant '.
Such a person is not a tenant at all: he has no estate or interest in the premises occupied by him.
He has merely the protection of the statute in that he cannot be turned out so long as he pays the standard rent and permitted increases, if any, and performs the other conditions of the tenancy.
His right to remain in possession after the determination of the contractual tenancy is personal: it is not capable of being transferred or assigned, and devolves on his death 463 only in the manner provided by the statute.
The right of a lessee from a landlord on the other hand is an estate or interest in the premises and in the absence of a contrant to the contrary is transferable and the premisses may be sublet by him.
But with the determination of the lease, unless the tenant acquires the right of a tenant holding over, by acceptance of rent or by assent to his continuing in possession by the landlord, 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.
Section 12 (1) of the Act merely recognises his right to remain in possession so long as he pays or is ready and willing to pay the standard rent and permitted increases and performs the other conditions of the tenancy, but not the right to enforce the terms and conditions of the original tenancy after it is determined.
" In Jai Singh Morarji and others vs M/s Sovani (P) Ltd., ; yet another decision from Bombay the ratio in Anand Nivas was reiterated and It was held that tenant in Section 15 of the Bombay Rent Actmeant the contractual tenant and not the statutory tenant.
Then came another decision, Damadilal and others vs Parashram and others; , on M.P. Accommodation Control Act.
It in the Court traced the genesis of the concept of statutory tenant derived from the English Rent Act but carved out an exception, where, the sanctity, of the contract ' was touched by legislation.
It was held that where the statute itself provided continuance in possession of the tenant after determination of the tenancy in some right the tenant was at par with contractual tenant.
Reason was the definition of 'tenant ' under Section (2) (i) of the Act.
It read as under: "a person by whom or on whose account or behalf for the rent of any accommodation is, or, but for a contract express or implied, would be payable for any accommodation and includes any person occupying the accommodation as a sub tenant and also any person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act; but shall not include any person against whom any order or decree for eviction has been made.
" This section was construed thus, "The definition makes a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him 464 thus putting him on par with a person whose contractual tenancy still subsists.
The incidents of such tenancy and a contractual tenancy must therefore be the same unless any provision of the Act conveyed a contrary intention.
That under this Act such a tenant retains an interest in the premises, not merely a personal right of occupation, will also appear from Section 14 which contains provisions restricting the tenant 's power of subletting.
Section 148 is in these terms:. . .
No such provision existed in the Bombay Rent Act.
The ratio in Damadilal 's case, therefore, could not apply to right or interest created by a statutory tenant under the Bombay Act.
The decisions in Damadilal 's case did not in any way deviate from the decisions given earlier by this Court in Anand Nivas case.
All these cases however were of sub tenants.
In 1981 this Court had an occasion to deal with the case of a licensee under the Bombay Rent Act and his rights under Section 15A of the Act.
The Bench was of the opinion that the licensee was not entitled to obstruct the eviction proceedings which had become final against the tenant as a statutory tenant could not assign or create any interest after termination of his tenancy.
It was observed in Ludhichem Agencies vs Ahmed R. vs Peer Mohamed and Anr.
1: "An agreement for licence can subsist and continue to take effect only so long as the licensor continues to enjoy a right, title or interest in the premises.
On the termination of his right, title or interest in the premises, the agreement for licence comes to an end.
If the licensor is a tenant, the agreement for licence terminates with the tenancy.
No tenant is ordinarily competent to grant a licence enduring beyond his tenancy.
On the termination of the licensor 's tenancy the licensee ceases to be a licensee.
" On facts however since the statutory tenancy too cam to an end before Section 15A was amended due to passing of the decree by the trial court the High Court distinguished this decision ignoring the material difference between the two enactments.
What was lost sight of was that the observation made by this Court in Damadilas 's case at page 2234 to the following effect, "We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only a personal right to remain in occupation, without ascertaining what his rights 465 are under the statute. . .
It is not possible to claim that the "sanctity" of contract cannot be touched by legislation.
Were on the language of the Section as it stood under that Act.
Therefore, in absence of any legislation touching the contract it appears to be settled that contractual tenant is left with no transferable right after determination of his tenancy.
In our opinion the learned judge in drawing an inference from Ludhichem Agencies (supra) that, 'a licence by a statutory tenant would continue to subsist 'lawfully till it was terminated and therefore if on the facts of that case the decree of ejectment against Saraswatibai had been made after 1.2.1973, then the licence in favour of the petitioners could have been considered to the subsisting on 1.2.1973,.
committed an error of law.
Section 15A reads as under: "15A (1)Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any con tract, where any person is on the lst day of February 1973, in occupation of any premises or any part thereof which is not less that a room as a licensee thereof, he shall on that date he deemed to have become, for the purposes of this Act, the tenant of the landlord in respect of the premises or part thereof in his occupation.
(2)The provisions of sub section (1) shall not affect in any manner the operation of sub section (1) of Section 15 after the date aforesaid.
" The section brought into force with effect from 1st February 1973 undoubtedly protected a licensee form eviction.
But it could operate in his favour only if he was in occupation of the premises on the date the Act came into force as a licensee.
It is, thus, not mere occupation but occupation as licensee which has been statutorily protected.
In other words the law would operate in favour of a person who held the premises under valid licence.
A valid licence could be created, as explained earlier, by a contractual tenant or by a statutory tenant if he continued at par with contractual tenant by operation of legislation.
In absence of any such provision in the Bombay Rent Act the licence created in favour of licensee by the statutory tenant could riot render the respondent, a licensee within the meaning of Section 15A of the Act.
466 Even a valid licence stands revoked in circumstances mentioned in Section 62 of the Indian Easements Act.
Its clause (a) reads as under: "62.
A license is deemed to be revoked (a)when, from a cause preceding the grant of it, the grantor ceases to have any interest in the property affected by the license:" The licence was granted by the contractual tenant in 1972.
But his tenancy had been determined by the landlord in 1966.
He thus had become statutory tenant.
He did not, in law had any assignable interest on the date he created the licence.
The grantor therefore from a cause preceding the grant had ceased to have any interest, and was incapable of creating any valid licence unless he could be deemed to be at par with the contractual tenant by any provision in the statute.
In absence of any such provision in the Bombay Rent Act the licence was invalid and stood revoked.
The occupation of the respondent thus was not as licensee within the meaning of Section 15A of the Act.
In the result this appeal succeeds and is allowed.
The order passed by the High Court in the Writ Petition is set aside and it shall stand dismissed.
In the circumstances of the case, however, there shall be no order as to costs.
V.M. Pretition dismissed.
| The appellant landlord determined the tenancy of the contractual tenant in 1966 and filed a suit for his eviction.
The suit was decreed ex parte.
In execution proceedings the licensee obstructed and claimed to be protected licensee under Section 15A of the Bombay Rent Hotel and Lodging House Rates Control Act, 1947.
The objection was rejected by the executing Court.
The appellate Court confirmed the same holding that even though the first licence was, created in 1966 before determination of the tenancy for a period of six years and the second licence having been created in 1972, it was not necessary to examine the validity of the first, as the second one was created when contractual tenant had become statutory tenant, and therefore, he was incapable of transferring any right or interest in favour of the licensee.
On appeal, the High Court upheld the finding of the appellate court that the licence was created in 1972 It also held that creation of licence by a statutory tenant, was valid.
Being aggrieved by the judgment of the High Court, the appellant landlord preferred an appeal, before the Court.
Allowing the appeal, this Court, HELD: 1.1 In the absence of any legislation touching the contract, a contractual tenant is left with no transferable right after determination of his tenancy.
(465 B) 1.2 The law would operate in favour of a person who held the premises under valid licence.
A valid licence could be created, by a contractual tenant or by a statutory tenant if he continued at par with contractual tenant by 461 operation of legislation.
(465 G) 1.3In the instant case, the licence was granted by the contractual tenant in 1972.
But his tenancy had been determined by the landlord in 1966.
He thus had become statutory tenant.
He did not, in law had any assignable interest on the date he created the licence.
The grantor, therefore, from a cause preceding the grant had ceased to have any interest, and was incapable of creating any valid licence unless he could be deemed to be at par with the contractual tenant by any provision in the Statute.
In absence of any such provision in the Bombay Rent Act, the licence was invalid and stood revoked.
The occupation of the respondent thus was not as licensee within the meaning of Section 15A of the Act.
(466 B C) Vasant Tatoba Hargude and Ors.
vs Dikkaya Muttaya Pujari: , approved.
Anand Nivas Private Ltd. vs Anandji Kalyanji 's Pedhi & Others, AIR 1965 SC 414; Jai Singh Morarji and others vs M/s Sovani (P) Ltd., ; ; Damadilal and others vs Parashram and Others, ; and Luadhichem Agencies vs Ahmed R. vs Peer Mohamed and Anr., 1, referred to.
|
ivil Appeal No. 3241 of 1979 etc.
From the Judgment and Order dated 24.7.1979 of the Allahabad High Court in Civil Misc.
Writ Petition No. 11370 of 1975.
M.V. Goswami and Dr. B.S. Chauhan for the Appellant.
Prithvi Raj, R.S. Rana and Ashok K. Srivastava for the Respondents.
The Judgment of the Court was delivered by NATARAJAN, J.
In these appeals by special leave, the appellants assail the interpretation given to certain provi sions of Section 4A of the U.P. Imposition of Ceiling on Land Holdings Act, 1960 as amended by U.P. Acts 18 of 1973 and 20 of 1976 (hereinafter referred to as the Act) by the Allahabad High Court.
Conflicting interpretations had been given by single judges on the relevant provisions and hence a reference was made in Kallu vs State of U.P. & Ors., [1979] A.L.I. 1113 to which connected writ petitions were tagged on to a Division Bench for an authoritative pro nouncement on two questions viz. 569 "1.
What is the true scope and effect of sub clause (b) of clause 'firstly ' of Section 4 A? 2.
In particular, whether the said sub clause would take in the entire plot only if two crops were grown in every inch of the land covered by it." The Division Bench, in its reported judgment Kallu vs State of U.P., has discussed the matter and answered the two questions as under: "Clause 'firstly ' of Section 4 A requires the Prescribed Authority to form an opinion as to whether, during the material Fasli years, irrigation facilities were available from such sources as are enumerated therein in respect of any crop.
The relevant consideration is merely the existence of irrigation facilities and not its actual utilisation.
This is under standably so because if facilities are avail able and yet a tenure holder neglects to make use of them there is no justifiable reasons why he should have an advantage over those who have been up and doing while he has chosen to be idle and asleep.
We have already held that 'land ' and 'plot ' cannot be equated.
If irri gation facilities of the nature mentioned in sub clause (a) of clause 'firstly ' of Section 4 A are available only to a part of the total area of which a plot is comprised it cannot be held that irrigation facilities were available for the entire plot.
In such cases, the Pre scribed Authority on a correct interpretation of subclause (a) of clause 'firstly ' will have to treat only that area of a tenure holder 's plot as 'irrigated land ' to which irrigation facilities were available.
We are consequently of the opinion that if a large plot consist partly of an area to which irrigation facili ties are available as also some to which irrigation facilities are not available only that area thereof will be covered by sub clause (a) of clause 'firstly ' to which irri gation facilities were in fact available.
Of course 'usar land ' as defined in the Act and determined in the manner provided by the Rules will have to be excluded even though irriga tion facilities may have been available to it.
Similarly other varieties of land exempted under Section 6 will have to be excluded from consideration.
As far as sub clause (b) of clause 'firstly ' is concerned, the 570 requirement is 'that at least two crops were grown in such land in any one of the aforesaid years ' (emphasis supplied) The expression such land, it is obvious, means land referred to in sub clause (b) is 'in ' and not 'over ' and consequently if the crops were grown in any portion of the area of a plot to which irriga tion facility was available under sub clause (a) of clause 'firstly ', the entire area to which irrigation facility was available shall have to be treated as land in which two crops were grown.
The requirement of sub clause (b) of clause 'firstly ' of Section 4 A is not that every inch of the land to which irrigation facilities were available in the material years should have grown double crops.
To take a hypothetical example, if to a plot of land consisting of 50 acres, irrigation facilities were available to an area of 20 acres and on any portion of such 20 acres at least two crops were grown in any of the years 1378 Fasli to 1380 Fasli, the entire area of 20 acres to which irrigation facilities were available will have to be treated as irrigated land for the purpose of sub clause (b) of clause 'firstly ' of Section 4A.
The word 'in ' is one of common use.
If it is said that an individual lives in a particular building or locality it does not convey that he is in occupation of the entire building or locality.
Similarly when it is said that one has grown threes in a piece of land or raised crops therein, it does not signify that he has grown trees or raised crops over the entire land.
When the legislature by amending the Act made availability of irrigation facilities the basis for determination of the ceiling area and surplus land instead of the quality of the land it must have had some purpose in mind.
During the last decade farm technology and agricultural science have made rapid progress and human ingenuity coupled with labour and application of scientific know how has suc cessfully converted even deserts into green belts provided water was available.
Applica tion of scientific methods has made possible improvement in soil quality and its fertility.
It is not unreasonable to infer that when the Act was amended the legislature intended that if any land has irrigation facilities avail able to it and is not 'usar land ' and in some part of it 'dofash ' crops have in fact been raised in any of the relevant 'fasli ' years, a willing and hard working tenure holder by application of modern agricultural appliance and fertilisers can improve the productivity of the land and consequently no premium should 571 be available to those who fail to do so.
In this view of the matter, to take a concrete case to compute the area of a tenure holder 's irrigated land ' under clause 'firstly ' of Section 4A Prescribed Authority must find out the area of land to which irrigation facili ties of the prescribed nature were available for any crop during the relevant Fasli years, exclude therefrom 'usar land ' etc., and if it finds that over any part of such area at least two crops were grown it must hold the entire area of 'irrigated land '.
Such an interpreta tion resolves the problem which the Prescribed Authority would be faced with in determination of the 'irrigated land ' of a tenure holder where records reveal the growing of the crops on varying areas of his holding during the material Fasli Years." "For the reasons given, our answer to question No. 1, passed by the learned single judge is as follows: If in any portion of an area of plot or plots to which during the Fasli Years 1378 to 1380 irrigation facilities were available and over any portion of such area double crop had in fact been sown, the entire area 'of the plot to which irrigation facilities were available will be covered by clause 'firstly ' of Section 4 A since both the condition laid in subclause (a) and (b) will be complied with.
" "Our answer to question No. 2 is in the nega tive.
In as far as a contrary view has been taken with regard to the scope of sub clauses (a) and (b) of clause 'firstly ' of Section 4 A of the Act in Gasi Ram vs State of U.P., (supra) and similar opinion expressed in Surrinjpal Singh vs State of U.P., and Sitaram Tyagi vs State of U.P., (Writ No. 8115 of 1975 decided on 22nd September, 1978, 1978 AWC SCC 114 page 90 have not been correctly decided.
" Thereafter, the writ petitions were placed before single judges for decision on merits and the petitions came to be dismissed.
In Civil Misc.
Writ Petition No. 11370 of 1975 it was held that plot Nos.
595 and 224 belonging to the peti tioner had been rightly treated as irrigated land in their entirety for purposes of computation under the Act.
Against that judgment, Civil Appeal No. 3241 of 79 has been 572 filed.
In the other appeal which arises from the dismissal of Civil Misc.
Writ Petition No. Nil of 84, leave has been granted confined only to Plot No. 466.
The writ petition was dismissed following the ratio in Kallu vs State of U.P., (supra).
Though the appeals are directed against the dis missal of the two writ petitions, the real challenge in the appeals is to the ratio laid down by the Division Bench in Kallu vs State of U.P., (supra).
The appellants dispute the correctness of the view taken by the Division Bench and would contend that in order to classify a land as irrigated land, there should be evidence of 'assured irrigation and secondly the two crops in a fasli should have been raised on the entire extent of the land and not in a portion of the land alone.
The interpretation of the terms of Section 4 A of the Act assume importance because 'ceiling area ' and 'surplus land ' under the Act have to be computed on the basis of the 'irrigated land ' held by a tenure holder.
Originally, the 'ceiling area ' under the Act was to be determined on the basis of 'fair quality land '.
However, by amendments intro duced by U.P. Act 18 of 1973 and U.P. Act 20 of 1976, 'cei ling area ' and 'surplus land ' are to be determined with reference to the assured irrigation facilities available to land held by a tenure holder.
We may now have a look at the relevant portions of Section 4 A of the Act.
They read as under: "4 A. Determination of irrigated land.
The prescribed authority shall examine the relevant khasras for the yeas 1378 Fasli, 1379 Fasli and 1380 Fasli, the latest village map and such other records as it may consider necessary, and may also make local inspection where it considers necessary, and thereupon if the prescribed authority is of opinion firstly, (a) that irrigation facility was available for any land in respect of any crop in any one of the aforesaid years; by (i) any canal included in Schedule No. 1 of irrigation rates notified in Notification No. 1579/W/XXIII 62 W 1946, dated March 31, 1953, as amended from time to time; or 573 (ii) any lift irrigation canal; or (iii) any State tube well or a private irriga tion work; and (b) that at least two crops were grown in such land in any one of the aforesaid years; or secondly, that irrigation facility became available to any land by a State Irrigation work coming into operation subsequent to the enforcement of the Uttar Pradesh Imposition of Ceiling of Land Holdings (Amendment) Act, 1972, and at least two crops were grown in such land in any agricultural year between the date of such work coming into operation and the date of issue of notice under Section 10; or thirdly, (a) that any land is situated within the effective command area of a lift irriga tion canal or a State tube well or a private irrigation work; and (b) that the class and composition of its soil is such that it is capable of growing at least two crops in an agricultural year; then the Prescribed Authority shall determine such land to be irrigated land for the purpose of this Act.
EXPLANATION I. (Omitted) EXPLANATION II.
(Omitted) EXPLANATION III.
(Omitted) On a reading of Section 4 A, it may be seen that the Legislature has prescribed different kinds of tests on the basis of which the authorities have to determine whether a land is irrigated land or not for the purpose of determining the ceiling area of a tenure holder.
The two broad tests are (1) availability of irrigation facilities and (2) the factum of raising or the capability of the soil for raising atleast two crops in an agricultural year.
We may now examine the merits of the appellant 's conten tions.
The statute has been enacted "to provide for the imposition of ceiling on land holdings in Uttar Pradesh and certain other matters connected ,therewith.
" The preamble to the Act reads as under: 574 "Whereas it is necessary in the interest of the community to ensure increased agricultural production and to provide land for landless agricultural labourers and for other public purposes as best to subserve the common good.
And whereas a more equitable distribution of land is essential.
And, therefore, it is expedient to provide for the imposition of ceiling on land holdings in Uttar Pradesh for the aforementioned purposes.
" The Act is thus a piece of social legislation for achieving the several objectives set out in the preamble.
In order to give greater thrust to the objects underlying the Act, the Legislature has changed the basis for reckoning the ceiling area from that of 'fair quality land ' to that of "assured irrigation facilities" available to a land.
Coming now to the specific provisions of Section 4 A dealt with by the High Court, it may be seen that in order 'to form an opinion whether irrigation facility was avail able for any land from one of the sources mentioned in sub clauses (i), (ii) and (iii) in respect of any crop in anyone of the aforesaid years viz., Faslis 1378 to 15380, the Prescribed Authority is enjoined to examine the Khasras for those three Fasli years, the village map, other relevant records considered necessary and also to make a local in spection whenever it is necessary.
Hence there is no scope for contending that a Prescribed Authority may form his opinion without reference to relevant material, in an arbi trary or capricious manner, to the detriment of a tenure holder as regards the availability of assured irrigation facility to a land from one of the enumerated sources.
Consequently, there is no merit in the first contention of the appellant that in addition to the materials and records set out in the sub clause, there must be independent evi dence of assured irrigation facility before ever a Pre scribed Authority can form an opinion about a land having assured irrigation facility.
As regards the second contention relating to sub clause (b), the clause refers only to the growing of atleast two crops in a land found to be having assured irrigation facil ity in any one of the relevant years.
The sub clause does not contemplate the raising of two crops on the entire extent of the land.
The classification has to be made with reference to the potentiality of the land to yield two crops in one Fasli year and not on the basis of the actual raising of two crops on the entire 575 extent of the land.
Therefore, sub clause (b) cannot be read so as to mean that two crops should have been grown on the entire extent of a land having irrigation facility for classifying the land as 'irrigated land ' as it would have the effect of limiting the operation of the sub clause contrary to the legislative intent.
The High Court has taken the view that when the Legislature made amendments to the Act, it must have had in mind the advancement that has been made in agricultural science and farm technology and by reason of it a tenure holder can overcome hurdles and raise two crops in a year over the entire extent of a land having irrigation facility.
We need not go as far as that.
The normal presumption, in the absence of contra material, would be that the quality and content of soil of a land would be uniform throughout its extent.
Such being the case, if a tenure holder is able to raise two crops in a year in a portion of the land, then it would be logical to hold that the other portions of the land also would have the capacity to yield two crops if the tenure holder had utilised the entire extent to raise two crops instead of utilising a portion of the land alone.
The raising of two crops even on a portion of the land will prove, in the absence of material to show poor quality of soil in portions of the land due to salinity etc.
, the uniform nature and content of the soil of the entire land.
The High Court was therefore right in holding that the Prescribed Authority can treat a land, having assured irrigation facility, as 'irrigated land ' if the tenure holder had raised two crops even m a portion of the land during anyone of the prescribed years and that it is not necessary that the raising of the two crops should have been made on the entire extent of the land in order to classify the land as 'irrigated land '.
As the learned single judges have dismissed the writ petitions on the ground that the lands in question satisfy the tests laid down by the Division Bench in Kallu vs State of U.P., (supra), we do not find any merit in these appeals.
Consequently, both the appeals are dismissed but there will be no order as to costs.
R.S.S. Appeals dis missed.
| Clause 3(e) of Para 4 of the Swatantrata Sainik Samman Pension Scheme of the Government of India entitles a freedom fighter to pension for having become permanently incapaci tated during firing or lathi charge in the freedom struggle.
The appellant applied for grant of pension on the ground that he had suffered permanent loss of vision in his left eye due to brutal lathi charge by the police against freedom fighters.
His claim of permanent loss of vision in the left eye was duly certified by Government doctors.
The District Collector after making a detailed enquiry, certified the claim of the appellant as a bona fide one and recommended his case for grant of pension.
The State Government also appended their recommendation.
The Ministry of Home Affairs, however, declined to grant pension on the view that loss of vision in one eye did not amount to permanent incapacita tion.
A single Judge of the High Court dismissed appellant 's writ petition and a writ appeal against the said order was also dismissed by a Division Bench.
In this appeal by special leave, it was contended for the respondents that the incapacitation under clause 3(e) must not only be permanent but it must also be a total one, and since the appellant had not lost vision in both the eyes the incapacitation, though permanent, was only partial and not total; and that the petitioner had not been able to produce any documentary evidence from official records of the relevant period in support of his claim.
721 Allowing the appeal, HELD: 1.1 The words used in clause 3(e) of Para 4 of the Pension Scheme are "permanently incapacitated" and not 'permanently totally incapacitated".
The measure of test thus laid down by the clause is the permanent nature of the incapacitation and not the total nature of the incapacita tion.
If clause (e) were to be interpreted to include total incapacitation then a freedom fighter who has lost a leg or an arm cannot claim payment of pension on the basis of permanent incapacitation inasmuch as the incapacitation suffered by him is not of both the legs or both the arms.
It would be height of injustice to freedom fighters to construe clause (e) in the said manner.
1724F; 725A B] 1.2 In view of the certificate issued to him by the Government doctors that the appellant had suffered permanent incapacitation of his left eye due to lathi blows received by him during the freedom struggle and the State Government authorities having, after due enquiry, accepted the bona fides of the appellant 's claim and recommended his case for grant of pension the respondents were not justified in refusing to grant him pension under clause (e) of the Scheme.
[724G, 726C, 725E] 2.
No one can really expect official records to have been preserved for a period of 40 years to prove the treat ment given to a freedom fighter for the injuries sustained by him during the freedom struggle.
Hence, the objection relating to non production of official records of the reley ant period by the appellant to prove the sustainment of injury by him .deserves outright rejection as well as out right condemnation.
[726B C]
|
kes it clear that the family of Raja Dhrub Singh was governed by the Benaras School of Hindu Law and not by the Mithila School.
Further, the material on record is not sufficient to lead to the conclusion that the institution of putrika putra was in vogue during the relevant time even amongst persons governed by the Mithila School.
Throughout India including the area governed by the Mithila School, the practice of appointing a daughter to raise an issue (putrika putra) had become obsolete by the time Raja Dhrub Singh was alleged to have taken Raja Jugal Kishore Singh as putrika putra.
In fact Raja Dhrub Singh as found by the High Court, had not appointed his daughter as a putrika to beget a putrika putra for him.
It follows that the appellants who claim the estate on the above basis cannot succeed.
[62F G, 63F] The applicability of the above rule to Nambuderies of Kerala is however not decided.
[62G H] 4 & CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
114 119 of 1976.
From the Judgment and Decree dated 15 12 1972 of the Patna High Court in F.A. Nos. 130, 85, 86, 87, 131, and 134 of 1966.
D. V. Patel, section section Johar and section N. Mishra for the Appellants in CA Nos.
114 119 of 1976.
V. M. Tarkunde, U. R. Lalit, K. K. Jain, D. Goburdhan and P. P. Singh for Respondents 5 22 in CA Nos.
114 115/76.
L. M. Singhvi (Dr.), U. P. Singh and section section Jha for the Respondents in CA 114 119/76.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The above six appeals by certificate and Civil Appeals Nos. 494 496 of 1975 arise out of a common judgment dated December 15, 1972 of the High Court of Judicature at Patna passed in First Appeals Nos. 85 to 87, 130, 131 and 134 of 1966.
After the above six appeals and Civil Appeals Nos. 494 496 of 1975 were heard together for sometime, we found that the above six appeals i.e. Civil Appeals Nos. 114 119 of 1976 could be disposed of by a separate judgment.
We, therefore, proceeded with the consent of the learned counsel for the parties to hear fully Civil Appeals Nos. 114 119 of 1976.
By this common judgment, we propose to dispose of the above six appeals.
The further hearing of Civil Appeals Nos. 494 496 of 1975 is deferred.
The question which arises for our consideration in the above Civil Appeals Nos.
114 119 of 1976 is whether the appellants and others either claiming under the appellants or alongwith them are entitled to an estate popularly known as 'Bettiah Raj ' which was under the management of the Court of Wards, Bihar.
The last male holder of the said estate, Maharaja Harendra Kishore Singh Bahadur died issueless on March 26, 1893 leaving behind him two widows, Maharani Sheo Ratna Kuer and Maharani Janki Kuer.
Maharani Sheo Ratna Kuer who succeeded to the estate of Maharaja Harendra Kishore Singh on his death as his senior widow died on March 24, 1896 and on her death Maharani Janki Kuer became entitled to the possession of the estate.
Since it was found that Maharani Janki Kuer was not able to administer the estate, its management was taken over by the Court of Wards, Bihar in the year 1897.
Maharani Janki Kuer who was a limited holder of the estate died on November 27, 1954.
On her death, disputes arose amongst several persons who were parties to the suits 5 out of which the above appeals arise regarding the title to the 'Bettiah Raj ' estate.
The State of Bihar, however, claimed that none of the claimants was the heir of the last male holder and that since there was no heir at law as such at the time when the limited estate of Maharani Janki Kuer came to an end on her death, the entire estate alongwith the net income which the Court of Wards had realized from it became the property of the State of Bihar by virtue of the rule of escheat.
We shall refer to the respective submissions of the parties at a later stage.
It is not disputed that Raja Ugra Sen, the founder of the 'Bettiah Raj ' was governed by the Benares School of Mitakshara law as his family had migrated from the South Western part of the present State of Uttar Pradesh to the State of Bihar although in the course of the pleadings, there is a suggestion that the family was also being governed by the Mithila School of Mitakshara which was in force in the State of Bihar.
The question for decision in the instant case may no doubt ultimately appear to be a simple one but in order to determine the said question, it is necessary to relate the facts which spread over nearly three centuries and refer to a number of Smritis, commentaries and decisions.
The major part of the estate of 'Bettiah Raj ' is situated in Champaran District of the State of Bihar.
Some of its properties are situated in the State of Uttar Pradesh also.
The principality known as 'Bettiah Raj ' was established by Raja Ugrasen in or about the middle of the 17th century.
It was then known as Reasut of Sirkar Champaran consisting of four pergunnahs known as Majhwa, Simrown, Babra and Maihsi.
It was an impartible estate.
Raja Ugrasen was succeeded by his son, Raja Guz Singh in the year 1659.
Raja Dalip Singh, son of Raja Guz Singh came to the gaddi in the year 1694 and he was succeeded by his son, Raja Dhrub Singh in the year 1715.
Raja Dhrub Singh died in 1762 without a male issue but leaving a daughter by name Benga Babui, who had married one Raghunath Singh, a Bhumihar Brahmin of Gautam gotra.
It is said that he had another daughter also, but it is not necessary to investigate into that fact in these cases.
On the death of Raja Dhrub Singh who was a Jethoria Brahmin of the Kashyap gotra, his daughter 's son (Benga Babui 's son), Raja Jugal Kishore Singh entered into possession of the estate of 'Bettiah Raj ' and was in possession thereof at the date when the East India Company assumed the Government of the province.
On the assumption of the Government of Bengal by the East India Company, Raja Jugal Kishore Singh offered some resistance to their 6 authority and the Company 's troops were despatched to enforce his submission.
Raja Jugal Kishore Singh fled into the neighbouring State of Bundelkhand and his estates were seized and placed under the management of the Company 's officers.
During the absence of Raja Jugal Kishore Singh, Sri Kishen Singh and Abdhoot Singh who were respectively sons of Prithi Singh and Satrajit Singh, younger brothers of Raja Dalip Singh, found favour with the East India Company.
After some negotiations, the Government decided to allot the zamindari of Majhwa and Simrown pergunnahs which formed part of 'Bettiah Raj ' estate to Raja Jugal Kishore Singh and to leave Babra and Maihsi in possession of Srikishen and Abdhoot Singh.
On his return, Raja Jugal Kishore Singh accepted the decision of the East India Company which was formally announced on July 24, 1771 in the following terms: "The Committee of Revenue having approved of the reinstatement of Raja Jugal Kishore, we have now granted to him the zamindari of Majhwa and Simrown pergunnahs, and have settled his revenue as follows. " Accordingly, Raja Jugal Kishore Singh executed a kabulyat in accordance with the terms imposed by the Government under the grant and got into possession of pergunnahs Majhwa and Simrown.
He was again dispossessed in the following year as he failed to pay the Government revenue.
Srikishen and Abdhoot refused to execute a kabulyat for the two other pergunnahs alone and they were also dispossessed.
The entire Sirkar thus passed into the possession of the Government and was held by farmers of revenue on temporary settlements until the year 1791.
Raja Jugal Kishore Singh received an allowance for main tenance from the Government and died in or about the year 1783 leaving a son, Bir Kishore Singh.
Thereafter on October 10, 1789, Mr. Montgomerie, the then Collector, initiated fresh proceedings regarding the settlement of Sirkar Champarun, the estate in question, and on September 22, 1790, the Governor General in Council (Lord Cornwallis) addressed the following letter to the Board of Revenue: "It appearing from our proceedings that the late Raja Jugal Kishore was driven out of the country for acts of rebellion, and upon his being allowed to return into the company 's dominions, that the late President and Council thought proper to divide the zamindari of Champarun, allotting to Jugal Kishore the districts of Majhwa and Simrown, and to Srikishen Singh and Abdhoot Singh those of Maihsi and Babra, we direct that the heirs of the late Raja Jugal Kishore and Srikishen Singh and Abdhoot Singh be respectively restored to the possession and management of the 7 above districts (with the exception of such parts thereof as may belong to other zamindars or taluqdars, being the proprietors of the soil, who are to pay their revenues immediately to the Collector of the district), and that the decennial settlement be concluded with them agreeably to the General Regulations.
" All the parties were dissatisfied with the above decision.
Bir Kishore Singh who claimed to be entitled to the entire Sirkar Champarun, however, in obedience to the orders of the Governor General took possession of the two pergunnahs Majhwa and Simrown allotted to him and gave in his agreements for the settlement of them and at the same time prayed that he might be put into possession of the other two pergunnahs also.
Srikishen and Abdhoot also claimed the entire estate on the ground that Raja Jugal Kishore Singh was not a member of the family and had no title to the estate as "by the Hindu Shastra the female branch is not entitled to a share of the estate, much less the whole.
" They accordingly at first refused to give in their kabulyats for the pergunnahs Maihsi and Babra; but on Mr. Montgomerie 's advice they ultimately did so under protest and were placed in possession of those two pergunnahs.
Separate dowl settlements of Government revenue on the mahals in pergunnahs Majhwa and Simrown and on those in pergunnahs Maihsi and Babra were made with and accepted by Bir Kishore Singh and by Srikishen and Abdhut respectively.
The Sirkar Champarun was thus divided de facto into distinct zamindaris to be held by the grantees at revenues allotted to each of them separately.
Then started the first phase of judicial proceedings which even now continue to be devil the estate which Raja Bir Kishore Singh acquired pursuant to the orders of Governor General in Council.
On the 6th day of May, 1808, Ganga Prasad Singh, the eldest son of Raja Srikishen Singh, who had died by then, instituted a suit in the Zila Court of Saran claiming upon a plea of title by inheritance to recover from Raja Bir Kishore Singh possession of pergunnahs Majhwa and Simrown and certain salt mahals all of which were formerly part of Sirkar Champarun on the following allegations; that in the year 1762 upon due consideration of right to succession as established in the family, Raja Dhrub Singh had made over while he was still alive the rajgy of the Sirkar of Champarun to his father, Raja Srikishen Singh, son of Prithi Singh and at the same time executed in his favour a deed of conveyance of the rajgy and the milkeut of the estate comprising the whole of the Sirkar aforesaid and gave him entry into the zamindari.
He further alleged that when in the year 1763 the British Government was established, the lands comprised in the said Sirkar were attached but that Raja Srikishen Singh continued to receive the malikana and other rights annexed to 8 the zamindari upto 1770 and that in the following year, the settlement of the whole Sirkar was made with him and from the year 1772 to 1790 although the business of the Sirkar was conducted by the Amins and Mootahdars appointed for the purpose and Commissioner appointed temporarily for the collection of the revenue and at other times, his father, Raja Srikishen received the malikana.
He then proceeded to state the manner in which, upon the formation of the decennial settlement in 1790, Raja Srikishen was deprived of the possession of the pergunnahs which he claimed to recover and alleged certain fraudulent practices whereby possession had been obtained by Raja Bir Kishore Singh.
The suit was transferred from the Zillah Court of Saran to the Provincial Court of Patna.
The suit was contested by Raja Bir Kishore Singh.
In the course of the written statement, his counsel inter alia pleaded: "The whole of the above statement of plaintiff is both false and fraudulent for the real fact is that the Majhwa, Simrown, Maihsi and Babra pergunnahs forming the Champarun Sirkar were the rajgy, the zamindary, and the milkeut of Raja Dhrub Singh, an ancestor of my client and the said Raja held the sole possession of them without foreign interference or participation.
It is necessary to state that he had no son born to him; but Raja Jugal Kishore Singh, the father of my client was his grandson and the issue of a daughter he had by his senior Rani, Raja Dhrub Singh aforesaid having adopted Raja Jugal Kishore Singh, the father of my client, at the time of his birth, conducted the ceremonies of his adoption and marriage in the usual manner, and having after wards given him the tilak he established him upon the rajgy of the whole of the Champarun Sirkar".
The Provincial Court dismissed the suit by its judgment dated December 29, 1812 solely on the ground of limitation whereupon Raja Dindayal Singh (the legal representative of the original plaintiff, Raja Ganga Prasad Singh, who died in the meanwhile) filed an appeal before the Sadar Diwani Adalat during the pendency of which Raja Bir Kishore Singh died (in 1816) and was succeeded by his elder son, Raja Anand Kishore Singh.
The appeal was dismissed on July 9, 1817.
In its elaborate judgment, the Sadar Diwani Adalat rejected the case of the plaintiff in that suit relating to the conveyance of the rajgy by Raja Dhrub Singh in favour of Raja Srikishen Singh holding that the document relied upon was a forgery.
The above decision of the Sadar Diwani Adalat was affirmed by the Judicial Committee of the Privy Council in Rajah Dundial Singh & Ors.
vs Rajah Anand 9 Kishore Singh(1) by its judgment dated December 5 and 7, 1837.
The Judicial Committee affirmed the judgment of the courts below on the sole ground of limitation.
Raja Anand Kishore Singh continued on the Gaddi and in 1837, the hereditary title of Maharaja Bahadur was conferred upon him.
Upon his death in 1838, without any issue, he was succeeded by his younger brother, Maharaja Bahadur Nawal Kishore Singh.
Maharaja Bahadur Nawal Kishore Singh had two sons, Rajendra Kishore Singh and Mahendra Kishore Singh and upon his death in the year 1855, Maharaja Bahadur Rajendra Kishore Singh succeeded to the estate.
Maharaja Bahadur Rajendra Kishore Singh died in 1883 and his brother Mahendra Kishore Singh having pre deceased him, he was succeeded by Maharaja Bahadur Harendra Kishore Singh who as stated earlier was the last male holder of the estate and died issueless on March 26, 1893 leaving behind him two widows, Maharani Sheo Ratna Kuer and Maharani Janki Kuer.
So great was the esteem in which Maharaja Harendra Kishore Singh was held by the Government that the Lt. Governor of Bengal came to Bettiah personally to offer his condolence.
The occasion was used by Raja Deoki Nandan Singh (one of the great grandsons of Raja Srikishen Singh) to put forward his claim to the Bettiah Raj.
On April 11, 1893, he presented a memorial to the Lt. Governor claiming that the late Maharaja was his "Gotra Sapinda".
In the memorial, he stated thus: "Raja Dhrub Singh had no issue.
Therefore, according to the provisions of the Hindu Law he converted his daughter 's son Jugal Kishore Singh who belonged to the Gautam Gotra to Kashyap Gotra and then adopting him as his son appointed him to be his successor.
The Maharaja Bahadur was in the 5th lineal descent from Jugal Kishore Singh, the petitioner is in the 4th lineal descent from Raja Srikishen Singh.
That under the provisions of Kulachar law Your Honour 's humble petitioner is the legal heir and successor of the deceased Maharaja and. fully capable of managing the Raj." A reading of the above extract of the memorial shows that the case put forward by Raja Deoki Nandan Singh was directly contrary to the case put forward by his predecessor in the suit of 1808.
Whereas in the earlier suit, his predecessor had pleaded that Raja Jugal Kishore Singh was the daughter 's son of Raja Dhrub Singh and was not, therefore a member of the family of Raja Dhrub Singh, Raja Bir Kishore Singh had pleaded that Raja Jugal Kishore Singh having been adopted by 10 Raja Dhrub Singh was a member of the family of Raja Dhrub Singh.
In the above said memorial, it was pleaded by the successor of the plaintiff in the suit of 1808 that Raja Jugal Kishore Singh who belonged to Gautam Gotra had been adopted by Raja Dhrub Singh who belonged to Kashyap Gotra and had been appointed by him as his successor.
On the death of Maharaja Harendra Kishore Singh, the estate came into the possession of his senior widow, Maharani Sheo Ratna Kuer.
Within about two years from the date of the death of Maharaja Harendra Kishore Singh, a suit was instituted in Title Suit No. 139 of 1895 on the file of the Subordinate Judge of Tirhoot by Ram Nandan Singh, fifth in descent from Raja Ganga Prasad Singh (who was the plaintiff in the suit of 1808) against Maharani Sheo Ratna Kuer claiming the estate of Raja Harendra Kishore Singh.
The main pleas raised by him in the suit were that the succession to the Bettiah Raj was governed by the custom of male linear primogeniture; that females were excluded from succeeding to the Raj; that Raja Jugal Kishore Singh had been adopted by Raja Dhrub Singh as his son and that he being an agnate was entitled to the possession of the estate of Maharaja Harendra Kishore Singh.
Another suit viz.
Title Suit No. 108 of 1896 was filed by Girja Nandan Singh whose father Deo Nandan Singh had submitted the memorial to the Lt. Governor of Bengal on April 11, 1893.
This Girja Nandan Singh was fourth in descent from Doostdaman Singh, a younger brother of Raja Ganga Prasad Singh and while supporting the stand of the plaintiff, Ram Nandan Singh in the Title Suit No. 139 of 1895 on the point of Raja Jugal Kishore 's adoption by Raja Dhrub Singh and exclusion of females from succession to the Raj, he pleaded that he was entitled to succeed to the Raj by the rule of propinquity, as all the branches of the family were joint in status, there being no custom of male linear primogeniture as put forward in the suit of Ram Nandan Singh i.e. in the Title Suit No. 139 of 1895.
Both the suits were contested by Maharani Sheo Ratna Kuer.
During the pendency of the two suits, she died and Maharani Janki Kuer, the second widow of Maharaja Harendra Kishore Singh was brought on record as the defendant in both the suits.
Title Suit No. 139 of 1895 was decreed by the trial Court but on appeal by Maharani Janki Kuer, the said decree was set aside and the suit was dismissed by the High Court of Judicature at Fort William in Bengal by its judgment dated April 14, 1889.
Against the decree of the High Court, Ram Nandan Singh filed an appeal before the Privy Council.
The Privy Council affirmed the decree of the High Court in Ram Nandan Singh vs Janki Kuer(1) The Privy 11 Council held that the two pergunnahs Majhwa and Simrown which were granted pursuant to the orders of Lord Cornwallis to Raja Bir Kishore Singh became the separate property of Raja Bir Kishore Singh free from any coparcenery right of succession of the branches of the family then represented by Srikishen and Abdhoot.
They held that from the letter of Lord Cornwalis dated September 22, 1790 extracted above, it was clear that Raja Jugal Kishore Singh had been driven out from the country for the acts of rebellion and that the Government was at liberty to divide the Sirkar into two portions and to grant one portion to Raja Bir Kishore Singh and another portion to Srikishen and Abdhoot in direct exercise of sovereign authority.
It further held that the grants so made by the Government proceeded from grace and favour alone.
It was further held that the estate which was granted in favour of Raja Bir Kishore Singh became his separate and self acquired property though with all the incidents of the family tenure of the old estate as an impartible Raj Consequently, the plaintiff was not entitled to claim it on the basis of the custom of male linear primogeniture.
The Privy Council also held that there was no inconsistency between a custom of impartibility and the rights of females to inherit and therefore, Maharani Sheo Ratna Kuer and after her Maharani Janki Kuer could succeed to the estate of their husband, Maharaja Harendra Kishore Singh and remain in possession thereof.
The Privy Council, however, declined to decide the question whether Raja Jugal Kishore Singh had been adopted by his maternal grandfather, Raja Dhrub Singh or became his son and a member of his family by some customary mode of affiliation i.e. as Putrika Putra and left the question open in the following terms: "There remains only the issue whether Raja Jugal Kishore was adopted by his maternal grandfather Raja Dhrub Singh, or became his son and a member of his family by some customary mode of affiliation.
The determination of this issue against the appellant would be fatal to his case, because in that case he would not be able to prove that he was of the same family as the late Sir Harendra.
The learned judges have not found it necessary for the decision of the present case to decide this issue, and their Lordships agree with them in thinking that it is the better course not to do so, because the same issue may hereafter arise for decision between different parties.
" The other suit i.e. Title Suit No. 108 of 1896 which was filed by Girja Nandan Singh was dismissed by the trial court and the appeal filed by him before the High Court of Judicature at Fort William in Bengal (Calcutta) was also dismissed on April 14, 1889, the same day on which the High Court had disposed of the appeal in the other suit.
12 A few years later, one Bishun Prakash Narain Singh, fifth in descent from Abdhoot Singh also filed a suit in Title Suit No. 34 of 1905 in the court of the Subordinate Judge of Chapra, claiming title to the estate of Maharaja Harendra Kishore Singh on the footing that his branch of the family was joint in status with Maharaja Harendra Kishore Singh and so he was entitled to succeed to him under the rules of survivorship.
That suit failed in all the courts including the Privy Council whose judgment is reported in Rajkumar Babu Bishun Prakash Maraain Singh vs Maharani Janki Kuer & Ors.(1) The genealogy of the family relied on in the above suit which is found at page 858 in 24 Cal.
W. N. is given below to facilitate the understanding of the relationship amongst the parties: Raa Ugrasen Singh (died 1659) | Raja Gaj Singh (died 1694) | | | | Raja Daleep Singh Pirthi Singh Satrajit Singh (died 1715) (dead) (dead) | | | | | Bishun Prakash Raja Dhrub Singh Srikishen Singh Narayan Singh (died 1762) (dead) (Plaintiff) | | (Fifth in descent | | from Satrajit | | Singh) Daughter 's son (Putrika Putra) | | Raja Jugal Kishore Ram Nandan Girja Nandan Singh (died 1785) Singh Singh | (Defendant (Defendant | No. 2) No. 3) Raja Jugal Kishore (Fifth in (Fourth in Singh (died 1816) descent from descent from | Srikishen Singh) Srikishen Singh) | | | Maharaja Anand Maharaja Nawal Kishore Singh Kishore Singh (died 1838) (died 1855) | | | Maharaja Rajendra Mahendra Kishore Singh Kishore Singh (died 1883) (died before his | brother) | Maharaja Sir Harendra Kishore Singh, who died childless on 26th March, 1893, leaving (1) Rani Sheoratan Koer died (2) Rani Janki Koer Defendant No. 1 13 It should be mentioned here that in none of the suits Title Suit No. 139 of 1895, Title Suit No. 108 of 1896 and Title Suit No. 34 of 1905 referred to above, the question whether Raja Jugal Kishore Singh had become a member of the family of Raja Dhrub Singh either by virtue of adoption or as Putrika Putra (appointed daughter 's son) was decided even though the plaintiff in each of the above suits had raised such a plea.
As mentioned earlier after Maharani Janki Kuer succeeded to the estate of Maharaja Harendra Kishore Singh on the death of Maharani Sheo Ratna Kuer, the management of the estate was taken over by the Court of Wards, Bihar in 1897, a declaration being made that Maharani Janki Kuer was incompetent to manage the estate.
Since the properties of the estate were spread over both in the State of Bihar and in the State of Uttar Pradesh, the Bihar properties came to be managed by the Court of Wards, Bihar while those in Uttar Pradesh were being managed by the State of Uttar Pradesh through the Collector of Gorakhpur.
Maharani Janki Kuer took up her residence at Allahabad where she eventually died childless and intestate on November 27, 1954.
Shortly after her death on December 6, 1954, the State of Bihar made an application before the Board of Revenue, Bihar praying that the estate of Maharaja Harendra Kishore Singh which was held by Maharani Janki Kuer as a limited heir and managed by the Court of Wards and the Government of Uttar Pradesh, as stated above should be released from the management of Court of Wards and handed over to the Bihar State Government since the State of Bihar had become entitled to the estate by virtue of the rule of escheat, as there was no heir of the last male holder who could lay claim to it.
Upon this application, the Board of Revenue directed the issue of a Notification which was published in the Official Gazette calling upon interested parties to prefer their claims, if any, to the properties comprised in the estate.
In pursuance of this Notification about one dozen persons came forward, some of whom claimed to be entitled to the stridhana and personal properties of late Maharani, such as cash, jewellery etc.; some others claimed to be entitled to maintenance allowance out of the estate while some others claimed the entire estate on the footing that the title to the estate had passed to them by succession which opened upon the death of Maharani Janki Kuer.
Amongst the persons who thus claimed title to the estate, mention may be made of Bhagwati Prasad Singh of village Baraini, in the District of Mirzapur (Uttar Pradesh) and Suresh Nandan Singh of Sheohar.
The Board of Revenue, however, declined to release the estate in favour of any of the claimants and on January 18, 1955 passed an order to the effect that the Court of Wards would retain 14 charge of the properties comprised in the estate until the dispute as to its succession was determined by a competent civil court.
Thereafter one Ram Bux Singh instituted a suit being Title Suit No. 3 of 1955 on the file of the Civil Judge at Varanasi claiming title to the estate.
That suit was, however, allowed to be withdrawn with the permission of the court.
Subsequently came to be instituted Title Suit No. 44 of 1955 on the file of the Subordinate Judge at Patna by Suresh Nandan Singh.
On his death, his son, Davendra Nandan Singh and his widow Ram Surat Kuer were brought on record as plaintiffs.
That suit was dismissed alongwith two other suits with which alone we are concerned in these appeals reference to which will be made hereafter.
Since the plaintiffs in the above suit were also defendants in the said two other suits, the plaintiffs therein filed three First Appeals Nos. 169, 170 and 171 of 1966 before the High Court of Patna against the decrees passed in the three suits.
All the aforesaid three appeals were dismissed for non prosecution by the High Court.
We are, therefore, not concerned with the claim of the plaintiffs in that suit in these appeals.
The two other suits that were filed were Title Suit No. 25 of 1958 and Title Suit No. 5 of 1961.
Title Suit No. 25 of 1958 was filed by Ambika Prasad Singh and others claiming the estate on the basis that Raja Jugal Kishore Singh succeeded to the gaddi of Sirkar Champarun as the adopted and affiliated son and successor of Raja Dhrub Singh and not as his daughter 's son as alleged subsequently by some others; that the last male holder of the estate was Maharaja Harendra Kishore Singh, the great grandson of the said Raja Jugal Kishore Singh and that plaintiff No. 1 in the suit, Ambika Prasad Singh being nearest in degree among the reversioners to the last male holder to Maharaja Harendra Kishore Singh as the descendent of Satrajit Singh, the full brother of Raja Dalip Singh was the legal heir to the estate in question.
It was pleaded that plaintiffs Nos. 2 and 4 to 8 and 10 to 13 being next in degree to the plaintiff No. 1 and plaintiff No. 14 being the wife of plaintiff No. 7 and plaintiff No. 9 being the mother of plaintiffs Nos.
10 to 13 had also joined the suit in order to avoid multiplicity of suits and conflict of interest.
It was also alleged that there was an agreement amongst some of the plaintiffs entered into on September 22, 1955 to claim the estate jointly and that subsequently the said agreement had been repudiated and a fresh family arrangement had been entered into by the plaintiffs which was bonafide settling their claims to the estate.
Under the said family arrangement, it had been agreed that the estate in the event of their succeeding in the suit should be distributed amongst 15 them in accordance with the terms contained therein.
They claimed that in any event, the plaintiffs in the said suit alone were entitled to the estate and no others.
The next suit with which we are concerned in these appeals is Title Suit No. 5 of 1961 which was filed by Radha Krishna Singh and others.
The case of the plaintiffs in this suit was that Raja Dhrub Singh died leaving behind him two daughters viz. Benga Babui and Chinga Babui; that Benga Babui was married to Babu Raghunath Singh of Gautam Gotra who was by caste a Bhumihar; that Raja Dhrub Singh had become separated from his other agnatic relations, namely the heirs of Prithvi Singh of village Sheohar and Satrajit Singh of village Madhubani; that on his death which took place in 1762, Raja Jugal Kishore Singh succeeded him as his daughter 's son and that plaintiffs 1 to 8, sons of Bhagwati Prasad Singh who belonged to the family of Raghunath Singh were the nearest heirs of the last male holder, Maharaja Harendra Kishore Singh.
In substance, their case was that Raja Jugal Kishore Singh who succeeded to the estate of Raja Dhrub Singh continued to be a member of his natural father 's family and had not become either by adoption or by affiliation a member of the family of Raja Dhrub Singh.
It was further alleged that plaintiffs 1 to 8 were men of poor means and could not arrange for money to fight out the litigation and they, therefore, had conveyed one half of their right in the suit estate under a registered sale deed dated December 12, 1958 in favour of plaintiffs 9 to 15.
In view of the said deed, according to the plaintiffs in the said suit, plaintiffs 1 to 8 were entitled to one half of the estate and the other half belonged to plaintiffs 9 to 15.
On the above basis, Title Suit No. 5 of 1961 was filed by the plaintiffs therein for a declaration of their title.
The plaintiffs in Title Suit No. 44 of 1955 were impleaded as defendants in Title Suit No. 25 of 1958 and Title Suit No. 5 of 1961.
The plaintiffs in Title Suit No. 25 of 1958 were impleaded as defendants in the other suits.
Similarly the plaintiffs in Title Suit.
No. 5 of 1961 were impleaded as defendants in the two other suits.
The State of Bihar which had preferred its claim on the basis of the rule of escheat was also impleaded as defendant in each of the three suits.
The defendants in each of the suits other than the State of Bihar denied the claim of the plaintiffs in that suit.
The State of Bihar pleaded in all the three suits that none of the plaintiffs was an heir of the last male holder.
The Additional Subordinate Judge, Patna who tried all the three suits together dismissed all of them by his judgment dated February 15, 1966.
The principal issues which arose for decision before the trial court were: (1) Was Raja Jugal Kishore Singh the Putrika Putra of Raja Dhrub Singh by appointed daughter and affiliated as such as 16 alleged by the plaintiffs in Title Suit No. 44 of 1955 and Title Suit No. 25 of 1958? (2) Was succession to Bettiah Estate governed by the Mithila or the Benares School of Hindu Law? (3) Was the Bettiah Estate self acquired or the joint property of Raja Jugal Kishore Singh? (4) Was the succession to the Bettiah estate governed by the rule of primogeniture? (5) Whether any of the plaintiffs was the heir of the last male holder; and (6) Has the Bettiah estate vested in the State of Bihar by escheat? At the conclusion of the trial, the trial court held that the custom of taking a son as Putrika Putra had become obsolete by the time Raja Dhrub Singh was alleged to have taken Raja Jugal Kishore Singh as the Putrika Putra and, therefore, Raja Jugal Kishore Singh was not the Putrika putra of Raja Dhrub Singh; that the succession to the estate of Maharaja Harendra Kishore Singh was governed by the Benares School of Hindu law; that the estate having been acquired by force of arms was the self acquired property of Raja Jugal Kishore Singh; that the succession of the Bettiah estate was not governed by the rule of primogeniture; that in view of the finding that Raja Jugal Kishore Singh was neither putrika putra nor was he affiliated to of family of Raja Dhrub Singh by adoption in any form, the plaintiffs in Title Suit No. 25 of 1958 and Title Suit No. 44 of 1955 could not claim to be the heirs of the last male holder: that the plaintiffs in Title Suit No. 5 of 1961 had not established that they were the reversioners to the estate and as none of the plaintiffs in the three suits had established that they were entitled to the estate it had vested in the State of Bihar by virtue of the rule of escheat.
It is already stated that the three First Appeals Nos. 169 to 171 of 1966 filed on the file of the High Court by the plaintiffs in Title Suit No. 44 of 1955 were dismissed for non prosecution.
Aggrieved by the decree of the trial court, the plaintiffs in Title Suit No. 25 of 1958 filed First Appeals Nos. 130, 131 and 134 of 1966 on the file of the High Court of Patna and the plaintiffs in Title Suit No. 5 of 1961 filed First Appeals Nos. 85, 86 and 87 of 1966 on the file of the said Court.
The above said six appeals were heard by a Bench of three learned Judges of the High Court viz. G. N. Prasad, J., A. N. Mukherji, J. and Madan Mohan Prasad, J., G. N. Prasad, J. held that the custom of taking a son as Putrika Putra had become obsolete by the time Raja Dhrub Singh was alleged to have taken Raja Jugal Kishore Singh as putrika putra and so Raja Jugal Kishore Singh had 17 not become a member of the family of Raja Dhrub Singh and that the plaintiffs in Title Suit No. 25 of 1958 had not therefore established their claim to the estate.
He agreed with the finding of A. N. Mukherji, J. that the plaintiffs in Title Suit No. 5 of 1961 had established their title to the estate.
A. N. Mukherji, J. held that the plaintiffs in Title Suit No. 5 of 1961 were entitled to succeed in their action and agreed with the finding of G. N. Prasad, J. that Raja Jugal Kishore Singh had not become a member of the family of Raja Dhrub Singh either as a putrika putra or by adoption for the reasons given by G. N. Prasad, J. Madan Mohan Prasad, J. agreed with the opinions of G. N. Prasad and A. N. Mukherji, JJ.
that the institution of putrika putra had become obsolete during the life time of Raja Dhrub Singh and that Raja Jugal Kishore Singh had not been taken as putrika putra or in adoption by Raja Dhrub Singh.
He however, did not agree with the opinion expressed by A. N. Mukherji, J. which had the concurrence of G. N. Prasad.
J. that the plaintiffs in Title Suit No. 5 of 1961 had established that the plaintiffs 1 to 8 in Title Suit No. 5 of 1961 were the nearest reversioners entitled to the estate.
In view of the aforesaid opinions, the appeals filed by the plaintiffs in Title Suit No. 25 of 1958 were dismissed since all the three Judges were unanimously of opinion that Raja Jugal Kishore Singh had not become a member of the family of Raja Dhrub Singh either as putrika putra or by adoption and all the appeals filed by the plaintiffs in Title Suit No. 5 of 1961 were allowed.
In the result, Title Suit No. 5 of 1961 was decreed as prayed for Consequently the claim of the State of Bihar was negatived.
Aggrieved by the decree passed in the six appeals referred to above, the plaintiffs in Title Suit No. 25 of 1958 applied to the High Court for the issue of a certificate to prefer appeals to this Court.
The State of Bihar also made a similar application.
It should be mentioned here that in the course of the hearing of the appeals before the High Court, one of the contentions urged by the parties other than the plaintiffs in Title Suit No. 25 of 1958 was that the decision of the Privy Council in Ghanta Chinna Ramasubbayya & Anr.
vs Moparthi Chenchuramayya, Minor & Ors.(1) was binding on the courts in India and that it was not open to the plaintiffs in Title Suit No. 25 of 1958 to urge that Raja Dhrub Singh could take Raja Jugal Kishore Singh as putrika putra.
G. N. Prasad, J. with whom A. N. Mukherji, J. agreed had held relying on the above decision of the Privy Council that the institution of putrika putra had become obsolete during the relevant period.
It was contended by the plaintiffs in Title Suit No. 25 of 1958 that the decision of the Privy Council in Ghanta Chinna Ramasubbayya & Anr.
vs 18 Moparthi Chenchuramayya, Minor & Ors.
(supra) was not binding on Indian courts after India became a Republic.
The Division Bench which heard the applications for the issue of certificates being of opinion that the case of the plaintiffs in Title Suit No. 25 of 1958 involved a substantial question of law as to the interpretation of the Constitution viz. whether the decision of the Privy Council in Ghanta Chinna Ramasubbayya & Anr.
vs Moparthi Chenchuranayya, Minors & Ors.(supra) was binding on the Indian Courts after India became a Republic issued a certificate in favour of the plaintiffs in Title Suit No. 25 of 1958 under Article 132(1) of the Constitution.
On the applications filed by the State of Bihar, the High Court issued a certificate under Article 133 of the Constitution certifying that the case involved substantial questions of law of general importance which in the opinion of the High Court needed to be decided by the Supreme Court.
On the basis of the above certificates, plaintiffs in Title Suit No. 25 of 1958 filed Civil Appeals Nos.
114 119 of 1976 and the State of Bihar filed Civil Appeals Nos.
494 496 of 1975.
After the above appeals were filed the respondents in Civil Appeals Nos. 114 119 of 1976 who had succeeded in the High Court filed a petition before this Court to revoke the certificate issued by the High Court under Article 132(1) of the Constitution.
When the above appeals were taken up for hearing alongwith the petition for revocation of the certificate, the appellants in Civil Appeals Nos. 114 119 of 1976 filed a Special Leave Petition under Article 136 of the Constitution requesting this Court to grant them leave to canvass questions other than those relating to the interpretation of the Constitution in support of their case.
We have heard the parties on the above Special Leave Petition also.
As mentioned earlier, we propose to dispose of by this Judgment Civil Appeals Nos. 114 119 of 1975 and the Special Leave Petition referred to above.
At the outset it is to be noted that the appellants in Civil Appeals Nos. 114 119 of 1975 can succeed only if they establish that Raja Jugal Kishore Singh had become the son of Raja Dhrub Singh in a manner known to law.
In the instant case even though there was some amount of ambiguity at some early stages of these proceedings in the trial court as to the true case of the appellants, finally they took the position that Raja Jugal Kishore Singh had become the son (putrika putra) of Raja Dhrub Singh as the latter had appointed his daughter i.e. the mother of the former as his putrika for the purpose of begetting a son who would be his (latter 's) putrika putra.
The State of Bihar and the other contesting parties claimed that the practice of appointing a daughter to beget a son who would be putrika putra had become obsolete by the time such appointment was alleged to 19 have taken place in this case; that even if such a practice was in vogue, Raja Dhrub Singh had in fact not made any such appointment and lastly the appellants who claimed on the above basis were not the nearest reversioners of the last male holder.
From the pleadings relevant for the purpose of these appeals, three questions arise for consideration: (1) Whether the practice of appointing a daughter as putrika for begetting a son who would be putrika putra was in vogue during the life time of Raja Dhrub Singh? (2) If the answer to question No. (1) is in the affirmative, whether Raja Dhrub Singh had in fact appointed his daughter (the mother of Raja Jugal Kishore Singh) as his putrika? and (3) If the answers to questions Nos.
(1) and (2) are in the affirmative, whether the appellants were the nearest reversioners to the last male holder Maharaja Harendra Kishore Singh, if he had lived till the date on which the limited estate ceased i.e. till the death of Maharani Janki Kuer which took place on November 27, 1954? From the points formulated above, it is evident that if the appellants in these appeals i.e. plaintiffs in Title Suit No. 25 of 1958 establish that Raja Jugal Kishore Singh was the putrika putra of Raja Dhrub Singh, the plaintiffs in Title Suit No. 5 of 1961 have to fail but if the appellants fail to establish that fact, they fail irrespective of the result of the dispute between the plaintiffs in Title Suit No. 5 of 1961 and the State of Bihar.
It is in these circumstances, we proposed to dispose of these and the connected appeals in two parts.
In order to determine whether the practice of taking a son as putrika putra was prevalent at the time when Raja Dhrub Singh is alleged to have taken Raja Jugal Kishore Singh as putrika putra, we have to examine the several texts and practices prevailing in India at the relevant point of time.
According to Yajnavalkya, the sources of Hindu Dharma are those enumerated in the following text: Shruti smritih sadacharah swasya cha priyamatmanah samyakasankalpajah kamo dharmmoolmidang smrittam.
(The sources of Dharma are described to be (1) the Vedas, (2) the Smritis, (3) the practices of good men, (4) what is acceptable to one 's own soul, and (5) the desire produced by a virtuous resolves).
While interpreting the Smritis one difficulty which has to be encountered is the uncertainty about their chronology.
Another difficulty felt by many jurists while interpreting them is the existence 20 of conflicting texts, sometimes in the same Smriti.
This appears to be on account of the successive changes in the views of society, which may have taken place over several centuries.
Very often the prevailing practices and customs at a given point of time might be quite different from those obtaining some centuries before that time Maxims which have long ceased to correspond with actual life are reproduced in subsequent treatises, as pointed out by John. D. Mayne, either without comment or with a non natural interpretation.
"Extinct usages are detailed without a suggestion that they have become extinct from an idea that it is sacrilegious to omit anything that has once found a place in the Holy Writ.
Another inference is also legitimate that while some Smritis modified their rules to provide for later usages and altered conditions of society, other Smritis repeated the previous rules which had become obsolete, side by side with the later rules.
(See Mayne 's Treatise on 'Hindu law and Usage ' (1953 Edition) pp 20 21).
Etymologically, the word 'putrika ' means a daughter (especially a daughter appointed to raise male issue to be adopted by a father who has no sons), and 'putrika putra ' means a daughter 's son who by agreement or adoption becomes the son of her father (Vide Sanskrit English Dictionary by Sir M. Monier Williams).
According to Hemadri, the author of Chaturvarga Chintamani (13th Century), a 'Putrika putra ' can be of four descriptions.
The following passage appearing at page 1046 in Volume II, Part (4) of the Collection of Hindu Law Texts Yajnavalkya Smriti with the commentaries of the Mitakshara etc.
(translated by J. R. Gharpure) refers to the four kinds of putrika putras: "The putrika putra is of four descriptions.
(1) The first is the daughter appointed to be a son.
(See Visishtha XVII.
15" Putrikaiveti ) (2) The next is her son.
He is called "the son of an appointed daughter", without any special contract.
He is, how ever, to be distinguished from the next i.e. the third class.
He is not in the place of a son, but in the place of a son 's son and is a daughter 's son.
Accordingly he is described as a daughter 's son in the text of Sankha and Likhita: "An appointed daughter is like unto a son, as Prachetasa has declared: her offspring is termed a son of an appointed daughter: he offers funeral oblations to the maternal grand father and to the paternal grandsire.
There is no difference between a son 's son and a daughter 's son in respect of benefits conferred." (3) The third description of a son of an appointed daughter is the child born of a daughter who was given in marriage with an express stipulation as stated by Vasishtha 21 XVII.17.
He appertains to his maternal grandfather as an adopted son.
(4) The fourth is a child born of a daughter who was given in marriage with a stipulation in this form "the child who shall be born of her, shall perform the obsequies of both." He belongs as a son to both grandfathers.
But in the case where she was in thought selected for an appointed daughter, she is so without a compact, and merely by an act of the mind.
(Manu Ch.
IX 127 and 136), Hemadri quoted in Colebrocke.
" It is well known that in the ancient Hindu law, the right of a person to inherit the property of another depended principally on his right to offer pinda and udaka oblations to the other.
The first person who was so entitled was the son.
As time passed the concept of sonship was modified and by the time of Manu thirteen kinds of sons were known aurasa son who was begotten on a legally wedded wife and twelve others who were known as secondary sons (putra prathinidhis) and Manu omits any reference to putrika putra as such although in another place he observes : Aputroanen vidhina sutang kurvit putrikam Yadpatyam Bhavedasyah Samepoothro bhavedithi (He who has no son may make his daughter in the following manner an appointed daughter (Putrika saying to her husband) `the male child born of her shall be my son ').
Another reading of the same sloka gives the second part of the above sloka as `yadupathaya bhavadasthaya thanmasthathu sadhukarma ' (The (male) child born of her shall perform my funeral rites).
Yathaivathma thatha puthrah puthren duhithasma Thasyamatmani thishthanthyam kathmanyo dhananghareth Manu IX 130 (A son is even as one 's self, a daughter is equal to a son, how can another (heir) take the estate while (such daughter who is) one 's self lives).
Yajnavalkya says that twelve sons including the legitimate son who is procreated on the lawfully wedded wife were recognized by law.
Of them, it is said, the legitimate son is considered to be the primary son and others as secondary sons.
The relevant text reads thus: Aursodharmmapatnija statsamah putrikasutah Kshetrajah kshetra jatastu sagotrerentaren wa grihe prachanna uttpanno goodhjastu sutah smritah kanin kanyakajato matamah sutomatah 22 Akshatayang kshatayamba jaatah paunarbhavah sutah Dadyanmata pita wa yang sa putro dattako bhaweta Kritashcha tabhyang veekritah kritrimah syataswa yangkritah dattatma tu swayang Datto garbevinah sahodhajah Utasristho grahyate yastu sopividhho bhawetsutah The above text is translated by section section Setlur in his book entitled `A complete Collection of Hindu law Books on Inheritance ' thus : "The legitimate son is one procreated on the lawful wedded wife.
Equal to him is the son of an appointed daughter.
The son of the wife is one begotten on a wife by a sagotra of her husband, or by some other relative.
One, secretly produced in the house, is son of hidden origin.
A damsel 's child is one born of an unmarried woman : he is considered as son of his maternal grandsire.
A child, begotten on a woman whose first marriage had not been consummated, or on one who had been deflowered before marriage, is called the son of a twice married woman.
He whom his father or his mother gives for adoption shall be considered as a son given.
A son bought is one who was sold by his father and mother.
A son made is one adopted by a man himself.
One, who gives himself, is self given.
A child accepted, while yet in the womb, is one received with a bride.
He who is taken for adoption having been forsaken by his parents, is a deserted son.
" `Aurasa ' is the son procreated by a man himself on his wife married according to sacramental forms prescribed by Sastra.
`Putrikaputra ' is the son of an appointed daughter.
`Kshetraja ' is the son begotten on the wife of a person by another person sagotra or any other.
`Gudhaja ' is the son secretly born in a man 's house when it is not certain who the father is.
`Kanina ' is the son born on an unmarried girl in her father 's house before her marriage.
`Paunarbhava ' is the son of a twice married woman.
`Dattaka ' is the son given by his father or mother.
`Krita ' is the son bought from his father and mother or from either of them.
`Kritrima ' is the son made (adopted) by a person himself with the consent of the adoptee only.
`Svayamdatta ' is a person who gives himself to a man as his son.
`Sahodhaja ' is the son born of a woman who was pregnant at the time of his marriage.
`Apavidha ' is a person who is received by another as his son after he has been abandoned by his parents or either of them.
There is one other kind of son called `Nishada ' who is the son of a Brahmin by a Sudra who is not referred to in the above quoted text of Yajnavlkya.
While commenting on the above text, Vijnanesvara explains `putrika 23 putra ' in the Mitakshara (composed between 1070 1100 A.D.) as follows : Tatasamah putrikasutah tatsamah aurasasamah putrikayah sutah ataevoursasamah, yathah vashisthah abhratrikang pradasyami tubhyang kanyamalangkritam asyang yo jayate putrah sah me putro bhawedititee athwa putrikaiv sutah putri kasutah sopyoursasamaev pitravayavanamalpatwata matravayavanang bahulyachha, Yathas vashishthah tritiyah putrah putrikaivetyarthah (The son of an appointed daughter (putrika putra) is equal to him: that is equal to the legitimate son.
The term signifies`son of a daughter '.
Accordingly he is equal to the legitimate son as described by Vasishtha: "This damsel, who has no brother, I will give unto thee, decked with ornaments: the son who may be born of her shall be my son."; Or that term may signify a daughter becoming by special appointment a son.
Still she is only similar to a legitimate son; for she derives more from the mother than from the father.
Accordingly she is mentioned by Vasishtha as a son, but as third in rank.
"The appointed daughter is considered to be the third class of sons.") (Vide section section Setlur on `A complete collection of Hindu Law Books on Inheritance ' p. 30).
Proceeding further Vijnanesvara comments on the following text of Yajnavalkya : Pinddonshaharshchekshang poorvabhawe parah parah Among these, the next in order is heir and presents funeral oblations on failure of the preceding) as under : Atekshang poorvoktanang putranang poorvasya poorvasyabhawe uttrah pindadhah shradhdong shaharo veditavyaah (Of these twelve sons abovementioned, on failure of the first, respectively, the next in order, as enumerated, must be considered to be the giver of the funeral oblation or performer of obsequies, and taker of a share or successor to the effects.).
Then Vijnanesvara says with reference to what Manu Smritis has stated about the right of the primary and secondary sons to succeed to the estate of a person thus : "Manu, having promised two sets of six sons, declares the first six to be heirs and kinsmen; and the last to be not heirs, but kinsmen : "the true legitimate issue, the son of a wife, a son given, and one made by adoption, a son of concealed origin, and 24 one rejected are the six heirs and kinsmen.
The son of an unmarried woman, the son of a pregnant bride, a son bought, a son by a twice married woman, a son self given, and a son by a Sudra woman, are six not heirs but kinsmen.
" Thereafter he deals with the right of a woman to inherit the estate of one, who leaves no male issue.
He says "that sons, principal and secondary, take the heritage, has been shown.
The order of succession among all on failure of them, is next declared.
" And then quotes the following text of Yajnavalkya : Patni duhitharaschaiva pithrau bhratarastatha tata suta gotraja bandhuh shisya sabrahmacharinah akshamabhawe poorvasya dhanbhaguttarottarah swaryathsya hyaputrasya sarv varnekshwayan vidhih (The wife, and the daughters also, both parents, brothers likewise, and their sons, gentiles, cognates, a pupil, and a fellow student: on failure of the first among these, the next in order is indeed heir to the estate of one who departed for heaven leaving no male issue.
This rule extends to all classes).
Commenting on the above text, Vijnanesvara says: Mkhyagaunsutha dhay grihrantitee nirupitam tekshambhawe sarwekshang dayadakrama uchyate, poorvokta dwadash putra yasyang na santi asavaputrah tashyaputrasya swaryatasya purlokang gatasya ghanbhaka ghangrahi akshang patnayadinamanukrantanang madhye poorvasya poorvashyabhawe uttara uttaro ghanbhagiti sambandhah (He, who has no son of any of the twelve descriptions above stated is one having `no male issue '.
Of a man, thus leaving no male progeny, and departing for another world, the heir, or successor, is that person, among such as have been here enumerated (the wife and the rest) who is next in order, on failure of the first mentioned respectively.
Such is the construction of the sentence).
From the foregoing, it is obvious that in the course of the passages extracted above, Vijnanesvara was only commenting upon the relevant text of Yajnavalkya which laid down the practice prevalent in ancient times.
He also notices that according to Manu only six of the twelve sons were entitled to succeed to the estate and the remaining six were not heirs but kinsmen.
We have not been shown any Commentary of Vijnanesvara that at the time when the Mitakshara was written, all the twelve kinds of sons described by Yajnavalkya were in fact entitled to succeed to the estate of the deceased and that the wife of the deceased succeeded to his estate only when none of the 25 twelve kinds of sons was existing.
Certainly that has not been the practice for several centuries.
In the absence of a son, grandson or great grandson (aurasa or adopted) the wife succeeds to the estate of her husband.
The other kinds of sons including putrika putra are not shown to have preceded the wife.
Baudhayana who belonged to the Krishna Yajurveda School and who composed the Baudhayana Dharma Sutra long prior to the Mitakshara refers to the twelve kinds of sons and divides them into two classes one being entitled to share the inheritance and the other to be members of the family only: Aurasang putrikaputrang kshetrajang dattkritrimau goodhhajang chapvidhang cha rikthabhajah prachakchate Kanin cha sahodhang cha kritang pounarbhavang tatha swayangdatang nikshadang cha Gotrabhajah prachakchte In regard to this they quote also (the following verses): They call the legitimate son, the son of an appointed daughter, the son begotten on a wife, the adopted son, the son made, the son born secretly, and the son cast off, entitled to share the inheritance.
The spinster 's son, the son taken with a bride, the son bought, the son of a twice married woman, the self given son, and the Nishada (these) they call members of (their father 's family) (Vide West & Buhler on `Hindu Law Inheritance ' at p. 317).
That some of the secondary sons were not entitled to succeed according to Baudhayana may be noticed here and this statement does not agree with the Mitakshara 's Commentary that all the principal and secondary sons succeed before the wife.
This shows that the statement in the Mitakshara refers partly to historical facts and partly to existing facts.
Vishnu Dharmasastra which according to Dr. Jolly belongs to the third century A.D. describes `putrika putra ' as follows: Putrikaputrasthrithayah yastwasyaah putrah sa me putro bhawediti ya pithra datta sa puthrika putrikavidhinaapratipaditapi bhratrivihina puthrikaiv (The third is the son of an appointed daughter.
She is called an appointed daughter, who is given away by her father with the words, `The son whom she bears, be mine '.
A girl who has no brother is 26 considered an appointed daughter, though she be not given away according to the rule of an appointed daughter) (Vide West & Buhler on `Hindu Law Inheritance ' at p. 338).
In this text what needs to be noticed is that a brotherless daughter becomes a putrika even if she is not given according to the prescribed procedure.
Vasishtha who according to Dr. Jolly must have composed his Dharma Sutra several centuries before Christ describes `putrika ' as follows : Tritya puthrika, vigyayate, abhratrika pungsah pith rinbhyeti pratichhinang gachhati putratwama Abhrathrikang pradasyami tubhyang kanyamalangkritama Ashyang yo jayate puthrah sa me puthro bhawediti (The third is an appointed daughter.
It is known that "the girl who has no brother comes back to the males of her own family, to her father and the rest, returning she becomes their son.
" Here follows the verse to be spoken by the father when appointing a daughter, "I shall give thee to the husband, a brotherless damsel, decked with ornaments; the son whom she may bear, he be my son." (Vide West & Buhler on `Hindu Law Inheritance ' at p. 331).
In the above text "the girl who has no brother comes back to the males of her own family, to her father and the rest, returning she becomes their son" apparently refers to the following Shloka in Rig Veda : Abhratew punsa aeti pratichi Gartarugiv sanye dhnanama jayew patya ushatee suvasa Uksha hashtreva nirirnite apshah Rig Veda, I, Sukta 124.
Stanza 7.
(She goes to the West, as (a woman who has) no brother (repairs) to her male (relatives), and as one ascending the hall (of justice) for the recovery of property.
(She mounts in the sky to claim her lustre) and like a wife desirous to please her husband, Ushas puts on becoming attire, and smiling as it were, displays her charms).
Apararka or Aparaditya was a king who ruled in the twelfth century.
His commentary on the Yajnavalkya Smriti is considered to be of paramount authority and is referred to with respect in many of the 27 later Digests.
After referring to the primary and secondary sons enumerated by Yajnavalkya, Apararka observes : Puthrapratinidhinang madhye dattakah avang kaliyuge grahyah Athah aev kalou nivarthantha ityanuvrittau shaunkenoktam "dathoursetarekshang thu puthrathwen parigrahah " ithee.
(Of the different kinds of substitutes for son, only the Dattaka is valid during the Kaliyuga.
Therefore Shaunaka says: "the acceptance of sons other than Datta and Aurasa" is prohibited in the Kaliyuga.) (Vide Ghose on 'Hindu Law ' Vol. II at p. 254.) The verse of Shaunaka quoted by Apararka is found in the verses on Kalivarjya collected and printed at page 1013 of Vol.
III of P. V. Kane 's History of Dharmasastra.
The 17th verse reads (The acceptance of sons other than datta or aurasa) is one of the acts not to be done in Kaliyuga.
We find the following text in 'Parasara Madhava ' which is believed to have been written by Madhavacharya, the prime minister of the Vijayanagara kings in or about the year 1350: Dattavyatiriktanang gounputrarnang rikthbhaktava Pratipadakani wakyani yugantaravikshyarni kalou yuge tekshang putratwen parigrahrnasya smrityantare nikshidhatwata " Dattourasetrekshantu puthrathwen parigrahah devarern sutotpattih wanaprashthashramagrahah kalou yugotwimana dharmana varjyanahurmanikshinah ithee (The texts establishing the right to inherit of the subsidiary sons other than the Dattaka or the adopted son were applicable in past ages (and have no force now) because in another Smriti their being taken as sons is prohibited in the Kali Yuga: 'The acceptance as sons of other than the Dattaka and Aurasa sons, ' the procreation of a son by Niyoga by the husband 's younger brother and adopting the life of the Vanaprastha in old age are prohibited by the wise.) (Vide Ghose on 'Hindu Law ' Vol. II at p. 626).
The quotation in the above Commentary is stated to be from Aditya Purana.
The Smriti Chandrika of Devannabhatta according to Dr. Julius Jolly is a remarkable book on Hindu Dharmasastra for its originality and for its early date.
Though following Mitakshara on most points of importance, it introduces a great deal of new matter as well particularly with regard to the rights of woman over Stridhana, relying upon 28 many Smriti texts not referred to in the Mitakshara.
It is believed that the Smriti Chandrika was written in the thirteenth century for the author quotes Apararka (12th century) and he in his turn is quoted by Mitramisra (14th century).
In the chapter entitled 'On partition of wealth received through secondary fathers", Smriti Chandrika states: Awang nirupitagournputhranang surwekshang yugantare puthratwen parigrah, Kalou tu dattakasyaikasya "dattourasetarekshang tu putratwen parigrahah: itee, Kaleradou dharmaguptyarthang mahatmabhirdattakourse tarekshang putratwen parigraha nivarrnata, putrika karanmapyasmadev wakyatkalou nivaritama, Dattoursetratwatputrikayah, awang cha kalavoursaputrapouthrayorabhawe dattak aev gounputhro bhawati nanya ityanusandheyama.
(The secondary sons thus enumerated had all been recognised as sons in former ages; but, in the Kali age, adopted son alone is recognized.
By the text: "None is to be taken as a son except a son of the body or one who is adopted.
" the learned have, in the early period of the Kali age, prohibited the recognition of any other son than the legitimate and the adopted, with the view of maintaining virtue in the world.
The appointment of a daughter to raise up a son to her father must also be considered by the same text to be prohibited in the Kali age, such a son not being either one of the body or adopted.
The conclusion hence is that, in the Kali age, in default of a legitimate son or grandson, the adopted son alone and none else is recognised as a subsidiary son.
(Vide Setlur on 'Hindu Law Books on Inheritance ' at page 272).
It is no doubt true that in some earlier decisions to which a detailed reference at this stage is not necessary some statements found in Smriti Chandrika which were directly in conflict with the Mitakshara were not accepted and the Mitakshara was given the preference but still as observed by Mayne there can, however, be little doubt that its general authority is fairly high on points on which it does not come into conflict with the Mitakshara and that it is a work which is referred to throughout India with great respect by Nilakantha, Mitramisra and others.
Dattaka Chandrika which is a recognised treatise on the law of adoption declares in paragraphs Nos. 8 and 9 of section 1 thus: "8.
A substitute.
Now such is of eleven descriptions, the son of the wife and the rest.
Thus Manu (ordains): "Sages declare 29 these eleven sons (the son of the wife and the rest) as specified to be substitutes for the real legitimate son; for the sake of preventing a failure of obsequies.
" Vrihaspati also.
"Of the thirteen sons who have been enumerated, by Manu in their order, the legitimate son and appointed daughter are the cause of lineage.
As oil is substituted by the virtuous for liquid butter; so are eleven sons by adoption substituted for the legitimate son and appointed daughter.
Of these however in the present age, all are not recognised.
For a text recites: "Sons of many descriptions who were made by ancient saints cannot now be adopted by men, by reason of their deficiency of power;" and against those other than the son given, being substitutes, there is a prohibition in a passage of law wherein after having been promised, "The adoption, as sons of those other than the legitimate son and son given," it is subjoined, "These rules sages pronounce to be avoided in the Kali age." (See 'Hindu Law Books ' edited by Whitley Stokes in 1865 at page 630).
Dattaka Mimansa written by Nanda Pandita between 1595 1630 states. "64.
"Sons of many descriptions who were made by ancient saints cannot now be adopted by men by reason, of their deficiency of power etc.", on account of this text of Vrihaspathi and because, in this passage ("There is no adoption, as sons, of those other than the son given and the legitimate son etc.") other sons, are forbidden by Saunaka, in the Kali or present age, amongst the sons however (who have been mentioned) the son given, and the legitimate son only are admitted.
" (See 'Hindu Law Books ' edited by Whitley Stokes in 1865 at page 547).
In Bhagwan Singh vs Bhagwan Singh & Ors.(1) a Full Bench of the Allahabad High Court had to consider the authority of Dattaka Chandrika and Dattaka Mimansa as sources of Hindu Law.
Since some doubts had been expressed about it by Mandlik, Golapchandra Sarkar and Dr. Jolly who were themselves reputed writers on Hindu Law, after an elaborate discussion about several earlier decisions and treatises on Hindu Law published by that time, the majority of the Full Bench (Edge, C.J., Knox, Blair and Burkitt, JJ.) expressed the 30 view that Dattaka Mimansa was not on questions of adoption an 'infallible guide ' in the Benares School of Hindu Law.
But the minority (Banerji and Aikman, JJ.) held that Dattaka Mimansa and Dattaka Chandrika were works of paramount authority on questions relating to adoption in the Benares School also.
The Privy Council in the appeal filed against the judgment of the Full Bench observed in Bhagwan Singh & Ors.
vs Bhagwan Singh (Minor)(1) & Ors.
thus: "Their Lordships have mentioned in the prior adoption cases the views of Knox, J. as to the authority of the two Dattaka treatises just quoted.
In the present case the learned Chief Justice Edge takes even more disparaging views of their authority; denying, if their Lordships rightly understand him, that these works have been recognised as any authority at all in the Benares School of Law.
If these were anything to show that in the Benares School of Law these works had been excluded or rejected, that would have to be considered.
But their authority has been affirmed as part of the general Hindu Law, founded on the Smritis as the source from whence all Schools of Hindu Law derive their precepts.
In Doctor Jolly 's Tagore Lecture of 1883, that learned writer says: "The Dattaka Mimansa and Dattaka Chandrika have furnished almost exclusively the scanty basis on which the modern law of adoption has been based.
" Both works have been received in courts of law, including this Board, as high authority.
In Rangama vs Atchama (4 Moore 's Ind. Ap.
97) Lord Kingsdown says: "They enjoy, as we understand, the highest reputation throughout India." In 12 Moore, p. 437, Sir James Colvile quotes with assent the opinion of Sir William Macnaghten, that both works are respected all over India, that when they differ the Chandrika is adhered to in Bengal and by the Southern jurists, while the Mimansa is held to be an infallible guide in the Provinces of Mithila and Benares.
To call it infallible is too strong an expression, and the estimates of Sutherland, and of West and Buhler, seem nearer the true mark; but it is clear that both works must be accepted as bearing high authority for so long a time that they become embedded in the general law.
" The writings of Sir William Macnaghten, Morley, Colebrooke, Sir Thomas Strange, Babu Shyama Charan Sarkar and J. section Siromani supports the above view.
In Rajendra Narain Lahoree vs Saroda Sonduree Dabee,(2) Uma Sunker Moitro vs Kali Komul Mozumdar(3), 31 Lakshmappa vs Ramava(1), Waman Raghupati Bova vs Krishnaji Kashiraj Bova(2), Minakshi vs Ramanada(3), Tulshi Ram vs Behari Lal(4) & Beni Prasad vs Hardai Bibi(5), the Indian High Courts have accepted the authority of Dattaka Mimansa and Dattaka Chandrika.
The Privy Council has also taken the same view in the Collector of Madura vs Moottoo Ramalinga Sethupathy(6).
In Abhiraj Kuer vs Debendra Singh(7) this Court has dealt with the value to be attached to Dattaka Chandrika and Dattaka Mimansa as follows: "Learned Counsel has emphasised that great authority attaches to all statements of law as regards adoption that are contained in Dattak Mimansa.
There is no doubt that for many years now the Dattak Chandrika of Kuvera and Dattak Mimansa of Nanda Pandit have been recognised to be of great authority on all questions of adoption.
It is true that Prof. Jolly in his Tagore Law Lectures had in no uncertain terms characterised the latter to be of little value; and eminent scholars like Dr. Mandlik and Golap Chandra Sarkar while writing in the latter part of the last century subjected many of Nanda Pandit 's views to unfavourable criticism.
Inspite of all this the Privy Council in Bhagwan Singh vs Bhagwan Singh (1899) L.R. 26 I.A. 153, 161 did recognise that both the Dattak Mimansa and Dattak Chandrika had been received in courts of law including the Privy Council as high authorities and after drawing attention to Lord Kingsdown 's statements as regards these in Rungama vs Atchama (1846) I.A. 1, 97 and Sir James Colvile 's statement in Collector of Madura vs Moottoo Ramlinga Sethupathy (1868) 12 M.I.A. 397, 437, stated thus: "To call it (i.e. Dattak Mimansa) infallible is too strong an expression, and the estimates of Sutherland and of West and Buhler, seem nearer the true mark; but it is clear that both works must be accepted as bearing high authority for so long a time that they have become embedded in the general law." While saying this mention must also be made of the observations of the Privy Council in Sri Balusu Gurulingaswami vs Shri Balasu Ramalakshmamma (1899) L.R. 26 I.A. 113, 136 decided on the same date (March 11, 1899) but 32 immediately before Bhagwan Singh 's case, was decided, expressing their concurrence with the view that caution was required in accepting the glosses in Dattaka Mimansa and Dattak Chandrika where they deviate from or added to the Smrities.
" Even when they are read with care it is not possible to disbelieve the statement of law with which we are concerned since they are in conformity with many other writings discussed above.
A careful reading of the texts extracted above leads to an inference that the institution of putrika putra had become obsolete and not recognised by Hindu society for several centuries prior to the time when Smriti Chandrika or Dattaka Chandrika were written and these two.
Commentaries belong to a period far behind the life time of Raja Dhrub Singh.
Some of the decisions relied on by the parties may now be considered.
The decision in Nursingh Narain & Ors.
vs Bhuttun Loll & Ors.(1) (compiled by D. Sutherland) was not a case where the claim of a putrika putra as it was understood in Hindu Law was upheld.
In that case, the Court had to decide whether a sister 's daughter could become an appointed daughter and her son a putrika putra.
The claim was rejected with the following observations: "There is no doubt that, in ancient times, there were many legal substitutes for the sons of the body (Auras).
Manu (Chapter 9, V, 180), and Yagnyavalkya (Mitakshara, Chapter I, Section 2) enumerate no less than twelve including the legitimate son of the body; and the latter authority ranks the son of an appointed daughter ("putrika putra") next to the legitimate son, and equal to him.
It is contended by the appellant in this case that a sister 's daughter may be adopted under this authority, and become "an appointed daughter", and her son a "putrika putra", but we do not see the slightest resemblance between the two cases.
The daughter appointed to raise up issue for her father must, according to the old Hindoo Law books, be a man 's own daughter, the child of his own loins; and it is solely on the ground of this near relationship that the son of the daughter, viz. the "putrika putra" is classed in the same rank with the lawful son of the body.
It is true that, in default of an "aurasa" daughter, a daughter of the body, that is, a man could, under the old Hindoo Law, adopt a subsidiary daughter as a substitute for her; but these adoptions were "for the sake of obtaining the heaven procured by 33 the daughter 's son" (vide Dattaka Mimansa, page 138, section 18), and not for the purpose of obtaining a "putrika putra," an adopted son by means of an appointed daughter. .We think, therefore, that the appellant in the present case is not a "putrika putra," that is, he is not the son of an appointed daughter in the proper sense of the term, and has, according to ancient Hindoo Law, no status in the family of Holas Narayan.
Taking this view of the case, it is not necessary for us to enter at any great length into the second point.
All the great authorities on Hindoo Law admit that, except the Dattaka and Kritrima, no other forms of adoption are allowable in the present age.
" The last para of the above quotation is of some significance so far as these appeals are concerned.
In Thakoor Jeebnath Singh vs The Court of Wards(1) the plaintiff laid claim to an impartible raj, raj of Ramgarh on the ground that he being the father 's sister 's son of the last holder, Rajah Trilokenath, who died unmarried was entitled to the estate in preference to the defendant who was a distant agnate of the last holder.
Ordinarily the plaintiff being a bandhu could not exclude the defendant who was a sagotra sapinda of the last holder.
He therefore, put forward the plea that as his mother was the appointed daughter of Maharaj Sidnath Singh, the paternal grandfather of the last holder and he as putrikaputra should be treated as a son of Maharaj Sidnath Singh entitled to succeed to the estate.
Two questions arose before the Judicial Committee of the Privy Council in that case as in the present appeals (1) whether the practice of taking a 'putrika putra ' was in vogue and (2) whether the mother of the plaintiff had in fact been an 'appointed daughter '.
On the first question, the Privy Council observed that it was not necessary to give a finding but on the other it held that the plaintiff had not shown that his mother was in fact an 'appointed daughter '.
Even so after referring to the statements found in the books of Sir Thomas Strange and Sir William Macnaghten, the Privy Council observed that it appeared that the practice of having a 'putrikaputra ' had become obsolete.
In that connection, it observed thus: "It is not necessary in this case to decide that this is so, although there certainly does not appear to have arisen in modern times any instance in the courts where this custom had been considered." 34 Absence of cases before courts within living memory in which a claim had been preferred on the basis of affiliation in putrika putra form showed that the said practice had become obsolete.
The contention based on the theory that a person could take a son as 'putrika putra ' was rejected by the Madras High Court in the year 1908 in Sri Raja Venkata Narasimha Appa Row Bahadur vs Sri Rajah Saraneni Venkata Purushothama Jaganadha Gopala Row Bahadur & Ors.(1) in the following words: "Mr. Seshagiri Ayyar on behalf of the appellant contended, first, that on a proper construction of the will the testator 's daughter was 'appointed ' by her father to raise a son for him in accordance with a practice which is now generally reputed to be obsolete.
We need not determine whether in any event the language of the will could be made to bear this construction; it clearly could be so construed only if there were in existence a living custom to which the words can be referred.
It is not such language as could be interpreted as indicating the testator 's intention to revive a dead custom, or create a new kind of heir for himself, unknown to the law of the present day, supposing him to have the power to do either of those things." In Nagindas Bhagwandas vs Bachoo Hurkissaondas(2) while rejecting the contention that the position of an adopted son in the family of the adoptive father was not that of a coparcener, the Privy Council observed: "It was endeavoured to establish that proposition by reference to the place which was assigned by Manu and other early authorities to the twelve then possible sons of a Hindu.
As to this contention it is sufficient to say that, whatever may have been the position and rights between themselves of such twelve sons in very remote times, all of those twelve sons, except the legitimately born and the adopted, are long since obsolete." A Division Bench of the Patna High Court in Babui Rita Kuer vs Puran Mal(3) while holding that defendant No. 2 in that case who was alleged to have been appointed as putrika by her father had not in fact been so appointed, observed (but without actually deciding): "However, the case of Thakoor Jeebnath Singh vs Court of Wards (1874 75) 2 I.A. 163, a Privy Council case, is important in this connexion.
The whole argument addressed to us is based 35 upon the effect of this custom of adoption of a daughter as putrika.
Now the Privy Council have laid it down that all Hindu text writers unanimously concur in holding the appointment of a daughter as a son to raise up issue to a sonless father is now obsolete; and no recent authority can be found within modern times where the custom has received judicial sanction.
In the Privy Council case referred to above a grave doubt is thrown upon the validity of such a custom, and it is there distinctly stated that if this custom is ever to be revived, it can only be on the clearest and most conclusive evidence.
To a like effect is the case of Sri Rajah Venkata Narasimha Appa Row Bahadur vs Sri Raja Suraneni Venkata Purushothama Jaganadha Gopala Rao Bahadur , where the custom alleged is considered not to be a living custom.
Mr. Mayne says at p. 93, Edn. 8, of his treatise on Hindu Law that the usage had become obsolete from time immemorial, and was so decided by the Civil Courts.
However, if this custom or usage is relied on in any given case it must be conclusively and undeniably proved.
I should be slow indeed to hold, if this obsolete custom can be established, that all the duties and obligations imposed on a Hindu son to discharge the debts of his father under Mitakshara Law would apply or attach to a daughter appointed as a putrika to raise issue to a sonless father the attention of the High Court.
The above case is from the State of Bihar itself.
If the practice of appointment of a putrika was in vogue, it would not have missed the attention of the High Court It is true that some observations made in Lal Tribhawan Nath Singh vs Deputy Commissioner, Fyzabad & Ors.(1) support the theory that the institution of putrika putra was in vogue even now.
Two of the questions involved in that case were whether Sir Pratap Narain Singh was the Putrika putra of Sir Man Singh who was the former holder of an impartible estate, known as taluka Ajudhia and whether the practice of appointing a daughter to bear a son to a Hindu was permitted by the Mitakshara and was enforceable.
Stuart, A.J.C. who delivered the leading judgment in that case with whom Kanhaiya Lal, A.J.C. agreed held that Sri Pratap Narain Singh was not the putrika putra of Sir Man Singh although the practice of appointing a daughter bear a son to a Hindu was permitted by the Mitakshara and was enforceable.
It is seen that the above case had a history.
Maharaja Pratap Narain Singh himself had earlier instituted a suit which ultimately ended up in an appeal before the Privy Council in Maharajah 36 Pertab Narain Singh vs Maharanee Sudhao Kooer(1).
In that case, his plea was that he (who was also known as Dadwa Sahib) was the son of a daughter of Maharajah Man Singh; that he had been treated by Maharajah Man Singh 'in all respects as his own son ' within the meaning of clause 4 of section 22 of Act I of 1869; that a will made by Maharajah Man Singh on April 22, 1864 had been revoked orally on a subsequent date and that he had become entitled to the estate of Maharajah Man Singh.
The Privy Council held that the will had been revoked and Maharajah had died intestate and that Maharajah Pratap Singh was the person who under clause 4 of section 22 of Act I of 1869 was entitled to succeed to the taluk, and that he had made out his claim to a declaratory decree to that effect.
The Privy Council further held that the declaration was limited to the taluk and what passed with it but it did not affect the succession to the personal property or property not properly the parcel of the talukdaree estate which was governed by the ordinary law of succession.
It is significant that no claim had been preferred by Maharaja Pratap Narain Singh on the ground that he was a putrika putra of Maharaja of Man Singh.
He merely claimed that he was a statutory heir under clause 4 of section 22 of Act I of 1869 which was passed at the request of Talukdars including Maharajah Man Singh as can be seen from the decision of the Privy Council in Maharajah Pertab Narain Singh 's case (supra) which observed thus: "So matters stood when the Maharajah, as one of the leading members of the British India Association of Talukdars, went down to Calcutta in order to take part in the discussions and negotiations which resulted in the passing of Act I of 1869.
This must have been in the latter half of 1868.
Imtiaz Ali, the vakil concerned in the drafting and preparation of this Act on the part of the talukdars, has sworn that clause 4 of the 22nd section originated with the Maharajah; that it was opposed by some of the talukdars, but finally approved of by the Select Committee of the Governor General 's Legislative Council on the bill and passed into law.
He also says that he was told by the Maharajah that his object in pressing this clause was to provide for the Dadwa Sahib." (NOTE : 'Maharajah ' referred to above is Maharajah Man Singh and 'Dadwa Sahib ' is Maharajah Pratap Narain Singh).
If the practice of appointing a daughter to bear a son was in vogue then Maharajah Man Singh need not have taken the trouble to 37 request the British Government to get Act I of 1869 passed and if Maharajah Pratap Narain Singh was a putrika putra, he would not have refrained from putting forward that case.
Moreover the Privy Council also clarified the object of introducing clause 4 of section 22 of Act I of 1869 thus: "Their Lordships are disposed to think that the clause must be construed irrespectively of the spiritual and legal consequences of an adoption under the Hindu Law.
They apprehended that a Hindu grandfather could not, in the ordinary and proper sense of the term adopt his grandson as a son.
Nor do they suppose that, in passing the clause in question, the Legislature intended to point to the practice (almost, if not wholly, obsolete) of constituting, in the person of a daughter 's son, a "putrika putra", or son of an appointed daughter.
Such an act, if it can now be done, would be strong evidence of an intention to bring the grandson within the 4th clause, but is not therefore essential in order to do so.
Moreover, it is to be observed that the 4th, like every other clause in the 22nd section, applied to all the talukdars whose names are included in the second or third of the lists prepared under the Act, whether they are Hindus, Mahommedans, or of any other religion; and it is not until all the heirs defined by the ten first clauses are exhausted that, under the 11th clause, the person entitled to succeed becomes determinable by the law of his religion and tribe." Triloki Nath who failed before the Privy Council thereafter filed a review petition before it.
That petition was dismissed in Pertab Narain Singh vs Subhao Kooer(1) but he was permitted if he so desired to reopen by suit in India the question whether he had been properly represented in the previous litigation in the Indian Courts.
Accordingly a suit was filed in 1879.
That ultimately was dismissed by the Privy Council in Perturbarain Singh vs Trilokinath Singh(2) holding that the previous proceedings were binding on Trilokinath Singh.
Another suit which had been filed in the meanwhile in the year 1882 for possession of the estate by Trilokinath Singh was also dismissed finally by the Privy Council in Triloki Nath Singh vs Pertab Narain Singh(3) with the following observations: "Their Lordships, therefore, merely declared Pratap Narain Singh 's title to the taluks and whatever descended under Act I of 38 1869.
As to other property which was not included in that Act, Pratap Narain would not have been the heir to the Maharaja during the lifetime of the widow.
She would have taken the widow 's estate in all property except that which was governed by Act 1 of 1869.
" Thus ended the first series of litigation.
Now reverting to the case of Lal Tribhawan Nath Singh (supra) it should be stated that the suit out of which the said appeal arose was instituted after the death of Maharaja Pratap Narain Singh in 1906 by Tribhawan Nath Singh, grandson of Ramadhin, the eldest brother of Maharaja Man Singh in the year 1915 for a declaration that he was entitled to the estate as the heir of Maharaja Pratap Narain Singh under clause 11 of section 22 of Act I of 1869 which provided that on the failure of persons referred to in the first ten clauses, the ordinary heirs under personal law of the last holder of the taluk was entitled to succeed.
He pleaded that the widows of Maharaja Pratap Narain Singh were disentitled to the estate on the ground of unchastity and that he was the nearest heir living at that time.
The above case was filed on the assumption that Maharaja Pratap Singh was the putrika putra of Maharaja Man Singh and hence the plaintiff being an agnate of Maharaja Man Singh was entitled to succeed.
(Note: The claim was almost similar to the claim in these appeals).
The defendants in that suit denied all allegations of the plaintiff set up in the case and pleaded that one Dukh Haran Nath Singh had been adopted by one of the widows of Maharaja Pratap Narain Singh and that even if they were not entitled to the estate, the estate had to go to the family of Narsingh Narain Singh i.e. the natural family of Maharaja Pratap Narain Singh.
The trial court dismissed the suit.
In the appeal, the oudh Judicial Commissioner 's Court after specifically recording a finding that Maharaja Pratap Narain Singh was not the putrika putra of Maharaja Man Singh held that the practice of appointing a daughter to bear a son to a Hindu was permitted by the Mitakshara and was enforceable.
Reliance is now placed before us on the above decision of the Oudh Court to establish that even now it is possible to have a son in the putrika putra form.
We have carefully read the two judgments of the two Additional Judicial Commissioners, Stuart and Kanhaiya Lal.
We feel that the question whether the practice of taking a son in putrika putra form was in vogue at the relevant time has not been considered in detail in the two judgments.
The approach to this question appears to be bit casual even though the judgments on other material issues appear to be quite sound.
Since they had held that no ceremony constituting the mother of Maharaja Pratap Narain Singh 39 had been performed, they might not have gone into the question of law in depth.
They just proceeded on the basis of some ancient texts including the Mitakshara without devoting attention to the practice having become obsolete.
All that Kanhaiya Lal, A.J.C. says on the above question at page 259 is "The case with which a son could be obtained by adoption has had the effect in course of time of rendering affiliation in the form of putrika putra more or less uncommon, but it has by no means become obsolete, for the Mitakshara gives the putrika putra the second or predominant position after the legitimate son and treats him in every respect as his substitute.
" The learned Additional Judicial Commissioner treats, we feel inappropriately, the institution of an illatom son in law in vogue in Malabar or Khanadamad recognised in Punjab as but relics of the institution of putrika putra.
We have dealt with elsewhere in this judgment some of the text books referred to by the learned Additional Judicial Commissioner.
It is to be noticed that the Oudh Court did not refer to any specific case where a claim based on the putrika putra title had been upheld.
The following remark made by Stuart, A.J.C. at page 230 is significant: "What reason then could he have had to be the only person in Oudh known to history who employed a practice by which he set aside his daughter to bear him a male heir?" We feel for the reasons given by us elsewhere in this judgment that the view expressed by the Oudh Court on the question of prevalence of putrika putra form of affiliation cannot be accepted as correct.
We shall now advert to some of the digests, lectures and treatises on 'Hindu Law '.
In Colebrooke 's Digest of Hindu Law (1874 Edition) Volume II, page 416, preface to the first edition of which was written in 1796, it was observed thus: "Among the twelve descriptions of some begotten in lawful wedlock and the rest, any others but the son of the body and the son given are forbidden in the Cali age.
Thus the Aditya purana, premising "the filiation of any but a son lawfully begotten or given in adoption by his parents", proceeds: "These parts of ancient law were abrogated by wise legislators, as the cases arose at the beginning of the Cali age. . .
In the like manner sufficient reasons may be assigned or the prohibition of appointing a daughter and so forth.
Again, by the term "powers" in the text of Vrihaspati is meant, not only devotion, but the consequence of it, namely, command over the senses.
40 Among these twelve descriptions of sons, we must only now admit the rules concerning a son given in adoption and one legally begotten.
The law concerning the rest has been inserted, to complete that part of the Book, as well as for the use of those who, not having seen such prohibitory texts, admit the filiation of other sons.
Thus, in the country of O 'dry (O 'risa), it is still the practice with some people to raise up issue on the wife of a brother." Sir F. W. Macnaghten who was a judge of the Supreme Court of Judicature at Fort William in Bengal writes in his book entitled Considerations on the Hindu Law, as it is current in Bengal ' (1824 Edition) at page 129: "Vrihaspati speaks "of the thirteen sons, who have been enumerated by Meru in their order".
And with reference to this we find in the Dattaca Chandrika, 'of these however, in the present lage, all are not recognized.
For a text recites, 'sons of many descriptions, who were made by the ancient Saints, cannot now be adopted by men, by reason of their deficiency of power; ' and against those, other than the son given, being substitutes, there is a prohibition in a passage of law, wherein, after having been premised "The adoption, as sons of these other than the legitimate son, and the son given," it is subjoined. 'This rule, sages pronounce to be avoided in the Kali age. ' "Upon the words, "in a passage of law" there is the following note; This passage, which is frequently cited, is attributed to the Aditya purana, and in its complete state is thus, 'The adoption, as sons of those other than the legitimate son, and son given; the procreation of issue by a brother in law; the assuming the state of an anchoret; these rules, sages pronounce to be avoided in the Kali age. '" Sir Thomas Strange, a former Chief Justice of Madras observes in his book on 'Hindu Law ' (published in 1830) Volume I at pages 74 75 as under: ". . whence the different sorts of sons enumerated by different authorities, all resolving themselves, with Menu, into twelve; that is, the legally begotten, and eleven subsidiary ones, reckoning the son of the appointed daughter (putrika putra) as the same in effect with the one legally begotten, and therefore not to be separately accounted; all formerly, in their turn and order, capable of succession, for the double purpose of obsequies, and of inheritance; six (reckoning, with Menu, the legally begotton, 41 and the son of the appointed daughter as one), deriving their pretensions from birth, six, from distinct adoptions; the first of the twelve, namely, the issue male of the body lawfully begotten, being the principal one of the whole as the son given in adoption was always the preferable one, among those obtainable expressly in this mode.
And now, these two, the son by birth, emphatically so called, (Aurasa), and (Dattaca) the son by adoption, meaning always the son given, are, generally speaking, the only subsisting ones, allowed to be capable of answering the purpose of sons, the rest, and all concerning them, being parts of ancient law, understood to have been abrogated, as the cases arose, at the beginning of the present, the Cali age.
" Sir Ernest John Trevelyan, a former Judge of the High Court of Calcutta in his book entitled "Hindu Law as administered in British India" (Third Edition) states at page 107 thus: "In ancient times the Hindu law recognised the following descriptions of sons as legitimate sons, viz. 1.
Aurasa,. . . 2.
Kshetraja,. . . 3.
Putrika putra, or son of an appointed daughter.
In ancient times a man could appoint his daughter to raise up issue to him.
The practice is obsolete.
Shastri Golap Chunder Sarkar, without giving any instances of its application, contends that there is no reason why it should not be now applied.
(to) 13. . . .
Of these the only sons that are now recognized by Hindu law are the Aurasa son and the Dattaka son.
According to the Mithila school a Kritrima son can be taken in adoption.
Adoption in this form is based upon, recent works, and is not referable to the ancient practice of taking Kritrima sons." Dr. Jullius Jolly in his Tagore Law lectures delivered in 1883 entitled "Outlines of an History of the Hindu Law of Partition, Inheritance and Adoption" states in his Lecture VII at page 144 thus: "The early history of the Law of Adoption may be traced in those enumerations of subsidiary or secondary sons, which occupy such a prominent place in the Indian Law books.
Nearly all these substitutes for real sons are now long since obsolete, but they are deserving of attention, not only from a historical, but from a practical point of view, because the rules regarding 42 them, being earlier in time, have in a measure formed the basis on which adoption in the proper sense of the term has been framed by the writers of the medieval and modern Indian Digests.
" That the enumeration of twelve or thirteen and even fifteen kinds of sons in ancient Smritis owes its origin to the tendency of ancient writers to deal with exhaustively all possible sons a man could conceive of irrespective of the fact that all of them might not have received legal sanction in the contemporary society is obvious from the inclusion in the list of fifteen sons of a son called Yatrakvachanotpadita (son produced in any other manner than the sons previously enumerated).
Referring to such a son, Dr. Jolly observes at page 146 thus: "Beginning with the son procreated anywhere, who comes in as the last of all, I may observe that the only other text in which this kind of son is referred to occurs in the Vishnusmriti; coming in, as it does, at the end of the whole list, the term Yatrakvachanotpadita seems to mean produced in any other manner than the sons previously enumerated," and may owe its origin to the systematizing spirit of a later age which wished to exhaust all sorts of sonship that might occur anyhow.
" After referring to the relevant texts of Apararka, Smriti Chandrika, Battaka Chandrika, Madhava, Visvesvara Bhatta, Vivada Chintamani, Dayabhaga, Dattaka Mimansa, Nirnaya Sindhu of Kamalakara Vyavahara Mayukha of Nilkantha and the Dharma Sindhu of Kasi Natha, Shri Rajkumar Sarvadhikari states in 'the Principles of the Hindu Law of Inheritance ' (Tagore Law Lectures, 1880) at pages 407 409 as follows: "This catena of texts will prove to you that the practice of affiliating different kinds of sons has become obsolete at the present day.
The only exception is the dattaka, or the son given by his parents.
It may be said that the Mitakshara, the Dayabhaga, and the Vivada Chintamani the leading authorities in the Benares, the Bengal, and the Mithila Schools seem still to countenance the practice.
That these schools do not recognise such a custom is proved beyond question by the other text writers of these schools, who have followed the lead of Vijnanesvara, Jimutavahana and Vachaspati Misra.
The authority of Visvesvara Bhatta, Madhava, Kamalakara, Nanda Pandita, and Jagannatha is quite enough to 43 show that the ancient practice of affiliating different kinds of sons has fallen into desuetude in this age.
The dictum of Jagannatha of the Bengal School establishes beyond question the fact that the practice of affiliating daughters in default of male issue, and the other forms of adoption enumerated by Manu, has become wholly obsolete in the present age.
The same may be said also of the Benares School, Visvesvara Bhatta, Madhava, Nirnaya Sindhu, and Dharma Sindhu give plain and unequivocal answers on this point "the practice is forbidden in the present age".
The authority of Visvesvara Bhatta is highly respected in the Mithila School.
The words of Madhava and Kamalakara carry universal weight.
The Dattaka Mimansa and the Dattaka Chandrika, the two standard treatises on adoption, are the reigning authorities in all the schools; and we have seen that both of them strongly denounce the practice.
The Smriti Chandrika and the Vyavahara Mayukha have forbidden the practice in the Dravira and the Maharashtra Schools.
It is plain, therefore, that the adopted son is the only secondary son recognised in the present age.
It may reasonably be asked, however, "how is it, if the practice of affiliating secondary sons be obsolete in the present age, that Vijnanesvara, Vachaspati Misra, and Jimutavahana devote such a large space in their treatises in discussing the rights of subsidiary sons?" The question may be answered in the words of Jagannatha: "They did so to complete that part of the book.
They did so simply to show the nature of the practice as it existed in former ages.
They merely gave a historical review of the subject, and did not enjoin the practice in the present age.
The fact is, the practice was still lingering in some parts of the country when the authors of the Mitakshara, Chintamani, and the Dayabhaga promulgated their laws.
The discussion of the rights of secondary sons, then was, in the language of Jagannatha, for the benefit of those who "not having seen the prohibitory texts still admitted the filiation of the subsidiary sons".
We can by no means admit that the practice universally prevailed at the time of Vijnanesvara, Vachaspati Misra, and Jimutavahana.
44 It was strongly denounced by Vrihaspati and others.
But it is not improbable that the custom was at its last gasp at the time of Vijnanesvara.
Aprarka, Devandara, and Madhava, coming after the author of the Mitakshara, abolished it altogether.
The custom might have partly revived in some parts of India at the time of Vachaspati Misra and Jimutavahana, and that might have been partly the reason of their discussing the nature of the custom in their works.
Apart from the question whether such a practice prevailed at the time of Vijnanesvara, Vachaspati Misra, and Jimutavahana, there is not the shadow of a doubt that the practice is obsolete at the present days.
Our authority for making this statement is the opinion of Devananda, Kamalakara, Nanda Pandita, Nilakantha and Jagannatha.
The last four authors are the most recent authorities on the subject, and their evidence as to the non existence of the custom at the present day cannot be questioned.
Their words authoritatively settle the point that the custom has been entirely abrogated in the present age." After quoting the text of Vrihaspati: Anekdhaah kritah puthra rikshibhiryeapratanah na shakyantedhuna karttoo shaktihinairidantanaih (Sons of many descriptions who were made by ancient saints cannot now be adopted by men, by reason of their deficiency of power).
Jogendra Smarta Siromani observes in his Commentary on the 'Hindu Law ' (1885 edition) at page 112 thus: "All the secondary sons, with the exception of the Dattaka, have not only become obsolete, but according to the Shastras, they are not sons at all in the present age.
" At page 148 in the same book, he further observes: "The Kritrima form of adoption prevails only in Mithila, Nanda Pandita recognizes it as legal notwithstanding the text of Adita Purana which declares that in the present age all the secondary sons have become obsolete with the exception of the Dattaka (see Mimansa, section II, para 65)." John D. Mayne, the author of 'Mayne 's Treatise on Hindu Law and Usage ' (11th Edition) states at page 114: "The truth is that there were only two kinds of sons, the aurasa and the adopted son.
The list of twelve or thirteen sons 45 was obviously due to the systematising habit of Sanskrit writers.
" In 'Mulla 's Principles of Hindu Law ' (14th Edition), it is stated at page 115 thus: "The daughter 's son occupies a peculiar position in the Hindu law.
He is a bhinna gotra sapinda or bandhu, but he comes in before parents and other more remote gotraja sapindas.
The reason is that according to the old practice it was competent to a Hindu who had no son to appoint a daughter to raise up issue to him.
Such a daughter, no doubt was the lawful wife of her husband, but her son, called putrika putra, becomes the son of her father.
Such a son was equal to an aurasa or legitimate son, and took his rank, according to several authorities, as the highest among the secondary sons.
Although the practice of appointing a daughter to raise up issue for her father became obsolete, the daughter 's son continued to occupy the place that was assigned to him in the order of inheritance and even now he takes a place practically next after the male issue, the widow and the daughters being simply interposed during their respective lives.
" The portion underlined in the above extract is quoted with approval by the Privy Council in Ghanta Chinna Ramasubbayya & Anr.
vs Moparthi Chenchuramayya Minor & Ors.
(supra).
N. R. Raghavachariar on 'Hindu Law Principles & Precedents ' (5th Edition) writes at page 78: "But with the settlement of the society to peace and order and the recognition and enforcement by some superior power of the mutual rights of the people, the idea of family relationship received a better refinement and definition, and all the sons excepting the Aurasa, the Dattaka and the son by a permanently and exclusively kept concubine (Dasiputra) have become obsolete.
But the Putrika putra form of adoption, perfectly natural and consistent with the feelings of affection which a Hindu has towards his daughter 's son, is still prevalent in Malabar, though in other parts of India it has become obsolete".
We find a detailed discussion of the aurasa and eleven or twelve kinds of subsidiary sons mentioned by ancient smriti writers in 'History of Dharmasastra ' (Vol.
III) by P. V. Kane at pages 643 to 661.
At page 657, the learned author writes 46 "In modern times the courts generally recognize only two kinds of sons, viz. aurasa and dattaka, the other kinds of sons being held to be long since obsolete.
Vide Nagindas vs Bachoo (43 I.A. 56 at p. 67).
But two more kinds of sons have been recognized in modern times in certain provinces only, viz. the kritrima in Mithila (modern Tirhoot) and the putrikaputra among the Nambudri brahmanas of Malabar, both of which will be dealt with below.
" At page 659 in the same book, Shri P. V. Kane says: "The putrikaputra is no longer recognised anywhere in India except among the Nambudri brahmanas of Malabar.
" All the above digests, lectures and treatises support the view that the practice of appointing a daughter as a putrika and of treating her son as putrika putra had become obsolete several centuries ago.
Whereas passages in the text books referred to above point out that the practice of appointing a daughter to raise an issue had become obsolete, we find the following passage in 'A Treatise on Hindu Law ' by Golapchandra Sarkar Sastri (Third Edition) at pages 124 125 striking a slightly different note: "Putrika putra: It is most natural that a person destitude of male issue, should desire to give a grandson by daughter the position of male issue.
The appointed daughter 's son is not regarded by Manu as a secondary son, but is deemed by him as a kind of real son.
This form of adoption appears to prevail in the North Western Provinces, and neighbouring district.
The Talukdars of Oudh submitted a petition to Government for recognising the appointed daughter 's son; and accordingly in the Oudh Estates Act "son of a daughter treated in all respects as one 's own son" is declared to be heir, in default of male issue.
This sort of affiliation appears to be most desirable and perfectly consistent with Hindu feelings and sentiments; there is no reason why it should not be held valid, when actually made by a Hindu.
The Dattaka Mimansa appears to have been written on purpose to invalidate the affiliation of a daughter 's son, for the benefit of agnate relations.
" We do not think that the above passage in any way supports the case of the appellants.
The author of the above book appears to make a special plea for reintroducing the institution of putrika putra.
He does not refer to any prevailing practice of affiliation of a putrika putra 47 in accordance with Hindu Sastras.
The reference to the passing of the Oudh Estates Act instead of supporting the case of the appellants weakens it.
We have dealt with this point in detail while dealing with the case of Lal Tribhawan Nath Singh (supra).
Sir E. J. Trevelyan also does not approve of this statement of Golapchandra Sarkar Sastri.
Jogendra Chunder Ghose in his book entitled 'The Principles of Hindu Law ' (1903 Edition) observes at pages 77 78: "It remains to record the changes in the Hindu Law brought about by the ingenuity of the Judges and lawyers of our modern Courts.
The position of the son, grandson, and great grandson remains unchanged.
The Putrika and the Putrika Putra are not recognized in spite of all the Rishis and all the Commentators.
The daughter takes after the widow according to the text of Yajnavalkya, but she is given a life interest against all authority, and for reasons invented by the Bengal lawyers.
The daughter 's sons come next, and they are declared to take per capita against all the Rishis and all the Commentators who have dealt with that question.
" From the above passage it is clear that the institutions of putrika and putrika putra have become obsolete.
But the tirade against Bengal lawyers is uncharitable.
They are not responsible for the change.
In fact it is Hindu society which brought about such a change.
We shall presently deal with the reasons which were responsible for such a change.
In the course of the arguments learned counsel for the appellants strongly contended that there was no justification to deny the right to a Hindu to take a son in the putrika putra form when it had been sanctioned by Yajnavalkya in his Smriti and by Vijnanesvara in his Commentary, the Mitakshara.
It was contended that merely because there were no instances where the said practice was followed in the immediate past, it could not be held that it had ceased to be a part of Hindu law.
It is seen from the several texts of commentaries extracted in the course of this judgment that the practice of taking a son in putrika putra form had become obsolete in modern times and there are good reasons in support of that view.
Before dealing with such reasons, we should keep in our view one of the statements of Vrihaspati which says thus: Dharmapi loka vikrikshatang na kuryata loka virudhang nacharet (Even if a rule is propounded by the Smritis, it should not be practised if it is rejected by the people or is opposed to their will).
A 48 rule of interpretation lays down that if there is a clear usage to the contrary, the Shastra has to yield.
If there is divergence of opinion amongst the Smritis, a Judge should consult the prevailing practice among the people while deciding a case.
There is another injunction of Vrihaspati which is very salutary: Kewalang shastramashritya nakartvyo hi nirnayah yukti hine vicharetu dharma hanih prajayate (The decision (in a case) should not be given by merely relying on the Sastras, for in the case of a decision devoid of reasoning loss of dharma results).
We shall now examine the reason for the abandonment of the practice of appointing a daughter to raise a son by the Hindu society.
Originally according to a vedic text cited by Lakshmidhara, a daughter was like a son, and a daughter 's son was like a son 's son.
Manu prescribed that he who had no son might make his daughter in the following manner an appointed daughter (putrika) saying to her husband 'The (male) child born of her, shall perform my funeral rites ' Aputronena vidihina sutang kurvit putrikam yadapatyang bhawedasyah tanmasyata swadhakarang According to Manu 'A son is even as one 's self, daughter is equal to a son, how can another (heir) take the estate, while (such daughter who is) one 's self, lives.
The daughter 's son shall take the whole estate of his maternal grand father who leaves no male issue.
Between a son 's son and the son of a daughter, there is no difference according to law.
But if, after a daughter has been appointed, a son be born (to her father) the division (of the inheritance) must in that (case) be equal, for there is no right of primogeniture for a woman".
Apastamba declared 'The daughter may take the inheritance of a sonless man '.
Yajnavalkya said 'The son of a putrika is equal to him (the son).
Narada stated 'in failure of a son, the daughter succeeds because she continues the lineage just like a son '.
From the above texts, it is obvious that in ancient times, the daughter and the daughter 's son were given preference over even the widow of a person in the matter of succession.
It is said that ancient 49 commentators like Medha thi thi and Haradatta had declared that the widow was no heir and not withstanding some texts in her favour, her right was not fully recognised till Yajnavalkya stated that the widow would succeed to the estate of a sonless person.
In Yajnavalkya Smriti, the order of succession to a male was indicated in the following order: (1) son, grandson, great grandson (2) putrika putra (3) other subsidiary or secondary sons, (4) widow and (5) daughter.
After daughter, it was not expressly stated that daughter 's son would succeed, but the parents were shown as the successors.
Vijnanesvara, however, interpreted the word (cha), which meant 'also ' in (Duhitaraschaiva) in the text of Yajnavalkya laying down the compact series of heirs as referring to daughter 's son.
The relevant text of Yajnavalkya has been quoted above.
Vijnaneswara interpreted the word 'cha ' referred to above as follows: Cha shavdadaduhitrabhave douhitre dhanbhaka yathah vishnuh aputhra pouthra santhane douhithra dhanmanpuyuh, poorvekshantu swadhaakare pouthra douhithraka mata" itee.
manurapi akrita wakrita wapi yang vindeta sadhrisha sutang pouthri maathamahasthen dadynat pindang haredhanmiti (By the import of the particle, 'also ', the daughter 's son succeeds to the estate on failure of daughters.
Thus Vishnu says "If a man leaves neither son, nor son 's son, nor wife, nor female issue, the daughter 's son shall take his wealth.
For in regard to the obsequies of the ancestors, daughter 's sons are considered as son 's son.
Manu likewise declares 'By that male child, whom a daughter whether formally appointed or not shall produce from a husband of an equal class, the maternal grandfather becomes the grandsire of a son 's son: let that son give the funeral oblation and possess the inheritance.) It may be noticed that but for the above interpretation of the word 'cha ' a daughter 's son would have come in as an heir after all agnates as the daughter 's son is only a cognate (Bandhu).
As a result of the above interpretation, the daughter 's son was promoted in rank next only to his maternal grand mother and his mother whose interest in the estate was only a limited one.
Viewed from this situation, the reason for abandoning the practice of appointing a daughter as putrika and treating her son as putrika putra becomes clear.
When a person had two or more daughters, the appointment of one of them would give her primacy over the wife and the other daughters (not so appointed) and her son (appointed daughter 's son) would succeed to the exclusion of the wife and other daughters and their sons and also to the exclusion of his own uterine brothers (i.e. the other sons of the appointed daughter).
Whereas in the case of plurality of sons all sons would succeed equally, in the case of appointment of a daughter, other daughters and their sons alongwith the wife would get excluded.
It is 50 probably to prevent this kind of inequality which would arise among the daughters and daughter 's sons, the practice of appointing a single daughter as a putrika to raise an issue must have been abandoned when people were satisfied that their religious feelings were satisfied by the statement of Manu that all sons of daughters whether appointed or not had the right to offer oblations and their filial yearnings were satisfied by the promotion of the daughter 's sons in the order of succession next only to the son as the wife and daughters had been interposed only as limited holders.
In Ghanta Chinna Ramasubbayya & Anr.
vs Moparthi Chenchuramayya, Minor & Ors.
(supra), the Privy Council after quoting with approval a passage in D.F. Mulla 's Book on Hindu Law (p. 40, 9th Edition) where it had been stated that although the practice of appointing daughter to raise up issue had become obsolete, the daughter 's son continued to occupy the place that was assigned to him in the order of inheritance observed thus: "The daughter 's son owes much to Vignaneshwara for his place in the scheme of the law of inheritance for, in the subjoined important text of Yajnavalkya, which forms the entire basis of the Mitakshara law of succession the daughter 's son is not expressly mentioned.
"The wife, and the daughters also, both parents, brothers likewise and their sons, cognates, a pupil and a fellow student: on failure of the first among these, the next in order is indeed heir to the estate of one, who departed for heaven leaving no male issue.
This rule extends to all persons and classes," Colebrook, Mit.
ii section 1, vs 2.
By interpreting the particle "also" in the above text, Vignaneshwara gave the daughter 's son a place in the law of inheritance.
"By the import of particle 'also ' (sects. 1 and 2) the daughter 's son succeeds to the estate on failure of daughters.
Thus Vishnu says 'if a male leave neither son, nor son 's son nor (wife nor female) issue the daughter 's son shall take his wealth for in regard to obsequies daughter 's sons are considered as son 's sons. '", Colebrook, Mit.
ii, section 2, vs 6.
It is interesting to note the remark of Mandlik on the above interpretation by Vignaneshwara.
He says: "After the word daughter 's son in the above text occurs the particle (Chaiva) 'also ', to give some sense to which Vignaneshwara introduces here, the daughter 's son in conformity with a text of Vishnu, 'the wealth of him ' who has neither sons nor grandsons goes to daughter 's son, for . . '," Compare Manu ch.
IX; vs 136.
(Mandlik 's translation, p. 221).
By the above ingenious exposition, the famous compiler of the Mitakshara shaped the law into conformity with the needs of the day without appearing to make any change and 51 thus gave the daughter 's son his present place in the law of inheritance".
Dr. Nares Chandra Sen Gupta in his Tagore Law Lectures, 1950 on 'Evolution of Ancient Indian Law ' also subscribes to the view that the institutions of putrika and putrika putra had become obsolete several centuries ago and observes at pages 146 148 thus: "In later Smritis, the Putrika has lost all her importance.
For already the daughter as such is mentioned by them as heir, irrespective of her being a Putrika, after the sons and the widow.
Manu too, while he begins by giving the formula by which a girl could be made a Putrika, in the immediately following slokas, says that a daughter and a daughter 's son as such inherit to a sonless person.
In Yajnavalkya the Putrika is barely mentioned, but the inheritance of the daughter after the widow is well settled.
Obsolesence of Putrika Now if a daughter and her son inherit as such and if every daughter 's son, and not merely the Putrika 's son inherits and, as in Baudhayana, offers oblations to the maternal grand father as such, all practical utility of Putrika disappears, and the institution naturally ceases to exist.
The obsolescence of this custom in the time of Manu and Visnu and others appears from the absence of further details about this institution in any of these Smritis.
Manu, indeed, true to its character as an encyclopedaeic digest of all texts gives us several texts relating to the Putrika, which belong to different strata of the history of law.
It is singular, however, that in his enumeration of the twelve kinds of secondary sons (IX, 159,160) he omits any reference to the Putrika or her son.
In another place (IX, 123 et seq.) however he deals with the Putrika 's son, but his treatment of the subject is mixed up with that of the daughter 's son generally.
As already pointed out, he lays down the law that a Putrika is made by a contract at the time of marriage (IX, 127), but, immediately after that, he follows with a text laying down that a daughter 's son as such inherits to a sonless person and offers pindas both to the father and the maternal grand father (IX, 132).
This he emphasizes by saying that the son 's son and the daughter 's son (not Putrika 's son alone) are equal in all respects (IX, 133, 136, 139).
In IX, 140 he lays down the order in which the Putrika 's son offers pindas to his maternal ancestors, while in IX, 135 he says that on the Putrika dying sonless, her husband inherits to her, thus indicating 52 that a true husband wife relation for spiritual and legal purposes now exists between her and her husband.
If we remember that the present text of the Manusamhita was essentially a compilation of all the texts of law which were current at the date of compilation in the name of Manu and that accordingly many texts are incorporated in it which had long become obsolete at that date, we shall be able to assess these texts at their proper value.
It will then be seen that these texts, so far as the Putrika 's son goes, do not lay down anything which was not already laid down by Gautama, Vasistha and Baudhayana.
The other texts, however, which give to the son of the daughter "akrita va krita va 'pi" "whether appointed or not" the same status as a Putrika 's son, belong to a later stratum already indicated in Vishnu.
These texts practically nullify the provisions about Putrika putra who had evidently ceased to be an institution of any practical utility, so much so that he finds no place in Manu 's enumeration of the twelve secondary sons.
Later Smritis, beyond occasionally mentioning the Putrikaputra among the twelve kinds of sons do not speak of them at all.
The zeal upon the obsolescence of the Putrika along with the various other kinds of secondary sons, except the Dattaka, was set by the text of the Adityapurana which gives an index expurgatorius of laws forbidden in the Kali Age and mentions among others the recognition of sons other than Aurasa and Dattaka.
This text, as the Smritichandrika, Parasara, Madhava and others observe, makes the institution of Putrika void in the Kali Age.
From the historical point of view we can only look upon this as a record of the contemporary fact, that this practice had gone out of vogue.
" We are broadly in agreement with the following passage occurring in Mayne 's Hindu Law (1953 Edition) at pages 181 182 which while dealing with the reason for putrika putra losing importance and the emergence of the adopted son as the only other son recognised by modern law states: "Apart from the exceptional kshetraja son, the prominence of the putrika putra or the son of an appointed daughter is an indication of the prevailing usage which was all in his favour.
His equality in status with the aurasa son both for spiritual and temporal purposes was established from the earliest times and he had to offer pindas both to his father and to his maternal grandfather and he took the estate of his own father if he left no other son.
In many respects therefore, he was like the son of two fathers and 53 it must have been increasingly felt that his father should not be deprived of the continuance of his own line.
The son of the appointed daughter, in offering pindas to his mother, had to recite the gotra of his maternal grandfather, as in the putrikakarana marriage the gift of the girl was not complete.
For religious purpose, this anomalous position of a son of two fathers must have been found to be unsatisfactory and, as a consequence, there was the repeated injunction not to marry brotherless maidens, which would make it difficult to secure suitable bridegrooms if the institution of putrikaputra was insisted upon.
There was also the injustice to his uterine brothers who were excluded by their appointed brother from the enjoyment of their maternal grandfather 's property.
Besides, the daughters other than the appointed daughter appear to have come into their own by the time of the Arthasastra of Kautilya.
This must have led to the gradual recognition as heirs to the maternal grandfather of sons of daughters without any appointment, while at the same time the putrikaputra 's duty to offer pinda to the maternal ancestors was imposed also on the daughter 's son.
But as the daughter 's son was only a bhinnagotra sapinda, it became necessary that an adoption of a son should be made whenever a continuation of the direct line was desired either for spiritual or temporal purposes.
All these reasons must have powerfully operated to bring the adopted son into a new prominence.
Accordingly, Manu provided for the identity of the adopted son with the family into which he was adopted.
" Now that the practice of appointment of a daughter as putrika has become obsolete, all daughters and their sons stand in the same position.
This perhaps is the reason as to why such practice was given up.
It was in the alternative contended that when once it was established that at the time of the ancient Smritis, a Hindu had the right to appoint a daughter for the purpose of raising a son for him that right would continue to be in existence until it was taken away by a competent legislature a law making body as we understand today.
It is also argued that the theory of a practice once recognized by law becoming obsolete was unknown.
In support of the above submission, strong reliance was placed on the decision of the High Court of Madras in Pudiava Nadar vs Pavanasa Nadar & Ors.(1) In that case, the question before the High Court was whether the rule of Hindu law which excluded a congenitally blind person from inheritance had 54 become obsolete or not.
The case was referred to a Full Bench as there was an earlier ruling of that Court in Surayya vs Subbamma(1) which had taken the view that the said rule had become obsolete and doubts had been entertained about the correctness of that view.
In Surayya 's case (supra) Sadasiva Ayyar, J. observed: "I need not say that a rule becomes obsolete when the reason of the rule disappears through change of circumstances and environments in the society which was governed by that rule", while Napier, J. who agreed with him said that owing to improved methods of education there was no reason why such a disqualification should still continue and that it was open to the Court to enunciate that rule by declaring it to be obsolete.
Schwabe, C.J. who presided over the Full Bench which decided Pudiava Nadar 's case (supra) after observing: "The next question is whether, assuming a blind man 's exclusion to have been the law at the date of the Mitakshara, it has since become obsolete.
This, in my judgment, is a question of fact.
A law does not cease to be operative because it is out of keeping with the times.
A law does not become obsolete because it is an anachronism or because it is antiquated or because the reason why it originally became the law, would be no reason for the introduction of such law at the present time.
" proceeded to state "In considering whether the custom has become obsolete in the sense of its having ceased to exist, the fact that it is an anachronism may be a proper matter to be taken into consideration, if there were evidence both ways, in weighing that evidence but otherwise it is of no importance.
In this case, in my judgment, the evidence is all in favour of the custom having continued.
There is no oral evidence before the Court and no statement of any text writer or any judgment to which our attention has been called that this custom has become obsolete in the sense of its having been discontinued.
" Oldfield, J. agreed with the Chief Justice.
Courts Trotter, J., the third Judge delivered a separate but concurring judgment in which he observed thus: "To my mind, before allowing a mandate such as I conceive this to be, to be disregarded, it must either be proved by evidence to be actually disregarded in practice at the present time and as I have already said there is no such evidence in this case or it must be shown by an examination of the smritis and commentaries 55 to have been obsolete at the time they were written, and that the authors thereof merely repeated parrot like the words of Manu and the Mitakshara as a maxim dignified by antiquity but not corresponding to the practice obtaining at the time either of the Mitakshara or of their own compilations.
If it could be shown that commentators earlier than the Mitakshara had used language meaning or implying that the rule in this respect was obsolete, that might be a legitimate ground for the conclusion that the Mitakshara was merely repeating the words of Manu without inquiring whether the rule survived in force when the Mitakshara was written.
If a commentator later than the Mitakshara used similar language, that might lead to a legitimate inference that, though in force at the date of the Mitakshara, the rule had subsequently become obsolete." Ultimately the Full Bench held that the rule which excluded a congenitally blind person from inheritance had not been shown to have become obsolete and that in the twentieth century any amendment to that rule could only be done by a legislature.
It is stated that the ratio of this decision has been dissented from in two subsequent decisions of the Madras High Court in Amritammal vs Valli Mayil Ammal(1) and in Kesava vs Govindan(2).
We are not concerned with the said subsequent opinions.
But the fact remains that both Schwabe, C.J. and Coutts Trotter, J. who decided the Pudiava Nadar 's case (supra) did not state that a rule of Hindu law could not become unenforceable on the ground that it had become obsolete.
The rule of desuetude or obsolescence has been applied by this Court while interpreting Hindu law texts.
In Shiromani & Ors.
vs Hem Kumar & Ors.(3) one of the questions which arose for consideration was whether the practice of allowing a larger share of property to the eldest son which was known as 'Jethansi ' or 'Jeshtbhagam ' had become obsolete and therefore unenforceable.
The claim of a party to such larger share was negatived by this Court by applying the principle that the rule though founded in the Sastras had become obsolete.
In doing so, this Court relied on a passage in the Mitakshara, which when rendered into English read thus: "Unequal division though found in the sastras (e.g. Manu IX, 105, 112, 116, 117, Yaj.
114) should not be practised because it has come to be condemned by (or has become hateful to) the people, since there is the prohibition (in Yaj.
I. 156) that an 56 action, though prescribed in the sastras, should not be performed when it has come to be condemned by the people, since such an action does not lead to the attainment of Heaven.
For example, though Yaj.
I. 109 prescribes the offering of a big ox or a goat to a learned brahmana guest, it is not now practised because people have come to hate it; or just as, although there is a Vedic text laying down the sacrificing of a cow 'one should sacrifice a barren cow called anubandhya for Mitra and Varuna ', still it is not done because people condemn it.
And it has been said "just as the practice of niyoga or the killing of the anubandhya cow is not now in vogue, so also division after giving a special share (to the eldest son) does not now exist".
There is another instance where an ancient rule regarding a form of marriage has been held to have become obsolete by courts.
Gandhava form of marriage had been permitted and recognised in ancient times.
Apart from Manu and some other Smritis recognising it, we have the following sloka in Kalidasa 's Abhijnana Sakuntalam: Gandhaverven vivahen bahwayo rajarshi kanyakah shruyante parirnitashtah pithrivischabhinanditah (Many daughters of royal sages are heard to have been married by the ceremony called Gandharva, and (even) their fathers have approved them).
But in Bhaoni vs Maharaj Singh(1) and Lalit Mohan vs Shyamapada Das(2) it was held that the Gandharva form of marriage could not be recognized as valid marriage as it had become obsolete.
While interpreting the ancient texts of Smritis and Commentaries on Hindu Dharmasastra, we should bear in mind the dynamic role played by learned commentators who were like Roman Juris Consults.
The commentators tried to interpret the texts so as to bring them in conformity with the prevailing conditions in the contemporary society.
That such was the role of a commentator is clear even from the Mitakshara itself at least in two places first, on the point of allotment of a larger share at a partition to the eldest son which is discussed above and secondly on the question of right of inheritance of all agnates.
The second point is elucidated by the Privy Council 57 in the following passage in Atmaram Abhimanji vs Bajirao Janrao & Ors.(1) "It was however, recognized in course of time that the rule enunciated in the ancient texts, giving the right of inheritance to all agnates, however remote, and placing the cognates after them, was not in conformity with the feelings of the people; and Vijnaneswara, when writing his commentary Mitakshara on the Smriti of Yajnavalkya, probably found that a usage had grown up restricting the samanodaka relationships to the fourteenth degree.
He accordingly refrained from endorsing the all embracing rule of Yajnavalkya, and while mentioning it in the verse dealing with the subject, he gave prominence to the restricted scope of the word, and supported it by citing Vrihad Manu.
It must be remembered that the commentators, while professing to interpret the law as laid down in the Smritis, introduced changes in order to bring it into harmony with the usage followed by the people governed by the law; and that it is the opinion of the commentators which prevails in the provinces where their authority is recognized.
As observed by this Board in Collector of Madura vs Moottoo Ramalinga Shathupathy (1868) 12 Moo.
I.A. 397, 436, the duty of a judge "is not so much to inquire whether a disputed doctrine is fairly deducible from the earliest authorities as to ascertain whether it has been received by the particular school which governs the district with which he has to deal, and has there been sanctioned by usage.
For under the Hindoo system of law, clear proof of usage will outweigh the written text of law." Indeed, the Mitakshara "subordinates in more than one place the language of texts to custom and approved usage": Bhyah Ram Singh vs Bhyah Ugur Singh (1870)13 Moo.
I.A. 373, 390.
It is, therefore, clear that in the event of a conflict between the ancient text writers and the commentators, the opinion of the latter must be accepted.
" The importance of the role of the commentators is explained by P.B. Gajendragadkar, J. (as he then was) in his article entitled "The Historical Background and Theoretic basis of Hindu Law ' in the 'Cultural Heritage of India ' (Vol. II) at page 427 published by the Ramakrishna Mission Institute of Culture thus: "In due course of time, when the distance between the letter of the Smritis and the prevailing customs threatened to get wider, commentators appeared on the scene, and by adopting ingenious interpretations of the same ancient texts, they achieved 58 the laudable object of bringing the provisions of the law into line with popular usages and customs.
The part played by Vijnanesvara in this connection deserves special mention.
The fiction of interpretation is seen in the three systems of jurisprudence known to us, the Roman, the English, and the Hindu system.
But as Mr. Sankararama Sastri points out, there is an interesting distinction among the three systems on this point.
Whereas the authority of the English case law is derived from the Bench, that of the Roman Responsa Prudentium and the Sanskrit commentary is derived from the Bar.
While in England the development of law is left entirely to the exigencies of disputes actually arising for adjudication, in India and at Rome, it was possible for the jurist to evolve and homogeneous body of Laws without reference to actually contested cases.
In this connection, it may be interesting to refer to the observations of Bentham that a legal fiction is a "willful falsehood having for its object the stealing of legislative power by and for hands which could not and durst not openly claim it and but for the delusion thus produced could not exercise it.
Nevertheless, the legal fiction of interpretation has played a very progressive part in the development of Hindu Law.
It is because this process was arrested during the British rule in this country that Hindu Law came to be fossilized, as judges relied mainly on the commentators without taking into account the changing customs and usages in the Hindu community.
" It was next contended by the learned counsel for the appellants that the rule against the appointment of a daughter by a Hindu to beget an issue for himself in Kali age enunciated by Saunaka and others should be treated as only directory and if any person appointed a daughter for that purpose in contravention of that rule still her son would become putrika putra of the person so appointing, with all the privileges of a putrika putra.
In support of the above contention, reliance was placed on the decision of the Privy Council in Sri Balusu Gurulingaswami vs Sri Balusu Ramalakshmamma & Ors.(1) in which it had been held that the adoption of an only son though prohibited, having taken place in fact was not null and void under Hindu law.
In that case, the Privy Council was faced with divergent opinions of the Indian High Courts on the interpretation of the relevant texts and was also probably moved by the creation of a number of titles which had been done on the basis of the opinions of some High Courts which had taken the view that the textual prohibition was only directory and not mandatory by applying a rule of interpretation expound 59 ed by Jamini, the author of 'Purva Mimansa ' that all texts, supported by the assigning of a reason were to be deemed not as vidhi but as arthavada or recommendatory.
The Privy Council had to reconcile in that case a number of inconsistent commentaries and judicial decisions.
Ultimately it upheld the adoption with the following observations which were made with a lot of reservation: "But what says authority? Private commentators are at variance with one another; judicial tribunals are at variance with one another; and it has come to this, that in one of the five great divisions of India the practice is established as a legal custom, and of the four High Courts which preside over the other four great divisions, two adopt one of the constructions and two the other.
So far as mere official authority goes there is as much in favour of the law of free choice as of the law of restriction.
The final judicial authority rests with the Queen in Council.
In advising Her Majesty their Lordships have to weigh the several judicial ulterances.
They find three leading ones in favour of the restrictive construction.
The earliest of them (in Bengal, 1868) is grounded on a palpably unsound principle, and loses its weight.
The second in time (Bombay, 1875) is grounded in part on the first, and to that extent shares its infirmity, and in part on texts of the Mitakshara, which are found to be misleading.
So that it, too, loses its weight.
The third (Bengal, 1878) is grounded partly on the first, and to that extent shares its infirmity; but it rests in great measure on more solid ground, namely, an examination of commentators and of decided cases.
It fails, however, to meet the difficulty of distinguishing between the injunction not to adopt an only son and other prohibitive injunctions concerning adoptions which are received as only recommendatory; the only discoverable grounds of distinction being the texts of the Mitakshara, which are misleading, and the greater amount of religious peril incurred by parting with an only son, which is a very uncertain and unsafe subject of comparison.
The judicial reasoning, then, in favour of the restrictive construction is far from convincing.
That the earliest Madras decision rested in part on a misapprehension of previous authority has been pointed out; and the Madras reports do not supply and close examination of the old texts, or any additional strength to the reasoning on them.
The Allahabad Courts have bestowed the greatest care on the examination of those texts, and the main lines of their arguments, not necessarily all the by ways of them, command their Lordships ' assent.
Upon their own examination of the Smritis, their Lordships find them by 60 no means equally balanced between the two constructions, but with a decided preponderance in favour of that which treats the disputed injunctions as only monitory and as leaving individual freedom of choice.
They find themselves able to say with as much confidence as is consistent with the consciousness that able and learned men think otherwise, that the High Courts of Allahabad and Madras have rightly interpreted the law and rightly decided the cases under appeal." Proceeding further, the Privy Council observed: "A Court of Justice, which only declares the law and does not make it, cannot, as the Legislature can, declare it with a reservation of titles acquired under a different view of it.
But their Lordships are placed in the position of being forced to differ with one set of Courts or the other.
And so far as the fear of disturbance can affect the question, if it can rightly affect it at all, it inclines in favour of the law which gives freedom of choice.
People may be disturbed at finding themselves deprived of a power which they believed themselves to possess and may want to use.
But they can hardly be disturbed at being told that they possess a power which they did not suspect and need not exercise unless they choose.
And so with titles.
If these appeals were allowed, every adoption made in the North West Provinces and in Madras under the views of the law as there laid down may be invalidated, and those cases must be numerous.
Whereas, in Bengal and Bombay the law now pronounced will only tend to invalidate those titles which have been acquired by the setting aside of completed adoptions of only sons, and such cases are probably very few.
Whether they demand statutory protection is a matter for the legislature, and not for their Lordships to consider.
It is a matter of some satisfaction to their Lordships that their interpretation of the law results in that course which causes the least amount of disturbance.
" In these appeals we are not faced with the situation with which the Privy Council was confronted.
No judicial decision of any court where a title had been upheld on the basis of putrika putra form of adoption has been brought to our notice.
If really such a practice was prevailing in recent centuries, persons with only daughters and no sons being not uncommon there should have arisen a number of cases.
We may remember that the Privy Council while deciding the case of Thakoor Jeebnath Singh (supra) observed that it was not necessary to decide the validity of the practice of appointment of a daughter to raise an issue 'although there certainly does not appear to have arisen 61 in modern times any instance in the courts where this custom has been considered '.
The only case where such a title was set but not established was the case of Lal Tribhuwan Nath Singh (supra) which has been dealt with separately by us.
Moreover we are not concerned in this case with the eligibility of a person being taken in adoption but the existence of the very institution of putrika putra itself.
When we have the predominant opinion of commentators supporting its non existence in the last few centuries extending to a period prior to the life time of Raja Dhrub Singh and there are good reasons for the Hindu society abandoning it, it would be inappropriate to resurrect the said practice by placing reliance on the above argument of the learned counsel, which in the circumstances appears to be highly tenuous.
At this stage, it should be stated that the High Court after considering in detail the evidence on record came to the conclusion that the family of Raja Dhrub Singh was governed by the Benaras School of Hindu law and not by the Mithila School (See para 64 of the judgment of G.N. Prasad, J. and paras 229 and 230 of Madan Mohan Prasad, J.).
No ground was made out by the learned counsel for the appellants in these appeals to take a different view.
We hold that the family of Raja Dhrub Singh was governed by the Benaras School of Hindu Law and there is no occasion to apply principles of the Mithila School of Hindu law to the present case.
The question whether the family was governed by the Benaras School or by the Mithila School became relevant before the High Court as an attempt was made by the appellants herein relying on some commentaries which were considered as having local application to show that the practice of appointment of a daughter to raise an issue was in vogue amongst those governed by the Mithila School.
The said commentaries on which reliance was placed by the appellants have been dealt with in detail by Madan Mohan Prasad, J. in paragraphs 204 to 215 of his judgment.
Summarizing his views on them, Madan Mohan Prasad, J. Observes at paragraphs 214 and 215 of his judgment thus: "214.
It will thus appear that of all the other writers of Mithila School mentioned earlier, Pandit Amarit Nath Jha is the only one who has unequivocally said that during the Kali age these four kinds of sons, viz. Aurasa, Dattaka, Kritrima and Putrika putra, can be made and recognised.
It will, however, appear that he has taken no note of Saunaka and Adityapuran.
Even though he has referred to Nanda Pandit and discarded the Kshetraj on account of the interpretation by Nanda Pandit, he 62 has not referred to the prohibition of Saunaka and the acceptance thereof by Nanda Pandit and naturally, therefore, he has given no reasons for differing with Nanda Pandit and the several other commentators who have been discussed earlier and who accepted the prohibition of Saunaka so as to include the Putrika Putra. 215.
The learned author of this book is a product of the 19th century.
Whether the custom of Putrika Putra obtain in Mithila is a question which cannot be answered merely on the basis of the precept of this writer that even during the Kali age such sons should be made.
It may be recalled that the Privy Council in the case of Thakur Jeebnath said that for more than a century not a single case of adoption in the form of Putrika Putra was brought to their Lordship 's notice.
Barring the few cases of Narsing Narain, Thakur Jeebnath and Babui Rita Kuer no other case was brought to our notice even today where the custom of Putrika Putra had been alleged or decided.
Be that as it may, nobody has claimed any authority for Pandit Amrit Nath Jha, except with respect to the Mithila School.
His authority will, therefore, lend support, if at all, to the case of the plaintiffs of Title Suit No. 25 of 1958, only if they are abloe to establish that the Bettiah Raj family was governed by the Mithila School of Hindu law.
I may state here that the conclusion which I have arrived at on this question is that the evidence in this case does not prove that the aforesaid family was governed by the Mithila School; on the other hand it is clear that it was governed by the Benares School of Hindu Law and in view of that the authority of Pandit Amrit Nath Jha is of no avail to the plaintiffs.
" We are generally in agreement with his views and we add that the material placed before us is not sufficient to hold that the institution of putrika putra was in vogue during the relevant time even amongst persons governed by the Mithila School.
On a consideration of the entire matter, we hold that throughout India including the area governed by the Mithila School, the practice of appointing a daughter to raise an issue (putrika putra) had become obsolete by the time Raja Dhrub Singh was alleged to have taken Raja Jugal Kishore Singh as putrika putra.
We, however, do not express any opinion regarding the applicability of the above view to Nambudiris of Kerala.
We should also record that the High Court has taken the view on a careful analysis and consideration of the entire material before it that Raja Dhrub Singh had in fact not appointed his daughter as a putrika to beget a putrika putra for him.
Apart from the 63 evidence led in the case, the case of the appellants has become very weak by the inconsistent positions taken up by the parties from stage to stage in the case as can be gathered from paragraphs 68 to 73 of the judgment of G.N. Prasad, J. We find it appropriate to quote here paragraph 73 of the judgment of G.N. Prasad, J, which reads thus: "73.
All these statements reveal a strange state of affairs.
Ambika (plaintiff No. 1) thought the plea with regard to the Kritrim form of adoption to be correct, but Kamleshwari (plaintiff No. 6) thought it to be incorrect.
Ambika had no knowledge of any plea of Dattak form of adoption having been set up on his behalf.
Kamleshwari not only characterised that plea to be wrong but even disclaimed to have any such plea having been taken on his behalf.
In other words, the plea of Dattak form of adoption was taken without the knowledge or authority of either of the two deposing plaintiffs, namely Ambika (D.W. 15) and Kamleshwari (D.W. 27), and it was evidently done at the initiative of the Karpardaz of the legal adviser of the plaintiffs of the title suit No. 25, who obviously could have no personal knowledge of the real facts, although, however, the plea of Dattak form of adoption was also given up at a later stage.
The multiplicity of the various pleas cannot be lost sight of while dealing with the surviving plea of Putrika Putra form of adoption, particularly when this also was not taken in the first instance.
It seems to me that the entire case of adoption put forward on behalf of the plaintiffs of Title Suit No. 25 is the product of imagination of their legal advisers, having little relation with true facts." After giving our anxious consideration to all aspects of the case, we hold that the practice of appointing a daughter as a putrika to beget a son who would become the putrika putra had become obsolete long before the life time of Raja Dhrub Singh and Raja Jugal Kishore Singh could not, therefore, in law be considered as putrika putra of Raja Dhrub Singh.
It follows that the appellants who claim the estate on the above basis cannot succeed.
In view of the foregoing, it is not necessary for us to go into the question whether the decisions of the Privy Council rendered prior to the abolition of its jurisdiction over India were binding on the Indian Courts, which is precisely the question formulated in the certificate issued by the High Court.
For the foregoing reasons, the appeals (Civil Appeals Nos. 114 119 of 1976) alongwith the Special Leave Petition therefore fail and are dismissed.
In the circumstances of the case, we absolve the appellants from the liability to pay costs in all the courts.
S.R. Appeals dismissed.
| Section 68F(1D) of the provides that no permit shall be granted or renewed during the period intervening between the date of publication, under section 68C of any scheme and the date of publication of the approved or modified scheme, in favour of any person in relation to an area or route or portion thereof covered by that scheme.
Respondent No. 2 was a private operator operating a Stage carriage route.
Its permit was due to expire on October 9, 1974 and it applied for its renewal.
The application was notified on June 5, 1974 under section 57(3) of the .
Objections to the renewal application were filed by the appellant Corporation on June 25, 1974 which also simultaneously applied for the grant of a permit to itself.
The Regional Transport Authority fixed December 21, 1974 for hearing and the case was adjourned.
In the meanwhile, respondent No. 2 filed a Writ Petition and challenged the validity of Rule 155A of the Motor Vehicles Rules and obtained stay of the hearing of the matter which was pending before the Regional Transport Authority.
The validity of the said rule was upheld by the High Court and the writ petition was dismissed.
A draft scheme of road transport service of the appellant corporation was published on June 4, 1976 under section 68C of the Act and that scheme overlapped a section of the route operated by respondent No. 2.
The Regional Transport Authority rejected the application of respondent No. 2 on October 30, 1976 and granted a permit to the appellant, which order was confirmed by the State Transport Appellate Tribunal.
The High Court, however in revision took the view that the matter fell within the purview of sub section (1D) of section 68, but held on a reading of the decision in Cheran Transport Co. Ltd. vs Kanan Lorry Service & Anr. ; , that the case fell within the purview of the "rider" to proposition No. 2 set out in that judgment with reference to the proviso to section (1D) of section 68F of the Act and allowed the revision petitions.
Allowing the appeals to this Court, ^ HELD: (i) By virtue of the clear provision of sub section (1D) of section 68F of the Act, no permit could be granted or renewed during the period intervening between the date of publication of the scheme under section 68C, and the date of publication of the approved or modified scheme, in favour of any person in any class of road transport service.
[72E] 70 (ii) The High Court clearly went wrong in thinking that the case fell within the purview of the proviso to sub section (1D) and it consequently erred in taking into consideration the so called rider to proposition 2 mentioned in the judgment in Cheran 's case.
[72F] (iii) The proviso would have been applicable only if the period of operation of the permit of the respondent had expired after the publication of the scheme prepared under section 68C; but that was not so in this case.
[72F] In the instant case, it was respondent No. 2 who filed a fruitless writ petition and prevented the disposal of the renewal application for a long time by obtaining a stay order.
|
minal Appeal No. 130 of 1955.
I Appeal under Article 134 (1) (C) of the Constitution of India from the judgment and order dated March 11, 1955, of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal Revision No. 60 of 1954 arising out of the judgment and order dated February 21, 1954, of the Sessions Judge at Gonda in Criminal Appeal No. 292 of 1953.
G.C. Mathur and C. P. Lal, for the appellant.
March 26.
The Judgment of the Court was delivered by IMAM J.
This is an appeal by the State of Uttar Pradesh against the decision of the Allahabad High Court on a certificate granted by that Court that the case was a fit one for appeal to this Court, 771 The undisputed facts are that one Mohammad Yasin was prosecuted under section 379, Indian Penal Code.
He was released on bail.
The respondent along with one Ram Narain stood surety for him, having executed surety bonds under section 499 of the Code of Criminal Procedure, undertaking to produce the accused Yasin before the Court to answer the charge and to forfeit Rs. 500 each to King Emperor Qaisar e Hind as a, penalty if they failed to do so.
Yasin absconded; All attempts to secure his presence before the Court were of no avail.
Consequently notices were issued under section 514 of the Code of Criminal Procedure to the sureties to show cause why their bonds should not be forfeited.
The Magistrate ' after giving the matter his consideration, ordered their bonds to be forfeited to the extent of Rs. 300 each.
The respondent appealed to the Sessions Judge of Gonda who dismissed his appeal.
Dissatisfied with the orders of the Magistrate and the Sessions Judge, the respondent filed a criminal revision in the High I Court and Mulla J. allowed his application and set aside the order of the Magistrate forfeiting the bond executed by him.
At the request of the Government Advocate the learned Judge granted the requisite certificate by virtue of which the present appeal is before us.
The only question for consideration is whether the bond executed by the respondent was one under the Code of Criminal Procedure and therefore capable of being forfeited in accordance with the provisions of section 514, Criminal Procedure Code.
Section 499 of the Code, requires that before any person is released on bail or released on his own bond, a bond for such sum of money as the police officer or Court, as the case may be, thinks sufficient shall be executed by such person, and, when he is released on bail, by one or more sufficient sureties conditioned that such person shall attend at the time and place mentioned in the bond, and shall continue so: to attend until otherwise directed by the police officer or Court, as the case may be.
In Schedule V of the Code of Criminal Procedure various forms are set out and a. 555 of the Code provides that ,subject to the power conferred by section 554 and by 772 article 227 of the Constitution, the forms set forth in that Schedule, with such variation as the circumstances of each case require, may be used for the respective purposes therein mentioned, and if used shall be sufficient.
Form XLII of that Schedule sets forth the contents of a bond to be executed by an accused and his surety.
The bond is in two parts one part to be signed by the accused and the other part to be signed by his surety or sureties.
Both the accused and the sureties in executing such a bond guarantee the attendance of the accused in Court whenever called upon to answer the charge against him and in case of default also bind themselves to forfeit to Government the specified sum of money mentioned therein.
This is what the bond should state since the Adaptation of Laws Order, 1950, dated January 26, 1950. 'Previous to that Order the word Government did not appear in the bond.
By virtue of cl. 4 of the said Order, whenever an expression mentioned in column 1 of the Table thereunder occurred (otherwise than in a title or preamble or in a citation or description of an enactment) in an existing Central or Provincial Law whether an Act, Ordinance or Regulation mentioned in the Schedules to the Order, then unless that expression was by the Order expressly directed to be otherwise adapted or modified, or to stand unmodified, or to be omitted, there shall be substituted therefor the expression set opposite to it in column, 2 of the said Table.
In column 1 of the Table the words " Crown " " Her Majesty " and " His Majesty " appear and against them in column 2 the word 'Government" appears.
The plain reading of this clause is that wherever the words " Crown ", "Her Majesty " or " His Majesty " appear, for them, the word " Government " shall be substituted in the existing Central or Provincial Laws mentioned in the First Schedule to the Order.
The Code of Criminal Procedure is one of the Central Laws mentioned in the said Schedule wherein Schedule V of the Code of Criminal Procedure is mentioned and the Order directs that throughout Schedule V of the Criminal Procedure Code, except where otherwise provided, for the words " Her Majesty The Queen 773 and "His Majesty The King" the word "Government" shall be substituted.
Previous to the Adaptation of Laws Order, 1950, there was the Adaptation of Laws Order, 1948 and the words "Empress of India" appearing in the bond were repealed and in place thereof the, words " Her Majesty the Queen " were substituted.
India attained Dominion status in 1947 and became a Republic in 1950.
The Adaptation of Laws Order, 1948 and that of 1950 were consequential upon the change of status of India into a Dominion and then into a Sovereign Republic.
Since January 26, 1950, therefore, no bond executed in favour of the Empress of India could be said to be a bond executed under the Code of Criminal Procedure.
The bond which the respondent had executed was to forfeit to the King Emperor a certain sum of money if he made default in procuring the attendance of the accused before the court.
He did not execute a bond by which he bound himself to forfeit the said sum either to the Government of the Union of India or that of the State of Uttar Pradesh.
The bond executed: by him in 1953 was a bond unknown to the law of the Republic of India under the Code of Criminal Procedure at the time of its execution.
Section 514 of the Criminal Procedure Code empowers a court to forfeit a bond which has been executed under the provisions of that Code and since the bond executed by the respondent is not one under the Code of Criminal Procedure, resort could not be had to the provisions of section 514 of the Code to forfeit the same.
It was, however, urged on behalf of the State that under cl. 4 of the Adaptation of Laws Order, 1950, the form of the bond stood amended by the substitution of the word "Government" therein in place and stead of the words "Her Majesty The Queen" and the bond should be read accordingly.
The words King Emperor Qaisar e Hind must be deemed as no longer existing in the forfeited bond.
Clause 4 of the Order, however, directs that the word "Government" shall be substituted for the words " Crown ", " Her Majesty " and " His Majesty ".
There is no mention therein of the words King Emperor or Emperor of India, Queen Empress or Empress of India or Qaisar e Hind as being so 774 substituted.
The words King Emperor Qaisar e Hind in the bond executed by the respondent cannot therefore be read, by virtue of cl. 4 of the Order, to mean Government.
There has undoubtedly been some error, carelessness or negligence on the part of those on whom a duty lay to make the necessary changes in the phraseology of the bond set out in Schedule V of the Code of Criminal Procedure to be executed under section 499.
The fact, however, remains that the respondent had not bound himself either to the Government of the Union of India or that of the State of Uttar Pradesh to have his bond forfeited on his failure to produce the accused before the court and he is entitled to say that no order of forfeiture could be passed against him with respect to a bond which was not one under the Code and which was one unknown to the law, as contained in the Code, at the, time of its execution.
The objection raised by the respondent to the order forfeiting the bond executed by him is a substantial one and the said order was made under a, misapprehension that it could be made under section 514 of the Code of Criminal Procedure.
The appeal is accordingly dismissed.
Appeal dismissed.
| The appellant was working as a senior clerk in the office of the chief Commercial Superintendent.
Northern Railway, Varanasi on May 22, 1982, the senior Commercial officer wrote a letter to him calling upon him to offer his explanation in regard to twelve charges of gross indiscipline, mostly relating to the Deputy Chief Commercial Superintendent.
The appellant submitted his explanation to the charges by his reply dated June 9, 1982.
On the very next day, the Deputy Chief Commercial Superintendent served a second notice upon the appellant saying that the explanation offered by him was not convincing but that another chance was being given to him to offer his explanation regarding the specific charges which were conveyed to him earlier.
By this letter, the appellant was also called upon to submit his explanation within three days ' as to why deterrent disciplinary action should not be taken against him.
The appellant submitted his further explanation on June 14, 1982, but on the very next day, the Deputy Chief Commercial Superintendent passed an order dismissing him from service on the ground that he was not fit to be retained in service.
The appellant filed a writ petition in the High Court of Allahabad challenging the order of dismissal on various grounds.
The writ petition was dismissed and hence the appeal special leave of the Court.
Allowing the appeal, the Court.
^ HELD: 1: 1.
The order of dismissal passed against the appellant stands vitiated for the simple reason that the issue as to who, between the appellant and Respondent No. 3 (the dismissing authority) was speaking the truth was decided by Respondent No. 3.
The main thrust of the charges against the appellant related to his conduct qua Respondent 3.
Therefore, it was not open to the latter to sit in Judgment over the explanation offered by the appellant and decided that the explanation was untrue.
No person can be a judge in his own 303 cause and no witness can certify that his own testimony is true.
Any one who has a personal stake in an enquiry must keep himself aloof from the conduct of the inquiry.
[306 F H] 1: 2.
On the facts of the case, the illegality touching the proceedings which ended in the dismissal of the appellant is "so patent and loudly obtrusive that it leaves an indelible stamp of infirmity" on the decision of Respondent No. 3.
[307 B C] 2.
From the charges 2 to 7 and 11, it is obvious that if an enquiry were to be held into the charges framed against the appellant, the principal witness for the Department would have been Respondent No. 3 (the dismissing authority) himself as the main accuser and the target of appellant 's misconduct.
Surprisingly, the explanation dated June 9, 1982 of the appellant to the letter of accusation dated May 22,1982 was considered on its merits by Respondent himself.
Thereby, the accuser became the Judge.
[305 G H, 306 A] Not only that, the further explanation submitted by the appellant was considered by Respondent No. 3 himself.
The order of dismissal dated June 15, 1962 which was issued by Respondent No. 3 recites that he was fully satisfied that it was not reasonably practicable to hold an inquiry into the appellant 's conduct as provided by the Rules and that he had come to the conclusion that the appellant was not fit to be retained in service and had, therefore, to be dismissed, Evidently, Respondent 3 assessed the weight of his own accusations against the appellant and passed a judgment which is one of the easiest to pass, namely, that he himself was truthful person and the appellant a liar.
In doing this Respondent No. 3 violated a fundamental principle of natural justice.
[305 B C, 306 F] The State of U.P. vs Mohammad Nooh ; , referred to.
The contention that inspite of the above legal position, the appellant does not deserve the assistance of the court, since he was habitually guilty of acts subversive of discipline cannot be accepted.
In the first place, to hold the appellant guilty of habitual acts of indiscipline is to assume something which remains unproved, Secondly, the illegality from which the order of dismissal passed by Respondent No. 3 suffers is of a character so grave and fundamental that the alleged habitual misbehaviour on the part of the appellant cannot cure or condone it.
[307 C E] 4.
The aviod needless complications in working out the mutual rights and obligations of the parties, the court directed: (i) The appellant who is due to retire from service shall be treated as having retired from service with effect from April 1, 1984: (ii) He shall be paid arrears of salary due until March 31, 1984 on the basis of salary last drawn by him on June 15, 1982 without taking into account the increments which he might have earned subsequent to that date: 304 (iii) The Provident Fund and gratuity shall also be paid to the appellant as calculated in accordance with the rules, as if no order of dismissal was passed against him; and (iv) he may not and shall not rejoin his duties and he will be treated as on leave between 23rd March, 1984 and 31st March, 1984.
[307 F H, 308 A B]
|
vil Appeals Nos.
1221 & 1222 of 1977.
From the Judgment dated 20.1.1976 of the Andhra Pradesh High Court in Appeal Nos. 758 and 632 of 1975.
Mrs. Shyamala Pappu and Ms. Indira Sawhney for the Appel lants.
T.V.S.N. Chari for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
The appellants arc aggrieved that the High Court by the common judgment dated 20.1.1976 in two cases had substantially reduced on erroneous grounds the enhanced compensation allowed by the Subordinate Judge on reference under Section 18 of the Land Acquisition Act (for short the Act).
Civil Appeal No. 1222 of 1977 relates to acquisition of Ac.
8.33 cents of land in Survey No. 2/1 of Dondaparthi village in pursuance to Notification under Section 4(1) of the Act published on 7.7.1966 for construction of quarters for the staff of Porl Trust.
Civil Appeal No. 1221 of 1977 relates to acquisition of Ac.1.68 cents of land in Survey No. 2/2A of the same village in pursuance to the Notification published on 1.8.1968 for the purpose of formation of the national highway diversion road.
The appellants claimed land value at the rate of Rs. 10 per sq. yard since the Land Acquisition Officer awarded only 0.88 paise per sq. yard.
The learned Subordinate Judge determined the market value of the land at the rate of Rs. 11 per sq yard accepting as basis the value of land under the transactions evidenced by Exhibits A 1 to A 4, but granted the compensa 175 tion at the rate of Rs. 10 per sq. yard as the claimants themselves had claimed compensation at the rate of Rs. 10 per sq. yard.
The State preferred appeal against the said judgment of the 'Subordinate Judge to the High Court of Andhra Pradesh.
The High Court accepted Exhibits A I to A 4 as reflecting the value of land in the neighbourhood.
It however following the decision of this Court in Tribeni Devi vs Collector, Ranchi, ; , that a deduction of 1/3 of the value is to be made when large extent of land is acquired under housing scheme, determined the market value of the appellants land at the rate of Rs. 6.50 paise per sq. yard and accordingly reduced the total compensation allowed by the Subordinate Judge.
The learned counsel for the appellants contended before us that the High Court had erroneously applied the principle laid down in Tribeni Devi 's case (supra) without properly appreciating the nature of the land in question and the purpose for which it had been acquired.
It was submitted that the land in question was fully developed and eminently suitable for being used as house sites and, therefore, there was no justification for making any deduction.
It is also pointed out that even in respect of the land acquired for the purpose of formation of the road, the High Court wrongly proceeded on the basis that expenses have to be incurred for development and thus in awarding the compensa tion, the High Court wrongly applied principles of deduction of 1/3 of the value.
The learned counsel has taken us through the relevant evidence and maintained that the learned Subordinate Judge had reduced the land value to Rs. 10 per sq. yard though the market value was higher at Rs. 11 per sq. yard only because the appellants had themselves limited the claim to Rs. 10 per sq. yard The learned counsel for the respondent maintained that the appellants ' land forms part of large tract acquired for the purpose of construction of houses, that the sale deed Exhibits A 1 to A 4 relate to small plots which are fully developed and when the transaction is compared, it is neces sary to take into account the development that is required to be made for bringing the acquired land suitable for the purpose of construction and that the High Court was right in making the deduction of 1/3 of the value in the facts and circumstances of the case.
In awarding compensation in acquisition proceedings, the Court has necessarily to determine the market value of the land as on the date of the relevant Notification.
It is useful to consider the value paid for similar land at the material time under genuine transactions.
The market value envisages the price which a willing purchaser may pay under bona fide trans 176 fer to a willing seller.
The land value can differ depending upon the extent and nature of the land sold.
A fully de veloped small plot in an important locality may fetch a higher value than a larger area in an undeveloped condition and situated in a remote locality.
By comparing the price shown in the transactions all variables have to be taken into consideration.
The transaction in regard to smaller property cannot, therefore, be taken as a real basis for fixing the compensation for larger tracts of property.
In fixing the market value of a large property on the basis of a sale transaction for smaller property, generally a deduc tion is given taking into consideration the expenses re quired for development of the larger tract to make smaller plots within that area in order to compare with the small plots dealt with under the sale transaction.
This principle has been stated by this Court in Tribeni Devi 's case (supra).
In Kaushalya Devi vs Land Acquisition Officer, ; , this Court observed at pages 912 913 as under: "When large tracts are acquired, the transac tion in respect of small properties do not offer a proper guideline . . . .
In certain other cases this Court indicated that for determining the market value of a large property on the basis of a sale transaction for smaller property a deduction should be given.
" We shall also refer to the observations of this Court in Administrator General of West Bengal vs Collector, Varanasi, ; "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 perspec tive.
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 valua tion 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 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.
" 177 This Court has in a recent decision in Special Tahsil dar Land Acquisition, Vishakapatnam vs Smt.
A. Mangala Gowri, 1991(2) Scale 301, following Tribeni Devi 's case pointed out as under: "It is to be noted that in building Regula tions setting apart the lands for development of roads, drainage and other amenities like electricity etc.
are condition precedent to approve lay out for building colonies.
There fore, 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 amenities of roads, drainage, electricity etc.
then deduction of 1/3 would not be justified.
In the rural areas housing schemes relating to weaker sections deduction of 1/4 may be justi fied.
" The principle of deduction in the land value covered by the comparable sale is thus adopted in order to arrive at the market value of the acquired land.
In applying the principle it is necessary to consider all relevant facts.
It is not the extent of the area covered under the acquisition, the only relevant factor.
Even in the vast area there may be land which is fully developed having all amenities and situated in an advantageous position.
lf smaller area within the large tract is already developed and suitable for build ing purposes and have in its vicinity roads, drainage, electricity, communications etc.
then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified.
The national highway runs very near to the proposed Port trust colony.
The lands acquired already for the South Eastern Railway Staff Quarters lie to the southern side of the land under acquisition.
The town planning trust road runs on the northern side of the land under acquisition.
The colony is in the fast developing part of the municipal town.
The plot of Ac. 1.68 cents in Survey No. 2/2A acquired for the formation of the diversion road is adjacent to built in area.
The land involved in these cases is of even level and fit for construction without the necessity for levelling or reclamation.
The High Court has itself conclud ed on the evidence that the lands covered by the acquisition are located by the side of the National Highway and the southern railway staff quarters with the town planning trust road on the north.
The neighbouring areas are already de veloped ones and houses have been constructed, and the land has potential value for being used as building sites.
Having found that the land is to be valued only as building sites and stated the advantageous position in which the land in question lies though forming part of the larger area, the High Court should not have applied the principles of deduc tion.
It is not in every case that such deduction is to be allowed.
Where the acquired land is in the 178 midst of already developed land with amenities of roads, electricity etc.
, the deduction in the value of the compara ble land is not warranted.
The proposition that large area of land cannot possibly fetch a price at the same rate at which small plots are sold is not absolute proposition and in given circumstances it would be permissible to take into account the price fetched by the small plots of land.
If the larger tract of land because of advantageous position is capable of being used for the purpose for which the smaller plots are used and is also situated in a developed area with little or no require ment of further development, the principle of deduction of the value for purpose of comparison is not warranted.
With regard to the nature of the plots involved in these two cases, it has been satisfactorily shown on the evidence on record that the land has facilities of road and other ameni ties and is adjacent to a developed colony and in such circumstances it is possible to utilise the entire area in question as house sites.
In respect of the land acquired for the road, the same advantages are available and it did not require any further development.
We are, therefore, of the view that the High Court has erred in applying the principle of deduction; and reducing the fair market value of land from Rs. 10 per sq. yard to Rs. 6.50 paise per sq. yard.
In our opinion, no such deduction is justified in the facts and circumstances of these cases.
The appellants, therefore, succeed.
In the result, the appeals are allowed and the respond ent is directed to pay the compensation as determined by the learned Subordinate Judge with interest and solatium in accordance with law.
In the circumstances of the case, we make no order as to costs.
G.N. Appeals allowed.
| By way of notification dated 18.6.1977, the Central Government exempted from duty all goods falling under Tariff item No. 68 of the First Schedule to the in or in relation to manufacture of which no process was ordinarily carried on with the aid of power.
The respondents in the first set of appeals have been manufacturing crude sodium sulphate.
Since the respondents used diesel pumps for pumping brine into salt pans, in the process of manufacture, the benefit of the said notification was denied to them on the ground that the process of manu facture was carried on with the aid of power.
However, on appeal, the Collector of Customs (Appeals) allowed the benefit to the respondents.
Revenue preferred an appeal and the Tribunal affirmed the Collector 's order.
In the other appeals, the Respondents, manufacturer of lime, used to lift the raw materials to the platform at the head of the kiln by the aid of power and the raw materials were mixed manually into the kiln.
The benefit of the said notification was denied to the Respondents by the Assistant Collector.
Even an appeal before the Collector of Appeals failed.
However, on appeal the Tribunal accepted the claim of the Respondents.
In all these matters the Tribunal took the view that the manufacturing process started from the stage of feeding raw materials into the salt pan or the kiln as the case may be and the transferring of the raw materials was a stage prior to the manufacturing process and so the 125 use of power for such transfer would not disentitle the respondents from the benefit under the said notification.
Aggrieved by the orders of the Tribunal, the Revenue has preferred the present appeals.
Before this Court, the Revenue contended that pumping the brine into the pan or lifting the raw materials to the kiln head was a process in relation to the manufacture of the final product and since that process with the aid of power was integrally connected with the manufacture, the exemption would not apply.
The Respondents contended that if the process carried on with the aid of power does not bring about any change in the raw materials, it cannot be said that any process in or in relation to the manufacture of an article has been carried on with the aid of power and, therefore, mere transfer of raw materials by the use of power cannot be considered as a process of manufacture.
Allowing the appeals, this Court, HELD: 1. Process in manufacture or in relation to manufacture implies not only the production but the various stages through which the raw material is subjected to change by different operations.
It is the cumulative effect of the various processes to which the raw materials is subjected to the manufactured product emerges.
Therefore, each step towards such production would be a process in relation to manufacture.
Where any particular process is so integrally connected with the ultimate production of goods that but for that process manufacture of processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture.
[130 E F).
2.1 The natural meaning of the word 'process ' is a mode of treatment of certain materials in order to produce a good result, a species of activity performed on the subject matter in order to transform or reduce it to a certain stage.
There is nothing in the natural meaning of the word 'process ' to exclude its application to handling.
There may be process which consists only in handling and there may be a process which involves no handling or not merely handling but also use.
It may be a process involving the handling of the material and it need not be a process involving the use of material.
The activity may be subordinate but one in relation to the further process of manufacture.
[130G, 131 A B] 126 2.2 A process is a manufacturing process when it brings out a complete transformation for the whole compo nents so as to produce a commercially different article or a commodity.
But, that process itself may consist of several processes which may or may not bring about any change at every intermediate stage.
But the activities or the opera tions may be so integrally connected that the final result is the production of a commercially different article.
Therefore, any activity or operation which is the essential requirement and is so related to the further operations for the end result would also be a process in or in relation to manufacture to attract the relevant clause in the exemption notification.
The word 'process ' in the context in which it appears in the notification includes an operation or activi ty in relation to manufacture.
[132H, 133 A B] J.K. Cotton Mills vs
S.T. Officer; , ; Union of lndia vs Delhi Cloth & General Mills, [1963] Supp. 1 SCR 586, relied on.
3.1 The transfer of raw material to the reacting vessel is a preliminary operation but it is part of a continuous process ,but for which the manufacture would be impossible.
The handling of the raw materials for the purpose of such transfer is then integrally connected with the process of manufacture.
The handling for the purpose of transfer may be manual or mechanical but if power is used for such opera tion, it cannot be denied that an activity has been carried on with the aid of power in the manufacturing process.
The use of diesel pump sets to fill the pans with brine is an activity with the aid of power and that activity is in relation to the manufacture.
It is not correct to say that the process of manufacture starts only when evaporation starts.
The preliminary steps like pumping brine and filling the salt pans form integral part of the manufacturing proc ess even though the change in the raw material commences only when evaporation takes place.
The preliminary activity cannot be disintegrated from the rest of the operations in the whole process of manufacture.
Similarly, when coke and lime are taken to the platform in definite proportions for the purpose of mixing, such operation is a step in the manufacturing process.
It precedes the feeding of the mix ture into the kiln where the burning takes place.
The whole process is an integrated one consisting of the lifting of the raw materials to the platform mixing coke and lime and then feeding into the kiln and burning.
These operations are so interrelated that without anyone of these operations manufacturing process is impossible to be completed.
There fore, if power is used in 127 anyone of these operations or anyone of the operations is carried on with the aid of power, it is a case when in or in relation to the manufacture the process is carried on with the aid of power.
[133 C G] 3.2 'Processing ' may be an intermediate stage in manu facture and until some change has taken place and the com modity retains a continuing substantial identity through the processing stage, one cannot say that it has been manufac tured.
That does not, however, mean that any operation in the course of such process is not in relation to the manu facture.
[136 E] Dy.
Commissioner, Sales Tax; Ernakulam vs Pio Food Packers, ; ; Union of India vs Delhi Cloth & General Mills, [1963] Suppl.
1 SCR 586; Standard Fireworks Industries vs Collector, , relied on.
Nirma Chemical Works & Ors.
vs Union of India & Ors.
, ; Chowgule & Co. Pvt. Ltd. vs Union of India, ; , referred to.
|
Appeal No. 134 of 1951.
Appeal from the Judgment and Order dated 20th November, 1950, of the Labour Appellate Tribunal, Lucknow, in Appeal No. 10 of 1950.
Bakshi Tek Chand and Veda Vyasa (section B. Kapur, with them) for the appellants.
Shaukat Hussain for the respondent.
Bishen Singh for the intervener.
December 17.
The Judgment of the Court was delivered by DAS J.
This appeal has been filed with the special leave granted by this Court on May 10, 1951.
By the order granting such leave the appeal has been restricted to one point only, namely, " whether the Government of Uttar Pradesh had the power to extend the time for making the award ex post facto, i.e. after the time limit originally fixed therefore had expired.
There is no dispute as to the facts.
An industrial dispute having arisen between the appellant company and its employees, by Labour Department Notification No. 637 (ST)/XVIII 53 (ST)/50 dated February 18, 1950, the Governor of Uttar Pradesh was pleased, in exercise of the powers conferred by section 3 read with section 4 of the U. P. (U. P. Act No. XXVIII of 1947), to refer the said dispute to the Labour Commissioner.
U. P., or a Conciliation Officer of the State Government nominated by him for adjudication on seven several issues specified therein and to direct the adjudicator to conclude the adjudication proceedings and submit his award to the Government not later than April 5, 1950.
The Labour Commissioner by his letter No. I.M.R. 14 A nominated Shri M. P. Vidyarthi, Regional Conciliation Officer, U. P., as the adjudicator in the above dispute with a direction that be should submit his, award by March 25, 1950, and that if the proceeding, were not likely to be 441 completed within that time he should move the Government for extension of time at least a week before the specified date.
By Notification No. 897 (ST)/XVIII 53 (ST)/50 dated March 20, 1950, the Governor was pleased to order that the adjudicator should also adjudicate on an additional issue formulated therein.
By a further Notification No. 950 ' (ST)/XVIII 53 (ST)/60 dated March 24, 1950, the ,Governor was pleased to refer another additional issue for the decision of the adjudicator.
The adjudicator did not make his award on or before April 55 1950, as directed by the first order of reference but made his award on April 13, 1950, that is to say, 8 days after the expiry of the time originally fixed for the making of the award.
About thirteen days after.
the I delivery of the award Labour Department Notification No. 1247 (ST)/XVIII 53 (ST)/50 was issued on April 26, 1950, whereby the Governor was pleased, in exercise of powers conferred by section 3 read with section 4 of the 'Act, to allow the adjudicator in the said dispute to submit his award by April 30, 1950.
Thereafter by Notification No. 1447 (ST)/XVIII 53(ST)/50 dated August 1, 1950.
, the Governor was pleased, in exercise of powers conferred by section 6 (2) read with sections 3 and 4 of the Act, to order that the award be enforced for a period of six months from the date of that order in the first instance and thereafter for such further period as might be prescribed.
On August 17, 1950, the appellant company preferred an appeal against the award to the Labour Appellate Tribunal contending, inter alia, as follows: That the award dated April 13, 1950, is vitiated, having been given after the expiry of the time limit.
(a) In its order dated February 18, 1950, para.
(5), Government directed the adjudicator to conclude the proceedings and submit his award not later than the 5th April, 1950.
The award is dated 13th April, 1950.
The Government, however, tried to remedy 442 this defect by the issue of G.O. No. 1247 (ST) XVIII 53 (ST)/50 dated April 26, 1950, but under the law this is of no avail.
To be a valid extension of date granted to the adjudicator, Government ,.,order should have been issued before the 5th April, 1950, to keep the authority of the adjudicator alive.
"On the date the adjudicator made the award, i.e., 13th April, 1950, he had no power to make an award.
" The Appellate Tribunal by its decision given on November 20, 1950, dismissed the appeal with the following observations on the point mentioned above. " With regard to the last point our view is that as the Government had the authority under section 6 of the Act to fix time limit for submitting an award it had also the necessary and incidental power to extend the time limit originally fixed, if it considered it necessary.
The first proviso to section 3 empowers the Provincial Government to add more matters for adjudication.
It is obvious that additions to the matters already referred to would or may take more time than what had been originally estimated, and so ,it may lead to an impossible position if the Government had no power to extend the time originally fixed by it, and it makes no difference, in our opinion, whether the time is extended before or after the expiry of the time originally limited.
" The present appeal is against that decision of the Appellate Tribunal but limited to the question hareinbefore mentioned.
Dr. Tek Chand appearing in support of this appeal urges that the adjudicator derived his authority under the order made by Notification No. 637, dated February 18, 1950.
Section 6 (1) provides that the adjudicator " shall, within such time as may be specified, submit its award to the State Government.
" The time specified by the order was " not later than April 5, 1950.
" On the expiry of that time the adjudicator became functus officio and bad no power or authority to make the award.
It is true that two 448 more issues were, by the two subsequent orders, added to the list of issues to be determined by the adjudicator but those issues, Dr. Tek Chand submits, did not involve any detailed investigation into facts necessitating any further time for making the award.
Learned counsel contends that the U.P. Act under consideration has no provision empowering the State Government to enlarge the time for the making of ' the award by the adjudicator. 'In the circumstances, if the State Government took the view that the addition of those two issues would render the time ' specified in the original order inadequate for the purpose it should have cancelled the previous notification and issued a fresh notification referring all the issues to the adjudicator and specifying a fresh period of time within which he was to make his award. ' The State Government did not adopt that course.
What it purported to do was to extend the time for making the award not only after the time originally fixed had expired but also after the award had, actually been submitted.
The argument is that even assuming but not admitting that the State Government had the power to extend the time before the time had expired it certainly had no power to do so after the award had been made, for it was meaningless, urges Dr. Tek Chand, to extend the time to do an act which bad already been done.
He refers us to the decision of the Judicial Committee in Baja Har Narain Singh vs Chaudhrain Bhagwant Kuar(1) where it was held that under the Code of Civil Procedure of 1882 the Court had no power to extend the time for making the award after the award had been filed.
Section 514 of that Code enabled the Court to grant a further time and from time to time to enlarge the period for the delivery of the award but section 521 provided that no award shall be valid unless made within the period allowed by the Court.
Their Lordships of the Privy Council took the view that it would not have been competent for the Court to extend the time after the award had been made, for once the award was made (1) L.R. 18 I.A. 55; 13 All.
300 444 and delivered the power of the Court under section 514 was spent and that although the Court had the fullest power to enlarge the time under that section as long as the award was not completed it no longer possessed any such power when once the award was made.
in order to give full effect to section 521 the Judicial Committee had to confine the exercise of the power to extend the time given to the Court by section 514 to a point of time before the award had been made.
This decision was relied upon by Mr. Justice Harring ton sitting singly on the Original Side of the Calcutta High Court in Shib Krishna Dawn & Co. vs Satish Chander Dutt(1) which was a case governed by the Code of 1908.
The learned Judge overlooked the fact that paragraph 8 of the Second Schedule to the Code of 1908 which corresponded to section 514 of the Code of 1882 expressly conferred power on the Court to allow further time and from time to time, either before or after the expiration of the period fixed for the making of the award, to enlarge such period and that paragraph 15 which corresponded to section 521 of the Code of 1882 contained no provision that an award made out of time was ipso facto invalid and that consequently the reasoning underlying the decision of the Judicial Committee in the case of Raja Narain Singh vs Chaudhrain Bhagwant Kuar (2) had no application to the case before him, which was governed by the Code of 1908.
Having regard to the difference in the language of the relevant provisions of the two Codes, the correctness of the decision of Harrington J. was doubted by Mr. Justice Chitty also sitting singly on the Original Side of the Calcutta High Court in Sri Lal vs Arjun Das(3).
Eventually the, decision of Mr. Justice Harrington was dissented from by a Division Bench of the same High Court sitting in appeal from the Original Side in Jetha Lal Laxmi Chand Shah vs Amrita Lal Ojha(4), which held that the Court had power to enlarge the time for making the award even after the award had (1) I.L.R.38 Cal.
(3) (2) 18 I.A. 55.
(4) I.L R. ;42 C.W.N. 833.
445 actually been made.
The learned Judges in the last mentioned case referred to and relied on the case of Lord vs Lee(1).
Reference has also been made by learned counsel for the respondents to Dentron vs Strong (2) and toMay vs Harcourt (3).
It will be noticed that all those English cases were decided under section 15 of the Common Law Procedure Act, 1854 (17 & 18 Vic , c. 125).
It is true that in that English statute there was no provision similar to section 521 of our Code of 1882 which was noticed by the Privy Council in the case cited by Dr. Tek Chand; nevertheless section 15 of the English statute like section 514 of the Code of Civil Procedure of 1882 corresponding to paragraph 8 of the Second Schedule to the Civil Procedure Code of 1908 and like section 9 of the English Arbitration Act, 1889, corresponding to section 12 of the Indian Arbitration Act, 1899, empowered the Court, from time to time, to enlarge the time for making the award.
There is a similar provision for enlargement of time in section 148 of our Civil Procedure Code of 1908.
There is, however, no similar provision in the U. P.
Section 6(1) of that Act peremptorily requires the adjudicator to submit his award to the State Government " within such time as may be specified " and not "within such time as may from time to time be specified.
" It is significant that the only occasion when the State Government can, under the U. P. Act, specify a fresh period of time is when it remits the award for reconsideration under sub section (2) of section 6, for under subsection (3) the adjudicator is enjoined to submit his award, after reconsideration, within such period as may be specified by the State Government.
Even in this case, under section 6(2) and (3) the State Government may in the order remitting the award specify a time within which the award, after reconsideration, must be filed.
This gives power to the State Government to fix a fresh period of time to do a fresh (1) (2) (1874) L. R. 9 Q.B. 11 7, (3) I.P.R. 13 Q. B.D. 688, 446 act, namely, to reconsider and file the reconsidered award.
It does not give the State Government any power to enlarge the time fixed originally for the initial making of the award.
Therefore, except where ,the State Government under section 6 (2)remits the 'award for reconsideration it has no power even to specify a fresh period of time and much less a power to extend the time for the initial making of the award under section 6 (1).
In exercise of the powers conferred by clauses (b), (c), (d) and (g) of section 3 and section 8 of the U. P. , the Governor was pleased to make an order embodied in Notification No. 615 (LL)/XVIII 7 (LL) 1951, dated March 15, 1951.
The proviso to rule 16 of that order authorised the State Government to extend from time to time the period within which the Tribunal or the adjudicator was to pronounce the decision.
These rules were, however, not in force at the time material to the case before us.
Learned counsel appearing for the respondent and for the State of Uttar Pradesh have not referred us to any similar rule which, was in force in 1950.
In view of the language of section 6 of the U. P. Act and in the absence of a rule like the proviso to rule 16 referred to above it must follow that the State Government had no authority whatever to extend the time and the adjudicator became functus officio on the expiry of the time specified in the original order of reference and, therefore, the award which had not been made within that time must be held to be without jurisdiction and a nullity as contended by Dr. Tek Chand.
Learned counsel for the respondents refers us to the provisions of section 14 of the U. P. General Clauses Act, 1904, which provides that where by any Uttar Pradesh Act any power is conferred on the State Government then that power may be exercised from time to time as occasion requires.
Sections 3 and 4 of the U. P. , certainly confer power on the State Government to refer disputes to an adjudicator for decision 447 and section 6 (1) may be read as empowering the State Government to specify the time within which the adjudicator to whom an industrial dispute is referred for adjudication is to submit his award.
The combined effect of section 14 of the U. P. General Clauses Act and section 6(1) of the U. P. , it is contended, is that the adjudicator is enjoined to submit his report "within such time as may from time to time be specified " and that this being the position, the principles laid down in the English decisions referred to above must be held to be applicable to the present case.
We are unable to accept this line of reasoning.
Under section 14 of the U. P. General Clauses Act the State Government may exercise the power conferred on it by sections 3, 4 and 6, that is to say, it can from time to time make orders referring disputes to an adjudicator and, whenever such an order of reference is made, to specify the time within which the award is to be made.
This power to specify the time does not and indeed cannot include a power to extend the time already specified in an earlier order.
The legislative practice, as evidenced by the provisions of the different statutes referred to above, is to expressly confer the power of extension of time, if and when the legislature thinks fit to do so.
There is no question of any inherent power of the Court and much less of the Executive Government in this behalf.
Section 14 of the U. P. General Clauses Act does not in terms, or by necessary implication, give any such power of extension of time to the State Government and, therefore, the Respondents can derive no support from that section.
Learned advocate for the Intervener, the State of Uttar Pradesh, draws our attention to section 21 of the U. P. General Clauses Act, 1904, and contends that the order of April 26, 1950, should be taken as an amendment or modification, within the meaning of that section, of the first order of February 18, 1950.
It is true that the order of April 26, 1950, does ex facie purport to rectify, the order of 448 February 18, 1950, but, in view of the absence of any distinct provision in section 21 that the power of amendment and modification conferred on the Government may be so exercised as to have retrospective operation the order of April 26, 1950, viewed merely as an order of amendment or modification, cannot, by virtue of section 21, have that effect.
If, therefore, the amending order operates prospectively, i.e., only as from the date of the order, it cannot validate the award which bad been made after the expiry of the time specified in the original order and before the date, of the amending order, during which period the adjudicator was functus officio and had no jurisdiction to act at all.
We do not think the respondents can derive any support from section 21 of the U. P. General Clauses Act.
The result, therefore is that this appeal must be allowed and the award must be declared to be null .and void and we order accordingly.
In the circumstances of this case we make no order as to costs.
Appeal allowed.
Agent for the intervener: C. P. Lal.
| Government of India published a 'scheme known as the "Export Promotion Scheme" according to which the value of import licence for raw materials in an industry depended upon the value of specified varieties of goods exported by the applicant for an import licence.
It also empowered the Controller of Imports and Exports under cl. 2 'of Appendix 42 of the Import (Control) order 1955 to issue a license up to 66 2/3 per cent of the export value in the case of Indian artsilk sarees and up to 100 per cent in the case of other Indian artsilk fabrics.
The appellant firm R of exporters and importers relying upon cl.2 of the Export Promotion Scheme applied for an import licence equivalent to the value of the goods it had exported and earned foreign exchange.
In view of certain malpractices the Government of India suspended the "Export Promotion" scheme and set up a committee for verification of the values of goods exported.
The Committee after scrutinising the firm 's claim found that rates of some of the items could not be accepted as reasonable, and recommended an import licence approximately of the value of 45 per cent of the goods exported.
The firm R after making an infructuous demand for a licence for the full value of the goods exported filed a writ petition.
They submitted that the Controller of Licences had arbitrarily reduced the value of their import licence and had thereby unlawfully infringed their fundamental right.
They also claimed that the Controller was bound to grant licence under the Export Promotion Scheme for the full value of the goods exported by them and in failing to do so had practised discrimination 73 against them, because several other importers during the identical period were given licences for the full value of goods exported.
Held, that the fundamental right of a citizen to carry on any occupation, trade or business under article 19(1)(g) of the Constitution is not absolute; it is subject to reasonable restrictions which may be imposed by the State in the interest of the general public.
The right of the State to impose control in the larger interest of the general public on imports has accordingly not been denied; nor is the authority of the State to issue the Imports (Control) Order, 1955 in exercise of the powers conferred by the Imports and Exports (Control) Act providing for imposition of restrictions by permitting import of certain goods only in accordance with the licences or customs permits granted by the Central Government, open to challenge.
The authority to grant or refuse to grant the licence is conferred upon high officers of the State and the grant of licence is governed by the Import Trade Control Policy and detailed provisions are made setting out the grounds on which licences may be refused, suspended or cancelled and provision to afford a hearing before action is taken is also made; thus the powers conferred under cl.3 of the Imports (Control) Order, 1955 are not uncanalised or arbitrary.
The power granted to the licensing authority to grant licences only up to the maximum specified in cl.2 of the appendix 42 is by itself not an unreasonable restriction, nor will the notification directing scrutiny of all applications amount to imposing an unreasonable restriction.
The clause invests the Controller with authority, it does not impose an obligation upon him enforceable at the instance of the exporter, to issue a licence for the amount (subject to the maximum prescribed) claimed by the exporter.
The power is plainly discretionary and the orderd by the Controller granting a licence only for 45% of the goods exported does not infringe the fundamental right of the petitioner under article 19(1)(g) of the Constitution by imposing an unreasonable restriction.
Held, further that in the absence of evidence to show that discriminatory treatment was made between the aggrieved person and to persons similarly circumstanced, there can be no violation of article 14 of the Constitution which confers a guarantee against arbitrary discrimination between persons similarly circumstanced .
Held, also that where an application for writ of mandamus, direction or order under article 226 of the 74 Constitution is dismissed by the High Court, the only remedy to the aggrieved person is to come up by appeal and he has no right to be heard as an intervener.
|
minal Appeal No. 159 of 1957.
Appeal by special leave from the judgment and order dated February 14, 1956, of the Bombay High Court in Criminal Appeal No. 1232 of 1955, arising out of the judgment and order dated October 3, 1955, of the Additional Sessions Judge for Greater Bombay in Case No. 38 V. Sessions 1955.
Purshottam Tricumdas, B. K. B. Naidu and I. N. Shroff, for appellant No. 1.
Appellant No. 2 did not appear.
H. J. Umrigar, R. H. Dhebar and T. M. Sen, for the respondent.
March 16.
The Judgment of the Court was delivered by SHAH, J.
At a trial held with the aid of a common jury in Case No. 38 of the Vth Session 1955 before the 321 Additional Sessions Judge, City Court, Greater Bombay, the two appellants were convicted of offences under section 409 read with section 34 of the Indian Penal Code.
The Additional Sessions Judge sentenced the first appellant to suffer rigorous imprisonment for five years and the second appellant to suffer rigorous imprisonment for four years.
In appeal, the High Court of Bombay reviewed the evidence, because in the view of the Court, the verdict of the jury was vitiated on account of a misdirection on a matter of substantial importance, but held that the conviction of the two appellants for the offence under section 409 read with section 34 of the Indian Penal Code was, on the evidence, not liable to be set aside.
The High Court accordingly confirmed the conviction of the two appellants but reduced the sentence passed upon the first appellant to rigorous imprisonment for three years and the sentence against the second appellant to rigorous imprisonment for one year.
Against the order of conviction and sentence, the appellants have appealed to this court with special leave.
The facts which gave rise to the charge against the two appellants are briefly these: On June 15, 1948, the Textile Commissioner invited tenders for dyeing Pugree Cloth.
The Parikh Dyeing and Printing Mills Ltd., Bombay hereinafter to be referred to as the company of which the first appellant was the Managing Director and the second appellant was a Director and technical expert, submitted a tender which was accepted on July 27, 1948, subject to certain general and special conditions.
Pursuant to the contract, 2,51,059 3/4 yards of cloth were supplied to the company for dyeing.
The company failed to dye the cloth within the stipulated period and there was correspondence in that behalf between the company and the Textile Commissioner.
Approximately 1,11,000.
yards out of the cloth were dyed and delivered to the Textile Commissioner.
On March 25, 1950, the company requested the Textile Commissioner to cancel the contract and by his letter dated April 3, 1950, the Textile Commissioner complied with the request, and cancelled the contract in respect of 96,128 yards.
On November 20, 1950, the contract was cancelled by the 322 Textile Commissioner in respect of the balance of cloth and the company was called upon to give an account without any further delay of the balance undelivered and it was informed that it would be held responsible for " material spoiled or not accounted for ".
On December 4, 1950, the company sent a statement of account setting out the quantity of cloth actually delivered for dyeing, the quantity of cloth returned duly dyed and the balance of cloth, viz., 1,32,160 yards remaining to be delivered.
Against the cloth admitted by the company remaining to be delivered, it claimed a wastage allowance of 2,412 yards and admitted liability to deliver 1,29,748 yards lying with it on Government account.
It appears that about this time, the company was in financial difficulties.
In December 1950, the first appellant left Bombay to take up the management of a factory in Ahmedabad and the affairs of the company were managed by one R. K. Patel.
In June 1952, an application for adjudicating the two appellants insolvents was filed in the Insolvency Court at Ahmedabad.
An insolvency notice was also taken out against the two appellants at the instance of another creditor in the High Court at Bombay.
Proceedings for winding up the company were commenced in the High Court at Bombay.
In the meantime, the mortgagee of the machinery and factory of the company had entered into possession under a covenant reserved in that behalf, of the premises of the factory of the company.
The Textile Commissioner made attempts to recover the cloth remaining undelivered by the company.
A letter was posted by the Textile Commissioner on April 16, 1952, calling upon the company to deliver 51,756 yards of cloth lying with it in bleached condition to the Chief Ordnance Officer, Ordnance Depot,, Sewri, but the letter was returned undelivered.
It was ultimately served with the help of the police on the second appellant in October 1952.
Thereafter on November 7, 1952, another letter was addressed to the company and the same was served on the second appellant on November 25, 1952.
By this letter, the company was reminded that 1,35,726 3/4 yards of cloth 323 were lying with it on account of the government and the same had to be accounted for, and that the instructions to deliver 51,756 yards to the Chief Ordnance Officer, Ordnance Depot, Sewri, had not been attended to.
The Textile Commissioner called upon the company to send its representatives to " clarify the position " and to account for the material.
After receiving this letter, the second appellant attended at the office of the ' Textile Commissioner and on November 27, 1952, wrote a letter stating that " the main factors involved in not delivering the goods in finished state was that the material was very old ", was " dhobibleached in different lots", was " bleached under different conditions and therefore unsuitable for vat colour dyeing in heavy shades", that it varied in length, weight, and finish and had " lost affinity for vat colour dyeing".
It was also stated that the company had in dyeing the basic material, suffered " huge losses" estimated at Rs. 40,000.
It was then stated: " We are, therefore, however prepared to co operate with the Government and are willing to make good the government 's bare cost.
Please let us know the detail and the actual amount to be deposited so that we may do so at, an early date.
We shall thank you if we are given an appointment to discuss the matter as regards the final amount with respect to the balance quantity of the basic material." On December 29, 1952, the premises of the company and the place of residence of the appellants were raided, but no trace of the cloth was found.
A complaint was then filed with the police charging the two appellants with criminal breach of trust.
in respect of 1,32,4041 yards of cloth belonging to the Government.
There is no dispute that approximately 1,30,000 yards out of the cloth entrusted to the company by the Textile Commissioner for dyeing has not been returned.
By its letter dated December 4, 1950, the company admitted liability to deliver 1,29,748 yards of cloth, but this cloth has not been returned to the Textile Commissioner in spite of repeated demands.
That the appellants, as directors of the company had dominion over that cloth was not questioned in, the trial court.
The plea that there were other Directors 324 of the company besides the appellants who had dominion over the cloth has been negatived by the High Court and in our judgment rightly.
Direct evidence to establish misappropriation of the cloth over which the appellants had dominion is undoubtedly lacking, but to establish a charge of criminal breach of trust, the prosecution is not obliged to prove the precise mode of conversion, misappropriation or misapplication by the accused of the property entrusted to him or over which he has dominion.
The principal ingredient of the offence being dishonest misappropriation or conversion which may not ordinarily be a matter of direct proof, entrustment of property and failure in breach of an obligation to account for the property entrusted, if proved, may in the light of other circumstances, justifiably lead to an inference of dishonest misappropriation or conversion.
Conviction of a person for the offence of criminal breach of trust may not, in all cases, be founded merely on his failure to account for the property entrusted to him, or over which he has dominion, even when a duty to account is imposed upon him, but where he is unable to account or renders an explanation for his failure to account which is untrue, an inference of misappropriation with dishonest intent may readily be made.
In this case, on a search of the factory on December 29, 1952, the cloth remaining to be delivered by the company was not found.
At the trial, the appellants sought to explain the disappearance of the cloth from the factory premises where it was stored, on the plea that it was old and was eaten up by white ants and moths, and had been thrown away as rubbish.
This plea of the appellants was not accepted by the High Court and we think rightly.
No information was given at any time to the Textile Commissioner after December 4, 1950, that the cloth had been eaten up by white ants and moths, and was therefore thrown away or otherwise destroyed.
Nor was any evidence led in support of the plea by the appellants.
In this court, counsel for the first appellant contended that failure to return the cloth may give rise to a civil liability to make good the loss occasioned 325 thereby, but in the circumstances of the case, the first appellant cannot be found guilty of the offence of criminal breach of trust.
Counsel submitted that the first appellant had left Bombay in 1950 and had settled down in Ahmedabad and was attending to a factory in that town, that thereafter the first appellant was involved in insolvency proceedings and was unable to attend to the affairs of the company in Bombay, and if, on account of the pre occupation of the first appellant at Ahmedabad, he was unable to visit Bombay and the goods were lost, no criminal misappropriation can be attributed to him.
But the case pleaded by the appellant negatives this submission.
The first appellant in his statement before the trial court admitted that he often went to Bombay even after he had migrated to Ahmedabad and that he visited the mill premises and got the same opened by the Gurkha watchman and he found that the heap of cloth lying in the mill was getting smaller every time he visited the mill and on inquiry, he was told by the watchman that every day one basketful of sweepings was thrown away.
He also stated that he was shown several places in the compound of the factory where pits had been filled up with these sweepings, and that he found a small heap lying by the side of the " Tulsipipe gutter" and also in the warehouses in the mill premises.
It is clear from this statement and other evidence on the record that even after he migrated to Ahmedabad, the first appellant was frequently visiting the factory at Bombay.
The evidence also discloses that meetings of Directors were held from time to time, but the minutes of the Directors ' meetings have not been produced.
The books of account of the company evidencing disbursements to the Directors of remuneration for attending the meetings and the expenses for the alleged collection and throwing away of the sweepings have not been produced.
It is admitted by the first appellant that the letter dated November 27, 1952, was written by the second appellant under his instructions.
In his statement at the trial, the first appellant stated that he was informed of the letter dated November 26, 1952, from the Textile Commissioner and that he 42 326 could not attend the office of that officer because he was busy attending to the insolvency proceedings and that he deputed the second appellant to attend the office and to explain and discuss the position.
Be then stated, "We had informed the Commissioner that the company was prepared to pay for the cloth remaining after deducting the amount claimed as damages".
The letter dated November 27, 1952, was evidently written under the direction of the first appellant and by that letter, liability to pay for the cloth after certain adjustments for losses alleged to be suffered by the company in carrying out the contract was admitted.
By the letter dated December 4, 1950, liability to deliver the cloth was admitted and by the letter dated November 27, 1952, liability to pay compensation for the loss occasioned to the Government was affirmed.
The appellants who were liable to account for the cloth over which they had dominion have failed to do so, and they have rendered a false explanation for their failure to account.
The High Court was of the opinion that this false defence viewed in the light of failure to produce the books of account, the stock register and the complete absence of reference in the correspondence with the Textile Commissioner about the cause of disappearance established misappropriation with criminal intent.
Counsel for the first appellant contended that probably the goods passed into the possession of the mortgagees of the assets of the company.
but on this part of the submission, no evidence was led in the trial court.
Counsel for the first appellant, relying upon the observations in Shreekantiah Ramayya Munipalli vs The State of Bombay (1), also contended that, in any event, a charge under section 409 read with section 34 of the Indian Penal Code cannot be established against the first appellant unless it is shown that at the time of misappropriation of the goods, the first appellant was physically present .
But the essence of liability under s.34 is to be found in the existence of a common intention animating the offenders leading to the doing of a criminal act in furtherance of the (1) ; 327 common intention and presence of the offender sought to be rendered liable under section 34 is not, on the words of the statute, one of the conditions of its applicability.
As explained by Lord Sumner in Barendra Kumar Ghose vs The King Emperor( ') the leading feature of section 34 of the Indian Penal Code is 'participation ' in action.
To establish joint responsibility for an offence, it must of course be established that a criminal act was done by several persons; the participation must be in doing the act, not merely in its planning.
A common intention a meeting of minds to commit an offence and participation in the commission of the offence in furtherance of that common intention invite the application of section 34.
But this participation need not in all cases be by physical presence.
In offences involving physical violence, normally presence at the scene of offence of the offenders sought to be rendered liable on the principle of joint liability may be necessary, but such is not the case in respect of other offences where the offence consists of diverse acts which may be done at different times and places.
In Shree Kantiah 's case (supra), misappropriation was committed by removing goods from a Government depot and on the occasion of the removal of the goods, the first accused was not present.
It was therefore doubtful whether he had participated in the commission of the offence, and this court in those circumstances held that participation by the first accused was not established.
The observations in Shree Kantiah 's case (supra) in so far as they deal with section 34 of the Indian Penal Code must, in our judgment, be read in the light of the facts established and are not intended to lay down a principle of universal application.
The High Court has found that the two appellants were liable to account for the cloth over which they had dominion and.
they failed to account for the same and therefore each had committed the offence of criminal breach of trust.
The High Court observed: " In such a case, if accused Nos. 1 and 2 (Appellants 1 & 2) alone were concerned with the receipt of the goods, if they were dealing with the goods all the time, if they were receiving communications from the Textile Commissioner 's office and sending replies, to (1) [1924] L.R. 52 I.A. 40, 52.
328 them, and if the part played by each of them is apparent from the manner in which they are shown to have dealt with this contract, then it is a case of two persons entrusted with the goods and a breach of trust obviously being committed by both of them '.
It was submitted that the High Court erred in finding the appellants guilty of offences under section 409 of the Indian Penal Code when the charge framed against them was one under section 409 read with section 34 of the Indian Penal Code.
A charge framed against the accused person, referring to section 34 is but a convenient form of giving notice to him that the principle of joint liability is sought to be invoked.
Section 34 does not create an offence; it merely enunciates a principle of joint liability for criminal acts done in furtherance of the common intention of the offenders.
Conviction of an accused person recorded, relying upon the principle of joint liability, is therefore for the offence committed in furtherance of the common intention and if the reasons for conviction establish that the accused was convicted for an offence committed in furtherance of the common intention of himself and others, a reference in the order recording conviction to section 34 of the Indian Penal Code may appear to be asurplusage.
The order of the High Court recording the conviction of the appellants for the offence under section 409 of the Indian Penal Code is therefore not illegal.
It was submitted for the first appellant that the sentence passed against him was unduly severe, and that, in any event, no distinction should have been made between him and the second appellant in the matter of sentence.
It is evident on the findings accepted by us that property of considerable value has been misappropriated by the first appellant.
He was the Managing Director of the company an& primarily, he had dominion over the property entrusted to the company.
The second appellant was, though a Director, essentially a technician.
Having regard to these circumstances, if the High Court has made a distinction between the two appellants, we ought not to interfere with the sentence, which by itself cannot be said to be excessive.
The appeal fails and is dismissed.
Appeal dismissed.
| The appellant was tried by the Special judge Tiruchirappalli under section 165A of Indian Penal Code for attempting to bribe K, a Deputy Superintendent of Police.
The prosecution case was that in connection with the.investigation by the Inspector of Police of a case involving the appellant, the latter went to K 's bungalow and presented to him a closed envelope, that when K found that it contained currency notes he threw it away which the appellant picked up, that thereupon K asked the appellant to produce the currency notes and the appellant complied with the demand that K then gave information to a Magistrate about the attempt made by the appellant to offer him a bribe.
The Special judge acquitted the appellant.
On appeal, the High Court accepted the prosecution case and convicted the accused.
In the High Court Counsel for the appellant entered appearance before notice of appeal under section 422 of the Code of Criminal Procedure was issued to the appellant and when the appeal was ready for hearing intimation was given under the rules to the Special judge to communicate to the appellant about the appeal filed against him.
The questions for determination were (1) whether the protection under article 20(3) of the Constitution of India had been violated by ask ing the accused to produce the currency notes, and (2) whether the provisions of section 422 of the Code of Criminal Procedure, had not been complied with because notice of the appeal had not been served on the appellant.
Held, (i) that there was no contravention of article 20(3) as the appellant was not in the position of a person accused of an offence when he was asked to produce the currency notes and that, in any case, on the facts proved the appellant was not compelled to be a witness against him.
M. P. Sharma vs Satish Chandra and others, [1954] S.C.R. 1077.
considered.
(2) that in an appeal under section 4I7 Of the Code of Criminal Procedure under section 422 notice of the appeal has to be given to the accused, but where, as in the present case, the High Court found on the facts that the appellant was fully apprised of the time and place at which the appeal would be heard, and counsel 117 appeared on his behalf and argued the appeal the fact that a formal notice of the appeal was not served on him would not vitiate the conviction.
|
ON: Cases Nos. 11 and 12 of 1950.
Appeals under article 132 (1) of the Constitution of India from the Judgment and Order dated April 5, 1950, of the High Court of Judicature for the State of Punjab at Simla (Khosla J.) in Criminal Revision Nos, 1144 and 1147 of 1949.
Achhru Ram (Gopal Singh, with him) for the appellant in Case No. 11.
H. J. Umrigar for the appellant in Case No. 12.
section M. Sikri (Advocate General of Punjab) (H. section Gujral, with him) for the respondent, the State of Punjab.
M. C. Setalvad (Attorney General for India) (B. Sen, with him) for the Intervener. 1952.
December 5.
The Judgment of the Court was delivered by MUKHERJEA J.
The facts giving rise to these two connected appeals may be briefly narrated as follows: Darshan Singh, the appellant in Case No. 1 1, and Attar Singh who is the appellant in Case No. 12, along with three other persons were tried by the Special Magistrate, Ambala, East Punjab, on charges under section 120 B of the Indian Penal Code, read with section 3/10 of the East Punjab Cotton Cloth and Yarn (Regulation of ' Movement) Order, 1947, and section 7 of the Essential Supplies Act, 1946.
There wets a further charge under section, 8 of the Essential Supplies Act against three of these accused, Darshan Singh begning on of them.
321 The allegation against all the accused, in substance, was that they conspired to export 76 bags of mill made cloth to Pakistan without a permit, by smuggling them through the customs barrier near Wagha, on the morning of the 26th ,May, 1948.
Wagha is., about 18 miles from Amritsar, and at a distance of nearly half a mile from this place lies the actual Indo Pakistan border.
Between the customs barrier and the border there is a small Police Post and almost opposite the Police Post is the customs office which is located in a tent.
The prosecution case ' is that at about 7 a. m. on the 26th of May, 1948, a truck, loaded with a large quantity of millmade cloth owned by the accused Ram Singh, arrived at the customs barrier near Wagha.
Rajendra Singh, another accused, who was on duty at that time as the Customs Supervisor, allowed the truck to pass through and the truck stopped near the customs office on the side of the Police Post.
As soon as the truck stopped, Darshan Singh, who was the Deputy Superintendent in charge of the customs barrier, and Attar Singh, who was a Customs Preventive Officer at Amritsar and was then under order of transfer to some other place, went to the Police Station and asked Kulraj, the Sub Inspector in charge of the same, to allow the lorry to pass through upto the border.
Kulraj did not accede to this request and thereupon both Darshan Singh and Attar Singh went back to the customs tent.
The truck was then unloaded and the goods were handed over to a large number of coolies who began carrying them towards the border, being followed by both Attar Singh and Ram Singh.
A little later, Kailash Chandra, a Police Sub Inspector of Amritsar who was at that time on special duty in connection with checking and detec tion of smuggling cases, arrived at the place on a motor bicycle and being informed by Kulraj of what had happened before, both he and Kulraj proceeded in his motor cycle towards the border and overtook the coolies who were carrying the goods.
The coolies were rounded up and brought back to the border along 322 with Attar Singh, though Ram Singh managed to Slip away.
Kailash Chandra made a report of the occurrence to Inder Singh, who was the head of the Special Police Establishment at Delhi dealing with smuggling cases, and after a detailed investigation, the five accused were sent up to take their trial.
The trying Magistrate convicted all of them under section 120 B of the Indian Penal Code, read with section 3/10 of the East 'Punjab Cotton Cloth and Yarn Order, 1947, and sentenced them to rigorous imprisonment for a period of one year each.
Attar Singh was further convicted under section 7 of the Essential Supplies Act and Darshan Singh under section 8 of the said Act, and there was a sentence of one year 's rigorous imprisonment and a fine of Rs. 1,000 upon each one of them under these sections, the sentence of rigorous imprisonment to run concurrently with that on the previous charges.
Against this judgment there was an appeal taken by all the accused to the Court of the Sessions Judge at Amritsar.
The Additional Sessions Judge, who heard the appeal, acquitted two of the accused but maintained the conviction of the other three, namely, Attar Singh, Ram Singh and Darshan Singh, though their sentences were reduced.
Thereupon these three persons presented three separate revision petitions to the High Court of East Punjab at Simla which were heard and disposed of by Mr. Justice Khosla sitting singly.
The learned Judge dismissed the revision petitions but granted a certificate under article 132 of the Constitution on the ground that the cases involved a substantial question of low as to the interpretation of the Constitution.
It is on the strength of this certificate that these two appeals have come before us, one being filed by Darshan Singh and the other by Attar Singh.
No appeal has been preferred by the accused Ram Singh.
The constitutional point involved in these appeals has been presented before us very lucidly by Mr. Achhru Ram who appeared on behalf of Darslian 323 Singh, the appellant in Case No. II, and his contention, in substance, is that the East Punjab Cotton Cloth and Yarn Order, 1947, which was promulgated by the Governor of East Punjab by notification dated 15th November, 1647, and under the provisions of which the prosecution was launched against the accused, was ultra vires the authority of the Governor, in so far as it purported to legislate on matters of export and import across the customs frontier, and consequently the accused could not be held guilty of any offence for having violated such provisions.
For a proper appreciation of raised by the learned counsel, it would be necessary to refer to certain provisions of the Government of India Act, 1935, as well as to those of a number of later enactments.
Under entries 27 and 29 of List II of the Government of India Act, 1935, " trade and commerce within the province " and " produc tion. supply and distribution of goods " were provincial subjects, while " import and export across the customs frontier " was a central subject being covered by item 19 in List I. Section 102 of the Government of India Act, 1935, gave the Central Legislature the power to legislate on provincial subjects if and when a proclamation was issued by the Governor General that a state of emergency existed in the country, and such legislation would, under sub section (4) 'of the section, cease to have effect on the expiration of a. period of ' six months after the proclamation had ceased to operate.
It appears that these extraordinary powers were assumed by the Central Legislature during the period of the last war when there was a Proclamation of Emergency by the Governor General, and the Defence of India Rules promulgated during this period dealt with various ' provincial matters.
The Proclamation of Emergency was revoked by the Governor General under section 102, clause (3), of the Constitution Act on 1st April, 1946, and the result of the revocation was that all orders passed on the basis of the Defence of India Act or the Defence of India Rules ceased to be 42 324 operative after the 30th of September, 1946.
The (state of the country, however, was at that time far from normal and it was considered necessary that the control of the Central Legislature over the production, supply and distribution of goods should not be discontinued.
To meet this situation, the British Parliament passed a temporary Act (9 and 10 Geo.
6 chapter 39) which gave the Indian Legislature, during the period specified in the Act, the power to make laws with regard to certain provincial subjects.
The provision of section 2 of the Act, so far as is necessary for our present purpose, stood as follows: "(1) Notwithstanding anything in the Government of India Act, 1935, the Indian Legislature shall, during the period mentioned in section 4 of this Act, have power to make laws with respect to the following matters: (a)trade and commerce (whether or not within a Province) in and the production, supply and distribution of, cotton and woollen textiles, paper, petroleum products, spare parts of mechanically propelled vehicles, coal, iron, steel and mica; ".
Armed with this authority, the Indian Legislature passed the Essential Supplies (Temporary Powers) Act of 1946, sections 3 and 4 of which are in these terms: " 3.
The Central Government so far as it appears to it necessary or expedient for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices may, by notified order provide for regulating and prohibiting the production, supply and distribution thereof and trade and commerce therein.
* * * * 4.The Central Government may by notified order direct that the power to make orders under section 3 shall in relation to such matters and subject to such conditions,, if any, as may be specified in the direction, be exercisable also by 326 (a) * * * * (b)such Provincial Government or such officer or authority subordinate to a Provincial Government as may be specified in the direction.
" By a notification dated 20th of December, 1946, issued under section 4 mentioned above, the Central Government delegated to the Governor of Punjab the powers under section 3 of the Act.
On the 15th of November, 1947, the Governor of East Punjab, in exercise of the powers delegated by the said notification, passed the East Punjab Cotton Cloth and Yarn (Regulation of Movement) Order, 1947, and sections 2, 3 and 10 of the Order are material for our present purpose.
Section 2 is in these terms: "In this Order unless there is anything repugnant in the subject or context, (a) " export " means to take out of the Province of the East Punjab or the said land by rail, road or river to any Province or State of the Dominions of India and Pakistan and includes taking out of the Province of East Punjab to any place, situated in the said lands as well as out of the said lands to any place situated in the East Punjab.
" Section 3 runs as follows: " No person shall export or attempt to export cotton cloth or yarn except under the authority and in accordance with the conditions of a permit, issued by a permit issuing authority. .
The permit shall be in form IV, specified in Schedule 'A ' annexed to this Order ".
Section 10 provides: "If any person contravenes any provision of this Order, he shall be punishable with imprisonment which may extend to 3 years, with fine or both and without prejudice to any other general punishment which may be imposed by any court trying such contravention may direct that any cotton cloth and/,or yarn in respect of which the court is satisfied that this order, has been contravened together with the 326 covering and packing of such cloth shall be forfeited to His Majesty.
" The point for our consideration is, whether the above provisions which prohibit inter alia the export of certain essential commodities to any country outside India without a permit and make the violation of such provisions an offence, were validly made by the Governor in exercise of the powers delegated to him under section 4 of the Essential Supplies (Temporary Powers) Act 1946 ? It is not suggested by the learned counsel that there was anything improper in the Central Government 's delegating its powers to the Governor of East Punjab under section 4 of the Essential Supplies (Temporary Powers) Act.
His contention is that the Governor, in making the order, acted in excess of is delegated authority by prohibiting the export of cotton cloth and yarn to any I place outside India.
Matters of export and import, it is said, were not within the scope of section 3 of the Essential Supplies and :the notification tinder section 4 could only delegate to the Governor such powers as the Central Government could itself 'exercise under section 3.
Section 3 of the Essential Supplies Act, it is true, authorised the Central Government to make provisions for regulating and prohibiting the production, supply and distribution of the essential commodities specified in the Act and also trade and commerce therein; but it is argued by the learned counsel that the expression, " trade and commerce ", as used in the section, must be taken to mean trade and commerce within a province or at the most between provinces inter se, but it cannot include any transaction by way of exporting goods outside India.
This interpretation, somewhat restricted as it appears to us, is sought to be supported by a two fold argument.
In the first Place, it, is said, that the Essential Supplies Act, as its, Preamble shows, was passed by the Central Legislature in exercise of the authority conferred upon it by the India (Central Government and Legislature) Act, 1946, (9 and, 10 Geo.
6, c. 39) and that statute 327 conferred, only for a short period of time, a, power in the Central Indian.
Legislature to legislate on certain provincial matters, which it could not do after the revocation of the Proclamation of Emergency on the termination of the war.
It is said, therefore, that the Essential Supplies Act purported to deal exclusively with provincial matters, and import and export of goods outside the Indian territory, being a central subject, could not reasonably be brought within the purview of the Act.
The other line of reasoning that is put forward in support of the argument is, that the intention of the Central Legis lature not to include export and import within the provisions of the Essential Supplies Act is evidenced by the fact, that the Central Legislature dealt with export and import of goods separately, and by an, altogether different set of enactments which exist side by side with the Essential Supplies Act and other legislation of the same type preceding it.
It is pointed out that there was an order made under the Defence of India Rules on 3rd November, 1945, (being Order No. 91 c. w. (1) 45) imposing prohibitions on export of various descriptions of goods specified therein.
The Defence of India Rules were due to expire on the 30th September, 1946.
On the 26th September, 1946, the Essential Supplies Ordinance was passed and this was later replaced by the Essential Supplies Act.
On the very day that this Ordinance ,was passed, another Ordinance, being Ordinance No. XX of 1946, was promulgated, which inter alia continued the provisions of the Defence of India Rules relating to prohibition and restriction of import and export of goods.
Subsequently on the 26th of March, 1947, the Im ports and Exports (Control) Act was passed, which dealt comprehensively with the subject of control over exports and imports.
As it would be unnatural to suppose that the legislature was legislating on the same subject simultaneously by two parallel sets of legislation existing side by side, it is argued that export and import of goods were not within the scope and intendment of the Essential Supplies Act.
328 These arguments though somewhat plausible at first sight, do not appear to us to be sound or convincing.
It is a cardinal rule of interpretation that the language used by the legislature is the true depository of the legislative intent, and that words and phrases occurring in a statute are to be taken not in an isolated or detached manner dissociated from the context, but are to be read together and construed in the light of the purpose and object of the Act itself.
The object of the Essential Supplies Act, as set out in the preamble, was to provide for the continuance, during a limited period of time, of the power to control the production, supply and distribution of, and trade and commerce in, foodstuffs, cotton and woollen textiles, petroleum, iron and other essential commodities, a list of which appeared in the Act itself.
Section 3, which is the most material part of the Act,, authorised the Central Government, whenever it considered expedient or necessary, for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, to provide by notified order, for regulating or prohibiting, the production, supply and distribution thereof or trade and commerce therein.
Keeping this object in view and reading the words" trade and commerce " in the light of the context, there appears to be no reason why these words should not be taken in their ordinary or natural sense and why restriction on the export of goods to any place outside a province, including a neighbouring foreign State should be deemed to be outside their scope and ambit.
For maintenance or increase of supply of essential commodities within a province and to secure their equitable distribution and availability at fair prices, it might certainly be necessary to restrict export of the goods outside the province, and Pakistan being a foreign State abutting on the very borders of East Punjab, it was quite natural for the East Punjab Governor to mention Pakistan as one of the places to which export of goods from his province should not be allowed without a proper permit.
As 329 the main object of the legislation was the continuance of control over the production, supply and distribution of commodities considered essential to the community and as these are provincial subjects, the Central Legislature in legislating on them must have to invoke the powers conferred upon it by the India (Central Government and Legislature) Act, 1946 (9 & 10 Geo.
6, c. 39) spoken of above; and that is plainly the reason why a reference to that statute was made in the second paragraph, of the preamble.
But from this it cannot be argued that the Central Legislature was legislating only in exercise of the powers which it derived from the British Parliament and that it did not exercise the powers which it itself had under the Government of India Act.
It is not disputed that the Central Legislature was fully competent to legislate on exports and imports which are central subjects and in making any provision relating thereto, it cannot be said that it acted in excess of its authority.
Even taking the legislation to be purely on the provincial subjects of production, distribution and supply of goods, restriction of export as ancillary to production and supply of essential commodities would, in our opinion, be quite within the scope and ambit of such legislation and in pith and substance it would be an enactment dealing exclusively with these provincial matters.
Looked at from this standpoint, the other argument advanced by Mr. Achhru Ram would also be found to be without any substance.
The imports and Exports Act or the earlier Order and Ordinance, referred to by the learned counsel, were legislation essentially on the subject of exports and imports.
Their object was to regulate or control imports and exports generally and they dealt with a large variety of articles far outnumbering those enumerated in the Essential Supplies Act.
The object of the imports and Exports Act was not to regulate production and distribution of commodities considered essential to the community 330 and it was not as a means to secure that object that it purported to prohibit or restrict exporting of goods.
Thus the scope and purpose of the two sets of legislation were totally different and there was nothing wrong if they existed side by the side and were in operation at one and the same time, We are not told that there was any overlapping of the provisions of these two statutes; and as the competency of the legislature to enact both these sets of provisions is not disputed, we do not think that any occasional overlapping, even if it is assumed to exist, would be at all material.
In our opinion, therefore, the contentions raised in regard to the constitutional point involved in these appeals are unsupportable and could not be accepted.
As the appeals have come up before us on the strength of a certificate granted under article.
132(1) of the Constitution, the appellants are not entitled to challenge the propriety of the decision appealed against on a ground other than that on which the certificate was given except with the leave of this court as provided for by clause (3) of article 132 of the Constitution.
At the close of the arguments of the parties in regard to the constitutional point referred, to above.
, we made it clear to the learned counsel appearing for both the appellants that we would not allow any question relating to the merits of the cases to be raised before us which turned merely on appreciation of evidence by the courts below.
Mr. Umrigar, who appeared for Attar Singh the appellant in Case No. 12, however stated to us that he would crave leave to bring to our notice one important matter which, according to him, resulted in grave miscarriage of Justice at least so far as his client was concerned.
He pointed out that both the Additional Sessions judge and the learned Judge of the High Court in deciding the case against his client relied upon an admission alleged to have been made by the latter that he was present at the customs barrier at Wagha on the morning of the day of occurrence and had gone there to say good bye to the customs staff, he 331 being under an order of transfer from Amritsar to Gurdaspur.
It is said by the learned counsel that his client never admitted his presence at the customs barrier on the morning of 26th May, 1948, and that he neither did nor had any occasion to put forward any explanation regarding his presence there at that time.
The whole thing, it is said, is based upon sheer misapprehension and is not warranted by anything appearing on the record.
There is no doubt that the Additional Sessions Judge as well as the High Court did refer in their respective judgments to the alleged admission of Attar Singh and rely upon the same to arrive at their decision in the case.
The Additional Sessions Judge said in his judgment: " The next important man is Attar Singh accused.
He admits his presence at the barrier on that morning, when he says that he had gone to bid good bye to the customs staff on his transfer to Gurdaspur According to the leave obtained by him he had yet to remain at Amritsar till 28th and in view of illness of his wife he need not have been in hurry to go to the barrier for this purpose so soon.
I am not convinced with his explanation.
" The High Court in referring to the said admission observed as follows: " Attar Singh admitted that he was present at the barrier on that morning but the explanation he gave was this.
His office is at Amritsar but be had received orders of transfer to Gurdaspur.
His wife was ill and, therefore, he could not move immediately.
So he applied for a few days leave, and on the morning of the 26th of May he went to the barrier to say goodbye to his colleagues in the Customs Department and while he was there this incident took place without his knowledge. .
Attar Singh 's explanation of his presence at the spot does not convince me at all.
" It appears that in course of the examination of the accused Attar Singh under section 342 of the Criminal 43 332 Procedure Code before the trial Magistrate a specific question was put to him as to whether he could explain his presence on the scene of occurrence on the 26th May, 1948, although it was alleged that he was on leave.
To this question he replied categorically that he was not present as alleged.
In this state of the records, we asked the learned Advocate General, who appeared for the State of East Punjab, as to when and how was the admission referred to above made by Attar Singh.
The Advocate General, answered that the admission might be in the written statement which Attar Singh said he would file when he was interrogated under section 342 of the Criminal Procedure Code.
In order to clear up the matter we had the further hearing of the case adjourned to enable the Advocate General to produce before us the written statement, if any, that was filed by Attar Singh in the trial court.
The case was again taken up for hearing on the 26th of November last and the Advocate General frankly stated to us that no written statement by Attar Singh 'was on the records at all.
It is clear, therefore, that both the courts below in coming to their decision regarding the guilt of the accused did rely to a considerable extent on the so called admission of Attar Singh which, it must be held, had no existence in fact.
The Advocate General contends that even if there was an error committed by the courts below in this respect, we should nevertheless dismiss the appeal inasmuch as there is sufficient evidence to support the conviction of the accused independently of the so called admission of Attar Singh; and he invited us to examine the evidence ourselves and come to our own decision on the point.
Without in any way disputing our right to adopt this course in cases where it may be considered necessary, we think that in the circumstances of the present case the proper order to make will be to direct a rehearing of the appeal by the Session& Court on the evidence as it actually stands after excluding from consideration the alleged Admission of Attar Singh.
There can be no doubt 333 that the supposed admission was of a very damaging character and was highly prejudicial to the accused.
It is quite,, problematic to value its effect upon the minds of the Judges in the courts below and it is difficult for us to say that had it been excluded from consideration the courts would have come to the same decision of guilt or that conversely a verdict of acquittal would have been a perverse one.
In such cases, the function of this court, which is not an ordinary court of criminal appeal, is not so much to weigh and appraise the evidence again to find out the guilt or innocence of the accused as to see that the accused gets a fair trial on proper evidence.
It has been argued by Mr. Achhru Ram, and in our opinion quite rightly, that if the case of Attar Singh is to be heard afresh, the same order should be made in the case of Darshan Singh as well.
Not only are the two cases closely interconnected, but so far as Darshan Singh is concerned the prosecution sought to establish his complicity.
in the affair primarily by adducing evidence to show that he was in the company of Attar Singh when both of them approached Kulraj, the officer in charge of the police station, and requested him to allow the truck to pass through.
The Additional Sessions Judge observed in his judgment that the only motive of Darshan Singh was to help his colleague, namely Attar Singh, who was about to leave the district.
It is necessary, therefore, that the case of Darshan Singh should also be reheard and the whole evidence against him reconsidered with a view to find out whether he is guilty or innocent.
The result, therefore, is that both the appeals are allowed.
The judgment of the High Court as well as that of the Additional Sessions Judge are set aside and the cases remitted to the Sessions Court in order that they may be heard afresh on the evidence on record in the light of the observations made above after excluding from consideration the supposed admission of Attar Singh., Pending the decision of the Session a Court, the accused would remain on bail 7 on the same terms as before.
Appeals allowed.
Agent for the appellant in Case No. 11: Naunit Lal.
Agent for the appellant in Case No. 12: A. D. Mathur.
Agent for the respondent and the intervener G. H. Rajadhyaksha.
| Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, which was passed by the Indian Legislature in 1946 empowered the Central Government by notified order to provide for regulating and prohibiting the production, supply and distribution of any essential commodity and trade and commerce therein; section 4 of the Act empowered the Central Government to delegate its powers under section 3 to the Provincial Government or any officer thereof.
The Governor of the Punjab to whom such powers had been delegated under section 4 passed the East Punjab Cotton Cloth and Yarn Control Order, 1947, which prohibited the export of cotton cloth and yarn to any country outside India except under a permit, and made export without permit an offence.
The validity of this order was questioned on the ground that the Governor had acted in excess of his powers in so far as lie prohibited export outside India without a permit: Held, (i) that, keeping the object of the Essential Supplies Act, 1946, in view and reading the words " trade and commerce " in a. 3 of the Act in the light of the context, these words could be interpreted as including the export of goods outside the Province including a neighbouring foreign State and the Governor in passing the impugned Order did not act in excess of the powers delegated to him; (ii)that as the Central Legislature was fully competent to legislate on exports and imports and making any provision relating thereto under the Government of India Act, 1935, it had power to make a law prohibiting export to a foreign State, even &part from the powers conferred on it by the India (Central Government and and Legislature) Act, 1946 (9 320 (iii) even taking the legislation to be purely on the provincial subjects of production, distribution and supply of goods, restriction of import as ancillary to production and supply of essential commodities would be quite within the scope and ambit of such legislation and in pith and substance the enactment would be one dealing exclusively with these provincial matters.
It is a cardinal rule of interpretation that the language used 'by the legislature is the true depository of the legislative intent, and that words and phrases occurring in a statute are to be taken not in an isolated or detached manner dissociated from the context, but are to be read together and construed in the light of the purpose and object of the Act itself.
|
Petition Nos.
464 & 617 of 1977.
(Under Article 32 of the Constitution of India. ) K. Parasaran, Attorney General, Shanti Bhushan, Ashwani Kumar, K.G. Bhagat, L.N. Sinha, Raja Ram Aggarwal, S.P. Gupta, H.K. Puri, V. Parthasarthy, T.C. Sharma, P.P. Singh, Ms. A. Subhashini, Mrs. Sushma Suri, G. Gopalakrishnan, O.P. Rana, A.V. Rangam and Shartha Raju for the appearing par ties.
F.S. Nariman, K.K. Venugopal, A.K. Verma, D.N. Mishra and section Kachawa for the intervener in W.P. No. 464/77.
The Judgment of the Court was delivered by THOMMEN, J.
The petitioners are owners of sugar mills operating in the State of Uttar Pradesh in areas classified for the purpose of determining the price of levy sugar as West and East Zones.
They challenge the validity of notifi cations dated 28th November, 1974 and 11th July, 1975 (Annexures 8 & 9) issued by the Central Government in exer cise of its power under sub section (3 C) of section 3 of the (Act No. 10 of 1955), as amended to date (hereinafter referred to as the 'Act ').
The petitioners do not, and cannot, challenge the validity of the subsection by reason of Article 3 lB of the Constitution of India.
By the impugned orders, the Central Government fixed the prices of levy sugar for 1974 75 production.
For the purpose of determining the prices, the country is divid ed into 16 zones, and the prices fixed for various grades of sugar in terms of section 3 (3 C) of the Act vary from ' zone to zone.
Prices are determined with reference to the geographical cum agro economic considerations and the aver age cost profiles of factories located in their respective zones.
Each State for this purpose constitutes a separate zone, while U.P. is divided into 3 zones and Bihar into 2 zones.
The petitioners contend that these orders are ultra vires the Act and violative of their fundamental fights as the prices of levy sugar have been determined arbitrarily with reference to the average cost profiles of factories grouped together in zones without regard to their individual capacity and cost characteristics.
Such prices do not re flect the actual manufacturing cost of sugar incurred by producers like the petitioners or secure to them reasonable returns on the capital employed by them.
Geographical zon ing, for the purpose of price fixation, they point out, is an irrational ' and discriminatory system of (1) Published in the Gazette of India Extraordinary dated 28.11.1974 and 11.7.1975.
919 averaging wide cost disparities amongst producers of widely varying capacity.
Cost of manufacture of sugar depends on a number of factors, such as recoveries from the sugarcanes, duration of the crushing season, crushing capacity of the plant, the sugarcane price paid and the capital employed in the manufacture of sugar.
These factors vary from factory to factory.
Fixation of the levy sugar prices on zonal basis without regard to these divergent factors and the compara tive cost profiles gives the owners of bigger factories an undue advantage over producers like the petitioners whose factories are comparatively of lower crushing capacity and whose manufacturing cost is consequently higher.
Clubbing of the petitioners ' factories with dissimilar factories in the same zones for the purpose of price fixation is discrimina tory, arbitrary and unreasonable.
The petitioners point out that the system of geographical zoning for the purpose of price determination has been severely criticised by the Bureau of Industrial Costs & Prices (The "BICP") who have strongly recommended the division of the sugar industry into groups of units having similar cost characteristics with particular reference to recovery, duration, size and age of the unit and capital cost per tonne of output, and irrespec tive of their location.
The respondents, on the other hand, contend that the classification of sugar industry into 15 zones (now 16) was upheld by a Constitution Bench of this Court in Anakapalle Co operative Agricultural & Industrial Society Ltd. etc.
vs Union of India & Ors.
, ; The conten tion that the zonal system was discriminatory and violative of constitutional principles was pointedly urged, but cate gorically rejected by this 'Court.
The method adopted by the Government in fixing the price of levy sugar is fully sup ported by the recommendations of various expert bodies.
The Tariff Commission in its 1973 Report recommended division of the country into 16 zones for this purpose.
The price of sugar is fixed with reference to the Cost Schedule recom mended by that body.
These recommendations are based on various factors such as cost and output of individual la bour, cane price (accounting for about 70 per cent of the cost of sugar production), quality of sugarcane, taxes on sugarcane, cost of other material, transport charges, cost of storing the sugar produced, cane development charges and other overhead expenses, selling expenses etc.
These factors are almost identical for the entire zone.
The cost of manufacturing sugar, the respondents con tend, depends not only on recovery from the sugarcane, duration of crushing season, crushing capacity of the plant, the sugarcane price paid and the capital employed, as stated by the petitioners, but also to a consider 920 able extent on the condition of the plant and machinery, quality of management, investment policy, relations with cane growers and labour, financial reputation etc.
They say: "It is evident from the Tariff Commission Report of 1959, as also the Official Directory of the Bombay Stock Exchange, that the petitioner Company has been consistently diverting huge amounts for investments running into several lakhs elsewhere instead of ploughing back the same into the peti tioner 's sugar industry in question.
Thus, the petitioner Company has been neglecting the sugar factory and for such neglect of their own they cannot blame the Zonal System." Mr. Shanti Bhushan, appearing for the petitioners, does not object to the factories being grouped together on the basis of factors common to them with a view to fixing the prices applicable to them as a class of producers.
He does not advocate fixation of price separately for each unit.
He says that the sugar factories must be grouped together, not on the basis of their geographical location, but similarity in cost characteristics.
He relies upon the 1976 Report of the BICP.
The present system of fixing prices according to the regions, where the factories are located, he says, is based on "averaging wide cost disparities" as a result of which manufacturers like the petitioners incurring a high cost of production and others incurring a low cost of pro duction are treated alike.
Such a system works to the disad vantage of the former and to the advantage of the latter.
This, Mr. Shanti Bhushan contends, is an unreasonable and invalid classification and violative of constitutional principles.
While this line of argument is supported by Mr. Raja Ram Agarwal, Mr. S.P. Gupta appearing for the interven er in Civil Writ Petition No. 464 of 1977 advocates aboli tion of zonal classification or grouping of any kind and supports fixation of price for each individual factory with reference to its cost and regardless of any other considera tion.
Such unit wise determination alone, according to him, satisfies the requirements of Section 3(3 C).
Any system of zoning or grouping for determination of price, he contends, will fail to meet the norms of that sub section.
Mr. M .M. Abdul Khader, on the other hand, submits that while averag ing and costing with reference to a representative cross section may ordinarily be an appropriate method for deter mining the fair price, such a method is inappropriate for a small zone like Kerala where there are only three manufac turing units.
In respect of such a zone, he says, unit wise fixation of price is the only just and proper method.
921 Mr. K.K. Venugopal, counsel for Indian Sugar Mills ' Association (ISMA), on the other hand, supports the zoning system.
He says that, except for a few producers like the petitioners, all the rest of them in the country have ac cepted the principle of zoning.
In his written submissions, Mr. Venugopal states as follows: "As was seen during the course of hearing only 2 or 3 per sons have come forward challenging zoning.
There are 389 sugar factories in the country and the present intervener has 166 members.
Besides there are 220 members with the cooperative sector.
Their Association being National Federa tion of Cooperative Sugar Factories Ltd., has also inter vened in these petitions and have adopted the arguments of ISMA.
Hence almost the entire industry has supported zoning and only a handful of people who also factually are not high cost units have opposed zoning." Mr. Venugopal submits that the present case is squarely covered by the decisions of this Court in Anakapalle Cooper ative Agricultural & Industrial Society Ltd. etc.
vs Union of India & Ors.
, ; and The Panipat Cooperative Sugar Mills vs The Union of India, [1973] 2 SCR 860.
He says that the petitioners have not made out a case for reconsideration of these two decisions.
He refers to T. Govindaraja Mudaliar etc.
vs The State of Tamil Nadu & Ors., ; at 228 to 230 and submits that this Court would not reexamine an earlier decision merely because certain aspects of the question had not been noticed in that decision.
Mr. Venugopal, however, advocates neutralisation of the high cost incurred by the old units having lower crushing capacity by giving them an incremental levy price as recommended by the High Level Committee in 1980.
Before we examine the provisions of section 3(3 C) in the context of the general scheme of the Act, we shall briefly refer to the observations of this Court in Anaka palle; , and Panipat, [1973] 2 SCR 860.
Grover, J. speaking for the Bench in Anakapalle (supra) states ': "The system of fixing the prices, according to certain regions or zones, is not a new one.
The Tariff Commission in 1959 favoured the formation of four zones.
In the report of the Sugar Enquiry Commission 1965 it was pointed out that the Government had actually fixed the prices for 22 922 zones which meant that from four zones the number had been increased to twenty two or more.
The Commission was of the view that there should be five zones only in addition to Assam.
The Tariff Commission, 1969 however recommended the constitution of fifteen zones largely on State wise basis with an exception only in case of Uttar Pradesh and Bihar.
Uttar Pradesh was divided into three zones and Bihar into two.
The Tariff Commission had been specifically requested to inquire into the working of the zonal system, the main point for inquiry being the zones into which the sugar producers should be grouped having regard to the basis of classification to be recommended by the Commission.
The view of the Commission was that on the whole the number of price zones should be fifteen which would reduce, though not eliminate, the inter se anomalies in the cost structure without resorting to the extreme of the fixation of price for each unit or a single or at the most two, one for the sub tropical and other for the tropical one.
The Tariff Commission hoped that in the course of time conditions would be created making the operation of the second alternative feasible." Rejecting the contention that it was the zonal system that caused the losses allegedly incurred by some of the sugar producers, Grover, J. says that ordinarily these units ought to have made profits.
The reasons for incurring losses can be many, such as inefficiency, failure to pursue the right policy, poor management and planning etc., but these reasons have no relation to the zonal system.
That system by and large has led to efficiency and provides an incentive to cut down the cost.
Healthy competition among the units in the same zone should in the normal.
course result in reduc tion of cost and greater efficiency in the operation of the units.
It is proper management and planning that would lead to the success of any commercial venture.
The contention of the producers that they have been incurring losses on ac count of the zonal system is opposed to the evidence pro duced by them.
The Court has rejected the extreme contention that prices should be fixed unitwise, i.e., on the basis of actual cost incurred by each unit.
Referring to this conten tion, this Court observes: "Apart from the impracticability of fixing the prices for each unit in the whole country, the entire object and pur pose of controlling prices would be defeated by the adoption of such a system.
" 923 Grover, J. states that, during the earlier period of price control, it was on an all India basis that the price was fixed.
That is still the objective.
If such an objective is achieved, it would undoubtedly be conducive to conferring proper benefit on the consumers.
The objective of the Tariff Commission is to have only two regions for the whole coun try, viz., sub tropical and tropical.
The Court has rejected as baseless the criticism against the principle of weighted average adopted in the fixation of price in each zone.
Such a principle is well recognised and acted upon by various Sugar Enquiry Commissions.
A proper cost study is intended to do justice to the weak and strong alike.
There is abundant justification for continuing and sustaining the zonal system.
The varying climatic conditions of each State have been taken into account.
For the same reason, Bihar is divided into 2 zones and U.P. into 3 zones, while, in the case of many other States, each State is treated as a single zone.
This system of zoning is thus adopted with special reference to climatic and agro economic conditions.
Rejecting the contention that the zonal system has resulted in discriminatory treatment, this Court states: "We are unable to hold that while classifying zones on geographical cum agro economic consideration, any discrimi nation was made or that the price fixation according to each zone taking into account all the relevant factors would give rise to such discrimination as would attract Article 14 of the Constitution.
" Even if there is no price control, the uneconomic units would be at a great disadvantage.
The Court states: "Even if there is no price control each unit will have to compete in the market and those units which are uneconomic and whose cost is unduly high will have to compete with others which are more efficient and the cost of which is much lower.
It may be that uneconomic units may suffer losses but what they cannot achieve in the open market they cannot insist on where price has to be fixed by the govern ment.
The Sugar Enquiry Commission in its 1965 report ex pressed the view that "cost plus" basis of price fixation perpetuates inefficiency in the industry and is, therefore, against the long term interest of the country.
" Considering the general principle involved in price fixa tion, the Court states: 924 "It is not therefore possible to say that the principles which the Tariff Commission followed in fixing the prices for different zones are either not recognised as valid principles for fixing prices or that simply because in case of some factories the actual cost was higher than the one fixed for the zone in which that factory was situate the fixation of price became illegal and was not in accordance with the provisions of sub section (3 C).
It has not been denied that the majority of sugar producers have made prof its on the whole and have not suffered losses.
It is only some of them which assert that their actual cost is far in excess of the price fixed.
That can hardly be a ground for striking down the price fixed for the entire zone provided it has been done in accordance with the accepted principles . . ".
The Court concludes: "When prices have to be fixed not for each unit but for a particular region or zone the method employed by the Commis sion was the only practical one and even if some units because of circumstances peculiar to them suffered a loss the price could not be so fixed as to cover their loss.
That cannot possibly be the intention of the Parliament while enacting sub section (3 C) of section 3 of the Act.
If that were so the price fixation on zonal or regional basis would have to be completely eliminated.
In other words, the entire system of price control which is contemplated wilt break down because fixation of price for each unit apart from being impractical would have no meaning whatsoever and would not be conducive to the interest of the consumer. ' ' This Court has thus in Anakapalle (supra) rejected the argument that the alleged loss incurred by certain sugar producers is attributable to fixation of price on a zonal basis; or the zonal system has led to inefficiency or lack of incentive, or it has resulted in unequal or unfair treat ment.
On the other hand, the zonal system has encouraged a healthy competition amongst the units in the same zone.
Unit wise fixation is impracticable.
The Tariff Commission is the best judge in selecting units for cost study to determine the average cost.
The fair price has to be deter mined with reference to the conditions of a representative cross section of the industry.
For all these reasons, there is ample justification in continuing and sustaining the zonal system for 925 the purpose of price fixation.
Price has to be fixed for each zone and necessarily it varies from zone to zone.
There is no discrimination in the classification of zones on a geographical cum agro economic consideration and any such classification is perfectly consistent with the principle of equality.
In Panipat, [1973] 2 SCR 860, Shelat, J. speaking for the same Constitution Bench that has decided Anakapalle; , , referes to the norms adopted in sub sec tion (3 C), viz., (a) determination by the Government of the "price of sugar", and (b) payment of "an amount" to the manufacturer, and states that the concept of fair price which is what is referred to in sub section (3 C) as "price of sugar" does not by any account mean the actual cost of production of every individual manufacturer.
Such price has to be arrived at by a process of costing with reference to a representative cross section of the manufacturing units.
He states: "The basis of a fair price would have to be built on a reasonably efficient and economic representative crosssec tion on whose workings cost schedules would have been worked out and the price to be determined by Government under sub section (3 C) would have to be built." So stating, Shelat, J. rejects the contention that such price has to be determined unit wise.
Any such fixation of price, he points out, would be contrary to the concept of partial control postulated by the subsection and would perpetuate inefficiency and mismanagement.
But, of course, any such price, he hastens to add, has to be fixed reasona bly and on relevant considerations.
Referring to the policy of partial control, Shelat, J. states: " . . the Central Government was confronted with two main problems (a) deterioration in the sugar industry, and (b) the conflicting interests of the manufacturer, the consumer and the cane grower.
The floor price of cane fixed by Government was intended to protect the farmer from ex ploitation, but that was found not to be an incentive enough to induce him to increase his acreage.
A device had to be found under which a price higher than the minimum could be paid by the manufacturer of sugar.
The consumer, on the other hand, had also to be protected against the spiralling of sugar price and his needs, growing as they were, had to be satisfied at some reasonable price.
" 926 Shelat, J. emphasises the need to modernise the factories which alone would yield a reasonable return.
This is what he states: 'Both these and a larger production of sugar would not be possible unless there was a reasonable return which would ensure expansion, which again would not be possible unless new machinery for such expansion was brought in and facto ries, particularly in U.P. and Bihar, were modernised and renovated.
A fair price for sugar, therefore, had to be such as would harmonise and satisfy at least to a reasonable extent these conflicting interests.
" Significantly, the BICP 's recommendation to group indi vidual units having homogenity in cost, irrespective of their location, was not accepted by the Central Government, particularly because the Tariff Commission itself had con sidered the question and reached the conclusion that geo graphical cum agro economic considerations demanded the grouping of factories with reference to State zones, or subzones as in the case of U.P. and Bihar.
To group them on the basis of their location in various regions of the coun try for the purpose of price fixation is a rational method reflecting economic realities.
This is particularly so as conditions generally vary from State to State as regards the availability and quality of sugarcane, labour conditions and other factors, whereas within the same region like facili ties are generally available to all factories.
If the cost structure varies from factory to factory, such variation is not necessarily caused by the non availability, or the poor quality of raw material, or the labour conditions, but probably for reasons unconnected with them, such as the age of the plant, availability of finance, management ability, etc.
There is great force in the submission of the respond ents that to group together factories having a high cost profile and to determine a price specially applicable to them is, as recognised by this Court in Panipat (supra) and Anakapalle (supra), to put a premium on incompetence, if not mismanagement.
The history of control over sugar has been set out at length in Panipat (supra) and we do not wish to burden this judgment with a narration of the circumstances which have led to the introduction of partial control under which 60% of the output of sugar is acquired and the balance left for free sale.
It is in implementation of this policy that sub section (3 C) of section 3 was inserted2 Before we examine the 2.
For an illuminating discussion of this aspect, See A.M. Khusro, Price Policy, Lancer International (1987), p. 62 63: 927 provisions of that sub section under which the impugned notification have been issued, we shall refer to the statu tory scheme.
The Act was, as stated in the preamble, enacted by Parliament "to provide, in the interest of the general public, for the control of the production, supply and dis tribution of, and trade and commerce in, certain commodi ties".
The entire Act is devoted to the cause of the general public with a view to achieving equitable distribution of essential commodities at fair prices.
Section 3 of the Act confers wide power upon the Central Government to control production, supply, distribution, etc., of essential commodities.
It reads: "3.
Powers to control production, supply, distribution, etc., of essential commodities (1) If the Central Govern ment is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regu lating or prohibiting the production, supply and distribu tion thereof and trade and commerce therein.
" Sub section (2) of section 3 says that, without preju dice to the generality of the powers conferred by sub sec tion (1), an order made "After many years of adverse experience a new strategy of dual pricing was introduced in sugar.
The mills were asked to deliver to the public distribution system about 60 per cent of their output say at Rs.2 per Kg.
and were allowed to sell the balance of 40 per cent in the free market at say Rs.6 per kg.
The mills were delighted to do so as they got very much enhanced receipts from their flee market sales.
With larger receipts they offered in the following season a higher price to the farmer (the sugarcane grower) who, in turn, grew and offered more cane.
In other words, the law of supply which had been held captive, as it were, was freed from bondage.
With a higher price offer from the mills, the cane growers brought more land under sugar cane, diverted land from other crops to cane, used more inputs, produced and delivered to the mills more cane and in fact diverted cane deliveries from the open pan system to the mill system.
Having thus obtained much more cane, the mills produced much more sugar and sold 30 40 per cent of it in the free market.
Within a year or two, the free market price of sugar fell from Rs.6 to Rs.3 or even Rs.2.50.
At this rate consumers began to buy more in the free market, millions of ration cards remained unused and the demands on the public distribution declined substantially.
Prolonged shortages of sugar got converted into a relative abundance.
" 928 under that sub section may provide for the matters specified in subsection (2).
One of them is what is contained in clause (f) of sub . section (2) which empowers the Central Government to require any person dealing in any essential commodity to sell the whole or a specified part of such commodity to the Central Government or the State Government or to a nominee of such Government.
It reads: "(2) Without prejudice to the generality of the powers conferred by sub section (1), an order made thereunder may provide (a). . . . . . . . . . . . . . . . . . (f) for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling of any essential commodity , (a) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or (b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a speci fied part of such commodity when produced or received by him, to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order.
" The power contained in sub section (1) or sub section (2) is exercisable by an order.
An 'order ' is defined under section 2 to include a direction issued thereunder.
Any order made under section 3 by the Central Government or by an officer or authority of the Central Government is re quired by sub section (6) of section 3 to be laid before both Houses of Parliament, as soon as may be, after it is made.
Any order made under section 3 which is of a general nature or affecting a class of persons has to be notified in the official gazette.
[Subsection (5) of section 3].
929 Sub section (3) of section 3 provides that where any person has sold any essential commodity (sugar being such a commodity) in compliance with an order made with reference to clause (f) of sub section (2), he shall be paid the price of the goods purchased from him as provided under clauses (a), (b) and (c) of sub section (3).
This subsection oper ates only where an order has been made under sub section (1) with reference to clause (f) of sub section (2).
While clause (a) of the sub section postulates an agreed price, consistently with the controlled price, if any, clause (b) speaks of a price calculated with reference to the con trolled price, if any, when no agreement is reached.
Where neither clause (a) nor clause (b) applies, either because there is no agreement or because there is no controlled price, the seller has to be paid, as per clause (c), a price calculated at the market rate prevailing in the locality at the date of the sale.
Sub section (3 A) empowers the Central Government to regulate in accordance with the provisions of the sub sec tion the price of any foodstuff sold in a locality in com pliance with an order made with reference to clause (f) of sub section (2).
This power is exercisable by a direction which has to be duly notified in the official Gazette.
The power to issue the direction is notwithstanding anything contained in sub section (3).
Before issuing the notifica tion, the Central Government has to form an opinion that the price of any foodstuff (including sugar) has to be regulated for the purpose of cotrolling the rise in its prices or preventing its hoarding in any locality.
Any such notifica tion will remain in force for any specified period not exceeding 3 months.
The price payable in such cases is either the agreed price consistently with the controlled price, if any, or where no such agreement is possible, the price calculated with reference to the controlled price, if any, or where neither of these two methods is applicable, the price calculated with reference to the average market rate prevailing in the locality during the period of 3 months immediately prior to the date of the notification.
The average market rate will be determined by an officer authorised by the Central Government and the rate so deter mined by him is not liable to be questioned in any court.
Sub section (3 C) which is the crucial provision, was inserted in 1967.
It reads: "(3 C).
Where any producer is required by an order made with reference to clause (f) of sub section (2) to sell any kind of sugar (whether to the Central Government or a State Government or to an officer or agent of such Govern 930 ment or to any other person or class of persons) and either no notification in respect of such sugar has been issued under sub section (3 A) or any such notification, having been issued, has ceased to remain in force by efflux ot time, then, notwithstanding, anything contained in sub section (3), there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to (a) the minimum price, if any, fixed for sugarcane by the Central Government under this section; (b) the manufacturing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar, and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar.
Explanation For the purposes of this sub section, "produc er" means a person carrying on the business of manufacturing sugar." (emphasis supplied) Sub Section (3 C) is attracted whenever any producer is required to sell sugar by an order made with reference to sub section (2)(f) and no notification has been issued under sub section (3 A) or any such notification, having been issued, has ceased to be in force.
Whenever sub section (3 C) is attracted, it operates notwithstanding anything con tained in sub section (3).
This means the compensation payable to the seller in the circumstances attracting sub section (3 C) is not the price postulated in sub section (3).
Nor is it the price mentioned under sub section (3A), for that sub section cannot be in operation when sub section (3 C) is attracted.
What is payable under sub sectin (3 C) is an "amount" calculated with reference to the "price of sugar" determined in the manner indicated in that sub sec tion.
931 Construing sub section (3 C), this Court in Panipat [1973] 2 SCR 860,870 says: "Sub section 3C, with which we are presently concerned was inserted in sec.
3 by sec.
3 of Act 36 of 1967.
The sub section lays down two conditions which must exist before it applies.
The first is that there must be an order made with reference to sub section 2 cl.
(f), and the second is that there is no notification under sub section 3A or if any such notification has been issued it is no longer in force owing to efflux of time.
Next, the words "notwithstanding anything contained in sub section" suggest that the amount payable to the person required to sell his stock of sugar would be with reference to the price fixed under the subsection and not the agreed price or the market price in the absence of any controlled price under sub sec.
The sub section then lays down two things; firstly, that where a producer is required by an order with reference to sub sec.
2(f) to sell any kind of sugar, there shall be paid to that producer ' an amount therefore, that is for such stock of sugar as is required to be sold, and secondly, that such amount shall be calculated with reference to such price of sugar as the Central Government may, by order, determine, having regard to the four factors set out in cls.
(a), (b), (c) and (d).
Unlike the preceding three sub sections under which the amount payable is either the agreed price, or the controlled price, or where neither of these prices is applicable at the market or average market price, the amount in respect of sugar required to be sold is to be calculated at the price determined by th Central Government . " What is specially significant is that sub section (3 C) postulates payment of an amount to the producer who has been required to sell sugar in the circumstances mentioned there in.
What is required to be paid to him is not the price of sugar, but only an amount.
That amount has to be calculated with reference to the price of sugar.
The "price" is deter mined by the Central Government by means of an order which, as required by sub sections (5) and (6), has to be notified in the official gazette and laid before both Houses of Parliament.
The order notifying the "price of sugar" is of general application and it is the rate at which the actual "amount" payable to each seller is calculated.
The price of sugar must be determined by the Central Govern 932 ment having regard to the factors mentioned in clauses (a) to (d) of sub section (3~C).
This is done with reference to the industry as a whole and not with reference to any indi vidual seller.
In contradistinction to the "price of sugar", the "amount" is calculated with reference to the particular seller.
The Central Government is authorised to determine different prices for different areas or for different facto ries or for different kinds of sugar.
Whether factories are required to be grouped together for a rational determination of the prices according to their location or their size, age and capacity or by any other standard is a matter for deci sion by the Central Government on the basis of relevant material.
What is contemplated by the legislature in dele gating such wide discretion to the Central Government is that it must apply its mind to the manifold questions rele vant to the determination of prices and with due regard to the norms laid down in the sub section.
What is required by sub section (3 C) is the adoption of a valid classification of factories having a rational nexus to the object sought to be achieved, viz., determination of a fair price of sugar with reference to which the actual amounts payable to the producers, in the circumstances attracting the sub section, are calculated.
Referring to the legislative background of sub section (3 C), this Court in Panipat (supra) observes: "In order to appreciate the meaning of cls.
(a), (b), (c) and (d), it must be remembered that ever since control on sugar was imposed, Government had set up expert committees to work out cost schedules and fairprices.
Starting in the beginning with an All India cost schedule worked out on the basis of the total production of sugar, the factories were later grouped together into zones or regions and different cost schedules for different zones or regions were con structed on the basis of which fair prices were worked out at which sugar was distributed and sold.
The Tariff Commis sion in 1958 and the Sugar Enquiry Commission in 1965 had worked out the zonal cost schedules on the basis of averaged recovery and duration, the minimum and not the actual price of cane, the averaged conversion costs and recommended a reasonable return on the capital employed by the industry in the business of manufacturing sugar.
This experience was before the legislature at the time when subsec.
3C was inserted in the Act.
The legislature therefore incorporated the same formula in the new sub section as the basis for working out the price.
The purpose behind 933 enacting the new sub section was three fold, to provide an incentive to increase production of sugar, encourage expan sion of the industry, to devise a means by which the cane producer could get a share in the profits of the industry through prices for his cane higher than the minimum price fixed and secure to the consumer distribution of at least a reasonable quantity of sugar at a fair price. ' ' Clauses (a) to (d) of sub section (3 C) postulate that the price of sugar must be determined having regard to the minimum price, if any, fixed for sugarcane by the Central Government, the manufacturing cost of sugar, the duty or tax applicable in the zone, and the securing of a reasonable return on the capital employed in the business of manufac turing sugar.
Referring to clause (d) of sub section (3 C), this Court observes in Panipat (supra): "It is clear from the reports of the Tariff Commission that a reasonable return recommended by that body at a fixed amount of Rs. 10.50 per quintal which worked out in 196667 at 12.5% per annum was not in respect of levy sugar only but on the whole, so that even if such a return was not obtain able on levy sugar but was obtainable on the whole, it would meet the requirement of cl.
In this conclusion we derive a two fold support, firstly, from the language used in cl.
(d) itself, viz., a reasonable return on the capital employed in the business of manufacturing sugar, which must mean the business as a whole and not the business of manu facturing levy sugar only, and secondly, from the fact of the Commission having all along used the same phraseology while recommending Rs. 10.50 per quintal as an addition by way of a reasonable return on the capital employed in the industry.
The cost schedules prepared by these bodies were for determining a fair price in relation to the entire sugar produced by the industry and the return which should be granted to it on the capital employed in the industry and not with respect to that stock only required to be sold under sub sec.
This is clear from the heading of Ch.
9 of the Tariff Commission 's report, 1969, "Cost Structure and Price Fixation".
" The petitioners contend that although the Government has the discretion to fix different prices for different areas or for different 934 factories, or for different kinds of sugar, such wide dis cretion has to be reasonably exercised.
It is, of course, a well accepted principle that any discretion conferred on the executive has to be reasonably exercised.
Nevertheless, it is a discretion which the Court will not curtail unless the exercise of it is impeachable on well accepted grounds such as 'ultra vires ' or 'unreasonableness '.
The petitioners further contend that the Act requires the Government to have regard to clauses (a) to (d) and, therefore, it is mandatory on the part of the Government to act strictly in compliance with the provisions of those clauses in determining the prices.
According to them, "having regard to" is a mandatory requirement demanding strict compliance with the provisions to which reference is made by the legislature.
They say that the ingredients of clauses (a) to (d) must be examined with reference to each producer as a condition precedent to the determination of the price of sugar.
We may in this connection point out that the petitioners have not furnished any data to show that the prices deter mined by the Government would have been different had the ingredients of clauses (a) to (d) of the sub section been examined with reference to each individual producer instead of a representative cross section of manufacturing units.
Be that as it may, the expression "having regard to" must be understood in the context in which it is used in the stat ute.
See Union of India vs Kamlabhai Harjiwandas Parekh & Ors., ; at 471.
These words do not mean that the Government cannot, after taking into account the matters mentioned in clauses (a) to (d), consider any other matter which may be relevant.
The expression is not "having regard only to" but "having regard to".
These words are not a fetter; they are not words of limitation, but of general guidance to make an estimate.
The Government must, of course, address itself to the questions to which it must have regard, and, having done so, it is for the Government to determine what it is empowered to determine with refer ence to what it reasonably consider to be relevant for the purpose.
The Judicial Committee in Commissioner of Income Tax vs Williamson Diamonds Ltd., , 49 observed with reference to the expression "having regard to": "The form of words used no doubt lends itself to the sugges tion that regard should be paid only to the two matters mentioned, but it appears to their Lordships that it is impossible to arrive at a conclusion as to reasonableness by considering the two matters mentioned isolated from other 935 relevant factors.
Moreover, the statute does not say "having regard only" to losses previously incurred by the company and to the smallness of the profits made.
No answer, which can be said to be in any measure adequate, can be given to the question of "unreasonableness" by considering these two matters alone . " See Commissioner of Income tax, West Bengal, Calcutta vs Gungadhar Banerjee and Co. (P) Ltd., ; at 444 45.
See also Saraswati Industrial Syndicate Ltd. etc.
vs Union of India; , at 959.
In State of Karna taka and Anr. etc.
vs Shri Ranganatha Reddy & Anr.
; , at 657 58 this Court stated: "The content and purport of the expressions "having regard to" and "shall have regard to" have been the subject matter of consideration in various decisions of the Courts in England as also in this country.
We may refer only to a few.
In Illingworth vs Welmsley, it was held by the Court of Appeal, to quote a few words from the judgment of Romer C.J. at page 144: "All that clause 2 means is that the tribunal assessing the compensation is to bear in mind and have regard to the average weekly wages earned before and after the accident respectively.
Beating that in mind, a limit is placed on the amount of compensation that may be awarded . . "In another decision of the Court of Appeal in Perry vs Wright (etc. etc.), Cozens Hardy M.R. observed at page 451: "No mandatory words are there used; the phrase is simply "regard may be had".
The sentence is not grammatical, but I think the meaning is this: Where you cannot compute you must estimate, as best as you can, the rate per week at which the workman was being remunerated, and to assist you in making an estimate you may have regard to analogous cases.
" It is worthwhile to quote a few words from the judgment of Fletcher Moulton L.J. at page 458.
Under the phrase "Regard may be had to" the facts which the Court may thus take cognizance of are to be "a guide, and not a fetter".
This Court speaking through one of us (Beg, J., as he then was), has expressed the same opinion in the case of Saraswati Industrial Syndicate Ltd. etc.
vs Union of India; , Says the learned Judge at page 959: "The expression "having regard to" only obliges the Government to consider as relevant data material to which it must have regard".
" 936 In State of U.P. & Ors.
vs Renusagar Power Co., ; , one of us (Mukharji, J., as he then was) observed: "The expression "having regard to" only obliges the govern ment to consider as relevant data material to which it must have regard . . ".
In O 'May and Ors.
vs City of London Real Property Co. Ltd., at 665 (H.L.), Lord Hailsham stated: "A certain amount of discussion took place in argument as to the meaning of 'having regard to ' in section 35.
Despite the fact that the phrase has only just been used by the draftsman of section 34 in an almost mandatory sense, I do not in any way suggest that the court is intended or should in any way attempt to bind the parties to the terms of the current tenancy in any permanent form . . ".
The words "having regard to" in the sub section are the legislative instruction for the general guidance of the Government in determining the price of sugar.
They are not strictly mandatory, but in essence directory.
The reasona bleness of the order made by the Government in exercise of its power under sub section (3 C) will, of course, be tested by asking the question whether or not the matters mentioned in clauses (a) to (d) have been generally considered by the Government in making its estimate of the price, but the Court will not strictly scrutinise the extent to which those matters or any other matters have been taken into account.
There is sufficient compliance with the sub section, if the Government has addressed its mind to the factors mentioned in clauses (a) to (d), amongst other factors which the Government may reasonably consider to be relevant and has come to a conclusion, which any reasonable person, placed in the position of the Government, would have come to.
On such determination of the price of sugar, which, as stated in Panipat (supra) is the fair price, the sub section postu lates the calculation of an amount, with reference to such price, for payment to each producer who has complied with an order made with reference to sub section (2)(f).
The "price of sugar", unlike the "amount" is arrived at by a process of costing in respect of a representative cross section of manufacturing units, beating, of course, in mind the legis lative instruction contained in clauses (a) to (d).
The Attorney General submits that orders determining the 937 prices of sugar in terms of the sub section are of general application and, therefore, legislative in character.
Omis sion, if any, to consider the peculiar problems of individu al producers is not a ground for judicial review.
The peti tioners ' counsel as well as Mr. Venugopal appearing for the intervener (ISMA), do not agree.
They submit that the sub section contemplates only administrative or quasi judicial orders of particular application and the impugned orders are not legislative.
They rely upon a certain observation of this Court in Union of India & Anr.
vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720.
Mr. Venugopal, however, hastens to add that his client does not seek personal heating before prices are determined.
Mr. B.R.L. Iyengar, supporting the contentions of the petitioners, points out that the expres sion 'determine ' used in sub section (3 C) indicates that the order to which that expression refers is quasi judicial.
Judicial decisions are made according to law while administrative decisions emanate from administrative policy.
Quasi judicial decisions are also administrative decisions, but they are subject to some measure of judicial procedure, such as rules of natural justice.
To distinguish clearly legislative and administrative functions is "difficult in theory and impossible in practice".3 Referring to these two functions, Wade says: 'They are easy enough to distinguish at the extremities of the .spectrum: an Act of Parliament is legislative and a deportation order is administrative.
But in between is a wide area where either label could be used according to taste, for example where ministers make orders or regula tions affecting large numbers of people . . ,, .4
Wade points out that legislative power is the power to prescribe the law for people in general, while administra tive power is the power to prescribe the law for them, or apply the law to them, in particular situations.
A scheme for centralising the electricity supply undertakings may be called administrative, but it might be just as well legisla tive.
Same is the case with ministerial orders establishing new towns or airports etc.
He asks: "And what of 'directions of a general character ' given by a minister to a nationa lised industry? Are these various orders legislative or administrative?" Wade says that the correct (3) Comd. 4060 (1932), p. 73; see H.W.R. Wade Adminis trative Law, 6th ed., p. 47 (4) Ibid p. 848.
938 answer would be that they are both.
He says:" . . there is an infinite series of gradations, with a large area of overlap, between what is plainly legislation and what is plainly administration".5 Courts, nevertheless, for practi cal reasons, have distinguished legislative orders from the rest of the orders by reference to the principle that the former is of general application.
They are made formally by publication and for general guidance with reference to which individual decisions are taken in particular situations.
According to Griffith and Street, an instruction may be treated as legislative even when they are not issued formal ly),, but by a circular or a letter or the like.
What mat ters is the substance and not the form, or the name.
The learned authors say: ".
. where a Minister (or other authority) is given power in a statute or an instrument to exercise executive, as opposed to legislative, powers as, for example, to requisition property or to issue a licence and delegates those powers generally, then any instructions which he gives to his delegates may be legisla tive".6 Where an authority to whom power is delegated is entitled to sub delegate his power, be it legislative, executive or judicial, then such authority may also give instructions to his delegates and these instructions may be regarded as legislative.
However, as pointed out by Denning, L.J., (as he then was) a judicial tribunal cannot delegate its functions except when it is authorised to do so express ly or by necessary implication ' see Bernard and Ors.
vs National Dock Labour Board and Ors., ; at 40.
Kenneth Culp Davis says: "What distinguishes legislation from adjudication is that the former affects the rights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely touched by it; while adjudica tion operates concretely upon individuals in their individu al capacity".7 Justice Holmes ' definition, which is what is called the "time test" and which Davis describes as one which has produced many unsatisfactory practical results, reads: "A judicial inquiry investigates, declares, and enforces liabilities as they stand on present or past facts and under laws supposed already to exist.
That is its purpose and end.
Legislation, on the other hand, looks to the future and (5) Ibid.
(6) Principles of Administrative Law, 5th ed.
, p. 65 (7) Administrative Law Text, 3rd ed., p. 123 24.
939 changes existing conditions by making a new rule, to be applied thereafter to all or some part of those subject to its power.
The establishment of a rate is the making of a rule for the future, and therefore is an act legislative, not judicial .
Prentis vs Atlantic Cost Line Co., ; ,226.
The element of general application is often cited as a distinct feature of legislative activity.
In the words of Chief Justice Burger, "rule making is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class"? Bernard Schwarts says: "an adjudication, on the other hand, applies to specific individuals or situations.
Rule making affects the fights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely affected; adjudication operates concretely upon individuals in their individual capacity ' '9 According to Schwartz, the "time test" and the "applicability test" are workable in most cases although in certain situations distinctions are indeed difficult to draw.
A statutory instrument (such as a rule, order or regula tion) emanates from the exercise of delegated legislative power which is the part of the administrative process resem bling enactment of law by the legislature.
A quasi judicial order emanates from adjudication which is the part of the administrative process resembling a judicial decision by a court of law.
This analogy is imperfect and perhaps unhelp ful in classifying borderline or mixed cases which are better left unclassified .10
If a particular function is termed legislative rather than judicial, practical results may follow as far as the parties are concerned.
When the function is treated as legislative, a party affected by the order has no fight to notice and heating, unless, of course, the statute so re quires.
It being of general application engulfing a wide sweep of powers, applicable to all persons and situations of a broadly identifiable class, the legislative order may not be vulnerable to challenge merely by reason of its omission to take into account individual peculiarities and differ ences amongst those falling within the class.
(8) Quoted by Bernard Schwartz in 'Administrative Law ' (1976), p. 144.
(9) Ibid (10) See Davis, Administrative Law Text, p. 123 940 In Union of India & Anr.
vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720 at 734 35, Chinnappa Reddy, J. referring to the earlier decisions of this Court states: " . . legislative action, plenary or subordinate, is not subject to .rules of natural justice.
In the case of Parlia mentary legislation, the proposition is self evident.
In the case of subordinate legislation, it may happen that Parlia ment may itself provide for a notice and for a hearing . .
But where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natural justice into such legislative activity . .
It is true that, with the proliferation of delegated legislation, there is a tendency for the line between legislation and administration to vanish into an illusion.
Administrative, quasi judicial decisions tend to merge in legislative activity and, con versely, legislative activity tends to fade into and present an appearance of an administrative or quasi judicial activi ty".
Stating that rule making is of general application to all members of a broadly identifiable class while adjudication is applicable to specific individuals or situations, the learned Judge observes: "A price fixation measure does not concern itself with the interests of an individual manufacturer or producer.
It is generally in relation to a particular commodity or class of commodities or transactions.
It is a direction of a general character, not directed against a particular situation.
It is intended to operate in the future.
It is conceived in the interests of the general consumer public.
The right of the citizen to obtain essential articles at fair prices and the duty of the State to so provide them are transformed into the power of the State to fix prices and the obligations of the producer to charge no more than the price fixed.
Viewed from whatever angle, the angle of general application, the prospectiveness of its effect, the public interest served, and the rights and obligations flowing therefrom, there can be no question that price fixation is ordinarily a legisla tive activity".
The learned Judge emphasises: 941 "Price fixation may occasionally assume an administrative or quasi judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals.
Such situations may arise when the owner of property or goods is compelled to sell his property or goods to the government or its nominee and the price to be paid is directed by the legislature to be determined accord ing to the statutory guidelines laid down by it.
In such situations the determination of price may acquire a quasiju dicial character".
These observations have been cited with approval by one of uS (Sabyasachi Mukharji, J., as he then was) in Renusagar (supra).
In Saraswati Industrial Syndicate Ltd. etc.
vs Union of India; , at 961, this Court states: "Price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material.
It could not, there fore, give rise to a complaint that a rule of natural jus tice has not been followed in fixing the price".
In Prag Ice & Oil Mills & Anr. etc.
vs Union of India; , at 317, Chandrachud, J., as he then was, speaks for the majority: "We think that unless, by the terms of a particular statute, or order.
price fixation is made a quasi judicial function for specified purposes or cases, it is really legislative in character in the type of control order which is now before us because it satisfies the tests of legislation.
A legisla tive measure does not concern itself with the facts of an individual case.
It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class".
See also the observation of Megarry, J., as he then was, in Bates vs Lord Hailsham of St. Marylebone & Ors., at 1024.
The impugned orders, duly published in the official gazettes notifying the prices determined for sugar of var ious grades and pro 942 duced in various zones, and applicable to all producers of such sugar, can, in our view, be legitimately characterised as legislative.
These orders are required by Sub section (6) to be laid before both Houses of Parliament.
The notified prices are applicable without exception to all persons falling within well defined groups.
The prices are deter mined in accordance with the norms postulated in the sub section.
It is with reference to such predetermined prices of sugar that the "amount" payable to each producer, who has sold sugar in compliance with an order made with reference to clause (f) of sub section (2), is calculated.
The calcu lation of such amount is, in contradistinction to the deter mination of "price of sugar", a non legislative act.
Thus, while individual consideration is relevant to the calculation of the "amount", it is not so for the determina tion of the "price of sugar" which is the rate at which the amount is calculated.
That price, as stated in Panipat (supra) is to be arrived at by a process of costing with reference to a reasonably efficient and economic representa tive cross section of manufacturing units.
In this connection, we must point out that at first blush a certain observation of Chinnappa Reddy, J. in Cyna mide, [1987] 2 SCC 720 at 741, on which much reliance is placed by the petitioners ' counsel, appears to be inconsist ent with what we have now stated.
The learned Judge says: "The Order made under Section 3(2)(c), which is not in respect of a single transaction, nor directed to a particu lar individual is clearly a legislative act, while an Order made under Section 3(3 C) which is in respect of a particu lar transaction of compulsory sale from a specific individu al is a non legislative act".
It would appear that what the learned Judge had in mind was an order by which the "amount" was calculated in terms of sub section (3 C) in respect of each individual producer and not an order determining the "price of sugar".
While the former is non legislative, the latter, by the very test adopted by the learned Judge, is legislative in character.
We, therefore, understand the observation of the learned Judge on this point as applicable only to the individual order fixing the "amount" in terms of the sub section and not to orders determining the "price of sugar" which are what the impugned orders are.
Any other construction of the sub section would conflict with what was adopted by the Constitution Bench in Panipat (supra) and would, therefore, be unsustainable.
943 The individual orders, calculating the "amounts" payable to the individual producers, being administrative, orders rounded on the machanics of price fixation, they must be left to the better instructed judgment of the executive, and in regard to them the principle of audi alteram partem is not applicable.
All that is required is reasonableness and fair play which are in essence emanations from the doctrine of natural justice as explained by this Court in A.K. Krai pak & Ors. etc.
vs Union of India & Ors., See also the observation of Mukharji, J., as he then was, in Renusagar, , 105.
Price fixation is in the nature of a legislative action even when it is based on objective criteria rounded on relevant material.
No rule at natural justice is applicable to any such order.
It is nevertheless imperative that the action of the authority should be inspired by reason.
Saras wati Industrial Syndicate Ltd.; , , 961, 962.
The Government cannot fix any arbitrary price.
It cannot fix prices on extraneous considerations: Renusagar, (supra).
Any arbitrary action, whether in the nature of a legis lative or administrative or quasi judicial exercise of power, is liable to attract the prohibition of Article 14 of the Constitution.
As stated in E.P. Royappa vs State of Tamil Nadu & Anr., ; , "equality and arbi trariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch.
" Unguided and unrestricted power is af fected by the vice of discrimination: Mrs. Maneka Gandhi vs Union of India & Anr., [1978] 1 SCC 248 at 293 294.
The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative, executive, or quasi judicial: Ramana Dayaram 'Shetty vs The International Airport Authority of India & Ors., ; at 1042; Ajay Hasia & Ors.
vs Khalid Mujib Sehravardi & Ors. ; and D.S. Nakara & Ors.
vs Union of India, ; Power delegated by statute is limited by its terms and subordinate to its objects.
The delegate must act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts.
All his decisions, whether characterised as legislative or administrative or quasi judicial, must be in harmony with the Constitution and other laws of the land.
They must be "reasonably related to the purposes of the enabling legislation".
See Leila Mourn ing vs Family Publications Service; , , If they are manifestly unjust or oppressive or outra geous or directed to an unauthorised end or do not tend in some degree to the accomplishment of 944 the objects of delegation, courts might well say, "Parlia ment never intended to give authority to make such rules; they are unreasonable and ultra vires".
per Lord Russel of Killowen, C.J. in Kruse vs Johnson, [1988] 2 Q.B. 91, 99.
The doctrine of judicial review implies that the reposi tory of power acts within the bounds of the power delegated and he does not abuse his power.
He must act reasonably and in good faith.
It is not only sufficient that an instrument is intra vires the parent Act, but it must also be consist ent with the constitutional principles: Maneka Gandhi vs Union of India, [1978] 1 SCC 248, 314 315.
Where a question of law is at issue, the Court may determine the rightness of the impugned decision on its own independent judgment.
If the decision of the authority does not agree with that which the Court considers to be the right one, the finding of law by the authority is liable to be upset.
Where it is a finding of fact, the Court examines only the reasonableness of the finding.
When that finding is found to be rational and reasonably based on evidence, in the sense that all relevant material has been taken into account and no irrelevant material has influenced the deci sion, and the decision is one which any reasonably minded person acting on such evidence, would have come to, then judicial review is exhausted even though the finding may not necessarily be what the Court would have come to as a trier of fact.
Whether an order is characterised as legislative or administrative or quasi judicial, or, whether it is a deter mination or law or fact, the judgment of the expert body, entrusted with power, is generally treated as final and the judicial function is exhausted when it is found to have "wanant in the record" and a rational basis in law: See Rochester Tel.
Corp. vs United States, ; , See also Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; As stated by Lord Hailsham of St. Marylebone L.C., (H.L.) in Chief Constable of the North Wales Police vs Evans; , at 1160 61: "The function of the court is to see that lawful authority is not abused by unfair treatment and not tO attempt itself the task entrusted to that authority by the law . .
The purpose of judicial review is to ensure that the indi vidual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter 945 which it is authorised by law to decide for itself a conclu sion which is correct in the eyes of the court".
In the same case Lord Brightman says: "Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made".
A repository of power acts ultra vires either when he acts in excess of his power in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissi ble purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness.
See Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; In the words of Lord Mac naghten in Westminster Corporation vs London and North Western ' Railway, , 430: " . .
It is well settled that a public body invested with statutory powers such as those conferred upon the Corporation must take care not to exceed or abuse its pow ers.
It must keep within the limits of the authority commit ted to it.
It must act in good faith.
And it must act rea sonably.
The last proposition is involved in the second, if not in the first. .".
In The Barium Chemicals Ltd. & Anr.
vs The Company Law Board & Ors., [1966] Supp.
SCR 311, this Court states: " . .
Even if (the statutory order) is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers, since the Authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extra neous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation.
In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts".
In Renusagar; , , 104, Mukharji, J., as he then was, states: 946 "The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary.
Similarly, if the power has been exercised on a non consideration or non application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous.
If a power (whether legislative or administra tive) is exercised on the oasis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated".
The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it The impugned orders are undoubtedly based on an exhaus tive study by experts.
They are fully supported by the recommendations of the Tariff Commission in 1969 and 1973.
It is true that these recommendations in some respects were the subject matter of criticism by a subsequently appointed expert body, viz., the BICP.
Apart from the fact that the BICP 's criticism has not been accepted by the Government, that criticism is not relevant in so far as the impugned orders are concerned because the latter are in regard to an earlier period.
These orders are fully supported by the relevant material on record.
The conclusions reached by the Central Government in exercise of its statutory power are expert conclusions which are not shown to be either discrim inatory or unreasonable or arbitrary or ultra vires.
The (11) See the observation of Lord Russel in Kruse vs Johnson, and that of Lord Greene, M.R. in Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; ; See also Mixnam Properties Ltd. vs Chertsey U.D.C., ; Commissioners of Customs and Excise vs Cure and DeeIcy Ltd. [1962] 1 Q.B. 340; McEldowney vs Forde, [1971] AC 632 (H.L.); Carltona Ltd. vs Commissioners of Works, , 564; Point of Ayr.
Collieries Ltd. vs Lloyd George, ; Scott vs Glasgow Corporation, , 492; Robert Baird L.D.v.
City of Glasgow, , 42; Manhattan General Equipment Co. vs Commissioner, ; , 134; Yates (Arthur) & Co. Pty. Ltd. vs Vegetable Seeds Committee, ; ; Bailey vs Conole, ; ; Boyd Builders Ltd. vs City of Ottawa, ; Re Burns and Township of Haldimand, 14 and Lynch vs Tilden Produce Co. 15,320 322.
947 material brought to our notice by the petitioners does not support the arguments at the bar that the Central Government has not applied its mind to the relevant questions to which they are expected to have regard in terms of the statute.
That the sugar factories for the purpose of determining the price of sugar in terms of sub section (3 C) should be grouped on the basis of their geographical location is a policy decision based on exhaustive expert conclusions.
Factories are classified with due regard to geographi cal cumagro economic considerations.
Fair prices for differ ent grades of sugar are determined for each zone with refer ence to a reasonably efficient and economic representative cross section of the manufacturing units.
Such classifica tion, as held in Panipat (supra) and Anakapalle (supra) cannot, in the absence of evidence to the contrary, be characterised as arbitrary or unreasonable or not rounded on an intelligible differentia having a rational nexus with the object sought to be achieved by subsection (3 C).
The person assailing such classification "carries the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences" Federal Power Commission vs Hope Gas Co., ; , 602 (1944).
If the petitioners nevertheless incur losses, such losses need not necessarily have arisen by reason of geographical zoning, but for reasons totally unconnected with it, such as the condition of the plant and machinery, quality of management, investment policy, labour relations, etc.
These are matters on which the petitioners have not furnished data, and, in any event judicial review is hardly appropriate for their consideration.
In this connection we would recall the observations of Chinnappa Reddy, J. in Union of India and Anr.
vs Cynamide India Ltd. andAnr., [1987] 2 SCC 720 at p. 736: "We do not agree with the basic premises that price fixation primarily affects manufacturers and producers.
Those who are most vitally affected are the consumer public.
It is for their protection that price fixation is resorted to and any increase in price affects them as seriously as any decrease does a manufacturer, if not more." In M/s. Gupta Sugar Works vs State of U.P. and Ors., [1987] Supp.
SCC 476 at p. 48 1 one of us (Jagannatha Shetty, J .) stated: "In this view of the matter, the primary consideration in the fixation of price would be the interest of consumers 948 rather than that of the producers." The Court has neither the means nor the knowledge to reevaluate the factual basis of the impugned orders.
The Court, in exercise of judicial review, is not concerned with the correctness of the findings of fact on the basis of which the orders are made so long as those findings are reasonably supported by evidence.
In the words of Justice Frankfurter of the U.S. Supreme Court in Railroad Commission of Texas vs Rowan & Nichols Oil Company, 311 US 570 577, 85 L. ed.
358,362: "Nothing in the Constitution warrants a rejection of these expert conclusions.
Nor, on the basis of intrinsic skills and equipment, are the federal courts qualified to set their independent judgment on such matters against that of the chosen state authorities . .
When we consider the limit ing conditions of litigation the adaptability of the judi cial process only to issues definitely circumscribed and susceptible of being judged by the techniques and criteria within the special competence of lawyers it is clear that the Due Process Clause does not require the feel of the expert to be supplanted by an independent view of judges on the conflicting testimony and prophecies and impressions of expert witnesses".
This observation is of even greater significance in the absence of a Due Process Clause.
Judicial review is not concerned with matters of econom ic policy.
The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either.
The Court does not supplant the "feel of the expert" by its own views.
When the legislature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonable~ ness.
In all such cases, judicial in quiry is confined to the question whether the findings of fact are reasonably based on evidence and whether such findings are consistent with the laws of the land.
As rated by Jagannatha Shetty, J. in M/s. Gupta Sugar Works, (supra): "the court does not act like a chartered accountant nor acts like an income tax officer.
The court is not concerned with any individual case or any particular problem.
The court 949 only examines whether the price determined was with due regard to considerations provided by the statute.
And wheth er extraneous matters have been excluded from determination." Price fixation is not within the province of the courts.
Judicial function in respect of such matters is exhausted when there is found to be a rational basis for the conclu sions reached by the concerned authority.
As stated by Justice Cardozo in Mississippi Valley Barge Line Company vs United States of America; , 292 US 282 290, , 1265: "The structure of a rate schedule calls in peculiar measure for the use of that enlightened judgment which the Commis sion by training and experience is qualified to form . .
It is not the province of a court to absorb this function to itself . .
The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body".
It is a matter of policy and planning for the Central Government to decide whether it would be on adoption of a system of partial control, in the best economic interest of the sugar industry and the general public that the sugar factories are grouped together with reference to geographi cal cum agro economic factors for the purpose of determining the price of levy sugar.
Sufficient power has been delegated to the Central Government to formulate and implement its policy decision by means of statutory instruments and execu tive orders.
Whether the policy should be altered to divide the sugar industry into groups of units with similar cost characteristics with particular reference to recovery, duration, size and age of the units and capital cost per tonne of output, without regard to their location, as recom mended by the BICP, is again a matter for the Central Gov ernment to decide.
What is best for the sugar industry and in what manner the policy should be formulated and imple mented, bearing in mind the fundamental object of the stat ute, viz., supply and equitable distribution of essential commodity at fair prices in the best interest of the general public, is a matter for decision exclusively within the province of the Central Government.
Such matters do not ordinarily attract the power of judicial review.
We would, in this connection, recall the words of Jus tice Frankfurter in Secretary of Agriculture, etc.
vs Cen tral Roig Refining Com 950 pany, etc.
, , "Congress was . . confronted with the formula tion of policy peculiarly with its wide swath of discretion.
It would be a singular intrusion of the judiciary into the legislative process to extrapolate restrictions upon the formulation of such an economic policy from those deeply rooted notions of justice which the Due Process Clause expresses . . ".
"Suffice it to say that since Congress fixed the quotas on a historical basis it is not for this Court to reweigh the relevant factors and, perchance, substitute its notion of expediency and fairness for that of Congress.
This is so even though the quotas thus fixed may demonstrably be disadvantageous to certain areas or persons.
This Court is not a tribunal for relief from the crudities and inequities of complicated experimental economic legislation".
It is important to remember that the division of the industry on a zonal basis for the purpose of price determi nation has been accepted without question by almost all the producers with the exception of a few like the petitioners.
Even if it is true that the petitioners as individuals are at a disadvantage and have suffered losses on account of the present system an assertion which has not been established and which by its very nature is incapable of determination by judicial review that is not sufficient ground for inter ference with the impugned orders.
We are not satisfied that the decisions of this Court in Anakapalle; , and Panipat, [1973] 2 SCR 860 require reconsideration in any respect.
We see no merit in the challenge against the im pugned orders.
The civil writ petitions are, in the circum stances, dismissed.
However, we do not make any order as to costs.
P.S.S. Petitions dismissed.
| The petitioner company had obtained three mining leases from the Government of Assam to extract sillimanite in the Khasi and Jaintia Hills District, for a period of 15 years.
Negotiations between the Union of India and the peti tioner for having the mining leases transferred to the public sector companies, Hindustan Steel Ltd. and Bokaro Steel Ltd., having failed, the Government of Meghalaya, on the request of the Central Government, passed an order dated 7th December, 1972 prematurely terminating the mining leases in terms of section 4 A(1) of the Mines and Minerals (Regu lation & Development) Act, 1957 as amended by the Mines & Minerals (Regulation and Development) Amendment Act, 1972.
Thereupon, the petitioner company filed the present petition under Article 32 of the Constitution.
On behalf of the petitioner it was inter alia contended that since no notice had been issued by the State Government before terminating the leases prematurely, it amounted to denial of natural justice thus vitiating the order of termi nation.
State of Haryana vs Ram Kishan & Ors., [1988] 3 S.C.C. 416, relied upon.
It was further submitted that having regard to the comparatively long periods of leases and the lapse of time, the petitioner would not pray for being put back in posses sion of the leased premises but would be content with an award for compensation for wrongful premature termination, to be determined by any arbitrator appointed by the Court.
On behalf of the respondents it was submitted that the decision of 984 this Court in Ram Kishan 's case was distinguishable; that the rules of natural justice could be statutorily excluded either expressly or by necessary implication; that grant of an opportunity to the lessee would be totally meaningless and futile; that the object and purpose of the statute clearly excluded the provision of an opportunity to the lessee before termination of the leases; that amendment of section 4 A of 1986 specifically providing for an opportuni ty of hearing became necessary because the grounds for premature termination set out in the new subsection (1) of section 4 A were made wider and more comprehensive; that in the writ petition the only prayer made was for quashing the order of premature termination; and that it was open to the petitioner to file a suit or take other appropriate remedies for obtaining compensation in respect of the unlawful termi nation.
The Barium Chemicals Ltd. and Anr.
vs Company Law Board and Others, [1966] Supp.
S.C.R. 311 and R.S. Dass vs Union of India and Others, [1985] Supp.
S.C.C. 617, referred to, Disposing of the writ petition, this Court, HELD: (1) The order dated 7.12.1972 passed under section 4A of the Act whereby the leases were terminated prematurely was null and void as it violated the principles of natural justice and was passed without giving an opportunity to the lessee of being heard.
State of Haryana vs Ram Kishan & Ors., ; , followed.
Dharam Veer vs Union of India, AIR (1989) Delhi 227, re ferred to.
(2) Though it is true that the scope of section 4 A (1) has been widened, the insertion of sub section 4 A(3) clear ly reflects a statutory intention that an opportunity of hearing must be given before the order of termination is passed, presumably as such an order widely effects the rights of the lessees.
[992A] (3) It is difficult to accept the contention that be cause an order under section 4 A is to be passed in order to give effect to a policy of the Government, it is not neces sary or useful to provide the lessees, whose leases are about to be terminated, an opportunity of hearing.
[992D] (4) It is true that the petitioner could have filed a suit or taken 985 other appropriate remedies for obtaining compensation in respect of the unlawful termination.
But, in the facts and circumstances of this case, it is not fair to ask the peti tioner to go hack and file a suit for compensation or dam ages which may be barred by limitation.
The writ petition was filed by the petitioner company in 1973 and has been pending in this Court for about 17 years.
After a lapse of such a long time the proper course is to adopt some method for deciding the quantum of compensation and damages, which can at once be simple and expeditious and which will avoid further unnecessary litigation.
[992G H; 993A] (5) The request made on behalf of the petitioner that the matter may be referred to arbitration is a fair one and indeed this course is also not seriously resisted by the respondents.
The issue of compensation/ damages is accord ingly referred to Arbitration.
[993B] (6) Having regard to the circumstances of the case, the compensation/damages should be restricted to a period of five years from the date of termination of the leases or upto the date of expiry of the original lease deeds whichev er is less and not for the entire unexpired period of all the leases.
[993C]
|
Civil Appeal No. 56 of 1971.
From the Judgment and Order dated 8.12.1969 of the Gujarat High Court in C.R.A. No. 654 of 1967.
Harish Salve, D.N. Misra and Ms. A.K. Verma for the Appellant.
S.H. Sheth and Ms. Kailash Mehta for Respondent No. 1.
M.V. Goswami and Ms. Vandana Sharma for Respondent No.2.
The Judgment of the Court was delivered by MISRA, J.
The present appeal by special leave is directed against the Judgment of the High Court of Gujarat dated 10th February 1970.
The dispute between the parties concerns a plot of land admeasuring 100 ft.
x 164 ft.
(i.e., approximately 1822 sq. yards) out of survey No. 18 in the city of Nadiad.
This plot was owned by Deviprasad Motilal Jaiswal and Vora Sunderlal Manilal was occupying it as a tenant.
He had also made certain constructions on the disputed plot.
The appellant purchased the said plot under a registered sale deed dated 18th April, 1955.
The defendant accepted the plaintiff as owner on a rent of Rs. 1325 721 per annum with effect from 18th April, 1955 under a registered rent note dated 9th June, 1955 for a period of five years.
The rent note provided (1) that the defendant shall pay to the plaintiff the amount of municipal tax at the rate of Rs. 40 per annum in respect of the rented premises, (2) that the said premises shall not be let out to anyone else, and (3) that on the expiry of the period of five years the defendant shall remove the constructions at his own expense and hand over to the plaintiff the premises in the condition in which it was let out.
It appears that the defendant No. 1 sublet a portion of the said premises to defendant No. 2, Pa Babubhai Gordhanbhai contrary to the terms of the rent note.
The period of lease contemplated in the rent note expired on 17th April, 1960 and the defendant continued as a statutory tenant on a monthly rent under the Rent Control Act.
The two sons of the plaintiff Suleman and Ganibhai are dealing in empty tins on a large scale and a spacious premises was required for the said business.
The plaintiff called upon the defendant to remove the construction erected on the land in dispute and to vacate the premises and handover the possession.
Although the plaintiff filed the suit for eviction on a number of grounds, we are concerned in the present appeal only with the plea that the premises in question had not been used by the defendant for a period of more than six months prior to the date of the suit without reasonable cause I and, therefore, the defendant was liable to eviction under s.13(1)(k) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947, hereinafter referred to as the Act.
The trial court dismissed the suit holding that the notice of termination was not valid and that the plaintiff had failed to prove the bona fide requirement, and that the defendant No.2 was admitted as a sub tenant many years before the execution of the rent note by the plaintiff and, therefore, the plaintiff was not entitled to recover possession on the ground of illegal sub letting.
The plaintiff feeling aggrieved by the judgment took up the matter in appeal and the Assistant Judge allowed the appeal partly holding that the notice of termination was a valid one, that the plaintiff did not require the suit premises reasonably and bonafide for occupation for himself, and that the suit premises had not been used by the defendant continuously for a period of six months immediately preceding the date of suit with out any reasonable cause.
The defendant took up the matter in revision before the High Court and the High Court reversed the finding of the 1st appellate court on the question of user by the defendant.
It took the view that the construction of the super 722 structure on the land itself was a user and, therefore, the courts below and committed a manifest error in holding that the land in question had not been used for more than six months prior to the institution of the suit.
The plaintiff has now come to this Court by a special leave.
Mr. Harish, N. Salve counsel for the appellant strenuously urged that the tenant was liable to be evicted under s.13(1)(k) of the Act inasmuch as the premises have not been used for the purpose for which they were let out for a continuous period of six months immediately preceding the date of suit without reasonable cause.
He also contended that the defendant would be liable to eviction even if he did not use the premises and kept it locked.
Mr. S.H. Sheth for the defendant respondent in reply has contended that the purpose of letting cannot be assumed.
It has got to be alleged and proved.
The plaintiff could seek eviction under s.13(1)(k) of the Act only when he proves the purpose for which the premises have been let out and that the same has not been used for the purpose for which it was let out.
In the instant case neither the purpose of letting is indicated in the rent note nor has it been proved by evidence.
Therefore, the liability of the defendant under s.13(1)(k) does not arise.
The material portion of the rent note, Exbt.61, is as follows: .
The property of the said measurement and situate within the said four boundaries is rented by us from you and you have rented it to us.
The rent accrues from the date 18.4.1955.
It is agreed that the rent fixed is Rs. 1325 (Rupees thirteen hundred and twenty five) per year.
We shall pay the said rent to you every year in full.
If default is made in paying the rent you may get the said property vacated by us and our objection of any kind shall not be tenable in respect of the same.
The period fixed is for five years.
It expires on the date 17.4.1960.
We shall handover possession of the said property to you on the said date.
We shall not Rub let the said property to any one else.
The construction work which is made on the said 723 property belongs absolutely to us, the tenant.
And when we shall vacate the said property we shall remove the said construction work at the cost of us, the tenant.
We agree to handover the possession of the property to the owner in the same condition in which the property is rented.
Even if we use or do not use or keep the said property closed we, the tenant, are bound to pay the rent as stated above till the period fixed.
But if we the tenant, want to vacate the said property within the period fixed we can vacate the same by giving you notice before two months or if we want the said property on rent even after the expiry of the period fixed you are bound to give the same on rent and the rent is to be fixed according to the circumstances at that time and we shall pass and give a new rent note to you.
We, the tenant, are to pay Rs. 40 (Rupees forty) every year to you, the owner for municipal tax in respect of the said property in addition to the amount of rent.
If the municipal tax comes to more than forty rupees, you the owner are to pay the excess amount of tax.
A perusal of the rent note indicates that there is no specific mention of the purpose for which the premises was rented out to the defendant.
It has already been noted that the defendant had taken the premises from the predecessor in interest of the present plaintiff and had made certain superstructures on the land in question.
There is however, material on the record to show that the premises had been let out to the defendant for the purpose of business.
Indeed the premises had been taken in the name of a firm carrying on tobacco business.
The defendant admitted in his deposition that he had shifted his business to Baroda.
He had not used any portion of the land for any purpose for the last three or four years and the plaintiff has produced necessary registers from the Municipality and the Central Excise Department to show the same.
In addition, in the reply given by the counsel for the defendant to the notice of termination given by the plaintiff, he definitely admitted that the property was taken on rent by the tenant in his capacity as a manager and owner of the firm Vora Manilal Chhaganlal & Co. and that his client, the tenant, was a registered firm carrying on business in .
In this situation it cannot be argued with any force that the plaintiff has not been able to establish the purpose for which the premises had been let out to the defendant.
724 As s second limb to the argument Shri Sheth contended that if the plaintiff had specifically taken the plea of non user of the premises for the purpose for which it was let out he would have been able to prove the reasonable cause for not doing 80 but in the absence of such a plea the defendant has been seriously prejudiced.
This contention of the counsel also cannot easily be accepted when on the own admission of the defendant and defendant 's counsel the premises had been used for the purpose of carrying to tobacco business.
Therefore, the defendant fully knew the purpose for which he had taken the Promises as a tenant.
The stand of the defendant all through appears to be that even if he does not use the premises and have been paying rent he does not incur the liability of eviction and for this he banks upon the recital in the rent note that even if we use or do not use or keep the said property closed we the tenants are bound to pay the rent as stated above .
This stipulation in the rent deed only talks of the liability of the defendant to pay the rent even if he does not use the property and keeps it closet.
This, however, does not mean that the defendant can keep the premises closed without using it for years together before the suit.
This could never have been the intention of the law makers especially in these days of scarcity of accommodation in towns.
Even if the stipulation made in the rent note is construed to mean that the defendant tenant could keep the premises closed without using it for years together without incurring the liability of eviction, as is sought to be contended for the respondent, it would amount to allowing the parties contracting out of law.
This leads us to the second part of the submission made by the counsel for the appellant that on a correct interpretation of s.13(1)(k) of the Act even non user of the premises for any purpose whatsoever for years together would make him liable for eviction.
The contention on behalf of the respondent, however, is that we cannot add words to s.13(1)(k) and the intention of the legislature is clear from the words used therein, and all that s.13(1)(k) contemplates is that the premises had not been used for the purpose for which they w re let out for a continuous period of six months immediately preceding the date of suit without reasonable cause.
It toes not say that mere non user of the premises will make him liable for eviction.
The scheme of the Act as it appears from the preamble is to consolidate the law relating to the control of rents and repairs 725 of certain premises, of rates of hotels and lodging houses and of evictions.
m e control had to be brought in because of the scarcity of accommodation in the cities.
If this was the preamble of the Act it cannot be accepted that a tenant may take a premises on rent and keep it locked for years together without using it in the absence of any reasonable cause.
The intendment of the legislature could be carried out only when the premises is used and not kept vacant for years together.
Shri Sheth, however, sought to support the finding of the High Court that the construction of a superstructure is also a user of the property and the defendant had raised superstructures on the land in question.
This argument must be repelled.
It appears from the rent note, Exbt.
61, that the defendant had taken the premises from the present plaintiff when the defendant had already built the superstructures when he had taken the land on rent from the predecessor in interest of the plaintiff appellant.
Therefore, there was no question of using the land by raising constructions by the defendant after the execution of the rent note, Exbt.61.
Shri Sheth also referred to 8. 12 and 8. 13 of the Act and contended that these are the only two sections which give protection to the tenant and unless the conditions in the two sections are satisfied the tenant cannot be evicted.
What was let out by the plaintiff to the defendant tenant was the land and not the superstructures and so Shri Sheth argues that the non user of the superstructures does not amount to non user of the land.
On the own showing or the defendant respondent he had shifted his business to Baroda and, Therefore, he is not using the land for any purpose whatsoever.
Broadly speaking a premises can be let out either for residential or for business purpose.
In the instant case on the own showing of the defendant respondent it had been taken for the purpose of tobacco business and that business had been stopped for a period of 4 to 5 years before the institution of the suit as the business had expanded and the defendant had shifted to Baroda.
Therefore, it can be safely presumed that the land is not being used for the purpose for which it has been proved to have been let out.
The High Court in our opinion has gone wrong in holding that the construction of super structures on the land in dispute was itself a user.
As indicated earlier the super structures had already been built before the defendant took the land from the plaintiff under rent note, Exbt.61.
Therefore, there is no question of making any construction on the land in question by the defendant after the execution of the rent note.
726 As regards the sub tenancy it has been found by the courts below that it had been created long before the Act in question came into force and, therefore, there was no question of the eviction of the sub tenant as the sub tenancy was not illegal.
For the foregoing discussion the appeal must succeed.
It is accordingly allowed and the judgment of the High Court is set aside and the plaintiff 's suit stands decreed.
The parties shall however, bear their own costs.
| For the assessment year (1945 46) the assessable income of the appellant bank was computed by the Income tax Officer by splitting up its income into two heads " interest on securities " and " business income ", and deducting the business loss from interest on securities.
In the previous year the assessment showed a loss which was computed by setting off the " business loss against " interest on securities The appellant claimed that in the computation of its profits for the assessment year in question it was entitled to set off the carried over loss of the previous year under section 24(2) Of the Indian Income tax Act, 1922.
The Income tax Officer rejected the claim on the ground that the loss was under the head " business " and so could not be set off against income from securities under section 24(2) of the Act.
Both the Income tax Appellate Tribunal and the High Court, on reference, held that in view of sections 6, 8 and 10 of the Act " interest on securities " could not be treated as business income and therefore the appellant could not claim a set off under section 24(2).
On appeal to the Supreme Court it was contended for the appellant that (1) sections 8 and 10 should be so read that where the securities in the hands of an assessee are trading assets, section 8 would be excluded, being restricted to capital investments only, and the matter would fall under the head " business " within section 10, and (2) in any case, even if the income from securities fell under section 8, the appellant would be entitled to a set off under section
24(2) because it carried on only one business, namely banking, and the holding of securities by it was part of the said business.
Held, that the scheme of the Indian Income tax Act, 1922, is that the various heads of income, profits and gains enumerated in section 6 are mutually exclusive, each head being specific to cover the item arising from a particular source and, consequently, " interest on securities " which is specifically made chargeable to tax under section 8 as a distinct head, falls under that section and cannot be brought under section 10, whether the securities are held as trading assets or capital asset," 80 Commissioner of Income Tax vs Chunnilal B. Mehta, Salisbury House Estate Ltd. vs Fry, (1930) 15 T. C. 266, Commercial Properties Ltd. vs Commissioner of Income Tax, Bengal, and H. C. Kothari vs Commissioner of Income Tax, Madras, , relied on.
The question whether the holding of securities by the appellant formed part of the same business within section 24(2), could not be decided in the absence of a finding that the securities in question were a part of the trading assets held by the appellant in the course of its business as a banker, and the case was remitted to the High Court for a fresh decision on the reference after getting from the Tribunal a fuller statement of facts.
|
Civil Appeal No. 901 of 1968.
Appeal by special leave from the judgment and order dated the 5 10 1966 of the High Court of Judicature at Allahabad in Special Appeal No. 97 of 1965.
J. P. Goyal and A. G. Ratnaparkhi for the Appellant.
G. N. Dikshit and M. V. Goswami for Respondents.
J. This is an appeal by special leave against the judgment of a Division Bench of the High Court of Allahabad dated October 5, 1966, and raises a question of law regarding the applicability of sections 172 and 174 of the U.P. Zamindari Abolition and Land Re forms Act, 1950 (Act No. 1 of 1951).
,, It appears that the case had a checkered career and the dispute between the parties passed through several phases both before the Revenue Courts and in the High Court.
In order to appreciate the point of law involved in this appeal, it may be necessary to give a resume of be facts which culminated is the judgment of the High Court under appeal.
The dispute refers to lands comprised in Khata Nos.
1002, 1344 and 1411 of village Bishunpur in the District of Rae Bareli (U.P.).
It is not disputed that these Khattas originally belonged to one Harbans who died leaving behind three sons, namely Gurdin, Ramcharan and Ramadhin.
Ramcharan appears to have died issueless but Ramadhin died leaving a widow Smt.
Menda and a daughter from her Smt.
Phoola who was respondent No. 1.
The other son Gurdin died leaving a son Jit who had contested the present proceedings against Smt.
Phoola.
During the pendency of the present proceedings Jit also died and the proceedings have been continued by his son Ram Jivan Lallu.
The District of Rae Bareli fell in what was previously known as the Oudh Area of the United(1)Provinces.
The dispute between the parties appears to have arisen on the death of Ramadhin one of the sons of Harbans who died in 1916 leaving behind his widow Smt.
Menda.
At the time of the death of Ramadhin in 1916 the tenancy of the lands in dispute was governed by the provisions of the Oudh Rent Act, 1886 hereinafter referred to J as 'the Rent Act of 1886 '.
Under the provisions of the Rent Act of 1886 Smt.
Menda was to continue in possession of the lands as an heir of Ramadhin but only during the fixed period of the tenancy on the rent payable to the landlord and was not entitled to renewal of the same.
The terms and conditions of the tenancy at the time of the death of Ramadhin were governed by s.48 of the Rent Act of 1886 which applied to the oudh Area where the lands in dispute were situate.
Under s.48 of the Rent Act of 1886 it is obvious that on It the death of a tenant his widow was to continue in occupation of the lands for the unexpired portion of the period for which the deceased tenant might have held the holding.
Accordingly Smt.
Menda continued to occupy the lands after the death of her husband in 1916.
Meanwhile five years later the Rent Act of 1886 was amended by U.P. Act 4 of 1921 under which the status of a statutory tenant was con feared on a person who was in possession of the lands on the date when the amendment came into force.
The amendment introduced a substantial change in s.48 of the Rent Act of 1886 and added clause '(1)(18) to s.3 which runs thus: "(18) "Statutory tenant" means a tenant to whom section 36 or section 37 applies.
Explanation.
A person who succeeds as an heir of a(1)statutory tenant under section 48 shall not be deemed to be 265 a statutory tenant unless he has obtained a patta from the landlord or has remained in occupation of the holding for three years after the expiration of the period for which he is entitled to retain occupation of the holding under section 48: "Provided that when a holding is held by two or more co tenants no person who succeeds as an heir of any such co tenant under section 48 shall be deemed to be a statutory tenant of the holding unless he has obtained a patta from the landlord, or has remained in occupation of the holding for three years after the expiration of the period for which the heir of the last surviving co tenant is entitled to retain occupation of the holding under section 48." By virtue of the Explanation extracted above, a tenant to whom sections 36 and 37 applied would be deemed to be a statutory tenant.
Section 36 of the Rent Act of 1886 runs thus: "Every tenant, not being a tenant with a right of occupancy or a sub tenant, shall be entitled to retain possession of the holding occupied by him at the commencement of the Oudh Rent (Amendment) Act, 1921, at the rent then payable by him, for a period of ten years from the date of the last change in his rent or the last alteration in the area of the holding, or where no such change or alteration has taken place, from the date on which the tenant was admitted to the occupation of the holding." As Smt.
Menda was in possession of the holding at the date when the amendment came into force, she would be clearly governed by section 36 and not section 37 of the Rent Act of 1886 which deals with tenants who were admitted to the occupation of the holding after the coming into force of the amendment.
Under section 36 the widow was entitled to retain possession of the holding acquired by her for a period of ten years from the date on which she was admitted to the occupation of the holding.
Thus the combined effect of section 3(18) and section 36 of the Rent Act of 1886 would be to clothe Smt.
Menda with the status and the rights of a statutory tenant.
Section 48 made the status of a statutory tenant heritable and provided as follows: "(1) When statutory tenant dies, his heir shall be entitled to retain occupation of the holding at the rent pay able by the deceased for a period of five years from the date of the tenant 's death, and to receive compensation under the provisions of this Act for improvements, if any, made on the holding by his predecessor in interest, but shall not be entitled to a renewal of the tenancy.
Provided that a person who succeeds as an heir of a deceased tenant to whom clause (e) of sub section (1) of section 62A applies shall be entitled to retain occupation of the holding at the rent payable by the deceased only for 266 the unexpired portion of the statutory period of the deceased tenant.
(2) Subject to any rights which he may have under section 22 as a representative of the deceased, a collateral relative who did not at the date of the death of the, deceased, share in the cultivation of the holding, shall not be deemed to be an heir of the deceased within the meaning of this section.
" In the instant case as Smt.
Menda had succeeded as an heir to her husband before the amendment of section 48 her case will be governed by the provisions of section 48 and she would be entitled to retain possession of the tenancy but not to a renewal thereof.
It appears that soon after the death of Ramadhin the Court of Wards claimed that the tenancy had escheated to the State because Ramadhin had left no heirs and that Ramadhin was only a tenant at will.
Menda appears to have resisted the claim of the Court of Wards.
which resulted in proceedings before the Revenue Courts which ultimately found that Smt.
Menda had acquired the independent rights of a statutory tenant and was, therefore, not liable to be ejected at the instance of the Court of Wards.
This order was passed by the Assistant Collector on June 4, 1926 and thereafter Smt.
Menda continued in possession of the holding as a statutory tenant under the amended Rent Act of 1921.
We might mention here that previous to the passing of the U.P. Tenancy Act, 1939 the areas of Oudh and Agra in the United Provinces were governed by two separate Acts so far as the tenancies were concerned.
The areas in Agra were governed by the Agra Tenancy Act and those in Oudh by the Oudh Rent Act.
`The U.P. Tenancy Act 17 of 1939 appears to have consolidated the tenancies in the whole of the Province and the legislature passed one Act which would govern all the tenancies in the entire Province.
The U.P. Tenancy Act 17 of 1939 was passed on December 16, 1939 and by section 2 there of the Agra Tenancy Act, 1926 and the Oudh Rent Act, 1886 were repealed.
Section 29 of the Tenancy Act conferred the status of a hereditary tenant on any person who was a tenant of the land at the commencement of the Act.
Thus Smt.
Menda who continued to be in possession as a statutory tenant acquire the status of a hereditary tenant, under section 29(a) of the Tenancy Act which runs thus: "29.
Every person belonging to one or another of the following classes shall be a hereditary tenant, and subject to any contract which is not contrary to the provisions of section 4 shall be entitled to all the rights conferred, and be subject to all the liabilities imposed on hereditary tenants by this Act, namely: (a) every person who is, at the commencement of this Act, a tenant of land otherwise than as a permanent tenure holder, a fixed rate tenant, a tenant holding on special terms in Oudh, an ex Proprietary tenant, an occupancy tenant, 267 except as otherwise provided in this Act as a sub tenant or a tenant of sir :" The Tenancy Act having conferred heritable rights on the tenants to which section 29 applied also laid down an order of succession in which the rights of the tenants would pass after the death of the tenant.
Sections 36 and 37 of the Tenancy Act provided two different modes of devolution in the case of the death of a female tenant.
Section 36 runs thus: "36 (1) When a female tenant, other than a tenant mentioned in section 34, who either before or after the commencement of this Act has inherited an interest in a holding as a widow, as a mother, as a step mother, as a father 's mother, or, as a daughter dies or abandons such holding, or surrenders such holding, or a part of such holding or, in the case of a tenant inheriting as a widow or as a daughter, marries such holding or such part of such holding shall, not withstanding anything in section 45, devolve in accordance with the order of succession laid down in section 35 on the heir of the last male tenant, other than a tenant who inherited as a father 's father under the provisions of that section.
x x x x " Section 37 of the Tenancy Act runs thus: "when a female tenant, other than a tenant mentioned in section 34 or section 36 dies, her interest in the holding shall devolve in accordance with the order of succession given below: (a) male lineal descendants in the male line of descent: Provided that no member of this class shall inherit if any male descendant between him and the deceased is alive; (b) husband; (c) unmarried daughter, (d) daughter 's son; (e) brother (f) brother 's son.
" It will be seen that under section 36 of the Tenancy Act the heirs of the husband precedence over the daughter or the unmarried daughter, whereas in the case of a female tenant falling under section 37 of the Tenancy Act the unmarried daughter gets precedence over the brother the or brother 's son.
In other words, the policy of the law was that where a female tenant died having inherited an interest in the property from her husband then the male heirs of the husband should get preference over the female heirs.
Where, however, the female tenant had died having an independent and self acquired interest in the holding, her property was to pass in a different manner.
We are not concerned in this appeal with either section 36 or section 37 of the Tenancy Act, because Smt.
Menda had died some time in September 1952 L522SCI/76 268 when the U.P. Tenancy Act, 1939 had been replaced by the U.P. Zamindari Abolition and Land Reforms Act, 1950 (U.P. Act 1 of 1951) hereinafter to be referred to as 'the Abolition Act. ' In short, therefore, Smt.
Menda who originally occupied the lands in suit as a tenant on the death of her husband became a statutory tenant under the Rent Act of 1921, a hereditary tenant under the Tenancy Act and finally she acquired the status of a bhumidhar under the Abolition Act which came into force on July 1, 1952.
The relevant portion of section 18 of the Abolition Act may be extracted thus: 18.
(1) Subject to the provisions of Sections 10, 15, 16 and 17, all lands (a) in possession of or deemed to be held by an intermediary as sir, khudkasht, or an intermediary 's grove (b) held as a grove by, or in the personal cultivation of a permanent lessee in Avadh, (c) held by a fixed rate tenant or a rent free grantee as such, or (d) held as such by (1) an occupancy tenant, ' (ii) a hereditary tenant, (iii)a tenant on patta dawami or istamrari referred to in section 17 possessing the right to transfer the holding by sale.
(e) held by a grove holder, on the date immediately preceding the date of vesting shall be deemed to be settled by the State Government with such intermediary lessee, tenant, grantee or grove holder, as the case may be, who shall, subject to the provisions of this Act, be entitled to take or retain possession as bhumidhar thereof." As Smt.
Menda had already become a hereditary tenant under the Tenancy Act she automatically acquired the status of a Bhumidhar under the Abolition Act and by virtue of the legal fiction created by s.18(1) of the Abolition Act, the lands, having been vested in the State Government, were deemed to have been permanently settled with the bhumidhar, namely, Smt.
Menda in this case.
It is the admitted case of the parties that Smt.
Menda died some time in September 1952, i.e. Only a few months after coming into force of the Abolition Act.
The controversy between the parties now centers round the question as to who would succeed to the tenancy left by Smt.
Menda.
In other words, the matter to be decided is whether section 172 or section 174 of the Abolition Act would apply to the present case.
It is not disputed that Smt.
Menda died leaving a daughter Smt.
Phoola and her husband 's brother 's son Jit.
These were the two contending heirs for the property left by Smt.
Menda.
269 Sections 172 and 174 of the Abolition Act, insofar as they are A relevant, may be extracted as follows: "172.
(1) When a bhumidhar sirdar or asami, who has after the date of vesting, inherited an interest in any holding "(a) as a widow, widow of a male lineal descendent, in the male line of descent, mother or fathers mother dies, marries, abandons or surrenders of , such holding or part thereof; or (b) x x x the holding or the part shall devolve upon the nearest surviving heir (such heir being ascertained in accordance with the provisions of Section 171) or the last male bhumidhar, sirdar or asami.
X X "174.
When a bhumidhar, sirdar or asami (other than a bhumidhar, sirdar or asami mentioned in Section 171 or 172) who is a woman dies, her interest in the holding shall devolve in accordance with the order of succession given below: (a) son, son 's son, son 's son, son 's son 's son predeceased son 's widow and predeceased son 's predeceased son 's widow in equal shares per stripes: Provided firstly that the nearer shall exclude the remoter in the same branch: Provided secondly that a widow, who has remarried, shall be excluded; (d) daughter; x x x (g) brother 's son; x x x x It is, therefore, clear that the mode of succession to the property of Smt.
Menda would depend on the determination of the question whether Smt.
Menda had inherited an interest in any holding or had an independent interest in the holding.
This matter appears to have been canvassed before the Revenue Courts which upheld the plea of Smt.
Phoola.
To begin with on the death of Smt.
Phoola, Jit was successful in getting his name mutated in respect of the Khattas in dispute as being the nearest heir to Smt.
Menda.
The mutation was made by the Tahsilder Maharajgunj on July 30, 1954.
This mutation appears to have been challenged by Smt.
Phoola who claimed to be the daughter of Smt.
Menda and therefore a preferential heir to the property as compared to Jit.
In 1957 Smt Phoola filed a suit under section 209 of the Abolition Act for the ejectment of Jit from the disputed lands, on the ground that she was the sole legal heir of the 3 L522SCI/76 270 property left by Smt.
Menda.
In the meanwhile in 1961 a notification under section 4 of the Consolidation Act was issued bringing village Bishunpur m which the lands in dispute were situate under the consolidation operations.
Accordingly Smt.
Phoola filed an application during the consolidation operations before the Consolidation officer, Bachhrawan, for correction of the records under section 10(1) of " the U.P. Consolidation of Holdings Act and prayed that the name of Jit in the Khattas in dispute may be struck off and Smt.
Phoola 's name may be mutated therein.
The Consolidation officer accepted the plea of Smt.
Phoola and he accordingly struck off the name of it from the Khattas and directed that Smt.
Phoola being the legal heir of Smt.
Menda her name be mutated in respect of the Khattas.
Thereafter Jit filed an appeal against the order of the Consolidation officer before the Settlement officer (Consolidations), Tahsil Maharajgunj, District Rae Bareli.
The Settlement officer by his order dated December 26, 1961 dismissed the appeal and upheld the order of the Consolidation officer.
Thereafter Jit filed a second appeal be fore the District Deputy Director of Consolidation, Rae Bareli, which was permitted under the U.P. Consolidation of Holdings Act as it was in force then.
The District Deputy Director of Consolidation upheld the plea of Smt.
Phoola and held that she was entitled , to inherit the property of Smt.
Menda being her legal heir in preference to Jit who was merely her husband 's brother 's son and relied upon section 171 of the Abolition Act, and accordingly dismissed the appeal.
Thereafter Jit filed a revision before the Joint Director of Consolidation who also dismissed the revision as being concluded by a finding of fact.
Thereafter Jit filed a writ petition before the Allahabad High Court on December 21, 1962 and the writ petition was allowed by the Single Judge on August 6, 1965.
Phoola then filed a special appeal before a Division Bench of the Allahabad High Court which reversed the decision of the Sing Judge and dismissed the writ petition filed by Jit upholding the plea of Smt.
Phoola.
There after Jit moved the High Court for granting leave to appeal to this Court and the same having been refused the present appeal by special leave has been filed in this Court.
In support of the appeal Mr. J. P. Goyal has submitted that the Division Bench as also the Revenue Courts had taken a wrong view of the law in holding that Smt.
Phoola was entitled to succeed to the property left by Smt.
Menda.
The learned counsel submitted that the present case squarely fell within the ambit of section 172 of the Abolition Act since Smt.
Menda had originally inherited the property from her husband Ramadhin and, therefore, according to the order of succession provided in section 171 of the Abolition Act which applied to section 172, Jit who was the son of the brother of Ramadhin would succeed in preference to the daughter of Smt.
Menda.
The respondents despite service did not appear and we requested Mr. G. N. Dikshit to assist the Court amicus curiae and we are grateful to him for the valuable assistance he rendered to us in deciding the complicated issues of law involved in this appeal.
Mr. Dikshit submitted that at the time when Ramadhin died the tenancy was not heritable and therefore the , question of Smt.
Menda having inherited the estate of her husband did 271 not arise and the tenancy held by Smt.
Menda must therefore be regarded as having been acquired by her in her own right as her self acquired property and, therefore, the Division Bench of the High Court and the Revenue Courts were right in upholding the plea of Smt.
Phoola.
We have gone through the entire record as also the judgment of the Single Judge and the Division Bench and we think that the Division Bench of the High Court has taken an erroneous view of the law in the present case.
The Division Bench found that although it was established that Smt.
Menda had inherited the property from her husband Ramadhin yet the finding of the Revenue Courts was that she had acquired the status of a statutory tenant independently and since there was no error of law in this finding of the Revenue Courts there was no reason for the Single Judge to set aside the order of the Joint Director of Consolidation and allow the petition.
It was argued before the High Court that the matter was concluded by a Division Bench decision of the Allahabad High Court in Mst.
Jaini & ors.
vs Ram Prasad(1) and the High Court appears to have brushed aside this decision on a strange process of reasoning which does not appeal to us at all.
the High Court observed as follows: "Mr. Misra has strenuously contended that Jaini vs Ram Prasad (1)supra) is clear authority for the proposition that even in the case of a statutory tenant succession would devolve under section 36 which, according to Mr. Misra is a counter part of section 172 read with section 171 of the U.P. Zamindari Abolition Act.
Jaini vs Ram Prasad (supra) is clearly distinguishable because that case came up in appeal before this Court and not in the form of a writ or an appeal against the decision of a learned single Judge in a writ petition.
" It is obvious that whether a Division Bench decision is given in an appeal from an original suit or in a writ petition the ratio is binding on the subsequent Division Bench, and merely because the previous Division Bench judgment was given in a suit the subsequent Division Bench cannot refuse to follow the same because it was hearing the proceeding in a writ petition.
The rule of judicial precedent is a very salutary one and is aimed at achieving finality and homogeneity of judgments.
In case the Division Bench under appeal wanted to differ from the previous decision of the Division Bench of the same Court it ought to have referred the matter to a larger Bench but it was not open to it to ignore completely the previous decision on illogical and unintelligible grounds as given by the High Court.
We are further of the opinion that the Division Bench having found as a fact that Smt.
Menda had inherited the property initially from her husband erred in law in not applying the provisions of section 172 read with section 171 of the Abolition Act as a result of which Jit being her husband 's brother 's son was entitled to succeed to the estate left by Smt.
Menda in preference to Smt.
Phoola the daughter.
We now proceed to give reasons for this conclusion.
(1) A.I.R. 1952 All. 852.
272 Section 172 of the Abolition Act as extracted above provides that when a bhumidhar who has after the date of vesting inherited an interest in any holding dies the holding would devolve upon the heirs in accordance with the order of succession mentioned in section 171 of the Abolition Act.
It is manifest therefore that in order to determine the applicability of section 172 of the Abolition Act we must go to the origin of the title of the bhumidhar or the main source from " which the bhumidhar has derived interest in the holding.
It may be pertinent to note here that the statute uses the words "the holding or the part shall devolve" to denote that if it is found that a widow has inherited an interest in the holding from her husband, then it is the holding that devolves and not interest of the widow which ceased after her death.
Thus the statute seeks to make a clear cut distinction between a widow who has inherited an interest from her husband which is dealt with by section 172 of the Abolition Act and a widow who has acquired an independent interest in the holding which is covered by section 172 of the Abolition Act.
The High Court appears to have overlooked the fact that merely because Smt.
Menda having initially inherited possession or occupation of the holding from her husband acquired other types of interests merely by operation of law, that could not destroy the origin or the source of her title which was inheritance from her husband.
Nor can we regard the conferment of the status of a statutory tenant or a hereditary tenant or a bhumidhar under the various laws passed by the U.P. Legislature as amounting to an acquisition u. of a self acquired interest by the widow.
It was, however, argued by Mr. Dikshit that under the Rent Act of 1886 before its amendment by Act 4 of 1921 the estate which was held by Ramadhin was not heritable at all and, therefore, Smt.
Menda could not have inherited any interest in the tenancy on her husband 's death.
In this connection the learned counsel sought to draw a distinction between the provisions of the Agra Tenancy Act which had made the tenancies heritable and the provisions of the Oudh lenience Act which did not make the tenancies heritable.
Although the argument appears to be extremely attractive, on closer scrutiny it is not tenable.
The words used in section 172 of the Abolition Act are "inherited an interest".
The statute has not defined the word "interest" and therefore it must be deemed to be of the widest possible amplitude.
It will include not only an absolute interest but also a limited interest, a precarious interest and an inchoate interest or the like.
Section 48 of the Rent Act of 1886 before its amendment by Act 4 of 1921 stood as follows: "48.
(1) The heir of a tenant who dies during the currency of the tenancy of a holding shall be entitled to retain to occupation of the holding at the rent payable by the deceased for the unexpired portion of the period for which the deceased tenant might have held without liability to enhancement or ejectment, and to receive compensation under the provisions of this Act for improvements, if any, made on the holding by himself or his predecessor in interest, but shall not be entitled to a renewal of the tenancy.
x x x The expressions "heir of a tenant" and "shall be entitled to retain occupation" clearly postulate that the right to retain the occupation of 273 the lands in dispute is given only to the heirs of the deceased tenant A which clearly indicates that the person who retains occupation would inherit or succeed to a limited right which the deceased tenant possessed under the Act.
In the instant case since Smt.
Menda continued to retain occupation of the lands on the death of her husband, she did so only as the heir of her husband and not otherwise, for if that was not to then she could not have been entitled to retain occupation.
The word 'entitled" clearly signifies that the occupant must have some right, however precarious or limited it may be.
In these circumstances, therefore, there can be no doubt that Smt.
Menda 's occupation of the tenancy on the death of Ramadhin was by way of inheritance only.
There was no other method by which she could have a right or claim to retain occupation of the holding.
It is true that the interest of Smt.
Menda was a very limited one and she could have been ejected by the landlord under certain circumstances.
But section 48 of the Rent Act of 1886 undoubtedly conferred two important rights on the heir of the deceased tenant (1) the right to retain occupation of the holding on the rent payable; and (2) to receive compensation for the improvements made.
In these circumstances, therefore, it cannot be said that the occupation of the lands by Smt.
Menda on her husband 's death was purely in her individual or independent capacity or that the possession of the lands amounted to her self acquired property.
Section 174 of the Abolition Act would naturally apply only to such cases where` a widow does not inherit an interest from her husband but would include cases where the female tenant had an independent interest, namely, an interest which she possessed in the holding as her self acquired property, her stridden or the like.
That is why section 174 of the Abolition Act provides that it is the interest in any holding which devolves and not the holding.
Thus the language used in sections 172 and 174 of the Abolition Act unmistakably brings forth the distinction of the two contingencies in which the to sections are to apply.
The Revenue Courts have also held as a fact that initially Smt.
Menda had inherited the property from her husband but they have construed the conferment of the various kinds of status on Smt.
Menda after she had already invented the property as amounting to her self acquired property.
It seems to us that the Revenue Courts were wrong in misconstruing the scope and ambit of the words "inherited an interest in any holding" as mentioned in section 172 of the Abolition Act.
Section 172 A of the Abolition Act was introduced by an amendment of the Act in 1954 which makes the position absolutely clear, by declaring that where a sirdar or adhivasi who had inherited any interest in any holding as a widow, it would be deemed to be an accession to the holding of the last male holder thereof.
We are, however, not at all concerned with 8.
172 A of the Abolition Act, because Smt.
274 Menda had died two years before the amendment came into force and the question of succession to her estate would be governed by section 17 or section 174 of the Abolition Act.
In the Division Bench decision in Mst.
Jaini 's case (supra) the Allahabad High Court had taken the same view.
Malik, C.J., speaking for the Court observed thus: "Section 36 does not require that the tenancy as such should have been inherited by the widow.
All that it provides is that the widow should have inherited an interest in the holding.
The mere fact that she had to remain in possession for a further period of eight years before she could become the statutory tenant of the holding does not mean that she acquired no interest in the holding as a widow.
We fail to see how it could be said, in view of the language of section 36, that her acquisition of statutory rights had nothing to do with the fact that she had inherited an interest in the holding as widow of Bhau.
Section 36 was thus clearly applicable." The Division Bench also relied in the aforesaid case on an earlier unreported decision of a Single Judge of that Court in Sital vs Suraj Din(1) where exactly the same view was taken as the one we have taken in the instant case.
The observations of the learned Single Judge have been quoted by the Division Bench in the case referred to above thus: "We can assume that she acquired on the passing of the new Act (Act 4 of 1921) a fresh statutory period and a renewal of the tenancy but that does not take away the origin of her title.
It is only when a female tenant acquires tenancy rights which do not have their origin in inheritance that the case could be taken out of the` amble of section 36 to be governed by section 37.
" It would be seen that in this case the husband of the appellant had died in 1916 as in the instant case and yet the Court held that it is really the origin of the title that has to be seen and if the tenancy rights had their origin in inheritance then sections 36 & 37 would rot apply.
For these reasons, therefore, we are satisfied that the origin of the title of Smt.
Menda lay in inheritance of the estate of her husband however limited or precarious it may have been.
This being the position, the succession to the estate of Smt.
Menda would have to be governed by the provisions of section 172 of the Abolition Act which has applied the provisions of section 171 regarding the order of succession.
In the order of succession given in section 171 of the Abolition Act brother 's son is a preferential heir.
It might be mentioned here that by virtue of the amendment of the Abolition Act in 1954 the married daughter was also introduced as an heir before brother 's son.
But this was not the position prior to 1954 when the married daughter was completely excluded from inheritance.
It is also not disputed that Smt.
Phoola was (1) Second Appeal No.421 of 1943 decided on 20 12 48.
275 a married daughter on the death of Smt.
Menda.
In these circumstances, therefore, the holding held by Smt.
Menda would devolve on Ramadhin 's brother 's son, namely, Jit and thereafter on his heir who is now continuing the present proceedings.
Thus the Tahsildar Maharajgunj was fully justified in mutating the name of Jit in respect of the lands in dispute instead of Smt.
Phoola.
the Revenue Courts as also the Division Bench of the High Court had taken a legally erroneous view in holding that the mode of succession would be governed by section 174 of the Abolition Act as the interest left by Smt.
Menda was her self acquired property.
The result is that the appeal is allowed, the judgment of the Division Bench is set aside and that of the learned Single Judge is hereby restored.
In the peculiar circumstances of this case, and particularly having regard to the fact that the respondents have not appeared to contest the appeal before this Court, we make no order as to costs in this Court.
P.B.R. Appeal allowed.
| Under section 172 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, when a bhumidar who has, after the date of vesting, inherited an interest in any holding, dies, the holding or the part thereof shall devolve upon the nearest surviving heir (such heir being ascertained in accordance with the provisions of section 171).
Section 174 provides that when a bhumidar who is a woman dies, her interest in the holding shall devolve in accordance with the order of succession given in the section.
The appellant was the grandson (son 's son) of one brother while respondent No. I was the only daughter of another brother.
On the death of the(1)respondent 's father, her mother continued in possession of the lands as heir of her husband under the provisions of the Oudh Land Act, 1886.
U.P. Act 4 of 1921 which replaced the 1886 Act, conferred the status of a statutory tenant upon a person in possession of lands on the date of the amendment.
Section 29 of the U.P. Tenancy Act, 1939, which was a consolidating Act, conferred the status of a hereditary tenant on any person who was a tenant .
of the land at the commencement of the Act and so the mother acquired the status of a hereditary tenant.
The 1939 Act.
was replaced by the U.P. Zamindari Abolition & Land Reforms Act.
1950 under which she became a bhumidar.
The mother died in 1952.
On the death of the respondent 's mother the appellant got his name mutated in the revenue records as the nearest heir of the mother.
The respondent Sled a suit under section 21 of the Abolition Act 1950 claiming to be the sole legal heir to the property.
She also field an application before the Consolidation officer under the U.P. Consolidation of Holdings Act for mutation of her name in a place of the appellant 's, which was accepted.
On appeal to this Court it was contended that it was the appellant 's father who would succeed to the property in preference to the respondent and it was contended for the respondent that when the respondent 's father died, the tenancy was heritable and so the tenancy acquired by her mother was in her own right as self acquired property.
Allowing the appeal, ^ HELD: (1) Section 172A which was introduced in 1954 has no application to this case because the mother died two Years before the amendment came into force and the question of succession to her estate would be governed by section 172 or section 174 of the Abolition Act.
[274 A] (2) The statute seeks to make a clear cut distinction between a widow who has inherited an interest from her husband dealt with in section 172 and widow who had acquired an independent interest in the holding covered by section 174.
[272 C] Mst.
Jaini & Ors.
vs Ram Prasad, A.I.R. 1952 All. 852, approved.
(3) (a) Section 172 uses the word 'holding or the Dart shall devolve ' to denote that if it was found that a widow had inherited an interest in the holding from her husband then it was the holding that devolved and not interest of the widow, which ceased after her death.
The High Court had overlooked the fact that merely because the mother having initially inherited possession or 263 occupation of the holding from her husband acquired other types of interest A by operation of law that could not destroy the origin or the source of her title which was inheritance from her husband.
Nor did the conferment of the status of a statutory tenant under the various laws passed by the legislature amount to an acquisition of a self acquired interest by the widow.
[272B, D) (b) The words "inherited an interest" occurring in section 172 are not defined in the statute and, therefore, they must be deemed to be of the widest possible amplitude.
[272F] (4) Section 174 applies only to such cases where the widow did not inherit an interest from her husband but had an independent interest in the holding which she possessed as her self acquired property Under section 174 it is the interest in any holding which devolves and not the holding.
The language used in Ss. 172 and 174 of the Abolition Act unmistakably brings forth the distinction between the two contingencies in which the two sections are to apply.
[273E F] (5) The High Court having found as a fact that the mother had inherited the property initially from her husband erred in law in not applying the provision of section 172 read with section 171 of the Abolition Act as a result of which her husband 's brother 's son was entitled to succeed to the estate left by her in preference to her daughter (respondent).
[271H] (6) The origin of the title of the mother lay in inheritance of the estate of her husband however limited or precarious it might have been.
The succession to the estate of the mother would have to be governed by the provisions of section 172 of the Abolition Act.
In the order of succession given in section 171 brother 's son was a preferential heir.
Before the amendment of the Abolition Act in 1954, married daughter was completely excluded from inheritance.
[274G H] In the instant case the respondent having married on the death of her mother in 1952 the holding held by the mother would devolve on the appellants father and thereafter, on the appellant as heir to his father.
(7) The expressions 'heir of a tenant ' and 'shall be entitled to retain occupation ' occurring in section 48 of the Rent Act 1886 before its amendment in 1921 clearly postulate that the right to retain the occupation of the lands in dispute was given to the heirs of the deceased tenant, which clearly indicated that the person who retained occupation would inherit or succeed to a limited right which the deceased tenant possessed under the Act.
[273A] In the instant case on the death of her husband occupation of the.
tenancy by the mother was by no way other than as heir of her husband.
It cannot be said that the occupation of the lands by the mother on her husband 's death was purely in her individual or independent capacity or that her possession of the lands amounted to her self acquired property.
[273D E] (8) Whether a decision is given in appeal from an original suit or in a writ petition the ratio is binding on the subsequent Division Bench and merely because the previous Division Bench judgment was given in a suit the subsequent Division Bench cannot refuse to follow the same on the ground that it was hearing the proceeding in a Writ petition.
The rule of judicial precedent is a salutary one and is aimed at achieving finality of judgments.
In case the Division Bench under appeal wanted to differ from the previous decision of the Division Bench of the same court it ought to have referred the matter to a large bench.
[271F G]
|
Civil Appeal No. 571 of 1969.
Appeal by Special Leave from the Order dated the 6th September, 1968/26th October 1968 of the Government of India, Ministry of Finance (Department of Revenue and Insurance) bearing No. 5262 of 1968.
J. L. Nain, Mrs. A. K. Verma for J. D. Dadachanji & Co., for the Appellant.
R. B. Datar and Miss A. Subhashini, for the Respondent.
The Judgment of the Court was delivered by SARKARIA, J.
This is an appeal by special leave against an order of the Government of India, Ministry of Finance (Department of Revenue and Insurance).
The order was passed by Shri B. Sen, Commissioner (Revision applications), Government of India.
Indian Hard Metal (P) Ltd., the appellant, had imported 15 metric tonnes of wolfram ore from London.
The Customs authorities classified the said ore under item 87 of the Indian Customs Tariff and charged duty at the rate of 60 per cent ad valorem amounting to Rs. 62,871.03P., instead of classifying the imported ore either under item 26 of item 70(7) which are free from duty.
These relevant items, as entered in the Imported Tariff, may be set out as under: Item Name of Article Nature of Standard No. duty rate of 26 Metallic ores all X Free X sorts except ores and pigments ores and antimony ore.
70(7) Cobalt chromium tungsten X Free magnesium and all other nonferrous virgin metals not otherwise specified.
SECTION XXII (ARTICLES NOT OTHERWISE SPECIFIED) 87 All other articles not otherwis specified.
Revenue 60 per cent ad valorem.
The classification made under the residuary item 87 at the time of the import was upheld by the Assistant Collector of Customs; and the Commissioner of Customs dismissed the appeal of the assessee by an order dated July 31, 1965, holding that the 381 bags of wolfram ore was correctly assessable at the rate of 60 per cent duty under item 87 of the Indian Customs Tariff, and not being covered either 471 by entry 26 or 70(7) of the Indian Customs Tariff, was not duty free.
The appellant preferred a revision petition under section 131 of the Customs Act to the Government of India who declined to interfere and dismissed the revision.
Hence this appeal.
Mr. Nain, appearing for the appellant, submits that the ore in question contained a concentrate of 74% of tungsten from wolfram and the rest were impurities.
This concentration is the result of 'selective mining ' process which involves crushing, washing and magnetic separation.
It does not bring about any chemical change in the metal.
At the minepit in its natural form, the ore is not of marketable quality because the tungsten content in ' it, then is hardly 0.5 to 2 per cent.
By the aforesaid concentrating process, the ore is converted into ore of commercial quality.
It is maintained that in commercial parlance wolfram ore of marketable quality must contain a minimum of 655 'o to 70% of the metal, and in one of better quality, the content may be as high as 79%.
Even after being subjected to such process, the ore concentrate does not cease to be tungsten 'ore ' within the contemplation of item 70(7) of the Indian Import Tariff.
In sup port of his contentions, learned counsel has relied upon the judgment of this Court in Minerals & Metals Trading Corporation of India Ltd. vs Union of India & Ors.(1) and certain Certificates of experts, as also an extract from the treatise on 'Tungsten ', by C.J. Smithells Chapman Hall.
As against this, Mr. Datar has drawn our attention to the order, dated July 31, 1965, wherein the Appellate Collector of Customs has observed that no evidence was adduced by the importer to substantiate the contentions that the ore in question had undergone no chemical process before being imported, and that the inference is that such high purification of the concentrate could have been possible only by applying process other than by water, crushing and magnetic separation.
It is stressed that the decision of this Court in Minerals & Metals Trading Corporation of India Ltd. (supra), is not applicable because in that case the percentage of tungsten in the ore was 65% only and that much concentration could be reached by physical process only, such as, crushing washing etc.; while in the instant case, the percentage of the wolfram contained in the goods concerned is little over 75%.
In our opinion, the mere fact that the percentage of tungsten in the ore concentrate in the instant case is about 75 per cent, does not take the case out of the ratio of this Court 's decision cited by Mr. Nain.
(1) [l973] I S.C.R. 997. 472 In Minerals & Metals Trading Corporation of India Ltd. (supra), the appellant had imported 200 metric tons of wolfram concentrate from Russia, under a contract which prescribed minimum contents of 65 % of W03 in the concentrate.
The Customs authorities levied duty at the rate of 60% ad valorem under item 87 of the First Schedule The appellant claimed refund on the ground that no duty was leviable as the goods imported was an "ore" and fell, under item 27 or 70(7) of the Import Tariff.
The Assistant Collector of Customs held that the appellant was not entitled to refund because the term "ore" mentioned in the text of item 26 is confined to articles which are in form and condition in which they are mined and not as wolfram ore concentrate in powder form as in that case.
On appeal by the importer, the Appellate Collector head that the goods in question were in the manufactured form made by special specifications by dressing and were thus not "ores".
The Central Government rejected the revision application filed by the appellant, holding that the examination by the Chemists showed that the uniform granules of the material were not only separated from rock but also from various impurities and had been subjected to such processing as would take them out of the category of metallic ore mentioned in Intern 26.
This Court, speaking through Grover J., allowed the importer 's appeal, with these apposite observations: "There is a good deal of force in the argument of Mr. Setalvad for the appellant that the normally acceptable merchantable quality of wolfram or tungsten contains a minimum 65 % WO33.
This is the usable ore and it is in that sense that it is commercially understood.
Wolfram ore when , mined contains only 0.5 to 2 per cent W03 and in order to make it usable and merchantable ore with minimum 65% W03, concentration is necessary.
If item 26 of the Import Tariff is to be restricted to wolfram being material containing 0.5 to 2 per cent W03, it would be mainly rock which can neither be imported in large quantity and which will have no market.
The separating of wolfram ore from the rock to make it usable ore is a process of selective mining.
It is not a manufacturing process.
The important test is that the chemical structure of the ore should remain the same.
Whether the ore imported is in powder or granule form is wholly immaterial.
What has to be seen is what is meant in international trade and in the market by wolfram ore containing 60% or more W03.
On that there is a 473 preponderant weight of authority bath of experts and books and of writings on the subject which show that wolfram ore when detached and taken out from the rock in which it is embedded, either by crushing the rock and sorting out pieces of wolfram ore by washing or magnetic separation and other similar and necessary process, it becomes a concentrate but does not cease to be ore." (emphasis added) There is ample authority for the view that the tungsten content in the wolfram ore of marketable quality may vary from 60 to 79 per cent, and a concentration within these limits, of the metal in the ore can be attained simply by a process of a "selective mining", that is, by physical process not involving any chemical change in the metal.
The following passage (vide Annexure "I ' in the record) culled out from the Introduction to the treatise on "Tungsten" by C.J. Smithells Chapman Hall, fully bears out this conclusion: "Mining.
Tungsten ores, although so widely distributed rarely occur in massive form.
The ores are usually found in narrow veins, but in some of the rich deposits the veins may in places be several metres wide.
Castrate is the commonest metallic mineral associated with tungsten, but minerals containing bismuth, molybdenum, lead and copper are frequently found; pyrite and arsenopyrite are objection able minerals, which may be present in appreciable amounts, and other common minerals are quartz and fluorite.
There are several kinds of ore deposits classified as segregates, pegmatites replacement deposits, veins and placers.
The tungsten content of the ore as it is mined is usually from 0.5 to 2 per cent, although it amounts to 6 per cent in rare instances.
The concentration of tungsten ores depends chiefly on gravity methods, taking advantage of the high density of the metal, ,although flotation methods are also used.
the concentrates, which contain 60 70 per cent W03, to or the better qualities 75 79 per cent should be virtually free from S.P, As, sb, Bi, Cu, Sn, Ti, and Mo. Magnetic are employed to separate the tin and tungsten in the concentrates.
Scheelite, however, is non magnetic, but when it occurs with garnet, as it does in Tasmania, the garnet may be removed magnetically.
The concentration of Wolframite ores is difficult on account of their mica like formation.
Excessive crushing leads to high losses in tabling and as far as 12 978 SCI178 12 978SCI/78 474 possible the ore should be separated when coarsely crushed " (Emphasis supplied ) There is on the record another Certificate in the form of a letter, dated February 3, 1965, from the Director, National Metallurgical Laboratory, Jamshedpur, addressed to the Controller of Customs, Calcutta, in which it is opined: "The wolfram ore is always selectively mined in the techllical terminology. such "selective mining" does not constitute a manufacturing process.
Unless selective mining is done, the tungsten ore cannot be exported or even sold in the country of its origin.
In view of the above, the import of selectively mined tungsten ore containing 65 % W03 or more should not be regarded as the import of a product which has been manufactured overseas and has passed through the manufacturing process.
By the expression 'selectively mined ', we mean that the wolfram ore is detached and taken out from the rock in which it is embedded and this is done by crushing the rock and sorting out piece of wolfram ore therefrom either by hand or by washing or magnetic separation.
" Then, there is another Certificate from R. V. Briggs & Co. Pvt. Ltd., who claim to have been analysing various ores and minerals including wolframite for over 60 years.
According to these experts, wolframite is always concentrated as part of the mining operation.
The normal method is by washing the crushed ore, thereby freeing the mineral from the gangue.
These experts have further certified that the wolfram ore, which they have analysed for M/s. India Hard Metals, is processed except for physical concentration by washing.
It may be observed that in the Minerals & Metal Trading Corporation (ibid), also, this Court had relied upon a similar Certificate from R. V. Briggs & Co. Still, another Certificate, dated January 13, 1965, which is more or less to the same effect as the Certificate of the National Metallurgical Laboratory, was brought in evidence.
A similar Certificate from this Laboratory was relied upon as authentic expert opinion in the earlier case, also, decided by this Court.
No authority or expert opinion has been cited before us that a concentration of 75 per cent tungsten in wolframite ore of commercial quality, cannot be achieved merely by 'selective mining ', i.e. the physical process of crushing, washing, gravitation, magnetic separation or the like.
Nor is there any evidence on the record to show 475 that the mined ore was subjected to any chemical process which caused a change in the chemical structure of the ore.
The finding of the Appellate Collector of Customs that such a high degree (75%) of tungsten metal virtually free from impurities in the material, could be attained only by some chemical manufacturing process and not merely by crushing, washing or magnetic separation, is not based on any evidence whatever.
It is contrary to the opinions of expects and authorities on the subject, which were brought on the record.
It is evident from the passage extracted from Smithells ' treatise, and the other Certificates of experts, mentioned above, that in order to bring mined wolframite ore to a marketable quality, it has to be concentrated by physical methods, such as, crushing, washing, gravitation, magnetic separation etc.
And by such physical process only, a concentration of WO3 varying from 60 per cent to 79 per cent in the ore can be achieved.
Wolframite (WO3) of ordinary merchantable quality contains 60 to 70 per cent of tungsten, while wolframite ore of better commercial quality contains 75 to 79 per cent of the metal In the light of the above discussion, there is no manner of doubt that the goods imported by the appellants had to be classified as imported ore, falling either under item 26 or item 70(7) of the Import Tariff, and as such, no duty was leviable on them.
The appellants are, therefore, entitled to the refund of the duty paid by them on the goods in question.
In the result, the appeal is allowed with costs, and the impugned orders including the Order dated October, 26, 1968, of the Central Government, are set aside.
The respondents are directed to make appropriate orders for refunding the amounts collected from the appellants by way of import duty on the goods in question.
N.V.K. Appeal allowed .
| The six employees in the Tin Plate Co. of India Ltd. were adjudged insolvents.
They were members in a Provident Fund of the said company, having certain amounts standing to their credit in the Fund.
The appellants creditor of the said employees filed applica tions under section 4 of the Insolvency Act against the company and Trustees of the Fund for orders that amounts standing to the credit of the insolvents in the Provident Fund account were their properties and had vested in the court and were available for distribution amongst the creditors and therefore should be brought into court.
The respondent pleaded in answer that the amount standing to the credit of each insolvent in the Provident Fund represented the contributions of the company and of the employees and that the corpus was a trust fund in the hands of the trustees of the fund; so they were not properties of the insolvents over which they had a disposing power and that they were not debts due to the insolvents.
It was said that according to the rules governing the Provident Fund the monies become payable to the employee or any other member of his family only on the happening of certain contingencies such as retirement, discharge, dismissal or death and that till then no right accrued to the insolvent.
It was further urged that the trustees could not be removed from the custody and control of the fund by the Official Receiver.
On a construction of the Rules of the Provident Fund, the Insolvency Court held in favour of the creditor.
On appeal, the High Court held that under the rules of the Fund, the insolvents had no present disposing power over the monies standing to their credit and that the Fund had vested in the Trustee.
On appeal to the Supreme Court: Held that it is reasonably clear from these rules that a subscriber has a present interest in the Fund though the moneys may become payable to him, or his nominee or heirs only in the future.
Even where there is a declaration about the nominee who is to receive payment after the subscriber 's death, the fund would still be the property of the subscriber in the hands of the nominee for the satisfaction of his debts, as there is no present gift to take effect immediately.
It could not be maintained that the subscribers had no right, title or interest in the fund or that such interest as they may possess was dependent upon a possible contingency which may or may not occur.
The amount standing to the credit of a subscriber even if payable in future would be a debt due by the company to him within the meaning of section 60 of the Code and hence liable to attachment and sale.
A person cannot enter into any arrangement or agreement by which his own title will cease in the event of bankruptcy for it would then be a fraud perpetrated on the Insolvency Law.
The liability of the estate to be attached by creditors on a bankruptcy or judgment is an incident of the estate, and no attempt to deprive it of that incident by direct prohibition would be valid.
Notwithstanding the rules of the Fund in the present case, the subscribers have an interest in the moneys which can vest in the Official Receiver on their adjudication.
The word "property" in the Insolvency Act is used in the widest possible sense which includes even property which may belong to or is vested in another but over which the insolvent has a disposing power which he may exercise for his own benefit; and this part of the definition has reference obviously to powers of appointment and the power of a Hindu father who is the managing ember of a joint family.
The fact that on the date of the adjudication the insolvent could not transfer the property does not militate against the view that he has a vested interest in the same.
Banchharam Mojumdar vs Adyanath Bhattacharjee, ([1909] I.L.R. , Dugdale vs Dugdale ([1888] 38 Ch. D. 176), Ex parte Dever.
In re Suse and Sibeth ([1887] , Hudson vs Gribble ([1903] 1 K.B. 517), D. Palaiya vs
T. P. Sen and another (A.I.R. 1935 Pat. 211), Secretary, Burma Oil Subsidiary Provident Fund (India) Ltd. vs Dadibhar Singh (A.I.R. 1941 Rang.
256), Gajraj Sheokarandas vs Sir Hukamchand Sarupchand and another (A.I.R. 1939 Bom.
Anandrao alias Adkoba s/o Risaram ji vs Vishwanath Watuji Kalar and others, (A.I.R. 1944 Nag. 144), Ismail Jokaria & Co. vs Burmah Shell Provident Trust Ltd. (A.I.R. 1942 Sind 47), Bishwa Nath Sao vs The Official Receiver ([1936] I.L.R. 16 Pat. 60), and Sat Narain vs Behari Lal and Others ([1924] 52 I.A. 22), referred to.
|
: Civil Appeal No. 213 of 1955.
Appeal from the judgment and order dated June 26, 1953 of the Calcutta High Court in I.T.R. No. 34 of 1952.
A.V. Viswanatha Sastri, Y. C. Talukdar and Sukumar Ghose, for the appellant.
K.N Rajagopal Sastri and.
D. Gupta, for the respondent.
May 12.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with a certificate under article 135 of the Constitution read with section 66A(2) of the Indian Income tax Act raises the question as to whether the appellant ",as entitled to a deduction of Rs. 24,809 in the computation of its profits and gains for the assessment year 1948 49.
The appellant deals in land and property and carries on land developing business and in the course of the said business, it buys land, develops it so as to make it fit for building purposes and sells it at a profit in plots.
The developments undertaken are in the main, 187 that roads are to be laid out, a drainage system to be provided and street lights installed and they are to be maintained till the sample are taken over by the Muncipality.
The whole of the development is not carried out before the land is sold, nor the whole of the sale price received in cash at the time of the sales.
The procedure followed is that when a plot is sold, the purchaser pays about 25 % of the purchase price in cash and undertakes to pay the balance with interest at a certain rate in ten annual installments which he secures by creating a charge on the land purchased.
The appellant, in its turn, undertakes to carry out the developments within six months from the date of the, sale but this time is not of the essence of the contract and what the appellant undertakes is to carry out the 'developments within a reasonable time.
The tinderbox is incorporated in the deed of sale itself, whereas the security is given by the purchaser by means of a separate document.
In the accounting year relating to the assessment year 1948 49 the appellant sold a number of plots and received a portion of the sale price from the purchasers according to the scheme mentioned above.
The appellant maintains its accounts in the mercantile method under which money not actually received but only treated as received on the basis that it was due and receivable is entered in the books of account on the credit side.
Even though the appellant did not receive the whole of the price, viz., Rs. 43,692 11 9, it entered in the credit side of its books of account the whole of that sum representing the full sale price of the lands sold during the accounting year though only a sum of Rs. 29,392 11 9 was actually received in cash from the purchaser and the balance of Its.
14,300 represented the unpaid balance retained by the purchasers the payment of which was secured by creating charge on the said lands as also the interest received or receivable in the year of account tinder the deeds of charge.
The whole of this sum of Rs. 43,692 11 9 was, however, credited in the books of account by the appellant according to the mercantile system of accounting adopted by it.
188 In so far as under the terms of the deeds of sale the appellant had undertaken to carry out the developments within six months from the date of sale it estimated a sum of Rs. 24,809 as the expenditure for the developments to be carried out in respect of the plots which had been sold during the year and debited the same in its books of account on the ground that the liability for the said sum of Rs. 24,809 had actually arisen, the appellant being bound to provide the facilities it had undertaken to do, even though no part of that amount represented any expenditure actually made during that year.
In the course of its assessment to income tax for the year 1948 49, the appellant claimed a deduction of the said sum of Rs. 24,809 in the computation of the profits and gains of its business.
The Income tax Officer disallowed that claim on the ground that the expenses had not been actually incurred in the year of account and also on the ground that the estimate had not been proved to be based on a consideration of the real expenses which the Company would have to incur for the purpose.
The Appellate Assistant Commissioner, on appeal, confirmed the disallowance by the I.T.O. on the ground that there was as yet no accrued liability and on the further ground that as the development would be carried out in the future, the expenditure estimated at current prices could not be allowed.
On appeal taken by the appellant before the Income.
tax Appellate Tribunal, the Tribunal, held that it was by no means certain what the actual cost would be when the developments were carried out and that although the appellant had undertaken to carry out certain developments, it could bring expenses into account only when the expenses were actually incurred.
The Tribunal accordingly dismissed the appeal.
The appellant thereafter made an application before the Tribunal requiring it to refer to the High Court under section 66(1) of the Income tax Act certain questions of law arising out of its order.
The Tribunal thereupon stated a case and referred the following question to the High Court for its decision: 189 Whether on the facts and circumstances stated above, the sum of Rs. 24,809 can legally be allowed as an expense of the year under consideration.
" The statement of case drawn by the Tribunal was severely criticized by the High Court as under: " Unfortunately, the treatment of the question by the authorities below has been of a somewhat summary character, presumably because it was raised and argued before them in a superficial form.
But even if such was the case, there is hardly any justification for the Tribunal failing to realise it least what facts were required to be found and stated.
The statement of case is sketchy and bare and like most of the statements we have to deal with during this session, has hardly any appearance of a case seriously stated.
" In spite of the above observations the High Court dealt with the question and after dealing exhaustively with the arguments which were urged be fore it by the learned Counsel for the appellant answered the question in the negative.
On an application made by the appellant, however, the High Court granted the requisite certificate under article 135 of the Constitution to appeal to this Court and lience, this appeal.
The question which really arises for our determination in this appeal is whether having regard to the fact that the appellant 's method of accounting, viz., the Mercantile method was accepted by the Income Tax Officer and the receipts appearing in the books of account included the unpaid balance of the sale price of the plots in question, the amount of liability undertaken by the appellant to earn those receipts was to be deducted even if there had not been actual disbursement made by it during the accounting year.
Put in other words, the question was whether in view of the fact that the sum of Rs. 43,692 11 9 had been entered on the credit side in the books of account even though it was not money actually received but only money treated as received on the basis that it.
was due and receivable, the sum of Rs. 24,809 which had been entered as debit, being the liability of the appellant 190 undertaken by it to earn those receipts, should be deducted in determining the taxable profits and gains of the appellant.
The mercantile system of accounting is well known and this method has been explained in a judgment of this Court in Keshav Mills Ltd. vs Commissioner of Income tax, Bombay (1).
" That system brings into credit what is due, immediately it becomes legally due and before it is actually received and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed.
" The main ground on which the claim of the appellant for deducting this sum of Rs. 24,809 ",as disallowed by all the authorities below was that the expenditure was not actually incurred in the year of account, it was by no means certain what the actual cost would be when the developments " are carried out and that there was as yet no accrued liability but only a contingent liability undertaken by the appellant, even though the undertaking was incorporated in the deeds of sale themselves.
The following were the developments undertaken to be carried out by the appellant as appears from the order of the Appellate Assistant Commissioner: " There was a condition in the Conveyance deeds that the appellant does hereby covenant with the purchaser that the appellant shall complete the construction of roads, drains, provide suitable pucca surface drains on both sides of the roads and shall also make arrangements for lighting up the said roads and shall maintain the said roads, drains, lights till the same are taken over by the Municipal Besides provision for roads, drains, etc.
, t~he ~Deed provides for filling u~p of low lands and there is a clause in the Conveyance Deed which shows that the ~appellant 's shall at his own cost ~fi.11 the low lands and tank with earth and bring the same to road level. " (~1) II9531 ~S.C.R. ~95o, 958~ 191 This undertaking having been incorporated in the deeds of sale themselves there was certainly a liability undertaken by the appellant to carry out these developments within six months from the dates of those deeds.
Time was of course not of the essence of the contract and the appellant therefore was at liberty to carry out that undertaking within a reasonable time.
That, however, did not absolve it in any manner whatever from carrying out the undertaking and the purchasers were in a position to enforce the undertaking by taking appropriate proceedings in that behalf.
Reliance was placed on behalf of the Revenue on the case of Peter Merchant Ltd. vs Stedeford (Inspector of Taxes) (1) in which a distinction was drawn between an actual i.e., legal liability, which is deductible, and a liability which is future or contingent and for which no deduction can be made.
The facts of that case were that the Company which carried on the business of managing factory canteens, had contracted with a factory owner to maintain the crockery, cutlery and utensils used in the canteen otherwise known as the light equipment in its original quantity and quality.
The cost of replacement was admittedly a proper deduction in computing profits, as was also any sum paid to a factory owner in settlement of the value of shortages on termination of the contract.
Owing to war and.
other circumstances it was impossible or impracticable for the Company to obtain replacements in some cases, and the obligations under the contracts with the factory owners in those cases still remained to be performed.
in the accounts for the year deductions had been made both of the amounts actually expended on replacements and the amounts which the company was liable to expend when the equipment became available.
The Company claimed to be entitled to deduct in computing its profits amounts representing at current prices, the liability to effect replacements as soon as the required equipment became obtainable.
The former amounts were allowed as deductions, and the latter the Court of Appeal (reversing the decision (1) 192 of the Court below) held not to be deductible.
The basis of the decision was that the real liability under the contract was contingent, not actual, since the obligations of the company were not such that it might be sued for the cost of 'replacements at current prices, but only for possible damages for breach of contract in the event of the factory owner preferring a claim under the contract, and since no legal liability could arise until such a claim was made, the liability had to be regarded as contingent and not deductible.
It is clear from the above that on the facts and circumstances of that case the Court held that it was not an accrued liability but was merely a contingent one and if that was the case only the sums actually expended could be deducted and not those which the company was liable to expend in the future.
Simon in his " Income tax ", Second Edition, Vol.
II, at p. 204 under the caption " Accrued Liability " observes as under, after citing the case mentioned above: .
"In cases, however, where an actual liability exists, as is the case with accrued expenses, a deduction is allowable; and this is not affected by the fact that the amount of the liability and the deduction will subsequently have to be varied.
A liability, the amount of which is deductible for income tax purposes, is one which is actually existing at the time of making the deduction, and is distinct from the type of liability accruing in Peter Merchant8 Ltd. vs Stedeford (lnspector of Taxes) which although allowable on accountancy principles, is not deductible for the purpose of income tax.
" Approaching the question before us in the light of the observations made above we have got to determine what was the nature of the liability which was undertaken by the appellant in regard to the development of the lands in question, whether it was an accrued liability or was one which was contingent on the happening of a certain event in the future.
There is no doubt that the undertaking to carry out the developments within six months from the dates of 193 the deeds of sale was incorporated therein and that undertaking was unconditional, the appellant binding itself absolutely to carry out the same.
It was not dependent on any condition being fulfilled or the happening of any event, the only condition being that it was to be carried out within six months which in view of the fact that the time was not of the essence of the contract meant a reasonable time.
Whatever may be considered a reasonable time under the circumstances of the case, the setting up of that time limit did not prescribe any condition for the carrying out of that undertaking and the undertaking was absolute interms.
If that undertaking imported any liability on the appellant the liability had already accrued on the dates of the deeds of sale, though that liability was to be discharged at a future date.
It was thus an accrued liability and the estimated expenditure which would be incurred in discharging the same could very well be deducted from the profits and gains of the business.
Inasmuch as the liability which had thug accrued during the accounting year was to be discharged at a future date the amount to be expended in the discharge of that liability would have to be estimated in order that under the mercantile system of accounting the amount could be debited before it was actually disbursed.
The difficulty in the estimation thereof again would not convert an accrued liability into a conditional one, because it is always open to the Income tax authorities concerned to arrive at a proper estimate thereof having regard to all the circumstances of the case.
That it can be so done is illustrated by Gold Coast Selection Trust Ltd. v Humphrey (Inspector of Taxes) (1) where a particular asset which could not be immediately realised in a commercial sense was valued in money for income tax Purposes in the year of its receipt and it was observed by Viscount Simon: " It seems to me that it is not correct to say that an asset, such as this block of shares, cannot be valued in money for income tax purposes in the (1) , 469.
25 194 year of its receipt because it cannot, in a commercial sense, be immediately realized.
That is no reason for saying that it is incapable of being valued, though, 'if its realization cannot take place promptly, that may be a reason why the money figure set against it at the earlier date should be reduced in order to allow for an appropriate interval.
Supposing, for example, the contract conferring the asset on the taxpayer included a stipulation that the asset should not be realized by the transferee for five years, and that if an attempt was made to realise it before that time, the property in it should revert to the transferor.
This might seriously reduce the value of the asset when received, but it is no reason for saving that when received it must be regarded as having no value at all.
The Commissioners, as its seems to me, in fixing what money equivalent should be taken as representing the asset, must fix an appropriate money value as at the end of the period to which the appellant 's accounts are made up by taking all the circumstances into consideration.
" As in the case of assets received during the accounting year which could not be immediately realized in a commercial sense, so in the case of liabilities which have already accrued during the accounting year, though they may not have to be discharged till a later date.
It will be always open to the Income tax authorities to fix an appropriate money value of that liability as at the end of the accounting period by taking all the circumstances into consideration and the estimate of expenses given by the assessee would be liable to scrutiny at their hands having regard to all the facts and circumstances of the case.
The High Court was, therefore, clearly in error when it stated: " In view of all the circumstances of the case it must in my opinion, be held that the amounts of sale price, not received in cash, were also received and for the purpose of earning the receipts the assessee spent, besides giving the lands, nothing more than a promise.
Since the whole amount was actually received in the year of account before and 195 without making the promised expenditure, no question of allowing a deduction of any expenditure from such receipts of the year arises.
" If then the estimated expenses which would have to be incurred in duly discharging that liability which was undertaken by the appellant and was incorporated in the deeds of sale could be deducted in accordance with the mercantile system of accounting adopted by the appellant and accepted by the I.T.O., is there anything in the Income tax Act which would prevent this debit being allowed as a deduction in the computation of the profits and gains of the appellant 's business? The appellant, had, it appears, claimed this deduction as and by way of expenditure wholly laid out for the purposes of its business under section 10(2)(xv) of the Income tax Act.
On an interpretation of that provision, the High Court was inclined to hold, though it did not decide the question, that to the extent that a definite liability had accrued about which all preliminary proceedings causing the accrual of the liability in a concluded form had already been gone through although the actual disbursement had not yet taken place, section 10(2)(xv) would cover accrued liabilities though the amount may not actually have been expended on the footing that the liability being certain, the amount was as good as spent and on that basis there would be room in the clause for debits which are proper debits under the mercantile system of accounting.
It, however, distinguished the present case on the ground that the liability here was a floating liability, the measure of which depended upon the will of the appellant and the discharge of which rested only in a promise and that the expenses were entirely at large and the development work itself merely so.
Apart, however, from the question whether section 10(2) (xv) of the Income tax Act would apply to the facts of the present case, the case is in our opinion, well within the purview of section 10 (1) of the Income tax Act.
The appellant here is being.
assessed in respect of the profits and gains of its business and the profits and gains of the business cannot be determined unless and until he expenses or the obligations which have been incurred are set off against the receipt 's The expression profits and gains has to be understood in its commercial sense and there can be no computation of such profits and gains until the expenditure which is necessary for the purpose of earning the receipts is deducted therefrom whether the expenditure is actually incurred or the liability in respect thereof has accrued even though it may have to be discharged at some future date.
As was observed by Lord Herschell in Bussel vs Town and County Bank, Ltd.( '): " The duty is to be charged upon I a sum not less than the full amount of the balance of the profits or gains of the trade, manufacture, adventure, or concern '; and it appears to me that that language implies that for the purpose of arriving at the balance of profits all that expenditure which is necessary for the purposes of earning the receipts must be deducted, otherwise you do not arrive at the balance of profits, indeed, otherwise you do not ascertain, and ' cannot ascertain, whether there is such a thing as profit or not.
The profit of a trade or business is the surplus by which the receipts from the trade or business exceed the expenditure necessary for the purpose of earning those receipts.
That seems to me to be the meaning of the word " profits " in relation to any trade or business.
Unless and until you have ascertained that there is such a balance, nothing exists to which the name " profits can properly be applied.
" A similar opinion was expressed in the Gresham Life Assurance Society V. Styles (2) : " When we speak of the profits or gains of a trader we mean that which he had made by his trading.
Whether there be such a thing as profit or gain can only be ascertained by setting against the receipts the expenditure or obligations to which they have given rise.
" These are no doubt observations from the English cases dealing with English statutes of Income tax, but the general principles which can he deduced therefrom (1) , 424 (2) 197 are, nevertheless, applicable here and it was stated by Lord Macmillan in Pondicherry Railway Co., Ltd. vs Commissioner of Income tax, Madras (1) " English authorities can only be utilised with caution in the consideration of Indian Income tax cases owing to the difference in the relevant legislation, but the principle laid down by Lord Chancellor Halsbury in Gresham Life Assurance Society vs Styles (supra), is of general application unaffected by the specialities of the English Tax system.
" The thing to be taxed", said his Lordship, "is the amount of profits or gains ".
The word " profits ", I think, is to be understood in its natural and proper sense in a sense which no commercial man would misunderstand.
" ' It may be useful to observe at this stage that prior to the amendment of the Indian Income tax Act in 1939, bad and doubtful debts were not treated as deductible allowance for the purpose of computation of profits or gains of a business, The Privy Council in the Income tax Commissioner vs Chitnavis observed: " Although the Act nowhere in terms authorises the deduction of bad debts of a business, such a deduction is necessarily allowable.
What are chargeable to income tax in respect of a business are the profits and gains of a year; and in assessing the amount of the profits and gains of a year account must necessarily be taken of all losses incurred otherwise you would not arrive at the true profits and gains.
" The High Court in disallowing the claim of the appellant in the present case only considered the provisions of section 10 (2)(xv) of the Act and came to the conclusion that on a strict interpretation of those provisions the sum of Rs. 24,809 was not an allowable deduction.
Its attention was drawn by the learned Counsel for the appellant to the provisions of section 10(1) of the Act also but it negatived this argument observing that under the Indian Act, the profits must be (1) (193i) L. R. 58 1.
A. 239, 252.
(2) (1932) L. R. 59 I. A. 290, 296.
198 determined by the method of making the statutory deductions from the receipts and any deduction from the business receipts, if it was to be allowed, must be brought under one or the other of the deductions mentioned in section 10(2) and that there was no scope for any preliminary deduction under general principles.
It was, however, held by this Court in Badridas Daga vs The Commissioner of Income tax(1) " It is to be noted that while section 10(1) imposes a charge on the profits or gains of a trade, it does not provide how those profits are to be computed.
Section 10(2) enumerates various items which are admissible as deductions, but it is well settled that they are not exhaustive of all allowances which could be made in ascertaining profits taxable under section 10(1).
" Venkatarama Aiyar, J., who delivered the Judgment of this Court then proceeded to discuss the cases of Commissioner of Income tax vs Chitnavis(2), Gresham Life Assurance Society vs Styles (3) and Pondicherry Railway Co. vs Income tax Commissioner(4), and observed:" The result is that when a claim is made for a deduction for which there is no specific provision in section 10(2), whether it is admissible or not will depend on whether, having regard to accepted commercial practice and trading principles, it can be said to arise out of the carrying on of the business and to be incidental to it.
If that is established, then the deduction must be allowed, provided of course there is no prohibition against it, express or implied, in the Act.
Turning now to the facts of the present case, we find that the sum of Rs. 24,809 represented the estimated expenditure which had to be incurred by the appellant in discharging a liability which it had already undertaken under the terms of the deeds of sale of the lands in question and was an accrued liability which according to the mercantile system of accounting the appellant was entitled to debit in its books of account (1) , 14.
(2) (1932) L.R. 59 I.A. 290, 296.
(3) (4) (1931) L.R. 58 I.A. 239, 252.
199 for the accounting year as against the receipts of Rs. 43,692 11 9 which represented the sale proceeds of the said lands.
Even under section 10(2) of the Income tax Act, it might.
possibly be urged that the word " expended was capable of being interpreted as " expendable "or to be expended " at least in a case where a liability to incur the said expenses had been actually incurred by the assessee who adopted the mercantile system of accounting and the debit of Rs. 24,809 was thus a proper debit in the present case.
We need not however base our decision on any such consideration.
We are definitely of opinion that the sum of Rs. 24,809 represented the estimated amount which would have to be expended by the appellant in the course of carrying on its business and was incidental to the same and having regard to the accepted commercial practice and trading principles was a deduction which, if there was no specific provision for it under section 10(2) of the Act was certainly allowable deduction, in arriving at the profits and gains of the business of the appellant under section 10(1) of the Act, there being no prohibition against it, express or implied in the Act.
It is to be noted that the appellant had led evidence before the Income tax authorities in regard to this estimated expenditure of Rs. 24,809 and no exception was taken to the same in regard to the quantum, though the permissibility of such a deduction was questioned by them relying upon the provisions of s.10(2) of the Act.
It therefore follows that the conclusion reached by the High Court in regard to the disallowance of Rs. 24,809 was wrong and it should have answered the referred question in the affirmative.
Before we conclude, we are bound to observe that having accepted the receipts of Rs. 43,692 11 9 in their totality even though a sum of Rs. 29,392 11 9 only was actually received by the appellant in cash, thus making the ' appellant liable for income tax on a sum of Rs. 14,300 which had not been received by it during the accounting year, it was hardly open to the Revenue to urge that the sum of Rs. 24,809 should not have been allowed as a permissible deduction before 200 arriving at the profits or gains of the appellant which were liable to tax.
Consistently enough with this attitude, the Revenue ought to have expressed its willingness to treat only a sum of Rs. 29,392 11 9 as the actual receipt of the appellant during the accounting year and made up the computation of the profits and gains of the appellant 's business on that basis.
The Revenue, however, did nothing of the sort and insisted upon having its pound of flesh, asking us to delete the whole of the item of Rs. 24,809 from the debit side of the account which it was certainly not entitled to do.
We accordingly allow the appeal, set aside the judgment of the High Court and answer the referred question in the affirmative.
The respondent will of course pay the appellant 's costs throughout.
Appeal allowed.
| The appellant company carried on land developing business and sold land after development on a profit.
The whole of the development was not carried out before the land was sold nor the whole of the sale price received in cash at the time of the sale.
In the accounting year in question the appellant sold a number of plots and received a portion of the sale price but as it maintained its accounts in the mercantile method it entered the whole price receivable, viz., Rs. 43,692 11 9, in credit side though only Rs. 29,392 11 9 was actually received and debited a sum of Rs. 24,809, being the estimated expenditure for the developments it had, by terms incorporated in the deeds of sale, under taken to carry out within six months thereof, although no part of it was actually spent during that year.
The appellant claimed a deduction of the said sum of RS.
24,809 in computation of the profits and gains of its business during the assessment year.
The Income tax Officer, while accepting the method of accounting adopted by the appellant, disallowed the 'claim on the ground that no expenses had actually been incurred and the estimate was only a probable one.
The Appellate Assistant Commissioner as well as the Income tax Appellate Tribunal confirmed the disallowance on appeals and the High Court, on a reference under section 66(1) of the Income tax Act held against the appellant.
The question was whether the deduction claimed was a legally allowable expense of the year in question.
Held, that the liability which was undertaken by the appel lant under the deeds of sale was an accrued liability and not a contingent one.
Although the time of six months was not of the essence of the contract, the undertaking it had given was unconditional and absolute in terms and the liability must be held to have accrued on the execution of the deeds of sale though it was to be discharged at a future date.
Keshav Mills Ltd. vs Commissioner of Income tax, Bombay, [1953] S C.R. 950, referred to.
Peter Meychant Ltd. vs Stedeford (Inspector of Taxes), distinguished.
24 186 The difficulty in estimating such a liability for purposes of debit under the mercantile system of accounting could be no ground for treating an accrued liability as a conditional one, since it was always open to the Income tax authorities to arrive a proper estimate thereof having regard to all the circumstances of the case.
Gold Coast Selection Trust Ltd. vs Humnphrey (Inspector Taxes), [19481 A.C. 459, referred to.
Regard being had, therefore, to the accepted commercial practice and trading principles, the estimated deduction, even if it did not come under any of the specific provisions Of section 10(2) of the Act, was certainly an allowable deduction under section 10(1) of the Act, there being no prohibition, either express or implied, against it in the Act and, consequently, the question must be answered in the affirmative.
Badridas Daga vs The Conimissioncr of Income tax, ; Russel vs Town and Country Bank Ltd., ; Gyesham Life Assurance Society, vs Styles, ; Pondichcry Railway co Ltd. vs Commissioner of Income tax, Madras, (1913) L.R. 58 .A. 239 and Income tax Commissioner vs Chitnavis, (1932) L.R. 59 I.A. 290, referred to.
|
Appeal No. 195 of 1954.
Appeal by special leave from the judgment and order dated the 20th May, 1953 of the CustodianGeneral of Evacuee Property, New Delhi in Revision No. 387 R/Judl/53.
Achhru Ram, (Ganpat Rai, with him) for the appellant.
C. K. Daphtary, Solicitor General of India, (Porus A.Mehta and R. H. Dhebar, with him) for respondents Nos. 1 & 2. 1955.
October 28.
The Judgment of the Court was delivered by JAGANNADHADAS J.
This is an appeal by special leave against the order of the Custodian General of Evacuee Property dated the 20th May, 1953, revising an order of the Additional Custodian of East Punjab, Delhi, dated the 20th March, 1952.
The two questions raised before us on the facts and circum stances, to be stated, are (1) whether the Custodian General had the revisional power which he purported to exercise, and (2) was the order of the Custodian General on its merits such as to call for interference by this Court.
The appellant before us, one Mrs. Indira Sobanlal, is a displaced person from Lahore.
She was the owner of a house.
at Lahore known as 5, Danepur Road.
Malik Sir Firoz Khan Noon of West Pakistan owned 766 bighas of agricultural land in a village called Punjab Khore within the State of Delhi.
An oral exchange is said to have taken place between these two.
, of the said properties, on the 10 th October, 1947.
In pursuance of that exchange Malik Sir Firoz Khan Noon is said to have taken possession of the Danepur Road House.
The appellant is also said to have been put in possession of the said agricultural lands in Punjab Khore presumably by way of attornment 1120 of tenants who were in actual cultivating possession of the lands.
Under section 5 A of the East Punjab Evacuees ' (Administration of Property) Act, 1947 (East Punjab Act XIV of 1947), as amended in 1948 and applied to the State of Delhi, such a transaction required confirmation by the Custodian.
In compliance with this section the appellant made an application on the 23rd February, 1948, to the Additional Custodian of Evacuee Property (Rural), Delhi, for confirmation of the above transaction of exchange and of the consequent transfer to her of the property in agricultural land.
In view of certain rules which came into force later and which prescribed that the application was to be in a set form furnishing certain particulars, the appellant filed an amended application dated the 14th August, 1948, furnishing the required particulars.
This application was not disposed of by the Additional Custodian, for reasons not clear on the record, until the 20th March, 1952.
On that date he passed an order confirming the exchange.
Meanwhile, however, a, proposal was put up to the Additional Custodian by his Revenue Assistant to allot agricultural lands of the village Punjab Khore, including those covered by this exchange, to a number of refugee cultivators.
The proposal was approved by the Additional Custodian on the 12th June, 1949.
In pursuance thereof a detailed allotment was made to twenty six individual allottees on the 27th October, 1949.
There is a report of the Rehabilitation Patwari dated the 27th February 1950, on the record showing that the allottees entered into possession of the land and cultivated their respective lands and settled down in the village.
After the order confirming the exchange was passed by the Additional Custodian on the 20th March, 1952, the appellant filed an application on the 5th May, 1952, asking to be placed in possession, and for a warrant of delivery of possession to be issued against the various allottees and tenants of the land.
The Naib Tehsildar recommended that possession may be given to the appellant and that the Patwari may be informed accordingly to take the necessary action in the matter.
But it does 1121 not appear from the record whether this was done, or whether possession was in fact delivered.
At this stage, a notice under section 27 of the (Central Act XXXI of 1950), appears to have been issued to the appellant by the Custodian General to show cause why the order of the Additional Custodian dated the 20th March, 1952, confirming the exchange and the further orders dated the 20th and 28th July, 1952, sanctioning mutation and other consequential and incidental orders made in connection therewith be not set aside.
This notice appears to have been issued asking the appellant to show cause on the 4th May, 1953.
The case was adjourned to the 12th May, 1953, at the request of counsel for the appellant and thereafter a more detailed notice dated the 14th May, 1953, was issued setting out the various grounds on which the previous orders were sought to be set aside.
The learned Custodian General passed the order now under appeal on the 20th May, 1953, setting aside the order of confirmation.
He directed the Custodian to decide the case after giving notice to all those who might be affected by the confirmation of this transaction.
As the earlier part of his order shows, the reference to the persons affected was to those who were allotted the lands in question by virtue of the order of the Additional Custodian of the year 1949 above referred to.
To appreciate the first question that has been raised as to the validity of the exercise of revisional powers by the Custodian General on the above facts, it is necessary to set out the course of the relevant legislative measures from time to time.
To meet the unprecedented situation of sudden migration of vast sections of population on a large scale from West Punjab to East Punjab and vice versa, leaving most of the properties which they had, moveable and immoveable, agricultural and nonagricultural, the concerned Governments bad to take wide legislative powers to deal with the situation, to set up the necessary administrative machinery, and to evolve and give effect to their policies in regard thereto from time to time.
The earliest of these legislative measures so far as we are concerned, was the East Punjab Evacuees (Administration of Property) Act, 1947 (East Punjab Act XIV of 1947), which came into force on the 12th December, 1947.
This Act was amended by the East Pun jab Evacuees ' (Administration of Property) (Amendment) Ordinance, 1948 (East Punjab Ordinance No. II of 1948) and later by East Punjab Evacuees ' (Administration of Property) (Amendment) Act, 1948, (East Punjab Act XXVI of 1948), which inserted two new sections, 5 A and 5 B I prescribing the requirement of confirmation Of transactions relating to eva cuee property and providing a right of appeal or revision therefrom.
These sections were specifically made applicable to transactions on or after the 15th August, 1947.
The above Punjab Legislative measures were extended to the State of Delhi by Central Government notifications under the Delhi Laws Act, dated the 29th December, 1947, the 28th January, 1948, and the 22nd April, 1948, respectively.
In so far as these measures applied to Chief Commissioners ' Provinces they were repealed by the Administration of Evacuee Property (Chief Commissioners ' Provinces) Ordinance, 1949, (Central Ordinance No. XII of 1949) which came into force so far as Delhi is concerned on the 13th June, 1949.
This Ordinance, in its turn, was repealed and a fresh Central Ordinance came into force in its place, applicable to all the Provinces of India except Assam and West Bengal.
That was Administration of Evacuee Property Ordinance.
, 1949, (Central Ordinance No. XXVII of 1949), which came into force on the 18th October, 1949.
This Central Ordinance in its turn was repealed and replaced by the (Central Act XXXI of 1950) which came into force on the 17th April, 1950.
It is necessary to notice at this stage that until the Central Ordinance XXVII of 1949 was passed, the Evacuee Property law was regulated by the respective Provincial Acts and were under the respective Provincial administrations.
Central Ordinance 1123 No. XXVII of 1949 provided for a centralised law and centralised administration which was continued by Central Act No. XXXI of 1950.
One of the main steps taken for such centralised administration was to create the office of Custodian General with powers of appeal and revision as against the orders of Provincial Custodians.
Section 5 of the Central Ordinance No. XXVII of 1949 authorised the Central Government to appoint a Custodian General of Evacuee Property in India for the purpose of discharging the duties imposed on him by or under the Ordinance, while the appointment of Provincial Custodians, Additional, Deputy or Assistant Custodians, was still left to the various Provincial Governments.
These provisions were continued by sections 5 and 6 of Central Act XXXI of 1950.
As regards the transactions by evacuees relating to evacuee property, the first legislative interference in East Punjab and Delhi appears to have been by virtue of East Punjab Evacuees (Administration of Property) (Amendment ') Ordinance, 1948 (East Punjab Ordinance No. II of 1948) and the East Punjab Evacuees ' (Administration of Property) (Amendment) Act, 1948 (East Punjab Act XXVI of 1948) which inserted two new sections 5 A and 5 B into the East Punjab Act XIV of 1947.
The said sections were as follows: "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.
(3) The Custodian shall reject any application made after the thirty first day of March, 1948 or after 142 1124 the expiration of two months from the date the transaction was entered into, whichever is later.
(4) The Custodian shall hold a summary enquiry into an application, which is not rejected under subsection (3) and may decline to confirm the transaction if it appears to the Custodian that (a) the transaction was not a bona fide one for valuable consideration; or (b) the transaction is in the opinion of the Custodian prejudicial to the prescribed objects; or (c) for any other reason, to be given by the Custodian in writing, the transaction ought not to be confirmed.
(5)If the Custodian confirms the transaction, he may confirm it unconditionally or subject to such conditions and terms as he may consider proper.
(6)The Custodian, if the order is not pronounced in the presence of the applicant, shall forthwith give notice in writing to the applicant of any order passed by him under sub sections (3), (4) or (5).
" 5 B. If the original order under section 5 A is passed by an Assistant or Deputy Custodian of Evacuee Property, any person aggrieved by such order may appeal within sixty days from the date of the order to the Custodian of ]Evacuee Property who may dispose of the appeal himself or make it over for disposal to the Additional Custodian of Evacuee Property; and subject only to the decision on such appeal, if any, the order passed by the Assistant or 'Deputy Custodian of Evacuee Property, or any original or appellate order passed by the Custodian or Additional Custodian of Evacuee Property shall be final and conclusive".
It will be seen that these two sections enjoined that transfers by an evacuee or intending evacuee relating to his property from and after the 15th August, 1947, required confirmation and provided for appeal or revision from the orders passed on applications therefor and subject thereto, such orders were made final and conclusive.
The requirement as to confirmation has been substantially continued in more or less the same form by sections 25, 38 and 40 respectively of 1125 the successive legislative measures with certain modi fications which are not material for this case.
But so far as the appealability or revisability of an order passed on an application for confirmation is concerned.
, there have been changes from: time to time.
It will be seen from section 5 B of the East Punjab Act, XIV of 1947, as quoted above, that any original order passed by the Custodian or Additional Custodian is not subject to appeal or revision and it is specifically declared to be final and conclusive.
Central Ordinance No. XII of 1949 by section 30(1) (b) thereof provided for an appeal to the High Court against an original order of a Custodian or Additional Custodian or authorised Deputy Custodian but there was no provision for revision of such an order.
Under the Central Ordinance No. XXVII of 1949 the position was substantially different.
Section 24 thereof, inter alia, provided that.
any person aggrieved by an order made under section 38 (which corresponds to the previous section 5 A of the East Punjab Act XIV of 1947) may prefer an appeal in ,such manner and within such time as may be prescribed, to the Custodian General where the original order has been passed by the Custodian, Additional Custodian or an Authorised Deputy Custodian.
Section 27 thereof provided for revisional powers of the Custodian General but it was specifically confined to appellate orders and there was no power given thereunder for revision by the Custodian General of an original order passed by the Custodian.
But under Central Act XXXI of 1950 which repealed and replaced this Ordinance the position became different.
The provision for appeal under section 24 thereof was virtually the same as before, in so far as it is relevant here.
But as regards revision, however, section 27 of the Act provided for the revisional powers of the Custodian General in the following terms: "27.
(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 for the purpose of satisfying him 1126 self as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit: Provided that the Custodian General shall not pass an order under this sub section prejudicial to any person without giving him a reasonable opportunity of being heard. . . . . . . " The question relating to the validity of the revisional powers exercised by the Custodian General in the present case arises with reference to the provisions above mentioned.
It is not disputed that Malik Sir Firoz Khan Noon was an evacuee.
Nor is it disputed that this property in Punjab Khore which was the subject matter of the exchange was evacuee property.
Though the exchange in question was alleged to have taken place on the 10th October, 1947, at a time when there was no restriction against any evacuee dealing with the property he left behind, it is indisputable that section 5 A of the East Punjab Act XIV of 1947 which has been specifically made retrospective from the 15th August, 1947, operates in respect of the present transaction also.
It, therefore, requires confirmation under the said section and under the corresponding sections in the subsequent legislative measures in this behalf.
It was in compliance with this requirement that the appellant made an application for confirmation on the 23rd February.
1948, and that a subsequent amended application was filed on the 14th August, 1948.
It is these applications that were disposed of on the 20th March, 1952, by the Additional Custodian, Delhi, by an order confirming the exchange, which has since been revised by the Custodian General on the 20th May, 1953.
The main contention of the learned counsel for the appellant is to the powers which are vested in the Custodian General to revise the original orders of the Custodian or Additional Custodian under section 27 of the Central Act XXXI of 1950 are not applicable to an order passed by the Custodian or Additional 1127 Custodian on an application made long prior to the time when the office of the Custodian General was set up and he was clothed with powers of revision.
It is urged that on the date when the application for confirmation was first made on the 23rd February, 1948, an order passed under section 5 A by the Custodian or Additional Custodian is final and con clusive under section 5 B.
It is strongly urged that the subsequent repeal and re enactment of these provisions cannot affect the right vested in the appellant to obtain a final and conclusive order from the Custodian or Additional Custodian on her application for confirmation.
Section 6 of the General Clauses Act and the Privy Council case in the Colonial Sugar Refining Co. Ltd. vs Irving(1) were relied on in support of this contention.
To determine the validity of this contention, it is necessary to trace the course of the various relevant statutory provisions from time to time which repealed the prior corresponding legislative measures and to determine the effect thereof.
The East Punjab Act XIV of 1947 was replaced by the Central Ordinance No. XII of 1949 relating to Chief Commissioners ' Provinces.
Section 40 thereof which repealed the prior Act was as follows: "40.
(1) The East Punjab Evacuees ' (Administration of Property) Act, 1947 (East Punjab Act XIV of 1947), as in force in Ajmer Merwara and Delhi, is hereby repealed.
(2)Notwithstanding such repeal, anything done or any action taken in the exercise of any power conferred by the Act aforesaid shall, in relation to the Provinces of Ajmer Merwara and Delhi, 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 said Act 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".
When this Ordinance was in turn repealed by (1) 1128 Central Ordinance No. XXVII of 1949, the repealing section 55 was as follows: "55.
(1) The Administration of Evacuee Property Ordinance, 1949 (XII of 1949), as in force in the Chief Commissioners ' Provinces is here by repealed.
(2). . . . . (3)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".
Ordinance No. XXVII of 1949 was in its turn repealed by Central Act XXXI of 1950.
This Act was amended by an Ordinance and later by an Act of, the same year.
Section 58 is the repealing provision of this Act as so amended.
The material portion thereof is as follows: "58.
(1) The Administration of Evacuee Property Ordinance, 1949 (XXVII of 1949) is hereby repealed.
(2). . . . . . (3)The repeal by this Act of the Administration of Evacuee Property Ordinance, 1949 (XXVII of 1949). . shall not affect the previous operation thereof, and subject thereto, 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 was taken".
Thus in the transition of the Evacuee Property law 1129 relating to Delhi, from the East Punjab Act XIV of 1947 to the present Central Act XXXI of 1950, there have been three repeals.
The first two repealing provisions are in almost identical terms but the third is somewhat different.
The difference is in two respects.
(1) The provision in the previous repealing sections that "any penalty incurred or proceeding commenced under the repealed law shall be deemed to be a penalty incurred or proceeding commenced under the new law as if the new law were in force on the day when the penalty was incurred or proceeding commenced" is now omitted.
(2) The provision that "anything done or any action taken in exercise of any power conferred by the previous law shall be deemed to have been done or taken in exercise of the powers conferred by the new law as if the new law were in force on the day when such thing was done or action taken" is continued.
But it is specifically provided that this is subject to the repeal not affecting the "previous operation of the repealed law" which in the context clearly means the previous operation of the repealed law in respect of "anything done or any action taken".
The question thus for consideration is what is the result brought about by these provisions.
Before proceeding to determine it, it is desirable to consider whether section 6 of the General Clauses Act can be relied on.
The position as regards section 6 of the General Clauses Act in the case of repeal and re enactment has been considered by this Court in State of Punjab vs Mohar Singh( ') and laid down as follows at page 899: "Whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears.
In the case of a simple repeal there is scarcely any room for expression of a contrary opinion.
But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention.
(1) ; , 899.
1130 The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them.
We cannot therefore subscribe to the broad proposition that section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation.
Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or con trary to the provisions of the section.
Such incom patibility would have to be ascertained from a consideration of all the relevant provisions of the new law. . . ".
In the present case sub section (3) of section 58 of Central Act XXXI of 1950 purports to indicate the effect of that repeal, both in negative and in positive terms.
The negative portion of it relating to "the previous operation" of the prior Ordinance appears to have been taken from section 6(b) of the General Clauses Act, while the positive portion adopts a "deeming" provision quite contrary to what is contemplated under that section.
Under the General Clauses Act the position, in respect of matters covered by it, would have to be determined as if the repealing Act had not been passed, while under section 58 of Central Act XXXI of 1950, the position so far as the positive portion is concerned has to be judged as if the repealing Act were in force at the earlier relevant date.
Therefore where, as in this case, the repealing section which purports to indicate the effect of the repeal on previous matters, provides for the operation of the previous law in part and in negative terms, as also for the operation of the new law in the other part and in positive terms, the said provision may well be taken to be self contained and indicative of the intention to exclude the application of section 6 of the General Clauses Act.
We are, therefore, of the opinion that the said section cannot be called in aid in this case.
Now, as to the meaning of section 58(3) of Central Act XXXI of 1950, it must be admitted that this is not free from difficulty.
This kind of provision in a 1131 repealing Act appears rather unusual.
Learned counsel for the appellant urges that the positive portion of this provision, i.e., "anything done or any action taken in exercise of any power conferred by or under, the 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 was taken" applies only to purely administrative matters and that his case falls within the scope of the first portion, viz., "the repeal. . shall not affect the previous operation of the (repealed) Ordinance".
His contention is that the application for, confirmation which was made by the appellant in 1948 and which remained pending until Act XXXI of 1950 came into force and superseded the earlier legislation in this behalf, had to be disposed of in accordance with sections 5 A and 5 B of the East Punjab Act XIV of 1947, as amended in 1948; that the order of confirmation passed by the Additional Custodian in such a pending application was not open to appeal or revision but became final and conclusive.
It is urged that on the filing of the application in 1948, the appellant got a vested right to have it determined under section 5 A with the attribute of finality and conclusiveness under section 5 B attaching to such determination.
According to the learned counsel this follows from the "previous operation" of the repealed law and is in consonance with the principle laid down by the Privy Council in Colonial Sugar Refining Co. Ltd. vs Irving(1).
It appears to us that these contentions are unsustainable.
Colonial Sugar Refining Co. Ltd. vs Irving(1) relates to the case of a right of appeal against an order passed or to be passed in a pending action.
Their Lordships treated the right of appeal to a superior tribunal in a pending action as an existing right and held that the suitor cannot be retrospectively deprived of it except by express words or by necessary implication.
This doctrine was affirmed by the Privy Council in Delhi Cloth & General Mills Co. Ltd. (1) 143 1132 vs
Income Tax Commissioner, Delhi(1) in its application to the converse case in the following terms: "Their Lordships can have no doubt that provisions 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".
It may be noticed that in the case in Delhi Cloth & General Mills Co. Ltd. vs Income Tax Commissioner(1), the orders of the High Court from which appeals were sought to be filed to the Privy Council were dated the 6th January, 1926 and 12th January, 1926.
As the Indian Income tax Act stood at the time and according to the interpretation of section 66 thereof by the Privy Council in Tata Iron & Steel Co. vs Chief Revenue Authority, Bombay(2) there was no appeal to the Privy Council.
The legislature by an amendment of the Income tax Act, which came into force on the 1st April, 1926, inserted therein section 66 A and gave a right of appeal against such orders as provided therein.
In this situation the Privy Council repelled the contention that the litigant could avail himself of the new provision by pointing out the finality of the orders fought to be appealed against and referring to it as an existing right.
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, 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.
Each of these Ordinances provided for (1) Lahore 284.
(2) (1923] L.R. 50 I.A. 212.
1133 appeal against such an order and the second of them provided for the exercise of revisional power against an appellate order of the Custodian.
Learned counsel for the appellant contends that, even so, the finality and conclusiveness, which would have attached to an order made under section 5 A, if made before Ordinance XII of 1949 was promulgated, was affected only to the extent of its being subject to an appeal and not to revision.
But once the attribute of finality in respect of such an order is affected by subsequent legislation, it does not appear to be of consequence that it was affected first by a provision for appeal and later by provisions for appeal and revision.
It is difficult to see that such provisions, in those cir cumstances, are anything more than alterations in procedure.
However this may be, it appears to be clear that while a right of appeal in respect of a pending action may conceivably be treated as a substantive right vesting in the litigant on the commencement of the action though we do not so decide no such vested right to obtain a determination with the attribute of finality can be predicated in favour of a litigant on the institution of the action.
By the very terms of section 5 B of East Punjab Act XIV of 1947, finality attaches to it on the making of the order.
Even if there be, in law, any such right at all as the right to a determination with the attribute of finality, it can in no sense be a vested or accrued right.
It does not accrue until the determination is in "fact made, when alone the right to finality becomes an existing right as in Delhi Cloth and General Mills Co. Ltd. vs IncomeTax Commissioner(1).
We are, therefore, of the opinion that the principle of Colonial Sugar Refining Co. Ltd. vs Irving(2) cannot be invoked in support of a case of the kind we are dealing with.
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 (1) Lahore 284, (2) 1134 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.
The application can be dealt with by the Custodian and on appeal by the Custodian General only as functioning under the previous law.
But as such Custodian or Custodian General they have disappeared by virtue of the repeal.
It is only the second portion of section 58(3) which continues them as though the appointments were made under the new Act a position which could scarcely be controverted.
To the extent of the future operation, if any, of the repealed law they can have no function.
Indeed, a comparison of the wording of section 58 of Act XXXI of 1950 with the wording of section 6 of the General Clauses Act would show that if the legislature intended either that pending proceedings were to be continued under the previous law or that anything in the nature of vested right of finality of determination or some right akin thereto was to arise in respect of such pending proceedings, the negative portion of section 58(3) would not have stopped short with saving only the "previous operation" of the repealed law.
It would have borrowed from out of some portions of the remaining sub sections (c), (d) and (e) of section 6 of the General Clauses Act, and provided in express terms for the continuance of the previous law in respect of pending pro ceedings.
Obviously no particular sub section of section 6 of the General Clauses Act could be borrowed in toto as that would contradict the positive portion of section 58(3) of Act XXXI of 1950 and would be inconsistent with the idea underlying it.
We are,therefore, clearly of the view that the appellant cannot call in aid the principle of the case in Colonial Sugar Refining Co. Ltd. V. Irving(1), nor can his case fall within the ambit of the first portion of sub section (3) of section 58 of Act XXXI of 1950.
The next question for consideration is how the (1) 1135 second and positive portion of section 58(3) of Act XXXI of 1950 is to be understood.
This portion says that "anything done or any action taken in exercise of any power conferred by or under the (repealed) 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 was taken".
To appreciate the meaning of this it is desirable to have a general idea of the scheme of the repealed Ordinance, the powers exercisable thereunder, and the nature of the things that may be done, or action that may be taken, thereunder.
The powers exercisable are to be gathered from various sections and broadly speaking fall under the follow ing categories.
To make appointments sections 5 and 6. 2.
To make enquiries sections 7, 16, 19 and 38 and to make declarations or issue notifications as a result thereof.
To make various kinds of consequential or administrative order such as those under sections 9, 10, 11, 12 and 21. 4.
To hear and dispose of appeals, reviews or revisions sections 24, 25, 26 and 27.
5.Power of the Central Government, to exempt, to give directions, to take action with regard to evacuee property, to delegate powers and to make rules sections 49, 50, 51, 52 and 53.
In addition there are provisions which bring about various consequences such as vesting in the Custodian, valid discharge by payment to the Custodian, attachment, and so forth, sections 7 (2), 8, 11, 13, 16 (3), 19 (3), 20 and 22, etc.
The above enumeration is by no means intended to be exhaustive but is merely to illustrate the scheme of the various provisions in the Ordinance with reference to which section 58 of the Act has to be understood.
There are also rules framed by virtue of section 53 of the Ordinance under which various powers may be exercised, things done, and action taken.
If section 58 (3) of Central Act XXXI of 1950 which 1136 repealed the prior Ordinance is understood with reference to the above scheme, there is no reason to confine the operation of the second portion of section 58(3) to administrative action as suggested by learned counsel for the appellant.
Broadly speaking, the second portion of section 58(3) refers to the whole range of, things that may be done, or action that may be taken, under the previous Ordinance and the rules framed thereunder, while the first portion of section 58(3) relates to the legal consequences resulting under the Ordinance or the rules from certain facts or from completed acts or things done thereunder.
Without attempting to be meticulously accurate, it may be stated in general terms, that the scheme underlying section 58(3) appears to be that every matter to which the new Act applies has to be treated as arising, and to be dealt with, under the new law except in so far as certain consequences have already ensued or acts have been completed prior thereto to which it is the old law that will apply.
In this view of section 58, the application of the appellant for confirmation pending on the date when Central Act XXXI of 1950 came into force had to be dealt with and disposed of under this Act and the order of confirmation passed in 1952 would clearly be subject to the revisional power of the Custodian General under section 27 of the said Act.
It is next contended that the revisional power cannot be exercised when there was an appeal provided but no appeal was filed, that it was open to the Assistant Custodian who appeared before the Custodian General in support of the notice for revision or to the allottees of the property in whose interest the revisional order appears to have been passed, to file an appeal under the Act as persons aggrieved.
Section 27 however is very wide in its terms and it cannot be construed as being subject to any such limitations.
Nor can the scope of revisional powers be confined only to matters of jurisdiction or illegality as is contended, because under section 27, the Custodian General can exercise revisional powers "for the purpose of satisfying himself as to the legality or 1137 propriety of any order of the Custodian".
We are thus clearly of the opinion that the contention of the learned counsel for the appellant that the exercise of revisional powers in this case by the Custodian General is without jurisdiction or is illegal, must fail.
The next question to be considered is as regards the merits of the revisional order of the Custodian General which is under appeal before us.
Learned counsel for the appellant attacked it on various grounds.
He urged that the ground on which the learned Custodian General set aside the Additional Custodian 's order, viz., absence of notice to the prior allottees is wholly untenable.
He contended that the allottees had no kind of interest in the land which entitled them to contest the application for confirmation, that they were at best only lessees for three years which was due to expire very shortly after the order of confirmation was passed by the Additional Custodian.
He pointed out that as soon as the application for confirmation was filed on the 23rd February, 1948, general notice by beat of drum and affixture in the locality and by publication in the Indian News Chronicle article was given, that the persons in possession at the time were only the previous tenants on the land, who either attorned to the appellant or left the village, that the allottees came into possession much later and pending the disposal of the confirmation proceedings and presumably subject to its result.
He also pointed out that even when the rules in this behalf came into force under Act XXXI of 1950, it was discretionary with the Custodian to give notice to persons other, than the transferor and transferee, if he considered them to be interested, and urged that since the same officer, Shri R. Dayal, made the allotment as also the confirmation, he must be taken to have exercised his discretion properly in not giving any notice to them, in view of the imminent expiry of the three years term for which they were put in possession.
It is strongly urged that having regard to the above considerations and to the categorical findings of the Custodian General himself that the 1138 transaction which was confirmed, was perfectly bona fide, the setting aside of the order of confirmation against which no appeal was filed by any one, and the consequential disturbance of the vested property rights of the appellant, was in the nature of perverse exercise of revisional power.
The learned Solicitor General appearing for the respondent contended that the finding of the CustodianGeneral about the bona fides of the transaction was only tentative, that the allottees, though provisionally placed in possession for three years had, what has come to be recognised as, a quasi permanent interest, that they had a genuine interest in opposing the confirmation sought, which related to a large tract of agricultural land, and which would reduce the pool of agricultural lands available for rehabilitation of displaced agriculturists and that confirmation of transactions relating to such land was opposed to the policy and directives of the Government and that the confirmation should not, in the circumstances, have been lightly granted by the Additional Custodian without notice to the allottees and a proper consideration of the policies and directives in this behalf.
In reply thereto learned counsel for the appellant urged that the alleged policies or directives are not relevant matters for consideration by the Custodian in these proceedings which must be taken to be quasi judicial, if not judicial, unless such policies or directives are embodied in rules made by the Central Government under section 56(2) (q) and that no such rules were prescribed by the relevant dates and that even the Custodian General himself in his order under appeal discounted the usefulness of any reference to notifications and directives for the purposes of this case.
It was also urged that the matters which could be taken into consideration are regulated by section 40(4) of Act XXXI of 1950 and that clause (c) thereof must be construed as referring to matters ejusdem generis with clauses (a) and (b) But in the view we take of the order under appeal and the course we propose to adopt, we do not wish to express any opinion on the merits of the above arguments.
1139 The order under appeal is one passed by virtue of the wide powers of revision vested in the Custodian General under section 27 of the Act.
The jurisdiction which has been challenged having been found in favour of the Custodian General, this Court would normally be slow to interfere with the order on its merits.
But with respect to the learned CustodianGeneral, his order is such that it is difficult to maintain it.
The learned Solicitor General himself has been obliged to put forward arguments in support of it which cannot be clearly gathered from the order itself.
It is also difficult together from it whether the remand to the Additional Custodian for reconsideration, after notice was a general and open remand where all questions on the merits are to be reconsidered or was only a limited remand and if so what the limitations are.
If it was meant to be an open general remand, as the concluding portion of his order seems to indicate, his definite findings on points (1) and (2) which he formulated for himself and the doubt he has expressed in his order about the usefulness of examining afresh the various notifications and directives to which his attention was drawn by the Assistant ,Custodian, would render it difficult for any Custodian on remand to consider any of those matters.
If so, the remand would appear to serve no substantial purpose.
In the circumstances, and in fairness to the learned Custodian General, the only proper course would be to set aside his order under appeal and to remit the matter back to him for fresh consideration.
On such fresh consideration he will give full opportunity to both sides for presentation of their respective points of view.
If on the rehearing, he decides to remand the case to the Custodian, he will clearly indicate what are the matters to be considered by him.
The learned Custodian General may also consider the feasibility of his dealing with the matter finally by himself, calling for a report, if need be, from the Custodian on specified matters, in order to obviate any further delay by appeal and revision in this already protracted matter.
| According to section 98(1)(a) of the Bombay Industrial Rela tions Act, 1946 a lock out shall be illegal if it is com menced.
or continued in cases where it relates to any indus trial matter specified in Schedule III, Item 6(ii).
Item 6(ii) states "employment including unemployment of persons previously employed in the industry concerned".
On account of financial and other difficulties the appellant laid off workers in some departments of the mill.
After.
a few days the management declared a lock out alleg ing that the workers gheraoed some officers in the mill, started 'dharna ' and behaved in an unruly manner.
The Labour Court, to which the dispute was referred, held that there was no evidence of violence or of gheraoes, that the situation in the mills was not of such a grave nature as called for a lock out and that the management resorted to the lock out on the slightest opportunity in order to avoid payment of compensation, since it was in continuous financial difficulties heading towards a closure and closure would have put the company under obligation to pay compensation.
Dismissing the appeal, HELD: (1) A lock out can be declared for reasons similar to those described in the present notice of lock out.
In that case although it will be lock out in another sense it may not be a lock out within the meaning of section 3(24) of the Act.
That kind of lock out with the avowed object of pre venting violence and threat to life and property may be justified on facts in a given case.
In such a situation it may be difficult to prove that it is an illegal lock out since in an illegal lock out the sole object is to compel the workmen to accept the terms of the employer which the workers consider as unreasonable and oppressive.
[713 F G] But in the instant case though the views of the Labour Court that threats and gheraoes "are the normal behaviour when an occasion like this takes place" should be disap proved, the ultimate conclusion after appreciation of the evidence was not such as would call for interference in an application under article 136 of the Constitution.
[713 H] (2) Though the Act has not defined 'lay out ', even according to the dictionary meaning, lay off means to dis continue work or activity; to dismiss or discharge tempo rarily.
When workers are in employment and they are laid off, that immediately results in their unemployment, howso ever temporary.
and such an unemployment will clearly come under item 6(ii) in Schedule III of the Act.
Since unemploy ment is an industrial matter under item 6(ii) of Schedule Iii of the Act, the lock out which had been found by the Labour Court to have direct connection with lay off is clearly illegal under section 98(1)(a) of the Act.
[715 BC]
|
80, 80A. 81 and 116 to 213 of 1960.
Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights.
section V. Gupta, M. C. Bhandare, section N. Andley, Rameshwar Nath and P. L. Vohra, for the petitioners.
H. N. Sanyal, Additional Solicitor General of India, D. N. Mukherjee and P. D. Xenon, for the respondents.
Porus A. Mehta, J. R. Gagrat, and G. Gopalakrishnan, for the interveners.
August 11.
The judgment of Gajendragadkar, Hidayatullah, Shah and Raghubar Dayal, JJ., was delivered by Hidayatullah, J., Subba Rao,:J., delivered a separate judgment.
112 HIDAYATULLAH, J ' These writ petitions raise identical questions, and a common argument was addressed to the Court in all of them.
Petitions Nos. 80 and 80A of 1960 have been filed by two petitioners.
One petitioner holds a permanent ' licence and the other, a temporary licence renewable triennially, to work as Dalal 's at New.
Customs House, Bombay.
In the other petitions also, petitioners Nos.
1 to 50 hold permanent licences, and petitioners Nos.
51 to 99 hold temporary but renewable licences.
Some of the permanent licences were issued in 1936, and some of the temporary licences were issued as far back as 1944.
These licences, whether permanent or temporary, were issued under s.202 of the , prior to its amendment by the Sea Customs 'Amendment) Act, 1955 (Act 21 of 1955).
They were issued after a brief enquiry and subject to the fulfilment by the applicant of the following conditions : "(1) He must produce at least 2 certificates of character each from a Justice of Peace or other persons of known respectability.
(2) He must certify that he has not been convicted of any criminal offence.
(3) He must declare that he will have no claim to any accommodation in the Custom House.
(4) He must also give a security of Rs. 2000 in cash or Government paper having an equivalent market value and execute a Bond for Rs. 2000 on It fifteen rupees Stamp Paper in the attached form.
" In 1955, by the amending Act, s.202 was substituted by another section.
The section now reads : "202.
(1) With effect from such date as the Central Government may, by notification in the Official Gazette specify, no person shall act as an agent for the transaction of any business relating to the entrance or 113 clearance of any vessel or the import or export of goods or baggage in any Custom house unless such person holds a licence granted in this behalf in accordance with the rules made under sub section: (2).
(2) The Chief Customs authority may make rules for the purpose of carrying out the provisions of this section and in particular such rules may provide for (a) the authority by which a licence may be granted under this section and the period of validity of any such licence; (b) the form of the licence and the fees payable therefor; (c) the qualifications of persons who may apply for a licence (d) the :restrictions and conditions (including the furnishing of a security by the licensee) for his faithful behaviour as regards the custom house regulations and officers) subject to which a licence may be granted ; (e) the circumstances in which a licence may be suspended or revoked; and (f) the appeals, if any, against an order of suspension or revocation of a licence, and the period within which such appeals shall be filed.
" As A result of the enactment of this section, the original licence, whether permanent or temporary. would have become ineffective after.
the date to be specified by the Central Government.
It became necessary for the petitioners and others to apply for licences granted in accordance with the rules framed under sub section
These rules were framed, and public notices were issued.
inviting applications ; but the dates were postponed 114 till the rules were published in the Gazette on May 14, 1960.
It is not necessary to refer to the prior history of these rules and to the many representations that were made, as they are not relevant.
On June 18 1960, a public, notice (No. 87) was issued fixing June 25, 1960 as the last date for making applications for the new licences, and the persons affected were informed that the.
operation of the new licences under the rules would commence on July 14, 1960.
On June 27, 1960, Writ Petitions Nos. 80 and 80A of 1960 were filed, followed by Writ Petitions Nos. 81 and 116 to 213 of 1960 filed on July 12 1960.
An ex parte ad interim stay of the revocation of the existing licences was obtained from this Court, and subsequently, the respondents undertook to issue to the petitioners special temporary licences renewable yearly till the disposal of these petitions.
Prior to the.
Custom House Agents Licensing Rules, 1960, there were four classes of Agents.
They were (1) Clearing Agents, (2) Dalals., (3) Muccadams and (4) Baggage Clearing Agents.
According to the petitioners, there were, 100 licensed Clearing Agents, 200 licensed Dalals, 270 Muccadams and about 15 Baggage Clearing Agents.
The duties and functions of these four classes of agents were different.
Whether these distinctions were always maintained and whether they grew out of regulations or usage is hardly necessary to enquire.
By the Rules of 1960, these classes were merged into one, and all licensed agents were placed on an equal footing.
In other words, there is to be hereafter one class of agents ' Though the petitioners holding "permanent ' licences and the petitioners holding 'temporary" licences with a term to run out have relied upon the fact that their licences are still valid, there was no serious attempt to deny that under section 202(1) they would be rendered ineffective after the date to be fixed by Government.
The "permanent ' licences 115 also are not in a favourable position in this regard.
If the first sub section requires that fresh licences to work as Custom House Agents be obtained, the distinction between permanent and temporary licences ceases to be material.
No part of s.202 was challenged as being void or ultra vires.
In these petitions, only the Rules &ire challenged as in breach of the fundamental rights under articles 14 and 19 of the Constitution and Also as being in excess of the rule making power conferred by sub section (2) of section 202.
Form prescribed under the Rules for taking security from the approved agents is also questioned as being in excess of the power to make rules and contrary, in certain respects, to the itself.
It may be mentioned that the petitioners in all the Writ Petitions are Dalals; but at the hearing, certain Clearing Agents obtained permission to intervene, and were also heard.
Since the , ' in general and section 202, in particular were.
not challenged in the petitions, we must start with the premise that the authority to insist , on fresh licences under the Rules in the case of all the operators was properly exercised.
The first question to consider is whether the Rules, speaking generally, were validly framed and the next question to consider is whether any of the.
Rules individually challenged goes beyond the , or offends against the Constitution.
In questioning the Rules generally, the petitioners submit that these Rules could only be framed for the purpose of carrying out the purposes of s.202 [ provide sub section
(1) ], or, to provide for the, matters 'mentioned in cls.
(a) to (f) of section 202(2).
Some of the Rules.
it is submitted, go beyond the general purpose of the section, which is to license agents and the special 'topics mentioned there, and seek to further some of the purposes of other parts of the Act.
Mention in this connection 116 is made specially of Form 'O ' prescribed by the Rules, under which the agents personally and the security furnished by them have been made liable for short collection of Customs duty, etc.
The question whether the agents are liable, in any event,.
for such short collection under section 39 is a question, which will have to be examined on merits separately, but for repelling the argument in its present from, it is sufficient to say that it is robbed of all its force by a. 9 of the .
under section 202(2), the Chief Customs authority is empowered to make rules for the purposes of t hat section.
That purpose is the licensing of agents and the regulation of their conduct and functions.
But the Chief Customs authority is also empowered by section 9 to make rules consistent with the " 'generally to carry out the provisions of this Act".
The power to make rules under section 202 is not the only power which the Chief Customs authority can exercise, and it is only too clear that power can also be derived from section 9, if there be need.
Thus, if it is necessary that the agents must carry out certain provisions of the Act, a rule can be made in the exercise of the two powers together.
Though the impugned Rules are headed as framed under s.202 of the ., they cannot be questioned, if they carry out not only the special purposes of s.202 but also certain other purposes of the Act, because the two powers will concur to sustain them.
It is only when a rule or rules are pointed out, which subserve neither the special purpose of the section nor the general purposes of the Act that they can be successfully questioned.
In short, therefore, the petitioners ' case on the individual Rules alone remains to consider.
The first contention is that under the impugned Rules, the number of licences to be granted at the Customs House can be limited by the Customs.
collector, and that applications can only be made, if the Customs collector publishes a notice inviting 117 applications.
This restriction, it is contended, is unconstitutional, as it interferes with the right of all the petitioners to carry on their profession or a vocation freely as contemplated, by Art, 19.
The Rules bearing upon these matters are rr.4 and 8.
The latter Rule says that the number of licences to be granted would be fixed by the Customs collector, having regard to the volume of import and export business transacted through the Customs House, and the number is capable of being revised from time to time.
The former empowers the Customs collector to invite applications, as and when he considers it necessary.
It cannot be said that the Rules are not designed to advance public interest, because even a processions or trade has sometimes to be limited in the public interest, When we pointed out to Mr. Gupta that this kind of limitation on the number of persons allowed to hold licences is common, as, for example, porters in a railway station, taxicab drivers and so on, he stated that at least during the transitional period, the old operators might have been given licences on production of proof that they held licences previously.
The argument is really not one based upon the interests of the public but upon the interests of the present holders of the licences.
Public interests in the context must override private interests.
It cannot be said that all the present operators are equally desirable, and if their number exceeds the requirement of the Customs House, it is obvious that some retrenchment in their numbers may legitimately be made, Every one has an equal chance of applying for the.
existing vacancies, but he must stand in.
competition with the others.
There is no limitation on the number of applications that can be made, and thus, every operator will get ' a chance to have his case examined.
It is to be expected that the most exprienced and the most efficient will get preference, and.
no claim can be made on behalf of the incompetant and the inefficient that they should 118 receive equal treatment.
Once the number is limited to the requirements of the business, it is manifest that the Customs collector will invite applications only, as and when occasion demands.
These Rules, in our opinion, cannot be said to ' offend against the Constitution.
The next contention is about rr.6(a), (b) and (c), which require the applicant to furnish to the Customs collector satisfactory evidence as to his respectability, reliability and financial status, and that he would be in a position to muster sufficient clientele and business in the event of his being granted the licence.
The applicant has also to furnish an income tax clearance certificate.
These conditions are challenged as being unreasonable restrictions upon the right to carry on a profession or avocation.
Serious attempt was not made to establish that the condition about respectability and reliability was unconstitutional.
It was, however, pointed out that evidence about financial status created a class barrier between the rich and the poor and only the rich were to be preferred.
By the words financial status" is not meant that the applicant must be a wealthy person; what is required is that he should not be financially embarrassed, and proof that he is in easy circumstances.
It is obvious that the agents under the Act deal with vast sums of money and valuable articles, and it may be necessary to scrutinise the financial position the applicant to find out whether or not he would be exposed to temptations.
A person heavily indebted or insolvent cannot be trusted in the same way as a person who is not so embarrassed, and an enquiry into financial status is so much in the public interest, that we cannot say that the condition must necessarily be unreasonable.
Similarly, the argument.
that new entrants would find it difficult to assure that they would have sufficient clientele and business and would thus be discriminated against, is not correct.
The Customs House is not a place where persons can allowed to learn a 119 profession or to take a chance.
The movement of goods, the due performance, of the duties and functions under the and observance of the regulations are not easy matters for a person, who is not sufficiently experienced and who has not got the backing of a certain amount of business and the experience which such business affords.
It may be necessary for a person to apprentice himself for some time to get to know the importers and exporters, and to prove to the Customsauthority that by reason of his apprenticeship and his business connections lie would be in a position to handle the work in the Customs House from the moment he is licensed.
The Rule is designed to avoid entry into the Customs House premises of persons who, being there, are unable to do business, and merely add to the number of persons present.
The last condition is the production of an income tax clearance certificate.
The petitioners rely upon a decision of the Madras High Court reported in K. Raman and Co. vs State of Madras (1).
In that case, it was hold that the fact that a person was in arrears of income tax was not germane to the issue of a licence under the Yarn Dealers Control Order, and that the insistence on the production of an income tax clearance certificate was extraneous to the carrying on of the business.
The position of an agent who handles other persons ' moneys and goods is different from that of a dealer who deals with goods on his own behalf.
As part of an enquiry into an applicant 's respectability, reliability and financial status, an enquiry can also be made to see whether he has discharged his debts to the State.
If a person is liable to income tax and pays it punctually, he would have no difficulty in proving it.
If, however, for some good reason the payment has been delayed, there would be nothing to prevent.
him from proving it.
(1) A.I.R. 1953 Mad '.
8A. 120 insistence upon the production of the certificate is, in our opinion, connected with the enquiry into his respectability and financial status.
to find out if he can be trusted with other persons ' money and goods.
The next Rule which is questioned is r. 9, which provides for an examination of the applicant.
This examination follows a scrutiny of the application under the other Rules, and embraces questions on various subjects.
The duties of the agents require them to handle goods, and the examination is designed to find out whether a candidate knows the elements of the law relating to the arrival, entry and clearance of vessels and goods.
Objection is not raised to the examination as a whole but only to cl.
(p) of r. 9 (2) under which a candidate is supposed to know the procedure in the matter of refund of claims, appeals and revision petitions under the .
It is contended that these are matters in which an agent is not interested as an agent, but are matters for the owner and the Castoms authorities to know.
It is true that the curriculum for the examination is somewhat extensive ; but it is also, clear that what is expected of the candidate is knowledge, not necessarily exhaustive but sufficient, of the laws relating to the arrival, entry and clearance of vessels and goods.
We do not think that it is wrong for the.
authorities to insist upon at least a working knowledge of the laws applicable to the kind of work the agents are required to do.
When licences are issued under other laws, a candidate is sometimes required to answer questions relating to the law under which the licence is issued.
One well known example is the questioning of a candidate about the rules of the road when he is issued a licence to drive a mechanically propelled vehicle.
These Rules advance efficiency, and the additional know, ledge about refunds, appeals and revisions under the Act may be necessary where an agent handles 121 goods of a principal, who is himself not present to file appeals or revisions or to claim refunds.
The Rule, in our opinion, is perfectly valid.
Rule 10 is the next subject of attack.
It provides that the Customs collector shall reject an application, for the grant of a licence (a) if the candidate fails to pass the examination, or (b) the number of vacancies do not justify the grant of such licence, or (c) the applicant is not otherwise considered suitable.
Objection is taken to cl.
It is said to confer a very wide discretion on the Customs collector, and reference is made to sub r.(2), in which it is provided that no appeal shall lie from the order.
of the Customs collector rejecting an application.
It is further pointed out that in July, 1960, the Rules were amended by the addition of r. 25, under which an appeal is to lie to the Chief Customs authority against every order of the Customs collector (i) rejecting an application for the renewal of a licence granted under these Rules; (ii) rejecting a fresh application made in accordance with r. 17 ; and (iii) refusing the grant or renewal of a special temporary licence under r. 24.
It is argued that even though an appeal has been provided for these matters.
, no appeal has been provided for the rejection under r. 10(1)(c).
No doubt, other reasons may exist for rejecting the application of a candidate, as for example, when he is found to be a leper or an epileptic ; but one would expect that an order of this kind would ' be backed by reasons to be recorded in writing.
It must be remembered that there is first a scrutiny of the application and an enquiry into the respectability, reliability and financial status of the candidate.
follows an examination, If a ' candidate satisfies 'all the above condition 's, there would hardly be any ground left.
for rejecting his application, except probably his physical unfitness to.
the work, The Rule which: is framed is so gel general that it leaves to discretion of the 122 Customs collector to reject a. candidate for a trumpery reason (which he need not state), even though the candidate may be otherwise suitable.
In out opinion, if a candidate is found fit under the other Rules and has successfully passed the examination, he should only be rejected under a rule which requires the Customs collector to state his.
reasons for the rejection, and the rules must provide for an appeal against that order, as they do in the other cases.
As the Rule stands, it cannot be considered to be a reasonable restriction upon the right of the successful candidate to carry on his avocation.
The next Rule which is questioned is r. 11, which enjoins the payment of a fee of Rs. 50 both for a fresh application as well as renewal of the licence.
In so far as the fee for the grant of a licence in the first instance is concerned, it cannot be said that the charge is exorbitant.
It is not disputed that a fee is an amount collected to reimburse the Government for the expenses of licensing.
It must reasonably be measured against the cost which may be entailed in the process of granting licences.
In the initial stage, the Customs authorities have to scrutinise applications, subject the candidates to an examination, and provide them with licences to carry on their work.
A fee of Rs. 50 initially may not be considered unreasonable, regard being had to the services involved.
The same, however, cannot be said in the case of renewals.
It is pointed out in the petition that formerly the charge was only 50 nP. It is averred in the petition that all that the licensing authority does, is to make an endorsement on the licence that it is renewed for a further period.
It has been ruled in this Court that under the guise of a fee there must not be an attempt to raise revenue for the general funds of the State.
In our opinion, a renewal fee of Rs. 50 does not entail services which can be reasonably said to measure against the charge.
It may be pointed out that, though this averment was made in the petition, 123 No. attempt was made by the answering respondents to traverse it.
In our judgment the renewal fee of Rs. 50 ceases to be a fee, and is, in its nature, a tax to raise revenue.
Such an impost cannot be justified ' as a fee, and we accordingly, hold that this charge is improper.
It would, however, be open to the Government to frame a rule in which the renewal fee to be charged is reasonable in the circumstances.
The next objection is to sub r.(g) and sub r.(k) of Rs. 15.
Sub rule (g) requires a Custom House Agent to pay over to Government all sums received for payment and to account to his client for monies in his hands.
Sub rule (k) requires him to maintain accounts in such form and manner as may be directed from time to time by the Castoms collector, and submit them for inspection to the Customs collector or an officer authorised by him.
No exception can be taken to sub r.(g) which only states what must be regarded as an inevitable obligation on the part of the Agent.
Sub rule (k) is said to be excessive control on the part of the Customs authorities of the way in which the agent may keep his own account.
:The licensing of an agent creates an assurance,, in the minds of the prospective clients, and the Rule is designed to ensure that the monies which the agents handle are properly accounted for.
In our opinion, these Rules are salutary, and further the control over the agents, who stand in a fiduciary capacity both in regard to their own clients and the Government.
Rule, 17, which enjoins upon a firm which acts as a licensee to report to the Customs collector as early as possible and, in any event, within a period of three days of a change in the constitution of the firm, is next challenged.
It is said that the period of three days is too short ; but it" must be remembered that 'a large number of transactions may go through without the licensing authority being aware that the constitution of a firm has changed.
The Rule is designed to bring promptly to the notice 124 of the Customs collector the change in the constitution of the firm, so that he may be in a position to decide for himself whether the licence in the changed circumstances should be allowed to operate or be suspended or revoked.
In our judgment, this Rule, cannot be questioned.
Mr. Porus Mehta who argued the case on behalf of the Clearing Agents, stated that the newly constituted firm is required to make a fresh application which is to be dealt with in accordance with the provisions of rr. 6 to 13.
According to him, every change in the, constitution of the firm requires the firm to go through the entire process of scrutiny and examination, which he ' terms unnecessary.
The rule is designed to ensure that the new members of firm answer the requirements which have been laid down is Rules 6 to 13, and these requirements may be necessary, if new,entrants come in.
It is to be noticed that pending the disposal of the application, the Customs collector is authorised by the rule in his discretion to allow the existing firm to carry on the business of Custom ' House Agents.
This softens the rigorous of the rule, because the work of the agents in proper cases would not be hampered, and the application would stand over for disposal to a later date.
Rule 19 which also enjoins the maintenance and inspection of accounts by a firm was criticised in the same manner as was r. 15, and for the reasons which we have given, we hold it to be conducive to the proper control of the financial activities of a firm as licensee.
Rule 22 deals with the cancellation of the licence for failure of the agent to comply with Any conditions of the bond executed by him, under "the Rules, for failure to comply with any of the, provisions of the Rules and for misconduct on. his part which, in the opinion of the Customs colloctor renders him unfit, to transact business in the 125 Customs House.
It is contended that,the rules are so exhaustive and numerous thatno agent would ever be able to keep out of theoperation of that Rule, and that he would be ' perpetually exposed to the penalty of suspension or revocation of his licence.
Rules are made for compliance and not for breach, and even though strict, they are all designed to ensure efficient and proper working on the part of the agents.
A rule insisting upon such compliance with the other rules on pain of penalty _cannot be said to be outside the rulemaking power of the Customs authorities.
Every order of suspension or revocation is subject to appeal, and there is thus room for interference if the Customs collector acts arbitrarily or perversely.
In our: opinion, with the existence of an appeal, the rigour of the rule, if any, is taken away except in those flagrant cases, where suspension or revocation of the licence would be merited.
Lastly, it is contended that the Rules control a licensed agent in a manner which makes him an unpaid servant ' of the Customs authorities.
This is one way of looking at the matter.
The right way to look at it is that a profession is being regulated, and the profession is one in which an agent deals with the property of another and by the law is deemed to be owner of the property.
A person in such a high fiduciary position must, of necessity, be subjected to strict control, and the licensing authority in holding him forth to the prospective principals as a reliable and trustworthy person must see that persons acting on the faith of the assurance of the licence are in no way damning.
The Rules, therefore, subserve a very salutary and necessary principle, and, in our judgment, are designed to advance public interest and cannot be questioned, unless a person wishes to act, dishonestly and wants to avoid control.
It is wellknown that many underhand practices are common at Customs Houses, and 'the Customs authorities 126 have to be vigilant in preventing them.
They must, therefore, see that they do not license the wrong type of person is and in the interests of the Revenue and more so, in the inte rests of persons who employ licensed agents, these Rules have, been framed.
Looking at the Rules generally, we are of opinion that though they, are strict, they axe Absolutely necessary, and their strictness would be felt only by persons, who, are not otherwise honest.
The main argument in the case is upon r.12 read with From It, which is the bond which every applicant has to executive in favour of the President of India, and its enforcement against the applicant under certain 'circumstances.
Under r. 12, it is provided that before a licence is granted under the Rules, the Customs collector shall require the applicant to enter into a bond in Form 'C ' for the 7 due observance of these Rules.
and the conditions of his licence and also to furnish a security of Rs. 3,000 in cash or securities and a solvent surety for a sum of Rs. 2,000.
The surety is required to execute ' a separate bond in, Form 'D '.
A proviso added to the 'Rule says that the security may be: increased or, decreased by the Customs collector at any time, should he, consider it necessary to do so, having regard to the volume and type of the business which the applicant will transact as Custom House Agent.
It may be mentioned here, that the four classes of agents which had grown in the past have now been fused into one, and an agent under the Rules may not confine his activities to those of any one or more of the four classes previously existing.
Objection, however, is taken to the basic figure of security and particularly, the cash security of Rs 3000, which are innovations under the present Rules.
Reference is made to the provisions of Form 'C ', in which it is provided as follows: 127 "It is also agreed and declared that the President of India may apply the above sum of Rs. . in making good wholly or in part, any short collection of duty or other charges in respect of any transactions made by the said. on behalf of importers in the event of such sums remaining unpaid,, even after issue of demands under section 39 of the .
" The petitioners contend.
that the increased security, particularly, in cash, puts an unreasonable restriction upon the right to carry on the profession or avocation.
They point to the fact that in the, past a security of Rs. 2,000 had been considered adequate, and from 1937 onwards, that security alone was demanded.
They also contend that as Dalals they are only required, to present the shipping bills and the assessment or appraisement of the customs duty is the function of the Customs Officer.
If any mistakes are made, due to an error on the part of the Customs authority, or even due to a wrong declaration of the real value of the goods by the importer, the collection of duty should be made from the owner of the goods and not from them.
They also contend that this is the meaning and intent of section 39, which, in terms, makes the owner of the goods liable to make up for the short collections and puts no responsibility on the agents.
They further.
contend that the last clause of the bond, quoted earlier, makes the agent liable for payment of the balance of the duty before any attempt is made to recover it from the owner or importer.
The last point need not detain us long, because it is raised on the existence of the ' word " 'even" in the clause "even after issue of demands under section 39 of the ".
The word "even" does not mean that the agent 's security can be touched before the notice is given.
It rather indicates that the security would be utilised to make up the deficit only when a notice 128 is given and if even after notice there is no compliance.
This would indicate that before the ,security is so utilised, a notice must go to the agent or his principal, and the bond makes the notice a sine qua non of an action to recoup the deficit duty from the security amount.
The larger question whether the agent can be made responsible for the short collection of duty under s.39 may be deferred for the moment.
Previous to the promulgation of the Rules, there were, as already stated, four classes of Agents, and their duties, by custom and usage, were also different.
It is now contemplated to make a single class of agents and also to restrict the number of such agents.
It is quite clear, therefore, that the amount of business which would be done by the agents who are licensed, would grow significantly.
Also, each agent would be entitled to do all kinds of businesses which were handled separately.
This justifies the demand for increased security, and it should be noticed that there is room for the reduction of the duty in individual cases, if the amount of business which the agent would carry on, would be small.
Similarly, there is provision for demanding increased security from a person who does or is expected to do a much larger amount of business as an agent.
There is thus no room for a proper adjustment of the amount of security to be obtained from each individual licensed agent, commensurate with the volume and type of business which he will transact.
We do not, therefore, consider that r. 12 is defective on this ground.
Before we deal with section 39, it is necessary to review certain other sections of the .
Under the , it is not obligatory upon a principal to appoint a licensed agent.
An importer or exporter, as the case may be, can also appoint any person with the approval of the Customs collector as 129 his agent, who need not be a licensed agent.
(R.3).
The Rules are me ant to control action of agents, particularly the licensed agents.
Under the Act, the position of an agent, whether licensed or not, is indicated in section 4, which reads "When any person is expressly or impliedly authorized by the owner of any goods to be his agent in respect of such goods for all or any of the purposes of this Act.
and such authorization is approved by the Customs collector, such person shall, for such purposes be deemed to be the owner of such goods." , One of the duties of the ' owner of the goods is to make a declaration of the real value of the goods in a bill of entry or shipping bill.
Under section 29, on the importation into, or exportation from, any customs port of any goods, whether liable to duty or not, the owner of such goods must, in his bill of entry or shipping bill as the case may be, state the real value, quantity and description of such goods to the best of his knowledge and belief, and must subscribe a declaration of the truth of such statement at the foot of such bill.
Under the same section, the Customs collector may require the production of invoices, broker 's note, policy of insurance or other document to satisfy himself about the real value, quantity or description of such goods.
The Customs Collector is also authorized to inspect the goods for the same purpose.
Under sections 29A and 29B, there may be an assessment of duty prior to the examination of the goods and a provisional assessment of duty and its payment even prior to, the production of the documents above mentioned or the inspection of the goods.
Section 30 of the Act defines "real value" and that is the value on which the assessment of the goods takes place.
That section is not dependent upon the 'declaration of the owner, but defines "real value" in terms of a formula which, on its application determines of the real value, apart from any declaration.
130 Section 31 provides for the examination of ad valorem goods, and if the real value such goods is correctly stated in the bill of entry or shipping bill, the goods are assesssed in accordance therewith.
Section 32 provides for the procedure, if it appears that such goods are properly chargeable.
with a higher rate or amount of duty than that to which they were subject according to the value stated in the bill of entry or shipping bill.
The Officer may then detain the goods and collect the proper duty.
Sections 33, 34A and 35 deal with abatement allowed or disallowed under certain circumstances.
Sections 36, 37 and 38 deal with the alteration of import and export duties or tariff valuations.
When the proper duty has been paid according to the checks and inspections, if any, the goods are allowed to be cleared.
Section 39, as the marginal note, shows correctly, deals with payment of duties not levied, short levied or erroneously refunded.
, The first subsection, provides as follows : "(1) When customs duties or charges have, not been levied or have been short levied through inadvertence, error, or collusion or misconstruction on the part.of the Officers of Customs, or through misstatement as to real value, quantity.
or description on the part of the owner or when any such duty or charge, after having been levied, or has been, owing to any such cause, erroneously refunded, the person chargeable with the duty or charge which has not been levied or which has been so short levied or to whom such refund has erroneously been made, shall pay the duty or charge or the deficiency or repay the amount paid to him in excess., on a notice of demand being issued to him within three months from the relevant date as defined in sub section (2); 131 and the Customs collector may refuse to pass any goods belonging to such person until the said duties or charges or the said deficiency or excess be paid or repaid," ' The second sub section need not be quoted, because ,it does not bear upon the controversy.
The contention of the Petitioners is that although in the first paragraph of section 39(1) the word "owner" may comprehend an agent who is deemed to be an_owner, if authorised under the Act, the, section does not use the word "owner" in the latter part, and speaks of "the person chargeable with the duty", meaning thereby a change over to the real owner of the goods in contradistinction to the agent.
They urge that this is even more apparent from the words of the fourth paragraph of the first sub,section which authorises the Customs collector to refuse to pass any goods belonging to ",such person" which must mean the goods belonging to the real owner, who is properly chargeable with the duty.
It is contended, therefore, that as the agent is not within the reach of s.39, the demand of duty from him cannot be made, and that the provisions of the bond by which the agent and his security are made liable, are beyond the provisions of section 39 and thus invalid.
One, thing is clear that the Customs authorities may have no dealing with the real owner of the goods where the agent has been authorised to deal with them for the purposes of the or any of its provisions.
Section, 4 clearly lays down a fiction, that if the agent is authorised by the real owner in respect of any of the matters in the Act, the Customs authorities would deal ' with the agent as if he were the owner.
The effect of the fiction is, therefore, to make an agent answerable to the Customs authorities within the four corners of his authorisation.
The fiction operates only within those limits.
An agent may be authorised 132 to declare the real value and to pay the customs duty or other charges.
If an agent is authorised in this manner, under the fiction created by section 4 he would be regarded as the owner and would be dealt with as such, by the Customs authorities.
It bar, already been pointed out that the real value, quantity and description of the goods have to be declared in the bill of entry or the shipping bill.
A form was shown to us at the bearing in which the declaration has to be made either by the real owner or the agent.
The form emphasis also that all responsibility for the declaration and for the payment of the proper duty and charges may be taken by an agent.
Once an agent has made a declaration and has also been authorised to pay the duty etc.
, it is to him that the Customs authorities would look for payment or additional payment, and it is to him that refunds would be, made.
The Customs authorities would not deal with the real owner, and that is the scheme of the Act.
When section 39 says that where customs duties or charges have not been levied or have been short levied through inadvertence, error collusion or misconstruction on the part of the officers of Customs, or through misstatement as to real value, quantity or description on the part of the owner, it refers not only to the real owner,, but also to an agent, if the latter can be deemed to be the owner.
, This is indeed, conceded by the petitioners.
The question then arises, what does the section mean when it speaks of " 'the person chargeable with the duty or charge which has not been levied or Which has been so short levied, or to whom such refund has erroneously been made"? Obviously enough, the person to be charged, in so far as the Customs authorities are concerned, is not the, real owner but the agent, a fictional owner of the goods.
If a 'fictional owner, can be read into the first part 133 of the section there is no reason why the words "the person chargeable with duty" cannot also be applied to him.
In the circumstances in which the agent makes a declaration with authorisation from the real owner, the agent is the person chargeable with the duty.
Otherwise, for the duty chargeable in the first instance the agent would be the person charge able with the duty and 'for any short payment he would cease to be such a person and the Customs authorities would have to deal with the real owner, who made no declaration or payment.
The words "the person chargeable with the duty. ", therefore, have advisedly been used not to exclude the agent but to describe in a neutral way the person from whom such a demand can be made.
They are wide enough in their ambit to take in, not only the real owner but also a "deemed owner" under the Act.
So far, there is no difficulty, and the objection of the learned counsel for the petitioners that a simpler method would have been to use the word " 'owner" in this part of the section ,is without substance, because the legislature may express its meaning and intention in different ways.
The critical argument, however, is, on the.
fourth paragraph of section 39(1).
There, it is provided that if the excess charge is not paid, "the Customs collector may refuse to Pass any goods belonging to 'such person ' until the said duties or charges or the said deficiency or excess be paid or repaid".
It is contended that an agent deals with numerous owners at the same time, and if this paragraph is applied literally, then the Customs collector would be entitled to refuse to pass the goods belonging to other Owners, handled by the same agent.
This argument, in our opinion, does not represent the true state of the law.
An agent, when he works for different owners with authorisation, undoubtedly becomes a fictional owner of the goods belonging to them; but he does not become.
a single, owner in respect of the good belonging to 134 different clients.
He becomes an owner quoad each client and his ownership of the goods is diversified and is not one.
The agent, therefore, stands in the shoes of several persons at the same time, and is himself a multitude of owners.
It is only when short payment has been made in his capacity as one fictional owner, that he can be asked to pay that which he ought to have paid in the first instance.
He is exposed to the penalty of having his goods detained in the, same capacity as owner quoad his defaulting client, and the goods within his control for the same client will be detained until the duty has been paid.
It is only the goods of the defaulting owner in respect of which he is also the deemed owner, that would suffer the penalty of detention but not the goods of a different owner, even though the agent may be authorised to deal on his behalf.
It is in this way that the section must be read ' without contradiction in its several parts, because to read it as suggested by the petitioners, creates a contradiction between the first paragraph and the other paragraphs that follow.
An authorised agent is an owner for all purposes of the Act (including payment of duty).
If one were to say that in the other paragraphs of section 39(1) he is not included, then the fiction which is created by section 4 would cease to be worked out to its logical limits.
Once it is held that the words ", 'the person chargeable with the duty. . . are apt to describe not only the real owner but also his authorised agent (and there is no reason why these words should be restricted), the fourth paragraph falls in line with the others, and the ownership of the agent is, therefore, limited to one client at a ' time, and the goods of that client of which the agent is also the deemed owner, are exposed to the. penalty of detention.
It must be remembered that the Act makes the 'goods ' liable to duty and the payment of duty by owners clears the goods.
The law goes further, and says that other goods of the owner are also liable for an deficit, if the 135 liable to duty are 'cleared. ' before the full duty has been paid.
The condition in the bond is limited by the operation of s.39 to the transactions of one constituent at a time, and the for feature of security is also limited to the constituent in default.
The bond prescribes for recouping of the deficiency in the customs duty or charges from the security, even after notice is given.
This notice must be given within three months from the relevant date as demand in the section.
The limit of three months also applies to the agent as the deemed owner in the same way as it does to the real owner.
If no notice.
is given, then the bond, on its own terms, cannot be enforced.
In our opinion, the contentions of the petitioners are not, sustainable.
In the result, the petitions must fail except to the extent that we declare r. 10(c) to be an unreasonable restraint upon the right of the petitioners to carry on their avocation and r.11 when it prescribes a renewal fee of Rs. 50, invalid inasmuch as it has provided not for a fee but for a tax.
Subject to this, the petitions are dismissed.
The petitioners will pay the costs of the other side (one set only), as they have lost substantially.
SUBBA RAO, J.
I have, had the advantage of ', perusing the judgment prepared by my learned brother, Hidayatullah, J.
I agree with him except in regard to r. 6(c) of ' the Custom House Agents Licensing Rules, 1960 (hereinafter called the Rules).
Rules 6(c) says : "An applicant for a licence shall furnish an income tax clearance certificate.
" The Rules were made to regulate the conduct of the clearing agents so that they may discharge their duties to the satisfaction of not only the Customs Authorities but also the public.
In my view, the production of income tax clearance certificate is extraneous to the issue, of a licence to a customs house agent.
How ' does the 'production of such a certificate improve the credentials of an applicant 136 for selection as a customs house agent, An applicant may be financially sound and also otherwise duly qualified; he may have discharged all his debts, and paid all his taxes except a small portion of his income tax: he may not have paid the income tax for good reasons.
Yet, if he goes.
not produce the income tax clearance certificate, he is disqualified.
What is.
the reasonable nexus between the production of such a certificate and a person 's right to do business as a clearing agent ? There is none, except a remote and fanciful presumption that a man who pays the income tax.
may also pay the dues payable to the Customs Authorities.
In K. Raman & Co., Tellicherry vs State of Madras (1), in the context of issue of a licence under the Yarn Dealers Control Order, as Judge of the Madras High Court,, I have held, "the fact that a person is in arrears of income tax is not germane to the issue of a licence under the Yarn Dealers Control Order.
It is a, circumstance extraneous to the petitioner 's right to carry on his business.
The Income tax Act provides an adequate machinery for realising the arrears due from an assessee.
I am of the view that the restriction imposed is unreasonable and is not in the interests of the general public.
" I still adhere to that view.
Every taxing Act has a machinery for collecting the tax imposed by it, but the said rule, in effect and substance, provides for an additional machinery for collection of income tax.
I would, therefore, hold that the nonproductive of an income tax clearance certificate is not germane to the issue of a licence under the said Rules.
I would therefore strike out r.6(c) of the Rules on the ground that it constitutes an unreasonable restriction on the right of an applicant to do business as customs, house agent, (1) A.I.R. 1953 mad.
137 BY COURT: In accordance 'with the opinion, of the majority, the petitions must fail except to the extent that we declare r.10 (c) to be: an unreasonable restraint upon the right of the, petitioners to carry on their avocation, and r.11, when it prescribes a renewal fee of Rs. 50, invalid inasmuch as it has provided not for a fee but for a tax.
Subject to this, the petitions are dismissed.
The petitioners will pay the costs of the other side (one set only), as they have lost substantially.
| The appellant and the, respondent nominated their arbitrator who heard the matter at length and the proceedings had reached a stage when an award might have been pronounced.
It was then that the appellant chose to obstruct the further progress of the proceedings by raising the plea that there was no, concluded contract.
The appellant refused to apply under section 33 and so a stalemate issued because the arbi trators were, not entitled to proceed further, with the arbitration proceedings.
, The respondent moved the court under section 28 along with section 33, for a decision of the question about the existence and validity of the. arbitration agreement and also prayed that extension of time be granted to ' the arbitrators for.
making the award.
The appellant pleaded in defence that ' there was no concluded contract, and there was no jurisdiction in the court to, grant extension under section 28 of the Act.
The High Court confirmed the finding of the trial court that there was a concluded contract which contained a valid arbitration agreement.
As for jurisdiction it held that since the petition had been filed as composit application under sections 28 and 33, it was open to the court under section 28 to enter upon the question of the existence or validity of the contract and so there was no substance in the point of jurisdiction raised by the appellant.
It is against this decision that the appellant came up by special leave.
Section 33 of the Arbitration, Act, :1940 consists of two parts the first part deals with a challenge to the existence or validity.
of an arbitration agreement or an award and it provides that only persons who challenge the existence of the arbitration agreement that; can. apply under the first part of the section.
The second.
part of the section refers to the application made to have the effect of either the arbitra 770 an application can be made to have the effect or purport of the agreement determined but not its existence.
That means that an application to have the effect of the agreement can be made provided the existence of the agreement is not disputed.
The question is whether a person affirming an arbitration agreement can apply under the latter part of section 33 about the existence of the agreement or its validity.
Held, that a party affirming the existence of an arbitration agreement cannot apply under section 33 for obtaining a decision that the agreement in question exists.
An application to have the effect of the arbitration agreement determined can however, legitimately cover the dispute as to the existence of the said arbitration agreement.
Section 32 of the Act creates a bar against the institution of suits with regard to an arbitration agreement or award on any ground whatsoever.
Thus if a party affirms the existence of an arbitration agreement or its validity it is not open to the party to file a suit for the purpose of obtaining a declaration about the existence of the said agreement or its validity.
The bar to the suit thus created by section 32.
inevitably raises the question as to what remedy is open to a party to adopt in order to obtain a appropriate declaration about the existence or validity of an arbitration agreement.
Held, that having regard to the scheme of sections 31, 32, 33 of the Act in matters which fall within the bar created by section 32, if a suit cannot be filed it is necessarily intended that an application can be made under the court 's powers provided for by section 31 and impliedly recognised by section 32 of the Act.
Held, further that in holding that section 32 impliedly recogniscs the inherent jurisdiction of the court to entertain an application made by parties affirming the existence of an arbitration agreement the provisions of section 32 is brought it line with the provisions of sections 33 and 20 of the Act.
Indeed section 33 is a corollary of section 32 and in a sense deals with the most usual type of cases arising in arbitration proceedings.
A question arises whether an application ran be made under such inherent jurisdiction for declaration that the contract which includes the arbitration agreement includes cases where the arbitration agreement is made a part of the contract itself.
Held, that where the challenge to the contract made in defence to the claim, is a challenge common to both the contract and the arbitration agreement, the petition in substance is a petition for a declaration as to the existence of a valid arbitration agreement and a suit to obtain such a declaration is clearly barred by section 32.
The fact that an incidental declaration is claimed about the existence and validity of the main contract does not affect the essential 771 character of the application.
It is an application for obtaining a declaration about the existence and validity of an arbitration agreement.
Held, also that the powers to enlarge time for making the award which is the subject matter of section 28 does not include a power to entertain a petition for declaration that there was a concluded contract between the parties containing a valid arbitration agreement.
Hayman vs Darwins.
Ltd., , referred to.
Messrs. M. Gulamali Abdulhussain & Co. vs Messrs. Vishwambharlal Buiya, I.L.R. , approved.
Bajranglal Laduram vs Agarwal Brothers, A.I.R. 1950 Cal.
267 and State of Bombay vs Adamjeee Hajee Dawood & Co. Ltd. I.L.R. (1 952) , disapproved.
|
ivil Appeal No. 4779 of 1989.
From the Judgment and Order dated 3.8.1987 of the Delhi High Court in S.A.O. No. 393 of 1986.
Ashok Sen, Ms. section Janani and Mrs. Urmila Kapoor for the Appellant.
G.C. Lalwani and P.N. Misra for the Respondent.
The Judgment of the Court was delivered by VERMA, J.
Leave granted.
The landlord Shri Shiv Chander Kapoor has preferred this appeal by special leave against the judgment dated August 3, 1987 passed by the Delhi High Court in S.A.O. No. 393 of 1986 whereby the High Court dismissed the landlord 's appeal against the Order dated October 14, 1986 of the Rent Control Tribunal affirming in appeal the order dated August 9, 1985 of the Rent Controller dismissing the landlord 's application dated October 12, 1983 for restoration of possession of the premises let out for residence to the tenant Amar Bose for the limited period of three years w.e.f. June 8, 1980 under section 21 of the Delhi Rent Control Act, 1958 (hereinafter referred as the 'Act ').
The true scope of the enquiry con templated when the tenant assails validity of the Rent Controller 's permission granted under section 21 of the Act for creation of a tenancy for limited period arises for determination in the present case.
The premises is the second floor of the building beating No. 19/10, Old Rajinder Nagar, New Delhi comprising of two rooms, a kitchen, bathroom and lavatory let out for resi dence on a monthly rent of Rs.800 apart from electricity and water charges.
The landlord offered to let out the premises for three years only w.e.f. June 8, 1980 for the reason that it would be needed by his family thereafter when his son got married, to which the tenant consented.
Accordingly, by an agreement in writing between the parties the premises was so let out for the limited period of three years w.e.f June 8, 1980 with the 302 permission of the Rent Controller obtained under section 21 of the Act.
The order of the Rent Controller is as under: "In view of the statements of the parties made above, I am satisfied that there is no collu sion or fraud.
I am also satisfied that the petitioner does not require the suit premises for a limited period of three years.
Permis sion, therefore, is hereby granted to the petitioner Sh.
Shiv Chander Kapoor to let out his premises No. 19/10, situated at Old Ra jinder Nagar, New Delhi, the details of which are given in the site plan Ext.
AI to the respondent for residential purpose for a limited period of three years with effect from 8.6.1980".
On failure of the tenant Amar Bose to restore possession of the premises to the landlord on expiry of the period of limited tenancy, an application dated October 12, 1983 was filed by the landlord before the Rent Controller praying for execution of the aforesaid order by delivery of vacant possession of the premises to the landlord.
The tenant filed his objection to the execution application which was replied by the landlord.
The Rent Controller by order dated August 9, 1985 rejected the landlord 's application taking the view that the permission granted under section 21 of the Act was invalid so that the tenant could not be evicted on expiry of the period of three years.
The landlord 's further appeal to the Rent Control Tribunal and then to the Delhi High Court failed.
Hence this further appeal.
The Rent Controller upheld the tenant 's objection that the landlord 's son being aged only about 19 or 20 years on the date of expiry of the period of limited tenancy while the minimum age prescribed by law for marriage being 21 years the ground that the premises would be needed on the son 's marriage after three years was untenable.
On this basis it was held that creation of tenancy for the limited period of three years amounted to fraud and misrepresenta tion by the landlord rendering invalid the permission grant ed under section 21 of the Act.
This view has been upheld by the Rent Control Tribunal and then the Delhi High Court, treating the grant of permission by Controller to be mechan ical and without application of mind.
The tenant also con tended that the landlord was in possession of the remaining building which comprises of sufficient accommodation to meet the bona fide need of the landlord 's family; and that the premises were constructed in 1972 and the second floor of the building was never occupied by the landlord being let out to other tenants from time to time.
In substance 303 the grounds taken by the tenant were two, namely (1) the landlord 's son was below the prescribed minimum age for marriage of 21 years on the date of the expiry of the period of three years of the limited tenancy which showed that the reason given was false, and (2) absence of bona fide need of the landlord for occupying the premises, namely, the second floor of the building.
The High Court 's order is based only on the first ground.
The scope of enquiry contemplated under section 21 of the Act when the tenant assails validity of the Controller 's permission to create a limited tenancy thereunder was seri ously debated at the heating of this appeal.
On behalf of the appellant/landlord it was urged that the scope is limit ed to examining only the existence of jurisdictional facts which permit grant of permission to creat a tenancy for limited period and no more.
On this basis, learned counsel for the appellant contended that the above first ground alone was within the scope of enquiry which too has been wrongly decided by the High Court on a misconstruction of Section 21.
On the other hand it was contended on behalf of the respondent tenant that the enquiry extends also to examining the other ground viz. existence of landlord 's bona fide need to occupy the premises on expiry of the period of limited tenancy.
The same earlier decisions of this Court on the point were relied on by both sides with equal vehemence in support of the rival contentions.
Section 21 is as under: "Recovery of possession in case of tenancies for limited period. (1) Where a landlord does not require the whole or any part of any premises for a particular period, and the landlord, after obtaining the permission of the Controller in the prescribed mannner, lets the whole of the premises or part thereof as a residence for such period as may be agreed to in writing between the landlord and the tenant and the tenant does not, on the expiry of the said period, vacate such premises, then, not withstanding anything contained in Section 14 or in any other law, the Controller may, On an application made to him in this behalf by the landlord within such time as may be pre scribed, place the landlord in vacant posses sion of the premises or part thereof by evict ing the tenant and every other person who may be in occupation of such premises.
(2) While making an order under sub section (1), the Con 304 troller may award to the landlord such damages for the use or occupation of the premises at such rates as he considers proper in the circumstances of the case for the period from the date of such order till the date of actual vacation by the tenant".
Chapter III of the Delhi Rent Control Act, 1958 compris ing of Sections 14 to 25 contains provisions relating to control of eviction of tenants.
The object of enacting the Rent Control laws is well known and it does not need an elaborate enunciation.
Suffice it ' to say that in view of acute shortage of housing accommodation, more particularly in the bigger cities, these laws have been enacted to regu late the letting of the available premises and an attempt has been made to reconcile the conflicting interests of landlords and the need for the protection of tenants.
Sec tion 14 of the Delhi Rent Control Act gives protection to the tenants against eviction and specifies the grounds on which alone the landlord can obtain an order of the compe tent authority to recover possession of any premises let out to a tenant.
Apparently, it was realised that some premises may be available for being let only for a limited period where the landlord did not require the same during that period alone provided the landlord was assured of restora tion of possession on expiry of the limited period.
However, while enacting a provision permitting the creation of a tenancy for limited period to utilise such premises and alleviate to some extent the suffering of persons needing residential accommodation, it was necessary also to ensure that the provision was not misused by capricious landlords to circumvent Section 14 of the Act.
It was to achieve this dual purpose that Section 21 was enacted in the Delhi Act to encourage landlords who did not need any premises for a limited period only, to let it out for such period with the assurance of restoration of possession at the end of that period without being required to satisfy Section 14 of the Act.
The provision also contains an internal check upon an unscrupulous landlord by requiting the Rent Controller 's permission to be granted in the given circumstances only.
The conditions on which permission can be granted by the Rent Controller under Section 21 are specified in Section 21 itself.
A fortiori when the question arises about the valid ity of the Rent Controller 's permission it can be tested only with reference to the specified conditions subject to which alone permission can be granted by the Controller.
No outside factor can be imported either for grant of the permission thereunder or for adjudicating its validity at a subsequent stage.
Section 21 being in the nature of an exception to the ordinary mode of 305 eviction of tenants prescribed under section 14 of the Act, it must be strictly construed and the scope thereof limited to its contents.
Section 1 of the Act is by itself the complete provision relating to the creation of a tenancy for limited period and recovery of possession on expiry of that period.
Thus, Section 21 is a self contained code in this behalf.
Section 21 permits the creation of a tenancy for limited period "Where the landlord does not require the whole or any part of premises for a particular period"; and it is to be let for 'residence '.
These words of the provision specify the jurisdictional facts which alone permit creation of a tenancy for limited period.
The remaining provision provides the machinery for doing so by an agreement in writing be tween the landlord and the tenant on the basis of which permission of the Controller is obtained.
The provision further says that if On expiry of the said period the tenant does not vacate such premises, then 'notwithstanding any thing contained in Section 14 or in any other law ' the Con troller may on an application by the landlord place the landlord in vacant possession of the premises by evicting the tenant and every other person who may be in occupation of such premises.
The enquiry contemplated at the stage of grant of permission by the Controller under this provision requires the Controller to be satisfied that the landlord does not require such premises for a limited period only; and the said premises is to be let as a residence in terms of an agreement in writing between the landlord and tenant.
On satisfaction of the existence of these facts, the Con troller grants permission for creation of tenancy for a limited period under this provision.
When recovery of pos session of the premises is sought thereafter by the landlord under this provision then the Controller is to restore possession to the landlord "notwithstanding anything con tained in Section 14 or in any other law" subject only to the requirements of this provision.
Obviously it is the existence of a valid permission of the Controller for creation of a tenancy for limited period under this provision which brings into existence a valid limited tenancy and, therefore, such valid permission is a sine qua non of Controller 's jurisdiction to order restora tion of possession on expiry of that period under the second part of Section 21.
It is, therefore, the obligation of the Controller to examine the question of validity of his earli er permission, if such an objection is raised before he orders restoration of possesion to the landlord on expiry of the limited term.
However, that enquiry must be limited only to the existence of the aforesaid jurisdictional facts at the time of grant of permission and no more.
This is quite evident from the expression 'notwithstanding anything con tained in Section 14 or in any 306 other law '.
in the second part of Section 21 itself.
This is the inbuilt safeguard in the provision against its misuse.
We have no doubt that the language of Section 21 of the Act clearly forbids the Controller from embarking on an enquiry beyond the ambit of Section 21 itself which may impinge into the sphere of Section 14 of the Act or any other law.
We have no hesitation in holding that it is the existence of the aforesaid jurisdictional facts at the time of grant of permission to create a limited tenancy which alone is required to be determined by the Controller, if and when, validity of his permission is assailed at a subsequent stage.
This being the scope of his enquiry while granting permission, the scope of enquiry at the subsequent stage cannot be wider.
For this reason any objection to the valid ity of the permission on a ground other than non existence of the jurisdictional facts at the time of grant of permis sion is untenable and beyond the scope of the Controller 's power to examine validity of his earlier permission before directing restoration of possession to the landlord under section 21 of the Act.
In short, the scope of enquiry before the Controller when validity of the permission granted by him is assailed is to determine: whether, the permission accorded by him earlier was not really to the creation of a genuine tenancy for limited period but to a mere pretence of the landlord for circumventing the provisions of Section 147 If so, such an act being a fraud on the statute, it does not bind the tenant whose consent to the sham transaction is obtained taking advantage of his unequal bargaining power, and he can assail the permission.
It is equally plain that the object of enacting Section 21 to permit creation of tenancies for limited period should not be frustrated by unduly enlarging the scope of that enquiry at the behest of a tenant who having given his free consent to the creation of a genuine limited tenancy thereafter attempts to thwart restoration of possession to the landlord by raising untenable pleas in spite of the clear prohibition made by the words "notwith standing anything contained in Section 14 or in any other law" This delicate balance between the two conflicting interests has to be borne in mind, in order to give true effect to Section 21 and thereby to promote the object of its enactment.
We may now refer to the decisions of this Court.
S.B. Naronah vs Prem Kurnari Khanna, ; is the first decision on the point which deals comprehensively with the scope of Section 21 of the Act.
Krishna lyer, J. speak ing for the Bench said as follows: 307 "Parliament was presumably keen on maximising accommodation available for letting, realising the scarcity crises.
One source of such spare accommodation which is usually shy is poten tially vacant building or part thereof which the landlord is able to let out for a strictly limited period provided he has some credible assurance that when he needs he will get it back . .
The problem is felt most for residential uses.
So the law has to make itself credit worthy.
Section 21 is the answer".
"Section 21 overrides Section 14 precisely because it is otherwise hedged in with drastic limitations and safeguards itself against landlords ' abuses . .
What, then, are those conditions and safe guards? The first condition is that the land lord does not require the demised premises "for a particular period" only . .
The Controller must be satisfied that the landlord means what he says and it is not a case of his not requiring the property indefinitely as distinguished from a specific or particular limited period of say one year, two years or five years.
If a man has a house available for letting for an indefinite period and he so lets it, even if he specifies as a pretence, a period or term in the lease, Section 21 cannot be attracted.
On the other hand, if he gives a special reason why he can let out only for a limited period and requires the building at the end of that period . . it is good compliance.
The second condition is that the letting must be made for a resi dential purpose.
The house must be made over 'as a residence ' ." "The fact that a landlord and a potential tenant together apply, setting out the formal ingredients of Section 21, does not relieve the Controller from being vigilant to inquire and satisfy himself about the requisites of the landlord 's non requirement "for a particu lar period" and the letting itself being 'as a residence '.
A fraud on the statute cannot be permitted . . " "If he makes a mindless order the Court, when challenged 308 at the time of execution, will go into the question as to whether the twin conditions for sanction have really been fulfilled.
Of course, there will be a presumption in favour of the sanction being regular, but it will still be open to a party to make out his case that in fact and in truth the conditions which make for a valid sanction were not present . . " " . . the sanction granted under Section 21, if it has been procured by fraud or collu sion, cannot withstand invalidity because, otherwise, high public policy will be given and hostage to successful collusion . .
Collusion between the strong and the weak cannot confer validity where the mandatory prescriptions of the law are breached or betrayed".
(emphasis supplied) S.B. Naronah 's case has thereafter been consistently followed by this Court and treated as the correct analysis of Section 21.
With respect, we concur and reiterate that the scope of Section 21 is succinctly summarised in the above extracts.
There is nothing in this decision to support the respondent tenant 's contention in this appeal that the scope of enquiry is wider permitting determination of the landlord 's bona fide need of the pemises as if such a ground for eviction specified in Section 14 of the Act has to be proved.
Extending the enquiry to that extent will indeed be against the express prohibition enacted in Section 21 it self.
The next decision in V. section Rahi and Anr.
vs Smt.
Ram Chambeli, ; Venkataramiah, J. (as he then was) speaking for the Bench applied the decision in S.B. Naronah 's case and pointed out that even though the initial presumption was that the permission granted by the Control ler under section 21 of the Act was regular yet the material produced should be examined in order to be satisfied that there has not been any misuse of the said provision by the landlord taking advantage of the helpless situation of the tenant due to house scarcity.
Facts of that case show that the scope of enquiry was limited only to examining existence of the jurisdictional facts at the time of grant of permis sion by the Controller.
In Smt.
Dhanwanti vs D.D. Gupta, [1986] 3 SCC 1, it was held on the facts of that case that permissions for letting out to the same tenant for limited period obtained more than once after expiry of each said 309 period was by itself not sufficient to establish that the premises was available for being let out for an indefinite period; without showing absence of landlord 's intention to occupy the premises.
Notice was taken of the common knowl edge that it is not possible for a man to plan his future life with any degree of definiteness and changing circum stances may justify such a course.
The principle applied was the same and the ultimate conclusion was reached on the particular facts of that case.
In Inder Mohan Lal vs Ramesh Khanna, ; , it was held that the presumption of validity of the permission given by the Controller was not rebutted by the tenant since there was no evidence to show non existence of any of the essential conditions which enable the permission to be granted.
The earlier decisions of this Court starting with Naronah 's case were referred and the test indicated therein was applied.
In S.K. Lata vs R.C. Chhiba and Another, ; , the permission given by the Controller for creation of tenancy for a limited period was held to be vitiated on the ground of fraud on statute because the permission was ob tained without disclosing that the tenant had already been inducted under an oral lease and was in possession of the premises prior to the application made before the Control ler.
It was, therefore, held applying the same test that an essential condition for grant of sanction under section 21 by the Rent Controller did not exist.
Now the only remaining point is the requirement of notice during enquiry into validity of the Controller 's permission before ordering restoration of possession to the landlord.
A decision of this Court on this point isJ. R. Vohra vs India Export House (P) Ltd. & Anr.
, ; In J.R. Vohra 's case it was reiterated that the condi tions specified for grant of permission by the Controller under section 21 must be 'truely fulfilled and not by way of any make belief before the Controller grants his permission for the creation of such limited tenancy '.
After reiterating this position the Court proceeded to consider the require ment of a notice to the tenant before issuing warrant of possession in favour of landlord.
It was held that the competing claims of the landlord and the tenant can be harmonised not by insisting upon service of a prior notice on the tenant before the issuance of the warrant of posses sion to evict him but by insisting upon his approaching the Rent Controller during the currency of the limited tenancy for adjudication of his pleas no sooner he discovers facts and 310 circumstances that tend to vitiate ab initio the initial grant of permission.
It was observed that there is no reason for the tenant to wait till the landlord makes his applica tion for recovery of possession to raise his plea.
It was further observed that in case the tenant comes to know, aliunde, of the landlord 's application for recovery of possession even without notice to him, he may raise his plea at that stage and the Controller would enquire into the same but in that situation the tenant may run the risk of getting his plea rejected as an after thought.
It was expressly held in this decision that there is no obligation on the part of the Rent Controller to serve a notice on the tenant before issuing the warrant of possession on the landlord 's applica tion made after expiry of the period of limited tenancy for recovery of possession.
It is obvious from the decision in J.R. Vohra 's case that the tenant is expected to raise such a plea during currency of the limited tenancy and on such a plea being raised by the tenant enquiry into it is contemplated.
Even though it is not expressly said in Vohra 's case, it is implicit that on such an application being made by the tenant requiring adjudication by the Controller, it is the Controller 's obligation to issue notice of the same to the landlord and then to make the adjudication with opportunity to both sides to prove their respective contentions.
As for the requirement of notice to the tenant before issuing the warrant of possession in favour of the landlord on his application for recovery of possession on expiry of the limited tenancy, it appears to us also that no notice to the tenant at that stage is either contemplated or expedi ent.
This appears to be the reasonable view which is in accord with the scheme of Section 21.
Obviously notice is to be given of a fact which may otherwise be not known to the notice.
The period of limited tenancy and the date of its expiry are known to the tenant from the very inception.
The tenant is equally aware of his own default in restoring vacant possession of such premises to the landlord on expiry of that period.
It is only these facts, well known to the tenant, which compel the landlord to apply for recovery of possession pursuant to the tenant 's default.
The plea of invalidity, if any, of Controller 's earlier permission must equally be known to the tenant at least by then coupled with his knowledge that unless a declaration is made at his instance that the Controller 's permission is invalid, he must vacate, the limited tenancy having expired.
Why then should a notice to him at that stage be necessary and for what useful purpose? We cannot think of any good reason to require a notice to the tenant at that stage.
The object of enquiring into the validity of the Controller 's permission under section 21 is only to ensure that essentials of a limited tenancy 311 existed and the same was genuine; and it is not meant to permit raising of frivolous pleas which would frustrate the very object of its enactment.
This view protects the honest tenants and only curbs the frivolous and vexatious pleas.
There is another aspect of the matter.
The Controller 's permission when granted to create a limited tenancy under section 21 of the Act is presumed to be valid unless de clared otherwise.
It is, therefore, for the person assailing its validity to get such a declaration from a proper forum in a proper proceeding.
Unless this is done, the order remains enforceable.
The duty is clearly on the tenant himself to raise the plea of invalidity and unless the order is declared invalid at his instance, it is enforceability cannot be doubted.
In Wade 's Administrative Law, 6th Edn.
at pp 35 1 353, there is an illuminating discussion of this topic.
It has been pointed out that 'void ' is meaningless in an absolute sense; and 'unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders '.
In the words of Lord Diplock, "the order would be presumed to be valid unless the presumption was rebutted in competent legal proceedings by a party entitled to sue".
For the above reasons, we are in respectful agreement with the view taken in J.R. Vohra 's case (supra) that there is no obligation on the Controller to issue notice to the tenant of the landlord 's application for recovery of posses sion made on expiry of the period of tenancy for a limited period under section 21 of the Act, but an enquiry on the tenant 's plea has to be made to the extent indicated, if the tenant assails validity of the Controller 's permission even at that stage.
We shall now consider the merits of this case on the basis indicated above.
The High Court has upheld rejection of the landlord 's application for recovery of possession under section 21 of the Act on the ground that the land lord 's son would be about 19 or 20 years old on expiry of three years period of limited lease but he could not be married till he attained the prescribed minimum age of 21 years which showed that the Controller 's order granting permission was mindless and was obtained by fraud.
The permission has, therefore, been held invalid.
In our opin ion, the High Court as well as the authorities below it misconstrued the requirements of Section 21 of the Act.
It is not a case where the landlord did not have a son who was expected to be 312 married some time after three years.
In substance the reason for availability of the accommodation for the limited period of three years only given by the landlord was that the premises was not needed by the landlord till his son got married some time after three years.
The reason was not to be construed as a statement that the son was to be married exactly on the date on which three years expired.
The date of son 's marriage could not be foreseen or estimated with such precision as to coincide with the date of expiry of the limited lease.
All that has to be seen is whether the period of limited tenancy was indicated by the landlord with refer ence to a foreseeable future event and the estimate of time of its occurrence was not unreasonable.
When the period of limited tenancy is stated on the basis of a future event, the happening of which is reasonably certain at that time though the precise date of the future event cannot be pre dicted with precision, the landlord 's estimate of the period after which the event is expected to happen, unless unrea sonable must be accepted for this purpose as genuine.
This would satisfy the test of a genuine limited tenancy if there be no other factor indicating it to be a mere pretence adopted by the landlord.
This test is fully satisfied in the present case.
Merely because the son 's age then was about one year below the prescribed minimum age for marriage the estimate of landlord that he would not need the premises for three years only till his son 's marriage cannot be treated as a pretence.
One year 's period for settling and arranging performance of the marriage is nothing unusual since exist ence of the basic facts is undisputed.
Existence of this jurisdictional fact to justify the permission has not been negatived and no material has been produced by the tenant to substantiate his plea.
The other ground taken by the respondent tenant is that the existing accommodation available with the landlord is sufficient for the needs of his family.
It is sufficient to state that the enquiry contemplated under section 21 in this behalf is not the same as that for determining existence of the ground of bona fide need of the landlord for an order of eviction under section 14 of the Act, and Section 14 is expressly superceded by Section 21.
This question is, there fore, beyond the scope of the present enquiry.
The respondent tenant also contended that the premises was constructed in 1972 and the landlord had never occupied this premises viz., the second floor of the building for his personal use and had even let out the first floor prior to 1980.
In the present case the respondenttenant did not produce any material to prove letting out of any part of the building much less this premises i.e. second floor of the building.
313 After the arguments were concluded before us and the judg ment was reserved, the respondent has filed an application under order 41 Rule 27 read with Section 15 1 C.P.C. for admitting additional evidence to show letting out of the second floor of the building.
It has been stated that the evidence could not be produced in the Courts below since the objections were not listed for investigation by the Courts.
No cogent ground is shown to permit any additional evidence when no attempt to produce any evidence was made in any of the Courts below upto the High Court or even here till conclusion of the hearing before us.
The application is rejected.
The lease for limited period of three years ex pired in 1983 and more than six years have been spent since then in this litigation at the stage of recovery of posses sion.
The facts of the case indicate that the respondent 's plea is a clear after thought and is baseless.
The absence of existence of any jurisdictional fact not having been proved by the respondent tenant even after objecting to recovery of possession on expiry of the period of limited tenancy there was no ground to refuse restoration of possession to the landlord.
More than twice the period of the limited lease has expired even after the date of expiry of the lease.
We see no reason to delay any more the relief due to the landlord.
Consequently, the appeal is allowed.
The impugned orders passed by the Rent Controller, Rent Control Tribunal and the High Court are set aside and the landlord 's application for recovery of possession is allowed.
The respondent tenant shall also pay Rs.2,000 as costs to the appellant landlord in addition to an amount equal to that calculated on the basis of the monthly rent for the entire period till the date of restoration of possession.
Y. Lal Appeal allowed.
| The Respondent firm made an application to the appel lantElectricity Board for the supply of 60 KVA electricity and the Board entered into an agreement with the Respondent firm in that behalf and gave electricity connec tion on 13.4.1981.
Thereafter the Respondent firm applied for reduction of electricity from 60 KVA to 45 KVA and a fresh agreement was executed on May 2, 1981 and fresh con nection of 45 KVA was given on 29.5.1981.
It is respondent 's case that it had requested the Electricity Board on 19.6.1981 to cut off the Electricity.
The firm received Bills for minimum guaranteed charges for four months i.e. from June to September 1981.
The firm refuted its liability to pay the bill on the ground that it consumed no electrici ty during the aforesaid period of 4 months.
Consequent upon the firm 's failure to pay the Bill, the Board disconnected the electricity connection on 28.9.1981.
The firm ultimately received a bill for Rs.22,951.50p for the period commencing from June to August 1981.
On the firm 's failure to pay the Bill, the Board sent a requisition to the Certificate Offi cer who sent a notice to the firm on 6.7.1981.
The Certifi cate Officer rejected the plea of the firm that it was not liable to pay the Bill and proceeded to attach the property of the firm.
Being dissatisfied with the action, the re spondent firm filed a Writ Petition in the High Court for quashing the bills as also the certificate proceedings.
The High Court took the view that the Board itself having disconnected the connection, it was not entitled to any charges for the period after September 1981 and it was not open to the Board to contend that under clause 9 of the agreement it was not open to either party to terminate the agreement of minimum guaranteed charges before the expiry of two years from the date of the agreement.
The High Court accordingly quashed, the bills as well as the certificate proceedings but allowed the charges for July, August and September 1981 to be adjusted against the security money.
276 The Electricity Board has therefore filed this appeal after obtaining Special Leave.
Allowing the appeal, this Court, HELD: A supply.agreement to a consumer makes his rela tion with the Board mainly contractual, where the basis of supply is held to be statutory rather than contractual.
In cases where such agreements are made, the terms are supposed to have been negotiated between the consumer and the Board, and unless specifically assigned, the agreement normally would have affected the consumer with whom it is made.
[286D E] The agreement was reasonable and valid and it was not determined with the disconnection of supply to the respond ent firm.
The liability to pay the minimum guaranteed charges, therefore, continued till the determination of the contract.
The Board was therefore entitled to submit the bills and make the demand on that account and recover the same according to law.
[285F G]
|
Appeal No. 96 of 1957.
Appeal by special leave from the judgment and order dated December 17, 1956, of the Punjab High Court (Circuit Bench) at Delhi in Civil Misc.
No. 896 D of 1956, arising out of the judgment and order dated November 1, 1956, of the Court of Commercial Subordinate Judge, Delhi in Suit No. 264 of 1956 under Order XXXVII, C.P.C. ]A. V. Vishwanatha Sastri 'and Naunit Lal, for the appellant.
Bakhshi Gurcharan Singh and Sardar Singh, for the respondent.
February 5.
The following Judgment of the Court was delivered by BOSE J. The defendants, Santosh Kumar and the Northern General Agencies, were granted special leave to appeal.
The plaintiff filed the suit out of which the 1213 appeal arises on the basis of a cheque for Rs. 60,000 drawn by the defendants in favour of the plaintiff and which, on presentation to the Bank, was dishonoured.
The suit was filed in the Court of the Commercial Subordinate Judge, Delhi, under 0.
XXXVII of the Code of Civil Procedure.
The defendants applied for leave to defend the suit under r. 3 of that Order.
The learned trial Judge held that " the defence raised by the defendants raises a triable issue," but he went on to hold that the defendants " have not placed anything on the file to show that the defence was a bona fide one." Accordingly, he permitted the defendants to appear and defend the suit on the condition of their giving security to the extent of the suit amount and the costs of the suit.
" The defendants applied for a review but failed.
They then applied under article 227 of the Constitution to the Delhi Circuit Bench of the Punjab High Court and failed again.
As a result, they applied here under article 136 and were granted special leave.
At first blush, 0.
XXXVII, r. 2(2), appears drastically to curtail a litigant 's normal rights in a Court of justice, namely to appear and defend himself as of right, if and when sued, because it says that when a suit is instituted on a bill of exchange, hundi or a promissory note under the provisions of sub rule (1) ". . the defendant shall not appear or defend the suit unless he obtains leave from a judge as hereinafter provided so to appear and defend." But the rigour of that is softened by r. 3(1) which makes it obligatory on the Court to grant leave when the conditions set out there are fulfilled.
Clause (1) runs " The Court shall, upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the application.
" 1214 But no sooner is the wide discretion given to the Court in r. 2(2) narrowed down by r. 3(1) than it is again enlarged in another direction by r. 3(2) which says that " Leave to defend may be given unconditionally or subject to such terms as to payment into Court, giving security, framing and recording issues or otherwise as the Court thinks fit.
" The learned counsel for the plaintiff argues that the discretion so conferred by r. 3(2) is unfettered and that as the discretion has been exercised by the learned trial Judge, no appeal can lie against it unless there is a " grave miscarriage of justice or flagrant violation of law" and he quotes D. N. Banerji vs P.R. Mukherjee (1) and Waryam Singh vs Amarnath (2).
Now what we are examining here are laws of procedure.
The spirit in which questions about procedure are to be approached and the manner in which rules relating to them are to be interpreted are laid down in Sangrayn Singh vs Election Tribunal, Kotah, Bhurey Lal Baya (1).
" Now a code of procedure must be regarded as such.
It is procedure, something designed to facilitate justice and further its ends; not a penal enactment for punishment and penalties; not a, thing designed to trip people up.
Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to both sides) lest the very means designed for the furtherance of justice be used to frustrate it.
Next, there must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them.
Of course, there must be exceptions and where they are clearly defined (1) ; , 305.
(2) ; (3)[1955] 2 S.C.R. 1, 8 9. 1215 they must be given effect to.
But taken by and large, and subject to that proviso, our laws of procedure should be construed, wherever that is reasonably possible, in the light of that principle.
" Applied to the present case, these observations mean that though the Court is given a discretion it must be exercised along judicial lines, and that in turn means, in consonance with the principles of natural justice that form the foundations of our laws.
Those principles, so far as they touch the present matter, are well known and have been laid down and followed in numerous cases.
The decision most frequently referred to is a decision of the House of Lords in England where a similar rule prevails.
It is Jacobs vs Booth 's Distillery Company (1).
Judgment was delivered in 1901.
Their Lordships said that whenever the deferce raises a " triable issue", leave must be given, and later cases say that when that is the case it must be given unconditionally, otherwise the leave may be illusory.
See, for example, Powszechny Bank Zwiazkowy W. Polsce vs Paros (2), in England and Sundaram Chettiar vs Valli Ammal (3) in India.
Among other cases that adopt the " triable issue " test are Kiranmoyee Dassi vs J. Chatterjee and Gopala Rao vs Subba Rao (5).
The learned counsel for the plaintiff respondent relied on Gopala Rao vs Subba Rao (5), Manohar Lal vs Nanhe Mal (6), and Shib Karan Das vs Mohammed Sadiq (7).
All that we need say about them is that if the Court is of opinion that the defence is not bona fide, then it can impose conditions and is not tied down to refusing leave to defend.
We agree with Varadachariar J. in the Madras case that the Court has this third course open to it in a suitable case.
But it cannot reach the conclusion that the defence is not bona fide arbitrarily.
It is as much bound by judicial rules and judicial procedure in reaching a conclusion of this kind as in any other matter.
It is unnecessary (1) (2) (3) (1935) 1 (4) (5) A.I.R. (1936) Mad.246.
(6) A.I.R. 1938 Lah.
(7) A.I.R. 1936 Lah.
12l6 no examine the facts of those cases because they are not in appeal before us.
We are only concerned with the principle.
It is always undesirable, and indeed impossible, to lay down hard and fast rules in matters that affect discretion.
But it is necessary to understand the reason for a special procedure of this kind in order that the discretion may be properly exercised.
The object is explained in Kesavan vs South Indian Bank Ltd. (1), and is examined in greater detail in Sundaram Chettiar vs Valli Ammal (supra), to which we have just referred.
Taken by and large, the object is to see that the defendant does not unnecessarily prolong the litigation and prevent the plaintiff from obtaining an early decree by raising untenable and frivolous defences in a class of cases where speedy decisions are desirable in the interests of trade and commerce.
In general, therefore, the test is to see whether the defence raises a real issue and not a sham one, in the sense that, if the facts alleged by the defendant are established, there would be a good, or even a plausible, defence on those facts.
Now, what is the position here? The defendants admitted execution of the cheque but pleaded that it was only given as collateral security for the price of goods which the plaintiff supplied to the defendants.
They said that those goods were paid for by cash payments made from time to time and by other cheques and that therefore the cheque in suit had served its end and should now be returned.
They set out the exact dates on which, according to them, the payments had been made and gave the numbers of the cheques.
This at once raised an issue of fact, the truth and good faith of which could only be tested by going into the evidence and, as we have pointed out, the learned trial Judge held that this defence did raise a triable issue.
But he held that it was not enough for the defendants to back up their assertions with an affidavit; they should also have produced writings and documents which they said were in their possession (1) I.L.R. 1217 and which they asserted would prove that the cheques and payments referred to in their defence were given in payment of the cheque in suit; and he said " In the absence of those documents, the defence of the defendants seems to be vague consisting of indefinite assertions. . . .
This is a surprising conclusion.
The facts given in the affidavit are clear and precise, the defence could hardly have been clearer.
We find it difficult to see how a defence that, on the face of it, is clear becomes vague simply because the evidence by which it is to be proved is not brought on file at the time the defence is put in.
The learned Judge has failed to see that the stage of proof can only come after the defendant has been allowed to enter an appearance and defend the suit, and that the nature of the defence has to be determined at the time when the affidavit is put in.
At that stage all that the Court has to determine is whether " if the facts alleged by the defendant are duly proved " they will afford a good, or even a plausible, answer to the plaintiff 's claim.
Once the Court is satisfied about that, leave cannot be withheld and no question about imposing conditions can arise; and once leave is granted, the normal procedure of a suit, so far as evidence and proof go, obtains.
The learned High Court Judge is also in error in thinking that even when the defence is a good and valid one, conditions can be imposed.
As we have explained, the power to impose conditions is only there to ensure that there will be a speedy trial.
If there is reason to believe that the defendant is trying to prolong the litigation and evade a speedy trial, then conditions can be imposed.
But that conclusion cannot be reached simply because the defendant does not adduce his evidence even before he is told that he may defend the action.
We do not wish to throw doubt on those decisions which decide that ordinarily an appeal will not be entertained against an exercise of discretion that has been exercised along sound judicial lines.
But if the 1218 discretion is exercised arbitrarily, or is based on a mis understanding of the principles that govern its exercise, then interference is called for if there has been a resultant failure of justice.
As we have said, the only ground given for concluding that the defence is not bona flde is that the defendant did not prove his assertions before he was allowed to put in his defence ; and there is an obvious failure of justice if judgment is entered against a man who, if he is allowed to prove his case, cannot but succeed.
Accordingly, interference is called for here.
The appeal is allowed.
We set aside the orders of the High Court and the learned trial Judge and remand the case to the first Court for trial of the issues raised by the defendants.
The costs of the appellants in this Court will be paid by the respondent who has failed here.
Appeal allowed.
| % Controversies relating to the seniority of the officers in the Indian Forest Service (I.F.S., for short) in this batch of cases from the States of Maharashtra, orissa and Uttar Pradesh, arose as asequal to three decisions of this Court in regard to the constitution of the Indian Forest Service, in Kraipak vs Union of India, AIR 1970 SC 150; Parvez Qadir vs Union of India, and Union of India vs Chothia, ; The Court had to consider in these cases the questions arising out of the selections made by the Special Selection Boards (S.S. Bs.) in place of the selections set aside by the Kraipak case above mentioned, and was concerned with the initial recruitment under section 4(1) of the I.F.S. (Recruitment) Rules, 1966.
The first selections by way of initial recruitments to the State cadres were made sometime in 1966 and 1967.
The Kraipak decision came in 1969.
In the meanwhile, in many of the States, the first selection had been made followed up by subsequent recruitments largely made on the basis of competitive examination under rule 4(2)(a) of the Recruitment Rules and a few also, by promotion under rule 4(2)(b).
As a result of the second (and third) selections made by the S.S.B., a number of officers in the respective State Forest Service (S.F.S.) had been given appointment in the IFS with effect from October 1, 1966, under rule 4(3A) and were placed in a position of higher seniority vis a vis the recruits direct recruits under rule 4(2).
The direct recruits were dissatisfied with this.
In the case of Uttar Pradesh, nine petitioners moved the High Court for relief, out of whom, eight direct recruits of 1968 and 1969 confirmed between 1969 and 1972 came up in appeal to this Court.
In this State, the initial recruitment was made in 1966 67 of 85 officers, 58 to the posts in the senior time scale and 27 to the posts in the junior time scale.
Subsequently, six persons were promoted under rule 4(2)(b) and 286 nine persons were recruited under rule 4(2)(a) of the Recruitment Rules.
the initial recruitment having been declared bad, a fresh S.S.B. was appointed and, on its recommendations, 104 persons were appointed to the service, 60 to senior scale posts and 44 to junior scale posts.
Again, in 1976, six more persons were added and thus 110 persons were taken in by way of initial recruitment as against 85 persons taken in the first selection.
The direct recruits were aggrieved by these selections.
Their case was rejected by the High Court.
In the case of Maharashtra, the first selection was made on 2.2.1967 of 57 officers, 36 for the senior time scale and 21 for the junior time scale.
This was set aside.
On July 13, 1971, at the second selection, 116 officers were found eligible but only 66 were considered suitable for appointment.
39 out of 51 eligible officers were found suitable for the senior scale, of whom, 35 were appointed immediately and four, later.
For junior scale 27 were found suitable, out of whom 23 were appointed initially and four, later.
All these 66 appointments were made w.e.f. t. tO. 1966.
Some persons, who had joined the State Forest Service in 1962 and had put in 4 years ' service as on 1.10.1966, and were thus eligible for consideration for junior scale posts, filed a writ petition in the High Court.
Their grievance was that the government had not considered all the officers who were eligible for the junior posts, as should have been done as laid down in the Chothia case aforementioned.
The High Court allowed the writ petitions.
Some of the respondents, comprising persons, who had been directly recruited under rule 4(2) between 1968 and 1970, appealed to this Court against the decision of the High Court.
In the case of Orissa, eight persons moved this Court by Writ Petitions.
They had joined the orissa State Forest Service as on 1.4.1962.
After two years ' training, they had been appointed Assistant Conservators of Forests on 1.4.1964.
By 1.4.1966, they had four years ' continuous service in the State Cadre.
They had become eligible for selection to junior scale posts in the l.
F.S. Two selections were made by way of initial recruitment, once in January, 1967, when 41 officers were selected, and, then, in 1972, 42 out of 82 eligible officers were selected.
The petitioners were taken into the I.F.S. under rule 4(2)(b) between 1975 and 1977.
The petitioners ' contention was that their names were not considered at all either at the first selection or at the second selection, and the selections were made by considering eligible officers in the order of seniority only to recruit 41 or 42 persons.
The government did not consider all the 82 eligible officers and select 34 out of them arranged in the order of preference, and this vitiated the selection, as 287 held in the Chothia case afore mentioned.
Dismissing the appeals from U.P. and Maharashtra subject to observations and allowing the Orissa writ petitions, and directing the Special Selection Board to redo the selections in the light of the principles set out, the Court, ^ HELD: The initial recruitment regulations clearly envisage that the Special Selection Board should consider the cases of all the officers in the State Forest Service who fulfil the conditions of eligibility and judge their suitability for appointment to posts in the service and prepare a list of such officers in the order of preference.
This selection was done by a Board, the constitution of which was found to be vitiated.
The logical consequence of this would be that the process of selection had to be redone by a validly appointed S.S.B., before which the range of selection was the same as was, or should have been, considered by the initial S.S.B. i.e. Out of those officers in the S.F.S. who were eligible as on 1.10.66.
However, there had been some changes subsequent to 1.10.66 in the C.R.S.
Of some of the officers pertaining to the period upto 1.
10.66, consequent on the representations for expunction or modification of the adverse remarks, and nobody could validly object to these persons also being considered since the case of an officers who has the adverse remark against him struck off or modified, is on the footing as if such adverse remark had not been there at all, or had been in the modified form from the beginning.
The decision in the Kraipak case necessitated a complete review of the first selection.
The subsequent selection Boards could not be compelled to restrict their adjudication regarding suitability to the same number of persons as the first Board had selected, so long as the same list of eligible officers and their records as on 1.10.1966 were considered.
[309D H; 310C D] The first proviso to rule 4(2) of the cadre Rules, only outlines the general principle that whoever has the power to do a particular thing, has also the power to exercise it from time to time, if needed.
The Central Government has the power to alter the strength and composition of the cadres at any time.
However, if the terms of the relevant rules are scruitinized, it will be seen that the strength and composition of the cadres have to be determined by regulations which have to be made by the Central Government in consultation with the State Government.
If the initial composition can be only drawn up in consultation with the State Government and by Regulations, it will not be permissible for the Central Government to modify or alter the same save in the same manner.
It is not possible to accept the contention of 288 the initial recruits that the mere appointment of an excess number of officers should be treated as an automatic expansion of the cadre strength and composition in exercise of the power available under rule 4(1).
[312D E; 313A B] These cases are concerned with a set of Regulations whose whole purpose is to fix the cadre strength.
It is also a provision in regard to an All lndia Service in regard to the constitution of which both the Central Government and the State Governments have a say.
The cadre strength could not be varied without amending the Regulations and schedule or without.
lt consulting the State Government concerned.
[313H;314A] The Cadre Regulations, read with the Cadre Rules, leave no doubt that the strength and composition referred to or prescribed therein, are of the entire cadre of the service in the State concerned and are not restricted to the recruitments made after the initial recruitment.
The total authorised strength referred to is the total number of officers, who, at any point of time, can man the posts in the cadre.
It could not have been the intention that the cadre should consist of an indefinite number of persons recruited by the S.S.B. from the S.F.S. supplemented by the number of officers referred to as the total authorised strength.
There is no difficulty in holding that the total strength of the cadre is to be counted by including the initial recruits and that all the eligible officers adjudged suitable cannot be recruited to the service in excess of the total authorised strength.
[314E F; 316B] The critical and difficult question in these appeals is not that appointments by way of initial recruitment were made in excess of the total authorised strength but that the government has failed to keep in mind the restrictions placed on the number of senior and junior posts in each cadre while making appointments.
The grievance of the appellants is that more recruitments have been made against the junior posts than is permissible under the respective schedule.
[316C E] The initial recruits are right in contending that the Cadre Regulations do not lay down any water tight classification of junior and senior posts in the manner contended for by the direct recruits.
It is true that the Cadre Regulations make a reference to seniors and junior posts, but this is not intended to be an essential element in the composition of the cadre.
The Cadre Rules do not indicate, in respect of some posts, whether they are to be considered as junior or senior, and they contain no definition of the words 'senior ' and 'junior ' posts.
It cannot be postulated that the entrants to the service will first enter on a junior 289 scale post and work their way upward.
All the rules show that an officer, being in the junior or senior time scale or on a junior post or senior post, depends upon various eventualities, and it is not possible to pin down any posts as senior or junior or any officer as on one of the two time scales.
The Court agreed with the initial recruits that the reference to junior and senior posts in the cadre should not be considered to be so rigid or integral a part of the cadre composition as to affect the validity of the appointments made m excess of a particular number.
[318B C; 319B C] One thing plain on the terms of the Regulations is that once a person is found to be eligible and is adjudged suitable for recruitment under the Initial Recruitment Regulations, he has to be taken into service as a part of the initial recruitment either immediately on 1.10.1966 or as and when the vacancies arise in the cadre.
It is necessary to remember that if the vacancies are in senior posts, they can be filled only by S.F.S. Officers with eight years ' continuous service, and exhypothesi such officers will not be available for at least four more years, and if the vacancies are of junior posts, they can be filled in only after a competitive examinations is held, which will take time.
The Court cannot accept the contention that officers of the S.F.S., who have been adjudged suitable by the S.S.B. should not be taken into the service merely because their number exceeds the number of posts available.
True, they cannot be appointed immediately but the consequence cannot be that they should be ignored and persons recruited under rule 4(2) given preference over them.
It is only rational to interpret the rules as laying down that all those officers of the S.F.S. with eight or four years ' experience, who are adjudged suitable for the service should be recruited to the service bef ore any recruitment can at all start under rule 4(2).
Whether all such persons are entitled to the back dating of their appointment to 1.10.1966 or not, they are certainly entitled to contend that their appointment should be given precedence over the appointments of the recruits under rule 4(2) of the Recruitment Rules.
In this view of the matter, the plea of the petitioners that they will get precedence over the surplus officers among the eligible cannot at all be accepted.
It is only right that persons should be adjudged on the basis of the correct C.R.S. Any.
Expunction or modification in the C.R.S.
Of a period naturally relates back to that period and no legitimate objection can be taken if the correct C.R.S are taken into account.
There was nothing wrong in the selections made by the Selection Board.
[319D E; 320D E; 321C E] Rule 4(3A) only places the fresh recruits in the same position as if they had been recruited in the first instance, i.e. on 1.10.1966 as indeed 290 they should have been, and thus involves no retrospective effect beyond the date of commencement of the Act.
It is also not 'correct to suggest that it prejudicially affects the direct recruits in any way.
The appellants acquire under the Rules no right to be in service until after the initial recruitment is over.
Under the Rules, they can rank only after the candidates who get in by way of initial recruitment.
The appellants cannot be aggrieved that those in service in the S.F.S. are found suitable for recruitment to the service and taken into service w.e.f. 1. 10.1966.
Those persons, even if not entitled to appointment as on 1. 10.1966, are entitled to be appointed as and when vacancies arise and must always be given a position of precedence over the recruits under Rule 4(2).
The direct recruits can hardly claim that they are prejudicially affected by the re making of the initial recruitment.
[323D G] So far as Orissa is concerned, all the 82 eligible officers had to be considered for initial recruitment, but the S.S.B. merely selected 42 officers and made an omnibus observation that the others were found unsuitable.
This, as explained Chothia 's case is not a proper compliance with the Rules, and so the selection has to be set aside with a direction that it should be re done properly.[324A B] There has been delay on the part of the petitioners in coming to this Court, but in view of the complicated nature of the issues involved, the petitioners should not be put out of the court on the ground of laches.
All the 82 eligible officers as on 1.10.66 should be considered and not merely some of them.
Their suitability should be adjudged.
If they are not found suitable, reasons should be given which the U.P.S.C. should be able to consider.
If they are found suitable, a list of such officers should be drawn up with ranking given to them in the order of preference for the consideration of the U.P.S.C.
Since this has not been done, the recruitments have to be set aside and the matter remanded with the direction that it should be finalised as per the Recruitment Rules and in the light of the judgment.
[324E G] If the Court had agreed with the direct recruits that there had been some invalidity or infirmity attached to the subsequent selections by way of initial recruitment, the Court would not have rejected the appeals on the ground that the Regulations cannot give rise to a cause of action.
There is no error in the procedure followed by the Government.
[327E] It is not the intention of the Court, nor can it be the result of dis 291 cussion, that the appointments of any officers recruited under rule 4(1) or 4(2) should be considered invalid.
All the officers selected will have to be adjusted, if necessary, by amending the Cadre Regulations.
The only result of the Court 's findings would be the re adjustment of the seniority with necessary and consequential effect on promotions in the service.
[327G] No merit in the appeals from U.P. and Maharashtra, Orissa writ petitions allowed, S.S.B. directed to re do the selections in the light of the principles set out in the judgment.[328A B] Kraipak vs Union of India, AIR 1970, SC 150; Parvez Qadir vs Union of India, ; ; Union of India vs Chothia; , ; Jagat Narain vs Union, CMWP 58 of 1968; Lila Gupta vs Lakshmi Narain, ; at 932; Atlas Cycle Industries Ltd. vs State of Haryana, ; at 1076, 1084, 1085; G.S. Lamba vs Union of India, at 1032; Kapur vs Union of India, ; Union of India vs Harnek Singh, L.P.A. 406/83, decided by the Punjab & Haryana High Court on 20.9.1983; Inderjit Singh vs Union of India, ; Amrik Singh and Ors.
vs Union of India & Ors.
, and R.R. Verma and Ors.
vs The Union of India & Ors., , referred to.
|
Civil Misc.
Petitions Nos.
20021 22 of 1986.
in Civil Appeal No. 2924 of 1984.
From the Judgment and order dated 22.7.1983 of the Delhi High Court in W.P. No. 963 of 1982.
S.N. Kacker, P.M. Amin, Atul, B. Munim and Ashok Grover for the Applicant.
A.K. Ganguli, Miss Sushma Relan and Miss A. Subhashini for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These two Civil Misc.
Petitions are by Star Diamond Company India.
The applicant has referred to the judgments of this Court in Raj Prakash 's case dated 5th March, 1986 and Indo Afghan Chamber of Commerce 's case ; dated 15th May, 1986.
The applicant states that the applicant was neither a party nor was served with any notice of the said proceedings resulting in the.
said two decisions.
According to the applicant, it was not bound by the directions therein.
We are unable to accept the said contentions.
Such decisions of Court laying down the position in law are laws binding on all.
In the order of this Court dated 18th April, 1985, the question of 783 entitlement under certain circumstances came up for consideration.
The Government had wrongfully refused to allow Export House Certificates to those who had not diversified their exports.
It was held by this Court following the decisions of several High Courts that this was wrong.
This Court in the order dated 18th April, 1985 in Civil Appeal No. 1423 of 1984, (a) confirmed the orders of the High Court, quashed the impugned orders of the Government and directed the Government to issue necessary Export House Certificates for the year 1978 79; (b) It was further directed that Export House Certificates should be granted within three months from this date.
(c) Save and except items which are 'specifically banned under the prevalent import policy at the time of import ', the parties the merchants would be entitled to import all other items whether canalised or uncanalised, and in accordance with the relevant rules.
Both canalised and uncanalised items could be imported in accordance with the relevant rules except those which were specifically banned under the prevalent import policy at the time of import.
The effect of this direction came to be considered in Raj Prakash Chemicals Ltd. vs Union of India (supra).
We have this date explained the effect of the same in Union of India vs M/s Godrej Soaps Pvt. Ltd & Anr., (Civil Appeal No. 3418/86 arising out of SLP (Civil) No. 8144 of 1986).
This question further came up for examination in the case of M/s Indo Afghan Chamber of Commerce & Ors.
vs Union of India, (Writ Petition No. 199 of 1986) (supra).
This day we have also in the judgment in M/s Godrej Soap 's case explained the true purport of the said decision.
The respondents have not permitted, according to the applicant clearance of the goods in view of the said two decisions referred to hereinbefore.
The case of the applicant is that it is not bound as the applicant was neither a party to any of the aforesaid proceedings nor any notice was given.
We are unable to accept this position.
For what we held in the said two decisions, we crave leave to refer to the said two decisions.
We reiterate as we have mentioned in M/s Godrej Soaps ' case whether importation of canalised items would be covered by the order was not adverted to in the first order dated 18th April, 1985.
Use of the expression "whether canalised or not" was intended to convey that both canalised and non canalised items would be covered within the ambit of the order.
The position has been clarified by the letter dated 18th June, 1986 written by the respondent which appears at page 132 of the Paper 784 Book.
It has been mentioned that the holders of additional licence issued for 1978 79 would be entitled to import only those goods which are included in Appendix 6 Part 11 of AM 85 88.
The fact that the Additional Secretary to the Government of India, Ministry of Finance (Department of Revenue) on 23rd April, 1986 wrote a letter which is not in consonance with the subsequent direction would not in any way affect the position or create any estoppel.
Nor can such a letter be used as an argument that that was the government 's understanding of the matter.
That is irrelevant.
In the premises the interim order prayed for in these applications is refused.
The applications are thus disposed of.
There will be no order as to costs.
| Section 384 of the Punjab Municipal Corporation Act 1976 states that the procedure provided in the Code of Civil Procedure in regard to suits shall be followed, as far as it can be made applicable, in the disposal of applications, appeals or references that may be made to the District Judge under the Act or any bye law made thereunder.
A dispute between the Railways and the Municipal Corporation resulted in revocation of the sanction for construction of certain shops situated on the road along side the railway line in the city of Amritsar.
Subsequently, the Municipal Commissioner passed an order directing demolition of these shops.
The appellant, who is an allottee of one of these shops on licence from the Railways, being aggrieved by that order preferred an appeal before the District Judge under section 269(2) of the Act.
In that appeal, the District Judge rejected an application submitted by the appellant for recording of evidence.
The appellant filed a writ petition against that order before the High Court which took the view that if the District Judge so feels the application for recording of evidence could be considered under Order 41, Rule.27 of the Code of Civil Procedure.
In the appeal by Special Leave to this Court on the question: 618 Whether in an appeal filed under section 269(2) of the Punjab Municipal Corporation Act 1976, the procedure of a civil suit as provided in the Code of Civil Procedure will have to be followed in view of the language of section 384 of the 1976 Act.
Dismissing the Appeal, the Court, ^ HELD: The language used in section 384 of the Punjab Municipal Corporation Act 1976 only indicates that the procedure as provided in the Code of Civil Procedure in regard to a suit will have to be followed in proceedings under that Act when the matter goes to the District Judge either by way of an application, reference or appeal.
The use of the phrase "as far as it can be made applicable" in that section goes to show that it is not expected in any one of the proceedings contemplated therein that is, applications, appeals and references to follow the procedure of a suit technically and strictly in accordance with the provisions contained in the Code of Civil Procedure.
It is only for the purposes of guidance that the procedure of a suit as Provided in the Code of Civil Procedure can be considered.
[621A B; C D] In an appropriate case whenever the District Judge feels satisfied he may give an opportunity to the parties to lead evidence under Order 41, Rule 27 of the Code of Civil Procedure, as it will be open to him to apply the procedure as far as it can be made applicable in the facts and circumstances of each case.
[621E F] It, therefore, could not be said that in an appeal under section 269 sub cl.(2) before a District Judge the procedure of a suit as provided in the Code of Civil Procedure will be necessary.
[621B C]
|
minal Appeal No. 138 of 1968.
Appeal by special leave from the judgment and order dated the June 10, 1968, of the Bombay High Court in Criminal Appeal No. 667 of 1967.
V. section Desai, P. section Nadkarni and Vineet Kumar, for the appellants.
section K. Dholakia and B. D. Sharma, for the respondent.
The Judgment of the Court was delivered by Ray, J.
This is an appeal by special leave from judgment dated 10 June, 1968 of the High Court at Bombay setting aside the order of acquittal of the appellants and convicting them under section 325 read with section 34 of the Indian Penal Code for having assaulted and injured Choharjasing and sentencing each of the appellants to four years rigorous imprisonment and a fine of Rs. 1000 each and six months rigorous imprisonment in default of payment of fine and further convicting the appellants under section 323 read with section 34 of the Indian Penal Code for having assaulted and injured Ramkeshwarsing and sentencing each of the appellant 's to three months rigorous imprisonment.
The sentences were to run concurrently.
The appellants and another accused were charged under sec tions 143, 147, 307 read with section 149 of the Indian Penal Code.
The four appellants were also charged under section 148 of the Indian Penal Code.
In the alternative the appellants were charged under section 307 read with section 34 of the Indian Penal Code.
The appellants and the other accused were further charged under section 326 read with section 149 of the Indian Penal Code.
In the alternative they were charged under section 324 read with section 34 of the Indian Penal Code.
The appellants and the other accused were further charged under section 324 read with section 149 of the Indian Penal Code.
In the alter native they were charged under section 324 read with section 34 of the Indian Penal Code.
The complainant Choharjasing and Nandlal are brothers.
They resided in room No. 5 of Vidya Bhuvan Kurla along with their cousin Ramkeshwarsing and Gayitrising brother in law of Choharjasing.
Chollarjasing.
Nandlal and Ramkeshwarsing were employed at Premier Automobiles at Kurla.
The, prosecution witness Awadh Narayan who resided at Moturam Chawl was also employed at Premier Automobiles.
Another prosecution witness 624 Dinanath was a shopkeeper residing at Halav Pool, Kurla.
The first appellant dealt in milk and resided at Maulana Chawl, Halav Pool, Kurla.
Appellant No. 2 is the brother of appellant No. 1 and resided at a nearby Chawl at Halav Pool and was employed at Premier Automobiles at Kurla.
Appellant No. 3 also resided at Halav Pool Chawl, Kurla and was employed at Premier Automobiles, Kurla.
Appellant No. 4 resided at another Chawl at Kurla and was also employed at Premier Automobiles, Kurla.
Accused No. 5 worked as a Mehtaji of one Jairaj Pandye and resided at Bhagwat Bhuvan, Halav Pool, Kurla.
The prosecution case was this.
The relation between Cho harjasing and his brother Nandlal on the one hand and appellants No. 1 and 2 on the other were strained for some time.
On the morning of 15 October, 1964 Nandlal brought a truck load of earth and spread the same in front on their room.
On that account there was some altercation between him and appellants No. 1, 2 and 3.
On the morning of 16 October, 1964 Choharjasing left his room and went to Podar Hospital at Worli for undergoing an operation for fistula.
He returned to his room at about 11 or 12 noon.
On his return he was told by his brother Nandlal about the quarrel and that the appellants and another accused had given a threat and enquired as to where Choharjasing was.
Nandlal further told Choharjasing that the appellants and the other accused had threatened that they would break Choharjasing 's hands .and feet.
Choharjasing went to the Police Station and filed a non cognizable complaint.
The police directed Choharjasing to approach the proper criminal court.
Choharjasing went to prosecution witness Dinanath and told him about the threats.
Choharjasing then returned to his room and launched with his brother Nandlal, cousin Ramkeshwarsing and brother in law Gaitrising.
Choharjasing was not feeling comfortable after the ,operation.
He sat on a charpoy (cot) outside his room.
Nandlal was with Choharjasing.
Ramkeshwarsing was inside the room.
At about 5 or 5.30 p.m. the appellants came there.
Appellant No. 1 was armed with a lathi.
Appellants No. 2, 3 and 4 had also lathis or something like iron bars.
Accused No. 5 was standing at some distance.
Accused No. 5 instigated the appellants by shouting the words 'Dekhte kya ho, Mar Dalo ' (what are you looking at, assault them).
Appellant No. 1 also shouted to assault.
The appellants surrounded Choharjasing and Nandlal and started assaulting them with weapons.
Appellants No. 1 and 4 hit Choharjasing.
Appellants No. 2 and 3 hit Nandlal.
Choharjasing fell down.
The assault continued.
Appellant No. 2 thrust his stick in the mouth of Choharjasing and he lost four of his teeth.
Choharjasing and Nandlal both fell unconscious.
Ramkeshwar sing received a blow on left hand.
625 The Sub Inspector of Police, on getting a telephone message came to the spot.
On the way the Sub Inspector met appellants No. 1 and 4 each of whom had injuries on their person.
They were put in the police van.
The van was taken to the place of incident.
Choharjasing and Nandlal were lying unconscious.
Witnesses Awadh Narayan and Dinanath were present there.
Choharjsing.
and Nandlal were put into the van and removed to the hospital.
At the time of admission to the hospital Choharjasing had 12 injuries.
Nandlal had 5 injuries.
Appellant No. 4 had 3 injuries.
Choharjasing and Nandlal were detained in the hospital as indoor patients from 16 October 1964 to 12 November, 1964.
Appellant No. 4 in spite of medical advice left the hospital on 17 October, 1964.
The trial Court acquitted all the 5 accused.
The trial Court gave these reasons.
Choharjasing and Ramkeshwarsing, did not mention accused No. 5.
Witness Award Narayan did not mention accused No. 5.
Ramkeshwarsing did not mention accused No. 2, 3 and 5.
Witness Awadh Narayan did not mention accused No. 3.
Choharjasing and Nandlal were all thin and of weak build.
The accused were hefty in build.
It is difficult to say why so many persons would engage in the assault on two weak persons, particularly when Choharjasing had just returned after operation from the hospital.
The injuries on appellants No. 1 and 4 were not satisfactorily explained.
The possibility of persons from the crowd feeling enraged at the assault on accused No. 1 to 5 who were holding important offices in the local Congress organisation and then rushing forward and inflicting injuries on the assaulters of Choharjasing and Nandlal two well known persons of the locality cannot be ruled out as contended for by the defence.
Iron bars and sticks were not recovered.
Ramkeshwarsing had failed to go to the police station of his own accord.
He and Choharjasing did not implicate accused No. 5 in their earlier statements.
The presence of accused No. 2 and 3 is not free from doubt.
Ramkeshwarsing and Awadh Narayan did not mention accused No. 2 in their earlier statements.
Ramkeshwarsing did ;not mention the name of accused No. in his statement to the police.
Choharjasing and Nandlal could not explain how accused No. 1 and 4 came to receive the injuries.
Though the injuries on Choharjasing and Nandlal are no doubt serious, the evidence does not satisfactorily establish that they were caused by the accused in furtherance of their common intention and that they formed an unlawful assembly and used force or violence and they rioted with deadly weapons in prosecution of their common intention.
The defence that accused No. 1 was assaulted and seeing 626 this accused No. 4 came there and he was assaulted cannot in the circumstances be overlooked.
With these reasons the trial Court acquitted all the five accused.
The High Court set aside the order of acquittal.
The High Court arrived at these conclusions.
The evidence established that the grievous injury inflicted on Choharjasing and Nandlal and the simple injury inflicted on Ramkeshwarsing were inflicted by the appellants.
The trouble arose on account of dispute over the open space adjoining the room of Choharjasing.
The appellants could not be convicted under section 307 of the Indian Penal Code The appellants were guilty of causing grievous hurt.
The High Court, therefore, convicted the appellants for injuries sustained by Choharjasing, Nandlal and Ramkeshwarsing.
Counsel for the appellants made these submissions.
The High Court interfered with the acquittal without giving any reasons The first information report about the cognizance of the offence was wrongly admitted in evidence.
The incident on the morning of 16 October, 1964 could not be believed and therefore the entire prosecution would fail.
As to the incident on the morning of 16 October, 1964 the trial Court said that the time of recording the complaint on 16 October, 1964 was 11.05 am.
where as the complainant 's version in court was that he returned from the hospital at about 11 a.m. or 12 noon, when he received information from Nandlal.
Further in the complaint Choharjasing did not mention about any of the accused and Nandlal also did not mention accused No. 5.
The land on which earth was spread belonged to one Khot and therefore appellant No. 1 could not have interest in that land.
Or these grounds the trial Court did not accept the version that there was any occurrence on the morning of 16 October, 1964.
The High Court, however, accepted the version that there was an incident on the morning of 16 October, 1964 and said that Chohajasing would not have taken the trouble of going to the police and lodging a complaint.
The High Court gave two broad reasons for accepting the prosecution version about the incident on the morning of 16 October, 1964.
First, there was the complaint by Choharjasing.
Secondly, Choharjasing had gone to the hospital on the morning of 16 October, 1964 and on his return from the hospital he went to lodge the complaint.
Choharjasing would not have done so, if there had been no incident in the morning.
The High Court referred to the first information report about the commission of the offence and said that once the statement was admitted in evidence it afforded a very strong corroboration 627 to the testimony of Choharjasing so far as the complicity of accused No. 1 to 4 in the crime was concerned and the first information report was admissible under section 157 of the Evidence Act.
The first information report is not substantive evidence.
It can be used for one of the limited purposes of corroborating or contradicting the makers thereof.
Another purpose for which the first information report can be used is to show the implication of the accused to be not an afterthought or that the information is a piece of evidence res gestao.
In certain cases, the first infor mation report can be used under section 32(1) of the Evidence Act or under section 8 of the Evidence Act as to the cause of the informant 's death or as part of the informer 's conduct.
The High Court was wrong in holding that the first information report would be admissible under section 157 of the Evidence Act.
When the maker of the first information report was examined in court the report was not tendered by the prosecution in accordance with the provisions of the Evidence Act.
The appellants were denied the opportunity of cross examination on the first information report.
The first information report was therefore wrongly relied upon in evidence for the purposes suggested by the High Court.
It is therefore to @ seen as to whether the High Court was justified in convicting the appellants on the evidence and the grounds mentioned in the judgment.
The evidence of the complainant is that in the afternoon of 16 October, 1964 all the appellants came armed with lathis or something like iron bars and all the four appellants assaulted Choharjasing and Nandlal with what the appellants had in their hands.
The further evidence is that appellant No. 2 thrust the lathi into Choharjasing 's mouth and be lost four of his teeth as a result of that.
Nandlal in his evidence stated that appellant No. 2 gave a blow with a stick on his head.
Nandlal and Choharjasing were attempting to run away when appellant No. 3 assaulted Nandlal on his head with what looked like an iron bar and appellant ,No. 4 also assaulted him with what he was holding and which also looked like an iron bar.
Nandlal further said that appellant No. 2 assaulted him before he fell down and after he bad fallen down all the appellants assaulted him.
Witness Ramkeshwarsing said that he saw all the appellants and when Choharjasing and Nandlal had fallen on the ground they were assaulted by all the appellants with sticks and iron bars.
Ramkeshwarsing further said that in the statement to the police he mentioned that he saw appellant No. 1, 2 and two others.
628 Witness Awadh Narayan said that he knew all the appellants and he saw sticks in their hands.
He corroborated Nandlal 's evidence that appellant No. 2 assaulted with a stick Choharjasing on the mouth.
He also said that all the appellants continued assaulting Choharjasing and Nandlal.
He said that in his statement to the police he mentioned the names of appellants No. 1 and 2.
Witness Dinanath said that he knew Choharjasing and Nandlal for a few years and he also know the appellants.
He said that appellant No. 2 had a stick in his hand and appellant No. 2 assaulted Nandlal on his head.
His further evidence was that appellant No. 2 gave a straight and perpendicular blow with a stick on the mouth of Choharjasing.
The Sessions Court was wrong in holding that Ramkeshwarsing did not mention the name of appellant No. 2.
He not only stated in his oral evidence that he had mentioned the name of appellant No. 2 to the police but this was also not challenged in cross examination.
The other witnesses Choharjasing, Nandlal, Awadh Narayan and Dinanath all spoke about the appellants who assaulted Choharjasing and Nandlal.
As to appellant No. 3 Choharjasing said that appellants No. 3 and 4 carried something like iron bars of a black colour.
As far as appellant No. 3 is concerned there is no contradictory police statement on the part of Choharjasing.
The oral evidence of Nandlal in relation to appellant No. 3 was that he assaulted Nandlal.
Nandlal in his statement to the police also mentioned about appellant No. 3.
There is no contradictory police statement on the part of Nandlal as far as appellant No. 3 was concerned.
Nor was any such contradiction put to Nandlal.
The medical evidence about the injuries to Choharjasing was that the injuries could be caused by hard and blunt substance like iron bars and lathis and were likely to cause death if not medically attended to.
The medical evidence about the injuries to Nandlal was that those injuries could be caused by coining in contact with hard and blunt substance such as lathi, bamboo, stones, iron bars etc.
and were serious injuries and were likely to cause death if not medically attended to.
Ramkeshwarsing 'in his oral evidence said that the appellants assaulted Choharjasing and Nandlal, He said that he did not mention appellants No. 3 and 4 in the police statement because he did not know them.
There is no contradictory police statement as far as witness Ramkeshwarsing is concerned in relation to appellant No. 3.
In his police statement he mentioned appellants No., 1 and 2 and he said that two others assaulted Choharjasing and Nandlal.
Ramakeshwarsing thus spoke of four persons 629 assaulting Chohajasing and Nandlal.
That was not challenged in cross examination.
Witness Awadh Narayan spoke of appel lant No. 3.
There is no contradictory police statement of Awadh Narayan in relation to appellant No. 3.
Witness Dinanath spoke about appellant No. 3 assaulting Choharjasing and Nandlal.
There is no cross examination of Dinanath that appellant No. 3 gave a blow with a stick to Nandlal.
On behalf of the appellants it was contended that appellants, No. 2 and 3 did not receive any injuries and therefore it was improbable that they would be involved in the assault.
That contention is unacceptable because of the clear and convincing evidence of several witnesses about appellants No. 2 and 3 assaulting Choharjasing and Nandlal.
The trial Court was wrong in holding that the names of appellants No. 2 and 3 were not mentioned by the witnesses to the police.
The names of appellants No. 2 and 3 were mentioned by the witnesses to the police.
The oral evidence of the witnesses was to that effect.
That evidence was not challenged.
The High Court was therefore justified in coming to the con clusion that the acquittal of appellants No. 2 and 3 by the trial Court was to be set aside.
The evidence of the several witnesses that appellants No. 2 and 3 assaulted Choharjasing and Nandlal cannot be discarded on the statement that the appellants No. 2 and 3 did not receive injuries.
It does not follow that appellants ,No. 2 and 3 were not at the scene of occurrence and did not commit the acts of assault just because there was no injury on them.
As far as appellants No. 1 and 4 are concerned the High Court was correct in holding that they were wrongly acquitted by the trial Court.
12 injuries on Choharjasing and 5 injuries on Nandlal were all serious in nature.
The oral evidence was rightly accepted by the High Court that all the appellants were guilty of assaulting Choharjasing, Nandlal and Ramkeshwarsing.
Counsel for the appellants relied on the decisions of this Court in Harbans Singh and Anr.
vs State of Punjab [1962]Suppl.
(1) S.C.R. 1041 and Khedu Mohton & Ors.
vs State of Bihar ; in support of the proposition that the High Court should not have interfered with the acquittal by the trial Court and if on the ruling of this Court in Khedu Mohton & Ors.
vs State of Bihar (supra) two reasonable conclusions can be reached on the basis of the evidence on record then the acquittal of the accused should be preferred.
The observations in Khedu Mohton 's case mean this: If two conclusions can be reached with a plausible appearance of reason the court should can in favour of that which leads to acquittal and not to that 630 which leads to t conviction.
Two views and conclusions cannot both be right and one must be preferred over the other because our criminal jurisdiction demands that the benefit of doubt must prevail.
As to powers of the appellate court this Court in Sanwat Singh & Ors.
vs State of Rajasthan ; laid down three principles.
First, the appellate court had power to review the evidence upon which the order of acquittal is founded.
Second, the principles laid down by the Judicial Committee in Sheo Swarup vs King Emperor 61 I.A. 398 are a correct guide for the approach by an appellate court.
These principles are that the views of the trial Judge as to the credibility of the witnesses, the presumption of innocence in favour of the accused, the right of the accused to the benefit of doubt and the slowness ,of an appellate court in disturbing the finding of fact arrived at by a Judge who had the advantage, of seeing the witnesses are the 'rules and principles ' in the administration of justice.
Thirdly, the appellate court in coming to its own conclusion should not only consider every matter on record having a hearing on the questions of fact and the reasons given by the trial court in support of the order of acquittal, but should also express reasons to hold that the acquittal was not justified.
in the light of the rulings of this Court to which reference has been made, we are satisfied that the High Court kept in view the rules and principles of appreciation of evidence and the right of the accused to the benefit of doubt and the, High Court gave reasons as to why the occurrence on the morning of 16 October, 1964 was proved and also why the appellants were found on the evidence on record to be guilty of having committed an offence.
Benefit of doubt was not sustainable in the present case inasmuch as the materials on record.
did not exclude the guilt of the appellants.
This Court in Khedu Mohton & Ors.
vs State of Bihar (supra) set aside the judgment of the High Court and restored that of the Sessions Judge by acquitting the appellants because the High ,Court did not deal with finding of the first appellate court that it was unsafe to place reliance on the evidence of four prosecution witnesses who were interested witnesses.
Another feature which vitiated the approach of the High Court in that case was that there was a delay of 8 days in filing the complaint and the first appellate, court said that it threw a great deal of doubt on the prosecution story.
The High Court made reference to some information lead before the Police and did not properly assess the delay in the filing of the complaint.
This Court found there that the information before the police prior to the complaint was 631 an application that there was an apprehension of breach of peace.
It is in this context of facts that this Court said that the High Court was wrong in setting aside the acquittal.
Once the appellate court came to the conclusion that the view of the trial court was unreasonable that itself would provide a reason for interference.
Again if it was found that the High Court applied the correct principles in setting aside the order of acquittal this Court would not ordinarily interfere with the order of conviction passed by the High Court in an appeal against acquittal or review the entire evidence where the High Court was right in its view of evidence.
Therefore, if the High Court has kept in view the rules and principles of appreciation of the entire evidence and has given reasons for setting aside the order of acquittal this Court would not interfere with the order of the High Court [See Harbans Singh vs State of Punjab (supra).
This Court in Nihal Singh & Ors.
vs State of Punjab ; said that there were two ways of dealing with an appeal by this Court from an order of conviction setting aside an acquittal.
One of the modes was to go through the evidence and find out whether the High Court had infringed the principles laid down in Sanwat Singh vs State of Rajasthan (supra) or whether the appeal was an exceptional one within the ruling of this Court in State of Bombay vs Rusy Mistry A.I.R. 1960 S.C. 391 where the finding was such that 'it shocks the conscience of the court or that it disregarded the forms of legal process or substantial and grave injustice had been done.
In dealing with an appeal against an acquittal the High Court can go into the questions of law and fact and reach its own conclusion on evidence provided it pays due regard to the fact that the matter had been before the Court of Sessions and the Sessions Judge had the chance and opportunity of seeing the witnesses depose to the facts See Laxman Kalu Nikalie vs The State of Maharashtra (1968) 3 S.C.R. [685].
The High Court was correct in setting aside the order of acquittal and convicting the appellants.
The appeal therefore fails and is dismissed.
If the appellants are on bail their bail bonds are cancelled.
They will surrender and serve out the sentence.
V.P.S. Appeal dismissed.
| This Court does not normally reappraise evidence in an appeal under article 136 of the Constitution but that fact would not prevent interference with an order of conviction, if, on consideration of the vital prosecution evidence in the case the Court finds it to be afflicted with ex facie infirmity.
The appellant was sentenced to death under section 302 Indian Penal Code.
The trial Court and the High Court based the conviction of the appellant primarily upon the testimony of two witnesses one of whom according to the prosecution case was present when the accused made murderous assault on the deceased and the other arrived soon after.
Neither of them nor anyone else who was told about the occurrence by the two witnesses made any report at the police station for more than 20 hours after the occurrence even though the police station was only two miles from the place of occurrence.
Setting aside the conviction, HELD : That the delay in lodging the report would raise considerable doubt regarding the varacity of the evidence of two witnesses and point to an infirmity in that evidence and would render it unsafe to base the conviction of the apPellant.
The first information report in a criminal case is an extremely vital and valuable piece of evidence for the purpose of corroborating the oral evidence adduced a ' the trial The object of insisting upon prompt lodging of the report to the police in respect of commission of an offence is to obtain early information regarding the circumstances in which the crime was committed, the names of the actual culprits and the part played by them as well as, the names of eye witnesses present at there scene of occurrence.
Delay in lodging the first information report quite often results in embellishment which is a Creature of after thought.
It is therefore essential that the delay in lodging the report should be satisfactorily explained.
[626 H]
|
vil Appeal No. 636 of 1964.
Appeal from the judgment and decree dated September 1, 1959 of the Madras High Court in O. section Appeal No. 104 of 1955.
T. V. R. Tatachari, for the appellants.
R. Thiagarajan, Jayaram and M. R. K. Iyer, for respondents, Nos. 1 and 9. 722 The Judgment of the Court was delivered by Mitter, J.
This is an appeal from a judgment of the High .Court at Madras on a certificate granted by it.
The main question in this appeal relates to the rate of interest payable in respect of four mortgages executed in between March 20, 1936 and January 2, 1938.
Both the learned trial Judge, Ramaswami J. of the Madras High Court and the Bench of two Judges in appeal were of the view that the provision for interest in the impugned mortgages should be reduced; but whereas the learned trial Judge reduced the rate of interest from 15 pet cent compoundable every quarter to 15 per cent compoundable with yearly rests, the Judges in appeal after taking all the circumstances into consideration held that 10 per cent compound interest with yearly rests would not be excessive and they reduced the rate accordingly.
They also scaled down the rate of interest to 6 per cent from the date of the institution of the suit.
The creditor has come up before this Court in appeal and his substantial complaint is that the rate of interest should not have been cut down by the Division Bench of the Madras High Court.
The power of the court to reduce interest in a case like this is derived from section 3 of the Usurious Loans (Madras Amendment) Act VIII of 1937.
Sub section (1) of that section gives the court the power to give relief in various ways if it has reason to believe that the transaction as between the parties thereto was substantially unfair.
One of such reliefs is the reopening of the transaction and relieving the debtor of all liability in respect of any excessive interest.
Explanation I to the section lays down that "if the interest is excessive, the court shall presume that the transaction was substantially unfair; but such presumption may be rebutted by a number of special circumstances justifying the rate of interest.
" Sub section (2) of section 3 provides by clause (a) that the word "excessive" in the section means in excess of that which the court deems to be reasonable having regard to the risk incurred as it appeared or must be taken to have appeared, to the creditor at the date of the loan.
Under clause (b) of the said sub section the court has also to take into account any amounts charged or paid etc.
and if compound interest is charged, the period at which it is calculated and the total advantage which may reasonably be taken to have been expected from the transaction.
Clause (c) of sub section 2 provides that in considering the question of risk, the court shall take into account the presence or absence of security and the value thereof, the financial condition of the debtor and the result of any previous transactions of the debtor, by way of loan, so far as the same were known, or must be taken to have been known, to the creditor.
Clause (d) of the said sub section enjoins upon the court to consider also all circumstances materially affecting the relations 723 the parties at the time of the loan or tending to show that the transaction was unfair, including the necessities or supposed necessities of the debtor at the time of the loan so far as the same were known, or must be taken to have been known, to the creditor.
In effect the provisions of the section which are relevant for the purpose of this appeal are as follows: (a)If the Court has reason to believe that the transaction was unfair it will exercise the powers given by subsection, (1).
(b)The court shall presume the transaction to be sub stantially unfair if the interest is excessive, such pre sumption being a rebuttable one by the special circumstances of the case; (c)In order to find out whether the interest is excessive the court must examine the circumstances of the case in the light of the risk incurred or the risk as would be apparent to the creditor at the date of the loan, and then judge whether compound interest at the rate prescribed and with therests provided for was justifiable keeping also in view thesecurity given by the mortgagor, the value of such securityand the condition of the debtor including the result of any previous transaction.
The net result of the above seems to be that the Court must go back to the date of the original transaction and form an opinion as to the rate of interest which would be reasonable after considering (a) the value of the security offered; (b) the financial condition of the debtor including the result of any prior transaction; (c) the known or probable risks in getting repayment, (d) whether compound interest was provided for and if so the frequency of the period of calculation of interest for being added to the principal amount of the loan.
The facts of the case may now be briefly stated.
The original mortgagor Dhanakoti Ammal had succeeded to the properties of her father along with her sisters under a will executed by him on the basis that the properties were his self acquired properties.
Her brother Alavandar filed a suit in the year 1919 through a next friend claiming that the properties were not the self acquired properties of his father and as such not capable of bequest under a will.
This suit was dismissed as also the appeal therefrom to 724 the Madras High Court preferred in 1922.
By the year 1936 when the first mortgage in favour of Srinivasavaradachariar, the appellant, before us, was executed, Dhanakoti Ammal was involved in debts.
The most important item of her properties was a market on the outskirts of the city of Madras which had become dilapidated and the Corporation of Madras was refusing to renew the licence unless it was put in good order.
She had further borrowed a sum of money repayable with interest at 20 per cent compoundable monthly.
Her brother Alavandar who was due to attain majority very soon threatened to file another suit impeaching the decree in the earlier suit.
As a matter of fact, the first two mortgages were executed in 1936 before Alavandar had filed his suit and the last mortgage was executed in January 1938.
Dhanakoti Ammal got more and more involved in debt and was adjudicated an insolvent in 0.
P. 148 of 1949.
Her properties got vested in the Official Assignee of Madras.
The Official Assignee brought the properties to sale which were ultimately purchased by Dr. Gopala Menon for Rs. 5,0001 .
Dr. Gopala Menon tried to come to an arrangement with Srinivasavaradachariar but nothing came out of it and the suit out of which this appeal has arisen was filed in the year 1950.
Other aliences were involved in the suit but we are not concerned with them.
According to the learned trial Judge the risks which the creditor ran in advancing the money were considerable in that the adequacy of the security was questionable in view of the threat of suit by Dhanakoti Ammal 's brother and the condition of the property in an undeveloped area of Kodambakkam.
The learned trial Judge could not find anything unfair in the transaction, but nevertheless he thought that the rate of interest should be scaled down to 15 per cent compoundable at the end of each.
The learned Judges of the Division Bench of the Madras High Court found that the amount advanced under the old mortgages came to nearly Rs. 48,000/ that there was already a prior mortgage in respect of which nearly Rs. 8,000/ was due and the value of the security though not very ample could not be said to be markedly inadequate and there was a shadow on the title of the mortgagor by reason of the threat of suit by her brother.
On a consideration of the entire evidence bearing on the point revealing the circumstances in which the loan transaction came into existence the appellate bench held that 15 per cent compound interest calculated with quarterly rests was certainly excessive.
Taking note of several decisions of the Madras High Court to which we shall presently refer, the learned Judges thought that the rate of interest to be allowed was 10 per cent compound interest with yearly rests.
It is difficult to predicate of any rate of interest as being excessive divorced from the circumstances of the case unless the rate 725 fixed is so high as to be suggestive of an unfair transaction on the face of things.
It is not for us to speculate as to why the Legislature of the State of Madras proceeded in such a round about way in making amendments to the Usurious Loans Act of 1918 for the purpose of giving relief to borrowers when it is well known that at or about the time of the Madras amendment the Legislatures of other States in India had fixed certain rates as being the maximum beyond which the courts of law were not competent to go.
So far as we are aware difference was made in the treatment of unsecured loans and secured loans and even in the case of the former the rate allowed was not to exceed 12 per cent simple in most of the States.
With regard to the rate of interest allowed by the Madras High Court after 1937 we find that in Venkatarao vs Venkataratnam(l) a bench consisting of Govinda Menon and Ramaswami JJ.
observed, "that anything above 12 per cent per annum simple interest is excessive, considering the nature of transaction in this State.
" There the suit was on a mortgage which provided for payment of interest at 12 1/2 per cent per mensem with annual rests.
In Sri Balasaraswati vs A. Parameswara Aiyar(2) a Division Bench consisting of Rajamannar C. J. and Panchapekesa Ayyar J. observed, "in normal cases where the security is ample to cover the loan and there is no danger at all to the principal and interest the court will hold more than 12 per cent simple interest to be excessive, as held in A.I.R. 1952 Madras 872 and by us in A.S. 348 and 361 of 1948".
According to the learned Judges "Where the security is not sound, 10 per cent compound interest can be allowed as in In the result the learned Judges only allowed simple interest at 12 per cent per annum.
In the instant cases the learned Judges in appeal also referred to a judgment, of Subba Rao J. (as he then was) in C. section 163 of 1949 as containing an observation that the dictum in Venkatarao vs Venkatratnam(l) that "anything above 12 per cent simple interest was excessive would not be taken as a principle of law applicable to all cases irrespective of the circumstances obtaining at the time of the transaction".
That transaction also related to Dhanakoti Ammal the original debtor in this case and Subba Rao J. (as he then was) reduced the rate of interest from 15 per cent compound interest to 12 per cent per annum simple.
We have not had the benefit of reading the judgment of his Lordship, but we take it that the result of it is as indicated in the judgment in appeal before us.
It appears to us therefore that in the opinion of a number of Judges of the Madras High Court who were cognizant of the state of affairs prevailing in the State interest beyond the rate of 12%.
per annum simple would be considered excessive by court of law where the security was not inadequate and the risk run by the creditor was not abnormal.
There can be no dispute that (1) A.I.R. 1952 Madras 872.
(2) A.I.R. 1957 Madras 122, 129.
726 interest payable at the rate of 10 per cent compoundable annually over a number of years would be more in the interest of the creditor than 12 per cent per annum simple for the same period.
In our opinion the learned Judges of the Division Bench of the Madras High Court were right in holding that 10 per cent compound interest with yearly rests would meet the justice of the case.
The security was not inadequate and the threat of suit by Alavandar in view of the fact that his earlier suit which had been taken in appeal to the Madras High Court and subsequently lost, was never regarded seriously.
This is corroborated by the fact that even after the institution of that suit in 1937 the appellant before us advanced further sums of money to Dhanakoti Ammal at the same rate of interest as before; if he had thought that his security was put in jeopardy by the institution of the suit he would have been careful not to advance any further amounts and would in any case have insisted on the rate of interest being higher than that provided for in the earlier mortgages.
In our opinion the Division Bench of the Madras High Court made a correct assessment of the situation and their pronouncement with regard to the rate of interest prior to the date of the suit ought not to be disturbed.
We also find no reason to interfere with the scaling down of the rate of interest to 6 per cent from the date of the filing of the suit.
Although the reasons are not indicated, it seems fairly plain that their Lordships were using their discretion as regards interest pendente lite.
We cannot overlook the fact that the mortgages were executed as far back as 1936 and 1938 and that the creditor who had waited till 1950 for the institution of the suit would, in any event, get interest substantially exceeding the principal amount of the loans.
In this view of things we are not prepared to interfere with the exercise of the discretion exercised by the learned Judges of the Madras High Court even though they have given no reasons for the reduction of rate of interest pendente lite.
In the result the appeal fails and is dismissed with costs.
G. C. Appeal dismissed.
| Three brothers and J entered into a partnership business.
The firm owned both movable and immovable properties.
Later, the three brothers created a Trust, with themselves as the first three trustees.
They also executed an unregistered deed of relinquishment by which they relinquished their rights in and claims to all the properties and assets of the firm, in favour of J. and of themselves in the capacity of trustees.
A new partnership firm was constituted between J. and the Trust by means of a partnership deed which specified the shares of the two partners in the profits and losses.
The Trust introduced a sum.
of Rs. 50,000 as its capital in the new firm.
For the assessment year 1943 44 the new firm applied for registration under section 26A of the Indian Income tax Act, 1922 but the Income tax Officer, Appellate Assistant Commissioner 'and the Appellate Tribunal rejected the application.
The Tribunal relied mainly on the ground that the deed of relinquishment being unregistered could not legally transfer the rights and the title to the immovable properties owned by the original firm, to the Trust and that as the immovable properties were not separable from the other business assets there was no legal transfer of any portion of the business assets of the original firm in favour of the Trust.
On a reference to the High Court, as to whether the new partnership legally came into existence and, as such, should be registered, it was contended on behalf of the Commissioner that the Tribunal had recorded a finding of fact that the firm seeking registration was not a genuine one and had never come into existence.
The High Court, after calling for further statements, held that the Tribunal had not recorded any such finding of fact, that the firm did in fact come into existence, and that there was no impediment to its registration.
in appeal to this Court, HELD : (i) The existence of a firm could be challenged on two alternative grounds; (a) that a firm had not come into existence at all, and (b) that though it came into existence in fact, its existence was not valid in law.
In the present case it was only the second question that was referred to the High Court.
The first could not at all be referred to the High Court as it would be a pure question of fact; and if the Appellate Tribunal had in fact recorded a finding of fact that the firm had not come into existence, the question of law referred to the High Court, would not arise at all.
Therefore, the new firm did in fact come into existence.
[788 E H] (ii)The new partnership between the Trust and J. was constituted under a deed which was property executed, was valid in law, and so the firm should be registered.
[791 C D] 785 The deed of relinquishment was in respect of the individual interests of the three brothers in the assets of the original firm, in favour of the Trust, and consequently, did not require registration, even though the assets of that firm included immovable property.
The deed was therefore valid without registration.
[790 F] Addanki Narayanappa vs Bhakara Krishnappa, ; followed.
Even if the deed of relinquishment required registration, it could only be invalid insofar as it affected immovable properties, but to the extent that it purported to transfer movable assets of the original firm, it would be valid.
A deed of relinquishment is in the nature of a deed of gift where the various properties dealt with are separable.
In the present case, therefore, the deed of relinquishment was valid at least in respect of movable properties, and the partnership seeking registration thus became owner of all the movable assets of the first partnership in addition to the Rs. 50,000 contributed as a capital investment by the Trust.
[790 G; 791 A, C]
|
vil Appeal Nos.
3236 39 of 1984.
From the Judgment and Order dated 7.2.
1983 of the Bombay High Court in F.C.A. Nos.
35/B, 36/B, 37/B & 38/B of 1981.
Ashok H. Desai, Solicitor General, Ravinder Narain, Aditya Narain, Rajan Narain, section Sukumaran, D.N. Mishra and Pallav Sishodia for the Appellant.
G.L. Sanghi, S.K. Mehta, Dhruv Mehta and Aman Vachher for the Respondent.
The Judgment of the Court was delivered by RAY, J.
The above four appeals on special leave by the appellant were filed against the judgment and order dated February 7, 1983 made by the Panaji Bench of the Bombay High Court in First Civil Appeal Nos.
35/B to 38/B of 1981 dis posing of all the four appeals field by the appellant against the judgment and order of the learned Civil Judge, Senior Division, Panaji, Goa dated 26.8.1981 confirming four different awards by an arbitrator appointed in pursuance to the agreement between the parties.
Appeal No. 35 of 1981 relates to the award, awarding to the respondent against the appellant Rs.2,75,091.13.
Appeal No. 36 of 1981 relates to an award, awarding to the respondent a sum of Rs.1,88,968.36.
Appeal No. 37 of 1981 relates to an award, awarding to the respondent Rs.3,36,230.36 and Appeal No. 38 of 1981 relates to an award, awarding to the respondent Rs.46,321.32.
The facts leading to these appeals are as follows: The appellant Goa, Daman & Diu Housing Board entered into two contracts on 15.3.72, and one contract each on 11.7.73 and on 4.7.73 with the respondent for the construc tion of tenements at Vasgoda Gama, Goa.
The appellant ac cepted two tenders of the respondent on 9.3.72 and remaining two on 24.2.73.
There was a time limit in all the aforesaid four contracts for the completion of the work referred to therein.
Several extensions were granted to the respondent for completing the work out the respondent failed to com plete the construction 907 work undertaken by him under the said four contracts.
On July 1, 1975 the appellant issued a notice to the respondent under clause 3 of the said contract for exercising the right of termination in view of the fact that the respondent was unable to fulfil the contractual obligation of completing the construction work in spite of the various extensions granted to the respondent.
On July 14, 1975, the Engineer in Charge of the appellant Board exercised its unilateral right of terminating the contract under clause 3 of the agreement in view of the fact that the respondent did not complete the work of construction undertaken by him in spite of various extentions granted to him.
On July 31, 1975, the Chairman of the appellant board confirmed that all the four contracts stood rescinded.
On May 17, 1976, the respondent served a notice to the appellant on the ground that the appellant had rescinded the work contracts.
The respondent stated therein various reasons why the work could not be completed.
Thereafter in April, 1978, the appellant filed a suit claiming damages for a sum of Rs.4,38,786.96 with interest against the respondent in the Court of the Civil Judge, Senior Division, Panaji, Goa.
Subsequently, an application was filed by the respondent under section 34 of the for stay of the suit.
Respondent also made another application to the Court under section 20 of the for directing the Housing Board to file the arbitration agreement in Court and in pursuance of clause 25 of the agreement to appoint an arbitrator.
Accord ingly, the Court by its order dated 28.2.1979 had the agree ment between the parties filed in court and directed the Housing Board to appoint an arbitrator.
On March 29, 1979 Shri J.S. Pinto, retired Superintending Engineer w.as ap pointed as Arbitrator.
The Arbitrator on March 23, 1981 submitted four awards granting the claims of the respondent as stated hereinbefore on the basis that the appellant was responsible for the slow progress and non completion of work and the work could not be completed as the contract was terminated by the appel lant, the Housing Board.
The said award was filed in the Court of Civil Judge, Senior Division, Panaji, by the Arbi trator on 31st March, 1981 for making the award Rule of the Court.
The appellant submitted his objections for setting aside the awards on April 27, 1981 on the grounds inter alia that the Arbitrator had misconducted himself by not framing the main issue i.e. whether or not the claimant abandoned the work and thereby committed breach of the agreement.
The Arbitrator misconducted himself by ignoring the letter of termination wherein it Was clearly stated that the termina tion has been done on account of the abandonment of the work by the claimants; the learned Arbitrator failed to decide upon the 908 question of the abandonment of work and has wholly side tracked the issue; the learned Arbitrator misconducted himself by not giving reasons for the award as required under the agreement under which he was appointed.
The learned Civil Judge, Senior Division, Panaji by his Order dated 26th August, 1981 rejected all the objections raised on behalf of the appellant against the said awards and confirmed the same.
All the four impugned awards have been made Rule of the Court.
The appellant thereafter filed the aforesaid First Civil Appeal Nos. 35/B, 36/B, 37/B and 38/B of 1981 against the said Order of the learned Civil Judge, Senior Division, Panaji, Goa on the ground that the Civil Judge did not consider that the Arbitrator misconducted himself in making the awards without recording any reasons for the same, even though the claim was Rs.50,000 and above as provided in clause 25 of the agreement between the parties and as such the awards should have been set aside by the Court.
The High Court held that having regard to the clause 25 of the terms of the agreement specifically providing that in all cases where amount of claim in dispute is Rs.50,000 and above the arbitrator was bound to give reasons for his award.
The statements that has been made by the Arbitrator while giving his findings could not be considered to be the reasoning for his finding of the award.
The Court also held that: "The award no where contains any reasoning for the same nor does it even obliquely mentions that in giving his findings the Arbitrator has even sought to adopt the reasoning of either of the parties.
In our view as the obligation of the Arbitrator under Clause 25 of the agreement stands, the reasons should appear to be so in this case.
" It was further held that as the arbitrator failed to give reasons for the award it would be a misconduct on his part and the award was liable to be vitiated on that ground.
The Court allowed all the appeals.
The order of the lower court was set aside and the awards were remanded back to the arbitrator for giving reasons for the same as required under clause 25 of the arbitration agreement and thereafter to file the same in the court of Civil Judge, Panaji, within eight weeks after the order is served on him.
909 Against this judgment and order the impugned appeals by special leave were filed.
The learned counsel on behalf of the appellants has contended that the High Court acted illegally in not consid ering at all that the arbitrator did not record any reasons for making awards allowing the claims each of which exceeds Rs.50,000 as provided under clause 25 of the arbitration agreement and as such the arbitrator has misconducted him self in the proceedings and instead of sending the awards made by the arbitrator to him for recording his reasons ought to have set aside the awards under section 30 of the .
It has also been contended that the High Court though it held that the arbitrator was guilty of misconduct and the awards made by him were liable to be vitiated on that ground yet inspite of setting aside the awards they were sent to the arbitrator for recording rea sons which is totally unwarranted by law.
The learned counsel appearing on behalf of the respond ent, on the other hand, submitted that the awards made by the arbitrator after hearing the parties cannot be said to be illegal or unwarranted as the same were made after con sidering all papers and documents filed by the parties and after duly hearing the parties.
As such there was no ille gality nor any misconduct committed in making the awards.
The arbitrator has fairly considered the issues and made the awards in question.
The misconduct, if any, on the part of the arbitrator does not concern with the probity and impar tiality of the arbitrator.
The only allegation against the arbitrator is that he has not recorded the reasons for the awards made by him as per term of clause 25 of the arbitra tion agreement.
It has, therefore, been contended by the learned counsel on behalf of the respondent that the order of the High Court in remanding the awards to the arbitrator for recording reasons clearly fails within the purview of section 16(1)(c) of the as the objec tion to the legality of the award is apparent on the face of it.
It does not fail within the provision of section 30 of the said act in as much as the arbitrator has not miscon ducted himself or the proceedings and the awards in question have not been improperly procured.
Several decisions have been cited at the bar in support of the respective conten tions advanced by the counsel for the parties.
Before considering the question whether the directions made by the High Court in remitting the award to the Arbi trator for giving reasons do fall within the purview of Section 16 of the , it is appropriate to set out the relevant provisions of section 16(1): 910 "Sec.
16(1): The Court may from time to time remit the award or any matter referred to arbitration to the arbitrators or umpire for reconsideration upon such terms as it thinks fit (a) where the award has left undetermined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration and such matter cannot be separat ed without affecting the determination of matters referred; or (b) where the award is so indefinite as to be incapable of execution; or (c) where an objection to the legality of the award is apparent upon the face of it.
" Section 16 empowers the Court to remit the award to the Arbitrator for reconsideration only in three cases specified therein.
Clause (c) of Section 16(1) provides that the award shall be remitted to the Arbitrator by the Court where an objection to the legality of the award is apparent on the face of it.
Of course, the High Court has come to a finding that the Arbitrator was guilty of misconduct for his failure to give reasons as required.
There is, however, nothing to show that the Arbitrator misconducted himself or the pro ceedings in any other manner nor there is anything to show that the awards have been improperly procured.
There is no allegation, far less, any finding, that the Arbitrator was biased or unfair or he has not heard both the parties or he has not fairly considered the submissions of the parties in making the awards in question.
In our opinion, it is evident from the four awards made by the Arbitrator that the Arbi trator has considered all the specific issues raised by the parties in the arbitration proceedings and came to his finding after giving cogent reasons.
The above awards cannot under any circumstances be considered to be made by the Arbitrator without recording any reasons for the same.
Therefore, in such circumstances, it is not proper to hold that the Arbitrator has misconducted himself or in the proceedings in the matter of giving the awards.
In these circumstances, we are unable to hold that the four awards made by the Arbitrator are bad for not recording reasons.
We, therefore, uphold the said awards and we do not think it necessary to decide the question as regards the scope of Section 30 or Section 16of 911 the .
The decision of the High Court remit ting the awards back to the Arbitrator for giving reasons is set aside and the awards made by the Arbitrator are upheld.
Let these awards be made rule of the Court.
The appeals are, therefore, dismissed.
There will be no order as to costs.
N.P.V. Appeals dis missed.
| The Respondent retired as Judge of the High1 Court on 3.10.1983 on superannuation and elected to receive his pension under of the First SChedule to the .
As a Judge of the High Court, he had put in service of 5 years 10 months and 17 days and his pension was determined at Rs.8,400 p.a. and family pension at Rs.250 p.m.
In 1986, the Act was amended providing for an increased pension from 1.11.1986.
Thereafter, the Respondent filed a Writ Petition before the High Court praying for directions that he was entitled to refixation of his pension from the date of his retirement at Rs.9,600 per annum on the basis that the period of his service for pension was fit to be enlarged to six years, by addition of 1 month and 13 days; that from November 1, 1986 his pension may be refixed at Rs.20,580 per annum at the rate of Rs.3,430 for six complet ed years of service; and that the family pension admissible to his wife be calculated on the basis that he had completed six years of service.
During the pendency of the Writ Petition the Respondent made representations to the Government of India that since the respondent fell short of 6 completed years of service only by 1 month and 13 days, the President may be pleased to allow him to add the period so as to 874 caluclate the pension, gratuity and family pension on the basis of 6 completed years of service as a Judge.
By its order dated April 16, 1987 the Government of India rejected the representation of the respondent among other grounds that the request was belated.
By its judgment dated March 15, 1988 the High Court allowed the Writ Petition directing the Government to retix his pension, family pension and gratuity treating him as having put in six completed years of service.
The Union of India has preferred the present appeal, by special leave against the High Court 's order.
It was contended on behalf of the appellants that the High Court has re written the retirement benefit provisions of the First Schedule to the Act which it was not entitled to and hence the refxation of the pension on that basis was wholly illegal and unconstitutional However, during the pendency of the appeal this Court in its proceedings dated December 15, 1988 the Government directed, after obtaining the necessary sanction from the President under Section 16 of the Act, the addition of 1 month and 13 days subject to the final decision of this Court in the appeal.
However, it was added that the period shall be disregarded in calculating additional pension.
if any, under , and of the First Sched ule of the said Act.
Allowing the appeal, this Court.
HELD: 1.
It is a well known practice in pensionary schemes to fix a minimum period for purposes of pension.
What shall be the minimum period for such pension will depend on the particular service, the age at which a person could enter into such service.
the normal period which he is expected to serve before his retirement on superannuation, and various other factors.
There is nothing in evidence to suggest that the period of seven completed years of service fixed for pension is arbitrary.
So far as the Judges of the High Court are concerned even under the Government of India Act a period of seven completed years of service before superannuation was prescribed for eligibility for pension.
In fact no pension was provided for those who had not com pleted seven years of service under pre constitutional scheme.
Thus there are historical grounds or reasons for fixing not less than seven years of service for pension.
Part I deals with pensionary scheme.
Prescribing a minimum period of service before retirement on superannuation, for pension is the very scheme itself and not a classification.
It is a qualification for eligibility.
It is different from computation of pension.
All those who 875 satisfy that condition are eligible to get pension.
[885G H; 886A C] 2.
Even those who had completed seven years of service were not given pension for all the completed years of serv ice at the rate of Rs.1,600 per annum and a maximum limit has been fixed for purposes of pension.
If one calculates the maximum amount provided with reference to the rate per year roughly in about 14 years of service one would have reached the maximum amount.
Any service above that period is not taken into account.
Thus a person who had put in the minimum period for getting the maximum pension could be said to be favourably treated against the person who had put in more number of years of service than needed for the maximum pension and thereby discriminated.
[886D E] 3.
It is not correct to state that the amount of pension provided in paragraph 9 is minimum pension.
The said para graph does not use the word 'minimum ' but only states that if a Judge retires without being eligible for pension under any of the provisions.
notwithstanding anything contained in the other provisions.
the pension of a particular amount mentioned therein shall be paid to the Judge.
This amount is not calculated or has any reference to any period of serv ice.
A Judge who had put in only two years of service before retirement will also receive the same amount as that of a Judge who has completed six years of service.
If the provision is struck down as unconstitutional the condition relating to completion of seven years of service in para graph 2, all those who had put in less than six completed years of service would be seriously affected and paragraph 9 also would become inapplicable.
Further, it may be open to those who have put in more than five years or more than four years as the case may be.
to contend that they are discrimi nated against because persons who had put in less than that period will get pension at much higher rate.
[886F H: 887A] 4.
The Amending Act 38 of 1980 provided that the amend ed liberalised pension scheme would apply only to a Judge who has retired on or after the commencement of the High Court and Supreme Court Judges (Conditions of Service) Amendment Act.
A similar provision which made the amendment 01 1976 applicable only to those Judges who have retired on or after October 1.
1974 was struck down as ultra vires and it was decided that the benefit of the amendment was available to.
all the retired Judges irrespective of the date of retirement but subject to the condition that the enhanced pension was payable only with effect from October 1, 1974.
The Amending Act of 1986 could not restrict the applicability of the amended provision to only those who have retired on or after the commencement of the Amending Act.
It 876 would be applicable to all the Judges irrespective of the dates of retirement and they would be entitled to be paid pension at the rates provided therein with effect from November 1, 1986.
[883A D] Union of India vs B. Malick. ; ; N.L. Abhyankar vs Union of India, ; and D.S., Nakara vs Union of India, ; , referred to.
In the instant case.
High Court had exceeded its jurisdiction and power in amending and altering the provi sions of paragraph 2 by substituting different minimum period for eligibility for pension in paragraph 2 of Part I. Since the respondent has not put in seven completed years of service for pension he will be eligible for pension at the rates provided in paragraph 9 of Part I of the First Sched ule to the Act, that is to say for the period from 4.10.1983 to 31.10.1986 at the rate of Rs.8,400 per annum and for the period on and from November 1, 1986 at the rate of Rs. 15,750 per annum.
[887B C] 6.
Since in compliance with the mandamus issued by the High Court, the President of India was pleased to sanction the addition of one month and 13 days to the service of the respondent to make it six years of completed service subject to the final decision in this appeal, this Court does not go into the question whether the High Court was right in set ting aside the earlier rejection for addition of the period.
The addition of one month and 13 days does not make any difference in calculation of pension it is relevant only for the purpose of calculating the gratuity under section 17A(3) of the Act.
As the period was less than three months and as the President was pleased to sanction the addition in exer cise of his power under Section 16 of the Act though subject to the final decision of this Court it is just and necessary to allow this addition to remain for the purposes of calcu lation of gratuity, and family pension only though not for pension.
The respondent will be entitled to fixation of family pension and for payment of gratuity calculated on the basis of his having completed six years of service.
[887D H] 7.1.
It is not the duty of the Court either to enlarge the scope of the legislation or the intention of the legis lature when the language of the provision is plain and unambiguous.
The Court cannot rewrite, recast or reframe the legislation for the very good reason that it has no power to legislate.
The power to legislate has not been conferred on the courts.
The Court cannot add words to a statute or read words into it which are not there.
Assuming there is a defect or an omission in the 877 words used by the legislature the Court could not go to its aid to correct or make up the deficiency.
Courts shall decide what the law iS. and not what it should be.
The Court of course adopts a construction which will carry out the obvious intention of the legislature but could not legislate itself.
But to invoke judicial activism to set at naught legislative judgment is subversive of the constitutional harmony and comity of instrumentalities.
[885A D] 7.2 Modifying and altering the scheme and applying it to others who are not otherwise entitled to under the scheme, will not also come under the principle of affirmative action adopted by courts some times in order to avoid discrimina tion.
What the High Court has done in this case is a clear and naked usurpation of legislative power.
[885F] P.K. Unni vs Nirmala Industries, ; Mangilal vs Suganchand Rathi, ; Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp. 1 SCR 489; Smt.
Hira Devi & Ors.
vs District Board, Shahjahanpur, ; ; Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; ; Gujarat Steel Tubes Ltd. vs Gujarat Steel Tubes Mazdoor Sabha, ; ; section Narayanaswa mi v.
G. Pannerselvam & Ors., ; ; N.S. Varda chari vs G. Vasantha Pai & Anr., ; ; Union of India vs Sankal Chand Himatlal Sheth & Anr., ; and Commissioner of Sales Tax, U.P.v.
Auriaya Chamber of Commerce, Allahabad; , , relied on.
|
Appeal No. 266 (NT) of 1980.
From the Judgment and Order dt 14.12.1979 of the Allahabad High Court in Sales Tax Rev. No. 214 of 1979.
Harish N. Salve, P.P. Singh and Ms. Meenakshi Grover for the Appellant.
R.C. Verma and Ms section Mukherjee for R.B. Misra for the Respondent.
The Judgment of the Court was delivered by YOGESHWAR DAYAL, J.
This appeal is directed against the judgment of the Single Judge of the Allahabad High Court passed in Sales Tax Revision No. 214 of 1979 dated 14th December, 1979.
By the impugned judgment the High Court set aside the order of the Judge (Revisions), Sales Tax, U.P. Lucknow holding that the Phosphorous Bronze which the assessee/appellant herein have been manufacturing, fell within the ambit of Notification No. ST II 333/X 10121971 dated the 15th November, 1971 issued in exercise of the powers under the second proviso to sub section (2) of section 3 A of the U.P. Sales Tax Act, 1948 (U.P. Act No.
XV of 1948), and took the view that the relevant entry at serial No. 2(a) of the said Notification did not cover the goods prepared by the appellant herein and was thus liable to be taxed as an unclassified commodity at the rate of 3.5%.The relevant entry reads as under: SI.
No. Description of goods Rate of tax 1. . . . 2. (a) Copper, tin, nickel or zinc 1 per cent.m or any other alloy containing any of these metals only.
(b). . . .
The contention on behalf of the appellant is that Phosphorous Bronze manufactured and marketed by them is covered under the aforesaid entry.
According to the appellant the said Phosphorous Bronze is made of tin and copper only.
It is further contended on behalf of the appellant that the small quantity of Phosphorous is used to deoxidise the metal and as such the Phosphorous is not an 721 essential substance of Phosphorous Bronze.
It is, however, admitted case of the parties that without the use of Phosphorous the Phosphorous Bronze cannot be produced and certain quantity of Phosphorous still remains in the Phosphorous Bronze.
The contention of the respondent is that Phosphorous Bronze is an alloy containing not only the metals mentioned in the aforesaid entry but Phosphorous also and as such it is not covered under the aforesaid entry.
The words "other alloy containing any of these metals only" mean that the alloy made of these metals i.e. copper, tin, nickel or zinc only and that alone is covered under the said entry.
It was submitted that if any other metal or substance is included in such an alloy, the same would not be covered under the aforesaid entry.
A similar question arose in the case of Commissioner of Sales Tax, U. P. vs Hindustan Metal Works, Hathras reported in (1964) 15 Sales Tax Cases 97 wherein it was held as under: "The Notification exempts tax on sale of alloys prepared from the solution of two or more of the metals enumerated therein.
On account of the word "only" the sale of an alloy prepared from the solution of two or more of those metals and some other substance or substances would not be exempt from tax.
The assesse sold an alloy called phosphorous bronze which was prepared from the solution of copper, tin, phosphorous and lead.
Phosphorous and lead are not mentioned in the notification.
They are deliberately added by the assessee as per agreement between the parties.
The sale is, therefore, prime facie liable to be taxed.
" We were referred to various dictionary meanings of the words Phosphorous Bronze 'which have been noticed by the learned Judge dealing with case in the High Court.
We are really concerned with the interpretation of the entry.
The emphasis in the entry is either it should be pure copper, tin, nickel or zinc and if it is an alloy containing two or more metals, it must be an alloy containing these metals only.
The expression "only" is very material for understanding the meaning of the entry.
Since the alloy in dispute contains Phosphorous, may be in a very small quantity, it cannot fall within entry 2(a) of the aforesaid Notification.
The appeal consequently fails and is dismissed with costs.
U.R. Appeal dismissed.
| Recruitment to the Punjab Superior Judicial Service was governed by the Punjab Superior Judicial Service Rules, 1963.
Rule 8 A inserted in the said rules by notification dated June 14, 1977 provided that instructions issued by the State Government from time to time in relation to reservation of appointments for posts for Scheduled Castes and Backward Classes were applicable for appointments to posts in the Service.
The Secretary to the Government of Punjab, Welfare of Scheduled Castes and Backward Classes Department by letter dated June 6, 1974 Informed all Heads of Department etc.
that it had been decided to increase the percentage of reservation in direct recruitment in all services from 20% to 25 % in the case of members of Scheduled Castes and from 2% to 5 % in the case of members belonging to Backward Classes, and Indicated the vacancies to be reserved for the members of Scheduled Castes in a lot of 100 vacancies and specified the points.
It also directed that the Roster already existing would not be abandoned, but would now be maintained in continuation from the vacancy in the existing Roster last filled up according to the new pattern of reservation.
Circular dated November 19, 1974 made provision for carrying forward of reservation for members of Scheduled Castes/Backward Classes, and directed that the reservation should be carried forward form vacancy to vacancy in the same block until a Scheduled Caste or a Backward Class person is appointed or promoted in the same block, and that the reservation should be carried from vacancy to vacancy in each Mock and from block to block until the carried forward vacancies are filled up.
594 By letter dated May 5,1975 the Secretary to the Government, Welfare Department Communicated to all Heads of Department ; that the Government has decided that henceforth, 50% vacancies of the quata reserved for Scheduled Castes should be offered to Balmikis and Mazhbi Sikhs as a first preference from amongst the Scheduled Castes candidate, .
The Under Secretary, Welfare Department Reservation Cell by his letter dated April 8,1980, clarified the position with regard to the implementation of instructions regarding reservation for Mazhbi Sikhs and Balmikis contained in the aforesaid letter dated May 5,1975, the Clarification was to the effect that : (1) the combined merit list can be disturbed while giving appointment to the candidate belonging to Balmikis and MazhbiSikhs; (ii) the first reserved vacancy can he offered to Balmikis and Mazhbi Sikhs although their name may be below in the merit list, and (iii) on the basis of 50% reservation Bal mikis and Mazhbi Sikhs 1,3,5 and so on reserved vacancies shall go to the candidates of these castes if available and 2,4,6 and so on reserved vacancies shall go to other Scheduled Castes candidates.
After introduction of Rule 8 A in the Punjab Superior Judicial Service Rules, four persons were appointed by way of direct recruitment to the Service in the year 1979.
One of them, Shri Balwant Rai, belonged to a Scheduled Caste (other then Balmikis or Mazhbi Sikhs).
Thereafter, in 1981 one post fell vacant but no person belonging to a Scheduled Caste could be selected and candidate belonging to general category was appointed against the said post In 1982, selection was made for two posts but only one person could he selected and he also belonged to the general category and no person belonging to a Scheduled Caste was available for appointment.
In 1986, six persons including the appellant and respondent No. 3 were appointed on the basis of direct recruitment.
Out of those six persons, four belonged to the general category and two belonged to Scheduled Castes.
One of the two persons was Shri G.S. Samra who belonged to a Scheduled Caste other than Balmikis or Mazhbi Sikh.
In the merit list for the said selection the appellant was placed at No. 1, Shri G.S. Samra at No. 2, and respondent No. 3 at No. 5.
As per the Roster, Shri G.S. Samra was placed at Point No. 7, the appellant at Point No. 8 and respondent No. 3 at Point No. 9.
After joining the Service, Shri G.S. Samra resigned and had ceased to be a member of the service prior.
to April, 1, 1988.
In the tentative seniority list as on April 1, 1988,the appellant was placed at serial No. 52 and respondent No.3 was placed at serial No. 53.
Respondent 595 No. 3 submitted a representation against his placement in the seniority list and claimed that he should be placed against the post reserved for scheduled castes at Serial No. 5 in the Roster and on that basis be given the seniority of the year of 1981, and that since he is a Mazhbi Sikh, he is entitled to preference over Shri G.S. Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs, and he claimed that he should have been placed at Point No. 7 in the Roster and Shri G.S. Samra should have been placed at Point No. 9 and on that basis also respondent No. 3 is senior to the appellant.
Representation was also invited from the appellant in this regard.
After considering the representations the High Court decided that respondent No. 3 was entitled to he placed above Shri G.S. Samra in view of the Circular Letter dated May 5, 1975 and that he should have been placed against Point No. 7 in the roster and Shri G.S. Samra should have been placed against Point No. 9 in the Roster, In the revised seniority list Respondent No. 3 was placed at Serial No. 52 while the appellant was placed at Serial No. 53.
Aggrieved by the aforesaid decision the appellant filed a Writ petition in the High Court which was dismissed.
The appellant appealed to this Court and contended that the first appointment, by direct recruitment, of a person belonging to the Scheduled Castes was of Shri Balwant Rai made in 1979, that was at Point No. 1 in the Roster, and should have gone to a Balmiki or Mazhbi Sikh but since no person belonging to these communities was available Shri Balwant Rai who belonged to a Scheduled Caste was appointed.
Relying on the clarification contained in the letter dated April 8, 1980 it was submitted that the vacancy at Point No. 5 reserved for Scheduled Castes was to be carried forwarded to point No. 7 and Shri G.S. Samra had to he adjusted at Point No. 7 in the Roster, that respondent No.3 being a Mazhbi Sikh could not claim to be placed at Point No. 7 against a vacancy which was reserved for a candidate belonging to Scheduled Castes other than Balmikis and Mazhbi Sikhs and that he could the before be only placed against the vacancy at Point No. 9 in the Roster.
The appeal was contested on behalf of Respondent No. 3 who urged that in view of the order dated May 5,1975,50% vacancies of the quota reserved for Scheduled Castes have to be offered to Balmikis and Mazhbi Sikhs and since Shri Balwant Rai belonging to a Scheduled Coste other than Balmikis & Mazhbi Sikhs had been appointed in 1979, the next post should go to Balmikis and Mazhbi sikhs, and on that basis, respondent No. 3 was entitled to be appointed against the second post at point No.7 of the Roster and Shri 596 GS.
Samra could only be appointed against third post at Point No. 9 in the Roster.
It was also urged that the clarification contained in the letter dated April 8, 1980 could only have prospective operation with effect from the date of its issue, and the sub roster indicated therein could be given effect to only from that date, and on that basis also respondent No3 was entitled to be placed against Point No. 7 in the 100 point roster and Shri GS.
Samra against Point No. 9 in the said roster.
Allowing the appeal and setting aside the judgment of the High Court, this Court, HELD : 1. (a).
There is no dispute in the instant case, that respondent No3 has been appointed against the post reserved for members of Scheduled Castes and the question is about the inter se placement of two persons appointed against vacancies reserved for Scheduled Caste candidates.
The Circular dated March 6, 1961 does not deal with the said question and it has to be dealt with on the basis of the instructions contained in the orders dated May 5,1975 and April 8,1980.
(605 E) Jagjit Singh vs State of Punjab, ; , explained and distinguished.
1.(b).
Respondent No.3 can only be treated to have been appointed against the vacancy at point No. 9 in the Roster and on that basis he must be placid below the appellant in the seniority list.
Respondent No 2 is directed to revise the seniority list of the members of the Service accordingly.
The appellant would be entitled to consequential benefits accruing as a result of revision in the seniority.
(605 F) 2.
The letter dated April 8, 1980 gives clarifications on certain doubts that had been created by some Departments in the matter of implementation of the instructions contained in the earlier letter dated May 5,1975.
Since the said letter dated April 8, 1980 is only clarificatory in nature there is no question of its having an operation independent of the instructions contained in the letter dated May 5, 1975 and the clarifications contained in the letter dated April 8,1980 have to be read as a part of the instructions contained in the earlier letter dated May 5, 1975.
(603 E) 3.
A statute which is explanatory or clarificatory of the earlier enactment is usually held to be retrospective.
597 Craies on Statute Law 7th Edn.
p. 58, relied on.
(603 F) 4.
All appointments against vacancies reserved for Scheduled Castes made after May 5,1975 (after May 14,1977 in so far as the Punjab Superior Judicial Service is concerned) have to be made in accordance with the instructions as contained in the letter dated May 5, 1975 as clarified by letter dated April 8, 1980.
(603 F) 5.
The appointment of Shri Balwant Rai in 1979 has to be treated to be an appointment made under the said instructions and operation of these instructions cannot be postponed till April 8, 1980.
The sub roster as indicated in the letter dated April 8, 1980 would have to be applied in respect of the post on which Shri Balwant Rai was appointed in 1979 and the said appointment has to be regarded as having been made against the vacancy at Point No. 1 in the roster which was reserved for Balmikis or Mazhbi Sikhs but since no Balmiki or Mazhbi Sikh was selected for that post, the said vacancy was assigned to Shri Balwant Rai who belonged to a Scheduled Caste other than a Balmiki or Sikh.
(603 H, 604 A) 6.
The vacancy at Point No. 1 which was reserved for Balmikis or Mazhbi Sikhs could not he carried forward in view of the directions contained in the letter dated April 8, 1980.
(604 A) 7.
The next post reserved for Scheduled Castes at Point No. 5 in the roster was meant for a person belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs.
(604 A) 8.
In the selections that were made in 1981 and 1982 no person belonging to a Scheduled Caste was selected and, therefore, posts at Point Nos. 5 and 6 in the Roster became available to candidates in the general category and the vacancy at Point No. 5 reserved for Scheduled Castes was carried forward to point No. 7.
(604 B) 9.
In 1986, two persons belonging to Scheduled Castes, namely Shri G.S Samra and respondent No. 3 were selected.
(604 B) 10.
Since the post appoint No. 5 which had been carried forward to point No. 7 was reserved for a candidate belonging to a Scheduled Caste other than Balmiki or Mazhbi Sikh it had to be assigned to Shri G.S. Samra falling in that category and respondent No.3 who was a Mazhbi Sikh could only be ap 598 pointed against the reserved vacancy at Point No. 9 in the Roster.
Respondent No.3 can not claim that the vacancy at Point No.7 should be assigned to him.
If respondent No.3.
is adjusted against the vacancy at Point No.9 in the Roster, he has to be placed in seniority below the appellant who was appointed against Point No. 8 in the Roster.
(604 C)
|
ubt, the order of dete n tion contains fresh facts.
In addition, the detaining a u thority has taken into consideration the earlier grounds of detention which grounds had been nullified by the High Cou rt by issuing a prerogative writ of habeas corpus.
A copy of the earlier grounds of detention was also one of the doc u ments furnished to the detenu which confirms the fact th at the detaining authority has considered the earlier groun ds of detention alongwith other documents for drawing h is requisite subjective satisfaction for passing the detenti on order.
The order of detention is vitiated on that groun d, and is therefore liable to be set aside.
[58F. G; 59F G] & ORIGINAL JURISDICTION: Writ Petition (Criminal) No. 61 of 1989.
(Under Article 32 of the Constitution of India. ) V.V. Vaze, M.K. Pandit and P.H. Parekh for the Petitioner.
P.S. Poti, M.N. Shroff and Mrs. H. Wahi for the Respondent section The Judgment of the Court was delivered by 54 section RATNAVEL PANDIAN, J.
This petition under Article 32 of the Constitution of India is filed by the petitioner, t he detenu herein, challenging the legality and validity of t he order of detention dated 21.10.1988 passed by the detaini ng authority (the Commissioner of Police, Surat City) clampi ng upon the detenu the above said order of detention und er Sub section (2) of Section 3 of the Gujarat Prevention of Anti social Activities Act, 1985 (hereinafter referred to as the 'Act ') on the ground that he on consideration of t he materials placed before him was satisfied that it was nece s sary to make the said order with a view to preventing t he detenu from acting in any manner prejudicial to the maint e nance of public order in the area of Nanpura Machhiw ad falling under the jurisdiction of Athwa Lines Police St a tion, Surat City and directed the detenu to be detained in Sabarmati Central Prison, Ahmedabad under the conditio ns specified in the Gujarat Prevention of Anti Social Activ i ties Order, 1985.
In pursuance of the impugned order t he detenu has been detained in the aforesaid prison.
The second respondent, the State of Gujarat, approv ed the impugned order on 26.10.1988 and confirmed the same on 13.12 '.
The detenu submitted his representation dat ed 15.12.
1988 which was received by the 1st respondent on 19.12.
1988 on which date itself the same was rejected.
T he copy of the representation sent to the second respondent w as rejected on 21.12.1988.
It is stated in the grounds of detention that the dete nu was illegally keeping in possession the country liquor a nd openly selling the same at the comer of Nanpura, Machhiwa d, Masjid Wali Gali, Bhandariwad and conducting a den (Add a) and that he had been arrested in 1988 for offences under t he Bombay Prohibition Act in respect of which number of cas es were registered which cases are still pending trial as disclosed in Annexure I.
It is further stated that t he detenu had engaged 10 persons whose names are given in paragraph 2 of the grounds of detention, to accelerate h is bootlegging activities and those hired persons who we re conducting den (Adda)under the instructions and guidance of the detenu had been arrested in 1988 in 19 different cas es under the Bombay Prohibition Act from the detenu 's ad da during police raids of which 8 cases are pending trial a nd the remaining eleven are under investigation, the details of which are given in Annexure 11 attached to the grounds of detention.
On the above materials and the statements of witnesses placed before him, the detaining authority h ad satisfied himself that the abovementioned bootlegging acti v ities of the detenu in a large scale in an organised mann er were seriously detrimental to the public health and we re likely 55 to endanger public health and consequently passed th is impuged order of detention.
Hence this writ petition.
Mr. V.V. Vaze, learned counsel appearing on behalf of the petitioner, detenu raised several contentions assaili ng the legality and validity of the order of detention one of which being that the detaining authority for drawing h is requisite subjective satisfaction to clamp this order of detention upon the petitioner/detenu had taken into consi d eration the previous grounds of detention which was t he subject matter of Special Criminal Application No. 46 of 1987 before the High Court of Gujarat.
Since we are inclin ed to dispose of this Writ Petition on this ground alone we a re not traversing on other grounds.
Admitedly, the Commission er of Police, Surat City passed an Order of detention.
Und er Section 3(2) of the Act on 2.1.
1987 in No. PCB/ PASA/I/ 87 on the ground that between 1984 to 1986 there were 19 cas es filed against the detenu under the Bombay Prohibition Act of which 16 were pending in Court and three others under inve s tigation when this previous order was passed.
The petition er filed Special Criminal Application No. 46 of 1987 before t he High Court of Gujarat at Ahmedabad challenging the validi ty of the said order.
The High Court by its judgment dated 3.
8. 1987 quashed the earlier impugned order of detention a nd directed the release of the detenu forthwith.
A copy of t he High court order is annexed to the Writ Petition as Annexu re 'D '.
The detaining authority in this case had made a refe r ence about the previous order in the impugned grounds of detention which reads thus: "You are associated with bootlegging activity for long tim e, therefore, under order number dated 2.1.87 you were order ed to be detained under PASA and were kept in Baroda Centr al Jail.
But you filed a petition against this order of dete n tion in the High Court by Special Criminal Misc.
Applicati on No. 46/1987, After this petition was heard on 3.8.87, t he Hon 'ble High Court quashed the detention order and releas ed you from detention.
The proceedings taken against you ha ve had no effect on you and after you were released from t he detention, you have continued your activity.
" The detenu, presumably based on the above statement, h as stated in his writ petition that the present order of dete n tion is clamped upon him since the earlier order passed on 2.1. 1987 had been quashed and set aside.
The detaini ng authority in attempting to reply 56 to the allegations made in paragraph No. 6 of the Wr it Petition, wherein it is averred "The petitioner states th at in some of the cases, the petitioner is acquitted and in none of the cases the petitioner is convicted till today ", has made the following statement in paragraph 9 of h is counter: "It is submitted that the present detaining authority to ok into consideration the previous grounds of detention also to establish that the petitioner was engaged in bootleggi ng activities since long.
" Now on this above statement it has been streneous ly urged that since the detaining authority for drawing h is subjective satisfaction had taken into consideration all t he previous grounds of detention, namely, the earlier groun ds of detention passed on 2.1. 1987 which had been subsequent ly quashed by the High Court the present detention order is liable to be set aside.
According to learned counsel for t he petitioner, once the previous grounds of detention had be en quashed on its merit, then the detaining authority has no justification to take into consideration the earlier groun ds of detention for passing this present detention order whi ch should have been based only on the fresh grounds that we re available subsequent to the quashing of the previous dete n tion order.
In support of this statement several decisio ns were relied on about which we make reference presentl y.
Firstly, the attention of the Court was drawn to Ghul am Nambi Zaki vs State of Jammu and Kashmir, wherein the State contended that the existence of fre sh material is not a condition precedent for passing the seco nd order and that in any event, the second order can be ma de when the first order is withdrawn or revoked for technic al defect.
Hidayatullah, C.J. speaking for the bench repell ed that contention holding thus: "The matter is not res integra.
In a number of decisions of this Court to which reference will be made presently, th is point has been considered and it has been held that once an order of revocation is made, another order detaining t he same person can only be passed if some additional or fre sh material is in possession of the State Government on whi ch action can be based.
" Then referring to the decision of the Constitution Ben ch in Hadibandhu Das vs District Magistrate, Cuttack and Anot h er; , , the learned Chief Justice observed: 57 "In other words, the revocation or expiry of the previo us order cannot lead ipso facto to a revival of the detenti on by the passing of a fresh order, because a person who is entitled to his liberty can only be put in a second jeopar dy when there are additional or fresh facts against him." Ultimately, he concluded: "As pointed out in the All India Reporter case (Hadiband hu Das case) the inference is very compulsive that fresh fac ts must be found for new orders otherwise once the old dete n tion comes to an end either by the expiry of the period of detention or by the cancellation of the order of detentio n, a fresh detention cannot be ordered." In Har Jas Dev Singh vs State of Punjab & Ors., ; , this Court while examining a similar question wi th regard to validity of second detention order passed und er Section 14(2) of the Maintenance of Internal Security A ct (Act 26 of 1971) on identical grounds of the earlier ord er expressed its view: "In these circumstances after the date on which the ord er cease to be in force, unless fresh facts have arisen on t he basis of which the Central Government or State Government or an Officer, as the case may be, was satisfied that such an order should be made, the subsequent detention on the ve ry same grounds would be invalid." The learned counsel also cited for the same principle of law, the decision in Chotka Hembram vs State of West Beng al & Ors.; , Those decisions mentioned albeit are cases wherein t he first detention order ceased to be either by revocation or by expiry of the period of detention.
What would be t he legal implications and ultimate effect of quashing an ord er of detention by the High Court in exercise of its jurisdi c tion under Article 226 of the Constitution of India th is Court in Ibrahim Bachu Bafan vs State of Gujarat & Ors ., , made the following rule: " . .
When the High Court exercises jurisdiction und er Article 226 of the Constitution it does not make an order of revocation.
By issuing a high prerogative writ like habeas 58 corpus or certiorari it quashes the order impugned before it and by declaring the order to be void and striking down t he same it nullifies the order.
The ultimate effect of cance l lation of an order by revocation and quashing of the same in exercise of the high prerogative jurisdiction vested in t he High Court may be the same but the manner in which t he situation is obtained is patently different and while o ne process is covered by Section 11(1) of the Act, the other is not known to the statute and is exercised by an authori ty beyond the purview of sub section (1) of Section 11 of t he Act.
It is, therefore, our clear opinion that in a situati on where the order of detention has been quashed by the Hi gh Court, sub section (2) of Section 11 is not applicable a nd the detaining authority is not entitled to make anoth er order under Section 3 of the Act on the same grounds.
" It emerges from the above authoritative judicial pr o nouncements that even if the order of detention comes to an end either by revocation or by expiry of the period of detention there must be fresh facts of passing a subseque nt order.
A fortiori when a detention order is quashed by t he Court issuing a high prerorgative writ like habeas corpus or certiorari the grounds of the said order should not be tak en into consideration either as a whole or in part even alon g with the fresh grounds of detention for drawing the requ i site subjective satisfaction to pass a fresh order becau se once the Court strikes down an earlier order by issuing ru le it nullifies the entire order.
In the present case, no doubt, the order of detenti on contains fresh facts.
In addition to that the detaini ng authority has referred to the earlier detention order a nd the judgment of the High Court quashing it, presumably f or the purpose of showing that the detenu in spite of earli er detention order was continuing his bootlegging activitie section But what the detaining authority says clearly in paragraph 9 of his affidavit in reply is that he took into considerati on the previous grounds of detention also for his conclusi on that the detenu 'was engaged in bootlegging activities sin ce long '.
In other words the detaining authority has taken in to consideration the earlier grounds of detention which groun ds had been nullified by the High Court in Special Crimin al Application No. 46 of 1987 by issuing a prerogative writ of habeas corpus.
Under Section 15 of the Act, the expiry or revocation of an earlier detention order is not a bar for making a subs e quent detention 59 order under Section 3 against the same person.
The provi so annexed to that Section states that in a case where no fre sh facts have arisen after expiry or revocation of an earli er order made against such person the maximum period for whi ch such person may be detained in pursuance of the subseque nt detention order shall in no case extend beyond the period of 12 months from the date of detention under the earli er order.
Chinnappa Reddy, J. in Abdul Latif Abdul Wahab Shei kh vs B.K. Jha and Another, ; = 03 speaking for the bench of this Court while dealing wi th Section 15 of the Act observed: "It, therefore, becomes imperative to read down Section 15 of the Gujarat Prevention of Anti Social Activities Ac t, 1985 which provides for the making of successive orders of detention so as to bring it in conformity with Article 22( 4) of the Constitution.
If there is to be a collision betwe en Article 22(4) of the Constitution and Section 15 of the Ac t, Section 15 has to yield.
But by reading down the provisio n, the collision may be avoided and Section 15 may be su s tained." Mr. Poti has sought to explain the statement of t he detaining authority made in his counter saying that t he earlier proceeding was considered only to a limited purpo se of taking note of the detenu 's continued involvement of bootlegging activities; but the entire grounds of earli er detention as they were, were not considered.
We are unab le to accept this explanation because the detaining authorit y, in the counter, in clear terms had expressed that he consi d ered the earlier grounds of detention also.
Incidently, it was brought to our notice that a copy of the earlier groun ds of detention was also one of the documents furnished to t he detenu in the present case which confirms the fact that t he detaining authority has considered the earlier grounds of detention along with other documents for drawing his requ i site subjective satisfaction for passing this impugn ed order.
In other words, the earlier grounds of detenti on dated 2.1. 1987, quashed by the High Court was one of t he material documents considered by the detaining authority in drawing his subjective satisfaction.
Therefore, we hold th at this order of detention is vitiated on the ground that t he detaining authority has taken into consideration the groun ds of earlier detention order alongwith other materials f or passing this impugned order.
Hence, the order is liable to be set aside.
Accordingly, we quash the detention order on this ground and direct that the detenu be set at liber ty forthwith if his detention is not required for any oth er case.
R.S.S. Petition allowed.
| With a view to preventing the petitioner detenu fr om acting in any manner prejudicial to the maintenance of public order, an order of detention was passed against h im by the Comissioner of Police, Surat City, under section 3( 2) of the Gujarat Prevention of Anti social Activities Ac t, 1985.
The grounds of detention referred to the detenu 's criminal activities connected with bootlegging on a lar ge scale and in an organised manner, and the several cas es registered and pending against him on that account.
T he detenu 's representations were dismissed by the 1st respon d ent and the State Government.
It was contended on behalf of the petitioner that t he Detaining Authority for drawing his requisite subjecti ve satisfaction had taken into consideration the previo us grounds of detention which were the subject matter of a Special Criminal Application before the Gujarat High Cour t, and the High Court had quashed the order of detention i m pugned in that case.
On the other hand, it was contended on behalf of the respondents that the earlier proceeding w as considered only to a limited purpose of taking note of t he detenu 's continued involvement in bootlegging activities.
Allowing the writ petition, and quashing the detention ord er it was HELD: (1) Even if the order of detention comes to an e nd either by revocation or by expiry of the period of detenti on there must be fresh facts for passing a subsequent orde r. [58D] Ghulam Nambi Zaki vs State of Jammu & Kashmir, ; Hadibandhu Das vs District Magistrate, Cuttack Anr.
; , ; HarJas Dev Singh vs State of Punja b; , and 53 Chotka Hembram vs State of West Bengal, 1, referred to.
(2) A fortiori when a detention order is quashed by t he Court issuing a high prerogative writ like habeas corpus or certiorari, the grounds of the said order should not be taken into consideration either as a whole or in part ev en alongwith the fresh grounds of detention for drawing t he requisite subjective satisfaction to pass a fresh ord er because once the Court strikes down an earlier order by issuing a rule it nullifies the entire order.
[58D E] Ibrahim Bachu Bafan vs State of Gujarat, , followed.
(3) It is imperative therefore to read down section 15 of the Act which provides for the making of successi ve orders of detention so as to bring it in conformity wi th Article 22(4) of the Constitution.
[59C] Abdul Latif Abdul Wahab Sheikh vs B.K. Jha & Anr .; , followed.
|
Appeal No. 2128 of 1969.
Appeal by special leave from the Award dated July 19, 1969 of the Ninth Industrial Tribunal, West Bengal, Calcutta in case No. VIII 396 of 1968.
C. K. Daphtarv.
Santosh Chatterjee and D. N. Mukherjee, for the appellant.
section C. Gupta, Manju Gupta and section C. Agarwala, for the respondents.
The Judgment of the Court was delivered by Bhargava, J.
The appellant, Messrs Alloy Steel Project, is an undertaking owned, controlled and managed by a Government Company, viz., Messrs Hindustan Steel Ltd. Alloy Steel Project was started in the year 1961 and it went into production in the year 1964 65.
No profit was earned at least right up to the year '1967 68.
The workmen, however, claimed bonus at the minimum rate prescribed under the Payment of Bonus Act No. 21 of 1965 (hereinafter referred to as "the Act") in respect of the year 1965 631 1966 on ' the plea that this Alloy Steel Project was a / part of the Hindustan Steel Ltd. and could not be treated as a new establishment for purposes of section 16 of the Act.
Hindustan Steel Ltd. was itself an establishment which had been in existence for a long period and had been even earning profits, so that exemption could not be granted to this Company in respect of payment of bonus under section 16 of the Act.
This claim of the workmen was resisted, by the Company on the plea that Alloy Steel Project was a separate establishment in respect of which separate balance sheets and profit and loss accounts were maintained, so that no bonus was payable until either this Project itself earned profits, or from the sixth accounting year following the year 1964 65 when this Project went into production.
The dispute between the work men and the Company.
could not be resolved amicably and, consequently, a reference was made under the which came up before the Ninth Industrial Tribunal, West Bengal.
The Tribunal held that Alloy Steel Project could not be treated as a separate establishment because, under the Act, a Company is itself an establishment, so that all units of a Company like Hindustan Steel Ltd. will constitute one establishment.
Since this Project had not been earning any profits the Tribunal directed payment of bonus at the minimum rate of 4 per cent of wages prescribed by the Act.
Aggrieved by this award of the Tribunal, the Company has come up in this appeal to this Court by special leave, though the name of the appellant is shown as Alloy Steel Project, because it was under this name that the reference was dealt with by the Tribunal.
The main basis of the decision of the Tribunal is that 'the word establishment ' has been used in this Act to indicate a "Company" as called in common parlance.
" It was on this view that the Tribunal further Proceeded to consider whether this Alloy Steel Project could be held to be an establishment separate from Hindustan Steel Ltd., or it had to be treated as a part of the parent establishment, viz., Hindustan Steel Ltd. In this approach, it is clear that the Tribunal committed an obvious error, as it ignored the indications which are manifest from the language used in the Act.
In section 2, sub section (15) and (16), establishments have been divided into two classes and their meaning has been defined.
In clause (16), "establishment in public sector ' is defined as meaning an establishment owned, controlled or managed by (a) a Government company as defined in section 617 of the ; (b) a corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by 632 (i) the Government; or (ii) the Reserve Bank of India; or (iii) a corporation owned by the Government or ' the Reserve Bank of India.
In clause (15) of section 2, "establishment in private sector" is defined to mean any establishment other than an establishment in public sector.
Thus, between these two clauses, all establishments are covered.
If an establishment is in public sector, it is covered by the definition in clause (16).
If the establishment is not in public sector, it will be covered by the definition of "establishment in private sector" in clause (15).
The significant words are those contained in clause (16) which show that an establishment in a public sector hag to be owned, controlled or managed by a Government company, or by a corporation of the nature described in that clause.
Obviously, therefore, an establishment in a private sector would be one which is owned, controlled or managed by a person or body other than a Government company or a corpora tion of the nature described in clause (16).
In this view, an establishment cannot be identified with a company.
It would be absurd to say that a company is owned, controlled or managed by a Government company or a corporation.
Obviously, the word "establishment" is intended to indicate something different from a company as defined in the .
This is further clarify by the provisions of sub section
(3) of section I which lays down the applicability of the Act.
The Act has been made applicable to every factory and every other establishment in which twenty or more persons are employed on any day during an accounting year.
Supposing a company has a factory in one premises and has another workshop entirely distinct and separate from that factory, in which the number of persons employed is less than 20.
The Act itself will apply to the factory, but will not apply to the other establishment in which the number of employees is less than 20.
This applicability of the Act will be independent of the other provisions of the Act.
Learned counsel for the respondent workmen relied on section 3 of the Act to urge that even the establishment employing less than 20 persons will be a part of the parent establishment consisting of the factory.
Section 3 is as follows : "3.
Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act 633.
Provided that where for any accounting year a separate balance sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or branch shall be treated as a separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was, immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus.
" It is to be noted that the principal part of section 3 lays down that different departments or undertakings or branches of an establishment are to be treated as part of the same establishment only for the purpose of computation of bonus under the Act.
They cannot be treated as part of one establishment for purposes of subsection (3) of section 1 of the Act.
In fact, section 3 cannot be, resorted to at all when the Act itself is inapplicable in view of the provision contained in section 1, sub section
It is, thus, quite clear that the Tribunal went entirely wrong in holding that simply because Alloy Steel Project is owned, controlled and managed by Hindustan Steel Ltd., it has to be treated as a part of Hindustan Steel Ltd. which is itself an establishment.
Hindustan Steel Ltd. cannot be described as an establishment.
The facts appearing on the record show that Hindustan Steel Ltd. has a number of. establishments.
These include Alloy Steel Project besides the Head Office, Rourkela Steel Plant, Bhilai Steel Plant, Durgapur Steel Plant, Coal Washeries Project and Bokaro Steel Project.
The Company, Hindustan Steel Ltd., cannot be equated with any one of these units.
They are all separate undertakings, departments or branches owned, controlled and managed by one single Company and, consequently,.
the point raised has to be decided on the basis whether, under the proviso to section 3 the Alloy Steel Project is to be treated as a separate establishment, or is to be treated as part of the main establishment owned by Hindustan Steel Ltd. Learned counsel for the respondent workmen, however, advanced a new argument which was not put forward before the Tribunal.
His submission was that, if an establishment of a Company consists of a number of departments, undertakings or branches, the principal part of section 3 will apply and all such departments, undertakings or branches must be treated as parts of one single establishment for purposes of computation of bonus under the Act, but the proviso to section 3 will not apply in such a case.
According to him, the proviso to section 3 will apply to establishments consisting of different departments, undertakings or branches which are owned, controlled or managed by persons other 634 than companies.
This argument was based on the reasoning that, in order to calculate available surplus for distribution of bonus in the case of a company the Act lays down in section, 6 (d) read with the Third Schedule that the deductions to be made from net _profits will also include dividends payable on , preference share ,capital, and 8.5 per cent of its paid up equity share, capital as at the commencement of the accounting year.
This provision cannot be given effect to in respect of separate units of a Company, .because the paid up capital or the preference share capital is not ,allocated between different units.
In the case of the present Company, viz., Hindustan Steel Ltd., the entire paid up capital is shown in the accounts of the Head Office.
The money needed for working of the various units, including the Alloy Steel Project, is shown as remittance received from the Head Office and not as.
paid up capital of the Alloy Steel Project etc.
The result is that, if Alloy :Steel Project or other units of the Hindustan Steel Ltd. are treated as separate establishments and available surplus is calculated separately for each unit, there will be no deduction @ 8.5 per cent ,of the paid up equity share capital as envisaged by section, 6(d) ,and the Third Schedule of the Act.
We do not think that there is any force in this argument.
First, it would be a strange method of construction of language to hold that the establishment referred to in the main part of section 3 will include all different departments, undertakings and "branches of a company, while it will not do so in the proviso to 'the same section.
Such different meanings in the same section in respect of the same words or expression cannot be accepted.
Secondly, it seems to us that no difficulty of the nature pointed out by learned counsel can arise in calculating available surplus. 'Wherever the Act lays down that certain deductions are to be made, it is obvious that those deductions will only be effective if, in fact, circumstances do exist justifying such deductions.
In the 'Third Schedule itself, the first ' deduction envisaged is dividend payable on preference share capital.
A number of companies do not have preference share capital.
In such cases, clearly, no ,occasion would arise for making such a deduction.
Very similar is the position with regard to certain other deductions which are permissible under the Second Schedule which principally lays down the method of calculation of available surplus.
There is, therefore, no reason for interpreting the proviso to section 3 in the manner urged by learned counsel simply because, in the case of separate departments, undertakings or branches of the establishment of a company, it may not be possible to make a deduction @ 8.5 per cent of the paid up equity share capital.
In the present case, there is very clear evidence that, though the Company, Hindustan Steel Ltd., has a number of undertakings, 635 Separate accounts are kept for each separate undertaking.
The annual reports for three years were produced before the Tribunal.
They clearly indicate that separate balance sheet was prepared for each unit and separate profit and loss account was worked out for each unit, except that, for the Head Office, though a separate balance sheet was prepared, the profit and loss was worked out on the basis of the consolidated accounts.
The Tribunal, in support of its view that Alloy Steel Project is a part of the establishment constituted by the Company, Hindustan Steel Ltd., relied on the circumstance that a consolidated balance sheet is prepared for the Company in respect of all its units and after such consolidation, profit and loss is also worked out for all the establishments together so as to find out the actual profit and loss earned or incurred by the Company itself.
From this, the tribunal sought to infer that there were no separate accounts in respect of each unit as are required to be maintained before they can be treated as separate establishments under the proviso to section 3.
The Tribunal has obviously gone wrong in ignoring the fact that separate balance sheets and profit and loss accounts are in fact maintained for each separate unit and the consolidated accounts are prepared only for the purpose of complying with the requirements of the companies Act.
The does lay down the requirement that a consolidated balance sheet and profit and loss account for all the units of the Company must be prepared and, for, that purpose, quarterly statements of accounts have to be sent by each unit to the Head Office.
There is, however, no provision even in the containing a prohibition to maintenance of separate balance sheets and separate profit and loss statements for each unit for purposes of the Act.
That accounts are separately maintained for each unit is not only established from the various annual reports filed before the Tribunal and the evidence of, the Company 's witness Umapada Chakraborty, but is also admitted by Suprakash Kanjilal, the only witness examined on behalf of the workmen.
The latter also admitted that separate bonus calculation is made in respect of each unit and bonus was declared separately in each unit.
No bonus was, however, declared in respect of the Alloy Steel Project.
That declaration was not made because of the claim that Alloy Steel Project was exempt from payment of bonus under section 16 of the Act.
Section 16 runs as follows: "16.
(1) Where an establishment is newly set up, whether before or after the commencement of this Act, ,the employees of such establishment shall be entitled to be paid bonus under this Act only (a) from the accounting year in which the employer derives profit from such establishment; or 918Sup CI/71 636 (b) from the sixth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, whichever is earlier Provided that in the case of any such establishment the employees thereof shall not, save as otherwise provided in section 33, be entitled to be paid bonus under this Act in respect of any accounting year prior to the accounting year commencing on any day in the year 1964.
Explanation I. For the purpose of this section, an establishment shall not be deemed to be newly set up merely by reason of a change in its location, management, name or ownership.
Explanation II.
For the purpose of clause (a), an employer shall not be deemed to have derived profit in any accounting year unless (a) he has made provision for that year 's depreciation to which he is entitled under the Income tax Act or, as the case may be, under the agricultural income tax law; and (b) the arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set off against his profits.
Explanation III.
For the purpose of clause (b), sale of the goods produced or manufactured during the course of the trial run of any factory or of the prospecting stage of any mine or an oil field shall not be taken into consideration and where any question arises with regard to such production or manufacture, the decision of the appropriate Government, made after giving the parties a reasonable opportunity of representing the case, shall be final and shall not be called in question by any court or other authority.
(2) The provisions of sub section (1) shall, so far as may be, apply to new departments or undertakings or branches set up by existing establishments 6 3 7 Provided that if an employer in relation to an existing establishment consisting of different departments or undertakings or branches (whether or not in the same industry) set up, at different periods has, before the 29th May, 1965, been paying bonus_to the employees of all such departments or undertakings or branches irrespective of the date on which such departments or undertakings or branches were set up, on the basis of the consolidated profits computed in respect of all such departments or undertakings or branches, then, such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employees of all such departments or undertakings or branches (whether set up before or after that date) on the basis of consolidated profits computed as aforesaid.
" Sub section (1) of section 16 grants exemption from payment of bonus to establishments newly set up for a period of six years, following the accounting year in which the goods produced or manufactured are sold for the first time and, in the alternative, up, to the year when the new establishment results in profit, whichever is earlier.
If the Alloy Steel Project is treated as an establishment newly set up for purposes of section 16(1), the exemption claimed would be fully justified.
Section 16(2) of the Act makes it clear that the provisions of sub section (1) are to apply even to new departments, undertakings or branches set up by existing establishments.
Consequently, even if Alloy Steel Project is treated as a new undertaking set up by the existing establishments of Hindustan Steel Ltd., the exemption under section 16(1) would be avail able to it.
The proviso to sub section
(2) of section 16 also does not stand in the way of this claim, because there is no evidence at all that in any year, after Alloy Steel Project was set up bonus was paid to the employees of all the units on the basis of consolidated profits of all such units.
The only exception has been in the case, of workmen of the Head Office where no separate profit and loss was worked out and the bonus was paid on the basis of the consolidated Profits of all the units belonging to Hindustan Steel Ltd. That, of course, was fully justified, because the Head Office was working for all the units, though as a separate unit.
It was in the accounts of the Head Office that the entire paid up capital was credited and advances were made by the Head Office to the various units out of this capital or out of loans taken by the Head Office.
In the case of the Head Office, therefore, the calculation of bonus on the basis of consolidated accounts was Justified; but that does not affect the principle to be applied to the separate units for which separate accounts, separate balance sheets and separate profit and loss statements are maintained.
The proviso to sub 638 section (2) of section 16 only comes in the way it bonus is paid in any year to the employees of all the units on the basis of consolidated accounts.
That has never been done in the case of the Hindustan Steel Ltd. Consequently, the Alloy Steel Project should have been treated as a separate establishment newly set up in the year 1961.
It went into production in 1964 65 and did not, earn any profits at all till 1967 68.
Therefore, no bonus was payable, to, the workmen of this undertaking for the year 1965 66 in view ,of the provisions of section 16(1) of the Act.
The appeal is allowed, the order of the Tribunal is set aside, and the reference of the dispute is answered accordingly.
In the circumstances of this case, we direct parties to bear their own ,costs of the appeal.
G.C. Appeal allowed.
| The Alloy Steel Project was an undertaking controlled and managed by a government company, namely, the Hindustan Steel Ltd. Alloy Steel was started in 1961 and went into production in 1964 65.
No profit was earned up to 1967 68.
The workmen claimed bonus at the minimum rate prescribed under the Payment of Bonus Act, 21 of 1965 in respect of the year 1965 66.
On behalf of the Alloy Steel Project exemption from payment of bonus was claimed under section 16(1) of the Act on the ground that it was a new establishment and had not made profits.
The Industrial Tribunal to which reference was made held that Alloy Steel could not be treated as a separate establishment because under the Act a company is itself an establishment so that all units of a company like Hindustan Steel Ltd. will constitute one establishment.
However, since Alloy Steel had not been earning profits the Tribunal directed payment of bonus at the minimum rate of 4% of wages as prescribed by the Act.
Aggrieved by this Award of the Tribunal the company appealed.
HELD : The Tribunal erred in holding the word 'establishment ' to be synonymous with 'company '.
In doing so it ignored the indications which are manifest from the language of the Act.
The significant words are those contained in section 2(16) which show that an establishment in a public sector has to be owned, controlled or managed by a Government company or by a corporation of the nature described in the clause.
Obviously therefore an 'establishment in private sector ' defined in section 2(15) to mean an establishment not in the public sector would be one which is owned, controlled or managed by a person or body other than a Government company or a corporation of the nature described in section 2(16).
In this view an establishment cannot be identified with a company.
It would be absurd to say that a company is owned, controlled or managed by a Government company or corporation Obviously, the word 'establishment ' is intended to indicate something different from a company as defined in the Companies Act.
[631 F 632 D] (ii) Alloy Steel was a separate establishment by virtue of the proviso to section 3 of the Act because for each of the undertakings of Hindustan Steel Ltd. including Alloy Steel separate accounts were kept though for the purpose of compliance with the provisions of the Companies Act a consolidated balance sheet and profit and loss account were also prepared.
There was no substance in the contention that the proviso to section 3 applies only to departments undertaking or branches controlled and managed by persons 630 other than companies.
It would be a strange method of construction of language to hold that the establishment referred to in the main part of section 3 will include all different departments undertakings and branches of a company, while it will not do so in the proviso to the same section.
There is no reason for interpreting the proviso to section 3 in this manner simply because in the case of separate departments, undertakings or branches of the establishment of a company, it may not be possible to make a deduction @ 8.5% of the paid up equity share capital.
[635 C D; 633 G 634 H] (iii) Sub Section (1) of section 16 grants exemption from payment of bonus to establishments newly set up for a period of six years following ,the accounting year in which the goods produced or manufactured are sold for the first time and, in the alternative; upto the year when the new establishment results in profit, whichever is earlier.
If the Alloy Steel Project was treated as an establishment newly set up for the purposes of section 16(1) the exemption claimed would be fully justified.
Section 16(2) of the Act makes it clear that the provisions of sub section
(1) are to apply even to new departments, undertakings, or branches set up by existing establishment.
Consequently, even if Alloy Steel Project was treated as a new undertaking set up by the existing establishments of Hindustan Steel Ltd. the exemption under section 16(1) would be available to it.
[637 D E] The proviso to Sub section
(2) of section 16 only comes in the way if bonus is paid in any year to the employees of all the units on the basis of the consolidated accounts.
That had never been done in the case of the Hindustan Steel Ltd. Consequently the Alloy Steel Project should have been treated as a separate establishment newly set up in the year 1961.
, It went into production in 1964 65 and did not earn any profits at all till 1967 68.
Therefore no bonus was payable to the workmen of this undertaking for the year 1965 66 in view of the provisions of section 16(1) of the Act.
[638 A B]
|
Civil Appeal No. 207 of 1956.
Appeal from the judgment and decree dated November 5, 1952, of the Madras High Court in Appeal No. 852 of 1948.
R. Thiagarajan and G. Gopalakrishnan, for the appellant.
Ganapathy Iyer, for respondent No. 3. 1962.
January 11.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
This is an appeal against the Judgment of the High Court of Madras, dismissing the suit filed by the appellant, as Muthavalli of the Jumma Masjid, Mercara for possession of a half share in the properties specified in the plaint.
The facts are not in dispute.
There was a joint family consisting of three brothers, Santhappa, Nanjundappa and Basappa.
Of these, Santhappa died unmarried, Basappa died in 1901, leaving behind a widow Gangamma, and Najundappa died in 1907 leaving him surviving his widow Ammakka, who succeeded to all the family properties as his heir.
On the death of Ammakka, which took place in 1910, the estate devolved on Basappa, Mallappa and Santhappa, the sister 's grandsons of 557 Nanjundappa as his next reversioners.
The relationship of the parties is shown in the following genealogical table.
Basappa | | | | | Santhappa Nanjundappa Basappa Mallammal d. 1907 d. 1901 | =Ammakka =Gangamma | d.1910 | | Ramegowda Mallegowda | | | | | | Basappa Mallappa Santhappa On August 5, 1900, Nanjundappa and Basappa executed a usufructuary mortgage over the properties which form the subject matter of this litigation, and one Appanna Shetty, having obtained an assignment thereof, filed a suit to enforce it, O.S. 9 of 1903, in the court of the Subordinate Judge, Coorg.
That ended in a compromise decree, which provided that Appanna Shetty was to enjoy the usufruct from the hypotheca till August, 1920, in full satisfaction of all his claims under the mortgage, and that the properties were thereafter to revert to the family of the mortgagors.
By a sale deed dated November 18, 1920, exhibit III, the three reversioners, Basappa, Nallappa and Santhappa, sold the suit properties to one Ganapathi, under whom the respondents claim, for a consideration of Rs. 2,000.
Therein the vendors recite that the properties in question belonged to the joint family of Nanjundappa and his brother Basappa, that on the death of Nanjundappa, Ammakka inherited them as his widow, and on her death, they had devolved on them as the next reversioners of the last male 558 owner.
On March 12, 1921, the vendors executed another deed, exhibit IV, by which exhibit III was rectified by inclusion of certain items of properties, which were stated to have been left out by oversight.
It is on these documents that the title of the respondents rests.
On the strength of these two deeds, Ganapathi sued to recover possession of the properties comprised therein.
The suit was contested by Gangamma, who claimed that the properties in question were the self acquisitions of her husband Basappa, and that she, as his heir, was entitled to them.
The Subordinate Judge of Coorg who tried the suit accepted this contention, and his finding was affirmed by the District Judge on appeal, and by the, Judicial Commissioner in second appeal.
But before the second appeal was finally disposed of, Gangamma died on February 17, 1933.
Thereupon Ganapathi applied to the revenue authorities to transfer the patta for the lands standing in the name of Gangamma to his own name, in accordance with the sale deed exhibit III.
The appellant intervened in these proceedings and claimed that the Jumma Masjid, Mercara, had become entitled to the properties held by Gangamma, firstly, under a Sadakah or gift alleged to have been made by her on September 5, 1932, and, secondly, under a deed of release executed on March 3, 1933, by Santhappa, one of the reversioners, relinquishing his half share in the properties to the mosque for a consideration of Rs. 300.
By an order dated September 9, 1933, exhibit II, the revenue authorities declined to accept the title of the appellant and directed that the name of Ganapathi should be entered as the owner of the properties.
Pursuant to this order, Ganapathi got into possession of the properties.
The suit out of which the present appeal arises was instituted by the appellant on January 2, 1945, for recovery of a half share in the properties that 559 had been held by Gangamma and for mesne profits.
In the plaint, the title of the appellant to the properties is based both on the gift which Gangamma is alleged to have made on September 5, 1932, and on the release deed executed by Santhappa, the reversioner, on March 3, 1933.
With reference to the title put forward by the respondents on the basis of exhibit III and exhibit IV, the claim made in the plaint is that as the vendors had only a spes succession is in the properties during the lifetime of Gangamma, the transfer was void and conferred no title.
The defence of the respondents to the suit was that as Santhappa had sold the properties to Ganapathi on a representation that he had become entitled to them as reversioner of Nanjundappa, on the death of Ammakka in 1910, he was estopped from asserting that they were in fact the self acquisitions of Basappa, and that he had, in consequence, no title at the dates of exhibit III and exhibit IV.
The appellant, it was contended, could, therefore, get no title as against them under the release deed exhibit A, dated March 3, 1933.
The District Judge of Coorg who heard the action held that the alleged gift by Gangamma on September 5, 1932, had not been established, and as this ground of title was abandoned by the appellant in the High Court, no further notice will be taken of it.
Dealing next with the title claimed by the appellant under the release deed, exhibit A executed by Santhappa, the District Judge held that as Ganapathi had purchased the properties under exhibit III on the faith of the representation contained therein that the vendors had become entitled to them on the death of Ammakka in 1910, he acquired a good title under section 43 of the , and that exhibit A could not prevail as against it.
He accordingly dismissed the suit.
The plaintiff took the matter in appeal to the High Court, Madras, and in view of the conflict of authorities on the question in that Court, the case was refer 560 red for the decision of a Full Bench.
The learned Judges who heard the reference agreed with the court below that the purchaser under exhibit III had, in taking the sale, acted on the representation as to title contained therein, and held that as the sale by the vendors was of properties in which they claimed a present interest and not of a mere right to succeed in future, section 43 of the applied, and the sale became operative when the vendors acquired title to the properties on the death of Gangamma on February 17, 1933.
In the result, the appeal was dismissed.
The appellant then applied for leave to appeal to this Court under article 133(1)(c), and the same was granted by the High Court of Mysore to which the matter had become transferred under section 4 of Act 72 of 1952.
That is how the appeal comes before us.
The sole point for determination in this appeal is, whether a transfer of property for consideration made by a person who represents that he has a present and transferable interest therein, while he possesses, in fact, only a spes successionis, is within the protection of section 43 of the .
If it is, then on the facts found by the courts below, the title of the respondents under exhibit III and exhibit IV must prevail over that of the appellant under exhibit A.
If it is not, then the appellant succeeds on the basis of Ex A. Section 43 of the runs as follows: "Where a person fraudulently or erroneously represents that he is authorised to transfer certain immovable property and professes to transfer such property for consideration such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contact of transfer subsists.
561 Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.
" Considering the scope of the section on its terms, it clearly applies whenever a person transfers property to which he has no title on a representation that he has a present and transferable interes therein, and acting on that representation, the transferee takes a transfer for consideration.
When these conditions are satisfied, the section enacts that if the transferor subsequently acquires the property, the transferee becomes entitled to it, if the transfer has not meantime been thrown up or cancelled and is subsisting.
There is an exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer.
But apart from that, the section is absolute and unqualified in its operation.
It applies to all transfers which fulfil the conditions prescribed therein, and it makes 1.
O difference in its application, whether the defect of title in the transferor arises by reason of his having no interest whatsoever in the property, or of his interest therein being that of an expectant heir.
The contention on behalf of the appellant is that section 43 must be read subject to section 6 (a) of the which enacts that, "The chance of an heir apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman or any other mere possibility of a like nature, cannot be transferred.
" The argument is that if section 43 is to be interpreted as having application to Cases of what are in fact transfers of spes successionis, that will have the effect of nullifying section 6 (a), and that therefore it would be proper to construe section 43 as limited to cases of transfers other than those falling within .
In effect, this argument involves importing 562 into the section a new exception to the following effect; "Nothing in this section shall operate to confer on the transferee any title, if the transferor had at the date of the transfer an interest of the kind mentioned in section 6 (a).
" If we accede.
to this contention we will not be construing s.43.
but rewriting it.
"We are not entitled", observed Lord Loreburn L. C., in Vickers vs Evans (1), "to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself." Now the compelling reason urged by the appellant for reading a further exception in section 43 is that if it is construed as applicable to transfers by persons who have only spes successionis at the date of transfer, it would have the effect of nullifying section 6(a).
But section 6(a) and section 4 relate to two different, subjects, and there is no necessary conflict between them; Section 6 (a) deals with certain kinds of interests in property mentioned therein, and prohibits a transfer simpliciter of those interests.
Section 43 deals with representations as to title made by a transferor who had no title at the time of transfer, and provides that the transfer shall fasten itself on the title which the transferor subsequently acquires.
Section 6 (a) enacts a rule of substantive law, while section 43 enacts a rule of estoppel which is one of evidence.
The two provisions operate on different fields, and under different conditions, and we see no ground for reading a conflict between them or for outing down the ambit of the one by reference to the other.
In our opinion, both of them can he given full effect on their own terms, in their respective spheres.
To hold that transfers by persons who have only a spes successionis at the date of transfer are not within the protection afforded by section 43 would destroy its utility to a large extent.
It is also contended that as under the law there can be no estoppel against a statute transfers 563 which are prohibited by section (6a) could not be held to be protected by section 43.
There would have been considerable force in this argument if the question The fell to be decided solely on the terms of section 6 (a).
Rules of estoppel are not to be resorted to for defeating or circumventing prohibitions enacted by Statutes on grounds of public policy.
But here the matter does not rest only on section 6 (a).
We have in addition, section 43, which enacts a special provision for the protection of transferees for consideration from persons who represent that they have present title, which, in fact, they have not.
And the point for decision is simply whether on then facts the respondents are entitled to the benefit of this section.
If they are, as found by the courts below, then the plea of estoppel raised by them on the terms of the section is one pleaded under, and not against the statute, The appellant also sought to rely on the decisions wherein it has been held that a plea of estoppel could not be raised against a millor who had transferred property on a representation that he was of age, and that section 43 was inapplicable to such transfers, vide Sadiq Ali Khan vs Jai Kishori Gadigeppa vs Balanagauda (2) Ajudhia Prasad vs Chandan Lal(3)But the short answer to this contention is that section 43 deals with transfers which fail forwant of title in the transferor and not want of capacity in him at the time of transfer.
It may further be observed in this connection that the doctrine of estoppel has been held to have no application to persons who have no contractual capacity where the claim is based on contract, vide Mahomed Syedol Ariffin, vs Yeoh Oai Gark (4); Levine vs Brougham (5), Leslie Ltd. section Sheil); Khan Gul vs Lakha Singh (7).
Decisions on transfers by minors therefore are of no assistance in ascertaining the true scope of section 43.
564 So far we have discussed the question on the language of the section and on the principles applicable thereto.
There is an illustration appended.to section 43, and we have deferred consideration thereof to the last as there has been a controversy as to how far it is admissible in construing the section.
It is as follows: "A, a Hindu, who has separated from his father B, sells to C three fields, X, Y and Z, representing that A is authorized to transfer the same.
Of these fields Z does not belong to A, it having been retained by B on the partition; but on B 's dying A as heir obtains Z. C, not having rescinded the contract of sale, may require A to deliver Z to him.
In this illustration, when A sold the field Z to C, he had only a spes successionis.
But he having subsequently inherited it, became entitled to it.
This would appear to conclude the question against the appellant.
But it is argued that the illustration is repugnant to the section and must be rejected.
If the language of the section clearly excluded from its purview transfers in which the transferor had only such interest as is specified in section 6(a), then it would undoubtedly not be legitimate to use the illustration to enlarge it.
But far from being restricted in its scope as contended for by the appellant, the section is, in our view, general in its terms and of sufficient amplitude to take in the class of transfers now in question.
Its is not to be readily assumed that all illustration to a section is repugnant to it and rejected.
Reference may, in this connection, be made to the following observations of the judicial Committee in Mahomed Shedol Ariffin vs Yeoh Ooi Gark (1) as to the value to given to illustrations appended to a section, in ascertaining its true scope: 565 "It is the duty of a court of law to accept, if that can be done, the illustrations given as being both of relevance and value in the construction of the text.
The illustrations should in no case be rejected because they do not square with ideas possibly derived from an other system of jurisprudence as to the law with which they are the sections deal And it would require a very special case to warrant their rejection on the ground of their assumed repugnancy to the sections themselves.
It would be the very last resort of construction to make any such assumption.
The great usefulness of the illustrations, which have, although no part of the sections, been expressly furnished by the Legislature as helpful in the working and application of the statute, should not be thus impaired.
" We shall now proceed to consider the more important cases wherein the present question has been considered.
One of the earliest of them is the decision of the Madras High court in Alamanaya Kunigari Nabi Sab vs Murukuti Papiah (1).
That arose out of a suit to enforce a mortgage executed by the son over properties belonging to the father while he was alive.
The father died pending the suit, and the properties devolved on the son as his heir.
The point for decision was whether the mortgagee could claim the protection of section 43 of the .
The argument against is was that "section 43 could not be so construed as to nullify section 6(a) of the , by validating a transfer initially void under s 6(a)".
In rejecting this contention, the Court observed: "This argument, however, neglects the distinction between purporting to transfer `the chance of an heir apparent, ' and `erroneously representing that he (the transferor) is 566 authorised to transfer certain immoveable property.
" It is the latter course that was followed in the present case.
It was represented to the transferee that the transferor was in praesenti entitled to and thus authorise to transfer the property." (p. 736) On this reasoning if a transfer is statedly of an interest of the character mentioned in section 6(a), it would be void, whereas, if it purports to be of an interest in praesenti, it is within the protection afforded by section 43 Then we come to the decision in The official Assignee, Madras vs Sampath Naidu (1), where a different view was taken.
The facts were that one vs Chetti had executed two mortgages over properties in respect of which he had only spes successionis.
Then he succeeded to those properties as heir and then sold them to one Ananda Mohan.
A mortgagee claiming under Ananda Mohan filed a suit for a declaration that the two mortgages created by Chetty before he had become entitled to them as heir, were void as offending section 6(a) of the .
The mortgagee contended that in the events that had happened the mortgages had become enforceable under section 43 of the Act.
The Court negatived this contention and held that as the mortgages, when executed, contravened section 6(a), they could not become valid under section 43.
Referring to the decision in Alamanaya Kunigari Nabi Sab vs Murkuti Papiah (2), the Court observed that no distinction could be drawn between a transfer of what is on the face of it spes successionis, and what purports to be an interest in praesenti.
"If such a distinction were allowed", observed Bardswell, J., delivering the Judgment of the Court, "the effect would be that by a clever description of the property dealt with in a deed of transfer one would be allowed to conceal the real nature of the transaction and evade a clear statutory prohibition.
" 567 This reasoning is open to the criticism that it ignores the principle underlying section 43.
That section embodies, as already stated, a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation.
It is immaterial whether the transferor acts bona fide or fraudulently in making the representation.
It is only material to find out whether in fact the transferee has been misled.
It is to be noted that when the decision under consideration was given, the relevant word of section 43 were, "where a person erroneously represents", and now, a amended by Act 20 of 1929, they are "where a person fraudulently or erroneously represents", and that emphasises that for the purpose of the section it matters not whether the transferor act fraudulently or innocently in making the representation, and that what is material is that he did made representation and the transferee has acted on it.
Where the transferee knew as a fact that the transferor did not possess the title which he represents he has, then he cannot be said to have acted on it when taking a transfer.
Section 43 would then have no application, and the transfer will fail under section 6(a).
But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodied in section 43, however fraudulent the act of the transferor might have been.
The learned Judges were further of the opinion that in view of the decision of the Privy Council in Ananda Mohan Roy vs Gour Mohan Mullick (1) and the decision in Sri Jagannada Raju vs Sri Rajah Prasada Rao (2), which was approved therein, the illustration to section 43 must be rejected as repugnant to it.
In Sri Jagannada Raju 's case (2), the question was whether a contract entered into by certain 568 presumptive reversioners to sell the estate which was then held by a widow as heir could be specifically enforced, after the succession had opened.
It was held that as section 6(a) forbade transfers of spes successionis, contracts to make such transfers would be void under section 23 of the contract Act, and could not be enforced.
This decision was approved by the Privy Council in Ananda Mohan Roy vs Gour Mohan Mullick(1), where also the question was whether a contract by the nearest reversioner to sell property which was in the possession of a widow as heir was valid and enforceable, and it was held that the prohibition under section 6(a) would became futile, if agreements to transfer could be enforced.
These decisions have no bearing on the question now under consideration, as to the right of a person who for consideration takes a transfer of what is represented to be an interest in praesenti.
The decision in The Official Assinee, Madras vs Sampatha Naidu (2) is, in our view, erroneous, and was rightly over ruled in the decision now under appeal.
Proceeding on to the decisions of the other High Courts, the point under discussion arose directly for decision in Shyam Narain vs Mangal Prasad (3).
The facts were similar to those in The official Assignee, Madras section Sampath Naidu(2) One Ram Narayan, who was the daughter 's son of the last male owner sold the properties in 1910 to the respondents, while they were vested in the daughter Akashi.
On her death in 1926, he succeeded to the properties as heir and sold them in 1927 to the appellants.
The appellants claimed the estate on the ground that the sale in 1910 conferred no title on the respondents as Ram Narayan had then only a spes successionis.
The respondents contended that they became entitled to the properties when Ram Narayan acquired them as heir in 1926.
The learned Judge, Sir section M. Sulaiman, C. J., and Rachhpal, J., held, agreeing with 569 the decision in Alamanaya Kunigari, Nabi Sab vs Murukuti Papiah (1),and deffering from The official Assignee, Madras vs Sampath Naidu (2),and Bindeshwari Singh vs Har Narain Singh (3), that s.43 applied and that the respondents, had acquired a good title.
In coming to this, conclusion, they relied on the illustration to section 43 as, indicating its, true scope, and observed: "Section 6 (a) would, therefore, apply to cases, where professedly there is, a transfer of a mere spes successionis, the parties knowing that the transferor has, no more right than that of a mere expectant heir.
The result, of course, would be the same where the parties, knowing the full facts, fraudulently clothe the transaction in the garb of a an out and out sale of the property, and there is, no erroneous representation made by the transferor to the transferor as, to his, ownership. "But where an erroneous, representation is, made by the transferor to the transferee that he is, the full owner of the property transferred and is authorized to transfer it and the property transferred is not a mere chance of succession but immovable property itself, and the transferee acts, upon such erroneous representation, then if the transferor happens, later, before the contract of transfer comes, to an end, to acquire an interest in that property, no matter whether by private purchase, gift, legacy or by inheritance or otherwise, the previous transfer can at the option of the transferee operate on the interest which has, been subsequently acquired, although it did not exit at the time of the transfer." (pp. 478,479).
This decision was followed by the Bombay High Court in Vithabai vs Malhar Shankar (4) and by the 570 Patna High Court in Ram Japan vs Jagesara Kuer(1).
A similar view had been taken by the Nagpur High Court in Syed, Bismilla vs Manulal Chabildas(2).
The preponderance of judicial opinion is in favour of the view taken by the Madras High Court in Alamanaya Kunigari Nabi Sab vs Murukuti Papiah (3), and approved by the Full Bench in the decision now under appeal.
In our judgment, the interpretation placed on section 43 in those decisions correct and the contrary opinion is erroneous.
We accordingly hold that when a person transfers property representing that he has a present interest therein, whereas he has, in fact, only a spes successionis, the transferee is entitled to the benefit of section 43, if he has taken the transfer on the faith of that representation and for consideration.
In the present case, Santhappa, the vendor in exhibit III, represented that he was entitled to the property in praesenti, and it has been found that the purchaser entered into the transaction acting on that representation.
He therefore acquired title to the properties under section 44 of the , when Santhappa became in titulo on the death of Gangamma on February 17, 1933, and the subsequent dealing with them by Santhappa by way of release under exhibit A did not operate to vest any title in the appellant.
The Courts below were right in upholding the title of the respondents, and this appeal must be dismissed with costs of the third respondent, who alone appears.
Appeal dismissed.
| M and S claiming to be reversioners to the estate of N sold the property in dispute to G predecessor in interest of the respondents.
The sale deed recited that the property belonged to the joint family of two brothers N and B, and on the death of N it was inherited by his widow and on her death it had devolved upon them as reversioners to the state.
G sued to recover possession of the properties.
The suit was contested by the widow of B(brother of N) claiming that the property was the self acquired property of her husband.
During the pendency of the litigation the widow died, and G applied to the revenue authorities to transfer the 'pattas ' in his name.
The appellants intervened alleging that the property was gifted to them by the widow, and S one of the reversioners had also executed a release of the said property for a consideration.
This objection was rejected.
The appellants then sued for possession of a half share in the properties held by the widow of B, relying upon the gift by the widow, and the deed of surrender by S one of the two reversioners to the estate of N.
They contended that the Vendors of the property to G had 555 only a spes successionis during the life time of the widow of B, and the transfer was on that account void and conferred no title.
The heirs of contended that the property was sold to by M and S on a representation that the Vendor had become entitled thereto, and the appellants as transferees from S were estopped from asserting that it was in fact the self acquisition of and that in consequence he had no title at the date of the sale.
^ Held, that where a person transfers property representing that he has a present interest therein, whereas he has, in fact, only a spes successions, the transferee is entitled to the benefit of section 43 of the , if he has taken the transfer for consideration and on the faith of the representation.
Held, further, that apart from the exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer section 43 of the is absolute and unqualified in its operation.
It applies to all transfers which fulfil the conditions prescribed therein, and it makes no difference in its application whether the defect of title in the transferor arises by reason of his having no interest in the property, or of his interest therein being that of an expectant heir.
The section deals with transfers which fail for want of title in the transferor and not want of capacity in him at the time of transfer.
It embodies a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on the representation.
It is immaterial whether the transferor acts bona fide or fraudulently in making the representation.
It is only material to find out whether in fact the transferee has been misled.
In view of the specific provision of section 43 the principle of estoppel against a statute does not apply to transfers prohibited by section 6 (a) of the Act.
The two provisions operate in different fields and under different conditions.
There is no necessary conflict between them, and the ambit of one cannot be cut down by reference to the other.
Section 6(a) enacts a rule of substantive law, while section 43 enacts a rule of estoppel which is one of evidence.
Held, also, that if the language of the section clearly excludes from its purview certain matters, it would not be legitimate to use the illustration to the section to enlarge it.
It is not to be readily assumed that an illustration to a section is repugnant to it and rejected.
Vickers vs Evans, (1910)79 L.J.K.B. 955, relied on.
556 Sadiq Ali Khan vs Jai Kishori, A.I.R. 1928 P.C. 152, Gadigeppa vs Balangauda, (1931) I.L.R. , Ajudhia Prasad vs Chandan Lal, I.L.R. (1937) All.
860 F.B.; Mohomed Syedol Ariffin vs Yeoh Ooi Gark; (1916) L.R. 43 I.A. 256; Levine vs Brougham, ; Leslie Ltd. vs Sheill, and Khan Gul vs Lakha Singh Lah.
701(F.B.), referred to.
Alamanaya Kunigari Nabi Sab vs Murukuti Papiah, , Shyam Narain vs Mangal Prasad, All. 474, Vithabai vs Mathar Shankar, I.L.R. , Ram Japan vs Jagesara Kuer, A.I.R. 1939 Pat. 116 and Syed Bismilla vs Munulal Chabildas, A.I R. , approved.
Official Assignee, Madras vs Sampath Naidu, and Bindeshwari Singh vs Har Narain Singh, Luck.
622, disapproved.
|
Special Leave Petition (Civil) No. 6577 of 1988.
From the Judgment and order dated 27.4.1988 of the High Court of Allahabad in C.M.W. No. 3777 of 1987.
G.L. Sanghi and Manoj Prasad for the Petitioner.
PG NO 278 The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This application for leave to appeal under Article 136 of the Constitution arises from the judgment and order of the High Court of Allahabad, dated 27th April, 1988 by the judgment under challenge the Division Bench by majority directed the Addl.
City Magistrate or the Officer at present exercising the power of Distt.
Magistrate under Rule 10(9) of the U.P. Urban Buildings (Regulation of Letting, Rent & Eviction) Rules 1972 to issue notice on all the five landlords mentioned in the petition within one week of the filing of the certified copy of the Order, and thereafter to make an Order in accordance with law and in the light of the observations made in the said Judgment.
The petitioner before the High Court, who is the petitioner herein also, was directed not to be dispossessed until disposal of the matter by the High Court.
This application is by the tenant petitioner.
The premises in question had five co owners, namely, Veeresh Saxena, R.C. Saxena.
D.C. Saxena, Smt.
Shanti Saxena and B.S. Saxena, respondent No. 3.
Until January, 1978, Veeresh Saxena was in sole and exclusive actual physical possession of the shop and carried on business in it.
In January, 1978 the present petitioner filed allotment application for the shop and he was the sole applicant.
On 28.1.1978, Veeresh Saxena vacated the shop and sent intimation of vacancy to the Rent Control Officer under the U.P. Urban Buildings (Regulation of Letting & Eviction) Act, 1972 (hereinafter called the Act).
The Rent Control Officer, then, directed him to appear in the allotment proceedings The Inspector reported that Veeresh Saxena was found to be in possession of the shop, discontinuing the business and was going to let out the shop.
On the Inspector 's report being pasted on the Notice Board of the Rent Controller Office, neither B.S. Saxena nor the other 3 co owners filed any objection.
Veeresh Saxena filed an affidavit before the Rent Control Officer that he wanted to let out the shop to the petitioner.
The 3 other co owners never objected to the petitioner`s tenancy on the allotment order throughout the last 10 years.
The allotment letter was accordingly passed on 12th February, 1978.
The possession was, thereafter, taken up, it was alleged by the petitioner in the special leave petition.
The petitioner had alleged that he had invested more than Rs.2 lakhs in the shop, but B.S. Saxena.
who was a non occupant owner, on or about 25th February, 1978 filed an application under section 16(5) of the Act, after 25 days of allotment, for review of the Order.
It was alleged by the petitioner that the evidence was overwhelmingly in support of the fact that he had taken PG NO 279 possession of the premises on or about 4/5th February, 1978.
The Rent Controller, however, on the said application of B.S. Saxena allowed the review application and cancelled the allotment order.
revision against the said order was filed before the learned Judge under section 18 of the Act.
The learned Addl.
Distt.
Judge dismissed the revision.
The petitioner, thereafter, filed a writ petition in the High Court of Allahabad .
The question arose about the maintainability of the review application under section 16(5) of the Act.
It is upon this point that the matter has been agitated before us.
There was a difference of opinion about the maintainability of the review application at the instance of a non occupant owner and the matter was referred to a Bench of 3 learned Judges and by majority the Division Bench came to the conclusion that such an application was maintainable.
The petitioner herein contends that the High Court was wrong in the view it took on the construction of Section 16(5)(b) of the Act.
The relevant provisions of the said sub section read as follow: "(5)(a) Where the landlord or any other person claiming to be lawful occupant of the building or any part thereof comprised in the allotment or release order satisfies the District Magistrate that such order was not made in accordance with clause (a) or clause (b) as the case may be of sub section (I), the District Magistrate may review the order: Provided 1hat no application under this clause shall be entertained later than seven days after the eviction of such person .
(b) Where the District Magistrate on review under this sub section sets aside or modifies his order of allotment or release, he shall put or cause to be put the applicant, if already evicted, back into possession of the building, and may for that purpose use or cause to be used such force as may be necessary.
(6) x x x (7) Every order under this section shall subJect to any order made under sec.
18 be final.
" PG NO 280 The contention is that a landlord who was not in actual physical possession until making of the allotment order or is evicted in pursuant thereof, is not competent to make an application for review of the allotment order or release order under section 16(5)(a) & (b) of the Act.
Admittedly, as mentioned hereinbefore, the respondent applicant was not in occupation when the Order was made.
He was, however, indisputably a landlord.
So, the question is whether on the construction of the section, a landlord who Is not in actual physical possession at the time of the release order, is entitled under the law to apply for review of the order.
The High Court held that he is entitled.
We are of the opinion that the High Court was right.
Section 16(5)(a) speaks of 'where the landlord or any other person '.
Hence,there are two categories of persons contemplated i.e. a landlord, or any other person.
The requirement of sub section, to be in lawful occupation of the building or any part thereof, applies Only in case of Lany other person claiming to be in lawful occupation and not in case of landlord.
The Section has used the expression ' or" and so the expression or is disjunctive of these two categories to be treated separately.
Hence, the requirement to be in lawful occupation.
is not there in case of an application by the landlord.
Mr. G.L. Sanghi, learned counsel appearing for the tenant, has sought to argue that by virtue of the proviso a landlord who was not in occupation, was not entitled to apply.
We are unable to accept this.
The proviso puts an embargo of 7 days in making the application for review.
It can only apply to those who were in lawful occuaption at the time of the making of the original Order.
It cannot curtail the rights of the landlord, as such, it only affects any other person who was lawful occupation.
In any event, it is a well settled principle of construction that unless clearly indicated, a proviso would not away substantive rights given by the Section or the sub section.
A land lord has a right to the property.
The Section should not be construed as to defeat the right to possession of property in appropriate cases unless the intention of the Legislature is manifest We find no such clear intention in the facts of this case.
We are, therefore,.
of the opinion that the High Court came to the correct conclusion that a landlord, even though not in actual physical possession at the time of the possession of the property.
call ask for review of the order of release or allotment.
It must be borne in mind that this view was also expressed by Mr. Justice N.D.Ojha, as our learned brother then was, in his judgment in Niren Kumar Das vs The District Judge, Pilibhit & Ors., AIR 1977 Allahabad PG NO 281 47.
We agree with that interpretation.
In that view of the matter, there is no substance in the contentions urged in the specil leave petition.
The application is, therefore,rejected.
N.V.K. Petition dismissed.
| The petitioners who have been convicted for the offence punishable under section 302 of the Indian Penal Code and have been sentenced to life imprisonment, claim entitlement to the benefit of section 5 of the Act.
Dismissing the writ petitions, HELD: The Punjab Borstal Act, 1926 does not have application to an offence punishable under section 302 of the Indian Penal Code.
[143G] The offence of murder is punishable with death even though the punishment awarded is not death but imprisonment for life.
[144H] 'Punishable ' in section 2(4) of the Act carries a meaning 'liable to be punished '.
Since the offence under section 302 is punishable with death, the provisions of the Punjab Borstal Act would not cover an offence under section 302 of I.P.C. and the benefit would not, therefore, be available to an accused convicted for the offence under section 302 I.P.C. [145E] Subhash Chand vs State of Haryana & Ors., ; applied; Hava Singh vs State of Haryana & Anr., [1987] 4 SCC 207; State of Andhra Pradesh vs Vallabhapuram Ravi, ; and Kunwar Bahadur & Ors.
vs State of Uttar Pradesh, [1980] (Supp.) SCC 339, distinguished.
PG NO 141 PG NO 142
|
iminal Appeal No. 10 of 1965.
Appeal by special leave from the judgment and order dated July lo, 1964 of the Mysore High Court in.
Criminal Appeal No. 223 of 1963.
R. H. Dhebar and section P. Nayyar, for the appellant.
The respondent did not appear.
674 The Judgment of the Court was delivered by Shelat, J.
This appeal, by special leave, raises the question as to the true meaning of section 42(1) of the (4 of 1939).
The respondent, the owner of a motor car bearing No. MYU 1089, carried 8 passengers in his said car on Nanjangud Mysore Road on April 5, 1963 and collected Rs. 5 from each of them.
He was charge sheeted under section 42(1) read with section 123 of the Act for having used the said car as "a transport vehicle" without the permit required under section 42(1).
The trial Magistrate did not go into the merits though the prosecution led evidence and acquitted him relying on the decision of the High Court of Mysore in Jayaram vs The State of Mysore(1).
The State took the matter in appeal to the High Court urging that the said decision required reconsideration.
On the view that it did not, , the High Court dismissed the appeal.
Hence this appeal.
In B.S. Usman Saheb vs The State of Mysore(2) the question arose whether an owner of a motor car who had carried cement bags and other goods from one place to another without a permit under "section 42(1) could be said to have used a "goods vehicle", and, therefore, could be said to have contravened section 42(1).
The trial Magistrate convicted the accused on the ground that once the car was used to transport goods, the vehicle was converted into "a goods vehicle" and required permit.
The High Court set aside the conviction holding that the mere fact that the owner of such motor vehicle used it for transporting goods did not mean that the vehicle was converted into a "goods vehicle" so as to attract section 42(1).
Likewise in Jayaram vs The State of Mysore(1) the accused who had his motor vehicle registered as a motor car used it for ,carrying passengers, for reward.
The High Court held that the ,said vehicle having been registered as a motor car as defined by section 2(16) was not "a transport vehicle" and no prosecution could lie under section 42(1).
The State of Mysore challenges the correctness of these decisions contending that though a motor vehicle is registered as a motor car, if it is used for a purpose set out in section 42(1) viz., carrying passengers for hire or reward, the motor vehicle on that occasion must be said to have been used as a "transport vehicle", and if so used without a permit, there would be a breach of that provision and the owner so using it or permitting it to be so used would be liable to be convicted.
To test the correctness of this contention, some of the relevant 'provisions of the Act may first be considered.
Section 2(18) Redefines a "motor vehicle" as meaning any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion (1) (2) 675 is transmitted thereto from an external or internal source. ' Section 2(16) defines a "motor cat" as meaning any motor vehicle other than a transport vehicle, omnibus, road roller, motor cycle or in.valid carriage.
:Clause 25 of section 2 defines "public service vehicle" as any motor vehicle used or adapted to be used for the carriage of passengers for, hire or reward, and includes a motor cab, contract carriage and stage carriage.
Section 2(33) defines "transport vehicle" as, meaning a public service vehicle or a goods vehicle.
Section 3 requires a person driving a motor vehicle in any public place to have an effective driving licence issued to himself authorising him to drive the vehicle and provides that no person shall drive a motor vehicle as a paid employee or, shall so drive a. transport vehicle unless his driving licence specifically entitles him so to do.
Section 42 in,Chapter IV deals with control of transport vehicles.
Sub section (1)provides: "No owner of a transport vehicle shall use or permit the use of the vehicle in any public place save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or,the Commission authorising the use of the vehicle in that place in a manner in which the vehicle is being used." Section 42(1) no doubt uses the words "owner of a transport vehicle" and provides that he shall not use or permit its use in any public place save in accordance with the conditions of a permit granted or countersigned by the prescribed authority.
These words, however, cannot mean that the 'sub section applies only to cases where the motor vehicle in question is registered as a transport vehicle.
If that were so, a person can use his motor vehicle,provided it is not "a transport vehicle", for carrying passengers for hire or reward without having to take out a permit for its use as"a transport vehicle".
Since the section is enacted for control of transport ,vehicles, it could never be the intention of the Legislature to allow such an anomalous result.
The sub section, therefore, must be construed in such a manner as to effectuate the object for which it was enacted.
So construed, it must mean that if a person owns.
a motor vehicle and uses it or permits its use as a transport vehicle he can do so provided he takes out the requisite permit therefor If he does not take out the permit and uses it or permits its use ;Ls "a transport vehicle" he commits an infringement of the subsection.
What the sub section emphasises is the use of a motor vehicle as a transport vehicle and the necessity of a Permit which is reqred for purposes of exercising control over vehicles used 'as transport vehicles.
This is clear from the definitions of "transport vehicle" and a "public service vehicle".
A "transport vehicle" means a "public service vehicle" and "a public service vehicle" means any motor vehicle either used or adapted to be used for carriage of passengers for hire or ' reward.
Therefore, any motor vehicle used for carriage of passengers for hire or reward is regarded when so M2Sup.
Cl/67 14 676 used as a public service vehicle and therefore a transport vehicle.
it is the use of the motor vehicle for carrying passengers for hire or reward which determines the category of the motor vehicle whether it is adapted for that purpose or not.
It must follow that even if a motor vehicle is occasionally used for carrying passengers for hire or reward it must be regarded when so used as a public service vehicle and therefore a transport vehicle and if it is so used without the necessary permit such use would be in breach of section 42(1) and the owner who uses it or permits it to be so used would be liable to be punished under section 42(1) read with section 123.
A similar construction wag given to para 5(d) of Sch.
11 of the Finance Act, 1920 and section 14 of the Finance Act, 1922 in Payne vs Allcock.(1) Section 14 of the Finance Act, 1922 provided that where a licence was taken out for a mechanically propelled vehicle at any rate under the Second Schedule of the Finance Act, 1920 and the vehicle was at any time, while such a licence was in force, used in an altered condition or in a manner or for a purpose which brings it within, or which if it was used solely in that condition or in that inianner or for that purpose would bring it within a class or description of vehicle to which a higher rate of duty was applicable under the said Schedule, duty at such higher rate would be chargeable in respect of the licence for the vehicle.
The appellant in that ,case, who carried on.
business as a green grocer held a licence for a private motor car, duty having been paid thereon at the horsepower rate under para 6, Scb.
II of the Finance Act, 1920.
The car was neither "constructed" nor "adapted" for use for conveyance of goods, but the appellant, while the licence was in force, used the said car occasionally for conveyance of goods in the course of his trade.
It was contended that this user was "for a purpose" which brought the car within a class to which higher rate of duty under para 5 of Sch.
11 of Finance Act, 1920 became chargeable.
The court accepted the contention and held that the user was for a purpose which brought the car Within para 5 Sch.
II of the said Act and the appellant was rightly convicted.
It was not in dispute that the car was used by the appellant only occasionally for conveyance of goods in connection with his trade.
Negativing the contention that the car was not chargeable to higher duty as it was not adapted.
forcarriage of goods, Avory, J., observed that "the section referred to cases where the vehicle, while the licence is in force, had been used in an altered condition or in a manner or for a purpose which brings it within, or which if it was used solely in that condition or in that manner or for that purpose would bring it within, a class or description of vehicle to which a higher rate of ,duty is applicable." He added that to construe that section, one has only to see what was the purpose for which the car was being used which would bring it within the class to which a higher rate of (1) [1932]2 K.B. 413.
677 duty was applicable.
The purpose which brought it within para 5, as distinguished from para 6 of Sch.
11, was the purpose of conveyance of goods.
At palge 421 of the Report it was further observed, "twhere a licence had been taken out and the vehicle was at any time, while that licence was in force, used, (a) in an altered condition, (b) in a manner, or (c) for a purpose, which brings it within or which if it was used solely in that condition or in that manner or for that purpose could bring it within a class or description of vehicle to which a higher rate of duty is applicable, then duty at the higher rate becomes chargeable.
" It is thus clear that what brought the motor vehicle under para 5, Sch.
II was the purpose for which it was used.
Similarly in Public Prosecutor vs Captain R. Rajagopalan(1) the High Court of Madras held that though rule 30(a) of the Madras Motor Vehicles Rules was intended to apply to motor vehicles used for the express purpose of letting for hire, if a motor vehicle was used even once for such a purpose, then, on that one occasion it was nonetheless let for hire.
Hence if a person undertakes to convey goods for reward in his private vehicle on one occasion without the necessary licence he would be regarded as having let his vehicle for hire and would commit an offence under that rule.
It was contended in that case that the Legislature did not intend to compel an owner of a private vehicle, who ordinarily uses his vehicle for his own purposes, to take out a licence merely because on one occasion he conveyed goods for hire in his private lorry.
That contention was negatived on the ground that a motor vehicle even if used once for conveying goods for reward would nonetheless be regarded on that occasion as one let out for hire.
In Re. Manager, Indian Express(2) a motor car owned by the petitioner was twice used for taking bundles of newspapers from the office of the Indian Express to the Railway Station.
It was held that when the car was used for taking the said bundles, it came within the definition of a "goods vehicle" as defined by section 2 (8) and, therefore, permit under section 42 (1) was necessary and as the owner had no permit thereunder, he was guilty of an offence punishable under section 123.
The combined effect of section 42(1) and the definitions of a "motor vehicle", a "public service vehicle" and a 'transport vehicle" is that if a motor vehicle is used as a transport vehicle, the owner who so uses it or permits it to be so used is required to obtain the necessary permit.
It is the use of the motor vehicle for carrying passengers for hire or reward which determines the application of section 42(1).
Therefore, whenever it is so used without the permit, there is an infringement of the subsection.
If the construction of that subsection adapted by the High Court of Mysore were correct, it would mean that whereas an owner of a transport vehicle is required to have the permit, the owner of a motor vehicle not constructed or (1) A.LR.
(2) A.I.R. 1945 Mad.
678 adapted as a transport vehicle can carry with impunity passengers for hire or reward without any permit therefor.
Section 42(1) has been enacted for the purpose of controlling vehicles carrying passengers, the object of such control being obviously to ensure safety of passengers.
The construction accepted by the Mysore High Court would defeat the object for which the Legislature provided such control in the interest of and for the safety of passengers.
The view taken by the Mysore High Court with respect is not correct and the view taken by the High Court of Madras is not only correct but is in consonance with the purpose and object of section 42(i).
The appeal is, therefore, allowed.
The order of acquittal passed by the trial Magistrate and confirmed by the High Court is set aside and the Magistrate is directed to proceed with the case on merits in accordance with law and in the light of the observations made in this judgment.
V.P.S. Appeal allowed.
| The appellant firm was appointed sole selling agent of a sugar manufacturing company and deposited Rs. 50,000 as security for due performance of the contract; this amount was to carry interest at 6 per cent per annum.
There was no restriction on the use of the said deposit by the, company.
According to cl.
(9) of the agreement the security and interest were to be refunded at the termination of the agency; in default of such payment the appellant firm was entitled to a commission as if agency had not terminated.
The clause further said that "as long as security with interest is not refunded and commission due is not paid this agreement will not be terminated.
" The company was ordered to be wound up before the period of agency came to an end.
Consequent on the winding up the appellant made an application praying for refund of its security deposit along with interest.
It was contended that as the company held the amount of deposit as a trustee the appellant was entitled to priority among the creditors.
On behalf of the liquidators it was denied that the amount deposited was in the nature of a trust entitled to preference over other debts.
The company judge held that he amount was an ordinary debt.
The Division Bench of the High Court also decided against the appellant.
In appeal by special leave to this ' Court.
HELD:The deposit did not amount to a trust.
The question whether the security deposit in a particular case can be said to be impressed with a trust will have to be decided on the basis of the terms of the agreement and the facts and circumstances of each case, without any leaning one way or the other on the fact that the money was given as a., security deposit.
[434 C] If a trust can clearly be spelled out from the terms of the agreement that ends the matter.
But if the trust cannot be spelled out clearly the fact that there was no segregation provided for, and the fact that interest was paid, would go a long way to show that the deposit was not impressed ' with the character of a trust particularly when the person with whom the deposit was made could mix it with his own money and could use it for himself.
In such a case the inference would be that the relationship between the parties was that of a debtor and creditor.
Further besides these circumstances, if there is any other term which suggests one kind of ' f relationship rather than the other that will also have to be taken into account.
[436 B C] In the present case the company was free to use the money for its own purpose and had to pay interest on it.
Further, in cl.
(9) of the agreement the security was put on a par with the commission which was nothing but a debt.
The courts below had therefore rightly treated the security deposit as an ordinary debt.
[436 F] Peter Donald Macpherson vs Dugald Mckechine and Ors.
XXVIII In the matter of Travancore National and 430 Quilon Bank Limited, Official Liquidators and Another Applicants, , In re Manekji Petit Manufacturing Company Ltd. A.I.R. 1932 Bom.
31 1, Maheshwari Brothers vs Official Liquidators, I.L.R. [1942] All. 242, Keshetra Mohan Das vs D. C. Basu, I.L.R. Gee vs Liddell, ; , Knatchbull vs Hallett, (1879 80) XIII Ch.
D. 696.
In re Hallett & Co., and Frank M.Mckey vs Maurcie Paradise, ; , referred to.
|
Appeal No. 1360 of 1968.
(Appeal by Special Leave from the Judgment and Order dated 22 11 1967 of the Andhra Pradesh High Court in Second Appeal No. 804/64).
T.S. Krishnamurthi lyer, R.K. Pillai and R. Vasudev Pillai, for the appellants.
T. V. section Narasimhachari, for the respondents.
The Judgment of P.N. Bhagwati and A.C. Gupta, JJ. was delivered by Bhagwati, J.S. Murtaza Fazal Ali, J. gave a separate opinion.
BHAGWATI, J. We have had the advantage of reading the judgment prepared by our learned brother section Murtaza Fazal Ali and we agree with the conclusion reached by him in that judgment but we would prefer to give our own reasons.
The facts giving rise to the appeal are set out clearly and succinctly in the judgment of our learned brother and we do not think it necessary to reiterate them.
The short question that arises for determination in this appeal is as to whether it is sub section (1) or sub section (2) of section 14 of the that applies where property is given to a Hindu female in lieu of maintenance under an instrument which in so many terms restricts the nature of the interest given to her in the property.
If sub section (1) applies, then the limitations on the nature of her interest are wiped out and she becomes the full owner of the property, while on the other hand, if sub section (2) governs such a case, her limited interest in the property is not enlarged and she continues to have the restricted estate prescribed by the instrument.
The question is of some complexity and it has evoked wide diversity of judicial opinion not only amongst the different High Courts but also within some of the High Courts themselves.
It is indeed unfortunate that though it became evident as far back as 1967 that subsections (1) and (2) of section 14 were presenting serious difficulties of construction in cases where property was received by a Hindu female in lieu of maintenance and the instrument granting such property pre scribed a restricted estate for her in the property and divergence of judicial opinion was creating a situation which might well be described as chaotic, robbing the law of that modicum of certainty which it must always possess in order to guide the affairs of men, the legislature, for all these years, did not care to step in to remove the constructional dilemma facing the courts and adopted an attitude of indifference and inaction, untroubled and un moved by the large number of cases on this point encumbering the files of different courts in the country, when by the simple expedient of an amendment, it could have silenced .judicial conflict and put an end to needless litigation.
This is a classic instance of a statutory provision which, by reason of its inapt draftsmanship, has created endless confusion for litigants and proved a para dise for lawyers.
It illustrates forcibly the need of an authority or body to be set up by the Government or the Legislature which would constantly keep in touch with the adjudicatory 267 authorities in the country as also with the legal profession and immediately respond by making recommendations for suit able amendments whenever it iS found that a particular statutory provision is, by reason of inapt language or unhappy draftsmanship, creating difficulty of construction or is otherwise inadequate or defective or is not well conceived and is consequently counter productive of the result.
it was intended to achieve.
If there is a close inter action between the adjudicatory wing of the State and a dynamic and ever alert authority or body which responds swiftly to the draw backs and deficiencies in the law in action, much of the time and money, which is at present expended in fruitless litigation, would be saved and law would achieve a certain amount of clarity, certainty and simplicity which alone can make it easily intelligible to the people.
Since the determination of the question in the appeal turns on the true interpretation to be placed on sub section (2) read in the context of sub section (1) of section 14 of the , it would be convenient at this stage to set out both the sub sections of that section which read as follows: "14(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner. Explanation.
In this sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheri tance or device, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner what ever, and also any such property held by her as stridharas immediately before the commence ment of this Act.
(2) Nothing contained in sub section (1) shah apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.
" Prior to the enactment of section 14, the Hindu law, as it was then in operation, restricted the nature of the interest of a Hindu female in property acquired by her and even as regards the nature of this restricted interest, there was great diversity of doctrine on the subject.
The Legisla ture, by enacting sub section (1) of section 14, intended, as pointed by this Court in S.S. Munna Lal vs
S.S. Raikumar(1) "to convert the interest which a Hindu female has in property, however, restricted the nature of that interest under the Sastric Hindu law may be, into absolute estate".
This Court pointed out that the is a codifying enactment and has made far reaching changes in the structure of the Hindu law of inheritance, and succession.
The Act confers upon Hindu females full rights of inheritance (1) [1962] Supp. 3 S.C.R. 418. 268 and sweeps away the traditional limitations on her powers of disposition which were regarded under the Hindu law as inherent in her estate".
Sub section (1) of section 14, is wide in its scope and ambit and uses language of great amplitude.
It says that any property possessed by a female Hindu,.
whether acquired before or after the commencement of the Act, shall be held by her as full owner thereof and not as a limited owner.
The words "any property" are, even without any amplification, large enough to cover any and every kind of property, but in order to expand the reach and ambit of the section and make it all comprehensive, the Legislature has enacted an explanation which says that property would include "both movable and immovable property acquired by a female Hindu by inheritance or device, or at a partition, or in lieu of maintenance or arrears of mainte nance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatever, and also any such property held by her as stridhana immediately before the commencement" of the Act.
Whatever be the kind of property, movable or immovable, and whichever be the mode of acquisition, it would be cov ered by subsection (1) of section 14, the object of the Legislature being to wipe out the disabilities from which a Hindu female suffered in regard to ownership of property under the old Sastric law, to abridge the stringent provi sions against proprietary rights which were often regarded as evidence of her perpetual tutelege and to recongnize her status as an independent and absolute owner of property.
This Court has also in a series of decisions given a most expansive interpretation to the language of sub section (1) of section 14 with a view to advancing the social purpose of the legislation and as part of that process, construed the words 'possessed of ' also in a broad sense and in their widest connotation.
It was pointed out by this Court in Gummalepura Taggina Matada Kotturuswami vs Setra Veeravva(1) that the words 'possessed of mean "the state of owning or having in one 's hand or power".
It need not be actual or physical possession or personal occupation of the property by the Hindu female, but may be possession in law.
It may be actual or constructive or in any form recognized by law.
Elaborating the concept, this Court pointed out in Mangal Singh vs Rattno(2) that the section covers all cases of property owned by a female Hindu al though she may not be in actual, physical or constructive possession of the property, provided of course, that she has not parted with her rights and is capable of obtaining possession of the property.
It will, therefore, be seen that sub section (1) of section 14 is large in its amplitude and covers every kind of acquisition of property by a female Hindu including acquisition in lieu of maintenance and where such property was possessed by her at the date of commence ment of the Act or was 'subsequently acquired and possessed, she would become the full owner of the property.
Now, sub section (2) of section 14 provides that nothing contained in sub section (1 ) shall apply to any property acquired by way of gift or under a will or any other instru ment or under a decree or order (1) [1959] supp.
1 S.C.R. 968.
(2) ; 269 of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.
This provi sion iS more in the nature of a proviso or exception to sub section (1) and it was regarded as such by this Court in Badri Pershad vs Smt.
Kanso Devi(1).
It excepts certain kinds of acquisition of property by a Hindu female from the operation of sub section (1) and being in the nature of an exception to a provision which is calculated to achieve a social purpose by bringing about change in the social and economic position of women in Hindu society, it must be construed strictly so as to impinge as little as possible on the broad sweep of the ameliorative provision contained in sub section (1 ).
It cannot be interpreted in a manner which would rob sub section (1 ) of its efficacy and deprive a Hindu female of the protection sought to be given to her by sub section (1 ).
The language of sub section (2) is apparently wide to include acquisition of property by a Hindu female under an instrument or a decree or order or award where the instrument, decree, order or award pre scribes a restricted estate for her in the property and this would apparently cover a case where property is given to a Hindu female at a partition or m lieu of maintenance and the instrument, decree, order or award giving such property prescribes limited interest for her in the proper ty.
But that would virtually emasculate sub section (1), for in that event, a large number of cases where property is given to a Hindu female at a partition or in lieu of mainte nance under an instrument, order or award would be excluded from the operation of the beneficent provision enacted in sub section (1 ), since in ,most of such cases, where property is allotted to the Hindu female prior to the enact ment of the Act, there would be a provision, in consonance with the old Sastric law then prevailing, prescribing limit ed interest in the property and where property is given to the Hindu female subsequent to the enactment of the Act, it would be the easiest thing for the dominant male to provide that the Hindu female shall have only a restricted interest in the property and thus make a mockery of sub section (1).
The Explanation to sub section (1) which includes within the scope of that sub section property acquired by a female Hindu at a partition or in lieu of maintenance would also be rendered meaningless, because there would hardly be a few cases where the instrument, decree, order or award giving property to a Hindu female at a partition or in lieu of maintenance would not contain a provision prescribing re stricted estate in the property.
The social purpose of the law would be frustrated and the reformist zeal underlying the statutory provision would be chilled.
That surely could never have been the intention of the Legislature in enacting sub section (2).
It is an elementary rule of construction that no provision of a statute should be construed in isola tion but it should be construed with reference to the con text and in the light of other provisions of the statute so as, as far as possible, to make a consistent enactment of the whole statute.
Sub section (2) must, therefore, be read in the context of sub section (1) so as to leave as large a scope for operation as possible to sub section (1) and so read, it must be confined to cases where property is ac quired by a female Hindu for the first time as a grant without any pre existing (1) ; 270 right, under a gift, will, instrument, decree, order or award, the terms of which prescribe a restricted estate in the property.
This constructional approach finds support in the decision in Badri Prasad 's case (supra) where this Court observed that sub section (2) "can come into operation only if acquisition in any of the methods enacted therein is made for the first time without there being any pre existing right in the female Hindu who is in possession of the property".
It ' may also be noted that when the Hindu Suc cession Bill 1954, which ultimately culminated into the Act, was referred to a Joint Committee of the Rajya Sabha, clause 15(2) of the Draft Bill, corresponding to the present sub section (2) of section 14, referred only to acquisition of property by a Hindu female under gift or will and it was subsequently that the other modes of acquisition were added so as to include acquisition of property under an instru ment, decree, order or award.
This circumstance would also seem to indicate that the legislative intendment was that sub section (2) should be applicable only to cases where acquisition of property is made by a Hindu female for the first time without any pre existing right a kind of acquisi tion akin to one under gift or will.
Where, however, proper ty is acquired by a Hindu female at a partition or in lieu of right of maintenance, it is in virtue of a pre existing right and such an acquisition would not be within the scope and ambit of sub section (2), even if the instrument, de cree, order or award allotting the property prescribes a restricted estate in the property.
This line of approach in the construction of sub section (2) of section 14 is amply borne out by the trend of judi cial decisions in this Court.
We may in this connection refer to the decision in Badri Parasad 's case (supra).
The facts in that case were that one Gajju Mal owning self acquired properties died in 1947 leaving five sons and a widow.
On August 5, 1950, one Tulsi Ram Seth was appointed by the parties as an arbitrator for resolving certain dif ferences which had arisen relating to partition of the properties left by Gujju Mal.
The arbitrator made his award on December 31, 1950 and under clause 6 of the award, the 'widow was awarded certain properties and it was expressly stated in the award that she would have a widow 's estate in the properties awarded to her.
While the widow was in possession of the properties, the Act came into force and the question arose whether on the coming into force of the Act, she became full owner of the properties under sub section (1) or her estate in the properties remained a restricted one under sub section (2) of section 14.
This Court held that although the award gave a restricted estate to the widow in the properties allotted to her, it was sub section (1) which applied and not sub section (2), because inter alia the properties given to her under the award were on the basis of a pre existing right which she had as an heir off .her husband under the Hindu Women 's Right to Property Act, 1937 and not as a new grant made for the first time.
So also in Nirmal Chand vs Vidya Wanti (dead) by her legal representatives(1), there was a regular partition deed made on December 3, 1945 between Amin chand, a coparcener and (1) C.A. No. 609 of 1965, decided on January 21, 1969.
271 Subhrai Bai, the widow of a deceased coparcener, under which a certain property was allotted to Subhrai Bai and it was specifically provided in the partition deed that Subhrai Bai would be entitled only to the user of the property and she would have no right to alienate it in any manner but would only have a life interest.
Subhrai Bai died in 1957 subse quent to the coming into force of the Act after making a will bequeathing the property in favour of her daughter Vidyawati.
The right of Subhrai Bai to bequeath the property by will was challenged on the ground that she had only a limited interest in the property and her case was covered by sub section (2) and not sub section (1).
This contention was negatived and it was held by this Court that though it was true that the instrument of partition prescribed only a limited interest for Subhrai Bai in the property, that was in recognition of the legal position which then prevailed and hence it did not bring her case within the exception contained in sub section (2) of section 14.
This Court observed: "If Subhrai Bai was entitled to a share in her husband 's properties then the suit proper ties must be held to have been allotted to her in accordance with law.
As the law then stood she had only a life interest in the properties taken by her.
Therefore the recital in the deed in question that she would have only a life interest in the properties allotted to her share is merely recording the true legal position.
Hence it is ' not possible to con clude that the properties in question were given to her subject to the condition of her enjoying it for her life time.
Therefore the trial court as well as the first Appellate Court were right in holding that the facts of the case do not fall within section 14(2) of the Hindu Succession Act, 1955.
" It will be seen from these observations that even though the property was acquired by Subhrai Bai under the instrument of partition, which gave only a limited interest to her in the property, this Court held.
that the case fell within sub section (1) and not sub section (2).
The reason obviously was that the property was 'given to Subbrai Bai in virtue of a pre existing right inhering in her and when the instrument of partition provided that she would only have a limited interest in the property, it merely provided for something which even otherwise would have been the legal position under the law as it then stood.
It is only when property is acquired by a Hindu female as a new grant for the first time and the instrument, decree; order or award giving the property prescribes the terms on which it is to be held by the Hindu female, namely, as a restricted owner, that sub section (2) comes into play and excludes the applicability of sub section (1).
The object of sub section (2), as pointed out by this Court in Badri Persad 's case (supra) while quoting with approval the observations made by the Madras High Court in Rangaswami Naicker vs Chinnammal(1), is "only to remove the disability of women imposed by law and not to interfere with contracts, grants or decree etc.
by virtue of which a woman 's right was restricted" and, there fore, where property is acquired by a Hindu female under the instrument in virtue of a pre existing (1) A.I.R. 1964 Mad.
387. 272 right, such as a right to obtain property on partition or a fight to maintenance and under the law as it stood prior to the enactment of the Act, she would have no more than limit ed interest in the property, a provision in the instrument giving her limited interest in the property would be merely by way of record or recognition of the true legal position and the restriction on her interest being a "disability imposed by law" would be wiped out and her limited interest would be enlarged under sub section (1).
But where property is acquired by a Hindu female under an instrument for the first time without any pre existing right solely by virtue of the instrument, she must hold it on the terms on which it is given to her and if what is given to her is a restricted estate, it would not be enlarged by reason of sub section (2).
The controversy before us, therefore, boils down to the narrow question whether in the 'present case the proper ties were acquired by the appellant under the compromise in virtue of a pre existing right or they were acquired for the first time as a grant owing its origin to the compromise alone and to nothing else.
Now, let us consider how the properties in question came to be acquired by the appellant under the compromise.
The appellant claimed maintenance out of the joint family properties in the hands of the respondent who was her deceased husband 's brother.
The claim was decreed in favour of the appellant and in execution of the decree for mainte nance, the compromise was arrived at between the parties allotting the properties in question to the appellant for her maintenance and giving her limited interest in such properties.
Since the properties were allotted to the appel lant in lieu of her claim for maintenance, it becomes neces sary to consider the nature of the right which a Hindu widow has to be maintained out of joint family estate.
It is settled law that a widow is entitled to maintenance out of her deceased husband 's estate, irrespective whether that estate may be in the hands of his male issue or it may be in the hands of his coparceners.
The joint family estate in which her deceased husband had a share is liable for her maintenance and she has a right to be maintained out of the joint family properties and though, as pointed out by this Court in Rant Bai vs Shri Yadunanden Ram,(1) her claim for maintenance is not a charge upon any joint family property until she has got her maintenance determined and made a specific charge either by agreement or a decree or order of a court, her right is "not liable to be defeated except by transfer to a bona fide purchaser for value without notice of her claim or even with notice of the claim unless the transfer was made with the intention of defeating her right".
The widow can for the purpose of her maintenance follow the joint family property "into the hands of any one who takes it as a volunteer or with notice of her having set up a claim for maintenance".
The courts have even gone to the length of taking the view that where a widow is in possession of any specific property for the purpose of her maintenance, a purchaser buying with notice of her claim is not entitled to possession of that property without first securing proper maintenance for her, vide Rachawa & Ors.
vs Shivayanappa (2) cited with approval in Ranibai 's case (supra).
It is, therefore, clear (1) ; (2) I.L.R. 273 that under the Sastric Hindu Law a widow has a right to be maintained out of joint family property and this right would ripen into a charge if the widow takes the necessary steps for having her maintenance ascertained and specifically Charged in the joint family property and even .if no specif ic charge i.s created, this right would be enforceable against joint family property in the hands of a volunteer or a purchaser taking it with notice of her claim.
The right of the widow to be maintained is of course not a ]us in rein, since it does not give her any interest in the joint family property but it is certainly jus ad rem, i.e., a right against the joint family property.
Therefore, when specific property is allotted to the widow in lieu of her claim for maintenance, the allotment would be in satisfac tion of her jus ad rem, namely, the right to be main tained out of the joint family property.
It would not be a grant for the first time without any pre existing right in the widow.
The widow would 'be getting the property in virtue of her pre existing right, the instrument giving the property being merely a document effectuating such pre existing right and not making a grant of the property to her for the first time without any antecedent right or title.
There is also another consideration which is very relevant to this issue and it is that, even if the instrument were silent as to the nature of the interest given to the widow in the property and did not, in so many terms, prescribe that she would have a limited interest, she would have no more than a limited interest in the property under the Hindu law as it stood prior to the enactment of the Act and hence a provision in the instrument prescribing that she would have only a limited interest in the property would be, to quote the words of this Court in Nirmal Chand 's case (supra), "merely recording the true legal position" and that would not attract the applicability of sub section (2) but would be governed by sub section (1) of section 14.
The conclusion is, therefore, inescapable that where proper ty is allotted to a widow under an instrument, decree, order or award prescribes a restricted estate for her in the property and sub section (2) of section 14 would have no application in such a case.
We find that there are several High Courts which have taken the same view which we are taking in the present case.
We may mention only a few of those decisions, namely, B.B. Patil vs Gangabai(1), Sumeshwar Misra vs Swami Nath Tiwari,(2) Reddayya vs Varapula Venkataraju,(3) Lakshmi Devi vs Shankar Jha (4) N. Venkanegouda vs Hanemangouda,(5) Smt.
Sharbati Devi vs Pt.
Hiralal,(6) Sesadhar Chandra Dev vs Smt.
Tara Sundari Dasi,(7) Saraswathi Ammal vs Anantha Shenoi (8) and Kunji Thomman vs Meenakshi(9).
It is (1) A.I.R. (1972) Bom.
16 (2) A.I.R. (1970) Pat.
(3) A.I.R. (1965) A.P. 66 (4) A.I.R. (1967) Mad.429 (5) A.I.R. (1972) Mys.
(6) A.I.R. (1964) Pub.
(7) A.I.R. (1962) Cal.
(8) A.I.R. (1966) Ker.
(9) I.L.R. 3 436SCI/77 274 not necessary to refer to these decisions since we have ourselves discussed the question of construction of sub sections (1) and (2) of section 14 on Principle and pointed out what in our view is the correct construction of these provisions.
We may only mention that the judgment of Pale kar, J., as he then was, in B.B. Patii vs Gangabai (supra) is a well reasoned judgment and it has our full approval.
The contrary view taken in Gurunadham vs Sundarajulu,(1) Santhanam vs Subramania,(2) section Kachapalava Gurukkal vs I7.
Subramania Gurukkal(3), Shiva Pujan Rai vs Jamuna Missir,(4) Gopisetti Kondaiah vs Gunda Subbarayudu(5), Ram Jag Misir vs The Director Consolidation, U.p.(6) and Ajab Singh vs Ram Singh (7) does not, in our opinion, represent the correct law on the subject and these cases must be held to be wrong ly decided.
In the circumstances, we reach the conclusion that since in the present case the properties in question were acquired by the appellant under the compromise in lieu or satisfac tion of her right of maintenance, it is sub section (1 ) and not sub section (2) of section 14 which would be applicable and hence the appellant must be deemed to have become full owner of the properties notwithstanding that the compromise prescribed a limited interest for her in his properties.
We accordingly allow the appeal, set aside the judgment and decree of the High Court and restore that of the District Judge, Nellore.
The result is that the suit will stand dismissed but with no order as to costs.
FAZAL ALI, J. This is a defendant 's appeal by special leave against the judgment of the High Court of Andhra Pradesh dated November 22, 1967 and arises in the following circumstances.
Venkatasubba Reddy, husband of appellant No. 1 Vaddebo yina Tulasamma hereinafter to be referred to as 'Tulasam ma ' died in the year 1931 in a state of jointness with his step brother V. Sesha Reddy and left behind Tulasamma as his widow.
On October 11, 1944 the appellant Tulasamma filed a petition for maintenance in forma pauperis against the respondent in the Court of the District Munsif, Nellore.
This application was set ex parte on January 13, 1945 bug subsequently the petition.was registered as a suit and an ex parte decree was passed against the respondent on June 29, 1946.
On October 1, 1946 the respondent filled an interlocutory application for recording a compromise alleged to have been arrived at between the parties out of Court on April 9, 1945.
The appellant Tulasamma opposed this application which was ultimately dismissed on October 16, 1946.
An appeal filed by the respondent to the District Judge,Nellore was also dismissed.
Thereafter Tulasamma put the decree in (1) I.L.R. (2) I.L.R. (3) A.I.R. (1972) Mad.
(4) I.L.R. (1947) Pat.
(5) I.L.R. (6) (7) A.I.R. (1969) J & K 92.
275 execution and at the execution stage the parties appear to have arrived at a settlement out of Court which was certi fied by the Executing Court on July 30, 2949 under O. XXI r. 2 of the Code of Civil Procedure.
Under the compromise the appellant Tulasamma was allotted the Schedule properties, but was to enjoy only a limited interest therein with no power of alienation at all.
According to the terms of the compromise the properties were to revert to the plaintiff after the death of Tulasamma.
Subsequently Tulasamma con tinued to remain in possession of the properties even after coming into force of the Hindu Succession Act, 1956 here inafter to be referred to as. 'the 1956 Act, or 'the Act of 1956 '.
By two registered deeds dated April 12, 1960 and May 26, 1961, the appellant leased out some of the proper ties to defendants 2 & 3 by the first deed and sold some of the properties to defendant 4 by the second 'deed.
The plaintiff/respondent filed a suit on July 31, 1961 before the District Munsiff, Nellore for a declaration that the alienation made by the widow Tulasamma were not binding on the plaintiff and could remain valid only till the life time of the widow.
The basis of the action filed by the plain tiff was that as the appellant Tulasamma had got a restrict ed estate only under the terms of the compromise her inter est could not be enlarged into an absolute interest by the provisions of the 1956 Act in view of section 14(2) of the said Act.
The suit was contested by the appellant Tulasamma who denied the allegations made in the plaint and averred that by virtue of the provisions of the 1956 Act she had become the full owner of the properties with absolute right of alienation and the respondent had no locus standi to file the present suit.
The learned Munsiff decreed the suit of the plaintiff holding that the appellant Tulasamma got merely a limited interest in the properties which could be enjoyed during her lifetime and that the alienations were not binding on the reversioner.
Tulasamma then filed an appeal before the District Judge Nellore, who reversed the finding of the Trial Court, allowed the appeal and dismissed the plaintiff 's suit holding that the appellant Tulasamma had acquired an absolute interest in the properties by virtue of the provisions of the 1956 Act.
The learned Judge further held that sub section
(2) of section 14 had no applica tion to the present case, because the compromise was an instrument in recognition of a pre existing right.
The plaintiff/respondent went up in second appeal to the High Court against the judgment of the District Judge.
The plea of the plaintiff/respondent appears to have found favour with the High Court which held that the case of the appel lant was clearly covered by section 14(2) of the Hindu Succes sion Act and as the compromise was an instrument as contem plated by section 14(2) of the 1956 Act Tulasamma could not get an absolute interest under section 14(1) of the Act.
The High Court further held ' that by virtue of the compromise the appellant Tulasamma got title to the properties for the first time and it was not a question of recognising a pre existing right which she had none in view of the fact that her husband had died even before the Hindu Women 's Right to Property Act, 1937.
We might further add that the facts.
narrated above have not been disputed by counsel for the parties.
The appeal has been argued only on the substantial questions of law which turn.
upon the interpretation of sub sections
(1) & (2) of section 14 276 of the .
It is common ground that in this case as also in the.
other connected appeals, the properties in suit were allotted under a compromise or an instrument in lieu of maintenance.
It is also admitted that the appellant Tulasamma was in possession of the properties at the time when the 1956 Act came into force.
Finally it is also not disputed that the compromise did purport to confer only a limited interest on the widow restricting completely her power of alienation.
We have now to apply the law on the facts mentioned above.
Similar points were involved in the other two appeals Nos.
135 of 1973 and 126 of 1972.
We have heard all the, three appeals together and in all these appeals counsel for the parties have confined their argu ments only to the questions of law without disputing the findings of fact arrived at by the Courts below.
Thus the two points that fall for determination in this appeal may be stated thus: .lm18 (1) whether the instrument of compromise under which the properties were given to the appellant Tulasamma before the 1956 Act in lieu of maintenance falls within section 14(1) or is covered by section 14(2) of the 1956, Act and (2) Whether a Hindu widow has a right to property in lieu of her maintenance, and if such a right is conferred on her subsequently by way of maintenance it would amount to mere recognition of a preex isting right or a conferment of new title so as to fall squarely within section 14(2) of the 1956 Act.
There appears to be serious divergence of judicial opinion on the subject and the High Courts have taken con trary views on this point.
Some High Courts, particularly, Bombay, Punjab, Calcutta and Patna have veered round to the view that a right of maintenance claimed by a Hindu widow is a pre existing right and any instrument or document or transaction by which the properties are allotted to the widow in lieu of her maintenance would only be recognition of a pre existing right and would not confer any new title on the window.
Following this line of reasoning the afore said High Courts have held that the properties allotted to the Hindu widow even though they conferred a limited inter est would fall clearly within the ambit of section 14(1) of the 1956 Act by virtue of which the limited interest would be enlarged into an absolute interest on the coming into force of the 1956 Act.
On the other hand the Orissa, Allahabad, Madras and Andhra Pradesh High Courts have taken a contrary view and have held that as the Hindu widow 's right to maintenance is not a right to property, property allotted to her in lieu of maintenance confers on her a right or title to the property for the first time and therefore such Conferment is protected by section 14(2) of the 1956 Act and is not covered by section 14(1).
Unfortunately, however, there is no decision of this Court which is directly in point, though there are some decisions which tend to support the view taken by the Bombay High Court.
277 Before, however, resolving this important dispute it may be necessary to consider the real legal nature of the incident of a Hindu widow 's right to maintenance.
In order to determine this factor we have to look to the concept of a Hindu marriage.
Under the Shastric Hindu Law, a marriage, unlike a marriage under the Mohammadan Law which is purely contractual in nature, is a sacrament a religious ceremony which results in a sacred and a holy union of man and wife by virtue of which the wife is completely transplanted in the household of her husband and takes a new birth as a partner of her husband becoming a part and parcel of the body of the husband.
To a Hindu wife her husband is her God and her life becomes one of selfless service and unstinted devotion and profound dedication to her husband.
She not only shares the life and love the joys and sorrows, the troubles and tribulations of her husband but becomes an integral part of her husband 's life and activities.
Cole brooke in his book 'Digest of Hindu Law ' Vol.
II de scribes the status of wife at p. 158 thus: "A wife is considered as half the body of her husband, equally sharing the fruit of pure and impure acts; whether she ascend "the pile after him, or survive for the benefit of her husband, she is a faithful wife.
" This being the position after marriage, it is manifest that the law enjoins a corresponding duty on the husband to maintain his wife and look after her comforts and to provide her food and raiments.
It is well settled that under the Hindu!Law the husband has got a personal obligation to maintain his wife and if he is possessed of properties then his wife is entitled as of right to be maintained out of such properties.
The claim of a Hindu widow to be main tained is not an empty formality which is to be exercised as a matter of concession or indulgence, grace or gratis or generosity but is a valuable spiritual and moral right which flows from the spiritual and temporal relationship of the husband an wife.
As the wife is in a sense a part of the body of her husband, she becomes co owner of the property of her husband though in a subordinate sense.
Although the right of maintenance does not per se create a legal charge on the property of her husband, yet the wife can enforce this right by moving the Court for passing a decree for maintenance by creating a charge.
This right is available only so long as the wife continues to be chaste.
Thus the position is that the right of maintenance may amount to a legal charge if such a charge is created either by an agree ment between the parties or by decree.
There are a number of authorities which have taken the view that even if the property is transferred and the trans feree takes the property with notice of the right of the widow to be maintained out of the property, the purchaser takes the obligation to maintain the widow out of the property purchased and the wife or widow can follow the property in the hands of the purchaser for the limited purpose of her maintenance.
We shall, however, deal with these authorities a little later.
278 Colebrooke in his 'Digest of Hindu Law Vol.
1I, quotes the.
Mahabharata at p. 121 thus: "Where females are honoured, there the deities are pleased; but where they are unhonoured, there all religious acts become fruitless.
" This clearly illustrates the high position which is bestowed on Hindu women by the Shastric Law.
Again Colebrooke in his book Vol.
II at p. 123, while describing the circumstances under which the maintenance is to be given to the wife, quotes Manu thus: "MANU : Should a man have business abroad, let him assure a fit maintenance to his wife, and then reside for a time in a foreign country; since a wife, even though virtuous, may be tempted to act amiss, if she be distressed by want of subsistence: While her husband, having settled her maintenance, resides abroad, let her continue firm in religious austerities; but if he leave no support, let her subsist by spinning an other blameless articles" This extract clearly shows that there is a legal obligation on the part of the husband to make arrangements for his wife 's due maintenance even if he goes abroad for business purposes.
Colebrooke again quotes Yajnawalkya at p. 243 of his book Vol.
thus: "When the father makes an equal partition among his sons, his wives must have equal shares with them, if they have received no wealth either from their lord or from his father.
If he makes an equal partition among his sons by his own choice, he must give equal shares to such of his wives also as have no male issue.
" This shows that when a partition is effected, the Hindu Law enjoins that the wife must get an equal share with the sons, thus reinforcing the important character of the right of maintenance which a Hindu wife or widow possesses under the Hindu Law.
Similarly Gopalchandra Sarkar Sastri dealing with the nature and incidents of the Hindu widow 's right to mainte nance observes in his treatise 'Hindu Law ' at p. 533 thus: "When the husband is alive, he is per sonally liable for the wife 's maintenance, which is also a legal charge upon his proper ty, this charge being a legal incident of her marital co ownership in all her husband 's property .
But after his death, his widow 's right of maintenance becomes limited to his estate, which, when it passes to any other heir, is charged with the same . .
There cannot be any doubt that under Hindu law the wife 's or widow 's maintenance is a legal charge on the husband 's estate; but the Courts appear to hold, 279 in consequence of the proper materials not being placed before them, that it is not so by itself, but is merely a claim against the husband 's heir, or an equitable charge on his estate; hence the husband 's debts are held to have priority, unless it is made a charge on the property by a decree.
" The view of the author appears to be that the Courts hold that the right of maintenance of a widow does not amount to a legal charge and this is so because proper materials were not placed before the Courts.
In other words, the author seems to indicate that the original Hindu Law contained clear provisions that the right of! maintenance amounts to a charge on the property of her husband and the obligation runs; with the property so that any person who inherits the property also takes upon the obligation to maintain the widow.
Sastri quotes from the original texts various ex tracts regarding the nature and extent of the right of maintenance of the Hindu women some of which may be extract ed thus: "The support of the group of persons who should be maintained, is the approved means of attaining heaven, but hell is the man 's portion if they suffer; therefore he should carefully maintain them.
The father, the mother, the Guru (an elderly relation worthy of respect), a wife, an offspring, poor dependants, a guest, and a religious mendicant are declared to be the group of persons who are to be maintained.
Manu, cited in Srikrishna 's commentary on the Dayabhaga, ii, 23.
It is declared by Manu that the aged mother and father, the chaste wife, and an infant child must be maintained even by doing a hundred misdeeds, Manu cited in the Mitak ' shara while dealing with gifts.
" The last extract dearly shows the imperative nature of the duty imposed on the owner of the property to maintain wife, aged mother, father etc.
even at the cost of perpetrating a hundred misdeeds.
Similarly Sastri in his book quotes Yajnaval kya at p. 523 thus: "Property other than what is required for the maintenance of the family may be given.
" The learned author highlights the importance of the right maintenance as being a charge on the property of the husband and observes as follows: "The ancestral immovable property is the hereditary source of maintenance of the mem bers of the family, and the same is charged with the liability of supporting its members, all of whom acquire a right to, such property from the moment they become members of the family, by virtue of which they are at least entitled to maintenance out of the same.
Such 280 property cannot be sold or given away except for the support of the family; a small portion of the same may be alienated, if not incompat ible with the support of the family.
There is no difference between the two schools as regards the view that the ances tral property is charged with the maintenance of the members of the family, and that no alienation can be made, which will prejudi cially affect the support of the group of persons who ought to be maintained.
Hence heirs are bound to maintain those whom the last holder was bound to maintain.
" The author further points out that under the Mitakshara law the daughter in law does, with her husband, acquire a right to the ancestral property, since her marriage, but she becomes her husband 's co owner in a subordinate sense, and the principal legal incident of this ownership is the right to maintenance, which cannot be defeated by gift or devise made by the holder of such property.
Similar observations have been made by the learned author at p. 528 of the book which may be extracted thus: "According to both the schools, the lawfully wedded wife acquires from the moment of her marriage a right to the property be longing to the husband at the, time and also to any property that may subsequently be acquired by him, so that she becomes a co owner of the husband, though her right is not co equal to that of the husband, but a subor dinate one, owing to her disability founded on her status of perpetual or life long tutelege or dependence.
. . . . . .
This right of the wife to maintenance from her husband is not lost even if the husband renounce Hinduism.
This right subsists even after the husband 's death although her husband 's right as distinguished from hers may pass by suvi vorship or by succession to sons or even to collaterals; these simply step into the posi tion of her husband, and she is required by Hindu law to live under their guardianship after her husband 's death.
" Finally it is pointed out by the learned author at p. 529 of the Book that the right which a woman acquires to her husband 's property subsists even after his death and ob served thus: "According to both the schools, the right which a woman acquires to her husband 's property subsists after his death, whether his interest passes by succession or by survivor ship to the male issue or any other person, and that this right does not depend upon the widow 's not possessing other means of support.
" 281 Summarising the nature of the liability of the husband to maintain his wife, the learned author observed as follows at p. 533 of his Book: "When the husband is alive, he is person ally liable for the wife 's maintenance, which is also a legal charge upon his property, this charge being a legal incident of her marital co ownership in all her husband 's property . .
But after 'his death, his widow 's right of maintenance becomes limited to his estate, which, when it passes to any other heir, is charged with the same . .
There cannot be any doubt that under Hindu law the wife 's or widow 's maintenance is a legal charge on the hus band 's estate; but the Courts appear to hold, in consequence of the proper materials not being placed before them, that it is not so by itself, but is merely a claim against the husband 's heir, or an equitable charge on his estate; hence the husband 's debts are held to have priority, unless it is made a charge on the property by a decree.
" To sump up, therefore, according to.
Sastri 's interpre tation of Shastric Hindu Law the right to maintenance possessed by a Hindu widow is a very important right which amounts.
to a charge on the property of her husband which continues to the successor of the property and the wife is regarded as a sort of co owner of the husband 's property though in a subordinate sense, i.e. the wife has no dominion over the property.
Similarly Mayne in his "Treatise on Hindu Law & Usage", 11th Edn., has traced the history and origin of the right of maintenance of a Hindu woman which according to him arises from the theory of an undivided family where the head of the family, is .bound to maintain the members including their wives and their children.
The learned author observes thus: (p. 813).
"The importance and extent of the right of maintenance necessarily arises from the theory of an undivided family.
The head of such a family is bound to maintain its mem bers, their wives and their children, to perform their ceremonies and to defray the expenses of their marriages;" Again at p. 816 para 684 the author stresses the fact that the maintenance of a wife is a matter of personal obligation on the part of the husband and observes thus: "The maintenance of a wife, aged parents and a minor son is a matter of personal obli gation arising from the very existence of the relationship and quite independent of the possession of any property, ancestral or acquired . . 'It is declared by Manu that the aged mother and father, the chaste wife and an infant child must be maintained even by doing a hundred misdeeds.
" 282 Again it has been observed at p. 818 para 687: "The maintenance of a wife by her hus band is, of course, a matter of personal obligation., which attaches from the moment of marriage." The author points out at p. 821 paragraph 689 that even after the coming into force of the Hindu Women 's Right to Property Act, 1937 which confers upon the widow a right of succession in respect of the non agricultural property, she is still entitled to maintenance from the family property.
The author observes thus: "It cannot, therefore, be said that the reason of the right has ceased to exist and the right is gone.
It was accordingly held that the widow of a deceased coparcener is still entitled to maintenance notwithstanding her right under the Act to a share in.
the non agricultural part of the family estate.
" Furthermore, the author cites the passage of Narada cited in Smriti Chandrika regarding which there is no dispute.
The saying runs thus: "Whichever wife (patni) becomes a widow and ' continues virtuous, she is entitled to be provided with food and raiment.
" At p. 822 para 690 the author points out that the right of a widow to be maintained is taken over even by the heirs of the husband who succeed to his property either by inheri tance or by survivorship.
In this connection the following observations are made: "She is entitled to be maintained where her husband 's separate property is taken by his male issue.
Where, at the time of his death, he was a coparcener she is entitled to maintenance as against those who take her husband 's share by survivorship." The Hindu law is so jealous in guarding the interests .
of Hindu women that the obligation for maintaining the Hindu women falls even on the King when he takes the estate by escheat or by forfeiture.
Similarly Mulla in his book "Hindu Law", 14th Edn., describes the incidents and characteristics of Hindu wife 's right to maintenance and observes thus at p. 597: "A wife is entitled to be maintained by her husband, whether he possesses property or not.
When a man with his eyes open marries a girl accustomed to a certain style of liv ing, he undertakes the obligation of maintain ing her in that style.
The maintenance of a wife by her husband is a matter of personal obligation arising from the very existence of the relationship, and quite independent of the possession by the husband of any property, ancestral or self acquired.
" 283 We might further mention that the Hindu wom en 's right to maintenance finally received statutory recognition and the entire law on the subject was consolidated and codified by the Hindu Married Women 's Right to Separate Maintenance and Residence Act, 1946 hereinaf ter to be referred to as 'the Act of 1946 ' which came into force on April 23, 1946.
Thus there appears to be complete unanimity of the various schools of Hindu law on the important incidents and indicia of the Hindu women 's right to maintenance which has now received statutory recognition and which only shows that the right to maintenance though not an indefeasible right to property is undoubtedly a pre existing right.
We shall now refer to some of the authorities which have dealt with this aspect of the matter.
In Narayan Rao Ramchandra Pant vs Ramabai(1), the Judicial Committee pointed out that the widow 's right to maintenance arises from the common law which developed from time to time.
justice West of the Bombay High Court appears to have entered into a very elaborate discussion of the entire law on the subject in Lakshman Ramchandra Joshi and Anr.
vs Satyabhamabai(2) and observed as follows: "These several authorities, no doubt, afford, in combination, a strong support to the proposition that a widow 's maintenance, especially as against the sons, the a charge on the estate, a right in re in the fullest sense adhering to the property, into whatever hands it may pass.
" These observations were reiterated in a later case in Narba dabai vs Mahadeo Narayan, Kashinath Narayan and Shamabai(3).
The observations of West J., in Lakshman Ramchandra Joshi and Anr 's case (supra) were fully approved by the Judicial Committee in Mst.
Dan Kuer vs Mst.
Sarla Devi(4), where it was observed: "But, apart from this circumstance, the judgment of West J., whose dissertations on Hindu Law must always command great esteem, contains an exposition of the law on this point, and the case is therefore rightly regarded as a leading authority on the ques tion.
In the course of his judgment that learned judge quotes with approval the remarks of Phear J., in Srimati Bhagabati vs Kanailal Mitter (1872) 8 Ben.
L.R. 225 that "as against one who has taken the property as heir, the widow has a right to have a proper sum for her maintenance ascertained and made a charge on the property in his hands.
She may also, doubtless, follow the property for this purpose into the hands of anyone who.
takes it as a volunteer, or with notice of her having set up a claim for maintenance against the heir" and that "when the property (1) L.R. 6 I.A. 114.
(2) I.L.R. (3) I.L.R. (4) L.R. 73 I.A. 208.
284 passed into the hands of a bona ' fide purchaser without notice, it cannot be affected by anything short of an already existing proprietary right; it cannot be subject to that which is not already a specif ic charge, or which does not contain all the elements necessary for its ripening into a specific charge.
" Summarising the entire position the Privy Council enunci ated the law thus: "The true rule of Hindu law in such matters would appear to be as follows: Two, obliga tions confront a joint Hindu family.
(1) The obligation to pay the debts (for instance, of the father) binding on the family; and (2) the moral obligation "to provide maintenance to the widows of the family.
" The latter obligation would, under certain circumstances, ripen into a legal obligation, as, for in stance, when a charge is created on specific property of the family either by agreement or a decree of the court; that, so long as neither of these two obligations has taken the form of a charge on the family property, the obligation to pay the binding debts will have precedence (as, for instance, in the course of the administration of the estate) over mere claims of a female member 's main tenance, but, if either of these two obliga tions assumes the shape of a charge, it would take precedence over the other." In Pratapmull Agarwalla vs Dhanabati Bibi,(1) the Judicial Committee pointed out that while a mother may not be the owner of her share until partition is made and has no pro existing right with regard to the share in the property, but she has a pro existing right for maintenance.
This Court also has made similar observations in a large number of cases regarding the nature and extent of the Hindu women 's right to maintenance.
In Rani Bai vs Shri Yadunandan Ram & Artr (2) this Court, while dealing with a situation where a widow claimed the right of maintenance but refused to hand over possession of the property until she secured her proper maintenance, observed as follows: .lm 15 "It cannot be disputed that the appel lant who is the widow of a pre deceased son of Jangi Jogi was entitled to receive main tenance so long as she did not to marry out of the estate of her father in law.
Although her claim for maintenance was not a charge upon the estate until it had been fixed and specifically charged thereupon her right was not liable to be defeated except by transfer to a bona fide purchaser for value without notice of a claim or even with notice of a claim unless the transfer was made with the intention of defeating her right.
The courts in India have taken the view that where a widow is in possession of a specific proper ty for the purpose of her maintenance a pur chaser buying with notice of her claim is not entitled to (1) L.R. 63 1.A. 33.
(2) ; 285 possession of that property without first securing proper maintenance for her: [vide Rachawa & others vs Shivayogappa I. .
In the present case it is difficult to understand how the appellant could be deprived of the possession of proper ties by a trespasser.
Moreover she was presum ably in possession of these properties in lieu of her right of maintenance and could not be deprived of them even by Jugli Bai without first securing proper maintenance for her out of the aforesaid properties.
" In Sheo Dyal Tewaree vs Judoonath Tewaree, (1) the Calcutta High Court stressed the fact that although the widow may not be the owner of a share but she had a pre existing right of maintenance.
Elucidating the nature and extent of a right of a Hindu wife to maintenance, the Calcutta High Court pointed out in Srinath Das vs Probodh Chunder Das(2) that the right of maintenance is really identified with the husband 's property right though of a subordinate nature.
In Hemangini Dasi vs Kedarnath Kundu Chowdhury(3) the Privy Council held that if the estate remained joint and undivided the maintenance of the mother remained a charge on the whole estate and that any share that the widow took in the property which was equal to the share of a son was really in lieu of maintenance for which the estate was liable.
The position has been very succinctly stated and meticu lously analysed by a decision of the Madras High Court in K.V. Thangavelu vs The Court of Wards, Madras,(4) where, dealing with the entire history of the matter and relying on various original texts of the Hindu jurists, the Madras High Court pointed out that a cogent ground for preferring the widow 's claim is to be found in her qualified or subordinate co ownership in the husband 's property declared by the Mitakshara.
The Court referred to verse 52 of Vyavaharad haya (chapter II) where the Mitakshara refers to Apastam ba 's Dharmasutra as follows: "From marriage arises also jointness (sahatwam) in the holding of property (dravya paragraphestiu)." In an earlier case Sarojinidevi vs Subrahmanyam,(5) the Madras High Court held that even after the coming into force of the Hindu Women 's Right to Property Act, 1937, which did not apply to agricultural lands, the right of the Hindu widow to maintenance stood in tact and the widow was enti tled to maintenance notwithstanding her right under the Act to a share in the non agricultural part of the family es tate.
To the same effect is an earlier decision (1) (2) 11 C.L.J. 580.
(3) I.L.R. (4) (5) I.L.R. 286 of the Madras High Court in Jayanti Subbiah vs Alamelu Mangamma( ') where the High Court pointed out that under the Hindu Law the maintenance of a wife by her husband is a matter of personal obligation arising from the very exist ence of her relationship and quite independent of the pos session by the husband of any property ancestral or self acquired.
We fully agree with this exposition of the law which is supported by a large number of authorities as discussed above.
In Yella 'wa vs Bhimangavda(2), the Bombay High Court was of the view that even the heir of the husband 's property could not be allowed to recover possession from the widow without first making proper arrangements for her mainte nance.
This case was approved by this Court in Rani Bags case (supra).
Thus on a careful consideration and detailed analysis of the authorities mentioned above and the Shastric Hindu Law on the subject, the following propositions emerge with respect to the incidents and characteristics of a Hindu woman 's right to maintenance: (1) that a Hindu woman 's right to maintenance is a personal obligation so far as the husband is ' concerned, and it is his duty to maintain her even if he has no property.
If the hus band has property then the right of the widow to maintenance becomes an equitable charge on his property and any person who succeeds to the property carries with it the legal obliga tion to maintain the widow; (2) though the widow 's right to maintenance is not a right to property but it is undoubtedly pre existing right in property, i.e. it is a jus ad rem not jus in rem and it can be en forced by the widow who can get a charge created for her maintenance on the property either by an agreement or by obtaining a decree from the civil court; (3) that the right of maintenance is a matter of moment and is of such importance that even if the joint property is sold and the purchas er has notice of the widow 's right to mainte nance, the purchaser is legally bound to provide for her maintenance; (4) that the right to maintenance is undoubt edly a preexisting right which existed in the Hindu Law long before the passing of the Act of 1937 or the Act of 1946, and is, therefore, a pre existing right; (5) that the right to maintenance flows from the social and temporal relationship between the husband and the wife by virtue of which the wife becomes a sort I.L.R. (2) I.L.R. 287 of co owner in the property of her husband, though her co ownership is of a subordinate nature; and (6)that where a Hindu widow is in possession of the property of her husband, she is enti tled to retain the possession in lieu of her maintenance unless the person who succeeds to the property or purchases the same is in a position to make due arrangements for her maintenance.
With this preface regarding a Hindu woman 's right to maintenance and the necessary concomitants and incidents of those rights, we now proceed to determine the question of law that arises for consideration in this appeal.
Before taking up that question, I might trace the historical growth of the legislation introducing slow and gradual changes in the Shastric Hindu from time to time.
The exact origin of Hindu Law is steeped and shrouded in antiquity and, therefore, it is not possible to determine the ethics or Justification for assigning a somewhat subordinate position to a Hindu woman in matters of inheritance, marriage and the nature of the limited interest which she took even after inheriting her husband 's property.
It is also strange that the Hindu Law made no provision for divorce at all.
This may be due to 'the fact that during the time of Manu and Yajnav alkya the structure of the Hindu society was quite different 'and there being no social problem of the magnitude that we have today, it was not considered necessary to break up the integrity and solidarity of a Hindu family by allowing ownership rights to the Hindu females.
Another object may have been to .retain the family property within the family in order to consolidate the gains which a particular family may have made.
However, these are matters of speculation.
But one thing is dear, namely, that the Hindu jurists were very particular in making stringent provisions safeguarding the maintenance of the Hindu females either by the husband or even by his heirs after his death.
Perhaps they thought that the property which a widow may receive in lieu of maintenance or the expenses which may be incurred for her maintenance would be a good substitute for the share which she might inherit in her husband 's property.
Nevertheless, the Legislature appears to have stepped in from time to time to soften the rigours of the personal law of Hindus by adding new heirs, conferring new rights on Hindu females and making express provisions for adoption, maintenance etc.
It appears that the question of conferring absolute interest on the Hindu female had engaged the attention of the Legisla ture ever since 1941 but the idea took a tangible shape only in 1954 when the Hindu Succession Bill was introduced and eventually passed in 1956.
This Bill was preceded by a Hindu Code Committee headed by Mr. B. N. Rau who had made a number of recommendations which formed the basis of the 1956 Act.
After the attainment of independence, the entire per spective changed, the nature of old human values assumed a new complexion and the need for emancipation of womanhood from feudal bondage became all the more imperative.
Under the strain and stress of 288 socio economic conditions and a continuous agitation by the female Hindus for enlargement of their rights a new look to the rights of women as provided by the Shastric Hindu Law had to be given.
In pursuance of these social pressures, it was necessary to set up a new social order where the women should be given a place of honour and equality with the male sex in every other respect.
This was the prime need of the hour and the temper of the times dictated the imperative necessity of making revolutionary changes in the Hindu Law in order to abolish the invidious distinction in matters of inheritance between a male and a female.
Similarly it was realised that there should be express provision for divorce on certain specified grounds inasmuch as the absence of such a provision had perpetrated a serious injustice to the Hindu females for a long time.
It seems to me that it was with this object in view that the Legislature of our free country thought it as its primary duty to bring forth legis lation to remove the dangerous anomalies appearing in the Hindu Law.
Even during the British times, there were certain legislation modifying certain provisions of the Hindu Law, e.g., the Hindu Law Inheritance Act which added a few more heirs including some females; the Hindu Women 's Right to Property Act, 1937, which provided that on partition a widow would be entitled to the same share as the sons in the property of her husband.
The Act of 1937, while giving a share to the wife on partition had not disturbed her right to claim maintenance which was preserved in tact and al though she was not permitted to sue for partition she was undoubtedly entiled to sue for maintenance without having recourse to the remedy of partition.
After independence the Parliament passed the Hindu Minority and Guardianship Act, 1956; the ; the Hindu Marriage Act, 1956 which regulated the law of marriage and divorce and ultimately the which provided for intestate succession.
The Hindu Succes sion Act, 1956 was, therefore, undoubtedly a piece of social legislation which fulfilled a long felt need of the nation and was widely acclaimed by the entire people as would appear from the debates which preceded the passing of the Act.
It is in the light of these circumstances that we have now to interpret the provisions of section 14(1) & (2) of the Act of 1956.
Section 14 of the 1956 Act runs thus: "14.
(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.
Explanation.
In this Sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheri tance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase 289 or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the com mencement of this Act.
(2) Nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property." This Court has interpreted the scope and ambit of section 14(1) and the Explanation thereto on several occasions and has pointed out that the object of the legislation was to make revolutionary and far reaching changes in the entire struc ture of the Hindu society.
The word "possessed" used in section 14(1) has also been interpreted by this Court and it has been held that the word has been used in a very wide sense so as to include the st.ate of owning or having the property in one 's power and it is not necessary for the application of section 14 (1) that a Hindu woman should be in actual or physical possession of the property.
It is sufficient if she has a right to the property and the said property is in her power or domain.
In S.S. Munnalal vs
S.S. Rajkumar (1) it was held that mere declaration of the share of the widow passed only an of her share under a preliminary decree would fall within the ambit of section 14(1) and even though the widow did not get actual possession of the property until a final decree is passed she would in law be deemed to be in posses sion of the property.
In that case, the High Court had held that mere declaration of the share of the widow passed only an inchoate interest to her and she never came to possess the share within the meaning of section 14 of the Act and there fore the property remained joint family property.
This Court reversed the judgment of the High Court holding that once a preliminary decree was passed in favour of the widow granting her a share in the property she must be deemed to be in possession of the property in question.
Their Lordships emphasised that the words "possessed by" used in section 14(1) clearly indicated that such a situation was envis aged by the Legislature.
White interpreting the provisions of section 14 the Court also pointed out that the 1956 Act was a codifying enactment which had made far reaching changes in the structure of the Hindu society and the object was to sweep away traditional limitations placed on the rights of the Hindu women.
In this connection, the Court observed as follows: "The Act is a codifying enactment, and has made farreaching changes .in the structure of the Hindu law of inheritance, and succes sion.
The Act confers upon Hindu females full rights of inheritance, and sweeps away the traditional limitations on her powers of dispositions which were regarded under the Hindu law as inherent in her estate . .
Normally a right declared in an estate by a preliminary decree would be regarded as property, and there is nothing in the context in which section 14 occurs or in the phraseology (1) [1962] Supp. 3 S.C.R. 418.
4 436 SCI/77 290 used by the Legislature to warrant the view that such a right declared in relation to the estate of a joint family in favour of a Hindu widow is not property within the meaning of section 14.
In the light of the scheme of the Act and its evolved purpose it would be difficult, without doing violence to the language used in the enactment, to assume that a right declared in property in favour of a person under a decree for partition is not a right to proper ty.
If under a preliminary decree the right in favour of a Hindu male be regarded a.s property the right declared in favour of a Hindu female must also be regarded as proper ty.
Earlier the Court observed in that very case as under: "By section 14 (1) the Legislature sought to convert the interest of a Hindu female which under the Sastric Hindu law would have been regarded as a limited interest into an abso lute interest 'and by the explanation thereto gave to the expression "property" the widest connotation.
The expression includes property acquired by a Hindu female by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage or by her own skill or exertion, or by purchase or by prescription, or in any other manner what soever.
By section 14(1) manifestly it is intended to convert the interest which a Hindu female has in property however restricted "the nature of that interest under the Sastric Hindu law may be into absolute estate.
" The matter was again considered by this Court in Eramma vs Verrupanna (1) where it was held that before a widow can get absolute interest under section 14(1) she must have some vestige of title, i.e. her possession must be under some title or right and not be that of a rank trespasser.
In this connection the Court observed as follows: "The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title whether before or 'after the com mencement of the Act.
It may be noticed that the Explanation to section 14(1 ) sets out the various modes of acquisition of the property by a female Hindu and indicates that the section applies only to property to which the female Hindu has acquired some kind of title however, restricted the nature of her interest may be . .
It does not in any way confer a title on the female Hindu where she did not in fact possess any vestige of title.
It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of a female Hindu and it does not confer any title on a mere trespasser.
In other words, the provisions of section 14( 1 ) of the Act cannot be attracted in the case of .
a Hindu female who is in possession of the property of the last (1) 291 male holder on the date of the commencement of the Act when she is only a trespasser without any right to property.
" In Mangal Singh vs Smt.
Ratno (1) a widow came into posses sion of her husband 's property in 1917 and continued to be in possession of the same till 1954 when she was dispos sessed by a collateral of her husband under the orders of the Revenue authorities.
She filed a suit for recovery of possession and during the pendency of the suit the Act of 1956 came into force.
This Court upholding the judgment of the High Court held that the dispossession of the widow being illegal, she must be deemed to be, in the eye of law, to continue in possession of the properties and acquired an absolute interest with the coming into force of the Act of 1956.
It was not a case where a Hindu female had parted with her right so as to.
place herself in a position where she could in no manner exercise her rights in that property any longer when the Act came into force.
This Court observed as follows: "It is significant that the Legislature begins section 14(1) with the words "any property possessed by a female Hindu" and not "any property in possession of a female Hindu.
" If the expression used had been "in possession of" instead of "possessed by", the proper interpretation would probably have been to hold that, in order to apply this provision, the property must be such as is either in actual possession of the female Hindu or in her constructive possession.
The constructive possession may be through a lessee, mortga gee, licensee, etc.
The use of the expression "possessed by" instead of the expression "in possession of", in our opinion, was intended to enlarge the meaning of this expression.
It is commonly known in English language that a property is said to be possessed by a person, if he is its owner, even though he may, for the time being, be out of actual possession or even constructive possession." "It appears to us that the expression used in section 14(1) of the Act was intended to cover cases of possession in law also where lands may have descended to a female Hindu and she has not actually entered into them.
It would of course cover.
the other cases of actual.
or constructive possession.
On the language of section 14( 1 ), therefore, we hold that this provision will become applicable to any property which is owned by a female Hindu, even though she is not in actual physical or constructive possession of that property." Again, while referring to an earlier case, namely, Eramma Verrupanna (supra), the Court clarified the position thus: "This case also, thus, clarifies that the expression "possessed by" is not intended to apply to a case of mere possession without title, and that the legislature intended this provision for eases where the Hindu female possesses the right of ownership of 'the property in question.
Even (1) ; 292 mere physical possession of the property without the right of ownership will not at tract the provisions of this section.
This case, also, thus, supports our view that the expression "possessed by" was used in the sense of connoting state of ownership and, while the Hindu female possesses the right of ownership, she would become full owner if the other conditions mentioned in the section are fulfilled.
The section will, however, not apply at all to cases where the Hindu female may have parted with her rights so as to place herself in a position where she could,.
in no manner, exercise her rights of ownership in that property any longer." In Sukhram & Anr.
vs Gauri Shanker &.
Another(1) the facts Were as follows: Hukam Singh and Sukh Ram were two brothers.
Chidda, the second appellant was the son of Sukh Ram and thus Chidda, Hukam Singh and Sukh Ram were members of a joint Hindu family governed by the Benares School of Mitakshara Law.
Hukam Singh died in 1952 leaving behind his widow Krishna Devi.
On December 15, 1956, Krishna Devi sold half share of the house belonging to the joint family.
This sale was challenged by the other members of the joint family on the ground that Krishna Devi had merely a life interest.
The question raised .was whether Krishna Devi acquired an abso lute .interest in the properties after coming into force of the .
It was argued before this Court that according to the Benaras School, a male coparcen er was not entitled to alienate even for value his undivided interest in the coparcenary without the consent of other coparceners and, therefore, Krishna Devi could not have higher rights than what her husband possessed.
This Court, however, held that in view of the express words of section 14 of the 1956 Act, once the widow was possessed of property before or after the commencement of the Act, she held it as full owner and not as a limited owner and, therefore, any restriction placed by Shastric Hindu Law was wiped out by the legislative intent as expressed in the Act of 1956.
The Court observed thus: "But the words of section 14 of the are express and explicit; thereby a female Hindu possessed of property whether acquired before or after the commence ment of the Act holds it as full owner and not as a limited owner.
The interest to which Krishna Devi became entitled on the death of her husband under section 3(2) of the Hindu Women 's Right to Property Act, 1937, in the property of the joint family is indisputably her "property" within the meaning of section 14 of Act 30 of 1956, and when she became "full owner" of that property she acquired right unlimited in point of user and duration and uninhibited in point of disposition." (1) ; 293 This case indirectly supports the view that if the intention of the Legislature was.
to confer absolute interest on the widow, no limitation can be spelt out ' either from the old Shastric Law or otherwise which may be allowed to defeat the intention.
This Court went to the extent of holding that the words in section 14(1) are so express and explicit that the widow acquired a right unlimited in point of user, though a male member governed by .the
Benaras school had no power of alienation without the consent of other coparceners.
Under the Act the female had higher powers than the male because the words of the statute did not contain any limitation at all.
On the parity of reasoning, therefore, where once a. property is given to the widow in lieu of maintenance and she enters in_to possession of that property, no amount of restriction contained in the document can prevent her from acquiring absolute interest in the property because the contractual restriction cannot be higher than the old Hindu Shastric Law or the express words the Act of 1956.
In Badri Prashad vs Smt.
Kansa Devi(1) the prepositer died in 1947 leaving behind five sons and a widow.
Soon after his death disputes arose between the parties and the matter was referred to an arbitrator in 1950.
The arbitrator in his award allotted shares to the parties wherein it was stated that the widow would only have widow 's estate in those properties.
While .the widow was in possession of the properties, the Act of 1956 came into force and the question arose whether or not she became full owner of the property or she only had a restricted interest as provided in the grant, namely, the award.
Court held that although the award had given a restricted estate, but this was only a narration of the state of law as it existed when the award was made.
As the widow, however, inherited the property under the Hindu Women 's Right to Property Act, her interest became absolute with the passing of the Act of 1956 and she squarely fell within the provisions of section 14(1) .of the Act.
It was further held that the mere fact that the partition was by means; of an award would not bring the matter within section 14(2) of the Act, because the interest given to, the widow was: on the basis of pre existing right and not a new grant for the first time.
This Court observed as follows: "The word "acquired" in sub section
(1 ) has also to be given the widest possible meaning.
This would be.
so be cause.
of the language of the Explanation which takes sub section
(1) applicable to acquisition of property by inheritance or devise or at a partition or in lieu of maintenance or arrears of maintenance or by gift or by a female 's own skill or exertion or by purchase or prescription or in any manner whatsoever.
Where at the commencement of the Act a female Hindu has a share in joint properties which are later on partitioned by metes and bounds and she gets ' possession of the properties allotted to her there can be No. manner of doubt that she is not only possessed of that property at the time of the coming into force of the Act but has.
also acquired the same before its commencement." (1) ; 294 This Court relied upon two earlier decisions: viz. S.S. Munnalal 's case and Sukhram 's case (supra).
This case appears to be nearest to the point which falls.
for determi nation in this appeal, though it does not cover the points argued before us directly.
Lastly our attention was.
drawn to.
an unreported deci sion of this Court in Nirmal Chand vs Vidya.
Wanti (dead) by her legal representatives(1) in which case Amin Chand and Lakhmi Chand were the owners of agricultural and non agri cultural properties.
The properties were partitioned in the year 1944 and Lakhmi Chand died leaving behind him the appellant and his second wife Subhrai Bai and his daughter by this wife.
There was a regular partition between Amin Chand and Subbrai Bai by a registered document dated Decem ber 3, 1945 under which a portion of the property was allot ted to Subhrai Bai and it was provided in the document that Subhrai Bai would be entitled only to the user of the land and she will have no right to alienate it in any manner but will have only life interest.
Later, Subhrai Bai bequeathed the property in 1957 to her daughter Vidya Wanti.
Subhrai Bai died and Vidya Wanti 's name was mutated in the papers after coming into ,force of the Act of 1956.
The point raised before the High Court was.
that as Subbrai Bai had been given only a limited interest in the property she had No. power to bequeath the property to her daughter as her case was not covered by section 14(1) but fell under section 14(2) of the Act.
This Court pointed out that at the time when the property was allotted to.
Subbrai Bai, the had.
not come into force and according to the state of Hindu Law as it ' then prevailed Subbrai Bai was undoubtedly entitled only to a limited interest.
There was a restric tion in the partition deed that Subhrai Bai would enjoy usufruct of the property only and shall not be entitled to, make any alienation.
It was not a restriction as such but a mere.
statement of law .as it then prevailed.
Such a re striction, therefore, ' would not bring the case of Subhrai Bai under section 14(2) of the Act and, therefore, she would acquire an absolute interest after the passing of the Act of 1956 and was, therefore, competent to execute the will in favour of her daughter.
This Court observed as follows: "If Subhrai Bai was entitled to.
a share in her husband 's properties then the suit properties must be held to.
have been allotted to her in accordance with law.
As the law then stood she had only a life interest in the properties taken by her.
Therefore the recital in the deed in question that she would have only a life interest in the properties allot ted to.
her share is merely recording the true legal position.
Hence it is not possibIe to, conclude that the properties in question were given to her subject to the condition.
of her enjoying it for her lifetime.
Therefore the trial court as well as the first Appellate Court were right in holding that the facts of the case do not fail within section 14(2) of the .
In the light of the above decisions of this Court the following principles appear to be clear: (1) C.A. No. 609 of 1965 decided on Jan. 21, 1969.
295 (1) that the provisions of section 14, of the 1956 Act must be liberally construed in order to advance the object of the Act which is to enlarge the limited interest possessed by a Hindu widow which was in consonance with the changing temper of the times; (2) it is manifestly clear that sub section
(2) of section 14 does not refer to any transfer which merely recognises a pre existing right without creating or conferring a new title on the widow.
This was clearly held by this Court in Badri Parshad 's case (supra).
(3) that the Act of 1956 has made revolution ary and far reaching changes in the Hindu society and every attempt should be made to carry out the.
spirit of the Act which has undoubtedly supplied a long felt need and tried to do away with the invidious distinc tion between a Hindu male and female in matters of intestate succession; (4) that sub section
(2) of section 14 is merely a proviso to.
(1) of section 14 and has to be interpreted as a proviso and not in a manner so ' as to destroy the effect of the main provision.
We have given our anxious consideration.
to the language of section 14(1) & (2) and we feel that o.n a proper interpreta tion of section 14(2) there does not appear to be any real incon sistency between section 14(1),.
the explanation thereto and sub section
To begin with, section 14(1) does not limit the enlargement of the estate of a Hindu widow to any particular interest in the property.
On the other hand the Explanation to section 14(1) brings out the real purpose.
of section 14(1) by giving an exhaustive category of cases where principle of section 14(1 ) has to operate, i.e. to 'cases where a Hindu female would get an absolute interest.
The argument of the learned counsel for the appellant is that as the right of maintenance was a pre existing right, any instrument or transaction by which the property was allotted to the appel lant would not be a new transaction so as to create a new title but would be only in recognition of a pre existing right, namely, the right of maintenance.
On the other hand Mr. Natesan appearing for the respondents submitted that the object of the proviso was to.
validate rather than disturb the past transactions which had 131aced certain restrictions or curbs on the power of a Hindu female and as.
the language of the proviso is very wide there is no warrant for not applying it to cases where pre existing rights are con cerned.
In the alternative, Mr. Natesan argued that the Hindu woman 's right to maintenance is not a legal right.
unless an actual charge is created in respect of the property and is, therefore not enforceable at law.
It is, therefore, not correct to describe a claim of a Hindu fe male 's right to.
maintenance simpliciter as a pre existing right because all the necessary indicia of a legal right are wanting.
After considering various aspects of the matter we are inclined to agree with the contentions raised by Mr. Krishna Murthy Iyer appearing for the appellant.
In the: first place, the appellant 's contention 296 appears to be more in consonance with the spirit and object of the statute itself.
Secondly, we have already pointed out that the claim of a Hindu female for maintenance is undoubtedly a pre existing right and this has been So held not only by various Courts in India but also by the Judicial Committee of the Privy Council and by this Court.
It seems to us, and it has been held as discussed above, that the claim or the right to maintenance possessed by a Hindu female is really a substitute for a share which she would have got in the property of her husband.
This being the position, where a Hindu female who.
gets a share in her husband 's property acquires an absolute interest by virtue of section 14(1) of the Act, could it be intended by the legisla ture that in the same circumstances a Hindu female who could not get a share but has a right of maintenance would not get an absolute interest ? In other words, the position would be that the appellant would suffer because her husband had died prior to the Act of 1937.
If the husband of the appellant had died after 1937, there could be no, dispute that the appellant would have got an absolute interest, because she was entitled to her share under the provisions of the Hindu Women 's Right to Property Act, 1937.
Furthermore, it may be necessary to study the language in which the Explanation to section 14(1) and sub section
(2) of section 14 are couched.
It would be seen that while the Explanation to section 14( 1 ) clearly and expressly mentions "property acquired by a female Hindu" at a partition or in lieu of maintenance or arrears of mainte nance there is no reference in sub section
(2) at all to this particular mode of acquisition by a Hindu female which clearly indicates that the intention of the Parliament was to exclude the application of sub section
(2) to, cases where the property has been acquired by a Hindu female.
either at a partition or in lieu of maintenance etc.
The Explanation is an inclusive definition and if the Parliament intended that everything that is mentioned in the Explanation should be covered by sub section
(2) it should have expressly so stated in sub section
Again the language of sub section
(2) clearly shows that it would apply only to such transactions which. are absolutely independent in nature and which are not in recog nition of or in lieu of pre existing rights.
It appears from the Parliamentary Debates that when the Hindu Succes sion Bill, 1954, was referred to a Joint Committee by the Rajya Sabha, in section 14(2) which was clause 16(2) of the Draft Bill of the Joint Committee, the words mentioned were only gift or will.
Thus the intention of the Parliament was to confine sub section
(2) only to two transactions, namely a gift or a will, which clearly would not include property received by a Hindu female in lieu of maintenance or at a partition.
Subsequently, however, an amendment was proposed by one of the, members for adding other categories, namely, an instru ment, decree, order or award which was accepted by the Government.
This would show that the various terms, viz., gift, will, instrument, decree, order or award mentioned in section 14(2) would have to.
be read ejusdem generis so as refer to transactions where right is created for the first time in favour of the Hindu female.
The intention of the Parliament in adding the other categories to sub section
(2) was merely to ensure that any transaction under which a Hindu female gets a new or independent title under any of the modes mentioned in section 14(2), namely, gift, will, decree, order, award or m instrument which prescribes a restricted estate would not be disturbed and would continue to occupy the field covered by section 14(2).
This 297 would be the position even 'if a Hindu male was to get the property by any of the modes mentioned in section 14(2): he would also get only a restricted interest and, therefore, the Parliament thought that there was no warrant for making any distinction between a male or a female in this regard and both were, therefore, sought to be equated.
Finally, we cannot overlook the scope and extent of a proviso.
There can be no doubt that sub section
(2) of section 14 is.
clearly a proviso to section 14 (1) and this has been so held by this Court in Badri Prasad 's case (supra).
It is well settled that a provision in the nature of a proviso merely carves out an exception to the main provision and cannot be interpreted in a manner so as to.
destroy the effect of the main provision or to render the same nugatory.
If we accept the argument of the respondent that sub section
(2 ) to section 14 would include even a property which has been acquired by a Hindu female at a partition or in lieu of maintenance then a substantial part of the Explanation would be completely set at naught which could never be the intention of the proviso Thus we are clearly of the opinion that sub section
(2) of section 14 of the proviso should be interpreted in such a way so as not to substantially erode section 14(1) or the Explanation thereto.
In the present case we feel that the proviso has carved out completely a separate.
field and before it can apply three conditions must exist: (i) that the property must have been acquired by way of gift, will, instrument, decree, order of the Court or by an award; (ii) that any of these documents executed in favour of a Hindu female must prescribe a restricted estate in such property; and (iii) that the instrument must create or confer a new right, title or interest on the Hindu female and not merely recognise or give effect to a pre existing right which the female Hindu already possessed.
Where any of these documents are executed but no restricted estate is prescribed, sub section
(2) will have no application.
Similarly where these instruments do not confer a new title for the first time on the female Hindu, section 14(1) would have no application.
It seems to me that section 14(2) is a salutary provision which has been incorporated by the Parliament for historical reasons in order to maintain the link between the Shastric Hindu Law and the Hindu Law which was sought to be changed by recent legislation, so that where a female Hindu became possessed of property not in virtue of any pre existing right but otherwise, and the grantor chose to impose certain conditions on the grantee, the legislature did not want to interfere with such a transaction by oblit erating or setting at naught the conditions imposed.
There was some argument at the bar regarding the use of the term " 'limited owner" in section 14(1) and "restricted es tate" in section 14(2).
Not much, however, turns upon this.
I think that the Parliament advisedly used the expression "restricted estate" in section 14(2), because while a limited interest would indicate only life estate, a restricted estate is much wider in its import.
For instance, suppose a donor while giving 298 the property to a Hindu female inserts a condition that she will have to pay Rs. 200/ to donor or to one of his rela tives till a particular time, this would not come within the term "limited interest", but it would be included by the term "restricted estate".
That is the only justification for the difference in the terminology of section 14( 1 ) and (2) of the Act.
Having discussed the various aspects of section 14(1) and (2) we shall now deal with the authorities cited before us by.
counsel for the parties which are by no means consist ent.
We will first deal with the authorities which took the view that we have taken in this case.
In this connection the sheet anchor of the argument of the learned counsel for the appellant is the decision of the Bombay High Court in B.B. Patil vs Gangabai (1) and that of the counsel for the re spondents is the decision of the Madras High Court in Guru nadham vs Sundrarajulu(2) and Santhanam vs Subramania(3).
The latter case was affirmed in appeal by the Division Bench of the Madras High Court in section Kachapalaya Gurukkal vs V. Subramania Gurukkal (4) and the aforesaid Division Bench judgment forms the subjects matter of Civil Appeal No. 135 of 1973 which will be disposed of by us by a separate judg ment.
We will now take up the case of the Bombay High Court relied upon by the learned counsel for the appellant which, in our opinion, lays down the correct law on the subject.
In B.B. Patil vs Gangabai (supra) the facts briefly were that the properties in question were the self acquired properties of Devgonda and after his death in 1902 Hira Bai daughter in law of Devgonda (widow of his son Appa, who also died soon thereafter) came into possession of the proper ties.
Disputes arose between Hira Bai and Nemgonda, the nephew of Devgonda, and the matter having been referred to the arbitrator he gave his award on October 16, 1903 and a decree in terms of the award was passed on October 24, 1903.
Under the decree in terms of the award, 65 acres of land and one house was allotted to Hira Bai out of which 30 acres were earmarked for the provision of maintenance and marriage of the three daughters and the rest of the property was ordered to be retained by Hira Bai for life with certain restrictions.
After her death these prop.reties were to revert to Nemgonda.
The dispute which was the subject matter of the appeal before the High Court was confined to 35 acres of land and the house which was in possession of Hira Bai.
Hira Bai continued to be in possession of these properties right upto February 25, 1967.
Meanwhile Nemgon da had died and his sons defendants 2 to 6 claimed the properties.
After the death of Hira Bai, the plaintiffs, who were two out of the three daughters of Hira Bai, filed a suit for possession claiming entire title to the properties in possession of Hira Bai on the ground that Hira Bai was in possession of the properties as limited owner at the time of the passing of the and (1) A.I.R. [1972] Bom.16.
(2) I.L.R. (3) I.L.R. (4) A.I.R. [1976] Mad. 279.
299 so her limited estate was enlarged into an absolute estate and the plaintiffs were, therefore, entitled to succeed to.
her properties in preference to the reversioners.
The suit was contested by defendants 2 to 6 mainly on the ground that as Hira Bai under the compromise was to retain only a life interest in the properties, her case would be covered by section 14(2) of the Act and after her death the properties would revert to the reversioners.
The Court held that as Hira Bai was put in possession of the properties in lieu of her maintenance, section 14 (2) had no application, because the award merely recognised the pre existing rights of Hira Bai and did not seek to confer any fresh rights or source of title on Hira Bai.
Thus even though the award did provide that Hira Bai would have a limited interest, section 14(2) would have no application and Hira Bai will get an absolute interest after the coming into force of the Hindu Success; on, Act, 1956.
The Court observed: "The explanation, thus, brings under ' its purview all properties traditionally acquired by a Hindu female on which merely by reason of the incidents of the Hindu law she has limited ownership.
In other words, sub section (1 ) read with this explanation provides that any property, howsoever acquired and in possession of a Hindu female after the commencement of the Act shall be held by her as a full owner in all cases where she former ly held merely limited ownership.
As a matter of fact, this sub section proceeds on the basis that there are.
several categories of properties of which a Hindu female, under the provisions of Hindu Law, is merely a limited owner.
By this enactment her rights! are enlarged and wherever under the Hindu Law she would merely obtain limited ownership, she would, after the commencement of the Act, obtain full ownership." "There is consensus of judicial opinion with regard to the ambit of sub section
(2) of section 14 of the Act.
It covers only those cases of grants where the interest in the grantee is created by the grant itself, or, in other words, where the gift, will, instrument, decree, order or award is the source or origin of the interest created in the grantee.
Where, however.
the instruments referred to above are not the source Of inter est created but are merely declaratory or definitive of the right to property anteced ently enjoyed by the Hindu female, sub section (2) has no application; and it matters not if in such instruments it is specifically provided in express terms that the Hindu female had a limited estate or ' that the property would revert on her death to the next reversioner such terms are merely the reiteration of the incidents of the Hindu Law applicable to the limited estate.
" Dwelling on the nature and incidents of the right of the widow ' to maintenance before the Hindu Women 's Right to Property Act, 1937, Palekar, J., speaking for the Court described the various 300 characteristics and incidents of the right of a Hindu female for maintenance (which have already been discussed by us).
Finally, the Judge observed as follows: "It appears to us that in the context of the Hindu widows the right to maintenance conferred under the Hindu Law is distinguisha ble in quality from her right to a share in the family property.
That may well be the reason why the explanation to sub section (1) of section 14 of the Act makes the female allottee of property "in lieu of maintenance" as much a limited owner as when the widow acquires "inheritance" or "at a partition".
And if in the latter two cases it is conceded that sub section (2) does not apply on the ground of antecedent right to the family properties, we do not see any rational justi fication to exclude a widow who has an equally sufficient claim over the family properties for her maintenance." Thus the following propositions emerge from a detailed discussion of this case: .lm10 (1) that the widow 's claim to maintenance is undoubtedly a tangible right though not an absolute right to property so as to become a fresh source of title.
The claim for maintenance can, however, be made a charge on the joint family properties, and even if the properties are sold with the notice of the Said charge, the sold properties will be bur dened with the claim for maintenance; (2) that by virtue of the Hindu Women 's Right to Property Act, 1937 the claim of the widow to main tenance has been crystallized into a full fledged right and any property allotted to her in lieu of maintenance becomes property to which she has a limited interest which by virtue of the provisions of Act of 1956 is enlarged into an absolute title; (3) Section 14(2) applies only to cases where grant is not in lieu of maintenance or in recognition of pre existing rights but confers a fresh right or tide for the first time and while conferring the said title certain restrictions are placed by the grant or transfer.
Where, .however, the grant is merely in recognition o.r in implementation of a pre existing right to claim maintenance, the case.
falls beyond the purview of section 14(2) and comes squarely within the explanation to section 14 (1).
The Court dissented from the contrary view taken by the Orissa and Madras High Courts on this question.
We find that the facts of this case are on all fours with the present appeal, and we are in complete agreement with the view taken and the reasons given by Palekar, J. Once it is recognised that right of maintenance is a pre existing tangi 301.
ble right, it makes no difference whether a Hindu widow died before or after the enactment of Hindu Women 's Rights to Property Act, 1937.
A similar view was taken by an earlier decision of the Andhra Pradesh High Court in Gadem Reddayya vs Varapula Venkataraju and Am, C) where the Court held that the family settlement was only in recognition of the pre existing right of the widow to maintenance and, therefore, was not covered by section 14(2) of the Act of 1956.
In our opinion, this case correctly states the law on the subject.
In Sumeshwar Mishra vs Swami Nath Tiwari, (2) the High Court of Patna appears to have taken the same view, and in our opinion very correctly.
The Patna High Court differed from the decision of the Madras High Court in Thatha Gurunadhan Chetti vs Smt.
Thatha Navaneethamma,(3) and in our opinion rightly.
We are of the opinion, for the reasons that we have already given above, that the.
view of the Madras High Court was not legally correct.
A later deci sion of the Patna High Court in Lakshmi Devi vs Shankar Jha(4) has also taken the same view.
We, however, fully approve of the view expressed by the Patna High Court and Andhra Pradesh High Court referred to above.
Similarly in H. Venkanagouda vs Hanamangouda(5) the Mysore High Court adopted the view of the Bombay High Court in B.B. Patil vs Gangabai (supra) and dissented from the contrary view taken by the Madras and the Orissa High Courts.
In our opinion, this decision seems to have correct ly interpreted the provisions of section 14(2) of the 1956 Act and has laid down the correct law.
The view of the Madras High Court and the Orissa High Court which was dissented fro.m by the Mysore High Court is, in our opinion, legally erroneous and must be overruled.
In Smt.
Sharbati Devi vs Pt.
Hira Lal & Anr.(6) the Punjab High Court clearly held that application of section 14(2) was limited to only those cases.
where a female Hindu ac quired a title for the first time, for otherwise the proper ty acquired in lieu of maintenance even though conferring a limited estate fell clearly within the ambit of explanation to section 14(1) of the Act and would, therefore, become the absolute property of the widow.
Thus the Punjab High Court also fully favours the view taken by the Bombay, Patna, Mysore, Andhra Pradesh and other High Courts discussed above and has our full approval.
The only distinction in the Punjab case is that here the widow got the properties after the coming into force of the Hindu Women 's Rights to Proper ty Act, 1937, but that, as we shall point out hereafter, makes no difference with respect to the legal right which a widow has to maintain herself out of the family property.
(1) A.I.R. 1965 .A.P. 66.
(2) A.I.R. 1970 Pat.
A.I.R. 1967 Mad. 429.
(4) A.I.R. 1074 Pat.
(5) A.I.R. 1972 Mys. 286.
(6) A.I.R. 302 The Calcutta High Court has also taken the same view in Sasadhai Chandra Dev vs Smt.
Sundari Desi (1) which we endorse.
In Saraswathi Ammal vs Anantha Shenoi, (2) the Kerala High Court, after a very detailed discussion and meticulous analysis of the law on the subject, pointed out that the right of a widow to maintenance was not a matter of conces sion but under the Sastri 's Hindu Law it was an obligation on the heirs who inherited the properties of the husband to maintain the widow and any property which the widow got in lieu of maintenance was not one given purely as a matter of concession, but the widow acquired a right in such property.
We fully agree with the view taken by the Kerala High Court in the aforesaid case.
In Kunji Thomman vs Meenakshi(3) although the Kerala High court reiterated its facts of that particular case previous view, on the High Court held that under the family settle ment the widow did not get any right to maintenance but was conferred a new right which was not based on her pre existing right and on this ground the High Court felt that the widow would not get an absolute interest in view of the explanation to section 14 (1).
In Chellammal vs Nallammal(4) the facts were almost similar to the facts of the present case.
A single Judge of the Madras High Court held that.
the case was clearly covered by the Explanation to section 14(1) of the Act and the properties given to the widow in lieu of maintenance became her absolute properties and would not be covered by section 14(2) of the Act.
This decision appears to have been overruled by a later decision of the same High Court in section Kachapalaya Gurukkal vs V. Subramania.
Gurukkal (supra) which is the subjectmatter of Civil Appeal No. 126 of 1972 and we shall discuss the Division Bench 's decision when we refer to the authorities taking a contrary view.
We find ourselves in complete agreement with the view taken by the Single Judge in Chellammal vs Nellammal (supra).
and we overrule the Division Bench decision in section Kachapalaya Gurukkal 's case (supra).
Thus all the decisions discussed above proceed on the right premises and have correctly.appreciated the nature and incidents of a Hindu woman 's right to maintenance.
They have also properly understood the import and applicability of section 14(2) of the 1956 Act and have laid down correct law on the subject.
We now deal with the authorities taking a contrary view.
which, in our opinion, does not appear to.
be the correct view.
In Narayan Patra vs Tara Patrani(5) the Orissa High Court, following a decision of the Andhra Pradesh High Court in G. Kondiah v.G. Subbarayya(6), held that since the widows were given only a (1) A.I.R. 1962 Cal.
(2) A.I.R. 1966 Ker.
(3) I.L.R. (4) (5) [1970] 35 Cuttak L.T. 667=A.I.R. 1970 Orissa 131.
(6) 303 restricted estate their case squarely fell within the ambit of section 14(2) of the Act and their interest would not be enlarged.
Reliance was also placed on a Madras decision in Thatha Gurunadharn Chetty vs Thatha Navaneethamma (supra).
It is obvious that the conclusions arrived at by the High Court are not warranted by the express principles of Hindu Sastric Law.
It is true that a widow 's c/aim for mainte nance does not ripen into a full fledged right to property, but nevertheless it is undoubtedly a right which in certain cases can amount to a right to property where it is charged.
It cannot be sand that where a property is given to a widow in lieu of maintenance, it is given to her for the first time and not in lieu of a pre existing right The claim to maintenance, as also the right to claim proper ty in order to maintain herself, is an inherent right con ferred by the Hindu Law and, therefore, any property given to her in lieu of maintenance is merely in recognition of the claim or right which the widow possessed from before.
It cannot be said that such a right has been conferred on her for the first time by virtue of the document concerned and before the existence of the document the widow had no vestige of a claim or fight at all.
Once it is established that the instrument merely recognised the pre existing right, the widow would acquire absolute interest.
Second ly, the Explanation to section 14(1) merely mentions the various modes by which a widow can acquire a property and the property given in lieu of maintenance is one of the modes mentioned in the Explanation.
Sub section (2) is merely a proviso to section 14(1) and it cannot be interpreted in such a manner as to destroy the very concept of the right conferred on a Hindu woman under section 14(1).
Sub section (2) is limit ed only to those cases where by virtue of certain grant or disposition a right is conferred on the widow for the first time and the said right is restricted by certain conditions.
In other words, even if by a grant or disposi tion a property is conferred on a Hindu male under certain conditions, the same are binding on the male.
The effect of sub section
(2) is merely to equate male and female in respect of grant conferring a restricted estate.
In these circum stances we do not agree with the views expressed by the Orissa High Court .
The other High Courts which have taken a contrary view are mainly the Andhra Pradesh, Allahabad and the Madras High Courts.
In an earlier decision of the Patna High Court in Shiva Pujan Rat and Others vs Jamuna Missir and Others(1) the High Court seems to rally round the view taken by the Madras High Court.
We shall take up the decisions of the Andhra Pradesh High Court.
As already indicated above, the earlier decision of the Andhra Pradesh High Court in Gadam Reddayya vs Vara pula Venkataraju took the same view which was taken later by the Bombay High Court and held that in a case like the present, a Hindu female would get an absolute interest and her case would not be covered by sub section
(2) of section 14 of the 1956 Act.
In Gopisetti Kondaiah vs Gunda Subbarayudu(2) another Division Bench of the same High Court appears to have taken a contrary view.
Jaganmohan Reddy, C.J., speak ing for the Court observed as follows: (1) I.L.R. 47 Pat.
(2) I.L.IR, 304 "In so far as the right of a Hindu woman to maintenance is concerned, it is necessary at this stage to point out one other basic con cept.
A Hindu woman has a right to be main tained by her husband or from her husband 's property or Hindu joint family property.
But that is merely a right to receive maintenance out of the properties without in any way conferring on her any right, title or interest therein.
It is not a definite right, but is capable of being made a charge on specific properties by agreement, decree of Court or award, compromise or otherwise . .
But this indefinite right, to be maintained from out of the properties of a Hindu Joint family, does not, however, create in her a proprietary right in the property . .
But if a restricted estate is given by any such instru ment, even if it be in lieu of maintenance, which is inconsistent with an estate she would get under the Hindu Law, then sub section (2) of section 14 would operate to give her only a restricted estate.
But if it is the latter, notwithstanding the fact that it was trans ferred in lieu of maintenance, if only a restricted estate was conferred by the instru ment, then she would only have the restricted estate.
" While we fully agree with the first part of the observations made by the learned Chief Justice, as he then was.
that one of the basic concepts of Hindu Law is that a Hindu woman has right to be maintained by her husband or from her husband 's property or the joint family property we respectfully disa gree with his conclusion that even though this is the legal position yet the right to receive maintenance does not confer on her any right, title or interest in the property.
It is true that the claim for maintenance is not an enforceable right but it is undoubtedly a pre existing right, even though no charge is made on the properties which are liable for her maintenance.
We also do not agree with the view of the learned Chief Justice that if the property is given to the widow in lieu of maintenance she will get only a restricted estate.
In our opinion, the High Court of Andhra Pradesh has proceeded on wrong prem ises.
Instead of acknowledging the right of a Hindu woman to maintenance as a right to a right or that matter a pre existing right and then considering the effect of the subsequent transactions, the High Court has first presumed that the claim for maintenance is not a tangible right at all and, therefore, the question of a pre existing right does not arise.
This, as we have already pointed out, is against the consistent view taken by a large number of Courts for a very long period.
Furthermore, this case does not appear to have noticed the previous Division Bench decision in Gadam Reddayya 's case (supra) taking the contrary view, and on this ground alone the authority of this case is considerably weakened.
At any rate, since we are satisfied that the claim of a Hindu woman for mainte nance is a pre existing right, any transaction which is in recognition or declaration of that right clearly falls beyond the purview of section 14(2) of the 1956 Act and, there fore, this authority does not lay down the correct law.
We, therefore, do not approve of the view taken in this case and overrule the same.
305 As regards the Madras High Court, the position appears to be almost the same.
There also, while a single Judge took the same view as the Bombay High Court and held that section 14(2) was not applicable, the Division Bench of the Court in an appeal against the order of another Single Judge took the contrary view.
In section Kachupalaya Gurukal vs Subramania Gurukkal (supra) the Court seems to draw an artificial distinction between a claim of a widow for maintenance and a pre existing right possessed by her.
According to the High Court, while a claim for maintenance simpliciter. was not a right at all, the right to get a share in the husband 's property under the Hindu Women 's Right to, Property Act, 1937 was a pre existing right.
The Madras High Court ap pears to have fallen into an error by misconceiving the scope and extent of a Hindu woman 's right to maintenance.
Secondly, it appears to have interpreted the proviso in such a manner as to destroy the effect of the main provision, namely, section 14(1) and the explanation thereto, for which there can be no warrant in law.
The decision of Natesan, J, in Gurunadham vs Sundrarajulu Chetty (supra) which had been affirmed by this judgment also, appears to have taken the same view and had fallen into the same error.
Furthermore, the view of the learned Judge that on the interpretation given and the view taken by the Bombay High Court which we have accepted, section 14 is intended to override lawful terms in contracts, bargains, bequests or gifts etc.
is not correct, because the scope and area of sub section
(2) of section 14 is quite separate and defined.
Such a sub section applies only to such transactions as confer new right, title.
or interest on the Hindu females.
In such cases the titles created under sub section
(2) are left in tact and section 14(1) does not interfere with the titles so created under those instruments.
Thus, in short, these two, decisions suffer from the following legal infirmities: (i) the Madras High Court has not correctly or properly appreciated the nature and extent of the widow 's right to.
maintenance: and (ii) the distinc tion drawn by the Court regarding the share given to the widow under the Hindu Women 's Right to.
Property Act allot ted to her before the passing of the Act in lieu of mainte nance is based on artificial grounds.
In fact the Act of 1937 did not legislate anything new, but merely gave statu tory recognition to the old Shastric Hindu Law by consoli dating the same and clarifying the right of the widow which she already possessed in matter of succession under the, Hindu Law.
This being the position, the Act of 1937 makes no difference.
so far as the legal status of a widow in regard to her right to maintenance was concerned.
The Act neither took away the: right of maintenance nor conferred the same; (iii) the Court appears to, have given an extended meaning to sub section
(2) of section 14 of the 1956 Act which has been undoubtedly enlarged so as to set at naught the express words in the Explanation to sub section
(1) of section 14 which ex pressly exclude the.
property given to a widow in lieu of maintenance or at a partition from the ambit of sub section
In other words, such a property, according to the Explana tion, is a property in which the widow would have undoubted ly a limited interest which by operation of law i.e. force of section 14(1 ) would be enlarged into an absolute interest if the widow is in possession of the property on the date when the Act was passed; (iv) similarly the Court failed to notice that 5 436 SCI/77 306 sub section
(2) of section 14 would apply only where a new right is created for the first time by virtue of a gift, will etc.
or the like executed in favour of the widow in respect of which she had no prior interest in the property at all.
For instance, a daughter is given a limited interest in presence of the widow.
Here the daughter not being an heir in presence of the widow (before the came into force) she had, no fight or share in the property, and if she was allotted some property under any instrument, a new and fresh right was created in her favour for the first time which she never possessed.
Such a case would be square ly covered by section 14(2) of the Act.
In Ram Jag Misir vs The Director of Consolidation, U.P.(1) the same view has.
been taken as the Madras High Court.
case does not discuss the various aspects which have been pointed out by us and proceeds purely on the basis that as the widow acquired a restricted estate under the compromise., section 14(2) would at once apply.
It has not at all considered the decisions of this Court that a mere description of limited interest in a grant or compromise is not a restriction but may just as well as merely a statement of the law as it stood when the grant was made.
The Court has also, not considered the various incidents and charac teristics of the widow 's right to maintenance under the Hindu Law.
Reliance was also placed by the learned counsel for the responderts on a Division Bench decision of the Patna High Court in Shiv Pujan Rai vs Yamuna Missir (supra) where the High Court held that the property given to a widow under a compromise in lieu of her maintenance was covered by sub section
(2) of section 14.
This decision was.
really based on the pecul iar findings of fact arrived at by the Courts of fact.
The High Court in the first place held that on the facts there was nothing to show that the widow acquired any inter est independent of the compromise under which she was given the property.
In these circumstances, it may be that the widow was given a. fresh or a new title under the compromise in which case the matter would be clearly covered by section 14(2) of the 1956 Act.
Even if this case be treated as an authority for the proposition that any property allotted to.
a widow under a compromise in lieu of maintenance would be covered by section 14(2) of the Act, then we dissent from this view, and for the reasons which we have already given we choose to prefer the view taken by the Patna High Court in a later case in Sumeshwar Mishra vs Swami Nath Tiwari (supra), which lays down the correct law on the subject.
Reliance was also placed on a Full Bench decision of the Jammu & Kashmir High Court in Ajab Singh & Ors.
vs Ram Singh and other.(2) In this case also the various aspects which we have indicated and the nature and extent of the Hindu women 's right to maintenance were not considered at all and the Court proceeded by giving an extended meaning to the provisions of sub section
(2) of section 14 which in that case was sub section
(2) of section 12 of the Jammu & Kashmir Hindu Succes sion Act, 1956.
It is true that the leading Judgment was given by one of us (Fazal Ali, J.,) but I must confess that the important question of law that has been argued before us in all its comprehensive aspects was not presented before me in that case and even the counsel O) (2) A.I.R. 1959 J & K 92.
307 for the respondents did not seriously contend that sub section
(2) of section 14 was not applicable.
For these reasons we are not in a position to approve of the Full Bench decision of the Jammu & Kashmir High Court in Ajab Singh 's case which.
is hereby overruled.
Thus on a careful scrutiny and analysis of the authori ties discussed above, the position seems to be that the view taken by the High Courts of Bombay, Andhra Pradesh, Patna, Mysore, Punjab, Calcutta .and
Kerala to the effect that the widow 's claim to maintenance, even though granted to her subject to certain restrictions, is covered by s.14 (1) and not by sub section
(2) is based on the following premises: (1) That the right of a Hindu widow to claim maintenance is undoubtedly a right against property though not a right to property.
Such a right can mature into a full fledged one if it is charged on the property either by an agreement or by a decree.
Even otherwise, where a family possesses property, the husband, or in case of his.
death, his heirs are burdened with the obligation to maintain the widow and, therefore, the widow 's claim for maintenance is not an empty formality but a pre existing right.
(2) Section 14(2) which is in the nature of a proviso to section 14(1) cannot be interpreted in a way so as to destroy the concept and defeat the purpose which; is sought to, be effectuated by section 14(1) in conferring an absolute interest on the Hindu women and in doing away with what was here tobefore known as the Hindu women 's estate.
The proviso will apply only to such cases which flow beyond the purview of the Explanation to section 14(1).
(3) That the proviso would not apply to any grant or transfer in favour of the widow hedged in by limitation or restrictions, where the grant is merely in recognition or declaration of a pre existing right, it will apply only to such a case where a new right which the female .did not possess at all is sought to be conferred on her under cer tain limitations or exceptions.
In fact in such a case even if a conditional grant is made to a male, he would be bound by the condition imposed.
The proviso wipes out the distinc tion between a male and a female in this respect.
The contrary view taken by the Madras, Orissa, Andhra Pradesh, Allahabad and Jammu & Kashmir High Courts proceeds on the following grounds: (1) That a widow 's claim to maintenance is merely an inchoate or incomplete right having no legal status, unless the widow gets a property in lieu of maintenance or unless a charge is created in a particular property the claim for maintenance cannot be legally enforced.
Thus, where under a grant, compromise, transfer or a decree, a property is allotted to the widow in lieu of maintenance, it is not the recognition of any pre existing right but it amounts to conferment of a new right for the first time which in fact did not exist before the said demise.
This view is really based on the provisions of the Hindu Women 's Right to Property Act, 1937, under which the widow has got the right to get a share of his son in lieu of partition and even 308 otherwise she is entitled to her share in the joint Hindu family property on partition.
These High Courts, therefore, seem to be of the opinion that in view of the provisions of the Hindu Women 's Right to Property Act, the widow in claim ing a share in the property has a pre existing right which is recognised by law, namely, the Act of 1937.
The same, however, cannot be said of a bare claim to maintenance which has not been recognised as a legal right and which can mature into a legally enforceable right only under a grant or demise.
This view suffers from a serious fallacy, which is, based on a misconception of the true position of a Hindu widow 's claim for maintenance.
It has been seen from.
the discussion regarding the widow 's claim for maintenance and her status in family that under the pure Sastric Hindu Law the widow is almost a co owner of the properties with her husband and even before the Act of 1937 she was entitled to the share of a son on the death of her husband after parti tion according to some schools of Hindu Law.
The Act of 1937 did not introduce any new right but merely gave a statutory recognition to the old Sastric Hindu Law on the subject.
In this respect the Act of 1937 is very different from the Act of 1956, the latter of which has made.
a revo lutionary change in the Hindu Law and has changed the entire complexion and concept of Hindu women 's estate.
In these circumstances, therefore, if the widow 's claim for mainte nance or right to get the share of a son existed before the Act of 1937, it is futile to dub this! right as flowing from the Act of 1937.
The second fallacy in this view is that the Court failed to consider that the.
claim for maintenance is an important right which is granted to the widow under the Sastric Hindu Law which enjoins the husband to maintain his wife even if he has no, property.
Where he has a property the widow has to be maintained from that property so much so that after the death of her husband any one who inherits that property takes the property subject to.
the burden of maintaining the widow.
Even where the property is transferred for payment of family debts and the transferee has the notice of the widow 's claim for maintenance, he has to discharge the burden of maintaining the widow from the property sold to him.
Thus the nature and extent of the right of the widow to claim maintenance is undoubtedly a pre existing right and it is wrong to say that such a right comes into existence only if the property is allotted to the widow in lieu of maintenance and not otherwise.
Another reasoning given by the courts taking the con trary view is that sub section
(2) being in the nature of a proviso to section 14(1) all grants with conditions take the case out of section 14(1).
This, as we have already pointed out, is based on a wrong interpretation of the scope: and 'ambit of sub section
(2) of section 14.
Lastly, the contrary view is in direct conflict with the observations made by this Court in the cases referred to above, where a grant in lieu of maintenance.
of the widow has been interpreted as being in recognition of a pre exist ing right ' so.
as to take away the case from the ambit of sub section
For these reasons and those given hereto.
before we choose to prefer the view taken by Palekar, J., in B B. Patil vs Gangabai (supra) which appears to be more in conso nance with the object and spirit of 309 the 1956 Act.
We, therefore, affirm and approve of the decisions of the Bombay High Court in B.B. Patil vs Ganga bai; of the Andhra Pradesh High Court m Gadam Reddayya vs Varapula Venkataraju & Anr.;of the Mysore High Court in H. Venkanagouda vs Hanamanagouda; of the Patna High Court in Sumeshwar Mishra vs Swami Nath Tiwari; of the Punjab High Court in Smt.
Sharbati Devi vs Pt.
Hira Lal & Anr and Cal cutta High Court in Sasadhar Chandra Dev vs Smt.
Tara Sund ari Dasi (supra) and disapprove the decisions of the Orissa High Court in Narayan Patra vs Tara Patrani; Andhra Pradesh High Court in Gopisetty Kondaiah vs Gunda Subbarayudu (supra); Madras High Court in section Kachapalaya Gurukkal vs V. Subramania Gurukkal (supra) and Gurunadham vs Sundararaulu; of the Allahabad High.
Court in Ram Jag Missir vs Director of Consolidation, U.P. and in Ajab Singh & Ors.
vs Ram Singh & Ors.
of the Jammu & Kashmir High Court.
Lastly strong reliance was placed by Mr. Natesan counsel for the respondents on a decision of this Court in Smt.
Naraini Devi vs Smt.
Ramo Devi & others(1) to which one of us (Fazal Ali, J.,) was a party.
This case is no doubt directly in point and this Court by holding that where under an award an interest is created in favour of a widow that she should be entitled to rent out the property for her lifetime, it was held by this Court that this amounted to a restricted estate under section 14(2) of the 1956 Act.
Unfortu nately the various aspects, namely, the nature and extent of the Hindu women 's right to maintenance, the limited scope of sub section
(2) which is a proviso.
sub section
(1 ) of section 14 and the effect of the Explanation etc., to which we have adverted in this judgment, were.
neither brought to our notice nor were argued before us in that case.
Secondly, the ground on which this Court distinguished the earlier decision of this Court in Badri Parshad vs Smt.
Kanso Devi (supra) was that in the aforesaid decision the Hindu widow had a share or interest in the house of her husband under the! Hindu Law as it was applicable then, and, therefore,such a share amounted to a pre existing right.
The attention of this Court, however, was not drawn: to the language of the Explanation to section 14(1) where a property given to a widow at a partition or in lieu of maintenance had been placed in the same category, and, therefore reason given by this Court does not appear to be sound.
For the reasons that we have.
already given, after taking an overall view of the situation, we are satisfied that the Division Bench decision of this Court in Naraini Devi 's case (supra) was not correctly decided and is therefore, overruled.
Indeed, if the contrary view is accepted, it will, in my opinion set at naught the legislative process of a part of Hindu Law ' of the intestate succession and curb the social urges and aspirations of the Hindu women, particularly in the International Year of Women, by reviving a highly detestable legacy which was sought to be buried by the Parliament after independence so.
that the new legislation may march with the times.
We would now like to summarise the legal conclusions which we have reached after an exhaustive considerations of the authorities mentioned above; on the question of law involved in this appeal as to the (1) 1976] 1 s.c.c. 574.
310 interpretation of section 14(1) and (2) of the Act of 1956.
These conclusions may be stated thus: (1) The Hindu female 's right to maintenance is not an empty formality or an illusory claim being conceded as a matter of grace and generosity, but is a tangible right against property which flows from the spiritual relationship between the husband and the wife and is recognised and enjoined by pure Shastric Hindu Law and has been strongly stressed even by the earlier Hindu jurists starting from Yajnavalkya to Manu.
Such a right may not be a right to property but it is a right against property and the husband has a personal obligation to maintain his wife and if he or the family has property, the female has the legal right to be maintained therefrom.
If a charge is created for the maintenance of a female, the said right becomes a legally enforceable one.
At any rate, even without a charge the claim for maintenance is doubtless a pre existing right so that any transfer declaring or recognising such a right does not confer any new title but merely endorses or confirms the pre existing rights.
(2) Section 14(1) and the Explanation thereto have been.
couched in the widest possible terms.
and must be liberally construed in favour of the females so as to advance the object of the 1956 Act and promote the socio economic ends, sought to be achieved by this long needed legislation.
(3) Sub section (2) of section 14 is in the nature of a proviso and has a field of its own without interfering with the operation of section 14(1) materially.
The proviso.
should not be construed in a manner so as to destroy the effect of the main provision or the protection granted by section 14(1) or in a way so as to become totally inconsistent with the main provision.
(4) Sub section (2) of section 14 applies to instruments, decrees, awards, gifts etc.
which create independent and new titles in favour of the females for the first time and has no application where the instrument concerned merely seeks to confirm, endorse, declare or recognise preexisting rights.
In such cases a restricted estate in favour of a female is legally permissible and section 14(1) will not operate in this sphere.
Where, however, an instrument merely de clares or recognises a pre existing right, such as a claim to maintenance or partition or share to which the female is entitled, the sub section has absolutely no application and the female 's limited interest would automatically be en larged into.
an absolute one by force of section 14(1) and the restrictions placed, if any, under the document would have to be ignored.
Thus where a property is allotted or trans ferred to a female in lieu of maintenance or a share at partition, the instrument is taken out of the ambit of sub section (2) and would be governed by section 14(1) despite any re strictions placed on the powers of the transferee.
(5) The use of express terms like "property acquired by a female Hindu at a partition", "or in lieu of maintenance" "or arrears of maintenance" etc.
in the Explanation to section 14(1) clearly makes sub section
(2) inapplicable to these catego ries which have been expressly excepted from the operation of sub section
311 (6) The words "possessed by" used by the Legislature in section 14(1) are of the widest possible amplitude and include the state of owning a property even though the owner is not in actual or physical possession of the same: Thus, where a widow gets a share in the property under a preliminary decree before or at the time when the 1956 Act had been passed but had not been given actual possession under a final decree, the property would be deemed to be possessed by her and by force of section 14(1) she would get absolute interest.
in the property.
It is equally well settled that the possession of the widow, however, must be under some vestige of a claim, right or title, because the section does not contemplate the possession of any rank trespasser with out any right or title.
(7) That the words "restricted estate" used in section 4(2) are wider than limited interest as indicated in section 14(1) and they include not only limited interest, but also.
any other kind of limitation that may be placed on the transferee.
Applying the principles enunciated above to the facts of the present case, we find (i) that the properties in suit were allotted to the appellant Tulasumma on July 30, 1949 under a compromise certified by the. Court; (ii) that the appellant had taken only a life interest in the properties and there was a clear restriction prohib iting her from alienating the properties; (iii) that despite these restrictions, she continued to be in possession of the properties till 1956 when the Act of 1956 came into.
force; and (iv) that the alienations which she had made in 1960 and 1961 were after she had acquired an absolute interest in the properties.
It is, therefore, clear that the compromise by which the properties were allotted to the appellant Tulasamma in lieu of her maintenance were merely in recognition of her right to maintenance which was a pre existing right and, there fore, the case of the appellant would be taken out of the ambit of section 14(2) and would fail squarely within section 14 (1) read with the Explanation thereto.
Thus the appellant would acquire an absolute interest when she was in possession of the properties at the time when the 1956.
Act came into force and any restrictions placed under the compromise would have to be completely ignored.
This being the position, the High Court was in error in holding that the appellant Tula samma would have only a limited interest in setting aside the alienations made by her.
We are satisfied that the High Court decreed the suit of the plaintiffs on an erroneous view of the law.
The result is that the appeal is allowed, the judgment and decree of the High Court are set aside, the judgment of the District Judge, Nellore.
is hereby restored and the plaintiffs ' suit is dismissed.
In the peculiar circumstances of this ease and having regard to the, serious divergence of judicial opinion of the various Courts of India, we would make no order as to costs in this Court.
P.B.R. Appeal allowed.
| The appellant was a lawyer, under whom the complainant (first respondent) was a junior.
The appellant was engaged as counsel in certain cases by the complainant 's father.
The appellant submitted statement of accounts to the complain ant 's father in respect of the sums spent by him in the suits.
After a lapse of three years the complainant filed a complaint against the appellant making allegations under sections 409, 468 and 474 I.P.C. The trial Court acquitted him holding that the prosecution had been launched after inordi nate delay and that there was no clear and conclusive evi dence of criminal intention and dishonest mental act on the appellant 's part.
The High Court, on appeal, set aside the acquittal holding that the appellant 's explanation in regard to the discrepancies was not true and could not be accepted.
Allowing the appeal to this Court, HELD: There was no sufficient ground for the High Court to interfere with the acquittal in this case when the rea sons given by the trial Court were weighty and cogent and there was no compelling justification to take a contrary view.
[112 F] The mere fact that certain amounts were in the hands of the appellant and the accounts submitted were incorrect would not lead to the conclusion that the appellant commit ted criminal breach of trust.
[111 F] In the instant case, the complainant was a junior of the appellant and he could himself easily find out the discrep ancy in the accounts and could have drawn the appellant 's attention to it.
The complainant 's father did not authorise him to file the complaint nor was he examined to corroborate the complainant.
Secondly, in a notice issued to the appel lant by the complainant 's father the latter did not at tribute any dishonest intention or criminal intent on for mer 's part.
The High Court was wrong in holding the charge as proved and in reversing the order of the trial Court.
[111 G; 112 C]
|
iminal Appeal No. 90 of 1961.
Appeal by special leave from the judgment and order dated January 10, 1961, of the Calcutta High Court in Criminal Revision No. 1545 of 1960.
Sukumar Ghose, for the appellant.
D. N. Mukherjee, for the respondent.
276 January 21, 1964.
The Judgment of the Court was delivered by MUDHOLKAR J.
This is an appeal against the judgment of the Calcutta High Court quashing the issue of process against the respondent.
The respondent is an Assistant Commissioner of Police in the City of Calcutta and the appellant had made a complaint against him alleging that he had committed an offence under section 348, I.P.C. that is, wrongful confinement in order to extort a confession or compel restoration of property.
The facts as alleged by the appellant are as follows: One Manoharlal Seth had lodged a complaint on July 28, 1960 against him and two other persons Fatehlal and Jaichand for offences under section 120B/420, I.P.C. and section 420 I.P.C. Manoharlal Seth had alleged in his complaint that these persons had induced him to purchase a bar of brass for Rs. 6,000 on the representation that it was of gold and thus duped him.
Upon this complaint, investigation was taken up by the police.
He came to know Manoharlal Seth in the course of his business.
They were on quite friendly terms in the beginning and later on considerable differences arose between him and Manoharlal Seth.
As a result of that Manoharlal Seth told him that unless he settled his differences with Manoharlal Seth according to the latter 's dictates he would put him into trouble through his friend, the respondent, and that it is because of this that Manoharlal lodged a complaint against him for cheating.
This complaint was thus a false complaint and it is common ground that ultimately it was dismissed by the Presidency Magistrate, 8th Court, Calcutta on January 2, 1961.
Then according to the appellant, on August 3, 1960 at about 6 00 A.M. P. C. Kundu, Sub Inspector of Police attached to Burrabazar Police Station along with another Sub Inspector section Bhattacharya, visited his residence, searched his house and arrested him.
Neither of them had any warrant with them for the search of the house or for the 277 arrest of the appellant.
Upon enquiry by him from these persons they told him that this was being done under the orders of the respondent.
After his arrest the appellant said that he was taken to the Burrabazar police station at about 7 00 a.m. and then to Jorasanko Police Station and produced before T. K. Talukdar, Sub Inspector in charge of that police station.
From there he was taken to various places in Calcutta with a rope tied round his waist by Kundu and Bhattacharya and was eventually produced at about 12 noon before the respondent in his office at Lalbazar.
There the respondent started threatening the appellant and asked him to settle the dispute with Manoharlal Seth and pay him Rs. 5,000 or to acknowledge in writing that he would pay this sum of money to Manoharlal Seth.
At about 3 30 p.m. on the same day his brother Iswarilal accompanied by a lawyer Chakravarthy visited the respondent 's office and sought the appellant 's release on bail as the offence was a bailable one.
The respondent, however, refused to grant bail saying that no bail would be granted until a sum of Rs. 5,000 was paid to Manoharlal Seth.
The appellant says that he was detained at Lalbazar Police Station till 8 00 p.m.
From there he was taken to Jorasanko Police Station and kept in the lock up for the whole night.
On the next day, that is, August 4, 1960 he was again produced before the respondent at Lalbazar where the latter repeated his threats and that after obtaining his finger prints and taking his photographs he was taken to the court of the Additional Chief Presidency Magistrate where he was released on bail at about 2 30 p.m.
On August 19, 1960 the appellant preferred a complaint before the Chief Presidency Magistrate, Calcutta, under section 348 and section 220, I.P.C. and section 13C of the Calcutta Police Act, 1866.
In so far as two of the persons named as accused therein, section I. Kundu and section I. Talukdar, he decided to issue process against them under section 220 I.P.C. and section 13C of the Calcutta Police Act.
As regards the respondent, he decided to issue process against him under section 348, I.P.C.
Upon a revision application preferred by the respondent the High Court quashed the process issued against him by 278 the learned Chief Presidency Magistrate.
The ground urged before; the High Court on behalf of the respondent was that before he could be proceeded against sanction of the State Government under section 197, Cr.
P.C. ought to have been obtained.
This contention was upheld by the High Court.
On.1 behalf of the appellant Mr. Sukumar Ghose contends that the High Court in quashing the process has proceeded to decide on the merits of the case even though there was no material before it to do so and that therefore its judgment cannot stand.
It is true that for considering whether section 197, Cr.
P.C. would apply the Court must confine itself to the allegations made in the complaint.
But that does not mean that it need not look beyond the form in which the allegations have been made and is incompetent to ascertain for itself their substance.
Here the substantial allegation is that the respondent questioned the appellant when he was produced at his office in Lalbazar, asked him to restore Rs. 5,000 to Manoharlal Seth who had lodged a complaint of cheating against the appellant and two others and that he declined to release him on bail.
No doubt the appellant has made a grievance in his complaint that the respondent said that the appellant would not be released on bail unless he either paid the amount or acknowledged in writing his liability to pay this amount.
Assuming that the allegation is true all that the thing boils down to is that the respondent refused to enlarge the appellant on bail and that he wanted the appellant to settle the matter with Manoharlal Seth.
It cannot be disputed that whether a person charged with an offence should or should not be released on bail was a matter within the discretion of the respondent and if while exercising a discretion he acted illegally by saying that bail would not be granted unless the appellant did something which the appellant was not bound to do, the respondent cannot be said to have acted otherwise than in his capacity as a public servant.
For this reason the sanction of the appropriate authority for the respondent 's prosecution was necessary under section 197, Cr P.C. 279 Mr. Ghose, however, contends that the appellant 's detention in the respondent 's office was illegal and that, therefore, the respondent could not be said to have been in a position to exercise any lawful authority with respect to him.
It is difficult to appreciate how the appellant 's detention could be said to be illegal because it was in pursuance of the investigation of the complaint lodged by Manoharlal Seth that he was arrested and brought for interrogation before the respondent.
It was not disputed before us that investigation into Manoharlal 's complaint had been ordered though there is a dispute as to whether it was ordered by the respondent or by the Deputy Commissioner of Police.
Whether it was by one or the other makes little difference.
We would like to make it clear that Mr. Ghose did not contend before us that the appellant 's detention in the office of the respondent was illegal because his initial arrest was without a warrant.
But we may point out that a police officer is legally empowered to arrest a person alleged to have committed an offence under section 420, I.P.C. without a warrant.
Such being the position the High Court was justified in quashing the process.
Accordingly we dismiss this appeal.
Appeal dismissed.
| The appellant made a complaint against the respondent, an Assistant Commissioner of Police for having committed an offence under section 348, Indian Penal Code, alleging that on the arrest of the appellant under section 1208/420 Indian Penal Code, the respondent had refused to grant him bail until a certain sum was paid or acknowledged in writing to be paid to the complainant.
The Chief Presidency Magistrate issued process.
On revision, the High Court quashed the process holding that sanction of the State Government under section 197 Code of Criminal Procedure ought to have been obtained.
On appeal by special leave, it was contended that the High Court in quashing the process had proceeded to decide on the merits of the case even though there was no material before it and therefore its judgment could not stand.
Held: (i) For considering whether section 197 Code of Criminal Procedure would apply the Court must confine itself to the allegations made in the complaint.
But that does not mean that it need not look beyond the form in which the allegations have been made and is incompetent to ascertain for itself their substance.
(ii) The sanction of the appropriate authority for the respondent 's prosecution was necessary under section 197 Code of Criminal Procedure.
Whether a person charged with an offence should or should not be released on bail was a matter within the discretion of the respondent and if while exercising a discretion he acted illegally by saying that bail would not be granted unless the appellant did something which the appellant was not bound to do, the respondent cannot be said to have acted otherwise than in his capacity as a public servant.
|
ransfer Petition No. 212 of 1986 Under Section 25 of the Code of Civil Procedure 1908.
M.K. Banerji, Solicitor General, A.K. Ganguli, R.D. Agar vala, and Miss Sushma Relhan for the Petitioners.
Hardev Singh, S.S. Sood, Bishamber Lal and R.S. Sodhi for the Respondents.
474 The Judgement of the Court was delivered by SABYASACHI MUKHARJI, J. This is an application for transfer under Section 25 of the Code of Civil Procedure filed by Union of India seeking transfer of a suit instituted before the Court of Senior Sub Judge, Amritsar by Respondents Nos. 1 and 2 i.e. Shiromani Gurdwara Prabandhak Committee, Amritsar and Sardar Gurcharan Singh Tohra, President, Shiromani Gurdwara Prabandhak Committee, Amritsar.
The suit claims damages of Rs.1,000 Crores for causing loss to movable and immovable properties of the various Gurdwaras being administered and managed by the Plaintiff No. 1 under the provisions of the Punjab Sikh Gurdwaras Act, 1925, during the period from June to September 1984, by the defendants, their employees, servants and agents by making a deliberate, unprovoked, unwarranted, unannounced, wanton and catastrophic attack by the various armed servants and employees of the defendants on the Gurdwaras in the Golden Temple, Amritsar and various other Gurdwaras in the State of Punjab.
It also sought mandatory injunction directing the defendants and their principal functionaries to tender unqualified apology before the Sikh Sangat for causing mental, sentimental, social and spiritual setback and also for causing deep sense of injury to the honour and self respect of Sikhs who are law abiding citizens.
There was also an application under order 33 Rule 1 & 2 of the Code of Civil Procedure for permission of the Court to sue the petitioners and the Respondent No. 3 herein as indigent persons After receiving the summons, the Union of India made an application opposing the application under order 33 Rules 1 & 2 made by the Respondents No. 1 & 2 and further alleging that it did not disclose any cause of action against the petitioners.
There was an amendment application which was allowed in spite of opposition by the Union of India and additions were made of Respondents Nos 4 to 37, some of them are Ministers, officers and Members of Armed Forces, including the present Chief of the Army for their participation in what is known as 'operation Blue Star ' from June, 1984 to September, 1984.
It is not necessary to set out in detail all the allegations made in the Plaint.
In the Plaint it has been alleged that the Shiromani Gurdwara Prabandhak Committee is a statutory organisation established under the provision of the Punjab Sikh Gurdwara Act 1925, for the purpose of administration and managing and looking after the affairs and property of the Sikh Gurdwara.
On 3rd June, 1984, it is alleged in the Plaint, which was the Martyrdom day of Shri Guru Arjun Devji, when 475 a large number of devotees came to the Golden temple complex at Amritsar to commemorate the said occasion the various units of the Armed Forces under the employment of the Union of India as well Police units under the employment of Union of India and the Government of Punjab launched an attack in the Golden temple complex by indiscriminate barbaric firing.
It was alleged that the same was maliciously done.
The defence of Union of India, as it appear from the petition is that it was an act of State necessary for the security and integrity of the State.
The action taken, it is claimed, was an exercise of sovereign power in respect of sovereign acts.
Indubitably, this is an unusual suit at a critical time in Punjab.
The basis of the Transfer Petition is that an extraordinary situation prevails in the State of Punjab in general and in Amritsar in particular for the trial of suit of this nature.
There has been communal tension between different communities as well as between different sections of the same community.
Anything connected with the Golden Temple is an extremely sensitive matter capable of arousing deep passions.
It is, therefore, stated that it is not possible to have a fair trial of the case in Amritsar or other parts of Punjab and it is necessary that the case should be tried in a calm and quite atmosphere.
We have noted the nature of the allegations and have heard learned counsel for the parties, where it has been submitted on behalf of the respondents that there was no communal tension as such in the State of Punjab and that the judicial administration in Punjab is functioning normally and it would be possible to meet the ends of justice in Punjab.
It is true, that the judicial administration is functioning normally in Punjab and it cannot be reasonably apprehended that the justice would not be done by the judiciary of Punjab, but what is stated is reasonable apprehension of the respondent Union of India and the said added respondents that in view of nature of the allegations and their consequences on the feelings of the sentiments of some sections of Sikh Community, justice may not be done.
It is not denied that certain sections of the Sikh community felt very strongly on the operation of Blue Star, their feelings are bound further to be hurt when the trial of this case goes on.
This Court had occasion to deal with this aspect of the matter in G.X. Francis & ors vs Banke Bihari Singh & Anr.
A.I.R. 1958 S.C. 309 where it was a case for transfer from Madhya Pradesh.
Justice Vivian Bose observed that there was ground for transfer from the area 476 because of the bitterness of the communal feeling and bitterness of the atmosphere.
It was reiterated that the Public confidence in the fairness of a trial held in such an atmosphere would be seriously undermined, particularly among the section of the community, and there was apprehension that administration of justice would not be possible in such atmosphere.
This was reiterated in Hazara Singh Gill vs The State of Punjab, ; where Justice Hidayatullah as the learned Chief Justice then was, observed that the question was really whether the petitioner can be said to entertain reasonably an apprehension that he would not get justice.
One of the highest principles in the administration of law is that justice should not only be done but should be seen to be done.
In that case there was enough allegation to show that certain strong parties were opposed to the petitioner in various ways.
In this case, in view of the nature of allegations regarding some of the respondents who have been added, strong feelings are likely to be roused in some section of community.
In such an atmosphere to meet the ends of justice it would be desirable to have the case transferred to a calmer and quieter atmosphere.
Justice would be done in such a way.
The power of this Court to transfer a suit or proceeding from one State to another State is a power which should be used with circumspection and caution but if the ends of justice so demand in an appropriate case, this Court should not hesitate to act.
The fact that an extraordinary atmosphere exists in Punjab cannot be denied.
To contend otherwise would be to contend for an unreality.
The suit is unusual and sensitive, and the time is critical.
This Court should act by transferring the case outside the State of Punjab to meet the ends of justice.
That is an absolute imperative in this case.
Our attention was also drawn to a recent decision of this Court in the case of State of Assam vs Atul Vohra, Transfer Petition No. 21/80 where this Court transferred certain writ petitions from the Gauhati High Court to the High Court of Delhi.
In the instant case there was some submission made on behalf of the respondents that the petition was not verified properly.
But on reading paragraphs 3 and 15 of the present petition, we are of the opinion that there are certain allegations which can made ground for reasonable apprehension that justice would not be done in the suit of this nature.
477 In view of that we are of the opinion that in the interest of justice this case should be transferred outside the State of Punjab.
It has been contended that Delhi is not a safer place for trial of this suit.
It has been contended both on behalf of Respondent Nos. 1 & 2 and State of Punjab that in view of recent happenings in Delhi, it is not a safe place for trial of this suit.
After having considered all aspects, we are of the opinion that an extraordinary situation exists in the State of Punjab and not in Delhi.
In view of the special features of the case and after considering the pros and cons, we are of the opinion that it should be tried in the interest of justice outside the State of Punjab.
We nay reiterate that this order shall not in any way be construed as a reflections on the independence and fairness of the judiciary of Punjab or on the ability of the Government of Punjab to maintain law and order in the State of Punjab.
Having regard to the nature of suit and the situation prevailing in the State of Punjab and having considered the submissions of all the parties about the alternative forum, we direct that the suit be tried by a learned Single Judge in the original side of the Delhi High Court.
The suit shall stand transferred accordingly and begin from the stage where it is.
The Chief Justice of the Delhi High Court will assign the learned Judge for hearing.
| The landlord appellant running a girls ' school.
filed an eviction suit against the tenant, the predecessor in interest of the respondent, on the ground that it needed additional accommodation for the school.
The trial Judge as well as the Appellate Court ordered eviction under section 12(i)(f) of the Madhya Pradesh Accommodation Control Act, 1961 holding that the object of the appellant society was to get the building back for expansion of its activities and had proved the same.
The High Court, however, in second appeal examined the sanctioned plan, held that the landlord 's claim for eviction was on the ground of reconstruction, and the series of shops shown in the plan were meant to be let out to tenants and set aside the order of eviction passed by the two courts below.
Allowing the appeal to this Court, ^ HELD: l(i).
The order of the High Court is set aside.
The orders of the Additional District Judge and the Trial Court are restored with the modification that in case any part of the building is used for shop or let out as shop, the first option should be given to the respondents and of that the building must be constructed on the basis of the appended sanctioned plan.
[517G; E] 1(ii).
The High Court fell into error in misconstruing the plan Ext.
4 and in holding that the landlord 's claim for eviction was on the ground of reconstruction.
The High Court went on to examine whether section 12(h) of the Act had been complied with.
There was no such necessity 515 in view of the facts as found by the two courts below.
In any case, in second appeal the High Court should not have interfered with such a question of fact.
[517B C] 2.
The case of the landlord appellant is clearly covered by s.12(1)(f) of the Madhya Pradesh Accommodation Control Act, 1961.
The mere fact that the landlord intended to make alterations in the house either on account of his sweet will or on account of absolute necessity in view of the condition of the house, would not affect the question of his requiring the house bona fide and reasonably for his occupation, when he had proved his need for occupying the house.
[516E F] Ramniklal Pitambardas Mehta vs Inderadaman Amratlal Sheth [1964] 8 SCR p.1, followed.
|
Appeal No. 30 of 1958.
Appeal by special leave from the judgment and order dated March 24, 1955, of the Punjab High Court in Civil Reference No. 3 of 1953.
Gopal Singh, for the appellants.
K. N. Rajagopala Sastri and D. Gupta, for the respondent.
212 1960.
August 17.
The Judgment of the Court was delivered by HIDAYATULLAH J.
This appeal, by special leave of this Court, is against the judgment 'and order dated March 24, 1955, of the Punjab High Court by which the High Court, purporting to act under section 66(4) of the Indian Income tax Act, called for a supplemental statement of the case from the Income tax Appellate Tribunal.
The special leave granted by this Court is limited to the question whether the High Court had jurisdiction in this case to call for the supplemental statement.
The assessee, Messrs. section Zoraster & Co., Jaipur, consists of three partners.
Two of them are coparceners of a joint Hindu family, and the third is a stranger.
They had formed this partnership in June, 1940, for the manufacture and sale of blankets, felts and other woollen articles.
A deed of partnership was also executed on March 16, 1944.
The assessee entered into contracts with Government for the sup ply of goods, and in the assessment year 1942 43, Rs. 10,80,658 0 0 and in the assessment year 1943 44, Rs. 17,45,336 0 0 were assessed as its income by the Income tax Officer, Contractor 's Circle, New Delhi.
The supplies to Government were made for.
Jaipur by the assessee, and payment was by cheques which were received at Jaipur and were endorsed in favour of the joint Hindu family, which acted as the assessee 's bankers.
The contention of the assessee was that this income was received at Jaipur outside the then taxable territories.
This contention was not accepted by the Income tax Appellate Tribunal, Delhi.
The assessee then applied for a reference to the High Court under section 66(1) of the Indian Income tax Act, and by its order dated December 10, 1952, the Income tax Appellate Tribunal referred the following question for the decision of the High Court: " Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in the taxable territories ? " 213 The Tribunal had stated in the statement of the case as follows: "The payment was made by the Government of India by cheques drawn on the Reserve Bank of India, Bombay Branch.
These cheques were received in Jaipur.
" It may be pointed out that in the contract of sale between the assessee and the Government of India, the following clause was included to determine the system of payment: " 21.
System of payment: Unless otherwise agreed between the Purchaser and the Contractor payment for the delivery of the stores will be made by the Chief Auditor, Indian Stores Department, New Delhi, by cheque on a Government treasury in India or on a branch of the Imperial Bank of India or the Reserve Bank of India transacting Government business.
" In dealing with the Reference, the High Court passed an order under section 66(4) of the Income tax Act observing, ". . it would be necessary for the Appellate Tribunal to find, inter alia, whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the Department in the matter ".
The High Court thereafter remanded the case to the Tribunal for a supplemental statement of the case on the lines indicated.
This order is questioned on the authority of the decision of this Court in The New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax(1) which, it is claimed, completely covers this case.
In that case also, the High Court of Bombay had called for a supplemental statement of the case, and it was ruled by this Court that the High Court had exceeded its jurisdiction.
Before dealing with this question, it is necessary to go back a little, and refer briefly to some cases decided earlier than The New Jehangir Vakil Mills case (1) and Jagdish Mills Ltd. vs Commissioner of Income tax (2), on which reliance has been placed in this case.
ID (1) ; (2) ; 214 Keshav Mills Co., Ltd. vs Commissioner of Income tax (1), the High Court of Bombay called for a supplemental statement of the case, but it expressed the view that if a cheque was received by a creditor on a British Indian Bank and he gave the cheque to his bank for collection, the bank must be treated as his agent and that, on the realisation of the amount of the cheque in the taxable territory, the creditor must be regarded as having received it in the taxable territory, even if he was outside it.
In Sir Sobha Singh vs Commissioner of Income tax (2), it was held by the Punjab High Court that where cheques were given to a bank for purposes of collection, the receipt of the money was at the place where the bank on which the cheques were drawn was situated.
These views found further amplification, and were applied in two other cases by the Bombay If high Court.
They are Kirloskar Bros. Ltd. vs Commissioner of Income tax (3 ) and Ogale Glass Works Ltd. vs Commissioner of Income tax (4).
In both these cases, it was held that unless the payee expressly constituted the post office as his agent, the mere posting of the cheque did not constitute the post office the agent of the payee, and that the amount of the cheque was also received at the place where the cheque was received.
In Kirloskar Bros. Ltd. vs Commissioner of Income tax(3), it was held that the mere posting of the cheque in Delhi was not tantamount to the receipt of the cheque in Delhi, because the payee had not requested the Government to send the cheque by post.
In Ogale Glass Works case (4), the Bombay High Court asked for a supplementary statement of the case from the Tribunal as to whether there was any express request by the assessee that the cheque should be sent by post, and held that as there was no such express request, the receipt of the money was not where the cheque was posted but at the place where the money was received.
(1) (2) (3) (4) I. Tax Reference No. 10 of 1949 of the Bombay H. C. decided on September 17, 1951.
215 The last two decisions of the Bombay High Court were reversed by this Court, and it was held that an intimation to the payer " to remit " the amount by cheque was sufficient nomination of the post office as the agent of the payee: vide Commissioner of Income tax vs Ogale Glass Works Ltd. (1) and Commissioner of Income tax vs Kirloskar Bros. Ltd. (2).
Later, the principle was extended still further by this Court in Jagdish Mills case(3).
It was held that where the bills had an endorsement Government should pay the amount due by cheque and the cheques were received in full satisfaction unconditionally, this constituted a sufficient implied request for the purpose of the application of the rule in Ogale Glass Works case of this Court.
Jagdish Mills case (3) and the New Jehangir Vakil Mills case (4) were decided by this Court on the same day.
In the latter case, the Department had to deal with a non resident Company which, at all material times, was situate at Bhavnagar, one of the Indian States.
Cheques in payment for supplies to Government were sent from British India to Bhavnagar.
The Department contended in the case that though the cheques were received at Bhavnagar, they were, in fact, cashed in British India and until such encashment, income could not be said to have been received but that on encashment in British India, the receipt of income was also in British India.
The Tribunal held that the cheques having been received at Bhavnagar the income was also received there.
In doing so, the Tribunal followed the Bombay decision in Kirloskar Brothers case (5).
The Tribunal, however, observed that if the Bombay view which was then under appeal to this Court were not upheld, then an enquiry would have to be made as to whether the Mills ' bankers at Ahmedabad acted as the Mills ' agents for collecting the amount due on the cheques.
The question whether the posting of the cheques from British India to Bhavnagar at the request, express or (1) (3) ; (2) (4) ; (5) 216 implied, of the Mills or otherwise, made any difference was not considered at any stage before the case reached the High Court of Bombay.
This was expressly found to be so by this Court in these words: " The only ground urged by the Revenue at all material stages was that because the amounts which were received, from the merchants or the Government were received by cheques drawn on banks in British India which were ultimately encashed in British India, the monies could not be said to have been received in Bhavnagar though the cheques were in fact received at Bhavnagar.
" The reference was held back by the Tribunal till the decision of this Court in Ogale Glass Works case (1) and Kirloskar Brothers ' case (2).
Even after seeing that in those two cases the request for payment by cheques to be sent by post made all the difference, the Tribunal did not frame its statement of the case or the question to include this aspect, because that aspect of the matter was never considered before. ' The question referred was thus limited to the legal effect of the receipt of the cheques at Bhavnagar without advertence to the fact whether the cheques were so sent by post at the request, express or implied, of the Mills.
The question framed was: " Whether the receipt of the cheques in Bhavnagar amounted to receipt of the sale proceeds in Bhavnagar ? " The question as framed and the statement which accompanied it brought into controversy the only point till then considered by the Tribunal and the taxing authorities.
When the case *as heard by it, the High Court desired to consider it from the angle of the Kirloskar Brothers(2) and Ogale Glass Works (1) cases.
It called for a supplemental statement of the case.
In doing so, the High Court went beyond the ambit of the controversy as it had existed till then and also the statement of the case and the question.
The High Court directed the Tribunal as follows: "On the finding of the Tribunal that all the cheques were received in Bhavnagar, the Tribunal to find (1) (2) 217 what portion of these cheques were received by post, whether there was any request by the assessee, express or implied, that the amounts which are the subject matter of these cheques should be remitted to Bhavnagar by post." In repelling the objection that such an enquiry was alien to the point decided by the Tribunal and might require fresh evidence, the High Court justified itself by saying: " But we cannot shut out the necessary inquiry which even from our own point of view is necessary to be made in order that we should satisfactorily answer the question raised in the Reference.
It must not be forgotten that under section 66(4) of the Income tax Act we have a right independently of the conduct of the parties to direct the Tribunal to state further facts so that we may properly exercise our own advisory jurisdiction.
" This Court pointed out that the High Court exceeded its jurisdiction under section 66(4) of the Indian Income tax Act.
It was observed: " If the question actually referred does not bring out clearly the real issue between the parties, the High Court may reframe the question so that the matter actually agitated before the Tribunal may be raised before the High Court.
But section 66(4) does not enable the High Court to raise a new question of law which does not arise out of the Tribunal 's order and direct the Tribunal to investigate new or further facts necessary to determine this new question which had not been referred to it under section 66(1) or section 66(2) and direct the Tribunal to submit a supplementary statement of the case.
" It was also pointed out that the facts admitted and/ or found by the Tribunal could alone be the foundation of the question of law which might be said to arise out of the Tribunal 's order.
The case thus set two limits to the jurisdiction of the High Court under section 66(4), and they were that the advisory jurisdiction was confined (a) to the facts on the record and/or found by the Tribunal and (b) the question which 28 218 would arise from the Tribunal 's order.
It was pointed out by this Court that it was not open to the High Court to order a fresh enquiry into new facts with a view to amplifying the record and further that it was equally not open to the High Court to decide a question of law, which did not arise out of the Tribunal 's order.
This was illustrated by comparing the question as framed by the Tribunal with the question which the High Court desired to decide.
Whereas the Tribunal had only referred the question: " Whether the receipt of the cheques at Bhavnagar amounted to receipt of sale proceeds in Bhavnagar ?", what the High Court intended deciding was: " Whether the posting of the cheques in British India at the request express or implied of the appellant, amounted to receipt of sale proceeds in British India ?" These were two totally different questions, and it was held that the High Court could not decide a matter which was different from that decided by the Tribunal, nor call for a statement of the case bearing on this new matter.
The proposition laid down in the Jehangir Vakil Mills case (1), finds support from yet another case of this Court decided very recently.
In Kusumben D. Mahadevia vs Commissioner of Income tax Bombay (2), it was observed: " In our opinion, the objection of the assessee is well founded.
The Tribunal did not address itself to the question whether the Concessions Order applied to the assessee.
It decided the question of assessability on the short ground that the income had not arisen in Baroda but in British India.
That aspect of the matter has not been touched by the Bombay High Court.
The latter has, on the other hand, considered whether the Concessions Order applies to the assessee, a matter not touched by the Tribunal.
Thus, though the result is the same so far as the assessment is concerned, the grounds of decision are entirely different.
(1) ; (2) ; ,421.
219 Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal.
It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order.
It is possible that the same question of law may involve different approaches for its solution, and the High Court may amplify the question to take in all the approaches.
But the question must still be the one which was before the Tribunal and was decided by it.
It must not be an entirely different question which the Tribunal never considered.
" It follows from this that the enquiry in such cases must be to see whether the question decided by the Tribunal admits the consideration of the new point as an integral or even an incidental part thereof.
Even so, the supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal, and should not open the door to fresh evidence.
The fact that in Ogale Glass Works case (1), the Bombay High Court had asked for a supplemental statement in the same way as in the Jehangir Vakil Mills case (2 ), and this Court did not rule out the new matter, cannot help the assessee in the present case, because the jurisdiction of the High Court was not questioned, as it had been done in the Jehangir Vakil Mills case, or has been done here.
We have thus to see whether in this case the question which was decided and which has been referred to the High Court admits the return of the case for a supplemental statement on the lines indicated by the High Court in the order under appeal.
At the very start, one notices a difference in the question of law in this case and the Ogale Glass Works case (3), on the one hand, and the question of law in the Jehangir Vakil Mills case (2), on the other.
In the former two cases, the question is very wide, while in the latter it is extremely narrow.
This can be Been by placing the three questions side by side as below : (1) I. Tax Reference No. 19 of 1949 of the Bombay H. C. decided on September 17, 1951.
(2) ; (3) 220 Jehangir Vakil Mills case " Whether the receipt of the cheques in Bhav nagar amounted to receipt of the sale proceeds in Bhavnagar ?" Ogale Glass Works case " Whether on the facts of the case, income, profits and gains in respect of sales made to the Government of India was received in British India within the meaning of Section 4(1)(a) of the Act ?" This case "Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in taxable territories ?" It is thus quite plain that the question as framed in this case can include an enquiry into whether there was any request, express or implied, that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works case (2) or Jagdish Mills case (3).
The first limit to the jurisdiction of the High Court as laid down by this Court is thus not exceeded by the High Court in exercising its powers under section 66(4) of the Income tax Act.
The question is wide enough to include the alternative line of approach that if there was a request, express or implied, to send the amount due under the bills by cheque, the post office would be the agent of the assessee, and the income was received in the taxable territory when the cheques were posted.
(1) ; (2) (3) ; 221 The next question is whether the High Court has transgressed the second limitation implicit is section 66(4), that is to say, that the question must arise out of the facts admitted and/or found by the Tribunal.
The High Court has observed that, ". . it would be necessary for the Appellate Tribunal to find inter alia whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, bad the assessee firm given to the Department in that matter.
" If the Tribunal has to make a fresh enquiry leading to the admission of fresh evidence on the record, then this direction offends against the ruling of this Court in the Jehangir Vakil Mills case (1).
If, however, the direction be interpreted to mean that the Tribunal in giving the finding must confine itself to the facts admitted and/or found by it, the direction cannot be described as in excess of the jurisdiction of the High Court.
It would have been better if the High Court had given directions confined to the record of the case before the Tribunal; but, in the absence of anything expressly to the contrary, we cannot bold that the direction would lead inevitably to the admit ting of fresh evidence.
This, at least, now cannot be done, since the Jehangir Vakil Mills case (1), has prohibited the admission of fresh evidence.
In our opinion, the present case does not fall within the rule in the Jehangir Vakil Mills case (1), and is distinguishable.
In the result, the appeal fails, and is dismissed with costs.
Appeal dismissed.
| The business of the respondent club was to run race meetings on a commercial scale.
The club did not own any horse, and therefore did not employ jockeys.
it was a matter of some importance to the club that there were jockeys of requisite skill and experience in sufficient numbers who would be available to the owners and trainers because otherwise the running of the race meetings would not be commercially profitable and its interest would suffer and it might have had to abandon its business if it did not take steps to make jockeys of the necessary calibre available.
Therefore it established a school for the training of Indian boys as jockeys and claimed the sums spent on the running of the school as deductable amount under section 10 (2)(XV) of the Indian Income Tax Act.
The question was whether in the circumstances of the case the expenditure claimed was one which was wholly and exclusively laid out for the purpose of the respondent 's business.
Held, that any expenditure which was incurred for preventing the extinction of a business would be expenditure wholly and exclusively laid opt for the purpose of the business of the assessee and would be an allowable deduction.
In the instant case the amount in dispute was laid out wholly and exclusively for the purpose of the respondent 's business, because if the supply of jockeys of requisite efficiency and skill failed, the business of the respondent would no longer be possible.
Eastern Investments Ltd. vs Commissioner of Income tax, West Bengal, ; and Commissioner of Income tax vs Chandulal Keshavlal & Co., ; relied on, British Insulated and Helsby Cables vs Atherton, [1926] A. C. 205, Morgan vs Tate & Lyle Ltd., and Boarland vs Kramat Pulai Ltd., , discussed.
Strong & Co. vs Woodifield, ; and Smith vs Incorporated Council of Law Reporting, , referred to.
Ward & Co. Ltd. vs Commissioner of Taxes, [1923] A. C. 145, distinguished.
|
ivil Appeal No. 1552 of 1966.
735 Appeal by special leave from the judgment and order dated June 8, 1966 of the Mysore High Court in C.R.P. No. 1118 of 1964.
M. C. Chagla and R. Gopalakrishnan, for the appellant.
M. R. Ramamurthi, section section Javali and M. Veerappa, for the respondent.
The Judgment of the Court was delivered by Vaidailyngam J.
this appeal, by special leave, is against the judgment of the Mysore High Court, dated June 8, 1966 in Civil Revision Petition No. 1118 of 1964.
The respondent land lord filed an application, dated July 6, 1962 under section 21 (1) (j) of the Mysore Rent Control Act, 1961 (Mysore Act XXII of 1961) (hereinafter called the Act) before the Rent Controller for eviction of the tenants (the appellants herein) on the ground that the premises were reasonably and bonafide required by him for the immediate purpose of demolishing and erecting of a new building.
According to the respondent the premises were old and were (not suitable for continued occupation.
The respondent had also stated in his application that he had obtained the necessary licence for erecting a new building after demolition of the existing building and that he had made all preparations for demolition and erection of new buildings on the site.
The appellant tenant contested the claim of the landlord on several grounds.
He pleaded that the premises were not old and that it was quite suitable for occupation and it does not require any re construction or remodelling.
The allegations that the building was old and required to be reconstructed were not bona fide and had been made by the landlord only as a pretext for evicting the tenant.
The tenant further pleaded that the requirement of the landlord was neither reasonable nor bona fide.
In any event, the tenant claimed that he should be entitled to be paid the value of the improvements that had been effected by him.
The Rent Controller, by his order dated January 22, 1964 accepted the claim of the respondent and ordered eviction of the appellant granting the tenant one month 's time for delivering vacant possession.
Though the Consulting Engineer who gave evidence as P.W. 2 on behalf of the respondent had stated that the building was over 60 years old but nevertheless it could go co for about 15 years more, the Rent Controller actually found that the building was more than 50 years old and that it was an old fashioned one.
He further found that when the landlord desired to pull it down and put up a modern building thereon, it could not under the circumstances, be said that his claim was not bona fide or reasonable 736 and that the intention of the landlord in pulling down the building and erecting a new one to get a better return was certainly understandable.
The Rent Controller further found that the landlord had proved that he had sufficient means to construct the building and that he had also obtained the necessary sanction from the Municipality concerned for reconstruction of the building.
In view of all these circumstances, the Rent Controller found that the requirement of the landlord was quite reasonable and bona fide.
Regarding the claim of the tenant for payment of improvements before eviction is ordered, the Rent Controller found that such a claim, even if established, could not stand in the way of the landlord getting possession of the premises.
Ultimately the application filed by the landlord was allowed.
The findings recorded by the Rent Controller were confirmed by the learned District Judge, by his judgment dated October 19, 1964 in A.S. No. 43 of 1964 taken before him by the tenant.
The revision filed by the appellant before the High Court was rejected by order dated June 8, 1966.
Mr. Chagla, learned counsel appearing for the appellant, contended that the interpretation placed by all the Courts on section 21 (j) of the Act was erroneous.
According to the learned counsel, unless the landlord was able to establish that the condition of the building was such that it required immediate demolition and re construction, no eviction of the tenant could be ordered under section 21 (1) (j) of the Act.
On the findings of the Courts, based upon the evidence of the Engineer, that though the building was old it could continue to exist for another 15 years, it should have been held that the conditions mentioned in section 21 (I) (j) were not attracted to justify an order of eviction of the tenant.
Mr. Ramamurthi, learned counsel for the respondent, pointed out that in order to attract section 21 (I) (j) it was not necessary that the landlord should establish that the condition of the building was such that it required to be demolished immediately.
On the other hand, the sub section made it clear that the requirement contemplated was that of the landlord and once his requirement had been held by all the Courts to be reasonable and bona fide, the order passed for eviction of the tenant was fully justified.
Having due regard to the scheme of the Act, we are satisfied that the interpretation placed upon section 21(1)(j) by the High Court is correct.
Section 21 (1), while placing a general embargo against a landlord from evicting a tenant, recognises, in its.
proviso the circumstances under which a landlord could seek recovery of 737 possession of a premises.
The ground upon which the landlord asked for eviction, in the present case, was based on section 21 (1) (j).
The material provision is as follows : "21.
(1) Notwithstanding anything to the contrary contained in any other law or contract no order or decree for the recovery of possession of any premises shall be made by any court or other authority in favour of the landlord against the tenant: Provided that the court may on an application made to it, make an order for the recovery of possession of a premises on one or more of the following grounds only, namely: . . . . . (j) that the premises are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of erecting a new building in place of the premises sought to be demolished; . . . . . .
According to Mr. Chagla, the words 'reasonably and bona fide required ', occurring in this clause, must be interpreted to have reference to the condition of the building, the demolition of which is sought to be made and those words have no reference to any intention entertained by the landlord.
The mere fact that a landlord may bona fide and reasonably entertain an idea of demolishing the building and reconstructing the same with a view to putting the property to a more profitable use after construction, will not satisfy the requirements of the said clause.
That is, according to the learned counsel, the condition of the building must be such that it is immediately necessary to demolish it, in which case alone eviction under cl.
(j) could be ordered.
We are not inclined to accept this construction sought to be placed by the appellant on the clause in question.
The proviso to section 21 (1) enumerates the various circumstances under which a landlord may seek to recover possession of the property from his tenant.
The requirement contemplated under clause (j) of the proviso to sub section
( 1 ) is that of the landlord and it does not have any reference to the condition of the building as such.
What is necessary under that clause is that the landlord must satisfy the Court that he reasonably and bona fide requires the premises for the immediate purpose of demolishing it and the demolition is for the purpose of erecting a new building in the place of the old one.
No doubt, as to whether the landlord 's requirement is reason 738 able and bona fide has to be judged by the surrounding circumstances, which will include his means for reconstruction of the.
building, and other steps taken by him in that regard.
In considering the reasonable and bona fide requirement of the landlord under this clause, the desire of the landlord to put the property to a more profitable use after demolition and reconstruction is also a factor that may be taken into account in favour of the landlord.
In our opinion, it is not necessary that the landlord should go further and establish under this clause that the condition of the building is such that it requires immediate demolition.
That the condition of the property may be such which requires immediate demolition is emphasized in cl.
(k) of the proviso.
When such a specific provision has been made in cl.
(k), the condition of the building cannot come into the picture nor could it have been dealt with again in cl.
So the requirement under cl.
(j) is that of the landlord and cannot have any reference to the building.
This Court, in Neta Ram vs Jiwan Lal (1) in interpreting no doubt a slightly differently worded provision in section 13(3)(a)(iii) of the Patiala and East Punjab States Union Urban Rent Restriction Ordinance, 2006 B.K. (8 of 2006 BK) held that one of the circumstances which could be taken into account in considering the requirements of the landlord with reference to the existing building is 'the possibility of its being put to a more profitable use after construction '.
In the case 'before us all the Courts have concurrently held that the requirement of the landlord is reasonable and bona fide and that he had obtained the necessary sanction from the municipality concerned and that the landlord had also the means for reconstruction of the building.
If the landlord does not commence demolition of the premises within the period specified in the order of the Court, the tenant is given a right under section 26(1) to issue a notice to the landlord of his intention to occupy the pre mises from which he had been evicted and also to apply to the Court for relief if the landlord does not comply with his request.
Again under section 27, the tenant has got a right to occupy the new building on its completion provided he satisfies the requirements contained in that section.
Under section 2 8 (I), the landlord is bound to intimate the tenant from whom he had received a notice under section 27 the date on which the erection of the new building will be completed from which date the tenant will be entitled to occupy the same.
Mr. Chagla has referred us to a decision of the Madras High Court in Mehsin Bhai vs Hate & Company (2).
The section which came up for consideration before the Madras High Court was section 14(3) of the Madras Buildings (Lease and Rent Control) Act, 1960 (Act XVIII of 1960) which was as follows: (1) [1962] Supp. 2 S.C.R. 623.
(2) 739 14(1)(b) that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished, pass an order directing the tenant to deliver possession of the building to the landlord before a specified date.
" That clause is substantially similar to section 21(1)(j) of the Act.
In the Madras case it is seen that the building from which the tenant was sought to be evicted was in good condition and there was no danger of its failing for another 20 years though the building was old.
Under those circumstances when the landlord applied under section 14(1) (h) of the Madras Act for eviction on the ground that he wished to demolish the building for the purpose of erecting a new building thereon, the High Court affirmed the decision of the Subordinate Court declining relief to the landlord, Though the learned Judge states that landlords May bona fide require such buildings, particularly old buildings in their own interest for demolition and reconstruction, he holds that it is equally possible that the mere fact that a building is old may be taken advantage of by a landlord to put forth such pretext, his real object being ulterior and not bona fide ,for the purpose of reconstruction.
We have no hesitation in agreeing with the learned Judge 's observation that the landlord must prove the reasonableness and bona fide nature of his requirement.
But, if the learned Judge intended to Iay down a proposition of law that under section 14 ( I ) (b) of the Madras Act, similar to section 21 ( 1) (j) of the Act a landlord cannot recover possession of the property for the purpose of re construction so as to put the property to a more profitable use, we are of the view that the decision of the Madras High Court must be considered to be erroneous.
There is absolutely no justification for putting such a narrow interpretation on the clause in question.
Mr. Chagla further urged that before his client is evicted his, claim for compensation should have been considered by the Rent Controller.
It is enough to say that, as pointed out by the High Court, that claim does not arise for consideration in these proceedings.
We may also state that a further contention regarding them validity of the notice to quit issued by the landlord which was taken before the High Court and held against the appellant, has not been canvassed before us.
In the result, the appeal fails and is dismissed with costs.
The petitioner/appellant undertaken to vacate the premises within a month from today.
Y.P. Appeal dismissed.
| The tenant of the appellant a Jagirdar, died without leaving any male issues.
His distant relations the respondents, took possession of his properties.
Thereupon the appellant brought a suit claiming possession.
of the properties as he was the owner.
The trial court dismissed the suit holding that the civil court has no jurisdiction to entertain the suit, and that in view of the Jagir Abolition Act, 1951 which was enacted during the pendency of the sit and with the vesting of the suit properties in the State, the appellant was not entitled to claim.
The first appellate court reversed these findings and held that though the suit properties had vested in the State, it was for the State to get itself impleaded, and as the State had not got itself impleaded, it was open to the appellant to press the suit.
In view of these conclusions, the appellate court demanded the suit to decide the other undecided issues.
After the remand, the trial court negatived the respondents defendants contention and decreed the suit.
In appeal that decree was affirmed.
In second appeal, the High Court agreed with the courts below on all issues except that relating to the effect of abolition of Jagirs.
It held that under the Jagir Abolition Act, the appellant lost his title to the suit properties.
In its view that issue was not concluded by the decision of the appellate court made before remand as the same had not been appealed against, since the court had inherent power to consider the correctness of that order.
In appeal, this Court: HELD : The case must be remanded for determination of the right of all the parties after impleading the State as a party.
The correctness of the remand order was not open to review by the High Court.
The order in question was made under rule 23, Order 41, Civil Procedure Code.
That order was appealable under Order 43 of that Code.
As the same was not appealed against, its correctness was no more open to examination in view of section 105 (2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness.
The High Court has misconceived the scope of its inherent powers.
Under the inherent power of courts recognised by section 151, Civil Procedure Code, a court has no power to do that which is prohibited by the Code.
Inherent jurisdiction of court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be involved.
In other words the court cannot make use of the special provisions of section 151 of the Code where a party bad his remedy provided elsewhere in the Code and be neglected 208 to avail himself of the same.
Further the power under section 151 of the Code cannot be exercised as an appellate power.
The appellant Jagirdar had not lost all rights in the suit properties.
The suit properties vested in the State in view of the Jagir Abolition Act.
But it was conceded at the bar that if the appellant was proved to have been the owner of the suit properties on the day the Jagir Abolition Act came into force, he was entitled to the compensation provided in that Act.
Therefore the appellant was interested in establishing that on the date Jagir Abolition Act came into force, he was the full owner of the suit properties.
[210 C] Himatrao vs Jaikishandas and Ors. ; followed.
|
Appeal No. 15 of 1968.
Appeal from the judgment and decree dated August 11, 1964 of the Allababad High Court in first Appeal No. 11 of 1957.
C. B. Agrawala, O. P. Rana and R. Bana, for the appellants.
Grover, J. This is an appeal by certificate from the judgment of the Allahabad High Court dacreeing the suit filed by the respondent company for recovery of a sum of Rs. 21,000/ on account of rent or damages in respect of storage charges for 4,000 Maunds of potatoes for which space had been reserved in the cold storage by the company The plaintiff respondent brought a suit against the State of Uttar Pradesh and impleaded three other defendants who were, at the material time.
in the service of the State.
Defendant No. 3 was a Horticulturist in the Department of Agriculture.
He negotiated with the plaintiff for storing Government potatoes in a cold storage which belonged to the plaintiff.
It was agreed that the Government potatoes would be sent for storage and the plaintiff would be entitled to charge at a certain rate per maund.
It was understood that 4,000 maunds of potatoes would be sent for storage.
How ever, no potatoes were sent although the plaintiff had reserved the requisite space in the storage which remained unoccupied during the season.
It appears that defendant No. 3 A. P. Gupta was acting on behalf of Srivastava defendant No. 2 who was Deputy Director, Horticulture.
Both these defendants were acting upon instructions from Sri Ram Krishna defendant No. 4 who was Assistant Development Commissioner, Planning Lucknow.
The suit was therefore filed against the State and the other three defendants to recover the storage charges amounting to Rs. 21,000/ .
3 Although, all the defendants raised a common plea that there was no contract between the parties for the storage of potatoes and that the entire matter remained at the stage of negotiations the real plea taken on behalf ' of the State was that no contract had been entered into in accordance with article 299 (1) of the Constitution.
The trial court upheld the objection of the State and dismissed the suit against it but it held the other defendants jointly liable for the storage charges.
The High Court on appeal by the defendants set aside the decree against defendants Nos. 2 and 4 but maintained it against defendant No. 3.
No appeal, however, was filed by the plaintiff against the State.
As the judgment of the High Court proceeded mainly on the provisions of sub section (3) of section 230 of the Contract Act the whole of that section may be set out : section 230. "In the absence of any contract to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, now is he personally bound by them.
Such a contract shall be presumed to exist in the following cases: (1) Where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad; (2) Where the agent does not disclose the name, of his principal; (3) where the principal,though disclosed,cannot be, sued.
According to the High Court the entire transaction had been entered into by the defendant on behalf of the, Government.
As the State Government was not liable by virtue of article 299 of the Constitution section 230 (3) would be applicable and defendant No. 3, who was apparently acting as an agent of the State Government, would become personally liable under the contract.
Certain observations in Chatturbhuj Vithaldas Jasani vs Moreshwar Parshrain & Others (1) appear to lend support to this view.
In that case also no formal contract had been.
(1) ; 4 entered into as required by article 299 (1) of the Cons titution.
The court observed that the Chairman of the Board of Administration had acted on behalf of the Union Government and his authority to contract in that capacity had not been questioned.
Both sides ,acted in the belief and on the assumption that the goods were intended for Government purposes.
The only flaw was that the contracts were not in proper form and because of this technical difficulty the principal could not have been sued.
But that was just the kind of case that section 230 (3) of the Indian Contract Act was designed to meet.
The Government might not be bound by the contract but it was very difficult to say that such contracts were void and of no effect.
There would be nothing to prevent ratification especially if that was for the benefit of the Government However, in a subsequent decision in State of West Bengal vs M/s B. K. Mondal and sons, (1) Gajendragadkar J., delivering the majority judgment of Bench said at page 885 with reference as he then was, the Constitution to the above observation: "The contract which is void may not be capable of ratification, but, since according to the Court the contract in question could have been ratified it was not void in that technical sense.
That is all that was intended by the observation in question.
We are not prepared to read the said observation or the final decision in the case of Chatturbhuj as supporting the proposition that notwithstand ing the failure of the parties to comply with article 299 (1) the contract would not be invalid.
Indeed, Bose, J., has expressly stated that such a contract cannot be enforced against the Government and is not binding on it.
" The effect of the reference to section 230 (3) of the Contract Act in Chatturbhui"s case(2)was not directly considered 'but in a large number of Subsequent decisions this Court has taken the view that the provisions of article 299 (1) (corresponding to section 175 (3) of the Government of India ' Act (1935) are mandatory and contain a prohibition against a contract being entered into (1) [1962] Supp. 1 S.C.R. 876.
(2) ; , 5 except in the manner prescribed by the aforesaid provisions.
We need only refer to the recent judgment in Mulamchand vs State of Madhya Pradesh (1).
After referring to the earlier decisions Ramaswami, J. observed at page 221 : "The principle is that the provisions of section 175 (3) of the Government of India Act, 1935 or the corresponding provisions of article 299 (1) of the Constitution of India are mandatory in character and the contravention of these provisions nullifies the contracts and makes them void.
There is no question of estoppel or ratification in such a case.
" It is clear that the observations in Chatturbhuj 's case(2) have been regarded either as not laying down the law correctly or as being confined to facts of that case.
The consensus of opinion is that a contract entered into without complying with the conditions laid down in article 299 (1) is void.
If there is no contract in the eye of the law it is difficult to see how section 230 (3) of the Contract Act would become applicable.
Although the High Court did not rely on section 235 of the Contract Act the trial court bad held that the defendants had no authority to enter into a contract on behalf of the State Government but still they purported to do so.
There was an implied warranty of authority which had to be presumed and the plaintiff was entitled to receive compensation for breach of that warranty under section 235 of the Contract Act.
Section 235 provides that a person untruly representing himself to be the authorised agent of another, and thereby inducing a third person to deal with him as such agent, is liable, if his alleged employer does not ratify his acts, to make compensation, to the other in respect of any loss or damage which he has incurred by so dealing.
The High Court did not base its decision on the above section.
But it seems that section 235 also can become applicable only if there is a valid contract in existence.
This appears to follow from the words "if his alleged employer does not ratify his acts." ' The contract should thus be such that it is (1) ; (2) ; 6 capable of ratification.
;In the present case where the con tract was entered into 'Without complying with the re quirements of article 299 (1) of the Constitution the question of ratification could not arise because on the view which has already been followed such a contract is void and is not capable of ratification.
However, we do not wish to express any final opinion on the applicability of section 235 of the Contract Act to cases where the contract suffers from the infirmity that the requirements of article 299 (1) of the Constitution have not been complied with.
The reason is that before the High Court no contention appears to have been advanced on behalf of the plaintiff based on section 235 of the Contract Act nor has the plaintiff 's counsel chosen to satisfy us that even if section 230 (3) was not applicable the decree should be sustained on the ground that relief could be granted by virtue of section 235 of the Contract Act.
The appeal thus succeeds and the judgment and decree of the courts below are hereby set aside and the suit of the plaintiff is dismissed.
In the circumstances of the case the parties are left to bear their own costs throughout.
| Certain sugar was pledged with the plaintiff bank (appellant herein) by Defendant No. 2 under a cash credit agreement.
Part of the said sugar was seized under the Public Demands Recovery Act in connection with a demand of sugar cess by the Cane Commissioner.
The sugar was sold and the sale proceeds were attached towards the payment of cess.
No payment was made to the plaintiff bank, which thereupon filed the present suit to enforce its claim.
The trial court granted a decree against the State of Bihar for the price of the sugar.
The High Court however held that no decree could be granted against the State as the seizure was lawful.
HELD:The pawnee had special property and a lien which was not of ordinary nature on the goods and so long as his claim was not satisfied no other creditor of the pawnor had any right to take away the goods or its price.
After the, goods had been seized by the Government it was bound to pay the amount due to the plaintiff and the balance could have been made available to satisfy the claim of other creditor of the pawnor.
But by a mere act of lawful seizure the Government could not deprive the plaintiff of the amount which was secured by the pledge of the goods to it.
As the act of the Government resulted in deprivation of the amount to which the plaintiff was entitled it was bound to reimburse the plaintiff for such amount which the plaintiff in ordinary course would have realized by sale of the goods pledged with it on the pawnor making a default in the payment of debt.
[303E G] The trial court was right in holding that the plaintiff 's right as a pawnee could not be extinguished by the seizure of the goods in its possession inasmuch as the pledge of the goods was not meant to replace the liability under the cash credit agreement.
It was intended to give the plaintiff a primary right to sell the goods in satisfaction of the liability of the pawnor.
The Cane Commissioner who was an unsecured creditor could not have any higher rights than the pawnor and was entitled only to the surplus money after satisfaction of the plaintiffs dues.
[303G 304B]
|
ppeal No. 652 of 1964, Appeal from the judgment and order dated May 7, 1963 of the Rajasthan High Court in D.B. Civil Misc.
Writ Petition No. 157 of 1962.
G.C. Kasliwal, Advocate General for Rajasthan.
K.K. Jain, for the appellants.
M.D. Bhargava and B.D. Sharma, for the respondent.
The Judgment of the Court was delivered by Siki, J.
This appeal by certificate of fitness granted by the Rajasthan High Court is directed against its judgment dated May 7, 1963, quashing the order of assessment dated March 5, 1962, made by the Sales Tax Officer, Jodhpur City, in so far as it levied sales tax on the turnover of Rs. 23,92,252.75 np.
The respondent, M/s Shiv Ratan G. Mohatta, which is a partnership firm having its head office at Jodhpur, hereinafter referred to as the assessee, claimed before the Sales Tax Officer that they were not liable to be assessed to sales tax in respect of the above turnover because, firstly, the assessee was not a dealer within section 2(f) of the Rajasthan Sales Tax Act (Rajasthan Act XXlX of 1954) with respect to this turnover, and secondly, because the sales were in the course if import within article 286 (1)(b) of the Constitution.
Although the Sales Tax Officer set out the facts of the case relating to the second ground, he deemed it sufficient to assess this turnover on the ground that the assessee was a dealer within section 2(f) of the Rajasthan Sales Tax Act, without adverting to the second ground.
The facts on which the assessee had relied upon to substantiate his second ground were these.
The Zeal Pak Cement Factory, Hyderabad (Pakistan), hereinafter called the Pakistan Factory, manufactured cement in Pakistan.
The Pakistan Industrial Development Corporation, hereinafter called the Pakistan Corporation, entered into an agreement with M/s Milkhiram and Sons (P) Ltd., Bombay, for the export of cement manufactured in Pakistan to India.
The State Trading Corporation of India entered into an agreement with the said M/s Milkhiram & Sons for the purchase of, inter alia, 35,000 long tons of cement to be delivered to it F.O.R. Khokhropar in Pakistan, on the border of Rajasthan.
The State Trading Corporation appointed the assessee as its agent, broadly speaking, to look after the import and the sale of the imported cement.
The modus operandi adopted by the assessee for the sale of the cement was as follows.
It would obtain from a buyer in Rajasthan an order under an agreement, a sample of which is on the record 73 The agreement fixed the price and the terms of supply.
By one clause the assessee disclaimed any responsibility regarding delay in dispatch and non receipt of consignment or any loss, damage or shortage in transit due to any reason whatsoever.
The agreement further provided that "all claims for loss, damage or shortage, etc., during transit will lie with the carriers and our payments are not to be delayed on any such account whatsoever.
" It was further provided in the agreement that the dues were payable in advance in full, or 90% in advance and the balance within 15 days of billing plus sales tax and other local taxes.
Clause 6 of the agreement is in the following terms: "A Post Card Loading Advice will be sent to you by the Factory as soon as the wagons are loaded in respect of your orders, and it will be your responsibility to arrange for unloading the consignment timely according to Railway Rules.
Ourselves.
and the suppliers will not be responsible for demurrage etc.
on any account whatsoever.
If the consignment reaches earlier than the Railway Receipt, it is the responsibility of buyer to arrange for and get the delivery timely against indemnity bond etc.
All the Railway Receipts etc. will be sent by registered post by the Suppliers in Pakistan.".
After this agreement had been entered into, the assessee would send despatch instructions to the Pakistan Corporation.
These instructions indicated the name of the buyer consignee and the destination, and provided that the railway receipt and D/A should be sent by registered post to the consignee.
These instructions were sent with a covering letter to the Pakistan Corporation requesting that these instructions be passed on to the Pakistan Factory for necessary action.
The Pakistan Corporation would then forward these despatch instructions to the Zeal Pak Cement Factory.
Later, the Pakistan Factory would advise the consignee that they had "consigned to the State Bank of India, Karachi, the particular quantity as per enclosed railway receipt and invoice.
" The State Bank of India, Karachi, would endorse the railway receipt in favour of the consignee and send it to him by post.
The consignee would take delivery either by presentation of the railway receipt or by giving indemnity bond to the Station Master undertaking to deliver the railway receipt on its receipt.
The Sales Tax Officer did set out most of these facts and the contentions of the assessee in the assessment order but disposed of the case with the following observations: "All the above went to prove that the assessee was an Agent of the non resident dealer for the supplies in the State.
The Assessee was an importer and hence submitted an application to the Custom Authority for the same.
It booked orders and issued sale bills.
Under the terms of an agreement of appointment of Agent, sale was to be effec 74 ted by the Agent.
Again while obtaining orders from the buyers under condition 5 Sales Tax was to be paid by the buyers to the assessee.
Thus to all intents and purposes the assessee is a dealer who is liable for payment of Sales Tax to the State.
They have rightly collected this amount from the buying dealers and retained with them.
This should come to the Government.".
We can find no discussion in the order on the question raised by the assessee that the sales were made in the course of import within article 286(1)(b) of the Constitution.
The assessee then filed a petition under article 226 of the Constitution and raised two contentions before the High Court, namely, (1) that the Sales Tax Officer failed to consider the impact and the effect of article 286(1)(b) on the facts of the case, and (2) that the Sales Tax Officer illegally held that the petitioner for all intents and purposes was a dealer liable to pay sales tax.
The State raised an objection to the maintainability of the petition on the ground that the petitioner should have availed of the alternative remedy of appeal provided under the Rajasthan Sales Tax Act, but the High Court overruled this objection on the ground that "the contention of the petitioner is that in view of article 286(1)(b) of the Constitution, the respondent had no jurisdiction to assess the petitioner to pay the sales tax on the sale of goods in the course of the import into the territory of India", and that even if there was no total lack of jurisdiction in assessing the petitioner to pay sales tax.
the principle enunciated in A.V. Venkateswarn v Ram chand Sobharaj Wadhwani (1) applied, and it was a case which should not be dismissed in litnine.
Then the High Court proceeded to deal with the merits of the case.
It first dealt with the question whether the petitioner was a dealer within the meaning of section 2(f) of the Rajasthan Sales Tax Act, and came to the conclusion that the petitioner must be deemed to be a dealer within the said section 2(f).
Then it proceeded to deal with the question whether the sales had taken place in the course of import.
The High Court held that in the circumstances of the case these sales had not occasioned the movement of goods but it was the first sale made by M/s Milkhiram and Sons to the State Trading Corporation which had occasioned the movement of goods.
Secondly, it held that in the circumstances of the case "the property in goods after the delivery had been taken by the petitioner on behalf of the State Trading Corporation passed to the State Trading Corporation and simultaneously to the ultimate buyers.
Thus the property in the (1) ; 75 goods passed to the ultimate buyers in Rajasthan when the goods had not reached the territory of India and were in course of import.
In view of the authority of their Lordships of the Supreme Court in J. V. Gokal and Co. (Private) Ltd. vs The Assistant Collector of Sales Tax (Inspection) & Others, ( '), it must be taken that the sale took place when the goods were in the course of the import and they should not be liable to the payment of the Sales Tax by virtue of article 286(1)(b).".
In the result, the High Court quashed the order of assessment in so far as it sought to levy tax on the turnover in dispute.
The Sales Tax Officer, Jodhpur, and the State of Rajasthan having obtained certificate of fitness from the High Court filed this appeal.
The learned Advocate General has raised two points before us: First, on the facts of this case the High Court should have refused to entertain the petition, and secondly, that it has not been established that the cement was sold in the course of import within article 286(1)(b).
Regarding the first point, he urges that an appeal lay against the order of the Sales Tax Officer; no question of the validity of the Sales Tax Act was involved and the taxability of the turnover depended on where the property passed in each consignment.
This involved consideration of various facts and, according to him.the crucial facts had not been brought on the record by the assessee on whom lay the onus to establish that the sales were in the course of import.
He says that the assessee should have proved that each railway receipt was endorsed by the State Bank of India, Karachi, to the buyer before each consignment crossed the frontier.
We are of the opinion that the High Court should have declined to entertain the petition.
No exceptional circumstances exist in this case to warrant the exercise of the extraordinary jurisdiction under article 226.
It was not the object of article 226 to convert High Courts into original or appellate assessing authorities whenever an assessee chose to attack an assessment order on the ground that a sale was made in the course of import and therefore exempt from tax.
It was urged on behalf of the assessee that they would have had to deposit sales tax, while filing an appeal.
Even if this is so.
does this mean that in every case in which the assessee has to deposit sales tax, he can bypass the remedies provided by the Sales Tax Act? Surely not.
There must be something more in a case to warrant the entertainment of a petition under article 226, something going to the root of the jurisdiction of the Sales Tax Officer, something to show that it would be a case of palpable injustice to the assessee to force him to adopt the remedies provided by the Act.
But as the High Court chose to entertain the petition, we are not inclined to dismiss the petition on this ground at this stage.
(1)[1960] 2 S.C.R. 852.
76 Regarding the second point, the learned Advocate General .argues that the onus was on the assessee to bring his case within article 286(1)(b) of the Constitution in respect of the sales to the various consignees.
He says that there is no evidence on record as to when the State Bank of India endorsed the railway receipt in favour of the ultimate buyer in respect of each consignment and without this evidence it cannot be said that the title to the goods passed to the ultimate buyer at Khokhropar or in the course of import.
He further urges that it would have to be investigated in each case as to when the State Bank endorsed the railway receipt and when the goods crossed the customs barrier.
He says that it is not contested that the ultimate buyer took delivery of goods without producing the railway receipt by virtue of special arrangements entered into with the railway, and according to him.
it is only when the delivery was taken by the buyer in Rajasthan that the title passed.
By that time, according to him, the course of import had ceased.
We do not think it necessary to consider the various arguments addressed by the learned Advocate General or the soundness of the view of the High Court on this point, because we are of the opinion that the High Court should not have gone into this question on the facts of this case.
The Sales Tax Officer had not dealt with the question at all, and it is not the function of the High Court under article 226, in taxing matters, to constitute itself into an original authority or an appellate authority to determine questions relating to the taxability of a particular turnover.
The proper order in the circumstances of this case would have been to quash the order of assessment and send the case back to the Sales Tax Officer to dispose of it according to law.
Under the Rajasthan Sales Tax Act, and other Sales Tax Acts, the facts have to be found by the assessing authorities.
If any facts are not found by the Sales Tax Officer, they would be found by the appellate authority.
and it is not the function of a High Court to find facts.
The High Court should not encourage the tendency on the part of the assesses to rush to the High Court after an assessment order is made.
It is only in very exceptional circumstances that the High Court should entertain petitions under article 226 of the Constitution in respect of taxing matters after an assessment order has been made.
It is true, as said by this Court in A. V. Venkateswarn vs Ramchand Sobharaj Wadhwani(1) that it would not be .desirable to lay down inflexible rules which should be applied with rigidity in every case, but even so when the question of taxability depends upon a precise determination of facts and some of the facts are in dispute or missing, the High Court should decline to decide such questions.
It is true that at times the assessee alleges some additional facts not found in the assessment order and the State, after a fresh investigation, admits these facts, but in a petition under article (1)[1962] 1 S.C.R. 753. 77 226 where the prayer is for quashing an assessment order, the High Court is necessarily confined to the facts as stated in the order or appearing on the record of the case.
In this case, as already indicated, we have come to the conclusion that the High Court should not have decided disputed questions of fact, but should merely have quashed the assessment order on the ground that the Sales Tax Officer had not dealt with the question raised before him and remanded the case.
Accordingly.
we allow the appeal, set aside the order of the High Court, quash the assessment order in so far as it relates to the. turnover of Rs. 23,92.252.75 up, and remit the case to the Sales Tax Officer to decide the case in accordance with law.
He will find all the facts necessary for the determination of the question and come to an independent conclusion untrammeled by the views expressed by the High Court.
We may make it clear that we are not expressing any view whether the finding of the High Court that the property in the goods passed simultaneously at Khokhropar to the State Trading Corporation and the ultimate buyer is correct or not.
There would be no order as to costs in this appeal.
Appeal allowed.
| The Sales Tax Officer rejected the assessed 's claim that he was not liable to be assessed to sales tax in respect of certain .sales of cement imported from Pakistan because (i) he was not a. dealer within the meaning of s.2(f) of the Rajas than Act 29 of 1954, and (ii) the sales in question were in the course of the import within the meaning of article 286(1)(b) of the Constitution.
In the order of assessment, there was no discussion of the question of applicability of article 286(1) (b).
The assessee therefore filed a petition under article 226 challenging the assessment order on the grounds taken before the Sales Tax Officer and also claiming that the latter had failed to consider the impact and effect of article 286(1)(b)on the facts of the case.
The State objected to the maintainability of the petition on the ground that the petitioner should have availed of the alternative remedy of appeal provided under the Rajasthan Sales Tax Act, but the High Court overruled this objection for the reason, inter alia, that the petitioner had challenged the appellant 's jurisdiction to assess him to.
sales tax in view of the.
provisions of article 286(1) (b).
Upon dealing with the merits of the case, the High Court held that on the facts of the case it was clear that the sales in question took place when the goods were in the course of import and therefore, by virtue of article 286(1)(b) were not liable to sales tax.
The court therefore quashed the order of assessment.
On appeal to this Court, it was contended on behalf of the State that the High Court should have refused to entertain the petition as many of the crucial facts had not been brought on the record by the respondent, and further more, it was not established that the cement was sold in the course of import into India.
HELD: The High Court should not have decided the disputed questions of fact, but should merely have quashed the assessment order on the. ground that the Sales Tax Officer had not dealt with the question raised before him and remanded the case.
[77 B] OBITER: The High Court should have declined to entertain the petition, as in this case there were no exceptional circumstances to warrant the exercise of the extraordinary jurisdiction under article 226.
It was not the object of article 226 to convert High Courts into original or appellate assessing authorities whenever the assessee chose to attack an assessment order on the ground that a sale was made in the course of import and was therefore exempt from tax.
The fact that an assessee might have to deposit sales tax when filing an appeal could not in every case justify his bypassing the remedies provided by the Sales Tax Act.
There must be something more in a case to warrant the entertainment of a petition under article 226, something going to the root of the jurisdiction of the Sales 72 Tax Officer, something to show that it would be a case of palpable injustice to the assessee to force him to adopt the remedies provided by the Act.
[75 G, H] A.V. Venkatesweran vs Ramchand Sobhraj Wadwani, A.I.R. , referred to.
|
Appeals Nos. 1837 and 1838 of 1968.
369 Appeals from the judgment and order dated February 10, 1965 and July 17, 1967 of the Calcutta High Court in Income tax Reference Nos. 274 of 1961 and 114 of 1963 respectively.
D. Pal, R. K. Choudhry, N. R. Khaitan, Krishna Sen and B. P. Maheshwari, for the appellant (in both the appeals).
B. Sen, R. N. Sachthey and B. D. Sharma, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Grover, J.
These appeals by certificate from a judgment of the Calcutta High Court arise out of Income Tax References in which the main point involved was whether the assessee company could be regarded as one in which the public are substantially interested within the meaning of the Explanation in section 23A of the Indian Income Tax Act,1922, hereinafter called the "Act".
The appeals relate to the assessment years 1952 53 and 1954 55.
The assessee is a public company incorporated under the Indian Companies Act, 1913.
Article 37 of its Articles of ' Association provided as follows "The Directors may at any time in their absolute and uncontrolled discretion and without assigning any reason decline to register any proposed transfer of shares.
" The Income Tax Officer held that the assessee was a company in which the public were not substantially interested within the meaning of the Explanation in section 23A of the Act.
Accordingly he applied the provisions of that section.
The assessee appealed to, the Appellate Assistant Commissioner.
The appeal relating to the assessment year 1952 53 was dismissed but with regard to the subsequent year it was alqowed.
The Appellate Tribunal upheld the contention that Article 37 of its Articles of Association did not operate as a bar to the free transferability of the shares and therefore it was a company in which the public were substantially interested within the meaning of the Explanation in section 23A of the Act.
Thereupon the Tribunal was moved by the Commissioner of Income tax for stating the case and referring the following question of law which was referred by it to the High Court in the case relating to the assessment year 1952 53 : "Whether on a true interpretation of Article 37 of the Articles of Association, the assessee Company can be regarded as one in which the public are substantially interested within the meaning of the third proviso to section 23A(1)".
3 7 0 A similar question was referred in the case relating to the assessment year 1954 55.
The High Court following a judgment of the same court in Commissioner of Income tax, West Bengal vs Tona Jute Co. Ltd.,(") answered the questions referred against the assessee and in favour of the Revenue.
In that case the Calcutta High Court had expressed the view that a public company whose Directors had absolute discretion to refuse to register the transfer of any share to any person whom it shall in their opinion be undesirable in the interest of the company to admit to membership and were not obliged to give any reason for refusal to register was not a company the shares of which were freely transferable to other members of the public, within the meaning of the Explanation in section 23A of the Act.
Section 23A of the Act confers power to assess companies to super tax on undistributed income in certain cases.
Sub section (9) inter alia provides that nothing contained in the section shall :apply to any company in which the public are substantially interested.
Explanation (1) which was so renumbered by section 7 of the Finance Act of 1957 to the extent it is material is as follows : "For the purposes of this section, a company shall be deemed to be a company in which the public are substantially interested." (a). . . . . (b) if it is not a private company as defined in the Indian Companies Act, 1913, (VII of 1913), and (i). . . . . . . (ii) the said shares were at any time during the previous year the subject of dealing in any recognised stock exchange in India or were freely transferable by the holder to other members of the public; and (iii). . . . .
The Calcutta High Court referred to the relevant provisions of the Indian Companies Act 1913 according to which unless the Article provided otherwise the shareholder had a free right to transfer his shares to whomsoever he liked.
But it was considered that where the Articles contained a power under which the Directors could decline to register any transfer of shares the Tight of free transfer was cut down by that Article and this affected the question of free transferability of the shares.
Moreover the (1) 371 transfer of shares was not complete until the registration of the name of the transferee and if such a registration could not be insisted on as a matter of right it could not be said that the shares were freely transferable.
The Madras High Court in East India Corporation Ltd. vs Commissioner of Income tax, Madras(1) and the Bombay High Court in Raghuvanshi Mills Ltd., vs Commissioner of Income tax, Bombay(1) took the contrary view and dissented from the opinion expressed in the Calcutta case that in the presence of an Article similar to Article 37 of the Articles of Association of the assessee the shares would not be freely transferable within the meaning of clause (ii) to Explanation 1 in section 23A (9) of the Act.
It may be mentioned that before its amendment, by the Finance Act 1955 the corresponding provision appeared in the Explanation in section 23A(1) after, the third proviso.
But instead of the word "were" the word "are" was employed.
The question, therefore, which has to be examined is whether the shares could be regarded as freely transferable to other members of the public, In our opinion the following observations in the East India Corporation case represent the correct view about the meaning of the word "transferable" : " "Transferable", ex facie, is not to be equated to "transferred".
The word imports a quality, a legal effect arising out of or inherent in the character and nature of the shares themselves.
This quality does not stand by itself, for the section says "are in fact freely transferable".
We have to give effect to each of these words, and if we did so, transferability is qualified by the fact which in the context, to out minds, means a factual tendency which is unrestricted and which ensures transferability.
In other words, we understand by the words "are in fact freely transferable" not that there should necessarily be actual transfers of shares; but a factual tendency towards free transfer of shares, subject, of course, to reasonable restrictions by holders to other members of the public." The Directors have certainly been given a discretion by Article 37 to decline to register any proposed transfer of shares but that does not mean that the shares cease to be transferable.
The said Article does not confer any uncontrolled or unrestricted discretion upon the Directors to refuse to register the transfer of shares in a given case.
In other words the Directors cannot act arbitrarily or capriciously.
It is well known that the power conferred by such an.
Article is of a fiduciary nature which has to be exercised by the (1) (2) 3 72 Directors in the best interests of the company for preventing any undesirable person becoming a member if that is likely to be prejudicial to the company.
It is a power which has to be reasonably exercised for protecting the interests of the company.
It cannot be assumed that the discretion conferred on the Directors will be abused for ulterior purposes.
The discretion which has been conferred for being exercised in the interest of the.company cannot take away the tendency of the free transferability of the shares in the absence of cogent material or other factors from which it can be inferred that the shares were not capable of being freely transferred.
Article 37 can by no 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 purposes, as has been noticed before, is only to give power to the Directors for declining to register the transfer of a share when the paramount interests of the company so require.
There may be cases where it can be shown that the Directors have been exercising that 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 Pr sent case there is no evidence of the Directors having acted in the aforesaid manner nor is there any restriction in the other Articles of Association interfering with the free transfer of shares by one shareholder to another.
We are unable, therefore, to uphold the judgment of the Calcutta High Court that the mere existence of an article like Article 37 would affect the free trans ferability of the shares within the meaning of the Explanation.
In the result the appeals are allowed and the decision of the High Court is set aside.
The question referred in each case is answered in favour of the assessee and against the Revenue.
The assessee shall be entitled to one set of costs in this Court.
G.C. Appeal allowed.
| The appellant, who was working as the Headmistress in the respondent school was reduced to the position of an Assistant Teacher.
Her appeal to the District Educational Officer under.
13(2)(vi) of Part 11 of the rules published by the State Government in the Gazette on August 29 1939, was rejected, but on a further appeal by her to the Divisional Inspector of Schools, the management of the school was directed to restore her to the position of Headmistress.
As the management did not do so, she filed a suit for the issue of a mandatory injunction to the respondent and for damages.
On the question whether the rules under which the appeal was filed and the order was made were only administrative instructions by the Government to its educational officers and not statutory rules which would give rise to a remedy enforceable at law at the instance of an employee of a school aggrieved against the management, HELD: (1) Section 56 of the Madras Elementary Education Act, 1920, authorized the Government to make rules to 'carry out all or any of the purposes of this Act ', and under sub section 2(h) for declaring the conditions subject to which schools may be admitted to recognition or aid, and rules were framed in 1922.
The Act was amended by Amendment Act of 1939, by which Chs. 11, IV, VI and section 55 were deleted.
The existing rules therefore could not be continued as they could not be regarded as rules for 'carrying out the purposes of the Act. ' Hence they were reframed and published in the Gazette in 1939 in two parts.
[13F, H; 14D].
(a) The first part contained rules dealing with matters provided for in the various sections.
The rules in Part II could not refer to any section because, they related to matters such as recognition and aid dealt with in sections and Chapters which were repealed by the 1939 amendment, and hence, Part II rules did not set out or refer to any section of the Act.
[14E].
(b) The rules in Part I were headed 'Rules framed under the Madras Elementary Education Act, 1920 ', but the Rules in Part 11 were not given any such heading or title.
[14F].
(c) There was no previous publication of the rules in Part 11 as required by section 56(1).
[14F G].
(d) The rules in Part 11 could not be claimed to have been made under section 56(2) (h) dealing with the conditions subject to which schools may be admitted to recognition or aid, because they did not satisfy the condition precedent for such rule making, namely, that they could be made only 'to carry out all or any of the purposes of the Act ', [16D F].
7 Therefore, the rules in Part 11 could not be said to be statutory rules framed under section 56.
[16F] (2) But the Government had the power de hors the Act to lay down conditions under which it could recognise and grant aid.
To achieve uniformity and certainty in the exercise of such executive power and to avoid discrimination, Government could frame rules which would however only be administrative instructions to its officers.
[17B D] The rules in the present case, relating to recognition and aid, thus governed the terms on which Government would grant recognition and aid and Government could enforce the rules on the management by the denial or withdrawal of such recognition or aid, if there was a breach or noncompliance of the conditions laid down in the rules.
But the enforcement of such rules was a matter between the Government and the management, and a third party, such as a teacher aggrieved by same order of the management, could not derive from the rules any enforceable right against the management on the grounds of a breach of or non compliance with any of the rules.
[17D E; 19B C] (3) The relation between the management of the elementary school and the teachers employed in it would be governed by the terms of the contract of employment and the law of master and servant in the absence of any statute or statutory rules controlling or abrogating such a contract and providing to the contrary.
[16F G] The result is that the relations between the managements and the teachers even in a recognised elementary school have to be regarded as being governed by the contracts of employment and the terms and conditions contained therein.
Part II Rules, which cannot be regarded ,is having the status of statutory rules made under section 56 cannot be said to have the effect of controlling the relations between the management of a school and its teachers.
[16H; 17A B] Therefore, the appellant could not be said to have had a cause of action for enforcing the directions given by the Divisional Inspector to restore her as the Headmistress in the appeal filed by her.
Appeals against orders passed by the management against a teacher are provided for under r. 13 so as to enforce the satisfaction of conditions under which recognition and aid would be granted or withdrawn, and not for regulating as between the teacher and the management, the relations of master and servant arising under the contract of employment.
[18B C] Chandrasekharan Nair vs Secretary to Government of Kerala, , A. Ramaswami Ayyangar vs State of Madras, , and Moss.
vs The Management, , approved.
Govindaswami vs Andhra, , overruled
|
81, 62, 63 & 3 of 1959.
Petition under article 32 of the Constitution of India for enforcement of Fundamental rights.
K. M. Munshi, N. C. Chatterjee, L. R. Das Gupta, G. K. Munshi, D. N. Mukherjee and R. Gopalakrishnan, for the petitioners.
C. K. Daphtary, Solicitor General of India, H. N. Sanyal, Additional Solicitor General of India, B. R. L. Iyengar, R. H. Dhebar and T. M. Sen, for respondents Nos. 1 to 10 (in Petn.
No. 81 of 59), Nos. 1 to 3 (in Petn.
No. 62 of 59), No. 1 (in Petns.
Nos. 63 and 3 of 59) and Nos. 2 and 3 (in Petn.
No. 3 of 59).
G.N. Dikshit and C. P. Lal, for respondent No. 11 (in Petn.
No. 81 of 59) and No. 2 (in Petn.
No. 63 of 59).
R. Gopalakrishnan, for the intervener.
December 18.
The Judgment of the court was delivered by KAPUR, J.
These petitions under article 32 of the Constitution raise the question of the constitutionality of the Drug and Magic Remedies (Objectionable Advertisement) Act (XXI of 1954) hereinafter referred to as the Act.
As the petitions raise a common question of law they may conveniently be disposed of by one judgment.
86 674 The allegation of the petitioners was that various actions had been taken against them by the respond which violated their fundamental rights under article 19(1)(a) and 19(1)(f) & (g).
They also challenged the Act because it contrvened the provisions of article 14 and articles 21 and 31.
The Act passed on April 30, 1954, came into force on April 1, 1955, along with the rules made thereunder.
As provided in its preamble it was "An Act to control the advertisement of drugs in certain cases, to prohibit the advertisement for certain purposes of remedies alleged to possess magic qualities and to provide for matters connected therewith." The petitioners in Writ Petition No. 81 of 1959, the Hamdard Dawakhana (Wakf) and another, alleged that soon after the Act came into force they experienced difficulty in the matter of publicity for their products and various objections were raised by the authorities in regard to their advertisements.
On December 4, 1958, the Drugs Controller, Delhi, intimated to the petitioners that the provisions of section 3 of the Act had been contravened by them and called upon them to recall their products sent to Bombay and other States.
As a result of this, correspondence ensued between the petitioners and the authorities.
On December 4, 1958, the Drugs Controller, Delhi State, stopped the sale of forty of their products set out in the petition.
Subsequently, objection was taken by the Drugs Controller to the advertisements in regard to other drugs.
Similarly objections were taken by the Drugs Controllers of other States to various advertisements in regard to medicines and drugs prepared by the petitioners.
They submitted that the various advertisements which had been objected to were pre pared in accordance with the Unani system and the drugs bore Unani nomenclature which had been recognised in the whole world for several centuries past.
The Act is assailed on the ground of discrimination under article 14, excessive delegation and infringement of the right of free speech under article 19(1)(a) and their right to carry on trade and business under 675 article 19(1)(f) & (g).
Objection is also taken under articles 21 and 31.
The petitioners therefore prayed for a declaration that the Act and the Rules made there under were ultra vires and void as violative of Part III of the Constitution and for the issuing of a writ of Mandamus and Prohibition and for quashing the proceedings and the notices issued by the various authorities the respondents.
In their counter affidavit the respondents submitted that the method and manner of advertisement of drugs by the petitioners and others clearly indicated the necessity of having an Act like the impugned Act and its rigorous enforcement.
The allegations in regard to discrimination and impairment of fundamental rights under article 19(1)(a), (f) & (g) and any infringement of articles 21 and 31 were denied and it was stated : " The restriction is about the advertisement to the people in general.
I say that the main object and purpose of the Act is to prevent people from self medicating with regard to various serious diseases.
Self medication in respect of diseases of serious nature mentioned in the Act and the Rules has a deleterious effect on the health of the community and is likely to affect the well being of the people.
Having thus found that some medicines have tendency to induce people to resort to self medication by reason of elated advertisements, it was thought necessary in the interest of public health that the puffing up of the advertisements is put to a complete check and that the manufacturers are compelled to route their products through recognised sources so that the products of these manufacturer could be put to valid and proper test and consideration by expert agencies.
" It was also pleaded that the advertisements were of an objectionable character and taking into consideration the mode and method of advertising conducted by the petitioners the implementation of the provisions of the impugned Act was justified.
Along with their counter affidavit the respondents have placed on record Ext.
A, which is a copy of the literature which 676 accompanied one of the various medicines put on sale by the petitioners and/or was stated on the cartons in which the medicine was contained.
In their affidavit in rejoinder the petitioners reiterated that Unani and Ayurvedic systems had been discriminated against; that self medication had no deleterious effect on the health of the community; on the contrary it " is likely to affect the well being of the people, in the context of effective household and domestic remedies based on local herbs popularly known to them in rural areas.
Self medication has its permission (?) limits even in America and Canada where unlicensed itinerant vendors serve the people effectively.
" For the petitioners in all the petitions Mr. Munshi raised four points: (1) Advertisement is a vehicle by means of which freedom of speech guaranteed under article 19(1)(a) is exercised and the restrictions which are imposed by the Act are such that they are not covered by cl.
(2) of article 19 ; (2)That Act, the Rules made thereunder and the schedule in the rules impose arbitrary and excessive restrictions on the rights guaranteed to the petitioners by article 19(1)(f) & (g); (3) Section 3 of the Act surrenders unguided and uncanalised power to the executive to add to the diseases enumerated in section 3; (4) Power of confiscation under section 8 of the Act is violative of the rights under articles 21 and 31 of the Constitution.
In Petitions Nos. 62 and 63 of 1939 which relate to two branches of Sadhana Ausadhalaya at Poona and Allahabad respectively, Mr. N. C. Chatterjee, after giving the peculiar facts of those petitions and the fact that the petitioners ' Poona branch was raided without a warrant, a number of medicines had been seized, and a complaint filed against the petitioners in that petition, submitted that section 3(b) of the Act was meant to strike down abnormal sexual activities, that advertisements in that case merely mentioned the names of the diseases and suggested the drug for the treatment 677 of those diseases, that the prohibition of such adver tisements was an unreasonable restriction on their fundamental right; that there was nothing indecent in saying that their medicine was a cure for a particular disease and that the Act was an undue interference with cure and treatment of diseases.
We now proceed to consider the vitality of the arguments raised on behalf of the petitioners.
Firstly it was submitted that the restriction on advertisements was a direct abridgement of the right of free speech and advertisements could not be brought out of the guaranteed freedom under article 19(1)(a) because no dividing line could be drawn and freedom of speech could not be curtailed by making it subject to any other activity.
The learned Solicitor General on the otherhand, contended that it was necessary to examine the pith and substance of the impugned Act and if it was properly considered it could not be said to have in any way curtailed, abridged or impaired the rights guaranteed to the petitioners under Art, 19(1)(a).
He also contended that the prohibited advertisements did not fall within the connotation of " freedom of speech ".
The doctrine of pith and substance,, submitted Mr. Munshi, was created for the purpose of determining the legislative competence of a legislature to enact a law and he sought to get support from the following observation of Venkatarama Aiyar, J., in A. section Krishna vs State of Madras (1) : ". and the Privy Council had time and again to pass on the constitutionality of laws made by the Dominion and Provincial legislatures.
It was in this situation that the Privy Council evolved the doctrine, that for deciding whether an impugned legislation was intra vires regard must be had to its pith and substance. " Though the doctrine of ' pith and substance ' was evolved to determine the constitutionality of an enactment in reference to the legislative competence of a legislature particularly under a federal constitution with a distributive system of powers it has been used in other contexts in some cases, e.g., in connection (1) ; ,406,410.
678 with the determination of the constitutionality of statutes restricting the rights to carry on certain activities and the consequent infringement of article 19(1)(g) : by Mahajan, C.J., in Cooverjee B. Bharucha vs The Excise Commissioner & The Chief Commissioner of Ajmer (1) in the case of Excise Regulation of 1915 regulating the import, export, transport, manufacture, sale and possession of intoxicating drugs and liquor and imposing duties thereon; by Das, C.J., in State of Bombay vs R. M. D. Chamarbughwala (2) in connection with a statute which was held not to be interference with trade, commerce or intercourse as such but to save it from anti social activities.
It is unnecessary to decide in the present case whether in its scope it extends to the determination of the constitutionality of an enactment with reference to the various sub clauses of cl.
(1)of article 19.
A more appropriate approach to the question is, in our opinion, contained in the dictum of Mahajan, J. (as he then was) in M/s. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh (3).
There he held that " in order to decide whether a particular legislative measure contravenes any of the provisions of Part III of the Constitution it is necessary to examine with some strictness the substance of the legislation in order to decide what the legislature has really done.
Of course the legislature cannot bypass such constitutional prohibition by employing indirect methods and therefore the Court has to look behind the form and appearance to discover the true character and nature of the legislation.
" Therefore, when the constitutionality of an enactment is ,challenged on the ground of violation of any of the articles in Part 111 of the Constitution, the ascertainment of its true nature and character becomes necessary, i.e., its subject matter, the area in which it is intended to operate, its purport and intent have to be determined.
In order to do so it is legitimate to take into consideration all the factors such as history of the legislation, the purpose thereof, the (1) ; , 877.
(2) ; (3) ; , 682.
679 surrounding circumstances and conditions, the mischief which it intended to suppress, the remedy for the disease which the legislature resolved to cure and the true reason for the remedy; Bengal Immunity Company Ltd. vs The State of Bihar (1); R.M.D. Chamarbaughwala vs The Union of India (2) Mahant Moti Das & Ors.
vs section P. Sahi ( 3).
Another principle which has to borne in mind in examining the constitutionality of a statute is that it must be assumed that the legislature understands and appreciates the need of the people and the laws it enacts are directed to problems which are made manifest by experience and that the elected representatives assembled in a legislature enact laws which they consider to be reasonable for the purpose for which they are enacted.
Presumption is, therefore, in favour of the constitutionality of an enactment.
Charanjit Lal Chowdhuri vs The Union of India & Ors.(4); The State of Bombay vs F.N. Bulsara (5); Mahant Moti Das vs section P. Sahi (3).
What then was the history behind the impugned legislation and what was the material before the Parliament upon which it set to enact the impugned Act.
(1) In 1927 a resolution was adopted by then Council of State recommending to the Central and Provincial Governments to take immediate measures to control the indiscriminate use of medical drugs and for standardisation of the preparation and for the sale of such drugs.
In August 1930, in response to the public opinion on the subject and in pursuance of that resolution the Government of India appointed the Drugs Enquiry Committee with Sir R. N. Chopra as its Chairman to enquire into the extent of the quality and strength of drugs imported, manufactured or sold in India and to recommend steps for controlling such imports, manufacture and sale in the interest of the public.
This Committee made a report pointing out the necessity of exercising control over import, (1) , 632 & 633.
(2) ; , 936.
(3) A.I.R. (1959) S.C. 942, 948.
(4) ; , (5) ; , 708.
680 manufacture and sale of patent and proprietary medicines in the interest of the safety of the public and public health.
The report pointed out in paragraph 256 259 how in other countries control was exercised and restrictive laws to achieve that end had been enacted.
In the Appendix to this Report was given a list of a number of samples of advertisements of patent and proprietary medicines dealing with cures of all kinds of diseases.
(2) As a result of the Chopra Committee Report the `Drugs act, was passed in 1940.
(3)In 1948 The Pharmacy Act was passed to regulate the provisions of pharmacy.
As a result of these two enactments the State Governments were given the responsibility of controlling the manufacture of drugs and pharmaceuticals and their sales through qualified personnel and the Central Government was given the control on quality of drugs and pharmaceuticals imported into the country.
(4)The Chopra Committee Report dealt with the popularity of the patent and proprietary medicines in the following words: "The pride of place must be accorded to ingenious propaganda clever and attractive dissemination of their supposed virtues and wide and alluring advertisements.
The credulity and gullibility of the masses, especially when 'certain cures ' are assured in utterly hopeless cases, can well be imagined.
Perusal of the advertisements of cures ' produces a great effect on patients who have tried treatment by medical men without success.
Such patients resort to any and every drug that comes in their way.
In an infinitesimal small number of cases spontaneous cures are also effected.
Widest publicity is given to these and the preparations become invested with miraculous virtues.
The reassurances of cure, the force of argument advanced to guarantee it and the certificates of persons said to have been cured which are all set out in advertisements make a deep impression, especially on those with weak nerves.
The love of mystery and secrecy inherent in human nature, the natural disinclination and 681 shyness to disclose details of one 's illness especially those involving moral turpitude, the peculiar temperament of the people who, high and low, rich and poor, demand 'something in a bottle ' for the treatment of every ailment and poverty of the people who cannot afford to pay the doctor 's bills or the high prices current for dispensed medicines, ' have all been enlarged upon as tending to self diagnosis and self medication by patent and proprietary medicines." (5)Evidence was led before the Chopra Committee deprecating the increasing sale of proprietary medicines particularly those with secret formulae as such drugs were positively harmful and were a serious and increasing menace.
There were advertisements and pamphlets issued in connection with these medicines which showed fraudulent practices and extravagant claims for these medicines.
(6)The Chopra Committee Report had also made a recommendation for a strict measure of control over proprietary medicines.
(7) The Bhatia Committee was set up in pursuance to a resolution No. CI 1(12)/52 dated February 14, 1953, and between March 1953, and end of that year it examined a large number of witnesses in different towns of India some of whom represented chemists and druggists, some were leading medical practitioners and some were State Ministers for Health.
The Bhatia Committee issued a Questionnaire to various organisations and witnesses.
It contained questions in regard to advertisement of drugs and therefore one of the objects of this Committee which was inaugurated by the Health Minister on March 12, 1953, was amongst other things to look into the control to be exercised over objectionable and unethical advertisements.
(8) There were a large number of objectionable advertisements in the Press in regard to patent medicines which were after the Act came into force pointed out by the Press Commission Report but it cannot be said that this fact was unknown to Parliament as this Committee also examined a number of witnesses.
87 682 (9) The Indian Medical Association had suggested to this Press Committee which was presided over by the late Mr. Justice Rajadhyaksha the barring of advertisements of medicines which claim to cure or alleviate any of the following diseases: Cancer, Bright 's disease, Cataract, Diabetes, Epilepsy, Glaucoma, Locomotor ataxia, Paralysis, Tuberculosis.
(10) In the United Kingdom, advertisements of drugs or treatment for these diseases are governed by the Cancer Act of 1939 and the Pharmacy and Medi.
cines Act of 1941.
(Advertisement relating to the treatment of venereal diseases are governed by the Venereal Diseases Act of 1917).
(11) Wyndham E.B. Lloyd in his book ' Hundred years of medicine ' published in 1936 wrote about the outstanding evils which arise from the use of secret remedies and nostrums.
It also drew attention to the dangers of advertisements in regard to them and what the British Medical Association had said about them.
(12)The British Medical Association had in a book entitled 'Secret Remedies What they cost and contain ' exposed ruthlessly the harmful effects of such remedies.
The council on Pharmacy and Chemistry of American Medical Association had also given its opinion on the harmful effects of indiscriminate self medication by the public and the grave danger which ensued from such misdirected and inadequate treatment, and the failure to recognise seriousness of the disease only when it was too late.
It is not necessary to refer to the recommendations of the Bhatia Committee or the Press Enquiry Committee because they were published in June and July 1954 respectively.
In England as far back as 1889, an Act called the Indecent Advertisements Act (52 and 53 Viet.
18) was passed to suppress indecent advertisements in which advertisements relating to syphilis, gonorrhoea, nervous debility or other complaints or infirmity arising from intercourse was prohibited.
In 1917 the Venereal Diseases Act (7 and 8 Geo.
21) was passed in England.
This placed restrictions on 683 advertisements relating to treatment for venereal diseases.
In 1941, The Pharmacy and Medicine Act, 1941 (4 and 5 Geo.
VI Ch.
42) was passed which corres ponds in material particulars to the impugned Act.
It cannot be said that there was no material before Parliament on the basis of which it proceeded to enact the impugned legislation.
This material shows the bistory of the legislation, the ascertained evil intended to be cured and the circumstances in which the enactment was passed.
In Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar (1), Das, C.J., observed : " that in order to sustain the presumption of con stitutionality the court may take into consideration matters of common knowledge, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation;" Thus it is open to the court for the purpose of determining the constitutionality of the Act to take all these facts into consideration and in the present case we find that there was the evil of self medication, which both in this country and in other countries, the medical profession and those, who were conversant with its dangers, had brought to the notice of the people at large and the Government in particular.
They had also warned against the dangers of self medication and of the consequences of unethical advertisement relating to proprietary medicines particularising those diseases which were more likely to be affected by the evil.
There is reason, therefore, for us to assume that the state of facts existed at the time of the legislation which necessitated the Act.
These facts we have already set out and it is not necessary to reiterate them.
With this background in view we proceed to examine the provisions of the Act and ascertain the predominant purpose, true intent, scope and the object of the Act.
The preamble shows that the object of the Act was to control the advertisement of drugs in certain cases, i.e., diseases and to prohibit advertisements relating to remedies pretending to have magic qualities and provide for other matters connected therewith, (1) ; , 297.
684 The title of the Act also shows that it is directed against objectionable advertisements.
The definition section (section 2) in cl.
(a) defines advertisements and in cl.
(b) drugs which include (i) medicines for use of human beings and animals, (ii) substances for use of diagnosis, treatment or prevention of diseases in human beings and animals, (iii) articles other than food which affect the organic functions of the body of human beings or animals and (iv) articles intended for use as a component of any medicine etc.
(c) defines magic remedies to include a talisman, mantra, kavacha and other charms and (d) relates to the publication of any advertisement and (e) what a venereal disease is.
Section 3 prohibits advertisement of drugs for treatment of diseases and disorders.
Clause (a) of section 3 deals with procurement of miscarriage in women for prevention of conception; cl.
(b) with maintenance or improvement of capacity of human beings for sexual pleasure; cl.
(c) with diagnosis and cure of venereal and other diseases.
Section 4 prohibits misleading advertisements relating to drugs.
Section 5 similarly prohibits advertisements of magic remedies efficacious for purposes specified in section 3.
Section 6 prohibits the import into and export from India of certain advertisement.
Section 14 is a saving clause which excludes registered practitioners, treatises or books,, advertisements sent confidentially to medical practitioners, wholesale or retail chemists for distribution among registered medical practitioners or to hospitals or laboratories.
It also excludes advertisements printed or published by Government or with the previous sanction of the Government.
Section 15 gives the Government the power to grant exemptions from the application of sections 3, 4, 5 and 6 in certain cases.
As already stated when an enactment is impugned on the ground that it is ultra vires and unconstitutional what has to be ascertained is the true character of the legislation and, for that purpose regard must be had to the enactment as a whole, to its objects, purpose and true intention and to the scope and effect of its provisions or what they are directed against and what they aim at (A. section Krishna vs State of Madras (1)).
Thus (1) ; , 4060 410. 685 examined it cannot be said that the object of the Act was merely to put a curb on advertisements which offend against decency or morality but the object truly, and properly understood is to prevent self medication or treatment by prohibiting instruments which may be used to advocate the same or which tend to spread the evil.
No doubt in section 3 diseases are expressly mentioned which have relation to sex and disorders peculiar to women but taken as a whole it cannot be said that the object of the Act was to deal only with matters which relate to indecency or immorality.
The name and the preamble are indicative of the purpose being the control of all advertisements relating to drugs and the use of the word animals in cl.
(b) of the definition section negatives the object being merely to curb the emphasis on sex and indecency.
Section 4 further suggests that the legislature was trying to stop misleading advertisements relating to drugs.
Section 5 also tends to support the object being prohibition of advertisements suggesting remedies for all kinds of diseases.
Section 6 also points in the same direction, i.e., to stop advertisements as to drugs.
Sections 14 and 15 are a clearer indication that there should be no advertisements for drugs for certain diseases in order that the general public may not be misled into using them for ailments which they may imagine they are suffering from and which they might believe to be curable thereby.
That this is so is shown by the fact that such advertisements can be sent to medical practitioners, hospitals and laboratories.
The exclusion of Government advertisements and the power to give exemption all point to the objective being the stopping of advertisements of drugs for the object above mentioned and not merely to stop advertisements offending against morality and decency.
Mr. Munshi 's argument was that section 3 was the key to the Act and that the object and direct effect of the Act was to stop advertisements and thereby impair the right of free speech by directly putting a prohibition on advertisement.
If the contention of Mr. Munshi were accepted then the restriction to be valid, must fall within cl.
(2) of article 19 of the Constitution.
In 686 other words it must have relationship with decency or morality because the other restrictions of that clause have no application.
If on the other hand the submission of the learned Solicitor General is accepted then the matter would fall under sub cls.
(f) and (g) and the restriction under article 19(6).
The object of the Act as shown by the scheme of the Act and as stated in the affidavit of Mr. Merchant is the prevention of self medication and self treatment and a curb on such advertisements is a means to achieve that end.
Objection was taken that the preamble in the Act does not indicate the object to be the prevention of treatment of diseases otherwise than by qualified medical practitioners as the English Venereal Diseases Act 1917 does.
In this Court in many cases affidavits were allowed to be given to show the reasons for the enactment of a law, the circumstances in which it was conceived and the evils it was to cure.
This was done in the case of Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar (1).
Similarly, in Kathi Raning vs The State of Saurashtra (2 ) and in Kavalap para Kottarathil Kochunni vs The State of Madras (3) affidavits were allowed to be filed setting out in detail the circumstances which led to the passing of the respective enactments.
In support of his argument that any limitation of his right to advertise his goods was an infringement of his freedom of speech because advertisement was a part of that freedom Mr. Munshi relied upon Alma Lovell vs City of Griffin (4).
In that case the objection was taken to the validity of a municipal ordinance prohibiting the distribution without a permit of circulars, handbooks, advertising or literature of any kind on the ground that such ordinance violated the first and the 14th amendment by abridging the freedom of the Press and it was held that such prohibition was invalid at its face as infringing the constitutional freedom of the Press and constitutional guarantee of such freedom embraced pamphlets and leaflets.
The actual violation which was complained of in that case consisted of the (1) ; (2) ; (3) ; (4) ; ; 687 distribution without the required permission of pamphlets and magazines in the nature of religious tracts.
Chief Justice Hughes, said : " The ordinance in its broad sweep prohibits the distribution of "circulars, handbooks, advertising or literature of any kind.
" It manifestly applies to pamphlets, magazines and periodicals.
" No doubt the word advertisement was used both in the ordinance as well as in the opinion by the learned Chief Justice but the case actually related to the distribution of pamphlets and magazines.
Mr. Munshi also relied on Express Newspapers (Private) Ltd. vs The, Union of India (1), where the cases dealing with freedom of speech were discussed by Bhagwati, J., but the question of advertisements as such did not arise in that case.
An advertisement is no doubt a form of speech but its true character is reflected by the object for the promotion of which it is employed.
It assumes the attributes and elements of the activity under article 19(1) which it seeks to aid by bringing it to the notice of the public.
When it takes the form of a commercial advertisement which has an element of trade or commerce it no longer falls within the concept of freedom of speech for the object is not propagation of ideas social, political or economic or furtherance of literature or human thought ; but as in the present case the commendation of the efficacy, value and importance in treatment of particular diseases by certain drugs and medicines.
In such a case, advertisement is a part of business even though as described by Mr. Munshi its creative part, and it was being used for the purpose of furthering the business of the petitioners and had no relationship with what may be called the essential concept of the freedom of speech.
It cannot be said that the right to publish and distribute commercial advertisements advertising an individual 's personal business is a part of freedom of speech guaranteed by the Constitution.
In Lewis J. Valentine vs F. J. Chrestensen (2).
It was held that the constitutional right of free speech is not infringed by (1) ,123 133.
(2) ; 688 prohibiting the distribution in city streets of handbills bearing on one side a protest against action taken by public officials and on the other advertising matter.
The object of affixing of the protest to the advertising circularwas the evasion of the prohibition of a city ordinance forbidding the distribution in the city streets of commercial and business advertising matter.
Mr. Justice Roberts, delivering the opinion of the court said: " This court has unequivocally held that the streets are proper places for the exercise of the freedom of communicating information and disseminating opinion and that, though the states and municipalities may appropriately regulate the privilege in the public interest, they may not unduly burden or proscribe its employment in these public thoroughfares.
We are equally clear that the Constitution imposes no such restraint on government as respects purely commercial advertising.
If the respondent was attempting to use the streets of New York by distributing commercial advertising, the prohibition of the Code provisions was lawfully invoked against such conduct.
" It cannot be said therefore that every advertisement is a matter dealing with freedom of speech nor can it be said that it is an expression of ideas.
In every case one has to see what is the nature of the advertisement and what activity falling under article 19(1) it seeks to further.
The advertisements in the instant case relate to commerce or trade and not to propagating of ideas; and advertising of prohibited drugs or commodities of which the sale is not in the interest of the general public cannot be speech within the meaning of freedom of speech and would not fall within article 19(1)(a).
The main purpose and true intent and aim, object and scope of the Act is to prevent self medication or self treatment and for that purpose advertisements commending certain drugs and medicines have been prohibited.
Can it be said that this is an abridgement of the petitioners ' right of free speech.
In our opinion it is not.
Just as in Chamarbaughwalla 's ease (1) it was said that activities undertaken and (1) ; 689 carried, on with a view to earning profits e.g. the business of betting and gambling will not be protected as falling within the guaranteed right of carrying on business or trade, so it cannot be said that an advertisement commending drugs and substances as appropriate cure for certain diseases is an exercise of the right of freedom of speech.
Das, C.J., in State Bombay vs R.M.D. Chamarbaughwala 's (1) case said at, page 920: "We have no doubt that there are certain activities which can under no circumstances be regarded as trade or business or commerce although the usual forms and instruments are employed therein.
To exclude those activities from the meaning of those words is not to cut down their meaning at all but to say only that they are not within the true meaning of those words.
" One has only to substitute for the words "trade or business or commerce" the phrase "freedom of speech" to see how it applies to the present case.
Freedom of speech goes to the heart of the natural right of an organised freedom loving society to "impart and acquire information about that common interest".
If any limitation is placed which results in the society being deprived of such right then no doubt it would fall within the guaranteed freedom under article 19(1)(a).
But if all it does is that it deprives a trader from commending his wares it would not fall within that term.
In John W. Rast vs Van Deman & Lewis Company (2), Mr. Justice McKenna, dealing with advertisements said: "Advertising is merely identification and description apprising of quality and place.
It has no other object than to draw attention to the article to be sold and the acquisition of the article to be sold constitutes the only inducement to its purchase.
" As we have said above advertisement takes the same attributes as the object it seeks to promote or bring to the notice of the public to be used by it.
Examples can be multiplied which would show that advertisement dealing with trade and business has relation (1) ; (2) ; , 690, 88 690 with the item "business or trade" and not with "freedom of speech".
Thus advertisements sought to be banned do not fall under article 19(1)(a).
It was also contended that the prohibition against advertisements of the petitioners was a direct abridgement of the right of freedom of speech and Alice Lee Grosjean vs The American Press Co. (1) was relied upon.
That was a case in which a tax was levied based on gross receipts for the privilege of engaging in the business of public advertisements in newspapers, magazines etc.
having a specified circulation and it was there held that such a statute abridged the freedom of the press because its effect was not merely to reduce revenue but it had tendency to curtail circulation.
This subject was discussed in Express Newspapers ' case (2) at pages 128 to 133 where the question was whether the Wage Board Act specifying the wages and conditions of service of the working journalists and thus imposing certain financial burden on the press was an interference with the right of freedom of Press and Bhagwati, J., said at page 135: " Unless these were the direct or inevitable consequences of the measures enacted in the impugned Act, it would not be possible to strike down the legislation as having that effect and operation.
A possible eventuality of this type would Dot necessarily be the consequence which could be in the contemplation of the legislature while enacting a measure of this type for the benefit of the workmen concerned.
" In considering the constitutionality of a statute the Court has regard to substance and not to mere matters of form and the statute must be decided by its operation and effect; J.M. Near vs State of Minnesota(3).
In the present case therefore (1) the advertisements affected by the Act do not fall within the words freedom of speech within article 19(1)(a); (2) the scope and object of the Act its true nature and character is not interference with the right of freedom of speech (1) ; (2) , 123 133.
(3) 75 La Ed. 1357, 1363 4. 691 but it deals with trade or business; and (3) there is no direct abridgement of the right of free speech and a mere incidental interference with such right would no alter the character of the law; Ram Singh vs The State of Delhi (1); Express Newspapers (Private) Ltd. vs The Union of India(2).
It is not the form or incidental infringement that determines the constitutionality of a, statute in reference to the rights guaranteed in article 19(1), but the reality and substance.
The Act read as a whole does not merely prohibit advertisements relating to drugs and medicines connected with diseases expressly mentioned in section 3 of the Act but they cover all advertisements which are objectionable or unethical and are used to promote self medication or self treatment.
This is the content of the Act.
Viewed in this way, it does not select any of the elements or attributes of freedom of speech falling within article 19(1)(a) of the Constitution.
It was next argued that assuming that the matter was within clauses (f) & (g) of article 19(1), the restraint was disproportionate to the purpose of the Act, the object sought to be achieved and the evil sought to be remedied.
It was further argued that it could not be said that the restrictions imposed by the Act were in the interest of the general public.
The basis of this argument was (1) the very wide definition of the word 'advertisement 'in section 2(a); (2) the use of the word 'suggest ' in section 3; (3) the uncanalised delegated power to add diseases to the schedule; (4) the existence of section 14(c) read with rule 6 of the Rules and (5) the procedural part in s.8 of the Act; all of which, according to counsel, showed that it was beyond ' all allowable limits of restraint under cl. 6 of article 19.
'Advertisement ' in the Act, it was argued, included not only advertisements in newspapers and periodicals and other forms of publication but also on.
cartons, bottles and instructions inside a carton.
Without this latter kind of advertisement, it was submitted, the user would be unable to know what the medicine was, what it was to be used for and how ? If the purpose (1) [1951] S.C.R.451, 455.
(2) , 123,133.
692 of the Act is to prevent objectionable and unethical advertisements in order to discourage self medication and self treatment it cannot be said that the definition is too wide keeping in view the object and the purpose of the Act which have been set out above.
It is these evils which the Act seeks to cure and if the definition of the word ' advertisment ' was not so broad and inclusive it would defeat the very purpose for which the Act was brought into existence.
The argument that the word 'suggest ' is something subjective is, in our 'opinion, also not well founded. 'Suggest ' has many shades of meaning and in the context it means commendatory publication.
It connotes a direct approach and its use in section 3 does not support the contention.
that the restraint is disproportionate.
In another part of the judgment we shall discuss the constitutionality of the power of delegation reasonableness of the range of diseases added in the schedule and it is unnecessary to go over the same field here.
Then we come to section 14(c) and r. 6, i.e., prohibited advertisement is to be sent confidentially by post to a registered medical practitioner or to a wholesale and retail chemist or a hospital and laboratory and the following words have to be inscribed on the outside of every packet containing the advertisement, i.e., " for the use only of registered medical practitioners or a hospital or a laboratory ".
If the purpose is to discourage self medication and encourage treatment by properly qualified medical practitioners then such a regulatory provision cannot be considered an excessive restraint.
The mere fact that in the corresponding English Act certain other persons are also mentioned and that such advertisements can be published in certain medical journals and scientific treatises is not a ground for holding the restriction to be disproportionate.
It is not a proper method of judging the reasonableness of the restrictions to compare every section of the Act with the corresponding English Act and then to hold it unreasonable merely because the corresponding section of the two Acts are different.
The evil may be the same but the circumstances and 693 conditions in the two countries in regard to journals may be different and there are bound to be differences in the degree of restrictiveness in the operativeportions of the two Acts.
The policy behind the Act is that medication should be on the advice of qualified medical practitioners.
Merely because the legislature thought that it would not exclude advertisements in medical journals of the country would not be indicative of the disproportion of the restraint.
Objection was then taken to the procedural part in section 8 and it was submitted that the power seizure and detention was unfettered and and there is no proper procedure laid down Criminal Procedure Code or the Drugs Act are no rules and safeguards in regard warrants or entry into premises as there Code of Criminal Procedure or the Drugs Act.
In another part of the judgment we shall deal with this question and it is not necessary to do so here.
It was next contended that the Act was not in the interest of the general public as it could not be said that the mention of the names of diseases or instructions as to the use of particular medicines for those diseases was not in the interest of the general public.
Besides, it would prevent the medicines being brought to the notice of the practising medical practitioners or distributing agencies.
It would also prevent a properly worded advertisement suggesting cure of diseases to people who for the sake of prestige and other understandably valid reasons do not like to confide to any person the nature of their diseases and that it would prevent medical relief in a country where such relief is notoriously inadequate.
We have already set out the purpose and scope of the Act, the conditions in which it was passed and the evils it seeks to cure.
If the object is to prevent self medication or self treatment, as it appears to be then these are exactly the evils which such advertisements would subserve if a piece of legislation like the Act did not exist.
It has not been shown that the restrictions laid down in the Act are in any manner disproportionate to the object sought to be attained by the Act nor has it been of 694 shown that the restrictions are outside the permissible limits.
Mr. Chatterjee in dealing with this point drew our attention to the test of reasonablenses as laid down in Chintaman Rao vs The State of Madhya Pradesh (1) where it was said by Mahajan, J. (as he then was) at pages 762 and 763: " The question for decision is whether the statute under the guise of protecting public interests arbitrarily interferes with private business and imposes unreasonable and unnecessarily restrictive regulations upon lawful occupation; in other words ' whether the total prohibition of carrying on the business of manufacture of bidis within the agricultural season amounts to a reasonable restriction on the fundamental rights mentioned in article 19(1)(g) of the Constitution.
" It has not been shown in the present case that under the guise of protecting public interest the Act arbitrarily interferes with private business or imposes unreasonable restrictions.
If the true intention of the Act is, as indeed it is, to stop objectionable and unethical advertisements for the purpose of discouraging self medication no question of unreasonable restrictions arises.
Mr. Chatterjee also relied upon the observation of Bose, J., in Dwarka Das Srinivas of Bombay vs The Sholapur Spinning & Weaving Company Limited (2) where the learned Judge said that " the provisions in the Constitution touching fundamental rights must be construed broadly and liberally in favour of those on whom the rights have been conferred ".
With this statement we are in accord.
The interpretation should be such as to subserve the protection of the fundamental rights of the citizen but that is subject to limitations set out in article 19 itself which are for the general welfare of all ,citizens taken as a whole and are therefore for the interest of the general public.
Mr. Chatterjee further contended that the restraint was excessive because the prohibition of a mere mention of the name of a disease and the suggestion of a cure for that could (1) (2) ; , 733.
695 not be a reasonable restriction.
As submitted by the learned Solicitor General the objection is not to the names but to the advertisements commending certain medicines as a cure for the same and this is what the Act is endeavouring to eliminate.
In our opinion it cannot be said that the restrictions either excessiveor disproportionate or are not in the interest of the general public.
The third point raised by Mr. Munshi was that thewords 'or any other disease or condition which maybe specified in the rules made under this Act ' in cl.(d) of section 3 of the Act are delegated legislation and do not lay down any certain criteria or proper standards,and surrender unguided and uncanalised power to theexecutive to add to diseases in the schedule.
Thelearned Solicitor General in reply supported theschedule as a case of conditional legislation and not the exercise of delegated legislative power and he further contended that even if it was held to be thelatter it was within the limits recognised by judicial decisions.
The distinction between conditional legislation and delegated legislation is this that in the former the delegate 's power is that of determining when a legislative declared rule of conduct shallbecome effective; Hampton & Co. vs U.S. (1) and thelatter involves delegation of rule making power which constitutionally may be exercised by the admin istrative agent.
This means that the legislature having laid down the broad principles of its policy in the legislation can then leave the details to be supplied by the administrative authority.
In other words by delegated legislation the delegate completes the legislation by supplying details within the limits prescribed by the statute and in the case of conditionallegislation the power of legislation is exercised by the legislature conditionally leaving to the discretion of an external authority the time and manner of carrying its legislation into effect as also the determination of the area to which it is to extend; (The Queen vs Burah (2 ); Russell vs The Queen (3); King Emperor vs (1) ; (2) , 835.
696 Benoarilal Sarma (1); Sardar Indar Singh vs State of Rajasthan (2). ) Thus when the delegate is given the power of making rules and regulations in order to fill in the details to carry out and subserve the purposes of the legislation the manner in which the requirements of the statute are to be met and the rights therein created to be enjoyed it is an exercise of delegated legislation.
But when the legislation is complete in itself and the legislature has itself made the law and the only function left to the delegate is to apply the law to an area or to determine the time and manner of carrying it into effect, it is conditional legislation.
To put it in the language of another American case: " To assert that a law is less than a law because it is made to depend upon a future event or act is to rob the legislature of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know.
" The proper distinction there pointed out was this: " The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend.
There are many things upon which wise and useful legislation must depend which cannot be known to the law making power, and must therefore be subject of enquiry and determination outside the hall of legislatures (In Lockes Appeal ; Field vs Clark 143 U. section 649.) But the discretion should not be so wide that it is impossible to discern its limits.
There must instead be definite boundaries within which the powers of the administrative authority are exercisable.
Delegation should be not be so indefinite as to amount to an abdication of the legislative function Schwartz American Administrative Law, page 21.
In an Australian case relied upon by the learned Solicitor General the prohibition by proclamation of (1) (1944) L.R. 72 I.A. 57, (2) , 697 goods under section 52 of the Customs Act 1901 was held to be conditional legislation: Baxter vs Ah Way (1) According to that case the legislature has to project its mind into the future and provide as far as possible for all contingencies likely to arise in the application of the law, but as it is not possible to provide for all contingencies specifically for all cases,, the legislature resorts to conditional legislation leaving it to some specified authority to determine in what circumstances the law should become operative or to what its operation should be extended, or the particular class of persons or goods to which it should be applied: Baxter 's case (1) at pp. 637 & 638.
Broadly speaking these are the distinguishing features of the two forms of delegation and these are their characteristics.
The question is in which compartment does the power given in the Act fall.
The power given to the authority under that provision (section 3) of the Act is contained in cl.
(d) in the following words: S.3 " Subject to the provisions of this Act, no person shall take any part in the publication of any advertisement referring to any drug in terms which suggest or are calculated to lead to the use of that drug for . . . . . . . . . . . . . . . . . . . . . . . . . . (d) the diagnosis, cure, mitigation, treatment or prevention of any venereal disease or any other disease or condition which may be specified in rules made under this Act." And power to make rules is laid down in section 16 which is as follows: section 16 (1) "The Central Government may by notification in the official gazette make rules for carrying out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may (a) specify any disease or condition to which the provisions of section 3 shall apply; (1) , 634, 637, 638.
698 (b) prescribe the manner in which advertisement of articles or things referred to in cl.
(c) of sub section
(1) of section 14 may be sent confidentially.
" For the petitioner it was argued that section 3(d) is delegated legislation and not conditional legislation as the power delegated therein is only to specify conditions and diseases in the rules.
The interdiction under the Act is applicable to conditions and diseases set out in the various clauses of section 3 and to those that may under the last part of clause (d) be specified in the rules made under section 16.
The first 'sub section of is.
16 authorises the making of rules to carry out the purposes of the Act and cl.
(a) of sub section (2) of that section specifically authorises the specification of diseases or conditions to which the provisions of section 3 shall apply.
It is the first sub section of section 16 which confers the general rule making power, i.e., it delegates to the administrative authority the power to frame rules and regulations to subserve the object and purpose of the Act.
Clause (a) of the second sub section is merely illustrative of the power given under the first sub section; King Emperor vs Sibnath Banerji (1).
Therefore, sub section 2(a) also has the same object as sub section
(1), i.e, to carry out the purposes of the Act.
Consequently, when the rule making authority specifies conditions and diseases in the schedule it exercises the same delegated authority as it does when it exercises powers under sub section
(1) and makes other rules and therefore it is delegated legislation.
The question for decision then is, is the delegation constitutional in that the administrative authority has been supplied with proper guidance.
In our view the words impugned are vague.
Parliament has established no criteria, no standards and has not prescribed any principle on which a particular disease or condition is to be specified in the Schedule.
It is not stated what facts or circumstances are to be taken into consideration to include a particular condition or disease.
The power of specifying diseases and conditions as given in section 3(d) must therefore be held to be going beyond permissible boundaries (1) (1945) L.R. 72 I.A. 241.
699 of valid delegation.
As a consequence the Schedule in the rules must be struck down.
But that would not affect such conditions and diseases which properly fall within the four clauses of section 3 excluding the portion of cl.
(d) which has been declared to be unconstitutional.
In the view we have taken it is unnecessary to consider the applicability of Baxter vs Ah Way (1).
We are of the opinion therefore that the words " or any other disease or condition which may be specified in the rules made under this Act " confer uncanalised and uncontrolled power to the Executive and are therefore ultra vires.
But their being taken out ' of cl.
(d) of section 3 does not affect the constitutionality of the rest of the clause or section as they are severable; R. M. D. Chamarbaughwala vs The Union of India (2).
The constitutionality of section 8 of the Act was challenged on the ground that it violated the petitioners ' right under articles 21 and 31.
That section when quoted runs as follows: " Any person authorised by the State Government in this behalf may, at any time, seize. . and detain any document, article or thing which such person has reason to believe ' contains any advertisement which contravenes any of the provisions of this Act and the court trying such contravention may direct that such document (includingall copies thereof) article or thing shall be forfeited to the Government".
It was pointed out by Mr. Munshi that there was nolimitation placed on, no rules and regulations made for and no safeguards provided in regard to the powers of a person authorised in that behalf by Government to seize and detain any document, article or anything which in the opinion of such person contains any advertisement contravening any of theprovisions of the Act.
It was also submitted that in the corresponding English Act of 1939, in section 10 there are proper safeguards provided in regard to the exercise of the power of seizure etc.
The first part of section 8 of the Act dealing with seizure and detention received slender support from the Solicitor General.
It may (1) , 634, 637, 638, (2)[1957] S.C.R. 930.
700 be, he contended, that having regard to the purpose and object of the Act the Indian legislature did not think it necessary to provide any safeguards and that the legislature thought that nobody would be prejudiced by reason of the want of safeguard previous to the seizure, In our opinion this portion of the section goes far beyond the purpose for which the Act was enacted and, the absence of the safeguards which the legislature has thought it necessary and expedient in other statutes, e.g., the Indian Drugs Act, is an unreasonable restriction on the fundamental rights of the petitioners and therefore the first portion of the section, i.e., " any person authorised by any of the provisions of this Act" is unconstitutional.
What then is the consequence of this unconstitutionality ? If this portion is excised from the rest of the section the remaining portion is not even intelligible and cannot be upheld.
The whole of the section 'must therefore be struck down.
By a portion of cl.
(d) of section 3 and the whole of B. 8 being declared unconstitutional the Act is not thereby affected as they are severable from the rest of the Act.
As a consequence of excision of that portion and of section 8 from the Act the operation of the remaining portion of the Act remains unimpaired.
R. M. D. Chamarbaughwala vs The Union of India(1).
As a result of section 8 being declared invalid, all the goods seized from the petitioners having been seized without the authority of law must be returned to the respective petitioners.
It will be for the Government to take such action in regard to the proceedings taken or prosecutions commenced as is in accordance with the law laid down in this Judgment.
We declare the portion of cl.
(d) of section 3 indicated above and section 8 unconstitutional and direct therefore that a writ of mandamus shall issue directing the respondents to return the goods seized.
As the petitioners ' challenge to the constitutionality of the Act is partially successful the proper order as to costs is that the parties do pay their own costs.
Petitions partly allowed.
| The Secretary of the Government of Bihar in the Revenue Department issued a notice to the petitioner company who were the lessees of mining lease, charging it with violation of sections 10, 12 and 14 Of the Bihar Mica Act, 1947, and calling upon it to show cause why action should not be taken to cancel its licence which was being issued from year to year for mining Mica.
The company asked for particulars of the alleged violation of the provisions of the Act from the Government which was furnished.
The company sent a written representation to the Government denying the allegations.
After two years of the said representation, the Government issued a notification cancelling the 78 610 petitioner company 's licence under the provisions of section 25(1)(c) Of the Act.
The company moved the Supreme Court under article 32 Of the Constitution for the issue of a writ of certiorari to quash the said order of the Government of Bihar cancelling the licence and for the issue of writ of mandamus directing them to forbear from giving effect to the said order of cancellation, on ground inter alia that the Government acted illegally and with mala fides and infringed the fundamental rights of the petitioner under article 19(1), sub cls.
(f) and (g) of the Constitution and that the provision of section 25(1)(c) of the Bihar Mica Act, 1947, operate as an unreasonable restriction on the said right, and even if the said section did not infringe its fundamental rights, the order of the Government in cancelling the lease without affording it a reasonable opportunity to show cause within the meaning of the second proviso to that section, infringed its fundamental rights.
Held, that the provisions of section 25(1)(c) of the Bihar Mica Act, does not impose an unreasonable restriction on the fundamental rights under article 19(1)(f) & (g) of the Constitution.
The restrictions which a State is authorised to impose under cls.
(5) & (6) of article 19 of the Constitution, in the interest of the general public over the fundamental rights of a citizen under sub cls.
(f) & (g) of clause (1) of article 19 must be reasonable and must not depend upon the mere uncontrolled discretion of the executive.
It is the duty of this Court to decide having regard to the concept and principle of reasonableness which is correctly laid down in The State of Madras vs V. G. Row, whether a particular Statute satisfied the objective test of " reasonableness.
" The statutory conditions of the Bihar Mica Act, subject to which the licence is given are, obviously, reasonable and necessary for regulating the mining industry The power to cancel the licence which is conferred on the Government under section 25 Of the said Act is only to achieve the object of the Act, i.e., to enforce provisions which have been enacted in the interest of the public, and that power is exercisable on the basis of objective tests and in accordance with the principles of natural justice.
The general proposition that whenever discretionary power is conferred on a State Government or the Union Government by law, the said law must necessarily operate as a reasonable restriction on a fundamental right, negatives the concept of fundamental rights for the simple reason that fundamental rights are guaranteed against State action.
Therefore, the conferment of such a power on the State Government and not upon a subordinate officer is only one of the considerations that may enter into the judicial verdict on reasonableness of a particular law and the reasonableness of that law falls to be decided only on the cumulative effect of the circumstances under which such power is conferred.
611 The concept of " reasonable opportunity " is an elastic one and is not susceptible of easy and precise definition.
What is reasonable opportunity under one set of circumstances need not be reasonable under different circumstances.
It is the duty of the Court to ascertain in each case, having regard to the overall picture before it, to come to a conclusion whether reasonable opportunity is given to a person to " show cause.
" Tribunals or authorities who are entrusted with quasi judicial functions are as much bound by the relevant principles governing the " doctrine of bias " as any other judicial tribunal.
In the instant case the Revenue Minister had personal bias within the meaning of the decisions and he should not have taken part in either initiating the enquiry or in cancelling the licence.
Neither the necessary conditions to enable the Government to take action under section 25(1)(c) Of the Act has been established nor the State Government has afforded reasonable opportunity to the petitioner within the meaning of the second proviso to section 25(1) Of the Act.
State of Madras vs V. G. Row, ; , followed.
Thakur Raghubir Singh vs Court of Wards, Ajmer, ; , held inapplicable.
|
(CRL.) No. 133 of 1991.
(Under Article 32 of the Constitution of India).
R.K. Jain, Ravi Prakash, Mrs. Swati Kapoor Ms. Abha R. Sharma and Ms. Rajni K. Prasad for the Petitioner.
464 Altaf Ahmed, Additional Solicitor General, Ms. Kusum Choudhary, C. Ramesh and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
On the basis of a letter received from a prisoner detained in Alipore Central Jail, Calcutta, drawing the attention of this Court to the long wait of Daya Singh, the petitioner convicted for the murder of late Chief Minister of Punjab Pratap Singh Kairon, lodged at present in Rohtak Jail Haryana, pending the execution of his death sentence, this case was registered as a writ petition and was listed before us on 27.3.1991.
All the relevant facts were not available from the letter but from the Office Report it appeared that the case of the condemned prisoner had earlier come to this Court.
We directed the Registry to examine the earlier files and place before us the relevant details.
In the meantime we stayed the execution of the death sentence.
The learned carousel for the State of Haryana was also informed about the case.
As directed, the case was placed before us again on Monday, the 1st April, 1991, when Ms. Kusum Chaudhary appeared on behalf of State of Haryana and orders were passed for notice to the counsel representing the Union of India.
Having heard about the case, the convict Daya Singh engaged his own counsel to represent him and to press this writ petition and accordingly Mr. R.K. Jain appeared for him on 5.4.1991.
We have, in the circumstances, treated this application as one directly by Daya Singh.
The Union of India is represented by Additional Solicitor General of India.
The case was further adjourned at the request of the counsel and was ultimately heard on 16.4.1991.
Mr. Jain has contended that if the relevant circumstances of this case are examined in the light of the decisions of this Court, the conslusion is irresistible that there has been inexcusable delay in executing the death sentence of the petitioner, and the sentence should, therefore, be quashed by this Court under Article 32 of the Constitution.
The petitioner was tried for the murder of Sardar Pratap Singh Karion which took place in 1965 and was convicted and sentenced to death by the trial court on 13.12.1978.
The sentence was confirmed by the High Court on 22.3.1980.
His Special leave petition was dismissed by this Court on 21.8.1980 and a further prayer for review was rejected on 2.9.1981.
He filed mercy petitions before the Governor and the President of India, which were also rejected.
465 Seveal orders of stay were passed from time to time, the details whereof are not very significant in view of the rejection by this Court of an earlier application under Article 32, being Writ Petition No. 191 of 1986, filed through his brother Lal Singh.
The case was dismissed on October 11, 1988 and the stay of the execution of the sentence stood vacated.
The reasoned judgment, however, was pronounced later and is resported in Smt.
Triveniben vs State of Gujarat; , The petitioner filed another mercy petition thereafter before the Governor of Haryana on 18.11.1988 and an order for stay of execution was again passed.
The matter remained pending and the petitioner has been awaiting the final outcome of his last petion since then.
On the basis of a newspaper report dated December 24, 1990 it is alleged that the attention of the Deputy Prime Minister was drawn to the petitioner 's case and the Deputy Prime Minister gave an assurance that he would examine the matter.
The report drew the attention of Alipore Jail prisoner which prompted him to send the letter which led the Registry of this Court to register the present writ petition.
The earlier writ petition of the petitioner Writ petition No. 191 of 1986, filed through his brother Lal Singh, was initially heard by a Division Bench of this Court and the matter, along with a number of other applications on behalf of other convicts was referred for the decision of the Constitution Bench.
The cases were heard at considerable length by the Constitution Bench of which one of us (Sharma,L) was a member and the leading argument at that stage was also made by Mr. R.K. Jain when all aspects of the cases were thoroughly considered.
Finally, this Court substituted the sentence of death of one convict (Harbhajan Singh) in another case by the sentence of imprisonment for life, but the other writ petitions including that of the prisoner were dismissed.
In the circumstances the petitioner cannot succeed on the basis of the earlier delay.
The operative part of the judgment, as stated earlier, was passed in October, 1988 and what is now relevant to consider is the delay subsequent to this date.
Before proceeding further we may refer to the decision in Smt.
Triveniben 's case laying down the principle which governs the present petition.
Although the cases were disposed of by two judgements, according to the opinion of the Bench, which was unanimous, undue delay in execution of the sentence of death entitles the condemned prisoner to approach this Court under Article 32, but this Court will examine only the nature of delay caused and circumstances ensued after the sentence was finally confirmed by the judicial process, and will have no jurisdiction to reopen the conclusions reached by the 466 Court while finally maintaining the sentence of death.
Further, while considering the grievance of inordinate delay this Court may consider all the circumstances of the case for deciding as to whether the sentence of death should be altered into imprisonment for life, and no fixed period of delay could be held to make to sentence of death inexecutable.
In the light of these observations the circumstances of the present case are to be examined.
It is true that while rejecting the earlier prayer of the petitioner on October 11, 1988 all the relevant considerations were taken into account and the petitioner cannot be permitted to raise the same plea once rejected, by repeated petitions.
But this does not deprive the petitioner the right to renew the prayer on fresh circumstances arising later and, therefore, not considered.
This is the position in the present case.
Although the matter was finally closed by this Court in October, 1988, the petitioner continues to remain in a state of suspense since then.
The main question is as to what is the effect of this delay.
The initial reason for the further delay has been a fresh mercy petition filed by the petitioner.
Does this fact justify keeping him under a sence of anticipation for more than two years? If the prayer was not considered fit be rejected at once it was certainly appropriate to have stayed the execution, but the matter should have been disposed of expeditiously and not kept in abeyance as has been done.
The counter affidavit filed on behalf of the Union of India states that on the receipt of the last mercy petition the Governor of Haryana immediately made a reference to the President of India seeking enlightenment on the question as to whether the Governor, while dealing with such applications, is bound by the advice of the Chief Minister of the State and whether it is open to the Governor to exercise his constitutional power in a case where an earlier application to the same effect had been rejected by the President.
Soon after the receipt of this communication, the matter was referred to the Department of Legal Affairs, Ministry of Law and Justice for advice, and the Ministry suggested that the question should be discussed with the Attorney General of India.
Since the matter remained under consideration no reply could be sent to the quarry and ultimately it was only in March this year, that the reply could be sent in the shape of a directive under Article 257(1) of the Constitution to all the Chief Secretaries of the State Governments and Union Territories.
The affidavit, however, does not furnish any fact or circumstance in justification of the delay.
In absence of any reasonable explanation by the respondents we are of 467 the view that if the concerned officers had bestowed the necessary attention to the matter and devoted the time its urgency needed, we have no doubt that the entire process of consideration of the questions referred would have been completed within a reasonable period without leaving any yawning gap rightly described by the learned Additional Solicitor General as "embarrassing gap".
There has, thus, been an avoidable delay, which is considerable in the totality of circumstances in the present case, for which the condemned prisoner in in no way responsible.
As was cautioned by this Court in Smt.
Triveniben 's case we are not laying down any rule of general application that the delay of two years will entitle a convict, sentenced to death, to conversion of his sentence into one for life imprisonment, rather we have taken into account the cumulative effect of all the circumstances of the case for considering the prayer of the petitioner.
Although the fact that the petitioner has been continuously detained in prison since 1972 was taken into account while rejecting his earlier writ petition, the same is not rendered completely irrelevant for the purpose of the present case and we have taken it into consideration merely as a circumstance assuming significance as a result of the relevant circumstances arising subsequent to the judgment rendered in October, 1988.
Having regard to all the circumstances of the case, we deem it fit to and accordingly substitute the sentence of imprisonment for life in place of the petitioner 's death sentence.
The writ petition is accordingly allowed.
In the letter from Alipore Jail a prayer has been made for the release of the petitioner.
As was indicated in Triveniben 's case, the only relief a convict awaiting execution of death sentence can get from this Court on the ground of delay is conversion of the sentence into that of life imprisonment.
However, on conversion of the death sentence to life imprisonment, the petitioner would now be governed and dealt with as a life convict for all purposes.
We are not required to say anything more in this behalf.
This prayer made in the letter is rejected.
R.P. Petition allowed.
| One R, the wife of S, disappeared from her husband 's house.
She was traced to the house of the appellants, A and his brother B.
When S went there and asked A to let his wife go with him A told him that he had married her and B threatened S and asked him to go away.
The appellants were charged under section 498 Indian Penal Code for detaining R when they knew or had reason to believe that she was the wedded wife of S, with intent to have illict intercourse with her.
The appellants pleaded that R was not validly married to S and that she had not been detained by them inasmuch as she was tired of living with S and had voluntarily and of her free will come to stay with them.
The Magistrate found the appellants guilty, convicted them and sentenced them to undergo simple imprisonment for two months each.
On appeal the Sessions Judge confirmed the conviction but reduced the sentence to a fine of Rs. 50/ each.
The appellants filed a revision before the High Court.
The High Court issued a notice of enhancement and after hearing the appellants dismissed the revision and enhanced the sentence to rigorous imprisonment for six months each.
Held, that detention in section 498 means keeping back a wife from her husband or any other person having the care of her on behalf of her husband.
Such keeping back may be by force; but it need not be by force.
It can be the result of persuasion, allurement or blandishments which may have either caused the willingness of the woman, or may have encouraged, or co operated with, her initial inclination to leave her husband.
The object of the section is to protect the rights of the husband and it cannot be any defence to the charge to say that, though the husband has been deprived of his rights, the wife is willing to injure the said rights and so the person who is responsible for the willingness has not detained her.
A was rightly convicted as the charge of detention was proved against him on the findings of the Courts below that he had offered to marry R and had thereby either persuaded or encouraged her to leave her husband 's house.
But the charge was not made out against B as it was not proved that he had offered any inducement, blandishment or allurement to R for leaving the protection of her husband and for refusing to return to him.
465 Sundara Dass Teva, (1868) IV Mad. H. C. R. 20; Ramaswamy Udayar vs Raju Udayar, A. 1.
R. ; Emperor vs Jan Mohomed, (1902) IV Bom.
L.R. 435; Broomfield, J., in Emperor vs
Mahiji Fula, Bom.
88, Emperor vs Ram Narayan Baburao Kapur, ; Mahadeo Rama vs Emperor, A.I.R. (1943) Bom.
179; Prithi Missir vs Harak Nath Singh, I.L.R. ; Bipad Bhanjan Sarkar vs Emperor, I.L.R. ; Banarsi Raut vs Emperor, A.I.R. (1938) Pat.
432 and Bansi Lal vs The Crown, (19I3) Punj.
L.R. 1066, approved.
Divatia, J., in Emperor vs Mahiji Fula, Bom.
88, Mabarak Sheikh vs Ahmed Newaz, and Harnam Singh vs Emperor, A.I.R. (1939) Lah.
295, disapproved.
Held further, that the High Court was not justified in en hancing the sentence to six months rigorous imprisonment, and it should have only restored the sentence passed by the trial Court.
The question of sentence is normally in the discretion of the trial Court and the High Court can enhance the sentence only if it is satisfied that the sentence imposed by the trial Court is unduly lenient, or, that in passing the order of sentence, the trial Court had manifestly failed to consider the relevant facts.
The sentence of two months simple imprisonment imposed by the trial Court was not so unduly or manifestly lenient as not to meet the ends of justice.
|
ivil Appeal Nos.
1335 36 of 1976.
853 From the Judgment and Order dated 9.12.75 of the Punjab & Haryana High Court in L.P.A. Nos. 231 and 267 of 1974.
Markandey Singh, Appellant in person, in CA.
No. 1335 of 1976 and Respondent in person in CA.
No. 1336 of 1976.
Girish Chandra, C.V. Subba Rao and K.S. Guruswamy for the appellants in CA.
No. 1336 of 1976.
V.C. Mahajan, for the Respondent In 1335 of 1976.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These two appeals are connected.
These deal with the rectification of year of allotment of absorption of the appellant in the first appeal and respondent in the second one Shri Markandey Singh (hereinafter called the appellant in the first appeal and respondent in the second appeal) in the Indian Police Service.
Shri M.L. Bhanot is the respondent in the first appeal.
He is appellant in the second appeal being Civil Appeal No. 1336 of 1976.
By the order dated 21st July, 1973, Shri Markandey Singh was assigned 1956 as the year of allotment in I.P.S. cadre.
Shri Bhanot challenged the said order.
The same was quashed by the learned single judge of Punjab & Haryana High Court on 4th April, 1974.
Letters Patent Appeal against the said order was dismissed by the Division Bench of the said High Court on 9th December, 1975.
The first appeal aforesaid arises from the said decision.
In order to appreciate the position, it may be relevant to note that Shri Markandey Singh the appellant in the first appeal joined the U.P. State Service as Deputy Superintendent of Police on 17th November, 1950 by passing a competitive examination.
Two years later he was confirmed as such.
In November, 1953, he joined on deputation the Union Territory of Delhi which had at that time no police service of its own.
While on deputation in 1958 and again in 1959 60, the appellant had officiated as Superintendent of Police but for administrative reasons was reverted back.
In July, 1960, Himachal Pradesh Indian Police Service was created and thereafter the Delhi Himachal Pradesh Police Service in March, 1961.
On 6th December, 1961, Shri Singh was again promoted to officiate as Superintendent of Police.
During the period of his officiation, his request for being absorbed in the Himachal Pradesh State Police Service was accepted and by an order dated 7th February, 1963, he was absorbed in the State Service with effect from 27th November, 1962.
While he was continuing to officiate in the senior post as aforesaid, on 854 30th April, 1965, he was confirmed in the Union Territory Cadre of I.P.S. with effect from 14th May, 1964.
He was assigned 1958 as the year of allotment.
He, however, made representation against the order of allotment in August, 1969 to the Central Government claiming the benefit of officiation from 6th December, 1961 to 13th May, 1963 in the matter of fixation of his year of allotment.
On 14th May, 1963, the appellant 's name had been brought on the select list of the officers to be promoted to the Indian Police Service and he was recruited with effect from the same date.
It may be noted that during the preceding period of officiation as mentioned hereinbefore he was not on the select list.
On 23rd April, 1970, his representation was rejected by the Central Government.
He made a second representation on 23rd June, 1970.
Shri Bhanot had appeared in the I.P.S. Examination.
He was successful and recruited in the Police Service in October, 1957.
The year of allotment assigned to him was 1957.
Shri Bhanot, was allotted the year 1957 on his joining the service by examination and the appellant allotted the year 1958 as mentioned hereinbefore.
In November, 1962, the respondent, Shri Bhanot was promoted as Superintendent of Police in the Union Territory of Delhi with effect from 13th May, 1961.
In November, 1966, reorganisation of State of Punjab took place and at that time Shri Bhanot was allotted to the joint I.P.S. Cadre of Delhi and Himachal Pradesh.
On coming to know in December, 1972 about the second representation made by Shri Singh, Shri Bhanot wrote to the Central Government that he having been allotted the year 1957 was senior to Shri Singh and if any change was brought about in the year of allotment of Shri Singh which was 1958, he, the respondent, should be intimated of the reasons so as to enable him to make an effective representation.
According to the respondent, which has been accepted by the Division Bench of the High Court of Punjab & Haryana in the impugned judgment, he did not hear anything from the Central Government in spite of the several reminders.
On 21st June, 1973, the Central Government by its order of the same date gave the benefit of officiation for a period from 6th December, 1961 to 13th May, 1963 to Shri Singh and accepted his representation and assigned to him 1956 as the year of allotment.
In consequence, Shri Singh was placed below one Shri B.P. Marwaha and above Shri Bhanot in the gradation list of Union Territory of I.P.S. Feeling aggrieved, Shri Bhanot filed the writ petition being Writ Petition No. 12 of 1974 before the High Court.
The learned single judge allowed the same.
He held that Shri Singh being on deputation was not entitled to the benefit of officiation on senior post prior to 27th November, 1962 with effect from which he was absorbed in Delhi Himachal Pradesh State Police Service.
The representation made by Shri Singh was barred by time.
855 It was further held by the learned single judge that acceptance of the second representation of Shri Singh without giving an opportunity to Shri Bhanot was in violation of the principles of natural justice.
In the premises the order dated 21st June, 1973 was quashed by the learned single judge.
There were two appeals before the Division Bench one was filed by Shri Singh against the judgment of the learned single judge and the other was filed by the Union of India.
Both these appeals were disposed of by the Division Bench by judgment in Letters Patent Appeal No. 231 of 1974 and for the reasons given in Letters Patent Appeal No. 231 of 1974, the appeal by the Union of India was also dismissed and being aggrieved by the said decision, the Union of India has preferred the second appeal herein namely Civil Appeal No. 1336 of 1976.
The question involved in these appeals is whether the year of allotment given to Shri Singh as 1958 was correct or not and whether the order passed by the High Court both of the learned single judge which was later upheld by the Division Bench to quash the year of allotment in favour of Shri Singh for the year 1956 was bad or not.
this depends upon the interpretation of various rules and provisions.
The main question which falls for consideration in these two appeals is whether the service rendered by one in a senior post in the I.P.S. Cadre of a particular State while the incumbent was on deputation to the State Police Service of that State from another State was entitled to the benefit for the purpose of working out the year of allotment in accordance with second proviso to rule 3(3)(b) of the Seniority Rules.
We are concerned with the unamended rule 3(3) of the said Rules.
The relevant part of the said rule reads as follows: "3(3) The year of allotment of an officer appointed to the Service after the commencement of these rules, shall be (a) Where the officer is appointed to the Service on the result of a competitive examination, the year following the year in which such examination was held; (b) Where the officer is appointed to the Service by promotion in accordance with rule 9 of the Recruitment Rules, the year of allotment of the junior most among the officers recruited to the 856 Service in accordance with rule 7 of those rules who officiated continuously in a senior post from a date earlier than the date of commencement of such officiation by the former; Provided that the year of allotment of an officer appointed to the Service in accordance with rule 9 of the Recruitment Rules who started officiating continuously in a senior post from a date earlier than the date on which any of the officers recruited to the Service, in accordance with rule 7 of those Rules, so started officiating shall be determined adhoc by the Central Government in consultation with the State Government concerned.
Provided further that an officer appointed to the Service after the commencement of these Rules shall be deemed to have officiated continuously in senior post prior to the date of the inclusion of his name in the Select List prepared in accordance with the requirements of the Indian Police Service (Appointment by Promotion) Regulation framed under rule 9 of the Recruitment Rules, if the period of such officiation prior to that date if approved by the Central Government in consultation with the Commission.
Explanation 1.
An officer shall be deemed to have officiated continuously in a senior post from a certain date if during the period from that date to the date of his confirmation in the senior grade he continues to hold without any break or reversion a senior post otherwise than as a purely temporary to local arrangement.
Explanation 2.
An officer shall be treated as having officiating in a senior post during any period in respect of which the State Government concerned certifies that he would have so officiated but for his absence on leave or appointment to any special post or any other exceptional circumstances.
" On behalf of the appellant before us, reliance was placed on the decision of this Court in Arun Ranjan Mukherjee vs Union of India & Ors., [1971] Suppl.
S.C.R. 574 A.I.R.
It may be mentioned that in 1954 the Central Government, in 857 exercise of the powers vested in it by section 3 of the All India Services Act, 1951 (hereinafter called the 'said Act ') framed certain rules.
The Indian Service (Recruitment) Rules (hereinafter called the 'Recruitment Rules '), the Indian Police Service (Cadre) Rules (hereinafter referred to as the 'Cadre ') and the Indian Police Service (Regulation of Seniority) Rules (hereinafter referred to as the 'Seniority Rules ').
The Indian Police Service (Fixation of Cadre Strength) Regulations ', 1955 (hereinafter referred to as the 'Cadre Regulations ') were also framed for determining the strength and composition.
It is not necessary to refer to the various rules to which the Division Bench in the impugned judgment has made exhaustive reference.
It is indisputable that Shri Singh, the appellant herein, was holding a substantive position in the U.P. State Police Service until he was taken over in the joint Police Service of Delhi and Himachal Pradesh in February, 1963, with effect from 27th November, 1962.
He was brought on the select list of officers to be promoted to I.P.S. cadre of the Union Territories of Himachal Pradesh and Delhi on 14th May, 1963.
Prior to that, he had been continuously officiating in a senior post since 6th December, 1961.
He claimed that he should be given the benefit of that period.
This was rejected by the learned single judge and this rejection was upheld by the Division Bench of the High Court.
He was on deputation in Delhi Himachal Pradesh State Police Service.
The question is what is the correct position.
The first representation that the appellant made for fixing the year of allotment to be given the benefit of continuous officiation on a senior post from 6th December, 1961, to 13th May, 1963 was rejected by an order dated 23rd April, 1970.
The said order of rejection is Annexure R. 4.
It stated that in accordance with the orders contained in Letter No. 1/2/62 Delhi IDH(S) dated 23.8.1963, of the Home Ministry, all cadre posts held by non cadre officers not on the Select List were deemed to have been kept in abeyance with effect from 27th September, 1961 onwards; and according to the Seniority Rules, the service rendered by an officer prior to his inclusion in the Select List could not be counted for seniority unless approved by the Central Government in consultation with the Union Public Service Commission under the Second proviso to rule 3(3)(b) of the Seniority Rules.
The requisite approval, it was stated, was not there.
In the second representation made by the appellant, the Division Bench noted the fact that Shri Singh had noted in Madan Gopal Singh vs Union of India, the Division Bench of Delhi High Court had quashed the aforesaid letter of the Home Ministry.
A 858 perusal of the order dated 21st June, 1973 made by the Central Government showed that the representation was accepted but not on the ground urged by him.
The reason why the second representation was accepted by the Central Government was that in November, 1972, the Union Public Service Commission had approved of the officiation of Shri Singh in the I.P.S. cadre post during the period 6th December, 1961 to 13th May, 1963 under the second proviso to rule 3(3)(b) of the Seniority Rules, "as they stood in May, 1963".
Accordingly, Shri Singh was allowed the year of 1956 and placed above Shri Bhanot.
Old rule 3(3)(b) of the Seniority Rules applicable in this case has been set out hereinbefore.
It was urged before the Division Bench that nowhere rule 3(3)(b) and the second proviso thereto in particular excludes the officiating period of deputation.
In this connection reliance was placed on the decision of the Division Bench in the case of Arun Ranjan Mukherjee vs Union of India and others (supra).
In as much as good deal of reliance was placed by the Division Bench as well as by the appellant before us on the said decision.
It may be mentioned that the appellant in that case joined the Indian Army as a Commandant Officer in 1942.
He became a Major in 1945.
His services were lent to the state of West Bengal and accordingly on 10th January, 1949, he was posted as a Commandant of the Special Armed Police Battalion, a post corresponding to a senior post in the I.P.S.
The said appellant with his consent was appointed to the West Bengal State Police Service on 1st July, 1953.
On 8th September, 1954, the Indian Police Service (Recruitment) Rules, 1954, Indian Police Service (Cadre) Rules, 1954 and the Indian Police (Regulation of Seniority) Rules, 1954 were framed by the Government of India under section 3 of the All India Services Act 61 of 1951.
On 6th June, 1955, the Indian Police Service (Appointment by Promotion) Regulations, 1955 were also issued under which 25% of the senior posts were allotted to the Indian Police Service cadre in each State.
The appointment of the appellant was outside the quota.
On 31st July, 1958, the appellant was appointed on probation in the State cadre of West Bengal.
In December, 1959 he was substantively appointed to a senior post in the Indian Police Service and confirmed thereon with effect from 21st July, 1958.
In December, 1958, the Ministry of Home Affairs conveyed to the Government of West Bengal its decision to fix the pay of the appellant in the senior scale of the Indian Police Service notionally from 10th January, 1949, the date from which he held an Indian Police Service Cadre post continuously.
On 19th January, 1960, the Indian Police Service (Seniority of Special Recruits) Regulations 1960 were framed pursuant to rule 5 A of the Seniority Rules on 11th October, 859 1960, the Government of India in consultation with the Union Public Service Commission decided to allot to the appellant the year 1948.
The year of allotment was subsequently changed to 1947 on the basis that the officiation of the appellant as well as that of the junior most direct recruit, in a senior scale did not start before 19th May, 1951.
The appellant filed a writ petition under Article 226 of the Constitution.
The learned single judge, allowing the petition, held that the date from which the appellant continuously officiated was 10th January, 1949 and that accordingly the year 1943 allotted to D the Junior most direct recruit, should also be allotted to the appellant.
The learned Single Judge also held that the first and second proviso to rule 3(3)(b) of the Seniority Rules were not applicable to the appellant.
The Division Bench in appeal agreed with the learned single judge, that the date of continuous officiation of the appellant was 10th January, 1949.
But the High Court thought that the year 1947 allotted to the appellant on the basis of his officiation from 19th May, 1951 could not be sustained because the latter date had been held by this Court to be irrelevant in the case of D.R. Nim, I.P.S. vs Union of India, ; Non the less the year of allotment 1948 assigned to the appellant in the order of 11th October, 1960 was sustained because it was on an ad hoc basis.
Against the High Court 's order the appellant appealed to this Court.
He urged under the main clause of rule 3(3)(b) of the Seniority Rules the year 1943 should be allotted to him as the said year had been allotted to D the junior most direct recruit and that the first proviso to rule 3(3)(b) did not apply to him as it applied only to those in the joint cadre; and that this Court should deduct the 'P ' factor from the date of officiation which as held by the High Court was 10th January, 1949 and allot to him the year 1943 as the year of allotment.
This Court dismissed the appeal and held that D was an Indian Police Officer recruited in 1945.
He became a member of the Indian Police Service under sub rule(1) of rule 3 of the Indian Police Service (Recruitment) Rules, 1954 on the date when the said Rules came into force in 1954, and was not an officer recruited to the service in accordance with rule 7 of those Rules.
The year of allotment assigned to D was not therefore available to the appellant under the main part of rule 3(3)(b).
This Court further held that the first proviso to rule 3 nowhere referred or even remotely indicated that it was only applicable to the persons in the joint cadre.
In fact rule 2(1) of the Seniority Rules and the words "State cadre" and "joint cadre" had been defined as having the meaning respectively assigned to them in the Indian Police Service (Cadre) Rules, 1954.
By reference to rule 7 of the Cadre Rule it is 860 apparent that what is to be determined is the authority which is to appoint, to the respective cadres i.e. in the case of State Cadre it is the State Government and in the case of Joint Cadre it is the State Government concerned.
The first proviso did not refer to any appointment to any cadre it only dealt with Regulation of Seniority and the reference to State Government concerned is for the purpose of fixing the date of officiation ad hoc in consultation with the Central Government.
When there are several State Governments the consultation by the Central Government must necessarily be with the State Government concerned in relation to the officer who was appointed to the cadre of that State.
Whether the first proviso applied or the second proviso applied, it was the Central Government that had to determine ad hoc, the year of allotment after approving the period of officiation in consultation with the Public Service Commission.
This Court further held that in view of the judgment in Nim 's case (supra) the order assigning 1947 as the year of allotment to the appellant on the basis of an arbitrary date of officiation namely 19th May, 1951 was bad and had been quite properly struck down by the High Court.
The High Court however had no power to direct the year 1948 to be fixed as the year of allotment for the determination of the seniority of the appellant on the basis that that was fixed on an ad hoc basis in an earlier occasion by the Government of India.
Once the Government of India had on a memorial presented by the Appellant decided finally in supersession of its previous decision that his year of allotment was 1947, the previous decision fixed on ad hoc basis could not be revived.
It was for the Government of India in consultation with the Commissioner to determine ad hoc the year of allotment to be assigned to the appellant in relation to the date of his continuous officiation.
This Court would not trespass upon the jurisdiction of the Government of India to determine ad hoc in consultation with the Commission on a consideration of the relevant materials, the date of the appellant 's continuous officiation and assign him a year of allotment.
This Court reiterated that it was for the Central Government to examine year of allotment after approving the period of officiation in consultation with the Union Public Service Commission.
It may be relevant to mention that this Court noted the observations of the Division Bench judgment of the Calcutta High Court which was under appeal in that case and noted that there was nothing in clause (b) of the said Rules which showed that while officiating in a "senior post", the officer concerned must be an officer belonging substantially to the State Police Service in question and could not be an officer on deputation from some other service.
It was urged before the Divi 861 sion Bench that this Court had approved the view of the Calcutta High Court that benefit of the period of deputation should be given to Shri Mukherjee.
The Division Bench was unable to accept the position.
The Division Bench was of the view that this Court had reiterated that it was relevant material which had to be taken into consideration by the Government of India but it was for Government to determine in consultation with the Union Public Service Commission the date of a person 's continuous officiation and assign to him a year of allotment and the High Court as such had no such power.
The Division Bench was of the view that the learned single judge of the High Court was right that this Court had not given any decision whether the period of deputation of Shri Mukherjee in that case before his absorption could be taken into account in assigning the year of allotment to him.
The learned single judge in Chambers as noted by the Division Bench further found support to this view with reference to relevant noting in the file of Shri Mukherjee which was produced before the learned single judge.
Rule 3(3)(b) of the Seniority Rules and the provisos thereto should not be read in isolation.
This rule is in the setting of other rules.
The Cadre rules read with Indian Police Service (Fixation of Cadre Strength) Regulations of 1955 fixed the strength of the Indian Police cadre of the Union Territories a particular figure.
Out of them, not more than 25% officers eligible for recruitment to the I.P.S. cadre had to be the substantive members of the State (U.T.) Police Service at that time.
The scheme as it stood, fixed the strength of the I.P.S. cadre State wise.
Recruitment by promotion thereto could only be from the substantive members of the Police Service of that particular State.
So long as Shri Singh remained as a substantive member of the U.P. State Police Service, he could not possibly be promoted to the joint I.P.S. cadre of the Union Territories of Delhi and Himachal Pradesh.
He became eligible to his promotion to the Union Territory I.P.S. Cadre only after he had been absorbed in the Delhi Himachal Pradesh State Police Service.
Proviso (1) to Rule 3(3)(b) of the Recruitment Rules gave a clear indication that for determining the year of allotment ad hoc the Central Government consulted the State Government concerned.
In Explanation (2) again, there was reference to a certificate by the State Government concerned that an officer would have officiated in a senior post but for his absence on leave or appointment to any special post.
It is apparent therefore that the State Government is the one, of the Police Service of which the Officer concerned is a substantive member.
In this case as found by the Division Bench, Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and he 862 had gone back to his parent State of U.P.
In case Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and he had gone back to his parent State of U.P., then according to Explanation (2) the U.P. State Government might have issued the certificate to facilitate his promotion to the I.P.S. cadre of the U.P. State.
The Promotion Regulation of 1955 laid down the determination of the eligibility of a substantive member of the State Police Service.
Thereafter, the names of the eligible officers were brought on the Select List, which were to be approved by the commission.
Appointments by promotion to the I.P.S. cadre are made from the Select List.
In the event of promotion, but for second proviso the benefit of continuous officiation on a senior post for fixing his year of allotment is given to an officer from the date after his being nominated on the Select List.
In Explanation (1) of rule 3(3), there is no mention that deputationist before his absorption in the State Police Service can get the benefit of such officiation.
That is the position.
Therefore before his absorption, it is not possible to accept the position that Shri Singh was entitled to the benefit of his officiation.
The Division Bench so held.
We are of the opinion that the Division Bench was right on this aspect of the matter.
It may be mentioned that Seniority Rules 1954 including rule 3(3)(b) quoted above were amended with effect from 22nd April, 1967.
Before the amendment, the appellant Shri Singh, had been confirmed in the Union Territory cadre of Indian Police Service with effect from 14th May, 1964 and had been allotted 1958 as the year.
The first representation was made by him in August, 1969 and the second in June, 1970.
The second proviso to old seniority rule 3(3)(b) referred to hereinbefore had laid down that where a promotee had officiated continuously in a senior post prior to the date of inclusion of his name in the Select List prepared in accordance with the Promotion Regulations, he could get the benefit of such officiation if approved by the Central Government in consultation with the Commission.
The Seniority Rules as amended in 1967, however, did not provide for such approval.
Hence, after the amendment of the Seniority Rules, the Central Government was not empowered to grant the approval as aforesaid in favour of Shri Singh in November, 1972.
This was the submission on behalf of the respondent, Shri Bhanot.
The argument was not accepted by the Division Bench because the question of allotment of Shri Singh in accordance with the Seniority Rules ripened before the amendment of 1967.
There is no rule vitiating the operation of the old seniority rules.
As a matter of fact, the party had proceeded all along in this case on the basis that the old seniority rules applied.
863 In Government of India and Anr.
vs C.A. Balakrishnan and Ors., this question was considered.
In that case the promotion in question was made in November, 1957.
The change in the relevant rules of promotion came in September, 1960.
This Court affirmed the decision of the High Court and held that in November, 1957 the post in question was a selection post and that the basis of seniority cum fitness introduced by the amendment rules in September, 1960 was not applicable.
The question, therefore, was held to be governed by the old rules.
The Division Bench held that the second representation made by Shri Singh was barred.
As mentioned hereinbefore, in support of the appeal, the appellant submitted that the Division Bench was in error in not following the ratio of the decision in the case of Arun Ranjan Mukherjee (supra).
We are unable to accept this submission.
Arun Ranjan Mukherjee 's case proceeded on the basis of the decision of this Court in the case of D.R. Nim, I.P.S.v.
Union of India (supra).
There under rule 3 of the Indian Police Service (Regulation of Seniority) Rules, 1954 issued under section 3(1) of the All India Services Act, 1951, the mode of determining the seniority of officers of the Indian Police Service was laid down.
It was provided that the officers were divided into categories: namely, (1) those in the Service at the commencement of the Rules, and (2) those appointed to the Service after the commencement of the Rules.
The second category was divided into two sub categories: namely, (a) officers appointed as a result of a competitive examination, and (b) officers appointed by promotion in accordance with rule 9 of the Recruitment Rules.
The year of allotment of an officer which determined his seniority, was determined according to rule 3(3)(a) or (b) of the present rules.
But if an officer started officiating continuously in a senior post from a date earlier than the date on which any of the officers was recruited to the Service by competition, the year of allotment had to be determined ad hoc by the Central Government under proviso (1) to rule 3(3)(b) and under proviso (2) to rule 3(3)(b), the period of officiation before the date of inclusion of the name of an officer in the Select List prepared in accordance with the requirements of the Indian Police Service (Appointment by Promotion) Regulations would be counted only if such period was approved by the Central Government in consultation with the Public Service Commission.
In that case the appellant was officiating as Superintendent of Police from June, 1957 that is from a date earlier than the date of any officer recruited by competition, and was appointed to the Indian Police Service by promotion in 1955 after the commencement of the Seniority Rules.
His name was included in the Select List in 1956.
The 864 government passed an order on 25th August, 1955, that officers promoted to the Indian Police Service should be allowed the benefit of their continuous officiation with effect only from 19th May, 1951.
The appellant challenged the order by a petition under Article 226 before the High Court because the period of his officiation from June, 1947 to May, 1951 was excluded for the purpose of fixation of his seniority.
The High Court dismissed the petition.
This Court under appeal held that the impugned order dated 25th August, 1955 should be quashed and the Central Government directed to fix the year of allotment and seniority of the appellant according to the law.
The date 19th May, 1951 in that case was an artificial and arbitrary date having nothing to do with the application of the first and second proviso to rule 3(3).
It has some relevance for the Indian Administrative Service, but why it should be applied to the Indian Police Service was not adequately explained.
Under the two provisos, this Court held, the Central Government had to determine ad hoc the year of allotment after approving or not approving the period of officiation in consultation with the Public Service Commission taking into consideration all the relevant facts.
The Central Government cannot pick out a date and say that a period prior to that date would not be deemed to be approved by the Central Government within the second proviso.
In view of the fact that he was officiating for eight years, that he was never reverted and that he was appointed to the post when vacancies fell, it could not be held that the appellant 's continuous officiation a mere temporary or local or stop gap arrangement, within the meaning of Explanation (1) to rule 3(3)(b).
In the instant case, the Central Government had not fixed the date of appellant 's absorption in the Select List as 1958 out of the hat so to say.
It had relevance as it appears from the basis of the order of the Central Government.
In this case, the appellant who was a deputationist before the absorption in the State Public Service could not be entitled to get such officiation.
In case Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and he had gone back to his parent State of U.P., then according to explanation (2), U.P. State Government might have issued the certificate to facilitate his promotion to the I.P.S. cadre of the U.P. State.
But so long as Shri Singh remained a substantive member of the U.P. State Police Service, he could not possibly be permitted to join I.P.S. cadre of the Union Territories of Delhi and Himachal Pradesh.
In accordance with the rules, he became eligible to his promotion to the Union Territory I.P.S. cadre only after he had been absorbed in Delhi Himachal Pradesh Police Service. 865 Reading the rules with which we are concerned which state that certain year should be assigned by the Government in consultation with Public Service Commission must be interpreted in the light of the well established rule of construction that if the words of a statute are in themselves precise and unambiguous no more is necessary than to expound these words in their natural and ordinary sense, the words themselves in such a case best declaring the intention of the legislature.
See in this connection the observations of this Court in The Collector of Customs, Baroda vs Digvijaysinhji Spinning & Weaving Mills Ltd.,[1962] 1 SCR 896 at 899.
This Court in Ram Prakash Khanna and others etc.
vs S.A.F. Abbas and others etc.
; , dealing with the aforesaid rule proviso 2, observed that under the second proviso to Rule 3(3)(b) a promotee could obtain the advantage of officiation continuously in a senior post prior to the inclusion of the name in the Select List if the period of such officiation is approved by the Central Government in consultation with the Union Public Service Commission.
This Court reiterated that approval as contemplated in Rule 3(3)(b) is a specific approval and is directed to the particular matter mentioned therein as to whether there was approval of the period of officiation prior to the inclusion in the names in the select list.
The officiation in a senior post is one of the indispensable ingredients in the application of rule 3(3)(b).
But it must be borne in mind that this was not a sine qua non.
This Court found on the materials in the appeal before this Court in that case that it could not be held that the Central Government gave any approval in consultation with the Union Public Service Commission to have the benefit of the period claimed by the appellant.
In the instant case, before the absorption of the appellant in the Himachal Pradesh Delhi, I.P.S. Cadre, his officiation had not been taken by the Central Government into consideration.
We are unable to say that the Central Government had not acted properly.
This appeal is not concerned with the assignment of year 1958 to Shri Singh but rule 16 clause (1)(iii) of the Service Rules provides for certain penalties and one of the penalties, inter alia, is the effect of superseding him in promotion to a Selection Post and as such is appealable.
We are of the opinion that the High Court was right that appeal does not necessarily lie only against the order imposing penalty and is also open to entertain appeal when the service rule was interpreted to the disadvantage of member of the service but rule 17 bars the filing of appeal after the expiry of 45 days.
Proviso to the said rule, however, gives discretion to the appellate authority to condone the delay if 866 sufficient cause is shown.
Rule 24 of All India Services (Discipline and Appeal) Rules, 1969 provides for review within different periods.
Under that rule since Shri Singh could have filed an application for review within one year, in this case remedy of review by Shri Singh had also become barred when the second order was passed.
Rule 25 regulates memorials.
It reads as follows: "A member of the Service shall be entitled to submit a memorial to the President against any order of the Central Government or the State Government by which he is aggrieved within a period of three years from the date of the passing of such order.
It appears that there is provision for appeal in the order of this nature.
Failure to prefer an appeal or apply for review was no bar to the submission of memorials to the President.
In December, 1963 in this case the year of allotment was assigned to Shri Singh.
Shri Singh made the first representation in August, 1969, after the period of limitation had expired.
It was contended, however, on behalf of the appellant relying on the Full Bench decision of the Punjab and Haryana High Court in Sunder Lal and others vs The State of Punjab, that in a case of bona fide mistake, there was always the power to rectify.
It was emphasised that every administrative authority has an inherent right to rectify its own mistakes.
So far as fixing the year 1957 was concerned, we are unable to accept the submission.
It is doubtful that inherent power can be invoked, if there is no reason for refixing the appellant 's year of 1957.
If belated claims are allowed arbitrarily, an atmosphere of uncertainty would prevail.
There should be no sense of uncertainty among public service.
Furthermore it is clear that if the fixation of year 1958 allotment is a mistake, the first representation was rejected with the order dated 23rd April, 1970 which has been set out in extenso in the judgment under appeal.
There the Government 's order reiterates that in accordance with the order contained in the Home Ministry 's letter to which reference is made, all cadre posts held by non cadre officers not on the Select List were deemed to have been kept in abeyance with effect from 27th September, 1961 onwards.
As such Shri Singh could not have claimed that he was officiating in the cadre post prior to coming on the Select List.
In those circumstances, Shri Singh could not be deemed to have officiated in cadre post during the period 6th December, 1961 to 14th May, 1963.
The order further reiterated that according to the seniority rules, the service rendered by an officer prior to inclusion in the Select List could not be counted for seniority unless approved by the Central Government in consultation 867 with the Union Public Service Commission.
It is clear that the Central Government was of the view that decision taken by it in 1963, fixing the said year of allotment was correct.
Good and cogent reasons were given for it.
It is true that the Home Ministry 's letter referred to in annexure R 4 has been quashed by the Delhi High Court but the same has no bearing on the correctness of the decision taken by the Central Government in 1963, because at the relevant time the letter was there and the Central Government was bound to act in accordance thereto.
The contention of the appellant that there was no period of limitation for the grant of the approval is not relevant.
It is therefore clear that there was no scope of the acceptance of second representation.
In the said order there is no mention of any mistake.
When the first order was made, it may be that it was not necessary to give any notice to Shri Bhanot but when the second order was made it affected adversely Shri Bhanot because he in the meantime having been absorbed in the I.P.S. in 1957.
In our opinion it is not that the constitutionality of any provision was challenged as was the case in A. Janardhana vs Union of India and Others, ; at 967 and in General Manager, South Central Railway Secundrabad and Anr.
vs A.V.R. Siddhanti and Ors.
; , , it was held that those would be affected by the grant of the year of seniority need not join as party.
But the position here is different.
Here Shri Bhanot would be adversely affected and his seniority would be affected and here the change was sought from the Government reversing the previous decision and in the meantime Shri Bhanot has acquired a year of allotment.
Therefore, in our opinion it should have been done upon notice to Shri Bhanot.
In any case, Shri Bhanot has been heard.
Our attention was drawn to certain observations of Administrative Law Cases & Materials, second edition by Peter Brett and Peter W. Hogg on the nature of appeal and in the light of the view we have taken, it is not necessary to refer to the said observations.
In the aforesaid view of the matter we are of the opinion that the High Court was right in dismissing the writ petition of the appellant herein.
We, however, having regard to the facts set out hereinbefore, direct the Central Government that the salary scale of the appellant should be refixed taking into consideration the appellant 's service in U.P. and Himachal Pradesh cadre in the senior position as a deputationist.
The appeals are, therefore, dismissed with the aforesaid directions without any order as to costs.
S.L. Appeals dismissed.
| Shri Markandey Singh, the appellant in the first appeal had joined the U.P. State Service as Deputy Superintendent of Police by passing a competitive examination.
In November, 1953, he joined on deputation the Union Territory of Delhi which at that time had no police service of its own.
While on deputation and again in 1959 60, he officiated as Superintendent of Police but was reverted back for administrative reasons.
In July, 1960, Himachal Pradesh Indian Police Service was created and thereafter, the Delhi Himachal Pradesh Police Service, in March 1961.
On 6th December, 1961, Shri Singh was again promoted to officiate as Superintendent of Police.
During the period of his officiation, his request for being absorbed in the Himachal Pradesh State Police Service was accepted and he was absorbed in the State Service with effect from 27th November, 1962.
He was confirmed in the Union Territory Cadre of I.P.S. with effect from 14th May, 1964.
He was assigned 1958 as the year of allotment.
He made a representation against the order of allotment to the Central Government, claiming the benefit of officiation from 6th December, 1961 to 13th May, 1963 in the matter of fixation of his year of allotment.
The Central Government rejected the representation by order dt.
23rd April, 1970, which stated that in accordance with the orders contained in letter NO.
1/2/62 Delhi IDH(S) dated 23.8.1963 of the Home Ministry, all cadre posts held by non cadre officers not on the Select List were deemed to have been kept in abeyance with effect from 27th September, 1961 onwards, and according to the seniority rules, the service rendered by an officer prior to his inclusion in the Select List could not be counted for seniority 848 unless approved by the Central Government in consultation with the Union Public Service Commission under the Second Proviso to rule 3(3)(b) of the Seniority Rules.
The requisite approval was not there.
Shri Singh made a second representation on 23rd June, 1970.
The Central Government by order dt.
21st June, 1973, accepted the second representation, gave the benefit of officiation in question and assigned to him 1956 as the year of allotment.
The reason why the second representation was accepted was that in November, 1972, the Union Public Service Commission had approved of the officiation of Shri Singh in the I.P.S. cadre for the relevant period under the second proviso to rule 3(3)(b) of the Seniority Rules "as they stood in May, 1963.
" In consequence, he was placed above Shri M.L. Bhanot, respondent, in the gradation list of Union Territory of I.P.S. Feeling aggrieved by the order of the Central Government, Shri Bhanot filed a writ petition before the High Court.
A Single Judge allowed the same, and quashed the order dt.
21st June, 1973.
Against the judgment of the Single Judge, two appeals were filed before the Division Bench of the High Court one by Shri Singh, and the second, by the Union of India.
Both the appeals were dismissed by the Division Bench.
Aggrieved by the decision of the High Court, Shri Singh and the Union of India filed these two appeals for relief in this Court.
Dismissing the appeals with directions, the Court, ^ HELD: The question involved in the appeals was whether the year of allotment given to Shri Singh as 1958 was correct or not and whether the order of the High Court, quashing the year of allotment given to Shri Singh as 1956 was bad or not.
This depended upon the interpretation of the various rules and provisions and the determination of the question whether an officer was entitled to the benefit of the service rendered by him in a senior post in the I.P.S. cadre of a particulare State while he was on deputation to the State Police Service of that State from another State, for the purpose of working out the year of allotment in accordance with the second proviso to unamended rule 3(3)(b) of the Indian Police Service (Regulation of Seniority) Rules (The 'Seniority Rules ').
[855D F] Rule 3(3)(b) of the Seniority Rules and the provisos thereto should not be read in isolation.
This rule is in the setting of other rules.
The Indian Police Service (Cadre) Rules (The 'Cadre Rules ') read with the Indian Police Service (Fixation of Cadre Strength) Regulations of 1955 849 fixed the strength of the Indian Police cadre of the Union Territories at a particular figure.
Out of them not more than 25% officers eligible for recruitment to the I.P.S. cadre had to be substantive members of the State (U.P.) Police Service at that time.
The scheme, as it stood, fixed the strength of the I.P.S. cadre State wise.
Recruitment by promotion thereto could only be from the substantive members of the Police Service of that particular State.
So long as Shri Singh remained as a substantive member of the U.P. State Police Service, he could not possibly be promoted to the joint I.P.S. Cadre of the Union Territories of Delhi and Himachal Pradesh.
He became eligible to his promotion to the Union Territory, I.P.S. cadre only after he had been absorbed in the Delhi Himachal Pradesh State Police Service.
Proviso (1) to Rule 3(3)(b) of the Recruitment Rules gives a clear indication that for determining the year of allotment ad hoc the Central Government consulted the State Government concerned.
In Explanation (2) again there is a reference to a certificate by the State Government concerned that an officer would have officiated in a senior post but for his absence on leave or appointment to any special post.
It is apparent, therefore, that the State Government is the Government of the Police Service of which the officer concerned is a substantive member.
In this case, as found by the Division Bench of the High Court, Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and he had gone back to his parent State of U.P.
In case Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Service and had gone back to his parent State of U.P., then according the Explanation (2), the U.P. State Government might have issued the certificate to facilitate his promotion to the I.P.S. Cadre of the U.P. State.
The Promotion Regulations of 1955 laid down the determination of the eligibility of a substantive member of the State Police Service.
Thereafter, the names of the eligible officers were brought on the Select List, who were to be approved by the Public Service Commission.
Appointments by promotion to the I.P.S. cadre are made from the Select List.
In the event of promotion, but for the second proviso, the benefit of continuous officiation on a senior post for fixing his year of allotment is given to an officer from the date after his being nominated on the State List.
In Explanation (1) of rule 3(3), there is no mention that deputationist before his absorption in the State Police Service can get the benefit of such officiation.
Therefore, it was not possible to accept the position that before his absorption Shri Singh was entitled to the benefit of his officiation.
The Division Bench of the High Court so held.
The Division Bench was right on this aspect of the matter.
[861D H;862A D] The Seniority Rules 1954 including rule 3(3)(b) were amended with 850 effect from 22nd April, 1967.
Before the amendment, the appellant Shri Singh had been confirmed in the Union Territory cadre of the Indian Police Service with effect from 14th May, 1964, and had been allotted 1958 as the year.
The question of allotment of Shri Singh in accordance with the Seniority Rules had ripened before the amendment of 1967.
There is no rule vitiating the operation of the old seniority rules.
Reliance was placed by the appellant Shri Singh on the decision of this Court in Arun Ranjan Mukharjee vs Union of India & Ors., , and the appellant submitted that Division Bench was in error in not following the ratio of the decision in that case.
The Court could not accept this submission.
[862D E;863C] In this case, the Central Government had not fixed the date of appellant 's absorption in the Select List as 1958 out of the hat, so to say.
It had relevance as it appeared from the basis of the order of the Central Government.
The appellant, who was a deputationist before the absorption in the State Police Service could not be entitled to get such officiation.
In case, Shri Singh had not chosen to be absorbed in the Delhi Himachal Pradesh State Police Service and had gone back to his parent State of U.P., then, according to explanation (2) the U.P. State Government might have issued the certificate to facilitate his promotion to the I.P.S. cadre of the U.P. State.
But so long as Shri Singh remained a substantive member of the U.P. State Police Service, he could not possibly be permitted to join I.P.S. cadre of the Union Territories of Delhi and Himachal Pradesh.
In accordance with the rules, he became eligible to his promotion to the Union Territory I.P.S. cadre only after he had been absorbed in the Delhi Himachal Pradesh Police Service.
[864F H] The rules with which the Court was concerned, which state that certain year should be assigned by the Government in consultation with the Public Service Commission, must be interpreted in the light of the well established rule of construction that if the words of a statute are in themselves precise and unambiguous no more is necessary than to expound these words in their natural and ordinary sense, the words themselves in such a case best declaring the intention of the legislature.
See in this connection the observations of this Court in The Collector of Customs, Baroda vs Digvijaysinhji Spinning & Weaving Mills Ltd., ; , 899.
[865A B] The officiation in a senior post is one of the indispensable ingredients in the application of rule 3(3)(b).
But it must be borne in mind that this was not a sine qua non.
In this case, before the absorption of 851 the appellant in the Himachal Pradesh Delhi I.P.S. cadre, his officiation had not been taken by the Central Government into consideration.
The Court could not say that the Central Government had not acted properly.
[865E F] This appeal was not concerned with the assignment of year 1958 to Shri Singh but rule 16, clause (1)(iii) of the Service Rules provides for certain penalties and one of the penalties, inter alia, is the effect of superseding him in promotion to a selection post and such is appealable.
The High Court was right that appeal does not necessarily lie only against the order imposing penalty and it is also open to entertain appeal when the service rule was interpreted to the disadvantage of member of the service but rule 17 bars the filing of appeal after the expiry of 45 days.
Proviso to the said rule, however, gives discretion to the appellate authority to condone the delay if sufficient cause is shown.
Rule 24 of All India Services (Discipline and Appeal) Rules 1969 provides for review within different periods.
Under that rule since Shri Singh could have filed an application for review within one year, in this case remedy of review by Shri Singh had also become barred when the second order was passed.
[865G H;866A B] It appeared that there is provision for appeal in the order of this nature.
Failure to prefer an appeal or apply for review was no bar to the submission of memorials to the President.
In December, 1963, in this case, the year of allotment was assigned to Shri Singh.
Shri Singh made the first representation in August, 1969, after the period of limitation had expired.
It was contended by the appellant relying on the full Bench decision of the Punjab & Haryana High Court in Sunder Lal & Ors.
vs The State of Punjab, that in a case of bona fide mistake, there was always the power to rectify.
It was emphasized that every Administrative authority has an inherent right to rectify its own mistakes.
It was doubtful that inherent power could be invoked if there was no reason for re fixing the appellant 's year.
If belated claims are allowed arbitrarily, an atmosphere of uncertainty would prevail.
There should be no sense of uncertainty among public service.
Furthermore, it was clear that if the fixation of year 1958 was a mistake, the first representation was rejected with the order dated 23rd April, 1970.
There, the Government 's order reiterated that in accordance with the order contained in the Home Ministry 's letter to which reference was made, all cadre posts held by the non cadre officers not on Select List were deemed to have been kept in abeyance with effect from 27th September, 1961, onwards.
As such Shri Singh could not have claimed that he had been officiating in the cadre post prior to coming on the Select List.
In 852 those circumstances, Shri Singh could not be deemed to have officiated in cadre post during the period 6th December, 1961 to 14th May, 1963.
The Central Government was of the view that the decision taken by it in 1963, fixing the year of allotment was correct.
It is true that Home Ministry 's letter referred to in Annexure R 4, had been quashed by the High Court but the same had no bearing on the correctness of the decision taken by the Central Government in 1963, because at the relevant time, the letter was there and the Central Government was bound to act in accordance therewith.
The contention of the appellant that there was no period of limitation for the grant of the approval was not relevant.
It was, therefore, clear that there was no scope of acceptance of the second representation.
In the said order, there was no mention of any mistake.
[866C H;867A C] When the second order was made, it affected Shri Bhanot adversely because he in the meantime had been absorbed in the I.P.S. in 1957.
It was not that the constitutionality of any provision was challenged as was the case in A. Janardhana vs Union of India & Ors., ; , 967.
In this case, seniority of Shri Bhanot would be adversely affected as he had acquired a year of allotment.
In the opinion of the Court, it should have been done upon notice to Shri Bhanot.
[867C E] The High Court was right in dismissing the writ petition of the appellant.
Having regard to the facts of the case, the Central Government was directed to refix the salary scale of the appellant, taking into consideration the appellant 's service in U.P. and Himachal Pradesh cadre in the senior position as a deputationist.
[867G] Arun Ranjan Mukherjee vs Union of India & Ors., ;Madan Gopal Singh vs Union of India, ;D.R. Nim, I.P.S. vs Union of India, ; ;Government of India and Anr.
vs C.A. Balakrishnana & Ors., ;The Collector of Customs, Baroda vs Digvijaysinhji Spinning & Weaving Mills Ltd., ; , 899;Ram Prakash Khanna & Ors., etc.
vs S.A.F. Abbas & Ors., etc.; , ;Sunder Lal & Ors.
vs The State of Punjab, ;A. Janardhana vs Union of India & Ors., ; ,967 and General Manager, South Central Railway Secundrabad & Anr., etc.
vs A.V.R. Siddhanti & Ors., etc.; , , referred to.
|
ivil Appeal No. 2458 and S.L.P. No. 9019 of 1980 From the Judgment and Order dated 7.12.
1979 of the Allahabad High Court in Civil Misc.
Writ Petition No. 3174 of 1975 R.N. Trivedi, Additional Advocate General, Gopal Subramaniam and Ms. Shobha Dikshit for the Appellants.
F.S Nariman, Raja Ram Agarwal, Yogeshwar Prasad, Mrs. Rani Chhabra and Ms. Suman Bagga for the respondent.
The Judgment of the Court was delivered by DESAI, J.
Respondent Raja Ram Jaiswal moved Civil Miscellaneous Writ Petition No. 3174 of 1975 under article 226 of the Constitution in the High Court of Judicature at Allahadad questioning the validity of the Notification dated February 6, 1975 issued under Sec.
4(1) of the Land Acquistion Act ( 'Act ' for short) as also a notice dated March 6, 1975 served upon him pursuant to the afore mentioned notification.
The impugned notification was published in the U.P. Government Gazette dated February 15, 1975.
By this impugned notification, land bearing Plot No. 62 approximately admeasuring 8265 sq.
was sought to be acquired as being needed for a public purposse namely for extension of Hindi Sangrahalaya of the Hindi Sahitya Sammelan Prayag.
A substances of this notification was published in the locality where the land sought to be acquired is situate.
On March 22, 1975, a corrigendum dated March 13, 1975 was published by which the impugned notification dated February 15, 1975 was to stand corrected Plot No. 26 instead of 62 and the area sought to be acquired to be read as 2865 sq.
1000 instead of 8265 sq.
After the publication of the corrigendum the petitioner sought amendment of the petition which was granted.
Validity of the amended notification was challenged on diverse grounds.
However, at the hearing of the petition, the challenge was confined to the following four grounds as summarised in the judgment of the High Court.
They may be extracted: "1.
Notification dated 6.2.75 issued under Sec.
4 of the Land Acquisition Act is invalid in as much as it had been issued without first complying with the provisions of rule 4 of the Land Acquisition (Companies) Rules, 1963.
Acquisition proceedings are mala fide.
Notice under section 4(1) of the Act was served upon the petitioner on 6th March, 1975 when only two days time was left for filing objections under Section 5 A of the Land Acquisition Act.
This rendered the proceedings illegal.
The notification under Section 4(1) did not relate to plot No. 26 belonging to the petitioner.
Proceedings to acquire the said plot are therefore without jurisdiction.
" After the petition was amended two additional grounds of challenge were pressed on behalf of the respondent.
They are: "1.
The notification dated 13th March, 1975 is invalid for the very same reason for which the notification dated 6th February, 1973 is claimed to be invalid.
The Land Acquisition proceedings are invalid inasmuch as the notification dated 13th March, 1975 was neither published nor was its substance notified in the locality, as also because no notice thereof had been served upon the petitioner.
" Negativing all the challenges except the one that as there was failure to cause public notice of the substance of notification under Sec.
4(1) to be published at convenient place in the locality on 1001 this short ground, the impugned notification was quashed.
Hence this appeal by the Collector, Allahabad and the Land Acquisition Officer by special leave.
Respondent who was the original petitioner but is respondent in the appeal filed by the Collector will be referred to as the petitioner in this judgment.
Petitioner field Special Leave Petition No. 9019 of 1980 against the same judgment contending that the High Court committed an error in rejecting the challenge to the validity of the impugned notification on the ground of legal mala fides as also on the ground of non compliance with Rule 4 of the Land Acquisition (Companies) Rules, 1963.
As both these matters arise out of the same judgment, they were heard together and are being disposed of by a common judgment.
It may be mentioned that connected Civil Appeal No. 2437 of 1981 was to be taken up for hearing after the hearing concluded in D the present appeal and therefore, the judgment in this matter was postponed because the observations in one were likely to have some impact on the disposal on merits of the contentions in the cognate appeal.
Though very much delayed by circumstances beyond our control, few days back the hearing in the cognate appeal is over and therefore, both the appeals can now be disposed of though by separate judgments.
A brief resume of the facts leading to the writ petition field in the High Court would be quite instructive in this case.
The Hindi Sahitya Sammelan ( 'Sammelan ' for short) for whose benefit the land was sought to be acquired was initially formed as a voluntary organisation in 1910 and on January 8, 1914 it was registered as a society under the Societies Registration Act retaining the same name.
Some where in 1950 difference arose between the members of the society and the attempt to alter the constitution of the society, ultimately led to litigation.
U.P. Legislature enacted an Act styled as U.P. Hindi Sahitya Sammelan Act No. 36 of 1956 under which a statutory body was created under the name of Hindi Sahitya Sammelan.
The statutory body was to take over the management and properties of the society.
The Act was however struck down as unconstitutional in Damyanti Naranga vs Union of India & Ors.(l) The pre existing Sammelan which was a registered society (1) ; 1002 continued to function as such.
It is for the benefit of the Sammelan that the land involved in the dispute was sought to be acquired.
According to the Sammelan, it is in need of land for building 'Sangrahalaya ' which was roughly translated as museum cum library cum reading room.
At the instance of the Sammelan, Allahabad Municipal Board agreed to hand over the land and building in which a municipal school was located, situated at Kamta Prasad Kakkar Road adjacent to the Central office and Press of the Sammelan, on certain conditions.
The Sammelan needed the land, as it was then declared, to establish a museum.
The land with the school building thereon was transferred to the Sammelan in 1953.
It may be mentioned that even till today the area of land admeasuring 7315 sq.
in possession of the Sammelan is Lying vacant and for the quarter of a century, museum has not come up.
This aspect is mentioned in some detail as it has an impact on the contention canvassed in these appeals.
Petitioner Jaiswal along with the members of his family purchased land bearing plot No. 26 with a building thereon admeasuring 2978 sq.
situated at K. P. Kakkar Road in March 1970.
The petitioner wanted to build a sound proof air conditioned cinema theatre on the plot No. 26 purchased by him.
The plan for the proposed theatre was sanctioned both by the District Magistrate and the local municipality in December 1970.
It may be recalled here that the judgment of this Court holding Hindi Sahitya Sammelan Act unconstitutional was rendered on February 23, 1971.
The Sammelan was wholly opposed to the construction of a theatre near its campus as in its view a theatre and a research cum study centre can go ill together.
Therefore, when the petitioner applied for a certificate of approval under Rule 3 read with rule 7(2) of the U.P. Cinematograph Rules 1951 for construction of a cinema theatre, authorities of the Sammelan raised a storm of protest, sometimes peaceful occasionally likely to turn violent impelling authorities to impose restrictive orders under Sec. 144, Code of Criminal Procedure.
Sammelan also submitted a long memorandum setting out its objections with a view to persuading the authorities not to grant a certificate of approval for construction of a cinema II (1) ; 1003 building.
Overrullng the objections the District Magistrate, the Licencing Authority under the U.P. Cinemas (Regulation) Act, 1955 granted the requisite certificate of approval under Rule 3 which would in law imply that having regard to the provisions of the 1955 Act and 1951 Rules, there was no legal impediment to constructing a cinema theatre on plot No. 26.
Thereupon, Secretary of the Sammelan addressed a letter to the Chief Minister of State of U.P. complaining against the grant of the permission by the District Magistrate and requesting the Chief Minister to cancel the permission.
Ultimately, having failed to thwart the grant of certificate of approval.
the Sammelan wrote a letter on October 13, 1971 for acquiring land bearing Plot No. 26.
It may be recalled that the certificate of approval for constructing a cinema building was granted by the District Magistrate on March 24, 1972.
The Sammelan addressed various letters to various authorities including the then Prime Minister of India requesting them to cancel the certificate of approval granted to the petitioner.
Ultimately on January 31, 1974, a notification under Sec.
4(1) of the Land Acquisition Act, 1894 was issued stating therein that the land bearing plot No.
`26 admeasuring approx.
2865 sq.
was needed for a public purpose namely for extension of Hindi Sangrahalaya of Hindi Sahitya Sammelan Prayag '.
This notification was published in the U.P. Government Gazette on February 9, 1974.A notice under Sec.
4(1) bearing the same date was served upon the petitioner as also the same was published in the locality.
The petitioner challenged the validity of this notification on diverse grounds in Writ Petition No. 1932174 and as a measure of interim relief, the High Court stayed further proceeding that may be taken to acquire the land.
In the meantime by notification dated February 6, 1975, the earlier notification under Sec.
4(1) dated January 31, 1974 was cancelled and a fresh notification was issued to acquire 'land bearing plot No. 62 admeasuring 8265 sq.
yds for the earlier mentioned public purpose '.
Consequently, the writ petition in which the validity of the earlier notification was questioned was disposed of as infructuous.
The second notification dated February 6, 1975 was published in the U.P. Gazette on February 15, 1975.A notice dated March 6, 1975 under Sec.
5A of the Land Acquisition Act was served upon the petitioner inviting him to file his objection, if there be any, against the proposed acquisition.
The petitioner filed detailed objections on March 8, 1975 inter alia contending that the acquisition is for a 1004 company and the pre requisite for acquisition for a company having not been carried out, the acquisition is bad in law.
It was also contended that the petitioner is not the owner of plot No. 62 admeasuring 8265 sq.
Promptly on March 13, 1975, a corrigendum was issued and published in the Gazette on March 22, 1975 correcting the notification dated February 6, 1975 to read that instead of plot No. 62, plot No. 26 be read and instead of area 8265 sq.
2865 sq.
be read.
In between the issue of the notification and the corrigendum, the petitioner filed Writ Petition 3174/75 questioning the validity Or the notification dated February 6, 1975.
The High Court struck down the notification as invalid and during the pendancy of the writ petition in the High Court, further continuance e of the acquisition proceedings were stayed.
If the petitioner questioned the validity of the notification on ground of mala fides, he ought to have joined Sammelan as respondent.
Having failed to implead a proper party, he behaved curiously in opposing the application of the Sammelan for being impleaded as a party.
The High Court was in error in rejecting the application.
Therefore, when the Sammelan moved an application for intervention under Order XX rule 3 of the Supreme Court Rules, 1966, we granted the same and Mr. S.N. Kacker learned counsel appeared for the Sammelan at the hearing of these appeals and addressed his oral arguments and submitted written submissions.
The High Court struck down the notification holding that in order to be a valid notification under Sec.
4(1), it has to be published or notified for general information in the Official Gazette and for purposes of Sec.
SA of the Act, it would be taken to have been published on the date of such publication in the Official Gazette, and the second part of Sec.
4(1) requires the publication of the substance of the notification in the locality ' This having not been complied with, the notification was bad and invalid.
The correctness of this view is questioned on behalf of the appellants.
After scruitinising the evidence placed on record, the High Court has recorded a finding that the substance of the notification was not published in the locality either after 15th February, 1975 when the notification dated February 6, 1975 was first published in the Official Gazette or after March 22, 1975 when the corrigendum was 1005 published in the Official Gazette and thus the requirement of the second part of Sec.
4(1) has not been complied with.
The finding that there was no such publication as herein indicated was not seriously questioned and in fact could not be questioned.
A few facts will affirmatively establish it.
The first notification dated January 31, 1974 was published in the official Gazette dated February 9, 1974 and in respect of which a notice was published in the locality in March, 1974.A copy of the notice was served on the petitioner on March 6, 1974.
This notification bore the number 78 VIII LAQ and it was in respect of plot No. 26 admeasuring 2865 sq.
This notification was cancelled and superseded by another notification No. 552 VIII LAQ dated February 6, 1975, which was published in the Official Gazette dated February 15, 1975.
This latter notification clearly recites that the earlier notification dated February 9, 1974 is thereby cancelled.
In the latter notification dated Feb. 6, 19751 the land proposed to be acquired was shown to be plot No. 65 admeasuring 8265 sq.
Admittedly notice of the substance of this notification was not published in the locality.
The petitioner had nothing to do with land bearing plot No. 62 admeasuring 8265 sq.
As the previous notification was cancelled, he had nothing to worry about the second notification which has no relevance to the plot belonging to him.
The corrigendum dated March 13, 1975 was issued and published in the Official Gazette dated March 22, 1975 correcting the plot number and the area and the corrected entry was to be in reference to plot No. 26 and area to be acquired was to be 2865 sq.
Admittedly, there was no notice of publication of the substance of the notification dated February 15, 1975 nor of the corrigendum dated March 22, 1975 in the lacality.
The High Court was therefore, right in holding that in respect of the later notification and corrigendum, no notice was published in the locality and latter part of Sec.
4(1) was not complied with.
4(1) in its application to the State of U.P. read as under: "4(1): Whenever it appears to the appropriate Government or Collector that land in any locality is needed or is likely to be needed for any public purpose, a notification to that effect shall be published in the Official Gazette, and the Collector shall cause public notice of the substance of 1006 such notification to be given at convenient places in the said locality.
" By Land Acquisition (U.P. Amendment And Validation) Act Vlll of 1974, the section was amended to read as under: "4(1): Whether it appears to the appropriate Government and the Collector that land in any locality is needed or is likely to be needed for any public purpose, a notification to that effect shall be published in the Official Gazette, and except in the case of any land to which by virtue of a direction of the State Government under Sub section (4) of Sec. 17, the provisions of Sec.
5 A shall not apply, the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality.
" Though this amendment of 1974 is subsequent to the impugned notification, yet some reference was made to it to buttress the sub mission that the only purpose of a notification under Sec.
4(1) and the public notice in the locality is to make functionally effective the provisions of Sec.
5A so that the persons interested in the land sought to be acquired can canvass his objections against the proposed acquisition.
We shall presently deal with it.
Mr. S.N. Kacker for the intervener and Mr. Dikshit for the State of U.P. urged that ordinarily courts do not interfere at the ,.
stage of Sec.
4 notification because it merely constitutes a proposal which will be meticulously examined after the objections are filed under Sec.
5A by the person interested in the land wherein all aspects of the matter can be threadbare gone into and examined.
Broadly stated, one cannot take serious exception to this submission.
However, as a notification under Sec. 4 (1) initiates the proceedings for acquisition of land aud uses the expression 'shall ' the mandate of the legislature becomes clear and therefore, the infirmities therein cannot be wholly overlooked on the specious plea that the courts do not interdict at the stage of a mere proposal.
bare perusal of Sec. 4 (1) clearly shows that in order to comply with the statutory requirements therein set out, a notification 1007 stating therein the land which is needed or is likely to be needed for a public purpose ' has to be published in the official Gazette.
The second part of the sub section provides that 'the Collector has to cause public notice of the substance of such notification to be given at convenient places in the locality in which the land proposed to be acquired is situated.
Both the conditions are held by a catena of decisions to be mandatory Whether the second condition is mandatory or directory is no more res integra.
In Khub Chand and Ors.
vs State of Rajasthan and Ors.(1), Subba Rao, CJ speaking for the court observed that 'the statutory intention is, therefore, clear, namely, that the giving of public notice is mandatory.
If so, the notification issued under section 4 without complying with the said mandatory direction would be void and the land acquisition proceedings taken pursuant thereto would be equally void. ' While reaching this conclusion, the Court distinguished the decision in Babu Barkya Thakur vs The State of Bombay(2) wherein it was held that 'any defect in the notification under Sec. 4 is not fatal to the validity of the proceedings, particularly when the acquisition is for a company and the purpose has to be investigated under section 5A or section 40 necessarily after the issue of the notification under section 4 of the Act '.
The Court pointed out that the defect with which the notification in Bahu Barkya Thakur 's case sufferred was of a formal nature and did not go to the root of the matter.
However, the decision is not an authority for the proposition that if a public notice of the notification was not given as prescribed by section 4, it can be ignored.
The pertinent observation of the court is that such an approach would constitute rewriting The section.
The court also referred to Smt.
Somavanti and Ors.
vs The State of Punjab & Ors.(3) and quoted with approval the statement therein made that a valid notification under sub section
(I) of Sec. 4 is a condition precedent t ) the making of a declaration under sub section
(1) of Sec. 6.
This view has been consistently followed and was approved in State of Mysore vs Abdul Razak Sahib(4), wherein it was observed that in the case of a notification under Sec. 4 of the Land Acquisition Act, the law has prescribed that in addition to the publication of the notification in the Official Gazette, the Collector must also give publicity of the substance of the notification in the concerned locality.
Unless both these conditions are satisfied, section 4 (1) ; at 125.
(2) (3) (4) ; 1008 of the Land Acquisition Act cannot be said to have been complied with.
The publication of a notice in the locality is a mandatory requirement.
Mr. Kacker however, drew our attention to a few more observations in the judgment wherein it was said that there is an important purpose behind publication of the substance of the notification in the locality because in the absence of such publication, the interested persons may not be able to file their objections challenging the proposed acquisition and they will be denied an opportunity afforded by section 5A which confers a very valuable right.
Relying on this observation Mr. Kacker urged that if the underlying purpose behind publication of a notice in the locality is to give an opportunity to the person interested in the land to object to the acquisition, where in a case the purpose is achieved as in this case the petitioner having filed his objections, the failure to publish the substance of the notification in the locality need not be treated fatal and cannot invalidate the proceedings.
The submission as presented is very persuasive and but for binding precedents, we would have accorded considerable attention to it.
But we would not whittle down a mandate of legislation recognised by a long line of decisions solely depending upon the facts of a given case.
Further the submission is predicated upon an assumption that the sole purpose behind publication of substance of notification in locality is to make requirements of Sec.
5A functionally effective.
The assumption as would be pointed out is not well founded.
In fact, the court in the last mentioned case went so far as approving the decision of the Mysore High Court in Gangadharaih vs State of Mysore & Ors.(l) wherein it was ruled that 'when a notification under section 4 (1) is published in the official Gazette and it is accompanied by or immediately followed by the public notice, that a person interested in the property pro posed to be acquired can be regarded to have had notice of the proposed acquisition. ' This is a mandatory requirement for legal compliance with requirements of Sec. 4 (1).
In Narendra Bahadur Singh and Anr.
vs State of U.P. & Ors(2) this Court reiterated that a publication of the notice in the locality as required by the second part of section 4 (1) is mandatory and unless that notice is given in accordance with the provisions contained therein, the entire acquisition proceedings are vitiated.
Repelling the contention, that (1) (2) ; 1009 the only purpose behind publication of a notice in the locality is to give opportunity to the person interested in the land to prefer objections under Sec.
5A which confers a valuable right, it was held that even though in the facts of that case, the inquiry under section 5A was dispensed with by a direction under Sec.
17 (4) of the Act, the failure to comply with the second condition in Sec. 4 (1) is fatal.
It was pertinently observed that provisions of Sec.
4(1) cannot be held to be mandatory in one situation and directory in another and therefore, it cannot be said that the only purpose behind making the publication of notice in the locality mandatory is to give an opportunity to the persons interested in the land to file objections under Sec.
Of course, what other object it seeks to subserve has been left unsaid.
But the answer is not far to seek.
At least we have no doubt that the only visible and demonstralle purpose behind publication of the substance of the notification under Sec. 4 (1) in the locality where the land proposed to be acquired is situated, is to give the persons interested in the land due opportunity to submit their considered objections against the proposed notification.
Incidentally, it may be pointed out that after the 1974 amendment, Sec. 4 (1) on its true interpretation may unmistakably indicate that where the enquiry under Sec.
5A is not dispensed with by resorting to Sec. 17 (4), compliance with the second part of Sec. 4 would be mandatory.
We however do not propose to go into this aspect because the amendment is subsequent to the notification.
Mr. Kacker however on behalf of the interveners while conceding that there cannot be a valid acquisition unless a notification is published in the Official Gazette and a substance of the notification is published in the locality, urged that publication in locality need not necessarily follow the publication of the notification in the Official Gazette but it may even precede the same because what is of importance is the decision to acquire, the notification and publication of the notice are mere formal expressions of the decision of the Govt.
to start acquisition proceedings.
Proceeding along it was said that the second requirement of Sec.
4 (1) v z. publication of the notice in the locality is only to make effective the provisions of Sec.
5A and that such minor defect cannot invalidate notification under Sec. 4.
To substantiate this submission, reliance was placed upon the decisions in Babu Barkya Thakur 's case, State of Madhya 1010 Pradesh & Ors.
vs Vishnu Prasad Sharma & Ors.(l) and Narendra Bahadur Singh 's case.
All these decisions do not bear out or substantiate the submission of Mr. Kacker for the reasons already mentioned.
Assuming that a notification in the Official Gazette is a formal expression of the decision of the Government, the decision of the Government is hardly relevant, unless it takes the concrete shape and form by publication in the Official Gazette.
Where a decision of the Government to be effective and valid has to be notified in the Government Gazette, the decision itself does not become effective unless a notification in the Official Gazette follows.
In Mahendra Lal Jaini vs The State of Uttar Pradesh & Ors.(2) it was held that a notification under Sec.
4A of the is required to be published in the Gazette and unless it is so published, it is of no effect.
Logically, the same view must be adopted for a notification under Sec. 4.
Therefore assuming that a notification is a formal expression of a decision of the Government to acquire land, unless the decision is notified in the Government Gazette by an appropriate notification, the proceedings for acquisition cannot be said to have been initiated and the decision would remain a paper decision.
Sec. 4 (1) further requires that 'the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality. ' The expression 'such notification. ' in the latter part of Sec. 4 (1) and sequence of events therein enumerated would clearly spell out that first the Government should reach a decision to acquire land, then publish a notification under Sec.4 (1) and simultaneously or within a reasonable time from the date of the publication of the notification cause a notice to be published containing substance of such notification meaning thereby that notification which is published.
Obviously, therefore, there cannot be a publication in the locality prior to the issuance of the notification.
The submission of Mr. Kacker does not commend to us.
In this context, it was next contended that at any rate the petitioner has not suffered any prejudice by the failure of the Government to publish a notice in the locality because the petitioner has filed detailed objections against the proposed acquisition.
If the (1) (2) [1963] Supp, 1 S.C.R. 912.
1011 only purpose behind publishing the notice in the locality was to give an opportunity to the persons interested in the laid to file their objections, the submission would have merited consideration, but the same has been expressly negatived and therefore, it is futile to examine the same.
To be brutally frank if this was the only ground for invalidating the notification, in the backdrop of facts we would have our serious reservations in upholding the decision, though as the law stands, the High Court was perfectly justified in reaching this conclusion.
Our reservations have nothing to do with the perfectly legal view taken by the High Court.
They stem from the facts of this case and our understanding of the purpose behind publication of notice as set out by us earlier.
In such a situation, we would have developed the concept of prejudice and the absence of it resulting in negativing the contention.
But there are other formidable challenges to the validity of the impugned notification, which of course have not found favour with the High Court but we are inclined to take a different view of the matter.
Therefore we let the decision of the High Court on this point stand.
Turning to the petition for special leave filed by the petitioner, we grant special leave to appeal and proceed to examine the two challenges to the validity of the notification under Sec.
4(1) which have been negatived by the High Court.
The petitioner questioned the validity of the notification inter alia on the ground that the acquisition was malafide and that the acquisition being for a Company, it would be invalid for failure to comply with the provisions of rule 4 of the Land Acquisition (Companies) Rules, 1963.
The High Court negatived both the challanges.
Mr. Nariman, learned counsel for the petitioner invited us to examine them.
The relevant averments on the question of mala fides as set out in the writ petition filed in the High Court may be briefly summarised.
As the objections by the Sammelan for not granting a certificate of approval for constructing a cinema building on Plot No. 26 were not accepted by the Licensing authority and a certificate of approval was subsequently granted to the petitioner, the Sammelan in order to achieve the same object, namely, not to permit a theatre to be constructed at the place, moved the authorities for acquiring the land.
It is averred that the genesis of the proceeding for acquisition is not in the need of the Sammelan but its failure to stop the cinema theatre coming up and thus the purported need is non 1012 existent and the initiation of the acquisition proceedings was mala fide.
Its sole purpose is to deprive the petitioner of the cinema business which he would legally carry on.
Frankly, the averments are not very specific, clear, precise and to the point.
But the comulative effect of the allegations is that Sammelan being actuated by the ulterior motive to thwart the petitioners ' project to construct a cinema building resorted to the dubious method of seeking acquisition of the land even though it had no need present or in near future of the land in question.
Obviously, if such be the allegation, the Sammelan ought to have been impleaded as a party to the writ petition Not only the Sammelan was not impleaded as the party, but when the Sammelan moved an application for intervention or for being joined as a party, the petitioner was ill advised to object to the same and unfortunately the objection prevailed with the High Court.
We are unable to appreciate both the objections and the view taken by the High Court.
Therefore, when Nariman pressed his petition for special leave to appeal against the rejection of the challenge on the afore mentioned two grounds, we made it abundantly clear that we would be least interested in examining the challenge founded on the ground of mala fides in the absence of the Sammelan.
The Sammelan had moved a petition for intervention which, it must be stated in fairness to Mr. Nariman, was not objected in this Court and we made it abundantly clear that the request for being impleaded as a party in the High Court ought not to have been objected.
Accordingly, the petition for intervention was granted and the Sammelan was given an opportunity to file its affidavit as well as any material that it chooses to place on record.
According to the rules, the interveners are not entitled to address oral submissions to the court but in the background of the facts of this case, we gave full opportunity to Mr. Kacker to address oral submissions.
It is in the backdrop of these facts that we propose to examine the challenge founded on the ground of mala fides.
A few facts will have to be recapitulated.
After the petitioner purchased the Plot No. 26 and submitted an application on July 6, 1971 to the licensing authority for grant of a certificate of approval as envisaged by rule 3 read with rule 7 of U.P. Cinematograph Rules, 1951 ( '1951 Rules ' for short) for constructing a cinema building on Plot No. 26, the Sammelan promptly objected to the grant of certificate of approval on the ground that existence of a cinema theatre within the vicinity of the campus of the institute of culture learning 1013 and research like the Sammelan would be destructive of the environment and the atmosphere of the institute, and existence of a cinema theatre at such a place would be an incongruity.
May be, it might be the honest and genuine belief of the office bearers of the Sammelan that an institute of learning and research cannot co exist with a cinema theatre in its vicinity, and that the latter may pollute the educational and cultural environment The District Magistrate as the licensing authority after corresponding with the State authorities granted the certificate of approval on February 24, 1974.
On October 13, 1971, the Sammelan sent a communication addressed to the Chief Minister of U.P. in which it was stated that a cinema building should not be permitted to be constructed in the vicinity of the campus of the Sammelan.
The letter also refers to an earlier application addressed to the Chief Minister requesting him to intervene so that the proposed cinema house may not be permitted to be constructed near the campus of the Sammelan, because it is likely to cause nuisance and interfere with the activities and the academic environment of the Sammelan.
Further request was made in the letter that administrative sanction may be granted for acquisition of land on which the cinema building is proposed to be constructed offering that the Sammelan is ready to pay whatever compensation that may have to be paid for acquisition of the land and the building thereon.
The Ditrict Magistrate by his letter dated November 8, 1971 addressed to the Pradhan Mantri of the Sammelan pointed out that the Revenue Board had directed that no institution should be given land more than that required for its purpose and that where the land is to be acquired by a body, such a body itself must make an attempt to directly purchase the land.
Then comes a sentence which may be extracted: "It is also evident by your above referred letter that you stood in need of acquiring land because the owner of the land wants to construct a cinema house over it and the institution does not want that a cinema should be constructed over the same.
It is clear by the above circumstances that the land is not so much required by the institution as for the construction of the cinema house.
Therefore, I would request you to consider the matter and if your aim is that the cinema house is not constructed you may resort to other means." (underlining ours) 1014 In the meantime on December 16, 1971, Joint Secretary to the Government of U.P. wrote to the District Magistrate enquiring as to 'whether in granting the certificate of approval, Rule 7 (2) of the 1951 Rules was violated; What is the sphere of the activities of the Sammelan; does it undertake teaching or other such activities by virtue of which it may be placed in the category of Educational Institutions; if for some other reasons, construction of cinema house on proposed site is against public interest, seek Government 's approval in this respect specifying the reasons thereon; obtain written objections from the Sammelan; if required take Government 's approval making recommendations; and intimate whether cinema building will be sound proof. ' On March 24, 1972, the District Magistrate as the licensing authority sent a detailed reply inter.
alia stating that the Sammelan is not an educational institution nor a residential institution and it has no regular programme of class teaching and it cannot be styled as an educational institution within the meaning of the expression in rule 7.
He also opined that having regard to all relevant factors and other circumstances construction of a cinema building on the proposed site is not against the public interest.
He also opined that the approved plans of the building show an air conditioned sound proof cinema theatre which would enhance the beautification of the locality and would enrich the coffers of the State.
It was lastly pointed out that the distance between the proposed cinema building and the campus of the Sammelan was about 95 feet as crow fly measure.
He concluded by saying that having regard to all the circumstances, he was of the opinion that public interest in no way would be damaged if the permission is granted for construction of the cinema house in question on the proposed site, and that he was proceeding to grant permission to the applicant which is being forwarded to the Government.
After the receipt of the permission, the old existing building on Plot No. 26 was demolished by the petitioner and construction of a modern cinema theatre fully air conditioned and sound proof was commenced On August 7, 1983, the Sammelan moved a formal application requesting for initiating acquisition proceedings of land included in Plot No. 26 as it was needed by the Sammelan for the purpose of extension of Hindi Sangrahalya (Museum '.
Skipping over some of the intermediate steps including a request to the then 1015 Prime Minister to intervene and thwart the cinema project, when the first notification under Sec. 4 (1) was published, the purpose for which the land was to be acquired was shown to be 'extension of Hindi Sangrahalya at Hindi Sahitya Sammelan Prayag '.
Way back on July 22, 1949, the Sammelan with a view to establishing a museum in connection with a Hindi University approached the Allahabad Municipal Board to transfer a middle school building along with the Gymnacia attached to it.
The Municipal Board unanimously sanctioned the proposal to handover the building of the school with appurtenant land situated at Kanta Prasad Kakkar Road (that is the road on which the irritating cinema theatre has come up) to the Sammelan subject to the condition that the Sammelan would construct a school building at South Malaka at a cost of Rs. 30,000.
The Sammelan accepted the condition and complied with it.
The Government accorded sanction to the proposal on September 9, 1953 and since then the school building with the land over which it is standing and the Gymnacia were transferred to the Sammelan.
It is an admitted position that an area of 7315 sq.
Of land in the Sammelan campus is lying vacant, open and unutilised till today, that is for thirty two years.
This will have a direct impact on the alleged need of the Sammelan of the land propsed to be acquired.
At the time of taking over the school building, the Sammelan had contemplated putting up a museum.
That again is the purpose for which the land involved in this appeal is sought to be acquired at the instance of the Sammelan.
When this rather disturbing position emerged on analysis and evaluation of uncontroverted facts, it was suggested that the Sammelan wanted to construct a building for Natyashala and Rangmanch for which plans have not been prepared.
All these inconvenient facts found reflection in the order sheet of the Collector dated September 3, 1973 in which it is stated that "since the authorities of the Sammelan have capacity to approach the highest authority of the democratic Government as is evident from the letters received from their office, the office is not capable to offer any comments whatever might be the proposal whether it is according to the rules or against the rules or the same should be allowed to remain as it is etc.
" Later on the Sammelan stated that after the land is acquired, it would be utilised for implementation of some new schemes.
Thus though the Sammelan indisputably had and has open land in its possession from 1953 till 1973, it did not construct the museum for which it had obtained land from the 1016 Allahabad Municipal Board.
That apart it again moved the Government for acquiring the land of the petitioner under the pretext that it is needed for constructing a museum.
When the facts counter indicated the purported need, it came out with a suggestion that it proposed to construct Natyashala and Rangmanch.
One may in passing, a bit humourously note that Natyashala is a place where dramatic performances are staged and Rangmanch is a place where dances are performed.
The Sammelan would put up with them.
That would show that such performances would not be destructive of educational and cultural environment of the campus of the Sammelan but a modern air conditioned sound proof cinema building would.
We leave this without comment.
But as these proposals failed to carry conviction, its latest stand is that let the land come, they would devise schemes for its proper utilisation as and when the land is made available.
This demonstrates the hollowness of the alleged need and removes the veil thereby disclosing the real purpose for acquiring the land.
Mr. Kacker urged that quitting the quibbling so far resorted to, the Court may examine a forthright submisson that the Sammelan 's interest in getting the land acquired is not merely to construct Sangrahalya but it is equally if not more interested in not having a cinema theatre at the place where it is being constructed.
Shorn of embellishment, the Sammelan would not tolerate the theatre and therefore when it failed to thwart the grant of certificate of approval and cinema theatre came up, it took the second step to achieve the first mentioned object viz. seek acquisition of land to satisfy an imaginary or non existent need.
The challenge on the ground of legal mala fides to the validity of the notification under Sec. 4 (1), a preliminary step in the process of acquisition has to be examined, evaluated and answered in the backdrop of these facts.
It can be stated without fear of contradiction that need of the land for Sangrahalya is a figment of imagination conjured up to provide an ostensible purpose for acquisition.
There is enough land roughly admeasuring 7315 sq.
Lying vacant and unutilised with the Sammelan for over a quarter of a century.
The Sangrahalya has not come up though this was the land which was taken from the Municipal Board for the avowed object of putting up a Sangrahalya.
The Sammelan moved on to Rangamanch and Natyashala and then ultimately adopted a position that when the land is made available, 1017 schemes will be devised for its proper use.
Could it be said with confidence that the Sammelan was ever interested in acquiring the land for effectuating any of its objects.
It has neither the plans nor the wherewithals nor any specific object for which it needs land and it is unable to use over years the land already available at its disposal.
Therefore, Mr. Kacker took bold and to some extent an imaginative stand.
He said that in seeking acquisition of the land, the Sammelan is actuated by a desire not to have the cinema theatre in its vicinity or if it has come into existence, to do away with the same.
When these facts stare into the face, can it be said with confidence that the Government or the Collector in whom the power to acquire land is vested, exercised the power for the purpose for which it is vested or are they guilty of legal mala fides.
The High Court disposed of the contention by an over simplification of this tangled web of facts without making the least attempt at unearthing the real motives of the Sammelan The tell tale facts disclose motives and unravel hidden objects The High Court by passed them by simply observing that there is nothing on record to indicate that the Collector or the State Government are inclined to act against the petitioner for any improper motives.
The High Court unfortunately missed the real contention of legal mala fides, as also an important piece of evidence that the Collector on whom the statute confers power to initiate proceeding for acquisition himself was satisfied that Sammellan sought acquisition not because it requires the land but it wants to stop or do away with the cinema theatre.
This becomes evident from the letter of the District Magistrate dated November 8, 1971.
It is well settled that where power is conferred to achieve a certain purpose, the power can be exercised only for achieving that purpose.
Sec. 4 (1) confers power on the Government and the Collector to acquire land needed for a public purpose.
The power to acquire land is to be exercised for carrying out a public purpose.
If the authorities of the Sammelan cannot tolerate the existence of a cinema theatre in its vicinity, can it be said that such a purpose would be a public purpose ? May be the authority of the Sammelan may honestly believe that the existence of a cinema theatre may have the pernicious tendency to vitiate the equcational and cultural environment of the institution and therefore, it would like to wish 1018 away a cinema theatre in its vicinity.
That hardly constitutes public purpose.
We have already said about its proclaimed need of land for putting up Sangrahalya.
It is an easy escape route whenever Sammelan wants to take over some piece of land.
Therefore, it can be fairly concluded that the Sammelan was actuated by extraneous and irrelevant considerations in seeking acquisition of the land the statutory authority having known this fact yet proceeded to exercise statutory power and initiated the process of acquisition.
Does this constitute legal mala fides Where power is conferred to achieve a purpose it has been repeatedly reiterated that the power must be exercised reasonably and in good faith to effectuate the purpose.
And in this context 'in good faith ' means 'for legitimate reasons '.
Where power is exercised for extraneous or irrelevant considerations or reasons, it is unquestionably a colourableq exercise of power or fraud on power and the exercise of power is vitiated.
If the power to acquire land is to be exercised, it must be exercised bona fide for the statutory purpose and for none other.
If it is exercised for an extraneous, irrelevant or non germane consideration, the acquiring authority can be charged with legal mala fides In such a situation there is no question of any personal ill will or motive.
In Municipal Council of Sydney vs Compbell(1) it was observed that irrelevant considerations on which power to acquire land is exercised, would vitiate compulsory purchase orders or scheme depending on them.
In State of Punjab vs Gurdial Singh & Ors (2) acquisition of land for constructing a grain market was challenged on the ground of legal malafides Upholding the challenge this Court speaking through Krishna Iyer, J. explained the concept of legal malafides in his hitherto inimitable language, diction and style and observed as under: "Pithily put, bad faith which invalidates the exercise of power sometimes called colourable exercise or fraud on power and oftentimes overlaps motives, passions and satisfactions is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal.
If the use of the power is for the fulfilment of a legimate object the actuation or cataly (1) at 375.
(2) ; 1019 sation by malice is not legicidal.
The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment.
When the custdian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested the court calls it a colourable exercise and is undeceived by illusion.
In a broad, blurred sense, Benjamin Disraeli was not off the mark even in Law when he stated: "I repeat that all power is a trust that we are accountable for its exercise that, from the people, and for the people.
all springs, and all must exist." After analysing the factual matrix, it was concluded that the land was not needed for a Mandi which was the ostensible purpose for which the land was sought to be acquired but in truth and reality, the Mandi need was hijacked to reach the private destination of depriving an enemy of his land through back seat driving of the statutory engine.
The notification was declared invalid on the ground that it suffers from legal mala fides.
The case before us is much stronger, far more disturbing and unparalelled in influencing official decision by sheer weight of personal clout.
The District Magistrate was chagrined to swallow the bitter pill that he was forced to acquire land even though he was personally convinced there was no need but a pretence Therefore, disagreeing with the High Court, we are of the opinion that the power to acquire land was exercised for an extraneous and irrelevent purpose and it was colourable exercise of power, namely, to satisfy the chagrin and anguish of the Sammelan at the coming up of a cinema theatre in the vicinity of its campus, which it vowed to destroy.
Therefore, the impugned notification has to be declared illegal and invalid for this additional ground.
The validity of the impugned notification was also challenged on the ground that even though the acquisition is for the Sammelan, a company, the notification was issued without first complying with the provisions of rule 4 of the Land Acquisition (Companies) Rules, 1963.
The High Court has negatived this challenge.
We must frankly confess that the contention canvassed by Mr. Nariman in this behalf would necessitate an indepth examination of the contention.
However, we consider it unnecessary in this case to undertake this exer 1020 cise because the judgment of the High Court is being upheld for the additional reason that the acquisition in this case was mala fide.
Therefore, we do not propose to examine the contention under this head.
For the reasons which appealed to the High Court and for the additional reasons herein stated, the appeal preferred by the Collector and the District Magistrate and another fails and is dismissed while the appeal on the grant of special leave to the petitioner is hereby partly allowed to the extent herein indicated.
Substantially, the Civil Appeal No. 2458 of 1975 fails and is dismissed with no orders as to costs.
S.R. Appeal dismissed and Petition allowed.
| The 39 petitioners in the writ petition were promotees to the post of Assistant in the Indian Council of Agricultural Research first respondent.
The Nos. 3 second respondent was the Union of India and respondent Nos. 3 to 31 were direct recruits to the same post.
Respondent Nos. 32 to 88 were also promotees and impleaded as proforma respondents.
The petitioners contended that they belonged to the service of the Central Secretariat, (Department of Agriculture) and the society was a part of that Department till 1.4.1965 on which date the Government of India decided to re organise the society into a fully autonomous organisation with its own Secretariat.
The petitioners opted to join the service in the Society on such re organisation.
Respondent Nos. 3 to 31 were directly recruited after an Open competitive test.
The seniority list was prepared by the Society in 1976 showing the relative positions of the promotees and the direct recruits.
A second seniority list was published by the Society on 7.4.1981 and this list brought changes in the earlier list and pushed down the promotees from the positions they occupied in that list.
The petitioners contended that this seniority list should be quashed on the ground that it violated Article 14 and 16 of the Constitution, as recruitment rules laying down the terms of services in the Society were not available seniority had to be fixed on length of service.
They were also entitled to seniority on the basis of the length of their service from the date of they came into the Society by virtue of the option.
The case of the contesting respondents was that seniority has to be fixed not with reference to tho reorganisation of the Society but on the date of their appointment on a regular basis, and that the petitioners had to establish that they were duly appointed in the service on a regular basis when they exercised their option.
Dismissing the Writ Petition.
1065 ^ HELD: 1.
In the absence of satisfactory proof of the date of appointment of the petitioners in the grade as assistants in the Society the petitioners cannot successfully urge violation of Article 14 and 16 of the Constitution.
No great injustice was done to the promotees in the preparation of the list.
Goeing through the list, one finds that the gap between the promotees and the direct recruits is of a very short duration and not wide as in other cases.
Direct recruitment was made first only 1967.
However, to work out the quota system an earlier date of appointment had to be given to the direct recruits.
This could not be avoided.
This has not done great injustice to the petitioners.
This dislocation was limited only to a period between 1965 to 1967 and 1967 to 1971 and not a fairly long period of time.
[1073 C E] 2.
The memorandum Annexure 4 dated 20th April, 1970 clearly states that the principles to determine the inter sc seniority of the ministerial staff in the reorganised Council was considered by the Society and that it was decided that the seniority of the Ministerial staff would be fixed on the basis of "date of appointment made on a regular basis.
" The contention of the petitioners that seniority has to be filed with reference to the date on which option was exercised by them, has no basis.
[1069D.E] 3.
Direct recruitment to the post of Assistants in the Society was made holding competitive examination in 1967 and 1971.
Upper Division Clerks, like the petitioners who were working with the Agricultural Department, could very well have appeared for this competitive examination and got themselves directly recruited as Assistants on successfully passing the competitive examination.
Some of the petitioners in fact appeared for the competitive test without success.
Those who were successful at the competitive examination and the interview were offered the post of Assistant by regular appointment.
[1069F H] 4.
Relying on Annexure 4 Memorandum dated 24.4.70 the petitioners ' attempt to contend that their seniority should start from the date they exercised option and that this is correctly reflected in 1976 list.
This submission overlooks the fact that even at that time, there were rules in existence prescribing a ratio of 1: I between promotees and direct recruits.
In addition to this, it has to be noted that here also, filling up of vacancies on a regular basis is emphasised, [1071 G H] 5.
The Union Government and the Society were originally in error in their assumption that no rules existed for regulating the service conditions in the Society Annexure 6, are rules relating to the Indian Council of Agricultural Research before its reorganisation.
The said rules show, that the posts of Assistants can be filled up 50% by direct recruit also.
The handbook for personnel officer shows that the relative seniority of direct recruits and promotees shall be determined according to the rotation of vacancies between direct recruits and promotees which shall based on the quotas of vacancies reserved for direct recruitment and promotion respectively in the Recruitment Rules.
New recruitment rules came into effect from 1.91974.
This method of recruitment was to be with effect from 1.1.1976.
It further provided that vacancies arising between 29.8.1973 and 31.12.1975 were to be filled wholly (100%) by promotion This 1066 means that vacancies prior to 29.8.1973 and 31.12.1975 will be filled up in accordance with the 1964 rules and vacancies between 29.8.1973 and 31.12 1975 will be filled by the promotees along and thereafter in the ratio 1: 1.
From these rules it is evident that the Society was conscious of the claims of the promotees and hence safeguards their interests by providing 100% posts for them between 29.8.1973 and 31.12.1975.
By doing so, justice was done to them in a great measure.
[1072 C E; G H; 1073]
|
on No. 40 of 1955.
Under Article 32 of the Constitution for a Writ of Habeas Corpus.
208 Purshottam Trikumdas, (K. B. Asthana, Syed Murtaza Fazl Ali and Rajinder Narain, with him) for the petitioner.
M.C. Setalvad, Attorney General for India and C.K Daphtary Solicitor General for India (Porus A. Mehta and R.H. Dhebar, with them) for the respondents.
April 7.
The Judgment of Mukherjea C. J., Das, Vivian Bose and Imam JJ.
was delivered by Das J. Sinha J. delivered a separate Judgment.
DAS J. This is a petition for a writ in the nature of a writ of habeas corpus calling upon the respondents to show cause why the petitioner, who is now confined in the Central Jail at Rewa, should not be set at liberty.
The petitioner 's grievance is that he has been deprived of his liberty otherwise than in accordance with procedure established by law.
A rule nisi having been issued, the respondents have filed an affidavit by way of return to the writ.
The question for our decision is whether the return is good and sufficient in law.
The facts leading up to the present petition are few and simple.
In the years 1948 and 1949 the petitioner was the Minister of Industries in the Government of Vindhya Pradesh which was at that time an acceding State within the meaning of section 6 of the Government of India Act, 1935 as amended in 1947.
On the 11th April, 1949 the petitioner was arrested in Delhi on the allegation that he had accepted illegal gratification in order to show favour to Panna Dia mond Mining Syndicate in the matter of the lease of the Diamond Mines at Panna.
In December, 1949 the petitioner along with one Mohan Lal, who was the then secretary in the Ministry of Industries, was put up for trial before the Court of Special Judge, Rewa, constituted under the Vindhya Pradesh Criminal Law Amendments (Special Courts) Ordinance No. V of 1949.
The charges were under sections 120 B, 161 465 and 466 of the Indian Penal Code as adapted for Vindhya Pradesh by the Indian Penal Code (Application to Vindhya Pradesh) Ordinance No. XLVIII of 209 1949.
By his judgment pronounced on the 26th July 1950 the Special Judge acquitted both the accused.
The State preferred an appeal against that acquittal to the Judicial Commissioner of Vindhya Pradesh.
By his judgment pronounced on the 10th March 1951 the Judicial Commissioner reversed the order of acquittal, convicted both the accused and sentenced them to different terms of rigorous imprisonment under the different sections in addition to the payment of certain fines.
On the application of the petitioner and his co accused the Judicial Commissioner on the 12th March 1951 issued a certificate to the effect that four points of law raised in the case and formulated by him in his order Were fit for the consideration of this Court in appeal under article 134 of the Constitution of India.
A petition of appeal was filed in this Court on the strength of this certificate of fitness and it was registered as Criminal Appeal No. 7 of 1951.
As the case involved a substantial question of law as to the interpretation of the Constitution, it was, in April 1953, placed before a Bench of five Judges of this Court as required by article 145(3) of the Constitution.
For convenience of reference we shall call a Bench of five or more Judges as the Constitution Bench.
The validity of the convictions and sentences was challenged before the Constitution Bench on the ground that there had been infringements of articles 14 and 20 of the Constitution.
A further point of law was raised that no appeal lay to the Judicial Commissioner from the acquittal by the special Judge.
By their judgment pronounced on the 22nd May 1953 the Constitution Bench rejected all these objections.
The judgment concluded with the following direction: "The appeal is accordingly directed to be posted for consideration whether it is to be heard on merits".
This was evidently done in view of the fact that the certificate of fitness granted by the Judicial Cormmissioner was limited only to four points of law.
The constitutional points having been disposed of, the appeal was placed before a Division Bench of three Judge who on the 20th October 1953 ordered 27 210 the appeal to be heard on the merits.
The appeal was accordingly put up for hearing before another Division Bench consisting of three Judges.
On the 5th March 1954 this Division Bench allowed the appeal of Mohan Lal and acquitted him but dismissed the appeal of the petitioner with respect to his conviction under sections 161, 465 and 466, Indian Penal Code, as adapted in Vindhya Pradesh, but set aside his conviction on the charge under section 120 B.
The sentence of three years ' rigorous imprisonment was maintained but the sentence of fine was set aside.
On the 18th March 1954 a petition for review was filed on behalf of the petitioner.
It was directed against the judgment of the Constitution Bench pronounced on the 22nd May 1953 repelling the constitutional points as well as against the judgment of the Division Bench dated the 5th March 1954 dismissing the petitioner 's appeal on the merits.
On objection being taken by the Registry against one application being filed for the review of two judgments one of which had been pronounced much earlier than the period allowed for filing a review application, the petitioner filed a second application for review of the judgment of the Constitution Bench and prayed for condonation of the delay in filing the same.
On the 5th April 1954 the application for review was put up for hearing before the same Division Bench which had pronounced the judgment on the merits dated the 5th March 1954.
After considering the points of review relating to that judgment the Division Bench on the same day came to the conclusion that no ground had been made out for review of that judgment and accordingly dismissed the petition.
An order was drawn up as of that date directing the petitioner who had been previously enlarged on bail to surrender and serve out his sentence.
On the 12th April 1954 another petition was filed on behalf of the petitioner praying that the review matter relating to the judgment of the Constitution Bench delivered on the 22nd May 1953 be placed before a Constitution Bench for final disposal.
That review application was put up before a Constitution 211 Bench which on the 17th May 1954 declined to entertain the same.
In the meantime the petitioner had in the last week of April 1954 surrendered and has since then been confined in the Central Jail at Rewa.
The present application has, therefore, been made for a writ of habeas corpus on the allegation that the petitioner has been and is being deprived of his liberty otherwise than in accordance with procedure established by law.
In the present petition the petitioner has again urged that the Court of the Judicial Commissioner of Vindhya Pradesh was not the proper forum for entertaining the appeal against the judgment of the Special Judge and consequently the judgment of the Judicial Commissioner setting aside the acquittal of the petitioner convicting and imposing sentence of imprisonment was void and inoperative.
Alternatively, it has been urged that, assuming that the Judicial Commissioner had jurisdiction to hear the appeal from the Special Judge and his judgment was in accordance with procedure established by law, the appeal filed by the petitioner in this Court against the judgment of the Judicial Commissioner should have been, under article 145(3) of the Constitution, beard and completely disposed of by the Constitution Bench.
As regards the first point as to the incompetency of the Court of the Judicial Commissioner to entertain the appeal from the decision of the Special Judge the same has been fully dealt with by the Constitution Bench and cannot be reagitated.
Indeed, learned counsel appearing in support of this petition has not pressed the same.
The only point urged before us is the alternative plea mentioned above which depends for its decision on a true construction of article 145.
Article 145 by clause (1) authorises this Court, subject to the provisions of any law made by Parliament and with the approval of the President to make rules for regulating generally the practice and procedure of the Court, including, amongst others, rules as to the procedure for hearing appeals, as to the entertainment of appeals under sub clause (c) of clause (1) of article 212 134 and as to the conditions subject to which any judgment pronounced or order made by the Court may be reviewed and the procedure for such review.
Clauses (2) and (3) of the article are in the terms following "(2)Subject to the provisions of clause (3), rules made under this article may fix the minimum number of Judges who are to sit for any purpose, and may provide for the powers of single Judges and Division Courts.
(3)The minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under article 143 shall be five: Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion".
The contention of the petitioner is that the question whether a particular case involves a substantial question of law as to the interpretation of the Constitution is to be examined at the time when the case first comes before this Court.
If at that stage it is found that it is a case involving a substantial question of law as to the interpretation of the Constitution it becomes irrevocably impressed with that character and quality and the minimum number of Judges who are to sit for the purpose of deciding such case must be a Constitution Bench, that is to say, a Bench of at least five Judges.
The argument then proceeds to say that once the Constitution Bench takes seisin of the case and starts the hearing that 213 Bench and that Bench alone must decide the whole of such case, that is to say, decide all questions, constitutional or otherwise, arising in the case.
Sri Purshottam Trikumdas who appears in support of this petition has strongly relied on the language used in clause (3) and contends that "the case" cannot be split up and that the clause requires the entire case to be disposed of by the Constitution Bench.
He, therefore, urges that the Division Bench had no jurisdiction to take up the case involving substantial ques tions of law as to the interpretation of the Constitution and consequently the judgment of that Division Bench pronounced on the 5th March, 1954 was illegal and void.
According to him, his client 's appeal, in the eye of the law, remains undisposed of and as he had been let out on bail until the disposal of his appeal, his detention in jail pursuant to the judgment of the Division Bench, which is a nullity, amounts to deprivation of his personal liberty otherwise than in accordance with procedure established by law and is an infringement of his fundamental right under article 21 of the Constitution.
The argument at first sight certainly appears to be plausible but on a deeper consideration of the constitutional provisions bearing on the subject and the general principles regulating the procedural powers of Courts we are unable to accept the same as sound or well founded.
In this very case the Judicial Commissioner of Vindhya Pradesh had granted a certificate of fitness under article 134(1)(c).
Consequently under the proviso to clause (3) of article 145 the appeal might well have been placed before a Division Bench consisting of less than five Judges.
In that situation, being satisfied that the appeal involved a substantial question of law as to the interpretation of the Constitution the determination of which was necessary for the disposal of the appeal, that Division Bench could refer the question for the opinion of a Constitution Bench and on receipt of the opinion dispose of the appeal in conformity with such opinion; but to accede to the argument of Sri Purshottam Trikumdas will lead us to hold that while a Division Bench of three 214 Judges could split up this very case, had it been posted before it in the first instance, by referring the con stitutional questions to a Constitution Bench for its opinion and then, after receipt of that opinion, disposing of the rest of the case on merits in conformity with such opinion, a Constitution Bench of five or more Judges before which the case happened to be posted in the first instance could not split up the case by deciding the constitutional questions and leaving the rest of the case to be dealt with and disposed of by a Division Bench of less than five Judges on merits in conformity with the opinion of the Constitution Bench thus saving the time of the Constitution Bench.
Reference may also be made to article 228 which authorises the High Court, if satisfied that a case pending in a Court subordinate to it involves a substantial question of law as to the interpretation of the Constitution the determination of which is necessary for the disposal of the case, to withdraw the case and either to dispose of the case itself or determine the said question of law and return the case to the Court from which it has been so withdrawn so as to enable the said Court to proceed to dispose of the case in conformity with the judgment of the High Court.
Here again learned counsel 's argument leads us to hold that while the High Court can split up a case involving a substantial question of law as to the interpretation of the Constitution a Constitution Bench of this Court cannot do so.
Apart from these provisions of the Constitution there are provisions made by procedural statutes which result in a case being partly heard by one Judge and partly by another Judge.
To cite only a few instances, reference may be made to section 24 and Order 18, rule 15 of the Code of Civil Procedure and sections 350, 526, 528 and 556 of the Code of Criminal Procedure.
The argument of Sri Purshottam Trikumdas, pushed to its logical conclusion, must amount to this that although Courts operating under the ordinary procedural code may split up cases into different stages for the purpose of hearing and decision) a Constitution Bench of this Court cannot do so if a case involving substantial questions of law as to 215 the interpretation of the Constitution happens to be posted before it in the first instance.
Learned counsel for the petitioner recognises the incongruity that results from his argument but contends that it cannot be helped because the relevant provisions referred to above expressly sanction the splitting up of cases whereas the body of clause (3) of article 145 does not.
His argument is that in the cases mentioned above splitting up of cases has to be allowed because the special provisions of the Constitution or other statutes provide for such splitting up in those cases.
He contends that the very fact that these provisions had to be made clearly indicates that but for them there could not have been any splitting up of the case.
It is said that these provisions are exceptions to the general rule of indivisibility of a case.
We are unable to accept this reasoning as correct.
In the first place the proviso to article 145(3), article 228 and the other provisions of the Codes referred to above quite clearly indicate that the splitting up of cases into different stages for bearing and decision is not repugnant to the Constitution or the general principles of procedural law.
The underlying principle of the Constitution is clear and all that it insists upon is that all constitutional questions should be heard and decided by a Bench of not less than five Judges.
As long as this requirement is fulfilled there can be no constitutional objection to the rest of the case being disposed of by a Division Bench of less than five Judges, so as to save the time of the Constitution Bench of five or more, Judges.
In the next place we are not aware of any such general rule of indivisibility as is being insisted upon by learned counsel.
There is nothing in principle which requires that a case,must always be decided in its entirety by one Judge or one set of Judges even though such a case may conveniently be dealt with in two or more stages.
Indeed, in Maulvi Muhammad Abdul Majid vs Muhammad Abdul Aziz(1) the Privy Council pointed out that where a Judge had before (1) L.R. 24 I.A. 22.
216 him a case consisting of two parts, a question of title and an incidental question of account depending on title, it did not require any provision of the Civil Procedure Code to authorise him to decide the first question and reserve the second for further investigation and that to treat such a proceeding as beyond the power of the Court and as an error which barred the proceedings reserved for further decision was a serious miscarriage of justice.
Indeed, the Court often exercises its inherent power, if it thinks fit to do so, to decide questions of jurisdiction or limitation or the like as preliminary questions reserving other questions of fact for future investigation.
The decision of a case at two or more stages may and often does result in the case not being decided by the same Judge, for the Judge who decided at the first stage may, by reason of death, retirement or transfer, be not available for deciding the case at the later stages, it follows, therefore, that no argument can be founded on any supposed general rule of indivisibility of a case for the purpose of its hearing and decision.
The consideration that there is no such general rule as is relied on by learned counsel and that the splitting up of cases is not generally repugnant to law and in particular to the Constitution, leads us to the conclusion that in construing clause (3) of article 145 no quality of indivisibility need be attributed to the words "the case" used therein.
A case may, to begin with, involve a substantial question of law as to the interpretation of the Constitution, but it may cease to do so at a later stage.
Suppose a case which involves a constitutional question is placed before a Constitution Bench but learned counsel appearing in support of the case intimates to the Bench that he does not press any constitutional point, surely he can not, in that situation, insist that the time of a Bench of five or more Judges should be spent on the determination of a case which, by his own election, has ceased to involve any constitutional question.
Likewise, when the constitutional questions involved in the case are disposed of by a Constitution Bench what 217 remains of the case cannot properly or appropriately be described as still a "case involving a substantial question of law as to the interpretation of this Constitution".
It should be borne in mind that when a case or appeal is properly admitted to this Court all that the parties are entitled to is a decision of this Court and not of any Particular Bench.
So long as the minimum number of Judges which the Constitution and the rules framed by this Court prescribe are present to hear and decide the questions raised from stage to stage, they represent the Court for the purpose of giving decisions on its behalf and the parties get all that they are entitled to under the law.
If a Court is entitled to decide a case in stages, as the Privy Council has held it can, there is no reason why article 145(3) should be so construed as to deprive this Court of that inherent power.
It will involve no violation of any principle of natural justice or of any legal principle if we construe clause (3) of article 145 as requiring only that the minimum number of five Judges must sit for the purpose of deciding any case in so far and as long as it involves a substantial question of law as to the interpretation of this Constitution.
We find nothing in the language of clause (3) of article 145 which militates against this interpretation of that clause.
Indeed, it is on this interpretation that the practice has grown up in this Court for a Constitution Bench to dispose of all constitutional questions and to leave the other subsidiary questions for disposal by a Division Bench of less than five Judges in conformity with the opinion of the Constitution Bench.
There is nothing that we find in the body of clause (3) of article 145 which compels us to depart from the famous maxim cursus curiae est lex curiae which was laid down by Lord Coke in Burrowes vs High Commission Court(1) and which was quoted with approval in Habibar Rahman vs Saidannessa Bibi(2).
For reasons stated above we consider that a good and valid return has been made by the respondents to the rule nisi issued to them and this application must be dismissed.
We order accordingly.
(1) 3 Bulst.
48, 53.
331, 335.
218 SINHA J. I regret to have to differ from my learned brethren on the construction of article 145(3) of the Constitution which is the main question in controversy in this case.
Clause (3) of article 145 is in these terms: "The minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under article 143 shall be five: Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the 'Purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion".
It is noteworthy that the Constitution has not vested this Court with complete power to make rules as to the constitution of Benches for hearing matters coming before this Court in its Original, Appellate or Advisery Jurisdiction.
Clause (2) of article 145 has invested this Court with power to make rules fixing the minimum number of Judges who are to sit for any purpose and for defining the powers of single Judges and Division Courts.
But this power is expressly made subject to the limitation laid down in clause (3) quoted above; that is to say, where any case involves a substantial question of law as to the interpretation of the Constitution (omitting the words not material for our present purpose) the minimum number of Judges prescribed by the Constitution to decide such a case is five.
A case may involve questions of law as to the interpretation of the Constitution, as also other questions.
In this case we have to determine whether clause (3) contemplates the whole case or a part of a 219 case.
In my opinion, the Constitution while laying down clause (3) of article 145 contemplates the whole matter in controversy arising in a case which may include substantial questions of law as to the interpretation of the Constitution as also other questions.
The main clause (3), excepting cases coming within the purview of the proviso does not contemplate a splitting up of a case into parts, one part involving substantial questions of law as to the interpretation of the Constitution and another part or parts not involving such questions.
My reasons for coming to this conclusion are as follows: Clause (3) itself read along with the proviso makes a distinction between a "case" and a "question" of the nature indicated in the proviso to the clause.
The Constitution has clearly indicated that cases coming within the purview of the proviso may be split up so as to admit of the questions of constitutional importance being determined by a Bench of at least five Judges who may be described for the sake of convenience as "Constitution Bench" in contradistinction to a Division Court consisting of less than five Judges, as is contemplated in the proviso.
The main clause (3) requires a case of the description therein set out to be heard and decided by a Constitution Bench, whereas the proviso contemplates that only the question of constitutional importance (using a compendious phrase) has to be decided by a Constitution Bench and the case out of which such a question arises remaining in the seisin of the Division Court before which the case was originally placed for hearing.
The Constitution has placed cases involving substantial questions of law of constitutional importance on a special footing.
If the framers of the Constitution had intended that not the whole case but only particular questions of the nature indicated had to be heard by a minimum number of five Judges, they would have used words similar to those used in the proviso making it permissible for the Constitution Bench to give its opinion for the decision of the case by a Division Court in conformity with that opinion, 220 A reference to the terms of article 228 of the Constitution would also show that the framers of the Constitution were fully alive to the difference between the decision of the "case itself" and a "question of law" of constitutional importance involved in that case.
It has made clear in that article that the High Court shall either decide the whole case including the question of law as to the interpretation of the Constitution which was necessary for the disposal of the case or determine only such a question or questions and return the case to the original court for disposal in conformity with the judgment of the High Court on such question or questions.
The Constitution made these specific provisions to emphasize that there is a distinction between determining the case itself and determining a substantial question of law of constitutional importance.
Can it be said that if clause (3) of article 145 had been enacted without the proviso, a case could be heard piecemeal first by a Constitution Bench which would determine only questions of law as to the interpretation of the Constitution, and then the residue of the case being heard and determined by a Division Court? That, in my opinion, would not be in compliance with the imperative provisions of the main clause (3).
The framers of the Constitution therefore enacted the proviso in the nature of an exception to the general rule laid down in the main clause (3).
It has to be observed that the proviso is limited to appeals only, subject to the further exception that such appeals should not have come up to this Court through the process laid down in article 132 of the Constitution.
It is thus clear that not all cases contemplated in the main clause (3) but only appeals of a particular description would come within the qualifying provisions of the proviso.
The word "case" has not been defined but it may be taken as settled law that it is much wider than a "suit" or an "appeal".
Hence whereas the proviso would apply to appeals brought up to this court, except those under article 132 of the Constitution, the main clause (3) would apply to all appeals and all 221 other matters coming up to this Court in its Original, Appellate and Advisory jurisdictions.
In my opinion, there cannot be the least doubt that the main provisions of clause (3) are all embracing, and contemplate all cases coming up to this Court.
It has not been contended that the present case comes within the purview of the proviso but it has been said that if it is open to a Division Court to refer a question of constitutional importance to a Constitution Bench, why should not a Constitution Bench be competent to refer questions other than those of constitutional importance to a Division Court? The answer is that whereas the former is contemplated by the Constitution in terms, the latter is not.
Nor are there any rules to that effect.
But it has been further observed that the splitting up of a case into parts, one involving questions of constitutional importance and the remaining part not involving questions of that kind, is not against the provisions of the Constitution.
But, in my opinion, if the Constitution has made a specific provision as to the splitting up of a case into parts, one cognisable by a Court of higher jurisdiction like a Constitution Bench and the rest by a court of lower jurisdiction like a Division Court, the argument is not available that a splitting up of a case apart from those specific provisions is also permissible.
In this connection reference was made to certain provisions of the Code of Civil Procedure as also of the Code of Criminal Procedure to show that those Codes do contemplate hearing of the same case in part by different courts, but those are all courts of co ordinate jurisdiction in which the question of the power of the court itself relatively to the subject matter of the case is not in question.
The court which originally dealt with the case and the court which finally came to hear and determine the matter were each one of them competent to deal with the whole matter or any part of it.
That is not the position here.
In this case the argument on behalf of the petitioner is that as admittedly his appeal involved substantial questions of law as to the interpretation of the Constitution and as it did not come 222 within the purview of the proviso to clause (3) of article 145 of the Constitution, it should have been dealt with throughout by a Constitution Bench.
It was suggested in answer to this argument that after the questions of law of constitutional importance had been dealt with by the Constitution Bench the case ceased to be one involving such questions and therefore could have been heard by a Division Court.
But the difficulty in accepting this argument is that once a Constitution Bench was seized of the case, it could not transfer it to another Bench for sharing the decision of that case with it.
That Bench should have heard out the whole case and it had not the power to direct, and it did not so direct, that the remaining part of the case should be heard by a Division Court.
Once a Constitution Bench is seized of the case, it has to hear the case to its conclusion.
There was no process known to the rules framed under the rule making power of this Court by which a case once it came before a Constitution Bench could get transferred from that Bench to a Division Court either automatically or by orders of any authority.
But it has been suggested that it may happen that a Constitution Bench may start the hearing of the case, and before the hearing is concluded one of the Judges is by reason of death or otherwise disabled from hearing out the case and in that event the Chief Justice has the power to constitute another Bench.
But that is quite a different matter.
In that case the hearing by the previous Bench comes to nothing and the Bench constituted afresh by the Chief Justice has to hear out the whole case afresh.
It has also been suggested on the other side that a "case" may mean a part of a case.
In my opinion, that submission is not well founded; because, if that argument were accepted and pushed to its logical conclusion, it may make the provisions of the main clause (3) of article 145 nugatory.
Article 132 of the Constitution has been, as indicated above, excepted from the operation of the proviso to clause (3).
Suppose an appeal is brought to this Court under article 132 of the Constitution as the case involved substantial 223 questions of law as to the interpretation of the Con stitution.
That case besides involving questions of that character, may also involve other questions.
If the argument that a "case" includes part of a case were accepted, then it will be permissible for a Constitution Bench to hear the questions of constitutional importance and leave the rest of the case to be determined by a Division Court, though such a case is expressly excluded from the operation of the proviso and thus is directly within the terms of the main clause (3).
Hence every case coming before this Court involving a question of constitutional importance may be dealt with in part in so far as it relates to that question by a Constitution Bench and the remaining part by a Division Court.
That, in my opinion, was not intended by the framers of the Constitution.
The term "case" therefore must mean the whole matter in controversy before this Court.
Such a matter may relate to one of several questions in controversy in the original court, if the determination of that question is sufficient to dispose of the case within the meaning of the Explanation to article 132 of the Constitution.
It was further argued by the learned Attorney General that the whole clause (3) of article 145 along with the proviso must be read together.
But even so read, the language of clause (3) does not warrant the hearing of the case piecemeal by different Benches unless it comes within the purview of the proviso.
The proviso is meant to cover only a limited class of cases which otherwise would have come within the purview of the main clause (3).
But the proviso cannot have a larger effect than is justified by its language, viz., that only a question of that description has to be referred for the opinion of the larger Bench, the case itself remaining on the file of the smaller Bench.
The proviso thus makes a clear distinction between a "case" and a "question".
It has also been said there is an inherent power in the court to transact its business according to its established practice.
In the first place, this Court is still in its formative stages and it cannot be said to 224 have an "established practice".
Secondly, it cannot establish a practice in the teeth of the provisions of the Constitution which it is pledged to uphold.
The reference to the decision of the Privy Council in Moulvi Muhammad Abdul Majid vs Muhammad Abdul Aziz(1) is not apt because in that case the hearing at the two stages of the trial was to be done by a court of coordinate jurisdiction; that is to say, a court which could hear and determine the whole case or each of the two parts of the case taken separately by itself, unlike the present case in which the two parts of the hearing have been done by two courts of unequal power.
Similarly the reference to the maxim " cursus curiae est lex curiae" of Coke C. J. in Burrowes vs High Commission Court(1), referred to in Habibar Rahman vs Saidannessa Bibi(3) and to the other cases all proceed on the assumption that there is nothing in the statute law against such a course being taken.
But, in my opinion, such a nebulous practice is opposed to the positive provisions of clause (3) of article 145.
In my opinion therefore, the present case comes directly within the main clause (3) of article 145 of the Constitution and is admittedly not covered by the proviso to that clause.
That being so, the petitioner 's appeal to this Court has not been heard and determined in accordance with the procedure established by this Constitution and therefore the petitioner is entitled to the benefit of the protection afforded by article 21 of the Constitution.
His appeal, therefore, has got to be heard and determined in accordance with the procedure laid down in article 145(3) of the Constitution.
I would therefore allow the petition to this extent only that the appeal be heard by a Constitution Bench on a declaration that the judgment of the Division Court dated the 5th March 1954 is not that of a competent court.
BY THE COURT: In accordance with the judgment of the majority, the petition is dismissed.
(1) L.R. 21 I.A. 22.
(2) 3 Bulst.
48, 53.
(3) I.L.R. , 335.
| The appellant landlord is a holder of life interest in the property in question He filed a suit against the tenant for eviction on the grounds of bona fide requirement by him for demolition and reconstruction.
The Rent Controller held the requirement of the landlord bona fide and ordered eviction of the tenant.
The appellant filed one petition for evicting the tenants in respect of two different tenancies, one for residential purpose and the other for non residential purpose.
The appellate Authority under the Madras Buildings (Lease and Rent Control) Act, 1960 dismissed the appellant 's application for eviction on the ground that a landlord having a life interest cannot seek eviction for bona fide requirement for demolition and reconstruction.
The High Court in Revision refused to inter fere with the order of the Appellate Authority under the Act.
On appeal by special leave, it was contended by the appellant that the land lord having a life interest is entitled to evict the tenant for bona fide requirement for demolition and reconstruction under section 14 of the Act.
The respondent contended that granting of the application of the landlord might prejudice the interest of the remainder man. ^ HELD: Allowing the appeal, (1) Definition of landlord under section 2(6) is wide enough to include the appellant who holds a life interest in the premises.
The right between the appellant and the remainder man with regard to the deed of settlement would have to be worked out in appropriate proceedings. 'The Act in question is a self contained and, complete Code for regulation of the rights between the land lord and tenants.
Even a possible dispute between the landlord and the remainder man cannot affect adjudication of the claim of the landlord against his tenants under the provisions of the Act.
[275F 276D] (2) A single petition with regard to two tenancies in the same premises is maintainable when the tenancy is one.
[276D E]
|
Civil Appeal No. 1951 of 1969.
Appeal by Special Leave from the Judgment and Order dated 7 1 69 of the Allahabad High Court in Civil Revision No. 506 510 and 548 552/65.
J. P. Goyal and section K. Jain for the Appellant.
R. K. Garg, V. J. Francis and D. K. Garg for Respondent No. 1.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by special leave from the judgment of the Allahabad High Court disposing of ten connected civil revisions.
Noorul Hasan Khan and others were the Zamindars of the village in which certain lands were given in Theka to Bhagwati Singh, Ram Prasad Singh and others on the 6th of March, 1948.
The Zamindari vested under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, hereinafter called the Act, on the 30th of June, 1952.
Disputes arose between the ex Zamindars and the ex Thekadars during the pendency of the proceedings under the U.P. Consolidation of Holding Act.
When entries in the list of tenancy holders were published under section 11 of the Consolidation of the Holdings Act relating to the lands in dispute consisting of several plots, objections were filed by both the parties.
Noorual Hasan Khan and others claimed that the plots in dispute being their exclusive Sir and Khudkasht would be deemed to have been settled with them by the State on the abolition of the Zamindari and their names should be recorded as bhumidars thereof.
On the other hand Bhagwati Singh and others claimed that they had become the Sirdars of the plots in dispute and they resisted the claim of the ex Zamindars.
The Consolidation Officer referred the matter to the Civil Judge of Azamgarh in accordance with section 12 of the Consolidation of Holdings Act.
The Civil Judge sent the matter for decision to an Arbitrator appointed under the Act as the dispute gave rise to the question of title.
Shri Kailash Chandra, an Assistant Collector, was appointed as an Arbitrator.
On consideration of the oral and documentary 979 evidence adduced before him he rejected the claim of ex Zamindars and decided the matter in favour of the ex Thekedars.
Bhagwati Singh and others were held to be the Sirdars of the plots in question.
Noorul Hasan and others filed objections to the Award before the Civil Judge.
He allowed the objections on the ground that the illegality of the Award was apparent on the face of it in as much as the Arbitrator did not apply the correct law in determining the rights of the parties.
He set aside the Award and remitted it back to the arbitrator for reconsideration in the light of his judgment.
Appeals were taken to the learned Additional District Judge who by order dated 8 12 1962 disagreed with the learned Civil Judge on the main question but affirmed his order of remand on the ground that in the Award many questions were left undetermined.
Both sides filed separate revisions before the High Court.
The High Court has allowed the revisions of the ex Thekedars and dismissed those of the ex Zamindars.
Hence this appeal.
The only point which was argued and agitated before us is whether Bhagwati Singh and others have been rightly held to be the Sirdars of the plots in question or whether the ex landlords had become the bhumidars.
The determination of this question depends upon a correct appreciation of the provisions of law contained in sections 12 and 13 of the Act.
We shall read the relevant portions of the two sections.
They are as follows : "12.
Thekedars to be hereditary tenants in certain circumstances. (1) Where any land was in the personal cultivation of a person on the Ist day of May, 1950, as a thekedar thereof and the theka was made with a view to the cultivation of the land by such thekedar personally, then notwithstanding anything in any law, document or order of court, he shall be deemed to be a hereditary tenant thereof entitled to hold, and when he has been ejected from the land after the said date, to regain possession as a hereditary tenant thereof liable to pay rent at hereditary rates.
Estate in possession of a thekedar. (1) Subject to the provisions of Section 12 and sub section (2) of this section a thekedar of an estate or share therein shall, with effect from the date of vesting, cease to have any right to or possess as such any land in such estate.
980 (2) Where any such land was in the personal cultivation of the thekedar on the date immediately preceding the date of vesting, the same shall (a) if it was sir or khudkasht of the lessor on the date of the grant of the theka, be deemed for purposes of Section 18, to be the sir or khudkasht of the lessor on the date immediately preceding the date of vesting and the thekedar shall, with effect from the date of vesting, become the asami thereof liable to pay rent at hereditary rates applicable on the date immediately preceding the date of vesting and entitled to hold the land as such for the unexpired period of the theka or for a period of five years from the date of vesting whichever is less; (b) if it was not sir or khudkasht of the lessor on the date of the grant of the theka and (i) its area does not exceed thirty acres, be deemed for purposes of Section 19 to have been held by the thekedar as a hereditary tenant liable to pay rent which shall be equal to the rent calculated at hereditary rates applicable on the date immediately preceding the date of vesting.
(ii) its area exceeds thirty acres, be deemed to the extent of thirty acres for purposes of Section 19 to have been held as a hereditary tenant as aforesaid and the remainder shall be deemed to be vacant land and the thekedar shall be liable to ejectment therefrom in accordance with the provisions of Section 209.
" It would be noticed from the provisions aforesaid that a Thekedar of an Estate ceases to have any right to hold or possess as such any land in such Estate with effect from the date of its vesting.
This is what has been provided in sub section (1) of section 13.
But it is subject to two exceptions viz.
, one the provision contained in section 12 and the other engrafted in sub section (2) of section 13.
There is no dispute between the parties that the land in possession of the Thekedars on the date of vesting was either covered by section 12(1) or section 13(2) (a).
We are not concerned in this case with section 13(2)(b) as the land admittedly was the Sir or Khudkasht of the lessor namely the Zamindars.
If such a land was in the personal 981 cultivation of a person on the 1st day of May, 1950 as a Thekedar thereof and if the Theka was made with a view to the cultivation of the land by such Thekedar personally then because of the non obstante clause occurring in sub section (1) of section 12 of the Act the Thekedar would be deemed to be a hereditary tenant of the land entitled to hold as such and liable to pay rent at hereditary rates.
If, however, the land was in personal cultivation of the Thekedar merely as a Thekedar appointed to collect rent from other tenants and incidentally allowed to cultivate the Sir or Khudkasht land of the lessor then he will be a mere asami in accordance with section 13(2)(a) of the Act.
The Arbitrator on a consideration of the Theka document found that the theka was made with a view to cultivation of the land by the Thekedar personally.
The interpretation of the Arbitrator was not such that it could enable the Civil Judge to take the view that there was an error of law apparent on the face of the record.
On the other hand it appears to us what the interpretation put by the Arbitrator was correct.
There is a subtle but clear dividing line between the two types of cases one falling under section 12(1) of the Act and the other coming within the ambit of section 13(2)(a).
In our opinion the High Court was right in its view that the Award of the Arbitrator was not fit to be interfered with.
For the reasons stated above, we dismiss this appeal but in the circumstances make no order as to costs.
N.K.A. Appeal dismissed.
| The appellant (plaintiff) the present Mahant, filed a suit for a declaration that the plaint schedule properties were his personal properties and that there was no trust of a religious or public nature so as to attract the provisions of the Bihar Hindu Religious Trust Act 1951.
It was contended in the suit that one G constructed a temple on his own land in the village, installed deities, performed puja and raj bhog till his death, that the public had no concern with the idols and that after his death he was succeeded by his son who became a bairagi.
Apart from the properties left by him, his son also acquired other properties.
On the son 's death he was succeeded by his Chela who became a Mahant.
Each succeeding Mahant was succeeded by his Chela.
Properties were acquired by the respective Mahants in their own name and treated as their personal properties.
One of the Mahants constructed a temple in a nearby village where he installed deities and performed puja and raj bhog.
It was claimed that the temple and the properties were the private properties of the Mahant and the public did not have any interest or right in them.
The suit was contested by respondent No. 1, contending that the temples and the properties were not the private properties of the Mahant and that they belonged to a Hindu Religious Trust to which the provisions of the Bihar Hindu Religious Trusts Act, 1951 were applicable.
The Trial Court dismissed the suit and its decree was confirmed by the High Court.
In the appeal to this Court, the question was whether the plaint schedule properties were properties in respect of which there was a trust of a public or religious nature so as to attract the provisions of the Bihar Hindu Religious Trusts Act, 1951.
^ HELD: 1.
The High Court was right in holding that there was a trust of a public nature.
[1130B] 2.
The fact that members of the public were permitted to go to the temple without any hinderance might not be a circumstance which by itself would conclusively establish that the temple was a public temple in the absence of an element of right in the user of the temple by the public.
Conversely the free use of the properties of the temple by the Mahant at a time when he was the sole manager of the temple and its properties would not necessarily lead to the inference that the temple was not a public temple.
[1129E] 3.
There can be no simple or conclusive factual test to determine the character of a trust.
The totality of the circumstances and their effect must be considered.
[1129F] In the instant case not only were the members of the public allowed free access to the temple, but they were evincing much greater interest in the insti 1126 tution as several villagers had made gifts of land to it, a circumstance which would ordinarily be consistent with the nature of the institution being public and not private.
[1129F] 4.
The situation of the temple would be an important circumstance in determining whether it was private or public.
[1129G] Deoki Nandan vs Murlidhar ; referred to.
In the instant case the High Court had pointed out that the temple was constructed outside the village on open land between two villages so as to be convenient to the villagers of both the villages.
It was constructed on a high platform and was open on all sides with plenty of space around it, so as to attract and accommodate large number of villagers from two villages.
This indicated that the trust was of a public nature.
[1129H 1130A] 5.
The donation of land by members of the public to the institution and location of the temple at a place freely accessible and convenient to the public were circumstances which indicated that the trust was of a public nature.
[1130B] Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,[1971] 3 S.C.R. 680, distinguished.
|
tition Nos.
17165 86 of 1984 & 1240 1/85 (Under Article 32 of the Constitution of India) K. Rajendra Choudhary and K. Shivraj Choudhary for the 20 Petitioners in W.P. No. 17165 86 of 1984.
M.K. Ramamurthy, Subodh Markandeya and Mrs. Chitra Markandeya for the Petitioners in W.P. No. 12401 of 1985.
K.G. Bhagat, T.V.S.N. Chari, Y. Prabhakar Rao and Ms. Vrinda Grover for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The group of writ petitions under Article 32 of the Constitution is at the instance of several directly recruited Assistant Engineers now designated as Deputy Executive Engineers in the Engineering Service of the Roads and Buildings division of Andhra Pradesh Government.
Writ Petition No. 12401 of 1985 is by 13 Assistant Engineers of the same service who were also directly recruited.
The challenge in the batch of writ petitions is mainly to an order of the Chief Engineer, respondent No. 2 therein, by asking for quashing of his order dated 8th of June, 1984 by which he regularised temporary service of promotees in the years 1972 73, 1973 74 and 1974 75 to the cadre of Assistant Engineers (Deputy Executive Engineers).
According to the petitioners, the retrospective regularisation made by the Chief Engineer of the promotees to the posts of Assistant Engineers is without authority and is in gross violation of the prescription of the Rules.
They have asked for a direction to the State Government and its authorities in Writ Petition No. 12401 of 1985 to consider the claim of direct recruits for promotion as Executive Engineers and consequential reliefs.
In the batch of writ petitions as also in the other writ application some promotee engineers have been impleaded as representatives of promotees and transferees in the division.
There are two sets of rules operating side by side in the State of Andhra Pradesh which are relevant.
The first is known as the Andhra Pradesh State and Subordinate Services Rules promulgated with effect from March 7, 1962 under the proviso to Article 309.
These have been referred to as 'General Rules ' and for convenience we maintain the same term in our judgment.
On June 27, 1967, another set of rules known as Andhra Pradesh (Roads and Buildings) Engineering Service Rules with retrospective effect from April l, 1965, were promulgated.
These have been referred to as 'Special Rules ' by the Administrative Tribunal and in our judgment those will also be referred to that way.
Under Rule 3(1) of the Special Rules the method of recruitment to the 21 category of Assistant Engineers has been provided and the methods are: (i) By direct recruitment; or (ii) By promotion of Junior Engineers; or (iii) By recruitment by transfer from Supervisor or Draughtsman Special Grade or Draughtsman Special Grade I of the Andhra Pradesh (R&B) Engineering Subordinate Service.
Sub rule (3)(a) of Rule 3 prescribes that of the substantive vacancies in the category of Assistant Engineers, 37 1/2% shall be filled up by direct recruitment and the remaining 62 1/2 % by transfer of Supervisors and Draughtsmen and by promotion of Junior Engineers.
The main complaint of the direct recruits has been that notwithstanding this prescription in the rules, there has been under recruitment of Assistant Engineers by direct recruitment and the recruits through the other two modes have come into the cadre far in excess of the limit provided by the rule and regularisation of such recruitment has been made by exercising powers under Rule 23 of the General Rules.
In the writ petition it has been pleaded that though five year qualifying service was necessary in the lower service for entitlement to consideration for promotion as Assistant Engineer, the period has been reduced to three years to enable larger recruitment from the alternate sources to the prejudice of direct recruits.
Reference has been made in the writ petition to the decision of the Andhra Pradesh Administrative Tribunal and it has been contended that inspite of such decision and in the teeth of the rules, Government have failed to make direct recruitment and have prejudiced their claim to seniority.
The respondents have controverted these allegations.
By a separate judgment delivered today, we have dismissed Civil Appeal No. 1995 of 1977 which was by two direct recruits to the post of Assistant Engineer.
The conclusion has been on the basis of the facts stated therein.
A reference to the Tribunal 's decision against which the two connected appeals have been filed would show that the matter was examined by a Full Bench of the Tribunal and the Tribunal did point out that the direct recruits were placed at a disadvantageous position and the seniority rule should not be allowed to over ride the recruit 22 ment rules.
The Tribunal found that the Full Bench decision had not been annulled by the State Government or set aside by this Court and was, therefore, binding on the State of Andhra Pradesh.
In the impugned decision, the Tribunal, therefore, held: " .
I would not like to issue directions straightaway to prepare the seniority list on the basis of the decision rendered in the Full Bench decision but while allowing the revision petition direct the Government to prepare the seniority keeping in mind the principle laid down in the Full Bench decision.
The petitioners if feel aggrieved against the decision are given the liberty to approach this Tribunal for redressal of their grievance".
The scheme contained in the sub rule, as indicated above, is that 37 1/2 % of the substantive vacancies are to be filled up by direct recruitment.
There is no justification at all for the State Government not to work out this provision of the rule.
The direct recruits have been agitating over their rights arising out of this rule and Government have turned their deaf ear.
At least from 1982 the dispute has been systematically raised and by the impugned decisions the Tribunal has called upon the State to work out the said rule properly.
Reopening the question of inter se seniority on the basis of non enforcement of the rules from the very beginning may create hardship and that would be difficult to mitigate but we see no justification as to why the benefit of the scheme under the rules should not be made available to direct recruits at least from 1982.
When the State Government by rules duly framed prescribed the method of recruitment and put the scheme into operation it had the obligation to comply with it.
The explanation offered by the State Government for non compliance of the requirements of the rules does not at all impress us.
We, therefore, direct that as on 31.12.1982, the State Government must ascertain the exact substantive vacancies in the category of Assistant Engineers in the service.
On the basis that 37 1/2% of such vacancies were to be filled up by direct recruitment, the position should be worked out.
Promotees should be confined to 62 1/2% o f the substantive vacancies and in regard to 37 1/2% of the vacancies the shortfall should be filled up by direct recruitment.
General Rules shall not be applied to the posts within the limits of 37 1/2% of the substantive vacancies and even if promotees are placed in those posts, no seniority shall be counted.
The State Government shall take steps to make recruitment of the shortfall in the direct recruitment vacancies within the 23 limit of 37 1/2% of the total substantive vacancies up to 31.12.1987 within four months from today by following the normal method of recruitment for direct recruits.
The seniority list in the cadre of Assistant Engineers shall be redrawn up, as directed by the Tribunal, by the end of September, 1988, keeping the directions referred to above in view.
There shall be a direction issued to the State of Andhra Pradesh to make recruitment to the category of Assistant Engineers by strict compliance of Special Rules hence forth.
In view of what we have stated above and following the principle indicated in the connected Civil Appeal which we have seperately disposed of today, we are of the view that the regularisation made in respect of the promotees of the years 1972 to 1975 should not at this point of time be disturbed particularly when the regularisation has been subsequent to the actual commencement of continuous service in the post of Assistant Engineer.
We would, however, reiterate that the directions given in Writ Petition No. 12401 of 1985 is equally applicable to the petitioners in the group and the State Government is directed to give effect to the judgment with meticulous care.
There would be no other direction in the batch of writ petitions nor would there be any direction for costs therein but Writ Petition No. 12401 of 1985 is allowed to the extent indicated above.
Hearing fees therein is assessed at Rs.3,000 to be paid by the State of Andhra Pradesh.
G.N. Petitions disposed of.
| % The writ petitioners herein challenge the order regularising the temporary service of promotees in the years 1972 73, 1973 74 and 1974 75 to the cadre of Assistant Engineers (Deputy Executive Engineers).
They contend that the retrospective regularisation made by the Chief Engineer is without authority and in gross violation of the prescription of the Rules.
Two sets of rules are operating side by side in the State of Andhra Pradesh, the Andhra Pradesh State and Subordinate Service Rules, 1962, the other, Andhra Pradesh (Roads and Buildings) Engineering Service Rules, 1967 promulgated with retrospective effect from April l, 1965.
Rule 3(1) of the latter rules provide for the method of recruitment of Assistant Engineers by direct recruitment or by promotion or by transfer from Supervisor or Draughtsman Special Grade or Draughts man Special Grade I of the Andhra Pradesh (R&B) Engineering Subordinate Service.
Sub rule (3)(a) of Rule 3 thereof prescribes that of the substantive vacancies of Assistant Engineers, 37 1/2% shall be filled up by direct recruitment, and the remaining 62 1/2% by transfer of Supervisors and Draughtsman and by promotion of Junior Engineers.
Notwithstanding this, there had been under recruitment of Assistant Engineers by direct recruitment and the recruits through the other modes have come into the cadre far in excess of the limit provided by the rule and had been regularised.
It has been contended that though five year qualifying service was 19 necessary in the lower service for entitlement to consideration for promotion as Assistant Engineer, the period had been reduced to three years to enable larger recruitment from the alternate sources to the prejudice of direct recruits.
Disposing of the writ petitions, this Court, ^ HELD: 1.
There is no justification at all for the State Government not to work out the provision viz. filling up by direct recruitment 371/2% of the substantive vacancies.
The direct recruits have been agitating from 1982 over their rights arising out of this rule and the Tribunal has called upon the State to work out the said Rule properly.
Reopening the question of inter se seniority on the basis of the rules from the beginning may create hardship, but the benefit of the scheme under the Rules should be made available to direct recruits at least from 1982.
[22D F] 1.2 The State Government must ascertain the exact substantive vacancies in the category of Assistant Engineers in service.
On the basis that 371/2% of such vacancies were to be filled up by direct recruitment, the position should be worked out.
Promotees should be confined to 62 1/2% of the substantive vacancies and in regard to 37 1/2% of the vacancies the shortfall should be filled up by direct recruitment.
Even if promotees are placed in those posts reserved for direct recruits, no seniority shall be counted.
[22F H] 1.3 Regularisation made in respect of the promotees of the years 1972 to 1975 should not be disturbed as the regularisation has been subsequent to the actual commencement of continuous service in the post of Assistant Engineer.
[23C] [The State Government has been directed to ascertain the number of vacancies upto 31.12.87 to be filled up by direct recruitment and to take steps to make direct recruitment to fill such posts, within four months and also to draw the seniority list by the end of September, 1988.] [22H; 23A B]
|
Appeal No. 760 of 1962.
Appeal by special leave from the judgment and order dated July 16, 1959 of the Andhra Pradesh High Court in Writ Petition No. 1123 of 1956.
K. R. Chaudhuri, for the appellant.
A. Ranganadham Chetty and B. R. G. K. Achar, for the respondent.
February 21, 1964.
The appellant filed a writ petition in the High Court questioning the validity of section 11 (2) of the Hyderabad General Sales Tax Act, No. XIV of 1950, (hereinafter referred to as the Act).
The material facts on which the petition was based were these.
The appellant acted as agent in the then State of Hyderabad to both resident and non resident principals in regard to sale of betel leaves.
Under the Act betel leaves were taxable at the purchase point from May 1, 1953, by virtue of a notification in that behalf.
We are here concerned with the assessment period from May 1, 1953 to March 31, 1954, covered by the assessment year 1953 54.
The appellant collected sales tax from the purchasers in connection with the sales made by it on the basis that the incident of the tax lay on the sellers and assured the purchasers that after paying the tax to the appellant, there would be no further liability on them.
After realising the tax, however, the appellant did not pay the amount realised to the Government but kept it in the suspense account of its principals, namely, 870 the purchasers.
When the accounts were scrutinized by the Sales Tax Department, this was discovered and thereupon the appellant was called upon to pay the amounts realised to the Government.
The appellant however objected to the payment on the ground that it was the seller and the relevant notification for the relevant period imposed tax at the purchase point, i.e. on the purchaser.
This objection was over ruled and the appellant was directed to pay the amount to Government.
The main contention raised on behalf of the appellant in the High Court was that section 11 (2) of the Act, which authorised the Government to recover from any person, who had collected or collects, after May 1, 1950, any amount by way of tax otherwise than in accordance with *.he provisions of the Act, as arrears of land revenue, was beyond the legislative competance of the State legislature.
The argument was that the Act was passed under Entry 54 of List 11 of the Seventh Schedule to the Constitution, which enables the State legislature to enact a law taxing transactions of sale or purchase of goods.
The entry therefore vests power in the State legislature to make a law for taxing sales and pur chases of goods and for making all necessary incidental provisions in that behalf for the levy and collection of sales or purchase tax.
But it was urged that that entry did not empower the State legislature to enact a law by which a dealer who may have collected a tax without authority is required to hand over the amount to Government, as any collection without the authority of law would not be a tax levied under the law and it would therefore not be open to the State to collect under the authority of a law enacted under Entry 54 of List II any such amount as it was not a tax on sale or purchase of goods.
The High Court held section 11 (2) good as an ancillary provision with regard to the collection of sales or purchase tax and therefore incidental to the taxing power under Entry 54 of List 11.
Further the High Court took the view that assuming that Entry 54 of List II could not sustain section 11 (2), it could be sustained under Entry 26 of List H.
Consequently the writ petition was dismissed.
The High Court having refused a certificate to appeal to this Court, the appellant obtained special leave and that is how the matter has come up be fore us.
871 It is necessary to read section II of the Act in order to appre ciate the point urged on behalf of the appellant.
Section 11 is in these terms: 1 1 (1) No person who is not registered as a dealer &hall collect any amount by way of tax under this Act nor shall a registered dealer make any such collection before the 1st day of May, 1950, except in accordance with such conditions and restrictions, if any, as may be prescribed Provided that Government may exempt persons who are not registered dealers from the provisions of this sub section until such date, not being later than the 1st day of June, 1950, as Government may direct.
(2) Notwithstanding to the contrary contained in any order of an officer or tribunal or judgment, decree or order of a Court, every person who has collected or collects on or before 1st May, 1950, any amount by way of tax otherwise than in accordance with the provisions of this Act shall pay over to the Government within such time and in such manner as may be prescribed the amount so collected by him.
and in default of such payment the said amount shall be recovered from him as if it were arrears of land revenue.
" It will be seen that section 11 (1) forbids an unregistered dealer from collecting any amount by way of tax under the Act.
That provision however does not apply in the present case, for the appellant is admittedly a registered dealer.
Further section II (1) lays down that a registered dealer shall not make any such collection before May 1, 1950, except in accordance with such conditions and restrictions, if any, as may be prescribed.
This provision again does not apply, for we are not concerned here with any collection made by the appellant before May 1, 1950.
The prohibition therefore of section 11 (1) did not apply to the appellant.
Then comes section 11 (2).
It applies to collections made after May 1, 1950 by any person whether a registered dealer or otherwise and lays down that any amount collected by way of tax otherwise than in accordance with the provisions of the Act shall be paid over to 872 the Government and in default of such payment, the said amount shall be recovered from such person as if it were arrears of land revenue.
It is clear from the words "other wise than in accordance with the provisions of this Act" that though the amount may have been collected by way of tax it was not exigible as tax under the Act.
Section 11 (2) thus provides that amounts collected by way of tax though not exigible as tax under the Act shall be paid over to Government, and if not paid over they shall be recovered from such person as if they were arrears of land revenue.
Clearly therefore s, 11 (2) as it stands provides for recovery of an amount collected by way of tax as arrears of land revenue though the amount was not due as tax under the Act.
The first question therefore that falls for consideration is whether it was open to the State legislature under its powers under Entry 54 of List II to make a provision to the effect that money collected by way of tax, even though it is not due as a tax under the Act, shall be made over to Government.
Now it is clear that the sums so collected by way of tax are not in fact tax exigible under the Act.
So it cannot be said that the State legislature was directly legislating for the imposition of sales or purchase tax under Entry 54 of List II when it made such a provision, for on the face of the provision, the amount, though collected by way of tax.
was not exigible as tax under the law.
The provision however is attempted to be justified on the ground that though it may not be open to a State legislature to make provision for the recovery of an amount which is not a tax under Entry 54 of List 11 in a law made for that purpose, it would still be open to the legislature to provide for paying over all the amounts collected by way of tax by persons, even though they really are not exigible as tax, as part of the incidental and ancillary power to make provision for the levy and collection of such tax.
Now there is no dispute that the heads of legislation in the various Lists in the Seventh Schedule should be interpreted widely so as to take in all matters which are of a character incidental to the topics mentioned therein.
Even so, there is a limit to such incidental or ancillary power flowing from the legislative entries in the various Lists in the Seventh Schedule.
These incidental and ancillary powers have to be exercised in aid of the main topic of legislation, 873 which in the present case, is a tax on sale or purchase of goods.
All powers necessary for the levy and collection of the tax concerned and for seeing that the tax is not evaded are comprised within the ambit of the legislative entry as ancillary or incidental.
But where the legislation under the relevant entry proceeds on the basis that the amount concerned is not a tax exigible under the law made under that entry, but even so lays down that though it is not exigible under the law, it shall be paid over to Government, merely because some dealers by mistake or otherwise have collected it as tax, it is difficult to see how such provision can be ancillary or incidental to the collection of tax legitimately due under a law made under the relevant taxing entry.
We do not think that the ambit of ancillary or incidental power goes to the extent of permitting the legislature to provide that though the amount collectedmay be wrongly by way of tax is not exigible under the law as made under the relevant taxing entry, it shall still be )aid over to Government, as if it were a tax.
The legisla turd cannot under Entry 54 of List II make a provision to the effect that even though a certain amount collected is not a tax on the sale or purchase of goods as laid down by the law, it will still be collected as if it was such a tax.
This is what section 11 (2) has provided.
Such a provision cannot in our opinion be treated as coming within incidental or ancillary powers which the legislature has got under the relevant taxing entry to ensure that the tax is levied and collected and that its evasion becomes impossible.
We are therefore of opinion that the provision contained in section 1 1 (2) cannot be made under Entry 54 of List 11 and cannot be justified even as an incidental or ancillary provision permitted under that entry.
An attempt was made to justify the provision as providing for a penalty.
But as we read section 11 (2) we cannot find anything in it to justify that it is a penalty for breach of any prohibition in the Act.
Penalties imposed under taxing statutes are generally with respect to attempts at evasion of taxes or to default in the payment of taxes properly levied (see sections 28 and 46 of the Indian Income Tax Act.
1922).
The Act also provides for penalties, for example section 19 and section 20.
The latter section makes certain acts or omissions of an 874 assessee offences punishable by a magistrate subject to com position under section 21.
Section 11 (2) in our opinion has nothing to do with penalties and cannot be justified as a penalty on the dealer.
Actually section 20 makes provision in cl.
(b) for penalty in case of breach of section II (1) and makes the person committing a breach of that provision liable, on conviction by a Magistrate of the first class, to a fine.
We are therefore of opinion that section 11 (2) cannot be justified under Entry 54 of List II either as a provision for levying the tax or as an incidental or ancillary provision relating to the collection of tax.
In this connection we may refer to cl.
(c) of section 20, which provides that any person who fails "to pay the amounts specified in sub section (2) of section 11 within the prescribed time" shall on a conviction by a Magistrate be liable to fine.
It is remarkable that this provision makes the person punish able for his failure to pay the amount which is not authorised as a tax at all under the law, to Government.
It does not provide for a penalty collecting the amount wrongly by way of tax from purchasers which may have been justified as a penalty for the purpose of carrying out the objects of the taxing legislation.
If a dealer has collected anything from a purchaser which is not authorised by the taxing law, that is a matter between him and the purchaser, and the purchaser may be entitled to recover the amount from the dealer.
But unless the money so collected is due as a tax, the State cannot by law make it recoverable simply because it has been wrongly collected by the dealer.
This cannot be done directly for it is not a tax at all within the meaning of Entry 54 of ,List II, nor can the State legislature under the guise of incidental or ancillary power do indirectly what it cannot do directly.
We are therefore of opinion that s.11 (2) is not within the competence of the State legislature under Entry 54 of List II.
The respondent in this connection relies on the decision of this Court in The Orient Paper Mills Limited vs The State of Orissa(").
That case in our opinion has no application to the facts of the present case.
In that case the dealer had been assessed to tax and had paid the tax.
Later in view of the judgment of this Court in State of Bombay vs The United Motors (India) Limited(2) the amounts paid in (1) ; (2) ; 875 respect of goods despatched for consumption outside the State were held to be not taxable.
The dealer then applied for refund of tax, which was held to be not exigible.
The refund was refused and and the dealer went to the High Court by a writ petition claiming that it was entitled to refund under section 14 of the Orissa Sales Tax Act (which was the law under consideration in that case).
The High Court allowed the petition in part and there were appeals to this Court both by the dealer and the State.
In the meantime, the Orissa legislature amended the law, by introducing section 14A, in the principal Act, which provided that refund could be claimed only by a person from whom the dealer had actually realised the amount as tax.
That provision was challenged in this Court but was upheld on the ground that it came within the incidental power arising out of Entry 54 of List 11.
That matter dealt with a question of refund and it cannot be doubted that refund of the tax collected is always a matter covered by incidental and ancillary powers relating to the levy and collection of tax.
We are not dealing with a case of refund in the present case.
What section II (2) provides is that something collected by way of tax, though it is not really due as a tax under the law enacted under Entry 54 of List II must be paid to the Government.
This situation in our opinion is entirely different from the situation in the Orient Paper Mills Limited 's case(").
The respondent further relies on a decision of the Madras High Court in Indian Aluminium Co. vs The State of Madras(2).
That decision was with respect to section 8 B of the Madras General Sales Tax Act of 1939 as amended by Madras Act 1 of 1957.
Though the words in section 8 B (2) were not exactly the same as the words in section 11 (2), with which we are concerned here, the provision in substance was to the same effect as section 11 (2).
In view of what we have said above, that decision must be held to be incorrect.
Lastly, we come to the contention of the respondent that section 11 (2) is within the legislative competence of the State legislature in view of Entry 26 of List 11.
That entry deals with "trade and commerce within the State subject to the provisions of entry 33 of List III".
It is well settled that (1) ; (2) [1962] XIII S.T.C. 967. 876 taxing entries in the legislative Lists I and II of the Seventh Schedule are entirely separate from other entries.
Entry 26 of List 11 deals with trade and commerce and has nothing to do with taxing or recovering amounts realised wrongly as tax.
It is said that section 11 (2) regulates trade and commerce and the State legislature therefore was competent under Entry 26 of List II to enact it.
We have not been able to understand what such a provision has to do with the regulation of trade and commerce; it can only be justified as a provision ancillary to a taxing statute.
If it cannot be so justified as we hold that it cannot we are unable to uphold it as regulating trade and commerce under Entry 26 of List II, There is in our opinion no element of regulation of trade and commerce in a provision like s, 11 (2).
We are therefore of opinion that the State legislature was Incompetent to enact a provision like section 11 (2).
We may also add that the provision contained in section 20(c), being consequential to section 11 (2) will fall along with it.
In consequence it was not open to the Sales Tax Officer to ask the appellant to make over what he had collected from the purchasers ,wrongly as sales tax.
It is not disputed, as appears from the final assessment order of the Sales Tax Officer, that the appellant was not liable to pay the amount as sales tax for the relevant period.
We therefore allow the appeal and quash the assessment order dated September 27, 1956 insofar as it is based on section II (2).
The appellant will get his costs in this Court as well as in the High Court.
Appeal allowed.
| The appellant collected sales tax from the purchasers of betel leaves in connection with the sales made by it.
But it did not pay the amount collected to the Government.
The Government directed the appellant to pay the amount to the Government and it thereupon filed a writ petition in the High Court questioning the validity of section 11(2) of the Hyderabad General Sales Tax Act 1950.
The main contention of the appellant before the High Court was that section 11(2) of the Act which authorises the Government to recover a tax collected without the authority of law was beyond the competence of the State Legislature because a tax collected without the authority of law would not be a tax levied under the law and it would therefore not be open to the State to collect under the authority of a law enacted under the Entry 54 of List II of the VII Schedule to the Constitution any such amount as it was not a tax on sale or purchase of goods.
The High Court held that a. 11(2) was good as an ancillary provision with regard to the collection of sales or purchase tax and therefore incidental to the power under Entry 54, List II.
The High Court also held that even if section 11(2) cannot be justified under that entry it could be justified under Entry 26, List II and in the result the writ petition was dismissed.
The present appeal is by way of special leave granted by this Court.
Held: (i) It cannot be said that the State Legislature was directly legislating for the imposition of sales or purchase tax under Entry 54, list II when it made the provisions of a. 11(2) for on the face of the provisions the amount, though collected by way of tax was not exigible as tax under the law.
(ii) It is true that the heads of legislation in the various lists in the Seventh Schedule should be interpreted widely so as to take in all matters which are of a character incidental to the topic mentioned therein.
Even so there is a limit to such incidental or ancillary powers These have to be exercised in aid of the than topic of legislation, which in the present case is a tax on sale or purchase of goods.
The ambit of ancillary or incidental powers does not so to the extent of permitting the legislature to provide that though the amount collected, may be wrongly, by way of tax is not exigible under the law as made under the relevant taxing entry, it shall still be paid over to the Govern ment as if it were a tax.
Therefore the provision contained in a. 11(2) cannot be made under Entry 54, List II and cannot be justified as incidental or ancillary provisions permitted under that Entry.
(iii) Section 11(2) cannot be justified as providing for a for the breach of any provision of the Act.
(iv) Entry 26, List II deals with trade and commerce and has nothing to do with taxing or recovering amount realised wrongly as tax.
There is no element of regulation of trade and commerce in a provision like section 11(2) and therefore that section cannot be justified under Entry 26.
List II.
869 (v) The provision in section 20(c) is also invalid as it is merely consequential to section 11(2).
The Orient Papers Mills Ltd. vs State of Orissa, ; , distinguished.
State of Bombay vs United Motors (India) Ltd., [1953] S.C.R. 1069, referred to.
Indian Aluminium Co. vs State of Madras, (1962) XIII Sales Tax Cases 967.
held to be wrongly decided.
|
ppeals Nos.
1457 to 1459 of 1958.
Appeals from the judgment and order dated August 21, 1964 of the Madras High Court in T.C. No. 75 of 1962 (Reference No. 50 of 1962).
M. C. Chagla and T. A. Ramachandran, for the appellant (in all the appeals).
section K. Aiyar add B. D. Sharma, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Shah, J.
Ramanathan Chettiar his son Muthiah Chettiar called hereinafter for the sake of brevity, Muthiah and Ramanathan, Annamalai and Alagappan, sons of Muthiah, constituted a Hindu undivided family.
The family owned a 3/5th share in M.R.M.S. Firm, Seramban in Malaya.
The firm was assessed under the Indian income tax Act, 1922, in the status of a firm resident within the taxable territories.
On September 16, 1950, Muthiah separated from the family taking his 1/5th share in the M.R.M.S. Firm.
On April 13, 1951 the status of the family became completely disrupted and the three sons of Muthiah took in equal shares the remaining 2/5th share the grandfather Ramanathan taking no share in the M.R.M.S. Firm.
For the assessment year 1952 53 Muthiah submitted a return of his income as an individual and stated under the head business income "Kindly ascertain his (assessee 's) share of profit and remittances from the Income tax officer, Second Additional Circle I, Karaikudi, in F. 6098 m/1952 53".
In Part III of the return Muthiah supplied the following information about his partners Name and address of Name of each partner Share the firm including assessee Messrs. R.RM.S. Firm 1.
Assessee (Muthiah Chettiar) 60/303 Seramban, F. M.S. 2.
M. RM.
M. Ramanathan Chettiar (minor).
40/303 3.
M. RM.
M. RM.
M. Alagappan Chettiar (minor).
40/303 4.
M. RM.
M. RM.
M. Annamalai Chettiar (minor) 40/303 6.
M.S.S. 60/303 7.
Charity 3/303 717 For the assessment year 1953 54 in column 3 in section B of the return Muthiah stated : "Kindly ascertain the remittances from the Income tax Officer, Fifth Additional, Karaikudi in F. 6098 m", and at p. 3 of the return in column 3 of Section F it was stated "Assessee has 60/303 share in Messrs. Joint Seramban (Malaya).
Kindly ascertain share of profit or loss from the Income tax Officer, Fifth Additional, Karaikudi in F. 6098.
" In Part III of the return he set out the names of the partners as, were mentioned in the return for 1952 53.
Against the names.
of Ramanathan Chettiar, Alagappan Chettiar and Annamalai Chettiar it was not disclosed that they were minors.
For the assessment year 1954 55 at the foot of page 1 of the return Muthiah stated : "The assessee has a remittance of Rs. 6,188 12 0 from R.R.M.S. Firm, Seramban.
His share of income may be taken from the firm 's file. ', and in Part III the names of seven partners as mentioned in 1952 53 return were set out Ramanathan, Alagappan, were not shown as minors.
Ramanathan, Alagappan and Aannamalai the three minor sons of Muthiah represented by their mother and guardian also filed returns of their respective income for the years 1952 53, 1953 54 and 1954 55 and disclosed therein their shares in the profit from the 2/5th share in the M.RM.S. Firm.
For the assessment years 1952 53, 1953 54 and 1954 55 the Income tax officer completed the assessments separately on the firm, on Muthiah as an individual and on the three minors represented by their mother and guardian.
Muthiah was assessed in respect of his share in the income of the firm and from other sources.
In his returns muthiah had not disclosed the share received by his minor sons and the Income tax officer did not in making the assessments include shares of the minors from the firm under section 16 (3) (a) (ii) of the Indian Income tax Act, 1922.
The Income tax Officer issued notices of reassessment to Muthiah under section 34(1) (a) of the Income tax Act, 1922 for the years 1952 53 and 1953 54 and under section 34(1) (b) for the year 1954 55.
Muthiah, filed returns under protest declaring the same income as originally assessed.
In the view of the Income tax Officer Muthiah had not furnished in Part III clause (c) of the return full facts regarding the other parties and in column 2 he had merely disclosed that Ramanathan, Alagappan and Annamalai were minors: that "information was not full in the sense that he had not stated that L10Sup./69 11 718 they were minors sons" of Muthiah.
Accordingly the Income tax Officer held that the income of the sons of Muthiah which should have been included under section 16 (3) (a) (ii) of the Income tax Act had escaped assessment in Muthiah 's hands and he brought that income to tax.
The Appellate Assistant Commissioner confirmed the order made by the Income tax Officer.
In appeal to the Tribunal it was contended by Muthiah that he had fully and truly disclosed all the particulars he was required to disclose in the returns of his income for the three years in question, and "section 34 (a) (a) had no application to the assessment years 1952 53 and 1953 54 and for 1954 55 the reopening was based only on a change of opinion".
Muthiah also contended that section 40 of the Income tax Act was mandatory and since the Income tax Officer had made separate assessments on the minors represented by their mother, no further ' assessment under section 16(3) could be made, the two sections being mutually exclusive.
The Tribunal observed that for the first two years section 34 (1) (a) applied, that in respect of the year 1954 55 there was no change of opinion but the assessment was made on information received within the meaning of section 34 (1 ) (b) of the Income tax Act and that separate assessment of the minors did not stop the Income tax Officer from assessing the income received by the minor sons in the hands of Muthiah.
The Appellate Tribunal accordingly confirmed the order of the Appellate Assistant Commissioner.
At the instance of Muthiah the following questions were referred to the High Court of Madras : (i) Whether on the facts and in the circumstances of the case, the re assessment made on the assessee under section 34 of the Act is valid in law for 1952 53 to 1954 55 ? (ii)Whether on the facts and in the circumstances of the case, the inclusion of the share income of the minor in the hands of the assessee by invoking the provisions of section 16(3) of the Act is valid in law notwithstanding that an assessment is made on the minor represented by his guardian ?" The answer to the second question must, in view of the recent judgment of this Court in C. R. Nagappa vs The Commissioner of Income tax, Mysore(1), be in the affirmative.
In considering the first question it is necessary to refer to certain provisions of the Income tax Act, 1922.
By section 3 (1) 719 the total income of the previous year of every individual, Hindu undivided family, Company and local authority and of every firm and other association of persons or the partners of the firm or the members of the association individually was charged to tax for that year in accordance with, and subject to the provisions of the act at any rate or rates prescribed by the Finance Act.
"Total income" was defined in section 2(15) as meaning "total amount of income, profits and gains referred to in sub section
(1) of section 4 computed in the manner laid down in this Act." Section 4(1) set out the method of computation of total income : it enacted (1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which (a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person or (b) if such person is resident in the taxable territories during such year, (i) accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year, or Section 22 by sub section
(1) required the Income tax Officer to give notice by publication in the press in the prescribed manner, requiring every person whose total income during the previous year exceeds the maximum exempt from tax, to furnish a return in the prescribed form setting forth his total income.
Sub sectian (2) authority the Income tax Officer to serve a notice upon a person whose income in the opinion of the Income tax Officer exceeded the minimum free from tax.
Section 23 dealt with the assessment.
It conferred power upon the Income tax Officer to assess the total income of the assessee and to determine the sum payable by him on the basis of such return, submitted by him.
Rule 19 framed under section 59 of the Income tax Act, 1922, required the assessee to make a return in the form prescribed thereunder, and in Form A applicable to an individual or a Hindu undivided family or an association of persons there was no clause which required disclosure of income of Any person other than the income of the assessee, which was liable to be included in his total income.
The Act and the Rules accordingly imposed no obligation upon the assessee to disclose to the Income tax Officer in his return information relating to income of any other person by law taxable in his hands.
720 But s ' 16 sub section
(3) provided that in computing the total income of any individual for the purpose of assessment there shall be included the classes of income mentioned in cls.
(a) and (b).
Sub section (3) (a) (ii) in so far as it is material provided "In computing the total income of any individual for the purpose of assessment, there shall be included: (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly (i) (ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner;" The assessee was bound to disclose under section 22(5) the names and addresses of his partners, if any, engaged in business, profession or vocation together 'with the location and style of the principal place and branches thereof and the extent of the shares of all such partners in the profits of the business, profession or vocation and any branches thereof, but the as was not required in making a return to disclose that any income was received by his wife or minor child admitted to the benefits of partnership of a firm of which he was a partner.
Counsel for the Commissioner contended that in the forms of returns prescribed in the "Notes of Guidance" for drawing up the return were printed, and thereby the assessee was informed that he had to disclose the income received by his wife and minor children from a firm of which the assessee was a partner.
Counsel has however not placed before the Court the forms of return in vogue in the relevant year of assessment.
In the Income Tax Manual published under the authority of the Central Government in 1945 under cl.
(3) printed at p. 185 theassessee is advised to include the return under the appropriate headcertain classes of income which are liable to be included in theassessment of an individual under section 16, and income liable to betaxed under sections 41D, 44E and 44F.
This instruction was repeated in the Manual Parts II and III at pp. 344 and 345 in the 10th Edition published in 1950.
But in the 11th Edition of the Manual published in 1954 no such instructions were printed.
About the date on which the instructions were deleted Counsel for the Commissioner was unable to give any information.
Assuming that there were instructions printed in the Forms of return in the relevant years ', in the absence of any head under which the income of the wife or minor child of a partner whose wife or a minor child was a partner in the same firm, could be shown, by not showing that income the tax payer cannot be deemed to have failed or omitted to disclose fully and truly all material 721 facts necessary for his assessment.
Section 16(3) imposer, an obligation upon the Income tax Officer to compute the total income of any individual for the purpose of assessment by including the items of income set out in cls.
(a) (i) to (iv) and (b), but thereby no obligation is unposed upon the tax payer to disclose the income liable to be included in his assessment under section 16(3).
For failing or omitting to disclose that income proceedings for reassessment cannot therefore be commenced under section 34 (1) (a) Section 22(5) required the assessee to furnish particulars of the names and shares of his partners, but imposes no obligation to mention or set out the income of the nature mentioned in section 16(3).
In the relevant years there was no head in the form under which income liable to be assessed to tax under section 16(3) (,a) and (b) could be disclosed.
We are in the circumstances unable to agree with the High Court that section 34 imposed an obligation upon the assessee to disclose all income includable in his assessment by reason of section 16(3) (a) (ii).
Section 34(1) (a) sets out the conditions in which the power may be exercised : it did not give, rise to an obligation to disclose information which enabled the Income tax Officer to exercise the power under section 16(3) (a) (ii), nor had the use of the expression "necessary for his assessment" in section 34(1)(a) that effect.
The High Court did not consider the question whether in the year 1954 55 the notice under section 34(1) (b) was properly issued against Muthiah.
The Tribunal in their judgment observed: "There is no basis for the argument that the Income tax Officer had only changed his opinion and reopened the assessment.
" We agree with that view.
The order of re assessment was made well within four years from the date of the last day of the year of assessment 1954 55.
The notice was therefore competently issued by the Income tax Officer.
The order passed by the High Court,, in so far as it relates to the years 1952 53 and 1953 54 is set aside and the answer in the negative is recorded.
For the year 1954 55 the answer recorded by the High Court is confirmed.
There will be no order as to costs throughout.
Y.P. Appeal partly allowed.
| The assessee Electricity Board constituted under the Electricity Supply Act, 1948, supplied and distributed electric energy within the State of Madhya Pradesh.
In the assessment years in question the Electricity Board sold, supplied and distributed electric energy to various consumers, It also supplied steam to Nepa Mills.
The mill was supplying water free and the Electricity Board was making a pro rata charge of conversion of water into steam.
The mill had also agreed to re imburse the Board for the loss sustained on account of the mills not taking the full demand of steam.
In proceedings under the C.P. & Bearar Sales Tax Act, 1947 'and the Madhya Pradesh General Sales Tax Act, 1959 the question for consideration, inter alia, were (i) whether electricity was 'goodS ' within the meaning of the two Acts and whether the Board was a 'dealer ' within the, meaning of section 2(c) of the 1947 Act and section 2(d) of the 1959 Act; and (ii) whether the supply of steam amounted to 'sale ' 'and was therefore taxable.
The High Court, in reference, held that electricity was not 'goods ', that the Board was not a 'dealer"in electricity and that the supply of steam was not taxable as it was not supplied With 'a profit motive.
In appeal by special leave to this Court by the Commissioner of Sales Tax, HELD: (i) The Electricity Board carried on the business of selling, supplying and distributing electricity which fell within the meaning of the expression 'goods ' in the two Acts and was therefore a 'dealer '.
[945 H] The definition of "goods" is very wide and includes all kinds of movable property.
The term 'movable property ' when considered with reference to 'goods ' as defined for the purposes of sales tax cannot be taken in a narrow sense and merely because electric energy is not tangible or cannot be moved or touched, like, for instance, a piece of wood or a book, it cannot cease to be movable property when it has all the attributes of such property.
It is capable of abstraction, consumption and use which, if done dishonestly, would attract punishment Under section 39 of the .
It can be transmitted, transferred, delivered, stored, possessed etc.
in the same way as any other movable property.
If there can be sale and purchase of electric energy like any other movable object, it st be held that electric energy was intended to be covered by the definition of 'goods ' in the two Acts.
If that had not been the case there was no necessity of specifically exempting sale of electric energy from the payment of sales tax by making a provision for it in the Schedule to the two Acts.
[945.E H] 940 Kumbakonam Electric Supply Corporation Ltd. vs Joint Commercial Tax Officer, Esplanade Division, Madras, 14 S.T.C. 600, Malerkotla Power Supply Company vs The Excise & Taxation Officer, Sangrur & Ors.
22 S.T.C. 325, Naini Tal Hotel.
Municipal Board, A.I.R. 1946 All.
502, Erie County Natural Gas & Fuel Co. Ltd. vs Carroll, , County of Durham Electrical etc.
Co. vs Inland Revenue , referred to.
Rash Behari vs Emperor, A.I.R. 1936 Cal.
753 distinguished.
(ii) On the facts of the present case the arrangement relating to supply of steam in return of water supplied by the mills on payment of actual cost was not one of sale but was more in the nature of a workS ,contract Where the main object of work undertaken by the payee of the price is not the transfer of a chattel qua chattel, the contract is one for work and labour.
[946 G H] The Government of Andhra Pradesh vs Guntur Tobaccos Ltd., 16 S.T.C. 240, and HaLsbury 's Laws of England, HI Edn.
34 page 6, referred to.
|
: Special Leave Petition (Criminal) No. 432 of 1981.
From the Judgment and order dated the 25th September, 1980 of the High Court of Andhra Pradesh at Hyderabad in Criminal Revision Case No. 461 of 1980.
P. Ram Reddy and G.N. Rao for the Petitioner.
The order of the Court was delivered by CHINNAPPA REDDY.
The respondent was charged with an offence under Section 34 (a) of the Andhra Pradesh Excise Act on the allegation that he was found in possession of a quantity of eight litres of illicitly distilled arrack, an intoxicant, in contravention of the provisions of the Act and the Rules made under the Act.
The learned Judicial First Class Magistrate convicted him and sentenced .
him to suffer rigorous imprisonment for a period of two years, which was the minimum sentence that could be awarded for an offence under Section 34 (a) of the A.P. Excise Act.
On an appeal preferred by the respondent, the Sessions Judge, Anantapur con firmed the conviction and sentence.
The respondent preferred a revision petition before the High Court.
The learned Single Judge who heard the revision confirmed the conviction.
But, on the question of sentence, he observed: 497 "Mr. T. Ramulu, appearing for the petitioner who has A filed this revision through jail, has submitted that the petitioner is aged 30 years and is a first offender and he has already served a sentence of about IN months and that the sentence may be appropriately modified.
It is true that under the A.P. Excise Act, a statutory minimum sentence is prescribed.
But having regard to the submissions made above, I feel the interest of justice will be satisfied if the sentence of imprisonment imposed against the petitioner is reduced to the period already undergone and if the fine of Rs. 5O/ , imposed is set aside.
The revision is dismissed subject to the modification as stated above.
" We are unable to understand why the High Court reduced the sentence.
The statute prescribes a minimum sentence.
It does not provide for any exceptions and does not vest the Court with any discretion to award a sentence below the prescribed minimum under any special circumstances.
The learned judge has himself noticed that the sentence imposed is the statutory minimum.
Having noticed that the statute prescribes a minimum sentence for the offence, the High Court has ununderstably reduced the sentence of imprisonment to less than the minimum permissible.
The High Court was clearly in error in doing so.
We think we have said enough to correct the error.
It is unnecessary to pursue the matter further by granting special leave.
The petition is dismissed with the above observations.
P.B.R. Petition dismissed.
| Where the statute prescribes minimum sentence and does not provide for any exceptions or vest the Court with any discretion to award a sentence below the prescribed minimum under any special circumstances, a Court cannot reduce the sentence to less than the minimum permissible.
[497 D E]
|
Special Leave Petition [Civil) Nos. 1 l(i50 58 of 1987.
From the Judgment and Order dated 3 1.7.
1987 of the Madras High Court in Appeal against Order Nos. 54 1 to 544 and 558 to 562 of 1981.
A.K. Sen, V. Krishnamurthy and V. Balachandran for the Petitioner.
A. V. Rangam for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These are petitions under Article 136 of the Constitution seeking leave to appeal against the judgment and order of the High Court of Madras dated 31st July, 1987.
The petitioner company undertook the work of widening and strengthening pavements in Nation Highway No. 7, Madurai Kanya kumari Road from Reaches 37.6 k.m.
to '1 ', k.m.
on the Madurai Kanyakumari Road and the work was divided into fourteen Reaches and 14 separate agreements were entered into between the petitioner and the Superintending Engineer, National Highways, Tirunelveli.
respondent No. 3 to the present petitions.
There is not much dispute on this point.
At the relevant time, according to, the petitioner, the Superintending Engineer.
National Highways, Salem was one Thiru Mohan.
He entered into reference.
He took up the matter for arbitration and called for statements from the parties.
Statements were filed before him and evidence were also adduced before him.
But before he could complete the adjudication he was transferred and was succeeded by one Thiru J.R. Cornelius, Superintending Engineer.
The contention of the petitioner in this case was that he had no Jurisdiction to, proceed and complete the arbitration.
It appears however, that he entered into the task of adjudication with the knowledge and consent of the petitioner and the petitioner had participated actively in the proceeding before him.
From the notices served by Thiru Mohan previously and subsequently by Thiru Cornelius.
it is apparent that the petitioner had knowledge of the change of the incumbent of the Superintending Engineer who was to arbitrate in the matter.
This is evident from the documents appearing at pages 164 PG NO 465 and 165 of the present paper book and both the parties had notice of the succession in office.
The arbitrator could not complete the award within time and there was need for extension of time.
He wrote a letter to the petitioner on lst May 1977 stating "extension of time was necessary to pass orders on reference and hearing has been concluded".
In reply to that fetter on 11th May, 1977 the petitioner agreed to such extension.
The petitioner was content with that situation and never asked for any further or fresh opportunity either to make any submission or to adduce any evidence.
In that light the arbitrator has made the award.
This was challenged before the learned District Judge by means of a suit under sections 30 and 33 of the that the previous arbitrator Thiru Mohan having entered into reference and Thiru Cornelius had no jurisdiction to conclude.
It was violative of the principles of natural justice, it was submitted.
But as mentioned hereinbefore, the petitioner had knowledge of the change of the incumbent.
He did not protest and the proceedings went on before Thiru Cornelius.
It is apparent from the terms of the agreement between the parties that the Superintending Engineer of the Circle for the time being was the named arbitrator.
The learned District Judge held that Thiru Cornelius was competent to pass the award.
The High Court also upheld that and rejected the challenge to the award on this ground made by the petitioner.
Shri A.K. Sen, learned counsel for the petitioners, urged before us that once an arbitrator had entered into reference, the next incumbent could not conclude the said arbitration proceeding without a fresh agreement.
In the facts of this case, as the petitioner had knowledge of the alleged defect and had acquiesced in the proceedings before the successor, namely, Thiru Cornelius; we are of the c,pinion, that this contention of Shri Sen cannot be entertained.
It was contended that there was violation of the principles of natural justice.
This objection cannot be entertained.
If the parties to the reference either agree beforehand to the method of appointment, or afterwards acquiescence in the appointment made with full knowledge of all the circumstances.
they will be precluded from objection~ to such appointment as invalidating subsequent proceedings.
Attending and taking part in the proceedings with full knowledge of the relevant fact will amount to such acquiescence, explains Russell on Arbitration.
18th Edition at page 105.
This was stated by the Judicial Committee long ago in Chowdhury Murtaza Hossein vs Mussumat Bibi Bechunnissa, 3 I.A. 209.
See also the observations of P.B. Mukherji, J. in the decision of the Calcutta High Court PG NO 466 Calcutta, A.I.R. 1456 Calcutta 470 at 472.
This Court held in N. Challappan vs Secretary, Kerala State Electricity Board and another; , that acquiescence defeated the right of the appellant at a latter stage.
See also the observations of this Court in Prasun Roy vs The Calcutta Metropolitan Development Authority and another; , See Russell on Arbitration, 20th Edition, pages 432 435.
Shri Sen contended that no notice was issued after the appointment of the new arbitrator.
This was factually incorrect, as mentioned before.
Then, it was said that the award was bad as it did not consider all the claims.
This also cannot be entertained.
It must be assumed that the arbitrator had considered all the evidence adduced before him.
There was no disregard of any principle of law.
There was nothing to indicate that the arbitrator had not considered all the evidence.
Unless there was a patent mistake of law and gross misstatement of facts resulting in miscarriage of justice or of equity, the award remains unassailable.
In this case the arbitrator gave no reason for the award.
There is no legal proposition which is the basis of the award, far less any legal proposition which is erroneous.
There is no appeal from the verdict of the arbitrator.
The Court cannot review, in such circumstances, the award and correct any mistake in the adjudication by the arbitrator See Champsey Bhara B Company vs Jivray Ballo Spinning and Weaving Company Ltd., 50 I.A. 324 and the observations of Bachawat, J. in Firm Madanlal Roshanlal Mahajan vs Hukumchand Mills Ltd., Indore, [ l967] 1 section C. R. 105 of this Court.
In the facts and circumstances of the case, in our opinion, this award is not assailable.
The High Court was, therefore, right in upholding the learned District judge 's dismissal of the challenge to the award.
These petitions, therefore, fail and are dismissed accordingly ,without any order as to costs.
N.P.V. Petitions dismissed.
| In compliance with the decision of the Supreme Court in Dr. Pradeep Jain etc.
vs Union of India B Ors.
; , and on the basis of the scheme approved by the Court, respondent No. 2 held an All India Entrance Examination for filling up 25 per cent seats in different Post Graduate Medical Colleges in the States and Union Territories and those run by public authorities.
The scheme provided that cut off base should be 50 per cent marks.
Out of about 2100 seats, only 500 could be filled.
In the Writ Petition filed before this Court, the petitioner, an unsuccessful candidate at the aforesaid examination sought (1) a direction that clauses 11 and 15(g) of the Bulletin of Information, published by respondent No. 2 in this regard were illegal, unconstitutional and incompetent, (2) a writ of certiorari to quash the list of successful candidates for admission within 25% reserved quota, and (3) a writ of mandamus to the respondents to admit the petitioner and similarly placed other candidates against the 1500 odd seats left out due to the arbitrary decision/action of the respondents, contending that no seat should go unfilled.
Disposing of the Writ Petition and a pending CMP in other disposed of Writ Petitions, HELD: 1.1 It is well settled that judicial determination is not to be tested by the touchstone of Article 14 of the Constitution.
[388B] In the instant case since the bulletin is in accordance with the scheme approved by this Court, and the examination PG NO 385 PG NO 386 has been held following the terms thereof, the petitioner is not entitled to ask for quashing a part of the bulletin and the list of selected candidates.
There is no tenable challenge against the examination.
[387H, 388A] 1.2 Since in the very first year of implementing the scheme, a stalemate has arisen, it is appropriate to give certain directions, which may in the facts and circumstances, be appropriate and adequate to meet the situation to the extent possible.
Sufficient number of qualified doctors are not available.
Every step should, therefore, be taken to turn out as many doctors with Post Graduate qualification as possible.
Since about 1600 seats have reverted to the States and medical colleges located within them, and have to be filled up, it is in the interest of the parties that this should be done as quickly as possible so that the academic time schedule may be stuck to.
[388B C, F, 389D] 1.3 Respondent No. 2 is directed to supply to each State and/or Union Territory from where candidates had appeared at the entrance test, candidate wise particulars confined to such State.
Once these particulars are available, the Selection Committee operating in the State and/or Union Territory or in the respective medical colleges covered by the scheme, as the case may be, shall draw up a list of the remaining candidates seeking admission as against the 75 per cent of the seats and the candidates who had taken the All India Entrance examination, but have not been found fit on the basis of the marks secured in their respective selection tests or at the MBBS examination, in States where there is no such selection test relating 75 per cent seats.
This shall be on the footing that marks in the respective selection tests or the test and the examination are at par and admission would be on the basis of merit.
No doubt, the All India Selection test had been a stricter one, but it would not be possible for this Court now to direct what weightage is to be added on that score.
Once the common list is drawn up on the basis of performance, admission to remaining seats can be taken up.
[389F G] [The admissions already effected inclusive of seats in the reserved quota shall continue.
But further admissions in respect of unfilled seats as against the 25 per cent quota shall be deferred now and again taken up after the list of eligible candidates is drawn up as per the time schedule now indicated.] [389H, 390B] Dr. Pradeep Jain etc.
vs Union of India & Ors. etc.
; , , referred to.
PG NO 387
|
Civil Appeal No. 1577 (NCE) of 1987.
From the Judgment and Order dated 24.4.
1987 of the Madras High Court in Election Petition No. 1 of 1986.
Ram Jethmalani, Ms. Rani Jethmalani and M.G. Ramachan dran for the Appellant.
R.K. Garg, section Padmanabhan, K. Raj.
Choudhary, R. Mohan, K. Chandrashekharan, R. Ayyam Perumal, V. Krishnamurthy, section Thananjayan, K.V. Vijaya Kumar, A.V. Rangam and V.R. Kari thi~ kayan for the Respondents.
770 The Judgment of the Court was delivered by KANIA, J.
This is an appeal from a judgment and order delivered by a learned Single Judge of the Madras High Court on April 24, 1987 dismissing an election petition filed by the appellant.
The appellant herein was the petitioner before the High Court and the respondents nos.
1 to 8 herein were arraigned as respondents in the same order in the election petition.
The dispute pertains to the election of six Members to the Rajya Sabha by the elected Members of the Tamil Nadu Legislative Assembly.
The election was held, as scheduled, on June 28, 1986.
The appellant and respondents nos.
1 to 7 were the eight candidates in the field, all the nominations having been found valid.
The 8th respondent was the Returning Officer.
The polling took place, as scheduled, on June 28, 1986 and, immediately thereafter, the ballot box was opened and the votes were sorted out.
The election was under the preferential system of voting and the particulars of the first preferences votes cast and secured by the candidates are as follows: Candidates First Preference Votes 1.
Appellant 33 2.
1st Respondent 35 3.
2nd Respondent 31 4.
3rd Respondent 33 5.
4th Respondent 32 6.
5th Respondent 34 7.
6th Respondent 34 8.
7th Respondent nil Out of the 33 first preference votes cast in favour of the appellant, one ballot paper was rejected by the 8th respondent, the Returning Officer, on the ground that the said ballot paper was marked by the voter otherwise than with the article supplied for that purpose.
It may be men tioned here that the first preference was indicated on the said ballot paper by a ball point pen with green ink whereas in the ball point pen kept along with the ballot box had blue ink.
The working result sheets of the counting were prepared and announced by the 8th 771 respondent.
The particulars of the said working result sheets are as follows: 1.
Appellant 3219 2.
1st Respondent 3301 3.
2nd Respondent 3270 4.
3rd Respondent 3300 5.
4th Respondent 3301 6.
5th Respondent 3301 7.
6th Respondent 3301 In consequence, respondents nos.
1 to 6 were declared as duly elected and the appellant was declared as having lost the election.
It is submitted by learned counsel for the appellant, that (1) the first preference vote in his favour in which first preference was indicated on the ballot paper in green ink was wrongly rejected.
The rejection of the said ballot paper by the Returning Officer was duly objected to by the appellant at the time of counting.
The said ballot paper is hereinafter referred to as "the said rejected ballot paper".
If the said rejected ballot paper had been received as valid, the appellant would have the proportionate number of preference votes and would have been declared elected.
The second contention raised by the appellant was that three ballot papers which did not contain the figure 1 in the space intended for marking the said figure should have been rejected and the same were wrongly accepted.
These ballot papers had been used for casting first preference votes in favour of the first respondent and if the same had been rejected, first respondent would not have been elected and in his place the appellant would have been elected.
Both the mistakes according to the appellant materially affected the result of the election.
Before going into the controversy raised before us, we may note the relevant provisions of the Election Law.
The election petition was filed under Chapter II of the Repre sentation of the People Act, 1951 (hereinafter referred to as "the said Act").
Section 59 of the said Act provides that at every election where a poll is taken votes shall be given by ballot in such manner as may be prescribed.
We are not 772 concerned here with the special procedure for voting pro vided in certain cases provided for under section 60 said Act.
Section leo of the said Act deals with the grounds for during elections to be void.
The relevant portion of the said section reads thus: "100(1) Subject to the provisions of sub section (2) if the High Court is of opinion (a) x x x (b) x x x (c) That any nomination has been improperly rejected; or (d) that the result of the election, in so far as it con cerns a returned candidate, has been materially affected (i) by the improper acceptance or any nomination, or (ii) by any corrupt practice committed in the interests of the returned candidate by an agent other than his election agent, or (iii) by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, or (iv) by any non compliance with the provisions of the Con stitution or of this Act or of any rules or orders made under this Act, the High Court shall declare the election of the returned candidate to be void".
Conduct of Election Rules, 1961 (referred to hereinafter as "the Election Rules") came into force on 25th of April, 1961.
Rule 30 of the Election Rules prescribes the form of the ballot papers.
Rule 31 of the Election Rules provides for arrangements at polling stations.
Sub rule (3) of Rule 31 runs as under: "(3) the returning officer shall provide at each polling station a sufficient number of ballot boxes, copies of the relevant part of the electroal roll, ballot papers, instru ments for stamping the distinguishing mark on ballot 773 papers and articles, necessary for electors to mark the ballot papers.
" Rule 39 of the Election Rules deals with the maintenance of secrecy of voting by electors within polling stations and the voting procedure.
The material portion of sub rule (2) of that rule runs as follows: "(2) The elector on receiving the ballot paper shall forth with (a) proceed to one of the voting compartments: (b) there make a mark on the ballot paper with the instru ment supplied for the purpose on or near the symbol of the candidate for whom he intends to vote." Rule 70 lays down rules for the conduct of polls.
The portion of Rule 70 material for the purposes of the case runs as follows: "(a) x x x x (b) to every election in a council unless voting by postal ballot has been directed in the whole of that constituency under clause (b) of rule 68, subject to the following modifications, namely: (i) clause (a) of sub rule (1) of rule 31 shall not apply to an election by assembly members; (ii) in lieu of rules 37 to 40, the following rules shall apply: 37A. Method of voting.
(1) Every elector has only one vote at an election irrespective of the number of seats to be filled.
(2) An elector in giving his vote (a) shall place on his ballot paper the figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance; and 774 (b) may, in addition, place on his ballot paper the figure 2 or the figures 2 and 3 or the figures 2, 3 and 4 and so on, in the space opposite the names of the other candidates in the order of his preference.
38A. x x x x 39A. Maintenance of secrecy of voting by electors within polling station and voting procedure (1) Every elector, to whom a ballot paper has been issued under rule 38A or under any other provision of these rules, shall maintain secrecy of voting within the polling station and for that purpose observe the voting procedure hereinafter laid down.
(2) The elector on receiving the ballot paper shall forth with (a) proceed to one of the voting compartments; (b) record his vote in accordance with sub rule (2) of rule 37A with the article supplied for the purpose.
(c) fold the ballot paper so as to conceal his vote; (d) insert the folded paper in the ballot box; and (e) quit the polling station: (It is not necessary to quote the rest of Rule 39A for the purposes of this Judgment) It was submitted by learned counsel for the appellant that the express on "article supplied for the purpose" used in Rule 39A(2)(b) and Rule 73(2)(e) of the Election Rules was misconstrued by the High Court.
It was submitted by him that in the context of the election law and the instructions contained in the hand books to which reference will be made that expression should be interpreted as meaning "actually given" or "handed over".
In this regard, reference was made to instructions given to the Presiding Officer in respect of elections to Lok Sabha and State Assemblies.
The relevant instructions in the said hand book provide that the proce dure followed in respect of the election to Lok Sabha and State Assemblies is that the Polling Officer or 775 Polling Assistant must give the rubber stamp properly inked to the voter before he proceeds into the voting booth for marking his choice and the Polling Officer or Polling As sistant must take back the said rubber stamp from the voter after he comes out from the voting both having cast his vote and then hand it over to the next voter and so on.
It was urged that the same procedure should have been followed mutatis matandis in the case of an election to the Legisla tive Council like the one in question before us, and if this were done, it would imply that the ball point pen for mark ing the preference should have been personally handed over to the voter with instructions to use it for marking his preference.
This argument is not worthy of acceptance.
As pointed out by the High Court, the nature of the elections to the Lok Sabha and the State Assemblies is different from that of elections to a Legislative Council or Rajya Sabha and this difference has to be taken into account in inter preting the relevant words used in the rules relating to an election.
The election to Lok Sabha and the State Assemblies is a direct election on the basis of a single member con stituency where the voter has only one choice whereas in the case of an election to the Rajya Sabha, the said election is by members of the Legislative Assemblies of the States and the election is an indirect election conducted on the prin ciple of proportional representation by means of a single transferable vote.
In the case of elections to the Lok Sabha and State Assemblies, a rubber stamp with arrow cross mark is provided with which the voter has to make a mark on the symbol of the candidate of his choice in the ballot paper.
Many of the voters are not familiar with the election proce dure and it is in these circumstances that the requirement has been provided that a rubber stamp containing the cross mark properly inked should be handed over to each voter with instructions to use the same for marking his vote or choice.
In the case of the election to the Rajya Sabha or a Legisla tive Council, the situation is entirely different.
The number of voters is limited.
One could assume that they are reasonably familiar with the procedure of voting; and the article supplied for marking the preference is a fountain pen or ball point pen.
In these circumstances, there is hardly any warrant for requiring that the procedure of handing over personally to each voter the article for mark ing his preference should be followed and it is quite/ ' adequate if the article for marking the preference, namely, the fountain pen or ball point pen is made available in the voting booth with clear instructions that the same should be used in marking the preference.
It must also be borne in mind that there is no express rule or instruction in connec tion with the elections to the RaRajya Sabha by Members of the State Assemblies or elections to the Legislative Coun cils of States which specifically requires that the arti 776 cle for marking the preference should be handed over to each voter personally.
In these circumstances, in our view, the High Court was right in interpreting the expression "article supplied for the purpose" in Rule 39A(2)(b) and Rule 73(2)(e) of the Election Rules as meaning "made available for the purpose" or "provided for the purpose".
Reliance was placed by learned counsel for the appellant on the decision of this Court in Ram Utar Singh Bhaduria vs Ram Gopal Singh & Ors., ; and particularly, the observations at page 200 of the said report.
We are of the view that that decision as well as the other decisions in this connection cited before us are in connection with the elections to the Lok Sabha or the State Assemblies and have no application to an indirect election like the election to the Rajya Sabha by Members of State Assemblies.
Rule 56 of the Election Rules deals with counting of votes.
The material portion of sub rule (2) of Rule 56 of the Election Rules runs as follows: "56.
Counting of Votes.
(1) The ballot papers taken out of each ballot box shall be arranged in convenient bundles and scrutinized.
(2) The returning officers shall reject a ballot paper (a) x x (b) If it bears no mark at all or, to indicate the vote it bears a mark elsewhere than on or near the symbol of one of the candidates on the face of the ballot paper or, it bears a mark made otherwise than with the instrument supplied for the purpose, or . " Rule 73 deals with the scrutiny of opening of ballot boxes and packets of postal ballot papers.
The material portion of sub rule (2) of Rule 73 runs as follows: "(2) a ballot paper shall be invalid on which (a) the figure 1 is not marked; or (b) the figure 1 is set opposite the name or more than one candidate or is so placed as to render it doubtful to which candidate it is intended to apply; or 777 (c) x x x (d) x x x (e) there is any figure marked otherwise than with the article supplied for the purpose.
" It would now be convenient to deal with the first con tention of the learned counsel for the appellant.
As we have already pointed out, the said rejected ballot paper was rejected on the ground that it was marked otherwise than with an article supplied for the purpose.
As we have already pointed out, the figure 1 indicating the first preference in the said ballot paper was marked in green ink whereas in the ball point pen kept in the voting booth with the ballot box, the ink used was blue.
The returning officer took the view that the said marking of preference in green ink clearly established that it was done with a bail point pen other than the one which was supplied for marking the preference and hence the vote was invalid.
It was urged by Shri Jeth malani in this connection that although the marking of preference was done in green ink, there was no doubt that the intention of the over concerned was to give the first preference vote to the appellant.
It was submitted by him that the fundamental rule of election law is that effect should be given to the intention of the voter and this could be done only by treating the vote as valid, as the intention of the voter was quite clear.
Mr. Jethmalani may be right when he contends that the intention of the voter could be clearly gathered and it was to cast the first preference vote for the appellant.
However, it is not enough for the vote to be valid that it is possible to gather the intention of the voter to vote for a particular candidate as pointed out by the Constitution Bench of this Court in the leading case of Hari Vishnu Kamath vs Syed Ahmad Ishaque and Others, ; at page 1132.
This Court held that ( 1132): "But when the law prescribes that the intention should be expressed in a particular manner, it can be taken into account only if it is so expressed.
An intention not duly expressed is, in a court of law, in the same position as an intention not expressed at all." In the present case Rule 39(2)(b) which is applicable to the election petition before us clearly prescribes that the vote must be cast by the voter in accordance with the said sub rule (2) of Rule 39 of the Election Rules, with the article supplied for the purpose.
Rule 39A(2)(b) read with Rule 37A(2)(a) prescribes that an elector in giv 778 ing his vote shall place on his ballot paper the figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance with the article sup plied for the purpose.
Hence, unless the ball point pen kept with the ballot box is not to be regarded as the article supplied for marking the preference, the intention of the elector in the present case cannot be given effect to as it was expressed in a manner inconsistent with the provisions in the rules.
Clause (b) of sub rule (2) of Rule 56 of the Election Rules provides inter alia that if a ballot paper contains a mark made on it otherwise than with the instru ment supplied for the purpose, the returning officer shall reject the said ballot paper.
Rule 73 is included in Part VII of the Election Rules and that Part applies to the counting of votes at elections by Assembly members.
Clause (e) of sub rule (2) of Rule 73 of the Election Rules set out earlier that a ballot paper shall be invalid on which there is any figure marked otherwise than with the article sup plied for the purpose.
Rule 73 is directly applicable to the case of the election in question and as aforesaid it pre scribes that if on the ballot paper there is any figure marked otherwise than with the article supplied for the purpose, the ballot paper shall be invalid.
Assuming that the voter in this case had expressed his intention clearly by marking the figure 1 in green ink, he did so in violation of the express provisions of the Rules which have a statuto ry force and hence no effect can be given to that intention.
It was next argued in this connection that the expres sion "article supplied for the purpose" as used in the said Rules 39A(2)(b) and 73(2)(e) was misconstrued by the Presid ing Officer and the High Court in the present case.
It was submitted by learned counsel for the appellant that Rule 56(2)(b) was not complied with by making a ball point pen available in the polling compartment near the ballot box for the use of the electors in marking their preference as law required that the Polling Officer should personally hand over the bali point pen to the voter before he proceeds to the voting booth with instructions to mark his preference with that ball point pen.
He referred to the hand book dealing with the procedure prescribed in elections to the Lok Sabha and to the Legislative Assemblies and submitted that the said procedure was applicable mutatis mutandis to elections to the Rajya Sabha and the Legislative Councils.
It was urged by him that the second proviso to clause (e) of sub rule (2) of Rule 73 of the Election Rules provides that if the returning officer is satisfied that any such defect as is mentioned in the said clause has been caused by any mistake or fault on the part of the Presiding Officer or Polling Officer, the ballot paper shall not be rejected merely on the ground of the said defect.
It was contended by him that the Polling Officer was bound to hand over to 779 each voter individually the ball point pen to be used for marking his preference on the ballot paper.
He submitted that the duty of the Polling Officer was to hand over the ball point pen to the voter to use the same for marking his preference and it was also his duty to take back the said pen from the voter after he has cast his vote and given the same to the next voter.
He urged that merely providing a bail point pen for voting did not constitute substantial compliance with Rule 39A(2)(b) or Rule 73(2)(e).
He urged that the mistake in the present case, namely, marking of the preference with green ink on the ballot paper, had occurred because no bail point pen was handed over as aforesaid to the voter concerned.
We are unable to accept this submis sion.
The procedure followed in an election to the Lok Sahba or the State Assembly is to give to the voter a rubber stamp for voting with an arrow mark properly inked with instruc tions to use the same for voting before the voter enters the voting compartment to put his mark against the name of the candidate for whom he desires to vote and to take the rubber stamp back from the voter when he comes out of the voting compartment and to repeat this process for every voter.
In the first place, it must be noticed that there is no rule or standing order requiring the Presiding Officer or to follow this procedure in the case of an election to the Rajya Sabha or Legislative Council of a State.
There is a material difference between an election to Lok Sabha or a Legislative Assembly which is a direct election with one constituency for each seat and only vote is to be cast and an election to Rajya Sabha which is an indirect election with the preferen tial system of voting.
Sub rule (2) of Rule 39 which is applicable to such an election to a Legislative Assembly provide that the elector on receiving the ballot paper has to make a mark on the ballot paper with the instrument supplied for the purpose on or near the symbol of the candi date for whom he intends to vote.
It is only in the case of an election like this that it becomes necessary to provide a rubber stamp properly inked to the voter to mark his prefer ence.
It must be remembered that in such an election case, the number of voters or electors is extremely large and many of them might be unfamiliar with the voting procedure.
An election to the Rajya Sabha, on the other hand, is an indi rect election with multiple candidates ' constituency and the system of voting followed is the preferential system of voting.
Rule 37A of the Election Rules which is applicable to such an indirect election by virtue of the provisions of Rule 70 provides that an elector in giving his vote shall place on his ballot paper figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance.
This difference in the case of an election to the Rajya Sabha makes it wholly unnecessary that the Presiding Officer or the Polling Officer should hand over to 780 every voter individually a bail point pen to mark his vote and it would quite wholly be adequate if the article for marking the preference, namely, a ball point pen, is provid ed to the voter to use the same for marking his preference or if the pen is placed in such a way as to make it clear that the marking of the preference is to be done with that pen and instructions given to use that pen for marking the preference.
The evidence of the returning officer, which has been accepted by the High Court is to the effect that there were two voting compartments in the polling booth and in each of them a ball point pen with blue ink was kept as soon as an elector went into the polling booth, one Polling Assistant gave him his identity slip and another Polling Assistant gave to the elector printed copies of Rules 37A and 39A of the Election Rules and a copy of the guidelines.
Then the elector went to the first Polling Officer who obtained his signature in the counter foil of the ballot paper and instructed the elector that he should mark his preference on the ballot paper with the article kept for the purpose inside the voting compartment.
Another Polling Officer gave the ballot paper to the voter and again in structed him to go into the voting compartment and mark the ballot paper with the article kept there for that purpose, fold the ballot paper before coming out and put in into the ballot box in front of the Polling Officer.
In the light of this evidence, we are of the view that the ball point pen with blue ink kept in the voting compartment for marking the preference must be regarded as the article supplied for that purpose, namely, the purpose of the voter marking his pref erence on the ballot paper.
It was submitted by learned counsel for the appellant that it was possible that a voter might have used his own pen if the pen kept in the voting compartment was not working and such a vote cannot be re garded as invalid.
We are not concerned with a case of that kind here as there is no evidence that in any voting com partment the ball point pen kept there was not working.
It was next urged that if a voter had used another ball point pen, that is, other than the one kept in the voting compart ment containing the blue ink, it would not have been possi ble to find out that the preference marked with such a bail point pen had been used for marking the preference and not the pen supplied.
This is of no relevance here.
The possibility that in a given case a breach of the rules may be difficult to detect cannot lead to the conclusion that the mandatory requirement that preference on the ballot paper must be marked with the article supplied for the purpose should be regarded as not binding in law.
We are, therefore, of the view that the said ballot paper was right ly rejected by the returning officer and the arguments urged by learned counsel for the appellant in that contention must be rejected.
781 The next point is regarding the three first preference votes cast in favour of respondent No. 1 which were accepted by the returning officer as stated earlier.
In respect of these three votes, the figure 1 is marked, not in the right hand column opposite the name of respondent No. 1, but in the left hand column containing the name of candidate and opposite the name of respondent No. 1.
The appellant unsuc cessfully objected to the validity of these three ballot papers on the ground that the first preference had not been marked in the space provided for that purpose opposite the name of the candidate concerned, namely, respondent No. 1, as required by Rule 37A(2).
It was submitted by learned counsel for the appellant that the returning officer as well as the High Court were in error in holding that the said three ballot papers were valid.
We propose to discuss this controversy very shortly because we are in full agreement with the reasoning and conclusions given by the High Court in its impugned judgment in coming to the conclusion that the returning officer was justified in rejecting the objec tions preferred by the appellant to the said three votes and holding that the same were valid.
The relevant portion of Rule 37A(2) of the Election Rules has already been quoted earlier.
Clause (a) of sub rule (2) of that Rule only pro vides that the voter shall place on his ballot paper the figure i in the space opposite the name of the candidate for whom he wishes to vote in the first instance.
it is signifi cant that this rule does not specifically say that the figure 1 must be placed in the column earmarked for marking the preference but only requires that the figure 1 should be placed opposite the name of the candidate.
Sub rule (4) of Rule 71 which is a definition runs as follows: "71(4): 'first preference ' means the figure 1 set opposite the name of a candidate; 'second preference ' means the figure 2 set opposite the name of a candidate; 'third pref erence ' means the figure 3 set opposite the name of a candi date, and so on;" It is significant that in this sub rule also there is nothing to indicate that the preference must be indicated in the column reserved for that purpose, the only requirement being that the figure 1 should be written opposite the name of the candidate.
Similarly, sub rule (2)(b) of Rule 73 only lays down that if the figure 1 is set opposite the name of more than one candidate or is so placed as to render it doubtful to which candidate it applied, the ballot paper would be invalid.
Sub rule 12) of Rule 73 deals with the invalidity of ballot papers and that subrule nowhere states that merely by reason of the preference being 782 marked in the wrong column, if the marking is opposite the name of the candidate concerned, the ballot paper shall be rendered invalid.
It is true that the column in which the preference should have been marked and intended for that purpose was the column on the righthand side of the first column where the name of the candidate was to be put; but there is no express provision to the effect that unless the preference is marked in the correct column, the ballot paper would be invalid.
In such a situation, the principle enunci ated by this Court in several judgments and reiterated in section Sivaswami vs
V. Malaikannan & Ors., ; that the primary task of the Court in a case where the question is whether the ballot paper is invalid is to ascertain the intention of the voter, must be applied.
In that case, the Court held that the ballot paper shall not be rejected as invalid if it is reasonably possible to gather a definite indication from the marking so as to identify the candidate in favour of whom the vote had been intended to be given.
This, of course, is subject to the rule that before a ballot paper is accepted as valid the ballot paper must not be invalid under any other express provision and the intention of the voter must not be expressed in a manner which is contrary tO or totally inconsistent with the manner pre scribed under the said Act or the Election Rules for ex pressing the same.
In the case of the said, three votes in question, the figure 1 was clearly marked opposite the name of respondent No. 1, being the candidate concerned, as required by the express provision of the said Rule 37A and the intention of the voter was clearly to cast the first preference in favour of respondent No. 1.
In these circum stances, the ballot papers were rightly accepted by the returning officer as valid and the High Court was justified in coming to the conclusion to which it has arrived.
In the result, the appeal fails and is dismissed.
Howev er, considering the facts and circumstances of the case, there will be no order as to costs.
R.S.S. Appeal dis missed.
| The petitioners in this group of Writ Petitions are workers in canteens run in different railway establishments.
The relief claimed in all the petitions is that the workers concerned should be treated as railway employees and should be extended all service conditions which are available to the railway employees.
For convenience sake, the canteens have been classified into three categories, viz., (i) Statutory canteens; (ii) Non statutory Recognised Canteens, and (iii) Non Statutory Non Recognised canteens.
Chapter XXVIII of the Railway Establishment Manual contains the necessary instructions for running the can teens.
Paragraph 2829 of Chapter XXVIII of the Manual refers to the provisions of Section 46 of the and under writes the fact that under these provisions, there is a statutory obligation on the Railway Administration to set up canteens in Railway establishments which are governed by the said Act and which employ more than 250 persons.
Paragraph 2831 lays down the principles governing the set ting up of the canteens which apply also to the non statuto ry canteens provided for under paragraph 2830.
Paragraph 2832 inter alia states that although the Administration can employ as agent a Staff Committee or a Co operative Society for management, the legal responsibility for proper manage ment rests not with the agency but solely with the Railway Administration.
The Department of Personnel & Training, Ministry of Personnel, Government of India, had issued Administrative Instructions on Departmental Canteens in Offices and Indus trial Establishments of the Government.
It is made clear in these instructions that the orders issued under the said Instructions are applicable to all Canteens/Tiffin Rooms functioning or to be set up in any Ministry, Department, Establish 688 ment, Office, or Installation of the government of India (Industrial or non industrial), including those functioning under the Ministries of Defence, P & T and Railways unless these three Ministries had previously decided to exempt any of the said Instructions due to specific reasons.
It was contended on behalf of the petitioner workers that, in view of the documents on record there is no reason why the employees in the canteens concerned should not be given the status of the railway employees with all conse quential benefits.
On the other hand, it was contended on behalf of the Railways that (i) the canteen employees are appointed by the Staff Managing Committees or Co operative Societies and not by the Railway Administration and as such there is no rela tionship of master and servant between the Railwasy Adminis tration and the Canteen employees, and in no case can they be deemed as holders of civil posts, either for Article 309 or for Article 311 of the Constitution; (ii) the control exercised by the Railway administration is only to ensure that the canteens are run in conformity with certain re quirements; (iii) the Railways have a primary objective of carrying goods and passengers and the welfare activities are ancillary to the main objective; (iv) the canteens continue at the discretion of the Railway Administration, and at any stage the Government can change the form of this welfare measure and choose to have another set up; (v) the Railways undertake varied welfare activities, and if it is decided to treat the employees engaged in the canteens as railway employees, it will be difficult to resist the claim from employees of these other institutions for a similar status; and (vi) the Railway Establishment Manual contains the necessary instructions for running the canteens, and hence the Railway Administration should be deemed to have been exempted from the operation of the Administrative Instruc tions on Departmental Canteens in Offices and Industrial Establishments of the Government, issued by the Department of Personnel & Training.
Allowing the petitions filed by the employees of the statutory canteens and non statutory (recognised) canteens.
and dismissing those of the non statutory (non recognised) canteens.
this Court.
HELD: Statutory Canteens (1) In terms of the Rules made by the State Governments under Section 46 of the it is obligatory on the Railway Administration to provide a canteen in an establishment which employs 689 more than 250 persons.
The provision of the canteen is therefore, deemed by the statute as a necessary concomitant of the manufacturing activity.
[692C; G] The employees of the departmental canteens/tiffin rooms were declared as holders of civil posts under the Government of India Notification dated December 11, 1979 which is annexed to the Administrative Instructions on Departmental Canteens in Offices and Industrial Establish ments of the Government.
That Notification states that all posts in the said canteens/tiffin rooms are to be treated as posts in connection with the affairs of the Union, and hence the incumbents would qualify as holders of civil posts.
Accordingly, service rules were framed under Article 309 as per the notification issued by the Government of India, Department of Personnel & Training on December 23, 1980.
[705H; 706A B] (3) The provisions contained in the Administrative Instructions, show that the Government has a complete con trol over the canteens and the workers employed therein 'are holders of civil posts within the meaning of Article 311 of the Constitution.
There recruitment and service conditions are governed by the rules applicable to the employees of the Department/Office/Establishment to which the canteens are attached.
[701E] (4) Although there is nothing expressly on record to show that the railway canteens are exempted from the said Administrative Instructions, but even assuming that the railway canteens are exempted by virtue of the relevant provisions of the Railway Manual, the fact remains that there are as yet no notifications on the lines of December 11, 1979 and December 23, 1980 issued for the benefit of the employees in the railway canteens.
[706E F] (5) It cannot be argued that there is any difference in the work performed by the employees in the canteens run in the establishments of the Ministries.
If the said two noti fications are applicable to the employees in the canteens run by the other departments of the Government of India, there is no reason why the same should not apply also to the employees in the canteens run by the Railways.
In the cir cumstances, it would be highly discriminatory not to apply the said two notifications to the employees in the Railway canteens.
It would be violative of Articles 14 and 16 of the Constitution.
The employees in the Statutory canteens of the Railways will therefore have to be treated as Railway serv ants.
[706F H; 707A] 690 (6) Thus the relationship of employer and employee stands created between the Railway Administration and the canteen employees from the very inception.
Hence, it cannot be gainsaid that for the purposes of the the employees in the statutory canteens are the employees of the Railways.
[707B] Order dated 22.10.1980 in Civil Appeal No. 368 of 1978 (Supreme Court); Madras High Court; Writ Appeals Nos.
414 415 of 1978.
referred to.
(7) If by virtue of all these facts the employees are entitled to the status of Railway employees they cannot be deprived of that status merely because some other employees similarly or dis similarly situated may also claim the same status.
The argument to say the least can only be described as one in terroram.
and as any other argument of the kind has to be disregarded.
[708E] Non Statutory Recognised Canteen (8) These canteens are run in the establishments which employ 250 or less than 2.50 employees; and are established with the prior approval and recognition of the Railway Board.
There is hardly any difference between the statutory canteens and non statutory recognised canteens.
The only material difference is that while one is obligatory under the , the other is not.
However.
there is no difference in the management of the two type of canteens.
[71 I G; 712C] (9) The Administration Instructions on Departmental Canteens in Government Offices and Government Industrial Establishments do not make any difference between the two so far as their applicability is concerned.
Hence, it cannot be seen why any distinction be made between the employees of the two types of canteens so far as their service conditions are concerned.
For this very reason, the two notifications of December 11, 1979 and December, 23, 1980 should also be equally applicable to the employees of these canteens.
[7 12G H] (10) If that is so, then these employees would also be entitled to be treated as railway servants.
A classification made between the employees of the two types of canteens would be unreasonable and will have no rational nexus with the purpose of the classification.
Surely it cannot be argued that the employees who otherwise do the same work and work under the same conditions and under a similar manage ment have to be treated differently merely because the canteen happens to be 691 run at an establishment which employees 250 or less than 250 members of the staff.
[712H; 713A B] Non Statutory Non Recognised Canteens (11) These canteens are run at establishments which employ 100 or less than 100 employees, and are established without prior approval or recognition of the Railway Board.
[692E] The Canteens are run more or less on ad hoc basis, the Railway Administration having no control of their function ing.
They are not required to be managed either as per the provisions of the Railway Establishment Manual or the Admin istrative Instructions.
In the circumstances the workers engaged in these canteens are not entitled to claim the status of the railway servants.
[713H; 714A]
|
ition (Civil) No. 619 of 1987 (Under Article 32 of the Constitution of India).
Dr. Y.S. Chitale, Brij Bhushan, S.K. Dhingra, Anil Kumar Gupta and B.N. Singhvi for the Petitioners.
B. Datta, Additional Solicitor General, P.P. Rao, C.M. Nayyar and Girish Chandra for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The above petition was originally filed by two members of the Delhi Higher Judicial Service, by name S/Shri R.L. Gupta and S.M. Aggarwal.
Since the Court was of the view that the petition of Shri S.M. Aggarwal should be considered independently, he was asked to file a separate petition.
The present petition was, therefore, confined to Shri R.L. Gupta, who is hereafter referred to as 'the petitioner '.
Shri R.L. Gupta, the petitioner joined the Judicial Service of Punjab on January 23, 1962 and became a member of the Delhi Judicial Service on its initial constitution on August 2, 197l.
He was confirmed in the said service as a Sub Judge on August 6, 1971.
He was sent on deputation as the first District & Sessions Judge, Sikkim at Gangtok on August 19, 1976.
While he was on such deputation he was promoted as Additional District & Sessions Judge in the Delhi Higher Judicial Service under rule 16 of the Delhi Higher Judicial Service Rules, 1970.
At the end of his period of deputation the petitioner came back to Delhi and joined as an Additional District & Sessions Judge.
In June, 1979 the petitioner was sent on deputation as Registrar, Special Courts, New Delhi and he remained on deputation until March.
Between March, 1980 and June, 1981 the petitioner again worked as an Additional District & Sessions Judge, Delhi.
On 14.6.1981 on the establishment of the Delhi Legal Aid and Advice Board the petitioner was sent on deputation as the first Member Secretary of that Board.
When he was still working as the Member Secretary of the Delhi Legal Aid and Advice Board, on April 26, 1985 the Government of India appointed a Commission of Inquiry presided over by Shri Justice Ranganath Misra, Judge, Supreme Court of India under the provisions of section 3 of the for the purpose of making enquiries into a matter of public 262 importance namely, the allegations in regard to the incidents of organised violence in Delhi following the assassination of Smt.
Indira Gandhi, the late Prime Minister of India.
On May 27, 1985 the Central Government addressed a letter to the Registrar of the Delhi High Court requesting the High Court to spare the services of the petitioner for being appointed as the Secretary of the Commission, referred to above.
The said letter reads thus: "CONFIDENTIAL/MOST IMMEDIATE D.O.NO.II.
14013/28/84 IS(US:D.V.) GOVERNMENT OF INDIA MINISTRY OF HOME AFFAIRS North Block New Delhi 110001 27th May, 1985.
S.K. PACHAURI DIRECTOR (IC II) Dear Miss Mehra, The Central Government vide Notification dated 26.4.1985, has appointed a Commission of Inquiry under the Chairmanship of Shri Ranganath Misra, a sitting Judge of the Supreme Court of India for the purposes of making an enquiry into the allegations in regard to the incidents of organised violence which took place in Delhi following the assassination of the former Prime Minister (copy enclosed).
One of the posts sanctioned for the functioning of this Commission is Secretary to the Commission in the scale of Rs. 2500 2750.
With the approval of Shri Justice Ranga Nath Misra, it has been proposed to appoint Shri Ramesh war Lal Gupta, Additional District and Sessions Judge and Member Secretary of the Delhi Legal Aid and Advice Board as Secretary of the Commission.
The post of Secretary has been created from the date it is filled in and upto 26.
10.1985 for the present but likely to continue.
We shall be grateful if you could kindly spare the service of Shri Rameshwar Lal Gupta to act as Secretary of the Commission for the aforesaid period.
This may be treated as Urgent.
263 Regards, Yours sincerely, Sd/ (Dr. S.K. Pachauri) Miss Usha Mehra Registrar, Delhi High Court, New Delhi.
Encl: As above." On receipt of the said letter the petitioner was asked by the High Court whether he was willing to work as the Secretary of the Commission.
The petitioner expressed his willingness to do so by his letter dated May 30, 1985.
On 31.5.85/ 1.6.85 the Registrar addressed a letter to the petitioner which reads thus: "Usha Mehra D.O. No. 279/Gaz.
Dated:31st May, 1985/ 1.6.85 Dear Shri R.L. Gupta, In pursuance to the requisition of the Central Govt.
contained in the Ministry of Home Affairs demi official letter No. II 14013/28/84 IS (US.D.V.) dated 27th May, 1985 and as desired by you and agreed to by the High Court, you are hereby permitted to go on deputation as Secretary to the Commission of Inquiry headed by Hon 'ble Mr. Justice Ranganath Misra, a Judge of the Supreme Court of India with effect from 1st June, 1985 at your own risk.
Deputation will be upto 26th October, 1985 or till the date of your recall, whichever is earlier.
Yours sincerely, Sd/ (USHA MEHRA) 264 Shri R.L. Gupta, Member Secretary, Delhi Legal Aid & Advice Board, New Delhi.
" Accordingly, the petitioner got himself relieved from the Delhi Legal Aid and Advice Board and joined as Secretary of the Commission of Inquiry.
Within three months from the date on which the petitioner joined the Commission, the Chief Justice of the Delhi High Court wrote a letter to Shri Justice Ranganath Misra stating that it had been decided by the High Court to place the petitioner on probation on the Delhi Higher Judicial Service as his turn had come for the same and, therefore, he might be relieved from his post of the Secretary of the Commission to enable him to report to the High Court as soon as possible but in any case not later than ten days from the receipt of the said communication.
On receipt of the said letter Shri Justice Ranganath Misra wrote to the Chief Justice of the Delhi High Court stating that the petitioner had got himself acquainted with the working of the Commission and at that juncture it was difficult to relieve him in the public interest.
Accordingly, he was not relieved by the Commission to revert to the Judicial Service.
The letter of Shri Justice Ranganath Misra was considered by the Full Court of the High Court at its meeting held on 22.11.85 and the following resolution was passed: "Shri R.L. Gupta had been on deputation with Delhi Legal Aid & Advice Board.
Vide this Court 's demi official letter No. 293/Gaz./VI.E.l0 dated 23.8.84 and D.O. No. 269/Gaz./VI.E.l0 dated 18.5.1985 he was asked to revert back to his parent cadre for being considered to be placed on probation.
Mr. R.L. Gupta instead of reverting back, went on second deputation as Secretary to R.N. Misra Commission of Enquiry at his own request and risk.
Shri R.L. Gupta was asked vide this Court 's endt.
No. 457 dated 26.8.85 to come back to parent cadre within l0 days otherwise the next person shall be placed on probation.
Mr. R.L. Gupta refused to come back and got it intimated through Justice R.N. Misra vide demi official letter dated 19 8.85 that he had come on deputation at his own risk.
Hence the case of Shri R.L. Gupta for being placed on probation was considered and as he has declined to be available to be placed on probation at his own risk, the same has been rejected.
Then the officers next to him were considered and the following officers were selected for 265 being placed on probation against regular vacancies: 1.
Shri Jaspal Singh 2.
Shri S.C. Jain 3.
Shri R.K. Sain 4.
Shri Mohd. Shamim 5.
Shri P.K. Jain.
" By the above resolution S/Shri Jaspal Singh, S.C. Jain, R.K. Sain, Mohd. Shamim and P.K. Jain were allowed to supersede the petitioner.
During the period of his deputation as Secretary to the Commission of Inquiry twelve more officers were placed on probation by 22.8.1986.
Thus in all seventeen Judicial officers were allowed to supersede the petitioner.
On the completion of the work of the Commission of Inquiry on October 31, 1986 the petitioner was posted again as Additional District & Sessions Judge and was placed on probation for a period of two years with effect from April 4, 1987.
Aggrieved by the aforesaid supersession the petitioner filed the above petition before this Court questioning the validity of the supersession on several grounds, some of them being common to the petitioner and Shri S.M. Aggarwal who had been impleaded as Petitioner No. 2.
Since the case of the petitioner can be disposed of on a short ground we do not propose to express our opinion on the grounds which are common to the petitioner, S.M. Aggarwal and other Judicial officers working in the Delhi Higher Judicial Service.
The contentions of the parties on those grounds are left open.
The short question which arises for consideration in this case is whether the supersession of the petitioner made by the High Court by placing seventeen officers, who were junior to him, on probation before he was placed on probation is valid or not.
While the petitioner 's contention is that no officer who is sent on deputation can be made to suffer from any evil consequences and that on his return to his parent department he should be placed in the same position in seniority which he would have occupied had he not gone on deputation, the submission made on behalf of the High Court is that the petitioner having gone on deputation at his own risk, he could not be placed on probation as an Additional District & Sessions Judge till 4.4.1987 and he was bound to lose his seniority.
It was further urged on behalf of the High Court that those Judicial officers who were junior to him in the seniority list but who had been placed on probation as Additional District and Sessions Judge before 4.4 1987 were entitled to be treated as his seniors.
266 At the hearing of this case we asked the learned counsel appearing for both the parties to show whether there were any rules governing the deputation of an officer working in the judicial department.
No such rules were produced before us.
This case has, therefore, to be determined on the principles of justice, equity and relevant judicial precedents.
In the State of Mysore vs M.H. Bellary, ; the facts of the case were these.
The respondent in that case, M.H. Bellary, was a Government servant in one of the departments of the Bombay Government.
He was sent on deputation to another department and after serving there for a long period and getting a number of promotions he was reverted back to his parent department and ordered to be posted at a considerably lower grade, while another Government servant who was below his rank had been promoted as Assistant Secretary.
Thereupon the respondent therein filed a petition before the High Court of Mysore (Karnataka) under Article 226 of the Constitution of India challenging the order of his posting.
There was a rule, rule 50(b) in the Bombay Civil Services Rules which read as follows: "50(b).
Services in another post, other than a post carrying less pay referred to in clause (a) of rule 22 whether in a substantive or officiating capacity, service on deputation and leave other than extra ordinary leave count for increments in the time scale applicable to the post on which the Government servant holds a lien as well as in time scale applicable to the post or posts, if any, on which he would hold a lien had his lien not been suspended: Provided that Government may, in any case in which they are satisfied that the leave was taken on account of illness or for any other cause beyond the Government servant 's control, direct that extra ordinary leave shall be counted for increment under this clause.
" That rule referred to the right of the Government servant who goes on deputation to earn increments in the pay scale applicable to the post on which he held a lien on his return to the parent department from the department to which he had been deputed.
One of the questions which arose for consideration in that case also was whether the respondent who had gone on deputation was entitled to claim the promotion which he would have got in his parent department had he 267 not been sent on deputation.
The High Court accepted the case of the respondent therein who had filed the writ petition and granted him the relief sought by him.
Aggrieved by the decision of the High Court the appellant, State of Mysore, filed an appeal before this Court.
In that appeal this Court observed thus: The other submission of learned counsel was that a Government servant though he had a right to increments in a time scale applicable to the post that he held on the date of his transfer on deputation and on which he had a lien, had no legal right to be promoted to a higher post and that the construction adopted by the High Court virtually conceded or guaranteed to officers on deputation a right to an automatic promotion which they would not have had if they had not been posted on deputation.
We see no force in this contention either.
Learned Counsel is right only in so far as the promotion involved relates to a selection post.
But where it is based on seniority cum merit, those considerations are not relevant.
The service of an officer on deputation in another department is treated by the rule as equivalent to service in the parent department and it is this equation between the services in the two departments that forms the basis of Rule 50(b).
So long therefore as the service of the employee in the new department is satisfactory and he is obtaining the increments and promotions in that department, it stands to reason that that satisfactory service and the manner of its discharge in the post he actually fills, should be deemed to be rendered in the parent department also so as to entitle him to promotions, which are often on seniority cum merit basis.
What is indicated here is precisely what is termed in official language the 'next below rule ' under which F an officer on deputation is given a paper promotion and shown as holding a higher post in the parent department if the officer next below him there is being promoted.
If there are adverse remarks against him in the new department o punishments inflicted on him there, different considerations would arise and these adverse remarks etc.
would and could certainly be taken into account in the parent department also, but that is not the position here.
In view of the facts of the case it is not necessary to discuss this aspect in any detail or any further." (underlining by us) 268 The above decision was followed by this Court in the State of Mysore and Another vs P.N. Nanjundiah and Another, 3 S.C.C. 633.
In that case this Court observed thus: "So long as the service of the employee in the new department is satisfactory and he is obtaining the increments and promotions in that department, it stands to reason that the satisfactory service and the manner of its discharge in the post he actually fills, should be deemed to be rendered in the parent department also so as to entitle him to promotion which are open on seniority cum merit basis.
" It is not disputed in this case that the petitioner would have been placed on probation as a matter of course on 22.11.1985 if he had been serving as an Additional District and Sessions Judge and would have continued to be senior to Shri Jaspal Singh who was placed on probation on that date.
In regard to the quality of the work rendered by the petitioner in the capacity of the Secretary to the Commission of Inquiry headed by Shri Justice Ranganath Misra, we may quote the certificate issued by Shri Justice Ranganath Misra on 29.11.1986.
It reads thus: "Shri R.L. Gupta, a Member of the Delhi Superior Judicial Service, worked as the Secretary of the Commission of Inquiry set up under my Chairmanship to inquire into the atrocities in Delhi, Kanpur and Bokaro following the assassination of the late Prime Minister Mrs. Indira Gandhi.
He worked in the Commission in that capacity from the beginning of June, 1985 till October, 1986.
Shri Gupta handled his job with ability and efficiency.
He impressed me as a brilliant judicial officer.
I found him to be well versed in law.
He exhibited character, courage and sagacity.
I was impressed by his sense of social vision, legal acumen and capacity to comprehend human problems.
" On his return to the Delhi Judicial Service from the Commission of Inquiry the High Court placed him on probation with effect from 4.4.1987.
The question for consideration, therefore, is whether it is just and reasonable to deprive the petitioner of his seniority only because he was not working in the Delhi Higher Judicial Service dur 269 ing the period when his juniors were allowed to supersede him.
We are not impressed by the submission made on behalf of the High Court that the petitioner having been informed by the High Court that he was going on deputation at his own risk he could not retain his seniority over his juniors who were placed on probation during the period of deputation.
It is well known that many officers have to be sent on deputation in the public interest to other departments in order to meat the exigencies of public service and that before sending them on deputation their consent is invariably taken.
Merely because they have given their consent to go on deputation they should not be allowed to suffer unless there is a specific rule to the contrary or other good reason for it.
That is the ratio of the decision in State of Mysore vs M.H. Bellary (supra) and of the decision in State of Mysore and Anr.
vs P.N. Nanjundiah (supra).
These decisions declare that an officer on deputation is entitled to get increments in the pay scale attached to the post in their parent department and also to get promotion when it is based on seniority cum merit as and when his junior in the parent department is promoted by the application of the 'next below rule '.
When increments and promotion can be earned, there is no reason why he should not be treated as being on probation also in the post held by him in the parent department even while he is on deputation.
In this case the petitioner was not even sent on deputation to a department where his services could be absorbed permanently.
He was sent on deputation as Secretary to a Commission which was asked to enquire into a certain matter of public importance which was to be over in a short time.
The Commission itself was to become functus officio on the submission of its report.
The Commission was presided over by a Judge of the Supreme Court of India and it was not possible for him to give up his post as Secretary of the Commission without the permission of the Chairman of the Commission and to return to the Delhi Judicial Service.
He continued in the post of the Secretary to the Commission of Inquiry as the Chairman of the Commission found it difficult to relieve him in the midst of the inquiry.
The object of placing an officer on probation is only to assess whether he is suitable for the post to which he is appointed.
It is not necessary that such assessment should always be made by the appointing authority unless there is any legal impediment.
Such assessment can also be made by the authority under whom the officer is required to work on deputation.
In the instant case the authority under whom the petitioner was asked to work while on deputation was a Judge of the Supreme Court of India who had approved the service of the petitioner as can be seen from the certificate issued on 29.11.1986 which is extracted above.
It may also 270 be seen from the decision of this Court in O.P. Singla & Anr.
vs Union of India & Ors.
, ; that the High Court had placed some of the officers of the Delhi Higher Judicial Service on probation for the purpose of confirming them in the Delhi Higher Judicial Service while they were on deputation in other departments.
Shri D.C. Aggarwal was placed on probation while he was working as a Member of the Sales Tax Tribunal, Shri Mahesh Chandra was placed on probation while he was a Member of the Central Government Industrial Tribunal and Ms. Santosh Duggal had been placed on probation during her tenure as Member, Customs, Excise and Gold Control Appellate Tribunal.
It is stated that the High Court declined to place the petitioner on probation when he was working as the Secretary of the Commission on account of the observation made by Justice Mukharjee in O.P. Singla 's case (supra) at page 396 of the Reports that such probations while the officers were on deputation were meaningless formalities.
But the High Court overlooked that the same learned Judge had observed little lower down in the said judgment that "an appointment on probation is not a jurisprudential sine qua non for absorption into the services, though normally and generally various rules of different services make such provisions as rule 12(2) here.
But as has been noted in the working out the practice of Delhi Judicial Service placement of promotees on probation has not been very strictly followed.
The promotees cannot suffer for this." Even though it had been stated that the petitioner was sent on deputation at his own risk to the Commission of Inquiry it would be unjust to hold that the High Court could have on the facts and circumstances of this case passed orders which would have the effect of superseding the petitioner.
We also fail to appreciate the implication of the observation made in the course of the resolution of the High Court that the petitioner had 'refused to come back and got it intimated through Justice R.N. Misra vide demi official letter dated 19.8.85 that he had come on deputation at his own risk. ' It was not truly a case of refusal on the part of the petitioner to go back to the Delhi Higher Judicial Service nor can it be said that he was responsible for what Shri Justice R.N. Misra had written.
Shri Justice R.N. Misra found it difficult to relieve the petitioner in the midst of the inquiry for obvious reasons and that could not be used against the petitioner for depriving him of his seniority.
The stand taken by the High Court in this case cannot, therefore, be upheld.
We may, however, state at this stage that Shri P. Dutta, Additional Solicitor General of India appearing on behalf of the Union of India has very fairly supported the case of the petitioner.
At this stage we have to observe that no innocent officer should 271 be exposed to the grave risk to which the petitioner has been exposed in this case.
In the instant case, the petitioner was promoted as an Additional District and Sessions Judge under rule 16 of the Delhi Higher Judicial Service Rules in 1976.
The post to which he was promoted was called a temporary post although truly it was not a temporary post.
Neither the High Court nor the Delhi Administration ever believed that the post to which the petitioner was promoted would ever cease to exist.
There was no chance of its abolition at all.
Yet it was called a temporary because it was in excess of the strength of the posts in the Delhi Higher Judicial Service which had been fixed at 16 by rule 4 read with the Schedule attached to the Delhi Higher Judicial Service Rules in the year 1970.
If the Schedule had been amended from time to time by increasing the number of posts keeping pace with the reality of the situation perhaps the strength should have been increased to 50 by now.
Rule 12(2) of the said Rules states that all candidates, other than those appointed at the initial constitution of the Service on appointment to the Service shall be on probation for a period of two years.
In the circumstances by appointing the Judicial officers of the Higher Judicial Service to temporary posts instead of appointing them to permanent posts the Delhi Administration has virtually made a mockery of the rules of recruitment.
To place a Judicial officer, promoted to the Higher Judicial Service, on probation nearly 9 years after his promotion as in this case is a mere farce.
Ordinarily an officer should be on probation from the date of his appointment and if he is found unsuitable within the period of probation he should be weeded out of service.
We are told that the reason for not placing a judicial officer on probation on his appointment is that the strength of the cadre is fixed at 16.
Is it just and reasonable to place an officer on probation nearly 9 years after his appointment and then turn him out of service if his services are found to be not satisfactory during the period of probation which would fall in the 10th and 11th year of his service in that cadre? The Administrators should know that the work in courts has increased by two or three times in almost every court during the last decade.
The population has increased by 20 crores during this period.
Laws have multiplied, transactions have increased and people are becoming more and more conscious of their rights.
But the number of Judges has remained constant.
This has led to frustration amongst litigants, lawyers and Judges.
This frustration gives rise to different kinds of tensions including the tension which is now prevailing in the city of Delhi.
We are told that the Delhi High Court has been pressing for the appointment of more number of Judges.
The High Court 272 addressed a letter to the Delhi Administration requesting it to sanction 169 additional posts in the Delhi Judicial Service on 16.1.1983.
The Delhi Administration sought some clarifications.
In reply the High Court has again by its letter dated 7th/ 11th January, 1988 urged for the sanctioning of 169 posts.
This letter shows that as on 1.9.1987 in the courts manned by the officers of the Delhi Judicial Service (who on promotion will be members of the Delhi Higher Judicial Service) there were 51,173 Regular Suits, 1210 Small Cause Suits, 974 Civil Appeals, 10,592 Rent cases, pending before courts dealing with such cases.
There were 97,943 cases pending before the courts of Chief and Additional Chief Metropolitan Magistrates and 2,35,033 cases pending before other Magistrates as on 1.9.1987.
The Delhi Administration appears to have not taken any serious notice of the appalling situation prevailing in the Delhi courts.
The Administrators should not look at the recommendation as one which is intended to provide some jobs to lawyers.
They should look at the recommendation of the High Court as one intended to give relief to the suffering litigants who waste their valuable time near courts for years waiting for justice.
This is a problem which should be solved on a war footing.
The Delhi Administration should straightaway increase the strength of the Delhi Judicial Service at least by 150, increase the number of posts in the Delhi Higher Judicial Service at least by 40, establish court premises in different parts of the Union Territory of Delhi and see that the pending cases which are in the order of lakhs, many of which are lingering for the last ten years and more, are disposed of within two years.
If the total strength is increased at all levels, this farce of placing the Judicial officers on probation after nearly ten years will also end.
We must also observe that the Government should not consider finance as a constraint because by not appointing sufficient number of Judges the Government is suffering more financially.
The Government itself being a big litigant is subjected to several orders of stay, prohibitory orders, injunctions etc.
leading to delay in completion of several projects and works.
The indirect effects of frustration amongst the people lead to a greater financial drain.
We may add here that if by any chance the arrears of cases come down, then the vacancies in judicial posts may not be filled up.
The expenditure on judicial department will thus automatically come down.
We hope that the Union of India and Delhi Administration will sanction at least 150 more posts in the Delhi Judicial Service and about 40 posts in the Delhi Higher Judicial Service and also take immediate steps to establish additional courts.
We also suggest that the expenditure on judicial administration should not be subjected to the constraints of non plan expenditure.
The judicial department is not an unproductive department.
Peace and tran 273 quility that will result from quick disposal of cases is much more valuable than the economic goods produced by factories.
Delay in disposal of cases affects the gross national product adversely.
In fact peace and tranquility will help in greater production of economic goods.
Quick disposal of cases will also save millions of man hours which are now being wasted near the courts in India.
There must be a change of attitude on the part of the Governments and the administrators at the secretariats.
It is imperative that every State should increase the strength of Judicial officers at least by thirty per cent immediately.
Otherwise there would be a catastrophe in about a year or two.
It is hoped that this warning will not go unheeded.
We are of the view that the petitioner in this case should have been placed on probation on 22.11.1985 even though he was on deputation on that date and on his confirmation he is entitled to maintain his seniority above Shri Jaspal Singh.
We, therefore, direct that the petitioner shall be deemed to have been on probation from 22.1.1985 and his services shall be regulated accordingly.
The petitioner shall also be deemed to be above Shri Jaspal Singh in the seniority list of officers in the Delhi Higher Judicial Service.
In making this order, as already stated, we have not considered the other contentions raised in the petition including the contention that the petitioner should be deemed to have been on probation from the date of his promotion to the cadre of Additional District Judge or any other date prior to 22.11.1985.
All those contentions are left open.
The Writ Petition is allowed accordingly.
There is no order as to costs.
S.L. Petition allowed.
| % The appellant No. 1, J.K. Cotton Spinning and Weaving Mills Limited, has a composite mill wherein it manufactures fabrics of different types, for which yarn is obtained at an intermediate stage, and the yarn is processed in an integrated process in the said composite mill for weaving the same into fabrics.
The Central Board of Excise issued a Circular dated September 24, 1980, purporting to interpret the rules 9 and 49 of the Central Excise Rules, 1944 (the Rules) and directing the subordinate excise authorities to levy and collect excise duty in accordance therewith.
The Board further directed vide the said Circular that the use of the goods in the manufacture of another commodity even within the place premises specified in this behalf by the Central Excise officers in terms of the powers conferred under rule 9 of the Rules, would attract duty.
As the implementation of the Circular worked to the prejudice of the appellants, they filed a writ petition in the High Court, challenging the validity of the Circular.
During the pendency of the said writ petition, the Central Government issued a Notification dated February 20, 1982, amending the rules 9 and 49 of the Rules, with section 51 of the Finance Act, 1982, providing that the amendments in the rules 9 and 49 shall be deemed to have, and to have always had, the effect with retrospective effect from the date on which the Rules came into force i.e. February 28, 1944.
Upon the amendments of the rules 9 and 49, with retrospective effect of the amendments, the appellants amended their writ petition above said to challenge the constitutional validity of Section 51 of the Finance Act abovementioned and the amendments to the rules 9 and 49.
701 The High Court allowed the writ petition in part.
It held (i) that section 51 and the rules 9 and 49 as amended were valid, (ii) the retrospective effect allowed by section 51 would be subject to the provisions of sections 11A and 11B of the (the Act), (iii) the yarn produced at an intermediate stage in the mill of the appellants and subjected to the integrated process of weaving into fabrics, would be liable to payment of excise duty in view of the amended provisions of the rules 9 and 49, but the sized yarn actually put into the integrated process would not again attract excise duty.
The appellants then filed this appeal (Civil Appeal No. 297 of 1983) before this Court by certificate.
Dismissing the Appeal, the Court, ^ HELD: The decisions of various High Courts cited, deal with the rules 9 and 49 of the Central Excise Rules, 1944, as they stood before they were amended by the Government Notification dated February 20, 1982.
In this case, what is involved is the interpretation of the said two rules after their amendment and the constitutional validity of the rules as amended.
The amendments to the rules 9 and 49 are quite legal and valid.
Section 51 of the Finance Act, 1982, giving retrospective effect to the said amendments is also legal and valid.
The apprehension of the appellants that the amendments to rules 9 and 49 having been made retrospective from the date the rules were framed, that is, February 28, 1944, the appellants may be called upon to pay enormous amounts of duty in respect of the intermediate goods which have come into existence and again consumed in the integrated process of manufacture of another commodity, is not right.
In view of section 11A of the Finance Act, there is no cause for such an apprehension.
Under Section 11A(1), the excise authorities cannot recover duties not levied or not paid or short levied or short paid or erroneously refunded beyond the period of six months, the proviso to section 11A not being applicable in the present case.
Thus though section 51 has given retrospective effect to the amendments of rules 9 and 49, it must be subject to the provision of section 11A of the Act.
Section 51 does not contain any non obstante clause, nor does it refer to the provision of section 11A, and it is difficult to hold that section 51 overrides the provision of section 11A. [712F H; 714D F] The appellants are liable to pay excise duty on the yarn obtained at an intermediate stage and, thereafter, further processed in an integrated process for weaving the same into fabrics.
Although it has been alleged that the yarn is obtained at an intermediate stage of an 702 integrated process of manufacture of fabrics, it appears to be not so.
After the yarn is produced, it is sized, and thereafter, subjected to a process of weaving the same into fabrics.
As the Court has held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity, is liable to the payment of excise duty, the yarn that is produced by the appellants is also liable to payment of excise duty.
[720G H: 721A B] The High Court has rightly held that the appellants are not liable to pay excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics.
No distinction can be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn.
The judgment of the High Court affirmed.
[721B C] In view of the decision of the Court in the Civil Appeal No. 297 of 1983, the Civil Appeals Nos. 2658 and 4168 of 1983 also dismissed.
[721D] The Province of Madras vs Boddu Paidanna and Sons AIR ; Caltex oil Refining (India) Ltd. vs Union of India & Ors. , Delhi Cloth and General Mills Co. Ltd. vs Joint Secretary, Government of India, ; Modi Carpets Ltd. vs Union of India, ; Synthetics and Chemicals Ltd. Bombay vs Government of India, , Devi Dayal Electronics and Wires Ltd. vs Union of India, [1982] E.L.T. 33; Oudh Sugar Mills Ltd. vs Union of India, [1980] E.L.T. 327, Oudh Sugar Mills Ltd. vs Union of India, [1982] E.L.T. 927, Maneklal Harilal Spg. & Mfg. Co. Ltd. vs Union of India, ; Nirlon Synthetic Fibres & Chemicals Ltd. vs Shri R.K. Audim; Assistant Collector & Ors.
In Misc.
491 of 1964, unreported judgment of Bombay High Court, dated April 30, 1970, Jawaharmal vs State of Rajasthan & Ors., ; ; Rai Ramkrishna and Ors.
vs State of Bihar, ; , K.P. Verghese vs The Income Tax officer, Ernakulam; , and Senior Electric Inspector and Ors.
vs Laxmi Narayan Chopra, ; , referred to.
|
Civil Appeals Nos.
801 802 of 1978: From the judgment and order dated the 30th September, 1976 of the Gujarat High Court at Ahmedabad in F.A. No. 696 of 1) 1971 and 1282 of 1969.
Soli J. Sorabjee, I.N. Shroff and H.S. Parihar for the Appellant.
S.K. Dholakia and R.C. Bhatia for Respondent Nos.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
These appeals raise a question of some importance from the point of Insurance Companies which insure motor vehicles against third party risks and more so, from the point of view of the general public which, by reason of the increasing hazards of indisciplined and fast moving traffic, is driven in despair to lodge claims for injuries suffered in motor vehicle accidents.
In case of air accidents, the injured and the dependents of the deceased receive, without contest, fairly large sums by way of compensation from the Air Corporations.
We have still to awaken to the need to evolve a reasonably comparable method for compensating those who receive injuries or die in road or train accidents.
The victims of road accidents or their dependents are driven to wage a long and unequal battle against the Insurance Companies, which deny their liability on every conceivable ground and indulge in an ingenious variety of factual disputations from 'who was driving the vehicle ' to 'whose negligence was the sine qua non of the accident '.
The delay in the final disposal of motor accident compensation cases, as in all 864 other classes of litigation, takes the sting out of the laws of compensation because, an infant child who seeks compensation as a dependent of his deceased father has often to await the attainment of majority in order to see the colour of the money.
Add to that the monstrous inflation and the consequent fall in the value of the rupee: Compensation demanded say, ten years ago, is less than quarter of its value when it is received today.
We do hope that the Government will apply itself seriously and urgently to this problem and find a satisfactory method of ameliorating the woes of victims of road accidents.
We have just talked of delay and it is just as well that we begin by saying that the accident out of which these proceedings arise happened on February 1, 1966.
A collision took place between a motor car, No. GJY 4973, and a goods truck, No. GTA 4123, at about 8.30 P.M. On Naroda Road, Ahmedabad, as a result of which Ajit Sinh, who was driving the car died instantaneously and Jadavji Keshavji Modi, who was travelling in the car, sustained injuries.
The truck was insured against third party risk with the appellant, the Motor owners Insurance Co. Ltd. The appellant had then an office in Ahemdabad but it ultimately merged with the New India Assurance Co. Ltd., Bombay.
Respondents 1 (a) to I (g), who are the heirs and legal representatives of the deceased Ajit Sinh, filed an application before the Motor Accidents Claims Tribunal, Ahmedabad, under section 110 D of the , 4 of 1939, seeking compensation in the sum of Rs. 30,000 for his death.
Jadavji Modi filed a separate application asking for compensation of Rs. 10,000 for the injuries suffered by him.
The Tribunal dismissed both the applications by a common judgment dated June 2(, 1968 on the ground that respondent No. 3 could not be said to have been driving the truck rashly and negligently at the time of the accident.
Jadavji Modi and respondents I (a) to I (g) filed separate appeals in the Gujarat High Court from the Judgment of t he Tribunal, being First Appeals Nos.
1202 of 1969 and 696 of 1971 respectively.
These appeals were disposed of by the High Court by a common judgment dated September 30, 1976.
The hearing proceeded, both before the Tribunal and the High Court, on the basis that the truck was used for carrying goods.
The High Court allowed the appeals, awarding a compensation of Rs. 19,125 to 865 respondents 1 (a) to 1 (g) with 6% interest from the date of application until realisation of the amount and a compensation of Rs. 10,000 with similar interest to Jadvaji Modi.
These appeals by special leave are directed against the judgment of the High Court.
This Court by its order dated April 18, 1978 granted special leave to the appellant to appeal from the judgment of the High Court, limited to the question relating to the construction of section 95 (2) of the , ("the ").
Chapter VIII of the bears the title "Insurance of motor vehicles against third party risks".
Section 93 defines certain terms while section 94 (1) provides for the necessity to insure a vehicle against third party risks.
By that section, no person can use a Motor vehicle in a public place, except as a passenger, unless there is in force in relation to the use of the vehicle a policy of insurance complying with the requirements of the chapter.
Section 95 prescribes the requirements of the insurance policy and the "limits of liability" thereunder.
Broadly, by sub section (1) of section 95, a policy of insurance must insure the person or classes of persons specified in the policy to the extent specified in sub section (2) against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place.
The proviso to sub section (I) consists of three clauses by which, speaking generally, a policy is not required to cover (i) liability in respect of the death of or injuries to an employee arising out of and in the course of his employment; (ii) liability in respect of the death of or bodily injury to persons carried in the vehicle except where the vehicle is used for carrying passengers for hire or reward; and (iii) any contractual liability.
That takes us to the provisions contained in section 95 (2) of the , the interpretation of which is the sole question for our consideration in this appeal.
The , save for Chapter VIII relating to the insurance of motor vehicles against third party risks, has been in force since July 1, 1939, in what were known as Part A and Part States and since April 1, 1951 in Part States.
Chapter VIII came into force on July 1, 1946.
Section 95 (2) of the originally read thus: "95 (2) Subject to the proviso to sub section (1), a 866 policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely : (a) where the vehicle is a vehicle used or adapted to be used for the carriage of goods, a limit of twenty thousand rupees; (b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a a contract of employment, in respect of persons other than passengers carried for hire or reward, a limit of twenty thousand rupees; and in respect of passengers a limit of twenty thousand rupees in all, and four thousand rupees in respect of an individual passenger, if the vehicle is registered to carry not more than six passengers excluding the driver or two thousand rupees in respect of an individual passenger, if the vehicle is registered to carry more than six passengers excluding the driver; (c) where the vehicle is a vehicle of any other class, the amount of the liability incurred." (emphasis supplied) Clause (a) of sub section (2) was substituted by a new clause by section 74 of the Motor Vehicles (Amendment) , 100 of 1956, with effect from February 16, 1957.
The amended clause (a), which was in force on February 1, 1966 when the Incident leading to these proceedings occurred, reads thus: "95(2)(a) Where the vehicle is a goods vehicle, a limit of twenty thousand rupees in all, including the liabilities, if any, arising under the , in respect of the death of, or bodily injury to, employees (other than the driver), not 867 exceeding six in number, being carried in the vehicle." (emphasis supplied) Clauses (b) and (c) of section 95 (2) remained as they were in 1939 and were not touched by the 1956 Amendment.
Section 95 (2) underwent a further amendment by the Motor Vehicles (Amendment) , 56 of 1969, which came into force on March 2, 1970.
As a result of that amendment, the section reads thus: "95 (2) Subject to the proviso to sub section (l), a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely : D (a) where the vehicle is goods vehicle, a limit of fifty thousand rupees in all, including the liabilities, f any, arising under the , in respect of the death of, or bodily injury to employees (other than the driver), not exceeding six in number, being carried in the vehicle; (b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment (i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all; (ii) in respect of passengers: (1) a limit of fifty thousand rupees in all where the vehicle is registered to carry more than thirty Passengers; 868 (2) a limit of seventy five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers; (3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and (4) subject to the limits aforesaid ten thousand rupees for each individual passenger in any other case; (c) save as provided in clause (d), where the vehicle is a vehicle of any other class, the amount of liability incurred; (d) irrespective of the class of the vehicle, a limit of rupees two thousand in all in respect of damage to any property of a third party.
" (emphasis supplied) We are concerned only with clause (a) of section 95 (2) and that too, as it existed on February 1, 1966 when the collision between the car and the truck took place.
We have extracted the other clauses of section 95 (2) in order to trace the legislative history of the section and to see whether the language used by the legislature in other parts of the same section affords a comparative clue to the interpretation of the provision contained in clause (a).
Clause (a) as originally enacted in 1939, provides that the insurance policy must cover the liability in respect of third party risks upto the limit of twenty thousand rupees, where the vehicle is used or adapted to be used for the carriage of goods.
By the amendment introduced by the Amendment 100 of 1956, the words "in all" were added after the words "twenty thousand rupees".
Clause (a) thus amended read to say that where the vehicle is a goods vehicle, the policy of insurance shall cover the liability in regard to third party risks upto the limit of twenty thousand rupees in all.
Whereas clause (a) in its original form spoke of a vehicle "used or adapted to be used for the carriage of goods", under the 869 amendment of 1956, the clause was made applicable to cases where the vehicle "is a goods vehicle".
The other amendment introduced by the of 1956 was that the overall limit of twenty thousand rupees was expressed to include the liability arising under the to the extent mentioned in the amendment.
The amendment introduced by the Amendment 56 of 1969 enhanced the liability under clause (a) from twenty thousand rupees to fifty thousand rupees in all.
Clause (b) of section 95 applies to vehicles in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment.
Under that clause as it stood originally in 1939, the liability was restricted to twenty thousand rupees in respect of persons other than passengers carried for hire or reward; and to twenty thousand rupees in all in respect of passengers.
The Amendment of 1956 did not make any change in clause (b).
But, the Amendment of 1969 enhanced the liability to the limit of fifty thousand rupees in all in respect of persons other than passengers carried for hire or reward.
In respect of passengers, the liability was enhanced from twenty thousand rupees to fifty thousand rupees in all, seventy five thousand rupees in all one lakh rupees in all, depending upon the registered capacity of the vehicle to carry passengers.
It may be recalled that the High Court awarded compensation in the sum of Rs. 19,125 to respondents 1 (a) to 1 (g) who are the heirs and legal representatives of Ajit Sinh who was driving the car, and Rs. 10,000 to Jadavji Modi who was travelling in the car.
The total amount of compensation awarded to the claimants thus comes to Rs. 29,125 that is to say, it is in excess of Rs. 20,000.
The contention of Shri Sorabjee who appears on behalf of the appellant insurance company is, that under clause (a) as it stood at the material time, the liability of the insurer under the statutory policy taken by the owner of the goods vehicle is limited to twenty thousand rupees in all and, therefore, the insurer cannot be asked to pay compensation in excess of that amount.
The liability to pay the balance, viz. Rs. 9,125 must according to the learned counsel, be fastened on the owner of the goods vehicle who would be vicariously responsible for the negligence of his employee who was driving the goods vehicle.
In support of this submission counsel relies strongly on the circumstance that the Amendment of 1956 which came into force on February 16, 1957, introduced the words 870 "in all" in clause (a).
It is urged that these words were introduced advisedly and deliberately in order to limit the overall liability of the insurer to twenty thousand rupees under the statutory policy.
These words of limitation cannot be ignored by asking the appellant to pay compensation in excess of twenty thousand rupees.
Counsel also seeks to derive support to his submission from the use of the words "in all" in clauses (b) and (d) of section 95 (2) as amended by Amendment 56 of 1969 which came into force on March ".
Having given our anxious consideration to these contentions of Shri Sorabjee, which are not without plausibility, we have come to the conclusion that the construction canvassed by the learned counsel will lead to great injustice and absurdity and must, therefore, be eschewed since, especially, the words of section 95 (2) cannot, in the context in which they occur, be regarded as plain and unambiguous.
We with first demonstrate the harsh and strange consequences which will flow out of the construction pressed upon us and we with then show why we consider That the material words of the section are of doubtful import.
for example, two or three persons die in a collision between a car and a goods vehicle and two or three others are injured as a result of the negligence of the driver of the goods vehicle, the heirs of the deceased and the injured persons will together be entitled to twenty thousand rupees in all, no matter how serious the injuries and how grave the hardship to the heirs ensuing upon the loss of lives of those who perished in the collision.
But there is a more flagrant injustice which one shall have to countenance if one were to accept the argument advanced on behalf of the appellant and it is this : If two persons of unequal economic status die in the kind of collision mentioned above, the heirs of the affluent victim will virtually monopolise the compensation by getting a lion 's share in it, thereby adding insult to the injury caused to the heirs of the indigent victim.
The purpose of law is to alleviate, not augment, the sufferings of the people.
It is well known that the award of compensation depends upon a variety of factors, including the extent of monetary deprivation to which the heirs of the deceased are subjected.
Applying that criterion as one of the many variable criteria which are applied for fixing compensation in motor accident cases, the heirs of the affluent victim may have been awarded, say, a compensation of Rs. 90,000.
The heirs of the other victim who may have been just managing to keep his body and soul together will probably have received by that standard a compensation of, say, 871 ten thousand rupees.
The compensation awarded to these two groups of heirs shall have to be reduced rateably in the proportion of 9: 1 in order to ensure it does not exceed rupees twenty thousand "in all".
The result of this will be that the insurance company will be liable to pay a sum of Rs. 18,000 to the heirs of the affluent person and Rs. 2,000 to the heirs of the other person.
The icy band of death may have fallen in one stroke on two victims of disparate economic status but then, the arithmetic of the appellants argument will perpetuate the gross inequality between the two even after their death.
We must avoid a construction which will produce such an unfair result, if we can do so without doing violence to the language of the section.
The owner of the truck will undoubtedly be liable to pay the balance but common experience shows that the woes of the injured and of the heirs of those who perish in automobile accidents begin after they embark upon the adventure of execution proceedings.
There are proverbial difficulties in proving ownership of goods vehicles, particularly if they are subject to a hire purchase agreement and truck owners are quite known for the ease with which they proclaim their insolvency.
It is therefore no consolation that the left over liability will fall on the insured.
Both by common practice and the application of recognised rules of statutory construction, harsh consequences following upon an interpretation are not considered as the governing factor in the construction of a statute, unless its language is equivocal or ambiguous.
If the language is plain and capable of one interpretation only, we will not be justified in reading into the words of the a meaning which does not follow natural from the language used by legislature.
It therefore becomes necessary to consider whether the language used by the legislature in section 95 (2) of the admits of any doubt or difficulty or is capable of one interpretation only.
If the words used by the legislature in clause (a) of section 95 (2) were the sole factor for determining the outside limit of the insurer 's liability, it may have been possible to accept the submission that the total liability of the insurer arising out of the incident or occurrence in question cannot exceed Rs. 20,000.
Clause (a) qualifies the extent of the insurer 's liability by the use of the unambiguous expression "in all" and since that expression was specially introduced by an amendment, it must be allowed its full play.
The legislature must be presumed to have intended what it has plainly said.
But, clause (a) does not stand alone and is not 872 the only provision to be considered for determining the outside limit of the insurer 's liability.
In fact, clause (a) does not even form a complete sentence and makes no meaning by itself.
Like the other clauses (b) to (d), clause (a) is governed by the opening words of section 95 (2) to the effect that "a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits", that is to say, the limits laid down in clauses (a) to (d).
We have supplied emphasis in order to focus attention on the true question which emerges for consideration: What is the meaning of the expression 'any one accident"? If that expression were plain and unambiguous, and its meaning clear and definite, effect would be required to be given to it regardless of what we think of its wisdom or policy.
But as we will presently show, the expression "any one accident ' does not disclose one meaning conclusively according to the laws of language.
It, clearly, is capable of more than one meaning, introducing thereby an ambiguity which has to be resolved by resorting to the well settled principles of statutory construction.
The expression "any one accident" is susceptible of two equally reasonable meanings or interpretations.
If a collision occurs between a car and a truck resulting in injuries to five persons, it is as much plausible to say that five persons were injured in one accident as it is to say that each of the five persons met with an accident.
A by stander looking at the occurrence objectively will be right in saying that the truck and the car met with an accident or that they were concerned in one accident.
On the other hand, a person looking at the occurrence subjectively, like the one who is injured in the collision, will say that he met with an accident.
And so will each of the five persons who were injured.
From their point of view, which is the relevant point of view, "any one accident" means "accident to any one '.
In matters involving third party risks, it is subjective considerations which must prevail and the occurrence has to be looked at from the point of view of those who are immediately affected by it.
If the matter is looked at from an objective point of view, the insurer 's liability will be limited to Rs. 20,000 in respect of injuries caused to all the five persons considered en bloc as a single entity, since they were injured as a result of one single collision.
On the other hand, if the matter is looked at subjectively as it ought to be, the insurer 's liability will extend to a sum of Rs. 20,000 in respect of the injuries suffered by each one of the five persons, since each met with an accident, though during 873 the course of the same transaction.
A consideration of preponderating importance in a matter of this nature is not whether there was any one transaction which resulted in injuries to many but whether more than one person was injured, giving rise to more than one claim or cause of action, even if the injuries were caused in the course of one single transaction.
If more than one person is injured during the course of the same transaction, each one of the persons has met with an accident.
We are, therefore, of the opinion that the ambiguity in the language used by the legislature in the opening part of section 95 (2) and the doubt arising out of the co relation of that language with the words "in all" which occur in clause (a), must be resolved by having regard to the underlying legislative purpose of the provisions contained in chapter VIII of the which deals with third party risks.
That is a sensitive process which has to accommodate the claims of the society as reflected in that purpose.
Indeed, it is in this area of legislative ambiguities, unfortunately not receding, that courts have to fill gaps, clear doubts and mitigate hardships.
In the words of Judge Learned Hand: "It is one of surest indexes of a mature and developed jurisprudence. to remember that statutes always have some purpose or object to accomplish whose sympathetic and imaginative discovery is the surest guide to their meaning".
(1) There is no table of logarithms to guide or govern statutory construction in this area, which leaves a sufficient and desirable discretion for the Judges to interpret laws in the light of their purpose, where the language used by the law makers does not yield to one and one meaning only.
Considering the matter that way, we are of the opinion that it is appropriate to hold that the word "accident" is used in the expression "any one accident" from the point of view of the various claimants, each of whom is entitled to make a separate claim for the accident suffered by him and not from the point of view of the insurer.
In The South Staffordshire Tramways Company Ltd. vs The Sickness and Accident Assurance Association Ltd., (2) the plaintiffs, a 874 tramcar company, effected with the defendants an insurance against claims for personal injury in respect of accidents caused by vehicles upto the amount of 250 "in respect of any one accident ' '.
One of the vehicles specified in the insurance policy was overturned, causing injuries to about forty persons, as a result of which the plaintiffs became liable to pay to those persons compensation to the extent of 833.
The question before the Court was whether the injuries caused to each of the said forty persons constituted a separate accident within the meaning of the policy.
The Court of Appeal answered that question in the affirmative.
Lord Esher, M.R., observed in his judgment that the claims made by the plaintiffs were in respect of personal injuries, and each person injured claimed ( ' for injuries in respect of an accident to his person by the vehicle.
"If several persons were injured", said the Master of Rolls, "upon the true construction of the policy, there were several accidents".
Bowen, L.J. took the same view of the matter by saying that the word "accident" may be used in either of two ways: An accident may be spoken of as occurring to a person.
Or as occurring to a train, or vehicle, or bridge.
In the latter case, though several persons were injured who were in the train, or vehicle, or on the bridge, it would be an accident to the train, or vehicle, or bridge.
In the former, "there might, however, be said to be several accidents, to the several persons injured".
Fry, L.J., concurred in the view taken by his Brethren, and observed that the meaning of the word "accident", as used in the policy of insurance, is "any single injury to the person or property accidentally caused.
" In Forney vs Dominion Insurance Co. Ltd. (1) the plaintiff, a solicitor, was insured under a professional indemnity policy whereby the defendants, the insurers, agreed to indemnify him in respect of loss arising from any claim or claims which may be made upon him by reason of any neglect, omission or error committed in the conduct of his business, subject to a proviso that the liability of the insurers was not to exceed a sum of 3000, "in respect of any one claim or number of claims arising out of the same occurrence ' '.
The Solicitor 's assistant gave a certain advice in a motor accident case which betrayed negligence.
The assistant had wrongly allowed a person to become administratrix of her late husband 's estate and the assistant also failed to issue writs within the six month limitation period.
A claim was made against the Solicitor for his assistant 's negligence for depriving the claimants of their right to be paid 875 damages.
The court assessed the quantum of damages differently for different claimants, which together exceeded the sum of 3000.
It was held that the Solicitor 's assistant was negligent twice and therefore there were two occurrences in the same case in respect of which the Solicitor became liable to pay damages for negligence.
Accordingly, the insurance company was held liable to indemify the Solicitor in respect of the damages awarded against him upto a limit of 3000 for each act of negligence.
In Halsbury 's Laws of England, (1) the decision in South Staffordshire Tramways company is cited in support of the proposition that the word 'accident "may fall to be construed from the point of view of each individual victim, so as to produce, in effect, as many accidents (even in a single occurrence) as there are victims" .
The provisions contained in section 95 (2) of the arose for consideration before a Full Bench of the High Court of Punjab in Northern India Transporters Insurance Co. Ltd. vs Smt.
Amrawati, (2) a Full Bench of the High Court of Madras in Jayalakshami & Ors.
vs The Ruby General Insurance Company, Madras & anr., (3) the High Court of Karnataka in Sanjiva Shetty vs Anantha & Ors., (4) and the High Court of Orissa in Sabita Pati & Ors.
vs Rameshwar Singh and anr.
(5) and M/s Construction India & Ors.
vs Mahindra Pal Singh Ahluwalia & ors.
(6) The Punjab case arose under section 95 (2) (b), while the other cases arose under section 95 (2) (a) of the .
In the case before the Madras Full Bench, a person called Krishnaswami who was driving a car died as a result of a collision between his car and a goods vehicle.
The Claims Tribunal dismissed the claim of the heirs of the deceased, but a Division Bench of the High Court took the view that compensation in the sum of Rs. 40,000 would be payable to them.
The Division Bench referred for consideration of the Full Bench the question whether on a true construction 876 of clause (a) of section 95 (2), the liability of the Insurance company was limited to rupees twenty thousand.
The Full Bench, overruling a previous decision of a Division Bench, answered this question in the affirmative.
It is important to bear in mind that the case before the Madras High Court was in a material respect different from the case before us.
The High Court had to consider the claim of one person only since, only one person had met with an accident.
In the case before us, more than one person has been injured, which raises the question as regards the construction of the words "any one accident ' ' which occur in section 95 (2).
That question did not arise in the Madras case and the decision, therefore, does not touch the question before us.
Similarly, in the case before the Orissa High Court in Sabita Pati, only one person was involved in the collision between a jeep and a goods vehicle.
Relying on the judgment of the Full Bench of the Madras High Court, the Orissa High Court held that the liability of the Insurance company was limited to rupees twenty thousand under section 95(2)(a) of the .
The n involvement of more than one person in a single occurrence raises a different question for consideration under section 95 (2) (a) than the involvement of a single person in a single occurrence.
In the latter case, it may be true to say that the liability of the insurer is limited to rupees twenty thousand under a statutory policy.
In the former, the interpretation of the words "any one accident ' ' came into play and we have already expressed our view on the meaning of those words.
In the case before the Karnataka High Court in Sanjiva Shetty, a taxi and a car met with a collision, as a result of which two persons travelling in the taxi, the driver of the car and a boy called Bharatisha sitting on the roadside were injured.
Before the High Court was the claim of the driver of the car and the boy.
A Division Bench of the High Court held that the total liability of the Insurance Company was limited to rupees twenty thousand in respect of the injuries suffered by them.
The High Court apportioned the liability by directing the insurance company to pay Rs. 18,730 to the boy and Rs. 1 ,270 to the driver of the car.
In view of our judgment in the instant case, the decision of the Karnataka High Court cannot be considered to be good law.
We may add that paragraph 22 of the judgment of the High Court says that it was "common ground" between the parties that the limit of the liability of the insurers was only rupees twenty thousand in all.
The High Court added ". indeed, no argument was addressed to the contrary by any of the 877 parties".
In the case before the Orissa High Court in M/s Construction India, two children travelling in a school bus belonging to the Orissa Government died in a collision between the bus and a goods vehicle.
Section 95 (2) (a) was held attracted and since more than one person was injured as a result of a single occurrence, the same question arose as before us.
The orissa High Court held that since the total compensation exceeded rupees twenty thousand, the liability of the insurers was limited to rupees twenty thousand in all and that the amount payable to the heirs of the deceased children was liable to be apportioned.
This decision also cannot be considered as laying down the correct law and there too, as in Sanjiva Shetty, no argument was advanced before the High Court on the construction of clause (a), particularly in reference to the words "any one accident" which occur in section 95 (2).
The case before the Punjab Full Bench in Northern India Transporters, arose under the old section 95 (2) (b) and need not really detain us.
Under that section, as it stood prior to its amendment in 1969, a policy of insurance was required to cover any liability incurred in respect of any one accident upto the limit of twenty thousand rupees in respect of persons other than passengers carried for hire or reward, where the vehicle was one in which passengers were carried for hire or for reward or by reason of or in pursuance of a contract of employment.
In respect of passengers, there was a twofold limit on the insurer 's liability: "a limit of twenty thousand rupees in all" and four thousand rupees in respect of an individual passenger if the vehicle was registered to carry not more than six passengers excluding the driver, or two thousand rupees in respect of an individual passenger if the vehicle was registered to carry more than six passengers excluding the driver.
A passenger bus was involved in an occurrence in which two passengers were killed.
The High Court held that the straightforward course was to take the language of the as it stood, which left no doubt that in the case of a bus registered for carrying more than six passengers, the limit of the liability was twenty thousand rupees in all and there was a further limit in respect of each individual passenger in the sum of two thousand rupees.
The words "any one accident ' in the opening part of section 95 (2) made no difference to this interpretation because, if more than one passenger was injured in a single occurrence, no one passenger was entitled to receive more than rupees two thousand or four thousand, depending on the registered capacity of the vehicle to carry passengers.
878 The judgment of the Punjab High Court was brought in appeal to this Court in Sheikhupura Transport Co. Ltd. vs Northern India Transport Co.(1) For reasons aforesaid, the judgment in that case is not an authority on the interpretation of clause (a) of section 95 (2).
After setting out the relevant provisions of section 95 (2) at pages 24 and 25 of the Report, Hegde J. speaking for himself and Jaganmohan Reddy, J. concluded: "In the present case we are dealing with a vehicle in which more than six passengers were allowed to be carried.
Hence the maximum liability imposed under section 95 (2) on the insurer is Rs. 2,000 per passenger though the total liability may go upto Rs. 20,000. ' ' Towards the end of the judgment, it was observed that reading the provision contained in sections 95 and 96 together, ". it is clear that the statutory liability of the insurer to indemnify the insured is as prescribed in Sec.
95,(2).
Hence the High Court was right in its conclusion that the liability of the insurer in the present case only extends upto Rs. 2,000 each, in the case of Bachan Singh and Narinder Nath".
In vies of the limit on the insurer 's liability in respect of each passenger, the argument on the construction of the words "any one accident" had no relevance and was therefore neither made nor considered by the Court.
Different considerations may arise under clause (b), as amended by 56 of 1969, but we do not propose to make any observations on that aspect of the matter, since it does not directly arise before us.
It was suggested that the interpretation which we are putting on section 95 (2) (a) will create difficulties in cases where the insured also incurs liability under the in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle.
It is true that under section 95 (2) (a), the liability of the insured and therefore the insurer 's indemnity includes the liability of the aforesaid description under the of 1923.
But that is a matter of apportionment which may require a rateable deduction to be made from the compensation payable to each victim, depending upon the quantum of compensation payable under the of 1923 to employees carried in the goods vehicle.
879 We cannot part with this case without impressing upto the A Government, once again, the urgent need to provide by law for the payment of reasonable amounts of compensation, without contest, to victims of road accidents.
We find that road accidents involving passengers travelling by rail or public buses are usually followed by an official announcement of payment of ex gratia sums to victims, varying between five hundred and two thousand rupees or so.
That is a niggardly recognition of the State 's obligation to its people particularly so when the frequency of accidents involving the public transport system has increased beyond believable limits.
The newspaper reports of August and September 1981 regarding deaths and injuries caused in such accidents have a sorry story to tell.
But we need not reproduce figures depending upon newspaper assessment because, the newspapers of September 18, 1981 carry the report of a statement made by the Union Minister of State for Shipping and Transport before the North Zone goods transport operators . that 20,000 persons were killed and 1.5 lakh were injured in highway accidents during 1980.
We wonder whether adequate compensation was paid to this large mass of suffering humanity.
In any event, the need to provide by law for the payment of adequate compensation without contest to such victims can no longer be denied or disputed.
It was four years ago that this Court sounded a warning and a reminder (1): "With the emergence of an ultra modern age which has led to strides of progress in all spheres of life, we have switched from fast to faster vehicular traffic which has come as a boon to many, though some times in the case of some it has also proved to be a misfortune The time is ripe for serious consideration of creating no fault liability.
Having regard to the directive principles of State policy, the poverty of the ordinary run of victims of automobile accidents, the compulsory nature of insurance of motor vehicles, the nationalisation of general insurance companies and the expanding trends towards nationalisation of bus transport, the law of torts based on no fault needs reform. ". it is only just and fair that the Legislature should make a suitable provision so as to pay adequate compensation by properly evaluating the precious life of a 880 citizen in its true perspective rather than devaluing human lives on the basis of an artificial mathematical formula.
It is common knowledge that where a passenger travelling by a plane dies in an accident, he gets a compensation of Rs. 1,00,000 or like large sums, and yet when death comes to him not through a plane but through a motor vehicle he is entitled only to Rs. 2,000.
Does it indicate that the life of a passenger travelling by plane becomes more precious merely because he has chosen a particular conveyance and the value of his life is considerably reduced if he happens to choose a conveyance of a lesser value like a motor vehicle.
Such an invidious distinction is absolutely shocking to any judicial or social conscience and yet section 95 (2) (d) of the seems to suggest such a distinction.
We hope and trust that our law makers will give serious attention to this aspect of the matter and remove this serious lacuna in section 95 (2) (d) of the .
We would also like to suggest that instead of limiting the liability of the Insurance Companies to a specified sum of money as representing the value of human life, the amount should be left to be determined by a Court in the special circumstances of each case.
We further hope our suggestions will be duly implemented and the observations of the highest Court of the country do not become a mere pious wish. ' (per Fazal Ali J, pp. 945, 946, 950, 951).
These observations are still languishing in the cold storage of pious wishes.
With the emergence of the General Insurance Corporation which has taken over general insurance business of all kinds, including motor vehicles insurance, it should be easy to give statutory recognition to the State 's obligation to compensate victims of road accidents promptly, adequately and without contest.
We are happy to note that the Gujarat High Court, by its judgment under appeal, took a just, correct and realistic view of the matter by holding that, under the statutory policy, the appellant insurance company is liable to pay the full amount of compensation to the heirs of the driver of the car and to the passenger who was travelling in the car, each amount being less than Rs. 20,000. 881 In the result the appeals are dismissed with costs in separate sets in favour of respondents 1 (a) to 1 (g) who are the heirs of the deceased Ajit Sinha and in favour of respondents 3 to 6 who are the heirs of Jadavji Keshavji Modi since deceased.
N.V.K. Appeals dismissed.
| Allowing the appeal, the Court.
^ HELD: 1.
The trial of a chid under the provisions of the Haryana Children Act, 1974 for the offence of murder was not barred.
The appellant here was a child within the meaning of that term under clause (d) of section 2 of the Act.
[689 A, C] 2.
A perusal of section 22 of the Central (Act LX of 1960) which is in pari materia with section 21 of the Haryana and other provisions of the State and Central Children Acts shows that the procedure for trial, conviction and sentence under the Children Acts are simple humane and by Courts manned with persons with knowledge of child psychology and child welfare; but not so under the Criminal Procedure Codes of 1898 and 1973.
The intention of the State Legislature of Haryana and of the Parliament in enacting the Children Acts was to make provisions for trial of delinquent children and dealing with them in accordance with such procedure so that the delinquent children do not come in contact with accused persons who are not children and but are hardened criminals.
The purpose undoubtedly was to reclaim delinquent children and rehabilitate them in such a way that they become useful citizens later in life.
[691 G H, 692 A B] 3:1.
The purpose of the Haryana Legislature as well as of the Parliament in enacting the Haryana and the Central respectively was to give separate treatment to delinquent children in trial, conviction and punishment for offences including offences punishable with death or imprisonment for life [693 C D] 3:2.
Section 27 of the Criminal Procedure Code, 1973 is not 'a specific provision to the contrary ' within the meaning of section S of the Code the intention of the Parliament was not to exclude the trial of delinquent children for offences punishable with death or imprisonment for life, inasmuch as section 27 does not contain any expression to the effect "notwithstanding anything contained in any passed by any State Legislature".
Parliament 687 certainly was not unaware of the existence of the Haryana coming into force a month earlier or the Central coming into force nearly fourteen years earlier.
What section 27 contemplates is that a child under the age of 16 years may be tried by a Chief Judicial Magistrate or any court specially empowered under the .
It is an enabling provision and has not affected the Haryana in the trial of delinquent children for offences punishable with death or imprisonment for life.
[693 C, D G] 4:1.
If there be any conflict between any provisions of the Act and the Criminal Procedure Act, in view of Article 254(1) of the Constitution, the provision of the Haryana repugnant to any provision of the Criminal Procedure Code will be void to the extent of repugnancy [692 B C] 4:2.
Criminal Procedure appears in Item 2 of the Concurrent List of the Seventh Schedule of the Constitution.
One of the circumstances under 'which repugnancy between the law made by the State and the law made by the Parliament may result is whether the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable.
In the case in hand the relevant provisions of the Criminal Procedure Code and the Haryana can co exist.
Their spheres of operation are different.
[693 G H, 694 A] Dev Singh and 2 Ors.
vs State of Madhya Pradesh, Madhya Pradesh, overruled.
|
Civil Appeal No. 1537 of 1970.
Appeal by special leave from the judgment and order dated the 10/30th June, 1969 of the Bombay High Court, Nagpur Bench, Nagpur in Appeal No. 90 of 1962.
1178 U. R. Lalit and A. G. Ratnaparkhi, for the Appellant.
section section Khanduja for the Respondent.
The respondent filed a suit in the Court of the Second Joint Civil Judge, Amrawati alleging that the house situated near Saraf Bazar in Amrawati had been purchased by her in 1950 for Rs. 4,000 and thereafter improvements had been affected by her to the property.
Being in need of money, she entered into an agreement with the appellant for a loan of Rs. 2,000 and it was decided that simultaneously she should execute a nominal document of sale and a rent note.
These documents were executed on January 7, 1953.
She alleged that the documents were never intended to be acted upon, and that the rent paid by her represented in fact interest at 18% on the loan.
She continued in possession of the house property throughout and, it is said, carried on repairs from time to time.
It was stated that the appellant was attempting to enforce the document as a sale deed by filing suits in the Court of Small Causes for recovery of rent.
As two suits had resulted in decrees, she considered it necessary to file the present suit for a declaration that she was, and continued to be, owner of the house property.
In defence, the appellant maintained that the sale deed represented a genuine, transaction, and ownership of the house property had passed to the appellant.
It was pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction.
Reliance was also placed on section 92 of the Indian Evidence Act.
The trial court held that the sale deed was never intended to be acted upon and decreed the suit.
The appellant appealed to the District Court, Amravati, but the learned District Judge did not accept the case that a sale had taken place.
He held, however, that the transaction between the parties constituted a mortgage.
He modified the trial court decree to conform to that finding.
The High Court of Bombay, in second appeal, did not agree with the finding of the lower appellate court that the transaction was a mortgage and affirmed the findings of the trial court that the sale deed and rent note were sham documents, that the decrees of the 1179 Court of Small Causes did not operate as res judicata and that section 92 of the Indian Evidence Act did not prevent the respondent from establishing the true nature of the transaction.
Accordingly, the High Court set aside the decree of the lower appellate court and resorted that of the trial court.
When this appeal was heard by us, it appeared that the parties may settle the dispute by negotiated compromise.
It seems, however, that no compromise has been possible.
Accordingly, we proceed to dispose of the appeal on its merits.
Two points have been raised before us.
The appellant urges that the Small Causes Court decrees, in view of the general principles of res judicata, precluded the trial of the question whether the sale transaction was a genuine transaction.
The other point concerns the operation of section 92 of the Evidence Act.
The successive suits were filed by the appellant against the respondent in the Court of Small Causes for recovery of arrears of rent.
In each suit the appellant contended that she was owner of the property and the respondent was her tenant.
The tenancy was alleged on the basis of the document dated January 7, 1953 which on its terms purported to be a sale deed by the respondent in favour of the appellant.
The respondent resisted the suits.
The court decreed the suits on the finding that the document was a sale deed, and therefore the respondent was not the owner of the property but merely a tenant of the appellant.
The question is whether this finding operates as res judicata in the instant suit.
The High Court repelled the plea of res judicata on the ground that section 11 of the Code of Civil Procedure governed the case, and that as a Court of Small Causes is not competent to try a suit for a declaration of title to immovable property, the court which passed the decrees relied on by the appellant was not competent to try the present suit and therefore an imperative condition of section 11 was not satisfied.
It is contended before us on behalf of the appellant that the High Court erred in applying the statutory provisions of section 11 of the Code, and should have invoked instead the general principles of res judicata.
On that, it is submitted, all that was necessary to find was whether the Court of Small Causes was competent to try the two earlier suits and decide the issues arising therein.
We have been referred to Gulabchand Chhotalal Parikh v, State of Bombay where 1180 this Court has taken the view that the provisions of section 11 of the Code are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit, and that on the general principles of res judicata, any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their case by a Court competent to decide it, will operate as res judicata in a subsequent regular suit.
It is not necessary, it was said, "that the Court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter".
The observations were made in considering the question whether decisions on matters in controversy in writ petitions under Article 32 or Article 226 of the Constitution could operate as res judicata in subsequent regular suits on the same matters in controversy between the same parties.
A number of other cases have been cited on behalf of the appellant in support of the plea of res judicata.
We have considered them and we do not think that they help the appellant.
In Muhammad Abdul Ghafur Khan vs Gokul Prasad and others the Allahabad High Court limited itself to observing that a Court of Small Causes possessed a discretion on whether to return the plaint under section 23, Provincial Small Cause Courts Act on a finding that the relief claimed depended on proof of title.
The same High Court in Madan Kishor and Another vs Mahabir Prasad and others merely observed that it was for the Court of Small Causes to decide under section 23 of the Provincial Small Cause Courts Act whether a question of title was involved in the suit and on finding so it was open to it to return the plaint.
That was also the view expressed by it in Ram Dayal Sonar vs Sukh Mangat Kalwat.
So also in Ganga Prasad vs Nandu Ram, the Patna High Court said that the Court of Small Causes had power under section 23 to return the plaint where it was of opinion that the question of title raised was so intricate that it should not be decided summarily.
To the same effect was the view expressed by the Lahore High Court in Ganesh Das vs Feroze Din. 1181 In Puttangowda Mallangowda Patil vs Nikanth Kalo Deshpande, the Bombay High Court declared that a Court of Small Causes could render a finding on an issue as to title to immovable property but only in a suit which did not ask for that relief and merely for payment of a sum of money.
Our attention was drawn to Asgarali Roshanalli and another vs Kayumalli Ibrahimji, but we find nothing there of assistance to the appellant.
Reliance was placed on the decision of the Allahabad High Court in Lala Jageshwar vs Shyam Behari Lal.
There a learned Single Judge took the view that as a Court of Small Causes is a Court of exclusive jurisdiction the restrictive conditions imposed by s 11 of the Code of Civil Procedure requiring "two fold competency" of the Court whose decision is to operate as res judicata cannot be invoked.
It was sufficient, he observed, that the decision had been rendered by a court of competent jurisdiction and it was not necessary that that court should also be competent to decide the subsequent suit.
The judgment was brought in appeal to this Court but while disposing of the appeal, Shyam Behari Lal vs Lala Jageshwar Prasad, this Court declined to decide whether a Court of Small Causes could be regarded as a Court of exclusive jurisdiction.
We find, however, that the view taken by the High Court in Lala Jageshwar Prasad (supra) was expressly overruled by a Full Bench of the High Court in Manzurul Haq and another vs Hakim Mohsin Ali and it was laid down that a Court of Small Causes could be described as a court of "preferential jurisdiction" but not as court of "exclusive jurisdiction".
It was also held by the Full Bench that a decision rendered by a Court of Small Causes in a suit for arrears of rent would not operate as res judicata in a subsequent suit filed in the Court of the Munsif for recovery of arrears of rent for a different period and for ejectment.
That the principle of res judicata could not be availed of where a decision given by a Court of Small Causes was relied on in a subsequent regular civil suit was the view also taken by the Punjab High Court in Pateshwar Parshad Singh vs A. section Gilani.
It seems to us that when a finding as to title to immovable property is rendered by a Court of Small Causes res judicata cannot 1182 be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property.
In order to operate as res judicata the finding must be one disposing of a matter directly and substantially in issue in the former suit and the issue should have been heard and finally decided by the court trying such suit.
A matter which is collaterally or incidentally in issue for the purposes of deciding the matter which is directly in issue in the case cannot be made the basis of a plea of res judicata.
It has long been held that a question of title in a Small Cause suit can be regarded as incidental only to the substantial issue in the suit and cannot operate as res judicata in a subsequent suit in which the question of title is directly raised.
Poholi Mullick vs Fukeer Chunder Patnaik, Chet Ram and others vs Ganga, Anwar Ali vs Nur Ul Haq and Another, Khandu valad Keru vs Tatia valad Vithoba.
See also Mohd. Yusuf and another vs Abdul Wahid and S.A.A. Annamallai Chettiar vs Molaiyan and others.
Our attention has been drawn to Explanation VIII to section 11 in the Code of Civil Procedure recently inserted by the Code of Civil Procedure (Amendment) Act, 1976.
Section 97(3) of the Amendment Act declares that the new provision applies to pending suits, proceedings, appeals and applications.
In our opinion the Explanation can be of no assistance, because it operates only where an issue has been heard and finally decided in the earlier suit.
Accordingly, we hold that the finding rendered by the Court of Small Causes in the two suits filed by the appellant that the document executed by the respondent is a sale deed cannot operate as res judicata in the present suit.
The next contention on behalf of the appellant is that sub s.(1) of section 92 of the Evidence Act bars the respondent from contending that there was no sale and, it is submitted, the respondent should not have been permitted to lead parole evidence in support of the contention.
Section 91 of the Evidence Act provides that when the terms of contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the 1183 terms of such contract, grant or other disposition of property, or of such matter, except the document itself.
Sub section
(1) of section 92 declares that when the terms of any contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms And the first proviso to section 92 says that any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contradicting party, want or failure of consideration, or mistake in fact or law.
It is clear to us that the bar imposed by sub section
(1) of section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction.
In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms.
The sub section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham.
Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever.
For that purpose oral evidence is admissible to show that the document executed was never intended to operate as an agreement but that some other agreement altogether not recorded in the document, was entered into between the parties.
Tyagaraja Mudaliyar and another vs Vedathanni.
The Trial Court was right in permitting the respondent to lead parole evidence in support of her plea that the sale deed dated January 7, 1953 was a sham document and never intended to be acted upon.
It is not disputed that if the parole evidence is admissible, the finding of the court below in favour of the respondent must be accepted.
The second contention on behalf of the appellant must also fail.
In the result, the appeal is dismissed with costs.
S.R. Appeal dismissed.
| Being in need of money, respondent entered into an agreement with the appellant for a loan of Rs. 2,000 and it was decided that simultaneously she should execute a nominal document of sale and rent note, of her house situated near Sarafa Bazar in Amravati.
These documents were executed on January 7, 1953.
The respondent continued in the possession of the house property throughout and carried on repairs from time to time.
Since the appellant was attempting to enforce the document as a sale deed by filing suits in the Court of Small Causes for recovery of rent and the said suits had resulted in a decree, the respondent filed a suit for declaration that she was and continued to be owner of the house property.
The documents executed on January 7, 1953, it was said, were never intended to be acted upon.
In defence, the appellant maintained that the sale deed represented a genuine transaction, and ownership of the house property had passed to her.
It was further pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction.
Reliance was also placed on section 92 of the Indian Evidence Act.
Dismissing the appeal by special leave, the Court ^ HELD: 1:1.
When a finding as to title to immovable property is rendered by a Court of Small Causes res judicata cannot be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property.
In order to operate as res judicata the finding must be one disposing of a matter directly and substantially in issue in the former suit and the issue should have been heard and finally decided by the court trying such suit.
A matter which is collaterally or incidentally in issue for the purpose of deciding the matter which is directly in issue in the case cannot be made the basis of a plea of res judicata.
A question of title in a Small Cause suit can be regarded as incidental only to the substantial issue in the suit and cannot operate as res judicata in a subsequent suit in which the question of title is directly raised.
[H81 G 1182A C] 1177 1:2.
Explanation VIII to section 11 of the Code of Civil Procedure operates only where an issue has been heard and finally decided in the earlier suit.
[1182 D E] 1:3.
In the instant case, the finding rendered by the Court of Small Causes in the two suits filed by the appellant that the document executed by the respondent is a sale deed cannot operate as res judicata.
[1182 E] Poholi Mullick vs Fukeer Chunder Patnaik, (1874) 22 Suth W.R. 349; Chet Ram and Others vs Ganga, 1886 Allahabad Weekly Notes; Anwar Ali vs Nur Ul Haq and Another, ; Khandu Valad Keru vs Tatia valad Vithoba, (1871) 8 Bombay H.C.R.A.C. 23(24) (DB); Mohd. Yusuf and another vs Abul Wahid, A.I.R. 1948 All.
296 and S.A.A. Annamalai Chettiar vs Molaiyan and others, A.I.R. 1970 Mad. 396, approved.
Muhammad Abdul Ghafur Khan vs Gokul Prasad and others, A.I.R. 1914 All.
527; Gulabchand Chhotalal Parikh vs State of Bombay, ; Madan Kishor and Another vs Mahabir Prasad and others, A.I.R. 1929 All. 816; Ram Dayal Sonar vs Sukh Mangal Kalwar, A.I.R. 1937 All. 676; Ganga Prasad vs Nandu Ram, A.I.R. 1916 Patna 75; Ganesh Das vs Feroze Din, A.I.R. 1934 Lahore 355, Puttangowda Mallangowda Patil vs Nikanth Kalo Deshpande, XV Bombay Law Reporter 773; Asgarali Roshanalli and another vs Kayumalli Ibrahimji, A.I.R. 1956 Bombay 236: Lala Jageshwar Prasad vs Shyam Behari Lal, A.I.R. 1967 All. 125; Shyam Behari Lal vs Lala Jogeshwar Prasad, ; Manzural Haq and another vs Hakim Mohsin Ali, A.I.R. 1970 All. 604; Pateshwari Parshad Singh vs A. section Gilani, A.I.R. 1959 Punjab 420, referred to and dissented from.
The bar imposed by sub section (1) of section 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction.
In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms.
The sub section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham.
Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever.
For that purpose oral evidence is admissible to show that the document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties.
[1183 C F] Tyagaraja Mudaliyar and another vs Vedathanni, A.I.R. 1936 Privy Council 70, followed.
|
(Civil) No. 1615 of 1986.
(Under Article 32 of the Constitution of India).
R.P. Gupta for the Petitioner.
C.V. Subba Rao for the Respondents.
1140 The Order of the Court was delivered by B.C. RAY, J.
The petitioner who was appointed as a constable in the Haryana Police Force on November 7, 1979 has challenged in this writ petition the order dated August 24, 1982 issued by the Commandant, 2nd Bn.
Haryana Armed Police, Madhuban on the ground that the impugned order of removal from service was in effect a penal order and as such the same being made without complying with the requirements of Article 311(2) as well as the Rule 16.24(ix)(b) of the Punjab Police Rules, 1934 is wholly arbitrary, illegal and unwarranted and so the impugned order is liable to be quashed and set aside and the petitioner to be reinstated in service.
The facts of the case in a nutshell are that the petitioner was enrolled as a constable in the Haryana Police Service in November, 1979 and he had been discharging his duties attached to his office duly and properly.
The peti tioner was a member of an unregistered Haryana Police Asso ciation.
The said association had been convassing for im provement in the Service conditions of the police personnel serving with the Haryana Police and on several occasions made representations for improvement of the service condi tions of the members of the police service.
As a part of its campaign for improvement in service conditions, the associa tion in the month of July gave a call to all its members to participate in "a nontaking of food campaign" which was to take place on 15th August, 1982.
On that day the petitioner and other police personnel numbering about 16,000 consisting of constables and head constables of Haryana Police Force attended to their duties but they did not take their food in the Mess.
The protest undertaken by the Haryana police constables/ head constables was a symbolic and peaceful one and no incident whatsoever had occurred on that day.
The respondents, however issued order of dismissal/removal against 425 policemen under rule 12.21 of the said rules without serving on them any charge sheet and without giving them any opportunity of hearing against the charges, prior to the passing of the said order of dismissal/removal from service.
About 154 of such policemen challenged the order of their dismissal/removal from service in writ petition Nos. 9345 to 9498 of 1983 before this Court and the Constitution Bench of this Court after hearing, set aside the said order of dismissal from service and directed reinstatement in service without any break in their service.
The petitioner because of his activities in the Associa tion was served with the impugned order of removal from service without being given any opportunity of hearing and without being asked to show cause against the purported order of dismissal from service.
The 1141 petitioner has challenged the validity of this impugned order in this writ petition.
A return has been filed on behalf of the respondents sworn by one Raj K. Vashishta, IPS, Commandant 2nd Bn.
Haryana Armed Police, Madhuban District, Karnal wherein in paragraph.
2 it has been stated that the impugned order is not an order of dismissal from service and in fact this is an order of discharge made under rule 12.21 of the Punjab Police Rules, 1934 as applicable in Haryana.
It has been further stated in paragraph 3 of the said affidavit that the petitioner deliberately suppressed the facts that: (i) That for his absence from duty, without leave for more than 24 hours with effect from 25.10.80 he had been awarded 5 days P.D. (ii) Again he had been warned for absence without leave for five hours on 21.4.81.
(iii) Notwithstanding the warnings and punishments awarded for absence from duty in 1980, and again in 1981, the petitioner did not show any improvements in his performance and conduct and again absented from duty on 15th August, 1982.
It has also been stated that a recruit constable who within a span of three years of his enrolment repeatedly absents from duty and does not improve himself in spite of warnings, is not likely to prove an efficient police offi cer.
It has further been averred in the said affidavit that the petitioner was discharged because the appointing author ity (Superintendent of Police) was of considered opinion on due assessment of his conduct and performance that he was unlikely to prove an efficient police officer.
These aver ments have been verified as correct according to the infor mation derived from the official records and believed by the deponent to be true.
There is no dispute that the petitioner was enrolled as a constable with effect from November 7, 1979 and he was on probation which is for a period of three years.
It is also well settled that a probationer has no right to the post and if he is found by the concerned authorities to be unsuitable for the post during the probation period his service may be done away with.
But nonetheless such a probationer has a right to have an opportunity of hearing against the order of dismissal removal from service if the same is made in effect by way of 1142 punishment or the same casts a stigma on the service career of the petitioner.
In other words if the order of dismissal/removal from the service is not one simpliciter on the ground that his service is no longer required but in substance and in effect the same is made by way of punish ment, the probationer like the petitioner who has no right to the post is to be given an opportunity of hearing.
If such an order of dismissal/removal from service is made without following the procedure envisaged in Article 311(2) of the Constitution of India as well as rule 16.24(ix)(b) of the Punjab Police Rules, 1934 the same will be illegal and bad and liable to be quashed.
This position has been well settled by this Court in the case of P.L. Dhingra vs Union of India, AIR 1958 (SC) 36 wherein it has been observed as under: " . .
Passing on to Article 311 we find that it gives a two fold protection to persons who come within the article, namely, (1) against dismissal or removal by an authority subordinate to that by which they were ap pointed and (2) against dismissal or removal or reduction in rank without giving them a reasonable opportunity of showing cause against the action proposed to be taken in regard to them.
Incidentally it will be noted that the word "removed" has been added after the word "dismissed" in both Clauses (1) and (2) of article 311.
Upon article 311 two questions arise, namely, (a) who are entitled to the protection and (b) what are the ambit and scope of the protection?" " . .
Shortly put, the principle is that when a servant has right to a post or to a rank either under the terms of the contract of employment, express or implied, or under the rules governing the conditions of his service, the termination of the service of such a servant or his reduction to a lower post is by itself and prima facie a punish ment, for it operates as a forfeiture of his right to hold that post or that rank and to get the emoluments and other benefits attached thereto.
But if the servant has no right to the post, as where he is appointed to a post, permanent or temporary either on probation or on an officiating basis and whose temporary service has not ripened into a quasi permanent service as defined in the Temporary Service Rules, the termination of his employment does not deprive him of any right and cannot, therefore, by itself be a punishment.
One test for determining whether the termination of the service of a government servant is by way of punishment is to ascertain 1143 whether the servant, but for such termination, had the right to hold the post.
If he had a right to the ' post as in the three cases hereinbefore mentioned, the termination of his service will by itself be a punishment and he will be entitled to the protection of article 311." " . .
But even if the Government has, by contract or under the rules, the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal or removal or reduc tion in rank, the Government may, neverthe less, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punish ment and the requirements of article 311 must be complied with.
" In the case of Samsher Singh vs State of Punjab and Anr., AIR 1974 (SC) 2 192 it has been observed as under: "No abstract proposition can be laid down that where the services of a probationer are termi nated without saying anything more in the order of termination than that the services are terminated it can never amount to a pun ishment in the facts and circumstances of the case.
If a probationer is discharged on the ground of misconduct, or inefficiency or for similar reason without a proper enquiry and without his getting a reasonable opportunity of showing cause against his discharge it may in a given case amount to removal from service within the meaning of Article 311(2) of the Constitution.
" It has been further observed that the form of the order may be innocuous but if the order is really by way of pun ishment then the protection under Article 311(2) will come into play and the probationer will be entitled to have an opportunity of hearing before the impugned order of dismiss al/removal from service is made.
The substance of the order and not the form could be decisive.
In a later decision of this Court i.e. Anoop Jaiswal vs Government of India and Anr., AIR 1984 (SC) 636 following the aforesaid two decisions this Court has observed that: 1144 "The form of the order is not decisive as to whether the order is by way of punishment and that even an innocuously worded order termi nating the service may in the facts and cir cumstances of the case establish that an enquiry into allegations of serious and grave character of misconduct involving stigma has been made in infraction of the provision of article 311(2).
Where the form of the order is merely a camouflage for an order of dismissal for misconduct it is always open to the Court before which the order is challenged to go behind the form and ascertain the true charac ter of the order.
If the Court holds that the order though in the form is merely a determi nation of employment is in reality a cloak for an order of punishment, the Court would not be debarred, merely because of the form of the order, in giving effect to the rights con ferred by law upon the employee." In the instant case it is clear and evident from the averments made in paragraph 3, sub para (i) to (iii) and paragraph (v) of the counter affidavit that the impugned order of removal/dismissal from service was in substance and in effect an order made by way of punishment after consider ing the service conduct of the petitioner.
There is no doubt that the impugned order casts a stigma on the service career of the petitioner and the order being made by way of punish ment, the petitioner is entitled to the protection afforded by the provisions of Article 311(2) of the Constitution as well as by the provisions of Rule 16.24(IX)(b) of the Punjab Police Rules, 1934.
The petitioner has not been served with any charges of misconduct in discharge of his duties as a police constable nor has he ever been asked to show cause against the said charges.
The order of removal from service was made because of his union activities namely participat ing in the call for expressing the protest of the associa tion for improvement in service conditions by abstaining from taking meals in the Mess on 15th August, 1982 although the petitioner like other members of the association per formed his duties on that day and did not abstain from duty.
It cannot be said in the facts and circumstances of the case that the impugned order is an order simpliciter of removal from service of a probationer in accordance with the terms and conditions of the service.
The impugned order undoubted ly, tantamounts to dismissal from service by reason of misconduct of the petitioner in discharge of the official duties aS police constable.
This matter is fully covered by the decision dated October 17, 1984 of the Constitution Bench in Ajit Singh & Ors.
vs State of Haryana & Ors.
, (W.P. Nos. 9345 9498/1983) and we are bound to follow the same.
1145 In the premises aforesaid the writ petition succeeds and is allowed, the impugned order of discharge of the petition er from Haryana Police Force under rule 12.21 of the Punjab Police Rules, 1934 passed by the Commandant, 2nd Bn., Har yana Armed Police is quashed and it is directed that he be reinstated in service with 50% back wages from the date of termination of his service till the date of his reinstate ment.
He would, however, be entitled to his full salary and other allowances admissible with effect from the date of his reinstatement.
It is further directed that there would be no break in continuity of service for purposes of seniority and pensionary benefits.
No costs.
M.L.A. Petition allowed.
| Appellant was tried by the Sessions judge and a jury on the charge of committing rape.
On the question of the age of the girl expert medical evidence was produced but no birth certificate was available.
The father of the girl could not be examined as he was dead.
According to the Police evidence the whereabouts of the mother were not traceable but the Police Officer who himself made the inquiry was not produced.
As regards the commission of the rape the girl herself was examined and there was the evidence of another girl and some circumstantial evidence.
The 750 accused filed a written statement but the judge refused to read it out to the jury.
The jury returned a unanimous verdict of guilty and the judge, accepting the verdict, convicted the appellant and sentenced him to 5 years rigorous imprisonment.
An appeal to the High Court was summarily rejected.
But the High Court granted "leave to appeal" on the ground that on account of the summary dismissal of the appeal appellant did not have the satisfaction of feeling that he had been fully heard and that justice should also appear to have been done by a full consideration of the evidence by the appellate court.
Held that, the certificate granted by the High Court amounts to a condemnation of the practice of summary dismissal of appeals, especially in jury trials.
Such practice prevails in most High Courts and has the sanction of statute law.
No certificate should be granted on a mere question of fact nor in a case where there are no complexities of law involved requiring an authoritative interpretation by the Supreme Court.
Haripada Dey vs The State of West Bengal, ; , followed.
There is no provision in the Code of Criminal Procedure requiring a Session judge to accept a written statement filed by an accused.
If such a written statement is allowed to be used at a Sessions trial by jury, it may throw the door open to irrelevant and inadmissible matter and cast an additional burden on the judge of separating admissible from inadmissible statements.
The judge had rightly refused the written statement to be read to the jury.
There is no rule of law or practice that there must be cor roboration of the testimony of the prosecutrix, before conviction for rape.
If the jury had been appraised of the necessity of corroboration, it was for the jury to decide whether or not it would convict on the uncorroborated testimony of the prosecutrix in the particular circumstances of the case before it.
Rameshwar vs The State of Rajasthan, , followed.
There was no misdirection on the question of the age of the girl.
The Session judge had pointed out the several items of evidence to the jury.
The failure of the prosecution to examine the Police Officer who actually made inquiry into the whereabouts of the mother does not affect the case as in any case the inquiry would be the result of hearsay.
|
ivil Appeals Nos.
96 to 98 of 1964.
Appeals by special leave from the judgments and orders dated September 22, 1960, and December 6, 1960 of the Punjab High Court in Income tax References Nos.
19 of 1958 and 6 of 1959 respectively.
S.V. Gupte, Solicitor General, R. Ganapathy Iyer and R.N. Sachthey, for the appellant.
Deva Singh Randhawa and Harbans Singh, for the respondent.
The Judgment of the Court was delivered by Shah, J.
On April 10, 1953 the estate of the joint Hindu family of which the respondent was a member was partitioned, and the respondent was allotted, besides other properties, 400shares of the Simbhaoli Sugar Mills Private Ltd., and was made liable to pay a business debt amounting to Rs. 3,91,875/ due by the family to R.B. Seth Jessa Ram Fateh Chand of Delhi.
On April 14, 1953 the respondent executed a deed of trust in respect of 300 out of the shares of the Simbhaoli Sugar Mills which fell of to his share.
The following are the material provisions of the deed of trust. "AND WHEREAS on partition, the author was allotted amongst other properties, four hundred shares of the Simbhaoli Sugar Mills Ltd., and fixed with liability for discharge of certain debts of the Joint Hindu Family AND WHEREAS for discharge of the debts detailed in the schedule appearing hereafter, the author now as absolute owner of the said shares has decided to settle on trust three hundred shares numbering 1 to 300 both inclusive, out of the said shares for the benefit of his creditors and other beneficiaries named hereafter and for the objects mentioned hereafter.
The author as holder of 300 shares out of the capital of Simbhaoli Sugar Mills Ltd. divesting himself of all proprietary rights in the said shares.
hereby declares that the said shares shall from this day be irrevocably held on Trust by the Trustees to be used by them for all or any of the purposes following, that is to say : (a) To pay off the debts as detailed in Schedule 'A ' attached hereto: These debts were incurred for the benefit of the Joint Hindu Family of the author and on disruption of the Joint Hindu Family and partition of properties among its members, made payable by the author.
686 And after his debts are paid off.
(b) To provide for the maintenance and education of the children and grand children of the author.
(c) To open and run Hospitals and Nursing Homes.
(d) To open and run School or SchooLs for the education of boys or girls in scientific and technical subjects.
To open and maintain a reading room and a lending library.
(f) To provide for the maintenance and education of orphans, widows and poor people and for that to give scholarships for inland and overseas studies to found orphanage.
widow houses and poor houses and to do all other things that the trustees may deem fit for carrying out the objects of the Trust.
" By el.
3 four persons including the respondent were appointed trustees, and the respondent was to hold the office of Chairman of the Trust during his lifetime.
The trust deed then provided: "In the books of the Company, the shares will stand in the name of the Chairman for the time being, who will have the power to operate the Bank accounts of the Trust, to preside at the meetings, exercise the right of th e vote in respect of the shares of the Trust.
" Clause 5 provided: "It is hereby declared that the trustees shall have the following powers in addition to the powers and the authorities hereinfore contained: (i) The trustees shall not be entitled to sell the shares except as provided hereafter but they can mortgage or pledge the same for raising funds as they may feel necessary for paying off the debts of the author, provided (ii) . . (iii) . . . (iv) . .
Clause 6 provided: "That in carrying out the objects of the trust the trustees shall keep in mind and abide by the following directions: (i) The payment of the debts of the author as detailed in Schedule 'A ' referred to above shall receive the topmost priority and the trustees shall not spend any money out of the trust property or its income 687 in any direction till they have paid off all the debts of the author, provided always if the trustees are unable to pay off the debts, out of the income i.e. dividends, bonuses etc.
of the shares within a period of ten years they shall be entitled to sell the same or part of it and thus pay off the debts that may be due at that time.
(ii) After debts are discharged the trustees shall spend the income of the trust property.
remaining in their hands after full discharge of the debts, on the maintenance of the children and grand children of the author and the remaining 20% on all or any of the other objects of the trust as the Trustees may think best.
(iii) . .
The respondent claimed before the Income tax Officer, Eward.
Amritsar that the dividend received by the trustees in respect of 300 shares of the Simbhaoli Sugar Mills was the income of the Trust and that he had no concern with that income as he had "divested himself irrevocably of the ownership of the shares" and that in any event Rs. 19,856/ being the amount due as interest to R. B. Seth Jessa Ram Fateh Chand should be allowed as a permissible deduction in computing the net income from dividend of the shares.
The Income tax Officer rejected the contentions of the respondent, holding that the Trust was a "fictitious transaction".
The Appellate Assistant Commissioner held that the respondent had not "irrevocably transferred the 300 shares of the Simbhaoli Sugar Mills" and therefore by virtue of section 16(1)(c) proviso one the respondent could not escape liability to pay tax on the dividend from the share.
The respondent appealed to the Income tax Appellate Tribunal.
but without success.
At the instance of the respondent the Tribunal drew up a statement of the case and referred the following questions to the High Court at Chandigarh: "(1) Whether the dividend income of 300 shares of the Simbhaoli Sugar Mills, Private Ltd. transferred by the assessee to section Raghbir Singh Trust was the income of the assessee liable to tax? (2)Whether the assessee was entitled to claim deduction of Rs. 19,856/ paid as interest to R.B. Seth Jessa Ram Fateh Chand against the dividend income of the aforesaid 300 shares?" The High Court answered the first question in the negative and declined to answer the second question.
With special leave.
the Commissioner of Income tax has appealed to this Court.
Section 2 sub section
(15) defines "total income" as meaning total amount of income, profits and gains referred to in sub section
(1) of section 4 688 computed in the manner laid down in the Act.
Section 16 of the Income tax Act enumerates the exemptions and exclusions admissible in the computation of total income in certain specified cases.
The material part of cl.
(c) of sub section
(1) of section 16 is as follows: "In computing the total income of the assessee (c) all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income tax (Amendment) Act, 1939 (VII of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor: Provided that for the purposes of this clause a settlement, disposition or transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or indirectly of the income or assets to the settlor, disponer or transferor, or in any way gives the settler, disponer or transferor a right to reassume power directly or indirectly over the income or assets: Provided further that the expression 'settlement or disposition ' shall for the purposes of this clause include any disposition, trust, covenant, agreement or arrangement, and the expression 'settlor or disponer ' in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made: Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the lifetime of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed.
on the said income as and when the power to revoke arises to him." Clause (c) was intended, while seeking to protect a genuine settlement by which the tax payer intends to part with control over property and its income.
to circumvent attempts made by him to reduce his liability to pay income tax by the expedient of so arranging a settlement or disposition of property that the income does not accrue to him, but he reserves a power over or interest in the property settled or disposed of, or in the income thereof.
By cl. 689 c) income arising to any person by virtue of a settlement or disposition whether revocable or not is deemed to be income of the settlor or disponer if the assets remain the property of the latter.
Again income arising to any person by virtue of a revocable transfer of assets is deemed to be the income of the transferor.
The first proviso then deems a settlement statutorily revocable, if it contains any provision for retransfer directly or indirectly of the income or assets settled, to the settlor, or where it gives to the settlor a right to reassume power directly or indirectly over the income or assets.
By the second proviso the expression "settlement or disposition" includes a disposition, trust, covenant, agreement or arrangement the Legislature has thereby sought to bring within the net, transactions similar to though not strictly within the description of settlements and dispositions.
The third proviso carves out from the amplitude of cl.
(c) as expounded by the first and the second provisos income arising to any person from a settlement which is not revocable for a period exceeding six years or during the lifetime of the person and from which income the settlor derives no benefit direct or indirect.
It was observed in a recent judgment of this Court: Commis sioner of Income tax, Bihar and Orissa vs Rani Bhuwanesliwari Kuer(1) that: "By the first proviso, settlements, dispositions or transfers of the character described therein, are deemed revocable for the purpose of the principal clause.
The function of proviso I and proviso 2 is plainly explanatory.
The second proviso in terms says that the expression settlement or disposition" is to include any disposition, trust, covenant, agreement or arrangement, and the expression "settlor or disponer" is to include any person by whom the settlement or disposition was made.
Similarly the first proviso states that settlements, dispositions or transfers, if they are of the character described, shall for the purpose of the principal clause be revocable transfers.
" The terms of section 16(1)(c) first proviso are reasonably plain.
A settlement or disposition is deemed to be statutorily revocable if there is a provision therein for retransfer of the income or assets or which confers a right to reassume power over the income or assets.
The provision may even be for retransfer indirectly or for conferring power to reassume indirectly over the income or the assets.
But the actual retransfer or exercise of the power to reasume is not necessary; if there be a provision of the nature con templated, the proviso operates.
The terms of the deed may now be examined.
The shares were settled upon trust, and four trustees one of whom was the respondent were appointed.
Genuineness of the trust is no longer (1) ,202.
690 in dispute.
The direction that the shares are to stand in the name of the Chairman for the time being appears to have been necessitated by section 33 of the Indian Companies Act, 1913 which prevented notice of any trust, expressed, implied or constructive to be entered on the register.
The deed recites that the shares are to be held on trust irrevocably by the trustees for all or any of the purposes mentioned therein.
The purpose for which the shares are to be held in the first instance is to pay off the debt due to R.B. Seth Jessa Ram Fatch Chand, and it is only after the debt is paid off that the directions in cls.
(b) to (f) of cl. 2 come into operation.
The deed is in terms expressly irrevocable, but on that account the operation of the first proviso is not excluded.
If by the direction for application of the income for satisfaction of the debts due by the respondent, it could be said in law that there is a provision for retransfer directly or indirectly of the income or a right to reassume directly or indirectly power over the income, the settlement would be deemed revocable, recital that it is irrevocable notwithstanding.
But the income from the shares since the execution of the deed of settlement arises to the trustees and it is liable to be applied for the purposes mentioned in the deed.
The income has to be applied for satisfaction of debts which the settlor was under a obligation to discharge.
but that is not to say that there is a provision for retransfer of the income or assets to the settlor, or that the settlor is invested with power to reassume the income or assets.
The assets and the income are unmistakably impressed with the obligations arising out of the deed of trust.
The settlor it is true obtains benefit from the trust consequent upon satisfaction of his liability, but on that account the first proviso is not attracted.
We are unable to accept the argument of counsel for the revenue that by the use of the expression "indirectly" in the first proviso the Legislature sought to bring within the purview of el.
(c) cases where the settler was under the guise of a trust seeking to discharge his own liability.
The proviso contemplates cases in which there is a provision for retransfer of the income or assets and such provision is for retransfer directly or indirectly.
It also contemplates cases where there is a provision which confers a right upon the settlor to reassume power over the income or assets directly or indirectly.
It is the provision for retransfer directly or indirectly of income or assets or for reassumption of power directly or indirectly over income or assets which brings the case within the first proviso.
Cases in which there is a settlement, but there is no provision in the settlement for retransfer or right to reassume power do not fail within the proviso, even if as a result of the settlement, the settler obtains a benefit.
It has been held in two cases decided by the High Court of Bombay that a person under an obligation arising out of his status 691 may execute a trust to discharge his own obligation without attracting the operation of section 15(1)(c).
In Ramji Keshavji vs Commissioner of Income tax, Bombay(1) under a consent decree.
the assessee executed a deed of trust conveying certain properties for the benefit of his wife.
to the trustees.
The deed provided that the net income from the properties shall be paid to the assessee 's wife during her lifetime and that she shall maintain her minor children by the assessee anal "run the household".
It was held by the High Court that the income derived from the trust property and payable to the assessee 's wife during her lifetime could not be deemed to be the assessee 's income, for the direction in the deed did not amount to a provision for retransfer of the income or assets or for reassumption of power directly or indirectly over income or assets within the meaning of the first proviso to section 16(1)(c).
In D.R. Shahapure vs Commissioner of Income tax, Bombay(2) the assessee with the object of making a provision for his wife made an entry in his business books of account crediting Rs. 20,000/ , and endorsed against the entry.
"The capital supplied to you will remain entirely mine but you will get the income over it up to the end of your life.
This capital I will not take back up to the end of your life but I will do business for you on this capital and see that you get Rs. 600 per annum for you".
No specific assets were set apart to.
meet the sum of Rs. 20,000/ and there were no other entries in the books with regard to it.
The High Court held that the entry was an irrevocable covenant to pay the income accruing on Rs. 20,000/ with a guarantee that it shall be Rs. 600 a year, and therefore the case was covered by the third proviso to section 16(1) (c) of the Act and the income which was paid to the wife under the covenant could not be deemed to be the income of the assessee under the first part of section 16(1)(c).
In our view these cases were correctly decided.
The appeals fail and are dismissed with costs.
One hearing fee.
Appeals dismissed.
(1) (1945)13 I.T.R.105.
| Managing Agency Compensation for termination of Circumstances in which such compensation is revenue.
The respondent, a private limited company, carried on business in tobacco and other commodities and also acted as managing agents for the N company and for two other companies.
It had three directors, all of whom were paid a fixed remuneration for attending to the business of the company.
On June, 21, 1951, the respondent company was appointed an agent of the Central Government for buying, checking, leaf drying, and retaining and reselling tobacco under, and in accordance with, directions issued from time to time.
On June 22 1951 the respondent passed a resolution placing one of the directors, A, in "special charge" of all the work under the contract with the Central Government and agreed to pay him 30 per cent of the net profits from the contract.
Under this arrangement, for the year ended 31st March 1952, commission at 30 per cent was calculated and paid to A and was claimed in the assessment year 1952 53 as a permissible deduction under section 10(2)(xv) of the Income tax Act, 1922.
The Income tax Officer allowed only 10 per cent of the net profit for the services rendered by A and disallowed the balance :amount claimed by the respondent.
The managing agency agreement of the respondent with the N Company was terminated in September 1 '951, when the State Government acquired the undertaking of that company, and the respondent was paid Rs. 17,346 as compensation for premature termination of its agency.
This amount was taken into account by the Income tax Officer in computing the respondent 's income for the year ended March 31, 1952.
Appeals against the order of the Income tax Officer to the Appellate Assistant Commissioner and to the Tribunal challenging the disallowance of part of the commission and inclusion of the compensation for termination of the managing agency were unsuccessful.
On a reference on both these points, the High Court decided them in the respondent 's favour.
HELD: (i) The contract with the Government was, for the respondent, an important contract requiring special attention by a person well acquainted with the practical details of the business.
If for such special services the management as prudent business men for advancing the interest of respondent bona fide regarded 30 per cent of the net profits as reasonable remuneration, the revenue authorities were not justified in reviewing that opinion and reducing the rate of remuneration.
[697B, C] 693 Where, on a consideration of the relevant materials the Appellate Tribunal is of the opinion that a particular remuneration is not bona fide, or is unreasonable, the High Court, in exercising its advisory jurisdiction, has no power to interfere with that opinion; but in the present case, material circumstances relating to the nature of the contract and the special services to be performed were not at all taken into account by the revenue authorities.
[697C E] (ii) Ordinarily, compensation for loss of office or agency.
is regarded as a capital receipt; but this rule is subject to an exception that payment received even for termination of an agency agreement, where the agency is one of many which the assessee bolds, and the termination of the agency does not impair the profit making structure of the assessee, but is within the frame work of the business, it being a necessary incident of the business that existing agencies may be terminated and fresh agencies may be taken, is revenue and not capital.
However, in the absence of evidence as to what effect the determination of the managing agency of the N company had upon the business of the respondent, the mere circumstance that the respondent had managing agencies of two other companies without more would not bring the present case within the exception [698H; 699 A c] Kelsal Parsons & Co. vs Commissioners of Inland Revenue, 21T.C. and Kettlewell Bullen & Co.
C.I.T. Calcutta, explained and distinguished.
|
ivil Appeal No. 11 29 of 1981.
(Appeal by special leave from the judgment and order dated the 12th March, 1981 of the Calcutta High Court in Matter No. 2829 of 1981.
AND CIVIL APPEAL No. 1130 OF 1981 (Appeal by special leave from the judgment and order dated the 5th March, 1981 of the Calcutta High Court in Matter No. 2829 of 1980) Somnath Chatterjee, M. Ramamurthi, section C. Birla, for the Appellants in C.A. 1129/81 and C.A. 1130/81 128 A.R. Sen, (For r.1 in C.A. 1130/81) section section Ray, (For r.2 in CA.
1130/81), Kapil Sibal, (For r.1 in C. A. 1129/81), B. Gupta & T.R. Bose, (for r.1 in CA.
1130/81) and Rathin Das with them.
S.S. Ray, (For r. 6), Tarun Kumar Bose, D. Mandal, Miss Bina Gunpta & O.P. Khaitan with him for Respondents Nos. 5 & 6 in the Appeals.
K. L. Hathi & Mrs. H. Wahi for the Intervener Mrs. Sarla Sahedad Puri.
The following judgments were delivered: CHANDRACHUD, C. J.
My learned Brother A.N. Sen has dealt fully with the various points argued before us.
I agree respectfully with his judgment, but desire to add a few words in view of the importance which this matter has acquired by reason of the immense circulation of 'black money ' clearly and almost concededly involved in the affairs of the firm which is facing a prosecution.
These appeals by special leave arise out of the judgment dated March 5, 1981 of a learned single Judge of the Calcutta High Court in Matters Nos.
2829 of 1980 and 37 of 1981.
The appeals are, in substance, by the State of West Bengal while the contesting respondents are a firm called 'Sanchaita Investments ' and its three partners, Swapan Kumar Guha, Sambhu Prasad Mukherjee and Beharilal Murarka.
The two Matters in the Calcutta High Court were in the nature of writ petitions under article 226 of the Constitution which were filed by the firm and its partners for quashing an investigation commenced against the firm.
Allowing the writ petitions, the High Court issued a writ of Mandamus directing the State Government and its concerned officers to "forthwith recall, cancel and withdrew the First Information Report . and all proceedings taken on the basis thereof", since the searches, seizures and arrests made in pursuance of the said F.I.R. are, according to the High Court, illegal and without jurisdiction.
It has directed that the books, documents and moneys seized during the search be returned to the firm and its partners, including a sum of Rs. 52,11,930.
The short question for consideration in these appeals by special leave is whether the F.I.R. Lodged by the commercial Tax officer, 129 Bureau of Investigation, against the firm and its partners discloses an offence under section 3 of "The ", 43 of 1978.
The Act, which was passed by the Parliament, came into force on December 13, 1978 and the two years ' period allowed by section 12 for winding up every kind of business relating to Prize Chits and Money Circulation Schemes expired on December 12, 1980.
The F.I.R. , which was lodged the next day on December 13.
reads thus: "To The Deputy Superintendent of Police, Bureau of Investigation, 10, Madan Street, Calcutta 72.
Sir, On a secret information that 'Sanchaita Investments ' of 5 6, Fancy Lane, Calcutta, is carrying on business of promoting and/or conducting prize chit and/or money circulation scheme enrolling members of such chit and/or scheme, participating in those, and/or receiving and remit ting monies in pursuance of such chits and/or scheme in violation of the provisions of the Prize Chits and Money (Circulation Schemes (Banning) Act, 1978, inquiry was held secretly to verify correctness or otherwise of the aforesaid secret information.
Enquiry reveals that the said 'Sanchaita Investments ' is a partnership firm, partners being Shri Bihari Prasad Murarka, Shri Sambhu Mukherjee and Shri Swapan Kumar Guha and that it was floated in or around 1975.
Enquiry further reveals that the said firm had been offering fabulous interest @ 48% per annum to its members until very recently.
The rate of interest has of late been reduced to 36% per annum.
Such high rates of interest were and are being paid even though the loan certificate receipts show the rate of interest to be 12% only.
Thus, the amount in excess of 12% so paid clearly shows that the 'Money Circulation Scheme ' is being promoted and conducted for the making of quick and/or easy money.
Prizes and/or gifts in cash were and are also awarded to agents, promoters and members too.
130 In view of the above, Sarvashri Bihari Prasad Murarka, Sambhu Mukherjee and Swapan Kumar Guha appear to have been carrying on business in the trade name of Sanchaita Investments ' in prize chits and money circulation scheme in violation of section 3 of the Prize Chits and Money Circulation Schemes l,(Banning) Act, 1978 and are therefore, punishable under section 4 of the said Act.
Necessary action may therefore, be kindly taken against the aforesaid offenders along with other accomplices as provided in the law.
Yours faithfully, Sd/ Commercial Tax officer, Bureau of Investigation.
" Section 4 of the Act provides that whoever contravenes the provisions of section 3 shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees, or with both, provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees.
Though the F.I.R. is riddled with the "and/or" clauses more appropriate in deeds of conveyancing, it is clear firm its tenor and is common ground that the gravamen of the accusation against the accused is that they are conducting a 'money circulation scheme '.
The reference in the F.I.R. to 'prize chits ' rejects but a common human failing to err on the safe side and the notorious effort of draftsmen to embrace as much as possible so that no argument may be shut out for want of pleading.
Since the sole question for consideration arising out of the F.I.R., as laid, is whether the accused are conducting a money circulation scheme, it is necessary to understand what is comprehended within the statutory meaning of that expression.
Section 2(c) of the Act provides: " 'Money circulation scheme ' means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing 131 as the consideration for a promise to pay money, on any A event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions.
" Grammar and punctuation are hapless victims of the pace of life and I prefer in this case not to go merely by the commas used in clause (c) because, though they seem to me to have been placed both as a matter of convenience and of meaningfulness, yet, a more thoughtful use of commas and other gadgets of punctuation would have helped make the meaning of the clause clear beyond controversy.
Besides, how far a clause which follows upon a comma governs every clause that precedes the comma is a matter not free from doubt.
I, therefore, consider it more safe and satisfactory to discover the true meaning of clause (c) by having regard to the substance of the matter as it emerges from the object and purpose of the Act, the context in which the expression is used and the consequences necessarily following upon the acceptance of any particular interpretation of the provision, the contravention of which is visited by penal consequences.
Commas or no commas, and howsoever thoughtfully one may place them if they are to be there, I find it impossible to take clause (c) to mean that any and every activity "for the making of quick or easy money" is comprehended within its scope.
For the matter of that, I cannot believe any law to ban every kind of activity for making quick or easy money, without more, on pain of penal consequences.
It is far too vague and arbitrary to prescribe that "whosoever makes quick or easy money shall be liable to be punished with fine or imprisonment".
For then, in the absence of any demarcation of legitimate money making activities from those which fall within the ban, the question whether the penal provision is attracted in a given case will depend upon the will and temper, sweet or sour, of the magistracy.
Besides, speaking of law and morals, it does not seem morally just or proper to say that no person shall make quick or easy money, especially quick.
A person who makes quick money may do so legitimately by the use of his wits and wisdom and no moral turpitude may attach to it.
One need not travel after to find speaking examples of this.
Indeed, there are honourable men (and now women) in all professions re 132 cognised traditionally as noble, who make quite quick money by the use of their talents, acumen and experience acquired over the years by dint of hard work and industry.
A lawyer who charges a thousand rupees for a Special Leave Petition lasting five minutes (that is as far as a Judge 's imagination can go), a doctor who charges a couple of thousands for an operation of tonsillitis lasting ten minutes, an engineer, an architect, a chartered accountant and other professionals who charge likewise, cannot by any stretch of imagination be brought into the dragnet of clause (c) Similarly, there are many other vocations and business activities in which, of late, people have been notoriously making quick money as, for example, the builders and real estate brokers.
I cannot accept that the provisions of clause (c) are directed against any of these J categories of persons.
I do not suggest that law is powerless to reach easy or quick money and if it wills to reach it, it can find a way to do it.
But the point of the matter is that it will verge upon the ludicrous to say that the weapon devised by law to ban the making of quick or easy money is the provision contained in section 2(c) of the "".
In order to give meaning and content to the definition of the expression 'money circulation scheme ' which is contained in section 2(c) of the Act, one has, therefore, to look perforce to the adjectival clause which qualifies the words "for the making of quick or easy money".
What is within the mischief of the Act is not "any scheme, by whatever name called, for the making of quick or easy money" simpliciter, but a scheme for the making of quick or easy money, "on any event or contingency relative or applicable to the, enrollment of members into the scheme", (whether or not such money or thing is derived from the entrance money of the members of such scheme or their periodical subscriptions).
Two conditions must, therefore, be satisfied before a person can be held guilty of an offence under sec.
4 read with secs.
3 and 2(c) of the Act.
In the first place, it must be proved that he is promoting or conducting a scheme for the making of quick or easy money and secondly, the chance or opportunity of making quick or easy money must be shown to depend upon an event or contingency relative or applicable to the enrollment of members into that scheme.
The legislative draftsman could have thoughtfully foreseen and avoided all reasonable controversy over the meaning of the expression 'money circulation scheme ' by shaping its definition in this form: 133 'money circulation scheme ' means any scheme, by whatever name called, (i) for the making of quick or easy money, or (ii) for the receipt of any money or valuable thing as the consideration for a promise to pay money, B On any event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription; I have reshaped the definition, in order to bring out its meaning clearly, without adding or deleting a single word or comma from the original text of section 2 (c).
The substance of the matter is really not in doubt: only the form of the definition is likely to create some doubt as to the meaning of the expression which is n defined and, therefore, I have made a formal modification in the definition without doing violence to its language and indeed, without even so much as altering a comma.
There is another aspect of the matter which needs to be underscored, with a view to avoiding fruitless litigation in future.
Besides the prize chits, what the Act aims at banning is money circulation schemes.
It is manifestly necessary and indeed, to say so is to state the obvious, that the activity charged as falling within the mischief of the Act must be shown to be a part of a scheme for making quick or easy money, dependent upon the happening or non happening of any event or contingency relative or applicable to the enrollment of members into that scheme.
A 'scheme, ' according to the dictionary meaning of that word, is 'a carefully arranged and systematic program of action ', a 'systematic plan for attaining some object ', 'a project '. 'a system of correlated things '.
(see Webster 's New World Dictionary, and Shorter oxford English Dictionary, Vol.
II), The Systematic programme of action has to be a consensual arrangement between two or more persons under which, the subscriber agrees to advance or lend money on promise of being paid more money on the happening of any event or contingency relative or applicable to the enrollment of members into the programme.
Reciprocally, the person who promotes or con ducts the programme promises, on receipt of an advance or loan, 134 to pay more money on the happening of such event or contingency.
Therefore, a transaction under which, one party deposits with the other or lends to that other a sum of money on promise of being paid interest at a rate higher than the agreed rate of interest cannot, without more, be a 'money circulation scheme ' within the meaning of section 2 (c) of the Act, howsoever high the promised rate of interest may be in comparison with the agreed rate.
What that section requires is that such reciprocal promises, express or implied, must depend for their performance on the happening of an event or contingency relative or applicable to the enrollment of members into the scheme.
Ir; other words, there has to be a community of interest in the happening of such event or contingency.
That explains why section 3 makes it an offence to "participate" in the scheme or to remit any money "in pursuance of such scheme".
He who conducts or promotes a money spinning project may have manifold resources from which to pay fanciful interest by luring the unwary customer.
But, unless the project envisages a mutual arrangement under which, the happening or non happening of an event or contingency relative or applicable to the enrollment of members into that arrangement is of the essence, there can be no 'money circulation scheme ' within the meaning of section 2 (c) of the Act.
Numerous persons lend their hard earned monies in the hope of earning high returns.
It is notorious that, eventually, quite a few of them lose both the principal and the interest, for no project can succeed against the basic laws of economics.
Sharp and wily promoters pay A 's money to and B 's to in order to finance interest at incredible rates, and eventually, then high risk investment made by them at the cost of the credulous lenders fails, the entire arrangement founders on the rock of foolish optimism.
The promoters, of course, have easy recourse to gadgets of the law of insolvency.
It is difficult to hold that the lender, himself a victim of the machinations of the crafty promoter, is intended by the Act to be arraigned as an accused.
I do not think that any civilised law can intend to add insult to injury.
The question as to whether the First Information Report prima facie discloses an offence under section 4 read with section 3 of the Act has to be decided in the light of these requirements of section 2 (c) of the Act.
I have already reproduced in extenso the F.I.R. Lodged by the Commercial Tax officer, Bureau of Investigation.
Analysing it carefully, and even liberally, it makes the 135 following allegations against the firm 'Sanchaita Investments ' and its three partners: (1) The firm had been offering fabulous interest (48% per annum to its members, which rate of interest was later reduced to 36% per annum; (2) Such high rate of interest was being paid even though the loan certificate receipts show that interest was liable to be paid at the rate of 12% per annum only; and (3) The fact that interest was paid in excess of 12% shows clearly that a 'Money Circulation Scheme ' was being promoted and conducted for the making of quick or easy money.
It seems to me impossible to hold on the basis of these allegations that any offence can be said to be made out prima facie under section 3 of the Act.
In the first place, the F.I.R. does not allege, directly or indirectly, that the firm was promoting or conducting a scheme for the making of quick or easy money, dependent on any event or contingency relative or applicable to the enrollment of members into the scheme.
Secondly, the F.I.R. does not contain any allegation whatsoever that persons who advanced or deposited their monies with the firm were participants of a scheme for the making of quick or easy money, dependent upon any such event or contingency.
The F.I.R. bears on its face the stamp of hurry and want of care.
It seems to assume, what was argued before us by Shri Som Nath Chatterjee on behalf of the prosecution, that it is enough for the purposes of section 2 (c) to show that the accused is promoting or conducting a scheme for the making of quick or easy money, an assumption which I have shown to be fallacious.
An essential ingredient of section 2 (c) is that the scheme for making quick or easy money must be dependent on any event or contingency relative or applicable to the enrollment of members into the scheme.
A First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied, cannot form the foundation or constitute the starting point of a lawful investigation.
In answer to the writ petitions filed by the accused in the Calcutta High Court, affidavits were filed on behalf of the pro 136 secuting agency, which do not improve matters in any way.
The affidavit filed by Arun Kanti Roy, Deputy Secretary, Finance Department, Government of West Bengal, alleges that: (i) The actual payment of a very high rate of interest against the professed rate of 12% attracted huge amounts of idle money into circulation .
(ii) The investment of money as collected is not under the regulatory control of the Reserve Bank of India or any other agency of the State dealing with credit control in relation to the country 's economy; (iii) The pooling of the purchasing power and the financial resources and the unfettered deployment thereof have resulted in the concentration of tremendous economic power in the hands of a few, posing a potential threat to the equilibrium of the country 's economy; (iv) The entire process is speculative in nature and directed towards luring away the investing public to the speculative market for making quick and easy money; (v) The very basis of the so called contractual arrangement between the firm and its depositors is founded on the fraudulent device to assure to the people a high rate of interest, the major portion of which is paid through unaccounted for money, thereby encouraging the growth of such unaccounted money in the hands of the investing public; (vi) The professed rate of interest is a mere subterfuge to provide a cloak of bona fides and legality to the under hand transactions, through which unaccounted for money comes into play in the market generating further unaccounted for money, a part whereof goes back to the depositors in the form of the balance of interest over 12% paid in cash, month by month; (vii) The firm did not have enough income or resources so as to be able to pay interest at such high rates; (viii) The irresistible conclusion, therefore, is that interest was being paid out of the capital itself; 137 (ix) "The depositor becomes a member of the investment scheme of the firm by subscribing to it and the payment of the quick and easy money by way of high rate of interest is dependent upon the period of investment and/or efflux of time which are very much relative and/or applicable to the membership of the depositors of the scheme to which the depositor agrees to subscribe"; and (x) In the process of its working, the scheme of the firm generates quick and easy money so as to render such scheme or arrangement a 'money circulation scheme ' within the meaning of the Act.
The Assistant Commissioner of Police Shri Sunil Kumar Chakravarty has adopted these pleas and statements in his own affidavit It is clear from these averments that even at the stage when the State of West Bengal and its concerned officers submitted detailed affidavits to the High Court, there was no clear basis for alleging and no material was disclosed to show that, prima facie, the firm was promoting or conducting a scheme for making quick or easy money which was dependent upon an event or contingency relative or applicable to the enrollment of members into that scheme.
The burden of the State 's song is that the scheme conducted by the accused generates black money and will paralyse the economy of the country.
These are serious matters indeed and it is unquestionable that a private party cannot be permitted to issue bearer bonds by the back door.
The fact that the accused are indulging in an economic activity which is highly detrimental to national interests is a matter which must engage the prompt any serious attention of the State and Central Governments.
But the narrow question for our consideration is whether on the basis of the allegations made against the accused, there is reason to suspect that they are guilty of an offence under section 4 read with sections 3 and 2 (c) of the Act.
The allegation which we have reproduced in clause (ix) above from the affidavit of Arun Kanti Roy is the nearest that can be considered relevant for the purpose of section 2 (c) of the Acts.
But even that allegation does not meet the requirement of that section since, what it says is that "the payment of quick and easy money by way of high rate of interest is dependent upon the period 138 of investment and/or efflux of time which are very much relative and/or applicable to the membership of the depositors of the scheme to which the depositor agrees to subscribe".
This is too tenuous to show that the scheme is dependent upon an event or contingency of the description mentioned in section 2(c), apart from the fact that the only participation which is alleged as against the depositors is that they become members of the "investment scheme" by subscribing to it.
There is no allegation even in any of the affidavits filed on behalf of the State of West Bengal and its concerned officers that the depositors and the promoters are animated by a community of interest in the matter of the scheme being dependent upon any event or contingency relative or applicable to the enrollment of members into it.
That being an essential ingredient of the offence charged, it cannot be said in the absence of any allegation whatsoever in that behalf, that there is "reason to suspect" the commission of that offence within the meaning of section 157 of the Code of Criminal Procedure, so as to justify the investigation undertaken by the State authorities.
My learned Brother, A.N. Sen J., has considered exhaustively the various authorities cited at the Bar by both the sides on the question as to the power of the courts to quash an investigation.
I fully concur with his careful analysis of those authorities and would content myself with a broad indication of the trend of law bearing on the subject.
Shri Ashok Sen and Shri Siddhartha Shankar Ray pressed upon us with considerable insistence the principle reiterated in W.H. King vs Republic of India, (that a statute which creates an offence and imposes a penalty of fine and imprisonment must be construed strictly in favour of the subject.
The principle that no person can be put in peril of his life and liberty on an ambiguity is well established.
But, as observed in M. V. Joshi vs M.U. Shimpi when it is said that penal statutes must be construed strictly, what is meant is that the court must see that the thing charged is an offence within the plain meaning of the words used and it must not strain the words: "To put it in other words, the rule of strict construction requires that the language of a statute 139 should be so construed that no case shall be held to fall within it which does not come within the reasonable interpretation of the statute", and that in case of doubt, the construction favourable to the subject should be preferred.
But I do not think that this rule of strict interpretation of penal statutes in any way affects the fundamental principle of interpretation, that the primary test which can safely be applied is the language used in the Act and, therefore, when the words are clear and plain, the court must accept the expressed intention of the Legislature.
It is unnecessary to pursue this matter any further in view of the fact that the language of section 2(c) is, in my opinion, clear and admits of no doubt or difficulty.
In R.P. Kapur vs The State of Punjab, the question which arose for consideration was whether a first information report can be quashed under section 561 A of the Code of Criminal Procedure.
The Court held on the facts before it that no case for quashing the proceedings was made out but Gajendragadkar J., speaking for the Court observed that though ordinarily, criminal proceedings instituted against an accused must be tried under the provisions of the Code, there are some categories of cases where the inherent jurisdiction of the Court can and should be exercised for quashing the proceedings.
One such category, according to the Court, consists of cases where the allegations in the F.I.R. Or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases, no question of appreciating evidence arises and it is a matter merely of looking at the F.I.R.
Or the complaint in order to decide whether the offence alleged is disclosed or not.
In such cases, said the Court, it would be legitimate for the High Court to hold that it would be manifestly unjust to allow the process of the criminal court to be issued against the accused.
In S.N. Sharma vs Bipen Kumar Tiwari, a first information report was lodged naming an Additional District Magistrate (Judicial) as the principal accused.
His application under section 159 of the Criminal Procedure Code asking that the Judicial Magistrate should himself conduct a preliminary inquiry was dismissed, but the Court observed that though the Code of Criminal 140 Procedure gives to the police unfettered power to investigate all cases where they suspect that a cognizable offence has been committed, in appropriate cases, an aggrieved person can always seek a remedy by invoking the power of the High Court under article 226 of the Constitution and that the High Court could issue a writ of mandamus restraining the police from misusing their legal powers.
Shri Som Nath Chatterjee has placed great reliance on the decision of this Court in State of West Bengal vs S.N. Basak, in which it was held that the statutory powers given to the police under sections 154 and 156 of the Code of Criminal Procedure to investigate into the circumstances of an alleged cognizable offence without authority from a Magistrate cannot be interfered with by the exercise of powers under section 439 or under the inherent powers conferred by section 561 A of the Code.
It must be remembered that no question arose in that case as to whether, the allegations contained in the F.I.R. disclosed any offence at all.
The contention of the accused in that case was that the statutory power of investigation given to the police under Chapter XIV of the Code is not available in respect of an offence triable under the West Bengal Criminal Law Amendment (Special Courts) Act 1949 and that being so, the investigation undertaken by the police was without jurisdiction.
That contention was negatived and, therefore, the application filed by the accused under sections 439 and 561A of the Code was dismissed .
In Jehan Singh vs Delhi Administration, the application filed by the accused under section 561 A of the Code for quashing the investigation was dismissed as being premature and incompetent, but that was because the Court found (per Sarkaria J. page 797) that prima facie, the allegation in the F.I.R., if taken as correct, disclosed the commission of a cognizable offence by the accused.
The only other decision to which I need refer is that of the Privy Council in King Emperor vs Kawaja Nazir Ahmad, which constitutes, as it were, the charter of the prosecution all over for saying that no investigation can ever be quashed.
In a passage oft 141 quoted but much misunderstood, Lord porter, delivering the opinion of the Judicial Committee, observed; "In their Lordships ' opinion, however, the more serious aspect of the case is to be found in the resultant interference by the court with the duties of the police.
Just as it is essential that every one accused of a crime should have free access to a court of justice so that he may be duly acquitted if found not guilty of the offence with which he is charged, so it is of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes on them the duty of inquiry.
In India, as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the court.
The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the court to intervene in an appropriate case when moved under section 491 of the Criminal procedure Code to give directions in the nature of habeas corpus.
In such a case as the present, however, the court 's functions begin when a charge is preferred before it, and not until then. ' (pp. 212 213) I do not think that this decision supports the wide proposition canvassed before us by Shri Som Nath Chatterjee.
In the case before the Privy Council, similar charges which were levelled against the accused in an earlier prosecution were dismissed.
The High Court quashed the investigation into fresh charges after examining the previous record, on the basis of which it came to the conclusion that the evidence against the accused was unacceptable.
The question before the Privy Council was not whether the fresh F.I.R. disclosed any offence at all.
In fact, immediately after the passage which I have extracted above, the Privy Council qualified its statement by saying; 142 "No doubt, if no cognizable offence is disclosed, and still more, if no offence of any kind is disclosed, the police would have no authority to undertake an investigation.
" If anything, therefore, the judgment shows that an investigation can be quashed if no cognizable offence is disclosed by the F.I.R. It shall also have been noticed, which is sometimes overlooked, that the Privy Council took care to qualify its statement of the law by saying that the judiciary should not interfere with the police in matters which are within their province.
It is surely not within the province of the police to investigate into a Report which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases.
The position which emerges from these decisions and the other decisions which are discussed by Brother A.N. Sen is that the condition precedent to the commencement of investigation under section 157 of the Code is that the F.I.R. must disclose, prima facie, that a cognizable offence has been committed.
It is wrong to suppose that the police have an unfettered discretion to commence investigation under section 157 of the Code.
Their right of inquiry is conditioned by the existence of reason to suspect the commission of a cognizable offence and they cannot, reasonably, have reason so to suspect unless the F.I.R., prima facie, discloses the commission of such offence.
If that condition is satisfied, the investigation must go on and the rule in Khwaja Nazir Ahmed (supra) will apply.
The Court has then no power to stop the investigation, for to do so would be to trench upon the lawful power of the police to investigate into cognizable offences.
On the other hand, if the F.I.R. does not disclose the commission of a cognizable offence, the Court would be justified in quashing the investigation on the basis of the information as laid or received.
There is no such thing like unfettered discretion in the realm of powers defined by statutes and indeed, unlimited discretion in that sphere can become a ruthless destroyer of personal freedom.
The power to investigate into cognizable offences must, therefore, be exercised strictly on the condition on which it is granted by the Code.
I may, in this behalf, usefully draw attention to the warning uttered by Mathew J. in his majority judgment in Prabhu Dayal Deorah vs The District Magistrate, Kamrup to the following effect: 143 "We say, and we think it is necessary to repeat, that the gravity of the evil to the community resulting from anti social activities can never furnish an adequate reason for invading the personal liberty of a citizen, except in accordance with the procedure established by the Constitution and the laws.
The history of personal liberty is largely the history of insistence on observance of procedure.
Observance of procedure has been the bastion against wanton assaults on personal liberty over the years.
Under our Constitution, the only guarantee of personal liberty for a person is that he shall not be deprived of it except in accordance with the procedure established by Law.
" For these reasons, which, frankly, are no different from those given by my learned Brother A.N. Sen, I am of the opinion that the investigation which has been commenced upon the First Information Report is without jurisdiction and must, therefore, be quashed.
I do accordingly and direct that no further investigation shall take place in pursuance.
Or on the basis of the F.I.R. dated December 13, 1980 lodged by the Commercial Tax Officer, Bureau of Investigation, with the Deputy Superintendent of Police, Bureau of Investigation, Madan Street, Calcutta.
I am free to confess that it is with considerable regret that I have come to the conclusion that the investigation must be quashed.
If the State authorities had applied their mind carefully to the requirements of section 2 (c) of the Act, this appeal might have had a different story to tell, the bare outlines of which I must now proceed to narrate.
The firm 'Sanchaita Investments ' commenced its business on July 1, 1975, its three partners contributing a total capital of Rs. 7000 (Rupees seven thousand).
On December 25, 1978 an advertisement appeared in the "Hindu" in the name of firm, claiming falsely that its business was "approved by the Reserve Bank of India".
Since the representation was likely to mislead the public, the Reserve Bank advised the firm in May 1979 too issue a suitable corrigendum, which the firm did.
On July 6, 1979, Shri Rudolph L. Rodrigues a Member of the Lok Sabha, wrote a confidential letter to Shri Charan Singh, the then Deputy Prime Minister, complaining that the business of the firm 144 was "a cover up for a parallel banking system for black money".
A copy of Shri Rodrigues ' letter was forwarded by the Director, Department of Economic Affairs, Ministry of Finance, to the Chief Officer, Department of Non Banking Companies, Reserve Bank of India, Calcutta, for inquiry.
By his letter dated August 7, 1979 the Chief officer pointed out the difficulty in directing investigation into the affairs of the firm since, its capital being less than Rs. One lakh, it did not come within the definition of a Non Banking institution as provided in section 54 (c) of the .
On September 13, 1980 the Deputy Secretary Finance Department Government of West Bengal, wrote a letter to the Chief Officer requesting him to examine the question whether the business of the firm came within the purview of the prize Chits and Money Circulation Schemes (Banning) Act, 1978 and if not, under which Act the affairs of the firm could be regulated.
On October 1, 1980, Shri Ashok Mitra, Finance Minister for the State of West Bengal, wrote a letter to Shri Venkataraman, Finance Minister to the Government of India, complaining that the firm was involved in high risk investments and that large amounts of public moneys were kept in deposit with the firm, which were not subjected to any regulatory control.
The letter of Shri Ashok Mitra appears to have been handed over informally to Dr. K.S. Krishnaswamy, Deputy Governor of the Reserve Bank, who, by his reply dated October 22, 1980, informed Shri Mitra that the legal department of the Reserve Bank was of the opinion that the mere acceptance of loans by the firm would not ordinarily be covered by the .
There was further correspondence on the subject between the authorities of the Government of India and the State Government, but nothing came out of it.
The Act came into force on December 13, 1978 and immediately on the expiry of the two years ' period of grace allowed by it, the F.I.R. was lodged against the firm on December 13, 1980.
On that day, the office of the firm at 5 6, Fancy Lane, Calcutta, was searched by the police, during the course of which a sum of Rs. 42,16,530 (Rupees forty two lacs, sixteen thousand, five hundred and thirty) was recovered.
The amount was tied in separate bundles of notes of different denominations.
Several books of accounts were also seized during the search.
145 On the same date, a search was carried out at the residence of Shambbu Prasad Mukherjee, a partner of the firm, when the following articles were seized: (1) One pass book of Syndicate Bank, Gariahat Branch, Calcutta, in the name of "Apcar Ave Toon", 9, Royd Street, Calcutta 17.
(The account was in a fictitious name and the pass book shows that a sum of Rs. Twenty eight crores was lying in credit in that account).
(2) A sum of Rs. 9,95,000 (Rs. nine lacs ninety five thousand) tied in separate bundles of notes of the denomination of Rs. 100 and 50.
(3) A country made 6 chamber revolver, with one bullet inside.
From the house of another partner, Biharilal Murarka, certain account books were seized.
During the course of investigation until January 8, 1981 when it was stopped by an order of this Court, as many as eighty places were searched by the police and a large number of documents were seized.
It is apparent from these documents that the firm was paying to its depositors interest at the rate of 48 per cent upto September 1979 and 36 per cent thereafter for a short period.
The interest was paid to each depositor every month by the agents who called on each depositor personally for that purpose.
The interest in excess of 12 per cent was invariably paid in cash.
The on coming elections to legislative bodies in 1980 appear to have led to reduction in the rate of interest, since the firm 's circulating capital was needed by "political parties".
Which parties, I do not know, but this much is fairly certain from the facts which have emerged before us that the funds available to the firm were diverted frequently for the use of political parties.
Certain lists of agents were seized during the investigation which show that Code numbers were assigned to at least 84 of them.
The agents have acquired large properties at various places, consisting of lands, apartments, cars etc.
Some of the agents have started new business activities.
146 A staggering revelation which came to light as a result of the searches at the office of the firm is that, as of September 1, 1980, the firm was holding deposits to the tune of Rs. 73,51,23,000 (Rupees seventy three crores, fifty one lacks, twenty three thousand and five hundred).
These deposits were received by the firm from persons drawn from all parts of the country, the pride of place belonging to Calcutta, Bombay, Delhi, Madras and Hyderabad.
Remittances also appear to have been received by the firm from overseas clients.
A compilation prepared by the State authorities in pursuance of an interim order passed by this Court shows that the total amount of deposits made by persons who had deposited a sum of Rs. 10,000 or less each comes to Rs. 11,49,40,950 (Rupees eleven crores, forty nine lacs, forty thousand, nine hundred and fifty).
The documents relating to the account in the fictitious name of "Apcar Ave Toon" show that a person alleged to bear that name was introduced to the Syndicate Bank, Gariahat Branch, Calcutta by the firm 's partner Sambhu Prasad Mukherjee.
The pass book relating to the account (Current Account No. 210) shows that the account was opened with a cash deposit of Rs. 28 lacs.
A total sum of Rupees twenty seven crores, ninety seven lacs eighty six thousand and odd was deposited in that account until December 6,1980, all deposits being in cash.
Such cash deposits varied often between 50 to 80 lacs at a time.
The amount of nearly Rs. 28 crores was withdrawn from the account steadily from November 11, 1980.
The account was closed on December 6, 1980, that is, a week before the F.I.R. was lodged on December 13, 1980.
Some of the entries in the pass book do not tally with the Bank 's Ledger.
A study of Current Account No. S 5O2 in the name of the firm with the United Bank of India, High Court Branch, Calcutta, shows that the firm had invested several lacs of rupees in various concerns numbering about forty.
Lacs of rupees have been transferred by the firm to various concerns.
Documents seized from the office premises of the firm show that the partners and their family members are insured with the L.I.C. in heavy amounts.
They have acquired large properties, particularly in Bombay.
147 Several offices and concerns in Bombay were searched by the police and interesting discoveries were made.
Their magnitude and variety are too large for the scope of this judgment.
I will close this narrative by saying that the income tax returns of Shambhu Prosad Mukherjee reveal that he had shown a sum of Rs. 8,00,000 as prizes received from Delhi Lotteries in 1979 and that the firm has not filed any income tax return after the financial year ending June 30, 1977.
It had asked for an extension of time on the ground that its accounts were not finalised but the Department rejected that prayer on December 9, 1980.
With further indulgence they have managed cleverly to secure is not yet known.
These facts disclose a bizzare state of affairs.
A token capital of Rs 7,000 has begotten a wealth of crores of rupees within a span of five years.
A bank account opened by the firm in a fictitious name had a sum of Rs. twenty eight crores in it, which was withdrawn within a week before the lodging of the F.I.R. Interest was being paid to depositors at the incredible rate of 48 p.c. p.a.
The firm had no ostensible source of income from which such exorbitant amounts could be paid and its account books, such as were seized from its head office, give no clue to its income or its assets.
The partners of the firm have become millionaires overnight.
Clerks and Chemists that they and some of their agents were in 1975, to day they own properties which will put a prince to shame.
"Rags to riches" is how one may justly describe this story of quick and easy enrichment.
There is no question that this vast wealth has been acquired by the firm by generating and circulating black money.
Indeed, rightly did Shri Ashok Sen appearing for the firm, ask us to be free to proceed on the assumption that the exorbitant amount of interest was being Paid from out of unaccounted money.
In these circumstances though I see no alternative save to stop all further investigation on the basis of the F.I.R. as laid, no offence being disclosed by it under section 4 of the Act, I am unable to accept the contention of Shri Ashok Sen that all documents, books papers and cash seized so far during the investigation should be returned to the firm and its partners forthwith.
The firm appears to be on the brink of an economic crisis, as any scheme of this nature is eventually bound to be.
Considering the manner in which the firm has manipulated its accounts and its affairs, I have no doubt that it will secret the large funds and destroy the incriminating documents if they are returned to it.
The State Government, 148 the Central Government and the Reserve Bank of India must be given a reasonable opportunity to see if it is possible, under the law, to institute an inquiry into the affairs of the firm and, in the mean while, to regulate its affairs.
I consider such a step essential in the interests of countless small depositors who, otherwise, will be ruined by being deprived of their life 's savings.
The big black money bosses will take any loss within their stride but the small man must receive the protection of the State which must see to it that the small dopositors are paid back their deposits with the agreed interest as quickly as possible.
I therefore direct that the documents, books, papers, cash and other articles seized during the investigation shall be retained by the police in their custody for a period of two months from to day and will be returned, on the expiry of that period, to persons from whom they were seized, subject to any lawful directions which may be given or obtained in the meanwhile regarding their custody and return.
With this modification, I agree respectfully with Brother A.N. Sen that the appeals be dismissed.
VARADARAJAN J.
I agree with the judgment and the final order proposed by the learned Chief Justice.
AMARENDRA NATH SEN, J.
This appeal by special leave has been filed by the State of West Bengal and three officers of the State against an order passed by a learned single Judge of the Calcutta High Court.
The facts material for the purpose of this appeal have been fully set out in the judgment of the learned single Judge of the Calcutta High Court.
The facts material for the purpose of this appeal may, however, be briefly indicated : Sanchaita Investments is a partnership firm duly registered under the Indian Partnership Act.
Sanchaita Investments (hereinafter referred to as the firm) has its principal place of business at Nos. 5 and 6 Fancy Lane, Calcutta.
Shambhu Prasad Mukherjee, Bihari Lal Murarka and Swapan Kumar Guha are the three partners of the Firm.
The capital of the partnership firm is Rs. 7,000/ .
The firm carries on the business as financiers and investors and in its business the firm accepts loans or deposits from the general public for different periods repayable with interest @ 12% per annum.
Under the terms of deposits, the depositors have a right to withdraw their deposits with the firm at any time before the expiry of the fixed 149 period of the deposit.
In case of premature withdrawal, the depositors however loses interest of 1% and is paid interest @ 11% per annum.
Under the terms and conditions of the deposits, the firm has also the liberty to repay the amount with interest to any depositor at any time before the expiry of the stipulated period of the deposit and in the event of such repayment by the firm, the firm is not required under the terms and conditions of the deposit or loan, to give any reason.
It appears that the firm has been carrying on its business on a very extensive scale.
In the year 1978, the Parliament passed an Act called the (hereinafter referred to as the Act).
On the 13th December, 1980, the Commercial Tax Officer, Bureau of Investigation, lodged a complaint of violation of the Act by the firm with the Police.
The F.I.R. has been set out in full in the judgment of the learned Trial Judge and the same reads as follows : " 13.12.1980 The Deputy Superintendent of Police, Bureau of Investigation, 10, Madras Street.
Calcutta 72 Sir, On a secret information that 'Sanchaita Investments ' of 5 and 6 Fancy Lane, Calcutta, is carrying on business of promoting and/or conducting prize chit and/or money circulation scheme enrolling members of such chit and/or scheme participating in these, and/or receiving and remitting monies in pursuance of such chits and/or scheme in violation of the provisions of the prize chits and money circulation scheme (Banning) Act, 1978.
Inquiry was held secretly to verify correctness or otherwise of the aforesaid secret information.
enquiry reveals that the said 'Sanchita Investments ' is a Partnership firm, partners being Shri Bihari Prasad Murarka, Shri Sambhu Mukherjee and Swapan Kumar Guha and that it was floated in or around 150 1975.
Enquiry further reveals that the said firm had been offering fabulous interest @ 48% per annum to its members until very recently.
The rate of interest has of late been reduced to 36% per annum.
Such high rates of interest were and are being paid even though the loan certificate receipts show the rate of interest to be 12% only.
Thus, the amount in excess of 12% so paid clearly shows that the 'Money Circulation Scheme ' is being promoted and conducted for the making of quick and/or easy money, prizes and/or gifts in cash were and are also awarded to agents, promoters and members too.
In view of the above, Saravsree Bihari Prasad Murarka, Sambhu Prasad Mukherjee and Swapan Kumar Guha appear to have been carrying on business in the trade name of 'Sanchaita Investments ' in prize chits and money circulation scheme in violation of section 3 of the Prize Chits and Money Circulation Scheme (Banning) Act, 1976 are therefore, punishable under section 4 of the said Act.
Necessary action may, therefore, be kindly taken against the aforesaid offenders along with other accomplice as provided in the law.
Yours faithfully Sd/ Illegible 13.12.1980 Commercial Tax Officer, Bureau of Investigation.
" On the 13th of December, two of the partners of the firm were arrested.
The office of the firm and also the houses of the partners were searched.
Various documents and papers were seized and a large amount of cash was also seized from the office and also from the residence of one of the partners.
Two partners who were arrested were, however, thereafter enlarged on bail.
The firm and its two partners, namely, Shambhu Prasad Mukherjee and Bihari Lal Murarka filed this writ petition in the High Court challenging the validity of the F.I.R. and the proceedings arising out of the same including the validity of the searches 151 and seizure of documents, papers and cash.
The respondents in the writ petition were six.
The first respondent was the State of West Bengal, Respondents No. 2 was the officer who had lodged the F.I.R. , Respondent No. 3 was the Assistant Commissioner of Police and Superintendent of Police, Bureau of Investigation, and respondent No. 4 was the Investigating officer in the cases pending before the Chief Metropolitan Magistrate Calcutta.
Respondent No. S was the Reserve Bank of India and Respondent No. 6 was the Union of India.
In brief the case made by the firm and its partners in the writ petition is that the firm is a non banking financial institution which carries on business of accepting deposits or loans from the general public on terms and conditions mentioned in the agreement of loan or deposit, pays interest to persons who invest or advance money to the firm in terms of the agreement between the parties and repays all amounts received from the parties with interest in terms of the agreement between the parties.
The further case made by the writ petitioners in the writ petition is that the amounts which they receive from parties are reinvested by them and out of the investments made by the firm, the firm pays the interest to the depositors and also the principal amount deposited by them in terms of the agreement between the parties.
In the writ petition there is a denial of the allegations made in the F.I.R. and the case is further made that even if the allegations made in the F.I.R. are assumed to be correct, there cannot be any question of any violation of the Act and no offence under the Act is disclosed.
It is the positive case of the writ petitioners in the writ petition that the Act has no application to the firm.
In the writ petition, the validity of the F.I.R. and the proceeding arising therefrom is challenged mainly on the ground that the F.I.R. does not disclose any offence under the Act which does not apply to the firm and there can be question of any violation of any provisions of the Act which has no application to the firm at all.
In answer to the averments made in writ petition, an affidavit affirmed by Shri Arun Kanti Roy, was filed on behalf of respondent Nos. 1 and 2, an affidavit affirmed by Shri Sunil Kumar Chakravorty on behalf of respondents Nos. 3 and 4 was filed and an affidavit affirmed by Shri Rani Annaji Rao on behalf of the Reserve Bank of India was also filed.
In the affidavit affirmed by Arun Kanti Roy, Deputy Secretary, Finance Department and Ex officio Director 152 of Small Savings, Government of West Bengal, on behalf of Respondents No. 1 and 2, that is, the State of West Bengal and Shri B.K. Kundu, there is an assertion that the Respondents come within the mischief of the Act and they have violated section 3 of the Act.
The relevant averments are contained in paragraphs 6, 7, 8 and 9 of the said affidavit and it is necessary to set out the same in their entirety: "6.
With reference to paragraphs 3 and 4 of the petition, I say that the petitioner firm accepts loans and/or deposits from all and sundry for varying periods without any authority of law.
Although the professed rate of interest of such deposit is at the rate of 12% per annum, the petitioner firm was actually paying interest at the rate of 48% per annum, which was recently reduced to 36% per annum.
The actual payment of such high rate of interest against the professed rate of 12% attracts huge amount of idle money into circulation and the investment of money as collected is not under the regulatory control of the Reserve Bank of India or any other agency of the State dealing with credit control in relation to the country 's economy.
The receipt of such money from the members of public at such high rate of interest is without any fetters as against the case of the receipt of money by banking companies as also non banking companies which are regulated under different provisions of law, to which I will crave reference at the time of hearing, if necessary The pooling of the purchasing power and/or the financial resources and the employment thereof being unfettered has resulted in the concentration of tremendous economic power in the hands of a few posing a potential threat to the equilibrium of the country 's economy.
The term of the deposit are unilaterally determined without any scrutiny by the Reserve Bank of India or with reference to the norms as to the credit control which the said Bank lays down and follows from time to time.
The acceptances of such deposits from the members of public with unrestricted use of the moneys so collected are completely repugnant to the accepted modes of public savings and investment thereof for generation of goods and services contributing to the economic growth of the country.
The entire process is 153 speculative in nature and directed towards luring away the investing public to the speculative market for making quick and easy money.
These are some of the activities which are sought to be banned by the banning provisions of the said Act, which has replaced similar regulatory measures contained in the several directions issued by the Reserve Bank of India under the , to the various financial institutions and non banking companies.
The present Act is applicable not only to such companies but also to individuals and firms.
All allegations contrary to and save as aforesaid are denied.
With reference to paragraph 5 of the petition I call upon the petitioner to disclose full particulars of their deposit scheme, which is disclosed will go to show that the terms and conditions are wholly arbitrary and contrary to the economic norms.
The very basis of the so called contractual arrangement between the petitioner firm and its depositors is founded on the fraudulent device to assure the people with a high rate of interest, the major portion of which is paid through unaccounted for money, thereby encouraging growth of such unaccounted for money in the hands of the investing public.
The professed rate of interest is a mere subterfuge to provide a cloak of bona fide and legality over the under hand transactions through which unaccounted for money comes into play in the market generating further unaccounted for money, a part thereof goes back to the depositors in the form of the balance of interest over 12% paid in cash month by month.
All allegations contrary to and save as aforesaid are denied.
With reference to paragraph 8 of the petition I say that the petitioners have been very much working on the above scheme to which the depositors have subscribed.
Whether such deposits are one time deposits and whether such deposits actually earn income in excess of the interest actually paid to the depositors or a matter of detailed investigation, which were in progress until the same was stopped by the order of the learned Court of Appeal passed on 8th January, 1981.
From whatever particulars are so far available to the answering respondents it can be 154 stated that the firm did not have so much income as the quantum of interest that was being paid by it and the irresistible conclusion from such state of affairs is that payment of interest was being made out of capital itself.
All allegations contrary to and save as aforesaid are denied.
With reference to paragraph 7 of the petition I reiterate the statements made hereinbefore and deny all allegations contrary thereto.
I specifically deny that no quick or easy money is accepted or received by the depositors or lenders or that payment of any such money is not contemplated or made by the firm as purported to be alleged.
The depositor becomes a member of the investment scheme of the company by subscribing to it and the payment of the quick and easy money by way of high rate of interest is dependent upon the period of investment and/or efflux of time which are very much relative and/or applicable to the membership of the depositors of the scheme, to which the depositor agrees to subscribe.
In the process of its working the scheme of the firm generates quick and easy money so as to render such scheme or arrangement as a money circulation scheme within the meaning of the said Act.
All allegations contrary to and save as aforesaid are denied.
The following further averments contained in paragraph 22 and in paragraph 30 of the said affidavit may also be noted: "22 . .
I further say that payment of interest at the clandestine rate of 36% or 46% as against the aforesaid rate of 12% is in the context of the scheme promoted and conducted by the petitioners tantamount to activity which is banned under the banking provisions of the said Act.
30 . .
No question of the depositors being ruined should arise if the petitioners had been running their business on sound economic line and had invested the fund collected from the depositors in safe and sound investment.
The 155 very fact that the petitioners are apprehensive of innumerable depositors being ruined goes to show that they engaged themselves and also the depositors in the speculative market and have rendered the investment insecure by reasons of the very nature of the business i.e. money circulation scheme transacted by them.
In the affidavit affirmed by Shri Sunil Kumar Chakraverty, Assistant Commissioner of Police and Deputy Superintendent of Police, Bureau of Investigation, Government of West Bengal, Finance, Taxation Department and filed on behalf of Respondents Nos. 3 and 4, the deponent adopts the statements made in the affidavit of Arun Kanti Roy and the deponent denies that the searches and seizures were unlawful and illegal.
The deponent further stated that as a result of the searches effected a mass of documents and a large amount of cash had been seized and the documents were being scrutinised.
In the affidavit affirmed by Shri Rani Annaji Rao, filed on behalf of Reserve Bank of India, the deponent has stated that the Reserve Bank of India which has no regulatory control over the firm has been unnecessarily made a party to the proceeding.
It has been further stated in the said affidavit that as desired by the parties and the Court, the Reserve Bank of India was placing the materials which had come to the knowledge of the Reserve Bank.
In this affidavit reference has been made to certain correspondence between the State Finance Minister, Union Finance Minister and the Deputy Governor of the Reserve Bank of India and also to various queries made and the enquiries made by the Reserve Bank of India.
It has been further stated that the view of the legal department of the Reserve Bank on the basis of the enquiries made had Been indicated to the Finance Minister of the State of West Bengal.
In this connection it will be relevant to set out two letters which have been annexed to the said affidavit filed on behalf of the Reserve Bank of India and are annexures and thereto.
Annexure is the copy of a letter addressed by Shri Ashok Mitra, State Finance Minister to the Union Minister for Finance and the said letter reads as follows: "Informally handed over to DG (K) at Calcutta.
Ashok Mitra D.O. No. IM.
28 2 80 Calcutta, October 1, 1980 156 Dear Shri Venkataraman, In the context of the action being taken by the Government of West Bengal under the , a question has arisen whether an organisation called 'Sanchaita Investments, with the address at 5 & 6, Fancy Lane, Calcutta 1 come within the purview of the above Act.
A reference in the matter has been made by our authorised officer under the above act to the Chief officer, Department of Non.
Banking Companies, Reserve Bank of India, Calcutta today.
I am enclosing a copy of an advertisement published by the above organisation in the local newspapers as also a copy of a loan certificate receipt issued by the said organisation.
I may mention that the authorised officer has issued notice under the above Act to a "Sanchaita Savings Scheme (P) Ltd." which is to be distinguished ' from 'Sanchaita Investments '.
It appears that the organisation called "Sanchaita Investments" is receiving large amount of monies from the public ostensibly as loans, and in lieu they are issuing loan certificates receipts.
While we have no documentary evidence, the news is strongly circulating in the market that the organisation is in fact offering rates of interest as high as 30 to 40 per cent even though the loan certificate receipts indicate a rate of interest of 12 per cent only.
There seems reasonable grounds for suspicion that this organisation is involved in extremely high risk investments which only can enable them to pay such rates of interest.
Since the security of monies deposited by the public is involved, we would suggest that a thorough enquiry be conducted by the Government of India into the activities of this organisation particularly for finding out whether they are infringing provisions of any relevant status.
It is felt necessary to conduct such an investigation on an urgent basis since large amounts of public monies are reported to be kept with this organisation, which does not seem as yet to have subjected to any regulatory control.
We are meanwhile awaiting a reply to our reference (copy enclosed) to the Reserve Bank of India regarding the applicability of the to this organisation.
157 With regards, Yours sincerely, Sd/ Ashok Mitra Shri R.V. Venkataraman, Union Minister for Finance, North Block, New Delhi 110001" Annexure is a letter by Shri K.S. Krishnaswamy, Deputy Governor of Reserve Bank to Dr. Ashok Mitra, State Finance Ministry.
The said letter is also here further set out: D.O. DNBC No. 2020/102 (Gen) LO 80/81 22nd Oct., 1980 Sanchaita Investments My Dear Ashok, You might recall that during my recent visit to Calcutta, you had sent me a copy of your o. Letter dated October 1, 1980 to Shri Venkataraman, Union Minister for Finance as also of a letter dated September 30, 1980 addressed to our Chief Officer, DNBC, Calcutta, in connection with the above firm.
I have had the position examined by our Legal Department.
According to them (vide extract of the note dated 17th October, 1980, enclosed for your confidential information) the acceptance of loans simpliciter by the firm by issue of receipts (as per the specimen received by us from our Calcutta Office) without floating any scheme or arrangement would not ordinarily be covered by the definition of "Prize Chit" and hit by the provisions of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978.
However, you may also like to consult your Legal Adviser on the subject 2.
As you may know, there are a few writ petitions pending in the Calcutta High Court where the interpreta 158 tion of section 2 (e) of the Banning Act is involved.
In that context I have thought it advisable to write to you on a confidential basis, rather than send a separate official reply.
I shall therefore be grateful if you could leave instructions with your staff to keep this matter and the views of our legal department strictly confidential.
With warm regards, Sd/ K.S. Krishnaswamy Dr. Ashok Mitra, Minister of Finance" Further supplementary affidavits had also been filed.
On consideration of the facts and circumstances of this case and the materials which were placed before the learned Judge, the learned Judge came to the conclusion that the Act did not apply to the firm and the learned Judge further held that the searches and seizures were also wrongful, illegal and improper; and in view of his finding the learned Judge quashed the proceedings and directed the return of all documents and the refund of cash monies seized, to the writ petitioners.
It appears from the judgment of the learned Judge that the matter had been very fully argued before him and the learned Judge in an elaborate judgment had considered the arguments advanced before him and thereupon recorded his findings and passed the order allowing the said writ petition.
Against the judgment and order passed by the learned Judge, the State of West Bengal and its three officers have preferred this appeal with special leave granted by this Court.
The writ petitioners, the Reserve Bank of India and Union of India have been made respondents in this appeal.
It does not appear that Union of India has participated in the proceedings before the learned Judge and no affidavit on behalf of the Union of India appears to have been filed before the learned Judge.
Mr. Som Nath Chatterjee, learned counsel appearing on behalf of the appellant has attached the judgment under appeal on the main ground that the learned Judge in this extraordinary jurisdiction should not have held that the Act has no application to the Respondent Firm and should not have on the basis of the said finding interfered with the investigation into the affairs of the firm.
Mr. Chatterjee contends that the question of applicability 159 of the Act will only come for consideration after the investigation has been completed and all relevant materials have been gathered on such investigation.
It is the contention of Mr. Chatterjee that at the investigation stage, the Court does not interfere and does not quash any proceedings before the investigation has been completed.
In support of this contention, Mr. Chatterjee has referred to a number of decisions of this Court.
I shall consider the relevant decisions referred to by Mr. Chatterjee at the appropriate time.
Mr. Chatterjee has submitted that after the investigation has been completed and all relevant materials have been gathered a charge under the Act may or may not be framed against the appellant firm for violation of the provisions of the Act.
It is his submission that if the materials collected do not indicate any infringement of the Act, no charge against the firm will be preferred, and all the accused persons will be discharged; if, on the other hand, materials gathered disclose an offences under the Act, proper charge against the accused persons will be framed and it will be open to the accused persons to raise the plea in the course of the prosecution that no offence under the Act has been committed by them and the Act has no application to the transactions of the firm and to the firm.
In the case of State of West Bengal vs S.N. Basak, this Court held at page 55 56 as follows: "The powers of investigation into cognizable offences are contained in Chapter XIV of the Code of Criminal Procedure.
Section 154 which is in that Chapter deals with information in cognizable offences and section 156 with investigation into such offences and under these section the police has the statutory right to investigate into the circumstances of any alleged cognizable offence without authority from a Magistrate and this statutory power of the Police to investigate cannot be interfered with by the exercise of power under section 561 A of Criminal Procedure Code.
As to the powers of the Judiciary in regard to statutory right of the police to investigate, the Privy Council in Ring Emperor vs Khawaja Nazir Ahmed (1944) L.R.I.A. 203, 212 observed as follows : 160 'The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the Court to intervene in an appropriate case when moved under section 491 of the Criminal Procedure Code to give directions in the nature of habeas corpus.
In such a case as the present, however, the court 's functions begin when a charge is preferred before it, and not until then.
It has sometime been thought that section 561A has given increased powers to the Court which it did not possess before that section was enacted.
But this is not so, the section give no new powers, it only provides that those which the Court already inherently possesses shall be preserved and is inserted as their Lordships think, lest it should be considered that the only powers possessed by the Court are those expressly conferred by the Criminal Procedure Code and that no inherent powers had survived the passing of that Act. ' With the interpretation which has been put on the statutory, duties and powers of the police and of the powers of the Court, were in accord.
The High Court was in error therefore in interfering with the powers of the police in investigating into the offence which was alleged in the information sent to the officer incharge of the police station".
In the case of State of Bihar and Anr.
vs J.A.C. Saldhana and Ors., this Court at p. 39 40 observed: "The next contention is that the High Court was in error in exercising jurisdiction under article 226 at a stage when the Addl.
Chief Judicial Magistrate who has jurisdiction to entertain and try the case has not passed upon the issues before him, by taking upon itself the appreciation of evidence involving facts about which there is an acrimonious dispute between the parties and given a clean bill to the suspects against whom the first information report was filed.
By so directing the learned Addl.
Chief 161 Judicial Magistrate the judgment of the High Court virtually disposed of the case finally.
As we are setting aside the judgment of the High Court with the result that the case would go back to the learned Additional Chief Judicial Magistrate, it would be imprudent for us to make any observation on facts involved in the case.
There is a clear cut and well demarcated sphere of activity in the field of crime detection and crime punishment.
Investigation of an offence is the field exclusively reserved for the executive through the police department, the Superintendent over which vests in the State Government.
The executive which is charged with a duty to keep vigilance over law and order situation is obliged to prevent crime and if an offence is alleged to have been committed it is its bounden duty to investigate into the offence and bring the offender to book.
Once it investigates and finds an offence having been committed it is its duty to collect evidence for the purpose of proving the offence.
Once that is completed and the investigating officer submits report to the Court requesting the Court to take cognizance of the offence under section 190 of the Code its duty comes to an end.
on a cognizance of the offence being taken by the Court the police function of investigation comes to an end subject to the provision contained in section 173 (B), there commences the adjudicatory function of the judiciary to determine whether an offence has been committed and if so, whether by the person or persons charged with the crime by the police in its report to the Court, and to award adequate punishment according to law for the offence proved to the satisfaction of the Court.
There is thus a well defined and well demarcated function in the field of crime detection and its subsequent adjudication between the police and the Magistrate".
Same views have been reiterated by this Court in the other decisions which were cited by Mr. Chatterjee.
In the case of S.N. Sharma vs Bipan Kumar Tiwari, this Court at p. 951 referred to the observations of the Privy Council in the case of King Emperor vs Khwaja Nazir Ahmed which have been quoted in the judgment of 162 this Court in the earlier decision and then proceed to hold at pp.
951 952: "Counsel appearing on behalf of the appellant urged that such an interpretation is likely to be very prejudicial particularly to officers of the judiciary who have to deal with cases brought up by the police and frequently give decisions which the police dislike.
In such cases, the police may engineer a false report of a cognizable offence against the judicial officer and may then harass him by carrying on a prolonged investigation of the offence made out by the report.
It appears to us that, though the Code of Criminal Procedure gives to the police unfettered power to investigate all cases where they suspect that a cognizable person can always seek a remedy by invoking the power of the High Court under article 226 of the Constitution under which, if the High Court could be convinced that the power of investigation has been exercised by a police officer mala fide the High Court can always issue a writ of mandamus restraining the police officer from misusing his legal powers".
Relying on these decisions and the principles enunciated therein, Mr. Chatterjee has argued that the learned Judge clearly erred in interfering with the investigation and quashing the proceedings at the stage of investigation before framing of charges against the accused persons.
Mr. Chatterjee argues that there is no allegation of mala fide in the instant case and the learned Judge has also come to a conclusion that there is no case of any mala fide on the part of the appellants.
Mr. Chatterjee has submitted that the materials which have been gathered as a result of the investigation which could be carried on only for a short while go to indicate that the transactions of the firm are not above board and they are not what they pretend or purport to be.
It is his submission that materials gathered clearly indicate that though the loan certificates stipulate interest to be paid @ 12% a much larger sum by way of interest ranging between 36% to 48% is actually paid to the depositors, and the amount which is paid in excess of the rate stipulated in the loan certificates is paid in cash in a clandestine manner, depriving and defrauding revenue of its legitimate dues.
Mr. Chatterjee comments that the payment of interest in this clandestine manner at a very high rate which is not shown or other 163 wise accounted for results not only in generation of black money, but paralyses the economy of the State.
Mr. Chatterjee has further commented that in view of this allurement to the depositors of payment of large sums of money in a clandestine manner, the firm which has a share capital of only Rs. 7000 has succeeded in alluring depositors and the deposits received by the firm with the capital of Rs. 7000 now exceed crores of rupees.
Mr. Chatterjee submits that a firm which carries on clandestine business of this nature is not entitled to invoke the extra ordinary jurisdiction conferred on the Court under article 226 of the Constitution.
Mr. Chatterjee has contended that the violation of section 3 of the Act has been alleged and it is his contention that the nature of business carried on by the firm indicates that the firm is conducting a 'Money Circulation Scheme '.
According to Mr. Chatterjee, 'Money Circulation Scheme ' by virtue of its definition in section 2 (c) of the Act means any scheme ' by whatever name called, for the making of quick or easy money.
It is his argument that the transactions disclose that the firm and the depositors are both trying to make quick or easy money, the scheme being that the depositors will deposit money against certificate stipulating interest to be paid @ 12% but they will in fact be paid interest at a much higher rate and thereby make quick or easy money and the firm invests the money received from the depositors in such transactions as to enable them to earn easy or quick money.
Mr. Chatterjee has further argued that money circulation scheme has to be interpreted to mean any scheme for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription.
Further investigation according to Mr. Chatterjee, can only show whether the scheme of making quick or easy money depends on any contingency relative in the enrollment of members into the scheme.
Mr. Chatterjee submits that the question of proper interpretation of the provisions of the Act and also of what money circulation scheme means, should come up only after investigation has been completed and all relevant materials have been collected.
It is Mr. Chatterjee 's submission that the interpretation of the provisions of the Act aud particularly what 'Money Circulation Scheme ' means, is not to be made in a 164 hypothetical way in the absence of relevant materials being gathered on completion of investigation.
Mr. Chatterjee has argued that after all the materials have been collected on completion of the investigation, it may be that materials may show that the firm is not conducting a Money Circulation Scheme and no charge against the firm may at all be preferred; if however, on the other hand, the materials, indicate that the firm is conducting a money circulation scheme and a charge is preferred, it will be open to the accused persons to take the defence that the business conducted by them is not one which will be considered to be a money circulation scheme within the meaning of the Act.
As I have earlier observed, the main grievance of Mr. Chatterjee is that the Court should have interfered at the stage of investigation and quashed the proceedings.
Mr. Chatterjee has next contended that section 7 of the Act, clearly empowers a Police officer not below the rank of an officer in charge of a police station to enter, search and seize in the manner provided in the said section.
It is Mr. Chatterjee 's contention that the searches have been carried out duly in terms of the provisions contained in the said section and cash money and other books and documents have been lawfully seized in terms of the provisions contained in the said section.
Mr. Chatterjee has further submitted that even if there had been any irregularity in the matter of searches and seizure, the searches and seizure are not rendered illegal and void as a result thereof.
Various decisions were also referred to by Mr. Chatterjee in support of his submissions.
Mr. A.K. Sen, learned counsel appearing on behalf of the firm has submitted that the learned Judge on a proper consideration of all the relevant materials and the provisions of the Act has correctly come to the conclusion that no offence under the Act is disclosed and the Act has no application to the firm and in that view of the matter the Learned Judge was perfectly justified in quashing the proceeding against the firm, and in directing the return of the documents and cash money seized by the police to the firm.
Mr. Sen has argued that investigation has to be done when an offence is disclosed for collecting materials for establishing an offence.
It is the argument of Mr. Sen that if no offence is disclosed there cannot be any investigation and any investigation when no offence is disclosed by the F.I.R. and the other materials, 165 means unnecessary harassment for the firm and its partners and illegal and improper deprivation of their liberty and property.
Mr. Sen submits that it is no doubt true that when an offence is disclosed, the Court normally does not interfere with the investigation into an offence.
He, however, contends that when no offence is disclosed, it, indeed, becomes the duty of the Court to interfere with any investigation which is improperly and illegally carried on to the serious prejudice of the persons.
In support of this contention Mr. Sen has referred to the decision of the Judicial Committee in the case of King Emperor vs Khwaja Nazir Ahmed (supra) and has relied on the following observations at p. 213: "No doubt, if no cognizable offence is disclosed and still more, if no offence of any kind is disclosed, the police would have no authority to undertake investigation.
In this connection, Mr. Sen also referred to the decision of this Court in the case of R.P. Kapur vs State of Punjab and has placed very strong reliance on the following observations at p. 393: "Cases may also arise where the allegations in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to decide whether the offence alleged is disclosed or not.
In such cases it would be legitimate for the High Court to hold that it would be manifestly unjust to allow the process of the criminal court to be issued against the accused person." Mr. Sen has also referred to the decision of this Court in Jehan Singh vs Delhi Administration; in which the aforesaid observations made by Gajendragadkar, J. in the case of R.P. Kapur vs State of Punjab, (supra) have been reproduced and reiterated.
Mr. Sen 166 further points out that in the case of S.N. Sharma vs Bipin Kumar Tiwari (supra), this Court at p. 951 recognises that "in appropriate cases the aggrieved person can always seek remedy by invoking powers of the High Court under article 226 of the Constitution under which, if the High Court could be convinced that the power of investigation has been exercised by a police officer mala fide, the High Court can always issue a writ of mandamus restraining the police officer from misusing his legal powers".
Mr. Sen has argued that the Learned Judge having properly appreciated the legal position has made the correct approach to the consideration of the present case.
It is his argument that the Learned Judge has carefully considered the materials which have been placed before him including the F.I.R. and he has properly analysed the provisions of the Act and on a proper interpretation of the Act and on a proper appreciation of the materials which were there before the Learned Judge, the Learned Judge has come to the conclusion that no offence under the Act is disclosed and the Act has no application to the firm.
Mr. Sen argues that for a proper appreciation of the question whether the materials disclose any offence under the Act, it is imperative to interpret the Act.
He contends that it will not be a proper approach to leave the question of interpretation to the stage after the investigation is complete, as according to Mr. Sen, there can be no investigation unless an offence has been disclosed.
Mr. Sen argues that if the materials do not disclose any offence, no investigation can be permitted to find out whether as result of the investigation an offence may be disclosed or not.
Mr. Sen submits that investigation can legitimately go on, once an offence is disclosed for collecting materials for establishing and proving the offence.
It is the contention of Mr. Sen that the case of the appellants is that the firm is conducting money circulation scheme which is banned by the Act.
Mr. Sen argues that to find out whether the firm is conducting a money circulation scheme, it is necessary to consider what a money circulation scheme is within the meaning of the Act and to find out whether on the materials alleged in the F.I.R. and also in the affidavits, it can be said that the business carried on by the firm is one in the nature of conducting a money circulation scheme.
Mr. Sen has argued that the learned Judge in his judgment has correctly interpreted what constitutes 'money circulation scheme ' within the meaning of the Act, and it is the argument of Mr. Sen that such interpretation is absolutely essential to find out whether the allegations made in the F.I.R. make out 167 a case that the firm is conducting a money circulation scheme.
Mr. Sen submits that the materials on record including the allegations made in the F.I.R. even if they are all assumed to be correct, do not go to show that the firm is conducting a money circulation scheme; and, in that view of the matter there can be no investigation, if no offence under the Act is disclosed.
Analysiag the F.I.R. and the other materials which have been placed before the Court, Mr. Sen submits that the materials go to indicate (1) that the firm is accepting deposits or loans from the public for a term against loan certificates which stipulate payment of interest @ 12%; (2) though interest is stipulated to be paid @ 12%, the firm, in fact, is paying interest at a much higher rate.
It used to pay interest @48% previously and is now paying interest @ 36%.
The amount of interest paid in excess of the stipulated rate of 12% is paid in cash in a clandestine manner to the depositors.
The excess amount of interest paid is not accounted for and results in accumulation of black money; (3) the firm invests the monies received from the depositors in high risk investments earning huge amount of unaccounted profits.
The investments made by the firm and the earnings from the investments made, also result in generation of black money; (4) because of the allurement of high rate of interest offered to the depositors, a major part of which is given in unaccounted black money, the firm which has a share capital of about Rs. 7000 only has received deposits over crores of rupees.
It is the contention of Mr. Sen that even if all these allegations which are there in the F.I.R. and also in the other materials which have been placed before the Court are accepted to be correct, the said allegations do not go to show that the firm is conducting a money circulation scheme and do not disclose any offence under the Act.
Mr. Sen in this connection has commented that though in the F.I.R. it has been alleged that the firm is carrying on business of promoting Prize Chits; no such case was sought to be made out before the Learned Judge or before this Court and there are no allegations or materials to show that the firm is carrying on business of promoting prize chit; and the only case that has been sought to be made before the Trial Court and also this Court is that the firm is carrying on business of conducting or promoting money circulation scheme.
Mr. Sen has argued that the money circulation scheme has been defined in section 2 (c) of the Act to mean "any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the considera 168 tion for a promise to pay money, on any event or contingency relative or applicable to the enrollment of members into the scheme whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription".
According to Mr. Sen, the essential requirements of a money circulation scheme are (1) There must be a scheme for the making of quick or easy money on any event of contingency relative or applicable to the enrollment of members into the scheme whether or not such money is derived from the entrance money of the members of such scheme or periodical subscription; or (2) there must be a scheme for the receipt of any money or valuable thing as the consideration for promise to pay money on any event or contingency relative or applicable to the enrollment of members into a scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or from periodical subscription.
Mr. Sen submits that neither F.I.R. nor any of the other materials go to show that the business carried on by the firm is, in any way, in the nature of conducting or promoting a money circulation scheme.
In this connection Mr. Sen has drawn our attention to the statement of objects for the passing of this enactment.
Mr. Sen has further submitted that this enactment which is in the nature of penal one has to be construed in the event of doubt or ambiguity in a manner beneficial to the party against whom any accusations is made.
Mr. Sen has further argued that the rules framed under the Act can also be taken into consideration for proper interpretation of the Act and the learned Judge in the instant case was justified in referring to the rules in construing the provisions of the Act.
In this connection Mr. Sen has referred to the decision in Ex parte Wier In re Wier and has relied upon the following observations at p. 879; "We do not think that any other section of the Act throws any material light upon the proper construction of this section, and if the question had depended upon the Act alone we should have had great doubt what the pro per construction was; but we are of opinion that, where the construction of the Act is ambiguous and doubtful on any point, recourse may be had to the rules which have been 169 made by the Lord Chancellor under the authority of the Act, and if we find that in the rules any particular construction has been put on the Act, that it is our duty to adopt and follow that construction".
Mr. Sen in this connection has drawn our attention to the relevant rules and he has argued that the rules leave no room for doubt that the Act has no application to the firm and no offence under the Act has been disclosed by the firm.
Mr. Sen has submitted that the construction of the Act by the Learned Judge is correct and it is his submission.
that in view of the provisions of the Act properly interpreted, there cannot be any doubt that the Act has no application to the interest case and there can be no question of any violation of the said Act by the firm.
It is the submission of Mr. Sen that the approach and the reasoning of the learned Judge are both sound.
Mr. Sen has next contended that the search and seizure carried on in the instant case are also illegal and unjustified.
It is the argument of Mr. Sen that if no offence under the Act is disclosed and the Act has no application, there cannot be any question of any search or seizure under the Act.
Mr. Sen has argued that the search and seizure.
done in the instant case have also not been done in confirmity with the provisions of law.
Mr. Sen has submitted that learned judge has correctly come to the conclusion that the search and seizure in the instant case were also illegal.
In this connection Mr. Sen referred to a number of decisions.
Mr. Ray and Mr. Sibal who followed Mr. Sen mainly adopted the submissions made by Mr. Sen. Mr. Ray, further contended that to be a chit fund or to be a money circulation scheme, an element of uncertainty or luck is essential.
It is the argument of Mr. Ray that in so far as the transactions carried on by the firm in the instant case are concerned, the said element is no where there.
Mr. Ray, in this connection referred to the definition of conventional chit and has argued that the conventional chits have not been brought within the purview of this Act.
Mr. Ray has drawn our attention to the decision of this Court in the case of Srinivasa Enterprises vs Union of India in which the validity of the Act came to be challenged in this Court and was upheld by this Court.
170 The appeal before us has been argued at great length.
A number of decisions have also been cited from the Bar.
I have already referred to some of the decisions which were cited before us.
I do not propose to consider all the case which were referred to in the course of argument by the learned counsel appearing on behalf of the parties as I do not consider the same to be necessary.
As I have already stated that the matter appears to have been elaborately argued before the learned Trial Judge who in his judgment has fully set out the relevant facts and circumstances of the case has noted the arguments which were advanced before him and the learned Judge has also referred to a number of decisions.
I may, however, note that Mr. Chatterjee, appearing on behalf of the appellants, has made a grievance before us that some of the decisions cited by him have not been considered by the learned Judge.
Though the matter has been argued at great length, yet, to my mind, the case appears to rest, in a fairly short compass.
In my opinion, the legal position is well settled.
The legal position appears to be that if an offence is disclosed, the Court will not normally interfere with an investigation into the case and will permit investigation into the offence alleged to be completed; if, however, the materials do not disclose an offence, no investigation should normally be permitted.
The observations of the Judicial Committee and the observations of this Court in the various decisions which I have earlier quoted, make this position abundantly clear.
The prepositions enunciated by the Judicial Committee and this Court in the various decisions which I have earlier noted, are based on sound principles of justice.
Once an offence is disclosed, an investigation into the offence must necessarily follow in the interests of justice.
If, however, no offence is disclosed, an investigation cannot be permitted, as any investigation, in the absence of any offence being disclosed, will result in unnecessary harrassment to a party, whose liberty and property may be put to jeopardy for nothing.
The liberty and property of any individual are sacred and sacrosanct and the Court zealously guards them and protects them.
An investigation is carried on for the purpose of gathering necessary materials for establishing and proving an offence which is disclosed.
When an offence is disclosed, a proper investigation in the interest of justice becomes necessary to collect materials for establishing the offence, and for bringing the offender to book.
In the absence of a proper investigation in a case where an offence is disclosed, the offender may succeed in escaping from the consequen 171 ces and the offender may go unpunished to the deteriment of the cause of justice and the society at large.
Justice requires that a person who commits an offence has to be brought to book and must be punished for the same.
If the Court interferes with the proper investigation in a case where an offence has been disclosed, the offence will go unpunished to the serious deteriment of the welfare of the society and the cause of the justice suffers.
It is on the basis of this principle that the Court normally does not interfere with the investigation of a case where an offence has been disclosed.
The decision on which Mr. Chatterjee has relied are based on this sound principle, and in all these cases, an offence had been disclosed.
Relying on the well settled and sound principle that the Court should not interfere with an investigation into an offence at the stage of investigation and should allow the investigation to be completed, this Court had made the observations in the said decisions which I have earlier quoted reiterating and reaffirming the sound principles of justice.
The decisions relied on by Mr. Chatterjee, do not lay down, as it cannot possibly be laid down as a broad proposition of law, that an investigation must necessarily be permitted to continue and will not be prevented by the Court at the stage of investigation even if no offence is disclosed.
While adverting to this specific question as to whether an investigation can go on even if no offence is disclosed, the judicial Committee in the case of King Emperor vs Khwaja Nizam Ahmed (supra) and this Court in R.P. Kapur vs State of Punjab (supra), Jehan Singh vs Delhi Administration (supra), S.N. Sharma vs Bipin Kumar Tiwari (supra) have clearly laid down that no investigation can be permitted and have made the observations which I have earlier quoted and which were relied on by Mr. Sen.
As I have earlier observed this proposition is not only based on sound logic but is also based on fundamental principles of justice as a person against whom no offence is disclosed, cannot be put to any harassment by the process of investigation which is likely to put his personal liberty and also property which are considered sacred and sacrosanct into peril and jeopardy.
Whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case.
In considering whether an offence into which an investigation is made or to be made, is disclosed or not, the Court has mainly to take into consideration the complaint or the F.I.R. and the Court may in appropriate cases take into consideration the relevant facts and circumstances of the case.
On a consideration of all the relevant 172 materials, the Court has to come to the conclusion whether an offence is disclosed or not.
If on a consideration of the relevant materials, the Court is satisfied that an offence is disclosed, the Court will normally not interfere with the investigation into the offence and will generally allow the investigation into the offence to be completed for collecting materials for proving the offence.
If, on the other hand, the Court on a consideration of the relevant materials is satisfied that no offence is disclosed, it will be the duty of the Court to interfere with any investigation and to stop the same to prevent any kind of uncalled for and unnecessary harassment to an individual.
In the instant case, the offence complained of is violation of the Act.
For a proper adjudication of the case and for a proper appreciation of the question, it, therefore, becomes necessary to consider the relevant materials and also the provisions of the Act for being satisfied as to whether the relevant materials go to indicate any violation of the Act and disclose any offence under the Act.
The materials are mainly contained in the F.I.R. which has been earlier set out in its entirety.
An analysis of the F.I.R. mentions the following allegations on the basis of which the said F.I.R. has been lodged: 1.
Sanchaita Investments is a partnership Firm.
Its partners are Behari Prasad Murarka, Sri Sambhu Mukherjee and Sri Swapan Kumar Guha The firm was started in and around 1975.
The Firm had been offering fabulous interest @ 48% to its members until very recently.
The rate of interest has of late been reduced to 36% per annum.
Such high rate of interest were and are being paid even though the loan certificate receipts show rate of interest to be 12% only.
Thus, the amount in excess of 12% so paid clearly shows that 'Money Circulation Scheme ' is being promoted and conducted for the making of quick and/or easy money, prizes and/or gifts 5.
Prizes or gifts in cash are also being awarded to agents promoters and members too.
173 6.
In view of the above, Sarvshri Behari Prasad Murarka, Sambhu Mukherjee and Swapan Kumar Guha appears to have been carrying on the business in the trade name of 'Sanchaita Investments ' in prize chits and money circulation Scheme in violation of section 2 of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978.
The other materials are contained in paragraphs 6, 7, 8, 9, 22, 27 and 30 of the affidavit and the two documents, namely, the article published in the Newspaper 'Business Standard ' dated 1611.1980 and the documents seized in the course of searches.
I have earlier set out in extenso the statement made in the said paragraphs of the affidavit filed on behalf of the State.
A copy of the article has been enclosed to the affidavit filed on behalf of the State.
The document seized in the course of searches and handed over to Court in the course of the arguments was a letter addressed by an officer of the Air Force to the firm in which the officer makes a grievance that the Firm which was paying interest @ 48% has now reduced the same to 36% in view of advances made to political parties.
The letter further records the fact that the firm hopes to pay the enhanced rate of interest of 48% in the near future.
An analysis of these materials suggest that the firm is carrying on activities of accepting deposits from the members promising to pay them interest on such deposits at an agreed rate of 12% as stipulated in the loan certificate; but, in fact, it has been paying interest to them at much higher rate of interest The materials further indicate that the firm is making high risk investments of the monies received from the depositors and has also been advancing monies to political parties.
The crux of question is whether these allegations disclose an offence under the Act namely, violation of section 3 of the Act even if all these allegations are deemed to be correct.
The question whether these allegations disclose an offence under the Act and can be the basis for any suspicion that an offence under section 3 of the Act has been committed or not, must necessarily depend on the provisions of the Act and its proper interpretation.
The Act has been enacted for implementing the recommendations of a Study Group of the Reserve Bank of India under the 174 Chairmanship of Shri James section Raj the then Chairman of the Unit Trust of India, constituted for examining in depth the provisions of Chapter IIIB of the and the directions issued thereunder to Non Banking Companies in order to assess their adequacy in the context of ensuring the efficacy of the monetary and credit policies of the country and affording a degree of protection to the interests of the depositors who place their savings with such companies.
Paragraph 2 of the Statement of objects and Reasons of the Act states: "Prize chits would cover any kind of arrangement under which moneys are collected by way of subscriptions, contributions, etc.
and prizes, gifts, are awarded.
The prize chit is really a form of lottery.
Its basic feature is that the foreman or promoter who ostensibly charges no commission collects regular subscriptions from the members.
Once a member gets the prize, he is very often not required to pay further instalments and his name is dropped from further lots.
The institutions conducting prize chits are private limited companies with a very low capital base contributed by the promoters, directors or their close relatives.
Such schemes confer monetary benefit only on a few members and on the promoter companies.
The Group had, therefore, recommended that prize chits or money circulation schemes, by whatever name called, should be totally banned in the larger interests of the public and suitable legislative measures should be undertaken for purpose.
" The relevant portion of paragraph 3 of the Statement of objects and Reasons reads as follows: The Bill proposes to implement the above recommendation of the Group by providing for the banning of the promotion or conduct of any prize chit or money circulation scheme, by whatever name called, and of the participation of any person in such chit or scheme.
The Bill provides for a period of two years within which the existing units carrying on the business of prize chits or money circulation schemes may be wound up and provides for penalties and other incidental matters.
" 175 It is, therefore, clear that the main object of the Act is to ban promotion or conduct of any Prize Chit or money circulation scheme, by whatever name called, and of the participation of any person in such chit or scheme.
section 2 of the Act deals with definitions.
Money Circulation Scheme is defined in section 2 (c) in the following words: "Money circulation Scheme ' means any scheme, by whatever name called.
for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions.
" Prize Chit is defined in section 2 (e) in the following terms: "prize chit ' includes any transaction or arrangement by whatever name called under which a person collects whether as a promoter, foreman, agent or in any other capacity, monies in one lump sum or in instalments by way of contributions or subscriptions or by sale of unit, certificates or other instruments or in any other manner or as membership fees or admission fees or service charges to or in respect of any savings, mutual benefits, thrift or any other scheme or arrangement by whatever name called, and utilises the monies so collected or any part thereof cr the income accruing from investment or other use of such monies for all or any of the following purposes, namely: (i) giving or awarding periodically or otherwise to a specified number of subscribers as determined by lot, draw or in any other manner, prizes or gifts in cash or in kind, whether or not the recipient of the prize or gift is under a liability to make any further payment in respect of such scheme or arrangement; (ii) refunding to the subscribers or such of them as have not won any prize or gift, the whole or part of the subscriptions, contributions or other monies collected with or without any bonus, premium, interest or other advantage by whatever name called, on the termina 176 tion of the scheme or arrangement, or on or after the expiry of the period stipulated therein, but does not include a conventional chit.
A Conventional Chit which is specifically excluded in the definition of prize chits in section 2 (c) (ii) is defined in section 2 (a) as follows "Conventional Chit" means a transaction whether called chit, chit fund, kuri or by any other name by or under which a person responsible for the conduct of the chit enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or certain quantity of grain instead) by way of periodical instalments for a definite period and that each subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be provided for in the chit agreement, be entitled to a prize amount".
section 3 of the Act the violation of which alleged reads: "No person shall promote or conduct any prize chit or money circulation scheme, or enrol as a member to any such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chit or scheme.
" section 7 of the Act provides: "(1) It shall be lawful for any police officer not below the rank of an officer in charge of a police station: (a) to enter, if necessary by force, whether by day or night with such assistance as he considers necessary any premises which he has reason to suspect, are being used for purposes connected with the promotion or conduct of any prize chit or money circulation scheme in contravention of the provisions of this Act; (b) to search the said premises and the persons whom he may find therein; 177 (c) to take into custody and produce before any judicial Magistrate all such persons as are concerned or against whom a complaint has been made or credible information has been received or a reasonable suspicion exists of their having been concerned with the use of the said premises for purposes connected with, or with the promotion or conduct of, any such prize chit or money circulation scheme as aforesaid; (d) to seize all things found in the said premises which are intended to be used, or reasonably suspected to have been used, in connection with any such prize or money circulation scheme as aforesaid.
(2) Any officer authorised by the State Government may: (a) at all reasonable times, eater into and search any premises which he has reason to suspect, are being used for the purposes connected with, or conduct of, any prize chit or money circulation scheme in contravention of the provisions of this Act; (b) examine any person having the control of, or employed in connection with, any such prize chit or money circulation scheme; (c) order the production of any documents, books or records in the possession or power of any person having the control of, or employed in connection with, any such prize chit or money circulation scheme; and (3) All searches under this section shall be made in accordance with the provisions of the Code of Criminal Procedure, 1973".
section 13 confers necessary powers to make rules and reads as under: "(1) The State Government may, by notification in the Official Gazette and in consultation with the Reserve Bank, make rules for the purpose of carrying out the provisions of the Act.
178 (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for: (a) the office of the Reserve Bank to whom full information regarding any prize chit or money circulation scheme may be furnished under the first proviso to sub section (1) of Section 12, and the form in which and the period within which such information may be furnished; (b) the particulars relating to the winding up plan of the business relating to prize chits or money circulation schemes.
" The complaint alleges violation of section 3 of the Act.
In other words, the complaint is that the firm is promoting or conducting a prize chit or a money circulation scheme.
The definition of prize chit has been earlier set out.
I have also earlier analysed the F.I.R. and the other materials on the basis of which the complaint is made and the materials which have been placed before the Court.
The materials do not indicate any thing to disclose that the firm is promoting or conducting any prize chit.
I may also here note that no arguments have been advanced on behalf of the appellants that the firm is promoting or conducting any prize chit; and in my opinion, rightly, as the allegations do not give any indication whatsoever of any case of a prize chit being promoted or conducted by the firm.
The argument on behalf of the appellants has been that the firm is promoting or conducting a money circulation scheme.
Though the Statement of objects and Reasons of the Act may suggest that the prize chit and a money circulation scheme are more or less of like nature, yet, in view of the separate definitions of these two being given in cl. 2 of the Act and in view of the further fact that section 3 speaks of prize chit or money circulation scheme, each of the aforesaid must be considered to be separate and distinct for the purposes of the Act; and promoting or conducting either prize chit or any money circulation scheme or both must be held to he an offence under the Act.
I shall now proceed to consider whether the materials disclose that the firm is promoting or conducting a money circulation scheme I have already set out the definition of money circulation scheme 179 as given in section 2 (c) of the Act.
On a plain reading of the said definition, the requirements of a money circulation scheme are: (i) there must be a scheme; (ii) there must be members of the scheme; (iii)the scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrollment of members into the scheme or there must be a scheme for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or contingency relative or applicable to enrollment of members into the scheme; (iv) the event of contingency relative or applicable to the enrollment of members into the scheme will however not he in any way affected by the fact whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription.
On a proper interpretation of this definition, it clearly appears that the condition in the said definition 'on any event or contingency relative or applicable to the enrollment of members into the scheme whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription ' qualifies both the provisions contained therein, namely, (i) money circulation scheme means a scheme by whatever name called, for the making of quick or easy money, (ii) or money circulation scheme means any scheme for the receipt of any money or valuable thing as the consideration for the promise to pay money.
Taking into consideration the language used in the section and particularly the two commas, one after the words "easy money" and the other after the words "pay money", it becomes clear that this stipulation is intended to cover both; and the interpretation contended for by Mr. Chatterjee that the further provision in the definition namely, "on any event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from entrance money of such scheme or periodical subscription" applies only to the second part, namely, money circulation scheme 'means any scheme, by whatever name called, for the receipt 180 of any money or valuable thing as the consideration for a promise to pay money, is not sound '.
On this interpretation, of Mr. Chatterjee, the provision in the definition, namely, 'money circulation scheme means any scheme by whatever Dame called for the making of quick or easy money ' will indeed become vague and meaningless.
For properly appreciating whether the offence of promoting or conducting a money circulation scheme is disclosed or not, it becomes necessary to consider whether the materials, even if they are all accepted to be correct, indicate that the business carried on by the firm satisfies the requirements of money circulation scheme and disclose an offence under the Act.
The materials show that the firm accepts loans or deposits from general public for a term against loan certificates which stipulate payment of interest @12%.
Materials also indicate that the firm pays stipulated amount of interest and further pays a much larger amount of interest in a clandestine manner to the persons who invest their monies in the firm against loan certificates.
The materials further indicate that the persons who have invested their monies with the firm against loan certificates used to receive, in fact, the stipulated amount of interest @ 12% and also used to receive an additional sum as further interest @ 36% in a clandestine manner.
The materials also indicate that this further rate of interest @ 36% paid clandestinely in additional to the stipulated rate of 12% has been reduced now to 24%, because of investments by the firm with political parties.
In other words, the materials go to show that though the rate of interest stipulated in the loan certificate was 12% the firm used to pay altogether interest @ 48% previously and is now paying interest @ 36% inclusive of payment of interest stipulated in the loan certificate.
The materials also indicate that the firm invest the deposits or loans received from the general public in high risk investments.
The materials, however, do not show that the payment of interest at the stipulated rate of 12% or at any enhanced rate in excess of the stipulated rate depends on any event or contingency or relative or applicable to the enrollment of any new depositors.
The materials also do not indicate that the firm makes any discrimination in the matter of payment of interest to its depositors.
The materials also do not indicate that the payment of interest to the depositors whether at the stipulated rate or at the enhanced rate is dependent on any element of chance and the 181 materials do not indicate that any kind of gifts is made by the firm to the depositors in addition to the payment of interest.
The first question that requires to be considered is whether these materials go to indicate that there is any scheme The word 'scheme ' has not been defined in the Act.
The word 'scheme ', however, has been defined in the Rules, in cl. 2 (g) thereof.
Cl. 2 (g) of the Rules state that a "scheme means a money circulation scheme or as the case may be a prize chit as defined in cl.
(c) and (e) respectively of section 2".
The word 'scheme ' as contemplated in section 2 (c) of the Act is therefore, to be money circulation scheme within the meaning of the Act.
To be a money circulation scheme, a scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrollment of the members into the scheme.
The scheme has necessarily to be judged as a whole both from the view point of the promoters and also of the members.
Even if it be assumed that the firm may be considered to be the promoter and the persons who invest their monies in the firm are members, the question has still to be considered whether investments of the monies with the firm in expectation of getting interest @ 48% and a big part of it in black in clandestine manner, can be said from the view point of the depositors that the investment is for the making of quick or easy money.
If any individual invests is money in expectation of getting a high return, say 50% or more and there is nothing clandestine in the transaction which is above board, can it be said that the investment is for making easy money or quick money ? Various individuals may invest their monies in their business which may yield very high profits.
Many individuals also may indulge in speculative business in expectation of high return of their money and may succeed or may not succeed in speculative transactions.
If such transactions are made openly and not in violation of any law, I have no doubt in my mind that it can never be said that such investment has been made for making quick or easy money, and such transactions can never come within the scheme for making easy or quick money as enumerated in the Act.
The further question that, however, arises for consideration is whether the position will be any different, if a part of the transaction is not above board and is secretive in nature.
To my mind, that will not make any difference and the transaction cannot be considered to be a scheme for the making of quick or easy money, though the transaction may offend against revenue laws or any other law.
Transactions in black money do not come within the 182 mischief of this Act.
Judged from the point of view of the depositors, it cannot, therefore, be said that their investment in the firm for high return by way of interest, part of which is above board and a part of which is clandestine, will form any part of a scheme for making easy or quick money.
It is further to be noted that this return on investment by way of interest is not dependent on any event or contingency whatsoever and has nothing to do with any event or contingency relative or applicable to the enrollment of any new members, even if the depositors be assumed to be members.
Judged from the point of view of the firm, there is nothing to indicate that the firm makes any investment in consultation with its depositors.
The materials only indicate that the firm indulges in high risk investments and also advances monies to political parties.
Neither of these acts appears to be illegal and they do not go to show that the firm makes easy or quick money.
lt is no doubt true that the materials go to show that the firm plays a larger amount by way of interest than payable on the basis of the rates stipulated in the loan certificate and the firm pays the excess amount of interest to the depositors in a clandestine manner.
The clandestine manner of payment of interest in excess of the stipulated rate does not, in any way, indicate the existence of any scheme for making quick or easy money.
It is again to be pointed out that in any event the mate rials do not indicate that the payment of interest by the firm in excess of the stipulated rate is in any way dependent on any event or contingency.
There is nothing to indicate any scheme for the receipt of the money by the firm from its depositors as a consideration for promise to pay the interest in excess of the stipulated rate and also to pay back principal amount on the expiry of the term dependent in any way on any event or contingency relative or applicable to the enrollment of new depositors, considering the depositors to be members.
I am, therefore, of the opinion, that not any, of the requirements of a money circulation scheme is satisfied in the instant case.
As there is no money circulation scheme, there can be no scheme as contemplated in the Act in view of the definition of scheme in the Rules.
The materials, appear to disclose violation of revenue laws.
They, however, do not disclose any violation of the Act.
The materials do not disclose that the firm is promoting or conducting money circulation scheme and the question, therefore, of 183 any violation of section 3 of the Act does not arise in the instant case.
As the firm is not conducting or promoting a money circulation scheme, and as no case is made that the firm is conducting or promoting a chit fund, the Act cannot be said to be applicable to the firm.
In my opinion, it does not become necessary to refer to the rules for coming to the conclusion.
I may, however, add that a consideration of the rules also clearly lends support to the conclusion to which l have come.
I find that the learned Judge has very carefully and elaborately considered all the aspects in his judgment and in the course of elaborate discussion, he has noted all the contentions raised by the parties and has carefully considered them.
The learned Judge on a careful consideration of all aspects and on a proper interpretation of the Act, has expressed the view that no offence under the Act is disclosed against the firm which does not conduct or promote money circulation scheme or a chit fund and the Act has no application to the firm.
It may also be noted that the learned Judge has also in his judgment referred to the report of the Reserve Bank and the opinion of the learned Advocate General of the State which lent support to the view taken by the learned Judge.
The view expressed by the learned Judge that the materials do not disclose that the firm is promoting or conducting a money circulation scheme and the Act has, therefore, no application to the firm meets with my approval and I agree with the same.
Before concluding it will be proper to refer to the decision of this Court in the case of Srinivas Enterprises vs Union of India which were relied on before the learned Judge and has been considered by me.
In this case, the validity of the Act was challenged before this Court while upholding the validity of the Act for reasons stated in the judgment, Krishna Iyer, J. who spoke for the Bench observed at p. 514 as follows: "In many situations, the poor and unwary have to be saved the seducing processes resorted by unscrupulous racketeers who glamourize and prey upon the gambling instinct to get rich quick through prizes.
So long as there is the restless spell of a chance, though small, of securing a prize, though on paper, people change.
the prospect by 184 subscribing to the speculative scheme only to lose what they had.
Can you save moths from the fire except by putting out the fatal flow ? Once this prize facet of the chit scheme is given up, it becomes substantially a 'conventional chit ' and the ban of the law ceases to operate.
We are unable to persuade ourselves that the State is wrong in its assertion, based upon expert opinions that a complete ban of prize chits is an overall or excessive blow.
Therefore, we decline to strike down the legislation on the score of Article 19 (1) (f ) and (g) of the Constitution.
" As I have earlier noticed the materials in the instant case do not disclose any element of chance in the matter of business carried on by the firm.
It may however, be said that these observations which were made while dealing with a case of chit fund are not of very great assistance while considering what may be a money circulation scheme within the meaning of the Act.
As no offence under the Act is at all disclosed, it will be manifestly unjust to allow the process of criminal code to be issued or continued against the firm and to allow any investigation which will be clearly without any authority.
In the view that I have taken, I do not consider it necessary to deal with other aspects namely, as to whether the searches and seizures were lawfully and properly done.
I, therefore, hold that the proceedings against the firm and its partners arising out of the F.I.R. must be quashed as the F.I.R. and the other materials do not disclose any offence under the Act and as such no investigation into the affairs of the firm under the Act can be permitted or allowed to be continued.
I, accordingly, quash the proceedings against that firm and its partners and order that no investigation under the Act into affairs of the firm is to be carried on or continued.
I agree with the final order proposed by the learned Chief Justice in regard to the return of the documents, books and cash.
185 The appeal, therefore, fails and is dismissed.
I, however, make no order as to costs.
The Judgment in Civil Appeal No. 1130 of 1981 will also govern Civil Appeal No. 1129 of 1981.
N.V.K. Appeals dismissed.
| The firm 'Sanchaita Investments ', commenced its business on July 1,1975, its three partners, the three respondents in the appeal contributing a total capital of Rs. 7,000/ .
The firm carried ' on business as financiers and investors and in its business the firm accepted loans or deposits from the general public for different periods repayable with interest at 12% per annum.
Under the terms of deposits, the depositors had a right to withdraw the deposit with the firm at any time.
In case of premature withdrawal the depositors were to lose interest of 1%.
Under the terms and conditions of the deposit the firm had also the liberty to repay the amount with interest to any depositor at any time before the expiry of the stipulated period of deposit without giving any reason.
The firm was carrying on its business on a very extensive scale.
In the year 1978 Parliament passed the .
The Act came into force on December 13, 1978 and section 12 provided a two years period ' 'for winding up every kind of business relating to prize chits and money circulation schemes.
122 On 13th December, 1980 the Commercial Tax officer lodged a complaint of violation of the Act by the firm with the police.
The FIR stated that the firm had been offering fabulous interest at 48% per annum lo its members, later reduced to 36% though the loan certificate receipts showed the rate of interest to be 11% only.
The amount in excess of 12% clearly indicated that the 'Money Circulation Scheme ' was being promoted and conducted for the making of quick and/or easy money and that prizes and for gifts in cash were also awarded to agents, promoters and members, and that the firm and its three partners in conducting such money circulation schemes had violated section 3 of the Act and were therefore punishable under section 4.
On tho same day the office of the firm was searched by the police and a sum of Rs. 42 lakhs was recovered.
The residences of the partners were also searched and large amount of cash as well as documents were seized.
Certain lists of agents seized during the investigation showed that code numbers were assigned to many of the agents and that the agents had acquired large properties at various places and had also started new business activities.
The partners were arrested and enlarged on bail.
The firm and its partners filed a writ petition in the High Court challenging the validity of the F.I.R. and the proceedings arising out of it including the validity of the searches and seizure of documents, papers and cash.
It was contended that the F.I.R. does not disclose any offence under the Act which does not apply to the firm and that there was no violation of any provisions of the Act.
The petition was contested by the State Government contending that the payment of interest by the firm and its partners at the clandestine rate of 36% against the bank rate of 12% in the context of the scheme promoted and conducted by the firm was tantamount to an activity which was banned under the Act.
and that in the process of its working, the scheme of the firm generated quick and easy money so as to render such scheme or arrangement a 'money circulation scheme ' within the meaning of the Act.
The High Court held that the Act did not apply to the Firm and that the searches and seizures were wrongful, illegal and improper and quashed the proceedings and directed the return of all documents and the refund of the cash seized.
In the appeals to this Court it was contended on behalf of the State Government that: (I) the question of applicability of the Act will only come up for consideration after the investigation has been completed and all relevant materials have been gathered on such investigation and that at the investigation stage, the Court does not interfere and also does not quash any proceedings before the investigation has been completed, (2) materials which had been gathered as a result of the investigation indicate that though the loan certificate stipulate interest to be paid @ 12% much larger sum by way of interest ranging between 36@ to 48% was actually paid to the depositions, in cash in a clandestine manner, depriving and defrauding the revenue of its legitimate dues, (3) the nature of business carried on by the firm indicates that the firm is conducting a 'Money circulation scheme ' thereby violating section 3 of the Act, and (4) the searches have been carried out in accordance with section 7 of the Act and the cash money and other books and documents have been lawfully seized 123 On behalf of the respondents it was contended that: (I) Investigation has to be done when an offence is disclosed for collecting materials for establishing an offence and any investigation when no offence is disclosed by the F.I.R. and the other materials, means unnecessary harassment for the firm and its partners and illegal and improper deprivation of their liberty and property, (2) even if all the allegations in the F.I.R. and in the other materials before the Court are accepted to be correct, the said allegation do not go to show that the firm is conducting a money circulation scheme and do not disclose any offence under the Act, (3) if no offence under the Act is disclosed and the Act has no application, there cannot be any question of any search or seizure under the Act, and (4) to be a chit fund or a money circulation scheme, an element of uncertainty or luck is essential and in so far as the transactions carried on by the firm are concerned, the said element is nowhere.
Dismissing the appeals.
^ HELD: By the Court 1.
The investigation which has been commenced upon the First Information Report is without jurisdiction and must, therefore, be quashed.
No further investigation shall take place in pursuance or on the basis of the F.I.R. dated December 13, 1980 lodged by the Commercial Tax officer, Bureau of Investigation.
[143 D] 2.
The documents, books, papers, cash and other articles seized during the investigation shall be retained by the police in their custody for a period of two months and will be returned, on the expiry of that period, to persons from whom they were seized.
[148 C] [Per Chandrachud, C.J. and Varadarajan J.] 1.
Two conditions must be satisfied before a person can be held guilty of an offence under section 4 read with sections 3 and 2 (c) of the Act.
In the first place, it must be proved that he is promoting or conducting a scheme for the making of quick or easy money and secondly, the chance or opportunity of making quick or easy money must be shown to depend upon an event or contingency relative or applicable to the enrollment of members into that scheme.
[132 P G] 2.
Besides the prize chits, what the Act aims at banning is money circulation schemes.
The activity charged as falling within the mischief of the Act must be shown to be a part of a scheme for making quick or easy money, dependent upon the happening or non happening of any event or contingency relative or applicable to the enrollment of members into that scheme.
[133 E F] 3.
A transaction under which, one party deposits with the other or lends to that other a sum of money.
On promise of being paid interest at a rate higher than tho agreed rate of interest cannot, without more, be a 'money circu 124 lation scheme ' within the meaning of section 2 (c) of the Act, howsoever high the promised rate of interest may be in comparison with the agreed rate.
What section 2 (c) requires is that the reciprocal promises, express or implied, must depend for their performance on the happening of an event or contingency relative or applicable to the enrollment of members into the scheme.
[134 A B] In the instant case it seems impossible to hold on the basis of the allegations in the F.I.R. that any offence can be said to be made out prima facie under section 3 of the Act.
In the first place, the F.I.R. does not allege, directly or indirectly, that the firm was promoting or conducting a scheme for the making of quick or easy money, dependent on any event or contingency relative or applicable to the enrollment of members into the scheme.
Secondly, the F.I.R. does not contain any allegation whatsoever that persons who advanced or deposited their monies with the firm were participants of a scheme for the making of quick or easy money, dependent upon any such event or contingency.
The F.I.R. bears the stamp of hurry and want of care.
It seems to assume, that it is enough for the purposes of section 2 (c) to show that the accused is promoting or conducting a scheme for the making of quick or easy money, an assumption which is fallacious.
An essential ingredient of section 2 (c) is that the scheme for making quick or easy money must be dependent on any event or contingency relative or applicable to the enrollment of members into the scheme.
[135 D G] 4.
A First Information Report which does not allege or disclose that the essential requirements of the penal provision are prima facie satisfied, cannot form the foundation or constitute the starting point of a lawful investigation.
[135 G] 5.
There is no allegation even in any of the affidavits filed on behalf of the State and its officers that the depositors and the promoters are animated by a community of interest in the matter of the scheme being dependent upon any event or contingency relative or applicable to the enrollment of members into it.
That being an essential ingredient of the offence charged, it cannot be said in the absence of any allegation whatsoever in that behalf, that there is "reason to suspect" the commission of that offence within the meaning of section 157 of the Code of Criminal Procedure, so as to Justify the investigation undertaken by the State authorities.
[138 B D] 6.
The rule of strict interpretation of penal statutes does not In any way affect the fundamental principle of interpretation, that the primary test which can safely be applied is the language used in the Act and, when the words are clear and plain, the court must accept the expressed intention of the legislature.
[139 B] 7.
The investigation can be quashed if no cognizable offence is disclosed by the F.I.R.
The judiciary should not interfere with the police in matters which are within their province It is surely not within the province of the police to .
investigate into a Report which does not disclose the commission of a cognizable offence and the Code does not impose upon them the duty of inquiry in such cases.
[142 B C] 125 8.
The condition precedent to tho commencement of investigation under section 157 of the Code is that the F.I.R. must disclose, prima facie, that a cognizable offence has been committed.
It is wrong to suppose that the police have an unfettered discretion to commence investigation under section 157 of the Code.
Their right of inquiry as conditioned by the existence of reason to suspect the commission of a cognizable offence and they cannot, reasonably, have reason so to suspect unless the F.I.R. prima facie, discloses the commission of such offence.
If that condition is satisfied, the investigation must go on.
The Court has then no power to stop the investigation for to do so would be to trench upon the lawful power of the police to investigate into cognizable offences on the other hand, if the F.I.R. does not disclose the commission of a cognizable offence, the Court would be justified in quashing the investigation on the basis of the information as laid or received.
[142 D F] W.H. King vs Republic of India ; , 424; M.V. Joshi vs M.U. Shimpi, ; , 993 994; R.P. Kapur vs The State of Punjab , 392 393; S.N. Sharma vs Bipen Kumar Tiwari ; ; State of West Bengal vs S.N. Basak ; ; Jehan Singh vs Delhi Administration ; and King Emperor vs Khwaja Nazir Ahmed 71 I.A. 203, referred to.
The power to investigate into cognizable offences must be exercised strictly on the condition on which it is granted by the Code.
[142 G] Prabhu Dayal Deorah vs The District Magistrate, Kamrup, ; , 22 23, referred to.
The State Government, the Central Government and the Reserve Bank of India must be given a reasonable opportunity to see if it is possible, under the law, to institute an inquiry into the affairs of the firm and in the meanwhile to regulate its affairs.
Such a step is essential in the interests of countless small depositors who, otherwise will be ruined by being deprived of their life 's savings.
[147 H; 148 A B] [Per A.N. Sen, J.] 1.
Once an offence is disclosed, an investigation into the offence must necessarily follow in the interest of justice.
If, however, no offence is disclosed, an investigation cannot be permitted, as any investigation, in the absence of any offence being disclosed, will result in unnecessary harassment to a party, whose liberty and property may be put to jeopardy for nothing.
The liberty and property of any individual are sacred and sacrosanct and the Court zealously guards them and protects them.
An investigation is carried on for the purpose of gathering necessary materials for establishing and proving an offence which is disclosed.
When an offence is disclosed, a proper investigation in the interest of justice becomes necessary to collect materials for establishing the offence, and for bringing the offender to book.
In the absence of a proper investigation in a case where an offence is disclosed, the offender may succeed in escaping from the consequences and the offender may go unpunished to the deteriment of the cause of justice and the society at large.
[170 F H; 171 A] 126 2.
Justice requires that a person who commits an offence has to be brought to book and must be punished for the same.
If the Court interferes with the proper investigation in a case where an offence has been disclosed, the offence will go unpunished to the serious deteriment of the welfare of the society and the cause of the justice suffers.
It is on the basis of this principle that the Court normally does not interfere with the investigation of a case where an offence has been disclosed.
[171 A C] 3.
Whether an offence has been disclosed or not must necessarily depend on the facts and circumstances of each particular case.
In considering whether an offence into which an investigation is made or to be made is disclosed or not, the Court has mainly to take into consideration the complaint of the F.I.R. and the Court may in appropriate cases take into consideration the relevant facts and circumstances of the case.
On a consideration of all the relevant materials.
the Court has to come to the conclusion whether an offence is disclosed or not.
If on a consideration of the relevant materials, the Court is satisfied that the offence is disclosed the Court will normally not interfere with the investigation into the offence and will generally allow the investigation into the offence to be completed for collecting materials for proving the offence.
If, on the other hand the Court on a consideration of the relevant materials is satisfied that no offence ii disclosed, it will be the duty of the Court to interfere with any investigation and to stop the same to prevent any kind of uncalled for and unnecessary harassment to an individual.
[171 G H; 172 A B] W.H. King vs Republic of India ; , 424; M.V. Joshi vs M.U. Shimpi, ; , 993 994; R.P. Kapur vs The State of Punjab ,392 393; S.N. Sharma vs Bipen Kumar Tiwari [1970](3) SCR 946; State of West Bengal vs S.N. Basak ; ; Jehan Singh vs Delhi Administration ; and King Emperor vs Khwaja Nazir Ahmed 71 I.A. 203 referred to.
The word 'scheme ' has not been defined in the Act.
It has however, has been defined in the Rules.
Cl. 2 (g) of the Rules state that a "scheme means a money circulation scheme or as the case may be a prize chit as defined in cl.
(c) and (e) respectively of section 2".
The word 'scheme ' as contemplated in section 2 (c) of the Act is therefore, to be money circulation scheme within the meaning of the Act.
To be money circulation scheme, a scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrollment of the members into the scheme.
The scheme has necessarily to be judged as a whole, both from the view point of the promoters and also of the members.
[181 B D] In the instant case investment of monies with the firm have been made with the expectation of getting interest @48% and a big part of in black in a clandestine manner.
The transaction cannot be considered to be a scheme for the making of quick or easy money, though it may offend against revenue laws or any other law.
Transactions in black money do not come within the mischief 127 Of this Act.
Judged from the point of view of the depositors, it cannot.
therefore, be said that their investment in the firm for high return by way of interest part of which is above board and a part of which is clandestine, will form any part or a scheme for making easy or quick money, [t 81 D H; 182 A B] 5.
There is nothing to indicate that the firm makes any investment ill consultation with its depositors.
The materials indicate that the firm indulges in high risk investments and also advances monies to political parties.
Neither of these acts are illegal and do not go to show that the firm makes easy or quick money.
The materials however show that the firm pays a larger amount by way of interest than payable on the basis of the rates stipulated in the loan certificate and the excess amount of interest is paid to the depositor in a clandestine manner.
This does not, in any way, indicate the existence of any scheme for making quick or easy money.
[182 C E] In the instant case the requirements of a money circulation scheme are not satisfied.
As there is no money circulation scheme, there can be no scheme as contemplated in the Act in view of the definition of scheme in the Rules.
The materials, appear to disclose violation of revenue laws.
The materials do not disclose that the firm is promoting or circulating money circulation scheme and the question, therefore, of any violation of section 3 of the Act does not arise.
[182 G H] In the instant case as the firm is not conducting or promoting a money circulation scheme, and as no case is made that the firm is conducting or promoting a chit fund, the Act cannot be said to be applicable to the firm.
[183 A] 6.
As no offence under the Act is at all disclosed, it will be manifestly unjust to allow the process of criminal code to be issued or continued against the firm and to allow any investigation which will be clearly without any authority.
[184 E]
|
Civil Appeal No.28 of 1958.
Appeal from the judgment and order dated April 17, 1956, of the Allahabad High Court, in Special Appeal No. 20 of 1954, arising out of the judgment and order dated February 10, 1954, of the said High Court (Company Jurisdiction), in Application No. 29 of 1953/Company case No. 24 of 1949.
October 30.
H. N. Sanyal, Additional Solicitor General of India, and N. C. Sen, for the appellant.
Rule 97 of the High Court Company Rules merely gives the landlord the right to claim payment of rent and nothing more.
It does not give any priority to him.
The question of priority is dealt with in section 230 which gives no priority to the landlord.
[Shah, J. Top priority is given to costs and expenses of winding up under sections 193 and 203(3).
191 We offered possession to the landlord and we never used the premises for the purpose of liquidation after the winding up order.
Therefore the rent claimed by the landlord cannot he treated to have been incurred as costs and expenses of winding up.
The real question for decision is whether we used the premises for the purpose of liquidation.
It has been found by the High Court that we did not do so.
There is a rule under the English Companies Act which is identical to our r. 97 but none of the English cases have gone so far as to make the liquidators liable for the rent claimed by the landlord even if the premises were not used for the purpose of liquidation.
In re Silkstone and Dodworth Coal and Iron Company, 17 Ch. D. 158, In re Oak Pits Colliery Company, and In re Levy and Company, , cited.
The Oak Pits case definitely holds that the landlord is not entitled to full rent accruing since the commencement of the winding up if the liquidator has done nothing except abstain from trying to get rid of the property.
This principle should be applied in this case and r. 97 should not be so interpreted as to give any priority to the landlord.
A. V. Viswanatha Sastri, Mrs. E. Udayaratnam and section section Shukla, for the respondent.
By a previous order Mootham, J., who was then dealing with company matters in the High Court, passed an order to the effect that the landlord was entitled to recover rent from the bank from the date of winding up to the date when the liquidators would give him possession and thus terminate the tenancy.
This order was virtually passed under section 45B of the Banking Companies Act and the respondent was entitled to payment according to the tenor of the order which is that he should be paid in full.
[Shah, I. How can a decree drawn up as a result of that order be executed ? The amount has to be proved.] H. N. Sanyal, Additional Solicitor General of India, and N. C. Sen, in reply.
Mootham, J 's order simply purports to declare the liability of the liquidators but does not decide the question of priority.
November 10.
The Judgment of the Court was delivered by SHAH J.
The U. P. Union Bank Ltd. (which will 'hereinafter be referred to as the Bank) was in occupation as a tenant of a building in Agra town belonging to the respondent.
at a monthly rental of Rs. 325 and Rs. 10 as municipal taxes.
The Bank made default in paying the rent accruing due and the respondent filed suit No. 810 of 1949 in the court of the Munsiff 192 at Agra for a decree for rent for three months and obtained an order of attachment before judgment on the movable property of the Bank.
The Munsiff by his decree dated December 2, 1949, decreed the suit, and confirmed the order of attachment before judgment.
In the meanwhile, on a petition dated September 13, 1949, the Bank was ordered to be wound up by the High Court of Judicature at Allahabad and the appellants were appointed liquidators of the Bank.
The employees of the Bank had vacated the premises on September 10, 1949, but the property of the Bank which was attached was with the consent of the respondent stored by the Commissioner appointed by the Munsiff 's court in the Banking hall which was sealed by that officer.
A part of the premises was, it appears, occupied by some trespassers.
The Official Liquidators called upon the respondent to take possession of the premises, but the latter declined to do so unless vacant possession of the entire premises was given to him.
On November 30,1950, the respondent applied to the High Court for permission to file a suit for ejectment and for arrears of rent due since September 30, 1949.
Mr. Justice Mootham, who heard the application declined to grant permission holding that the claim which the respondent intended to put forward against the Official Liquidators in the course of the proposed suit may be adjudicated upon in the winding up proceeding, and with the consent of parties, the learned Judge proceeded to decide that claim.
By order dated August 30, 1951, Mr. Justice Mootham I hold that the petitioner is entitled to recover rent from the Bank at the rate of Rs. 325 per mensem from 1st October, 1949, upto the date on which the Official Liquidators give the petitioner (the landlord) such possession of the premises as will, in law, terminate the Bank 's tenancy.
" Against this order, the Official Liquidators preferred an appeal being special appeal No. 17 of 1952, to a Division Bench of the High Court.
193 On April 23, 1953, the respondent applied to the Joint Registrar of the High Court to issue a certificate of non satisfaction and to transfer the order to the court of the Civil Judge of Allahabad for execution.
The Joint Registrar issued a certificate of non satisfaction of the order and directed that the same be transmitted to the District Judge, Allahabad, for execution.
The respondent filed an application for execution in the court of the Civil Judge, Allahabad, and obtained an order for attachment of an amount of Rs. 12,000 lying to the credit of the Official Liquid ators in the Allahabad Bank.
The Official Liquidators thereupon applied to the High Court praying that the execution proceedings pending in the court of the Civil Judge, Allahabad, be declared void and the order of attachment of the fund in the account of the Official Liquidators passed by the Civil Judge be quashed.
Mr. Justice Brij Mohan Lall, who heard the application held that the proceeding commenced against the Official Liquidators, without the sanction of the court under sections 171 and 232, cl.
I of the Indian Companies Act, 1913, and the attachment ordered thereunder were void and directed that the certificate of non satisfaction be recalled.
Against this order.
the respondent preferred a special appeal to the High Court being appeal No. 20 of 1954.
Appeals Nos. 17 of 1952 and 20 of 1954 were then heard.
Appeal No. 17 of 1952 was dismissed and by an order passed on April 17, 1956, the High Court partially modified the order of Mr. Justice Brij Mohan Lall, and directed the Official Liquidators to pay to the respondent in full the amount that had fallen due to him after October 1, 1949.
The High Court was of the view that the Official Liquidators having retained the Bank 's premises in their occupation, by virtue of the proviso to r. 97 framed by the High Court, the respondent was entitled to receive the rent due to him in full and was not liable to share the assets of the Bank pro rata with the other ordinary creditors.
Against the order passed by the High Court, this appeal has been preferred with the certificate of the High Court.
25 194 By his order Mr. Justice Mootham, merely declared the liability of the Bank to pay the rent accrued due since October 1, 1949: there is no direction for payment of the amount, and it is not necessary to consider the plea raised by counsel for the respondent that the order being virtually one under section 45 B of the Banking Companies Act, the respondent was entitled to payment according to the tenor of the order.
The order in terms declares the liability and does not decide any question of priority between the respondent and other creditors of the Bank.
By section 647 of the Companies Act No. 1 of 1957, the winding up of the Bank having commenced before that Act was enacted, the provisions with respect to the winding up contained in the Indian Companies Act No. VII of 1913, continue to apply to the Bank in the same manner and in the same circumstances as if Act 1 of 1957 had not been passed.
By section 230 of the Indian Companies Act, 1913, provision is made for payment of specified categories of debts in the winding up in priority to all other debts; but rent due to the landlord is not one of such debts to which priority is given by section 230.
The High Court held that in as much as by r. 97 of the Company Rules, it was provided, " When any rent or other payment falls due at stated periods, and the order or resolution to wind up is made at any time other than one of such periods the persons entitled to the rent or payment may prove for a proportionate part thereof up to the date of the winding up order or resolution as if the rent or payment grew due from day to day: Provided that where the Official Liquidator remains in occupation of premises demised to a company which is being wound up, nothing herein contained shall prejudice or affect the right of the landlord of such premises to claim payment by the company, or the Official Liquidator of rent during the period of the company 's or the Official Liquidator 's occupation; " for the rent accruing due in respect of the premises which remained in the occupation of the Official 195 Liquidators, the respondent was entitled to preferential payment.
The operative part of the rule deals with the rent or other payment in arrears till the date of winding up.
By the proviso, it is declared that the right of the landlord to claim payment by the company of the rent accruing due thereafter is not to prejudiced.
The proviso merely affirms the right of the landlord to claim payment of, rent accruing due since the date of winding up.
It does not deal with any question of priority in payment of debts.
By section 246 of the Indian Companies Act, 1913, power is conferred upon the High Court to make rules consistent with the Act, and the Code of Civil Procedure concerning the mode of proceedings to be had for winding up of the company and certain other matters.
The Legislature has by section 230 prescribed that certain specified categories of debts shall rank for priority over other debts due by the company and it is not within the competence of the High Court to prescribe by rule a category for priority in payment which is not included in that section.
By section 193 of the Act, the court has, in the event of the assets being insuffiicient to satisfy the liabilities, indisputably power to make an order for payment out of the assets, of the costs, charges and expenses incurred in the winding up in such order of priority as the court thinks fit, and in exercise of the power conferred by section 230 sub cl. 3, the court may direct the company to retain such sums as may be necessary for the costs and expenses of the winding up of the company before discharging even the debts in respect of which priority is prescribed by section 230.
If therefore, there is a debt which may reasonably fall within the description of costs and expenses of winding up of the company, the court may provide for priority in payment of that debt as it thinks just.
In the winding up of the company, it is open to the liquidators to disclaim land burdened with onerous covenants, of shares or stock in companies, of unprofitable contracts or of any other property that is unsaleable or not readily saleable.
The disclaimer operates to determine as from the date of disclaimer 196 the rights, interests and liabilities of the company and the property of the company, in or in respect of the property disclaimed.
By section 230 A, cl. 4, liberty is reserved to persons interested in the property requirng the liquidator to decide whether he will or will not disclaim.
It is also open to the court under sub section
5 of section 230 A on the application of any person entitled to the benefit or subject to the burden of a contract made with the company to make an order rescinding the contract on such terms as to payment of damages for non performance of contracts.
It is evident that on the winding up outstanding contracts of the company do not become ipso facto inoperative.
The contracts remain binding until disclaimed or rescinded in the manner provided by section 230 A; but the liability incurred under these contracts is merely an ordinary debt which ranks for claim to payment pro rata along with other creditors.
If the debt be regarded reasonably as falling within the description of costs and expenses of winding up of the company, it is open to the court to direct that preferential payment in respect thereof be made; otherwise the debt will be claimable out of the assets of the company pro rata with other ordinary creditors.
Distinction has been made by the courts in England where the relevant provisions of the Companies Act are substantially the same that if the liquidator continues in possession of leaseholds for the purpose of the better realization of assets, the lessor will be entitled to payment of the rent in full, as part of the expenses properly incurred by the liquidator; but as observed by Lord Justice Lindley, In re Oak Pits Colliery Companys (1). " No authority has yet gone the length of deciding that a landlord is entitled to distrain for or be paid in full rent accruing since the commencement of the winding up, where the liquidator has done nothing except abstain from trying to get rid of the property which the company holds as lessee.
" Evidently a distinction is made between property which remains in the occupation of the liquidator (1) 1882 Ch.
D 321, 331. 197 after the winding up when the occupation is shown to be for the purpose of liquidation and property which merely remain with the liquidator, he having abstained from trying to got rid of the same and It does not appear or is not shown that the property was used for the purpose of winding up.
The High Court held on the fact that the liquidators had remained in occupation of the premises not for the purpose of winding up but " because they could not think of any suitable method of getting rid of the premises in spite of all their desire to do so.
" It was pointed out that the Bank had closed its business and the liquidators were not carrying on any business after the winding tip and the properties were not used by the liquidators for the purpose of liquidation.
This conclusion of the High Court on the evidence has not been challenged.
The property not having remained with the liquidators for the purpose of liquidation, unless the court passes an order holding that the debt incurred was part of the costs and expenses of liquidation, the rent accruing due since the date of the winding cannot be claimed in priority over other ordinary debts.
We are therefore unable to agree with the High Court that under r. 97 of the Company Rules, if the premises remained in the occupation of the liquidators, not for the purpose of winding up, the landlord is entitled to priority in respect of payment of rent.
On the view taken by us, the appeal will be allowed, the order passed by the High Court set aside and the order passed by Mr. Justice Brij Mohan Lall restored with costs in this Court and in the High Court.
Appeal allowed.
| The U. P. Union Bank was in occupation of a building belonging to the respondent as a tenant.
After the passing of the winding up order of the bank the Official Liquidators removed the offices of the bank from the premises and called upon the respondent landlord to take possession thereof.
The respondent refused to do so as part of the premises was occupied by some trespassers.
Thereafter the Official Liquidators did not do any business in the building in connection with the winding up of the bank.
The respondent claimed the entire rent from the date of the winding up order up to the date on which the Official Liquidators would give him vacant possession of the premises.
The High Court held that in view of the proviso to r. 97 of the Rules framed by the High Court under the Companies Act the respondent was entitled to recover the entire rent claimed by him and not pro rata with the other creditors of the bank.
The proviso to r. 97 of the Company Rules runs thus: " Provided that where the official liquidator remains in occupation of premises demised to a company which is being wound up, nothing herein contained shall prejudice or affect the rights of the landlord of such premises to claim payment 190 by the Company or the Official Liquidator of rent during the period of the company 's or the Official Liquidator 's occupation." On appeal by the Official Liquidators by a certificate of the High Court: Held, that the landlord respondent was not entitled to claim priority in respect of payment of rent because the proviso to r. 97 of the Company Rules framed by the High Court affirms the right of the landlord to claim payment of rent accruing due since the date of winding up but does not deal with the question of priority in payment thereof, and further because the building in question did not remain in the possession of the liquidators for the purpose of liquidation.
In re Oak Pits Colliery Company, , followed.
Held, further, that section 230 of the Companies Act, 1913, which specifies categories to which priority in payment should be given, does not give priority to rent due to landlord and it is not within the competence of the High Court to give priority by its rules to a category which is not included in that section.
Under section 193 the Court has power to order payment of the costs and expenses of winding in such priority as it thinks fit in cases where the assets are insufficient to discharge the liabilities, and section 230(3) empowers the Court to direct the company to retain such sums as may be necessary for the costs and expenses of winding up even before discharging the debts for which priority is given by section 230.
If a debt can reasonably be described as costs and expenses of winding up the court may direct preferential payment thereof, otherwise only pro rata payment with the other ordinary creditors can be claimed out of the assets of the company.
|
Appeal No. 548 of 1967.
Appeal by special leave from the award dated October 5, 1966 ,of the Industrial Tribunal, Alleppey in Industrial Dispute No. 9 ,of 1965.
H. R. Gokhale and D. N. Gupta, for the appellant.
M. K. Ramamurthi, Shyamala Pappu, Vineet Kumar and R. Nagaratnam, for the respondents.
The Judgment of the Court was delivered by Mitter, J.
This appeal by the Remington Rand of India Ltd. :against their workmen arises out of an award dated 5th October, 1965 made by the Industrial Tribunal, Alleppey published in the Kerala Gazette dated 15th November, 1966.
The first point taken against this award is that it cannot be given effect to as it was published beyond the period fixed in the Act.
The notification accompanying the gazette publication stated that Government had received the award on 14th October, 1966.
It was argued by Mr. Gokbale that in terms of section 17(1) of the Industrial Disputes Act the award bad to be published " within a period of thirty days from the date of its receipt by the appropriate Government".
According to learned counsel, the award having reached Government on 14th October, 1966 it should have been published at the latest on 12th November, 1966 as section 17 of the Act was mandatory.
Our attention was also drawn to 165 sub section
(2) of section 17 according to which it is only the award published under sub section
(1) of section 17 that is final and cannot be called in question by any court in any manner.
We were also referred to section 17 A and section 19.
Under sub section
(1) of section 17 A an award becomes enforceable on the expiry of thirty days from the date of its publication under section 17 and under sub section
(3) of section 19 an award is to remain in operation for a period of one year from the date on which the award becomes enforceable under section 17 A. From all these provisions it was argued that the limits of time mentioned in the sections were mandatory and not directory and if an award was published beyond the period of thirty days, in contravention of section 17(1) it could not be given effect to.
To fortify his argument, learned counsel relied on certain observations of this Court in The Sirsilk Ltd. vs Government of Andhra Pradesh.(1) In that case, there was an order referring certain disputes between the appellant and its workmen to the Industrial Tribunal, Andhra Pradesh.
The Tribunal sent its award to Government in September 1957.
Before the Government could publish the award, the parties to the dispute came to a, settlement and on 1st October, 1957 a letter was written to the Government jointly on behalf of the employer and the employees intimating that the dispute which had been pending before the Tribunal had been settled and a, request was made to Government not to publish the award.
Government expressed its inability to withhold the publication taking the view that section 17 of the Act was mandatory.
The appellants filed writ petitions before the High Court of Andhra Pradesh under article 226 of the Constitution praying that Government might be directed not to publish the award sent to it by the Industrial Tribunal.
The High Court held that section 17 was mandatory and it was not open to Government to withhold publication.
The contention on behalf of the appellants was that section 17 providing for the publication of the award was directory and not mandatory.
Mr. Gokhale relied on the passage at page 452 of the judgment reading: "It is clear therefore, reading section 17 and section 17 A together, that the intention behind section 17(1) is that a duty is cast on Government to publish the award within thirty days of its receipt and the provision for its publication is mandatory and not merely directory".
Ultimately, however, on a conspectus of sections 17, 17 A, 18 and 19, it was observed that "though section 17(1) is mandatory and the Government is bound to publish the award received by it from an industrial tribunal, the situation arising in a case like the present is of an exceptional nature and requires a reconciliation between section 18(1) and section 18(3), and in such a situation, the only way to reconcile the two provisions is to withhold the publication of the award, as a binding settlement has.
already come into force. . " (1) ; , 452 166 Reference was also made to the case of Erumeli Estate vs Industrial Tribunal (1).
There the question directly arose as to whether non publication of the period mentioned in section 17 (1)invalidated the award and the learned Judge observed that he was not inclined to accept that contention although it was highly desirable that the award should be published within the time mentioned.
He said: "Exceptioning that a slight delay in publishing the award under section 17(1) results in postponing its finality under section 17 (2) or its becoming enforceable under section 17 A, no other consequence flows from the delay and therefore, in my view the provisions of sub s (1) of s 17 should be considered only to be merely directory. . ." Mr. Gokhale also referred us to the case of the State of Uttar Pradesh & Others vs Babu Ram Upadhya(2) where there is an elaborate discussion as to whether the use of the word "shall" in A Statute made the provision mandatory.
It was observed by Subba Rao, J. (as he then was) speaking for the majority of the Court that: "For ascertaining the real intention of the Legislature the Court may consider inter alia, the nature and the design of the statute, and the consequences which would follow from construing it One way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstances, namely, that the statute provides for a contingency of the non compliance with the provisions, the fact that the noncompliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered.
" Keeping the above principles in mind, we cannot but hold that a provision as to time in section 17(1) is merely directory and not mandatory.
Section 17(1) makes it obligatory on the Government to publish the award.
The limit of time has been fixed as showing that the publication of the award ought not to be held up.
But the fixation of the period of 30 days mentioned therein does not mean that the publication beyond that time will render the award invalid.
It is not difficult to think of circumstances when the publication of the award within thirty days may not be possible.
For instance, there may be a strike in the press or there may be any other good and sufficient cause by reason of which the publication could not be made within thirty days.
If we were to hold that the award would therefore be rendered invalid, it would be attaching undue importance to a provision not in the mind of the legislature.
It is well (1) [1962] IT L.L.J. 144.
(2 ) [1961]2 S.C.R 679, 710 167 known that it very often takes a, long Period of time for the reference to be concluded and the award to be made.
If the award becomes invalid merely on the ground of publication after thirty days, it might entail a fresh reference with needless the parties.
The non publication of the award within the period of thirty days does not entail any penalty and this is another consideration which has to be kept in mind.
What was said in the earlier passage from the judgment in The Sirsilk Ltd. vs Government of Andhra Pradesh(1) merely shows that it was not open to Government to withhold publication but this Court never meant to lay down that the period of time fixed for publication was mandatory.
Coming to the merits of the case, Mr. Gokhale argued that the Tribunal.
had gone wrong in revising the wage scales as it had done.
The head of dispute referred to the Tribunal was "revision of wages as per award of the Madras Labour Tribunal in 38 of 1960.
" The arguments advanced in this case were the same as in the Bangalore case (just now disposed of) and the Tribunal after noting the phenomenal progress of the Company and the enormous profits it was making, came to the conclusion that there was no reason why there should be any disparity in wages between the employees of a branch and the regional office when they were doing the same or similar work.
In this case also, there was no evidence of comparable concerns.
In our view, what we have said on this point of the dispute with regard to the Bangalore branch applies equally with regard to the Kerala branch and the matter will have to go back to the Tribunal for fixing the wages and the adjustment of the workers in the revised scale in the light of the observations made in that case bearing in mind Mr. Gokhale 's offer on behalf of the Company to increase the wages as in the other appeal.
With regard to dearness allowance again, what was said in the Bangalore appeal applies equally to this appeal.
Here again the Tribunal said: "It is also an accepted fact that the cost of living both at Trivandrum and at Ernakulam is higher than the cost of living at Madras.
Therefore, there is no justification in perpetuating the disparity in the payment of D.A. to the workmen working at Madras and those working in the Trivandrum Branch.
" In the result, the Tribunal directed that the workmen of Ernakulam branch should get dearness allowance "at the rate at which and in the manner in which" the pay and dearness allowance was being paid to the employees of Madras Regional Office.
In our view, dearness allowance should be the same as decided in the case of the workers of the Bangalore branch.
(1) ; 168 The scheme for gratuity is the same as in the case of the Bangalore branch with the only difference that the maximum fixed was 20 months ' wages after 20 years service.
In our view, there is no reason why the scheme for gratuity should not be the same in the Ernakulam branch as in the Bangalore branch in case of termination of service for misconduct and the qualifying period should be 15 years ' service.
Again, on principles already formulated, we hold that leave facilities at Ernakulam should be the same as those prevailing at Madras.
Next comes the dispute with regard to the working hours.
The working hours of the employees of Trivandrum and Ernakulam as prevalent were from 9 a. m. to 1.
p. m. and from 2 p. m. to 5 30 p. m. on week days and from 9 a. m. to 1 p. m. on Saturdays.
At Madras the Company 's workers work only for five days in a week from 9 a. m. to 1 p. m. and 1 45 p. m. to 5 30 p.m.
The total working hours were therefore somewhat less than those at Trivandrum and Ernakulam.
The complaint of the union before the Tribunal was that although by circular dated 24th March 1963 the Company had fixed the working hours from 9.30 a.m. for clerks and 9 a.m. for mechanics and peons, it was extracting half an hour 's work per day extra contrary to their own orders.
The Tribunal held that the circular should be given effect to and that the clerical staff should work from 9.30 a.m. to 1 p.m. and from 2 p.m. to 5.30 p.m. on working days and from 9.30 a.m. to 1 p.m. on Saturdays.
We see no reason to disturb this portion of the award.
Another head of dispute related to work load.
The complaint of the union was that the workload was too heavy and that the method of calculation of workload was arbitrary.
According to them, the workload fixed by agreement between the Company and its employees in Delhi and Lucknow was seven machines per day or 150 machines per month, while the workload at Trivandrum was 10 machines per day.
According to the Management the workload fixed i.e., 10 machines per day, was not too much and there was no reason for disturbing the prevailing arrangement.
But the Management did not deny that during the course of negotiations they had agreed to reduce the workload to seven machines per day or 150 machines per month and the Tribunal adopted this in the award with a rider that "all the machines attended to, whether new or old, whether under the service contract or not, will be counted for the sake of workload".
No satisfactory reason has been adduced as to why we should disturb the award.
The last head of dispute was with regard to "moving staff allowance".
The union demanded that workmen who were deputed on tour on Company 's work should be given a day off if they had to travel two nights consecutively.
Demand was also made that, 169 travelling staff should be paid overtime for the work done on holidays while on tour at double the normal wages for the day.
The Management disputed this claim on the ground that it was not possible to calculate the number of hours worked by the employee at the out station while on tour.
The Tribunal found on examining a mechanic that the jurisdiction of the branch was limited to the districts Trivandrum, Quilon, Alleppey and Kottayam and even if he was forced to work on holidays he was given over time wages.
The Tribunal held that it was only just and reasonable that tour in mechanics should be given a day off if they travelled on two consecutive days for reaching a place of work and also over time wages at double the wages for the work done on holidays.
It appears to us that with the limitation as to jurisdiction noted above, the occasion for a mechanic spending two consecutive nights for reaching a place of work will arise very seldom, but if it does, there is no reason why he should not get overtime wages as awarded by the Tribunal and we see no reason to interfere with this portion of the award.
In the result, the matter will go back to the Tribunal for disposal of the issue as to the revision of wage scales and adjustment of workers in the revised scales.
The scheme for gratuity will stand modified as indicated in our judgment in Civil Appeal No. 2105 of 1966 delivered today.
The rest of the award will stand.
The appellant will pay the respondent the costs of this appeal.
A ward modified.
| The Income tax Act, 1922, as originally enacted did not give to a cooperative society any exemption from payment of tax in respect of income from its business activities.
By departmental instructions issued under section 60 of the Act, exemption from payment of tax in respect of certain receipts of a co operative society were given.
The notification provided inter alia that as regards interest received by it from government securities, an amount which bears the same proportion to the total interest paid on debentures etc.
as the capital invested in government securities bears to the total working capital, shall be deducted from the interest on government securities as being exempt from tax.
The departmental instructions were later withdrawn and sub section
(3) was added to section 14 of the Act, by which, with effect from April 1, 1955, a cooperative society was not liable to pay tax in respect of the profits and.
gains of business carried on by it.
In 1956, an Explanation, applicable to banking companies, was added to section 8.
Clause (a) of the Explanation provided for the allocation of business ex penditure between different sources of income of banking companies; and cl.
(b) provided for allocation of outgoings in respect of " money borrowed" including money deposited with the bank [33BH; 34C F] Thus, in spite of section 14(3), for the assessment year 1956 57, there were no departmental instructions governing the apportionment of income from government securities between business and non business sources of income; and, in the case of a cooperative society which did not carry on the business of a banking company.
there was no statutory rule for such apportionment, the Explanation to section 8 not being applicable.
Therefore, in the case of a cooperative society which was not carrying on the business of a banking company a rule of apportionment consistent with commercial accounting for determining the income from government securities attributable to the business activity of the society had to be evolved.
[35H; 35A B] The appellant was a cooperative society not carrying on business of banking and for the assessment year 1956 57; it claimed that out of its gross income from securities, only Rs. 13,578 was chargeable to tax on the principle of the departmental instruction.
The Appellate Tribunal applied the principle of the Explanation to section 8 and computed the taxable income at Rs. 59,498.
The High Court held that the benefit of the departmental notification was not available to the appellant, because it must be deemed to have been withdrawn and that, the Explanation to section 8 did not in terms apply to the appellant.
31 In appeal to this Court, Held:In the absence of a statutory rule and departmental in structions, a rule of appointment which dismembers income in pro"portion to the business and non business components of the source from which it arises would be more consistent with principles of commercial accounting.
The proportion of income from securities which is exempt from taxation under section 14(3) will be that proportion which the capital of the Society used for the purposes of the business bears to the total working capital, and according to this rule, the gross income from securities which would be liable to tax was only Rs. 13,578.
It was not open to the appellant to contend that even this amount was not taxable.
Such a question was never raised either before the department or the Tribunal.
[33C D; 36F H] The principles laid down in cls.
(a) and (b) of the Explanation to s, 8 are not Applicable.
The rule in cl.
(a) is not a rule of apportionment for the purpose of taxation of composite income which is partly taxable and partly not.
It is an artificial rule, specially evolved for determining the appropriate outgoings for the purpose of realising interest .,from securities held by a banking company in computing income chargeable to tax.
Clause (b) deals with the proportion in which the outgoings are allocable.
The problem arising under section 14(3) is not one relating to allocation of outgoings to deter.
mine taxable income, but of apportionment of income under the taxable and non taxable heads.
[36C E]
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Civil Appeal No. 924 of 1970.
Appeal by special leave from the Judgment and order dated 19 10 1977 of the Punjab and Haryana High Court in Civil Writ Petition No. 3219/77.
Appellant in person.
H.S. Marwah, R.N. Sachthey and A. Sachthey for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against the judgment of the Punjab & Haryana High Court dismissing the Writ Petition filed by the appellant against the order of his termination passed by the Senior Superintendent of Police.
The appellant was appointed on 2 7 1973 as a temporary Assistant Sub Inspector of Police.
On 26 9 1977, his services were terminated by the Senior Superintendent of Police.
Against this order, the appellant moved the High Court of Punjab & Haryana but his petition was rejected.
Thereafter, he came to this Court and after obtaining special leave from his Court, the appeal has been placed before us for hearing.
The short point taken by the appellant in this appeal is that under Rule 12.8(1) of Punjab Police Rules, the petitioner must be considered to be on probation for a period of three years and as the appellant has crossed this period or three years, he must be deemed to have been confirmed and, therefore, his services could not be terminated.
In support of this submission, reliance is placed by the appellant on a Division Bench Judgment of this Court in case of The Superintendent of Police, Ludhiana and Anr.
vs Dwarka Das etc.
Where Shinghal J. speaking for the Court observed as follows: "So if Rules 12.2(3) and 12.21 are read together, it will appear that the maximum period of probation in the case of a police officer of the rank of constable is three years, for the Superintendent of Police concerned has the power to discharge him within that period.
lt follows that the power of discharge cannot be exercised under Rule 12.21 after the expiry of the period of three years.
" It is true that the observations made by this Court support the contention of the appellant to all extent.
But in our opinion, the 489 Division Bench decision was not correctly decided as it has not considered the Five Bench decision of this Court in case of State of Punjab vs Dharam Singh where after considering the number of cases, the Court observed thus: "This Court has consistently held that when a first appointment or promotion is made on probation for a specific period and the employee is allowed to continue in the past after the expiry of the period without any specific order of confirmation, he should be deemed to continue in his post as a probationer only, in the absence of any indication to the contrary in the original order of appointment or promotion or the service rules.
Tn such a case an express order of confirmation is necessary to give the employee a substantive right to the post, and from the mere fact that he is allowed to continue in the post after the expiry of the specified period or probation it is not possible to hold that he should be deemed to have been confirmed.
The reason for this conclusion is that where on the completion of the specified period of probation the employee is allowed to continue in the post without an order of confirmation, the only possible view to take in the absence of anything to the contrary in the original order of appointment or promotion or the service rules, is that the initial period of probation has been extended by necessary implication." In the instant case, the appellant was appointed purely on a temporary basis and not on probation and, therefore, Rule 12.8 which deals with officials who are appointed on probation does not apply to this case at all.
It is well settled that a person is appointed on probation only if he is appointed against a substantive vacancy.
In the instant case, it is not disputed that the appellant was appointed only against a temporary vacancy.
Assuming, however, that Rule 12.8 of the Punjab Police Rules applies to the appellant 's case and he is governed by Rule 12.8 even after the probation of three years is over, the police officer shall not be deemed to be confirmed unless there is any rule which provides that in absence of an order of confirmation at the end of the probation? the employee must be presumed to be confirmed.
There is no such provision in the present rules.
In these circumstances, therefore, as held by this Court in the case of Dharam Singh, it must be held that if no express order of confirmation was 490 passed after the appellant completed three years, it must be presumed that his probation was extended.
In this view of the matter, as the appellant was a temporary hand, the services could be terminated at any time.
It appears that the attention of this Court is Dwarka Das 's Case was not drawn to the case of State of Punjab vs Dharam Singh (supra) which has been decided by a larger Bench and therefore, the later decision rendered by this Court in Dwarka Das is directly opposed to the view taken by the larger Bench and must, therefore, be overruled.
For these reasons, therefore, we are unable to find any legal error in the order passed by the Senior Superintendent of Police in terminating the services of the appellant The appeal is accordingly dismissed.
A request has been made by the appellant that he may be allowed to retain the Govt.
quarter which has been allotted to him for some time so as to enable him to find alternative accommodation.
Mr. Marwah, Counsel for the State, has no objection if a reasonable time is given to the appellant for this purpose.
We, therefore, give three months ' time to the appellant to vacate the government quarter allotted to him on his furnishing an undertaking to the Sr.
Supdt.
of Police.
| Allowing the appeal.
^ HELD: For making the provisions of section 17(1) applicable: (a) the land in respect of which the urgency provision is being applied should be waste or arable and (b) there should be an urgency for taking immediate possession requiring dispensation of the right of the owner for filing an objection under section 5A and this right should not be interfered in a casual or cavalier manner.
[94C, F] In the instant case the Notification under section 17(4) of the Act neither mentioned that the land is waste or arable nor that there was urgency to take recourse to the provisions of the Act.
[94D] The direction given to the Collector to take action under Section 17 on the ground of urgency is not a legal and complete fulfillment of the requirement of the law.
|
Appeals Nos. 484 and 485 of 1965.
Appeals by special leave from the judgment and decree dated December 14, 1959 of the Madras High Court in Appeals Nos. 808 and 746 of 1954.
S.T. Desai, P. C. Bhartari, and J., B. Dadachanji, for the appellants (in both the appeals).
A.V. Rangam, for respondents Nos.
I to 3 (in C.A. No. 484 of 1965).
R. Gopalakrishnan, for respondents Nos.
I to 3 (In C.A. No.485 of1965).
B. Dutta, for respondents Nos. 4, 9 and II (in C.A. No. 484 of 1965) and respondents Nos.
13 to 17 and 20 (in C.A. No. 485 of 1965).
544 The Judgment of the Court was delivered by Bachawat, J.
In the village of Thenkarai in the Madurai District there is an ancient temple of Sri Thirumoolanathaswami.
Inams were granted by Hindu kings for performance of services ,of watchman, palanquin bearer, background music player, dancing girl, musical instrument player, mason, blacksmith carpenter, potter, washerman connected with the temple.
The inams were confirmed by the British Government.
For over 80 years, the inams were in the enjoyment of alienees from inamdars.
By an order passed on April 10, 1947 under section 44 B of the Madras Hindu Religious Endowments Act, the Revenue Divisional Officer, Usilampatti resumed the inam lands and regranted them to the temple.
On October 17, 1947, this order was confirmed on appeal by the District Collector.
The Revenue Divisional Officer and the District Collector held that the inams comprised both melwaram and kudiwaram rights in the land.
The orders were passed ,on notice to the alienees.
The alienees instituted a suit in the ,Court of the Subordinate Judge, Madurai under the proviso to section 44 B(2)(d)(ii) asking for a decree declaring that the inam grants consisted of the melwaram only.
The suit was withdrawn to the Court of the District Judge, Madurai and registered as O.S. No. 3 of 1954.
They, instituted another suit in the Court of the Sub ordinate Judge, Madurai, asking for a decree declaring that the ,order of the Collector dated October 17, 1947 was a nullity.
This suit was transferred to the Court of the District Judge and registered as O.S. No. 4 of 1954.
The District Judge dismissed O.S. No. 3 of 1954.
He decreed O.S. No. 4 of 1954 and declared that the order resuming the inam lands was illegal and a nullity.
The plaintiffs filed an appeal registered as A.S. No. 746 of 1954 in the High Court of Madras from the decree in O.S. No. 3 of 1954.
The High Court dismissed the appeal.
The State of Madras filed an appeal registered as A.S. No. 808 of 1954 from the decree in O.S. No. 4 of 1954.
The High Court allowed the appeal and dismissed the suit with respect to all the inams except the Dasi inam.
Regarding the Dasi inam, the High Court dismissed the appeal as the inam was enfranchised and could not be resumed.
It is from the decree of the High Court dismissing the suits in respect of the other inams that the plaintiffs have filed these appeals after obtaining special leave.
The two courts concurrently held that the inams comprised both the kudiwaram and the melwaram.
The District Judge held that the right to resume an inam could not be extinguished by adverse possession, and that, in any event, the claim of adverse possession was not established.
The High Court held that assuming the right of resumption could be so extinguished, it was not established that the plaintiffs and their predecessors in title were in pOS session of the inam lands adversely to the inamdars or the Gov 545 ernment.
The District Judge held that the inams were personal inams burdened with services and the order of resumption was therefore illegal and a nullity.
The High Court reversed this finding and held that the inams were for performance of services connected with the temple and were resumable under section 44 B. The District Judge held that section 44 B was retrospective in operation.
On this last point, the High Court did not express any opinion.
It may be noted that O.S. Nos. 3 and 4 of 1954 were tried along with O.S. Nos.
I and 2 of 1954 and disposed of by the District Judge by a common judgment.
O.S. Nos. 1 and 2 of 1954 related to inams granted for performance of puja in another temple.
From the decrees passed in O.S. Nos. 1 and 2 of 1954, there were appeals to the High Court and subsequently appeals to this Court.
The judgment in those appeals is reported in Roman Catholic Mission vs State of Madras(1).
One of the points in all the four suits was whether section 44 B was ultra vires the powers of the legislature.
This Court held that the Provincial Legislature was competent to enact section 44 B and the amendment to it.
On behalf of the appellants, Mr.S. T. Desai submitted that (1) the inam grants did not comprise the kudiwaram; (2) the inams were personal inams burdened with services and were not resumable under section 44 B; (3) Section 44 B (2) was not retrospective in operation and did not authorise resumption of the inams on the ground of any alienation thereof made before 1934; (4) there was no alienation of the inams as contemplated by section 44 B (2) (a) (i) and (5) the right of resumption of the inam lands was extinguished by adverse possession of the lands by the alienees for over 60 years.
The Madras Hindu Religious Endowments Act, 1926 (Madras Act II of 1927) was passed on January 19, 1927.
Section 44 B was inserted in the present Act by Madras Act XI of 1934 and was later amended by Madras Act V of 1944 and Madras Act, of 1946.
This section corresponds to section 35 of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 1951) which repealed Act II of 1927.
The material provisions of section 44 B are in these terms : "44 B. (1) Any exchange, gift, sale or mortgage, and any lease for a term exceeding five years, of the whole or any portion of any inam granted for the support or maintenance of a math or temple or for the performance of a charity or service connected therewith and made, confirmed or recognised by the British Government, shall be null and void.
Explanation.
Nothing contained in this sub section shall affect or derogate from the rights and obligations (1) ; 546 of the landholder and tenant in respect of any land as de fined in the Madras Estates Land Act, 1908.
(2)(a) The Collector, may on his own motion, or on the application of the trustee of the math or temple or of the Assistant Commissioner or of the Board or of any person having interest in the math or temple who has obtained the consent of such trustee, Assistant Commissioner or Board, by order, resume the whole or any part of any such inam, on one or more of the following grounds, namely : (i) that the holder of such inam or part has made an exchange, gift, sale or mortgage of the same or any portion thereof or has granted a lease of the same or any portion thereof for term exceeding five years, or (ii) that the holder of such inam or part has failed to perform or make the necessary arrangements for performing, in accordance with the custom or usage of such math or temple, the charity or service for performing which the inam had been made, confirmed or recognised by the British Government, or any part of the said charity or service, as the case may be, or (iii) that the math or temple has ceased to exist or the charity or service in question has in any way become impossible of performance.
When passing an order under this clause, the Collector shall determine whether such inam or the inam comprising such part, as the case may be, is a grant of both the melwaram and the kudiwaram or only of the melwaram.
(f)Where any main or part of an inam is resumed under this section, the Collector or the District Collector, as the case 'may be, shall, by order, regrant such inam or part (i)as on endowment to the math or temple concerned,or (ii)in case of resumption on the ground that the math or temple has ceased to exist or that the charity or service in question has in any way become impossible of performance, as an endowment to the Board, for appropriation to such religious, educational or charitable .,purposes not inconsistent with the objects of such math or temple, as the Board may direct.
" 547 The inam title deeds, the entries in the inam fair register prepared at the time of the confirmation of the inams by the Inams Commissioner in 1863 and the contemporaneous statement made by the inamdars are of the same pattern in respect of all the inams.
It is sufficient to refer to Exs.
B 4, B 5 and B 6 relating to the inam for the service of Sree Padarn Thangi (palanquin bearers).
The statement, exhibit B 4, shows that in fasli 1272 corresponding to 1862 63, Veerabadra Mudali, Periasami Mudali, Andiappa Mudali were in enjoyment of the inam and rendering the service under the direction of the Paisaldars or the trustees of the temple.
They made the following statement: "For taking the deities in procession round the village during the festival in the temple of Tirumulanathaswami and Akilandeswari Amman in the village of Kovil Thenkarai the aforesaid land has been granted as inam.
The paisaldars appointed our ancestors and got service from them.
The aforesaid manyam was in their enjoyment.
Afterwards the manyam was divided and during fasli 36, it was registered in the name of myself individual No. 1 and in the names of the fathers of individuals Nos. 2 and 3.
They were rendering the service and enjoying manyam and in the same manner.
We have been rendering the aforesaid service and enjoying the manyam.
" The entries in the inam fair register, exhibit B 5 show that the inam belonged to the category of Devadayam and was for the service, of Sree Padam Thangi which was being then rendered, that the original grant was made to the temple before fasli 1212 corresponding to 18023, and that in 1863 the inam was being enjoyed by Verrabadra Mudali, Periasami Mudali and Andiappa Mudali.
The title deed acknowledged their title to Devadayan or pagoda service inam to 11.47 acres of land held for the service of Sree Padam Thangi and confirmed the inam to them and their successors tax free to be held without interference so long as the conditions of the grant were duly fulfilled.
Those documents show that the lands were being enjoyed by the inamdars and were granted as inams.
The amount of the assessment or melwaram was very low and could not be an ade quate remuneration.
for the services to be rendered.
The plaintiffs claimed title to the lands under a grant from the inamdars on the footing that the inamdars were entitled to the kudiwaram and the melwaram.
The conclusion is irresistible that the inam comprised both the warams.
The inams were originally granted, to the temple for the performance of services connected therewith.
The trustees of the temple appointed persons to perform those services and placed the inams in their possession to be enjoyed by them as remuneration for the services to be rendered by them.
The Inam Commission confirmed the grants of the inams in favour of the hereditary officeholders then rendering the services.
Where there were several 548 holders of the office, the inams were shown to be in their enjoyment in equal shares.
It is quite clear that the inams were granted .to the holders of hereditary offices as remuneration for services to be rendered by them in connection with the temple.
There is a well recognised distinction between the grant of the land burdened with a condition of service and the grant of land as remuneration for an office, see, Forbes vs Noor Mahomed Tuquee(1).
Section 44 B does not apply to a personal inam burdened with a condition of service, See P. V. Bheemsena Rao vs Siyrigiri Pedda Yella Reddi(2).
It applies to an inam granted to an ,office holder as remuneration for his services connected with a math or temple as also to an inam granted to the institution direc tly.
The inams in the present case were not personal inams.
They were inams granted to office holders as remuneration for services to be rendered by them and were within the purview of 44 B.
The next question is whether section 44 B allows resumption of an inam falling within the purview of the section where the inam was alienated before the section came into force in 1934.
Subsection (1) of section 44 B renders null and void certain alienations of the inam.
Sub section (2) authorises resumption of the inam on certain grounds.
Sub section (2) is not dependent upon sub sec.
(1) and allows resumption even in cases where there has been no alienation of the inam.
In the present case, we are not concerned with the retrospective operation of sub see.
(1) of section 44 B, and we express no opinion on it.
But there can be no doubt that section 44 B (2)(a)(i) allows a resumption of the inam where there has ,been an alienation of the inam either before or after 1934.
Even apart from section 44 B, any inam whatever its nature could be resumed for failure to perform the conditions of the grant.
Subject to certain restrictions and safeguards, paragraph 2 of the Board 's Standing Order No. 54 permitted resumption of religious and charitable inams on the ground that the land was alienated or otherwise lost to the institution or service to which it once belonged or on the ground that the terms of the grant were not observed.
The object ,of section 44 B was to define and enlarge the, grounds on which the inams could be resumed and to devise a proper procedure for the resumption.
On general grounds of public policy, the legislature has declared that the inam may be resumed on any of the three grounds mentioned therein.
The first ground is that the holder of the inam has made an alienation.
The words "has made" in sub. section (2)(a)(i) takes in all alienations past and future and not only future alienations or alienations made after the section came into force. ' If there has been any alienation at any time the first ground ,exists and the inam may be resumed under section 44 B.
The words "has failed" in sub.
section
(2)(a)(ii) and the words "has ceased" and (1) (1870) 13 H.I.A.438,464.
(2) ; 549 "has become" in sub.
section
(2)(a)(iii) similarly authorise resumption of the inam if the other grounds exist though they may have arisen earlier.
Section 44 B(2) is in its direct operation prospective as it authorises only future resumption after it came into force.
It is not properly called retrospective "because a part of the requisites for its action is drawn from a time antecedent to its passing," See Maxwell on Interpretation of Statutes, 1 1 the, p. 21 1.
The, inams in the present case are resumable under section 44 B(2)(a)(i) though the alienations were made before 1934.
Section 44 B(2)(a)(i) is attracted if the holder of the inam has made an exchange, gift, sale or mortgage of the inam or has granted a lease of it for a term exceeding five years.
In the plaint in Suit O.S. No. 4 of 1954 the plaintiffs claimed that one Kunjanna Ayyar, their predecessor in title purchased the lands from the inamdars before 1861.
The plaintiffs failed to prove that the inamdars sold the lands.
The only direct evidence as to how Kunjanna Ayyar came into possession of the suit lands is furnished by exhibit A 2, a statement made by the inam holders to the Madurai District Collector on August 14, 1868.
It shows that Kunjanna Ayyar had taken the lands on cowle from the inamdars.
The word "cowle" means a lease.
In Wilson 's Glossary it is stated that the word ordinarily denotes a lease and not a mortgage.
Before the District Collector the plaintiffs admitted that they were holding under a cowle lease.
The District Collector held that the alienation was within the purview of section 44 B. The High Court also held that the plaintiffs and their predecessor in title were in enjoyment of the lands under the lease.
At no stage of the litigation either before the revenue authorities or in the plaint or before the District Judge or in the High Court did the plaintiffs contend that the alienation in their favour was not within the purview of section 44 B (2) (a) (i).
As a matter of fact, the case made in the plaint was that their predecessor in title had purchased the land from the inamdars.
Such an alienation is clearly within the purview of section 44 B(2)(a)(i).
For the first time in this Court it is contended that the alienation was by way of a lease from year to year.
It may be conceded that all lease& do not come within the purview of section 44 B(2)(a)(i).
The km must be for a term exceed ' 5 years.
A lease from year to year is not a lease for a term exceeding 5 years howsoever long the lessee might have continued in possession of the demised lands.
But we think that the plaintiffs ought not to be allowed to raise at this late stage the novel contention that the lease was from year to year '.
This contention is contrary to the case made by them in the plaint.
Moreover, the materials on the record do not support the contention.
The plaintiffs and their predecessor in title were in continuous possession of the lands for over 80 years under the cowle lease.
The original cowle is not forthcoming.
The plaintiffs claimed to be permanent alienees of the lands.
In all these circumstances, we are inclined to presume that the cowle granted 550 a permanent lease and the inams were resumable under section 44 B (2)(a)(i).
There is no period of limitation prescribed for the initiation of proceedings under section 44 B(2).
The section gave a new statutory right of resumption of the inams.
On a resumption of the inams, the title, if any, of all persons claiming through the inamdars to any subordinate interest in the inams stood determined.
Kunjanna Ayyar and his successors in title were lessees of the inam lands under the inamdars.
During the continuance of the tenancy, their possession was not adverse to the inamdars.
A fortiori, their possession *as not adverse to the Government under whom the inamdars held the inam lands.
They did not acquire any prescriptive title to the kudiwaram rights either against the inamdars or against the Government.
The Government could, therefore, resume the inam lands made under section 44 B(2) and dispossess the inamdars and the plaintiffs claiming as lessees under them.
The question whether an alienee from the inamdar can acquire prescriptive title to the kudiwaram rights in the inam lands against the Government and thereby defeat the latter 's right to resume the inam does not, therefore, arise for decision, and we express no opinion on it.
It, may be noted that in Roman Catholic Mission vs State of Madras( ') this Court held that there is no limitation barring imposition of assessment on the land after resuming the melwaram.
It follows that both the kudiwaram and melwaram rights were rightly resumed under section 44 B(2)(4)(i).
In the result, the appeals are dismissed.
In all the circumstances of the case, there will be no order as to costs.
G.C. Appeals dismissed.
(1) [1966] 3 S.C.R.283,299.
| Section 23A of the income tax Act, 1922, empowered the Income tax Officer to assess individual members of a company in respect of undistributed assessable income of the company in certain circumstances.
The proviso to this section made section 23A inapplicable to a company in which the public was substantially interested.
The explanation to the proviso laid down that a company shall be deemed to be one in which the public was 84 substantially interested if the shares of the company carrying not less than 25% of the voting power had been allotted unconditionally to or acquired by the public and were held beneficially by the public.
It was found that though the directors 'of the company 's qua directors did not hold more than 75% of the shares, the shares held by such directors as were partners in the firm of the Managing Agents of the company together with the shares held by other partners of the Managing Agents and the shares held by the members of the Managing Agency on behalf of minor children exceeded 75% of the voting power.
Held, that the company was not one in, which the public was substantially interested and section 23A was applicable to it.
No person could be said to belong to the "public" unless he held the shares unconditionally and beneficially for himself.
The words "unconditionally" and "beneficially" indicated that the voting power arising from the holding of those shires should be free and not within the control of some shareholder and the holder should not be a nominee of another.
Directors, qua directors, were not without the pale of the public as there was nothing that required them to act in unison.
What had to be seen was whether there was any individual or a group holding the controlling interest which group acting in concert could direct the affairs of the company at its will.
The partners of the Managing, Agency constituted a group holding more than 75% of the voting power in the company and they could not be counted as public as they must be taken to act in their own interest in unison".
Commissioner of Income tax vs H. Bjordal, [1955] 28 I. T. R. 25, referred to.
Shri Changdeo Sugar Mills Ltd. vs Commissioner of Income tax, Bombay, [1961] 41 and Raghuvanshi Mills Ltd. vs Commissioner of Income tax [1961] 41 , relied on.
|
Civil Appeal No.257 of 1958.
Appeal by special leave from the Award dated August 20, 1957, of the Industrial Court, Bombay, in Reference (IC) No. 197 of 1956.
C. K. Daphtary Solicitor General of India.
section N. Andley, J. B. Dadachanji and Rameshwar Nath,for the appellant.
B. P. Maheshwari, for the respondent.
I. N. Shroff, for Interveners Nos. 1 and 2.
The Intervener No. 3 did not appear.
1960 January 22, The Judgment of the Court was delivered by SUBBA RAO J.
This appeal raises the question as to what extent the reserves can be deducted from the amount required for rehabilitation of plant and machinery and also as to the manner by which the deductible reserves can be ascertained.
It would be enough if we narrated only the facts relevant to the question raised.
The appellant, Khandesh Spinning and Weaving Mills Company Limited, is a textile mill and its factory is situate at Jalgaon.
The respondent, Rashtriya Girni Kamgar Sangh, represents the employees of the appellant Company.
The respondent on behalf of the employees issued a notice to the appellant under section 42(2) of the Bombay Industrial Relations Act, 1946, demanding payment of reasonable bonus for the period from January 1, 1955 to December 31, 1955.
Negotiations in this regard having failed, the respondent made a reference to the Industrial Court under section 73A of the said Act for arbitration of the dispute arising out of the said notice.
The arbitrator, i.e. the Industrial Court, following the "Fall Bench Formula", ascertained the surplus to be Rs. 2.20 lakhs after deducting the prior charges from the gross profits of the Company, but it did not give any credit to the rehabilitation amount apart from the statutory depreciation.
The Industrial Court disallowed this item for the following reasons: It estimated the amount required for rehabilitation at Rs. 60 lakhs; out of this amount it deducted Rs. 51 lakhs representing tile reserves and the balance of Rs. 9 lakhs spread over a period of 15 years gave the 843 figure of Rs. 60,000 as the amount that should be set apart for the year in question for rehabilitation.
As the statutory depreciation was Rs. 83,639, it came to the conclusion that the Company would not be entitled to any allocation as a prior charge for rehabilitation.
After excluding the said item of rehabilitation, it The fixed the surplus in a sum of Rs. 2.20 lakbs and awarded to the employees four months ' basic wages as bonus.
The learned Solicitor General contended that the Industrial Court accepted the position that the reserves were used as working capital, but deducted the said amount from the amount required for rehabilitation on a wrong and unjustified assumption that, as the amounts so required would be spent for rehabilitation over a course of 15 years by instalments, the temporary user of the said reserves would not affect the question as they would be released in part or in whole in future years.
He argued that this assumption was contrary to the view expressed in decided cases and also the principle governing the ascertainment of the amount for rehabilitation purposes.
On the contrary the learned counsel for the respondent argued that the Industrial Court only assumed that the reserves had been utilised as working capital, as in the view taken by it did not in the least matter whether the reserves were so utilised or not and that, even if that view was wrong, the appellant could not succeed, unless it proved by relevant and acceptable evidence that the reserves were so utilised and that it did not place before the Industrial Court any such evidence to prove that fact.
The first ques tion, therefore, is, what is the scope of the finding of the Industrial Court in this regard ? The Industrial Court in dealing with the contentions of the parties before it observed as follows: "It is true that until some amount is required to be spent for rehabilitation, replacement or modernization, reserves must be used as working capital, but Shri Vimadalal 's argument overlooks that the amount required to be spent for rehabilitation over a course of 15 years is not required to be 844 spent all at once, but by installments over a long period.
" These observations did not record any finding that the reserves were used as working capital.
It was only an assumption made by the Industrial Court, as, the view taken by it, it was immaterial whether the reserves were used as working capital or not.
We do not think that the aforesaid opinion expressed by the Industrial Court is sound.
In ascertaining the surplus for the purpose of fixing the bonus for a particular year, the state of affairs in that year is the guiding factor.
If in a subsequent year any part of the reserves used as working capital is released, that amount will have to be taken into account in ascertaining the surplus for that year and so on for subsequent years: otherwise it will lead to the anomaly of the reserves being excluded from the amount required for rehabilitation, though as a matter of fact the entire reserves were utilised as working capital, and though in future years they were expected to be released but in fact not so released.
This would lead to a result inconsistent with the decisions on the subject which have clearly laid down that the reserves which have been used as working capital shall not be deducted from the amount fixed for rehabilitation.
This result does not advance the case of the appellant unless it is able to prove by admissible evidence that it has used the reserves as working capital during the bonus year in question.
The principles governing the "reserves" in this context are well settled.
This Court in The Associated Cement Companies Ltd. vs It,3 Workmen (1) restated the principle thus at p. 970: "Before actually awarding an appropriate amount in respect of rehabilitation for the bonus year certain .
deductions have to be made.
The first deduction is made on account of the breakdown value of the plant and machinery which is usually calculated at the rate of 50/ of the cost price of the block in question.
Then the depreciation and general liquid reserves available to the employer are deducted.
The reserves which have already (1) 845 been reasonably earmarked for specific purposes of the industry are, however, not taken into account in this connection.
Last of all the rehabilitation amount which may have been allowed to the employer in previous years would also have to be deducted if it appears that the amount was avail able at the time when it was awarded in the past and that it bad not been used for rehabilitation purposes in the meanwhile.
These are the broad features of the steps which have to be taken in deciding the employer 's claim for rehabilitation under the working of the formula.
" This decision, therefore, lays down, so far as it is relevant to the present purpose, that two items shall be deducted from the rehabilitation amount ascertained by adopting the "Full :Bench .Formuula" namely,(i)general reserves available to the employer and (ii) reserves which have not already been reasonably earmarked for specific purposes of the industry.
The question is whether the mere availability of reserves or the simple earmarking for specific purposes would be sufficient to claim the said amounts as deductions.
We do not think that by using the said words this Court meant to depart from the well recognized principle that if the general reserves have not been used as working capital, they cannot be deducted from the rehabilitation amount.
The reserves may be of two Kinds.
Moneys may be set apart by a company to meet future payments which the company is under a contractual or statutory obligation to meet, such as gratuity etc.
These amounts are set apart and tied down for a specific purpose and, therefore, they are not available to the employer for rehabilitation purposes.
But the same thing cannot be said of the general reserves: they would be available to the employer unless he his used them as Working capital.
The use of the words "reasonably earmarked" is also deliberate and significant.
The mere nominal allocation for binding purposes, such as gratuity etc.
, in the company 's books is Dot enough.
It must be ascertained by the Industrial Court on the material placed before it whether the said amount is far in excess of the requirements of the particular purpose for which 846 it is so earmarked and whether it is only a device to reduce the claim of the labour for bonus.
We do not suggest that it is the duty of the Industrial Court to ascertain the correct or exact figure required for a particular purpose; but it is certainly its duty to is cover whether the so called earmarking for a particular purpose is a device to circumvent the formula.
If it is satisfied that there is such a device, it shall deduct that figure in calculating the rehabilitation amount and if possible arrive at a real figure for that purpose.
So too, in the case of general reserves when an employer claims that a specific amount reserved has been used as working capital, it is the duty of the Industrial Court to arrive at a finding whether the said reserves, or any part of them, have been used as working capital and, if so, to what extent during the bonus year.
Shortly stated before a particular reserve can be deducted from the rehabilitation amount it must be established that it has been reasonably earmarked for a binding purpose or the whole or a part of it has been used as working capital and that only such part of the reserves coming under either of the two heads can be deducted from the said amount.
To illustrate, take a particular bonus year, say 1955.
To start with, from the gross profits of that year only items specifically declared by this Court in The Associated Cement Companies Ltd. vs Its Workmen to have a prior charge over the bonus shall be deducted to arrive at the surplus.
No question of deducting any other amount reserved in regard to the profits of that year arises.
But the company has specifically earmarked certain amounts for specific binding purposes in 1954 or earlier to meet future binding obliga tions, such as gratuity etc. ; or has reserved amounts for general purposes but not to meet any contractual or statutory obligations and has not utilised the same as working capital.
In the former case the amount must be deemed to have been utilised and, therefore, it cannot be deducted from the rehabilitation amount; but in the latter case, as the said amounts were not utilised by the employer as working capital, they shall be deducted from the rehabilitation amount.
(1) 847 What taken is the procedure to be followed for ascertaining the said facts ? The burden is obviously on the employer who claims the exclusion of the reserves from the rehabilitation amount on the ground that they are used as working capital or reasonably earmarked for a specific purpose to establish the said facts and to prove the same by relevant and acceptable evidence.
The importance of this question in the context of fixing the amount required for rehabilitation cannot be over estimated.
The item of rehabilitation is generally a major item that enters into the calculations for the purpose of ascertaining the surplus and, therefore, the amount of bonus.
So, there would be a tendency on the part of the employer to inflate this figure and the employees to deflate it.
The accounts of a company are prepared by the management.
The balance sheet and the profit and loss account are also prepared by the company 's officers.
The labour have no concern in it.
When so much depends on this item, the principles of equity and justice demand that an Industrial Court should insist upon a clear proof of the same and also give a real and adequate opportunity to the labour to canvass the correctness of the particulars furnished by the employer.
Cases coming before us disclose that the Industrial Courts and Labour Tribunals are not bestowing so much attention on this aspect of the case as they should.
Some of the tribunals act oil affidavits and sometimes even on balance sheets and extracts of accounts without their being proved in accordance with law.
For the purpose of holding an enquiry or a proceeding under the Bombay Industrial Relations Act, 1946, section 118 of the said Act confers on the Industrial Court the same powers as are vested in Courts in respect of (a) proof of facts by affidavits; (b) summoning and enforcing the attendance of any person and examining him on oath; (c) compelling the production of documents; and (d) issuing commissions for the examinations of witnesses.
In Courts facts have to be established either by oral evidence or by documentary evidence proved in the 108 848 manner prescribed by law.
But Order XTX of the Code of Civil Procedure empowers the Court, to have particular facts proved by affidavits.
Under rule `thereof "any Court may at any time for sufficient reason order that any particular fact or facts may be proved by affidavit, or that the affidavit of any witness may be read at the hearing, on such conditions as the Court thinks reasonable".
But it is subject to the proviso that where it appears to the Court that either part%, bonafide desires the production of a witness for (cross examination, and that such witness can be produced, an order shall not be made authorizing the evidence of ' such witness to be given by affidavit.
Under rule 2, "upon any application evidence may be given by affidavit, but the Court may, at the instance of either party, order the attendance for cross examination of the deponent ".
A combined effect of the relevant provisions is that ordinarily fact has to be proved by oral evidence,, but the Courts, subject to the conditions laid down in Order XIX, may ask a particular fact or facts to proved by affidavits.
Industrial Courts may conveniently follow the procedure.
In view of the importance of the item of rehabilitation in the matter of arriving at the surplus for fixing the bonus principles of equity and justice demand that tribunals should weigh with great care the evidence adduced by the management as well as by the labour to ascertain every sub item that goes into or is subtracted from the rehabilation.
If the parties agree,agrred figure can be accepted.
If they agree to the decision of affidavits that course may be followed.
in the absence of an agreement, the procedure prescribed in Order XIX of the Code of Civil Procedure may usefully be followed by the tribunals so tlitt, both the parties may have full opportunity to (Establish their respective cases.
Recent decisions of this Court emphasize this aspect of the matter.
In lndian Hume Pipe Company Ltd vs Their workmen (1), the balance sheet was upon for proving that the amounts were available for use as working capital and that the (1) ,5 849 balance sheet showed that they were in fact so used.
Bhagwati, J., who delivered the judgment of the Court, presumably to meet the contention that the balance sheet had not been proved, observed at p. 362 thus : " Moreover, no objection was urged in this behalf, nor was any finding to the contrary recorded by the tribunal.
" In that case it was conceded that the reserves were in fact used as working capital.
It is suggested that the learned Judge solely relied upon the relevant items in the balance sheet in support of his conclusion and that the said observation was only an additional ground given by him, but we are inclined to think that the Court would not have accepted the items in the balance sheet as proof of user if it was not satisfied that no objection was taken in that behalf.
In Tata Oil Mills Company Ltd. vs Its Workmen (1), a similar question was raised.
It was contended by the labour in that case that the depreciation reserve was Dot used as working capital and therefore no return should be allowed on the said reserve.
The Chief Accountant of the Company made an affidavit on behalf of the Company that the said depreciation reserve, along with others, had been used as working capital.
This Court accepted the affidavit for the year in question, but made the following observations for future guidance: "It will, however, be open to the workmen in future to show by proper cross examination of the company 's witnesses or by proper evidence that the amount shown as the depreciation reserve was not available in whole or in part to be used as working capital and that whatever may be available was, not in fact so used in the sense explained above.
In the present appeal, however,we must accept the affidavit of the chief accountant.
" These observations also recognized the necessity to give an opportunity to the workmen to cross examine the witnesses put forward by the management to prove the user of any particular reserve as working capital.
This Court once again dealt with the same (1) 850 subject in Anil Starch Products Ltd. vs Ahmedabad Chemical Workers Union (1).
That appeal also raised the question whether return should be allowed on the depreciation reserve used as working capital.
It was contended for the labour in that case that the depreciation reserve was not used as working capital.
Rejecting the said contention, Wanchoo, J., observed: It is enough to say in that connection that an affidavit was filed by the manager of the company to the effect that all its reserves including the depreciation fund had been used as working capital.
The manager appeared as a witness for the company before the Tribunal and swore that the affidavit made by him was correct.
He was cross examined as to the amount required for rehabilitation, which was also given by him in that affidavit; but no question was put to him to challenge his statement that the entire depreciation reserve had been used as working capital In the circumstances, we must accept the affidavit so far as the present year is concerned and hold that the working capital was Rs. 34 lacs.
" Notwithstanding the said finding, the learned Judge took care to reserve the rights of the workmen in future by making the following observations: "It will, however, be open to the workmen in future to show by proper cross examination of the company,s witnesses or by proper evidence that the amount shown as depreciation reserve was not available in whole or in part as explained above to be used as working capital and that whatever was available was not in fact so used.
" This judgment again reinforces the view of this Court that proper opportunity should be given to the labour to test the correctness of the evidence given on affidavit on behalf of the management in regard to the user of the reserves as working capital.
What is the position in the present case ? It is not suggested that there is any reserve which has been reasonably earmarked to discharge a contractual or statutory obligation.
We are only concerned with (1) Civil Appeal No. 684 Of 1957 (not reported) 851 general reserves.
The learned Solicitor General contends that the balance sheet discloses that the entire reserves have been used as working capital and that the respondent did not canvass this position in the statement filed by it before the Industrial Court.
We have already pointed out that the balance sheet, without its being proved by a person competent to do so, cannot prove that any reserves have been utilised as working capital.
In the written statement filed by the appellant before the Industrial Court, no specific allegation is made that the reserves were utilised as working capital, though in its statement of calculations the said reserves were not excluded from the amount claimed towards rehabilitation.
As there is no specific allegation, the respondent also in its statement did not deny the said fact, but in its statement of calculations it did not deduct the reserves from the rehabilitation amount.
Therefore, it must be held that the respondent did not accept the position that the reserve funds were utilised as working capital.
Strong reliance is placed upon the evidence of the General Superintendent of the appellant Company, but a perusal of that evidence discloses that the said witness has not deposed that the Company used the reserves as working capital; nor does the said witness seek to prove either the balancesheet or any extract taken therefrom.
In the circumstances, the respondent had no opportunity to cross examine him in respect of the alleged user of the reserves.
For the aforesaid reasons, we have no option but to hold that Rs. 51 lakhs representing the reserves were not used as working capital and, therefore, the said amount was rightly deducted by the Industrial Court from Rs. 60 lakhs fixed by it towards rehabilitation.
As the balance of Rs. 9 lakhs spread over 15 years came to only Rs. 60,000 during the bonus year and as the statutory depreciation was Rs. 83,639, the Industrial Court rightly excluded the entire rehabilitation amount from its calculations in arriving at the surplus.
No other points were raised before us.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
| The expression " the total sum directed to be paid " used in section 17(1) (a) of the , properly construed, does not mean the total sum directed to be paid to each individual applicant.
Consequently, an employer against whom a direction for payment is made under section 15(3) of the Act has a right of appeal under section 17(1) (a) not only when a single applicant is awarded a sum exceeding Rs. 300 but also when an award of a like amount is made on a single application made under section 16(2) of the Act on behalf of several employees belonging to the same unpaid group or on several applications consolidated into one under section 16(3) thereof.
Section 17(1) (a) does not contemplate that before the right to appeal can accrue to the employer in the latter case each individual applicant must be awarded Rs. 300 or more.
Since the language of the statute is clear and unambiguous no consideration of any possible hypothetical anomaly can be allowed to affect its plain meaning.
Laxman Pandu and Others vs Chief Mechanical Engineer, West ern Railway (B. B. and C. I. Railway), Lower Parel, Bombay. , overruled.
Union of India, Owning the South Indian Railway by General Manager vs section P. Nataraja Sastrigal & Ors.
A.I.K. ; A. C. Arumugam & Ors.
vs Manager, Jawahar Mills Ltd., Salem junction, A.I.R. 1956 Mad. 79; Promod Ranjan Sarkar vs R. N. Mullick, A.I.R. 1959 Cal.
318 and Cachar Cha Sramik Union vs Manager, Martycherra Tea Estate & Anr.
A.I.R. 1959 Assam 13, approved.
|
N: Criminal Appeal No. 221 of 1981.
Appeal by Special Leave from the Judgment and Order dated 23.10.1979 of the Madras High Court in Criminal Appeal No. 759/79 (Referred Trial No. 9/79).
A.T.M. Sampath and P.N. Ramalingam for the Appellant.
A.V. Rangam for the Respondent.
272 The Judgment of the Court was delivered by, CHANDRACHUD C. J.
The appellant, Muniappan, was convicted by the learned Sessions Judge, Dharmapuri under section 302 of the Penal Code and sentenced to death on the charge that he had committed the murder of his mother 's brother also called Muniappan and his son Chinnaswamy.
The conviction for murder and the sentence of death having been confirmed by the High Court of Madras by a Judgment dated October 23, 1979, this appeal has been filed by the accused by special leave.
The leave is limited to the question of sentence.
The judgments of the High Court and the Sessions Court, in so far as the sentence is concerned, leave much to be desired.
In the first place, the Sessions Court overlooked the provision, contained in section 354(3) of the Code of Criminal Procedure, 1973, which provides, in so far as is relevant, that when the conviction is for an offence punishable with death, the judgment shall in the case of sentence of death state special reasons for such sentence.
The learned Sessions Judge, in a very brief paragraph consisting of two sentences, has this to say on the question of sentence: "When the accused was asked on the question of sentence, he did not say anything.
The accused has committed terrific double murder and so no sympathy can be shown to him.
" The judgment of the Sessions Judge is in Tamil but we understand from the learned counsel, who appear in the case and both of whom understand Tamil well enough, that the Tamil word "Bhayankaram" has been rightly translated as "terrific".
We plead our inability to understand what is meant by a "terrific" murder because all murders are terrific and if the fact of the murder being terrific is an adequate reason for imposing the death sentence, then every murder shall have to be visited with that sentence.
In that event, death sentence will become the rule, not an exception and section 354(3) will become a dead letter.
We are also not satisfied that the learned Sessions Judge made any serious effort to elicit from the accused what he wanted to say on the question of sentence.
All that the learned Judge says is that "when the accused was asked on the question of sentence, he did not say anything".
The obligation to hear the accused on the question of sentence which is imposed by section 235(2) of the Criminal Procedure Code is not discharged by putting a formal question to the accused as to what he has to say on the 273 question of sentence.
The Judge must make a genuine effort to elicit from the accused all information which will eventually bear on the question of sentence.
All admissible evidence is before the Judge but that evidence itself often furnishes a clue to the genesis of the crime and the motivation of the criminal.
It is the bounden duty of the Judge to cast aside the formalities of the Court scene and approach the question of sentence from a broad sociological point of view.
The occasion to apply the provisions of section 235 (2) arises only after the conviction is recorded.
What then remains is the question of sentence in which not merely the accused but the whole society has a stake.
Questions which the Judge can put to the accused under section 235 (2) and the answers which the accused makes to those questions are beyond the narrow constraints of the Evidence Act.
The Court, while on the question of sentence, is in an altogether different domain in which facts and factors which operate are of an entirely different order than those which come into play on the question of conviction.
The Sessions Judge, in the instant case, complied with the form and letter of the obligation which Section 235(2) imposes, forgetting the spirit and substance of that obligation.
The High Court condemned the murders in terms equally strong by calling them "cold blooded" and thought that its duty to consider the propriety of the death sentence began and ended with that assertion.
Its failure to see the failings of the Sessions Court in the matter of sentencing led to an unexamined confirmation of the death sentence.
Coming to the judgement of the High Court itself, there are certain features of it which need a close reflection.
One of the questions before the High Court was as to the time when the double murder was committed because, upon that circumstance depended the veracity of the eye witnesses.
The doctor who performed the post mortem examination stated in his evidence that the deceased must have taken their food about four or five hours before their death.
The case of the prosecution was that the murders were committed at about 9.00 p.m. P.W. 1, who is the son of the deceased Muniappan, stated in his evidence that the deceased had taken their food at 8.30 p.m.
This was a very important aspect of the case to which the High Court should have applied its mind with care.
Instead, it took an extempore expedient by saying: "Both the deceased might have died a couple of hours after they substained the injuries at 9.00 p.m.".
It is impossible to appreciate how, after being shot in the chest and receiving the kind of injuries 274 which are described in the post mortem report, the deceased could have survived for a couple of hours after they were shot.
Yet another question which had an important bearing on the case was as to the delay caused in filing the F.I.R. The case of the prosecution is that P.W. 1 went to the Police Station promptly but the solitary police constable who was present there directed him to go to the village Munsif to have his complaint recorded.
Now, the record of the Police Station shows that a Sub Inspector of Police was also present at the Police Station which falsifies the evidence that only a police constable was present at the Police Station at the material time and, therefore, the F.I.R. could not be recorded.
The High Court has dealt with this aspect of the matter thus: "In passing, we may mention that this is a grave dereliction of duty on the part of the policeman who was in charge of the police station at that time and is a matter that ought to be enquired into by the higher authorities.
We hope that suitable directions will be issued to subordinate officers in this district to prevent a recurrence of such lapses on the part of policemen when reports of cognizable offences are given.
" The High Court added that the Inspector of Police was not on good terms with the Sub Inspector and, therefore, the former made a false entry that the latter was present at the police station, which, according to the High Court, was a serious matter which required to be probed by the Senior Officers.
We are not quite sure whether there is credible evidence on record to show any enmity between the Inspector and the Sub Inspector and whether the High Court merely relied on the statement made by counsel for the State that the relations between the two Police Officers were cordial.
Whatever that may be, we do not think that the High Court has explained satisfactorily why the F.I.R. was not recorded at the police station when P.W.1 went there.
The ex parte strictures passed by the High Court are likely to involve the two Police Officers or at least one of them into grave consequences.
They should have been given an opportunity to explain themselves before the High Court persuaded itself to make such scathing criticism on their conduct.
There is one more aspect of the Judgment of the High Court, which, with great respect, we are unable to appreciate.
A question arose before the High Court as to whether a "muchilikka" bears the signature of the appellant.
The High Court compared the 275 admitted signatures of the appellant with the disputed signature and came to the conclusion that the disputed signature was of the appellant himself.
The High Court castigated the Public Prosecutor who conducted the prosecution in the Sessions Court by saying that he had not followed the cross examination of P.W.1 "with attention, and not chosen to bring to the notice of P.W. 1 that the accused had signed the muchilikka, exhibit P. 1.
We do not know how the High Court came to know that the Public Prosecutor was not following the cross examination of the witness with attention, but we can guess why the High Court made that observation.
It added in parenthesis: "such lapses on the part of this Public Prosecutor have become frequent and have been commented upon by us, and we hope that at least hereafter he will take some interest in the cases which he is conducting.
" It is not the normal function of the High Court to pass judgment on the conduct of lawyers who appear before the lower courts.
One should understand if the High Court were to make its guarded observation on the conduct of lawyers appearing before it.
But how the learned Judges of the High Court had, in their capacity as Judges of the High Court, come to know that "such lapses on the part of this Public Prosecutor have become frequent. ," we are unable to understand.
These various matters make it unsafe to confirm the sentence of death imposed upon the appellant.
The reasons given by the learned Sessions Judge for imposing the death sentence are not special reasons within the meaning of section 354(3) of the Criminal Procedure Code and we are not sure whether, if he were cognisant of his high responsibility under that provision, he would have necessarily imposed the death sentence.
Accordingly, we set aside the sentence of death and sentence the appellant to imprisonment for life.
N.V.K. Appeal allowed.
| Section 16(1) (b) of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 empowers the District Magistrate to release the whole or any part of a building or any land appurtenant thereto, in favour of the landlord.
Section 17(2) provides that where a part of a building is in the occupation of the landlord for residential purposes or is released in his favour under section 16(1) (b) for residential purposes the allotment of the remaining part thereof under clause (a) of sub section (1) shall be made in favour of a person nominated by the landlord.
On intimation from tho tenant that he was vacating the premises, the rent control authority allotted them to the appellant without informing the landlady about the allotment.
On appeal the District Judge cancelled the allotment made in favour of the appellant The landlady then made an application for delivery of possession of the premises.
This application was rejected on the ground that she had not applied for release of the accommodation.
Her application under section 16(1) (b) for release of the premises was rejected and the accommodation was re allotted to the appellant.
The District Magistrate affirmed the order of the rent control authority.
The landlady 's writ petition impugning the orders of the courts below was allowed by the High Court.
The case was remitted to the courts below for reconsideration afresh of the question of allotment.
In appeal to this Court it was contended on behalf of the appellant that since the landlady was not in actual physical possession of the premises neither section 16(1) (b) nor section 17(2) had any application to the facts of this case.
Dismissing the appeal, ^ HELD: The order of the prescribed authority allotting the premises to the appellant was without jurisdiction and against the plain terms of section 17(2) of the Act.
The District Judge had rightly allowed the landlady 's appeal and cancelled The allotment to the appellant.
115 The object of the Act is that where a tenant inducted by the landlord voluntarily vacates the premises, partly occupied by the landlord, allotment in the vacancy should be made only to a person nominated by him, the dominant purpose of such provision being to remove any inconvenience to the landlord by imposing or thrusting on the premises an unpleasant neighbour or a tenant who invades the landlord 's right of privacy.
While empowering the prescribed authority to allot the accommodation, the Act safeguards the right of the landlord to have a tenant of his choice.
[117 B C, D] In the instant case if a tenant was thrust on the respondent without allowing her an opportunity to nominate a tenant of her choice it would violate the very spirit and tenor of section 17(2).
[120 F] Possession by a landlord of his property may assume various forms: a landlord living outside the town might retain possession over his property or a part of it either by leaving it in charge of a servant or by putting his household effects locked up in the premises.
Such occupation would be full and complete possession in the eye of law.
[119 F] In the instant case from the fact that the landlady was residing in another town and so was not actually residing in the premises it could not be said that she was not in possession of the premises or that she had severed her connection with her own property.
[119 G] The High Court was justified in quashing the orders of the rent control authority because no attempt had been made to approach the landlady for making a nomination in respect of the premises vacated by the original tenant.
All that the landlady did was to ask for the release of the premises.
Even if this was refused it was incumbent on the rent control authority to have fulfilled the requirements of section 17(2) before making an allotment in favour of the appellant or anyone else.
Simply because the landlady was living outside the town it could not be said that the provisions of this sub section would not apply and that the authorities concerned could make an allotment in favour of any person without giving an opportunity to her to exercise her privilege to nominate a tenant.
[120 A C]
|
Appeal No. 208 of 1969.
August 19, 1960, of the Third Industrial Tribunal, West Bengal, in Case No. VIII 119 of 1958.
A. V. Viswanatha Sastri, section K. Bose and Sardar Bahadur, for the appellant.
D. N. Mukherjee, for respondent No. 1.
Janardan Sharma and B. P. Maheshwari, for respondent No. 2. 1962.
August 21.
The following Judgment of the Court was delivered by MUDHOLKAR, J. The substantial question which.
falls for decision in this appeal by special leave.against an award made by the Third Industrial Tribunal, West Bengal, centres round the 662 question of production bonus.
The appellant company runs a steel mill at Belur.
There are various departments in the mill which have been grouped under three headings: direct productive departments, indirect productive departments and nonproductive departments.
In the last mentioned group come the general office, accounts department, establishment department, time office. stores, shipping department, drawing and design department, laboratory, progress and planning department, civil construction department, watch and ward department, medical department , and welfare department.
The first group consists of the following five departments : 1.
Steel foundry 2.
Electric Furnaces 3.
Rolling Mills 4.
Bolt and nuts shop and 5.
Machine shops.
The second group consists the following departments : 1.
Refractory attached to the electric furnaces 2.
Mill General, attached to the rolling Mills 3.
Roll turning, attached to the rolling Mills 4.
Yard Mazdoors, attached to the rolling mills and 5.Civil maintenance department, electric maintenance department and mechanical 'Maintenance department.
It is common ground that each productive department has an individual target for the purpose 663 of payment of production bonus over and above the wages.
The existing targets were fixed (a) in 1948, in electric furnaces and rolling mills;(b) in December, 1956, in the steel foundry and(c) in January, 1959, in the bolt and nut workshop.
According to the appellant the targets were revised from time to time in consultation and with the concurrence of the representatives of the workmen of the department concerned as and when occasion arose for doing so in consequence of the adoption of better methods of production, now techniques, addition of plant and machinery etc.
The workmen in three indirect productive departments, namely, refractory attached to the electric furnace, 'mill general ' attached to the rolling mills and roll turning attached to the rolling, mills are paid production bonus at the rate of 75% of the average rate of production bonus earned by the respective direct productive department to which these three indirect productive departments are attached.
The Yard Mazdoors attached to the rolling mills are paid on the basis of an arbitration award which is subsisting between the workmen and the company.
In civil maintenance, electric maintenance and mechanical maintenance departments, the workmen are paid production bonus at the rate of 75% of the average rate calculated on the basis of production bonus paid to the workmen in the productive, departments taken together.
In the steel foundry department, the target was 20 pounds per man per day until the end of 1956.
Towards the end of 1956 the Appellant had direct negotiations with the workers ' representatives of the department, and in view of the additions to the 664 plant and machinery and provision for additional facilities and working space and improvement in the technique of production 'Which raised considerably the production capacity of the said department, it was agreed to raise the target upto 25 pounds per man per day, The value of machinery and plant added to this department alone would be about Rs. 2 lakhs.
About Rs. 4.5 lakhs worth of electric cranes were also subsequently installed.
They are working for this department and the electric furnace department.
Since December, 1956 there have been further additions of machinery etc, to the extent of about Rs. 3 lakhs in this department alone.
According to the appellant the workmen all along worked without protest against the targets in force from time to time.
But nine months after the revised targets came into operation the second respondent, which is one of the two unions to which the workmen of the company belong, protested against the raising of targets in the steel foundry department form 20 to 25 pounds.
According to the appellant company, different schemes for payment of incentive bonus have been adopted in the different departments because incentive bonus is directly linked up with production targets.
These targets, according to the appellant, have been fixed by direct negotiations with the workman 's representatives in the respective departments as for instance the increase of the targets in the steel foundry from 20 pounds to 25 pounds per head per day at the end of the year 1956.
The respondent No, 1 which is the other union did not make any protest in this matter and indeed even in the proceedings before the Tribunal it did not join hands with the second respondent.
The Government of West Bengal, having come to the conclusion that an industrial dispute had arisen between the appellant and its workmen 665 with respect to the payment of incentive bonus, referred it for adjudication to the Third Industrial Tribunal under section 10 of the .
Both the unions filed their written statements before the Tribunal.
Subsequently disputes on the same question with three associate companies were also referred for adjudication to the same Tribunal.
We are, however, not concerned with the disputes other than the one in which the appellant, the National Iron & Steel Co. Ltd., is concerned.
The substance of the claims made on behalf of the workmen by the respondent No. 2 may be briefly summarised thus: The incentive bonus scheme at present in force should be revised so as to cover those categories of workmen who are at present out of it and to remove all anomalies in the existing scheme as well as to remove such differences as are found to exist.
It is further claimed that the present targets of production should be refixed and brought to the 1948 level.
The first respondent did not attack the targets on the standard of performance or production existing in the different departments of National Iron & Steel Co. Ltd. The main thing it wants is that the scheme of incentive bonus should be extended to all productive departments at the same rate without making any distinction between alleged direct productive workmen and alleged indirect productive workmen.
It wants that workmen in the indirect productive departments should be paid incentive bonus at the same rate at which workmen of the productive department to which the particular indirect productive department is attached are paid.
It also wants that a workman employed in the maintenance department, civil maintenance department 666 and siding maintenance department of the appellant should be paid one half of the total rate arrived at by adding the rates at which all the productive departments of the appellant as also the workmen of the associate companies are paid, As regards the workmen employed in the non productive departments it wants them to be paid bonus at one fourth of the total rate arrived at by adding the rates at which the workmen in the productive departments are paid.
It wants also that four employees in the shipping department should be paid at the rate at which the workmen of the rolling mills department are paid and the three chemists in the laboratory should be paid the same rate as workmen in electric furance department.
Finally it wants incentive bonus to be assessed on the basis of basic wages and dearness allowance earned by the workmen and also on the basis of the total earnings including the earnings for the days described as non productive days.
We may mention here that the appellant has denied that there were any anomalies in respect of the incentive schemes in the various departments.
The stand that it takes is that the introduction of such schemes being entirely the function of the management the company is under no legal or moral obligation to extend it to all categories of workmen.
The claim of the respondent No. 1 for the revision of targets and removal of anomalies and differences in the existing bonuses is thus said to be wholly unfounded.
The appellant has further justified the classifications of departments into direct productive, indirect productive and nonproductive on the ground that.
it is in conformity with the existing practice in the industry.
The employees in the productive departments are paid incentive bonus at the full rate which is normally payable for them for the 667 work they do and that there is no practice of employing direct productive workers in the indirect productive departments and that the workmen employed in the maintenance department are paid at 75% of the average bonus.
Production bonus, according to it, is paid to such workmen as are directly engaged in production work and maintenance and that non productive workmen are not covered by the existing scheme.
It also disputes the claim made by the first respondent on behalf of four clerks in the shipping department and the three chemists in the laboratory.
After the statements were filed by all the parties it was urged on behalf of the appellant that issues should be framed.
But the Tribunal did not accede to the request.
Ultimately, by an order made by it, the Tribunal said that it would adjudicate only on those points which were raised in subparagraphs "1, 2(b) and (c) of paragraph 18 of the written statement filed by the NISCO Karmachari Sanghs (respondent No. 1) and also on the points raised in the prayer portion in paragraph 25 of the written statement of Belur Iron & Steel, Workers ' Union (respondent No. 2)".
The Tribunal first considered the question of the revision of tragets.
According to it the target in the steel foundry department which was raised in December, 1956 from 20 lbs.
to 25 lbs.
should be reduced to 23 lbs.
In regard to the electric furnace department, rolling mills, bolt and nut shop and machine shop the Tribunal held that the target should be 50% of the productive capacity or efficiency of the workmen of the department.
It negatived the claim of the workmen for removal of the alleged anomalies in the existing bonus scheme.
With regard to the workmen 's claim for the exten 668 sion of the scheme to the clerical and watch andward staff the Tribunal held as follows: "This incentive production bonus shall be paid to workmen of the non productive departments at '.he rate of 12 1/2% of the total rate to be arrived at, by adding the rates at which all the productive departments may be paid.
This rate is allowed in consideration of the fact that the workmen of the non productive departments are not directly connected with production but only remotely.
The calculation of this bonus will be made with reference to basic pay only excluding D.A." The Taibunal further held that this would also apply to the four workmen in the shipping department and three chemists in the laboratory.
In so far as the workmen employed in the indirect productive department were concerned the Tribunal held that there was no case for making any change because the present rate of 75% of the bonus paid to the workmen of the productive departments was fair and reasonable. 'The Tribunal rejected the claim of the workmen that rates of production bonus to all categories of workmen whether employed in direct productive or indirect productive departments have to be uniform.
One of the points urged on behalf of the appellant before the Tribunal and taken in the statement of the case is that the introduction of incentive bonus, fixation of targets and fixation of production hours is a function of the management and the Tribunal has no right to interfere.
It has been held by this Court in Titaghur Paper Mills Co. Ltd. vs Its Workmen (1) that while it is the function of the management whether or not to introduce a scheme of incentive bonus, once such a scheme is (1) [1959] Supp. 2 S.C.R. 1012.
669 introduced the right to claim such bonus become,; a condition of service of workmen and, therefore, the Industrial Tribunal has jurisdiction to vary the scheme enforced by the employer including the rates of bonus.
This Court has pointed out in that case that the payment of incentive bonus is payment of further emoluments to the workmen depending not upon extra profits but upon extra production, as an incentive to them to put in more than the standard performance.
Where, therefore, the management has introduced a scheme for the grant of such bonus it is open to the Tribunal to vary the terms of the scheme if the circumstances of the case justify its doing so.
In view of the decision in that case Mr. Vishwanatha.
Sastri fairly conceded that the tribunal had jurisdiction to refix the targets as well as to refix the rates of the incentive bonus provided it found that the targets were too high or the rates wholly incommensurate to the additional performance put in by the workmen.
His main grievance on this score, however, was that the Tribunal had no material before it for reducing the targets in the steel foundry department, from 25 lbs.
per capita per day to 23 lbs.
He further contended that the view of the Tribunal that the targets for the other direct productive departments should be 50% of the capacity of the unit or the efficiency of workmen would lead to startling results.
He also drew our attention to an application made by the appellant during the course of the proceedings before the Tribunal for the appointment of assessors for the purpose of giving opinion on various technical matters which have to be borne in mind for the preparation of a scheme for incentive bonus payable to workmen engaged in different departments of the appellant.
No order was passed on this application by the Tribunal even though on ' being reminded of its omission to do so the Tribunal promised to make an order later.
So here we are faced with a situation where there 670 is no adequate data for judging what would be reasonable and proper targets from the point of view of both the employeres and the employees and what would be the reasonable rates of incentive bonus.
The Tribunal would have done well to bear in mind the fact that for the determination of technical matters it is always desirable to have the assistance of persons who are familiar with the subject.
No doubt the ultimate decision would rest with Tribunal but since the decision has to be based on proper material it should not, have denied to itself the opportunity of obtaining, the appropriate material.
On this one ground alone the award of the Tribunal with respect to the fixation of targets and the rates of incentive bonus in the various departments will have to be quashed.
For revising the target of 25 lbs.
per day in the steel foundry department the Tribunal had hardly any material before it.
It failed to give due importance to the fact that the original target of 20 lbs.
was raised to 25 lbs.
by the appellant after discussing the matter with the workmen concerned and with their consent.
The Tribunal would do well to remember that though it has power to vary an existing scheme and, therefore, also the targets provided therein, it cannot do so lightly.
Primarily it is the function of the management to fix and ordinarily even, to revise the targets.
No doubt, in exercise of this function the management must consult the workmen concerned.
But where all that has been done and the revised targets are the result of agreement between the management and the workmen there must be good reasons for revising the targets.
What the Tribunal has done with respect to the targets in the 'other productive department is still more unjustified.
As already stated it has fixed the targets in these departments at 50% of the total 671 productive capacity per month in these mills or 50% of the efficiency of the workmen employed.
It has directed that incentive bonus should be calculated at the present rate on the quantum of production in excess of those revised targets.
On the face of it, it would appear to have fixed the targets at very low levels and the result of doing this would be that half or more than half of the total earnings of a workman would come to him by way of incentive bonus without the production going up.
Its scheme, rather than proving as an incentive to production, would virtually be a disincentive.
Speaking about premium systems Florence Peterson in her "Survey of Labour Economics revised edition, has observed at p. 329 : "No matter what name they go by, all premium systems have one distinct characteristic, namely, a guaranteed rate with premium payments for production beyond an established standard.
The standard may be in terms of units of output or units of time, that is, minutes or hours.
The essential distinction in the various incentive systems have to do with (1) the point or level of production at which premiums begin, and (2) the formula used for determining premium rates.
In all premium systems the crucial factor is where the 'task ' or standard ' is set.
The policy adopted can tend towards either of two directions, namely, a strict standard which is difficult to accomplish, with high premiums for better than standard, or a lenient standard with relatively small permiums.
If a very, strict standard is set which can be exceeded 672 only through the best efforts of the most com petent workers, the guaranteed rate tends to become the actual earnings rate for most of the workers.
If, on the other hand, a rela tively easy standard is fixed, the major por tion of the total earnings of most employees on the job will consist of premium wages.
The second fundamental distinction in incentive plans has to do with the formula for the division of gains when above standard production is attained, regardless of whether or not the established standard is high or low.
Increasing the ratio of returns to the worker is obviously done for the purpose of encouraging ever higher production.
Plans providing for a decreasing ratio of returns, or a declining wage curve, are based upon the principle that increased output not only is a result of the workers efforts but is also due to improvement in working conditions for which management is responsible, and that management should therefore 'share ' in the gains. " Bearing in mind these observations and the fact that ordinarily the rate of incentive bonus is correlated to the target it would follow that if the target originally fixed by the employee is very high then the existing incentive bonus payable may well be regarded as having been fixed high.
Whether that is in fact so or not would, however, be a question to be decided by the Tribunal.
In this case the Tribunal without considering this point has directed that incentive bonus should be paid to the workmen in the department concerned at the existing rates even 673 though the targets have been halved.
That direction is pot proper.
On behalf of the workmen Mr. Sharma alleged that the existing targets are fixed so high that for earning incentive bonus the workmen have to sweet.
This contention also needs to be examined by the ,Tribunal. 'Now, since the scheme of incentive bonus already prevails in most of the departments of the company the Tribunal will have the jurisdiction to consider whether the existing scheme is onerous, unrealistic, unreasonable or otherwise.
We would, however, reiterate that the scheme should not be interfered with by the Tribunal unless it comes to the definite conclusion that the targets fixed are so high that an average working with ordinary efficiency can earn only the daily wage but nothing more.
It would render the task of the Tribunal easy if it tries to elicit the requisite information from assessors as well as from others conversant with t6 operations in each department.
Where, after considering the relevant material the Tribunal finds that targets are too high or not reasonably attainable, it will undoubtedly be within its competence to refix them.
But while refixing them it should take care to see that the targets are not so low that the major portion of the total earnings of most employees will consist of incentive bonus.
Thus in revising the scheme prepared by the management the Tribunal has on the one hand to guard the interest of the workmen and prevent what may fairly be called sweating and on the other it has to see to it that the revised targets do not encourage laziness or reduce production to low or uneconomic level.
The Tribunal should further bear in mind that where the targets have been agreed to between the employer and the employees and even though a scheme of incentive bonus has been in operation for some time and the workmen have had experienced of it no complaint has been made by them that the scheme is onerous.
This would be a relevant circumstance to be taken 674 into consideration when a demand is made long, after the scheme has been in force for revision of targets.
Again it must bear in mind the effect on production ascribable to improved techniques or to the installation of improved machinery.
Here the Tribunal has adverted to none of the matters.
To put it mildly, the manner in which the Tribunal 'has dealt with the question is wholly unsatisfactory.
We do not understimate the difficulty presented by the question of fixing of targets.
Perhaps the Tribunal 's s task in this regard would be rendered less difficult if, for instance, it can obtain material from which it could ascertain what the average production in each department was before the introduction of the original scheme and before improved techniques ware introduced and better machinery installed.
In the light of the material before it, the Tribunal should consider whether the old production could safely be accepted as the targets.
We realise that here it is the appellant 's case that the adoption of better techniques and installation of new machinery has made it possible for the workmen to produce more in the same time.
This contention of the appellant needs to be examined.
Here again, expert opinion will be valuable.
If the Tribunal finds that the increase in production is solely ascribable to the innovations made and the workload of the workmen has not been increased, there would be a case for the upward revision of the old targets correspondingly.
A complication will undoubtedly arise where the workload of workmen has increased.
When such is that case the Tribunal will have to bear in mind the fact that workmen are after all human beings and not machines, that they are apt to feel tired if they have to work at a a higher tempo than in the past, that performing mechanical operations over, a over a long period produces not only boredom but also a great strain on the 375 muscular powers of workmen with the result that it produces more fatigu, physical as well as psycho.
logical.
In such a case the revised target must, therefore, be reasonably below the level at which results of these kinds are apt to ensue.
What we have said is not exhaustive of the factors to be borne in mind and it would be open to the Tribunal to bear in mind such other factors as would be relevant in this connection.
The next question which has to be considered is the extension of the scheme for payment of incentive bonus to the clerical and watch and ward staff.
In Burn & Co., Ltd. vs Their workmen (1) this Court hold that from the point of view of economics the clerical and subordinate staff in an industry, like its manual workers, contribute towards its production and there man, therefore, be no reason for excluding them wholly from the benefits of a scheme of incentive bonus.
It was urged before, this Court on the authority of decision in Titaghur Paper Mills case (2) that the introduction of incentive bonus is the function of the management and the Tribunal should not impose a scheme for payment of such bonus on the management.
Dealing with this contention this Court observed "In the present case, however, the incentive bonus scheme has already been introduced by the company for the major part of its workmen and all that is now asked for is that the benefit of the scheme should be extended to the remainder of the workmen." Mr. Viswanatha Sastri has not challenged the correctness of the view taken by this Court in Bum & CO 'S Case.
His main grievance with regard to the direction in the award extending incentive bonus scheme to clerical and watch and (1) , 426.
(2) (1959) SUPP.
2 S.C.R. 1012, 676 ward departments is that if implemented it would entitle these workmen to get in effect 100% bonus or perhaps even more.
There are, as already stated, five productive department% and five indirect productive departments.
Now, if we, take 100 as the rate in each productive department the rate for the five indirect productive departments would be 75 and the total for all the departments would come to 875 and 12 1/2% of that would come to nearly 110 It is possible, as Mr. Sharma suggests that this is not what the Tribunal intended to do and that what it intended was to take the average rate for all the productive and indirect productive departments and give 12 of the average rate as bonus to the workmen of the nonproductive departments.
It may be that that was the intention of the Tribunal but the way in which it has expressed itself leads to the absurd result that the workmen employed in the non productive departments will actually get more incentive bonus than workmen emyloyed in the productive departments : Before, however, coming to the conclusion that the scheme of incentive bonus should be extended to these workmen the Tribunal would do well to ascertain whether a case has been made out by them for grant of incentive bonus.
Indeed one of the grounds which persuaded this Court in Burn & Co 's case (1) to extend the scheme of incentive bonus to the clerical staff was that there was increase in their work in consequence of rise in production.
The Tribunal would do well to ascertain whether in view of the increased production there has been a rise in the workload, if we may use that expression, with regard to nonproductive workmen.
If it finds that the workload has increased they could be held entitled to incentive bonus.
(1) ; , 426.
677 We may further point out that in Burn & co 's case (1) the Tribunal did not proceed to lay down the rate of incentive bonus to the clerical and subordinate staff but merely directed the company to extend the scheme to them and lay down the rates and conditions for those classes of workmen to be entitled to get the incentive bonus.
This Court has impliedly approved this direction.
Indeed, bearing in mind the principle that initially the whole question of incentive bonus involving the fixation of targets, prescribing rates an( lavingly down other conditions is the function of the management, we have no doubt that the course taken by the Tribunal in Burn & CO 's Case (1) was the proper one.
One more question remains to be considered and that is the contenation of Mr. Viswanatha Sastri that no question arises for payment of incentive bonus to piece rate workmen.
His argument is that if a piece rate workman produces more he earns more and, 'therefore, there is nothing more that he is entitled to.
We do not agree.
Even with regard to piece rate workmen there is a norm and if a piece rate workman produces anything beyond that norm he should be entitled to be pail for the excess at a higher rate.
That is what is being done in England and other industrialised countries like the United States and there appears to be no reason why it should not be required to be done in our country.
What the enhanced rate should be would necessarily be a matter to be determined with the assistance of assessors as well as of the company and the workmen.
We would, however, admininister a caution.
The result of prescribing a higher rate for production above the norm should not lead to a glaring disparity between the total actual earnings of an average piece rate workman and of a time rate workman working over the same period of time.
For, a wide disparity may lead to (1) ; ,426.
678 discontent, which is something which must be avoided in the interest of the industry as well as the workmen.
For the reasons stated above we quash the award in so far as it relates to the fixation of targets in the various departments of the appellant, fixation of rate of incentive bonus for time rate workmen as well as piece rate workmen and extension of the scheme to non productive departments and remand the dispute to the Tribunal for adjudication after appointing assessors, considering all relevant material placed before it by the parties to the dispute and make a fresh award in the light of our observations.
The rest of the award is affirmed.
There will be no order as to costs in this appeal.
| The appellant runs a steel mill and there are various departments in the mill which are grouped under three headings.
By agreement between the management and the workmen different production targets and different incentive bonus schemes for different departments have been in force for some time.
The respondent No. 2 on behalf of the work men claimed that incentive bonus scheme at present in force should be revised so as to cover those categories of workmen who are at present out of it.
It was further claimed that the present targets of production should be refixed and brought to the 1948 level.
On the failure of the parties to come to a settlement the Government referred the matter to the Industrial Tribunal for adjudication.
The Tribunal by its award directed the revision of production targets in certain departments.
With regard to the claim for extension of the scheme to the clerical and Watch and Ward Staff and the workmen in the shopping depart ment the Tribunal awarded the extension at certain specified rates.
The claim for revision of the rates of bonus in the indirect productive department was rejected.
The Tribunal also rejected the claim of the workmen that the rates of production bonus to all catagoriesd of workmen should be made uniform.
The appellants thereupon appealed to this Court by way of special leave.
The main question raised in the appeal was whether the Tribunal had jurisdiction to refix the production targets as well as the rates of incentive bonus.
A further question raised was whether piece rate workmen are entitled to incentive bonus.
The appellants made a grievance of the fact that their request to appoint assessors for giving opinion on technical matters was rejected by the Tribunal.
They also alleged that the Tribunal had no adequate data before it to determine the proper production targets.
661 Held, that the Tribunal ought to have borne in mind the fact that for the determination of technical matters it is always desirable to have the assistance of persons who are familiar with the subject and it should not deny to itself the opportunity of obtaining the appropriate material.
While it is the function of the management whether or not to introduce a scheme of incentive bonus, once such a scheme is introduced the Industrial Tribunal has jurisdiction to vary the scheme including the rates of bonus.
But the scheme should not be interfered with lightly.
The Tribunal is entitled to consider whether the scheme is erroneous, unrealistic or unreasonable.
Where after consideration of relevant materials the Tribunal finds the targets are too high it can refix them.
But it should also see that the targets fixed are not too low.
Held, also, that piece rate workmen are entitled to be paid at a higher rate for the excess they have produced beyond a norm.
But in fixing the higher rate care should be taken to avoid glaring disparity between the total earnings of an average piece rate worker and of a time rate workman working over the same period.
|
N: Criminal Appeal No. 129 of 1971 .
Appeal by Special Leave from the Judgment and order dated the 4th March, 1971 of the Bombay High Court at Bombay in Criminal Appeal No. 1502 of 1969.
R B. Datar and Rajen Yash Paul, for the Appellant.
M. N Shroff, for the Respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
The appellant and one Mohd. Yusuf Gulam Mohd. were charged for an offence under section 379 read with s 34 of the Indian Penal Code for snatching two sarees from one Govind whilst he was carrying them from the show of his master to that of a washer and dyer.
The learned Presidency Magistrate, who tried the case, accepted the prosecution evidence and found the appellant and Mohd. Yusuf Gulam Mohd. guilty of the offence under section 379 read with section 34 and 664 Sentenced each of their to suffer rigorous imprisonment for six months.
It does not appear from the judgment of the learned Presidency Magistrate that, though the appellant was only seventeen years and three months old at the date of the offence and the offence was not punishable with imprisonment for life, the attention of the learned presidency Magistrate was invited to the provisions of section 6 of the Probation of offenders Act, 1958.
The appellant preferred an appeal against the order of conviction and sentence to the High Court of p Bombay but the appeal was unsuccessful.
The High Court took the same view of the evidence as the learned Presidency Magistrate and confirmed the conviction of the appellant under section 379 read with section 34.
So far as the question of sentence was concerned, a submission was made on behalf of the appellant that since he was a young boy of about seventeen years and three months and this was his first offence, leniency should be shown tow him.
But the High Court r observed that age alone was not sufficient to invoke the mercy of the Court and the appellant had not done anything since the date of the offence to deserve the mercy of the Court and it did not, therefore, see any reason to interfere with the sentence of imprisonment passed against the appellant.
It appears that once again the provisions of section 6 of the Probation of offenders Act, 1958 were not specifically brought to the notice of the High Court and the sentence of imprisonment was maintained by the High Court without applying its mind to those provisions.
Hence the appellant preferred a petition for special leave to this Court and on that petition, this Court granted special leave limited to the question "whether the provisions of the Probation of offenders Act should have been applied in the case".
We are concerned in this appeal with section 6 of the Probation of offenders Act, 1958, for it is only under that section that the appellant claims the benefit of the provisions contained in the Act.
Subsection (1) of section 6, on a plain grammatical reading of its language, provides that when any person under twenty one years age is found guilty of having committed an offence punishable with imprisonment, but not with imprisonment for life, the Court, by which the person is found guilty, shall not impose any sentence of imprisonment, unless it is satisfied that, having regard to the circumstances of the case, including the nature of the offence and the character of the offender it would not be desirable to deal with him 665 him under section 3 or section 4.
This inhibition on the power of the Court to impose a sentence of imprisonment applies not only at the state of trial court but also at the stage "High court or any other Court when the case comes before it on appeal or in revision. '.
Vide section 11, sub section
(1) of the Act.
It is, therefore, obvious that even though the point relating to the applicability of section 6 was not raised before the learned Presidency Magistrate or the High Court, this Court is bound to take notice of the provisions of that section and give its benefit to the appellant, particularly since it is a section which is intended for the benefit of juvenile delinquents, reflecting the anxiety of the Legislature to protect them from contact or association with hardened criminals in jails and retrieve them from a life of crime and rehabilitate them as responsible and useful members of society.
Here, we find that whatever date be taken as the relevant date for determining the applicability of section 6 whether the date of the offence or the date of the judgment of the learned Presidency Magistrate or the date of the judgment of the High Court the appellant was below twenty one years age.
The offence of which he is found guilty is an offence under section 379 read with section 34 and it is clearly an offence punishable with imprisonment but not with imprisonment for life.
The conditions requisite for the applicability of section 6 are, therefore, plainly satisfied and under section 6, Sub section
(1) it is not competent to the Court to impose ant sentence of imprisonment on the appellant, unless the Court is satisfied that, having regard to the circumstances of the case, including the nature of the offence and the character of the appellant, it would not be desirable to deal with him under section 3 or section 4.
It is true that sub section
(2) of section 6 requires that for the purpose of satisfying itself whether it would not be desirable to deal with the appellant under section 3 or section 4, the Court is required to call for a report from the Probation officer and consider the report, if any, but we do not think it necessary in the present case to call for any report from the Probation officer nor to remand the case to the learned Presidency Magistrate for passing an appropriate order after calling for a report from the Probation officer and considering it.
We have on record the antecedent history giving the background of the appellant.
The appellant was at one time a well known child film actor and he actually won several awards for acting in films.
It appears that at some subsequent stage he fell in bad company and took to evil ways The offence which he is convicted is, no doubt, an offence as theft which cannot be lightly ignored, but it is comparatively of a minor characters in that only two sarees were snatched away from the hands of Govind, perhaps under the stress of economic necessity.
Moreover, this is a false offence of the appellant.
We are, therefore, not at all satisfied 12 L925SupCI/75 666 that it would not be desirable to deal with the appellant under section 3 or section 4 and consequently, the sentence of imprisonment passed on the appellant must be set aside.
We accordingly set aside the sentence of imprisonment passed on the appellant and direct that he be released on his entering into a bond wit one surety in the sum of Rs. 500/ to appear in the Court of the Presidency Magistrate to receive sentence, whenever called upon to do so within a period of six months and during that period to keep the peace and be of good behaviour.
The learned Presidency Magistrate is directed to take the necessary bond from the appellant and the necessary surety bond from a surety to his satisfaction.
The appellant will continue on bail till such time as these directions are carried out, after which the bail bond will stand canceled.
P.B.R. Appeal allowed.
| Certain lands belonging to the appellants were compulsorily acquired under the Hyderabad Land Acquisition Act for running a country fair or market (mondha).
After the acquisition, the municipality parcelled out the excess land and sold it for a housing colony.
The High Court dismissed the appellants ' writ petition, in limine.
On appeal to this Court it was contended that the acquisition was not for a public purpose and that it was mala fide.
Dismissing the appeal, ^ HELD: (1)(a) Providing a village market is an obvious public purpose.
[876C D] (b) A mondha is a country fair or village market.
Market is defined in section 2(20) of the Hyderabad District Municipalities Act in wide terms and section 72 of the said Act enumerates the purposes for which property may be vested in a municipality.
This includes markets.
It inexoorably follows from a joint reading of Ss. 2(20) and 72(a) of the District Municipalities Act that the purpose of providing a market for the townsfolk falls within the powers of the municipality.
[876G H] (2)(a) Striking down any Act for mala fide exercise of power is a judicial resered power exercised lethally, but rarely.
The charge of mala fides against public bodies and authorities is more easily made than made out.
It is the last refuge of a losing litigant.
[876D] (b) What has to be established is mala fide exercise of power by the State Government although the beneficiary is the municipality.
There is no evidence of malus animus in Government.
[877B] (c) Apart from the fact that a housing colony is a public necessity, once the original acquisition is valid and title has vested in the municipality how it uses the excess land is no concern of the original owner and cannot be the basis for invalidating the acquisition.
There is no principle of law by which a valid compulsory acquisition stands voided because long later the requiring authority diverts it to a public purpose other than the one stated in the declaration.
[877C]
|
Civil Appeal No. 173 of 1983.
PG NO 336 From the Judgment and Order dated 30.9.1982 of the Calcutta High Court in Suit No. 568 of 1979.
Ajay Nath Ray, Surendra Dube and Mrs. Indira Sawhney for the Appellant.
S.K. Kapur, Ranjan Deb, Gangadeb and B.P. Singh for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
A somewhat important question as to the nature and scope of the rights available to a defendant whose "defence has been struck out" calls for determination in this appeal in the particular context of the West Bengal Premises Tenancy Act, 1956.
The appeal arises from the judgment of a Full Bench of the Calcutta High Court constituted to resolve a conflict in the earlier decisions of the same court on this issue.
The Full Bench, by a majority of two (P.K. Banerjee and Chittatosh Mookerjee, JJ) to one (Ramendra Mohan Datta, Acting C.J.) decided that in a matter where the defence against delivery of possession has been struck out under sub section 3 of section 17 of the West Bengal Premises Tenancy Act, 1956, (hereinafter referred to as the 'Act ') the defendant tenant cannot cross examine the witnesses called by the plaintiff, excepting on the point of notice under section 13(6) of the said Act.
The correctness of the view taken by the majority is contested in this appeal.
Though the learned Judges were of opinion that the issue decided on the reference raised substantial questions of law of general importance, they considered themselves unable to grant a certificate of fitness for appeal to this Court since the reference had arisen only on an interim order and the view expressed did not result in a judgment, order or decree against which leave to appeal could be granted.
Thereupon the aggrieved party filed a petition for special leave to appeal before this Court, which was granted.
It is in this manner that the issue has been brought up before this Court.
A detailed factual background is not necessary since the question raised is purely one of law.
It may, however, be mentioned that the respondent in this appeal filed a suit in 1979 on the original side of the Calcutta High Court praying for a decree directing the defendant (present appellant) to deliver up vacant and peaceful possession of certain premises in Calcutta and also for a decree for mesne profits or damages from February 1, 1978 till the date of PG NO 337 delivery of possession.
The appellant, a company carrying on business at the premises in question, filed its written statement denying the averments in the plaint and the claims made therein.
During the pendency of the suit several interlocutory applications were made from time to time in which orders were passed directing the present appellant (hereinafter referred to as the tenant) to deposit certain sums in court.
At one stage it appears that the tenant made an application praying that he may be permitted to deposit the arrears of rent in monthly instalments along with the current rents.
No orders were passed on this application on the ground that the application was out of time.
However, it appears that subsequent to disposal of this application, the defence of the tenant had been struck off under the provisions of section 17(3) of the Act.
The correctness of this order striking out the defence of the tenant has become final and is no longer in issue.
It, however, appears that the tenant contended before the trial court (though the details are not available on record) that the order under section 17(3) could, at worst, preclude the tenant only from adducing evidence, oral or documentary, in support of the averments made in its written statement.
It was claimed that it was open to the tenant to exercise his rights (a) of cross examining the plaintiff 's witnesses; (b) of pointing out to the court the factual and legal infirmities in the plaintiff 's case; and (c) of addressing arguments on the basis of evidence as adduced by the plaintiff and tested by the cross examination on behalf of the defendant.
Learned counsel for the appellant also urged before us that though the defendant had conceded before the High Court that it will not be entitled to lead any evidence, the reference being of a general question regarding the consequences of a strike off, we should consider the question in all its aspects and lay down the principles governing such cases.
We may start by referring to the provisions of section 17 of the Act.
When a suit for eviction is filed under the Act agianst any tenant on any of the grounds specified in Section 13 of the Act, Section 17(1) imposes an obligation on the tenant to deposit into the Court or with the controller or pay to the landlord all arrears of rent due from him with interest within a specified period and also to PG NO 338 continue to deposit or pay the current rent thereafter regularly month after month.
Sub section (2) provides a machinery for the determination of the amounts to be so paid or deposited, in case of dispute.
Sub section (2A) and (2B) contain provisions enabling the Court, subject to certain restrictions, to extend the time for such deposit or payment or allow the deposit or payment to be made in instalments.
If the tenant deposits or pays the amounts as above, he is protected from being evicted from the premises on the ground of non payment of rent: sub section (4).
If, on the other hand, he fails to deposit any amount referred to above within the time permitted, the consequence set out in sub section (3) will follow.
That sub section reads: "(3) If a tenant fails to deposit, or pay any amount referred to in sub section (1) or sub section (2) within the time specified therein or within such extended time as may be allowed under clause (a) of sub section (2A), or fails to deposit or pay any instalment permitted under clause (b) of sub section (2A) within the time fixed therefor, the Court shall order the defence against delivery of possession to be struck out and shall proceed with the hearing of the suit." (underlining ours) Before discussing the interpretation of the crucial words of the sub section, it may be useful to set out certain analogous provisions which have been the subject of judicial consideration: (a) The West Bengal Act XVII of 1950, which preceded the one under consideration, was somewhat different in its language.
section 14(1) of that Act dealt with a case where the suit was based on the ground of non payment of rent.
The Court could make an order calling upon the tenant to pay up the arrears of rent on or before a specified date.
The sequitir was set out in sub sections (3) and (4) as follows: "(3) If within the time fixed in the order under sub section (1), the tenant deposits in the court the sum specified in the said order, the suit, so far as it is a suit for recovery of possession of the premises, shall be dismissed by the court.
In default of such payment the court shall proceed with the hearing of the suit: Provided that the tenant shall not be entitled to the benefit of protection against eviction under this section if PG NO 339 he makes default in payment of the rent referred to in clause (i) of the proviso to sub section 1 of section 12 on three occasions within a period of eighteen months." "(4) If the tenant contests the suit, as regards claim for ejectment, the plaintiff landlord may make an application at any stage of the suit for order on the tenant defendant to deposit month by month rent at a rate at which it was last paid and also the arrears of rent, if any, and the court after giving an opportunity to the parties to be heard may make an order for deposit of rent at such rate month by month and the arrears of rent, if any, and on failure of the tenant to deposit the arrears of rent within fifteen days of the date of the order or the rent at such rate for any month by the fifteenth day of the next following month, the court shall order the defence against ejectment to be struck out and the tenant to be placed in the same position as if he had not defended the claim to ejectment.
The landlord may also apply for permission to withdraw the deposited rent without prejudice to his right to claim decree for ejectment and the court may permit him to do so." (b) Our attention has been drawn to two provisions of the Rules framed by the Calcutta High Court governing proceedings on its Original Side.
These rules read as follows: Chapter IX Rule 4: Suit heard ex parte against defendants in default Where one or more of several defendants has or have filed a written statement or written statements, but another or others has or have not, the suit shall, unless otherwise ordered, upon production of a certificate showing such default, be heard ex parte as against the defaulting defendant or defendants.
Chapter XIV Rule 3: Where heard ex parte defendant may, in person, cross examine and address the Court Where a suit is heard ex parte against any defendant, such defendant may be allowed to cross examine, in person, the plaintiff 's witnesses, and to address the Court; but unless the Court otherwise specially orders, evidence will not be received on his behalf, nor will he be allowed the assistance of an Advocate or Attorney.
PG NO 340 (c) Another provision that may be referred to in this context is the one in Order 11 rule 21 of the Code of Civil Procedure (C.P.C.) This rule reads thus: 21(1) Non compliance with order for discovery Where any party fails to comply with any order to answer interrogatories, or for discovery or inspection of documents, he shall, if a plaintiff, be liable to have his suit dismissed for want of prosecution, and, if a defendant, to have his defence, if any, struck out, and to be placed in the same position as if he had not defended, and the party interrogating or seeking discovery or inspection may apply to the Court for an order to that effect, and an order may be made on such application accordingly, after notice to the parties after giving them a reasonable opportunity of being heard.
(2) Where an order is made under sub rule (1) dismissing any suit, the plaintiff, shall be precluded from bringing a fresh suit on the same cause of action.
On behalf of the appellant learned counsel submits that a tenant or defendant whose "defence is struck out" is in the same position as if he had filed no written statement in the suit.
It is pointed out that the Original Side Rules of the Calcutta High Court permit a defendant who is said to be ex parte, either by not filing a written statement or by non appearance, to cross examine the plaintiff 's witnesses and to address the court; not only that, the rules confer a discretion in the court to permit him to have the assistance of an advocate and even to adduce evidence on his behalf.
This is based on the principle that the effect of an order striking out the defence can only be that the defendant should not, because of his default, be permitted to plead the positive case, which he had or could have put forward in his written statement or substantiate it by leading evidence on his side.
This cannot preclude him from putting forward the plea that the plaintiff is not entitled to a decree as he has not proved his case.
This, it is said, he is entitled to do either by cross examining the plaintiff 's witnesses and thus demolishing the plaintiff 's case or addressing arguments either on points of law or even on the facts in the light of the plaintiff 's evidence as tested by his cross examination.
Even this cannot, it is urged, be an invariable rule and the Court should always have a discretion, as provided for in the Calcutta High Court Rules, to relax its rigidity depending upon the circumstances of each case.
The position in an eviction Petition, it is said, cannot be much different.
Learned counsel urges that is a well established principle, PG NO 341 particularly under the Rent Acts, that it is for the plaintiff to satisfy the court that the conditions set out in the statute to enable him to obtain an order of eviction are strictly fulfilled.
Even where a defendant is said to be ex parte, the plaintiff is not absolved from this responsibility and it is also necessary for the Court, in such cases, to satisfy itself that the plaintiff is entitled, on the terms of the statute, to the relief prayed for: vide K.K. Chari vs R.M. Seshadri, AIR ; and Inder Mohan Lal vs Ramesh Khanna, ; In doing this the Court can and should take the help and assistance of the defendant and counsel.
It should be open to the defendant/tenant, even if he cannot put up a positive case, to show to the Court that the plaintiff 's suit or petition should fail on its own inherent weaknesses.
Learned counsel has relied on certain decisions and the observations therein in support of his submissions.
These may be referred to: An early decision of this Court, Sangram Singh vs Election Tribunal, Kotah, Bhurey Lal Baya, ; , was concerned with the question whether a defendant who had been set ex parte at some of the hearings (after the first hearing) could be permitted to appear and take part in later hearings, without the ex parte order being set aside.
The Court, after referring the terms of the Order XVII Rule 2 of the Code of Civil Procedure, observed thus: "The learned Judges who constituted a Full Bench of the Lucknow Chief Court (Tulsha Devi vs Sri Krishna, thought that if the original ex parte order did not ensure throughout all future hearings it would be necessary to make a fresh ex parte order at each succeeding hearing.
But this proceeds on the mistaken assumption that an ex parte order is required.
The order sheet, or minutes of the proceedings, has to show which of the parties were present and if a party is absent the Court records that fact and then records whether it will proceed ex parte against him, that is to say, proceed in his absence, or whether it will adjourn the hearing; and it must necessarily record this fact at every subsequent hearing because it has to record the presence and absence of the parties at each hearing.
With all due deference to the learned Judges who hold this view, we do not think this is a grave or a sound objection.
A much weightier consideration is that the plaintiff may be gravely prejudiced in a given case because, as the PG NO 342 learned Rajasthan Judges point out, and as O 'Sullivan, J. thought, when a case proceeds ex parte the plaintiff does not adduce as much evidence as he would have if it had been contested.
He contents himself with leading just enough to establish a prima facie case.
Therefore, if he is suddenly confronted with a contest after he has closed his case and the defendant then comes forward with an army of witnesses he would be taken by surprise and gravely prejudiced.
That objection is, however, easily met by the wide discretion that is vested in the Court.
If it has reason to believe that the defendant has by his conduct misled the plaintiff into doing what these learned Judges apprehend, then it might be a sound exercise of discretion to shut out cross examination and the adduction of evidence on the defendant 's part and to allow him only to argue at the stage when arguments are heard.
On the other hand, cases may occur when the plaintiff is not, and ought not to be, misled.
If these considerations are to weigh, then surely the sounder rule is to leave the Court with an unfettered discretion so that it can take every circumstances into consideration and do what seems best suited to meet the ends of justice in the case before it." M/s. Paradise Industrial Corpn.
vs M/s. Kiln Plastics Products, ; was a case which arose under the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947.
The trial Judge passed an order directing the tenant to deposit certain amounts in court, in default, making the notice absolute and directing that the defence would be struck off and the suit fixed for ex parte hearing.
An ex parte decree followed.
A single Judge of the Bombay High Court set aside the ex parte decree on the ground that the above order was illegal and without jurisdiction as it did not conform to the provisions contained in section 11(4) of the Act in question which only provided that, in case the directions of the court are not complied with, the defendant "shall not be entitled to appear in or defend the suit except with leave of the Court, which leave may be granted subject to such terms and conditions as the Court may specify.
"It did not, in the view of the learned Judges, authorise the Court to strike off the defence straightaway.
Reversing this order of the leared Judge, this Court observed: "We are afraid the learned Judge of the High Court has missed the substance and chased the shadow.
The words "striking out the defence" are very commonly used by PG NO 343 lawyers.
Indeed the application made on February 24, 1969 by the plaintiffs was for a direction to order the defences of the defendants to be struck off in default of payment of the amount ordered by the Court.
The phrase "defence struck off ' or "defence struck out" is not unknown in the sphere of law.
Indeed it finds a place in Order XI Rule 21 of the Code of Civil Procedure . .
In effect; both mean the same thing.
Nobody could have misunderstood what was meant.
Indeed, one may even say that the phrase "the defence to be struck off" or "struck out" is more advantageous from the point of view of the defendants.
Even when a defence is struck off the defendant is entitled to appear, cross examine the plaintiff 's witnesses and submit that even on the basis of the evidence on behalf of the plaintiff a decree cannot be passed against him, whereas if it is ordered in accordance with Section 11(4) that he shall not be entitled to appear in or defend the suit except with the leave of the court he is placed at a greater disadvantage.
The use of the words 'defence struck off ' does not in any way affect the substance of the order and the learned Judge of the High Court was wholly in error in holding that because of the form of the order passed on June 2, 1969 the order was illegal and without jurisdiction.
The order squarely falls within Section 11(4).
What the law contemplates is not adoption or use of a formula; it looks at the substance.
The order is not therefore one without jurisdiction.
It is one which the Judge was competent to make.
Somewhat similar in nature are the observations made in M/s. Babbar Sewing Machine Company vs Trilok Nath Mahajan, ; while dealing with the provisions of Order XI Rule 21 of the C.P.C.
The court was of opinion that, for the nature of the default in the said case it was a travesty of justice that the trial court should have passed an order striking out the defence of the defendant and the High Court should have declined to set it aside.
In this context, after discussing the scope of Order XI Rule 21 as to the manner in which the discretion of the court should he exercised, the Court made certain general observations towards the end of the judgment of the following effect: "It was further contended that the High Court was in error in observing that 'in view of the clear language of PG NO 344 Order XI, Rule 21 ' the defendant has no right to cross examine the plaintiff 's witnesses.
A perusal of Order XI, Rule 21 shows that where a defence is to be struck off in the circumstances mentioned therein, the order would be that the defendant "be placed in the same position as if he has not defended".
This indicates that once the defence is struck off under Order XI, Rule 21, the position would be as if the defendant had not defended and accordingly the suit would proceed ex parte.
In Sangram Singh vs Election Tribunal, ; , it was held that if the court proceeds ex parte against the defendant under Order IX, Rule 6(a), the defendant is still entitled to cross examine the witnesses examined by the plaintiff.
If the plaintiff makes out a prima facie case the court may pass a decree for the plaintiff.
If the plaintiff fails to make out a prima facie case, the court may dismiss the plaintiff 's suit.
Every Judge in dealing with an ex parte case has to take care that the plaintiff 's case is, at least, prima facie proved.
But, as we set aside the order under Order XI Rule 21, this contention does not survive for our consideration.
We, therefore, refrain from expressing any opinion on the question.
" Our attention has also been invited to the incidental references by this Court to the aspect presently in issue before us while considering the questions, in the context of analogous provisions of the rent statutes, whether the Court has a discretion to extend the time for the deposits to be made by the tenant when there is no specific statutory provision to that effect and whether, where the tenant fails to make the deposit as directed, the Court is bound to strike out his defence or has a discretion to take or not to take this extreme step.
In Ram Chand vs Delhi Cloth & General Mills Co. Ltd., ; , this Court, on the language of the Delhi Rent Control Act agreeing with the High court ILR 1972 2 Delhi 503 on this point held that the Rent Controller has no power to condone the tenant 's default by extending the time for payment.
This Court, however, did not agree with the High Court 's view that the default of the tenant vested an indefeasible right in the landlord and entitled him to an order of eviction straightaway.
The Court observed: "While we agree with the view of the High Court that the controller has no power to condone the failure of the tenant to pay arrears of rent as required under section 15(1), we PG NO 345 are satisfied that the Full Bench fell into an error in holding that the right to obtain an order for recovery of possession accrued to the landlord.
As we have set out earlier, in the event of the tenant filing to comply with the order under section 15(1), the application will have to be heard giving an opportunity to the tenant if his defence is not struck out under section 15(7) and without hearing the tenant if his defence is struck out." (emphasis added) Shyamcharan Sharma vs Dharamdass, ; was a case under the Madhya Pradesh Accommodation Control Act.
The tenant had not been able to deposit the rents as per the directions of Court and sought an extension of time.
The landlord opposed the application for condonation of delay on the ground that the Court had no power to grant it.
This contention was rejected by the first court and first appellate court but the High Court accepted the plea and decreed the suit for eviction.
The Supreme Court allowed the tenant 's appeal.
It observed: "It is true that in order to entitle a tenant to claim the protection of section 12(3), the tenant has to make a payment or deposit as required by section 13, that is to say, the arrears of rent should be paid or deposited within one month of the service of the writ of summons on the tenant or within such further time as may be allowed by the court, and should further deposit or pay every month by the 15th, a sum equivalent to the rent.
It does not, however, follow that failure to pay or deposit a sum equivalent to the rent by the 15th of every month, subsequent to the filing 'of the suit for eviction, will entitle the landlord straightaway, to a decree for eviction.
The consequences of the deposit or payment and non payment or non deposit are prescribed by subss.
(5) and (6) of section 13.
Since there is a statutory provision expressly prescribing the consequence of non deposit or non payment of the rent, we must look to and be guided by that provision only to determine what shall follow.
section 13(6) does not clothe the landlord with an automatic right to a decree for eviction, nor does it visit the tenant with the penalty of a decree for eviction being straightaway passed against him.
section 13(6) vests, in the court, the discretion to order the striking out of the defence against eviction.
In other words, the Court, having regard to all the cir cumstances of the case, may or may not PG NO 346 strike out the defence.
If section 13 were to be construed as mandatory and not as vesting a discretion in the Court, it might result in the situation that a tenant who has deposited the arrears of rent within the time stipulated by section 13(1) but who fails to deposit thereafter the monthly rent on a single occasion for a cause beyond his control may have his defence struck out and be liable to summary eviction.
We think that section 13 quite clearly confers a discretion, on the court, to strike out not to strike out the defence, if default is made in deposit or payment of rent as required by section 13(1).
If the Court has the discretion not to strike out the defence of a tenant committing default in payment or deposit as required by section 13(1), the court surely has the further discretion to condone the default and extend the time for payment or deposit.
Such a discretion is a necessary implication of the discretion not to strike out the defence.
" The apparent conflict between these cases camp up for consideration in Ram Murti vs Bhola Nath, After considering the two earlier decisions, the Court observed: "It would be incongruous to hold that even if the defence of the tenant is not to be struck out under Section 15(7), the tenant must still be visited with the punishment of being deprived of the protection under Section 14(2).
In Hem Chand 's case the Court went to the extent of laying down that even if the defence of the tenant is struck out under Section l5(7), the Rent Controller could not straightaway make an order for eviction in favour of the landlord under Section 14(1)(a).
The Court held that the High Court was wrong in its assumption that failure to comply with the requirements of section 15(1) vests in the landlord an 'indefeasible right ' to secure an order for the eviction of the tenant under Section 14(1)(a).
The Court set aside the judgment of the High Court taking that view and remanded the matters to the Rent Controller observing that there was still an issue to be tried.
If that be so, the question at once arises, "what is the issue to be tried?" If the landlord has still to make out a case before the Rent Controller that he was entitled to an order for eviction of the tenant under section 14(1)(a), surely the tenant has the right to participate in the proceedings and cross examine the landlord.
It must logically follow as a necessary PG NO 347 corollary that if the defence is not to be struck out under Section 15(7) it means that the tenant has still the defences open to him under the Act.
In the premises, the conclusion is irresistible that he has the right to claim protection under Section 14(2).
What is of essence of Section 14(2) and of Section 15(6) is whether there has been a substantial compliance with the order passed under Section 15(1).
The words "as required by section 15(1)" in these provisions must be construed in a reasonable manner.
If the Rent Controller has the discretion under Section 15(7) not to strike out the defence of the tenant, he necessarily has the power to extend the time for payment of future rent under Section 15(1) where the failure of the tenant to make such payment or deposit was due to circumstances beyond his control.
The previous decision in Hem Chand 's case interpreting Section 15(7) and Section 14(2) in the context of Section 15(7) of the Delhi Rent Control Act, 1958, although not expressly overruled, cannot stand with the subsequent decision in Shyamcharan case interpreting the analogous provisions of the Madhya Pradesh Accommodation Control Act, 1961 as it is of a larger Bench." ( Underlining ours) One more decision of this Court to which counsel for the respondents referred may also be touched upon here, viz. Bela Das and others vs Samarendra Nath Bose, [1975] 2 S.C.R. 1004.
In that case, the respondent was a tenant of a certain premises in respect of which a suit for eviction had been filed.
The tenant was directed to pay into court the arrears and future rent but he did not comply with the order and his defence was struck out.
Thereafter, an ex parte decree of eviction was passed and confirmed by the first appellate court.
In second appeal, the High Court remitted the case to the trial court on the ground that, since the respondent had not admitted the appellants to be full owners of the premises but contended that other co sharers of the appellant 's family had also shares therein, there was a denial of the relationship of landlord and tenant and that the order striking out the respondent 's defence qua tenant did not prevent him from contesting the suit on the question of title.
The appeal against the High Court 's order was allowed by this Court.
The Court observed: "The defendant had admitted that he was the tenant under the plaintiffs but was merely asserting that there were some more landlords of the premises in question.
It was PG NO 348 not a case of denial of relationship of landlord and tenant between the parties.
In the case of Mahabir Ram, AIR 1968 Patna 415, the tenant had denied the title of the plaintiffs and set up a title in himself.
In the instant case the plea of the defendant has been that the plaintiffs being landlords of the suit premises for a moiety of share could not alone claim a decree for eviction against him.
Such a plea set up by the defendant to resist the suit for eviction was a plea qua tenant and not de hors it.
The striking out of the defence on 8.7.1964 had the effect of striking out all defence raised by the defendant qua tenant including his defence that the plaintiffs alone being co sharer landlords were not entitled to maintain the suit for eviction.
It may also be added that the learned Munsif in his order dated 8.7.1964 striking out the defence, which order was confirmed by a Bench of the High Court in Civil Revision No. 824 of 1964 decided on 21.4.1964, had pointed out on the basis of the defendant 's statements in his written statement as also in his rejoinder to the plaintiff 's petition under section 11A of the Act that the defendant had admitted that he was paying rent to the plaintiffs and had recognised them to be their landlords.
In that view of the matter also the plaintiffs were the landlords of the suit premises occupied by the defendant within the meaning of clause (d) of section 2 of the Act.
In either view of the matter there is no escape for the defendant in this case that his entire defence in the suit was in his capacity as a tenant and on its striking out it was struck out as a whole.
The hearing of the suit ex parte was, therefore, legal and valid.
The contrary view taken by the High Court is erroneous in law.
" A brief reference may now be made to the conflict of decisions in the Calcutta High Court which occasioned the reference to the Full Bench.
The first two cases were under the original side rules and concerned the consequences of a defendant failing to enter appearance in a suit.
In a very early decision in S.N. Banerjee vs H.S. Suhrawardy, AIR 1928 Cal.
772 Rankin, C.J. had observed, of the rights of a defendant who had not entered appearance, as follows: "If he does not enter appearance within the time limited the case will go into what is called the undefended list and when the case is on the undefended list it is not possible for the defendant without obtaining leave to enter PG NO 349 appearance.
He has a limited right to cross examine witnesses adduced on behalf of the plaintiff if he appears at the time when the undefended case is down for hearing, out his position is that of a man who for not entering appearance in time is precluded from defending the suit whether he appears at the hearing or does not appear at the hearing.
" Referring to these observations in Dabendra Nath Dutt vs Smt.
Satyabala Dassi and others, AIR 1950 Cal. 217, P.B. Mukharji, J. said: "Thus then there are two consequences of not entering appearance under the Rules.
One is that the suit is liable to be heard ex parte and the other is that no written statement can be filed.
In that context, I am not inclined to impose more punishment than those two so explicitly stated by the Rules.
Therefore I am of the opinion that a party subject to these handicaps imposed by the Rules can still appear, under the Civil Procedure Code when the suit is called on for hearing from the undefended list, not only to cross examine the witnesses of the plaintiff and demolish in such manner the plaintiffs case on evidence that the Court will not pass any decree in the plaintiff 's favour but also to make such arguments and submissions on law and on such evidence as the plaintiff may have brought to the Court.
These are, in my opinion, valuable rights under the Code which are not taken away by any Rules of the original side.
If that be so I fail to see why in such a case the terms of 0.9 Rr. 8 and 9 of the Code cannot be made applicable to the original side of this Court notwithstanding the technicalities of "entering appearance" as introduced by the Rules of the original side practice.
It may be that when because of the default in "entering appearance" the suit is liable to be heard ex parte, the defendant may not know or have notice when the suit is going to be heard.
But that is immaterial and that is a risk to which such a defendant makes himself open by such default.
But should he by any means whatever know that the suit is being heard from the undefended list he can nevertheless appear at such hearing and exercise the rights I have mentioned.
Rankin C.J. in the Court of appeal sees the possibility of cross examination in such a case by the defendant of plaintiff 's witnesses.
PG NO 350 I have not been able to persuade myself to take the view that a suit can only be defended by filing a written statement or by "entering appearance" under the Rules.
In my opinion filing of written statement is not the only way of defending a suit.
A defendant in my judgment may ably and successfully defend a suit against him by cross examination and arguments.
" In S.B. Trading Company Ltd. vs Olympia Trading Corpn.
Ltd., AIR 1952 Calcutta 685 Sarkar, J. (as His Lordship then was) had to consider the effect of strike off of defence under section 14(4) of the 1950 Act.
In that case, which was a suit for ejectment, the defence had been struck off as the defendants had not complied with an order made under section 14(4).
When the plaintiff proceeded to prove its claim for ejectment the defendants claimed to take part in the proceedings to oppose the decree for ejectment.
In the first place, they claimed that they were entitled to cross examine the plantiff 's witnesses and to address the court not as counsel but as agents of their clients.
The learned Judge declined the request.
He referred to the observations of P.B. Mukharji J. quoted earlier, that their rights were only aspects of the rights of defence and observed: "It seems to me that if I allow the defendants in this case to cross examine the plaintiff 's witnesses on their evidence as to the facts establishing the claim to ejectment and to address the Court with regard to that claim, I am really allowing the defendants to defend the claim against ejectment.
Section 14(4) says that this the defendants cannot do.
" The next question that arose was whether it was open to the defendants to contest the plaintiff 's claim that the defendant was not entitled to the benefit of the proviso to section 14(3).
The learned Judge also negatived this right.
He observed: "It would be a curious result and really would amount to annulling the provisions of sub section 4, if in spite of the defence being struck out, the defendants were in a position to contest the applicability of the proviso.
In my view, this latter argument of learned counsel for the plaintiff is plainly sound.
The proviso itself says that on certain things happening "the tenant shall not be entitled to the benefit of protection against eviction under this section.
"So, the proviso really contemplates a defence to the claim for ejectment, and if that defence is struck out, PG NO 351 it must necessarily mean that it is no longer open to the defendants to contest the existence of the facts giving rise to the applicability of the proviso.
I, therefore, reach the conclusion that the defendants will not be allowed to take any part in the proceedings for proof of the applicability of the proviso.
" The effect of a strike off of defence was expressed in even more forcible language by Chakravartti C.J.
In Gellatly vs Gannon, AIR 1953 Cal 409.
The learned Judge observed: "The language of section 14(4) is in no way qualified.
The policy of the section or, indeed, the whole Act seems to be that the Legislature is not minded to protect a tenant who will not even pay the monthly rent regularly.
If the tenant, on being directed to pay the current rent month by month, does not do so, the Act quite clearly provides that he will such conduct forfeit the special protection which the Act confers on tenants and will be relegated to his position the general law.
I do not find any justification in the language of section 14(4) to limit the defence against ejectment contemplated by it to defence against ejectment only on the ground mentioned in section 12(1)(i) of the Act.
" The question next arose before a Full Bench, consisting of section P. Mitra, C.J., M.M. Dutt, J. and A.K. De, J. in Gurudas Biswas vs Char Panna .
Seal, AIR 1977 Cal. 110 in the context of the 1956 Act.
One of the questions before the Full Bench was whether, in a suit for ejectment where the defence as to delivery of possession had been struckout under section 17(3) of the Act, the defendant could take thedefence of the non existence or invalidity of a notice under section 13(6) in the court below and in the court of appeal.
This question was answered in the affirmative, endorsing the conclusion reached in an of earlier decisions of the Court.
The reasoning was that the strike off only deprived the tenant of the special protection given to him under section 13(1) of the Act but did not preclude the necessity of the landlord having to prove the service of notice under section 13(6) of the Act which was a step to be taken before the filing of the suit.
The Court, however, observed: "To pass an ex parte decree in a suit for ejectment on or of the grounds in Section 13(1), the Court is required to decide, whether the suit is defended or not, (if the relation ship of landlord and tenant is not disputed as here PG NO 352 (a) whether the tenancy has been validly determined by a notice under Section 106, Transfer of Property Act, (b) whether a valid notice of suit was given before filing the suit (c) whether the ground alleged in the plaint to take away the tenant 's special protection conferred by Section 13(1), has been established on the evidence.
This is the requirement of Order 20, Rule 4, Civil Procedure Code, whether the suit is contested or not.
The Court cannot relieve itself of the necessity of complying with Order to, Rule 4 even if it strikes out the tenant s defence against delivery of possession or the written statement.
That being the position in law, it would be wrong, not to permit the tenant to contend and show, if possible, on plaintiffs evidence and materials as are on record, both at tile trial and also at the appeal stage, that the plaintiff is not entitled to the decree prayed for, though he would not be permitted either to cross examine plaintiffs witnesses, when they give evidence, or to call his own witnesses at the trial, if his defence is struck out. ' ' The above observations came up for consideration in Daya Moyee Sadhukhan vs Dal Singer Singh, AIR 1979 Cal 332.
In this case, on failure of the defendant to comply with the provisions of section l7(1) of the Act of 1956, his defence had been struck off.
Thereafter, at the hearing of the suit, the defendant was allowed to cross examine the plaintiff s husband On all issues but the defendant examined himself only on the question whether notice to quit i1ad been served properly in terms of section 106 of the Transfer of Property Act.
The landlord appellant argued before the High Court that as the defence had been struck out, the trial court was not justified in allowing the defendant to cross examine the plaintiff s witness and, in support of this contention reliance was placed on the observations in Gurudas Biswas vs Charu Panna Seal, AIR 1977 Cal. 110.
M.M. Dutt, J., delivering the judgment of the Bench, observed that, strictly speaking, the observations relied upon did not relate to the points that had been posed before the Full Bench for consideration and hence had no binding force.
He proceeded to consider the question on general principles.
He referred to Order 9, Rr. 6 and 7 of the C.P.C., the decision in Sangram Singh vs Election Tribunal, ; , Order I I Rule 21 of the C.P.C., the decisions in Paradise Industrial Corpn.
vs M/s. Kiln plastics Products, (supra) and the observations in Babbar Sewing Machine Company vs Trilok Nath Mahajan, (supra) and concluded: PG NO 353 "It is true that the Supreme Court did not express, any opinion on the question, but it is apparent that the Supreme Court was inclined to hold that the defendant was, entitled to cross examine the witnesses of the plaintiff.
The above decisions of the Supreme Court do not support the observations made in the Full Bench case referred to above, namely, that when the defence of the defendant has been struck out he would not be permitted to cross examine the plaintiff 's witnesses when they give evidence.
In the circumstances we hold that in a case where the defence of the defendant is struck out under the provision of section 17(3) of the West Bengal Premises Tenancy Act, 1956, the defendant will be entitled to cross examine the plaintiff 's witnesses on all the points.
There can be no doubt that his defence as to the service of the notice to quit and of suit will remain unaffected by the striking out of his defence against delivery of possession and he will be entitled to adduce evidence in support of that defence.
In other words, the defendant will be entitled to participate in the proceedings and make his submissions against the plaintiff 's case for delivery of possession.
The learned Judge was, therefore, justified in allowing the defendant to cross examine the plaintiff 's witness and to adduce evidence by examining himself on the point of notice.
" This is the background against which the issue has to be considered by us.
It would be useful for a proper appreciation of the two views if, at this stage, we summarise the pros and cons of the situation.
The points urged for the plaintiff are (a) In a statute hedged in with all protection to a tenant against eviction, one important safeguard to the landlord is in this provision which seeks to assure him at least of the prompt payment of the rents lawfully due to him.
The tenant is compelled to pay up the rent on pain of losing his right of defence against ejectment.
This is a provision which should be strictly enforced and full effect given to this right of the landlord.
(b) Defence being struk off does not merely mean the exclusion of the written statement or the positive case, if any.
which the defendant wishes to plead.
It means also the exclusion of all modes of his participation in the suit qua the plea of ejectment.
Cross examination of the plaintiff 's witnesses and putting forth arguments demolishing the PG NO 354 plaintiff 's case are as crucial and vital parts of the defence as the putting in of a written statement or examination of his own witnesses.
(c) In like situations any similar default on the part of the plaintiff will spell the dismissal of his suit.
(Order 11 Rule 21 C.P.C.) On like analogy, the defendant in default should be made liable for ex parte eviction straightaway.
Restrictions are already placed on this right of the plaintiff by requiring that he has to establish his case by leading evidence to substantiate the same.
There is no justification for imposing on him further handicap of the defendant 's participation, even to a limited extent.
(d) The concession that the defendant can cross examine the plaintiff 's witnesses or put forward arguments to demolish the plaintiff 's case will lead to confusion and practical difficulties.
The pleas sought to be taken by the defence in section B. Trading Co. vs Olympia Trading Coprn.
Ltd., AIR 1952 Cal.
685 and in Bela Das vs Samarendra Nath Bose, ; (e) Apart from the view of Sarkar, J. and the decision of the Full Bench in Gurudas Biswas vs Charu Panna Seal, AIR 1977 Cal. 110, the Patna High Court in Ganesh Ram vs Smt.
Ram Lakhan Devi, also has taken to similar view and held that such a defendant cannot be allowed to lead evidence in support of his pleas in defence.
(f) Under Order 8 Rule 5 of the C.P.C., when there is no written statement, the averments in the plaint are to be taken as correct and, if they are sufficient under the terms of the statute, a decree has to follow as a matter of course.
On the other hand, the aspects stressed by the defendant are: (a) The expression "defence being struck out" obviously relates to the consideration of a document being ruled out.
PG NO 355 It suggests that the intention is only that the written statement should be excluded from consideration.
Even treating the expression as equivalent to a direction that the court should proceed as if the defendant had not entered appearance at all, the tenant 's position cannot be worse than that of a similarly placed defendant under the Original Side Rules of the Calcutta High Court or under the C.P.C. (b) It is well established that mere absence of defence cannot make the plaintiff entitled to a decree straightaway.
Defence or no defence, the plaintiff in a suit has to satisfy the court that he has a case which deserves to be decreed.
In particular, in an eviction suit, under the rent laws, the court has to be satisfied that the statutory conditions justifying eviction are fulfilled.
This the plaintiff can establish only by leading evidence and such evidence will not be worth anything unless tested by cross examination.
The cross examination of the plaintiff 's witnesses is more an integral part of the plaintiff 's case than an aspect of defence.
(c) The Calcutta High Court has uniformly held that, even in an undefended action, a challenge on ground of non issue or invalidity of the notice under section 13(6) would be available to the defendant.
Though the notice has to be issued prior to the institution of a suit and, in this sense, is a pre condition to the filing of the suit, the non issue or invalidity is just one of the pleas that can be raised in defence.
If a tenant whose defence is struck off can raise that plea, there is no reason why he should not be allowed to do other things to show that the plaintiff is not entitled to a decree.
(d) The observations of this Court in Sangram Singh, Paradise Industrial Corpn.
and Eabbar Sewing Machine Company, (supra) are categorical and directly on this aspect of procedural law and deserve to be followed in the context of like provisions of tenancy legislations as well.
We have considered the contentions urged on behalf of both the parties and the respective view points of the two lines of decisions of the High Court.
We have also perused the decisions of this Court to which reference has been made.
Though none of them is a direct decision on the issue before us, the observations made, in so far as they enunciate general principles and relate to analogous statutory provisions are most helpful and instructive.
After PG NO 356 giving careful thought to all the aspects, we have come to the conclusion that the view expressed in the case under appeal by Ramendra Mohan Dutta, Acting Chief Justice, is preferable to the view taken by the other two learned Judges.
It is a more liberal and equitable view and also one consistent with the requirements of justice in such cases.
We proceed now to set out the reasons for our conclusion.
A provision like the one in section 17(4) is a provision in terrorem.
It penalises the defendant for certain defaults of his.
As pointed out by the decisions earlier referred to, the court will act with great circumspection before striking out the defence of a tenant under this provision.
This Court has interpreted provisions like this in rent acts to say that striking off of defence is not obligatory on the court merely because there is a default and that it is a matter for exercise of great judicial restraint.
But it does not necessarily follow that, once the defence is struck off, the defendant is completely helpless and that his conduct of the case should be so crippled as to render a decree against him inevitable.
To hold so would be to impose on him a punishment disproportionate to his default.
The observations made by this Court, while discussing the provisions of the Code of Civil Procedure, and the Original Side rules of the Calcutta High Court which deal with some what analogous situations, cannot be lightly brushed aside.
I hose decisions have enunciated a general equitable principle.
We are also of the same view that provisions of this type should be construed strictly and that the disabilities of a person in default should he limited to the minimum extent consistent with the requirements of justice.
This should be all the more so in the context of a tenancy legislation.
the main object of which is to confer protection on tenants against eviction by the landlord.
unless certain statutory conditions are fulfilled.
I he provisions should not be given any wider operation than could have been strictly intended by the legislature.
It has already been noticed that, in the Calcutta High Court.
there has been unanimity on the point that, even where defence is struck out, the validity of the notice under section 13(6) is challengeable.
This has been the settled view of that court for several years now which it would be inequitable to disturb after such a long time.
This type of cases, however, has been sought to be distinguished on the ground that such notice is a condition precedent to the institution of the suit and cannot perhaps be described as a defence to the suit.
This, however, is too tenuous a distinction.
For, in truth and substance the plea regarding the validity of the notice has invariably to be taken as a plea in defence in such suits.
The rule, therefore, is PG NO 357 really an exception to the strict application of a rule that a tenant whose defence is struck off cannot be heard at all against the plea of ejectment.
We agree that full effect should be given to the words that defence against ejectment is struck off.
But does this really deprive the defendant tenant of further participation in the case in any manner? While it is true that, in a broad sense, the right of defence takes in, within its canvass, all aspects including the demolition of the plaintiff 's case by the cross examination of his witnesses, it would be equally correct to say that the cross examination of the plaintiff 's witnesses really constitutes a finishing touch which completes the plaintiff 's case.
It is a well established proposition that no oral testimony can be considered satisfactory or valid unless it is tested by cross examination.
The mere statement of the plaintiff 's witnesses cannot constitute the plaintiff 's evidence in the case unless and until it is tested by cross examination.
The right of the defence to cross examine the plaintiff 's witnesses can, therefore, be looked upon not as a part of its own strategy of defence but rather as a requirement without which the plaintiff 's evidence cannot be acted upon.
Looked at from this point of view it should be possible to take the view that, though the defence of the tenant has been struck out, there is nothing in law to preclude him from demonstrating to the court that the plaintiff 's witnesses are not speaking the truth or that the evidence put forward by the plaintiff is not sufficient to fulfill the terms of the statute.
To us it appears that the basic principle that where a plaintiff comes to the court he must prove his case should not be whittled down even in a case where no defendant appears.
It will at once be clear that to say that the Court can only do this by looking the plaintiff 's evidence and pleadings supplemented by such questions as the court may consider necessary and to completely eliminate any type of assistance from the defendant in this task will place the court under a great handicap in discovering the truth or otherwise of the plaintiff 's statements.
For after all, the court on its own motion, can do very little to ascertain the truth or otherwise of the plaintiff 's averments and it is only the opposite party that will be more familiar with the detailed facts of a particular case and that can assist the court in pointing out defects, weaknesses, errors and inconsistencies of the plaintiff 's case.
We, therefore, think that the defendant should be allowed his right of cross examination and arguments.
But we are equally clear that this right should be subject to PG NO 358 certain important safeguards.
The first of these is that the defendant cannot be allowed to lead his own evidence.
None of the observations or decisions cited have gone to the extent of suggesting that, inspite of the fact that the defence has been struck off, the defendant can adduce evidence of his own or try to substantiate his own case.
Secondly, there is force in the apprehension that if one permits cross examination of the plaintiff 's witnesses by the defendant whose defence is struck off, procedural chaos may result unless great case is exercised and that it may be very difficult to keep the cross examination within the limits of the principles discussed earlier.
Under the guise of cross examination and purported demolition of the plaintiff 's case, the defendant may attempt to put forward pleas of his own.
To perceive quickly the difference between questions put out to elicit a reply from the plaintiff which may derogate from his own case and questions put out to substantiate pleas in defence which the defendant may have in mind and to restrict the cross examination to its limits will be not easy task.
We think, however, that this is a difficulty of procedure, rather than substance.
As pointed out by Ramendra Mohan Dutta, J. this is a matter to be sorted out in practical application rather than by laying down a hard and fast rule of exclusion.
A third safeguard which we would like to impose is based on the observations of this court in Sangram Singh 's case.
As pointed out therein, the essence of the matter in all such cases is that the latitude that may be extended by the court to the defendant inspite of his not having filed a written statement, should not cause prejudice to the plaintiff.
Where the defendant does not file a written statement or where he does not appear to contest the case the plaintiff proceeds on the basis that there is no real opposition and contents himself by letting in just enough evidence to establish a prima facie case.
Therefore, the court should ensure that by permitting the defendant at a later stage either to cross examine the witnesses or to participate in the proceeding the plaintiff is not taken by surprise or gravely prejudiced.
This difficulty however can be easily overcome in practice, because there is a wide discretion with the court and it is always open to the court, where it believes that the plaintiff has been misled, to exercise its discretion to shut out cross examination or to regulate it in such manner as to avoid any real prejudice to the interests of the plaintiff.
An objection to our above conclusion has been raised on the basis of the provisions of Order VIII of the Code of Civil Procedure.
Rules 1, 5 and 10 of this Order have been PG NO 359 recently amended by the Amendment Act of 1976.
We find nothing in these rules which will support the contention urged on behalf of the respondents.
Rule 1 merely requires that the defendant should present a written statement of his defence within the time permitted by the court.
Under rule 5(2), where the defendant has not filed a pleading it shall be lawful for the court to pronounce judgment on the basis of the facts contained in the plaint except against a person under disability but the court may in its discretion require any such fact to be proved.
Again under rule 10 when any party from whom a written statement is required fails to present the same within the time permitted or fixed by the court, the court "shall pronounce judgment against him or make such order in relation to the suit as it thinks fit.
" It will be seen that these rules are only permissive in nature.
They enable the court in an appropriate case to pronounce a decree straightaway on the basis of the plaint and the averments contained therein.
Though the present language of rule 10 says that the court "shall" pronounce judgment against him, it is obvious from the language of the rule that there is still an option with the court either to pronounce judgment on the basis of the plaint against the defendant or to make such other appropriate order as the court may think fit.
Therefore, there is nothing in these rules, which makes it mandatory for the court to pass a decree in favour of the plaintiff straightaway because a written statement has not been filed.
Reference was made before us to sub rule 1 of rule 5.
This sub rule, however, has application only in a case where a pleading is filed but does not contain a specific or implicit denial of the averments contained in the plaint or other document to which it is a reply.
Rule 5(1) cannot be made use of to sustain the contention that where there is no written statement the court is bound to accept the statements contained in the plaint and pass a decree straightaway.
These provisions of the Code of Civil Procedure, far from supporting the contentions of the plaintiff that a decree on the basis of the plaint should follow a failure to file the written statement.
rather indicate a contrary position, namely, that even in such cases, it is a matter for the court to exercise a discretion as to the manner in which the further proceedings should take place.
We, therefore, do not think that the terms of Order VIII in any way conflict with the conclusion reached by us.
For the above reasons, we agree with the view of Ramendra Mohan Dutta, ACJ that, even in a case where the defence against delivery of possession of a tenant is struck off under section 17(4) of the Act, the defendant, subject to the exercise of an appropriate discretion by the court on the facts of a particular case, would generally be entitled: PG NO 360 (A) to cross examine the plaintiff 's witnesses; and (b) to address argument on the basis of the plaintiff 's case.
We would like to make it clear that the defendant would not be entitled to lead any evidence of his own nor can his cross examination be permitted to travel beyond the very limited objective of pointing out the falsity or weaknesses of the plaintiff 's case.
In no circumstances should the cross examination be permitted to travel beyond this legitimate scope and to convert itself virtually into a presentation of the defendant 's case either directly or in the form of suggestions put to the plaintiff 's witnesses.
For reasons mentioned above, we allow the appeal and restore the suit before the trial Judge for being proceeded with in the light of the above conclusions.
We direct that the costs of this appeal will form part of the costs in the suit and will abide by the result thereof.
S.L. Appeal allowed.
| Execution applications were filed by the Appellant under section 21 of the Delhi Rent Control Act, 1958 for obtaining possession of the portions in the occupation of the respondents Tenants.
The appellant 's case was that she obtained s motion of the Additional Rent Controller on 26/27th February, 1976 and thereafter leased out specified portions in her property to the respondents under separate leases for a limited period of two years commencing from March 1, 1976.
The rear portion in the ground floor was leased out to one tenant and the first and second floor were leased out to another tenant.
Each tenant was to pay a sum of Rs.850 per month.
The execution applications were filed by the appellant against the two respondents as they failed to vacate the portion leased out to them at the end of the two year period.
The two respondents put up a common defence contending, that there was a single tenancy and not two tenancies, they were jointly inducted into possession of the entire leased portion in the month of December, 1975, under an oral lease and the tenancy was therefore not referable to the sanction given by the Additional Rent Controller on 26/27th February, 1976.
They placed reliance on the payment of Rs.1,700 on 10th December, 1975 as security deposit, and three months advance payment of rent of Rs.5,100 by means of cheque on 29th December, 1975.
The Rent Controller after inquiry and consideration of the accepted the case of the respondents, and held that an oral having been granted in favour of the respondents even in the month of December, 1975 their tenancy rights were not governed by the sanction given by the Additional Rent Controller under section 2l, and that sanction of the Rent Controller was vitiated by fraud in that it was by supressing the true facts from the notice of the Rent Controller.
The execution applications were accordingly dismissed.
PG NO 241 PG NO 242 In the appeals preferred to the Rent Control Tribunal, it was held that even if the respondents had been inducted into possession in December 1975 under an oral tenancy they must be deemed to have impliedly surrendered their earlier tenancy the sanction granted by the Rent Controller on 2h/27th February, 1976.
It was further held that the respondents ought to have brought to the notice of the Rent Controller without delay the fraud practised by the appellant and since they have failed to act promptly they were not entitled to seek nullification of the sanction of the Rent Controller.
The Tribunal allowed the appeals, held the execution applications were maintainable, and directed respondents to deliver possession to the appellant in a month 's time.
Second appeals were filed by respondents to the High Court, which were allowed.
It was held that as the respondents were already given tenancy rights they would not be governed by the sanction given by the Rent Controller on 26/27th February, 1976, that the sanction order itself was unenforceable as it was vitiated by fraud, and that no question of implied surrender of the earlier tenancy would arise, when the Rent Controller gave sanction for limited tenancy rights.
The High Court restored the order of the Rent Controller dismissing the execution appeals.
Dismissing the appeals by the landlord, the Court, HELD: 1.
What section 21 envisages is the creation of tenancy rights after getting the sanction of the Rent Controller.
Such being the case, the landlord should make known to the Rent Controller, if there is already a tenant in occupation of the premises, the factum of his possession and the terms of the tenancy and satisfy the Rent Controller that notwithstanding a tenant being in occupation of the premises under an earlier tenancy he should be granted sanction under section 21 to confer limited tenancy rights in favour of the existing tenant himself or in favour of new tenant.
[249D E] 2.
Section 21 was not intended to obtain 'post facto ' sanction of a tenancy that had already been created by supressing relevant information from the Rent Controller so as to enable the landlord to straight away recover possession of the leased property by filing an application under section 21 after the expiry of the period for which permission to lease had been granted by the Rent Controller.
[249E F] PG NO 243 3.
Besides what the parties say, the Rent Controller has to apply his mind before granting sanction under section 21 because the order passed by him has legal consequences and will govern the rights of the parties to the tenancy that is to follow in terms of the sanction.
[251C] S.B. Noronah vs Prem Kumari, [1980] I SCR 281; J.R. Vohra vs Indian Export House Pvt. Ltd., ; at 723; Inder Mohan Lal vs Ramesh Khanna, [1987] IV SCC 1 at page 9; and Joginder Kumar Butan vs R.P. Oberai, [1987] (IV) SCC page 20 at 29 referred to.
A statement made in contravention of facts, whether made by one or both the contracting parties, cannot alter the truth of the situation or cure the lacuna of withholding of relevant information.
[249H] In the instant case, it is inconceivable that irrespective of the differences in the size and nature of the two portions, the respondents would have consented to pay the same rate of rent to the appellant for the portions alleged to have been leased out to them.
The tenancies Granted to the two respondents are for the same period i.e. from March 1, 1976 to 28 February.
If all these factors are taken note of the only conclusion that can be reached is that only a single tenancy in favour of both the respondents should have been created for the entire leased portion and not two tenancies, one for the ground floor, and the other for the first and second floor.
The story of two tenancies put forward by the appellant is a make believe affair.
[248B D] In the instant case, when the appellant had already put the re spondent in possession of the property in December, 1975, she could not have bona fide made a statement before the Rent Controller that she would not be requiring the premises for her own occupation from 1st March 1976 onward for a period of two years.
The fact that respondent 910 appeared before the Rent Controller and gave statements in tune with the statement made by the appellant cannot improve the situation in any manner.
[249G H] 5.
The sanction obtained from the Rent Controller under Section 21 was vitiated by fraud and therefore a nullity.
It could therefore not be said that by reason of the respondents having agreed to take limited ten tenancy rights under the order of Rent Controller for a period of two years commencing from March 1, 1976 they must be deemed to have impliedly surrendered their earlier tenancy rights as envisaged under clause (f) of section 111 of the Transfer of Property Act.[252C E] PG NO 244 Doe d. Earl of Egrement vs Courtenay, , referred.
|
minal Appeal No. 150 of 1956.
Appeal by special leave from the Judgment and order dated October 18, 1955, of the Allahabad High Court in Government Appeal No. 60 of 1953 arising out of the judgment and order dated July 8, 1952, of the Court of Sessions Judge at Bareilly in Criminal Sessions Trial No. 27 of 1952.
Daulat Ram Prem and P. C. Agarwala, for the appellant, 658 Gyan Chand Mathur and C. P. Lal, for the respondent.
February 14.
The Judgment of the Court was delivered by KAPUR J.
The appellant along with one Qudrat Ullah was tried for the murder of one Sabir.
The latter was tried under section 302 read with section 114 of the Indian Penal Code for abetment, and the former under section 302 I.P.C.
Both the accused were acquitted by the learned Sessions Judge of Bareilly.
But the State took an appeal to the Allahabad High Court against the appellant only and the judgment of acquittal in his case was reversed and he was convicted under section 302 I.P.C. and sentenced to 'transportation for life '.
Against the judgment of the High Court the appellant has brought this appeal by Special Leave.
The facts which have given rise to the appeal are that Sabir was murdered on the 11th May, 195 1, at about 6 30 p.m.
The First Information Report was made by Qudrat Ullah the other accused at 6 45 p.m. the same day, i.e., within about 15 minutes of the occurrence.
The prosecution case was that there was an exchange of abuses between the deceased and the appellant near the shop of the First Informant, Qudrat Ullah.
The cause of the quarrel was that on the evening of the occurrence while Qudrat Ullah was sitting in his shop and the deceased was sitting just below the shop, the appellant came out of his house and on seeing him, the deceased asked him as to why he was in such a " dishevelled condition ", which annoyed the appellant and gave rise to an exchange of abuses.
On hearing this noise, the prosecution witnesses arrived at the spot and saw the appellant and the deceased grappling with each other.
The appellant is stated to have asked Qudrat Ullah to hand over a knife to him which Qudrat Ullah did; this knife is exhibit I II ', with which the appellant stabbed the deceased and then fled away.
As a result of the injuries the deceased fell down infront of Qudrat Ullah 's shop; some witnesses have stated that he fell on the wooden plank in front of the shop.
Qudrat Ullah picked up the knife which had been 659 dropped by the appellant, put the deceased in a rickshaw and took him to the hospital from where he went to the Police Station and made the First Information Report.
An objection has been taken to the admissibility of this report as it was made by a person who was a co accused.
A First Information Report is not a substantivepiece of evidence and can only be used to corroborate the statement of the maker under section 157 of the Evidence Act or to contradict it under section 145 of that Act.
It cannot be used as evidence against the maker at the trial if he himself becomes an accused, nor to corroborate or contradict other witnesses.
In this case, therefore, it is not evidence.
The Sub Inspector went to the spot, started investigation and arrested the appellant the same evening at his house.
The postmortem examination of the deceased showed injuries on the person of the deceased and, according to the doctor.
, death was due to shock and haemorrhage on account of the punctured wound in the chest, causing injuries to the lungs and these injuries could be caused with a sharp edged weapon.
The appellant and the deceased both belong to a sect of Jogis.
Evidence discloses that the deceased and the appellant were quite friendly with each other, and so were the deceased and Qudrat Ullah, who is a butcher and had a shop which is a part of his house.
Adjacent to the shop is the house of the appellant.
Eye witnesses of the occurrence were Yad Ali, P.W. 1, Banne, P.W. 2 and Mohd. Ahmed, P.W. 3.
Having been told by the sister of the deceased as to the occurrence, Ashraft, P.W. 4 came to the spot later and found the deceased lying unconscious.
Shakir, P.W. 5, younger brother of the deceased, on arriving near the shop of Qudrat Ullah heard the appellant and the deceased exchanging abuses, but was not a witness of the assault ' as just at that time he had gone, at the request of Qudrat Ullah, to fill his Chillum for the hookka and when he came back he found the deceased lying unconscious and the appellant running away towards his house.
The evidence of Yad Ali P. W. 1, is that he heard an exchange of abuses between the deceased and the appellant and when he moved about 4 or 5 paces he 660 saw them grappling with each other.
The appellant had the deceased ,in his grip", he asked Qudrat Ullah to hand over a knife to him which the latter did and with it the appellant stabbed the deceased and then went away to his house.
The statement of Banne is similar and so is the statement of Mohd. Ahmed, P. W. 3.
This evidence was not accepted by the learned Sessions Judge and he acquitted both the accused.
The State took an appeal only against the appellant which was allowed by the High Court.
It held " We may concede that the eye witnesses have falsely implicated Qudrat Ullah by deposing that he handed over his knife to the respondent on his demand.
There was no enmity between him and Sabir and he bad no motive to get him killed by the respondent.
It does not at all appear probable that after abetting the murder of Sabir he at once took him on a rickshaw to the hospital and from there went at once to the police station and lodged a report against the respondent.
This conduct of Qudrat Ullah is so inconsistent with the part said to have been played by him in the occurrence that we have little hesitation in rejecting the evidence about the part played by him.
" The High Court, however, accepted the.
testimony of the eye witnesses as against the appellant 's guilt and observed: "We are satisfied that the prosecution has fully established the, case against the respondent.
There is not the slightest doubt about his guilt.
The presumption of innocence has been fully rebutted by the prosecution.
The case against him does not become doubtful merely because the learned Sessions Judge said that there was a doubt about his guilt." The learned Judges also came to the conclusion that the view taken by the learned trial Judge was ;one " which no reasonable person could have taken.
It was a wholly erroneous view of the evidence which has resulted in gross miscarriage of justice inasmuch as a murderer escapes punishment",.
In the circumstances of the case and considering that there was some provocation, the High Court sentenced the appellant to I transportation for life.
661 There is a passage in the Judgment of the High Court which appears to us to be disconsolate and indicative of a wrong approach in deciding the guilt of an accused person.
Although the learned Judges recognised the principle that the onus was not on the accused, yet one of the observations is such that it comes perilously near to putting the burden on the accused if it does not actually do so.
The High Court has said: The respondent himself did not have the courage to say that he did not find them at the spot.
If 'he were innocent, he must have come out of his house immediately on hearing the noise and must have known who was present there and; who was not" This passage is so destructive of the cardinal principle of criminal jurisprudence as to the presumed innocence of an accused person till otherwise proved that it has become necessary to reiterate the rule stated by eminent authorities ". that it is the duty of the prosecution to prove the prisoner 's guilt subject to any statutory exception.
" it was next contended that the witnesses had falsely implicated Qudrat Ullah and because of that the Court should have rejected the testimony of these witnesses as against the appellant also.
The well known maxim falsus in uno falsus in omnibus was relied upon by the appellant.
The argument raised was that because the witnesses who had also deposed against Qudrat Ullah by saying that he had handed over the knife to the appellant had not been believed by the Courts below as against him, the High Court should not have accepted the evidence of these witnesses to convict the appellant.
This maxim has not received general acceptance in different jurisdictions in India; nor has this maxim come to occupy the status of a rule of law.
It is merely a rule of caution.
All that it amounts to is that in such cases the testimony may be disregarded and not that it must be disregarded.
One American author has stated: (1) Woolmington vs The Director of Public Prosecutions, ; 662 SUPREME COURT REPORTS [1957] validity. . and secondly, in point of utility because it merely tells the jury what they may do in any, event, not what they must do or must not do, and therefore, it is a superfluous form of words.
It is also in practice pernicious. . " (1) The doctrine merely involves the question of weight of evidence which a court may apply in a given set of circumstances but it is not what may be called " a mandatory rule of evidence ".
Counsel for the appellant drew our attention to a passage from an unreported judgment of the Privy Council, I Chaubarja Singh vs Bhuneshwari Prasal Pal.
" The defendants own evidence and that of several of his witnesses is of no use to, him.
He cannot contend that any court of law can place reliance on the oath of people who have admittedly given false evidence upon the other branches of the case.
" This passage is a very slender foundation, if at all, for conferring on the doctrine the status of anything higher than a rule of caution and the Privy Council cannot be said to have given their weighty approval to any such controversial rule which has been termed as " worthless", "absolutely false as a maxim of life" and "in practice pernicious" in works of undoubted authority on the law of evidence (2).
The High Court was not unmindful of what the witnesses stated as to Qudrat Ullah 's part in the commission of the offence and having taken that into consideration, it said: " While the learned Sessions Judge was right in acquitting Qudrat Ullah, he was completely wrong in acquitting the respondent of whose guilt there was not the slightest doubt.
The direct evidence made out a clear case against him and there was no sound reason for disregarding it.
" After discussing the evidence of the witnesses and the discrepancies pointed out by the appellant the High Court held " there is not the slightest doubt about his guilt." (1) Wigmore on Evidence Vol.
III para 1009.
(2j Wigmere Vol.
III para 1009.
663 It was because of the above two contentions raised by counsel for the appellant and because it was a case of reversal of a judgment of acquittal that we allowed counsel to go into the evidence which he analysed and drew our attention to its salient features and to the discrepancies in the statements of witnesses and the improbabilities of the case; but we are satisfied that the learned Judges were justified in coming to the conclusion they did and the view of the trial judge was rightly displaced.
Upon a review of the evidence of the prosecution witnesses we have come ,to the conclusion that the appellant was rightly convicted.
The appeal is, therefore, dismissed and the judgment of the High Court is affirmed.
A appeal dismissed.
| The transport industry can be nationalised by two methods: (i) where the Government acts under Chapter IV A, (section 68 (b) and (c) of the ), after formulating the scheme for taking over a route or routes, and (ii) the more effective method, to take over the running of the entire transport services by nationalising them, along with their units, (Vehicles, workshops etc.) either by one stroke or by stages spread over a short time.
The Karnataka State adopted the second method and the legislation viz., the Karnataka Contract Carriages (Acquisition) Act, 1976 was upheld by this Court in State of Karnataka and Anr.
vs Ranganatha Reddy and Anr., ; The Tamilnadu State passed, the Tamil Nadu Stage Carriages and Contract Carriages (Acquisition) Ordinance, 1973 which later took the shape of the Tamil Nadu Stage Carriages and Contract Carriage (Acquisition) Act, 1973.
The intention of the Act was to start the nationalisation scheme in one district of the State first and then extend it to other districts.
Section 1 provided 726 that the policy of nationalisation shall come into force on the 14th January, 1973.
Clause (iii) of sub section (4) (b) of section I laid down that with respect to stage carriages in any other district in the State, the Act will come into force on such dates as the Government may by notification appoint.
Section 2 codified one of the clauses of the preamble by enacting a declaration that the Act was meant 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 the acquisition in respect of the stage carriages and contract carriages and other properties referred to in section 4.
Section 4, the pivotal section provided that on and from the date as may be specified by the Government in respect of any stage carriage or contract carriage operator, the permit issued to the operator shall vest in the Government absolutely free from all encumbrances and stage carriages or contract carriages which vest in the Government, shall by force of such vesting be freed and discharged from any trust, obligation and encumbrances etc.
It was further provided that any person interested shall have no claim in relation to such carriages or contract carriages taken over by the State in pursuance of the nationalisation policy and the claim, if any, would be limited to the amount payable under the Act.
Sub section (3) of section 4 contained a declaration that the vesting of the stage carriages and other properties shall be deemed to have been acquired for a public purpose and in public interest.
Section 6 provided for a reasonable amount of compensation to be paid to the operators on their properties vesting in the Government.
Where the amount can be fixed by agreement, the same shall be determined in accordance with the agreement and in other cases by an arbitrator appointed by the Government.
Section 12 provided for an appeal to the High Court against the award of the arbitrator.
The schedule to the Act fixed the scale of compensation enunciated the principles on which it was to be awarded and contained the guidelines for its payment.
The operators whose stage carriages were taken over by the State Government assailed the constitutional validity of the Act in their writ petitions in the High Court.
The High Court held that the Act was ultra vires Articles 14 and 19 of the Constitution as it did not fall within the scope of Articles 31 C, and that by virtue of the Act the financiers who were the owners of the stage or contract carriages would be completely wiped out of their business and that therefore Article 19 was clearly violated.
It further held that the objects of Article 30 (b) & (c) have not been subserved and since the vehicles taken over by the State under the Act were moveable properties Article 39 was not applicable.
In appeals to this Court it was contended on behalf of the State that the Act squarely fell within the protective umbrella of Article 31 inasmuch as 727 in pith and substance, the Act sought to subserve and secure the objects contained in clauses (b) and (c) of Article 39 and was, therefore, fully protected from the onslaught of Articles 14,19 and 31.
The provisions of the Act are almost in pari materia with the Karnataka Contract Carriages (Acquisition) Act, 196, which has been upheld by this Court.
On the other hand, it was contended on behalf of the operators (Respondents in the appeals and petitioners in the writ petition) that the manner in which the transport services had been nationalised under the Act did not fall within the ambit of Article 39 (b) and (c) as the buses or the vehicles were not an integral part of the policy of nationalisation.
If the Act had nationalised the transport services without taking over the units and the workshops, etc, then the operators could have had something to fall back upon to earn their livelihood.
Complete deprivation of livelihood by the Act amounted to a confiscatory piece of legislation and therefore void.
Allowing the appeals and dismissing the writ petitions: ^ HELD: The Tamilnadu Stages Carriages and Contract Carriages (Acquisition) Act 1973 is constitutionally valid.
[766 A] 1.
By and large the provisions of the two Acts viz. the Karnataka Contract carriage (Acquisition) Act, 1976 and the Tamil Nadu Stages Carriages and Contract Carriages (Acquisition) Act, 1973 appear to be identical in many respects and the general structure and the fundamental features of the two Acts are almost same.
In view of the clear decision of this Court regarding the constitutional validity of the Karnataka Act, very little survives so far as the arguments in this case, advanced on behalf of the respondents are concerned.
Further the three important decision in Minerva Mills, Waman Rao and Sanjeev Coke Manufacturing cases, reinforce and reiterate the conclusions reached in the Karnataka case.
D E] 2.
(i) There appears to be complete unanimity of judicial opinion on the point that although the directive principles are not enforceable yet the court should make a real attempt at harmonising and reconciling the directive principles and the fundamental rights and any collision between the two should be avoided as far as possible.
[736 B] (ii) Whereas in the 25th Amendment, the protective umbrella given by Constitution was restricted to laws passed only to promote objects in Cls.
(b) & (c) or article 39, by virtue of the 42nd Amendment the limitations which were confined to Cls.
(b) and (c) of article
39 were taken away and the Article was given a much wider connotation by legislating that Acts or laws giving effect to all or any of the principles laid down in part IV of the Constitution would be protected by the umbrella contained in article 31C and would be immune from challenge on the ground that they were violative of article 14 or 19.
[738 C D] (iii)From a combined reading of Bharati 's and Minerva Mills ' cases as also of the subsequent decisions, the undisputed position is that article 31C, as introduced by the 25th Amendment, is constitutionally valid in all respects.
[738 G H] 728 3.
An important facet of Act 31C, is that there should be a close nexus between the statute passed by the legislature and the twin objects mentioned in clauses (b) and (c) of article 39.
The doctrine of nexus cannot be extended to such an extreme limit that the very purpose of article 39 (b) and (c) is defeated.
By requiring that there should be nexus between the law and article 39 (b) what is meant is that there must be a reasonable connection between the Act passed and the objects mentioned in article 39 (b) and (c) before the said Article can apply.
If the nexus is present in the law then protection of article 31C becomes complete and irrevocable.
[739 F 740 A] State of Kerala & Anr.
vs N.M. Thomas & Ors., ; at 993 to 996; His Holiness Kesavananda Bharati Sripadagalaveru vs State of Kerala,[1973] Supp.
S.C.R. 1; Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; at 261; Waman Rao & Ors. etc. etc.
vs Union of India & Ors.
[1981]2 S.C.R. 1 at 41; and Sanjeev Coke Manufacturing Co. vs M/s. Bharat Coking Coal Ltd. & Anr. , referred to. 4.
In a case where article 31C applies, whether compensation is necessarily to be given, has the following facts: (a) if article 31C is taken, to exclude article 31 (2) the question of compensation becomes irrelevant and otiose, ,[741 D] (b) nationalisation of transport service by the State is unobjectionable and unexceptionable and can be accomplished in three different methods: (i) nationalisation of services and not units thereof, [741 E] (ii) nationalisation of the services alongwith the entire assets of the units, and [741 F] (iii) nationalisation of the services and part of the assets of the units of the operators.
[741 G] In the instant case, the State of Tamil Nadu has taken recourse to method (iii) above, i.e. it has nationalised the entire transport service as also a part of the entire assets of the units thereof.
As nationalisation is a policy decision, an enquiry into the policy of the legislature or the considerations governing the same, cannot be made by the courts unless the policy is so absurd as to violate the provisions of the Constitution.
In view of article 31C, the court cannot strike down the Act merely because the compensation for taking over the transport services or its units is not provided for.
The reason for this is that article 31C was not merely a pragmatic approach to socialism but imbibed a theoretical aspect by which all means of production, key industries, mines, minerals, public supplies, utilities and services may be taken gradually under public ownership, management and control.
[741 H 742 B] Akadasi Padhan vs State of Orissa [1963] Supp.
(2) S.C.R. 691, referred 729 5.
From a perusal of Bharati 's as also Karnataka cases the following principles for assessing compensation after the amendment of article 31 (2) by substitution of the word 'amount ', emerge: (1) that compensation should not be arbitrary or illusory, (2) that the amount fixed as compensation should not be unprincipled, (3) that the compensation sought to be paid should not be so arbitrary or illusory as to be unconscionably shocking, and (4) it is not necessary that compensation must represent the actual market value or be adequate for even if compensation is inadequate but not illusory, the requirement of article 31 (2) is fully complied with.
[755 E H] In the instant case, on the question of compensation the relevant sections of the Act are completely in accordance with the principles enunciated above and hence the argument of the counsel for the respondents that the compensation is wholly inadequate or illusory must be overruled.
[756 A] 6.
(i) The compensation awarded or the principles contained in the various sections of the Act are not illusory but amount to a just and sufficient compensation to the operators whose properties are taken away.
In fact, it was to meet such situations that article 31C was introduced so that any obstacle resulting in evil consequence to the operators or persons whose properties are taken over is completely removed.
[757 B] In the instant case, the State has nationalised the stage and contract carriages for the purpose of providing a general and expeditious transport at reasonable rates to the members of the public and such a policy is undoubtedly in public interest and involves an important public purpose.
[758 F] (ii) article 39 (b) does not mention either moveable or immovable property.
The actual expression used is 'material resources of the community ' "Material resources" are wide enough to cover not only natural physical resources but also moveable or immovable properties.
[759 E] 7.
(i) If the State chooses to monopolise trades in certain essential commodities or properties, the purposes mentioned in article 39 (b) & (c), article 31 (2) would be completely excluded; otherwise no State monopoly is ever possible.
It was for this reason that Parliament thought it advisable to protect the objects contained in Article 39 (b) (ii) Article 31(2) by virtue of the 25th Amendment omitted the word 'compensation ' and had substituted the word 'amount ' which gives ample discretion to the State to fix a reasonable amount if the property of an individual is taken over for a public purpose.
The court in such matters cannot 730 interfere with the amount so fixed unless it is shown to the court 's satisfaction that the amount fixed is so monstrous as to shock its conscience.
[761 G 762 A] 8.
The persons whose properties are taken over cannot be heard to complain that the compensation awarded to them should be according to the market value which, if conceded, would defeat the very purpose and objective of Article 39 (b) & (c).
The principles that emerge are.
(1) that in view of the express provisions of article 31C which excludes article 31 (2) also, where a property is acquired in public interest for the avowed purpose of giving effect to the principles enshrined in article 39 (b) & (c), no compensation is necessary and article 31 (2) is out of the harms way, and (2) That even if the law provides for compensation, the courts cannot go into the details or adequacy of the compensation and it is sufficient for the State to prove that the compensation was reasonable and not monstrous or illusory so as to shock the conscience of the court.
[762 E; C D] In the instant case, both the conditions mentioned above are fully satisfied having regard to the provision of the Act.
[762 F] 9.
It will not be correct to construe the word 'distribution ' in a purely literal sense so as to mean only division of a particular kind or to particular persons.
The words, apportionment, allotment allocation, classification, clearly fall within the broad sweep of the word 'distribution '.
So construed, the word 'distribution ' as used in the article 39 (b) will include various facets, aspects, methods and terminology of a broad based concept of distribution.
The word 'distribution ' does not merely mean that property of one should be taken over and distributed to others like land reforms where the lands from the big landlords are taken away and given to landless labourers or for that matter the various urban and rural ceiling Acts.
That is only one of the modes of distribution but not the only mode.
[763 G 764 A] In the instant case, distribution is undoubtedly there though in a different shape.
So far as the operators were concerned they were motivated by making huge profits and were most reluctant to go to villages or places where the passenger traffic is low or the track is difficult.
This naturally caused serious in convenience to the poor members of the community who were denied the facility of visiting the towns or other areas in a transport.
By nationalising the transport as also the units the vehicles would be able to go to the farthest corner of the State and penetrate as deep as possible and provide better and quicker and more efficacious facilities.
This would undoubtedly be a distribution for the common good of the people and would be clearly covered by cl.
(b) of article 39.
[764 B C] 731
|
Writ Petition (CRL) No. 745 of 1987.
(Under Article 32 of the Constitution of India).
J.M. Khanna for the Petitioner Ravindra Bana, G. Venkatesh Rao and C.V. Subba Rao for the Respondents.
The following order of the Court was delivered: O R D E R The petitioner has been convicted for the offence of murder and sentenced to imprisonment for life.
He claims in this application under Article 32 of the Constitution the benefit of the Punjab Borstal Act and has placed reliance on a decision of this Court in the case of Hava Singh vs State of Haryana, AIR 1987 SC 2001.
A counter affidavit has been filed disputing the tenability of the claim.
In Hava Singh 's case (supra) a two Judge Bench (including one of us) was considering the claim of a convict for an offence of murder to release taking into account the period the prisoner had stayed in the Borstal institution.
In that case, it was observed: "It is evident from the averments made in the writ petition as well as in the said counter affidavit that the petitioner was admittedly adolescent at the time of his con 558 viction was sent to Borstal Institute at Hissar.
Subsequently, he has been transferred to the District Jail at Rohtak and is undergoing the sentence of imprisonment for life.
It appears from the objects and reasons of Punjab Borstal Act, 1926 that the object of the Act is to provide for segregation of adolescent prisoners from those of more mature age, and their subsequent training in separate institutions.
These Borstal Institutions meant for detaining adolescent offenders and to impart to them such industrial training and other instructions and subject them to such disciplinary and moral influence as will conduce to their reformation.
This is evident from the provisions of section 2(1) of Punjab Borstal Act, 1926.
Sub section (2) of section 2 defines detained as detained in and detention as detention in a Borstal Institution.
Section 5 of the said Act which is very vital for the purpose of decision of this case is quoted hereinbelow: '5.
Powers of courts to pass a sentence of detention in a Borstal Institution in the case of a convict under twenty one years of age in lieu of transportation or rigorous imprisonment (1) When any male person less than twenty one years of age is convicted of an offence by a court of sessions, a Magistrate specially empowered under section 30 of the Code of Criminal Procedure, 1898, or a Judicial Magistrate of the first class, or is ordered to give security for good behaviour and fails to give such security, and when by reason of this criminal habits or tendencies or associations with persons of bad character it is expedient in the opinion of the Judge or Magistrate, that he should be detained, such Judge or Magistrate may, in lieu of passing a sentence of transportation or rigorous imprisonment, pass an order of detention for a term which shall not be less than two years and shall not exceed seven years when the order is passed by a Court of sessions or a Magistrate specially empowered under section 30 of the Code of Criminal Procedure, 1898, and shall not be less than two years nor exceed three years, when the order is passed by a judicial magistrate of the first class not so empowered.
(2) . . . . . . . 559 (3). . . . . . . .
This court further stated: "The petitioner who was adolescent admittedly being less than twenty one years of age at the time of his conviction though convicted under Section 302/34 I.P.C. and sentenced to imprisonment for life, was sent to the Borstal Institute in accordance with the provisions of Punjab Borstal Act, 1926.
On his attaining the age of about twenty one years he was transferred back to the Jail.
There is no provision except section 20 under the said Act for transferring back an adolescent convict on his attaining the age of twenty one years from the Borstal Institute to Jail for undergoing the unexpired term of imprisonment.
The Court then referred to section 20 of the Act dealing with incorrigibles and observed: n "The section empowers the State Government to commute the residue of the term of detention of an inmate in Borstal Institute to such term of imprisonment of either description not exceeding the residue as the State Government may direct and also to order transfer of the inmate to any jail in Punjab in order to complete the said term of imprisomnent when such an inmate is reported to be incorrigible or is exercising bad influence on the other inmates of the Institution or such an inmate has committed a major Borstal Institution offence as provided in the rules.
" The Court then stated: "This Court while considering an indentical case in the State of Andhra Pradesh vs Vallabhapuram Ravi; , has observed that a person detained in a Borstal School under section 10 a has to be released after he has served the full term of 5 years of detention or on his completing 23 years of age.
He cannot be retransferred thereafter to prison.
Such a retransfer would defeat the very object and purpose of the Act of providing for detention of young offenders in Borstal School for the purpose of reformation and rehabilitation of such offenders '.
It is to be 560 noted in this connection that sentence of detention is passed in lieu of sentence of imprisonment which may have been passed.
Hence the detention order under section S of the said Act is not imprisonment and Borstal School where the adolescent offender is detained is not a prison.
It has also been observed further that section 433 A, Cr.
P.C. would not operate where a person is detained by an order under section 10 a of the Act.
Section 433 A of the Code was introduced not to set at naught provisions like 10 A of the Act which dealt with a special class of offenders like adolescent offenders but only to regulate capricious and arbitrary decisions under Section 432 of the Code and the remission rules sometimes reducing the sentence of imprisonment for life imposed on persons who had been convicted of capital offences but had been sentenced to imprisonment for life to short periods like five to six years.
" Under the Punjab Act, 'offence ' has been defined in section 2(4) to mean "an offence punishable with transportation or rigorous imprisonment under the Indian Penal Code other than (a) an offence punishable with death;." Hava Singh 's case did not refer to the definition of 'offence ' and relied upon the decision in the case of Ravi (supra) though the scheme of the Andhra Act was very different.
The Andhra Act known as the Andhra Pradesh Borstal Schools Act, 1925, does not have the definition of 'offence ' and there is no exclusion as provided in the Pun jab Act.
What is excepted in the definition is an offence which is punishable with death.
Section 302 of the Indian Penal Code provides: "Whoever commits murder shall be punished with death or imprisonment for life and shall also be liable to fine. " One of the punishments for the offence of murder is death and, therefore, the offence of murder would be covered within section 2(4)(i)(a) of the Punjab Act and to such a conviction the Punjab Borstal Act would have no application.
Support for such a view is available from 561 several decisions of different High Courts.
Section 562(1) of the Code A of Criminal Procedure of 1898 as amended in 1923 brought in the phrase: "Punishable with death or transportation for life".
In Emperor vs Mt. Janki & Anr., AIR 1932 Nag. 130 that phrase was interpreted disjunctively and women convicted of an offence for which transportation for life was one of the punishments provided were held ineligible for release on probation under section 562.
It was pointed out that the words 'death or transportation for life ' must be read as referring to offences the penalty for which provided by the Penal Code contains either death or transportation for life as one of the punishments awarded and not necessarily both.
Reliance was placed on a full Bench decision of the Rangoon High Court in King Emperor vs Nga San Htwa & Ors., AIR 1927 Rangoon 205 which was dealing with a similar phrase occurring in section 497 of the old Code.
A Division Bench of the Madhya Pradesh High Court in Chetti vs State of Madhya Pradesh, AIR 1959 MP 241 also took the same view.
In Emperor vs Bahawati, AIR 1928 Lahore 920 it was held that as one of the alternative punishments for that offence under section 307 of the Penal Code, is transportation for life, it is obvious that section 562 is not applicable and the accused must be sentenced to rigorous imprisonment and fine.
The Allahabad High Court in the case of State vs Sheo Shanker, AIR 1956 All. 326, the Madras High Court in Public Prosecutor of Madras vs Paneswar Rao, AIR 1946 Mad.
178, the Rajasthan High Court in Sarkar vs Jalam Singh, AIR 1950 Raj, 28 and the Bombay High Court in Naranji Premji vs Emperor, AIR 1928 Bom.
244 have taken the same view.
In Hava Singh 's case the definition was not placed for consideration before the Court and, therefore, the conclusion which has been reached is not correct.
The Punjab Borstal Act does not have application to an offence punishable under section 302 IPC.
therefore, the conclusion in Hava Singh 's case is not correct.
The petitioner is not entitled to the benefit of the Punjab Borstal Act as he has been sentenced to imprisonment for life for the offence of murder punishable under section 302 IPC for which the sentence of death is prescribed as an alternate.
The writ petition is dismissed.
P.S.S. Petition dismissed.
| % Sectlon 5 of the Punjab Borstal Act, 1926 empowers courts to pass a sentence of detention in a Borstal institution in the case of male persons less than twenty one years of age convicted of an offence, in lieu of transportation or rigorous imprisonment.
Section 2(4)(i)(a) of the Act which defines 'offence ' takes in offences other than an offence punishable with death.
In his writ petition under Article 32 of the Constitution, the petitioner who has been convicted for the offence of murder and sentenced to imprisonment for life claimed benefit of the Punjab Borstal Act relying on Hava Singh vs State of Haryana, AIR 1987 SC 2001.
The State contested his claim Dismissing the writ petition. ^ HELD: l. l The Punjab Borstal Act does not have application to an offence punishable under section 302 I.P.C.[561F G] 1.2 What is excepted in the definition of 'offence ' in section 2(4)(i)(a) of the Act is an offence which is punishable with death.
One of the punishments under section 302 I.P.C. for the offence of murder is death, and.
therefore, the offence of murder would be covered with section 2(4)(i)(a) of the Act and to such a conviction the Punjab Borstal Act would have no application.
[560F G] 1.3 The petitioner is, therefore, not entitled to the benefit of the Punjab Borstal Act as he has been sentenced to imprisonment for life for the offence of murder punishable under section 302 I.P.C. for which the sentence of death is prescribed as an alternate.
[561G] 557 1.4 In Hava Singh 's, case the definition of offence was not placed for consideration before the court and, therefore, the conclusion which has been reached is not correct.
[561F] Emperor vs Mt. Janki & Anr., AIR 1932 Nag. 130; King Emperor vs Nga San Htwa & Ors., AIR 1927 Rangoon 205; Chetti vs State of Madhya Pradesh, AIR 1959 MP 291; Emperor vs Bahawati, AIR 1928 Lahore 920; State vs Sheo Shankar, AIR 1956 All. 326; Public Prosecutor of Madras vs Paneswar Rao, AIR 1946 Mad. 178; Sarkar vs Jalam Singh, AIR 1950 Raj.
28 and Narauji Premji vs Emperor, AIR 1928 Bom.
referred to.
Hava Singh vs State of Haryana, AIR 1987 SC 2001 overruled.
|
Civil Appeal No. 342 of 1956.
Appeal from the judgment and order dated September 14,1956, of the Bombay High Court, in Special Civil Application No. 2496 of 1956.
R. V. section Mani, for the appellant.
C. K. Daphtary, Solicitor General of India, B. Sen, and R. H. Dhebar, for the respondents.
August 28.
The Judgment of the Court was delivered by section K. DAS J.
This is an appeal on a certificate granted by the High Court of Bombay under article 132 (1) of the Constitution, and the question involved in the appeal is the true scope and effect of article 3 of the Constitution, particularly of the proviso thereto as it stands after the Constitution (Fifth Amendment) Act, 1955, 607 On December 22, 1953, the Prime Minister of India made a statement in Parliament to the effect that a Commission would be appointed to examine " objectively and dispassionately ' ' the question of the reorganisation of the States of the Indian Union " so that the welfare of the people of each constituent unit as well as the nation as a whole is promoted ".
This was followed by the appointment of a Commission under a resolution of the Union Government in.
the Ministry of Home Affairs, dated December 29, 1953.
The Commission submitted its report in due course and on April 18, 1956; a Bill was introduced in the House of the People (Lok Sabha) entitled The States Reorganisation Bill (No. 30 of 1956).
Clauses 8, 9 and 10 of the said Bill contained a proposal for the formation of three separate units, namely, (1) Union territory of Bombay ; (2) State of Maharashtra including Marathawada and Vidharbha; and (3) State of Gujurat including Saurashtra and Cutch.
The Bill was introduced in the House of the People on the recommendation of the President, as required by the proviso to article 3 of the Constitution.
It was then referred to a Joint Select Committee of the House of the People (Lok Sabha) and the Council of State (Rajya Sabha).
The Joint Select Committee made its report on July 16, 1956.
Some of the clauses of the Bill were amended in Parliament and on being passed by both Houses, it received the President 's assent on August 31, 1956, and became known as the (37 of 1956) hereinafter called the Act.
It is necessary to read here section 8(1) of the Act which instead of constituting three separate units as originally proposed in the Bill constituted a composite State of Bombay as stated therein.
" S.8 (1): As from the appointed day, there shall be formed a new Part A State to be known as the State of Bombay comprising the following territories, namely : (a) the territories of the existing State of Bombay, excluding 608 (i) Bijapur, Dharwar and Kanara districts and.
Belgaum district except Chandgad taluka; and (ii) Abu Road taluka of Banaskantha district; (b) Aurangabad, Parbhani, Bhir and Osmanabad districts, Ahmadpur, Nilanga, and Udgir taluks of Bidar district, Nanded district (except Bichkonda and Jukkal circles of Deglur taluk and Modhol, Bhiansa and Kuber circles of Modhol taluk) and Islapur circle of Boath taluk, Kinwat taluk and Rajura taluk of Adilabad district, in the existing State of Hyderabad, (c) Buldana, Akola, Amaravati, Yeotmal, Wardha, Nagpur, Bhandara and Chanda districts in the existing State of Madhya Pradesh; (d) the territories of the existing State of Saurashtra; and (e) the territories of the existing State of Kutch; and thereupon the said territories shall cease to form part of the existing States of Bombay, Hyderabad, Madhya Pradesh, Saurashtra and Kutch, respectively.
" The appointed day from which the new State of Bombay came into existence was defined in the Act as meaning November 1, 1956.
But before that date, to wit, on September 12, 1956, the appellant herein filed a petition under article 226 of the Constitution in the High Court of Judicature at Bombay in which he alleged, in substance, that the formation of the composite State of Bombay as one unit instead of the three separate units as originally proposed in the Bill contravened article 3 of the Constitution, inasmuch as the Legislature of the State of Bombay had no opportunity of expressing its views on the formation of such a composite State.
The appellant asked for a declaration that section 8 and other consequential provisions of the Act were null and void and prayed for an appropriate writ directing the State Government of Bombay and the Union Government not to enforce and implement the same.
This writ petition was heard by the Bombay High Court on September 14, 1956, and by its judgment of even date, the High 609 Court dismissed the petition, holding that there was no violation or contravention of article 3 of the Constitution.
The appellant then obtained the necessary certificate under article 132(1) of the Constitution, and filed his appeal in this Court on October 18, 1956 on the strength of that certificate.
Now, it is both convenient and advisable to read at this stage article 3 of the Constitution, as amended by the Constitution (Fifth Amendment) Act, 1955, the alleged violation of which is the main ground of attack by learned counsel for the appellant.
" article 3: Parliament may by law (a) form a new State by separation of territory from any State or by uniting two or more States or parts of States or by uniting any territory to a part of any State ; (b) increase the area of any State; (c) diminish the area of any State; (d) alter the boundaries of any State; and (e) alter the name of any State ; Provided that no Bill for the purpose shall be introduced in either House of Parliament except on the recommendation of the President and unless, where the proposal contained in the Bill affects the area, boundaries or name of any of the States the Bill has been referred by the President to the Legislature of that State for expressing its views thereon within such period as may be specified in the reference or within such further period as the President may allow and the period so specified or allowed has expired.
" It is clear that by its substantive part the Article gives a certain power to Parliament, viz., the power to make a law in respect of any of the five matters mentioned in cls.
(a) to (e) thereof.
This power includes the making of a law to increase the area of any State; diminish the area of any State; and alter the name of any State.
The substantive part is followed by a proviso, which lays down certain conditions for the exercise of the Power.
It states that no Bill for the purpose (the word " purpose " obviously has reference 610 to the power of making law in respect of the matters mentioned in the substantive part) shall be introduced in either House of Parliament except on the recommendation of the President and unless, where the proposal contained in the Bill affects the area, boundaries or name of any of the States, the Bill has been referred by the President to the Legislature of that State for expressing its views thereon.
Thus, the proviso lays down two conditions: one is that no Bill shall be introduced except on the recommendation of the President, and the second condition is that where the proposal contained in the Bill affects the area, boundaries or name of any of the States, the Bill has to be referred by the President to the Legislature of the State for expressing its views thereon.
The period within which the State Legislature must express its views has to be specified by the President; but the President may extend the period so specified.
If, however, the period specified or extended expires and no views of the State Legislature are received, the second condition laid down in the proviso is fulfilled in spite of the fact that the views of the State Legislature have not been expressed.
The intention seems to be to give an opportunity to the State Legislature to express its views within the time allowed; if the State Legislature fails to avail itself of that opportunity, such failure does not invalidate the introduction of the Bill.
Nor is there anything in the proviso to indicate that Parliament must accept or act upon the views of the State Legislature.
Indeed, two State Legislatures may express totally divergent views.
All that is contemplated is that Parliament should have before it the views of the State Legislatures as to the proposals contained in the Bill and then be free to deal with the Bill in any manner it thinks fit, following the usual practice and procedure prescribed by and under the rules of business.
Thus the essential content of the second condition is a reference by the President of the proposal contained in the bill to the State Legislature to express its views.
thereon within the time allowed.
It is worthy of note, and this has been properly emphasised in the judgment of the High 611 Court, that what has to be referred to the State Legislature by the President is the proposal contained in the Bill.
The proviso does not say that if and when a proposal contained in the Bill is modified subsequently by an amendment properly moved and accepted in Parliament, there must be a fresh reference to the State Legislature and a fresh bill must be introduced.
It was pointed out in the course of arguments that if the second condition required a fresh reference and a fresh bill for every amendment, it might result in an interminable process; because any and every amendment of the original proposal contained in the Bill would then necessitate a fresh Bill and a fresh reference to the State Legislature.
Other difficulties might also arise if such a construction were put on the proviso; for example, in a case where two or three States were involved, different views might be expressed by the Legislatures of different States.
If Parliament were to accept the views of one of the Legislatures and not of the other, a fresh reference would still be necessary by reason of any amendment in the original proposal contained in the Bill.
We are referring to these difficulties not because we think that a forced meaning should be given to the words of the proviso to avoid certain difficulties which may arise.
We are of the view that the words of the proviso are clear enough and bear their ordinary plain meaning.
According to the accepted connotation of the words used in the proviso, the second condition means what it states and what has to be referred to the State Legislature is the proposal contained in the Bill; it has no such drastic effect as to require a fresh reference every time an amendment of the proposal contained in the Bill is moved and accepted in accordance with the rules of procedure of Parliament.
That in the present case the States Reorganisation Bill was introduced on the recommendation of the President has not been disputed; nor has it been disputed that the proposal contained in the Bill was referred to the State Legislatures concerned and their views were received, According to learned counsel for 612 the appellant, however, this was not enough compliance with the second condition of the proviso.
He has put his argument in several ways.
Firstly, he has contended that the word " State " in article 3 should be given a larger connotation so as to mean and include not merely the geographical entity called the State, but its people as well: this, according to learned counsel for the appellant, is the " democratic process " incorporated in article 3 and according to this democratic process, so learned counsel has argued, the representatives of the people of the State of Bombay assembled in the State Legislature should have been given an opportunity of expressing their views not merely on the proposal originally contained in the Bill, but on any substantial modification thereof.
Secondly and following the same line of argument, he has contended that the word " Bill " should be given an extended meaning so as to include any amendment, at least any substantial amendment, of the proposal contained in the Bill; and thirdly, he has contended that in the present case the formation of a new Bombay State as one unit was so different from the three units originally proposed in the Bill that it was not really an amendment of the original proposal but a new I proposal altogether for which a fresh Bill and a fresh reference were necessary.
We proceed now to consider these contentions.
It is necessary to state at the outset that our task is to determine on a proper construction the true scope and effect of article 3 of the Constitution, with particular reference to the second condition laid down by the proviso thereto.
We bring to our task such considerations as are germane to the interpretation of an organic instrument like the Constitution; but it will be improper to import into the question of construction doctrines of democratic theory and practice obtaining in other countries, unrelated to the tenor, scheme and words of the provisions which we have to construe.
In plain and unambiguous language, the proviso to article 3 of the Constitution states that where the proposal contained in the Bill affects the area, boundaries or name of any of the States, the Bill must be referred by the 613 President to the Legislature of the State for expressing its views.
It does not appear to us that any special or recondite doctrine of " democratic process " is involved therein.
Learned counsel for the appellant has invited our attention to article IV, section 3, of the American Constitution which says inter alia that " no new State shall be formed or erected within the jurisdiction of any other State, nor any State be formed by the junction of two or more States or parts of States without the consent of the Legislatures of the State concerned as well as of the Congress.
" That provision is quite different from the proviso we are considering: the former requires the consent of the State Legislature whereas the essential requirement of our proviso is a, reference by the President of the proposal contained in the Bill for the expression of its views by the State Legislature.
For this reason we do not think that the decisions relied on by learned counsel for the appellant (State of Louisiana vs State of Mississipi (1), and State of Washington vs State of Oregon(1)) are in point.
The expression I State ' occurs in article 3, and as has been observed in the State of Texas vs George W. White (3), that expression may have different meanings: it may mean a territorial region, or people united in political relation living in that region or it may refer to the government under which the people live or it may even convey the combined idea of territory, people and government.
Article 1 of our Constitution says that India is a Union of States and the States and the territories thereof are specified in a Schedule.
There is, therefore, no difficulty in understanding what is meant by the expression 'State ' in article 3.
It obviously refers to the States in the First Schedule and the I Legislature of the State ' refers to the Legislature which each State has under the Constitution.
That being the position we see no reasons for importing into the Construction of article 3 any doctrinaire consideration of the sanctity of the rights of States or even for giving an extended meaning to the expression I State ' occurring therein.
None of the constituent units of the (1) ; (2) ; (3) (i869) ; 78 614 Indian Union was sovereign and independent in the sense the American colonies or the Swiss Cantons were before they formed their federal unions.
The Constituent Assembly of India, deriving its power from the sovereign people, was unfettered by any previous commitment in evolving a constitutional pattern suitable to the genius and requirements of the Indian people as a whole.
Unlike some other federal legislatures, Parliament, representing the people of India as a whole, has been vested with the exclusive power of admitting or establishing new States, increasing or diminishing the area of an existing State or altering its boundaries, the Legislature or Legislatures of the States concerned having only the right to an expression of views on the proposals.
It is significant that for making such territorial adjustments it is not necessary even to invoke the provisions governing constitutional amendments.
The second line of argument presented on behalf of the appellant is that the word I Bill ' in the proviso must be interpreted to include an amendment of any of the clauses of the Bill, at least any substantial amendment thereof, and any proposal contained in such amendment must be referred to the State Legislature for expression of its views.
We do not think that this interpretation is correct.
Wherever the introduction of an amendment is subject to a condition precedent, as in the case of financial bills, the Consti tution has used the expression I A bill or amendments ', e.g. in article 117.
No such expression occurs in art 3.
Secondly, under article 118 Parliament has power to make rules of its own procedure and conduct of business, including the moving of amendments etc.
Rule 80 of the rules of procedure of the House of the People (Lok Sabha) lays down the conditions which govern the admissibility of amendments to clauses or schedules of a Bill, and one of the conditions is that an amendment shall be within the scope of the Bill and relevant to the subject matter of the clause to which it relates.
Article 122 (1) of the Constitution says that the validity of any proceedings in Parliament shall not be called in question on the ground of any alleged 615 irregularity of procedure.
In view of these provisions, we cannot accept an interpretation of article 3 which may nullify the effect of article 122, an interpretation moreover which is based not on the words used therein but on certain abstract and somewhat illusory ideas of what learned counsel for the appellant has characterised as the democratic process.
We recognise that the formation of a new composite State of Bombay as in section 8 of the Act was a substantial modification of the original proposal of three units contained in the Bill.
That, however, does not mean that it was not a proper amendment of the original proposal or that the State Legislature had no opportunity of expressing its views on all aspects of the subject matter of the proposal.
The High Court rightly pointed out that in the debates in the State Legislature several members spoke in favour of a composite State of Bombay.
The point to note is that many different views were expressed in respect of the subject matter of the original proposal of three units, and as a matter of fact it cannot be said that the State Legislature had no opportunity of expressing its views in favour of one composite unit instead of three units if it so desired.
It cannot be said that the proposal of one unit instead of three was not relevant or pertinent to the subject matter of the original proposal.
ID T. H. Vakil vs Bombay Presidency Radio Club Ltd. (1), a decision on which learned counsel for the appellant has relied, the question arose of the power of the chairman of a club to rule an amendment out of order.
It was said therein that (1) an amendment must be germane to the subject matter of the original proposition and (2) it must not be a direct negative thereof.
Judged by these two conditions, it cannot be said that the proposal of one unit instead of three was not germane to the subject matter of the original proposal or was a direct negative thereof.
We are unable, therefore, to accept the third contention of learned counsel for the appellant to the effect that the formation of a new Bombay State as envisaged in section 8 of the Act was so completely divorced from the proposal contained in (1) 616 the Bill that it was in reality a new bill and therefore a fresh reference was necessary.
It is advisable, perhaps, to add a few more words about article 122(1) of the Constitution.
Learned counsel for the appellant has posed before us the question as to what would be the effect of that Article.
if in any Bill completely unrelated to any of the matters referred to in Cls.
(a) to (e) of article 3 an amendment was to be proposed and accepted changing (for example) the name of a State.
We do not think that we need answer such a hypothetical question except merely to say that if an amendment is of such a character that it is not really an amendment and is clearly violative of article the question then will be not the validity of proceedings in Parliament but the violation of a constitutional provision.
That, however, is not the position in the present case.
For these reasons, we hold that there was no violation of article 3 and the Act or any of its provisions are not invalid on that ground.
The appeal accordingly fails and is dismissed with costs.
Appeal dismissed.
| A Bill introduced in the House of the People on the report of the States Reorganisation Commission and as recommended by the President under the proviso to article 3 Of the Constitution, contained a proposal for the formation of three separate units, viz., (1) Union territory of Bombay, (2) Maharashtra, including Marathawada and Vidarbha and (3) Gujrat, including Saurashtra and Cutch.
This Bill was referred by the President to the State Legislatures concerned and their views obtained.
The joint Select Committee of the House of the People (Lok Sabha) and the Council of States (Rajya Sabha) considered the Bill and made its report.
Subsequently, Parliament amended some of the clauses and passed the Bill which came to be known as the .
That Act by section 8(1) constituted a composite State of Bombay instead of the three separate units as originally proposed in the Bill.
The petition , out of which the present appeal has arisen, was filed by the appellant under article 226 of the Constitution in the High Court of Bombay.
His contention was that the said Act was passed in contravention of the provisions of article 3 of the Constitution, since the Legislature of Bombay had not been given an opportunity of expressing its views on the formation of the composite State.
The High Court dismissed the petition.
Held, that the proviso to article 3 lays down two conditions and under the second condition therein stated, what the President has to refer to the State Legislature for its opinion is the proposal contained in the Bill.
On a true construction, the proviso does not contemplate that if Parliament subsequently modifies that proposal, there must be a fresh bill or a fresh reference to the State Legislature.
The word 'State ' in article 3 of the Constitution has obvious reference to article i and the States mentioned in the First Schedule to the Constitution, and the expression 'Legislature of the State ' means the Legislature of such a State.
There are, therefore, no reasons for the application of any special doctrine of democratic theory or practice prevalent in other countries in interpreting those words; nor any justification for giving an extended meaning to the word 'State ' in determining the true scope and effect of the proviso.
77 606 The requirements of article IV, section 3 of the American Constitu tion are materially different from those of the second proviso to article 3 Of the Indian Constitution and, consequently, decisions based on the former are not in point.
State of Louisiana vs State Of Mississipi, (1905) 202 U.S.
I and State of Washington vs State of Oregon, (19O8) 2II U.S. 127, held inapplicable.
State of 'Texas vs George W. White; , referred to.
It is not correct to contend that the word 'Bill ' in the proviso must be interpreted to include an amendment of any of the clauses of the Bill or at least a substantial amendment thereof, and that any proposal contained in such amendment must be referred back to the State Legislature.
Such an interpretation of article 3 will nullify the effect of article 122(1) and is untenable in view of the provisions in articles 117 and 118 of the Constitution.
Although the formation of a composite State in terms of section 8 of the Act was without doubt a substantial modification of the proposal as originally contained in the Bill, it could not be said that the said modification was not germane to the subject matter of the original proposal or was a direct negative thereof, so as to be beyond the scope of an amendment.
T. H. Vakil vs Bombay Presidency Radio Club Ltd., (1944) 47 Bom.
L.R 428, applied.
Therefore, the Act could not be held to have been enacted in violation of article 3 Of the Constitution.
|
ivil Appeals Nos.
945 47 of 1991.
From the Judgment and Order dated 8.8.1990 of the Punjab & Haryana High Court in L.P.A. Nos.
266, 267 and 268 of 1986.
P.P. Rao, J. Lal, Ms. Yasmin Tarapore, S.K. Bagga and C.M. Nayar for the Appellants.
G.L. Singhi, J.K. Sibal and Ms. Kamini Jaiswal for the Respondents.
The Judgment of the Court was deliverd by FATHIMA BEEVI, J.
Special leave granted.
These Civil Appeals arise from the common judgment dated 8.8.1990 of the High Court of Punjab and Haryana dismissing Letters Patent Apeals against the judgment dated 12.2.1986 of the single Judge allowing writ petitions filed under Articles 226 and 227 of the Constitution of India.
Civil Appeals arising out of S.L.P. (C) Nos.
14471 73 of 1990 are filed by the State of Punjab and Civil Appeals arising out of S.L.P. (C) Nos.
14236 38 of 1990 are filed by Ram Saran and O.P. Singhla, the respondents in the writ petitions.
We shall hereinafter refer the contesting respondents Ram Saran and O.P. Singhla as 'the appellants ' and writ petitioners as 'the petitioners ' for the sake of convenience.
In the Punjab Excise & Taxation Department, there were two separate and distinct cadres known as Assistant Excise and Taxation 733 Officers governed under the Punjab Excise and Taxation Department (State Service Class III A) Rules, 1956 (hereinafter referred to as Class III/A Rules ') and the Excise and Taxation Officers governed by the Punjab Excise and Taxation Department (State Service Class II) Rules.
Under the Class II Rules, appointment to the cadre of Excise and Taxation Officers was made (a) by direct recruitment to the extent of 50% and (b) by promotion from amongst Assistant Excise and Taxation Officers to the extent of 50%.
Under Class III A Rules, subordinate staff was eligible for promotion to the extent of 50% of the vacancies of Assistant Excise and Taxation Officers and their shares were as under: (i) Taxation Inspector 25% (ii) Excise Inspector 12 1/2% (iii) Ministerial Staff Head Office 6 1/4% (iv) Ministerial Staff Sub Office 6 1/4% The appellants as well as the writ petitioners joined the ministerial cadre of the Excise and Taxation Department as Clerks and were confirmed as such.
The writ petitioners were promoted to the higher post and later appointed as Excise/Taxation Inspectors in 1971 72 by transfers under Rule 7(a)(ii) of the Punjab Excise Subordinate Service Rules, 1943.
On such transfer as Excise/Taxation Inspectors, the lien of the writ petitioners was suspended in accordance with the provisions of Rule 3.14(b) of the Punjab Civil Services Rules (Volume I Part I).
The appellants continued in the ministerial cadre, Ram Saran as Assistant and O.P. Singhla as Superintendent.
The Excise and Taxation Department was reorganised on 18th May, 1977.
The cadre of Assistant Excise and Taxation Officers was abolished on 18th May, 1977 and the Assistant Excise and Taxation Officers were redesignated as Excise and Taxation Officers.
Thereafter Class III A Rules became redundant and inoperative and under Class II Rules became redundant and inoperative and under Class II Rules, there was no provision for promotion from subordinate staff direct as Excise and Taxation Officers.
The Government in order to provide avenues of promotion to the subordinate staff decided to make suitable amendment to the Class II Rules on the following terms: "Rule 5.
The members of the service shall be recruited in 734 the following manner, namely: a. xxx xxx xxx b.
In the case of an Excise and Taxation Officer; (i) by promotion from amongst the Taxation Inspectors and Excise Inspectors who have an experience of working as such for a minimum period of five years; or (ii) by promotion from amongst the Superintendents, Assistant, Accountants and Senior Scale Stenographers working in the Excise and Taxation Commissioners Head Office and in the Divisional and District Offices of the Department of Excise and Taxation, Punjab," It was further provided that there will be certain quota for each of the above categories for promotion to the rank of Excise and Taxation Officers.
The State Government decided to adopt and apply the draft provision of Rule 5 in the matter of filling up of the vacancies in the carde of Excise/Taxation Officers before rules could be formally promulgated.
Thus on 22.8.1983, Ram Saran and O.P. Singhla were promoted as Excise/Taxation Officers.
The writ petitioners having been transferred to the other cadres of Excise/Taxation Inspectors have continued there for 14/15 years beyond and period of probation and also qualified the departmental test for Inspectors and they were not considered for the promotion as Excise and Taxtion Officers.
The writ petitions were, therefore, filed challenging the promotion of the appellant mainly on the ground that on the basis of their seniority and lien on the post in the ministerial cadre, the writ petitioners had a right to be considered for promotion to the post of Excise and Taxation Officers prior to the appellants.
The contention of the appellants as well as the State was that though the lien of the writ petitioners in the ministerial cadre was suspended in terms of Rule 3.14(b) of the Punjab Civil Service Rules, if the petitioners wanted that they should be considered for the post of Excise and Taxation Officers on the basis of their lien in the ministerial cadre, they may seek reversion and thereafter their case would be considered on merits and under rules.
It was clarified by the Financial Commissioner in the order dated 7.8.1985 that the case of the writ petitioners would be considered in the light of the eligibility under the 735 relevant rule, that is to say, the amended Rule 5.
The eligibility prescribed under the said rule for promotion from amongst Superintendents etc.
in the ministerial service includes experience of working as such for a period of five years.
The writ petitioners felt that if the service rendered by them as Excise and Taxation Inspectors was not being considered as service rendered in the ministerial cadre, they would be ineligible for consideration to the post of Excise and Taxation Officers.
The learned single Judge accepted the contention of the writ petitioners that there was no conscious decision to apply the draft rules and consequently for the post of Excise and Taxation Officer, the writ petitioners are entitled to be considered without any bar of eligibility as their juniors had already been considered for the post.
On appeal, the Division Bench proceeded on the assumption that the draft rules though not promulgated were rightly implemented.
The Division Bench dealt with the question whether the service rendered on transfer to the ex cadre would be available to the writ petitioners in the matter of their promotion to the higher posts thus: "In view of this, question that calls for determination is as to whether on the return of the writ petitioners from the post of Excise and Taxation Inspectors to the Ministerial cadre, the service rendered by them on the post of Excise and Taxation Inspector could by deeming fiction be considered as having been rendered in the Ministerial cadre? The answer to this question is that such a service is to be counted as if the petitioners were always in the Ministerial cadre.
Once it is held that the petitioner lien was only suspended under Rule 3.14(b) of the Punjab Civil Service Rules, the petitioners had a right to come back to their posts in the Ministerial cadre and once that is so, the rest would follow as if for all times deemingly they were in the Ministerial cadre.
" The Division Bench relied on the decision of this Court in State of Mysore & Anr.
vs P.N. Nanjundiah & Anr., , and opined that the entire service rendered by the petitioners as Excise and Taxation Inspectors will be considered in the Ministerial cadre and if that is counted the petitioners would be eligible for promotion under the relevant rules.
It rejected the contention that the petitioners could not be said to be retaining a lien in the Ministerial cadre as they had successfully completed the period of probation as Excise and Taxation 736 Inspectors and they will be deemed to be confirmed there.
The Division Bench endorsed the view that the revival of the lien essentially means that it stands revived with effect from the date it had been suspended, and dismissed the appeals observing: ". we may observe that the petitioners shall now be considered forthwith for the posts of ETOs from the date their juniors were promoted and if found suitable they will be promoted to that rank from the dates their juniors were promoted and they would be entitled to all the consequential benefits arising out of their promotion from the said date.
" Shri P.P. Rao, the Senior Counsel for the appellants, and Shri G.L. Sanghi, the Senior Counsel for the respondents (writ petitioners), conceded that both parties claim promotion to the post of Excise and Taxation Officers only by virtue of the provision in the amended Rule 5 of Class II Rules and, therefore, the question whether there had been conscious application of the said rule before promulgation is only academic.
We agree with the view of the High Court that for the purpose of present controversy we have to assume that the amended Rules were rightly implemented before they were formally promulgated in effecting the promotions now challenged.
The appellants maintain that the Division Bench as clearly wrong, and that the petitioners in order to claim the benefit of promotion from the ministerial cadre under the amended Rules have necessarily to satisfy the eligibility test.
To be more specific, they should have actual experience of five years in the ministerial cadre even when they are reverted back to that cadre.
We have said that the petitioners were appointed as Inspectors by transfer under Rule 7 of the Punjab Excise Subordinate Service Rules, 1943 and thereafter they belonged to a different cadre.
Their lien had also been suspended after three years.
The Punjab Civil Services Rules, Volume, I, Part I, Rule 3.14 reads: "3.14.
(a) A competent authority shall suspend the lien of a Government employee on a permanent post which he holds substantively; if he is appointed in a substantive capacity 737 (1) to a tenure post, or (2) to a permanent post outside the cadre on which he is borne, or (3) provisionally, to a post on which another Government employee would hold a lien, had his lien not been suspended under this rule.
(b) A competent authority may, at its option, suspend the lien of a Government employee on a permanent post which he holds substantively if he is deputed out of India or transferred to foreign service, or in circumstances not covered by clause (a) of this rule, is transferred, whether in a substantive or officiating capacity, to a post in another cadre, and if in any of these cases there is reason to believe that he will remain absent from the post on which he holds a lien, for a period of not less that three years.
(c) xxx xxx xxx (d) If a Government employee 's lien on a post is suspended under clause (a) or (b) of this rule, the post may be filled substantively, and the Government employees appointed to hold it substantively shall acquire a lien on it: Provided that the arrangements shall be reversed as soon as the suspended lien revives.
Note 1.
xxx xxx xxx Note.
When a post is filled substantively under this clause, the appointment will be termed "a provisional appointment"; the Government employee appointed will hold a provisional lien on the post; and that lien will be liable to suspension under clause (a) but not under clause (b) of this rule.
(e) xxx xxx xxx (f) A Government employee 's lien which has been suspended under clause (b) of this rule shall revive as soon as he ceased to be on deputation out of India or on foreign service or to hold a post in another cadre . " 738 According to the appellants, the respondents having been transferred to the cadre of Excise and Taxation Inspectors and having continued there for 14/15 years beyond the period of probation, their lien over ministerial post was suspended.
The consideration of their names for the purpose of promotion as Excise and Taxation Officers from the ministerial post did not arise.
The amended Rule introduced eligibility that would exclude the service rendered by the petitioners in other posts and if such service is excluded, the petitioners would be ineligible.
The lien of the petitioners had been suspended by the competent authority under the mandatory provisions of Rule 3.14(b) referred to.
They could seek reversion to their parent ministerial cadre and claim consideration for promotion to the post of Excise and Taxation Officers according to their eligibility and suitability.
The next below rule does not apply to the case of promotion to the higher posts in other cadres under specific rules governing promotions to those cadres.
The recruitment to the post of Excise and Taxation Officer is governed by Punjab Excise and Taxation Department (State Service Class II) Rules, 1956.
The eligibility of Taxation Inspectors and Excise Inspectors and members of ministerial establishment for the post is governed by the amended Rule 5.
According to the proposed Rule 5(b)(ii), promotion to the post of Excise and Taxation Officer is to be made from amongst the Superintendents, Assistants, Accountants and Senior Scale Stenographers working in the Excise and Taxation Commissioners Head Office and in the District and Divisional Offices.
In view of this provision, the Taxation Inspectors and Excise Inspectors whose lien against their posts in the ministerial cadres has been suspended and who are not working on the eligible ministerial establishment posts and who have been working as Taxation Inspectors and Excise Inspectors for a long number of year cannot claim that they are to be considered automatically for recruitment to the post of Excise and Taxation Officer.
The normal line of promotion within the cadre for the members of the ministerial establishment was from the lowest post of a Clerk to the highest post of a Superintendent.
So also the further channel of promotion was open to the Inspectors to the post of Excise and Taxation Officer.
If the Inspectors are to be considered for the post of Excise and Taxation Officer from the quota of the ministerial establishment, that will result in the Inspectors getting two avenues for promotion while the ministerial staff losing even the one which had been provided.
The appointment to the ex cadre posts of Excise and Taxation Inspector is made by transfer in accordance with the provisions of Rule 739 7 of Subordinate Service Rules, 1943 which provide that appointment to the cadre post shall be made by transfer or deputation of an official already in Government service.
It implies that any Government employee irrespective of his office can be appointed as Excise or Taxation Inspector.
The Excise and Taxation Inspectors ' cadre is distinctly different from the ministerial cadre having duties or functions altogether different in nature and content.
Instead of waiting for their turn to be promoted from the Inspectors quota, the petitioners have laid the claim to the quota in the ministerial service.
The appellants are also persons who have been confirmed in the ministerial cadre and have worked for more than 20 years as such.
The result would be that there would be no promotions to the post of Excise and Taxation Officer from the ministerial staff as such, and those who got transferred as Inspectors would be getting double benefit by claiming promotion to the post of Excise and Taxation Officer as members of the ministerial staff while retaining their right to claim promotion from within the quota specifically provided for the Inspectors.
The petitioners with suspended lien on the post of Clerk and continuously holding the Inspector 's post for over 13 years cannot be considered to be at par with officials continuously working on the ministerial post for over 21 year.
From the scheme of the Rules and the method of recruitment, it is clear that the petitioners while working as Inspectors on appointment by transfer to that cadre had the advantage of being considered for promotion as Officers under the amended Rule 5 out of the quota for Inspectors, while the ministerial staff to the exclusion of the Inspectors were entitled to certain percentage.
The petitioners without being on the ministerial cadre even by reversion could not claim promotion as a member of the ministerial cadre without revival of the lien.
Such revival could be effected only on reversion and not while the lien remained suspended.
When the rule requires members of the ministerial staff to have experience as such for five years to satisfy the elibility requirement, the Inspectors cannot claim that service in the different cadre with their lien suspended be equated to service in the ministerial cadre and treated as experience in the ministerial cadre even if the functions and duties of the Inspectors may be of identical nature.
The purpose of the rule is to provide promotional avenues to different categories within specified limits.
The benefit intended for one category cannot be extended to another category by stretching the rules, particularly when no injustice would result.
The argument that the petitioners if found ineligible would remain in the lower cadre while their juniors are being promoted to the higher cadre 740 cannot be coutenanced.
Even when the juniors continued in the lower ministerial cadre for long years, the petitioners were in a different cadre which had a larger promotional avenue and they are satisfied in that post.
If the petitioners did not exercise their option to revert back to the ministerial cadre at the right time to qualify themselves for further promotion, the appellants cannot be deprived of the benefit they derived by continuing in the lower cadre on account of that situation.
The High Court was clearly wrong in holding that the petitioners have acquired eligibility by rendering service in the cadre of Inspectors since their lien had been suspended.
The decision in State of Mysore 's case (supra) is distinguishable on facts.
Rule 53(b)(i) of the Mysore Service Rules considered in that case provided that service in another post whether in a substantive or officiating capacity shall count for increments in the time scale applicable to the post on which the Government servant holds a lien or as well as in the time scale applicable to the post, if any, on which he would hold a lien had his lien not been suspended.
The Court noticed that the service of an officer on deputation to another department is treated as equivalent to the service in the parent department under the rule.
On account of that equation between the service in the two departments, it was held that the service on deputation should be deemed to be rendered in the parent department.
The ratio of the decision is, therefore, not applicable in the present case.
In C. Narasinga Rao & Ors.
vs State of Andhra Pradesh by its Secretary, Vol.
2 1968 S.L.R.644, Rule 9 of the Andhra Pradesh State and Subordinate Service Rules provided that service rendered in the transferred department should be deemed to have been rendered in the parent department for promotion and seniority.
And when the rule is thus specific, it was held that the petitioners ' service in the police department should be deemed to have been rendered in the parent department entitling them to promotion.
If the Government employee was on deputation or holding a post in another cadre, the lien shall revive as soon as he ceased to hold the post in another cadre.
There is no revival of the lien during the period the employee continues to hold a post in another cadre.
Therefore, during the period the suspension is operative, the employee cannot claim that he had been continuing in the post in the parent cadre and gaining experience.
When the rule is clear and specific that for the purpose of promotion from the cadre of Superintendents, Assistants, Accountants, Senior Scale Stenographers to the post of Excise and 741 Taxation Officers, the eligibility qualification is 'experience of working 'as such ' for five years ' the employee is not entitled to claim the experience in the ex cadre as experience of working in the ministerial cadre.
In the light of what has been stated above, we are unable to uphold the decision of the High Court.
The writ petitions are liable to be dismissed.
Accordingly, we allow the appeals.
R.N.J. Appeals allowed.
| In the Punjab Excise and Taxation Department there were two separate cadres known as "Assistant Excise & Taxation Officers" governed under the State Service Class III A Rules, 1956 and "Excise & Taxation Officers" governed by the State Service Class II Rules.
Under the class II Rules, appointments were made in the ratio of(a) 50% by direct recruitment and (b) 50% by promotion from amongst Assistant Excise and Taxation Officers.
Likewise under the Class III A Rules 50% of the vacancies were filled by direct recruitment and 50% by promotion from the subordinate staff comprising the Taxation Inspectors, Excise Inspectors, Ministerial Staff Head Office and Ministerial Staff Sub office who within themselves had shares as laid down.
The Writ Petitioners and the contesting respondents Ram Saran and O.P. Singhla had initially joined the Punjab Excise and Taxation Department as clerks and were confirmed as such.
The Petitioners were promoted and appointed as Excise/Taxation Inspectors by transfer under Rule 7(a)(ii) of the Punjab Excise Subordinate Service Rules, 1943 and their lien in the taxation department suspended under Rule 3.14(b) of the Punjab Civil Service Rules.
Whereas Ram Saran and O.P. Singhla continued in the ministerial cadre and were Assistant and Superintendent respectively at the relevant time.
730 Following reorganisation of the department, the carde of Assistant Excise & Taxation Officers was abolished and all the Assistant Excise & Taxation Officers were redesignated as Excise and Taxation Officers.
Consequently Class III A Rules became redundant.
As under Class II Rules there was no provision for promotion of subordinate staff direct as Excise & Taxation Officers the Government in order to provide avenues of promotion to the ministerial carde including Taxation Inspectors and Excise Inspectors brought in suitable amendments to these Rules on the following terms. "Rule 5.
The members of the service shall be recruited in the following manner namely: (a) xxx xxx xxx (b).
In the case of an Excise and Taxation Officer; (i) by promotion from amongst the Taxation Inspectors and Excise Inspectors who have an experience of working as such for a minimum period of five years; or (ii) by promotion from amongst the Superintendents, Assistant, Accountants and Senior Scale Stenographers working in the Excise and Taxation Commissioners Head Office and in the Divisional and District Offices of the Department of Excise and Taxation, Punjab." Applying the draft amended Rules before they were formally promulgated the contesting respondents Ram Saran and O.P. Singhla were promoted as Excise & Taxation Officers on 22.8.1983.
The Writ Petitioners who had been transferred earlier to other cardes of Excise/Taxation Inspectors and worked there for 14/15 years beyond the probation period were not considered.
They therefore, filed writ petitions in the High Court challenging the promotion of the appellants mainly on the ground that on the basis of their seniority and lien in the ministerial cadre, they had a right to be considered for promotion prior to the appellants.
The appellants and the State contended that if the Petitioners wanted to be considered for this post on the basis of their lien in the ministerial carde, they may seek reversion to this cadre and thereafter their case would be considered on merits in accordance with the eligilbility as prescribed under the amended Rule 5 which includes experience of working as such for a period of five years in the ministerial 731 cadre.
To this reply of the Writ Petitioners was that if the service rendered by them in the other cadre as Excise and Taxation Inspectors was not considered as service rendered in the ministerial cadre, they would be ineligible for consideration to this post.
The learned single judge accepted the petitioners ' contention and in allowing the Writ Petitions held that there was no conscious decision to apply the draft rules and consequently the Petitioners were entitled to be considered for the post of Excise & Taxation Officers without any bar of eligibility as their juniors had already been considered.
On appeal, the Division Bench took the view that the draft rules, though not promulgated were rightly implemented.
However on the question whether service rendered by the Petitioners on transfer to the other cadres could be considered as having been rendered in the Ministerial cadre, the Division Bench relying on the decision of this court in State of Mysore & Anr.
vs P.N. Nanjundiah & Anr., , held that it did and that if that is counted the petitioners would be eligible for promotion under the relevant rules with their suspended lien reviving with effect from the date it had suspended and they shall be considered forthwith.
Against this order Ram Saran and O.P. Singhla have preferred appeals by special leave and so has the State separately.
Reversing the decision of the High Court and allowing the appeals dismissing the writ petitions, this Court, HELD: From the scheme of the Rules and the method of recruitment it is clear that the petitioners while working as Inspectors on appointment by transfer to that cadre had the advantage of being considered for promotion as Officers under the amended Rule 5 out of the quota for Inspectors, while the ministerial staff to the exclusion of the Inspectors were entitled to certain percentage.
[739E] The petitioners without being on the ministerial cadre even by reversion could not claim promotion as a member of the ministerial cadre without revival of the lien.
Such revival could be effected only on reversion and not while the lien remained suspended.
[739F] If the Government employee was on deputation or holding a post in another cadre, the lien shall revive as soon as he ceased to hold the post in another cadre.
There is no revival of the lien during the period the employee continues to hold a post in another cadre.
Therefore, during the period the suspension is operative, the employee cannot claim that he had been continuing in the post in the parent cadre and gaining experience.
[740G] 732 When the rule is clear and specific that for the purpose of promotion from the cadre of Superintendents, Assistants, Accountants, Senior Scale Stenographers to the post of Excise and Taxation Officers, the eligibility qualification is 'experience of working ' as such ' for five years, the employee is not entitled to claim the experience in the ex cadre as experience of working in the ministerial cadre.
[740H 741A] State of Mysore & Anr.
vs P.N. Nanjundian & Anr., , distinguished.
C. Narasinga Rao & Ors.
vs State of Andhra Pradesh by its Secretary, Vol. 2 relied upon.
|
N: Criminal Appeal No. 320 of 1986 193 From the Judgment and order dated 12 11.1984 of the Delhi High Court in Crl Revision No 228 of 1982 section Rangarajan, Miss Asha Rani Jain and Sanjay Parikh, for the Appellant.
K.N. Chitkara and R.C. Verma for the Respondent.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
Special leave granted.
Heard both sides.
The five appellants were tried by the court of Additional Sessions Judge, Delhi on a charge of murder under Section 302 read with Section 34 of the Indian Penal Code.
After a very detailed consideration of the evidence adduced in the case, the learned Additional Sessions Judge acquitted the appellants giving them the benefit of doubt The respondent herein, who is a son of the deceased victim of the murder preferred a criminal revision petition before the High Court of Delhi under Section 397/401 Cr.
P.C. challenging the order of acquittal passed by the learned Additional Sessions Judge.
A learned Single Judge of the High Court allowed that revision petition, set aside the acquittal of the appellants and remitted the case to the trial court for re trial Aggrieved by the said judgment of the High Court the appellants have come up to this Court with this appeal and the main contention raised by them is that the learned Single Judge of the High Court has transgressed the bounds of his revisional jurisdiction in reappreciating the evidence and setting aside their acquittal.
After hearing counsel appearing on both sides we have unhesitatingly come to the conclusion that the aforesaid contention of the appellants is well founded and has to be upheld.
Briefly stated, the prosecution case was that on the mid night of 3rd and 4th June, 1980 while Laxman Singh (P.W. 1) was sleeping on the terrace of his house in the DESU Colony, Delhi along with his cousin Moti Lal (P.W. 7), they heard the noise of a quarrel and loud shouting from the lane below and on looking down from the terrace they found that deceased Ram Chander was being beaten by accused 194 Nos. 1 and 4 (Appellant Nos. 1 and 4).
Thereupon they rushed to the place of the incident.
One Babu Lal who was residing in the adjoining quarter also came there and when all the three tried to intervene and separate deceased Ram Chander and the two accused, the first accused called out to Bhagwat (second accused), who was looking down from his adjacent quarter asking him why he was just watching while Ram Chander was assaulting them.
In response to the said call it is alleged that Bhagwat along with the remaining accused came there carrying lathis in their hands.
There appears to have been a free for all fight.
It is said that Ram Chander wielding an iron handle of a hand pump was giving blows to the accused and he in turn was being beaten by lathis by the remaining persons.
It is the case of the prosecution that Ram Chander was administered lathi blows on his head by accused Nos. 1 and 2, as a result of which he fell down bleeding and died on the spot.
Thereafter all the five accused are said to have run away from the scene with their lathis.
In support of the prosecution story, three persons were examined as eye witnesses namely, P.W 1, P.W. 2 and P.W. 7.
P W. 2, however, turned hostile and did not support the prosecution version in his deposition before the trial court.
The learned Additional Sessions Judge discussed at length the testimony given by P.W 1 and P W. 7 as well as the medical evidence adduced in the case.
He found that there were serious discrepancies and glaring inconsistencies between the versions spoken by P.W. 1 and P.W. 7 and that the medical evidence also did not support their version of the incident.
In the result he found that the testimony of these eye witnesses could not be safely relied on and the prosecution had failed to prove its case beyond reasonable J doubt.
The learned Single Judge of the High Court has thought it fit to re appreciate the evidence of the two eye witnesses as well as the testimony given by the medical doctor who conducted the postmortem on the body of the deceased Ram Chander.
By such a process of elaborate re examination of the evidence the learned Single Judge was inclined to reach a conclusion different from that recorded by the learned Additional Sessions Judge regarding the acceptability of the testimony of P.W 1 and P.W. 7.
It is on this basis that the learned Judge has proceeded to set aside the acquittal of the appellants and order a retrial of the case after virtually recording findings in regard to the credibility of the evidence given by the witnesses relied on by the prosecution.
195 Even in an appeal against an order of acquittal no interference will be made with the judgment of the trial court except in rare and exceptional cases where there has been some manifest illegality in the approach to the case or the appreciation of the evidence or where the conclusion of fact recorded by the Trial Judge is wholly unreasonable so as to be liable to be characterised as perverse and there has been a resultant miscarriage of justice The revisional jurisdiction of the High Court while dealing with an order of acquittal passed by the trial court is more narrow in its scope.
It is only in glaring cases of injustice resulting from some violation of fundamental principles of law by the trial court, that the High Court is empowered to set aside the order of the acquittal and direct a retrial of the acquitted accused.
From the very nature of this power it should be exercised sparingly and with great care and caution.
In K.C. Reddy vs State of Andhra Pradesh, ; , this Court had occasion to consider the scope of the revisional jurisdiction conferred on the High Court in relation to orders of acquittal passed by the trial court and after referring to two earlier decisions of this Court reported in D. Stenbens vs Nosibolla, [1951] S R. 284 and Jogendranath Jha vs Polailal Biswas, ; the legal position was explained thus: "These two cases clearly lay down the limits of the High Court 's jurisdiction to interfere with an order of acquittal in revision; in particular, Jogendranath Jha 's case stresses that it is not open to a High Court to convert a finding of acquittal into one of conviction in view of the provisions of section 439(4) and that the High Court cannot do this even indirectly by ordering re trial.
What had happened in that case was that the High Court reversed pure findings of facts based on the trial court 's appreciation of evidence but formally complied with sub section
(4) by directing only a re trial of the appellants without convicting them, and warned that the court retrying the case should not be influenced by any expression of opinion contained in the judgment of the High Court.
In that connection this Court observed that there could be little doubt that the dice was loaded against the appellants of that case and it might prove difficult for any subordinate judicial officer dealing with the case to put aside altogether the strong views expressed in the judgment as to the credibility of the prosecution witness and the circumstances of the case in general.
" 196 This decision was subsequently followed by this Court in Akalu Ahir and others vs Ramdeo Ram, ; where this Court observed: "The unrestricted right of appeal from acquittal is specifically conferred only on the State and a private complainant is given this right only when the criminal prosecution was instituted on his complaint and then also subject to special leave by the High Court.
It is further provided in section 439(S), Cr.
P.C. that where no appeal is brought in a case in which an appeal is provided, no proceedings by way of revision would be entertained at the instance of the party who could have appealed.
The State Government, therefore, having failed to appeal, cannot apply for revision of an order of acquittal.
Again on revision, the High Court is expressly prohibited from converting an acquittal into a conviction.
Considering the problem facing the Court in this case in the background of this scheme, the High Court when approached by a private party for exercising its power of revision from an order of acquittal, should appropriately refrain from interfering except when there is a glaring legal defect of a serious nature which has resulted in grave failure of justice.
It is not expected to act under sections 435/439, Cr.
P.C. as if it is a hearing on appeal in spite of the wide language under section 435 which empowers it to satisfy itself as to the correctness, legality or propriety of a finding, sentence or order and as to the regularity of any proceeding and also in spite of the fact that under section 439 it can exercise inter alia the power conferred on a court of appeal under section 423, Cr.
The power being discretionary, it has to be exercised judiciously, and not arbitrarily.
Judicial discretion, as has often been said, means a discretion which is informed by tradition, methodised by analogy and disciplined by system.
In Amar Chand Aggarwal vs Shanti Bose, A.I.R.1973 S.C. 799, this Court said that normally the jurisdiction of the High Court under section 439, Cr.
P.C. is to be exercised only in exceptional cases when there is a glaring defect in the procedure or there is a manifest error on point of law and there has consequently been flagrant miscarriage of justice.
In the background of the position just stated a private complainant can only claim a right, in common with all aggrieved parties in a criminal proceedings, to 197 invoke the revisional jurisdiction of the High Court for redress against miscarriage of justice arising from an erroneous order of acquittal." The same position has been reiterated by this Court in Satyendra Nath Dutta and Anr.
vs Ram Narain, [1975] 2 S.C.R. 743.
It is unfortunate that the High Court did not keep in mind the principles laid down in the aforesaid rulings regarding the limits of its revisional powers while dealings with an order of acquittal passed by the subordinate court.
The mere circumstance that a finding of fact recorded by the trial court may in the opinion of the High Court be wrong, will not justify the setting aside the order of acquittal and directing a re trial of the accused.
In the present case the judgment of the learned Additional Sessions Judge did not suffer from any manifest illegality.
The dominant justification of the order of acquittal recorded by the trial court is the view it took of the evidence of the two eye witnesses.
Having carefully gone through the records of the case we are satisfied that it was a possible view and it cannot be characterised as illegal or perverse.
It may well be that the learned Single Judge of the High Court was not inclined to agree with the said view on the basis of his independent scrutiny and appreciation of the evidence adduced in the case but that would not furnish any justification for interference in revision with the order of acquittal passed by the learned Additional Sessions Judge.
Even in an appeal the Appellate Court would not have been justified in interfering with an acquittal merely because it was inclined to differ from the findings of fact reached by the trial court on the appreciation of the evidence.
The revisional power of the High Court is much more restricted in its scope.
We accordingly hold that the High Court has clearly transgressed the limits of its revisional jurisdiction under Section 439(4) of Cr.
P.C. in setting aside the order of acquittal passed by the Additional Sessions Judge and directing a re trial of the case.
The appeal is therefore allowed, the judgment of the High Court is set aside and the order of the acquittal passed by the trial court will stand restored.
A.P.J. Appeal allowed.
| The appellants, after trial by the Court of Additional Sessions Judge on a charge of murder under section 302 read with section 34 of the Indian Penal Code, were acquitted giving them the benefit of doubt.
The respondent, a son of the deceased victim, preferred a criminal revision petition before the High Court under section 397/401 Cr.
P.C. challenging the order of acquittal.
A Single Judge allowed the revision petition, set aside the acquittal of the appellants and remitted the case to the trial Court for re trial.
The appellants appealed to this Court, inter alia, contending that the Single Judge of the High Court has transgressed the bounds of his revisional jurisdiction in reappreciating the evidence and setting aside their acquittal.
Allowing the appeal, ^ HELD: 1.
The High Court has clearly transgressed the limits of its revisional jurisdiction under section 439(4) of Cr.
P.C. in setting aside the order of acquittal passed by the Additional Sessions Judge and directing a re trial of the case.
[197F] 2.
Even in an appeal against an order of acquittal no interference will be made with the judgment of the trial Court except in rare and exceptional cases where there has been some manifest illegality in the approach to the case or in the appreciation of the evidence or where the conclusion of fact recorded by the Trial Judge is wholly unreasonable so as to be liable to be characterised as perverse and there bas been a 192 resultant miscarriage of justice.
The revisional jurisdiction of the High Court while dealing with an order of acquittal passed by the trial court is more narrow in its scope.
It is only in glaring cases of injustice resulting from some violation of fundamental principles of law by the trial court, that the High Court is empowered to set aside the order of the acquittal and direct a re trial of the acquitted accused.
From the very nature of this power it should be exercised sparingly and with great care and caution.
[195A C] K.C. Reddy vs State of Andhra Pradesh, ; ; D. Stenbens vs Nosibolla, ; ; Jogendranath Jha vs Polailal Biswas, ; ; Akalu Ahir and Ors.
vs Ramdeo Ram, [1974] I SCR 130; Amar Chand Aggarwal vs Shanti Bose; , ; and Satyendra Nath Dutta and Anr.
vs Ram Narain, ; followed.
The mere circumstance that a finding of fact recorded by the trial court may in the opinion of the High Court be wrong, will not justify the setting aside of the order of acquittal and directing a re trial of the accused.
[197C] In the instant case, the High Court did not keep in mind the principles regarding the limits of its revisional powers while dealing with the order of acquittal passed by the Additional Sessions Judge, which did not suffer from any manifest illegality.
The dominant justification of the order of acquittal recorded by the trial court is the view it took of the evidence of the two eye witnesses.
Having carefully gone through the records of the case, this Court is satisfied that it was a possible view and it cannot be characterised as illegal or perverse.
It may well be that the Single Judge of the High Court was not inclined to agree with the trial Court 's finding on the basis of his independent scrutiny and appreciation of the evidence adduced in the case but that would not furnish any justification for interference in revision with the order of acquittal passed by the Additional Sessions Judge.
Even in an appeal the Appellate Court would not have been justified in interfering with an acquittal merely because it was inclined to differ from the findings of fact reached by the trial court on the appreciation of the evidence.
The revisional power of the High Court is much more restricted in its scope.
[ 197B F]
|
ivil Appeal Nos.
782 783 of 1973.
Appeals by Special Leave from the Judgment and Order dated 18 11 1972 of the Andhra Pradesh High Court in Cases Referred Nos. 50 and 52 of 1970.
P. A. Francis, K. C. Dua and Miss A. Subhashini for the Appellant.
L. A. Subba Rao for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
These two appeals by Special Leave are filed against a common judgment dated November 18, 1971 delivered by the High Court of Andhra Pradesh in Case Referred Nos. 50 and 52 of 1970.
Sri Bommidala Kotiratnam (hereinafter referred to as 'the statutory agent ') is a dealer in tobacco at Guntur in the State of Andhra Pradesh.
During the previous year relevant to the assessment year 1962 63, the statutory agent purchased tobacco in India and exported it to Japan, where it was sold through M/s. Toshoku Ltd. (the assessee involved in Civil Appeal No. 782 of 1973 a Japanese Company and admittedly non resident.
Under the terms of the agreement between the statutory agent and the assessee referred to above, the latter was appointed the exclusive sales agent in Japan for selling tobacco exported by the former.
The assessee was entitled to a commission of 3% of the invoice amount.
The sale price received on the sale of tobacco in Japan was remitted wholly to the statutory agent who debited his commission account with the amount of commission payable to the Japanese company and credited the same in the account of the Japanese company in his books on December 31, 1961.
The amount was remitted to the Japanese company on 589 February 1, 1962 on which date an appropriate debit entry was made in the account of the Japanese company with the statutory agent.
The statutory agent had similarly sold some tobacco during the same accounting period through another non resident business house by name 'M/s Societe Pour Le Commerce International Des Tobacs ' (the assessee involved in Civil Appeal No. 783 of 1973) carrying on business in France.
The terms of agreement were the same as in the case of the Japanese Company referred to above, the only difference being the geographical area in which each of them had to render service as a selling agent.
In this case also the statutory agent made similar entries in his books regarding the commission payable to the assessee and ultimately made a debit entry in the account of the assessee in his books when the amount was transmitted to the assessee.
During the assessment year the question whether the commission amounts sent to the Japanese company and the French business house (hereinafter referred to collectively as 'the assessees ') were assessable in terms of section 161 of the Income tax Act, 1961 (hereinafter referred to as 'the Act ') arose for consideration before the Income tax Officer.
The statutory agent contended that the amounts in question were not taxable in view of the clarification of the legal position by the Board Circular (XXVII I) of 53 No. 26 (II/53) dated July 17, 1953 which stated: "A foreign agent of an Indian exporter operates in his own country and no part of his income arises in India.
Usually his commission is remitted directly to him and is therefore not received by or on his behalf in India.
Such an agent is not liable to Indian Income tax.
" The Income tax Officer, however, came to the conclusion that the sums in question were taxable in view of the decision of this Court in P. V. Raghava Reddi & Anr.
vs Commissioner of Income tax(1) and assessed them under section 143(3) read with section 163 of the Act.
The appeals preferred by the statutory agent against the orders of assessment before the Appellate Assistant Commissioner of Income tax and the Income tax Appellate Tribunal were unsuccessful.
Thereafter the following common question of law was referred to the High Court of Andhra Pradesh under section 256(1) of the Act: "Whether on the facts and in the circumstances of the case the assessment on the appellant under section 161 of the Income tax, Act, 1961 is justified?" 590 The High Court held that the assessments were not justified and answered the question against the Department.
Hence these appeals under Article 136 of the Constitution.
The relevant provisions of the Act on which reliance is placed before us are sections 5(2), 9(1)(i), 160, 161 and 163.
Section 5(2) of the Act which deals with the chargeability of the income of a person who is a non resident under the Act provides that subject to the provisions of the Act, the total income of any previous year of a person who is a non resident includes all income from whatever source derived (a) which is received or is deemed to be received in India in such year by or on behalf of such person, or (b) accrues or arises or is deemed to accrue or arise in India during such year.
Explanation 1 to section 5(2) of the Act declares that an income arising abroad can not be deemed to be received in India for the purpose of that section by reason only of the fact that it is included in a balance sheet prepared in India.
Section 9(1)(i) of the Act provides that all income accruing or arising whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India shall be deemed to accrue or arise in India.
The explanation to this clause provides that in the case of a business of which all the operations are not carried out in India, the income of the business deemed under this clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India and in the case of a non resident no income shall be deemed to accrue or arise in India to him through or from operations which are confined to the purchase of goods in India for the purpose of export.
An agent of a non resident including a person who is treated as an agent under section 163 of the Act becomes, according to section 160(1) of the Act, the representative assessee in respect of the income of a non resident specified in sub section (1) of section 9 of the Act.
Section 161 of the Act makes a representative assessee, who is an agent of a non resident personally liable to assessment in respect of the income of the non resident.
Section 163 of the Act defines persons who may be regarded as agents of non residents for the purposes of the Act.
Sections 160, 161 and 163 of the Act are merely enabling provisions which empower the authorities at their option to make assessment on and to recover tax due under the Act from the representative assessee.
It is not disputed in these cases that if the incomes in question of the assessees are taxable, the statutory agent is liable to pay the tax.
The real question which falls for determination is whether the said incomes are taxable.
The facts found in these appeals are that the statutory agent exported his goods to Japan and 591 France where they were sold through the assessees.
The entire sale price was received in India by the statutory agent who made credit entries in his account books regarding the commission amounts payable to the assessees and remitted the commission amounts to them subsequently.
One extra feature in the case of the Japanese company is that it had been appointed as an exclusive agent for Japan.
It is not disputed that the assessees rendered service as selling agents to the statutory agent outside the taxable territories.
In order to establish its case, the Revenue has strongly relied on the decision of this Court in the case of P. V. Raghava Reddy (supra).
A perusal of that decision shows that the said case is distinguishable on facts.
In that case the assessee had exported in the years 1948 49 and 1949 50 certain quantity of mica to Japan.
Mica was not exportable directly to Japanese buyers during those years as Japan was under military occupation but to a State organisation called Boeki Cho (Board of Trade).
To negotiate for order and to handle its other affairs in Japan in connection therewith the assessee engaged San Ei Trading Co. Ltd., Tokyo as its agent.
The Japanese Company was admittedly a 'non resident ' company.
Under the agreements the assessee under took to pay certain percentage of gross sale proceeds as commission to the Japanese Company.
With regard to the mode of payment of commission, the agreements provided a term which read thus: "In view of the difficulties in this country it is requested that the first party credits all these amounts to the account of the second party with them without remitting the same until definate instructions are received by the first party.
" The first party to the agreement was the assessee and the second party was the Japanese Company.
During the two accounting years a total amount of Rs. 13,319 12 4 was paid to the Japanese Company either directly or through others to whom the assessee was instructed by the Japanese Company to pay the amount.
The Court rejected the contention of the assessee that the Japanese Company was not in receipt of the amount in the taxable territories and the amount was not income within the meaning of section 4(1)(a) of the Indian income tax Act, 1922 with the following observations: "This leaves over the question which was earnestly argued, namely, whether the amounts in the two accounting years can be said to be received by the Japanese Company in the taxable territories.
The argument is that the money was not actually received, but the assessee firm was a debtor in respect of that amount and unless the entry can be deemed to be a payment or receipt cl.
(a) cannot apply.
We need not consider the fiction, 592 for it is not necessary to go into the fiction at all.
The agreement, from which we have quoted the relevant term, provided that the Japanese Company desired that the assessee firm should open an account in the name of the Japanese Company in their books of account, credit the amounts in that account, and deal with those amounts according to the instructions of the Japanese Company.
Till the money was so credited, there might be a relation of debtor and creditor; but after the amounts were credited, the money was held by the assessee firm as a depositee.
The money then belonged to the Japanese Company and was held for and on behalf of the Company and was at its disposal.
The character of the money changed from a debt to a deposit in such the same way as if it was credited in a Bank to the account of the Company.
Thus, the amount must be held, on the terms of the agreement, to have been received by the Japanese Company, and this attracts the application of section 4(1)(a).
Indeed, the Japanese Company did dispose of a part of those amounts by instructing the assessee firm that they be applied in a particular way.
In our opinion, the High Court was right in answering the question against the assessee." The Court, as it is obvious from the portion extracted above, proceeded to hold that the amount in question was received by the Japanese Company in India and hence was taxable on that basis.
In the cases before us there were no terms corresponding to the term extracted above which was found in the agreements between the assessee and the Japanese Company in P. V. Raghava Reddi 's case (supra).
It cannot be said that the making of the book entries in the books of the statutory agent amounted to receipt by the assessees who were non residents as the amounts so credited in their favour were not at their disposal or control.
It is not possible to hold that the non resident assessees in this case either received or can be deemed to have received the sums in question when their accounts with the statutory agent were credited, since a credit balance without more only represents a debt and a mere book entry in the debtor 's own books does not constitute payment which will secure discharge from the debt.
They cannot, therefore, be charged to tax on the basis of receipt of income actual or constructive in the taxable territories during the relevant accounting period.
The second aspect of the same question is whether the commission amounts credited in the books of the statutory agent can be treated as incomes accrued, arisen, or deemed to have accrued or arisen in India to the non resident assessees during the relevant year.
This takes us to section 9 of the Act.
It is urged that the commission amounts 593 should be treated as incomes deemed to have accrued or arisen in India as they, according to the Department, had either accrued or arisen through and from the business connection in India that existed between the non resident assessees and the statutory agent.
This contention overlooks the effect of clause (a) of the Explanation to clause (i) of sub section (1) of section 9 of the Act which provides that in the case of a business of which all the operations are not carried out in India, the income of the business deemed under that clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India.
If all such operations are carried out in India, the entire income accruing therefrom shall be deemed to have accrued in India.
If, however, all the operations are not carried out in the taxable territories, the profits and gains of business deemed to accrue in India through and from business connection in India shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories.
If no operations of business are carried out in the taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India.
(See Commissioner of Income tax, Punjab vs R. D. Aggarwal & Co. & Anr.(1) and M/s. Carborandum Co. vs C.I.T., Madras(2) which are decided on the basis of section 42 of the Indian Income tax Act, 1922, which corresponds to section 9(1)(i) of the Act.) In the instant case the non resident assessees did not carry on any business operations in the taxable territories.
They acted as selling agents outside India.
The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchasers from abroad does not amount to an operation carried out by the assessees in India as contemplated by clause (a) of the Explanation to section 9(1)(i) of the Act.
The commission amounts which were earned by the non resident assessees for services rendered outside India cannot, therefore, be deemed to be incomes which have either accrued or arisen in India.
The High Court was, therefore, right in answering the question against the Department.
For the foregoing reasons, the appeals fail and are hereby dismissed with costs.
(Hearing fee one set).
V.D.K. Appeals dismissed.
| Dismissing the Revenue appeal by special leave, the Court ^ HELD: (1) The credit entries made in the books of a statutory agent do not by themselves amount to receipt by assessees who are non residents as long as the amounts so credited in their favour are not at their disposal or control.
[592 F] The non resident assessees in this case neither received nor could be deemed to have received the sums in question when their accounts with the statutory agent were credited, since a credit balance without more only represents a debt and a mere book entry in the debtor 's own books does not constitute payment which will secure discharge from the debt.
They cannot, therefore, be charged to tax on the basis of receipt of income actual or constructive in the taxable territories during the relevant accounting period.
[592 F G] P. V. Raghava Reddi & Anr.
vs Commissioner of Income tax [1962] Supp. 2 S.C.R. 596, distinguished.
(2) Under clause (a) of the Explanation to clause (i) of sub section (1) of section 9 of the Income Tax Act.
in the case of the business of which all the operations are not carried out in India, the income of the business deemed under that clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India.
If all such operations are carried out in India, the entire income accruing therefrom shall be deemed to have accrued in India.
If, however, all the operations are not carried out in the taxable territories, the profits and gains of business deemed to accrue in India through and from business connection in India shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories.
If no operations of business are carried out in the taxable territories, it follows that the income accruing or arising abroad through or from any business connection in India cannot be deemed to accrue or arise in India.
[593 B D] 588 In the instant case the non resident assessees did not carry on any business operations in the taxable territories.
They acted as selling agents outside India.
The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchasers from abroad does not amount to an operation carried out by the assessees in India as contemplated by clause (a) of the Explanation to section 9(1)(i) of the Act.
The commission amounts which were earned by the non resident assessees for services rendered outside India cannot, therefore, be deemed to be incomes which have either accrued or arisen in India.
[593 E G] Commissioner of Income tax, Punjab vs R. D. Aggarwal & Co. & Anr. and M/s. Carborandum Co. vs C.I.T. Madras ; , referred to.
|
Civil Appeal No. 2544 of 1969.
From the Judgment and Decree dated 21 12 1965 of the Kerala High Court in A.S. No. 403 of 1961.
1135 P. Govindan Nair, C. section Ananthakrishna Iyer, section Balakrishnan and Mrs. Baby Krishnan, for the Appellant.
T. section Krishnamurthy Iyer and Mrs. section Gopalakrishnan for the Respondents.
E. M. section Anam and P. N. Pura for Respondent No. 9.
The Judgment of the Court was delivered by DESAI, J.
On a certificate granted by the Full Bench of the High Court of Kerala, original plaintiff, a Hindu widow who was seeking partition of a share to which her deceased husband was entitled, having lost in both the Courts, has filed this appeal.
The High Court granted the certificate under Article 133(1)(c) of the Constitution as in its opinion the following substantial questions of law arise from the judgment rendered by it: 1.
Whether under the Mitakshara Law the parties are governed by customary law, and, in the absence of any rule of customary law on the point in question, by Mitakshara Law property can be divided, albeit by a family settlement, between two artificial units of a joint family, one comprising the sons of a father by his first wife, the first wife and his step mother, and the other comprising his son by his second wife and the second wife so as to constitute each unit into a coparcenary with rights of survivorship between its members; and 2.
Whether the use of the word 'tavazhi ' (in any case a misnomer) in describing the two units in the will, Ext.
P 1 left by the father and held to be the basis of the family settlement, is sufficient in the circumstances, to establish an intention that the members of each unit were to take the property as coparceners and not as tenants in common, the grouping into units being only for convenient enjoyment? The factual background from which, according to the High Court the aforementioned two questions emerge for consideration of this Court may be stated.
One Karappan, son of Chulliparambil Krishnan, had two wives Nani and Ponni.
Defendant 1 Krishnan, defendant 2 Shankaran, one Raman, husband of plaintiff Kallyani, and deceased Madhavan, husband of defendant 3 and father of defendants 4, 5 and 6, were his sons by first wife Nani, and one Kesavan was his son by the second wife Ponni.
He had six daughters, four by the first wife and 1136 two by the second wife.
One Valli was the second wife of his father and she had three daughters.
Karappan and his family are Ezhavas and in the matter of inheritance, succession and on the question of personal law they were governed essentially by customary law and in the absence of any specific custom they are governed by the Hindu Mitakshara Law.
Karappan executed a registered deed variously described as a will or a deed of partition or evidencing family arrangement, Ext.
P 1 dated January 25, 1910, the salient features of which may be reproduced.
After narrating his near relations including his two wives, male and female children born to each and his father 's second wife and her children, the following recitals are worthy of note: "There are as belonging to me now properties to the value of Rs. 8000/ mentioned in the sub joined schedules A and B as my tarwad properties and also my self acquired properties and properties to the value of Rs. 200/ of the C schedule which is set apart as common properties".
"Since I am seriously ill and in order that there may not arise any dispute in future in respect of properties belonging to me, I have resolved today the following with regard to the course of enjoyment of the said properties after my death".
"I myself shall have the full powers of disposition over all the properties described in A, B and C schedules during my life time and after my death, out of the properties to the value of Rs. 8000/ , Rs. 1300/ worth of properties shall vest in each of my male issues, Rs. 300/ in my first wife, Rs. 1000/ in my second wife since she is sick and Rs. 200/ in my father 's second wife".
"On the above basis I have set apart to be vested in them after my death Rs. 5200/ worth of properties to the first tavazhi male issues, Rs. 300/ to my first wife and Rs. 200/ to my father 's wife, altogether properties worth Rs. 5700/ scheduled to A schedule; Rs. 1300/ worth of properties comprising items 1 to 4 and 6 to 12 of B schedule to the second tavazhi, inclusive of an owelty of Rs. 227 as.
5 decided to be paid by the first tavazhi to the second tavazhi, and item 5 of B schedule worth Rs. 1000/ to my second wife". "And that 1/5th share of assessment of C schedule property shall be paid annually by Kesavan in the Amsom and receipt obtained".
1137 "It is also resolved that each tavazhi shall meet the travelling expenses of female issues and maintain properly the women who return on the death of their husbands, that both tavazhis shall equally maintain the children of my aunt and my sister and that since C schedule properties are partitioned now, all my male issues shall have equal rights over the property after my death".
This is a registered deed.
Soon thereafter, in February 1910, Karappan died.
Raman, the husband of the plaintiff, the third son of the first wife, died on February 20, 1936.
Plaintiff widow of Raman sued for partition and separate possession of her undivided 1/4 share in properties set out in A, B and C schedules to the plaint.
It is necessary to clarify here that there were A, B and C schedules annexed to Ext.
P 1 which, for clarity of understanding, would be referred to as the Will of the deceased though it would be presently pointed out that it is ineffective as a Will.
Schedules A and B to Ext.
P 1 specify certain properties.
Properties set out in schedule B to Ext.
P 1 except item No. 5 were awarded to Kesavan, the son by the second wife, and item No. 5 to the second wife.
Properties in schedule A to Ext.
P 1 subject to adjustment pointed out in Ext.
P 1 were given to the first wife and her sons.
Properties set out in schedule C to Ext.
P 1 were kept undivided and were the subject matter of another suit filed by the present plaintiff which has ended in a decree in her favour and which decree has become final.
On the other hand, properties set out in schedule A to the plaint are the very properties which are shown in schedule A to Ext.
In respect of properties set out in the schedule B to the plaint it is alleged that they were acquired by the joint labour of defendants 1 and 2, deceased Raman and Madhavan, and it is equally true of properties set out in schedule C to the plaint but they were separately set out because they stood in the name of the wife of defendant 1.
Plaintiff, however, claimed 1/4 of her share in all the properties set out in schedules A, B and C to the plaint.
The suit was principally resisted by defendant 1 as per his written statement dated July 12, 1958.
It was in terms contended that the properties dealt with by Ext.
P 1 were the joint family properties of Karappan and his sons and that Karappan was not entitled to and had no authority in law to execute a Will in respect of the properties.
There is an averment which may be extracted.
It reads: "Even though Karappan has no right to execute the Will accordingly, what Karappan actually did was that he parti 1138 tioned the properties between the two tavazhies in order to avoid future quarrel between the two wives and their children.
As a father he has got the right to partition his properties according to the custom of the community and according to the Mitakshara law, that Will would be valid as a deed of partition and accordingly accepting the same later, properties had been taken possession by the two tavazhies separately.
Even though the execution of such a deed was against procedure, it was in order to honour the wishes of deceased Karappan that the same was acted upon".
In respect of plaint B schedule properties, the contention was that it was acquired by the private income of the first defendant and that schedule 'C ' properties belonged to the wife of defendant 1 and that plaintiff has no share in it.
It was also contended that as the four sons by the first wife of Karappan constituted a tavazhi, it has all the incidents of a coparcenary and, therefore, succession was governed by survivorship and hence the plaintiff has no share in schedule A properties.
The trial Court framed as many as 12 issues.
The important findings of the Trial Court are that Ext.
P 1 is neither effective as a Will nor as a deed of partition.
Without specifically so saying that Ext.
P 1 would be effective as a family arrangement, it was held that Ext.
P 1 had the effect of constituting a coparcenary of four brothers, sons of first wife of Karappan and that it was their joint family property and they did not hold as tenants in common but as joint tenants and were governed by survivorship in the matter of succession.
The contention that even in such a situation the widow would be entitled to her share because of a customary right was negatived.
In respect of B and C schedule properties it was held that they belonged exclusively to defendant 1 and his wife and plaintiff cannot claim a share in them.
Consistent with these findings, the plaintiff 's suit was dismissed.
A Full Bench of the Kerala High Court heard the first appeal preferred by the plaintiff.
The High Court substantially agreed with the findings of the trial Court and specifically held that Ext.
P 1 furnished important evidence of a family arrangement accepted and acted upon by all the parties affected thereby.
It was held that as family arrangement it is binding and it indicated that the division was per branches, therefore, the four sons by the first wife of Karappan divided as one branch and one son alone by the second wife separated as a different branch and as four sons by the first wife constituted a joint family, succession would be governed by survivorship and the plaintiff is not entitled to claim any share in schedule A properties.
1139 On the question of acquisition of schedule B and C properties, the finding of the trial Court was confirmed.
It may be mentioned that plaintiff had filed another suit for partition of properties set out in C Schedule to Ext.
P 1 and that suit was decreed in plaintiff 's favour and that decree has become final.
Two questions of general importance framed by the High Court are rather involved and confusing and do not pinpoint the attention on questions of law emerging from the judgment of the High Court.
The first question that needs to be answered is whether Ext.
P 1 styled as a Will by the deceased Karappan would be effective as a Will.
If by Ext.
P 1 deceased Karappan attempted to make a Will of the ancestral property in his hand in which his sons had acquired interest by birth, obviously he had no power to make a Will in respect of such property.
P 1 does not purport to devise by Will the individual share of testator Karappan in the joint family property but he attempts to make a will of all the properties, ancestral and self acquired and even to dispose of property in which his sons had interest by birth, by will.
He has not claimed any share in the property but claimed a right to deal with ancestral property as he desired.
In Ext.
P 1 itself he describes properties set out in schedules A and B annexed to Ext.
P 1 as his tarvad properties.
Expression 'tarvad ' in Marumakkattayam Law is the name given to the joint family consisting of males and females, all descended in the female line from a common ancestress.
A tarvad may consist of two or more branches known as thavazhies; each tavazhi or branch consisting of one of the female members of the tarvad and her decendents in the female line (see Mayne 's Hindu Law and Usage, 11th Edn., pp. 792 93.) Thus when property is described as tarvad property in a broad sense it is admitted to be joint family property.
This also becomes clear from the recital in Ext.
P 1 that properties in A and B schedules were tarvad properties and property in C schedule were claimed by him as his self acquired properties and they were to be kept joint and were not sought to be dealt with by Ext.
Therefore, to the extent Ext.
P 1 purports to dispose of ancestral properties by will it would be ineffective as a will as testator Karappan had no power or authority to dispose of by will ancestral properties in his hand.
And as he has not attempted to dispose of his undivided share in the ancestral properties by Ext.
P 1 it is not necessary here to examine the question whether Mitakshara law as administered in Tamil Nadu and Kerala enables an undivided coparcener to dispose of his share in joint family property by will.
Therefore, Ext.
P 1 is not effective as a will and 1140 the respondents did not invite us to affirm their rights under Ext.
P 1 as if it is a binding will.
The next stage in the unfolding of the case is whether Ext.
P 1 is effective as a partition.
Partition is a word of technical import in Hindu law.
Partition in one sense is a severance of joint status and coparcener of a coparcenary is entitled to claim it as a matter of his individual volition.
In this narrow sense all that is necessary to constitute partition is a definite and unequivocal indication of his intention by a member of a joint family to separate himself from the family and enjoy his share in severalty.
Such an unequivocal intention to separate brings about a disruption of joint family status, at any rate, in respect of separating member or members and thereby puts an end to the coparcenary with right of survivorship and such separated member holds from the time of disruption of joint family as tenant in common.
Such partition has an impact on devolution of shares of such members.
It goes to his heirs displacing survivorship.
Such partition irrespective of whether it is accompanied or followed by division of properties by metes and bounds covers both a division of right and division of property (see Approviar vs Rama Subha Aiyar quoted with approval in Smt.
Krishnabai Bhritar Ganpatrao Deshmukh vs Appasaheb Tuljaramarao Nimbalkar & Ors.
A disruption of joint family status by a definite and unequivocal indication to separate implies separation in interest and in right, although not immediately followed by a de facto actual division of the subject matter.
This may at any time, be claimed by virtue of the separate right (see Girja Bai vs Sadashiv.
A physical and actual division of property by metes and bounds follows from disruption of status and would be termed partition in a broader sense.
There was some controversy whether a Hindu father governed by Mitakshara law has a right to partition ancestral properties without the consent of his sons.
After referring to Mitakshara, I, ii, 2, Mayne in 'Hindu Law & Usage ', 11th Edn.
p. 547, states that a Hindu father under the Mitakshara Law can effect a partition between himself and his sons as also between his sons inter se without their consent and that not only can he partition the property acquired by himself but also the ancestral property.
The relevant text may be extracted: "The father has power to effect a division not only between himself and his sons but also between the sons 1141 inter se.
The power extends not only to effecting a division by metes and bounds but also to a division of status".
Similarly, in Mulla 's Hindu Law, 14th Edn., p. 410 (para 323), it is stated that the father of a joint family has the power to divide the family property at any moment during his life time provided he gives his sons equal shares with himself, and if he does so, the effect in law is not only a separation of the father from the sons, but a separation of the sons inter se.
The consent of the sons is not necessary for the exercise of that power.
It, therefore, undoubtedly appears that Hindu father joint with his sons governed by Mitakshara law has the power to partition the joint family property at any moment during his life time.
Mr. Krishnamoorty Iyer urged that even though undoubtedly a Hindu father joint with his sons and governed by Mitakshara law has the power to partition the joint family property, this power enables him to partition the property by metes and bounds but he has no power merely to disrupt the joint family status unaccompanied by division of property by metes and bounds.
The limited question that needs answer in this case is whether a Hindu father joint with his sons governed by Mitakshara law has the power to disrupt the joint family status being a first step in the stage of dividing the property by metes and bounds.
The wider question whether a coparcener of a coparcenary governed by Mitakshara law brings about a disruption of joint family status by definite and unequivocal indication of his intention to separate himself from the family would constitute disruption of status qua the non separating members need not be examined.
A Hindu father joint with his sons and governed by Mitakshara law in contradistinction to other manager of a Hindu undivided family or an ordinary coparcener enjoys the larger power to impose a partition on his sons with himself as well as amongst his sons inter se without their consent and this larger power to divide the property by metes and bounds and to allocate the shares to each of his sons and to himself would certainly comprehend within its sweep the initial step, viz., to disrupt the joint family status which must either precede or be simultaneously taken with partition of property by metes and bounds.
This view taken in Kandaswami vs Doraiswami Ayyar; does not appear to have been departed from.
Further, the text from Mayne 's book extracted in the preceding paragraph shows that the weight of authority is against the proposition canvassed for by Mr. Iyer.
It does, therefore, appear that a Hindu father governed by 1142 Mitakshara law has power to partition the joint family property belonging to the joint family consisting of himself and his sons and that this power comprehends the power to disrupt joint family status.
The question is, has Karappan as father exercised his power to partition the joint family property by Ext.
P 1 ? Even though the father has a right to make a partition of the joint family property in his hand, he has no right to make a partition by will of joint family property amongst various members of the family except, of course, if it could be made with their consent (see Brijraj Singh vs Sheodan Singh.
Whether it is effective as family arrangement will be presently examined.
Therefore, if by Ext.
P 1 Karappan attempted to make a partition of the property by his will, Ext.
P 1 would be ineffective as a partition.
By Ext.
P 1 Karappan does not divide his property by metes and bounds vesting the share of each in presenti in each of his sons.
One thing that is not in dispute is that Karappan did not intend Ext.
P 1 to be effective from the date on which it was executed.
In his own words he states that he was seriously ill and as he would like to avoid a dispute in future in respect of his properties and, therefore, he resolved that his property shall be enjoyed after his death in the manner stated in Ext.
He reserved to himself the full powers of disposition over all the properties more particularly described in the various schedules annexed to Ext.
P 1 during his life time and whatever directions were given in Ext.
P 1 were to be effective only after his death.
At two places in terms he stated that the dispositions made by Ext.
P 1 were to be effective after his death.
It is, therefore, inescapable that Ext.
P 1 was not to be effective as a partition in broader sense, namely, dividing property by metes and bounds from the date on which it was executed.
It was to be effective from a future date and that future uncertain event was the death of Karappan and that during the time he would remain alive he would deal with the properties at his sweet will.
Further, there was no effective partition by metes and bounds by Ext.
P 1 though the shares of sons were specified as also the provision for female members was made.
If intention of the testator is to be gathered from the language of Ext.
P 1 Karappan intended it to be a will to be effective after his death.
He never intended it to be a partition in presenti.
Therefore, Ext.
P 1 cannot be effective as a deed of partition in the broader sense, i.e. partition by metes and bounds.
What then is the effective of Ext.
P 1 on the joint family of which Karappan was father cum manager ? The respondents contend that 1143 it is a family arrangement providing for carving out branchwise (shakha per wife) separation of interest in the joint family properties and as it was unreservedly accepted by all affected thereby after the death of Karappan, it is binding on all.
Appellant contends that Ext.
P 1 had the effect of disrupting the joint family status and from that date members of the joint family entitled to their shares in the joint family property, held as tenants in common and not as joint tenant with the result that inheritance by survivorship, a special feature of a Hindu coparcenary, would be displaced by Hindu law of succession, the property going to the heirs recognised by law.
Defendant 1 who contested the suit in terms stated that Ext.
P 1 was not effective as a will.
He than stated that Ext.
P 1 purports to partition the property between the two tavazhies represented by Karappan 's two wives and their respective male offspring.
It may, however, be stated that nowhere in the written statement he has put forth the contention that Ext.
P 1 evidences a family arrangement assented to by all affected thereby.
That case appears to have been made out by the High Court for the first time and since the plaintiff has been non suited on the finding that Ext.
P 1 was a family arrangement which provided for a coparcenary of four sons of the first wife of Karappan, retaining inheritance by survivorship amongst the four members it is necessary to examine the contention whether Ext.
P 1 provides for a family arrangement assented to by all concerned.
An ineffective will sometimes though not always, if otherwise consented by all adult members, may be effective as a family arrangement but as the father of a joint Hindu family has no power to impose a family arrangement under the guise of exercising the power of partition, the power which undoubtedly he has but which he has failed to effectively exercise, cannot in the absence of consent of all male members bind them as a family arrangement.
What constitutes family arrangement has been fully examined by this Court in M. N. Aryamurthy & Anr.
vs M. D. Subbaraya Setty (dead) through I.r. & Ors.
Broadly stated, it is that there must be an agreement amongst the various members of the family intended to be generally and reasonably for the benefit of the family and secondly the agreement should be with the object either of compromising doubtful or disputed rights or for preserving the family property or the place and security of the family.
Both these ingredients appear to be absent in this case.
In Brijraj Singh 's case (supra) a father purported to make a will in which he recorded a partition of the joint family property amongst his three sons.
He did not take a share for himself and simultan 1144 eously gave double share to his eldest son.
There were usual recitals of partition and allotment of shares and it was further stated that in anticipation of execution of the deed various sharers were put in possession of property allotted to each of them.
This was done two months prior to the execution of the so called will.
The document was held ineffective as a will but on evidence it was found that all concerned had acquiesced in the arrangement evidenced by the deed and the deed was intended to operate from the date of its execution and, therefore, it evidenced a family arrangement contemporaneously made and acted upon by all the parties and hence binding.
Similarly in Lakshmi Chand vs Anandi, two brothers having no male issue and constituting a joint Hindu family governed by Mitakshara, signed a document, described therein as an agreement by way of will.
The document provided in effect that if either party died without male issue, his widow should take a life interest in a moiety of the whole estate and that if both the parties died without male issue, the daughters of each, or their male issue, should divide the father 's share.
The document was registered.
A few days after its execution one brother died, and his widow was entered as owner of a moiety of the estate.
Subsequently the other brother sued for a declaration that the document was null and void.
Privy Council held that the document could not operate as will but that as a co sharer in a Mitakshara joint family with the consent of all his co sharers he could deal with the share to which he would be entitled on a partition and was binding as family arrangement.
To be effective as a family arrangement the deed must be one intended to operate from the date of its execution, a feature wanting in Ext.
P 1, and it must be assented to and acquiesced in and acted upon by all affected thereby.
At the time of execution of Ext.
P 1 there is no evidence as to who were the adult members of the family other than Karappan who consented to the alleged family arrangement.
One thing, however, may be pointed out that defendant 1 gave his age as 87 years on December 29, 1959, when his evidence commenced.
Presumably he must have been born in 1872.
But there is no evidence about the age of other children of Karappan.
The only evidence as to the consent of the male members is that after the death of Karappan all male members acted according to the wishes of Karappan as disclosed and ordained in Ext.
Assuming it to be so, Ext.
P 1 was to operate after the death of Karappan and not from the date of execution.
The High Court after referring to Brijraj Singh 's case (supra) overlooked the fact that in accepting the deed before it, the Judicial Committee was impressed by the fact that it was intended to speak from the date on which it was written and not future date, viz., 1145 death of the writer.
P 1 in terms reserves to Karappan his right to deal with the property at his sweet will and was to be operative after his death.
The High Court completely overlooked this material difference.
Assuming that Ext.
P 1 was to be treated as family arrangement after the death of Karappan, the absence of any evidence of agreement amongst family members entitled to a share, to the terms of Ext.
P 1 when it was executed, the absence of any dispute at or about the time Ext.
P 1 was executed amongst the members of the family sought to be settled by Ext.
P 1; and the absence of evidence that arrangement was necessary for the security of the family or property would wholly negative the contention that Ext.
P 1 would furnish evidence of family arrangement.
We have grave doubt whether a Hindu father can impose family arrangement sans direct evidence of consent of each of his sons, to be effective after his death.
Therefore, Ext.
P 1 does not furnish evidence of family arrangement.
Now, if Ext.
P 1 cannot be effective as a deed of partition inasmuch as it did not result in division of property by metes and bounds, its effect on continued joint family status may be examined.
If it disrupted joint family status by its very execution, there was thereafter no question of directing any family arrangement to be effective from a future date as per its terms and even though it may spell out a family arrangement what effect the disruption of joint family status would have on the mode of succession has to be ascertained.
One thing is crystal clear that Ext.
P 1 is not a deed of partition in the sense it does not purport to divide the property amongst various coparceners by metes and bounds.
However, in Hindu law qua joint family and joint family property the word 'partition ' is understood in a special sense.
If severance of joint status is brought about by a deed, a writing or an unequivocal declaration of intention to bring about such disruption, qua the joint family, it constitutes partition.
(see Raghavamma vs Chenchamma).
To constitute a partition all that is necessary is a definite and unequivocal indication of intention by a member of a joint family to separate himself from the family.
What from such intimation, indication or representation of such interest should take would depend upon the circumstances of each case.
A further requirement is that this unequivocal indication of intention to separate must be to the knowledge of the persons affected by such declaration.
A review of the decisions shows that this intention to separate may be manifested in diverse ways.
It may be by notice or by filing a suit.
Undoubtedly, indication or 1146 intimation must be to members of the joint family likely to be affected by such a declaration.
Has not Ext.
P 1 the effect of bringing about a disruption of joint family headed by Karappan and consisting of himself and his sons? The fact situation is that in Ext.
P 1 Karappan specified the share of each of his sons, the property allotted on share being valued at Rs. 1300/ each of the four by the first wife and one by the second wife, and vesting the share so specified in each of his sons.
He also specified value of the property allotted to his first wife, to his second wife and to the second wife of his father.
In the process he found that something more was given to the sons of his first wife and in order to restore the equilibrium of treating his sons equally, he directed that owelty to the tune of Rs. 227/ and odd be paid by the sons of the first wife to the sons of his second wife.
This was with a view to correcting the inequality in division of shares.
He also states that there will be two branches.
He refers to them as tavazhies and himself and his family as tarvad.
Tarvad is akin to joint family and tavazhi is a branch of the family.
The High Court, however, treated the use of the words 'tarvad ' and 'tavazhi ' and 'Karnavaran ' to be inappropriate and hence inconsequential.
Similarly, the High Court found specification of share of each of the male child as not indicative of a partition in the sense of disruption of joint family status.
Partition can be partial qua person and property but a partition which follows disruption of a joint family status will be amongst those who are entitled to a share on partition.
On death of Karappan, Kesavan, the son of the second wife obtained a physical partition of the property, took his own share and left the family.
There was first a disruption of the joint family by specifying the shares in Ext.
Till disruption of joint family status takes place no coparcener can claim what is his exact share in coparcenary property.
It is liable to increase and decrease depending upon the addition to the number or departure of a male member and inheritance by survivor ship.
But once a disruption of joint family status takes place, coparceners cease to hold the property as joint tenants but they hold as tenants in common.
Looking to the terms of Ext.
P 1 there was a disruption of joint family status, the shares were specified and vested, liabilities and obligations towards the family members were defined and imbalance out of unequal division was corrected.
This certainly has effect of bringing about disruption of joint family status and even if there was no partition by metes and bounds and the coparceners continued to remain under the same roof or enjoyed the 1147 property without division by metes and bounds, they did not hold as joint tenants unless re union is pleaded and proved.
It was, however, contended and the contention has found favour with the High Court that when Kesavan, the second wife 's son of Karappan took the properties allotted to his share and left the family, as per terms of Ext.
P 1 four sons of Nani were constituted joint tenants or members of a coparcenary.
In reaching this conclusion reliance was placed by the High Court on Palani Ammal vs Muthuvenkatachala Moniagar.
In that case, after referring to Appovier 's case, (supra) it was observed as under: "But the mere fact that the shares of the coparceners have been ascertained does not by itself necessarily lead to an inference that the family had separated.
There may be reasons other than a contemplated immediate separation for ascertaining what the shares of the coparceners on a separation would be.
It is also now beyond doubt that a member of such a joint family can separate himself from other members of the joint family and is on separation entitled to have his share in the property ascertained and partitioned off for him and that the remaining coparceners without any special agreement amongst themselves may continue to be coparceners and to enjoy as members of a joint family, what remained after such a partition of the family property.
That the remaining members continued to be joint may, if disputed, be inferred from the way in which their family business was carried on after their previous coparcener had separated from them." In Bhagwan Dayal vs Smt.
Reoti Devi, this Court examined the effect of a separation of one member of a joint family on the joint family status and on the remaining members in the light of the Privy Council decision in Palani Ammal 's case.
(supra) The relevant observation is as under: "The general principle is that every Hindu family is presumed to be joint unless the contrary is proved: but this presumption can be rebutted by direct evidence or by course of conduct.
It is also settled that there is no presumption that when one member separates from others that the latter remained united; whether the latter remain united or not must be decided on the facts of each case." 1148 In fact, Judicial Committee in Balabux vs Rukhmabai unequivocally held that there is no presumption when one coparcener separates from others that the latter remained united.
An agreement amongst them must be proved either to remain united or to reunite.
In Sengoda vs Muthu, the High Court interpreted Palani Ammals case to lay down that if a partition takes place with respect to one coparcener, the decree or the deed bringing about partition would provide a pointer as to the effect of the decree or the deed on the remaining coparceners.
In Bhagwati Prasad Shah & Ors.
Dulhin Rameshwari Juer & Anr.
, this Court pointed out that the general principle undoubtedly is that a Hindu family is presumed to be joint unless the contrary is proved but where it is admitted that one of the coparceners did separate himself from the other members of the joint family and had his share in the joint property partitioned off for him, there is no presumption that the rest of the coparceners continued to be joint.
There is no presumption on the other side too that because one member of the family separated himself there has been separation with regard to all.
It would be a question of fact to be determined in each case upon the evidence relating to the intention of the parties whether there was a separation amongst the other coparceners or they remained united.
Except that four sons by Nani remained under one roof and were joint in food and laboured together there is no evidence that they agreed to constitute a coparcenary assuming that a coparcenary a creature of law could be created by agreement.
And if Karappan specified even the share of each of his sons by Nani in Ext.
P 1, this evidence of remaining together is hardly sufficient to warrant a conclusion that these four sons constituted a coparcenary.
P 1 could not support such a conclusion and High Court was in error in spelling out such conclusion from Ext.
P 1 overlooking its specific direction of a specified share of each of his sons and liability to pay owelty.
A further submission that there was partition branchwise is unknown to Mitakshara law and is wholly untenable.
In Mayne 's Hindu Law, 11th Edn., p. 347, law as thus stated: "So long as a family remains an undivided family, two or more members of it, whether they be members of different branches or of one and the same branch of the family, can have no legal existence as a separate independent unit; but all the members of a branch, or of a sub branch, 1149 can form a distinct and separate corporate unit within the larger corporate family and hold property as such.
Such property will be joint family property of the members of the branch inter se, but will be separate property of that branch in relation to the larger family.
The principle of joint tenancy is unknown to Hindu law except in the case of the joint property of an undivided Hindu family governed by the Mitakshara law.
" In Bhagwan Dayal 's case (supra) legal position after referring to earlier decisions has been culled out as under: "Coparcenary is a creature of Hindu law and cannot be created by agreement of parties except in the case of re union.
It is a corporate body or a family unit.
The law also recognizes a branch of the family as a subordinate cooperate body.
The said family unit, whether the larger one or the subordinate one, can acquire, hold and dispose of family property subject to the limitations laid down by law.
Hindu law does not recognise some of the members of a joint family belonging to different branches, or even to a single branch, as a corporate unit.
" Now, if five sons of Karappan each constituted a branch, obviously after one son as a branch separated unless a reunion is pleaded, other four cannot constitute a corporate body like a coparcenary by agreement or even by subsequent conduct of remaining together enjoying the property together.
In Balkishen Das & Ors.
vs Ram Narain Sahu & Ors., an ikrarnama was produced which showed that defined shares in the whole estate had been allotted to the several coparceners.
There was a passage which gave liberty to any of the parties either to live together as a member of the joint family or to separate his own business.
Mahabir was given four annas share and others defined shares in the remainder.
Contention raised was that Mahabir alone separated and others remained joint.
Subsequent conduct was relied upon to substantiate the contention that they remained together.
Negativing this contention it was held that the ikrarnama effected a separation of estate even if the parties elected either to have a partition of their shares by metes and bounds, or to continue to live together and enjoy their property in common as before.
Whether they did one or the other would affect the mode of enjoyment, but not the tenure of the property or their interest in it.
The ikrarnama effected a separation in estate, its legal 1150 construction and effect could not be controlled or altered by the subsequent conduct.
Once the shares were determined and allotted, it was held consistently with Appovier 's case (supra) that this converted them from joint holders into tenants in common.
In Boddu Venkatakrishna Rao & Ors.
vs Boddu Satyavathi & Ors., the following passage in Mulla 's Transfer of Property Act (Fifth Edn.), was approved: "The principle of joint tenancy appears to be unknown to Hindu law, except in the case of coparcenary between the members of an undivided family.
" Once disruption of joint family status takes place as Lord Westbury puts it in Appovier 's case, (supra) it covers both a division of right and division of property.
If a document clearly shows the division of rights and status its legal construction and effect cannot be altered by evidence of subsequent conduct of parties.
Now, in this case Ext.
P 1 itself specifies the share of each member separately.
There is no concept known to Hindu law that there could be a branch of a family wife wise.
To illustrate, if a Hindu father has two wives and he has three male children by the first wife and two by the second, each wife constituting a branch with her children of the family is a concept foreign to Hindu law.
Therefore, tavazhi wife wise stated in Ext.
P 1 has to be ignored and the contention that there was a partition amongst wife wise branches as represented by each wife is equally untenable.
P 1 did bring about a specification of shares and once such shares were defined by the father who had the power to define and vesting the same there was a disruption of joint family.
There was thus a division of rights and division of property by allotment of shares.
The mode of enjoyment immediately changed and members of such family ceased to be coparceners holding as joint tenants but they held as tenants in common.
Subsequent conduct of some of them to stay together in the absence of any evidence of re union as understood in law is of no consequence.
In any event when Kesavan, the son of the second wife, sought and obtained physical partition of the properties allotted to him and left the family there being no evidence whether others agreed to remain united except the so called evidence of subsequent conduct, which is irrelevant or of no consequence, disruption of status was complete.
Therefore, the four sons of the first wife held the property as tenants in common.
There is evidence in the form of some documents showing that defendant 1 was described as Karnavaran of a coparcenary of the 1151 four sons of the first wife of Karappan and that the property was enjoyed as a joint family property.
In view of our conclusion that such subsequent conduct is not conclusive of any agreement to reunite, it is not necessary to examine the evidence.
In view of our conclusion that since the execution of Ext.
P 1 on January 25, 1910, or after the death of Karappan in February 1910, when Kesavan, the son of the second wife took his share of the property left the family there was a disruption of the joint family and the sons of Karappan by his first wife held the property, which remained for them after Kesavan obtained his share, not as joint tenants but as tenants in common, the plaintiff would be entitled to the share to which her deceased husband Raman was entitled.
Raman had 1/4 share in A schedule properties which the plaintiff would be entitled and therefore, there would be a preliminary decree in her favour to that effect.
Plaintiff 's claim to a share in properties set out in schedules B and C annexed to the plaint has been concurrently negatived by both the courts on the finding that they are the properties of defendant 1 and his wife and are not accretions to the property which devolved from Karappan.
This concurrent finding of fact arrived at on appreciation of evidence appears to be correct and need not be disturbed.
Therefore, plaintiff 's suit with regard to a share in B and C schedule properties has been rightly dismissed.
At the commencement of hearing of the appeal it was pointed out that original plaintiff Kallyani is dead and there is some dispute between her two daughters Yashoda and Janaki about succession to the estate of Kallyani.
Both had applied to the exclusion of each other for being substituted as legal representatives of the deceased.
For purposes of this appeal both were substituted for the deceased appellant.
It is not necessary to decide this question in this appeal because whoever of the two establishes her right to inherit the property of Kallyani would be entitled to the same but the dispute would be between Yashoda and Janaki and the other defendants have no right to be heard in that matter.
Accordingly this appeal succeeds and it is partly allowed.
The judgment and decree of the trial Court and the High Court dismissing the plaintiff 's suit in regard to A schedule property are set aside.
Plaintiff 's suit is decreed and it is declared that she has 1/4 share in properties set out in schedule A annexed to the plaint.
A preliminary decree to that effect shall be drawn.
Defendant 1 shall pay the costs of the plaintiff throughout.
S.R. Appeal allowed in part.
| One Karappan son of Chulliparambil Krishnan had two wives Naini and Ponni.
Through his first wife Naini he had four sons Krishnan (D1), Shankaran (D2), Raman and the husband of plaintiff appellant Kallyani who died after him and Madhavan who predeceased him and husband of D3 and father of D4, D5 and D6 and four daughters.
He had one son by name Kesavan and two daughters, through his second wife Ponni.
One Valli was the second wife of his father and she had three daughters.
Karappan and his family are Ezhavas and in the matter of inheritance, succession and on the question of personal law they were governed essentially by customary law and in the absence of any specific custom, they are governed by the Hindu Mitakshara law.
Karappan executed a registered deed variously described as a will or a deed of partition or evidencing family arrangement, exhibit P1 dated January 25, 1910.
In this deed after narrating his near relations including his two wives male and female children born to each and his father 's second wife and her children, he described the manner in which the A, B and C scheduled properties should be taken by them, after his death.
In February 1910 Karappan died.
Raman, the husband of the plaintiff appellant, the third son of the first wife died on February 20, 1936.
Plaintiff widow of Raman sued for partition and separate possession of her undivided 1/4 share in properties set out in A, B and C schedules to the plaint.
The Trial Court held that Ext.
P1 had the effect of constituting a coparcenary of four brothers, sons of first wife of Karappan and that it was their joint family property and they did not hold as tenants in common but as joint tenants and were governed by survivorship in the matter of succession.
The contention that even in such a situation the widow would be entitled to her husband 's share because of a customary right was negatived.
In respect of B & C schedule properties, it was held that they belonged exclusively to defendant 1 and his wife and plaintiff cannot claim a share in them.
The High Court affirmed the Trial Court 's judgment and decree treating exhibit P1 as family arrangement and hence the plaintiff 's appeal by certificate.
Allowing the appeal, the Court ^ HELD: 1. Ext.
P1, styled as a will by the deceased Karappan is not effective as a will.
If by Ext.
P 1 deceased Karappan attempted to make a will of the ancestral property in his hand in which his sons had acquired 1131 interest by birth, obviously he had no power to make a will in respect of such property.
exhibit P1 does not purport to devise by will the undivided share of testator Karappan in the joint family property, but he attempts to dispose of by a will all the properties in which his sons had interest by birth.
He had not claimed any share in the property but claimed a right to deal with ancestral property as he desired.
In exhibit P1 itself he describes properties set out in schedules A and B annexed to exhibit P1 as his tarvad properties.
[1139B C] 2.
Expression "tarvad" in Marumakkattayam law is the name given to the joint family consisting of males and females, all descendants in the female line from a common ancestress.
A tarvad may consist of two or more branches known as 'Thavazhies ', each tavazhi or branch consisting of one of the female members of the tarvad and her descendants in the female line.
Thus when property is described as tarvad property in a broad sense it is admitted to be joint family.
This also becomes clear from the recital in exhibit P.1 that properties set out in A and B schedules were tarvad properties and property in C schedule were claimed by him as his self acquired properties and they were to be kept joint and were not sought to be dealt with by exhibit P1.
Therefore, to the extent exhibit P1 purports to dispose of an ancestral properties by will it would be ineffective as a will as Karappan had no power or authority to dispose of by will ancestral properties in his hand.
[1139C G] 3.
Partition is a word of technical import in Hindu law.
Partition in one sense is a severance of joint family status and coparcener of a coparcenary is entitled to claim it as a matter of his individual volition.
In this narrow sense all that is necessary to constitute partition is a definite and unequivocal indication of his intention by a member of a joint family to separate himself from the family and enjoy his share in severalty.
Such an unequivocal intention to separate brings about a disruption of joint family status, at any rate, in respect of separating member or members and thereby puts an end to the coparcenary with right of survivorship and such separated member holds from the time of disruption of joint family as tenant in common.
Such partition has an impact on devolution of shares of such members.
It goes to his heirs displacing survivorship.
Such partition irrespective of whether it is accompanied or followed by division of properties by metes and bounds covers both a division of right and division of property.
A disruption of joint family status by definite and unequivocal indication to separate implies separation in interest and in right, although not immediately followed by a de facto actual division of the subject matter.
This may at any time, be claimed by virtue of the separate right.
A physical and actual division of property by metes and bounds follows from disruption of status and would be termed partition in a broader sense.
[1140A E] 4.
A Hindu father joint with his sons governed by Mitakshara law has the power to partition the joint family property at any moment during his life time.
The consent of the sons is not necessary for the exercise of that power.
This power comprehends the power to disrupt joint family status.
[1141H, 1142A] Kandaswamy vs Doraiswamy Iyer, Mad. 317; approved.
Even though the father has a right to make a partition of the joint family property in his hand, he has no right to make a partition by will of joint family property amongst various members of the family except, of course, with their consent.
In the instant case, if by exhibit P1 Karappan attempted to make 1132 a partition of the property by his will, exhibit P1 would be ineffective as a partition.
By exhibit P1 Karappan does not divide his property by metes and bounds vesting the share of each in present in each of his sons.
[1142B C] exhibit P1 would not be effective as a partition in broader sense, namely, dividing property by metes and bounds from the date on which it was executed as it was to be effective from a future date and that future uncertain even was the death of Karappan and that during the time he would remain alive he would deal with the properties at his sweet will.
Further, there was no effective partition by metes and bounds by exhibit P1 though the shares of sons were specified as also the provision for female members was made.
If intention of the testator is to be gathered from the language of exhibit P1 Karappan intended it to be a will not a partition in presenti.
Therefore, exhibit P1 cannot be effective as a deed of partition in the broader sense i.e., partition by metes and bounds.
[1142E G] Brijraj Singh vs Sheodan Singh, 10 I.A. 161; referred.
An ineffective will sometimes though not always, if otherwise consented by all adult members, may be effective as a family arrangement but as the father of a joint Hindu family has no power to impose a family arrangement under the guise of exercising the power of partition, the power which undoubtedly he had but which he has failed to effectively exercise, it cannot in the absence of consent of all male members bind them as a family arrangement.
[1143D F] 7.
A family management must be an agreement amongst the various members of the family intended to be generally and reasonably for the benefit of the family and secondly the agreement should be with the object either of compromising doubtful or disputed rights or for preserving the family property or the place and security of the family.
In this case, both these ingredients are absent.
[1143F G] H. N. Aryamurthy & Anr.
vs N. D. Subbaraya Setty (dead) through I.rs and Ors., ; applied.
Brijraj Singh vs Sheodan Singh, 40 I.A. 161; Lakshmichand vs Anandi, 53 I.A. 123; discussed.
To be effective as a family arrangement the deed must be one intended to operate from the date of the execution, and it must be assented to and acquiesced in and acted upon by all affected party.
In the instant case, exhibit P1 in term reserves to Karappan his right to deal with the property at his sweet will and was to be operative after his death.
Moreover, at the time of the execution of exhibit P.1 there is no evidence as to who were the adult members of the family other than Karappan who consented to the alleged family arrangement.
Assuming that exhibit P1 was to be treated as family arrangement after the death of Karappan, the absence of any evidence of agreement amongst family members entitled to share, to the terms of exhibit P.1 when it was executed, the absence of any dispute at or about the time exhibit P.1 was executed amongst the members of the family sought to be settled by exhibit P.1 and the absence of evidence that arrangement was necessary for the security of the family or property would wholly negative the contention that exhibit P.1 would furnish evidence of family arrangement.
It is doubtful whether a Hindu father can 1133 impose family arrangement sans direct evidence of consent of each of his sons, to be effective after his death.
Therefore exhibit P 1 does not furnish evidence of family arrangement.
[1444E H, 1145A C] 9.
In Hindu Law qua joint family and joint family property the word partition ' is understood in a special sense.
If severance of joint family status is brought about by a deed, a writing or an unequivocal declaration of intention to bring about such disruption, qua the joint family, it constitutes partition.
To constitute a partition all that is necessary is a definite and unequivocal indication of intention by a member of a joint family to separate himself from the family What form such intimation, indication or representation of members should take would depend upon the circumstances of each case.
A further requirement is that the unequivocal indication of intention to separate must be to the knowledge of the persons affected by such declaration: This intention to separate may be manifest in diverse ways.
Undoubtedly, indication or intimation must be to members of the joint family likely to be affected by such a declaration.
[1145E H, 1146A] Raghavan vs Chenchamma, ; ; referred to.
Partition can be partial qua person and property but a partition which follows disruption of joint family status will be amongst those who are entitled to a share on partition.
Till disruption of joint family status takes place no coparcener can claim what is his exact share in coparcenary property.
It is liable to increase and decrease depending upon the addition to the number or departure of a male member and inheritance by survivorship.
But once a disruption of joint family status takes place, coparceners cease to hold the property as joint tenants but they hold as tenants in common.
[1146E G] In the instant case, on death of Karappan, Kesavan the son of the second wife obtained a physical partition of the property took his owon share and left the family, there was first a disruption of the joint family status.
Looking to the terms of exhibit P 1 there was a disruption of joint family status as the share of each son was specified and vested, liabilities and obligations towards the family members were defined and imbalance out of unequal division was corrected.
This certainly has the effect of bringing about disruption of joint family status and even if there was no partition by metes and bounds and the coparceners continued to remain under the same roof or enjoyed the property without division by metes and bounds, they did not hold as joint tenants unless re union is pleaded and proved.
[1146G H, 1147A] 11.
There is no presumption when one coparcener separates from other that the latter remained united.
An agreement amongst them must be proved either to remain united or to re unite.
A Hindu family is presumed to be joint unless the contrary is proved but where it is admitted that one of the coparceners did separate himself from the other members of the joint family and had his share in the joint property partitioned off for him, there is no presumption that the rest of the coparceners continued to be joint.
There is no presumption on the other side too that because one member of the family separated himself there has been separation with regard to all.
It would be a question of fact to be determined in each case upon the evidence relating to the intention of the parties whether there was a separation amongst the other coparceners or they remained united.
Except that four sons by Naini remained 1134 under one roof and were joint in food laboured together there is no evidence that they agreed to constitute a coparcenary assuming that a coparcenary a creature of law could be created by agreement.
And if Karappan specified even the share of each of his sons by Naini in exhibit P 1, this evidence of remaining together is hardly sufficient to warrant a conclusion that these four sons constituted a coparcenary.
exhibit P 1, could not support such a conclusion and the High Court was in error in spelling out such conclusion from exhibit P 1 overlooking its specific direction of a specified share of each of his sons and liability to pay owelty.
[1148B F] Palani Ammal vs Muthuvenkatachala Mariagon, 52 I.A. 83; Bhagwan Dayal vs Mrs. Reoti Devi, ; ; Balabax vs Rukhmabai ILR 3C IA. 130; Sengoda vs Muthu, I.L.R. ; referred to.
Bhagwati Prasad Shah and Ors.
vs Pulhin Rameshwari Juer and Anr., , followed.
Partition branchwise is unknown to Mitakshara Law.
In the instant case, if five sons of Karappan each constituted a branch obviously after one son as a branch separated unless a reunion is pleaded, other four cannot constitute a corporate body like a coparcenary by agreement or even by subsequent conduct of remaining together enjoying the property together.
[1148F, 1149E] Balakishan Das and Ors.
vs Ram Narain Sahu and Ors., 30 I.A. 139; bhagwan Dayal vs Mrs. Reoti Bai, [1962] 3 S.C.R. 440; Boddu Venkatakrishna Rao and Ors.
vs Boddu Satyavathi and Ors., ; ; referred to.
Once disruption of joint family status takes place, it covers both a division of right and division of property.
If a document clearly shows the division of rights and status its legal construction and effect cannot be altered by evidence of subsequent conduct of parties.
[1150C] 14.
There is no concept known to Hindu Law that there would be a branch of a family wife wise.
[1150D] In this case exhibit P 1 itself specifies the share of each member separately.
Therefore, tavazhi wife wise stated in exhibit P 1 has to be ignored.
Ex P 1 did bring about a specification of shares and once such shares were defined by the father who had the power to define and vesting the same there was a disruption of joint family.
There was thus a division of rights and division of property by allotment of shares.
The mode of enjoyment immediately changed and members of such family ceased to be coparceners holding as joint tenants but they held as tenants in common.
The plaintiff would be entitled to the share to which her deceased husband Raman was entitled.
Raman had 1/4th share in 'A ' schedule properties which the plaintiff would be entitled.
[1150D, E F, 1151C]
|
Appeal No. 445 of 1962.
Appeal from the judgment and order dated April 1 1 and 12.
1960, of the Bombay High Court in Income tax Reference No. 52 of 1959.
R. J. Kolah and I.N. Shroff, for the appellant.
K. N. Rajagopal Sastri, and R.N. Sachthey, for the respondent.
April 10.
The judgment of the Court was delivered by section K. DAS, J.
This is an appeal on a certificate of fitness granted by the High Court of 973 Bombay under section 66 A (2) of the Indian Income tax Act, 1922.
The New Jehangir Vakil Mills Co., Ltd. Bhavnagar, appellant before us and called tile assessee, carried on the business of manufacturing and selling textile piecegoods at Bhavnagar in the former Bhavnagar State.
The present appeal is concerned with the assessment year 1945 46, the account year being the calendar year 1944.
In the said assessment year the Income Tax officer concerned added to the taxable income of the assessee a sum of Rs. 1,86,931/ (which was later reduced to Rs. 1,23,840/ ) as a revenue receipt, representing an amount by which the sale price exceeded the original cost of certain shares and securities purchased and sold by the appellant.
It was held that in the relevant account year in which the shares were sold and profits made as also in the preceding years, the assessee was a dealer in shares and securities.
In respect of this addition of Rs. 1,23,840/ the assessee raised two contentions.
The first contention was that it was not a dealer in shares and securities in the relevant account year or in the years past and that the shares and securities were held by way of investment and the investment surplus was in the nature of a capital receipt.
The second contention was that even if the assessee was a dealer in shares and securities in the relevant account year, the Income tax officer committed an error in the matter of the computation of profits in not taking the market value of the shares as at the opening day of that year as the cost thereof.
These were the two questions along with a third question which were referred to the High Court under section 66 (2) of the Act.
The third question does not now survive, and therefore we set out below the two questions which fall for decision in this appeal: 1.
In the event of the surplus aforesaid being held to be income assessable to income tax 974 whether the income should be ascertained by taking the market value of the shares as at the opening day of the year as the cost ? 2.
Whether there is any evidence on record to justify the Tribunal 's finding that the assessee company was a dealer in shares not only in the year under consideration but in the years past ? Now, as to the contention whether the assessee was a dealer or not in shares and securities in the calendar year 1944 the position appears to be that the Income tax officer found against the assessee.
There was an appeal to the appellate Assistant Commissioner who remanded the case to the Income tax officer on the ground that the materials in the record were not adequate to decide the question.
The the remand proceedings the assessee filed before the Income tax officer statements showing the position of transactions relating to shares and securities from 1939 onward.
These statements marked as annexure 'C ' form part of the statement of the case.
In his remand report dated April 1, 1952 which is also a part of the statement of the case, the Income tax officer examined the purchase and sale of shares in different years by the assessee and came to the conclusion that the assessee was a dealer in shares at least from the year 1942 by reason of the frequency and multiplicity of the transactions which the assessee conducted since that year.
It further pointed out that the assessee had sold certain shares out of a block of shares in the year 1943, and after taking out the price of the shares realised in 1943, the remaining amount was shown in the balance sheet as the value of the remaining shares in each block.
The value of such shares as shown in the balance sheet for 1943 was not the cost price of the assessee.
In some cases it was below 975 cost.
As a result of this valuation in the balance sheet, the profits from the sale of shares during 1945,46 would be Rs. 1,23,8401 .
If, however, the difference between the sale price and the market value of the shares as on the first day of the account year was taken into account, the results might be different.
On the basis of the aforesaid remand report the Appellate Assistant Commissioner examined the records of the transactions and observed : "There are five different transactions of purchase and two transactions of sale in 1942.
The tempo of purchases and sales goes up from 1943.
There are purchases of fifteen or twen ty different dates in 1943.
There is a similar number of transactions in 1944.
Many of the shares purchased in 1943 have been disposed of in 1944.
Several scrips purchased in 1944 have been sold within the year.
The number of transactions is, in my opinion, sufficiently numerous to show that the assessee is a dealer in shares.
" There was an appeal then to the Tribunal.
The Tribunal came to the conclusion that so far as Government securities were concerned the assessee was obliged to keep its large cash invested in Government securities and, therefore, so far as these securities were concerned, the amount realised by their sale was not a revenue receipt and should not be included in the total income of the assessee.
It held, however, that the assessee was a dealer in shares in 1944 and as to the computation of the profits made on the sale of the shares, such profits were correctly computed to be the difference between the original cost price of the shares to the assessee at the time of purchase and the price realised at the time of sale, and the Tribunal significantly added that this computation was correct on the finding that the 976 assessee was a dealer not only in 1944 but from 1942onward.
We may here state that for the years prior to the account year 1944, the department had treated the assessee as an investor and not a dealer in shares and had made assessments accordingly for those years.
Those assessments have now become final.
When the matter went to the High Court on a case stated by the Tribunal, the High Court observed that the crucial year was the year 1943, for if the assessee was a dealer in shares since 1943 and sold some of them in the account year 1944 and made profits thereon, then both the questions referred to the High Court must be answered against the assessee.
The High Court re framed the second question by substituting the words "in the year 1943" for the words "in the years past".
The High Court further pointed out that in the exercise of its advisory jurisdiction it did riot sit in appeal over the decision of the Tribunal that the assessee was a dealer in shares in the year 1943.
It also held that on the materials on record it was open to the Tribunal to come to the conclusion that the assessee was a dealer in shares in 1943 and as to the computation of profits it pointed out that if the assessee was a dealer in 1943 also, then it was not open to the assessee to say that the market value of the shares as on the opening day of the year 1944 should be taken as the cost of the shares.
Accordingly, the High Court answered both the questions against the assessee.
Learned counsel for the appellant has addressed us at length on both questions.
However, it appears to us that by reason of the re framing of the second question, the two questions really merge into one, namely, was the assessee a dealer in shares in 1943 and continued to be such a dealer in 1944 which is the relevant account year ? The question no doubt has two aspects.
Firstly, there is the aspect whether there is any evidence to justify the finding that the 977 assessee was a dealer in shares in 1943.
,Secondly, there is the aspect as to how the profits made from the sale of shares in 1944 should be computed in the assessment year 1945 46.
It is however manifest that it ' the assessee was a dealer in 1943 also, then the principle laid down by this court in Commissioner of Income tax vs Bai Shirinbai K. Kooka (1), will not apply, for that decision proceeded on the footing that the assessee of that case converted her investment shares into a stock in trade and carried on a trading activity as from April 1, 1946, the relevant account year being the financial year 1946 47.
If the assessee in the present case was a dealer in 1943, then nothing happened on the opening day of the relevant account year, namely, January 1, 1944 and there is no reason why the market value of the shares on that date should be taken into consideration in computing the profits.
Learned counsel for the assessee has however pressed an argument which may now be stated.
He has submitted that he is not arguing that it was not open to the assessing authorities to consider the question whether the assessee was a dealer in shares in 1944 which was the relevant account year.
What he contends is that it was not open to the taxing authorities to consider and find that the assessee was a dealer in shares in 1943; because for all years prior to 1944 the department had already assessed the assessee on the footing that it was an investor of shares and not a dealer and those assessments having become final could be re opened only either under section 34 or section 35 of the Act.
The argument is that in assessing the assessee for the account year 1944 it was open to the department to treat the assessee as a dealer in 1944 but not for any earlier year which was not the subject of the assessment proceedings Learned counsel states that if he is right in his first contention, then the profits made on the sale of shares in 1944 must be computed in the manner laid down in Commissioner of Income tax vs Bai Shirinbai K. Kooka(1), (1) [1962] Supp, 3 S.C.R. 391. 978 because the assessee will be treated as a dealer for the first time in the relevant account year 1944.
The argument appears plaussible at first sight and it may perhaps be conceded that the question of the computation of profits in a case like this is not entirely free from difficulty.
However, on a very careful consideration of the argument we have come to the conclusion that it is not worthy of acceptance.
As to the first aspect of the question we see no difficulty.
The appellate Assistant Commissioner and the Tribunal have referred to various transactions relating to shares shown in the books of the assessee.
From those transactions they came to the conclusion that the assessee was a dealer in 1943.
The High Court has also summarised the various transactions in which the assessee indulged in the year 1943.
Having regard to the frequency and nature of those transactions it was open to the taxing authorities to come to the conclusion that the assessee was a dealer in shares in 1943.
We are not prepared to say that the rule of "no evidence" can be applied to the present case.
We therefore consider that the High Court correctly answered the question relating to this aspect of the case.
Now, as to computation of profits.
Though it is true that the question which directly arose before the taxing authorities in the present case was ' whether the assessee was a dealer in 1944, the question of the position of the assessee in 1943 also arose in determining how the profits made in 1944 should be computed.
It is not therefore quite correct to say that the position of the assessee in 1943 was completely outside the scope of the assessment proceedings of 1945 46.
In determining or computing the profits made by the sale of shares in 1944, the assessing authorities had to go into the question did the assessee start its trading 979 activity on January 1, 1944 or did it start the trading activity at an earlier date ? If the assessee was a dealer when the shares sold in 1944 were originally purchased, then obviously the principle in Commissioner of Income tax vs Bai Shirin Bai K. Kooka (1), will not apply and the profits will be the excess of the sale price over the original cost price.
The extent to which a decision given by an Income tax officer for one assessment year affects or binds a decision for another year has been considered by courts several times and speaking generally it may be stated that the doctrine of res judicata or estoppel by record does not apply to such decisions; in some cases it has been held that though the Income tax officer is not bound by the rule of res judicata or estoppel by record, he can re open a question previously decided only if fresh facts come to light or if the earlier decision was rendered without taking into consideration material evidence etc.
As to the argument based on sections 34 and 35, it is enough to point out that the assessment relating to the year 1943 is not being reopened.
That assessment stands.
What is being done is to compute the profits of 1944, which the assessing authorities could do, by finding out when the trading activity in shares began? The question of the profits in 1944 was not and could not be the subject of any assessment proceeding relating to 1943, for such profits arose only on the sale of the shares in 1944.
In Broken.
Hill Proprietary Company vs Broken Hill Municipal Council (2), the question was one of the capital value of a mine for rating purposes.
This question of valuation as between the parties was determined by the High Court of Australia in a previous year.
But it was held that the decision did not operate as res judicata.
The reason given was : "The decision of the High Court related to a valuation and a liability to a tax in a previous (1) [1962] Supp. 3 S.C.R. 391.
(2) 980 year, and no doubt as regards that year the decision could not be disputed.
The present case relates to a new question namely, the valuation for a different year and the liability for that year.
It is not eadem questio and therefore the principle of res judicata cannot apply.
" In another decision reported in the same volume, Hoystead vs Commissioner of Taxation (1), one of the questions was whether certain beneficiaries under a will were joint owners.
It was held that though in a previous litigation no express decision had been given whether the beneficiaries were joint owners, it being assumed and admitted that they were, the matter so admitted was so fundamental to the decision then given that it estopped the Commissioner.
The latter decision was distinguished in Society of Medical officers of Health vs Hope (2).
Both the decisions were again considered by the judicial Committee in Caffoor vs Income Tax Commissioner (3).
The decision in Broken Hill Proprietary Company 's case (4), was approved and the principle laid down was that in matters of recurring annual tax a decision on appeal with regard to one year 's assessment is said not to deal with eadem questio as that which arises in respect of an assessment for another year and consequently not to set up an estoppel.
As to the decision in Hoystead 's case (1), it was stated : "Their Lordships are of opinion that it is im possible for them to treat Hoystead 's case as constituting a legal authority on the question of estoppels in respect of successive years of tax assessment.
So to treat it would bring it into direct conflict with the contemporaneous decision in the Broken Hill case ; and to follow it would involve preferring a decision, in which the particular point was either assumed without (1) (2) (3) (4) , 981 argument or not noticed to a decision, in itself consistent with much other authority, in which the point was explicitly raised and explicitly determined.
" In Installment Supply (P) Ltd. vs Union of India (1) this court referred to the decisions just mentioned and said that it was well settled that in matters of taxation there would be no question of res judicata.
On the principle stated above, it seems to us that it was open to the taxing authorities to consider the position of the assessee in 1943 for the purposes of determining how the gains made in 1944.
should be computed, even though the subject of the assessment proceedings was the computation of the profits made in 1944.
The circumstance that in an earlier assessment relating to 1943 the assessee was treated as an investor would not in our opinion estop the assessing authorities from considering, for the purpose of computation of the profits of 1944, as to when the trading activity of the assessee in shares began.
The assessing authorities found that it began in 1943.
On that finding the profits were correctly computed and the answer given by the High Court to the question of the computation of the profits was correctly given.
For these reasons the appeal fails and is dismissed with costs.
| The history of the Nathdwara Temple in the District of Udaipur showed that Vallabha, who was the founder of the denomination known as Pushtimargiya Vaishnava Sampradaya, installed the idol of Srinathji in a temple and that later on his descendants built the Nathdwara Temple in 1761.
The religious reputation of the temple grew in importance and several grants were made and thousands of devotees visiting the temple made offering to the temple.
The succession to the Gaddi of the Tilkayat received recognition from the Rulers of Mewar, but on several occasions the Rulers interfered whenever it was found that the affairs of the temple were not managed properly.
In 1934 a Firman was issued by the Udaipur Darbar, by which, inter alia, it was declared that according to the law of Udaipur all the property dedicated or presented to or otherwise coming to the Deity Shrinathji was property of the shrine, that the Tilkayat Maharaj for the time being was merely a custodian, Manager and Trustee of the said property and that the Udaipur Darbar had absolute right to supervise that the 562 property dedicated to the shrine was used for the legitimate purposes of the shrine.
The management of the affairs ' by the appellant Tilkayat was not successful and it became necessary that a scheme should be framed for the management of the Temple.
On February 6, 1939, the Governor of Rajasthan promulgated an Ordinance, which was in due course replaced by the Nathdwara Temple Act, 1939.
The appellant challenged the validity of the Act on the grounds, inter alia, that the idol of Shrinathji in the Nathdwara Temple and all the property pertaining to it were his private properties and, as such, the State Legislature was not competent to pass the Act, that even if the Nathdwara Temple was held to be a public temple, he as Mahoney or Shebait had a beneficial interest in the office of the high priest as well as the properties of the temple and that on that footing, his rights under articles 14, 19 (1) (f) and 31 (2) of the Constitution of India had been contravened by the Act.
it was also urged that the provisions of the Act infringed the fundamental rights guaranteed to the Denomination under article 55 (1) and 26 (b) and (c) of the Constitution.
The question was also raised as to Whether the tenets of the Vallablia denomination and its religious practices required that the worship by the devotees should be performed at the private temple and so the existence of public temples was inconsistent with the said tenets and practices.
Held, (1) that neither that tenets nor the religious prac tices of the ' Vallablia school necessarily postulate that the followers of the school must worship in a private temple.
(2)that in view of the documentary evidence in the case it could not be held that the temple was built by the Tilkayat of the day as his private temple or that it still continues to have the character of a private temple; that though from the outside it had the of a Haveli, the majestic structure inside was consistent with the dignity of the idol and with the character of the temple as a public temple.
(3)that ail absolute monarch was the fountain head of all legislative, executive and judicial powers, that it was of the very essence of sovereignty which vested in him that he could supervise arid control the administration of public charity, and that this principle applied as much to Hindu monarchs as to ,my other absolute monarch.
Any order issued by such a Ruler would have the force of law and govern the rights of the parties affected there by and that, accordingly, the Firman issued by the Maharana of Udaipur in 1934 was a law by which the affairs of the Nathdwara Temple were governed after its issue, 563 Madhaorao Phalke vs The State of Madhya Bharat, [1961] 1 section C. R. 957, relied on.
(4)that under the law of Udaipur the Nathdwara Temple was a public temple and that the Tilkayat was no more than the Custodian, Manager and Trustee of the property belonging to the temple.
(5)that having regard to the terms of the Firman of 1934 the right claimed by the Tilkayat could not amount to a right to property under article 19 (1) (f) or constitute property under article 31 (2) of the Constitution,; that even if it were held that this right constituted a right to hold property, the restrictions imposed by the Act must be considered as reasonable and in the interests of the public under article 19 (5).
Vidya Varuthi Thirtha vs Balusami Ayyar, (1921) L. R. 48 1.
A. 302 and the Commissioner Hindu Reliqious Endowment,Madras vs
Sri Lakshmindra Tirtha Swamiar of Sri Shirur Mutt; , , considered.
(6) that the Act was not invalid on the ground of discrimination under article 14.
Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar, ; , relied on.
(7)that the right to manage the properties of a temple was a purely secular matter and could not be regarded as a religious practice under article 25 (1) or as amounting to affairs in matters of religion under article 26 (b).
Consequently, the Act in so fit, as it provided for the management of the properties of the Nathdwara Temple tinder the provisions of the Act, did not contravene articles 25 (1) and 26 (b).
The Durgah Committee, Ajmer vs Syed Hussain Ali, [1962] 1 section C. R. 333, referred to.
(8)that the expression "Law" in article 26 (d) meant a law passed by a competent legislature and under that Article the legislature was competent to make a law in regard to the ad.
ministration of the property belonging to the denomination and that the provisions of the Act providing for the constitution of a Board to administer the property were valid.
Ratilal Panachand Candhi vs The State of Bombay, , referred to.
564 (9)that the scheme envisaged by sections 3, 4, 16, 22 and 34 of the Act merely allowed the administration of the Properties Of the temple which was a purely secular matter to be undertaken by the Board and that the sections were valid.
(10)that under section 5 (2) (g) it was necessary that the members of the Board other than the Collector of Udaipur District should not only profess Hindu religion but must also belong to the Pushti Margiya Vallabhi Sampradaya; and that the proviso to section 5 (2) (g) which enabled a Collector to be a statutory member of the Board even though he may not be a Hindu and may not belong to the denomination, did not contravene articles 25 (1) and 26 (b).
(11) that the expression "affairs of the temple" in section 16 referred only the purely secular affairs in regard to the administration of the temple and that the section was valid.
(12)that section 30 (2) (a) in so far as it conferred on the State Government power to make rules in respect of the qualifications for holding the office of the Goswami, was invalid.
(13)that sections 5, 7, 10, 11, 21, 27. 28, 35, 36 and 37 were valid.
|
Appeals Nos. 776 and 777 of 1957.
Appeals by special leave from the judgment and order dated September 25, 1956, of the Bombay High Court in Income tax Application No. 48 of 1956; and from the judgment and order dated March 17,1954, of the Income tax Appellate Tribunal, Bombay, in E.P.T.A. Nos. 757, 903 and 944 of 1948 49, respectively.
A. V. Viswanatha Sastri and G. Gopalakrishnan, for the appellants.
A. N. Kripal and D. Gupta.
for the respondent.
November 30.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These are two appeals, with special leave, against an order of the High Court of Bombay rejecting a petition under section 66(2) of the Indian Income tax Act and the order of the Income tax Appellate Tribunal, Bombay, in respect of which the petition to the High Court was made.
Messrs. section C. Cambatta & Co. (Private) Ltd., Bombay, have filed these appeals, and the Commissioner of Excess Profits Tax, Bombay, is the respondent.
We are concerned in these appeals with three chargeable accounting periods, each ending respectively on December 31, beginning with the year, 1943 and ending with the year, 1945.
807 The appellants carry on various businesses, and one such business was the running of a theatre and restaurant, called the Eros Theatre and Restaurant.
In October, 1943, a subsidiary Company called the Eros Theatre and Restaurant, Ltd. was formed.
The paid up capital of the subsidiary Company was Rs. 7,91,100 divided into 7,911 shares of Rs. 100 each.
7,901 shares were allotted to the appellant Company as consideration for assets, goodwill, stock in trade and book debts which were taken over by the subsidiary Company, and the remaining 10 shares were held by the Cam batta family.
The assets which were transferred were as follows: Assets: Assets transferred.
Rs.1,28,968 Stock in trade.
Rs.40,000 Book debts. .
Rs.100 Rs.1,69,068 They together with the capital reserve of Rs. 6,21,032 made up the amount of Rs. 7,90,100.
In the books of the subsidiary Company, the share capital account was shown separately as follows: Rs. 2,50,000 debited to the various assets account.
Rs. 5,00,000 debited to the goodwill account.
Rs. 40,000 debited to the stock in trade account.
Rs. 100 debited to the book debts account.
It will thus appear that goodwill was not shown separately in the appellants ' account books, but only in the accounts of the subsidiary Company.
In working out the capital of the two Companies for excess profits tax, a sum of Rs. 5,00,000 was claimed as goodwill as part of the capital of the subsidiary Company.
Both the Department as well as the Tribunal held that section 8(3) of the Excess Profits Tax Act applied; and the goodwill was not taken into account in working out the capital.
The Tribunal declined to state a case, but the High Court directed that a reference be made on two questions, which were framed as follows: 808 "(1) Whether on the facts of the case, the Appellate Tribunal was right in applying section 8(3) of the Excess Profits Tax Act? (2).
Whether in the computation of the capital employed. in the business of the assessee, the Tribunal erred in. not including the value of the goodwill or any "portion thereof?" The High Court by its judgment and order answered the first question in the negative and the second, in the affirmative.
It held that sub section
(5) and not sub section
(3) of section 8 of the Excess Profits Tax Act was applicable.
It, therefore, held that "the Tribunal should have allowed for the value of the goodwill whatever it thought was reasonable at the date of the transfer.
" When the matter went before the Tribunal again, three affidavits and a valuation report by a firm of architects were filed.
The goodwill, according to the report of the architects, amounted to Rs. 25 lakhs.
It may be mentioned here that the subsidiary Company was using the premises under a lease granted on November 20, 1944, for three years beginning from April 1, 1944, on a rental of Rs. 9,500 per month.
The Tribunal came to the conclusion that no goodwill had been acquired by the business of the Theatre as such, and that whatever goodwill there was, related to the site and building itself.
They then proceeded to consider what value should be set upon the goodwill on the date of the transfer of the subsidiary Company as directed by the High Court.
They took into account certain factors in reaching their conclusions.
They first considered the earning capacity of the business, and held that prior to 1942 the business had not made profits, and that the name of Eros Theatre and Restaurant thus by itself had no goodwill at all.
They, therefore, considered that the only goodwill which had been acquired attached to the lease, which the trustees had given to the Eros ;Theatre and Restaurant Ltd., and computing the goodwill as the value of the lease to the subsidiary Company, they felt that Rs. 2 lakhs was a liberal estimate of the value of the goodwill in the hands of Eros Theatre and Restaurant, Ltd. at the material time.
809 Petitions under sections 66(1) and 66(2) read with a. 21 of the Excess Profits Tax Act were respectively rejected by the Tribunal and the High Court; but the appellants obtained special leave from this Court, and filed these appeals.
In our opinion, a question of law did arise in the case whether the goodwill of the Eros Theatre and ' Restaurant, Ltd., was calculated in accordance with law.
The Tribunal seems to have taken into account only the value of the leasehold of the site to the subsidiary Company, and rejected other considerations which go to make up the goodwill of a business.
No doubt, in Cruttwell vs Lye(1), Lord Eldon, L. C. observed that goodwill was "nothing more than the probability that the old customers would resort to the old place".
The description given by Lord Eldon has been considered always to be exceedingly narrow.
The matter has to be considered from the nature of the business, because the goodwill of a public inn and the goodwill of a huge departmental stores cannot be calculated on identical principles.
The matter has been considered in two cases by the House of Lords.
The first case is Trego vs Hunt (2), where all the definitions previously given were considered, and Lord Macnaghten observed that goodwill is "the whole advantage, whatever it may be of the reputation and connection of the firm, which may have been built up by years of honest work or gained by lavish expenditure of money".
In a subsequent case reported in Inland Revenue Commissioners vs Muller & Co.s.
Margarin, Ltd. (3), Lord Macnaghten at pp.
223 and 224 made the following observations:.
"What is goodwill? It is a thing very easy to describe, very difficult to define.
It is the benefit and advantage of the good name, reputation, and connection of a business.
It is the attractive force which brings in custom.
It is the one thing which distinguishes an old established business from a new business at its first start. . .
If there is one attribute common to all cases of goodwill in it is the attribute (1) 346.
(2) (3) 810 of locality.
For goodwill has no independent existence.
It cannot subsist by itself. 'It must be attached to a business.
Destroy the business, and the goodwill perishes with it, though elements remain which may perhaps be gathered up and be revived again".
These two cases and others were considered in two 'Australian cases.
The first is Daniell vs Federal Com missioner of Taxation (1), where, Knox, C. J. observed: "My opinion is that while it cannot be said to be absolutely and necessarily inseparable from the premises or to have no separate value, prima facie at any rate it may be treated as attached to the premises and whatever its value may be, should be treated as an enhancement of the value of the premises".
In the second case reported in Federal Commissioner of Taxation vs Williamson (2), Rich, J., observed at p. 564 as follows: "Hence to determine the nature of the goodwill in any given case, it is necessary to consider the type of business and the type of customer which such a business is inherently likely to attract as well as the surrounding circumstances. .
The goodwill of a business is a composite thing referable in part to its locality, in part to the way in which it is conducted and the personality of those who conduct it, and in part to the likelihood of competition, many customers being no doubt actuated by mixed motives in conferring their custom".
In Earl Jowitt 's Dictionary of English Law, 1959 Edn., "goodwill" is defined thus: "The goodwill of a business is the benefit which arises from its having been carried on for some time in a particular house, or by a particular person or firm, or from the use of a particular trade mark or trade name" It will thus be seen that the goowill of a business depends upon a variety of circumstances or a combination of them.
The location, the service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors go individually or together to make up the goodwill, (1) ; (2) ; 811 though locality always plays a considerable part.
Shift the locality, and the goodwill may be lost.
At the same time, locality is not everything.
The power to attract custom depends on one or more of the other factors as well.
In the case of a theatre or restaurant, what is catered, how the service is run and what the competition is, contribute also to the goodwill.
From the above, it is manifest that the matter of goodwill needs to be considered in a much broader way than what the Tribunal has done.
A question of law did arise in the case, and, in our opinion, the High Court should have directed the Tribunal to state a case upon it.
Civil Appeal No. 776 of 1957 is allowed.
The High Court will frame a suitable question, and ask for a statement of the case from the Tribunal, and decide the question in accordance with law.
The costs of this appeal shall be borne by the respondent; but the costs in the High Court shall abide the result.
There will be no order in Civil Appeal No. 777 of 1957.
C. A. No. 776 of 1957 allowed.
| Section 2(5) of the , properly construed, does not by itself confer the power on the appropriate Government to make a reference.
That power is really contained in section 10(i) of the Act.
In deciding whether it should or should not make a reference under section 12(5) of the Act the appropriate Government need not base its decision solely on the report of the conciliation officer, but is free to take into consideration all other relevant facts and circumstances under section 10(1), and where it refused to make a reference it must record and com municate its reasons therefore to the parties concerned.
Such reasons, however, must be germane, and not extraneous or irrelevant, to the dispute.
But in exercising such wide powers as are conferred by section 10(1), the appropriate Government must act fairly and reasonably and not in a punitive spirit, and although considerations of expediency may not be wholly excluded, it must not be swayed by any extraneous considerations.
Consequently, in a case where the issues in dispute related to a claim of classification for specified employees and additional bonus and the sole ground on which the Government refused to refer the dispute for adjudication under section 12(5) was that the employees had adopted go slow tactics during the relevant year, although the company had nevertheless voluntarily paid three months ' bonus for that year and the report of the conciliation officer was in favour of the employees, Held, that the Government acted on irrelevant considerations and its decision being wholly punitive in character a clear case for the issue of a writ of mandamus was made out.
Held, further, that since the work done by the employees prima facie justified the claim for classification and it was in consonance with the practice prevailing in other comparable concerns, the misconduct of the respondents could be no ground for refusing reference as the claim was in regard to the future benefit to the employees.
228 The claim of bonus being also prima facie justified by the profits earned during the relevant year in accordance with well settled principles of industrial adjudication, the order of refusal was in the nature of a punitive action that was wholly inconsistent with the object of the Act.
|
Civil Miscellaneous Petition No. 19065 of 1987.
IN Civil Appeal No. 1713 of 1987.
From the Judgment and order dated 11.6.1987 in Writ Petition No. 389 of 1981 F. D. Damania, Atul Tewari and Ms. Bina Gupta for the petitioners .
The following order of the Court was delivered: O R D E R The certificate on the basis of which this appeal is filed is issued by a learned Single Judge of the High Court of Bombay under Article 134A of the Constitution in respect of an order passed by him in a Writ Petition in which the employees of the State Bank of India had questioned the right of the management to fix the hours of work and the hours of recess and its right to stagger the period of recess and had prayed for other consequential reliefs.
The learned Single Judge allowed the petition following certain earlier decisions of the High Court rendered by the Division Benches.
He however proceeded to grant a certificate of fitness to file an appeal against his decision before this Court following an earlier order of a Division Bench granting such a certificate in respect of one of those earlier decisions.
He issued the 155 certificate under Article 134A of the Constitution without referring to A the Article under which the appeal could be filed.
Article 134A of the Constitution reads thus: "134A.
Every High Court, passing or making a judgment, decree, final order, or sentence, referred to in clause ( 1) of article 132 or clause ( 1) of article 133, or clause ( 1) of article 134, (a) may, if it deems fit so to do, on its own motion; and (b) shall, if an oral application is made.
by or on behalf of the party aggrieved, immediately after the passing or making of such judgment, decree, final order or sentence, determine, as soon as may be after such passing or making, the question whether a certificate of the nature referred to in clause ( 1) of article 132, or clause ( 1) of article 133 or, as the case may be, sub clause (c) of clause (1) of article 134, may be given in respect of that case.
" The certificate contemplated under Article 134A of the Constitution can only be a certificate which is referred to in clause ( 1) of Article 132 or in clause ( 1) of Article 133 or in sub clause (c) of clause ( 1) of Article 134 of the Constitution.
This is quite obvious from the language of Article 134A of the Constitution.
This case does not fall, either under Article 132(1) or under sub clause (c) of Article 134(1) as it neither involves a substantial question of law as to the interpretation of the Constitution nor it is a criminal proceeding.
It can only fall.
if at all, under Article 133(1) of the Constitution.
Article 133 of the Constitution reads thus: "133.
(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court in the territory of India if the High Court certifies under Article 134A (a) that the case involves a substantial question of law of general importance; and (b) that in the opinion of the High Court the said 156 question needs to be decided by the Supreme Court.
(2) Notwithstanding anything in article 132, any party appealing to the Supreme Court under clause ( 1) may urge as one of the grounds in such appeal that a substantial question of law as to the interpretation of this Constitution has been wrongly decided.
(3) Notwithstanding anything in this article, no appeal shall, unless Parliament by law otherwise provides, lie to the Supreme Court from the judgment, decree or final order of one Judge of a High Court.
" Clause (3) of Article 133 says that notwithstanding anything in that Article no appeal shall unless Parliament by law otherwise provides lie to the Supreme Court from the judgment, decree or final order of one Judge of the High Court.
Before the introduction of Article 134A of the Constitution by the Forty fourth Amendment of L) the Constitution there was no express provision in Articles 132, 133 and 134 of the Constitution regarding the time and manner in which an application for a certificate under any of those articles could be made before the High Court.
There was also a doubt as to the power of the High Court to issue a certificate suo motu under any of those articles.
Article 134A was enacted to make good the said deficiencies.
Article 134A does not constitute an independent provision under which a certificate can be issued.
It is ancillary to Article 132(1), Article 133(1) and Article 134(1)(c) of the Constitution.
That is the reason for the use of words "if the High Court certifies under article 134A" in Article 132(1) and Article 133(1) and for the use of words "certifies under article 134A" in Article 134(1)(c).
The High Court can issue a certificate only when it is satisfied that the conditions in Article 132 or Article 133 or Article 134 of the Constitution as the case may be are satisfied.
In the instant case such a certificate could not have been issued by reason of clause (3) of Article 133 of the Constitution by the learned Single Judge.
The fact that in a similar case a certificate had been issued by a Division Bench of the High Court consisting of two Judges in a case decided by the Division Bench did not empower the Single Judge to issue the certificate under Article 133(1) of the Constitution in a case decided by him.
The restriction placed by clause (3) of Article 133 of the Constitution could not be got over by relying upon the order of the Division Bench.
157 We, therefore, revoke the certificate This petition of appeal A may, however, be treated as a Special Leave Petition under Article 136 of the Constitution and posted for preliminary hearing.
| HELD: 1.1 The reasonableness of the reasons given by an arbitrator in making his award cannot be challenged in proceedings under Article 136.
[183E] 1.2 Appraisement of evidence by the arbitrator is ordinarily never a matter which the court questions and considers.
Section 1 of the Evidence Act, 1872 in its rigour is not intended to apply to proceedings before an arbitrator.
In the instant case, the parties have selected their own forum and the deciding forum must be conceded the power of appraisement of the evidence.
The arbitrator is the sole judge of the quality as well as quantity of evidence and it will not be for the Supreme Court to take upon itself the task of being a judge of the evidence before the arbitrator.
It may be possible that on the same evidence the Court might have arrived at a different conclusion than the one arrived at by the arbitrator but that by itself could be no ground for setting aside the award of an arbitrator.
1186B D] Haji Ebrahim Kassam Cochinwall vs Northern Indian oil Industries Ltd., A.I.R. 1951 Calcutta 230, referred to. 2.
There was no violation of any principles of natural justice in the instant case.
It was not a case where the arbitrator had refused cogent and material factors to be taken into consideration.
The award could not therefore, be said to be vitiated by non reception of material or non consideration of the relevant aspects of the matter.
[186A B] Mediterranean & Eastern Export Co. Ltd. vs Fortress Fabrics Ltd., 11948] 2 All.
E.R. 186, referred to.
Whether in a particular contract time was the essence of the contract or not, is a mixed question of law and fact.
In the instant case, the reasons given by the arbitrator in holding that it could not be taken 182 that time was the essence of the contract, were cogent and based on materials on record and have a rational nexus with the conclusion arrived at by him.
[184C;186A] 4.
The word 'reasonable ' have in law the prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know.
An arbitrator acting as a Judge has to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to the primordial necessity of order in the social life.
Therefore, where reasons germane and relevant for the arbitrator to hold in the manner he did have been indicated, it cannot be said that it was unreasonable.
[187E F; 184E Re a Solicitor, at 371 of the Report) and Stroud 's Judicial Dictionary, Fourth Edition, page 2258, referred to.
In the instant case the arbitrator acted reasonably and rationally.
The challenge to the award was, therefore, rightly rejected by the High Court.
[187G]
|
Criminal Appeal No. 12 of 1978 From the Judgment and Order dated 19.4.1976 of the Andhra Pradesh High Court in Referred Trial No. 2 of 1976.
K. Ram Kumar for the Appellant.
G. Narasimhulu and S.K. Mehta for the Respondents.
The Judgment of the Court was delivered by B.C. RAY, J.
This appeal by special leave is against the judgment and order dated 19.4.1976 made by the High Court of Andhra Pradesh in the Referred Trial No. 2 of 1976 and Criminal Appeal Nos. 159, 168 and 169 of 1976 acquitting all the 7 accused who were convicted and sentenced by the Ses sions Court, West Godawari Division at Eluru, Andhra Pradesh in Sessions Case No. 71 of 1975.
The prosecution case in short is that on 23rd July, 1974 at 7.30 a.m. the accused persons forming themselves into an unlawful assembly in the house of the 1st accused and arming themselves with spears, sticks and crow bars attacked the deceased while he was returning from the canal carrying water in what is locally known as "Kavadi".
When the de ceased reached the house of the 1st accused, all the ten accused came from behind and the 2nd accused gave a blow with a stick on the back of the head of the deceased as a consequence of which he fell down on his back.
Then the 1st accused speared the deceased on his face and legs, the 5th accused poked the deceased on his right wrist with a crow bar and the 6th accused speared the deceased on his legs and hands.
The 329 rest of the accused then beated the deceased with sticks indiscriminately.
The deceased cried "Bobu".
This was heard by his wife (P.W.5) from her house which is situated about 150 yards.
She immediately ran to the scene of occurence and saw accused 1 to 8 and two others entering into the house of the 1st accused.
P.W. 5 then sent intimation to her brother P.W. 2 who was working as labourer in a sugar factory through P.W. 8.
P.W. 2 and others took the deceased to Bhimadole Police Station in a cart which is about 4 kms.
away from their house and lodged the F.I.R., exhibit P 1 wherein all the names of accused Nos. A1 to A4 and A6 to A8 as well as the nature of injuries inflicted on the person of the deceased were mentioned.
This FIR was registered at 9.30 a.m. and a case u/s 326 I.P.C. was registered.
Subsequently, the deceased was found dead on examination by the Doctor, P.W. 12 at the Government Hospital, Elurn.
The F.I.R. was then altered to one u/s 302 I.P.C.
The Inspector of Police made inquest of the dead body and the inquest report has been marked as exhibit P5.
All the 10 accused were charged u/s 147 I.P.C. The accused Al, A4, A5 and A6 who were armed with deadly weapons were also charged u/s 148 I.P.C. and accused A1 to A10 were charged u/s 302 read with section 149 I.P.C. They were all committed to the Court of Sessions.
The Sessions Judge after considering the entire evidence and also heating the counsel for the prosecution as well as the defence found that accused A 1 to A3 and A5 to A8 were guilty of the offence u/s 147 I.P.C. and also u/s 302 read with section 149 I.P.C. A1, A5 and A6 were also held guilty u/s 148 I.P.C.
The accused A4, A9 and A10 were however acquitted of the offence u/s 147 I.P.C. Accused A4 was also not found guilty of offence u/s 148 I.P.C. The accused A 1, A5 and A6 who were convicted u/s 302 read with section 149 I.P.C. were sentenced to death and they were directed to he hanged by their necks till their death subject to confirma tion by the High Court.
A3, A7 and A8 were convicted u/s 302 read with section 149 I.P.C. and they were sentenced to undergo imprisonment for life.
A2, was also convicted u/s 302 read with section 149 I.P.C. and he was sentenced to death and directed to be hanged by his neck till death.subject to confirmation by the High Court.
The accused A1 to A3 and A5 to A8 who were convicted u/s 147 I.P.C. were sentenced to undergo rigorous imprisonment for one year.
A1, A5 and A6 were convicted u/s 148 I.P.C. and they were sen tenced to rigorous imprisonment for two years.
All the above sentences were to run concurrently.
Against this judgment and order 3 criminal appeals being Criminal Appeal Nos.
159/1976, 168/1976 and 169/1976 were filed.
These criminal appeals along with R.T. No. 2 of 1976 were heard by the High Court of Andhra Pradesh, Hyderabad and the learned Judge by his order dated 5th May, 1976 acquitted all the accused of both the charges of rioting and murder levelled 330 against them and set aside the convictions and sentences allowing all the appeals and rejecting the reference.
It is against this judgment and order the instant appeal on special leave was filed before this court by the State.
This court granted special leave to appeal by its order dated 11.1.1978 and also ordered issue of bailable warrants against each of the accused persons in the sum of Rs.10,000 with one surety to the satisfaction of Additional Sessions Judge, Eluru.
We have heard the learned counsel for both the parties and we are constrained to hold that the judgment passed by the High Court acquitting all the accused is not a proper judgment in accordance with the provisions of Section 354 of the Code of Criminal Procedure 1973.
The learned Judge has not at all considered and marshalled the evidences examined on behalf of the prosecution particularly the evidences of PWs 1, 3, 4, 6 and 7 who were eye witnesses to the gruesome murder committed in the morning at about 7.30 a.m.
The names of all the 7 accused appeared in the F.I.R. lodged by PW 2 in the Police Station at 9.30 a.m., exhibit PI and exhibit P.23 and P.24 dated 23.7.1974.
The learned Judge did not formulate properly the points for decision and did not marshal the evidences on record and did not come to specific finding on each of the points for determination by recording specific reasons for arriving at the decision.
It is really unfortu nate that the learned Judge approached the case from wrong angle and without properly formulating the points for deci sion and without any proper appraisal of the evidences adduced by the prosecution to prove the guilt of the accused persons and also without adverting to the reasonings of the Sessions Judge, has perfunctorily come to the finding that the prosecution has failed to prove beyond doubt the case against the accused even though there are eye witnesses P.Ws. 1, 3, 4, 6 and 7 to the occurence.
In our considered opinion, this judgment is not in accordance with the mandatory requirements as laid down in Section 354 of the Code of Criminal Procedure.
We therefore, set aside the judgment and order of acquittal passed by the High Court of Andhra Pradesh and remit the ease back to the High Court, Andhra Pradesh for deciding the case in accord ance with law on a proper appraisal and marshalling of the evidences on record as early as possible.
The order of interim stay is vacated and bail bonds are cancelled.
The records be sent to the High Court forthwith.
The High Court will be free to consider whether the accused will be en larged on bail.
| The ten accused persons forming themselves into an unlawful assembly in the house of A 1 and arming themselves with spears, sticks and crow bars attacked the deceased while he was returning from the canal carrying water in 'Kavadi '.
As a result of the injuries sustained by the deceased he died.
All the ten accused were charged under section 147 I.P.C. accused A 1, A4, A5 and A 6, who were armed with deadly weapons were also charged under section 148 I.P.C. and accused A 1 to A I0 were further charged under section 302 read with section 149 I.P.C.
The trial Court acquitted A 4, A 9 and A I0 of all the charges levelled against them.
Accused A 1 to A 3 and A 5 to A 8 were convicted section 147 I.P.C. and sentenced to undergo rigorous imprisonment for one year.
Accused A I, A 5 and A 6 were convicted section 148 I.P.C. and sentenced to undergo rigorous imprisonment for two years.
Accused A 1, A 2, A 5 and A 6 were convicted u/s 302 read with section 149 I.P.C. and sentenced to death.
Accused A 3, A 7 and A 8 were also convicted section 302 read with section 149 I.P.C. but sentenced to undergo imprisonment for life.
The High Court allowed the appeals flied by the convict ed accused and acquitted all of them of the charges levelled against them and rejected the reference.
Allowing the appeal of the State to this Court, HELD: 1.
The judgment passed by the High Court acquit ting all the accused is not a proper judgment in accordance with the provisions of section 354 of the Code of Criminal Proce dure 1973.
The learned Judge has not at all considered and marshalled the evidence of witnesses examined on behalf of the prosecution particularly the evidence of PWs.
1, 3, 4, 6 and 7 who were eye witnesses to the gruesome murder commit ted in the morning at about 7.30 a.m. 328 The names of all the seven accused appeared in the F.I.R. [330 C] 2.
The learned Judge approached the case from wrong angle and without properly formulating the points for deci sions and without any proper appraisal of the evidences adduced by the prosecution to prove the guilt of the accused persons and also without adverting to the reasoning of the Sessions Judge, has perfunctorily come to the finding that the prosecution has failed to prove beyond doubt the case against the accused even though there are eye witnesses P.Ws. 1, 3, 4, 6 and 7 to the occurrence.
[330 E] 3.
The judgment of the High Court is set aside and the case is remitted back to the High Court for deciding it in accordance with law on a proper appraisal and marshalling of the evidence on record as early as possible.
[330 F G]
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